Michael Lewis's best-selling book The Big Short raises questions about the validity of the ideas underpinning the financial regulation legislation Congress is now considering.
Although only 14 percent of the public approves of Congress, in an ordinary year 95 percent of all incumbents are re-elected. How is this possible?
There is no evidence for the notion that large, nonbank financial institutions cannot be allowed to fail, yet the claim has become the foundation for the Obama administration's regulatory regime.
Senate Republicans know that government housing policies were the principle cause of the financial crisis, but have been unwilling to confront that problem or to filibuster further financial regulation.
The Obama administration is gradually changing the nature of our economy and society by putting government at the center.
The financial regulation bill proposed by Senator Chris Dodd could result in massive costs, which will ultimately be paid for by taxpayers.
Taken as a whole, the administration's financial regulatory proposals suggest an ideological agenda focused on controlling another sector of the economy.
The Dodd financial regulation bill lacks any recognition of the existence of a competitive market.
Taxpayers are on the hook for about $400 billion due to a fiasco that politicians, including then-Senator Barack Obama, could have prevented.
Senator Chris Dodd's financial regulation bill would create numerous problems for the financial system, including giving power to the FDIC for which it is completely unprepared.
The Lehman Brothers bankruptcy in the fall of 2008 threw a sharp and critical light on the inadequacies of the world's system for resolving insolvent, globally active financial institutions; a debtor-selection system could ameliorate many of these inadequacies.
If Senator Chris Dodd's bill passes, it will reform the financial system the way Obamacare will reform the health care system.
Partisan gridlock is not the reason financial reform is stalled; the administration's plans are flawed and it is encountering resistance from both sides of the aisle in Congress.
While members of Congress might complain that Goldman Sachs was paid in full during the American International Group bailout, many of them support legislation that authorizes the government to do exactly the same thing in the future.
Privatizing Fannie Mae and Freddie Mac is the best option as a matter of policy, but Congress is likely to take the path of least resistance and restore them as government-sponsored enterprises once the housing market is stable.
Attorney General Eric Holder should reconsider the logic of holding civilian trials for Guantánamo detainees.
President Obama's financial reform proposals reflect a limited understanding of good financial or banking policy: the solution to long-term problems in the banking business is not to narrow the activities of bank holding companies, as the president plans, but to broaden them.
Barney Frank's decision to "roll the dice" on subsidized housing is becoming an epic disaster for taxpayers.
Although the Gramm-Leach-Bliley Act was intended to free banking organizations (including banks and their holding companies) from a regulatory strait-jacket that was impeding their ability to compete, it has not yet had a significant effect.
The current financial crisis should not be considered a failure of capitalism but a failure of U.S. government policies.
If AIG was not too big to fail, why did the government rescue it? And why do we need to turn the financial system upside down?
Current financial reform proposals would establish "too big to fail" as national policy.
American Bankruptcy Institute
November 5, 2009
The administration's rationale for setting up a government-run resolution authority--to the extent that it is based on the idea that the interconnectedness of Lehman caused the financial crisis--is not well founded.
An alternative narrative is that the financial crisis was caused by U.S. government housing policies that helped create 25 milion subprime and Alt-A mortgages--47 percent of all U.S. mortgages--which are currently defaulting at unprecedented rates.
The House Financial Services Committee's October 27 Discussion Draft proposes measures that would, if enacted, retard economic growth, allow the government to assume control over the financial system, and seriously impair financial competition.
If the financial crisis was caused by subprime mortgages and predatory lending, the government's own policies made it happen.
Senate Banking Committee
October 8, 2009
The best long-term solution for Fannie Mae and Freddie Mac is privatization: as private entities they will not create future losses for taxpayers, and a private system will encourage more innovation, efficiency, and competition, which should lead to lower mortgage rates.
The Obama administration's proposal for a resolution authority for nonbank financial firms has a fundamental flaw.
Three AEI scholars discuss the financial crisis and the misguided policies that led to it.
The centerpiece of the administration's proposal for financial regulatory reforms this year--putting the Fed in charge of regulating or monitoring systemic risk--is a serious error.
The administration's proposal for regulating the credit default swaps market is unlikely to reduce systemic risk, and may in fact increase it.
AEI's Peter J. Wallison and Alex J. Pollock offer their opinions on the proposed Consumer Financial Protection Agency.
The Obama administration's plan for financial regulation reveals a preference for stability over change and progress.
We should not want to rescue firms from failure if their bankruptcy would only create a temporary disruption in the economy.
The Consumer Financial Protection Agency Act of 2009 discriminates based on perceived experience, sophistication, and perhaps even intelligence disparities.
Conservatives have always argued that liberals are elitists who do not respect ordinary Americans; the proposed Consumer Financial Protection Agency seems to prove it.
The administration's proposal for a Consumer Financial Protection Agency (CFPA) promises to be one of the most comprehensive and controversial pieces of regulatory legislation ever presented to Congress.
Everyone will want to become big enough to enjoy "systemic risk" protection.
The current financial crisis is a demonstration that well-intentioned government intervention in the private economy can have devastating consequences.
A careful look into credit-default swaps shows that they are not only simpler than thought, but also vital to keeping the financial system strong.
The stress tests boosted confidence in U.S. banks, suggesting that earlier disclosure of bank balance sheet conditions would have stabilized markets sooner.
Is it desirable or feasible to develop a regulatory framework that will prevent firms from becoming too big to fail or posing a risk of systemic harm?
It may be a good sign that Barney Frank is deferring action on a plan to create a government agency to resolve "systemically important" failing financial institutions.
Increasing regulation, and spreading it over the rest of the financial economy, may solve Congress's problem, but it makes everything else worse.
Is the current crisis the result of a failure of capitalism or a failure of government policy?
Neither actual conditions in the financial markets nor historical patterns call for the systemic risk and resolution system envisioned by the Obama administration's financial system reform proposal.
The Geithner plan is particularly vulnerable to the kind of criticism that might chase away private investors.
There is no sound policy reason for the federal government to protect the safety and soundness of any financial institution that is not backed in some way by the government.
An idea gaining strength in Washington is to create a systemic risk regulator, compounding the moral hazard of Fannie Mae and Freddie Mac.
Giving a government agency the power to designate companies as systemically significant and to regulate their capital and activities is a very troubling idea.
The debate about fair value accounting has only intensified since the financial crisis began.
Cash flow, not the mark-to-market price, reveals a security's true value.
There is an emerging consensus that the Fed should become a systemic risk regulator, but this is a bad idea, both because of the Fed's current mission and the nature of systemic risk.
AEI Online
February 19, 2009
Government policies and regulators are to blame for the financial crisis.
Long-term pressure to expand homeownership connects government policies to both the housing bubble and the poor quality of the mortgages on which it is based.
Property-and-casualty insurance companies will almost inevitably fall victim to the proposed "systemically significant" designation and regulation.
Why should regulation be extended to most of the major players in the financial system when it has been a consistent failure for banks?
We are in the midst of a serious financial crisis, and there is a temptation to act precipitously, without thinking of the long-term consequences.
AEI Online
December 31, 2008
Although thecredit default swapmarket can be improved, excessive restrictions on it would create considerably more risk than it would eliminate.
The most persuasive case for the cause of the financial crisis is the U.S. government itself.
What caused the financial crisis? Simple: the destructive housing policies of the federal government.
The Treasury secretary is currently endorsing a very bad idea.
Enormous losses could have been avoidedif the SEC and the FASB had recognized that mark-to-market accounting should not be used when there is no active market.
The government's takeover of Fannie Mae and Freddie Mac is similar to the savings-and-loan collapse of only twenty years ago.
The financial crisis provides no warrant either for a systemic risk regulator or for the supervision of other participants in the financial markets that have not previously been regulated.
The legal authority and funding are already in place.
The only banking deregulation in recent years was that of Fannie and Freddie.
If the government chooses to regulate the capital markets, we will simply be assuring ourselves of many more financial crises in the future.
AEI Online
September 30, 2008
The government takeover of Fannie and Freddie was necessary because of their massive losses on more than $1 trillion of subprime and Alt-A investments.
Barack Obama's claim that the financial crisis is due to Republican deregulation depends on ignoring several important facts.
What should we make of the proposed government bank bailout?
Without government encouragement, banks would never have offered such dodgy loans.
Treasury Secretary Henry Paulson missed a chance to protect taxpayers via receivership of Fannie Mae and Freddie Mac.
Long after Henry Paulson is gone from the Treasury, Washington will be wrestling with the problem of what to do about Fannie and Freddie.
A Newsweek business roundtable looks at the two faces of globalization and whether the United States can stay ahead.
AEI Online
August 26, 2008
There are three policy options for Fannie Mae and Freddie Mac: privatization, nationalization, or liquidation.
Fair value accounting has been the principal cause of an unprecedented decline in asset values and an unprecedented rise in instability among financial institutions.
Treasury Secretary Henry Paulson's plan alleviates concerns about the potential failure of Fannie and Freddie but does not address the underlying problem with the GSEs.
The Federal Reserve, the Treasury, and the Securities and Exchange Commission have taken actions recently that could have profound impact on the nation's financial system.
The rush to regulate the securities industry ignores the lessons of history and might plant the seeds of disaster.
The story of Fannie Maeand Freddie Mac is a cautionary tale about the moral hazard created by government support for private institutions.
Including investment bank regulation and backing in the Fed's portfolio would harm the securities market by introducing moral hazard and compromising market discipline.
The Democrats have been very vocal in opposing free trade agreements but have not paid any attention to the drastic flight of financial markets out of the United States.
Fannie Mae and Freddie Mac are dangerously weak. So why are House Democrats delaying critical regulatory reforms?
The bailout of Bear Stearnscould lead to increased government regulation of the financial sector, including hedge funds.
The financial markets are too big to be effectively regulated by government agencies, so regulators should think twice before intervening.
Neither faith nor science can answer the most important questions.
The Treasury's plan for a new financial regulatory structure deserves considerable praise, but the agency did not close the circle that it opened.
Just because fair-value accounting is favored by accountants does not mean that it is ideal.
AEI Online
April 11, 2008
Regulating securities firms the way we regulate banks, and giving them routine access to the Fed's discount window, makes no practical or policy sense.
AEI Online
March 28, 2008
Congress should act soon to protect U.S. taxpayers from the risk of GSE insolvency.
Congress has made a serious error by limiting the control of banks to companies engaged in financial activities. Hopefully the FDIC will not follow suit.
Amid widespread financial turmoil and talk of recession, fivescholars atAEI graded and assessed the Federal Reserve’s recent policy decisions.
The fall in housing prices and mortgage values has exposed a serious flaw in the idea that private, shareholder-owned, government-sponsored enterprises, such as FannieMae and Freddie Mac,can be effective instruments of government policy.
Lawmakers should turn their attention to persuading banks and other financial intermediaries to raise more capital.
Barack Obama calls for a "movement for change," but he is preaching classic liberal ideals that have been around since the New Deal.
AEI Online
February 25, 2008
Banks have been heavily regulated, ostensibly for stability. Yet in thecurrent crisis, banks are suffering and unregulated hedge funds are doing fine.
U.S. public securities markets are losing their competitive edge due tocurrent litigation policies.
Proposals to increase the conforming loan limit are really proposals to take more of these benefits away from the people who actually need the help and give it to people who do not.
The Reagan coalition and the 2008 presidential election.
AEI Online
January 16, 2008
The Federal Deposit Insurance Corporation should permit its moratorium on nonfinancial firms acquiring ILC charters to expire as planned on January 31.
XBRL (eXtensible Business Reporting Language) can change the financial world. The SEC can help make XBRL widespread.
Government-backed lenders could be a bigger problem than the savings and loan crisis.
Government-backed lenders could be a bigger problem than the savings and loan crisis.
AEI Online
November 26, 2007
Comments on federal regulation of depository institutions, securities, and insurance.
AEI Online
October 29, 2007
The Treasury Department's call for financial services regulation reform will resound into the future as American competitiveness is challenged.
The Treasury Department's "superconduit" is not a bailout. It's a means of price discovery for mortgage- and other asset-backed securities.
The Treasury Department's "superconduit" is not a bailout. It's a means of price discovery for mortgage- and other asset-backed securities.
Today, the American party system is facing election challenges like those of Lincoln during the Civil War.
Testimony on the elimination of policy separating banking and commerce.
A debate on the interpretation of Ronald Reagan's legacy.
AEI Online
September 28, 2007
Chairman Cox continued some of his predecessor's troubled initiatives, pursued some good ones of his own,but missed several opportunities.
Government enterprises do not add capital to the mortgage market.
Government enterprises do not add capital to the mortgage market.
AEI Online
August 6, 2007
The Securities and Exchange Commission should weigh a compromise proposal on proxy access and how to pay for it.
Opponents of the Iraq war can have their say, but they must deal with the inconvenient reality that the United States might well win it.
A discussion of recent issues that have emerged in the areas of banking, mutual funds, and regulatory and accounting regimes.
How regulators are dragging downAmericans' 401(k)s.
American politics, culture, and lawis more receptive to a regulatory regime that operates on rules rather than principles.
A new book on former president Ronald Reagan is methodologically disappointing, and it ignores Reagan's classical liberal philosophy.
No matter what happens in Iraq, we are still better off with Saddam Hussein out of the picture.
A new House Resolution intended to protect the banking industry against competition will ultimately hurt American consumers and banks.
"Principles-based" regulation will face challenges in the United States from American culture, the plaintiffs bar, converging accounting standards, and a legitimate case for "rules-based" regulation.
The Stoneridge case could make nearly anyone liable for securities fraud at public companies.
Is frivolous U.S. litigation preventing foreign companies from entering our public securities markets?
Absolutely not. But maybe union pension plans should be. . . .
XBRL,a new way of organizing financial and business data, transcends language, systems, and software.
Eliminating the authority of mutual fund boards to approve advisory fees and expenses would foster price competition in the industry.
WhileCongress need not makeurgent changes in the FHLB system, the system's lack of rationale could lead to substantial restraints on its growth--and possibly its eventual decline.
A regulatory change in the mutual fund systemcould encourage price competition.
Why would it be that in the mutual fund industry, the principal players--the investment advisers of mutual funds--refuse to compete on price with one another?
Auditors' opinions sound more certain than they are. The language needs to be changed.
Far from requiring greater government oversight, U.S. banking’s woes have been the product of regulation.
If the financialpower of the United Statesis eroding, as several recent reports contend, what isreally to blame?
The company's capitulation to federal regulators is less significant thanone mightthink.
The current securities class actions regime threatens our financial system. Congress should return enforcement authority to the SEC.
AEI Online
February 9, 2007
The victims of Regulation FD and the Global Settlement are the very investors the SEC is supposed to protect.
Amicus brief indicating the ways in which the Seventh Circuit’s decision in AT&T Corp. v. Lila T. Gavin will have a profound and adverse impact on the United States' securities markets.
Proposed rule for Management’s Report on Internal Control over FinancialReporting (File No. S7-24-06).
The legislativecompromise gives the regulator sufficient authority to control or reduce the GSEs' portfolios and makes the bill satisfactory.
By putting off a decision on the court ruling in AFSCME v. AIG, the SEC has left corporations in the dark and handed an advanteage to shareholder activists.
AEI Online
December 5, 2006
Shareholder access proposals, masquerading as the questionable notion of "shareholder democracy," would hamper corporate efficiency and profitability.
Bureaucratic hedging in a new blue-ribbon report can't hide the need for fundamental reform.
Acontroversial 2003 Securities and Exchange Commission rule, intended to make it easier for shareholders to nominate and elect members of corporate boards, is back on the table.
Exchequer Club
November 15, 2006
The use of subordinated debt would be a superior approach in determining appropriate levels of bank capital.
AEI Online
November 9, 2006
Basel II's bank capital requirements leave much to be desired, but with modifications and the use of the leverage ratio, banking regulation can somewhat simulate market-based risk assessments.
We should not fear, or object to, the competition of foreign markets; in fact, we should welcome it. But we shouldn't impair our own ability to compete with needless and costly regulation.
AEI Online
October 20, 2006
Deregulation has improved access and quality and cut waste and prices across several industries. Why would anyone insist on continuing to regulate insurance rates?
Technology in the form of XBRL could helpin the future to level the playing field between large and small firms in the competition for capital.
In the year since it was passed by the Senate Banking Committee, legislation to reform the regulation of Fannie Mae and Freddie Mac has languished in the Senate.
AEI Online
August 8, 2006
Urgent action by theSecurities and Exchange Commission is necessary if the United States is to retain its preeminence in the financial world.
The SEC has a statutory obligation to consider efficiency, competition and capital formation when it makes its rules, and it violated the APA by failing to do so.
The only sure way to eliminate the risk of false accounting is to reduce the kinds of risky activities in which government-backed management can engage.
While mutual funds are currently the dominant form of investment for the retail investor who is looking for diversification, ETFs and customized portfolios of various kinds are growing faster.
In opposing Wal-Mart's application to acquire a bank-like institution in Utah, the banking industry is hurting its own prospects for growth and expansion.
Will the Securities and Exchange Commission be able to return to a time when it could gain the acceptance of its rules simply by asserting that they are necessary to protect investors?
Under Christopher Cox, the Securities and Exchange Commission may finally be ready to take control of its enforcement staff.
Banks trying to prevent Wal-Mart from entering their businessshould tell us a lot about what the separation of banking and commerce is really about.
Testimony before the Federal Deposit Insurance Corporation on the legality of Wal-Mart's application to acquire an ILC (Industrial Loan Corporation).
Why was the Rudman report of Fannie Mae such a disappointment?
The portfolios of mortgages and mortgage-backed securities held by Fannie Mae and Freddie Mac have now become the central issue in the legislative battle over improvements in their regulation.
AEI Online
March 13, 2006
U.S. companies need to accelerate the development and use of XBRL, a financial reporting system that enables investors and analysts to compare company performance.
AEI Online
March 10, 2006
Has the time come for a federal chartering system for insurance companies?
The Rudman Report on Fannie Mae recites facts eerily similar to what we now know about Enron.
The GSEs are not doing the job they should for low-income homebuyers.
WillExtensible Business Reporting Languagethreaten the future of American business competition?
Alan Greenspan's support for the separation of banking and commerce is an ironic coda to an extraordinary government career.
Can a separation between banking and commerce be justified?
What are the costs of regulation?
There is no longer any policy basis underlying the principle of separating banking and commerce.
AEI Online
January 6, 2006
Examiningtheir incentives and access to informationraises questions about whether a supermajority of independent directors should be the “gold standard” of corporate governance.
AEI Online
December 1, 2005
Doesthe policy of separating banking and commerce have any continuing viability after the adoption of the Gramm-Leach-Bliley Act in 1999?
This paper explores important areas of the SEC ' s jurisdiction where attention to its statutory obligations would produce more balanced policies in the future .
The astonishing thing about President George W. Bush's choice of Harriet Miers for a seat on the Supreme Court is that he made the same mistake that sank his father's presidency.
AEI Online
October 6, 2005
A federal appeals court has given life to language in a 1996 congressional enactment that the SEC has largely ignored.
The 2004 election appears to be a contest that was determined by long-term trends, and thus carries important lessons for strategists in both parties.
AEI Online
September 12, 2005
Given the administration’s determination on this issue, it is highly likely that legislation limiting or eliminating the GSEs’ portfolios will be sent to the president’s desk.
AEI Online
August 1, 2005
The answer to the question “Why do we regulate banks?” is that we do so because we want to, not because we must.
Tech Central Station
July 15, 2005
Fortunately, new leadership is on the way. Soon, perhaps, investors and shareholders will be allowed to make their own decisions.
The bill fails to improve on current law or address the critical issues of financial risk that Congress needs to consider for GSEs to play a constructive role in the housing finance system.
It is extremely difficult to concludethat the Sarbanes-Oxley Act conferred more tangible or intangible benefits than its tangible and intangible costs.
Tech Central Station
June 6, 2005
Now that Bill Donaldson will be replaced by Rep. Chris Cox, we can hope for something more substantial.
Berlin Journal, No. 10
May 18, 2005
Various factors suggest that eithera realignment hasoccurred in American politics or that a period of sustained Republican hegemony--the functional equivalent of a realignment--is ahead.
The idea that the size of Fannie Maeand Freddie Mac’s portfolios might be limited or reducedis now the central feature of the debate regarding mortgage-backed securities.
Financial Times
May 4, 2005
The Pension Benefits Guaranty Corporation'senormous liability is only the latest example of the U.S. government's well-intentioned efforts gone awry.
AEI Online
April 14, 2005
The ability of Fannie Mae and Freddie Mac to hold mortgages and mortgage-backed securities should be curtailed to protect taxpayers and the economy from risks they incur.
New York Times
April 2, 2005
Tightening regulation of Fannie Mae and Freddie Mac without reducing the real source of the risks they create would be like bailing furiously while ignoring the hole in the boat.
Wall Street Journal
March 24, 2005
With the president's vision of an Ownership Society, it would be ironic if the SECnow extends regulation to NASDAQ--a market that is functioning well withoutSEC intervention.
American Academy in Berlin
March 10, 2005
Factors suggest that eithera realignment hasoccurred in American politics, or that a period of sustained Republican hegemony--the functional equivalent of a realignment--is ahead.
The recent settlements of lawsuits against WorldCom and Enron introduced political considerations into the process of settling class actions.
Army-Navy Club
February 9, 2005
We live now in a world reconstructed byReagan's ideas, his ideals, and his principles.
AEI Online
February 1, 2005
Congress must take steps to gain control of the Public Company Accounting Oversight Board.
AEI Online
January 11, 2005
The SEC should eliminate the "trade-through" rule altogether, not extend it to Nasdaq markets.
Financial Times
January 5, 2005
The SEC should open competition between electronic market centers and the NYSE by eliminating the trade-through rule.
AEI Online
December 1, 2004
The authoraddresses whether the Securities and Exchange Commission should permit the electronic order-matching markets to compete with the New York Stock Exchange.
Perhaps, inspired by the wreckage left around them by the GOP victory in 2004, Democrats of the Center will be able to take back their party.
AEI Online
October 1, 2004
The Securities and Exchange Commission--once known for the professionalism of its analysis--has begun to propose and adopt rules and regulations without support in empirical data.
The American Banker
October 1, 2004
At a time when new disclosures raise serous doubts about the true financial condition of Fannie Mae, a practical privatization plan may be a better alternative than tighter regulation.
Financial Times
September 28, 2004
Fannie Mae and Freddie Mac could be privatized, and minor changes in regulation could lead to a mortgage financing system that produces lower rates without government backing.
AEI event on HUD's housing regulations
September 13, 2004
If the government wants to assist low income families in becoming homeowners, it shouldwork through a government agency that does not have a directly conflicting agenda.
AEI Event on the Workings of NASDAQ's Electronic Market
September 9, 2004
The author introduces Frank Hatheway and Peter Martyn of NASDAQ and highlights the complexities of trading stocks electronically.
AEI Online
September 1, 2004
A new form of disclosure is necessary to provide investors with information about the success of companies in creating value and the likelihood of sustaining profitability in the future.
Regulation
September 1, 2004
Senator John Kerry continues to add nuances to his position on Iraq as he seeks to criticize President George W. Bush's policy.
The proposal of the Securities and Exchange Commission for market structure reform, like so many other recent SEC initiatives, seems entirely ad hoc.
George W. Bush, like Ronald Reagan, understands the power of American ideals.
Vice President Dick Cheney was right to resist disclosure of the documents and discussions associated with his energy-policy task force.
The American Banker
June 25, 2004
The deregulation plan advanced for the banking industry was part of the U.S. Treasury's contribution to the implementation of President Ronald Reagan's philosophy.
AEI event on the accounting industry
June 14, 2004
Of all the professional skills that are necessary in today’s complex economy, accounting must be the one that is least understood.
AEI event on market shock and trading efficiency
June 10, 2004
Close analysis of how different markets function under varying circumstances can shed light on the optimal structure for the securities markets in the United States.
RonaldReagan was the very embodiment of the best in the people who elected him twice to the country's highest office.
If investors lost confidence after recent corporate scandals, it was not in the markets or in financial disclosure but in the good sense of the nation’s political leadership.
The International Economy
June 1, 2004
After years of muscling and seducing, government-sponsored enterprises Fannie Mae and Freddie Mac are facing some unexpected challenges.
Subcomittee on Capital Markets, Insurance, and Government Sponsored Enterprises
May 18, 2004
The Securities and Exchange Commission's proposed Regulation NMS fails to address the basic question of market structure and should be withdrawn.
The pundits may not admit it, butPresident George W. Bush'sIraq record is clear.
The traditional underwritten public offering better serves the needs of both companies and investors.
A hard look at Fannie Mae and Freddie Mac suggest that privatization for these government-sponsored enterprises has become an attractive option.
Did John Kerry lie when he said he threw away his own medals of honor?
The SEC should abandon its new proposed shareholder voting rule until it can demonstrate why intervention is evennecessary.
Why should the Federal Accounting Standards Boardrequire the expensing of options if it has no idea how it should be done?
Having made it through the primary process to a virtual lock on the Democratic nomination, Senator John Kerry will now have to deal with the tangled web of contradictions he left behind.
Financial Times
March 8, 2004
Highprice-to-earnings ratios are a reflection of the failure of Generally Accepted Accounting Principlesas a system of financial reporting in the knowledge economy.
AEI Event on March 8
March 8, 2004
The SEC's proposed rule on shareholder voting focuses on process without consideration of the way public companies organize themselves or relate to their shareholders.
High price-to-earnings ratios reflect not a renewed bubble or investors' overoptimism, but the failure of GAAP as a system of financial reporting in the knowledge economy.
AEI event on home loan banks
February 4, 2004
National Review Online
November 3, 2003
Iraqis don't have to start from scratch.
AEI event on the housing market
October 27, 2003
Introduction to the conference on the privatization of the Housing GSEs.
New York Times
October 26, 2003
As the 2004 election approaches, George W. Bush will face enormous pressure to alter his policies, but changing directions out of political expediency would be a grave mistake.
American Banker
October 24, 2003
Congress and the administration have finally begun to consider legislation on Fannie Mae and Freddie Mac, but what they have put on the table does not address the real issue.
AEI Online
October 21, 2003
Introduction to conference on what institutional investors want in a trading system.
AEI event on the profitability of NYSE specialists
October 8, 2003
Introduction to the conference on the profitability of NYSE specialists.
Regulation magazine
October 1, 2003
Much of today's business world evolves around values that do not appear on balance sheets.
National Review Online
September 29, 2003
The United Nations can't share power in Iraq.
Wall Street Journal
September 3, 2003
If the corporations traded on the NYSE and Nasdaq are now to be controlled by committees of the risk-averse, we may all face limited economic growth.
AEI event on 9/3/03
September 3, 2003
Peter J. Wallison introduces the nonfinancial indicators conference.
AEI Online
September 1, 2003
An array of stimulus factors has failed to generate growth in the U.S. economy, largely a consequence of the Sarbanes-Oxley Act and the stock exchange regulations it has spawned.
National Review Online
August 1, 2003
The media serves society and justifies its constitutional protection when it addresses real issues. When it fails to do this job, it deserves scrutiny itself.
House Subcommittee on Commerce, Trade and Consumer Protection
July 22, 2003
It is not correct to believe that Fannie Mae and Freddie Mac are financially strong companies simply because they are producing earnings or have strong-looking balance sheets.
Senate Subcommittee on Financial Management
July 21, 2003
The costs of and risks created by Fannie and Freddie overwhelmingly outweigh any benefits they provide that I believe they should be fundamentally changed.
Federal Deposit Insurance Corporation
July 16, 2003
Is the policy of separating banking and commerce after the adoption of the Gramm-Leach-Bliley Act in 1999still based on any comprehensible rationale or is it now simply superstition?
Memorial Service for Don Regan
July 15, 2003
Memorial speech for Don Regan.
Ronald Reagan relied on nothing but his own firmly held convictions and his talent for strategy.
Financial Times
June 16, 2003
The only protection against the systemic risk associated with Fannie and Freddie is their full privatisation.
AEI event on Fannie Mae & Freddie Mac
June 9, 2003
Introduction by Peter J. Wallison at 6/9/2003 "Are Fannie Mae and Freddie Mac Meeting Their Obligations?" event.
Wall Street Journal
June 2, 2003
The objective of the SEC should be to ensure that investors get the most useful information possible, but GAAP financial statements do not meet this test by themselves.
International Economy
June 1, 2003
The entire U.S. economic system could be seriously impaired if Fannie or Freddie were unable to meet their obligations.
National Review Online
May 22, 2003
Recent bombings--like the bombing in Bali several months ago--are signs of al Qaeda's weakness, not its strength.
Washington Times
May 13, 2003
The argument that high deficits cause high interest rates, and these rates weaken the economy or slow the economic recovery, isshown by actual experience to be false.
If the SEC should decide to take up the question of market structure, its choices would not be seriously limited by restrictions or mandates in its existing legal authority.
The Ronald Reagan Library
March 19, 2003
As difficult asGeorge W.Bush's position is today, Ronald Reagan's was worse.
George W. Bush confronts his own challenge. He will follow in Reagan's footsteps, ignore popular opinion abroad and vocal opposition at home, and move to disarm and liberate Iraq.
The American Banker
March 7, 2003
The only protection against the systemic risk associated with Fannie and Freddie is their full privatization, so that a fully competitive secondary mortgage market will develop in this country.
Cash flow is a more reliable indicator than audited financial statements, and it would be of greater use to investors if the SEC encouraged companies to present this data in a usable form.
Financial Times
February 7, 2003
News that the members of the accounting oversight board voted to give themselves large salaries has finally focused the public's attention on theSarbanes-Oxley Act'sspecifics.
Requiring companies to expense options in the absence of any satisfactory method to evaluate their costs would be inconsistent with the principles and objectives of accounting.
In light of the nation's experience with Reaganomics, it is hard to resist the conclusion that what we are hearing is not economics or even Rubinomics, but partisan politics.
AEI Event on Audited Earnings
January 23, 2003
In adopting the Sarbanes-Oxley Act, Congress acted hastily, without adequate thought, and apparently without an understanding of the problem it was seeking to address.
Washington Post
January 12, 2003
The political frenzy surrounding Enron's collapse and other corporate scandals may have produced--or at least exposed--a significant shift in the relationship between Congress and the White House.
With their post-election rationalizations and excuses fortheir losses, it is clear thatDemocrats are not ready abandon either their unpopular policies or their illusions.
AEI Online
January 1, 2003
The recent controversy over the SEC suggests that now Congress, the White House, and the public all take for granted that the independent agencies are the president's responsibility.
American Banker
December 13, 2002
The corporate scandals of this past spring and summer have given hope to the would-be regulators that they might be able to reclaim some lost territory.
Japanese Nikkei Business
December 2, 2002
The author writes about President Koizumi's reforms for Japan's economy.
Financial Times
November 21, 2002
The taxpayers, through the generosity of Congress, have offered Fannie and Freddie a great deal: heads you win; tails we lose.
2002 Federal Home Loan Bank Directors Conference
November 14, 2002
Although they are analogous to corporate directors, the directors of government-sponosored enterprises have a duty of loyalty that extends beyond the GSE itself and its shareholders or their equivalent.
AEI Online
November 1, 2002
Congress and the stock exchanges rapidly answered the cry to act in the wake of corporate scandals.
AEI conference on mortgage rates
October 25, 2002
Are Fannie Mae and Freddie Mac a mechanism--and an inefficient one at that--for transferring a subsidy from all taxpayers to homeowners?
Speech at an AEI Event
October 4, 2002
This introductory speech, delivered at an AEI event, discusses how to encourage the development of a broad and deep transatlantic securities market.
The International Economy
October 1, 2002
One of the most successful efforts to increase disclosure has been a proposal to require Fannie and Freddie to register their securities with the Securities and Exchange Commission.
The Washington Times
August 27, 2002
With all of the recent attention focused on corporate and accounting fraud, few investors are aware that the SEC now has before it a decision that could radically change the structure of today's securities markets.
AEI event on FannieMae and FreddieMac
June 12, 2002
Peter J. Wallisonintroduction from 6/12/2002 "Are Fannie and Freddie Adequately Disclosing What Investors Need?" event.
Le Centre Francais sur les Etats-Unis
May 15, 2002
The Enron collapse has had a resonance far beyond its significance as an economic matter.
Consumers' Research Magazine
May 1, 2002
American Enterprise Institute-Japan Economic Foundation Meeting
April 29, 2002
The significance of Japan's non-performing loan problem can easily be underestimated.
Washingtonpost.com
April 10, 2002
The Wall Street Journal
April 2, 2002
Corporate governance is a major and neglected issue with respect to Fannie and Freddie.
Senate Banking, Housing, and Urban Affairs Committee
March 13, 2002
There is clearly a current and growing need for information that supplements conventional GAAP financial statements.
American Banker
January 11, 2002
The rejection of the TD Bank application shows why it is now time for Congress to renounce this anticompetitive policy once and for all.
The Wall Street Journal
January 9, 2002
What actually causes inflation is still something of a mystery, but a substantial body of economic opinion holds that it is government spending, whether it is financed by taxes or by borrowing.
The Christian Science Monitor
January 3, 2002
The protests over the president’s decision to authorize military tribunals to try terrorists call to mind Barry Goldwater’s remark that “extremism in defense of liberty is no vice.”
Exchequer Club Luncheon
December 19, 2001
The Gramm-Leach-Bliley Act has created a competitive imbalance in the financial services market that is worse than what had existed before.
Introduction to AEI Event on Banking Reform
November 13, 2001
The Gramm-Leach-Bliley Act's requirement that companies that control banks engage only in activities that the Fed defines as "financial in nature" is its fatal flaw.
AEI Online
November 1, 2001
Best program for terrorism coverage would expose the insurance industry to substantial first-dollar losses and would not regulate premium rates or charge insurance companies a premium.
Research Institute of the Ministry of Economics Trade and Industry
September 25, 2001
Japan's accounting system must fairly reflect values, nonperforming loans must be sold at auction,foreign bidders must be welcomed,and government must recapitalize the banks.
Securities Industry News
September 3, 2001
Although SEC interested in obtaining higher disclosure standards from foreign companies, this cannot be achieved by discouraging foreign companies from U.S. listings.
AEI Online
August 1, 2001
Although blanket privacy protections have been proposed, Congress should pass targeted privacy laws that address particular harms while protecting legitimate uses of credit information.
The unanimous decision of the Microsoftcase provides a template for analyzing the activities of Fannie Mae and Freddie Mac under the antitrust laws.
The New York Times
July 24, 2001
Legislators have proposed legislation that requires explicit consent from customers before their financial information is released, which would protect privacy at great cost.
Has the latest round of U.S. banking reform ensured the stability of U.S. banks ordoes the probability and cost of future bank and financial crises need to be further reduced?
The Wall Street Journal
June 26, 2001
Since the adoption of the post-Watergate reforms, the political parties have been sliding into irrelevance.
The Washington Post
June 3, 2001
Supreme Court ruling could trump the McCain-Feingold campaign finance reform bill andwould restore political parties to their proper place at the center of the campaign process.
American Banker
May 11, 2001
The subordinated debt issued by Fannie Mae and Freddie Macis notcredibly unprotected and of sufficient size.
American Banker
April 27, 2001
After the savings and loan debacle of the late 1980s, it is imprudent to allow institutions to take risks while leaving those that bear the losses without the means to control them.
FILP has clearly been a failure in performing the one role that was of singular importance during the 1990s—adjusting the economy through countercyclical spending.
The Wall Street Journal
March 29, 2001
When will Congress realize that GSEs are uniquely problematic institutions that can do great harm to a market economy?
The New York Times
March 17, 2001
Soft money is not a monster; it consists of contributions to political parties for party building, getting out the vote, and issue advertising.
The Washington Times
December 14, 2000
Polls have consistently shown that the American people thought Mr. Bush had won Florida and the presidency, even though a substantial minority--and occasionally a majority--thought it would be fair to "count all the votes."
The New York Times
December 9, 2000
By holding, in a split decision, that all the so-called "undercounted votes" in Florida must be counted, the court has virtually guaranteed that there can be no conclusion to the Florida election story until well after Dec. 12, the date that Congress has fixed for the selection of an incontestable slate of delegates.
AEI Online
December 1, 2000
Fannie Mae and Freddie Mac enjoy an implicit subsidy from the federal government, yet their corporate structure obligates them to maximize profits for their shareholders.
The Wall Street Journal
November 17, 2000
Those who purport to see an abuse of power in the secretary's actions do not understand the nature of the discretion granted in a constitutional system.
H.R. 3703 is a milestone in Congressional efforts to gain control of the Government Sponsored Enterprises, and more generally the liabilities they create for the United States Government.
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