Thursday, January 28, 2010
Friday, June 26, 2009
Saturday, May 09, 2009
They had an incredible variety of guest writers, from the deregulation fanatic, to the former regulator and a variety of other economists. It will be interesting to see if any of these suggestions are taken up by Congress this year.
There wasn't a lot of coherent agreement (naturally), but I came away with two general thoughts:
1. There will always be a regulator. In times of crisis, most people want a credible public authority with sufficient power to prevent total meltdown. Unfortunately, at the time of greatest systemic risk, the regulator will face the greatest political pressure to not intervene. Therefore the regulator needs political independence.
2.Rather than fight this someone-in-charge impulse, it would be better to have an agency with sufficient resources to credibly quantify the risks of new financial instruments. By actively sharing this information with the public, the agency could help investors make informed decisions and reduce the risk of industry capture.
Going forward, regulation of the ratings agencies will also need to changed. Shutting down tax havens etc. has been a nice sideshow for the G20 et al to unite on, but the real work is clearly remaining.
Thursday, February 26, 2009
However, now that the immediate terror has subsided a bit, we have a fairly deep division (even amongst economists) about what to do to fix the problem. Everyone is worried that we will repeat Japan's experience, the ominous Lost Decade of growth. The only problem is that there is widespread disagreement on which symptoms matter and which are cause versus effect.
This post does a great jobs of summarizing the current positions and their recommendations:
Friday, January 02, 2009
Saturday, December 27, 2008
"If there was one thing I learned from my experience, it was what a bad job the financial system does by people with low incomes."
Given the economic status implicit in pursuing an advanced degree, it is not surprising that virtually no economists have personal experience with living in the underclass. It is surprising though that more do not study this significant portion of the population.
A profession that seeks to benefit all portions of society should strive to understand all portions as well. No doubt many economists do not fully see the bubble of privilege they reside in. This lack of perspective damages the credibility of the profession and begs for unintended consequences in policy recommendations.
Perhaps it is too much for academic economists to step off campus, but they might at least get in touch with the Sociologists and Community Studies professors across the hall. This diary is a laudable example of the learning that can occur when we step into the shoes of the working poor.
I found this list of life advice useful and fairly comprehensive. My own comments follows:
Nice list Tom. I can hear a wealth of experience in your words. I am always grateful for the opportunity to skip hard times others have endured by listening to their stories!
I have to agree with the others that self-change is not easy at all. The real difference is that it is never impossible. If you have given away your ability to make the decisions in parts of your life it will appear difficult, perhaps insurmountable. But it’s never beyond reach.
I think the important thing is to realize that the first person you have to convince is yourself. “I can’t do anything” is a tempting thought, but if you reduce it to a trivial level it’s obviously false (you can always act at some basic point).
So if you find yourself lacking in confidence or motivation, start with your absolute smallest unconnected problem and fix it. Make a plan, gather what you need and get it done. Take a little time to appreciate your success, then move on to your new smallest problem.
By the time you reach issues that are actually difficult you will have built up some confidence and discipline in your problem-solving abilities and will feel ready to ask other to help. Just make sure not to rush ahead. Set a pace that won’t overwhelm you. Start soon and start slow.
Sunday, November 30, 2008
The gradual accumulation of checks in an organization is a kind of learning, based on disasters that have happened to it or others like it.
Whenever someone in an organization proposes to add a new check, they should have to explain not just the benefit but the cost. No matter how bad a job they did of analyzing it, this meta-check would at least remind everyone there had to be a cost, and send them looking for it.
If I taught an MBA class, you better believe this would be in it.