A Mystery in Which Everyone is Guilty - Johan Norberg on "Financial Fiasco"

A loose monetary policy that created lots of cheap money, government interventions into the housing market, and the hubris of Wall Street firms deemed "too big to fail" combined to send the world economy into a tailspin, argues Swedish author Johan Norberg.

Reason senior editor Michael C. Moynihan sat down with author Norberg to discuss his latest book Financial Fiasco: How America's Infatuation with Homeownership and Easy Money Created the Economic Crisis, an overview of what caused the current financial crisis (and what did not) and how politicians of all parties and all ideologies helped make the problem much worse.

For downloadable versions please visit www.reason.tv.

Approximately 10 minutes. Shot by Meredith Bragg and Dan Hayes. Edited by Dan Hayes.

Category:

News & Politics

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• Johan Norberg
• Michael C. Moynihan
• Financial Fiasco
• reason.tv
• reasontv
• reason
• magazine
• CATOtoo
• big
• to
• fail
• the cato institute

[Elasaltaculos]

Crisis in capitalism? Are you serious? Wouldn't we have to have free markets in the United States in order to blame the free market?

The crisis happens because we are moving away from free market capitalism.

[Moragauth]

It is incredible how many people blindly trust in the gov't, when it's the mother of all monopolies.

[JohnMYX]

I'd go gay for Johan Norberg

[samm1809]

@Moragauth oh my god. it's quotes like that that are remembered for a thousand years.

[samm1809]

@Elasaltaculos they'll never learn.

[hellofaname]

fuck! johan lost the ponytail.

[Myndir]

Re- the housing bubble, few people mention the China factor: cheap imports in most good suppressed prices, but the money supply had still increased dramatically. As a result, in a vindication of monetarism, people continued to spend and ultimately this had a price impact where external supply was NOT a factor: houses. You can't buy houses from China, so increased demand had a big impact where supply was least extendable. House price inflation, as all inflation, was a monetary phenomenon.

[3martijns]

DEM LIBS were main cause, with ACORN, FANNIE, FREDDIE.

[oiuoiu988]

ok, this is a coincidence that i found your comment on the day we were commenting back and forth about austrian economics but the guy in this video is describing austrian business cycle theory (see my comment below). austrian economics is part of praxeology, which you may have found out by now is the science of human action. kinda weird running into YOU here lolol

[oiuoiu988]

because the cato institute doesnt want to project legitimacy onto austrian economics because a lot of government economists would be out of work if they acknowledged the legitimacy of the austrian business cycle.

[Skyler827]

Ok, I think It's an overstatement to say illegitimate force. We all have to pay taxes, even if we don't like how the money is spent. The main thing I was saying is a government is allowed to run huge federal deficits, but companies don't have that kind of authority, and go out of business (in theory) once they go under. The federal government just tends to accumulate debt, while companies and corporations just tend to accumulate profit. That's why the economy needs to be left to co./coorp.s

[jvillard]

What illegitimate force?