On April 3rd 2008, in their final policy dialogue for the Spring Semester, TJPPP students traveled to the District. Our first speaker was Michael Stanton, CEO of the Association of International Auto Manufacturers. He spoke about the willingness of the international auto manufacturers to comply with increased fuel efficiency standards and laws lessening greenhouse gas emissions. He then contrasted this with a discussion of the costs of the innovation necessary to reduce American dependence on imported oil. Questioning whether customers would pay an additional $8,000 for a hybrid version of one of America’s newest models, Stanton brought the challenges faced by the auto industry into focus.
The next two speakers focused on the financial dimensions of the economic crisis. Michael Fratantoni of the Mortgage Bankers Association of America contended that those investing in mortgage-backed securities had all the information they needed to make informed investments; it was, after all, in the prospectus. Frantantoni admitted that lending standards had been overly relaxed, that maybe home ownership is not for everyone, and that the compensation structure on Wall Street will likely change. He expressed a sentiment that policy makers were simply “responding to a need to do something,” bringing our attention to the speed and the extent of responses to the financial crisis.
Mark Carlson, of the Board of Governors of the Federal Reserve, discussed disruptions to financial markets and credit availability, and the Federal Reserve’s multiple strategies to improve financial conditions.