Economic Insights – September 2013

Five years ago this month, the economy was sucked into a financial panic, as the collapsing housing bubble triggered the sub-prime mortgage crisis. The damage was compounded by ill-conceived mark-to-market accounting standards and a web of opaque derivatives, which caused the financial markets to freeze.

Rather than change the rules quickly to help alleviate the crisis, Henry Paulson at the Treasury and Ben Bernanke at the Fed pushed TARP and Quantitative Easing. In the six months after TARP was passed and QE first went into effect, th.....