Wasting a Crisis

Mahoney casts the foundational securities laws of the New Deal in a completely different light, going behind the assertions of contemporary commentators and providing compelling evidence that we ought to question their accuracy. This is a truly important book and a timely addition of a powerful contrarian view to today's policy discussions that tend to have a one-sided focus on the need for expanded regulation without regard to whether there is any supporting evidence for proposed policies. --Roberta Romano, Yale Law School Mahoney in this brilliant book explodes the conventional wisdom uncritically adopted by policymakers and academics that lax regulation and market failures were an important contributing cause of the Great Depression. He also demolishes the related myth that the securities laws and later reforms solved the problem. This book is a must-read not just for anyone interested in the history of the securities laws but more generally for anyone interested in understanding the false narrative typically used to justify new regulatory schemes. --Daniel R. Fischel, University of Chicago Law School With Wasting a Crisis, Mahoney counters the prevailing view that financial crises are the product of market failure. Rather, he suggests, regulation itself often produces problems--and, moreover, does not fix those it is intended to fix. Mahoney has an important perspective that is at odds with the conventional wisdom, and his powerful and persuasive critique is theoretically and empirically grounded with a narrative that pulls the reader in. --Jennifer H. Arlen, New York University School of Law For the past twenty years, Mahoney has cheerfully punctured the conventional wisdom about corporate and financial regulation. Ranging as far back as the 1696 crisis in England and as close up as the aftermath of the Great Recession, but training his eye most carefully on the New Deal era, Mahoney shows in Wasting a Crisis that the reforms enacted after a crisis are nearly always hasty and are usually designed to deflect blame from governmental officials' precrisis missteps. Wasting a Crisis is both erudite and readable, supported with clever empirical analysis and full of counterintuitive insights into the political process. It is a classic of economic history, a superb book by a superb scholar. --David Skeel, University of Pennsylvania Law School