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Avoiding a Keynesian Rush to Regulate the Financial Markets

In his address to Congress, President Obama vowed to "move quickly" to reform financial regulation. The next day the President met with economic advisors and Members of Congress to jump-start the effort that's quick. There is little doubt financial regulation needs improving. But a rushed restructuring would almost certainly do more harm than good. There are at least three dangers in "quick fix" financial reform: differing emergency and long-term needs; improperly diagnosing the crisis; and, slowing economic recovery. ....

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