Readers interested in John Allison’s appearance at Trump Tower may also be interested in Arnold Kling’s review of Allison’s book, The Financial Crisis and the Free Market Cure, which appeared in the October 2012 issue of Reason Papers.
When it comes to the financial crisis of 2008, the conventional view seriously under-estimates the extent to which collectivization of financial risk was the cause of the problem and seriously over-estimates the extent to which strengthening this collectivization represents a long-term solution. I am in complete accord with Allison on that score. However, I do not share his view that there is a free market “cure.” At best, there are movements in the direction of the free market that would reduce the costs of regulation without increasing the risks of another meltdown. However, such changes will not be made as long as the conventional history of the crisis—which treats it as resulting from the loss of will to regulate—holds sway. And I do not believe that, in the end, Allison’s book will have much of an impact on converting those who hold the conventional view.
Read the whole thing here (4 page PDF).
H/t: Alison Bowles (for the WSJ article)