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

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.

Unregulated markets presumably can fuck up big time, but as these beasts are rarely met, it is a bit of a moot question. And it is clear that inadequate prudential regulation is a big part of the story (and why Oz has not had anywhere near the problems, since we have good prudential regulation). That plus Federal Reserve's huge liquidity injections (such liquidity injections being a typical feature of bubbles) plus structural changes in Wall St are all more important that CRA + the 2FF's. Even in the housing bubble, regulatory rationing of land use is more important.

What CRA did is distort the risk structure of the US mortgage market while FF & FF clearly swelled to an unsustainably large degree their provision of mortgage loans. And, according to your link, they were in sub-primes. The US taxpayers having to bailout institutions holding about $US1trillion in mortgage loans can hardly be a small factor.

Monetary authorities providing too much liquidity for too long, prudential regulators being too loose, land use regulators rationing land, poorly regulation government-back interventions distorting the US mortgage market: this is not a simple story of market fuckup, it is a rather more complex.

The effect of government interventions show up in market behaviour. So do things that have little to do with regulators. It makes things complex.