{"id":298348,"date":"2010-02-09T09:38:40","date_gmt":"2010-02-09T14:38:40","guid":{"rendered":"http:\/\/blogs.wsj.com\/economics\/2010\/02\/09\/secondary-sources-consumer-agency-euro-crisis-climate-change\/"},"modified":"2010-02-09T09:38:40","modified_gmt":"2010-02-09T14:38:40","slug":"secondary-sources-consumer-agency-euro-crisis-climate-change","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/298348","title":{"rendered":"Secondary Sources: Consumer Agency, Euro Crisis, Climate Change"},"content":{"rendered":"<p><em>A roundup of economic news from around the Web.<\/em><\/p>\n<ul>\n<li><a href=\"http:\/\/online.wsj.com\/article\/SB10001424052748703630404575053514188773400.html\"><strong>Consumer Agency:<\/strong><\/a> Writing for the Journal, TARP watchdog <strong>Elizabeth Warren <\/strong>argues for creation of a Consumer Financial Protection Agency. &#8220;The consumer agency is a watchdog that would root out gimmicks and traps and slim down paperwork, giving families a fighting chance to hang on to some of their money. So far, Wall Street CEOs seem determined to stop any kind of watchdog. They seem to think that they can run their businesses forever without our trust. This is a bad calculation. It&#8217;s a bad calculation because shareholders suffer enormously from the long-term cost of the boom-and- bust cycles that accompany a poorly regulated market. J.P. Morgan CEO Jamie Dimon recently explained this brave new world, saying that crises should be expected &#8220;every five to seven years.&#8221; He is wrong. New laws that came out of the Great Depression ended 150 years of boom-and-bust cycles and gave us 50 years with virtually no financial meltdowns. The stability ended as we dismantled those laws and failed to replace them with new laws that reflected modern business practices.&#8221;<\/li>\n<li><a href=\"http:\/\/www.voxeu.org\/index.php?q=node\/4583\"><strong>Euro Zone Debt Crisis:<\/strong><\/a> On voxeu <strong>Charles Wyplosz<\/strong> aims to present facts and myths about the debt crisis in the euro zone. &#8220;Myth No.5: Contagion, already under way, would be destructive. This statement is too vague. It cannot destroy the monetary union, as argued above. But contagion can bring the value of the euro down \u0096 but this would be mostly good news for the Eurozone as it is suffering from an overvalued exchange rate at a time of anaemic domestic demand. Fact No.5: The real worry is the banking system. Some European banks hold part of the Greek debt and, if still saddled with unrecognized losses from the subprime crisis, some might become bankrupt. Many governments have simply not pushed their banks to straighten up their accounts and they are now discovering some of the unforeseen consequences of supervisory forbearance.&#8221;<\/li>\n<li><a href=\"http:\/\/belfercenter.ksg.harvard.edu\/analysis\/stavins\/?p=533\"><strong>Climate Change:<\/strong><\/a> Harvard&#8217;s <strong>Robert Stavins<\/strong> looks at the current state of climate-change policy. &#8220;It is interesting to note that many \u0096 perhaps most \u0096 economists have long favored the variant of cap-and-trade whereby allowances are auctioned and the auction revenue is used to cut distortionary taxes (on capital and\/or labor), thereby reducing the net social cost of the policy.  Cap-and-Dividend moves in another direction.  This system (which was introduced several years ago in the \u0093Sky Trust\u0094 proposal) has some merits compared with the economist\u0092s favorite approach of tax cuts, namely that the Cap-and-Dividend scheme addresses some of the distributional issues that would be raised by using the auction revenue to fund tax cuts (which could favor higher income households).  On the other hand, it eliminates the efficiency (cost-effectiveness) gains associated with the tax-cut approach.  In fact, Stanford\u0092s Larry Goulder has estimated that the tax-and-dividend approach would cost 40% more than an approach of combining an auction of allowances with ideal income tax rate cuts.  (By \u0093ideal,\u0094 I mean focusing on tax cuts that would lead to the lowest net cost.) In general, there are sound reasons to seek to compensate consumers for the energy price increases that will be brought about by a cap-and-trade system, or any meaningful climate change policy. But it is important not to insulate consumers from those price increases, as diluting the price signal reduces the effectiveness and drives up the cost of the overall policy.  Thus, \u0093compensation\u0094 as in Cap-and-Dividend is fine, but \u0093insulation\u0094 is not.&#8221;<\/li>\n<\/ul>\n<p><strong>Compiled by <a href=\"mailto:philip.izzo@wsj.com\">Phil Izzo<\/a><\/strong><\/p>\n<p><a href=\"http:\/\/feedads.g.doubleclick.net\/~at\/0G1b1_cOKPFTMpm-4ebE3etA0xQ\/0\/da\"><img decoding=\"async\" src=\"http:\/\/feedads.g.doubleclick.net\/~at\/0G1b1_cOKPFTMpm-4ebE3etA0xQ\/0\/di\" border=\"0\" ismap=\"true\"><\/img><\/a><br \/>\n<a href=\"http:\/\/feedads.g.doubleclick.net\/~at\/0G1b1_cOKPFTMpm-4ebE3etA0xQ\/1\/da\"><img decoding=\"async\" src=\"http:\/\/feedads.g.doubleclick.net\/~at\/0G1b1_cOKPFTMpm-4ebE3etA0xQ\/1\/di\" border=\"0\" ismap=\"true\"><\/img><\/a><\/p>\n<div class=\"feedflare\">\n<a href=\"http:\/\/feeds.feedburner.com\/~ff\/wsj\/economics\/feed?a=QzK0b80H0Vs:lkVKS_QpadM:yIl2AUoC8zA\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/wsj\/economics\/feed?d=yIl2AUoC8zA\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/wsj\/economics\/feed?a=QzK0b80H0Vs:lkVKS_QpadM:F7zBnMyn0Lo\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/wsj\/economics\/feed?i=QzK0b80H0Vs:lkVKS_QpadM:F7zBnMyn0Lo\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/wsj\/economics\/feed?a=QzK0b80H0Vs:lkVKS_QpadM:V_sGLiPBpWU\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/wsj\/economics\/feed?i=QzK0b80H0Vs:lkVKS_QpadM:V_sGLiPBpWU\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/wsj\/economics\/feed?a=QzK0b80H0Vs:lkVKS_QpadM:qj6IDK7rITs\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/wsj\/economics\/feed?d=qj6IDK7rITs\" border=\"0\"><\/img><\/a>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/wsj\/economics\/feed\/~4\/QzK0b80H0Vs\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A roundup of economic news from around the Web. Consumer Agency: Writing for the Journal, TARP watchdog Elizabeth Warren argues for creation of a Consumer Financial Protection Agency. &#8220;The consumer agency is a watchdog that would root out gimmicks and traps and slim down paperwork, giving families a fighting chance to hang on to some [&hellip;]<\/p>\n","protected":false},"author":850,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-298348","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/298348","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/850"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=298348"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/298348\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=298348"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=298348"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=298348"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}