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The Lame “Uncertainty” Defense

By James Kwak The indefatigable Brad DeLong has devoted his energies to singlehandedly protecting Larry Summers from the Internet (although, he makes pains to say, he likes Janet Yellen almost as much). Although I’m letting most of the Fed chair sideline debate pass me by, DeLong and others have raised one issue that played an … Continue reading The Lame “Uncertainty” Defense

The Last Hold Out: Senator Blanche Lincoln Against 13 Bankers

By Simon Johnson By now you have probably realized – correctly – that “financial reform” has turned into a victory lap for Wall Street. When they saved the big banks, with massive unconditional support (both explicit and implicit) over a year ago, top administration officials promised they would be back later to fix the underlying … Continue reading The Last Hold Out: Senator Blanche Lincoln Against 13 Bankers

What Did Robert Rubin Think About Derivatives?

By James Kwak First Bill Clinton said he got bad advice from Robert Rubin on derivatives. Then a Clinton adviser issued a statement essentially taking it back and blaming Alan Greenspan. (Jennifer Taub discussed some of the substantive issues on this blog.) Dan Froomkin asked Rubin, who said, “I thought we should regulate derivatives; I … Continue reading What Did Robert Rubin Think About Derivatives?

Clinton Confesses: Rubin and Summers Gave Bad (strike that) Excellent Advice on Derivatives

The following guest post was contributed by Jennifer S. Taub, a Lecturer and Coordinator of the Business Law Program within the Isenberg School of Management at the University of Massachusetts, Amherst (SSRN page here).  Previously, she was an Associate General Counsel for Fidelity Investments in Boston and Assistant Vice President for the Fidelity Fixed Income Funds. … Continue reading Clinton Confesses: Rubin and Summers Gave Bad (strike that) Excellent Advice on Derivatives

Too Politically Connected To Fail In Any Crisis

Over the past 30 years Wall Street captured the thinking of official Washington, persuading policymakers on both sides of the aisle not to regulate (derivatives), to deregulate (Gramm-Leach-Bliley), not enforce existing safety and soundness regulations (VaR), and to stand idly by while millions of consumers were misled into life-ruining financial decisions (Alan Greenspan). This was pervasive … Continue reading Too Politically Connected To Fail In Any Crisis

Firefighter Arson And Our Macroeconomic Policymakers

Firefighter arson is a serious problem.  The U.S. Fire Administration, part of Homeland Security, concluded in 2003, “A very small percentage of otherwise trustworthy firefighters cause the very flames they are dispatched to put out” (p.1). Illustrative and shocking anecdotes are on pp. 9-15 of that report, as well as here and here. Macroeconomic policy … Continue reading Firefighter Arson And Our Macroeconomic Policymakers