One of the things that I think we have to figure out, and soon, is proper regulation of financial markets, if we are going to climb out of the hole we are in. In many circumstances, I tend to argue that regulations are too inflexible to deliver good policy. But in financial markets, a certain amount of standardization at this point–perhaps with sunsetting–would make a lot of sense.

Nobody makes that case better than Michael Lewis in The Big Short: Inside the Doomsday Machine. There is much to kvetch about in this book: I get weary of the ‘hero’s journey’ take that writers like Lewis adopt in order to tell their stories journalistically rather than using evidence. And it’s a pretty one-sided book. Yet, I sat through seminar after seminar after seminar with economist after economist after economist who couldn’t explain WTH happened as clearly as Lewis does in this book. That’s a real gift, and a real contribution to the discussion about how to go forward.