How did this Economic Crisis happen? John Allison Knows…

September 30th, 2009

Here’s an incredible lecture given by John Allison given at the Ayn Rand Center for Individual Rights. This is probably the best lecture I’ve heard on the current economic crisis. Being the former CEO of a gigantic financial firm, BB&T Corporation, he is able to provide a unique, insider perspective to what went wrong.

Essentially his take on the crisis is very Austrian in nature, it discusses how both malinvestment and overinvestment were able to occur and were incentivized by many forms of government intervention. He discusses how the subprime mortgage market came about, how that damage spread to the capital markets, why lending froze up, and eventually – at the tail end of his lecture, provides some really great ideas for what to do to fix the problem both in the short-term and in the long-term. I especially like his philosophical point at the very end of his lecture about the real problem being philosophical disputes in America. He explains how if we truly want to fix our economic problems in the long-run then we’re going to need to fix these problems – he highlights the disturbing idea in America that there is such a thing as a ‘free lunch’.

Again, it’s a must see lecture if you want to know the truth about how this economic crisis began and who is at fault. I’ll give you a hint: Government, government, government…

Seriously watch it. Listen to it. Know it.

John Allison on How did the Economic Crisis begin, and what to do about it