Bailouts: Public Money, Private Profit

Bailouts: Public Money, Private Profit

by Robert Wright (Editor)


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Today's financial crisis is the result of dismal failures on the part of regulators, market analysts, and corporate executives. Yet the response of the American government has been to bail out the very institutions and individuals that have wrought such havoc upon the nation. Are such massive bailouts really called for? Can they succeed?

Robert E. Wright and his colleagues provide an unbiased history of government bailouts and a frank assessment of their effectiveness. Their book recounts colonial America's struggle to rectify the first dangerous real estate bubble and the British government's counterproductive response. It explains how Alexander Hamilton allowed central banks and other lenders to bail out distressed but sound businesses without rewarding or encouraging the risky ones. And it shows how, in the second half of the twentieth century, governments began to bail out distressed companies, industries, and even entire economies in ways that subsidized risk takers while failing to reinvigorate the economy. By peering into the historical uses of public money to save private profit, this volume suggests better ways to control risk in the future.

Additional Columbia / SSRC books on the privatization of risk and its implications for Americans:

Health at Risk: America's Ailing Health System—and How to Heal ItEdited by Jacob S. Hacker

Laid Off, Laid Low: Political and Economic Consequences of Employment InsecurityEdited by Katherine S. Newman

Pensions, Social Security, and the Privatization of RiskEdited by Mitchell A. Orenstein

Product Details

ISBN-13: 9780231150545
Publisher: Columbia University Press
Publication date: 02/04/2010
Series: A Columbia / SSRC Book (Privatization of Risk)
Pages: 160
Product dimensions: 5.50(w) x 8.25(h) x (d)
Age Range: 18 Years

About the Author

Robert E. Wright is holder of the Nef Family Chair of Political Economy at Augustana College, a research economist at the National Bureau of Economic Research, editor of Pickering and Chatto of London's financial history monograph series, and a guest curator for the Museum of American Finance.

Table of Contents

1. The Evolution of the Reconstruction Finance Corporation as a Lender of Last Resort in the Great Depression, by Joseph R. Mason, Louisiana State University and the Wharton School
2. Financial Crises and Government Responses: Lessons Learned, by Benton E. Gup, University of Alabama
3. Hybrid Failures and Bailouts: Social Costs, Private Profits, by Robert E. Wright, NYU Stern School of Business
4. After the Storm: The Long Run Impact of Bank Bailouts, by Guillermo Rosas and Nathan M. Jensen, Washington University in Saint Louis

What People are Saying About This

Nouriel Roubini

Do bailouts make good financial sense and benefit the public at large? What are the ethical issues surrounding government bailouts? How far back does this history go in America and what have been the consequences of these interventions? This book tackles these questions as well as, most importantly, whether government bailouts speed up financial recovery. Compact, easy-to-read, yet firmly grounded in academic scholarship, Bailouts is an excellent introduction for nonspecialists interested in the costs and benefits of bailouts.

Nouriel Roubini, New York University Stern School of Business, and coauthor of Bailouts or Bail-ins: Responding to Financial Crises in Emerging Economies

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