One of my favorite commentators and the coauthor of one of the most important books on the recent financial crisis, James Kwak, has just posted a profound and timely addition to his blog. He notes the developing interest in behavioral economics and the importance of understanding irrationality in decisionmaking, most prominently by my pathbreaking...
Today NPR ran a story about a bill before the Senate that would close a controversial tax loophole. Investment fund managers, ranging from hedge funds to real estate funds, can structure their income–”carried interest income”–to be paid at the long term capital gains rate of 15%, instead of the top income tax rate of...
There are signs that more people are starting to understand what it takes to build good regulation. We have to start taking the profession of regulation, and professional regulators, seriously. For thoughtful commentary, see James Surowiecki’s column in the current issue of the New Yorker. Bookmark on Delicious Digg this post Recommend on Facebook...
There was a time when we worried that concentrations of economic power would destroy competition and even distort the political process. Yet despite the fact that such distortions are in fact occurring in the financial arena, for one, we seem either less concerned or less aware of the problem than when antitrust enforcement was...
In efficient markets the mistakes of individual participants are corrected by the aggregate performance of the market as a whole. But when companies become so large that their mistakes spill out into the pubic arena, requiring some kind of public intervention to repair or salvage the situation, the pubic has an interest in...
Congress has made much more progress on financial reform than cynics might have thought. The House and Senate bills have now been passed with strong majorities and will now be reconciled in what will surely be a bruising conference committee. The conference will proceed from June 15 and Congressional leaders hope to present the...
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