Political Bubbles

Financial Crises and the Failure of American Democracy

Nolan McCarty, Keith T. Poole, Howard Rosenthal (Autoren)

Buch | Softcover

368 Seiten

2015
Princeton University Press (Verlag)
978-0-691-16572-1 (ISBN)

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Behind every financial crisis lurks a "political bubble"--policy biases that foster market behaviors leading to financial instability. Rather than tilting against risky behavior, political bubbles--arising from a potent combination of beliefs, institutions, and interests--aid, abet, and amplify risk. Demonstrating how political bubbles helped create the real estate-generated financial bubble and the 2008 financial crisis, this book argues that similar government oversights in the aftermath of the crisis undermined Washington's response to the "popped" financial bubble, and shows how such patterns have occurred repeatedly throughout US history. The authors show that just as financial bubbles are an unfortunate mix of mistaken beliefs, market imperfections, and greed, political bubbles are the product of rigid ideologies, unresponsive and ineffective government institutions, and special interests. Financial market innovations--including adjustable-rate mortgages, mortgage-backed securities, and credit default swaps--become subject to legislated leniency and regulatory failure, increasing hazardous practices.
The authors shed important light on the politics that blinds regulators to the economic weaknesses that create the conditions for economic bubbles and recommend simple, focused rules that should help avoid such crises in the future. The first full accounting of how politics produces financial ruptures, Political Bubbles offers timely lessons that all sectors would do well to heed.

Nolan McCarty is the Susan Dod Brown Professor of Politics and Public Affairs and chair of the Department of Politics at Princeton University. Keith T. Poole is the Philip H. Alston Jr. Distinguished Professor in the Department of Political Science at the University of Georgia. Howard Rosenthal is professor of politics at New York University and the Roger Williams Straus Professor of Social Sciences, Emeritus, at Princeton University.

Acknowledgments vii Introduction 1 Part I: The Political Bubble - Why Washington Allows Financial Crises to Occur Chapter 1 Bubble Expectations 31 Chapter 2 Ideology 38 Chapter 3 Interests 71 Chapter 4 Institutions 90 Chapter 5 The Political Bubble of the Crisis of 2008 117 Part II: Pops - Why Washington Delays in Solving Financial Crises Chapter 6 Historical Lessons of the Responses to Pops 153 Chapter 7 The Pop of 2008 184 Chapter 8 "Pop"ulism 228 Chapter 9 How to Waste a Crisis 251 Epilogue 275 Notes 283 Bibliography 305 Name Index 327 Subject Index 333

Zusatzinfo	3 halftones. 26 line illus. 11 tables.
Verlagsort	New Jersey
Sprache	englisch
Maße	146 x 229 mm
Gewicht	454 g
Themenwelt	Sozialwissenschaften ► Politik / Verwaltung ► Politische Systeme
	Sozialwissenschaften ► Politik / Verwaltung ► Politische Theorie
	Wirtschaft ► Volkswirtschaftslehre ► Finanzwissenschaft
	Wirtschaft ► Volkswirtschaftslehre ► Wirtschaftspolitik
ISBN-10	0-691-16572-6 / 0691165726
ISBN-13	978-0-691-16572-1 / 9780691165721
Zustand	Neuware