9 of 30
Robert Shiller
Robert Shiller
Arthur M. Okun Professor of Economics at Yale University and author of Subprime Solution and Irrational Exuberance

As the financial crisis unfolded on the weekend of September 13, I was on Clam Island writing my New York Times column. My goal was to propose a long-term fix to the basic causes of the problem, but I was also worried about another Great Depression. That is not an overstatement. I was incredibly anxious.

Up until that point the government had prevented anything from happening that would really frighten people, and Lehman was possibly going to be the first institution not bailed out. The government was taking a gamble by letting such a venerable firm go under because no one could predict the systemic consequences. And as we saw, markets froze.

Since then the threat of an institution failing has been eliminated. While this is important in the short term because it prevents further collapse, the too-big-to-fail mentality worries me in the longer run. Risk management will be constrained artificially by convention. It impresses me how much convention dictates action. Confidence has come back more than I expected, but unfortunately at the same time we are losing our capitalist roots. The government is running industries and banks. I would like to see some inspirational move back to free markets.

NEXT: Whitney Tilson: Played out as predicted

Last updated September 14 2009: 3:19 PM ET
Email | Print | Share  |  RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
More Galleries
5 biggest share buybacks of 2014 Stock repurchases are booming. These five companies are ready to spend over $79 billion on buybacks. More
10 horrifying corporate mascots McDonald's Happy is part of a long lineage of creatures great and small that shill for products and mortify consumers. Mr. Mucus, anyone? More
5 best cities to launch a career The top spots in the U.S. for new grads to land a job -- and actually enjoy life -- according to financial site WalletHub. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.