Category: Politics

Real Reasons Bankers Don’t Like Basel’s Rules: Clive Crook – Bloomberg. Why bankers’ whining about higher equity requirements is just that: A much-cited paper by Stanford’s Anat Admati and colleagues — “Fallacies, Irrelevant Facts, and Myths in the Discussion of Capital Regulation: Why Bank Equity Is Not Expensive” — should have ended this debate once…

I’ve gone on about this elsewhere, but thought I should bring it up front and center here. While everyone hyperventilates about government debt, they don’t seem to be aware of the massively greater load of private debt, and its spectacular runup compared to government debt: This from Steve Keen’s latest. (It’s not very long. There…

I’m stealing this headline directly from Sandwichman. He sez: No it doesn’t. It almost never is. To pay back government debt, you have to run a budget surplus, and while there may be modest surpluses from time to time, they don’t add up to more than a minuscule fraction of all the accumulated debt. But…

Let’s start with two basic facts: • Governments in all thriving, prosperous countries tax/spend 25–50% of those countries’ GDP (averaging around 40%). • Governments in non-prosperous countries — those that haven’t suffered a recent crash in the numerator/GDP — are all below that range. There is not a single thriving, prosperous country that does not…

File under: “Every brilliant, original thought or formulation that you think you’ve come up with has probably been thought of before, and probably by a Nobel laureate.” Nanute points us to: 15 Fatal Fallacies of Financial Fundamentalism. William Vickrey, 1996. Here are the first three paragraphs. As they say in the trade, read the whole…

Tax-to-GDP ratio and bond yields in OECD countries Tax-to-GDP ratio and bond yields in OECD countries (excluding Greece) In fact, governments that tax sufficiently to pay their bills have lower borrowing costs. Go figger. More here: The welfare state is not to blame for the Euro crisis « We are all dead.. Related posts: Is the…

Ask and ye shall receive. Roger Chittum sent me this: Estimated correlations between sons’ and parents’ incomes, 1950-2000 Higher correlations, of course, mean lower mobility. Why do all these inflection points land at 1980 (or just before)? While you’re there, don’t miss this incredible interactive graphic: Mobility decreasing in recent decades | State of Working America.…

By every measure I’ve been able to find, income mobility in America is much lower than in other prosperous (especially northern European) countries. (Follow Related Posts links below for details.) But I’ve had trouble tracking down changes in those measures. Here’s one: I’m finding it difficult to parse the date axis at the bottom (and I…

It’s no secret that humans are prone to confirmation bias: adopt a belief, then go seek out evidence that supports it. Rafts of books, articles, and blog posts have been published on the subject, over many decades. But so far (I haven’t searched comprehensively, by any means) I’ve been disappointed because they all tend to…

When asked why he chose to emigrate to Canada even though he still runs his business in the Chinese mainland, Michael Li gave a simple answer: “protection.” Li, who works in venture capital, told the Global Times that the environment, food safety, social welfare and relatively small population in Canada give him a feeling of…

The economic mess in which the United States and Europe find themselves and which has been exported to much of the rest of the world is the direct consequence of too much economic freedom. The excess freedom is the direct consequence of financial deregulation. Paul Craig Roberts served as Assistant Secretary of Treasury in the…

Various sources have been pushing me lately to read Ian Steedman‘s work. Right out of the gate, I come upon this aha! paper: The welfare of almost all employed people is significantly affected by how they spend their working hours — and not just by how long they work and what they can purchase with their earnings. Yet…

You have to face the following fact: all assets declined by about the same amount, and real estate around the world by the same amount, even in places where there were no subprime mortgages. Cause and effect is not very easy to disentangle. This argument seems to have legs (at least if this one does).…

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areas disproportionately served by lenders covered by the CRA experienced lower delinquency rates and less risky lending. Similarly, the threshold tests show no evidence that either program had a significantly negative effect on outcomes. Emphasis mine. via The Subprime Crisis: Is Government Housing Policy to Blame? | The Big Picture. Related posts: Eugene Fama on…

My buddy Ole has a great line that I’ve been following and quoting as a mantra for businesspeople for a couple of decades: Hire the lazy. By which he means (and I mean), hire people who will figure out how to streamline and automate the boring and repetitive parts of their jobs, so they can…

The Bonddad Blog: About that GSE/CRA Causing the Bubble Argument ….. Related posts: Eugene Fama on the (Subprime) Meltdown Did Fannie, Freddie, and the Community Reinvestment Act Cause the Meltdown? Uh uh. Did CRA and the GSEs Cause the Housing Crisis? Uh uh. The Poor Get Poorer Explaining the Fed Credibility Argument

’81. ’90. ’01. ’08. Does anyone else see a trend here? Chart Focus: How high unemployment lingers. Related posts: Length of Unemployment is Worst Since World War II There is Only One Trustworthy News Source: Fox. There is Only One Trustworthy News Source: Fox. There is Only One Trustworthy News Source: Fox. There is Only…