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Would the Real Tyler Cowen Please Stand Up?

money-investing

Tyler Cowen has written several posts in favor of the bailouts. His argument goes something like this: Note that even when the Fed “bails out” a large investment bank, or insurance company, they are checking a chain reaction which would likely spread to some commercial banks, thus bringing in deposit insurance as well, not to […]

AIG Bonus Tax Constitutional, Bad Policy, Unnecessary

aig-too-big-to-fail

Jack Balkin, the Knight Professor of Constitutional Law and the First Amendment at Yale Law School, examines the Constitutionality of the Houseand Senate versions of the bills taxing bonuses of AIG and other companies that received government bailouts and pronounces them Constitutional.  He quickly dismisses arguments under the Due Process, Takings, Ex Post Facto, and […]

Geithner Plan: TARP 2.0?

money-investing

Tim Geithner takes to the pages of WSJ to flesh out his Plan for Bad Bank Assets. Our new Public-Private Investment Program will set up funds to provide a market for the legacy loans and securities that currently burden the financial system. The Public-Private Investment Program will purchase real-estate related loans from banks and securities […]

Renogiating Mortages

foreclosure

Eric Posner has a Slate piece offering a novel plan for “renegotiat[ing] all those bad loans at no cost to the taxpayer.” The solution to this problem is for the government to force renegotiations to occur. A simple plan could do this. The plan would give all homeowners who live in a ZIP code where […]

No More Moral Hazard

money-investing

Glad we beat that one. Now on to world hunger and poverty. Oh, and the cornocupia machine well be ready a week from Friday.

Bush’s New Deal?

money-investing

The Bush administration is “working on a sweeping series of programs that would represent perhaps the biggest intervention in financial markets since the 1930s, embracing the need for a comprehensive approach to the financial crisis after a series of ad hoc rescues,” Deborah Solomon and Damian Paletta report for WSJ. At the center of the […]

Financial Crisis and Moral Hazard

Moral Hazard Cartoon

Lance Paddock, in his best Mr. Rogers imitation, asks, “Can you say moral hazard?” Unfortunately, the notion of “too big to fail” means that those who behave badly often keep the benefits when things go well but pass off the negative consequences of failure. UPDATE: Via Greg Ransom, I see that Cato’s Gerald Driscoll has […]