How Bad Was It? The Costs and Consequences of the 2007 – 09 Financial Crisis, by Tyler Atkinson.
The 2007 – 09 financial crisis was associated with a huge loss of economic output and financial wealth, psychological consequences and skill atrophy from extended unemployment, an increase in government intervention, and other significant costs. Assuming the financial crisis is to blame for these associated ills, an estimate of its cost is needed to weigh against the cost of policies intended to prevent similar episodes.
We conservatively estimate that 40 to 90 percent of one year’s output ($6 trillion to $14 trillion, the equivalent of $50,000 to $120,000 for every U.S. household) was foregone due to the 2007 – 09 recession.
The cost of letting the financial industry run the economy for their own benefit. Who gets to manufacture money? Do they profit by it? Why do bureaucrat/bankers set the most important price in the economy, the overnight interest rate? Why isn’t it set by the free market? Didn’t price setting by bureaucrats go out of fashion after the fall of the Soviet Union? Why does the Australian head of the Reserve Bank get paid twice as much as our prime minister?
hat-tip Mark Ellis