Banking is like manufacturing explosives. However carefully you manage it, there are inevitable blow-ups. But if you keep production units small and sufficiently separated, you can minimize the overall damage that any eventual accident will cause. Ravi Jagannathan, a finance…
Category: Other
Credit McNamara for the way we operate
Robert McNamara’s mistakes as Secretary of Defense have eclipsed forever his other contributions, including his participation in the genesis of operations research. This important field at the intersection of applied economics, engineering and mathematics has affected the world more than…
Oil speculators fill niche, but controls sound
Large financial firms are contending with the oil industry right now for the title of ‘most hated business sector,’ so few in the general public will oppose a new initiative by the Commodity Futures Trading Commission to impose tighter regulation…
Afghan development a tough task
Despite the news this week of the U.S. military’s major offensive in Afghanistan and the the fact the government has increased U.S. troop levels in Afghanistan to three times 2008 levels, the Obama administration stresses that the primary U.S. emphasis…
Rumor of Great Lakes raiding doesn’t hold water
In public policy affairs, just as in private or business ones, it is important to balance the time and resources expended to achieve some goal with the value of the goal itself. Economists call this benefit-cost analysis. But it boils…
Kicking the tires on “cash for clunkers”
The Obama administration’s cash-for-clunkers program of paying up to $4,500 for owners of fuel-thirsty vehicles to trade them in on more fuel-efficient vehicles may not be a clunker itself, but it is no creampuff. The program is pretty simple. The…
Flawed logic led to flawed banking regulation
Events of the past two years have exposed a logical flaw in our historic approach to regulating financial institutions, especially banks. To its credit, the Obama administration recognized this flaw in its proposals for regulatory changes. Whether the administration’s proposal…
Overlapping financial regulators are out of date
The Obama administration has just sent Congress its proposals for improved regulation of financial institutions. In future columns we can examine just how proposals from the administration and Congress might work out. First, however, let’s take a moment to reflect…
Those on the left and right need to keep it real
Few things in life are as treacherous as unrealistic expectations. You are sure to be disappointed if you place your hopes on something that has an extremely low probability of coming true. But highly unrealistic economic expectations seem rampant right…
Mayo wants its way, and for you to pay
I admit I am not impartial. The fact that for 23 years I have lived three blocks from a rail line with up to 70 trains a day hauling things like chlorine gas, anhydrous ammonia, molten sulfur, sulfuric acid and…