CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Thursday, April 22, 2010
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
Previous Posts
- Japan's Exports Rise 43%; Barclays Economist Says ...
- Intrade Odds Above 50% for Reps to Control House
- Paulson Now Turns Bullish on Housing and Economy
- The Unsustainable Unionacracy of California
- CA Defaults Drop 40.2% in 2010:QI from Last Year
- 25 Reasons the Bull Market Recovery is Real
- Advanced Degrees: 139 Women for Every 100 Men
- Ceterius Paribus, Equal Pay Day Falls in January
- Economic Deja Vu?
- Leading Economic Index Rises 12th Straight Month
11 Comments:
I object and take exception ...
I can see that 20 bucks, give it here.
Look at it as a B.O.H.I.C.A. treatment...
The government is ready to watch Wall Street with a bright spotlight, while a bureaucrat with a blow horn directs financial experts how to perform.
The government created the recession and financial crisis, and got us out of the recession and financial crisis. Yet, the damage is everyone elses fault.
"and got us out of the recession and financial crisis"...
Call me a skeptic Peak Trader but I got to toss the B.S. flag on that last bit...
Just how did this administration get us out of something (the recession) we've not gotten out of yet?
Two government failures are:
1. Fiscal policy doesn't operate like monetary policy (i.e. raising and cutting taxes to help smooth-out business cycles).
2. The moral hazard of "too big to fail" (government facilitating risk).
Juandos:
1. Restrictive monetary policy, contractionary fiscal policy, and foreigners absorbing dollars (or shifting dollars from the private sector to the public sector) caused the recession. The world was flooded with dollars. Yet, there were too few dollars in the U.S. private sector.
2. The U.S. was on a path to a mild recession after the Fed eased the money supply in late '07 and Bush cut taxes in early '08.
3. When Lehman failed, the credit market froze and there were much fewer dollars causing a severe recession.
4. The Fed's quantitative easing, TARP, and a greater fiscal expansion together put a floor on the recession and began a recovery.
5. Fiscal policy squandered so much money on spending rather than tax cuts, the U.S. is in a very weak position. Basically, we used up all the fuel, and an economic boom is needed to fill up the tank, which we didn't get and won't get.
"Fiscal policy squandered so much money on spending rather than tax cuts, the U.S. is in a very weak position. Basically, we used up all the fuel, and an economic boom is needed to fill up the tank, which we didn't get and won't get"...
Clear, concise, and a thoroughly ugly picture you paint there Peak Trader but I can't see any flaws in your reasoning...
Juandos, the government is blaming the private sector for problems created by the government.
The Democrats have been adept directing taxpayer anger towards Wall Street, while the Republicans have been incompetent explaining why it's the government's fault.
So, there may be strangulation instead of regulation, that goes beyond the moral hazard of "too big to fail."
Wrong countries.
They should be over the Third World hell-holes, namely the BRIC's.
Basically, we used up all the fuel, and an economic boom is needed to fill up the tank, which we didn't get and won't get.
...and selling the country will not be the answer in whatever form it takes.
"So, there may be strangulation instead of regulation, that goes beyond the moral hazard of "too big to fail.""...
Yet, 'to big to fail' may still be the political game in Washington today...
Consider the following from the Heritage Foundation blog:
The Fatal Flaws of the Wall Street Bailout Bill
To much hand holding by all the wrong people it seems...
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