Alex J. Pollock - Surprised Again!―The COVID Crisis and the New Market Bubble

Praise forSurprised Again!

Pollock and Adler masterfully track governments financial response to the global pandemicand raise critical questions about the future implications of increasing backstops for housing, student loans, pensions, and maybe even cryptocurrencies. A brilliant and clear recounting of the last two years, and a roadmap for the next potential crisis.

Winthrop Watson, President and CEO of the Federal Home Loan Bank of Pittsburgh

Without warning the Covid-19 pandemic swept across the globe in early 2020, fundamentally altering the daily lives of billions. At the same time, the pandemic gave rise to a financial crisis that shocked experts and threw markets into a tailspin. This definitive account by two Treasury Department insiders provides critical insight into the causes of that crisis, how it was abated, and how we might be less surprised by the next one. Suffice it to say, it is a must-read book for economic policymakers, investment professionals, and anyone interested in financial markets.

Heath Tarbert, former Chairman, Commodity Futures Trading Commission

What will not surprise you is the wisdom, wit, and insight that Alex Pollock and Howard Adler bring to this indispensable guide to financial prophecy. The future may be a closed book, but you must openand readthis one.

James Grant,Grants Interest Rate Observer

Tired of government bailouts with taxpayer money? Want government programs designed to maximize benefits while minimizing costs to the public fisc? Thought about risk transfers associated with federal intervention in the market? Then read this book!

Keith Noreika, former Acting Comptroller of the Currency

Surprised Again! is an outstanding demonstration of how government efforts to promote financial stability can sow the seeds of instability. The surprise in question was the 2020 financial crisis caused by the Covid pandemic and lockdowns. The authors, Alex J. Pollock and Howard B. AdlerTreasury officials at the timehave given us a work of disinterested scholarship, filled with lucid explanations and eye-opening charts. They show that some of the governments responses successfully stabilized markets and alleviated immediate hardships, others failed to address serious problems the pandemic and lockdowns had exposed, and others produced new surprises (such as surging asset and price inflation) that left us ill-prepared for the next crisiswhich, we now know, was to arrive in early 2022. Surprised Again! will demystify finance for students and give experts a deeper understanding of things they thought they knew.

Christopher DeMuth, Distinguished Fellow, Hudson Institute, and former President, American Enterprise Institute

Surprised Again! does a superb job of revisiting the financial melt-down, government response, and economic recovery triggered by the pandemic. The authors infuse this history with thoughtful reflections on the history of central bank crisis management and the political ramifications of the Federal Reserve and Congressional actions taken to combat the Covid crisis. In the end we learn what perhaps is no surprise: bailouts lead to bubbles, and politicians will never let a crisis go to waste.

Paul Kupiec, Senior Fellow, American Enterprise Institute

In Surprised Again! Alex Pollock and Howard Adler have created a true gem for the reader. At one level so easy to understand, at another deeply philosophical and rich in insights about the human condition in the environment of economics and finance. The reader will not find anywhere else such a lucid account of how the details of Fed and Treasury policies made the everything bubble. The Cincinnatian doctrine is a treasure to be unwrapped, and even the most crypto-illiterate amongst us will appreciate the authors treatment of the revealed sting in the tail of a crypto surprise: how what seemed like a libertarian revolt against central banks will very likely end up vastly increasing and centralizing their power. Join the trip of superior but humbled understanding of financial markets made possible by Surprised Again!

Brendan Brown, Senior Fellow, Mises Institute and Senior Fellow, Hudson Institute

A masterful survey of the financial sector and its post-Covid dependence on easy money from the Federal Reserve. This book is the first place to turn for a clear exposition of key financial topicshousing, municipal debt, pension funds, student loans, cryptocurrencies, and more. The reader will be surprised yet again at the extent of financial problems lurking below the surface.

Thomas H. Stanton, Johns Hopkins University

Surprised Again! is a salutary reminder that we do not see through the fog of human affairs, and dont see when the next crisis is almost upon us, or understand it fully when it hits us. It hints that, as human beings, we do not want to recognize that hard times are coming. More important, the authors suggest that this is partly due to mistaken beliefs that economic laws are hard scientific laws. The authors carefully analyze the multiple sources of debt in the American economy, potential sources of debt crises, if not now, then in the future. They insightfully consider the risks of central banks seeking to extend their power by the introduction of central bank digital currency, possibly replacing commercial bank money.

Dr. Oonagh McDonald CBE, author ofCryptocurrencies: Money, Trust and Regulation

From Covid and crypto to student loans, inflation, and the Federal Reserve, the authors of Surprised Again! puncture conventional thinking about finance, government, and our so-called free market economy with wit, logic, and a commanding understanding of our nature as animals subject to prolonged fits of irrationality, especially when it comes to money. Every member of Congress and everyone on the Federal Reserve Board should own a copy; we can even hope they read it.

Arthur Herman, Senior Fellow, Hudson Institute, and author ofThe Viking Heart: How Scandinavians Conquered the World

In the aftermath of the 2008 financial crisis I made two predictions: There would be another crisis; and it would be caused by something other than the originate to distribute mortgage system that abandoned any pretense of credit underwriting. Read this book if you want to understand why these predictions were right. It is a very accessible volume that explains eternal verities about financial institutions and markets: financial markets are inherently prone to periodic crises; government intervention has mitigated some of these tendencies, while other intervention, however well intentioned, has made things worse. The analysis is supported with readily understandable data about recent financial crises and the public policy responses. You do not need a degree in finance to understand it, and, for the most part, the data that is presented stand on their own and are not, as in so much current writing, provided as a prop for an ideological polemic.

Allan I. Mendelowitz, President, ACTUS Financial Research Foundation

Surprised Again! is a highly sophisticated analysis of every major potential problem in the U.S. financial system today, presented in a delightfully readable and accessible form. The theme of the book is the surprise we have all experienced when a seemingly placid and functioning sector of the U.S. economy suddenly turns into a source of dangerous instability or crisis. Why do these things happen so often, and why dont we see them coming? The authors high level positions in the U.S. Treasury Department put them in ideal positions to understand how difficult it can beeven with the informational resources of the U.S. governmentto predict the future of the vast U.S. economy or financial system. So the lesson is clear: surprises can never be ruled out, but it is possible to understand where the most likely economic or financial dangers lurk. The authors lay these out with admirable clarity. Forewarned is forearmed.