Wednesday, November 19, 2008

Poole at The Cato Institute's Annual Monetary Conference

William Poole, Senior Fellow at the Cato Institute, and Former President Federal Reserve Bank of St. Louis, is speaking at a panel during the Cato Institute 26th Annual Monetary Conference on Lessons from the Subprime Crisis and The Way Forward. He identifies excessive leverage at the private sector as the main culprit for the financial crisis and warns of overreaction in the form of over-regulation which is undesirable in his view.

Poole is suggesting to tackle the tendency of excessive leverage by the private financial sector by changing the tax code (I kid U not) and give fiscal incentives to participants who lower their leverage ratios. What a crazy suggestion. There's no method in this madness since this libertarian think tank obviously resorts to tax cuts whenever there is trouble on the horizon and fails to recognize the obvious: changing the statutes of the Federal Reserve, who's misguided monetary policy is responsible for the current crisis, can help to solve it.

source: Cato Institute 26th Annual Monetary Conference, Lessons from the Subprime Crisis

Cato Institute

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