There ought to be a law

Have you ever watched a major league infielder boot a routine ground ball and thought: “For the amount of money he’s being paid, he shouldn’t make that kind of rookie mistake”?  As a fan, it is frustrating. That is how we should all feel about the crises that have rocked the financial world during the … Read more

Don’t Be a Regulatory Neigh-Sayer

Europe has again been rocked by a crisis. The problem was first diagnosed in Ireland in January, but it very soon became clear that its tentacles extend to Britain, France, the Netherlands, Luxembourg, Sweden, Romania, and Cyprus. What is this latest catastrophe?  Why, the great European horsemeat scandal of 2013, of course. News of the … Read more

Your cheatin’ Alma Mater

It was reported this week that Bucknell University has been providing inflated information on the SAT scores of its incoming students for several years.  The news follow similar revelations in recent months about a number of universities, including George Washington University, Emory University, and Tulane University Business School. The news puts these elite universities in … Read more

Wanted: Central Banker

A couple of weeks ago, the Economist magazine ran an unusual “help wanted” ad.  The Governor of the Bank of England, Sir Mervyn King, will retire in June and the British government is looking for a replacement. On the one hand, it might seem like a great job.  The Governor receives a salary of £300,000, … Read more

Libor needs to be scrapped—not reformed

Last Friday, a top British top financial regulator issued a report suggesting numerous reforms to the London Interbank Offered Rate (Libor).  Libor, a benchmark interest rate that affects more than $300 trillion in financial transactions, is constructed from the cost of funds estimates submitted by a handful of large banks.  This summer, e-mails surfaced showing … Read more

The biggest threat to capitalism

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

Enforce the regulations that we already have

Republicans and Democrats are arguing over how many regulations we should add—or remove—from the financial services industry.  Before we think about altering the regulations, we should think about enforcing the ones we currently have. Ever since the sub-prime meltdown erupted during 2008, politicians on both sides of the aisle have taken aim at the rules … Read more

Alan Meltzer’s straw “Keynesian”

Remember when “liberal” became the insult of choice among Republicans? Apparently, “Keynesian” has now taken on that status for Republican economists.  Never mind that Keynesian is ill-defined (old Keynesian?  new Keynesian?  the Keynesian part of the neoclassical synthesis?)–making Keynesian a dirty word and applying it to those with whom you disagree has become the tactic … Read more

See no evil, hear no evil, and, if you are a ratings agency, speak no evil

You don’t have to look too far to find nutty policy proposals. One of my favorites is  Herman Cain’s suggestion that Congressional bills be limited to no more than three pages. Another, reported in recent days by both the Financial Times (which claims to have seen an actual draft) and the Wall Street Journal, is the … Read more