The Escape Artist
February 10, 2011
How Timothy Geithner survived.
Zombies! Run For Your Lives!
August 10, 2010
The Weekly Standard has a cover package about how President Obama drove the economy in the ditch. One of the stories, which I discussed yesterday, is premised entirely on ignoring economic forecasts from early 2009. The other article is Matthew Continetti's article, "The Zombie Economy," which is a kind of neoclassical argument that the economy needs to be totally purged, but Obama is intervening to support politically-connected business that ought to be allowed to die.
Tremble, Banks, Tremble
July 09, 2010
The financial crisis in America isn't over. It's ongoing, it remains unresolved, and it stands in the way of full economic recovery. The cause, at the deepest level, was a breakdown in the rule of law. And it follows that the first step toward prosperity is to restore the rule of law in the financial sector. First, there was a stand-down of the financial police. The legal framework for this was laid with the repeal of Glass-Steagall in 1999 and the Commodities Futures Modernization Act of 2000.
Sharron Angle And Party Suicide
June 09, 2010
It's not very often you see a political party shoot itself in the foot by nominating an obviously terrible candidate when better alternatives are available. One exception is the Illinois Democrats, who turned what should be a safe seat into a competitive one by nominating Alex Giannoulias, whose family bank went under, for Senate. (Giannoulias hilariously said he would answer questions about the bank only after the primary, and Democratic voters even more hilariously decided to nominate him anyway.) But the nomination of Republican Sharron Angle for Senate in Nevada stands on its own.
No, Barney Frank Didn't Crash The Economy
June 04, 2010
The notion that the economic crisis was caused by Barney Frank and Fannie and Freddie Mac has gained extremely broad currency on the right, but is so silly economists pay no attention to it at all. Paul Krugman has a great blog post summing up the ridiculousness of the whole notion: 1. The Community Reinvestment Act of 1977 was irrelevant to the subprime boom, which was overwhelmingly driven by loan originators not subject to the Act. 2. The housing bubble reached its point of maximum inflation in the middle years of the naughties: Robert Shiller 3.
Libertarians vs. Big Banks
April 01, 2010
Cato's Arnold Kling has a thought-provoking article in National Review arguing for breaking up the large banks: It is the political economy that most concerns me. Freddie Mac and Fannie Mae represent everything that is wrong with the politics of big banks. They acquired lobbying prowess, their decisions were distorted by political concerns, and they were bailed out at taxpayer expense. All of these developments seem to be inevitable with large financial institutions, and all are deeply troubling to those who value economic freedom.
Student Loan Reform And Intellectual Corruption
March 31, 2010
Jacob Levy marvels at the way conservatives have portrayed President Obama's student loan reform as a "Soviet-style takeover": Notice that banks would be free to continue to make student loans. And they're not having their existing assets taken. All they're losing is the ability to make publicly subsidized student loans in the future. A comparison with Soviet nationalization is just nuts. The old system consisted of guaranteed loans -- the government would pay private banks to lend money to students for tuition, and guarantee their losses if the students defaulted.
Has Sprawl Recovered Enough for the National Economy?
January 27, 2010
A new study conducted by researchers from the University of Alabama and University of Florida, sponsored by the Natural Resource Defense Council , shows that car-dependent communities have statistically higher rates of mortgage foreclosure than communities with multiple transportation options, such as transit, biking and walking. This also explains to some extent why across the country that “walkable urban” home values over the past two years have been flat or slightly down while fringe “drivable sub-urban” communities have suffered the worst price declines. The average American household spe
A Really Merry Christmas From Fannie And Freddie To Their C.E.O.s
December 24, 2009
Fannie Mae and Freddie Mac, the couple which together has needed $111 billion to stay afloat and are very far from doing so, did their filings with the Securities and Exchange Commission on Thursday afternoon, just before Christmas eve. I suppose this was to make sure the news contained in them would get the maximum possible attention. This was reported by the Associated Press. But see if it gets printed in your morning newspaper. The two gargantuan mortgage lenders are not yet done with government subventions.
A (Very!) Promising Sign From Lieberman and Collins
December 04, 2009
This morning, three key moderates--Republican Susan Collins, Independent Joe Lieberman, and Democrat Arlen Specter--announced the introduction of a cost-containment amendment to the health-care bill that sent a promising signal about their desire to support the overall Senate bill. The announcement was the strongest indication yet that Collins is a gettable vote and that Lieberman is more persuadable than he previously signaled. Describing the amendment as a “tri-partisan effort,” Collins described the overall bill as containing “a number of promising ideas” that they were hoping to bolster.