The current mess in the U.S. banking industry is both unfair and economically inefficient. But there are no easy ways to clean it up. The situation reminds me of the old joke about the too-agreeable rabbi. Two members of the…
Category: Other
Team of solid economic advisors would boost Pawlenty
While not yet a declared presidential candidate, Gov. Tim Pawlenty needs to recruit some well-respected economic advisers. When governors like him run for president, executive experience is their strong suit, but they lack experience in national economic issues. That is…
Lehman–or somebody else–had to fail
Historians and laypeople will argue about the causes and effects of the great financial debacle of 2007-2010 for decades, just as they continue to debate the Great Depression. Looking back, people will ask “What if the Fed had intervened to…
Voters–and politicians–need to forget pledges
At the Minnesota budget summit a week ago, Martin Sabo made a profound assertion: ‘There should be one pledge, and that is not to make pledges.’ He meant that legislators and congressional representatives need the flexibility to agree on solutions…
Social Security’s “payback” better than many think
The current hot debate about proposed changes in health care financing has sparked concern for many about how such changes will affect Medicare benefits. Also looming in the background: the unresolved question of how Social Security might be changed to…
The “paradox of thrift” will hurt now–but help later
Pay off $500 of your Visa bill and you may put someone out of work for a week. That is the downside of the Federal Reserve’s announcement this week that U.S. households paid down their consumer debt by $21.6 billion…
Bogged down by a sense of entitlement
The ongoing brouhaha over proposed health care changes shows how costly the term “entitlement” can be. There are two relevant meanings of the word. One is an exact legal definition relating government funding to benefit eligibility. The other, more ambiguous,…
Federal Reserve profits on bailout funds no mystery
The recent news that the Federal Reserve made some $14 billion on sundry lending and securities purchases over the past two years is raising comments. It should not. The Fed usually makes money by managing our nation’s money supply. So…
Even when cash isn’t involved, “opportunity cost” crucial
The mess in which our nation finds itself in Afghanistan illustrates a fundamental economic concept, that of ‘opportunity cost.’ This idea, often expressed as “there’s no such thing as a free lunch,” reflects the fact that in a world of…
Economics can put consumers in a real pickle
Economics is a study of human behavior, specifically of how humans make decisions about using the scarce resources at their disposal so as to best meet their needs and wants. They inevitably make such decisions multiple times each day. My…