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Double Liability A Better Response to J.P. Morgan Mess
Tweet Share on Facebook May 22, 2012 CommentHester Peirce is a senior research fellow at the Mercatus Center at George Mason University. Prior to joining Mercatus, Peirce worked at the Securities and Exchange Commission and as senior counsel on the Senate Banking Committee.
Gasps about J.P. Morgan's more than $2 billion in trading losses dominated Washington conversation last week. J.P. Morgan, the government-anointed rescuer of its weaker brethren during the financial crisis, was not supposed to make a mistake like this. As people fret about the need for more regulation to keep big banks from losing money, it is worth asking whether regulating banks into profitability is really the answer.
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Merkel's 'Austerity,' Obama's 'Growth,' and the Power of Framing
Tweet Share on Facebook May 21, 2012 CommentJames Rickards is a hedge fund manager in New York City and the author of "Currency Wars: The Making of the Next Global Crisis" from Portfolio/Penguin. @JamesGRickards
Economic analysis is difficult enough without politicians misleading the public through something called "framing." The idea is that if your give your policy a good label and give your opponent's policy a bad label, those labels will stick and affect the debate even if the actual policies are the opposite of what the label tries to convey. This process has been given a boost lately with the popularity of behavioral economics, which looks at framing in a scientific way. Yet, it's one of the oldest tricks in politics.
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China’s Scary Financial System
Tweet Share on Facebook May 21, 2012 CommentMr. Hahn is director of economics at the Smith School, University of Oxford and chief economist at the Legatum Institute. Mr. Passell is a senior fellow at the Milken Institute and the economics editor of the Legatum Institute's Democracy Lab. They are co-founders of Regulation2point0.org, a web portal on regulatory policy.
As China's economy slows, skepticism about the sustainability of the Chinese miracle is gaining traction. But the reasons offered for why Beijing's ducks may finally be coming home to roost are all over the place.
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Government Regulation Is Killing Economic Growth
Tweet Share on Facebook May 18, 2012 Comment (1)Robert Luddy is a member of the North Carolina Leadership Team for Job Creators Alliance and president and founder of CaptiveAire Systems, Inc.
The history of this nation is one of risk and reward. Our Founding Fathers took major risks to journey to an unknown land and launch an unprecedented experiment in human freedom and create the United States of America. Generations of patriots have risked everything in defense of this experiment. These roots of freedom have grown into the most dynamic economy in the history of the world.
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Congress Must Do More for Long-Term Unemployed
Tweet Share on Facebook May 16, 2012 Comment (5)Chad Stone is chief economist at the Center on Budget and Policy Priorities.
The long-term unemployed are in deep trouble, with the human and economic costs of long-term unemployment reaching crisis proportions. That was the message of a piece in Sunday's New York Times from an incongruous pairing of economist policy wonks from opposite sides of the political divide. Policymakers should take heed.
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How to Prevent Another J.P. Morgan-Style Loss
Tweet Share on Facebook May 16, 2012 CommentDavid Brodwin is a cofounder and board member of American Sustainable Business Council. Follow him on Twitter at @davidbrodwin.
Last week's $2 billion trading loss at J.P. Morgan Chase dashes any hope that we've resolved the instability of our banking system. How can we get banks to trade responsibly? When "too big to fail" banks generate huge losses, we all suffer. Legitimate businesses can't get credit. Taxpayers foot the bill for bailouts. Working Americans get laid off as scarce credit hobbles the economy.
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How Barack Obama's Fed Policy Fuels the Oil Shock
Tweet Share on Facebook May 16, 2012 CommentJoseph Mason is the Moyse/LBA Chair of Banking at the Ourso School of Business at Louisiana State University and a senior fellow at the Wharton School of the University of Pennsylvania.
The Federal Reserve met last month to discuss its economic outlook. And though the Fed didn't announce a formal third round of quantitative easing, Chairman Ben Bernanke confirmed the zero-bound interest rate policy will continue into the near future. What is interesting to note—and underreported—is the impact this will have on oil prices.
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Leaving Fannie Mae, Freddie Mac As Is Risks Another Housing Bubble
Tweet Share on Facebook May 15, 2012 Comment (6)Anthony Sanders is a senior scholar at the Mercatus Center and the distinguished professor of Real Estate Finance at George Mason University.
Last week Fannie Mae, one of the two mortgage giants in conservatorship with Freddie Mac, reported a $2.7 billion profit for the first time since the financial crisis. This seemingly good news may actually be a reason to finally do something about Fannie and Freddie rather than pretending that they will be just fine on their own.
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Obama's Corporate Tax Plan Not the 'Job Killer' Big Business Claims
Tweet Share on Facebook May 15, 2012 Comment (2)In February President Obama laid out his framework for reforming corporate taxes. He proposed a substantial cut in the corporate income tax rate from 35 to 28 percent—a boon to companies, especially small businesses that lack the opportunities for tax avoidance that major companies regularly exploit.
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Why J.P. Morgan's Jamie Dimon Should Resign
Tweet Share on Facebook May 14, 2012 Comment (30)James Rickards is a hedge fund manager in New York City and the author of Currency Wars: The Making of the Next Global Crisis from Portfolio/Penguin. Follow him on Twitter: @JamesGRickards.
Of all the tricks Wall Street uses to pull the wool over the eyes of regulators, Congress, and everyday Americans, none is more effective than the pretense that the strategies used in finance are so complicated that few outside the banking industry could possibly understand them. Wall Street CEOs ask to be treated like nuclear engineers and say "trust us" when it comes to the complexity of their tasks. In fact, no trust could be more misplaced and no claim to superior knowledge could be further from the truth.
