Stanford scholars contribute to books published by the Hoover Institution Press

making_failure_feasibleTwo new books from the Hoover Institution Press grapple with two unrelated subjects that have shaped history: bank regulatory reform and ANDREI SAKHAROV.

In Making Failure Feasible, a group of Hoover economists and scholars challenges existing U.S. banking policy while urging bold monetary reforms, such as adding a new Chapter 14 to the U.S. bankruptcy code. The ideas presented are the result of the Hoover Institution’s Resolution Project, which was composed of a group of Stanford and Hoover economists, including JOHN TAYLOR and KENNETH E. SCOTT, two of the book’s editors.

Sakharov_CoverImageTaylor said that Chapter 14 would allow failing financial firms to go through bankruptcy without disrupting the economy.

“There is no reason why financial firms should be bailed out by the government and be viewed as too big to fail. If they go broke or become insolvent they should just be allowed to fail and go through bankruptcy, just like non-financial firms,” he explained.

By making failure of such firms feasible, Taylor said, it would mean that their failure would not wreak havoc on the economy. “This reform would prevent taxpayer bailouts and create a financial system with less risk and more stability.”

He noted that due to the research by the authors of this book, legislation on this very point is now working its way through Congress. “The hope is that the additional research in this book will help usher this legislation into law.”

The other book, Andrei Sakharov: The Conscience of Humanity, was edited by Hoover Distinguished Fellow  GEORGE P. SHULTZ, the former U.S. Secretary of State, and Hoover senior fellow SIDNEY DRELL. The book examines the life and works of Russian nuclear physicist and human rights activist Andrei Sakharov, who played a leading role in speaking out against Soviet rulers, the testing of nuclear weapons and the Soviet system of imprisonment. The idea is to illustrate the nature of – and possible solutions to – today’s nuclear threats.