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September 21, 2008
Washington Post
Sebastian Mallaby says, the Treasury plan outlined Friday (9/26) involves vast risks, huge complexity and no guarantee of success. There are better ways forward, such as ordering banks to raise capital or buying equity stakes in them.
See more in North America, Financial Crises
September 20, 2008
Wall Street Journal
Many policymakers are drawing parallels between today's financial crisis and the Great Depression. But Amity Shlaes points out that the stock market crash of October 1929 and the Great Depression were not the same thing. This has important implications for policy responses.
See more in North America, Economics, Financial Crises
September 19, 2008
Bloomberg
Amity Shlaes argues that recovery is possible without a bailout, as demonstrated by the case of GM and JP Morgan in the early 1920s. A new rule forcing investment banks to share the cost of a rescue would discourage unnecessary bailouts.
See more in North America, Economics, Financial Crises
September 16, 2008
Bloomberg.com
In this Bloomberg op-ed, Amity Shlaes suggests that three new rules are needed to lay the path for recovery of Wall Street. No more bailouts, clean up the rating system, and make the U.S. more competitive by lowering corporate taxes.
See more in Financial Crises
September 16, 2008
Washington Post
Sebastian Mallaby writes that in refusing to bail out Lehman, Paulson gambled that he could let the institution fail without sowing market pandemonium. If he is right, Paulson's move may limit the damage to U.S.-style financial globalization.
See more in Economics, Financial Crises
September 10, 2008
Bloomberg.com
In this Bloomberg op-ed, Amity Shlaes argues that Fannie Mae's demise was rooted in 1968, when President Lyndon Johnson moved the Federal National Mortgage Association off-budget. Fannie's fall will remind voters that being off-budget does not eliminate risk to the taxpayer.
See more in Financial Crises
August 18, 2008
Wall Street Journal
In this Wall Street Journal op-ed, Benn Steil argues that the U.S Federal Reserve has seriously damaged the credibility of the policy framework its chairman has long championed, inflation targeting, by pursuing other objectives inconsistent with price stability.
See more in United States, Financial Crises
August 11, 2008
Washington Post
Sebastian Mallaby urges the presidential candidates to consider a bolder response to the economic crisis than what's been seen so far. A second fiscal stimulus is required combined with a medium-term plan to fix entitlements so as not to bust the budget.
See more in Financial Crises, Presidency
July 21, 2008
Washington Post
In response to the failure of Bear Stearns, the near-failure of Lehman Brothers, and now the crisis at Fannie Mae and Freddie Mac, the SEC has begun clamping down on short-selling. However, in this Washington Post op-ed, Sebastian Mallaby says that short-sellers serve as useful market watchdogs and are the wrong villain in this crisis.
See more in Financial Crises
June 30, 2008
Nikkei Financial Daily
Despite the extraordinary financial crisis, with big banks recording huge losses and tightening their lending standards, the US economy has continued to expand. In this Nikkei article, Roger Kubarych argues that although it is by no means certain that recession can be avoided over the next year, it would be wrong to exaggerate the downside risks to the US economy.
See more in Economics, Financial Crises
April 21, 2008
Nikkei Financial Daily
In this Nikkei article, Roger Kubarych outlines the lessons learned in the past few weeks that will be of lasting importance to global investors. He finds that "too complex to fail" is the prevailing U.S. economic doctrine—with the Bear Stearns bail-out as case in point. Kubarych also argues that banks are capitalists until they need government hand-outs but will revert to type once the crisis fades.
See more in United States, Financial Crises, Geoeconomics
February 13, 2008
Nikkei Financial Daily
Three developments have altered the US economic and financial climate this year - a distinct tightening of credit terms, a sudden slide in confidence, and emerging signs that the US labor market is softening – and they have been powerful enough to compel an almost unprecedented policy response by both the Federal Reserve and the US Government. Roger Kubarych argues that the monetary policy easing and fiscal stimulus will work, albeit slowly, but the effects on financial markets are less clear.
See more in United States, Economics, Financial Crises
September 27, 2007
Nikkei Financial Daily
Thousands of US homeowners who had financed their houses through what have come to be known as subprime mortgages stopped making their monthly payments. Those delinquencies, now about 15% of the total, set off a chain reaction that touched off one of the worst financial nightmares in years. Roger Kubarych offers some lessons from the subprime mortgage crisis, as well as prospects for the future.
See more in Financial Crises
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In Money, Markets, and Sovereignty, the authors present a fascinating intellectual history of monetary nationalism from the ancient world to the present and explore why, in its modern incarnation, it represents the single greatest threat to globalization.
In The Closing of the American Border, Edward Alden goes behind the scenes to tell the story of the Bush administration’s struggle to balance security and openness in the wake of the September 11, 2001, terrorist attacks.
In Termites in the Trading System, Jagdish Bhagwati reveals how the rapid spread of preferential trade agreements endangers the world trading system.
In Regional Monetary Integration, Peter B. Kenen poses an important question: Should various country groups follow the lead of the European Monetary Union and form similar full-fledged monetary unions?
In contrast to conventional wisdom, the growth in government spending and heightened regulation during the Great Depression may have done much to slow economic recovery.
In this report, Benn Steil shows that the financial crisis is the inevitable bust of a classic credit boom, and explains how monetary, taxation, and home ownership promotion policy combined with other feaures of the financial system to fuel an unsustainable buildup in debt. He recommends significant reforms to reverse the debt financing bias and make the system more resilient to falls in asset prices.
In order for policymakers to tackle today’s global economic crisis, this report argues, they must go beyond bailouts and stimulus packages and focus on one of the crisis's root causes: imbalances between savings and investment in major countries.
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