For earlier parts in the series, see here and here.
In the history of public policy, like in other disciplines, sometimes the most fascinating topics are the most ordinary, the most overlooked. The things we don’t really notice can be the most powerful influences in our lives, because they can function unseen. And that brings us to the topic for today’s post.
We grumble about taxes, we handle money every day, but we don’t really think about what the power of the public purse means.
As the leaders of the industrialized world converge on Pittsburgh later this week to "commit to a framework for sustainable and balanced growth" (as President Obama has put it), perhaps a nail in that frame could be the forgiveness of the debt burden saddling many of the world's poorest countries.
There are regulatory agencies with good reputations, and then there are agencies with bad reputations. There are bad ideas, and then there are criminally bad ideas. That's why it is so disturbing to see a regulatory agency with a good reputation like the FDIC propose a criminally bad idea.
(AP) — Regulators may borrow billions from big banks to shore up the dwindling fund that insures regular deposit accounts.
For anyone with even a passing familiarity with issues associated with economic inequality, The Wall Street Journalfront page story last week was shocking. Its use of bad data was a misuse of this important forum. In effect, the article says that economic inequality was never really a problem, and even if it is we no longer have to worry about it. These conclusions are just plain wrong.
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
This is almost silly but considering the move today by the Federal Reserve to limit executive pay, the below video, in the tacky genre of Lifestyles of the Rich and Famous might jar some reality on executive compensation.
In the debt-based currency system of today credit is the life-blood. Without credit the economy has no money and nothing can grow.
That's why all this talk about economic recovery is puzzling. There is no talk about more jobs, higher incomes, or more paid working hours. So any recovery must come from credit. Yet it is credit that is lacking.
Professor Tim Congdon from International Monetary Research said US bank loans have fallen at an annual pace of almost 14pc in the three months to August (from $7,147bn to $6,886bn).
"There has been nothing like this in the USA since the 1930s," he said. "The rapid destruction of money balances is madness."
You are probably familiar with the old fable about the scorpion and the frog. The one where the scorpion asks the frog for a ride across a river and the frog declines because it fears that the scorpion will kill it. Then the scorpion cons the frog by appealing to the logic that if it kills the frog, it would surely die too. Convinced, the frog agrees to help the scorpion but half way across the river, the scorpion stings the frog anyway. Paralyzed, in shock of disbelief, and just before sinking, the frog asks the scorpion "Why did you sting me"? The scorpion replies that it was just in its nature.
It's not enough to run a financial institution into the ground, but when a nation tries to limit executive pay, bankers scurry like rats to the Cayman Islands:
A group of 45 bankers at Barclays yesterday bypassed potential curbs on pay and bonuses by jumping ship to set up a Cayman Islands company and manage $12.3 billion of Barclays’ most toxic debt. They will be paid at least $400 million over ten years (see Commentary, facing page).
In an exotic piece of financial engineering, the bank will lend $12.6 billion to Protium, a newly created Cayman Islands-registered hedge fund, to buy the toxic assets.
One of the largest ideological barriers to establishing Job Insurance, just as was the case with Social Security and Medicare/Medicaid, is that it would in a fundamental way reshape the composition and relations of the public and private sectors. This more than anything else is what terrifies Republicans (it’s the reason why the GOP has targeted the public option especially) because it undermines one of the most important justifications for anti-statist and pro-corporate ideology. If the public sector and the private sector are not diametric opposites – if in fact, the public can do things that the private can, instead of the private sector being the only repository of competence and efficiency (and thus, capable of replacing the public sector) – then there is no practical argument against government intervention in the economy, and increasingly fewer philosophical arguments against it.
And so the argument will be made that this is socialist, that it’s un-American. And none of that is true.
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
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