7. Topological Economic Theory

We recall that one of the problems with banking regulation has been its post-facto rather than preemptive mode—fixing bank panics after they occur rather than preventing them. And we recall that this was particularly true of the 2007 global bank panic. Binyamin Appelbaum wrote: “The Fed (Federal Reserve System) began 2007 still deeply immersed in complacent disregard for problems in the housing market. Fed officials knew that people were losing their homes. They knew that subprime lenders were blinking out of business with every passing week. But they did not understand the implications for the broader economy… August 2007 was the month that the Fed began its long transformation from somnolence to activism.” (Appelbaum 2013)