Our nation’s ongoing economic travails may be entering a new phase, but are not ending. The stock market has recovered from lows set in March, the rate of job losses may be easing and some indicators may show credit is…
Category: Other
Investors should flex muscle on exec pay
There is little argument that the CEOs of many major U.S. corporations are overpaid. The relevant questions involve the degree of overpayment and what, if anything, government should do to correct the problem. Of course, “overpaid” is a value judgment…
Bubbling over with optimism
Financial bubbles make smart people pour money down ratholes. That is an underappreciated aspect of bubbles like the one from which we currently are recovering. Gyrations in the value of houses or retirement savings capture people’s attention. So do bankruptcies…
New credit card rules come with a cost
Public discussion of the new credit card legislation makes clear that many people have not thought through the economic functions of this most ubiquitous form of modern consumer debt. Nearly all U.S. adults have a credit card and many of…
Economists, like jurists, are swayed by more than facts
President Barack Obama’s nomination of Judge Sonia Sotomayor to the Supreme Court raises the question of whether a person’s life experience should influence how she or he analyzes particular issues. An economist has no particular standing to comment on qualifications…
For good policy, Fed execs needs to ‘fess up
Since the wheels started coming off the wagon of the U.S. financial markets in June 2007, when Bear Stearns allowed two hedge funds it managed go broke after losses on mortgage-backed securities, Federal Reserve economists have taken a curious stance.…
Not all sin taxes are equal in benefits to society
Increasing taxes on alcoholic beverages would improve the efficiency of the U.S. economy, at least marginally. Increases in taxes on tobacco or a new tax on sweetened soft drinks would not. Whether that assessment influences debate at the national level,…
Leaders need incentives to do good
Once again, Minnesota’s governor and Legislature seem deadlocked on budget issues. This is a perennial problem, but the stakes are particularly high as the state faces a very large budget shortfall. Moreover, this is against a backdrop of the worst…
Economic downturn affects savings at all levels
The Social Security ‘trust fund’ is now projected to run out of money in 2037, moved up from 2041, according to its trustees’ latest report. That would not mean an end to benefits, but it would limit them to the…
Kazakh crisis should chill credit swaps
Recent news about loans to Kazakhstan and credit default swaps illustrates the complicated and sometimes perverse incentives created by the esoteric financial instruments that sprang up over the last 15 years. This particular case is not, in itself, of importance…