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The media and other statists have created a myth that the financial crisis was caused by banking deregulation and greed on Wall Street. However, banks were not deregulated. In fact, three major new regulations were passes during the Bush Administration: The Privacy Act, The Patriot Act, and Sarbanes-Oxley. Banks were misregulated, not deregulated. Also, there has always been plenty of greed (and fear) on Wall Street. However, there is not one shred of evidence there was a greed plague that swept the Street.
The financial crisis and failed recovery were primarily caused by government policy. The two main culprits were errors made by the Federal Reserve and government housing policy, specifically as executed by Freddie Mac and Fannie Mae, the giant government-sponsored enterprises that would never have existed in a free market.
My book, The Financial Crisis and The Free Market Cure covers this and other economic myths and misunderstanding such as the “shadow” banking system, fair value accounting, Pick-a-Payment mortgages and the like. However, as interesting as the economic discussion is, the real solution for our financial problems is philosophical and the cure was espoused by Thomas Jefferson in the Declaration of Independence: “Life, Liberty, and the Pursuit of Happiness.”
People on all sides of the political spectrum defend liberty, but few people understand why liberty is essential to human well-being. Government regulations put “balls and chains” on innovators and entrepreneurs and thereby, slow and eventually stop progress. Given man’s nature, socialism and communism are doomed to failure.
So, again, I say, the US has a simple choice: The laws of mother nature and human nature are not subject to popularity or political whim. Capitalism or decline. You choose.

"John Allison has written easily one of the most important books of the year. Go out and buy it." - Forbes

“Required reading. . . . Shows how our economic crisis was a failure, not of the free market, but of government.”
—Charles Koch, Chairman and CEO, Koch Industries, Inc.

“… a sophisticated yet accessible analysis of the causes and solutions to America’s financial meltdown.”
—Ed Crane, President Emeritus of the Cato Institute

“An indispensable contribution to the debate about the future of the American economy.”
—Arthur Brooks, President, American Enterprise Institute

“[This is] the best, deepest explanation of what caused the crisis and the consequences of our government’s response to it.”
—Yaron Brook, President and Executive Director, Ayn Rand Institute
“No one is better equipped to understand what is going on today and the causes of the financial crisis. Please pay attention to what he says here.”
—Bernie Marcus, Chairman, The Marcus Foundation, and cofounder, Home Depot

“Allison explains the unintended consequences of government policies and their impact on the financial crisis . . . and recommends practical steps to improve the economy and individual liberty.”
—James M. Kilts, former Chairman and CEO, Gillette Company

“John Allison is superb with his comprehensive and thought-provoking explanation for our current economic crisis and a clear and compelling path to a brighter future.”
—Steve Reinemund, Dean, Wake Forest University Schools of Business, and retired Chairman and CEO, PepsiCo

“[John Allison] assembles evidence that shows that our financial crisis, followed by the Great Recession, was caused by Congress, the Federal Reserve, Freddie Mac, and Fannie Mae, and was helped along by the Bill Clinton, George W. Bush, and Barack Obama White Houses.”
—Walter E. Williams, syndicated coumnist

John A. Allison

John A. Allison  is the President and CEO of the Cato Institute. Prior to joining Cato, Allison was Chairman and CEO of BB&T Corporation, the 10th largest financial services holding company headquartered in the United States. During his tenure as CEO from 1989 to 2008, BB&T grew from $4.5 billion to $152 billion in assets. He was recognized by the Harvard Business Review as one of the top 100 most successful CEOs in the world over the last decade.

Allison has received the Corning Award for Distinguished Leadership, been inducted into the North Carolina Business Hall of Fame, and received the Lifetime Achievement Award from the American Banker. He is a former Distinguished Professor of Practice at Wake Forest University School of Business, and serves on the Board of Visitors at the business schools at Wake Forest, Duke, and UNC-Chapel Hill. He is also one of the lead spokespersons for banking and policy reform today, appearing at universities and business groups nationwide and serving on the board of directors of the Ayn Rand Institute.

Allison is a Phi Beta Kappa graduate of the University of North Carolina at Chapel Hill. He received his master’s degree in management from Duke University, and is also a graduate of the Stonier Graduate School of Banking.