Morning Is Coming
July 01, 2010
Do a thought experiment: Think back a year ago to what most analysts were predicting for the financial sector and for the state of the economy. In his newspaper column, Paul Krugman repeatedly warned that the policies adopted by the Bush and Obama administrations would have dire consequences. There was talk in other corners about no new business lending, slumping retail sales, and rising unemployment with no end in sight. But here we are—in the midst of a rebound. Each week over the last year, a number of positive and negative economic indicators were announced.
A Pretty Good Deal on Financial Reform
June 25, 2010
Parsing the final compromise.
Who’s Going to Replace Orszag?
June 25, 2010
The first-day stories on Peter Orszag’s looming departure from OMB highlighted a number of possible successors.
Why Is Orszag Leaving?
June 22, 2010
[Guest post by Noam Scheiber] Let's stipulate that there will always be some amount of lurid speculation when a cabinet official exits—probably more so for the first cabinet-level official to depart an administration. But my hunch is that Obama budget director Peter Orszag is bowing out this summer for pretty pedestrian reasons. First the lurid speculation, such as it is: It’s true that Orszag sometimes clashed with fellow members of the Obama economic team. In particular, there was at times a rivalry between Orszag’s OMB and Larry Summers's National Economic Council.
The $64 Trillion Question (Part 1)
June 22, 2010
That we seem to have avoided another Great Depression doesn’t mean our economy is anywhere near as strong as it should be. In fact, most indicators—from unemployment to private investment—prove quite the opposite. What can be done? How can we ensure the U.S. enjoys not merely a modest recovery but the kind of buoyant prosperity we saw in the decades after World War II and briefly in the 1990s? We put the question to few political economists and will run their thoughts over the next couple weeks.
June 17, 2010
Did Obama just dump his best friend on Wall Street?
Am I Too Hard on Financial Reform?
May 27, 2010
[Guest post by Noam Scheiber:] The morning after the Senate approved its financial reform package last week, I wrote a piece suggesting that while the legislation should mitigate the too-big-to-fail (TBTF) problem, it isn’t likely to solve it. Not long after, I spoke with a Treasury official who protested that I was being uncharitable. After mulling over our conversation, I’ve decided he was right—I was a bit uncharitable. Perhaps more importantly, my critique was a little muddled, which made me sound more critical than I actually am.
May 10, 2010
Last Wednesday, Arkansas Senator Blanche Lincoln took to the Senate floor and delivered about as fiery a speech as you’ll hear in the chamber, at least on the subject of financial reform. “Currently, five of the largest commercial banks account for ninety-seven percent of the [derivatives market],” she said.
Of course, scapegoats are intrinsic to the language of politics. And scapegoats are particularly useful to ignorant politicians. The fact is that most politicians do not know the slightest about how finance—public or private—actually operates. It is for them a matter of good and evil—mostly good when prosperity reigns, mostly evil when prosperity collapses.
April 20, 2010
Some two dozen executives from large corporations will be descending on Capitol Hill today to make the case against over-regulating derivatives. The “fly-in” is being organized in part by the U.S. Chamber of Commerce through a group called the Coalition for Derivatives End-Users, according to the Chamber’s Ryan McKee. Many corporations use derivatives to hedge against fluctuations in the price of their inputs—for example, an airline might sign a contract to lock in future fuel prices, thereby passing the risk along to someone else.