“Though the principles of the banking trade may appear somewhat abstruse, the practice is capable of being reduced to strict rules. To depart upon any occasion from those rules, in consequence of some flattering speculation of extraordinary gain, is almost always extremely dangerous, and frequently fatal to the banking company which attempts it.”
— Adam Smith, “The Wealth of Nations”, 1776
Here’s an interesting interview with Harvard economics professor Ken Rogoff, author of This Time Is Different: Eight Centuries of Financial Folly, about the financial crisis and implications for public policy and the economy going forward.
“In The Wall Street Journal, Mark Helprin writes about what we owe to the fallen, and to those now serving.”
“A growing body of evidence points to Venezuelan dictator Hugo Chavez’s singular role in supporting terrorism and related criminality.”
“In The Wall Street Journal, Mark Helprin writes about what we owe to the fallen, and to those now serving.”
“A growing body of evidence points to Venezuelan dictator Hugo Chavez’s singular role in supporting terrorism and related criminality.”
Gene Fama and Ed Lazaer provide a very interesting discussion and perspectives on the financial crisis and its public policy implications!
Here’s a list of articles that I have been reading lately:
Satirists Clarke and Dawe do their best to explain the ongoing European sovereign debt crisis:
Here’s a list of articles that I have been reading lately:
Hard Sell – WSJ.com
Source: online.wsj.com
“John Fund writes in The Wall Street Journal that ObamaCare appears more unpopular than ever.”
Chronicle of a Currency Crisis Foretold – Project Syndicate
Source: www.project-syndicate.org
“The crisis in Greece and the problems in Spain and Portugal have exposed the euro’s inherent flaws, and no amount of financial guarantees – much less rhetorical reassurance – from the EU can paper them over. While the euro is likely to survive the current crisis, not all of the eurozone’s current members may be there a year from now.”
Progressives, Jim Crow, and Selective Amnesia
Source: www.american.com
“The Rand Paul episode reveals a drastic misreading of history and of the government’s role in ending racial discrimination in this nation.”
America’s New Jobs Bill – WSJ.com
Source: online.wsj.com
“The Wall Street Journal dissects this week’s stimulus bill.”
Money Market Funds Missing from the Senate Bill – Regulating Wall Street
Source: w4.stern.nyu.edu
“Money market funds are the stepchild of finance. Even though they manage more than $4 trillion in assets, you won’t find them in the Senate’s financial reform bill from last Thursday. Is this justified?”
Not just their Big Fat Greek Funeral – Mark Steyn – Macleans.ca
Source: www2.macleans.ca
“As lazy, feckless, corrupt and violent as Greece undoubtedly is, it’s not that untypical…”
That’s Rich at Steven Landsburg | The Big Questions: Tackling the Problems of Philosophy with Ideas.
Source: www.thebigquestions.com
“It’s now crystal clear what the Tea Party stands for, says Frank Rich midway through a column that makes it crystal clear what Frank Rich stands for, and it isn’t pretty.”
Stimulus Surprise: Companies Retrench When Government Spends – HBS Working Knowledge
Source: hbswk.hbs.edu “New research from Harvard Business School suggests that federal spending in states appears to cause local businesses to cut back rather than grow. A conversation with Joshua Coval.”
Game Theory TV – Freakonomics Blog – NYTimes.com
Source: freakonomics.blogs.nytimes.com “Game theory lessons on YouTube.”
Review & Outlook: The New Lords of Finance – WSJ.com
Source: online.wsj.com “The Wall Street Journal editorial page says that Congress’s financial reform is a marriage of Big Finance and Big Government.”
Roberts on the Crisis | EconTalk | Library of Economics and Liberty
Source: www.econtalk.org
“Russ Roberts, host of EconTalk, discusses his paper, “Gambling with Other People’s Money: How Perverted Incentives Created the Financial Crisis.” Roberts reflects on the past eighteen months of podcasts on the crisis, and then turns to his own take, a narrative that emphasizes the role of government rescues of creditors and the incentives this created for imprudent lending. He also discusses U.S. housing policy, particularly the Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac and how the government’s implicit guarantee of lenders to the GSE’s interacted with housing policy to increase housing prices. This in turn, Roberts argues, helped create the subprime market, created mainly by private investors. The episode closes with some of Roberts’s doubts about his narrative.”
Consumer Financial Protection–the Good, the Bad and the Ugly – Regulating Wall Street
Source: w4.stern.nyu.edu
“On Thursday the Senate passed its version of the financial reform bill, and the reconciliation process with the previously passed House bill will now begin. What are the implications for consumer protection? The similarities between the two bills in the area of consumer protection and more notable than their differences, but there are some distinctions to keep in mind and some troubling issues common to both bills. Consumer protection is a worthy goal, especially given some of the documented abuses leading up to and during the financial crisis, but bad regulation may be worse than under-regulation.”
Economic View – Greece May Not Be as Rich as It Looks – NYTimes.com
Source: www.nytimes.com
“Europe no longer pretends Greece is wealthy. Now the Continent acts as though Greece will quickly become wealthy enough to pay back ever-growing sums of debt.”
Here’s a list of articles that I have been reading lately:
Report: Majority Of Government Doesn’t Trust Citizens Either
Source: www.theonion.com
“According to the poll – which surveyed members of the judicial, legislative, and executive branches – 9 out of 10 government officials reported feeling “disillusioned” by the populace and claimed to have “completely lost confidence” in the citizenry’s ability to act in the nation’s best interests.”
From The Onion…
A Pessimistic View of the Health Care System
Source: jeffreymiron.com
“Regarding the changes taking place in health care, from a physician’s perspective I think that our pay will be cut, the patient loads will be much higher, we will continue to face frivolous lawsuits, the …”
Public Pensions Headed for Disaster – Business – The Atlantic
Source: www.theatlantic.com
“The New York Times has a practically libertarian-sounding article on public pensions.”
Edward Jay Epstein: Goldman and Washington’s Wall Street Takeover – WSJ.com
Source: online.wsj.com
“In The Wall Street Journal, Edward Jay Epstein says that the SEC case that Goldman Sachs defrauded investors in its Abacus 2007-AC1 fund is weak, but it has helped the government justify sweeping new powers over the financial industry.”
Peter J. Wallison: Republicans and Obama’s New Deal – WSJ.com
Source: online.wsj.com
“In The Wall Street Journal, AEI senior fellow Peter J. Wallison says that the GOP should have filibustered and never allowed the Dodd bill to reach the Senate floor.”
John C. Goodman: Goodbye, Employer-Sponsored Insurance – WSJ.com
Source: online.wsj.com
“In The Wall Street Journal, John C. Goodman writes that companies are discovering that it’s cheaper to pay fines to the government than to cover workers.”
Mortimer Zuckerman: The Bankrupting of America – WSJ.com
Source: online.wsj.com
“In The Wall Street Journal, Mortimer Zuckerman writes that we have a ruinous collaboration of elected officials and unionized public workers.”
Source: mindyourdecisions.com
“There’s a neat online video game that tests whether you can identify real stock data from randomized, generated data. The game is called ARORA, an abbreviation for “a random or real array” of prices.”
The Reduced Credit Act – WSJ.com
Source: online.wsj.com
“The Wall Street Journal writes that an amendment to the financial reform bill in the Senate would give banks another reason not to lend.”
Bruised but Not Out: A Bullish View on the Future of Financial Innovation
Source: knowledge.wharton.upenn.edu
“The Great Recession has given a black eye to the tools of financial innovation. Collateralized debt obligations, synthetic derivatives and other once-arcane investment vehicles are now the poster boys …”
Making the Simple Complicated – Economix Blog – NYTimes.com
Source: economix.blogs.nytimes.com
“Domestic legislation to tax the economic damage wrought by greenhouse gases is problematic, an economist says.”
Management: Pithy questions | The Economist
Source: www.economist.com
“This paper presents a market equilibrium model of CEO assignment, pay and incentives under risk aversion and heterogeneous moral hazard. Each of the three outcomes can be summarized by a single closed-form equation.”
An Enduring Culture of Free Enterprise – The American, A Magazine of Ideas
Source: www.american.com
“Despite the bruising it has taken, support for free enterprise and the capitalist system remains robust.”
The Clearinghouse Rescue Plan
Source: online.wsj.com
“As miracle cures go, clearinghouses for derivatives seem to be everyone’s favorite. By requiring that most swap contracts be settled daily through institutions that collect and spread financial risk, Congress and Treasury claim that we can all sleep better at night without fear of more AIGs. Sorry to break this reverie, but if this is true, why does Senator Chris Dodd’s financial bill give clearinghouses access to the Federal Reserve’s discount window? That’s the special Fed lending facility that is typically available only to banks that can’t get the funding they need elsewhere. Does the Senator know something most Americans do not?”
Obama and the ‘Special Relationship’
Source: online.wsj.com
“In stark contrast to the stratospheric hopes that Mr. Obama would dramatically improve America’s relations with the world in general and the U.K. in particular, a full 74% of the British people now think that their relationship with the U.S. has stayed the same or even worsened since Mr. Obama’s election.”
The IRS Cracks Down on Small Charities
Source: online.wsj.com
“For many small charities in the United States, May 17 may be remembered as the day their tax exemptions died. This was the deadline for charities with annual revenues of less than $25,000 to file Form 990 with the IRS.”
Vanguard’s Bailout Warning
Source: online.wsj.com
“Speaking of too big to fail (see above), Senate Democrats continue to claim that their pending financial reform bill will end bailouts. But when even a potential beneficiary is warning about the financial favoritism that will result, taxpayers have every right to demand that Senators scrap their “resolution process” for too-big-to-fail banks.”
Politicians As Plutocrats
Source: online.wsj.com
“As ‘state capitalism’ grows abroad, state intervention in the economy grows at home.”
Source: w4.stern.nyu.edu
Quoting from this article, written by finance professor Robert Whitelaw at NYU, “You might think that the Senate has enough to do attempting to save the country from another financial crisis. Measuring and regulating systemic risk, orderly liquidation of failing financial institutions, Freddie and Fannie, rating agencies–the list of critical issues is long and the problems are complex. However, significant regulatory reform is apparently not enough to keep our diligent Senators busy. A couple of weeks ago Senator Tom Harkin took the time out to propose capping ATM fees, and this past week the Senate approved an amendment put forward by Senator Richard Durbin to reduce the “swipe fees” that banks and other companies charge on credit and debit card transactions.”
Mount St. Helens, 30 years ago – The Big Picture – Boston.com
Source: www.boston.com
“On May 18th, 1980, thirty years ago today, at 8:32 a.m., the ground shook beneath Mount St. Helens in Washington state as a magnitude 5.1 earthquake struck, setting off one of the largest landslides in recorded history – the entire north slope of the volcano slid away.”
Massachusetts Insurers Post Big Losses – Business – The Atlantic
Source: www.theatlantic.com
“When MassCare passed, it was supposed to lower the average cost of healthcare by getting relatively cheap young people into the system, and ending the inefficiencies of caring for the uninsured. Unfortunately, it hasn’t quite worked out that way.”
Scott Gottlieb: No, You Can’t Keep Your Health Plan – WSJ.com
Source: online.wsj.com
“In the Wall Street Journal, Dr. Scott Gottlieb writes that insurers and doctors are already consolidating their businesses in response to Obamacare.”
Moheb Zaki: Egypt’s Persecuted Christians – WSJ.com
Source: online.wsj.com
“In The Wall Street Journal, Moheb Zaki of the Ibn Khaldun Center in Cairo notes that violence against Copts is on the rise, yet all but ignored by the state.”
John H. Cochrane: Greek Myths and the Euro Tragedy – WSJ.com
Source: online.wsj.com
“John H. Cochrane writes in The Wall Street Journal that the Greek bail-out won’t work. Germany and France simply cannot borrow or tax enough to cover Europe’s debts and looming deficits.”
Why Does Academia Treat Its Workforce So Badly? – Business – The Atlantic
Source: www.theatlantic.com
“A piece on adjuncts in Inside Higher Ed has been attracting a lot of attention among academics of my acquaintance.”