Rescuing American Capitalism by Maurice R. Greenberg

From the January/February 2010 issue of The National Interest. Please click here for the full table of contents.

THE CURRENT crisis in the financial system was well over a decade in the making. A combination of new incentives to increase home ownership, long-term low interest rates, the taking on of increased leverage by banks, and the creation of financial products that were not properly overseen or managed led to a catastrophic economic meltdown. The question now is can we learn from this and also prevent what ended up being a disastrous handling of the crisis itself from happening again.

Any responsible government has a plan in place should a national-security disaster strike. It is clear from the uncoordinated actions taken by the U.S. Treasury and the Federal Reserve, however, that they did not have a similar set of con...

From the Archives:
A Sit-Down with Brent Scowcroft
by Justine A. Rosenthal
The principles of transformationalism—idealism spread by the barrel of a gun—have been central to America’s foreign-policy failings over the last eight years. With a new leadership in power, Washington has a chance to right past wrongs. But that will only be possible with a more realist approach to our international engagements and a concerted effort to reach out to our allies and enemies alike.
Nuclear Abolition, A Reverie
by Fred C. Iklé
The hope that we might one day rid the world of nuclear weapons is as old as the technology itself. Atomic destruction has always seemed too great a risk to bear. Yet a nuclear-free world is nothing but a dream—world government, a Praetorian Guard and effective ways to punish rogue nations are almost-insurmountable prerequisites. Maintaining our long-held tradition of nonuse may just be enough to keep us safe.
Republican Reckoning
by Jacob Heilbrunn
Mismanaged for eight years by the Bush administration, the Republican Party is in peril. Neoconservative table scraps are neither appropriate nor wise. But the GOP has another foreign-policy tradition to which it can turn. Presidents from Eisenhower to Reagan emphasized prudent restraint coupled with the pragmatic use of force. Unless they want to remain in the wilderness, Republicans would do well to learn from their own history.