Regulatory Interventions in the 2008 US Post-Economic Crisis - Assignment Example

?Regulatory Interventions in the 2008 US Post-Economic Crisis Outline I. Introduction II. Local Financial Market and Global Economic Background Before the Recession a. About 30 Years of Financial Deregulation b. Global Trade Imbalance c. Stock Market Risk Mismanagement d. Unsustainable Government Policies? III. USA’s Regulatory Response to the 2008 Recession a. Stimulus Funds for the American Recovery and Reinvestment Act (ARRA) b. Common Regulatory Measures Implemented c. Dodd-Frank Act d. Financial Reform Bill 2010 IV. Positive Impact of the Regulations Towards Economic Recovery a. Gradual Rise of Employment b. More Benefits and Incentives for the American People c. Prevention of Corporate Massive Retrenchments d. Worldwide Recovery Thru USA Recovery V. Negative Impact of the Regulations Favoring Social Welfare Economy a. Sudden Growth in USA Public Debts b. Artificial, Weak, and Unstable Economic Growth c. Unpopularity to the Rich and Objections to Tax Policy VI. Conclusions Abstract The US Financial Crisis has dragged the economy with its high unemployment rates since the time the economic recession began in 2008. A key expected solution for faster recovery has been high employment which can revive the payments of homeowners to investors of the housing industry. However, there is a need to generate productivity following the series of Stimulus Funds in order to multiply the capital infused in trillions of dollars. Or the economic recovery will be transient and may return to perform another economic recession, right after funds are consumed. Regulations spearheaded by the Dodd-Frank Act are meant to make the financial institutions and big corporations more careful in their risk management. Such regulations were found to be critical after deregulation was given a chance to work for over 30 years and yet failed with its grandstanding recession. The question remaining is how funds can be effectively channelled to entrepreneurs given the past experiences wherein a greater part of the Stimulus Funds never reached the Small Business Entrepreneurs (SBEs) who can use capital to generate more productivity, hire people, and earn profits. Most of the Stimulus Funds went to social welfare and large corporation bail outs. Further study is required to evaluate the possibility of reinstating the Glass-Steagall Act for the purpose of further regulating the banks to focus on diligently supplying funds to SBEs and supporting those SBEs with sufficient guidance in order to earn successfully. This can logically stop the banks’ vested interests on Investment Portfolios since they will not be allowed to engage in other investment activities except to lend entrepreneurs what they will need in order to progress. I. Introduction Right after the economic recession declared by the National Bureau of Economic Research (NBER) to have lasted December 2007 all the way to June 2009, the phenomenon was described as not only “the longest and deepest recession of the post-World War II era” but also the “largest decline in output, consumption, and investment, and the largest increase in unemployment, of any post-war recession” (Labonte, M. 2010, p.2). Stimulus funds from the Federal Reserve worth more than a Trillion Dollars along with the monetary policy of maintaining almost zero interest rate, facilitated the recovery. $700 billion, which was later reduced to $ 470 billion infused into the financial system was done via a program called Troubled Assets Relief Program (TARP) in October 2008. The US Government purchased real estate properties that lost their values as a result of the recession, for the purpose of adding some liquidity to the banks. As of mid-2012, most programs under the TARP were reported closed. Major beneficiaries rescued were Fannie Mae and Freddie Mac, AIG, Citigroup, and Lehman Brothers of the financing sector, and later included General Motors and Chrysler of the automobile sector. Saving the giant enterprises reduced the need to retrench and lay-off employees. However, there were economic and moral issues about giving priority to supporting the rich owners while the greater majority were not similarly rescued. The government of people turned out to be undemocratic by passing on the financial burden to the people’s government at the expense of the great majority, to favor a handful minority who are rich. Thus, the Dodd-Frank Act amended TARP, reduced the support to $ 470 billion down from $ 700 billion, and regulated its future use. Not all of the funds utilized to support large enterprises were expected to return. Much of the amount became non-cash assets in the form of government ownership of some assets or businesses. As of May 2012, losses written off reached $ 15.64 billion. See Table 3 – TARP Funds Outstanding or Lost in the Appendix Section. Webel, Baird (2012, p. 6) estimated the total cost of TARP to the Congressional Budget to have reached $ 32 billion by 2012. While banks and big businesses ventured into rebuilding their capital through rescue loans granted even at a time when risk of loss was high, economists sought the root causes of this 2008 recession. One of those reasons was the sudden rise in prices of oil, from $51 / barrel as of early 2007 to over 250% of that amount, or $129 / barrel by July 2008 (p.10). Actually, there were additional major reasons like the weak regulation over the financial market in the USA. All the major reasons will be the basis for analyzing USA’s post-recession regulations from 2009 to the present. II. Local Financial Market and Global Economic Background Before the Recession a.34 Years of Financial Deregulation Kessler, G. (2012) believes that as a result of the analysis by the Obama Administration, the regulations tended to favor the middle class while rich people had to be taxed more. Deregulation for 30 years from the time of the Bush Administration back to the Clinton Administration and even earlier had proven to be costly to the Americans, because the rich got much more while the less suffered more. Sherman, M. (2009, p. 1), in the case of Marquette vs. First of Omaha traced deregulation way back in 1978 when the US Supreme Court allowed the banks to practice usury nationwide, whereby the ceiling for usury was eliminated. One other high-risk decision was a repeal of the Glass-Steagall Act of 1933. It was supposed to disqualify commercial banks from engaging in Investment Brokerage, to protect depositors against possible exposure of cash deposits to risky investments performed by the banks themselves. One advantage of the Glass-Steagall Act was that it prevented banks from serving the depositors with a conflict of interest that tended to favor the interest of maximizing profits for the bank by exposing the depositors’ money. This was not present when the Banking Act of 1933 was repealed. During the recession, the Financial Crisis Inquiry Commission (2011, p. xxxvii) discovered that the economic crisis was avoidable and definitely made by human error, For example, the Federal Reserve’s Monetary Policy Board could have prevented the flow of overvalued real estate properties by setting mortgage security standards and imposing procedures to check the true value of securities on the papers and not on the basis of evaluations of credit agencies that analyze risks and property values. The FCIC’s conclusion included discovery of the lack of transparency, high risk lending, neglect to check the security behind the mortgage, and the lack of initiatives by SEC and the Monetary Policy Making Body to control the high risk lending. The leverage ratios of financing companies like Lehman Brothers, Bear Stearns, Merrill Lynch, Goldman Sachs, and Morgan Stanley averaged 40:1 as of the time of the recession. They hid that leverage by window dressing, by working with derivatives, and other means of hiding the facts. Fannie Mae and Freddie Mac had a leverage of 75:1. These are evidences of the lost benefits without the Glass-Steagall Act. Because banks themselves were allowed to do Investment Banking, much of the financial resources of the country would be cornered by the banks themselves instead of supporting more and more entrepreneurs through banking facilities. Loan requirements became more strict because of the more probable reason that the banks themselves want the capital for their own investments. Borrowers would tend to be limited because the preferred users of funds are the lenders themselves who are allowed to invest funds in their own Investment Operations. Under the Glass-Steagall Act, banks were prevented from engaging in non-banking activities. Thus, in order to earn in the business of banking, lending to qualified borrowers had to be done. To avoid too much risk, the lending activities had to be spread to more borrowers in good standing. After the repeal of that Banking Act of 1933, it is logical to conclude how banks must have redirected their priority towards enriching the banks rather than serving the public with sound financial advices and services so that they can deposit more into banks. Banks can have their own Investment Portfolio supported by depositors’ money, while fewer Entrepreneurs can have access to better distribution of wealth since banks will naturally prefer to invest in their own businesses outside of the banking industry. The Financial Modernization Act, otherwise known as Gramm-Leach-Bliley Act replaced the Glass-Steagall Act by 1999. And the present result has been the stifling effect on the majority’s needs for business financing since the banks would allow lending only under difficult terms for the borrowers, e.g. with interest rates exceeding the original Usury Rates, and only if there are more funds after the Investment Banking Operations are already satisfied. b.Global Trade Imbalance Verick, Sher and Islam, Iyanatul (2010) identified the realities prior to the economic recessions as a means to understanding what happened and what are the reactions taken as a result of the recession and after the recession. Findings included the following: (1) The monetary policy was loose. (2) Financial regulation was lax. (3) Risk was not foreseen accurately. (4) There was a global trade imbalance with the USA spending beyond its means, while China sold so much in order to grow fast. The imbalance stemmed from the savings generated by oil exporting countries and rapidly growing economies like China. In effect, the deficits of USA and the UK were funded by emerging economies, c.Stock Market Risk Mismanagement Mortgage default was just one of the reasons for the liquidity problems that characterized the economic recession in 2008. Murphy, A. (2008, p. 2) also identified securities being traded in the stock market to be very risky because the debts supposed to be “insured” by the financial instruments were estimated to be over 400% the value of the security. Owners of such securities did not even practice inspecting the contents of the documents. They were dependent on the analysis of brokers who study the trend of values in the stock market. The so called “credit default swaps” (p.8) were underpriced. And no premiums were charged for underpricing. Computations of analysts did not include any forecasted average loss per year out of trading the stocks. This brought into existence the popular “credit bubble” (p.8) . It became a part of the deregulated financial market for Investment Firms or Investors to hedge investments on loans and bonds backed by credit default swaps as the insurance. Many investors thought that securities being traded were free from risks due to an insurance from big and well-known banks. Little did people know they were dealing with high risk financial instruments that could lose their value when the bubble finally bursts. What this means is simply that no investor would like to buy or takeover the financial instruments, and no bank will be willing to lend against the securities. In reality, the loss of liquidity in the financial market triggered less and less willingness to lend, and higher need for cash. Borrowers outnumbered lenders until only the government could lend. This usually means that lenders become stricter in their lending requirements, more conservative in valuations, and wary about sudden rise in the demand for cash, if at all there is any plan to lend. d.Unsustainable Government Policies? Horwitz, Steven (2012, p. 4) considered the economic crisis of 2008 as the evidence of failed financial markets deregulation. However, he traced the root cause to a government “misguided policy” of working for unsustainable growth. He discusses the Austrian Theory of booms and busts in an economy and matches the recent recession to have followed this theory which inevitably ends up in a sudden decline, which happens to be the inevitable correction of an erratic government policy. The misguided policy was suspected to be the excessive lending without a corresponding additional savings for leverage. That was true in the Austrian Theory because it involved Central Banks creating more money for lending. But in the actual US financial market, there was not much of money creation prior to the recession. But there was no control over the leverage ratios between equity and debts. Investment banks kept borrowing using assets as securities and then lending as they accepted more assets. When the assets lost their value, and defaults created liquidity problems, there were no more willing lenders to cover for the deficits brought about by defaults. It was during the recession when government intervention via Stimulus Funds increased money supply. Theoretically, however, there was a similar over-investment in capital assets which caused a lot of bankruptcies, bailouts, retrenchments, mergers, and other ways of meeting the recession. Loanable funds were diverted to the housing industry. These could not generate immediate returns like exports or manufacturing and marketing of products in demand, except in a situation wherein the homeowners would be able to pay the monthly amortizations until houses and lots are fully paid. Employment of household members was imperative. But unemployment rate soared from less than 5% to about 10%. Figure 1 in the Appendix Section shows why homeowners were forced to default on their amortizations. Murphy, Austin (2008) pinpointed unrealistic assumptions to be the root cause of the economic recession. Mortgage defaults were just symptoms. There was miscalculated pricing of debt swaps as a result of seemingly valuable assets (e.g. because of the presence of insurance against losses due to defaults). Mortgages were backed by securities and were insured (for example) by AIG. The analyses of brokers were trusted until they were proven wrong. Buyers did not bother to look at the papers being traded. This process could not possibly last without encountering errors due to wrong assumptions, which inevitably needed corrections. The practices of Investment Banking were also not sustainable. III.USA’s Regulatory Response to the 2008 Recession Stimulus Funds for the American Recovery and Reinvestment Act (ARRA) has reached $772 billion from February 2009 to November 2, 2012. $ 290.7 billion went to Tax Benefits. $ 244.8 B was allocated for grants, loans, and contracts. And $ 236.5 B went to entitlements. To show transparency per State and per specific beneficiaries, there is a website for anyone who wishes to check on the details at Recovery.gov “Track the Money” online. Figure 5 shows the many sectors that benefited over the years – Individual Tax Credits worth $131.8 B ; Education funds for student aid, training and employment services worth $ 91.2 B; Medicaid/Medicare $ 94.5 B; Unemployment Insurance Programs worth $ 61.1 B; Family Services, $ 44.0 B; Tax Incentives for businesses worth $ 32.6 B; and many more. a.Common Regulatory Measures Implemented Theoretically, increasing the growth of an economy should generate higher demand for goods and services. Tcherneva, P.R. (2011, pp. 3-4) recalled the Okun’s Law which states that a 3% decline in growth rate follows a 1% rise in unemployment. It is for this reason why government initiates pump priming the economy with Stimulus Funds in times of recession. With more funds, businesses will have more funds to generate more productivity. Then employment can rise and growth should follow. b.Dodd-Frank Act Congress passed what was originally entitled “the Dodd-Frank Wall Street Reform and Consumer Protection Act” which came to be known as “the Dodd-Frank Act”(Johnson, K. N. 2011, p.1299) for the purpose of regulating the complex financial system in USA. Deregulation in past years had created a variety financial institutions that did not exist prior to the repeal and implementation of the Glass-Steagall Act of 1933 and the Financial Modernization Act or Gramm-Leach Bliley Act of 1999. The observed financial institutions resorted to alternatives such as negotiations with government bail-outs in the form of loans and/or equity investments to cover for substantial deficits as a result of losses. There were those that filed their applications for bankruptcy (e.g. New Century Financial Corporation as early as April 2007; Ownit Mortgage Solutions, ResMae Mortgage Corp., Mortgage Lenders Network, Inc., and People’s Choice Home Loans had filed their bankruptcy applications even earlier in 2007). Others worked towards merging, acquiring, or disposal of some assets in order to operate profitably. 85-year old Bear Stearns was one of the examples of financial services companies that crumbled due to the effects of deregulations. It had borrowed up to 1000% or 10 X Bear Stearns Equity by 2007 in order to invest in the financial market for collateralized debt obligations (CDOs). Eventually, the financial crisis of Bear Stearns worsened and signalled other financial institutions to beware. Yet by 2008, Lehman Brothers encountered difficulties with getting government bailout funds to avert bankruptcy. Its filing of bankruptcy was considered “the largest bankruptcy in US history” (p.1311). Washington Mutual was placed under “receivership by the Office of Thrift Supervision” and was noted to be the “largest bank failure in the history of the United States” (p. 1311). These were just a few of the examples considered by the Dodd-Frank Act which ventured to oversee financial institutions in trouble with the credit and capital market within USA. It was meant to supervise the Federal Deposit Institution Corporation (FDIC), the regulation for hedge funds, Federal Reserve Banks, the insurance regulating agency of government, holding companies of banks, the derivatives market, and to create a Consumer Financial Protection Bureau (p.1313). There were many other benefits gained from the Dodd-Frank Act. For one, it provided for incentives to trim down the size and cost of operations. Companies with over $50 billion had to follow recommended higher standards of capitalization and liquidity, and limited incentive compensation. A Financial Stability Oversight Committee was created by the Doff-Frank Act. With such an Act, liquidation of even big banks identified among those “too big to fail” would be made possible through orderly procedures. This has the effect of obliging the big banks to be more careful with future transactions that would have a significant impact on the risk management, because the option of bail-outs might no longer be allowed in the presence of a way to shutdown big banks without causing great damage to the financial system. c.Financial Reform Bill 2010 III. Positive Impact of the Regulations Towards Economic Recovery a.Gradual Rise of Employment Figure 3 shows a little improvement in the unemployment trend. The unemployment rate remains high. But there have been reports of ongoing hiring of the unemployed. There is a logical explanation for the slow growth in the employment of people. Most of the Stimulus Funds have not been utilized for generation of productivity. Instead they were used to bail out large corporations, and to supply the social welfare requirements of the people. b.More Benefits and Incentives for the American People The website of Recovery.gov gives a very detailed list of benefits enjoyed by people in the USA. See Figure 5 for details of the different purposes of ARRA Stimulus Funds. They can be summarized in terms of benefits to individuals who are employed or unemployed, benefits to encourage businesses to generate additional employment, benefits to entrepreneurs who might want to venture into productive endeavours, benefits for people who need health care, and even benefits for those who simply need to eat something each day while not knowing what to do to overcome their poverty. c.Prevention of Corporate Massive Retrenchments Perhaps the only reason why large corporations were bailed out was because thousands of people would lose their jobs. Those organizations were multinationals. Thus, their workers are not only in the USA but also in many other countries. As a matter of fact, Andrews, M. (2011) emphasized the tendency for other countries to imitate the reactions of the US government to recession. Moora, Mart (2010) presented the big picture of the impact of the 2008 Economic Recession that started in the USA, onto the other countries like UK, Germany, China, and Japan. He mentioned how the White House realized by 2009 government could have regulated the financial system to avoid a recession, but failed to do so (p. 10). There were six (6) ways proposed to overcome difficulties encountered during the recession. These are: (1) The creation of a New Financial Services Oversight Council. This regulating body should coordinate the different agencies in order to direct all of them towards a common goal and to minimize risks;(2) A New Federal Reserve Authority; (3) The appointment of a New Chief who would serve as “National Bank Supervisor” (p.10) for “all federally chartered banks”;(4) Reduction of thrift banks and the loopholes of regulations; (5)Improvement of capitalization for all financial firms; (6) And SEC registration of hedge fund advisers and the pooling of capitalization. In other words, government felt it was time to exert closer supervision and have better control over the situation of the financial system, in order to correct the crisis. d.Worldwide Recovery Thru USA Recovery USA is a major trading partner of many European and Asian countries. A weak economy within America leads to reduction in demand for goods from countries exporting to USA. Thus, when there were Stimulus Funds to improve the money supply and ability of people to buy goods and services, productivity of countries supplying USA with some products naturally improved. However, as USA became more indebted, mounting pressures against further Stimulus Funds took place in Congress. Unemployment seemed to remain high since the time of the recession. There was a question of whether or not the recovery plan was working to uplift the economic standing of the country. On one end, the people heard about more money supply made available to reduce the impact of recession by preventing further retrenchments. The other end of the facts showed much of the Stimulus Funds were meant to bail out large enterprises. Such funds could not generate additional productivity for the economy. Funds reaching the individuals gave only temporary relief. New jobs opportunities came in trickles. Thus, economic recovery of other countries depending on the USA recovery became sluggish and continues to be so until the present. IV.Negative Impact of the Regulations Favoring Social Welfare Economy a.Sudden Growth in USA Public Debts The Obama Administration was heavily criticized for raising the debt-to-GDP ratio of the USA during his term. Indeed, the country’s debts soared from $ 9 Trillion in 2007 to $ 13.5 Trillion by 2010. Figure 6 in Appendix Section gives more details in absolute dollar figures. b.Artificial, Weak, and Unstable Economic Growth Romero, P.J. and Edwards, J.A. (2012) cited the theoretical worry of Economists whenever Stimulus Funds are implemented. Prices of goods and services can go up due to a sudden rise in money supply. For the most recent recession, they predicted higher taxes, lower growth rates for targets, lower stock prices, and eventual stagflation. The increase in money supply will be temporary until such time that funds are channelled to generate profitable productivity. There may be some tax credits for people to have more means, or incentives for businesses to generate more employment, or simply giveaways to incease domestic consumption. But these will translate to a temporary robust economy unless the funds added are utilized to earn, build business activities, and generate ongoing additional employment. c.Unpopularity to the Rich and Objections to Tax Policy The class of people who certainly do not want more money supply to be enjoyed by the people are those who fear inflation and devaluation of the dollar with respect to many commodities. Only those who have substantial cash to devalue would not want their wealth to lose its value. Taxing the rich earners will definitely disappoint those earning so much more than the average Americans. Instead, what the rich want is to capitalize on their available resources in order to earn more and to employ people who should work in order to earn their money supply. IV. Conclusions After many scholarly studies tried to trace the root causes of the 2008 economic recession, some definite findings guided government to regulate the financial market. One root cause was risk mismanagement. Another involved the effect of over 30 years of deregulating the financial system. Many noticed the over-investment in capital assets, particularly in the housing industry, by the banks, which had the effect of lowering the liquidity of the financial system. In response to the destructive effects of economic recession, government initiated the TARP under the previous administration, and followed up with ARRA. This gradually increased the number of people employed in the USA, aside from giving millions of people as well as businesses some financial benefits in order to rise up from the losses. The Dodd-Frank Act regulated the system of bailing out companies by providing the system with closer supervision and imposing liquidation procedures such that closing businesses will not cause great damage to the entire economy. The repercussion of regulations has been for the purpose of making sure that Stimulus Funds are properly utilized to increase the employment and growth of the country, instead of utilized for the private interest of bailing out reckless entrepreneurs or enriching already rich banks. In due time, those regulations should benefit the greater majority as well and not just the giant corporations and big banks who invest funds abroad just because it is more profitable to do so. Although the financial crisis is not yet over until after low unemployment rate is achieved, at least it is clear how the process should be in order to fully recover. One further study that should be done is an evaluation of the option to re-instate the Glass-Steagall Act for the purpose of obliging the banks to serve the interest of private business developments rather than self-interest of stockholders of banks and their investment banking activities. References Andrews, Matt. Developing Countries Will Follow Post-Crisis OECD Reforms But Not Passively This Time. Governance: An International Journal of Policy, Administration, and Institutions. Vol. 25 Issue 1 (December 27, 2011) Appelbaum, Eileen; Batt, Rosemary; and Lee, Jae Eun. Financial Intermediaries in the United States: Development and Impact on Firms and Employee Relations. Center for Economic and Policy Research (CEPR), August 2012. Baily, Martin Neil. Restoring Economnic Growth. SERIES: Campaign 2012 Research Papers No.5 / 12. Viewed November 12, 2012 @ http://www.brookings.edu/research/papers/2012/03/07-econgrowth-baily Bermeo, Nancy and Pontusson, Jonas (Eds). 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Seton Hall Law Review, Vol. 40 Issue 4 Article 1. (November 9, 2011). Kessler, Glenn. Obama’s Claim that the Bush Tax Cuts Led to the Economic Crisis. The Fact Checker: the Truth Behind the Rhetoric. Viewed November 12, 2012 2012 @ http://www.washingtonpost.com/blogs/fact-checker/post/obamas-claim-that-the-bush-tax-cuts-led-to-the-economic-crisis/2012/09/30/06e8f578-0a6e-11e2-afff-d6c7f20a83bf_blog.html Labonte, Marc. The 2007-2009 Recession : Similarities To And Differences From the Past. Congressional Research Service, October 7, 2010. Moora, Mart. Global Crisis and Financial Regulations: Who Determines What? Cross-Country Analysis of China, Germany, Japan, UK, and USA. Colonial Academic Alliance Undergraduate Research Journal (CAAURJ) Vol. 1 Art. 10 (October 20, 2010). Viewed November 12, 2012 @ http://digitalarchive.gsu.edu/caaurj/vol1/iss1/10 Murphy, Austin. An Analysis of the Financial Crisis of 2008: Causes and Solutions. NY: Social Science Research Network, November 4, 2008. Reuters. Factbox: Highlights of US Financial Reform Bill. Reuters.com, June 25, 2010. Viewed November 13, 2012 @ http://www.reuters.com/article/2010/06/25/us-financial-regulation-bill-idUSTRE65O1DR20100625 Romero, Philip J. and Edwards, Jeffrey A. (Eds). Your Macroeconomic Edge: Investing Strategies for the Post-Recession World. New York, USA: Business Expert Press, April 12, 2012 Sherman, Matthew. A Short History of Financial Deregulationin the United States. Washington DC: Center for Economic and Policy Research, July 2009. Shierholz, Heinz, The US Economy’s Recovery is Stronger Than People Think. Economic Intelligence US News, January 24, 2012. Viewed November 13, 2012 @ http://www.usnews.com/opinion/blogs/economic-intelligence/2012/01/24/the-us-economys-recovery-is-stronger-than-people-think Tcherneva, Pavlina R. Fiscal Policy Effectiveness: Lessons from the Great Recesion. Levy Economics Institute of Bard College Working Paper No. 649. January 2011. US Congress. The Glass-Steagall Act a.k.a. The Banking Act of 1933. US EPA. American Recovery and Reinvestment Act of 2009: Overview of EPA’s Progress After One Year. Office of the Inspector General EPA-350-R-10-003, March 2010. Verick, Sher and Islam, Iyanatul. The Great Recession of 2008-2009: Causes, Consequences, and Policy Responses. IZA Discussion Paper No. 4934. May 2010.Viewed @ Social Science Research Network (SSRN) http://ssrn.com/abstract=1631069 Webel, Baird. Troubled Asset Relief Program (TARP): Implementation and Status. Congressional Research Service 7-5700; R4127, May 18, 2012. Williams, John C.. Bank Regulation in the Post-Crisis World. President’s Speech, May 4, 2012. Federal Reserve Bank of San Francisco Appendix Figure 1 – Losses / Cost of Implementing TARP [Source: Webel, Baird. Troubled Asset Relief Program (TARP): Implementation and Status. Congressional Research Service 7-5700; R4127, May 18, 2012. p. 6] Figure 2 – US Unemployment Rates in a Chart Up To 2011 (Source: Williams, John. US Shadow Government Statistics 1995-2011. Shadowstats.com, August 5, 2011 ) Figure 3 – US Unemployment Rates by Proportion of Labor Force (Source: William, John. Shadow Government Statistics: Unemployment Rates by Bureau of Labor Statistics. Shadowstats.com, November 2, 2012. Viewed November 14, 2012 @ http://www.shadowstats.com/charts/employment/unemployment/unemployment-rates) Figure 4 – Factors Identified in the Global Financial Crisis (Source: Verick, Sher and Islam, Iyanatul. The Great Recession of 2008-2009: Causes, Consequences, and Policy Responses. IZA Discussion Paper No. 4934. May 2010.Viewed @ Social Science Research Network (SSRN) http://ssrn.com/abstract=1631069 p.14) Figure 5 – Sectors Funded by ARRA Stimulus Funds (Source: www.Recovery.gov ) Figure 6 – USA National Debt History From 2000 – 2010 (Source: US Treasury. Historical Debt Outstanding – Annual 2000- 2010. Viewed November 14, 2012 @ http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm ) Read More