Comments | erudito: Economic (and financial crisis) links

erudito

Economic (and financial crisis) links

Mar 13, 2009 06:14

Amartya Sen arguing that what is needed is more attention to overlooked ideas from Smith and Pigou.

Let us consider the possibility that a Harvard MBA has negative value.

Paper on how the bond market failed to anticipate WWI.

Newspapers have plenty of (internet) readers: just not enough ways to turn that into revenue.

A post which is a short ( Read more... )

credit crisis, economics, economic cycles, housing, links, policy

Comments 6

basal_surge March 12 2009, 23:27:27 UTC

A fair proportion of us kiwi's are currently unimpressed by our PM. He and his party have been doing a lot of abuse of parlimentary process to ram through a bunch of ideological rather than realistic responses to the current financial system, and he's curently doing a spin job to enable him to gut the ACC act, the that thing which prevents NZ from having the insane liability litigation culture so beloved of the lawyers of the US...

basal_surge March 12 2009, 23:30:16 UTC

Much has I have issues with Sue Bradford from our greens, here's her take on it

basal_surge March 12 2009, 23:32:58 UTC

Key also wants to privatise our prisons, and in particular, in such a way as the coercive power of the state with respect to prisons will fall outside of the power of the Ombudsman if the prison is a private one. Given the record of their preferred bidder overseas (Greens on that again), I'm not keen on this either.

basal_surge March 12 2009, 23:35:43 UTC

More on the oversight issue here from Idiot at No Right Turn.

enrobso March 13 2009, 08:06:14 UTC

You've spoken much about the US foreclosure crisis being the result of regulatory encouragement to give mortgages to people who who couldn't repay them. I recoiled from the First Home Buyer's Grant because I felt it encouraged people who hadn't learned to save to take on massive debts, the repayments of which they would find a constant struggle to meet.

There were companies openly advertising "Don't worry about saving for a deposit! Between the new Home Buyer's Grant and the State Government New Homes Grant you can get into one of our house and land packages with nothing up front!"

You and I differ greatly on the function of government, but I think we would both agree that encouraging people to go into debt is definitely not a function of government.

I'll be happy to see it knocked on the head because I think it should have been drowned at birth.

Not only erudito March 13 2009, 09:50:15 UTC

I would not claim the foreclosure crisis was only caused by regulatory encouragement to give mortgages to people who who couldn't repay them. I would argue it made it worse (likely much worse), but there would have been some simply from the housing bubbles eventually bursting.

Of course, the housing bubbles themselves derived from regulatory restrictions. But I just want to make it clear that I do not go for a unicausal explanation. After all, such regulatory encouragement hardly forced banks and other financial corporations to get quite so weird and wonderful in their securitisation and derivatives. Or to leverage on the basis of the market always rising. Or to believe that their computer models told them how the world was.

Having said that, funding increasing demand in a fundamentally supply-constrained market is, how do we say this politely?, the triumph of politics over good policy. Also known as an outrageous abuse of the taxing power.

And yes, regarding encouraging people to go into debt is definitely not a function ( ... )