Sound Banking
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“Foreign Lenders: Friends Indeed to a U.S. Treasury in Need”
“When the U.S. government wishes to spend more money than it receives as tax revenue, it covers the shortfall by borrowing, and foreign lenders have become increasingly important sources of such borrowed funds. Reliance on foreign lenders is as old as the republic. Indeed, loans from the French and the Dutch proved critical in keeping…
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“How to Feed a Recovery”
“To get a sense of the current economic climate, I spoke with John Taylor, Stanford economics professor and George P. Shultz Senior Fellow in Economics at the Hoover Institution. He is well known in economic-policy circles for coining the Taylor rule, a monetary-policy principle that offers guidance on how to tinker with interest rates to…
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“Lots of Regulatory Expansion but Little Reform”
“In the wake of every financial crisis, politicians face the demand that they Do Something. They feel they have to enact something to “make sure this never happens again”—although historically it has always happened again anyway. Moving the boxes on the regulatory organization chart and expanding regulatory powers are always available options, and the financial…
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“Nationalization of the Morgage Market”
“On Sunday, September 7, the United States government took control of more than half the U.S. mortgage market, through its seizure—and that is the word used in mainstream press accounts—of Fannie Mae and Freddie Mac, two colossal government-sponsored enterprises (GSEs), hybrid organizations owned by private individuals yet created by the government. The likes of this…
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“Fed May Reemerge as Bigger Buyer With Resumption of Treasury Purchases”
“The Federal Reserve will likely reemerge as the biggest buyer of Treasuries when it resumes purchasing U.S. government securities today to prevent money from draining out of the financial system. JPMorgan Chase & Co. strategists estimate the Fed will buy about $284 billion in Treasuries over the next year, or more than the combined purchases…
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The Fed Can’t Solve Our Economic Woes
A policy of low interest rates is a textbook response of monetary authorities to the economic weakness brought on by deficient aggregate demand. The policy is justified by pointing to various ways in which money can promote economic activity—including by stimulating investment, discouraging savings, encouraging consumption spending, and allowing individuals to lower their debt burdens…
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“Treasury Fixing Mortgage-Finance System Juggles Limitless Bailout, Economy”
“The U.S. Treasury Department, hosting a summit tomorrow on how to repair the mortgage-finance system, may get a blunt message from stakeholders in an industry tied to 15 percent of the country’s economy: Don’t screw it up. The system’s size and complexity mean that a wrong move by the Obama administration could restrict credit, drive…
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“Fed Official Warns of Starting a Cycle of Boom and Bust”
“In a sharply worded dissent to the Federal Reserve’s decision to help ease the supply of credit to the economy, a member of the Fed committee that sets interest rates said Friday that the central bank’s monetary strategy could backfire and touch off a new boom-and-bust cycle. The member, Thomas M. Hoenig, the president of…
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“Perspectives on the U.S. Economy: Fiscal Policy Issues”
“A clear and credible path of fiscal consolidation is clearly needed and would do much to remove uncertainty about future policy and thereby build confidence. The reason why such a plan is not being articulated and carried out now is an apparent concern that such a consolidation would remove needed stimulus from the economy. In…
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“The High Costs of Very Low Interest Rates”
“The prevailing view among economists, policy makers and Federal Reserve Board governors is that a zero or near-zero short-term interest rate stimulates the economy—the lower the rate, the better. It is time to re-examine this conventional wisdom. In fact, lowering interest rates too much may not stimulate recovery, but actually slow it. Yes, there are…
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“Foreign Lenders: Friends Indeed to a U.S. Treasury in Need”
“When the U.S. government wishes to spend more money than it receives as tax revenue, it covers the shortfall by borrowing, and foreign lenders have become increasingly important sources of such borrowed funds. Reliance on foreign lenders is as old as the republic. Indeed, loans from the French and the Dutch proved critical in keeping…
-
“How to Feed a Recovery”
“To get a sense of the current economic climate, I spoke with John Taylor, Stanford economics professor and George P. Shultz Senior Fellow in Economics at the Hoover Institution. He is well known in economic-policy circles for coining the Taylor rule, a monetary-policy principle that offers guidance on how to tinker with interest rates to…
-
“Lots of Regulatory Expansion but Little Reform”
“In the wake of every financial crisis, politicians face the demand that they Do Something. They feel they have to enact something to “make sure this never happens again”—although historically it has always happened again anyway. Moving the boxes on the regulatory organization chart and expanding regulatory powers are always available options, and the financial…
-
“Nationalization of the Morgage Market”
“On Sunday, September 7, the United States government took control of more than half the U.S. mortgage market, through its seizure—and that is the word used in mainstream press accounts—of Fannie Mae and Freddie Mac, two colossal government-sponsored enterprises (GSEs), hybrid organizations owned by private individuals yet created by the government. The likes of this…
-
“Fed May Reemerge as Bigger Buyer With Resumption of Treasury Purchases”
“The Federal Reserve will likely reemerge as the biggest buyer of Treasuries when it resumes purchasing U.S. government securities today to prevent money from draining out of the financial system. JPMorgan Chase & Co. strategists estimate the Fed will buy about $284 billion in Treasuries over the next year, or more than the combined purchases…
-
The Fed Can’t Solve Our Economic Woes
A policy of low interest rates is a textbook response of monetary authorities to the economic weakness brought on by deficient aggregate demand. The policy is justified by pointing to various ways in which money can promote economic activity—including by stimulating investment, discouraging savings, encouraging consumption spending, and allowing individuals to lower their debt burdens…
-
“Treasury Fixing Mortgage-Finance System Juggles Limitless Bailout, Economy”
“The U.S. Treasury Department, hosting a summit tomorrow on how to repair the mortgage-finance system, may get a blunt message from stakeholders in an industry tied to 15 percent of the country’s economy: Don’t screw it up. The system’s size and complexity mean that a wrong move by the Obama administration could restrict credit, drive…
-
“Fed Official Warns of Starting a Cycle of Boom and Bust”
“In a sharply worded dissent to the Federal Reserve’s decision to help ease the supply of credit to the economy, a member of the Fed committee that sets interest rates said Friday that the central bank’s monetary strategy could backfire and touch off a new boom-and-bust cycle. The member, Thomas M. Hoenig, the president of…
-
“Perspectives on the U.S. Economy: Fiscal Policy Issues”
“A clear and credible path of fiscal consolidation is clearly needed and would do much to remove uncertainty about future policy and thereby build confidence. The reason why such a plan is not being articulated and carried out now is an apparent concern that such a consolidation would remove needed stimulus from the economy. In…
-
“The High Costs of Very Low Interest Rates”
“The prevailing view among economists, policy makers and Federal Reserve Board governors is that a zero or near-zero short-term interest rate stimulates the economy—the lower the rate, the better. It is time to re-examine this conventional wisdom. In fact, lowering interest rates too much may not stimulate recovery, but actually slow it. Yes, there are…
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