Yearly Archives: 2013

Long-Term Barriers to Growth

There is now widespread agreement that ‘deep’ history matters for comparative development. Recent research has shown that ancestry – the transmission of genetic and cultural traits across generations – matters more than the history of geographic regions. This column argues that long-term divergences in inherited traits can create barriers to the diffusion of technology. The greater a population’s genetic distance to the population on the technological frontier, the lower its relative income will be. Development policies should aim at reducing barriers to exchange and communication.

Links 10/2/13

David Dayen: Mysterious Study Backs Financial Adviser Thieves Who Want To Keep Bilking Small Investors

At the risk of self-promotion, allow me to point you in the direction of a piece by me running today in The New Republic. It’s about a proposed update to the Department of Labor’s fiduciary rule, and how the financial services industry, along with members of both parties, are working to stop it. An excerpt:

The Forgotten War: 12 Years in Afghanistan Down the Memory Hole

Ann Jones, who has reported from Afghanistan since 2002, is the author of Kabul in Winter (Metropolitan 2006) and War Is Not Over When It’s Over (Metropolitan 2010), among other books. She wraps up a trilogy on war with publication next month of a Dispatch Books project in cooperation with Haymarket Books: They Were Soldiers: […]

Carbon Pricing: The Price Is Wrong

For U.S. climate activists to succeed, they must demand serious government spending on energy efficiency and renewables—spending comparable to the current war budget. Calling for hundreds of billions in annual green public investment has potential for the popular appeal needed to build a powerful grassroots climate movement. That investment would be the best policy as well. Massive clean energy spending would not only provide jobs and economic growth on a grand scale. It is the most effective way to reduce greenhouse gas pollution.

Monetary Policy Implementation: Some Facts and a Monetary Myth.

Nathan here. Tonight I’m moderating an event on monetary policy implementation at my University, the University of Ottawa. We will have three speakers, Donna Howard, Eric Tymoigne and Marc Lavoie. The event will begin about 5:30 and will probably finish- at the latest- by 7:30. Donna Howard is a former head of financial markets at […]

Why the US Mortgage Market Will Remain Heavily Dependent on Government Support (Updated)

In Senate Banking Committee testimony today, Georgetown law professor Adam Levitin explains why the private label (non-government guaranteed) mortgage market is a textbook case of what Nobel prize winning economist George Akerloff called a “market for lemons”.

Links 10/1/13

Wolf Richter: Bubble Trouble: Record Junk Bond Issuance, A Barrage Of IPOs, “Out Of Whack” Valuations, And Grim Earnings Growth

When Blackstone’s global head of private equity, Joseph Baratta, said Thursday night that “we” were “in the middle of an epic credit bubble,” the likes of which he hadn’t seen in his career, he knew whereof he spoke.

Junk bond issuance hit an all-time record of $47.6 billion in September, edging out the prior record, set in September last year, of $46.8 billion, according to S&P Capital IQ/LCD. Year to date, issuance amounted to $255 billion, blowing away last year’s volume for this period of $243 billion. The year 2012, already in a bubble, set an all-time record with $346 billion. This year, if the Fed keeps the money flowing and forgets about that taper business, junk bond issuance will beat that record handily.

David Dayen: The U.S. Government Has Shut Down. Unfortunately, How the U.S. Governs Hasn’t.

Being ensconced here on the West Coast, I didn’t have to wait up all night wondering whether or not the government would shut down. You know things were over around dinnertime in California and points west, when House Republicans decided to pass a resolution to move to a conference committee on the continuing resolution to fund the government. The Senate has tried 18 times over the past six months, ever since they passed a budget, to move to conference, and were denied each time. So the clear obviousness of this stunt meant I could stop taking bets on the outcome.

And yet, it must be said that there is a very clear, however cruel, logic to this shutdown, logic employed by members of both parties for decades.

Bill Black: Why do Conservatives Oppose Prosecuting Elite Corporate Frauds?

There are at least four principles that virtually all conservatives purport to support – except when the potential defendant is socially elite. I have written previously about two of these principles on several occasions – the need for accountability and “broken windows” theory that calls for the prosecutors to make the prosecution of even minor street crimes a high priority if they have, even indirectly, a material effect on the community.

The third principle is that it is vital to punish in order to deter crime. Gary Becker, the very conservative Nobel laureate in economics, emphasized this point (again, in the context of street crime). Under Becker’s theory of crime our current practices of allowing elite banksters to become wealthy through leading the “sure thing” of accounting control fraud with immunity from the criminal laws will predictably lead to new, larger epidemics of fraud that will continue to cause our recurrent, intensifying financial crises. It is rare, however, to find a prominent conservative who is demanding a priority effort to prosecute the elite bank officers who ran those frauds. I know of no conservative member of Congress publicly making that demand today. Senator Chuck Grassley has previously criticized the Obama administration’s failure to prosecute elite bankers.

Fall Colors, Climate Change, and Planetary Governance

By Lambert Strether of Corrente.

Planetary. He said planetary. OK, OK! The Episcopalians have a liturgy that, back in my day, was called “Star Trek”; it includes the beautiful phrase “this fragile earth, our island home” [warbling and woo-wooing noises under the rubric “optional”]. But bear with me. I’ll start with the leaves, and we’ll get to some ideas on governance from there, based on experience with landfill, land use, and fracking activism.

Links 9/30/13

Obama, ObamaCare, and Health Care as a Right

By Lambert Strether of Corrente.

For Obama watchers, it seem ludicrous to imagine that he has any concern for rights whatever, in particular for the Fourth and Fifth Amendments. Be that as it may, Obama has clearly stated that health care is a right, so I’m going to take him at his word. Here he is in debate during Campaign 2008: