Quote of the day: I’m not an economist, but we’ve got five applicants for every single job opening. If you tell me that the best response to that situation is to lay off hundreds of thousands of teachers, I will not accept that this means that you’re smarter and more expert than I am. I…Read More Herbert Hoover, redux
When politicians use mutually incompatible arguments to attack the same proposal, it’s safe to say that they are more interested in scoring political points than actually participating in a meaningful debate. Here’s Andrew Sullivan on RNC posturing about the stimulus bill: On the one hand, they seem to be saying (a la McCain) that this…Read More The extraordinary cluelessness of the Republicans
I just got back from a morning’s Christmas shopping at Bellevue Mall. It was eerily quiet, with the kind of traffic that I would have expected to see on a typical Saturday in March. I walked by several high-end shops (jewelry, perfume, that kind of thing) that were empty except for a couple of worried-looking…Read More Spookily quiet
Yglesias skewers the notion that nobody is especially to blame for the financial crisis, that it’s just “human nature”. (And Ta-Nehisi Coates really ought to know better.) After all, the underlying premise of our finance-led rush to hyperinequality has been that the rich are very very very very different from you and me and that…Read More Apportioning responsibility
Leave it to the Queen to ask the obvious question: The latest Occam’s razor award goes to Her Majesty the Queen. In the unlikely surroundings of the London School of Economics, she last week cut to the quick. Describing the credit crunch as “awful”, she tapped a gilded economist on the proverbial shoulder and asked:…Read More "We are not amused"
Nils Gilman discusses how he and some colleagues spent a day last March discussing financial scenarios. By the end of the day… …we had laid out a scenario whereby the money center banks […] could end up insolvent, necessitating a wholesale nationalization of the banking sector.Â We then looked around the table at each other and…Read More "That could never happen. Impossible."
For those short-sighted people who think that this financial crisis is all about punishing fat cats on Wall Street, think again. Via the Leiter Reports Wachovia bank has frozen the accounts of nearly 1,000 colleges, leaving institutions unable to access billions of dollars they depend on for salaries, campus construction, and debt payments. The freeze,…Read More The financial crisis and your kid's education…
A group of Princeton economists look at the causes of the financial crisis, and what should be done about it. (And when!) (This is also available on iTunes U.) It looks as if the really urgent steps have already been taken – nationalizing Fannie, Freddie, and AIG – and we can afford to spend a…Read More Take an hour to understand what's going on
Andrew Sullivan posts some thoughts by a reader on the proposed financial bail-out. Third, the administrations proposals continue a process of socializing loss and preserving profits and distributions, many of which were made with full knowledge of the pending losses. When management distributes illusory profits to insiders in full knowledge of a massive loss, this…Read More Term of art: "fraudulent conveyance"
Wisdom from Michael Thomas in Forbes.com today: As I pondered, the thought came to me that if there are particular culprits who are conspicuously and flamingly behind Wall Street’s unholy predicament, and who bear continuing responsibility for its day-to-day worsening, they are the rating agencies. Which leads to the logical conclusion that perhaps the best…Read More First thing we do is shut down the rating agencies