In Favor of Arts Spending
Michael Kaiser makes some good arguments in favor of increased arts funding, but unfortunately he mixes them up with bad ones, and he glosses over the best ones. The result is that Tyler Cowen gets to...
View ArticleObama’s Big Speech
I agree with pretty much everything in Barack Obama’s big speech today about his stimulus plan. And not (just) because I’m some kind of lefty: Alex Tabarrok feels much the same way, as does Evan...
View ArticleCan We Really Guide the Economy?
Ryan Avent says that he thinks the "plausible range of economic outcomes is, at the moment, quite wide indeed", and wonders whether "the size of this conceivable range is actually reflective of...
View ArticleWhen Stimulus Doesn’t Scale
Barack Obama wants ideas from Paul Krugman, who of course is happy to oblige — and to make the good point that "we don’t have many specifics from the Obama people themselves". But hidden in the...
View ArticleBernanke’s Unconvincing Confidence
Ben Bernanke’s speech in London this morning constitutes a clear overview of the various bullets that the Fed has fired into the onrushing crisis. But he starts off with a bold and puzzling claim: I...
View ArticleThe Behavioral Economics of the Stimulus
I knew that there was some serious behavioral economics behind the Obama team’s plans to structure a tax rebate by reducing withheld tax! Jim Surowiecki has chapter and verse: In the words of the...
View ArticlePhil Gramm’s U-Turn
Phil Gramm, November 2008: “There is this idea afloat that if you had more regulation you would have fewer mistakes,” he said. “I don’t see any evidence in our history or anybody else’s to substantiate...
View ArticleAnnals of Central Bank Transparency, Federal Reserve Edition
John Lanchester reviews Liaquat Ahamed’s Lords of Finance: America’s first modern central bank was established in 1913, in the teeth of strong populist suspicion of bankers. The men who conceived it...
View ArticleWhy is the ECB Being so Gradualist?
Jim Surowiecki asks a good question today: if you know that you’re going to cut interest rates — and Jean-Claude Trichet has made it abundantly clear that he intends to cut interest rates in March —...
View ArticleGeithner’s Vagueness Explained
How could Geithner’s much-vaunted financial rescue plan have been so stunningly vague on arrival, given the amount of time he’d worked on it? The Washington Post reveals that in fact he’d only been...
View ArticleAdventures in Icelandic Monetary Policy
What does it mean that Iceland has just raised interest rates by 600bp, after cutting them by 350bp a couple of weeks ago? I’m not talking about monetary policy here, I’m talking about what it means in...
View ArticleEconomic and Financial Bad News
If you’re one of those people who needs a negative GDP number to convince yourself that we’re in a recession, here you go. But the headline -0.3% figure isn’t the worst bit: that would be the 8.7% fall...
View ArticleThe 50bp Lower Bound on Interest Rates
There’s been lots of talk in recent days of the "zero bound" on the Fed funds rate — which is exactly where the Taylor Rule would put it. But the real bound might be halfway between here and there, at...
View ArticleThe Bank of England Capitulates
If there’s one advantage of being a little behind the curve when it comes to rate cuts, it’s that you can shock the markets with an absolutely monster out-of-the-blue 150bp cut even as most people were...
View ArticleWhy Would Treasury Cut AIG’s Interest Payments?
The WSJ’s latest AIG story has set off Joe Wiesenthal’s bullshit detector — and mine, too. It’s headlined "U.S. Weighs Options to Ease Strain on AIG", and it seems to be an attempt to jawbone Treasury...
View ArticleAIG Bailout 2: Why?
The WSJ has details of AIG Bailout II: Under the terms being finalized on Sunday night, the government would replace its original $85 billion loan with a two-year duration with a $60 billion loan with...
View ArticleThe Right Kind of Bailout
Today’s NYT has an article about the enormous obstacles facing any Detroit bailout bill between now and October, with Senator Richard Shelby of Alabama saying that "the financial situation facing the...
View ArticleWhen Stabilization Isn’t Stimulus
Quote of the day comes from Neel Kashkari: Treasury Assistant Secretary Neel Kashkari, who is heading up the government’s implementation of the rescue plan, defended the department’s actions, saying...
View ArticleA Smaller World
Lou Jiwei, the head of China’s CIC sovereign wealth fund, is saying some interesting things: “Right now we do not have the courage to invest in financial institutions because we do not know what...
View ArticleMonopoly Money
Larry Doyle thinks he’s joking: That’s when the bankers and the C.E.O.s all disappeared into that underground paradise they’ve been building since the eighties; that’s when women’s skin started falling...
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