The Unbroken Window

I was just reading an excerpt from Joseph Stiglitz’s The Roaring Nineties. In it, Stiglitz makes his usual argument that market failures are everywhere and that wise government policy can and has stepped in to the rescue. An illustration he uses is that during the 1930s when Fannie Mae was organized by the government, it [...]

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I teach a course on Money and Banking, so I try to read some of the modern literature on international financial markets. This paper came across my desk:
Fetters of Gold and Paper
We describe in this essay why the gold standard and the euro are extreme forms of fixed exchange rates, and how these policies had [...]

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Might one argue that the Federal Reserve, in combination with various measures by the federal government to pursue easy credit policies for the past 50 years, has been an effective tool in crime fighting?
I’d love to be able to parse this out empirically – but remember one reason why we have organized and other crime [...]

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In perhaps no other sector of the economy is F.A. Hayek’s Use of Knowledge in Society an apt description of the challenges facing economic actors than in the money, banking and financial sector.  Very briefly, here are three reasons why the execution of monetary policy ought to be viewed with a lot more humility than [...]

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What would happen if the commies actually had influence in the everyday affairs of the current administration. No, seriously. As profligate as the last two Admins have been, I do not think they have crossed this line, at least not yet. Let’s address one of the points made in that “article.”
Myth #1: The government should [...]

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Yesterday, without examination, we posted a look at what the Fed’s balance sheet looks like today. Here is what the Fed’s Balance Sheet looked like in the summer of 1996 (click it to enlarge).

Not too much “fishy” stuff – this was at the tail end of the Latin American debt crisis, the S&L Crisis had [...]

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Did you know that the U.S. government created an agency colloquially known as “Farmer Mac?” Yep, in 1988 Congress chartered a company to do in agriculture exactly what Fannie and Freddie have done in the mortgage market. Farmer Mac, a “private” company, is “allowed” to purchase loans from agricultural lenders and then repackage them into [...]

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Last week Professor Landsburg discussed why it makes sense to eliminate taxes on capital gains. The reason is that any tax on capital is, in fact, a disguised tax on labor. The “problem” is that it (capital gains taxes) end up taxing labor differently in different time periods. I suspect that is a feature not [...]

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Is this what Barney Frank had in mind in 2003?

When Charles E. Haldeman Jr. became Freddie Mac’s chief executive officer in August, the ailing housing-finance giant had already consumed $51 billion of government money to stay afloat. It’s likely to need even more.Freddie’s federal overseers nevertheless have instructed Mr. Haldeman to focus on something that [...]

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