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Responses to the Financial Crisis
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.