The Federal Open Market Committee meeting on March 17-18, if it achieved nothing else, made one thing abundantly clear: even after all the damage that has been caused to the global economy, the Fed neither accepts responsibility for its misdeeds, nor has any intention of modifying its errant behavior. A private sector institution that behaved […]

US treasury secretary Tim Geithner called last week for the lending power of the International Monetary Fund to be trebled. For those of us who were hoping that institution would expire of long-term neglect, this was a disquieting development. Can it be that the Bretton Woods institutions, which have played a largely pointless and occasionally […]

The political response to this economic downturn has differed from previous responses to downturns in a number of ways, the most economically significant of which lies in the extent to which failure has been subsidized. Counterproductive economic pathologies have been encouraged, financial structures that endangered global prosperity have been bailed out and trillions of dollars […]

Wall Street over the last generation has been a prolific generator of casinos, in which the dealing community can make a very nice living indeed by providing investment and “hedging” services to outside investors. Of all these casinos, the credit default swaps market has been among the most lucrative. As the credit crisis has unfolded, […]

The $787 billion stimulus bill has been signed by President Obama, and the $275 billion help for homeowners has been announced and generally well received, but still the stock markets keep dropping. Worldwide, daily new plans for stimulus and rescue are met with daily declines in stock prices and gloomy economic figures. There’s a reason […]

As the Obama stimulus plan passes and Treasury Secretary Tim Geithner unveils the outline of a $1.5 trillion bank rescue package, the die has been definitively cast in favor of the Keynesian stimulus approach to the ongoing unpleasantness. That has been conventional wisdom since the Great Depression, but it’s still worth looking at what might […]

For free market enthusiasts, the Obama administration’s $500,000 remuneration limit for banks receiving public bailouts is less obnoxious than it seems at first. Most obviously, it provides a useful incentive against further recourse to taxpayer funds – even the near-deadbeat Citigroup is not to be subjected to it until it asks for yet more money. […]

Until the House Republican revolt this week, there has been a worldwide consensus that the way to get out of a deep recession is through fiscal “stimulus” – gigantic gobs of public spending that explode the budget deficit but provide jobs to those without them. It’s a theory first publicized by Maynard Keynes, but it […]

Those who have visited Michigan recently or the Mahoning Valley of Ohio in the 1980s can recognize the symptoms of a rust belt. A hitherto prosperous industry, paying high wages to its employees, has been overtaken by market changes and is forced into harsh downsizing or even bankruptcy. As a result, the lives of many […]

As the $1.19 trillion forecast 2009 US budget deficit combines with the forthcoming $825 billion (and counting) stimulus package, observers seem convinced that for some mystical reason US Treasuries are a “safe haven” – endlessly attractive to Asian and Middle Eastern central banks and therefore able to yield considerably less than the expected rate of […]