Be wary of foreign leaders who complain they are innocent victims of bad U.S. economic policies. This is a little bit like friends who blame you for their hangovers — after they’ve spent the night dancing on tables. This is…
Category: Other
Bigger financial firm? Often it’s not better
Economies of scale are not guaranteed. Take that lesson from Citigroup’s sale of a controlling interest in its Smith Barney brokerage operation, and its decision to split itself into two pieces. The myth that bigger is always better is a…
Swindles go hand-in-hand with bubbles
With possible losses of $50 billion, one may exaggerate by describing Bernie Madoff’s scheme as the tip of an iceberg. If history is any guide, however, numerous other frauds will emerge before our ongoing debacle is over. The basic problem…
Armed forces need a better pay structure
One problem with economic crises is that their urgency diverts energy from less dramatic issues. With the current focus on bailouts and stimulus packages, Congress and the Obama administration probably will let issues raised by the 2008 Quadrennial Review of…
Stimulus could “crowd in” private-sector spending
As Congress mulls over an economic stimulus package, its members have to decide whether they believe government spending always reduces private-sector spending or if there are times when the government can actually boost private spending. Many conservative politicians and economists…
Will crisis spur leap in economics theory?
Ongoing economic problems promise that 2009 will be a tense year for the global economy, and the lives of billions of people will depend on how the year’s events play out. It thus will be a crucial period for economists,…
Rebalancing economy takes time
As a new year dawns, let’s hope that in 2010 our economy returns to ‘internal and external balance.’ Yes, I know that it is 2009, not 2010. But there is no hope that ongoing economic turmoil will end this year.…
Be realistic about tracking bailout money
Hardly anything is more fungible than money. Keep that in mind when you hear expressions of outrage about banks’ inability or unwillingness to explain what they did with the money received through the Treasury and Federal Reserve’s frantic bailout of…
Price swings bounce “inelastic” commodities
How primary commodity producers — farming, mining and energy companies — remember 2008 will be a bit like how different people remember an amusement-park visit. For those who like scary rollercoasters, it was great. For others, the sooner forgotten, the…
Emotion clouds tax policy debates
It is human nature to view a policy differently depending on whether it hurts you or favors you. It is also human for politicians to view as unjust a policy that hurts vocal citizens. But this doesn’t imply that catering…