N. Gregory Mankiw, his Chairman of the Council of Economic Advisers, warned in February 2004 that expecting a government bailout if things go wrong “creates an incentive for a company to take on risk and enjoy the associated increase in return.”

Since risky investments usually pay more than safer investments, the incentive is for a government-supported enterprise to take bigger risks, since they get more profit if the risks pay off and the taxpayers get stuck with the losses if not.

[ . . .]

Chairman Greenspan added his voice to those urging Congress to create a “regulator with authority on a par with that of banking regulators” to reduce the riskiness of Fannie Mae and Freddie Mac, a riskiness ultimately borne by the taxpayers.

– from article –

Bailout Politics

by Thomas Sowell, on Creators.com



Hoover Institute


Board of Trustees of Leland Stanford Junior University
Phone: 650-723-1754


Hoover Digest, Research and Opinion on Public Policy


Pay to Stay

Is it so outlandish to suggest that we sell the right to live in the United States? Outlandish or not, such a policy would benefit legal and illegal immigrants alike. By Gary S. Becker.

The Hong Kong Experiment
A controlled experiment in the field of economics? The last fifty years of history have provided just that. The free economy: Hong Kong. The mixed economy: the United States. The socialist economies: Great Britain and Israel. Nobel laureate and Hoover fellow Milton Friedman evaluates the results.

Watching Stalin Win
Transcripts of power sturggles in the Politburo, unseen for more than 70 years, are about to be published. Paul R. Gregory on a major historical find.

What Latin America Owes to the “Chicago Boys”
Economists educated at the University of Chicago have for some two decades been putting free market reforms into effect in Chile, Argentina, and other Latin American countries. One of their teachers, Nobel Prize–winner and Hoover fellow Gary S. Becker, examines the results. What does he find? Dictatorships that have been turned into democracies and economic stagnation that has been transformed into growth.

How FDR Saved Capitalism
During the economic crisis of the 1930s, many expected a socialist revolution. The revolution never came. Why? The man in the White House co-opted the left. By Hoover fellow Seymour Martin Lipset and Gary Marks.

The Dance of the Lemons
Why is the quality of teachers so low? Just try getting rid of a bad one. Hoover media fellow Peter Schweizer explains.



The Hoover Digest offers informative writing on politics, economics, and history by the scholars and researchers of the Hoover Institution, the public policy research center at Stanford University.

The opinions expressed in the Hoover Digest are those of the authors and do not necessarily reflect the opinions of the Hoover Institution, Stanford University, or their supporters.

The Hoover Digest (ISSN 1088-5161) is published quarterly by the Hoover Institution on War, Revolution and Peace, Stanford University, Stanford CA 94305-6010.

The print version of the Hoover Digest is available on a subscription basis of $25 a year in the United States (foreign subscriptions are subject to additional postage).

Do you have a comment about the Hoover Digest? A question about your subscription to the print edition? Contact the Hoover Press.

© 2007 by the Board of Trustees of the Leland Stanford Junior University.

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Charles Lindsey, Managing Editor


WELCOME to China Leadership Monitor, where you’ll find articles from the current issue as well as an archive of back issues, and subscription information. China Leadership Monitor offers authoritative assessments of trends in Chinese leadership politics and policy. Read more about China Leadership Monitor.


Philip Bobbitt Philip Bobbitt

Philip Bobbitt is the Herbert Wechsler Professor of Jurisprudence and director of the Center for National Security at Columbia Law School. He is also a senior fellow at the Robert Strauss Center for International Security and Law at the University of Texas. He is the author of seven books, of which Terror and Consent:The Wars for the 21st Century (Knopf, 2008) is the most recent. He has served in various capacities in government, including posts at the White House (associate counsel to president), the Senate (legal counsel to the Iran-Contra Committee), the State Department (the counselor on international law), and the National Security Council (director for intelligence programs, senior director for critical infrastructure, and senior director for strategic planning). He is a fellow of the American Academy of Arts and Sciences. He lives in New York, Austin, and London.

Stephen Krasner Stephen D. Krasner

Stephen D. Krasner is the Graham H. Stuart Professor of International Relations at Stanford University, a senior fellow at the Freeman Spogli Institute, and a senior fellow at the Hoover Institution. He was director of the policy planning staff at the Department of State (2005–7), director for governance and development at the National Security Council (2002). In 2003–4 he was deputy director of the Freeman Spogli Institute and director of the Center for Democracy, Development and the Rule of Law at the institute, as well as a member of the board of directors of the United States Institute of Peace. He received his B.A. from Cornell, M.A. from Columbia, and Ph.D. from Harvard. He is the author of Sovereignty: Organized Hypocrisy (Princeton: 1999), several other books, and more than eighty articles. He is a fellow of the American Academy of Arts and Sciences and a member of the Council on Foreign Relations.


Hoover Institute Task Force Members

If you go through this page – you will find a lot of interesting connections – including Evers, who is working for President Bush and his team currently, and Ed Lazear (and others). Also, there are a surprising number that have come from a really few institutions like – Chicago, Harvard, etc., etc., etc. and have now or in the past worked for a continuing delegation of policy makers inside the US White House and Congress / The US Financial Advisors and Policy Makers Teams in every place you look. Oh well, welcome to the real world.

– note at the end is mine –

Cricket Diane C Sparky Phillips, 09-30-08, USA