Russell Roberts's Blog, page 1543

He Should Bone-up on History

Here's a letter to the Washington Post:

Benjamin Kelley says that his art "represents the dehumanization of modern society" ("An artistic body of work's bone of contention," July 16).  I'd like to ask him which aspects of pre-modern society he believes to have been most humane.  Was it a life-expectancy of about 30 years?  How about mass illiteracy?  Maybe Mr. Kelley longs for the odors, lice, and scabs that regularly adorned human bodies that seldom bathed and that slept on dirt or...

Woulda coulda shoulda

Mark Thoma writes:

A big problem when the financial crisis hit was that regulators did not have the authority to force financial institutions in the shadow banking system into the type of resolution process the FDIC uses for banks in the traditional banking system. This solves that problem, and this is an important change.

Arnold Kling writes:

On the most important issue of "too big to fail," the legislation does exactly the wrong thing. It gives regulators discretion to use resolution...

The $550 million typo

Goldman has settled the Abacus suit with the SEC, and will pay a $550 million fine:

Settlement papers filed in a New York court contained the following statement from Goldman. "It was a mistake for the Goldman marketing materials to state that the reference portfolio was 'selected by' ACA Management LLC without disclosing the role of Paulson & Co. Inc. in the portfolio selection process and that Paulson's economic interests were adverse to CDO investors. Goldman regrets that the marketing...

New hires or new jobs?

In this earlier post, I expressed doubt about the Keynesian mechanism of stimulating aggregate demand as a way to put people back to work. As President Obama tours Michigan, trying to claim that his economic policies are working, you can see the issues clearly. Despite a lot of money flowing into the area, unemployment remains high and employment is below the level of a year ago. How can that be? Doesn't all that federal spending boost aggregate demand and put people back to work? Read these ...

Experts at work

The WSJ reports:

But the work on the far-reaching rewrite of the nation's financial rules will hardly be over when Mr. Obama signs it into law. The legislation gives financial regulators significant discretion to shape the rules implementing the legislation. That rulemaking process will determine how the new law affects those ranging from traders of complicated derivatives to consumers shopping for a mortgage or a credit card.

All told, the bill directs regulators to write 533 rules, according...

Pension spike

More hard-to-believe info on the world of public employee compensation in California. From the Contra Costa Times (HT: Roman Hardgrave):

PETER NOWICKI, the chief of the Moraga Orinda Fire District, knows how to play the retirement system. That's why he was able to convert a $185,000 annual salary into a $241,000 yearly pension.

The losers are taxpayers and employees of the fire district who are left to help finance the outrageous payments. They should insist that elected officials put a stop...

Some Links

Former Securities & Exchange Commission commissioner Paul Atkins recently published two essays worthy of careful reading.  This one is at Forbes.com; this one is at the Wall Street Journal.

Here's the final entry of my three-part series, in the Pittsburgh Tribune-Review, analogizing the economy to a huge jigsaw puzzle.  (The nature of the analogy changed somewhat from essay one to essay three; still, I believe that insight can be gained by pondering this analogy.)

This new paper by Andreas...

Simple

From the Washington Post:

On Tuesday, Obama tapped Jacob Lew as budget director and publicly directed him to reduce the deficit.

Well that's that. All Lew has to do is what Obama told him. Simple.

The road to poverty

In this 1933 essay from the Yale Review, "National Self-Sufficiency"," John Maynard Keynes turns against free trade. As I say in The Choice, self-sufficiency is the road to poverty. I'm liking this Keynes fellow less and less.

The Greek part of Oakland

I noted the other day that the average (the average!) cost to the city of Oakland of employing a police officer is $188,000 and that the city was negotiating for concessions to avoid layoffs. Today comes the news that they couldn't agree–80 Oakland police officers have been laid off.

With the story comes a few more  facts:

Oakland laid off 80 police officers Tuesday after negotiations between city officials and union leaders failed on one simple matter: job security.

The police union demanded...