Reading List for the Current Financial Crisis

Over the last couple of weeks, I have been captivated by the happenings on Wall Street. It truly does seem like a critical time for our great nation, and one can only hope that the people handling this crisis will make the right decisions. I do feel that we’re in good hands, because Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke are well-respected across the board and are by all accounts two of the smartest people in the financial world. I think we all just have to trust them. It’s going to be hard for me or anyone to second-guess those guys in 5-10 years, because most economists say there is nothing close to a historical precedent for the current crisis. In any case, I wish I had a more formal education in finance and economics, so I could better understand what’s going on. But I don’t, so I’ve just been reading as much as I possibly can. Here are the best articles I have run across, in no particular order:

• Freddie Mac and Fannie Mae: An Exit Strategy for the Taxpayer – from the Libertarian think tank the Cato Institute; includes a timeline of the history of Fannie Mae and Freddie Mac.
• AIG’s Troubles and Why They Matter – New York Times Illustration.
• New Agency Proposed to Oversee Freddie Mac and Fannie Mae – from Stephen Labaton at the New York Times. Notice that this article was written five years ago – of course the proposal never came to fruition.
• Who Is To Blame For The Subprime Crisis? – from Investopedia.
• The Social Imperative of Sound Money – opinion piece from the Ludwing von Mises Institute, a Libertarian academic organization; it is a bit critical of Henry Paulson.
• Seven Deadly Sins of Deregulation — and Three Necessary Reforms – opinion piece by Robert Kuttner, a liberal economist. Though I don’t agree with his stance on this issue, it’s important to include an opposing viewpoint.