He urges a limited series of reforms:
Although it is the most severe financial crisis since the Great Depression of the 1930s, it is a far smaller crisis, especially in terms of the effects on output and employment. The United States had about 25% unemployment during most of the decade from 1931 until 1941, and sharp falls in GDP. Other countries experienced economic difficulties of a similar magnitude. So far, American GDP has not yet fallen, and unemployment has reached only a little over 6%. Both figures are likely to get quite a bit worse, but they will nowhere approach those of the 1930s.
- Increase capital requirements for lending institutions.
- Sell off Fannie and Freddie.
- No more bailouts.
Finally -- no matter how much it is desired and predicted by liberals and hard lefties, Becker assures us that this is not the "final crisis of capitalism".
Read it here.
Becker is also a blogger -- for a more extensive look at his thinking go to here.