John Cassidy's Blog, page 123

Tiger vs. the Golf Media: It's No Contest

Watching Tiger Woods effortlessly handling the polite queries from golf reporters at his meticulously staged press conference in Augusta yesterday, I was reminded of a story about the English soccer team at the 1986 soccer World Cup, which took place in Mexico. For the early stages of the tournament, the English team was based in Monterrey, a grim industrial city in the north of the country. I went to Mexico as a fan, but one of my old Fleet Street pals, Allan Hall, was there working for The...

In Defense of Bubbles

If there's one subject I've bored New Yorker readers with more than any other over the past decade or so, it's the dangers of speculative bubbles. When I first started banging on about this subject, back in the late nineteen nineties—see, for example, this piece from 1997—nobody took much notice. Back then, many economists, including Fed Chairman Alan Greenspan, were skeptical about the very existence of bubbles. Even if they did exist, it was widely believed that they didn't present much...

In Defense of Bubbles…

If there's one subject I've bored New Yorker readers with more than any other over the past decade or so, it's the dangers of speculative bubbles. When I first started banging on about this subject, back in the late nineteen nineties—see, for example, this piece from 1997—nobody took much notice. Back then, many economists, including Fed Chairman Alan Greenspan, were skeptical about the very existence of bubbles. Even if they did exist, it was widely believed that they didn't present much...

ObamaCare by the Numbers: Part 2

This is a long and somewhat involved post. For those of you with O.A.D.D. (online attention-deficit disorder), I've provided an express and local version.

EXPRESS:

The official projections for health-care reform, which show it greatly reducing the number of uninsured and also reducing the budget deficit, are simply not credible. There are three basic issues.

The cost and revenue projections rely on unrealistic assumptions and accounting tricks. If you make some adjustments for these, the...

ObamaCare by the Numbers: Part 1

Here goes another post destined to make me unpopular in some quarters. (You can find my previous contribution on the same subject here.)

From a political and historical perspective, the passage of health-care reform is a major victory for liberals, moderates, and even conservatives with a social conscience. It has long been a national disgrace that a country as rich as the United States failed to provide basic health care for tens of millions of its citizens. President Obama, to his credit...

An Inefficient Market in Tigers?

According to William Hill, the British bookmaker, Tiger Woods is the 4/1 favorite to win the Masters, his first tournament in six months, which begins on April 8th. In statistical terms, this implies that bettors believe he has a twenty per cent chance of winning, or, alternatively, if the tournament were played five times, he would win once. (Bookmakers like Hill change the odds to reflect the weight of money. If people bet more money on Tiger, his odds would shorten.)

Stated in this way...

What Did Ken Chenault Do to Earn $80.1 Million?

Why are Americans so furious at Wall Street bigwigs and other members of the business élite? The root of the problem, I think, is that people perceive, in my view rightly, that C.E.O.s, senior Wall Street bankers, and other members of the corporate aristocracy live according to different rules.

Take Ken Chenault, the longtime C.E.O. of American Express. In many ways, Chenault, one of the few African-American bosses of a Fortune 500 company, is an admirable figure. The son of a Long Island...

What Did Ken Chenault Do to Earn $79.6 Million?

Why are Americans so furious at Wall Street bigwigs and other members of the business élite? The root of the problem, I think, is that people perceive, in my view rightly, that C.E.O.s, senior Wall Street bankers, and other members of the corporate aristocracy live according to different rules.

Take Ken Chenault, the longtime C.E.O. of American Express. In many ways, Chenault, one of the few African-American bosses of a Fortune 500 company, is an admirable figure. The son of a Long Island...

The Lehman Report: Is It Time for a Special Prosecutor?

After a slow start, commentators and media outlets are finally cottoning onto the implications of a devastating new report on the collapse of Lehman Brothers. Andrew Ross Sorkin, my fellow chronicler of the financial crisis and frequent co-panelist, has a good column in today's Times which takes to task the regulators who ignored, or possibly even condoned, the accounting shenanigans that Lehman was getting up to during its final months. Meanwhile, Eliot Spitzer and Bill Black, two lawyers...

The Second-Mortgage Conundrum

Since putting up my last post, I've been doing some more research into the vexed question of whether big banks are hiding enormous losses on home equity loans and other second mortgages. The Roosevelt Institute's Mike Konczal reckons that is what is happening. He argues that this practice makes a mockery of last year's "stress tests," which the Treasury and Fed carried out to assure investors of banks' solvency. Finding reliable data on this issue isn't easy, but after speaking to industry e...