Economic (and financial crisis) links

[erudito]

About per capita income and its geographical distribution in the Roman Empire.

About militarising foreign aid (pdf).

Saudi supertanker has been seized by Somali pirates, the largest ship ever hijacked. Paper on the economics of piracy (pdf).

Singapore will allow payments to providers of human kidneys and eggs.

Rupert Murdoch is positive about

Comments

[taavi]

And you know what? The case that the CRA caused the current crisis has as much legitimacy as the case that FDR caused a recession to turn into the Great Depression. Little to none.

Different argument

[erudito]

Caused on its own? Clearly not. For being a major factor, particularly when combined with the role of Fannie Mae and Freddie Mac, the evidence is strong.

FDR clearly did not cause a recession to turn into the Great Depression (in the sense of the scale and length of the contraction), that happened under Hoover. The question whether FDR's policies on balance helped or hindered recovery (and which did what) is more open.

Re: Different argument

[taavi]

It must have been someone else who linked to lots of pieces arguing that Roosevelt turned a recession into the Great Depression by causing investment uncertainty. See here.
As for CRA/Fannie/Freddie, see here. F&F didn't make subprime loans, and their share of the "near-prime" market was small and declining well before the crisis hit.
This is all one big exercise on your part in evading the simple conclusion that unregulated markets can, and do, fuck up big time occasionally.

Re: Different argument

[erudito]

Strangely, I do not always agree with everything that I link to. That FDR's policies, particularly from 1935, suppressed economic recovery is a very arguable case: but the huge contraction before he took office is clearly not his fault

Re: Different argument (2)

[erudito]

Another reason why we have less problems here is that Oz governments have largely learned their lesson about not acting as if private lenders are too risk averse in the State Bank of SA and (especially) Tricontinental debacles.

It is striking how there are certain similarities in the S&L/"
Thrifts" debacle at the end of the 1980s and the 2FF debacle just recently. The latter managed the interesting double of both suppressing risk (through the implicit government guarantee) and increasing risk (through regulatory support for loans to lower-income applicants). The S&L's also had suppressed risk (though the explicit government guarantee) and had as their original purpose the easier provision of mortgages. (I am not aware of any continuing regulatory channeling to higher risk applicants in their case, it was more the creation of one-way bets that was the problem.)

[jordan179]

The case that the CRA caused the current crisis has as much legitimacy as the case that FDR caused a recession to turn into the Great Depression. Little to none.

That is reasoning by analogy from authority, which is a particularly weak form of argument. Especially given that the chronologies of the Great Depression and of this recession are totally different -- the real estate boom that led to the initial malinvestment in the mid to late 1920's happened under Coolidge, and the first responses to the recession resulting from Black October in 1929 happened under Hoover. FDR was not President until 1933 -- three and a half years into the Depression.

I wonder why the memory of this event gets so foreshortened? Shades of Biden's "President Roosevelt got on the TV in 1929 and reassured the nation," which was a mishmosh of three separate decades (1920's - Stock market crash, 1930's - President Roosevelt fights the Depression, 1940's - TV's start to become common). Anyway, your argument has the same legitimacy as Biden's -- little to