Today on NPR I heard about Brooksley Born, who was the chairperson of the Commodity Futures Trading Commission. She lobbied Congress, banks, and the the President to let the CFTC regulate derivatives. However, she was opposed by Robert Rubin, Alan Greenspan, and Larry Summers. What is really disturbing is that even though someone in a position of power knew what to do, she was blocked by people who had more power. It shows that economic policy decisions have to be backed by one of a select few.
Raghuram Rajan was the chief economist of the IMF when he also foresaw a collapse in the financial markets. He was also ridiculed and marginalized by Larry Summers and others.
This makes me more pessimistic about preventing economic crashes in the future.
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