Let Them Eat Credit
August 27, 2010
By most counts, the U.S. economy started growing in the middle of last year. For many Americans, though, it does not feel as if the Great Recession has ended—unemployment and underemployment are still alarmingly high, and job growth is weak. Many causes have been suggested for both the economic collapse and mediocre recovery, but one that is hardly ever mentioned is income inequality. This is a mistake. Growing income inequality in the United States and the policy responses it has spawned have done tremendous damage to our economy.
Alan Greenspan Needs Stockholm Syndrome
July 09, 2010
Ezra Klein has been doing some great blogging from the Aspen Ideas Festival, which is indeed full of ideas--some good, some not so good. Into the latter category I would put some remarks by former Federal Reserve Chairman Alan Greenspan, as relayed by Ezra today: Coming to the issue of taxes, this gets to the more fundamental issue of the effects of taxation and spending cuts. There are several studies out there evaluating past efforts at fiscal restraint that show the heavy weight of successful contraction has been on the spending side.
In Michael Lewis’ disturbing but illuminating book unearthing the machinations behind the global financial crisis, The Big Short, one of the Wall Street investors enmeshed in creating the web of sub-prime mortgage-backed securities and related derivatives reports on how he knew the bubble was going to burst.
May 19, 2010
Matthew Yglesias harkens back to Alan Greenspan's 2001 testimony endorsing huge tax cuts, on the grounds that, without tax cuts, the national debt will soon disappear, and then the federal government will start buying up stocks, leading to socialism. In fact, Yglesias understates the full loopiness of Greenspan's argument.
March 25, 2010
The new council that will cripple financial reform.
Smart Debt and Stupid Debt
March 11, 2010
Washington—There is a pathetic quality to our discussion of deficits and fiscal responsibility because we never face up to how much we need government to do. Our debates are also characterized by a politically convenient amnesia. Just a decade ago, we were running surpluses so big that Alan Greenspan, then chairman of the Federal Reserve, worried about what would happen once our national debt was liquidated. We had this problem well in hand until we started waging wars and cutting taxes at the same time. What would a rational approach to the budget look like?
The Greenspan Kitsch Bubble
February 19, 2010
Before the financial crisis, Alan Greenspan accumulated a degree of cultural prestige that some of us saw at the time as absurd and in hindsight is obviously comical. The Wall Street Journal has a fantastically entertaining story about one little corner of this ridiculous episode: the market for oil paintings of Greenspan. Yes, these were very popular for a while: In the years before the 2008 financial crisis, Wall Street and Mr. Greenspan's reputation boomed in tandem, and an obscure young artist, Ms.
The Pathetic Party
February 02, 2010
Barely a week into George W. Bush's presidency, his tax cut seems almost inevitable. The Democrats appear set to repeat their sordid performance of 20 years ago--when, instead of resisting Ronald Reagan's tax cut, they larded it with special-interest subsidies of their own. The size of the tax cut acceptable to Democrats edges up almost daily, from $500 billion to (as we go to press) $850 billion. Republicans, meanwhile, have begun predicting that the eventual tax cut might end up even larger than Bush's bloated proposal.
If You Read Just One Piece About the Fed...
December 21, 2009
Read this one by Binyamin Appelbaum and David Cho of The Washington Post. It's just a terrific piece of financial journalism for a popular audience. For what it's worth, I agree with Felix Salmon that there aren't any good alternatives to the Fed when it comes to regulating big banks. I also think the Fed acquitted itself reasonably well once the financial system melted down last year. And I can't think of a better person to rethink the Fed's approach to bank regulation than Dan Tarullo, whom Obama appointed to the Fed board. But boy did the Fed screw up in the run-up to the crisis.
October 09, 2009
The shock of the financial meltdown has had congressional committees scrambling for their gavels for the better part of a year. Politicians have been discussing how to make sure that such a near-cataclysm never happens again, and, for the most part, they've focused on the need for new regulation.