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John Diamond, Edward A. and Hermena Hancock Kelly Fellow in Tax Policy at the Baker Institute, discusses the financial crisis of 2008 in a piece based on his Oct. 15, 2008, speech to the River Oaks Women"s Breakfast Club in Houston, Texas.

Diamond contends the current financial crisis is the result of well-intentioned -- but economically unsound -- policies that were initiated and implemented by the federal government and private sector firms. He provides a history of the events leading up to the crisis, and then examines the immediate policies that have been proposed to stabilize the economy in the short term. He also mentions some long-term reforms that could help reduce the likelihood of asset price bubbles in the future. Finally, Diamond points out a few policies that should be rejected because they would increase the risk of a severe economic recession or depression.

Read Diamond"s discussion about the financial crisis of 2008.