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Governmental Intervention In An Economic Crisis, Robert K. Rasmussen, David A. Skeel Jr.
Governmental Intervention In An Economic Crisis, Robert K. Rasmussen, David A. Skeel Jr.
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This paper articulates a framework both for assessing the various government bailouts that took place at the onset of Great Recession and for guiding future rescue efforts when they become necessary. The goals for those engineering a bailout should be to be as transparent as possible, to articulate clearly the reason for the intervention, to respect existing priorities among investors, to exercise control only at the top level where such efforts can be seen by the public, and to exit as soon as possible. By these metrics, some of the recent bailouts should be applauded, while others fell short. We …
Bankruptcy Or Bailouts?, Kenneth M. Ayotte, David A. Skeel Jr.
Bankruptcy Or Bailouts?, Kenneth M. Ayotte, David A. Skeel Jr.
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The usual reaction if one mentions bankruptcy as a mechanism for addressing a financial institution’s default is incredulity. Those who favor the rescue of troubled financial institutions, and even those who prefer that their assets be promptly sold to a healthier institution, treat bankruptcy as anathema. Everyone seems to agree that nothing good can come from bankruptcy. Indeed, the Chapter 11 filing by Lehman Brothers has been singled out by many the primary cause of the severe economic and financial contraction that followed, and proof that bankruptcy is disorderly and ineffective. As a result, ad-hoc rescue lending to avoid bankruptcy …
The Legal Origins Theory In Crisis, Lisa Fairfax
The Legal Origins Theory In Crisis, Lisa Fairfax
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The Legal Origins Theory purports to predict how countries respond to economic and social problems. Specifically, the legal origins of the United States should strongly influence the manner it approaches economic problems and its approach should be distinct from the response of civil law countries. If the theory is accurate, America's legal tradition should have a profound impact on its response to the crisis. This Article seeks to test the boundaries of the theory by assessing whether it could have predicted the manner the U.S. responded to the current economic crisis. After analyzing the U.S. response to the crisis, this …