"We're in the same situation of people who have lost a limb but can still feel it," said Ricardo Hausmann, a Venezuelan economist who teaches at Harvard. "I don't know how long it will take for Chávez to realize he's lost a limb."
The world economy is plainly in a poor state, but it could get a lot worse. This is a time to put dogma and politics to one side and concentrate on pragmatic answers. That means more government intervention and co-operation in the short term than taxpayers, politicians or indeed free-market newspapers would normally like.
"I'm trying to make sense of all this financial fiasco from economics perspectives. I read blogs. But now there are way too many people talking about anything out there. Suggestion?"
"Don't read them all. Just check regularly those of Mankiw, Krugman, Arnold Kling (of EconLog -- in the meantime, just skip Bryan Caplan), Econbrowser (both Hamilton and Chinn)"
"What about magazines, newspapers?"
"New York Times. Don't miss Leonhardt. And of course The Economist".
"I'm not a professional economist. But if I were to read academic papers, what do you suggest?
"Ben Bernanke's papers in early 80s"
"Books?"
"Bernanke's Essays on the Great Depression"
"As for Indonesian context?"
"The two Basris: Chatib and Faisal"
This crisis is so huge and complex that I don't think you can fairly cite anything as the main cause. But it is certain that the way we account for securities has contributed, by turning illiquidity in various banks into insolvency. Moreover, while deregulation played a role, so has regulation. One of the reasons that severe markdowns are such a problem for banks is that the thin balance sheet triggers a ratings downgrade. At that point, many large institutions are legally prohibited from investing in them; others are forbidden by charter. The change in the government sanctioned rating kicks in government rules which ensure that bankruptcy rapidly follows a writedown. Did I mention that financial firms are not allowed to restructure in bankruptcy? They have to liquidate.
Title II. Sect. 211. Transportation fringe benefits to bicycle commuters.
[With]: "(i) QUALIFIED BICYCLE COMMUTING REIMBURSEMENT.—The term 'qualified bicycle commuting reimbursement' means, with respect to any calendar year, any employer reimbursement during the 15-month period beginning with the first day of such calendar year for reasonable expenses incurred by the employee during such calendar year for the purchase of a bicycle and bicycle improvements, repair, and storage, if such bicycle is regularly used for travel between the employee's residence and place of employment.... [and some more down the document]
We also hear that it is the free market that is to blame. But the facts show that it was the government that pressured financial institutions in general to lend to subprime borrowers, with such things as the Community Reinvestment Act and, later, threats of legal action by then Attorney General Janet Reno if the feds did not like the statistics on who was getting loans and who wasn't.That's Thomas Sowell
To blame laissez faire for today's economic crisis is akin to blaming the human body's natural and normal functioning for the illness suffered by someone who's overdosing on heroin.That is Don Boudreaux.
Saying that "greed" caused today's problems is like saying that gravity caused the death of someone pushed from the top floor of the Empire State building.
