Monthly Archives: December 2012

What is Going on with the Fed? No, Not Anything Like What it Seems | | 12.15.12

6.5% unemployment or bust; until then, the money spigot is open wide. This was the gist of the Fed’s world-headline-grabbing announcement this week. Less noticed was that, as the FT reported on the same day, “The US Federal Reserve is carrying out its first ever system-wide stress test of bank liquidity…”  Translation: The Fed will be pushing […]
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Honoring Robert H. Bork | | 12.20.12

At the Constitutional Convention in 1787, it was remarked that the system the delegates were designing – a government of checks and balances, sovereign states, limited government and enumerated powers — would likely last in tact no more than 150 years, that is, to the 1930s. Today, some would say the prediction was all too […]
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Federal Reserve Moves in Opposite Directions on Fixing the Economy | | 12.14.12

Here’s a flash. Things aren’t always as they seem in Washington. Case in point: This week headlines around the world screamed that the Federal Reserve Board is making lowering unemployment, not controlling inflation, its key objective. It will continue holding down interest rates and expanding the money supply so long as unemployment remains above 6.5 percent. This means […]
Posted in Economic Policy: The Great Financial Crisis | Tagged | Comments closed

A Quiz and Two Rules for the Budget Talks | | 12.11.12

OK, class, here’s a quiz. If the government were to raise the top personal income tax rate by, say, 25 percent, what would be the increase in its take of the total gross domestic product? Twenty-five percent? Are you sure?  After all how much of the government’s total personal income tax take actually comes from […]
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Why The President Will Go Over The Fiscal Cliff Rather Than Compromise On Tax Rates | | 12.4.12

Why is President Obama so unmovable on about tax rates increases on high earners? Oh, I know what he says.  Fairness.  The rich – whoever they are – must pay their fair share (I’m not going to get into whether they already do or maybe even pay more than their fair share). But that’s no […]
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How We Are Racing Towards The Economic Cliff | | 12.2.12

Forget about the fiscal cliff. Are we headed to the economic cliff? A successful software entrepreneur and school friend sent me this chilling email last week: Yesterday I was speaking to a banker in central California who related how he is being prevented from doing his job due to the compliance people (read government pressures) and could […]
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