Around the Institute

2009 DC Salon

April 25, 2009  • Institute Contributor

From Economic Crisis to the New New Deal
The United States, along with much of the world, faces the most challenging economic crisis since the Great Depression. Output is falling, unemployment is rising, and deflation is a clear and present danger. Despite remarkably bold policy initiatives undertaken in recent weeks both by the Treasury and the Federal Reserve, there is little sign yet that the economy is responding to treatment. Not since the election of FDR has a new president taken office in such a daunting environment.Our seminar will address four main questions. How did we get into this mess? How do we get out of it? How do we reduce the risk that it might happen again? And how will the crisis and the response to it shape the future of the U.S. economy? We will look for the financial roots of the crisis in the U.S. mortgage business, in Federal Reserve policy during the earlier part of this decade, in global economic imbalances and capital flows, in the culture of Wall Street, and elsewhere. We will ask whether the policy response up to now has been adequate and well-designed, and what more needs to be done. We will look with particular care, of course, at the proposals of the new administration. And we will look further ahead, asking what changes are needed to our systems of financial regulation and broader economic governance—domestically and internationally—if we are to avoid making the same mistakes again. And we will strive to put the crisis and its resolution in a broader historical context. How deep do the roots of this emergency go? What, if anything, does the financial meltdown tell us about the underlying defects of “Anglo-American capitalism”? Will Obama’s New Deal, by design or otherwise, change the United States as profoundly as FDR’s did?  
Moderated by: Clive Crook, senior editor, The Atlantic, columnist, National Journal, and commentator, the Financial Times