June 03, 2009
This year, Nouriel Roubini, the economist known to the general public as Dr. Doom, Prophet of the Financial Apocalypse, spent the early hours of Mardi Gras on the floor of the Frankfurt Stock Exchange. It was only 11 a.m., but the party was rollicking. Traders careened around the floor, hooting and honking, dressed as dragons and devils and convicts. Rock music roared overhead, and no one seemed to care that, by the bye, the market had tanked.
June 03, 2009
Earlier this spring, Nawaz Sharif threatened to topple Pakistani President Asif Ali Zardari's government. Since taking power in September, Zardari had been promising to reinstate Iftikhar Chaudhry, the chief justice of the supreme court, whom Pervez Musharraf had sacked on March 9, 2007. But Zardari, who feared that Chaudhry would try to either curb executive power or dredge up corruption cases, balked repeatedly. This annoyed Sharif--and many of his fellow countrymen--to no end.
May 15, 2009
When President Obama announced Supreme Court Justice Souter’s decision to retire, he said he would prefer a candidate who understands that justice “is also about how our laws affect the daily realities of people's lives.” This is not the description of most law professors that I know (and I know quite a few). Nor is this the description of anyone who has spent their entire career as a lawyer or judge. In fact, the type of person who is most likely to have this kind of first-hand experience is an elected official--an effective and dedicated politician. The nine members of the current U.S.
April 15, 2009
A new theory of the AIG catastrophe.
Will Soaking The Rich Go Too Far?
April 06, 2009
Clive Crook--one of my favorite conservative writers--has a new column in which he warns against raising taxes on the rich to finance new government spending, particularly health care. The reason? The U.S. tax code is already very progressive by international standards. Making the tax code even more progressive will, Crook says, push it even more to that extreme. Mr. Obama intends to squeeze the rich, but the scope for this may be more limited than US liberals would wish.
April 01, 2009
A dispatch from business school after the 2008 financial crisis.
The Making And Unmaking Of The Bubble
March 31, 2009
Technology investor Glenn Hutchins had a useful essay in Fortune a few weeks back on the causes of the bubble. Some of the statistics he pulls together really help make things concrete: From 1930 to 1997, U.S. house prices grew by .7% annually. From 1998 to 2006, they rose at an 8% clip. This was of course enabled by cheap mortgages of all stripes offered to less and less creditworthy borrowers.
Will The Banks Go On Strike?
March 29, 2009
There is no question that the Obama administration has abandoned any vestige of laissez-faire capitalism. It may not be socialism, and it’s certainly not fascism, as some idiots--sorry, conservative thinkers--have declared, but it is at the least capitalism with a very strong dose of state planning. The real question is on behalf of whom, or under whose dictates is the planning being conducted.
Whistling Past The Graveyard
March 16, 2009
Simon Johnson is a professor at MIT Sloan School of Management and a senior fellow at the Peterson Institute for International Economics. He is co-founder of the global economy website, BaselineScenario.com. Expectations were low for this weekend's G20 meeting of finance ministers and central bank governors. Despite that, we should be disappointed with the outcome. There was no substantial progress on any policies that will help pull us out of a severe recession. The U.S.
What That Swedish Model Actually Looks Like
February 24, 2009
Not quite as buxom or blonde as you might think, but not bad either... Swedish economist Anders Aslund has a very helpful post over at the Peterson Institute blog: Sweden did not nationalize its banks. It was Norway that did so, which is an alternative model. In Sweden, a temporary emergency bank authority was set up on the model of the US Federal Deposit Insurance Corporation. ... The banks were forced to write off their bad debts and transfer them to bad banks. Sweden had no aggregator bad bank and the bad banks were not nationalized. Each big bank set up its own bad bank. ...