You Down with FTT? (yeah, you know me…)
I was on a panel the other day exploring the idea of a financial transaction tax, or an FTT (here’s the video). Much of the discussion focused on the attributes of the idea, riffing off of the bill by Sen Harkin and Rep DeFazio for a small FTT on stock, bond, and derivative trades. Whaddya [...]
The IMF on Capital Controls: Washing Out the Shampoo Economy
OTE readers know I worry about the advent of the “shampoo economy:” bubble, bust, repeat. The last few business cycles both here and in other advanced economies have been characterized by this pattern. To be clear, economies are cyclical…that’s a given. But nowhere is it written—well, outside of Minsky—that the cycles have to be driven [...]
Things that Make You Go…Hmmm…About Globalization
In mid-Mexico, writing comments for a talk on globalization later when I gaze out my window and see this: There’s Burger King, Pizza Hut, and KFC is just out of range. I’m not sure what the “Wall St. Institute” is but maybe they supply the bubbles to the Mexican soft drink industry. So there’s some [...]
How Did Things Get So Screwed Up?
I expected this presidential race to tighten up, so why should I find that fact so dispiriting? At least two reasons come to mind. First, the stakes are high. If Romney/Ryan win and really do: –pass another massive trickle down tax cut on top of making the Bush tax cuts permanent; –repeal Obamacare, voucherize Medicare, [...]
Really!? It Doesn’t Matter if Banks Deceive Customers? A Reminder of Why We Need Financial Reform
MarketWatch, a source I generally like for quick, accurate summaries of what’s going on in markets, has a strange and unsettling commentary up today about a settlement between Discover Financial Services and federal bank regulators. The investigation was started by the Federal Deposit Insurance Corporation and later joined by the Consumer Financial Protection Bureau. From [...]
Q&A on MSNBC
Did a TV spot on the Alex Witt Show this afternoon and I thought she posed a useful set of questions. For those of you out running, walking, reading a novel, watching football, baking a cake, or just spacing out, here they are with brief responses. 1) The credit rating agency Egan-Jones downgraded the US [...]
Ben “I’ve-Still-Got-Bullets” Bernanke Speaks!
Federal Reserve Chair Ben Bernanke gave a good talk today—worth reading if you’re up for slogging through such things—wherein he stressed the benefits and costs of all the stuff the Fed can do to help boost the economy when their main tool—the federal funds rate—is stuck at zero. If you were looking for Gentle Ben [...]
What the Heck Happened to the Middle Class?
Holding forth on this very important question over at MSNBC’s Lean Forward site. Companion piece to this.
The NYT and the Causes of the Income Slump
The NYT’s middle-class income series is back with an interesting list of the factors most commonly cited for the slump in median income in the US (I posted a few initial thoughts about this series here). Though they left out a really important one (but you have to read this to the end to find [...]
US Faces Low Borrowing Costs—Not Free Lunch
Those of us who want to see more temporary government spending on jobs programs right now (I’d call it “stimulus” but that’s a dog whistle these days) often cite the very low interest rates of government bonds as yet another good reason—along with the high unemployment rate—to do this. Last month, the interest rate on [...]
Downgrading the Downgrade
Remember the catastrophic debt downgrade from a year ago, when the S&P credit rating agency took the US debt rating down a notch and interest rates, according to some scolds of the day, like Rep Paul Ryan, were going to go through the roof? Yeah, me neither. But MarketPlace does, and they did a nice [...]
Share Price Madness
Just did a CNBC segment predicated in part on the question that given the recent decline in GM’s share price, was the government’s auto-rescue the right policy? To which I say…Oy. Look, share prices go up and down with lots of things, not least of which is the weak economy both here and especially in [...]
When It Comes to Financial Market Reform…
…it seems to me that the people you want to listen to are the ones who built the architecture that failed and now see the follies of their ways…like former Citigroup CEO Sandy Weill…over at MSNBC.com. Update: You get the popcorn, I’ve got a clip of a few of us discussing Weill’s statements on CNBC [...]
This Morning’s Papes
Ideological Grandstanding Isn’t Free: I’m swimming in de Nile about this one, but Rep Boehner, Sen McConnell and the R’s are threatening another round of stonewalling on the debt ceiling, which we are expected to again bump up against in February. I won’t go through the gory details, but instead of a the historical rubber [...]
Even the IMF Wants GSEs to do PR
OK, too many acronyms in that title. But when the International Monetary Fund, in its new US economic assessment, points out that “[a]ggressive implementation of the measures proposed by the Administration to speed up the housing recovery could yield sizable benefits to the broader economy,” perhaps policy makers should pay attention. I mean, these folks aren’t [...]
Hard Libor
Update: See this NYT editorial out this AM on this. As I note below, the way this worked, traders in the bank asked the folks responsible for setting the Libor to tweak it for them. “Always happy to help,” one employee wrote in an e-mail after being asked to submit false information. “If you know [...]
The Challenges of Messaging: Political Economy Version
[OTE’ers: this is MUCH longer than the usual post. That’s because a) I have only an internal editor and he loves every line!, b) it’s too hot to go out and play, c) I’ve thought a lot (too much?) about this, and tried to learn from my many mistakes. Still, I think many will find [...]
Learning to See Brown Shoots Instead of Green Ones
Lots of focus on the Federal Reserve’s announcement yesterday to twist again (here’s Greg Ip’s take at The Economist). Twist 2 is another dose of so-called unconventional monetary stimulus. In this case, they swap out some of their holdings of short-term debt for longer-term debt, intended to lower interest rates at the long end of [...]
Austerity: Obsession in Recession
Gave a talk on austerity—fiscal contraction to offset recession–the other day at the Center for American Progress. Here’s the deck, much of which is self-explanatory, with a few annotations: Slide 1: I actually think you’d be quite hard pressed to find an historical example where spending cuts or tax increases (especially the former) led to [...]
Uncertainty Insurance
I’ve avoided adding my voice to the uncertainty chorus—the idea that what’s holding back growth and hiring is uncertainty about the future of health care, tax, or environmental policy. It’s neither what businesses themselves say nor what economic theory would dictate as the cause of the current slump—that would be weak demand for their goods [...]
Jared Bernstein’s areas of expertise include federal and state economic and fiscal policies, income inequality and mobility, trends in employment and earnings, international comparisons, and the analysis of financial and housing markets.
