Essential Economics for Politicians

Bruddah IZ said:
Ah yes, Calomiris and Haber wrote the book I have referenced here before, "Fragile by Design". So, where is the deviation. I don't see any. You should read the linked paper in the article that you link or the book "Fragile by Design" . It is chocked full of banking and economic history. Thanks for bringing this up.
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Where is the free market capitalism you are so fond of?
 
espola said:
http://blogs.wsj.com/economics/2013/04/09/why-canada-can-avoid-banking-crises-and-u-s-cant/
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Calomiris and Haber Podcast interview on Fragile by Design:

So the basic idea of the book is that banking systems are fragile by design because it is impossible to take politics out of bank regulation. And it's impossible to do so because there are inherent conflicts of interest between government and banking systems such that banks need governments and governments need banks. Those conflicts of interest basically boil down to three features. First, governments simultaneously regulate banks and borrow from banks. Second, governments simultaneously use their police power in order to enforce debt contracts on behalf of banks; but people who are being, let's say, forced out of their houses because they've defaulted on a mortgage are voters, and so when banking crises occur governments often have reasons to not enforce those debt contracts. Third, governments are in charge of liquidating failed banks. But the biggest group of creditors to a bank when a bank is liquidated are its depositors--who are voters. And so governments have incentives to change the rules of government deposit insurance for political ends--so often extend deposit insurance beyond its statutory limits. Because of those three basic inherent conflicts of interest, it's extremely difficult to remove politics from banking. Governments have, or parties inside the government have inherent reasons for wanting to use the banking system for their own ends, and at the same time, bankers need the government in order to do things like enforce debt contracts. There's no getting politics out.


http://www.econtalk.org/archives/2014/02/calomiris_and_h.html
 
Bruddah IZ said:
Good question. Read above.
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What does that have to do with Canada?

Canadian government has a long history of interfering with Canadian industry, ostensibly to help the Canadian workers and investors - agriculture, railroads, aircraft, automobiles, lumber, mining, fishing...
 
espola said:
What does that have to do with Canada?

Canadian government has a long history of interfering with Canadian industry, ostensibly to help the Canadian workers and investors - agriculture, railroads, aircraft, automobiles, lumber, mining, fishing...
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Ostensibly? Please continue.
 
espola said:
Starting before 1700 and continuing until today. Is that long enough?
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Sure.

Canadian government has a long history of interfering with Canadian industry, ostensibly to help the Canadian workers and investors - agriculture, railroads, aircraft, automobiles, lumber, mining, fishing...
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Can you tell us what the Canadian government did to "interfere" with Canadian industry?
 
Here’s a letter to the Wall Street Journal:

Sen. Elizabeth Warren supports those who oppose school choice (“Progressive Values on the Ballot,” Nov. 10), presumably because she believes that competition causes suppliers (in this case K-12 schools) to worsen their service to customers. Yet Sen. Warren also supports – because she thinks that it will intensify competition throughout the economy – active antitrust enforcement, presumably because she believes that competition causes suppliers to improve their service to customers.

Is it too much to ask Sen. Warren to decide one way or another if she believes that competition for customers worsens or improves suppliers’ performance – or, alternatively, to ask her to explain why K-12 schooling is an exception to the well-established rule that competition doesn’t worsen, but improves, the performance of its suppliers?--Donny B.
 
Richard Epstein's advice to Trump:

You should take a similar hard look to actions take by the Department of Labor that disrupt all businesses. The recent decision to roughly double the wage and overtime provisions of the Fair Labor Standards Act to people who earn under $47,476 per year cannot be ducked by any firm. The administrative and financial burdens make it especially difficult for tech start-ups to sign up employees and for universities to compensate the graduate students so necessary for engineering and the natural sciences. These rules have to be pulled right away to give breathing room to American firms. In the slightly longer horizon, once your administration can name a majority of the members to the National Labor Relations Board, it has to reverse ground on virtually every major ruling that has come down, and to immediately terminate with prejudice the litigation that seeks to treat franchisors like MacDonald’s as “joint employers” subject to the jurisdiction of the NLRB. The Obama administration takes the view that successful business models have to be destroyed in the name of social justice, even if job stagnation results.

http://www.hoover.org/research/open-letter-president-trump
 
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