Imagine that all bank deposits — the dollars in your checking account — were 100% backed, one-for-one, by your bank’s reserve holdings at the Fed (the modern, fiat-money-world equivalent of gold reserves). Runs on bank deposits would be impossible, because the outfit that issues reserves and currency can’t run out of reserves and currency — […]
Yes, that’s right. Scalia said Citizens United was wrongly decided. He said it yesterday, at the argument on the constitutionality of California’s Prop. 8. He also said that the right to bear arms doesn’t, after all, preclude the federal government and the states from enacting gun-ownership restrictions as they wish, so the recent Court opinions […]
The New York Times points us to a possible first in the state government bond market. My initial reaction was to wonder about flood insurance risk assessment by state, and wether our conversation might go beyond FEMA into more real areas of risk assessment. Mostly we seem to spend our time not avoiding risk but […]
This item confirms that the Northwest Plan for Social Security would work rather well for Congress, Social Security, and beneficiaries. Beltway conventional wisdom thought otherwise. My own reaction was of puzzlement by the Beltway conventional wisdom. Fiscal Times reports: We’ve already seen evidence that consumers have largely shrugged off this year’s expiration of the payroll tax […]
Cross-posted from Middle Class Political Economist. Your read it here first: Real wages fell 0.2% in 2012, down from $295.49 (1982-84 dollars) to $294.83 per week, according to the 2013 Economic Report of the President. Thus, a 1.9% increase in nominal wages was more than wiped out by inflation, marking the 40th consecutive year that […]
Breaking: 1st update- #prop8 unlikely to be upheld; either struck down or #scotus won’t decide case. More in 30 mins. This is the more important of the two gay-marriage cases. Tomorrow’s argument will be on the constitutionality of the federal Defense of Marriage Act (DOMA), but almost no one (best as I can tell), thinks […]
Via The Big Picture and Ritholz comes Nervousness in over banked Europe Go no further than the following two charts to understand why markets freaked out over Dijsselbloem’s comments. Europe is way overbanked and vulnerable to financial sector shocks.Even in the so-called “safe haven” Switzerland the banking system is outsized relative to the country’s GDP. […]
David Zetland writes a well written nine page look at the limits of economics in at least the media and political level, and a look at the limits of what economic models have to offer most people. This will be a series of posts highlighting major points over time. The paper must be downloaded to […]
We generally start this evening with the birth of Moses (Exodus 2:2-3; “And the woman conceived , and bare a son: and when she saw him that he was a goodly child, she hid him three months. 3 And when she could not longer hide him, she took for him an ark of bulrushes, and […]