Moral hazard

Back in 2009, there was a lot of talk about the “moral hazard” of bailing out big financial institutions.  The concern was that, once bailed out, the banks would learn that no matter what happened the Federal Reserve and government would be there to cover all of their bad loans – and thus make more.   In short, providing insurance for default makes it more likely that it will occ Continue Reading

Buy little, buy small

The first snow of the season fell around us in Saint Paul, a wet gloppy snow that froze into a slick shield of ice.  The city pulled in tight around itself as driving became an ordeal, knuckles tight and eyes wide and everything as white as the world itself.  A week and a season defined by rush-rush and shopping started with a moment apart from the world made for hot cocoa.

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Print or die

Europe has come to understand that what is at stake right now is not just the economies of a few member nations, but the future of European Union itself.  The cornerstone of that union is the Euro, the single currency that has made close cooperation even tighter.  But in order to save that currency, there is little that can be done short of the member nations drawing much closer toget Continue Reading

Election recap

The election is over.  As everyone decompresses the habit of constant analysis flashes back to what happened over the long months of campaigning.  Like any process, it’s good to step back at the end and think about what went well, what went wrong, and how it all could have been better.

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Super committee

Back in August, negotiations over the Federal budget were so impossible that Congress had to punt to a “Super Committee” that had until November 23rd to report back on how to proceed.  Failure to come up with a plan would trigger automatic spending cuts and probably quite a bit of chaos.

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Euro contrast

This morning the Euro crisis moved on from the still unresolved Greek issue to Italy. There is nothing new here except that Italian PM Silvio Berlusconi said he would resign after an austerity package was passed and move the nation ahead into new elections.  How did that happen?

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Assault on Shakespeare

Today the movie “Anonymous” opens in the US and UK.  It is a work of historical fiction centered around the notion that William Shakespeare was not a real person, but a pen-name used by the Earl of Oxford.  Under normal circumstances it would be best to simply ignore something this ridiculous, but reaction Continue Reading

“Supply side” is dead

“Supply Side” economics has always been a fancy term that sounded like a plan.  It was popular in the 1980s because it seemed to work – but very few people ever understood that it worked for the wrong reasons.  It was, at least in practice, the old Keynesian theory dressed up in a suit and ready for a white-collar world.

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Occupying

The times, they are a changin’.  As the weather turns grey and cold an old fashioned protest has taken over Wall Street issuing demands that … well, they don’t have demands yet but the leadership … well, they don’t want leaders, but we do know that the establishment is pushing them to … actually, Mayor Bloomberg Continue Reading