ABSTRACT
In 2007 and 2008, the financial crisis unfolded with a rapidity and ferocity few would have imagined possible, giving rise to the deepest recession since the Great Depression. Tragically, Alan Greenspan's assumption was tested in the financial crisis. The crisis was not confined to the financial system, but spread rapidly into the larger economy. Yet, the worsening economic news and fears that the tepid recovery had stalled were driven from the headlines by a second regulatory crisis, this time in the Gulf of Mexico. In sum, the combination of deregulation and a systematic underinvestment in public agencies has created a system prone to disaster. Scholars of regulatory capitalism are correct in noting that a dynamic network of governance arrangements has emerged in recent decades, and in some ways it can serve functions analogous to public regulation. The impact of polarization and gridlock has been evident in key social regulatory areas like environmental protection.
