Around The Dial – July 13
Economic policy reports, blog postings, and media stories of interest:
- Ross Douthat opines about “the class war we need.”
- Elizabeth Warren discusses the unfinished business of financial reform.
- Naked Capitalism says “don’t let Goldman be Goldman.”
- Economix compares unemployment rates by country.
Restoring The Rule of Law
Writing in The New Republic, James Galbraith of the University of Texas at Austin argues that the key to recovery is restoring the rule of the law within the financial sector. Argues Galbraith:
… The first step toward health is realism. We must first stop pretending that bad assets can be made good, that bad loans will someday be repaid, and that bad people can run good banks. Debt crises are resolved when debts are written down and gotten rid of, when the institutions that peddled bad debts are restructured and reformed, and when the people who ran the great scams have been removed. Only then will private credit start to come back, but even then the result of bank reform is more prudent banks, by definition more conservative than what we’ve had.
…
So yesterday’s borrow-like-there’s-no-tomorrow America is done for in any event; there will not be another bank-sponsored private credit boom. The housing crisis (and therefore the middle-class insolvency) won’t go away soon. There is no cure for falling housing prices except time and patience; debt relief will at best stabilize the middle class. It follows that the private banks and dealers and borrowing by households are not going to be at the center of the next expansion.
…
We are in the post-financial-crash. We need to do what the U.S. did during the New Deal …. That is, we need to create new, policy-focused financial institutions like the Reconstruction Finance Corporation to take over the role that the banks and capital markets have abandoned….
The Importance of Unemployment Insurance
A recent story on the National Public Radio show All Things Considered reported on the impact that emergency unemployment insurance payments has on real families struggling with job losses during the ongoing recession.
Click here to listen to the segment.
Around The Dial – July 12
Economic policy reports, blog postings, and media stories of interest:
- The New York Times profiles Paul Volcker.
- Paul Krugman asks just what we’ve learned about macroeconomics.
- Econbrowser graphs just who is buying federal debt.
- Citizen Cohn wonders if businesses should operate like the post office.
Public Spending in North Carolina
A new policy brief from the N.C. Budget and Tax Center traces state spending per capita in North Carolina. For the current fiscal year, per capita spending is estimated to total $1,946, which, after adjusting for inflation, is the lowest level recorded since fiscal year 1996-97. The chart below illustrates the change.
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