Financial Crisis

Bernanke’s legacy

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Barack Obama recently indicated that he is unlikely to reappoint Ben Bernanke as chairman of the Federal Reserve when his term expires next January. Understandably, the media is focused on who might succeed Bernanke to lead the US central bank. After all, the chairman of the Federal Reserve is often described as the second most … Read more

Will the Brits go negative?

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A little over a year ago, I argued that the Federal Reserve should consider charging banks for the privilege of holding their reserves.  The reasoning for this is straightforward: charging interest on banks (instead of paying interest, as the Fed now does) will encourage banks to come up with more profitable uses for their money, … Read more

The biggest threat to capitalism

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Most of us spend more time thinking about the latest London Olympics results than the scandal surrounding the London InterBank Offered Rate, or Libor. That is a big mistake. We should be paying more attention to the Libor scandal.  And we should be terrified. The public has been so fatigued by the flood of awful … Read more

Musings on Libor

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Here are a couple of recent musings on Libor. “Bankers Should Take A Lesson From The Mob,” was slated to appear in today’s Hartford Courant. “5 Questions With . . . Richard Grossman on the Libor Scandal,” an interview with Lauren Rubenstein, appeared in the Wesleyan Connection a few days before.

A Blatant Misuse of History

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Writing nearly 40 years ago, historian Ernest R. May warned of the dangers of misusing history for policy purposes.  May was primarily concerned that policy makers drew the wrong lessons from the past. In their opinion piece in yesterday’s Wall Street Journal, Glenn Hubbard, dean of Columbia Business School and an advisor to Mitt Romney, … Read more

Ben Bernanke is a much better economist than John Taylor

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Writing in Thursday’s Wall Street Journal, John Taylor takes the Federal Reserve to task for its “interventionist” behavior. Taylor’s main complaint with the Fed’s conduct of monetary policy is that it is unstable and unpredictable (verging on the whimsical!).  He argues that this stems in part from the Fed’s mandate to pursue low unemployment in … Read more