Questioning a Soda Tax's Effectiveness
September 02, 2009

A proposed tax on sugary drinks has gotten some good press of late, but here's a new paper that casts doubt on its obesity fighting abilities for children and adolescents. Jason Fletcher of Yale, David Frisvold of Emory, and Nathan Tefft of Bates collected data on the effects of soft drink taxes in about 20 states that had implemented them at some point between 1988 - 2006. While the taxes -- which averaged about 2% over the period -- did reduce soft drink consumption by the young, they were not helpful in reducing obesity rates. The reason?

Worth Reading
September 01, 2009

Bailouts of Fannie and Freddie could also turn a profit. Sheila Bair: Super-regulator would "benefit the largest banks and punish community ones." Vanity Fair profiles Hank Paulson. Flash orders come to an end at Nasdaq. The number of "decent jobs" will stay flat over the next decade. Study: Multi-taskers are slowed down by irrelevant information.

A 'New Era' for Infrastructure?
September 01, 2009

Infrastructure—roads and rails, ports and pipes, bits and bytes—determines how efficiently and rapidly people, goods, and information move within and across our major metropolitan markets, driving their success and prosperity. It's only slightly hyperbolic to contend that the past 12 months marked a new era in U.S. infrastructure.

TNRtv: Geithner May Be More Arsonist Than Firefighter
September 01, 2009

Simon Johnson, professor at MIT's Sloan School of Management, senior fellow at the Peterson Institute for International Economics, and co-founder of B

Madoff and the SEC: Intricate and Extremely Interesting
September 01, 2009

Edward Jay Epstein has become the de facto historian of the Madoff scandal. Every time he and I speak, he has found another key to the master Ponzi schemer's evil genius. There was a time when the Securities and Exchange Commission trusted Madoff absolutely. So he was able to clear two other stock markets by saying that the documents they used in their defense were kosher.

Geithner May Be More Arsonist Than Firefighter
September 01, 2009

Simon Johnson, professor at MIT's Sloan School of Management, senior fellow at the Peterson Institute for International Economics, and co-founder of b

Is Modern Finance Like Junk Food?
September 01, 2009

Is modern finance more like electricity or junk food? This is, of course, the big question of the day. If most of finance as currently organized is a form of electricity, then we obviously cannot run our globalized economy without it. We may worry about adverse consequences and potential network disruptions from operating this technology, but this is the cost of living in the modern world. On the other hand, there is growing evidence that the vast majority of what happens in and around modern financial markets is much more like junk food--little nutritional value, bad for your health, and a h

David Brooks and the Centralization Meme
September 01, 2009

I consider David Brooks one of the two-to-three best columnists in the business, and he's obviously warmly disposed toward Obama, so I doubt he intends to be uncharitable in today's column. But I think that's where he ends up nonetheless. Particularly this: "By force of circumstances and by design, the president has promoted one policy after another that increases spending and centralizes power in Washington." Do Obama's policies--both enacted and proposed--centralize power in Washington? Of course.

Military Spending as Fiscal Stimulus?
September 01, 2009

Martin Feldstein -- Harvard economist, McCain advisor, and member of Obama's Recovery Advisory Board -- wants more resources devoted to defense spending: The focus on domestic economic policies in the 1930s and the desire to remain militarily neutral delayed the major military buildup that eventually achieved the economic recovery. The administration’s current budget point to a one‐fifth reduction in the share of GDP devoted to defense over the next decade.

SEC to Fraudster Banks: We're Coming
August 31, 2009

After the stress test results came out a few months back, I did a piece  about how, while the government's scrubbing of bank balance sheets was certainly welcome, there were still a lot of things the banks weren't fessing up to. One of those things was loss reserves--that is, the amount of capital banks set aside to absorb losses on loans that turn bad. Here's a brief explanation: The real problem is that the banks won't fully acknowledge their losses. One of the more elusive concepts in all of accounting is an exercise known as reserving.