Better, said Mr Mishkin, to act fast once a bubble bursts.

ECONOMIST: Assets and their liabilities

For his next act, he correctly predicted the housing bubble.

FORBES: SHILLER: Predicting Stock Markets Is Like Predicting An Argument With Your Spouse

Living inside their Beltway Bubble, they are convinced that the 2002 business regulatory act Sarbanes-Oxley is a success story, requiring only tweaking around the edges.

FORBES: Beltway Bureaucrats Bad For Business

However, it was massive government support for the housing industry through the mortgage deduction, rules such as the Community Reinvestment Act, and a multitude of subsidy programs that created the property bubble which burst so disastrously in 2008.

FORBES: Raise Taxes To Clinton-Era Levels? How About Spend At Clinton-Era Levels?

First, the 1995 act, with other attempts to curb shareholder suits, fed the surge in business fraud during the bubble.

ECONOMIST: Face value