A roundup of economic news from around the Web.
- Financial Reform: Writing for the Journal, Alan Blinder says that greed isn’t always good, and that financial regulation reform is lagging. “I’m worried. The financial services industry, once so frightened that it scurried under the government’s protective skirts, is now rediscovering the virtues of laissez faire and the joys of mammoth pay checks. Wall Street has mounted ferocious lobbying campaigns against virtually every meaningful aspect of reform, and their efforts seem to be paying off. Yes, the House passed a good bill. Yet it would have been even better but for several changes Financial Services Committee Chairman Barney Frank (D., Mass.) had to make to get it through the House. Though the populist political pot was boiling, lobbyists earned their keep.”
- Regional Fed: On the Atlanta Fed’s macroblog, David Altig explains the importance of the regional bank model for the Fed. ” In 2009, the Atlanta Fed president, first vice president, and Research staff members made more than 400 speeches to an aggregate audience approaching 30,000 citizens in the six states that we cover. We made this effort in the service of two objectives: First, to give the Federal Reserve System a personal face and to explain, as best we could, the hows and whys of Fed actions to a justifiably concerned public. Second, to collect intelligence and feedback, in real time, from the people making real Main Streetlevel decisionsto give, in President Lockhart’s words, “voice to people” in the monetary policy process. The district bank configuration of the Federal Reserve is the democratic footprint of the U.S. central bank. If ill-conceived legislation concentrates more power in Washington, that footprint will surely fade. And central bank accountability will not be strengthened. It will be diminished.”
- Financial Rescues: International Monetay Fund First Deputy Managing Director John Lipsky explains how the IMF will prepare a report on how the financial sector could make a fair and substantial contribution toward paying for any burdens associated with government interventions. ” At its heart, our analysis will address how to fund the direct financial sector support that could be required in a potential financial crisis. Assessing this need will require analysis of the spillover effectsthat is, externalitiesthat financial sector activities pose for the rest of the economy. At an analytical level, the burdens resulting from financial crises can be addressed through taxation, or regulation, or a mix of the two. Thus, a key question that our analysis will have to confront is the appropriate balance between these two basic policy options.”
Compiled by Phil Izzo