Willamette Lawyer | Spring 2009 • Vol. IX, No. 1
Remembering Paulus: The College of Law community mourns the passing of Professor Emeritus John C. Paulus, a master teacher and member of the Willamette law faculty for 36 years.
h g u o r h T g n i Wa d the t he Muck Examining Market Collapse Americans are living through an unprecedented financial crisis. The trouble began almost two years ago, in the summer of 2007, when Bear Stearns narrowly averted collapse because of failed subprime investments. It accelerated in the spring of 2008 when Bear Stearns was absorbed by JPMorgan Chase & Co. in a rescue orchestrated by the federal government. The crisis then hit with full force in the fall of 2008 with government takeovers of Fannie Mae and Freddie Mac, the $150 billion bailout of AIG Inc. and the bankruptcy of Lehman Brothers. It continued throughout the fall and winter with the failure of Washington Mutual and the multibillion dollar bailouts of Citigroup, Bank of America, General Motors Corp. and Chrysler. We also have witnessed the demise of the last freestanding investment banks, as Merrill Lynch was swallowed by Bank of America, and Morgan Stanley and Goldman Sachs were both transformed into bank holding companies, both to improve regulatory oversight and to give them access to greater government support. Since last fall, much attention has been focused on the causes of the financial meltdown, as well as the potential solutions to the problem. Willamette University College of Law has not been immune to this fixation on the credit crisis. Causes of the crisis were the focus of a brown-bag luncheon at the law school last September, the schoolâ€™s annual Securities Regulation Conference in Portland at the end of October, and the roundtable discussion that follows. In this brief introduction to that roundtable discussion, I will attempt to summarize the causes of the financial meltdown and provide some context for the solutions offered by our leaders in Washington. 8 | Willamette Lawyer