Category Archives: Macroeconomic policy

“2010: Foreseeable and Unforeseeable Risks ~ The Room For Policy Error is Enormous”

By John Bougearel, author of Riding the Storm Out and Director of Financial and Equity Research for Structural Logic Policymakers managed to extinguish a financial panic in 2008-09 by March 2009. This rescue operation allowed the broad U.S. stock market as measured by the SP500 to rally nearly 70%. Extinguishing the panic was to be […]

How not to solve a financial crisis

By Edward Harrison As we head into the New Year, I am trying to look back at the last one with some semblance of a coherent interpretation of events that leads to a strategic vision of the future. I have already touched on stimulus, kleptocracy and crony capitalism as dominant themes for the year 2009. […]

A look back at the debate on the role of monetary and fiscal stimulus in depression

By Edward Harrison of Credit Writedowns. As Yves is in light posting mode, I wanted to run these thoughts by you here at Naked Capitalism regarding stimulus and the role of government in a debt-deflationary environment. As we approach the new year, I have decided to write a few thematic posts as a look back […]

Guest Post: Economists Are Trained to Ignore the Real World

By George Washington of Washington’s Blog. As I have repeatedly noted, mainstream economists and financial advisors have been using faulty and unrealistic models for years. See this, this, this, this, this and this. And I have pointed out numerous times that economists and advisors have a financial incentive to use faulty models. For example, I […]

How to escape currency volatility and contagion in the globalized world of finance

By Edward Harrison of Credit Writedowns. This is a modified version of an article I posted yesterday at the Big Picture based on two recent articles I wrote on currency news in the Baltics and the Middle East. The question I ask is this: now that finance is global and capital can move in and […]

Guest Post: Larry Summers Is Like a Guy Who Yells That the Sun Really DOES Revolve Around the Earth and that the Current Orbit is Just a Temporary Aberration . . . and That If We Just Wait a Little While, “Everything Will Return to Normal”

Two leading White House economic advisors – Larry Summers and Christina Romer – are giving very different views on the economy. As Fox news summarizes: “Everybody agrees that the recession is over,” said Larry Summers, director of the National Economic Council. “Of course not,” countered Council of Economic Advisers Chairwoman Christina Romer in a separate […]

Meredith Whitney: The government is “out of bullets”

By Edward Harrison of Credit Writedowns I am not sure I buy Meredith Whitney’s assertion that the government is “out of bullets” in its quest to prop up the economy. It’s a matter of political will more than anything else. Nevertheless, I do agree with her basic premise in the CNBC video below that the […]

“Let’s Deport Poor People! A Modest Proposal for the Unemployment Problem (with apologies to Swift)”

By Marshall Auerback, a fund manager and investment strategist who writes for New Deal 2.0. In 1729, Jonathan Swift wrote an essay — “A Modest Proposal” — satirically suggesting that the impoverished Irish ease their economic troubles by selling children as food for rich gentlemen and ladies. In that spirit, we would like to assist […]

Barack Obama gets it

By Edward Harrison This quote from President Obama comes via Brad DeLong: We’ve got a long- term structural deficit that is primarily being driven by health care costs, and our long-term entitlement programs. All right? So that’s the baseline. Now, if we can’t grow our economy, then it is going to be that much harder […]

Guest Post: Questions for Bernanke’s Senate Confirmation Hearing

The Senate Banking Committee will be chatting with Ben Bernanke this Thursday to vote on his reappointment. Demand that the Committee ask the following questions for our esteemed Esteemed Chairman (and contact your own Senators also and demand that they find out the answers to the following questions). If you are a Senate aide, please […]

Buiter has concerns other than Dubai, warns of sovereign debt delusion

By Edward Harrison of Credit Writedowns Willem Buiter has just taken on a new role at Citi. The news of Willem Buiter’s role as Chief Economist at Citigroup comes via DealBook at the New York Times below. Afterward, I have some comments about Dubai contextualizing Yves’ recent post detailing a reluctance by the government to […]

Guest Post: The Tax Code ENCOURAGES Leverage

Among the most prophetic voices prior to the economic crash was UCLA economics professor Harold H. Somers, who warned in 1991 that revisions to the tax code would increase leverage, which could lead to economic disaster: The result is to tilt the well-worn playing field even more in favor of leveraging, leading to the possibility […]

Guest Post: Instead of Fixing the U.S. Economy or Creating Jobs for AMERICANS, Obama Will Spend The Money in Afghanistan and Iraq

America is in the most severe unemployment crisis since – and perhaps including – the Great Depression. And yet Obama, like Bush, has done virtually nothing to create more jobs. Instead, they both gave trillions to the biggest banks (who are not loaning it out to the little guy) and for waging wars in Afghanistan […]

A few thoughts about the limitations of government

By Edward Harrison of Credit Writedowns. In this post: A few thoughts about the limitations of government Our founding fathers How large should government be? How policy helps frame the debate Where we are headed In a recent post, “Stop the madness now!” I voiced my growing concern with the direction in which the country […]