Western governments have overcome or been ruined by investment bubbles since at least the time of Emporer Tiberius, when a fall in the prices of ostrich feathers and ivory combined with other events to produce a “perfect storm” for Roman finance houses.
I learned this and other fascinating facts about financiers’ finaglers’ reliance on “moral hazard” to backstop investments, reading The Road from Ruin during travel to and from Washington, D.C., coincidentally as financial reforms were being hammered out in Congress.
The subtitle of the book, whose author was interviewed at KPCC back in March, is “How to Revive Capitalism and Put America Back on Top.” More on the book’s recommendations for financial reform legislation, and a comparison to what is now before the Senate, later this week.
The initial package was passed during an early summer heat wave, which I experienced first-hand. Senator Robert Byrd (D-WV) was initially hospitalized with symptoms of dehydration and heat exhaustion; his death has thrown passage of the financial reform bill into doubt.
Next Post: Financial Panics in The Road from Ruin.
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