South By North Strategies, Ltd.

Assessing Financial Reform

The Baseline Scenario assesses the broad contours of the financial reform reconciliation process and is not pleased. Writes Simon Johnson:

The financial crisis of fall 2008 revealed serious dangers have developed in the heart of the world’s financial system.  The Bush-Obama bailouts of 2008-09 confirmed that our biggest banks are “too big to fail” and the left, center, and right can agree with Gene Fama when he says: “too big to fail” is perverting activities and incentives.
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This is not a leftist message, although you hear people on the left make the point.  But people on the right also increasingly understand what is going on – there is excessive and abusive power at the heart of our financial system that completely distorts markets (and really amounts to a hidden, unfair and dangerous taxpayer subsidy).
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This administration and this Congress had ample opportunity to confront this problem and at least wrestle hard with it.  Some senators and representatives worked long and hard on precisely this issue.  But the White House punted, repeatedly, and elected instead for a veneer of superficial tweaking.   Welcome to the next global credit cycle – with too big to fail banks at center stage.

Around The Dial – June 21

Economic policy reports, blog postings, and media stories of interest:

• Naked Capitalism takes down The New Republic’s J.P. Morgan “hype” piece.
• Ezra Klein meets “the anti-stimulus.”
• Robert Kuttner asks why Democrats attack Social Security.
• Bloomberg.com reports on the loss of recovery funds.

In The News: May Employment Report

South by North Strategies’ analysis of the May employment report for North Carolina was featured in media outlets across the state.

• The News & Observer: “Jobless Count Drops in NC”
• The Charlotte Observer: “Carolina’s’ Jobless Rate Drops Again in May”
• The News & Record: “Region Slow to Recover from Recession”
• The Winston-Salem Journal: “Jobs Gain Not A Trend”
• The High Point Enterprise: “Slow Growth”
• Triangle Business Journal: “Govt Hiring Cuts NC Unemployment Rate”

The High Cost of College

The PBS NewsHour debates whether higher college costs have led to better college educations.

Around The Dial – June 18

Economic policy reports, blog postings, and media stories of interest:

• The PBS NewsHour reports on one town’s shift to a green economy.
• Paul Krugman has “‘that 30s feeling.”
• Economix describes the “pitfalls of the health mandate.”
• Greg Anrig presents simple steps for strengthening Social Security.