Collected posts on the financial crisis

governmentLinks to my posts over the last three years on the causes of the crisis. This is an ongoing project, and I’ll add new items to the Financial Crisis page as they are posted. Ten posts:

1. What is the US economy? Introduction. Before blaming the economic crisis on either government regulation or free enterprise, we need to know what kind of economic system the U.S. had before the crisis. A survey of the relevant factors in identifying the degree of capitalism or socialism then in place.

2. Deregulation? The Federal Register’s size: Data on one measure of government regulation — page counts of its publication of new rules each year.

3. register1991When was the financial sector deregulated? Data on two measures of regulation: The size of the federal government’s annual budget for regulating the financial and banking sector, and the total number of government employees regulating that sector.

4. The Subprime Mortgage Crisis: A simplified flowchart of subprime mortgages’ contribution to the crisis. Presidents, congressmen, Fannie Mae, and lenders’ changing incentives.

5. longerPathologies of the mixed economy (or, How we got into this frackin’ mess): A big-picture overview of the development of our mixed economy. Integrating developments in ethics, economics and political history, and public choice. A video-lecture version.

6. Money and monetary systems: An introductory contrast of private/competing money systems to our government/monopoly money system. Includes an analogy of books to money: Books are to the intellectual realm what money is to the economic realm.

7. Has the Federal Reserve been a failure? A report on a conference paper given by economic historians George Selgin and Lawrence White comparing the Fed’s original mission with its track record over the twentieth century.

8. wall-streetWhat is the OWS complaint? A question for those venting their frustration at Wall Street rather than Pennsylvania Avenue.

9. Warren Buffett and the power of corporations: On the crucial distinction between political power and economic power.

10. John Allison on the financial crisis: I can’t take any credit for this excellent talk, but the former CEO of BB&T had a front-row view of the events leading up to and during the crisis. I also can’t take any credit for economist George Reisman’s depressingly clear overview explanation.

[Return to the Financial Crisis page. Return to the Business and Economics page. Return to the main page.]

Deregulation? The Federal Register’s size

Following up on my post entitled “When was the financial sector deregulated?”

register1991Another crude measure of regulation or deregulation is to count the number of pages in the U.S. Federal Register. The Federal Register is the government’s daily publication of new and proposed rules. Some of the rules are trivial and some have large impact; some are proposed and some are final; some are clarifications and some are new. But cumulatively the Register‘s increasing or decreasing bulk tells us something about regulatory trends.

For the last generation, here are the Federal Register‘s total page counts for selected years:

1980s: 52,992 pages per year average.
1990s: 62,237 pages per year average.
2005: 73,870 pages.
2010: 81,405 pages.

(Side note: This year alone, the Register has published about 590 items related to the Dodd-Frank Wall Street Reform and Consumer Protection Act.)

Question: Does anyone know of a Register page count by economic sector? For example, have number of pages devoted to regulating the Finance and Banking sector increased or decreased over that time?

Of course, page-measurement is a very crude indicator. It doesn’t tell us whether particular rules were good or bad, and it doesn’t tell us whether the overall effect of the rules was positive or negative. So we also have to discuss at least two other follow-up pro-regulation arguments:

1. “Magic Bullet” explanations of the financial crisis: Yes, government regulation increased overall–but if only government regulators hadn’t altered Regulation #355,017, the financial crisis would have been avoided. Or: If only the regulators had also enacted Regulation #4,854,229, the crisis wouldn’t have happened.

2. “Relative-Size Inadequacy” arguments: Yes, regulation increased, but the size of the financial sector increased at a higher rate, so under-regulation was the cause of the crisis.

And the deeper, underlying pro-regulation argument that:

3. Left to themselves, financial markets are predatory and incapable of self-regulation, so top-down government regulation is necessary.

Clyde Wayne Crews. Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State. Cato Institute, 2002.
Clyde Wayne Crews, Jr. Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State. Competitive Enterprise Institute, 2006.
The 2010 page count: Politifact Virginia.
Federal Register: The Daily Journal of the United States Government.

Related: My essay, “Defending Shylock: Productive Work in Financial Markets.”
What is the US economy? Introduction.