Crony Capitalism: Lessons from the Great Recession

Published October 26, 2021

After the Great Recession, lawmakers passed the Dodd-Frank Act, designed to help avoid future bank bailouts. But in practice, it granted the government immense discretionary power to bail out and regulate Wall Street firms and the wider economy. That opened the doors for crony capitalism and put undue power in the hands of regulators and special interests.

Discussion Questions:

1. Are there more examples of regulatory capture?
2. Who benefits the most from increased regulations?

Additional Resources:

• Click here to buy John B. Taylor’s book First Principles: Five Keys to Restoring America’s Prosperity.
• Watch “The Danger of Regulatory Capture” on PolicyEd. Available here.
• Read “Too Big to Fail, Title II of the Dodd Frank Act and Bankruptcy Reform,” by John B. Taylor. Available here.