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TOTM I have no intention of wading into the debate over the climate change chapter in Superfreakonomics. I’m sure you all know the controversy: Levitt and . . .
I have no intention of wading into the debate over the climate change chapter in Superfreakonomics. I’m sure you all know the controversy: Levitt and Dubner had the temerity to suggest that global warming was a huge problem, that we should look hard for really expensive solutions, and we need to do something. And the outcry was from . . . the global warming alarmists. Curious.
Read the full piece here.
TOTM Geoff mentions the pending bills on the Hill that would grant merchants an antitrust exemption to negotiate interchange fees. The insurance industry exemption has also . . .
Geoff mentions the pending bills on the Hill that would grant merchants an antitrust exemption to negotiate interchange fees. The insurance industry exemption has also been in the news of late in the wake of the Democrats’ threats of repeal. Here’s what I’m puzzled about. Other than self-interested parties that have a lot to gain from an exemption (I’d like an exemption from income taxes if anybody cares), why won’t anybody say that industry exemptions from the Sherman Act price-fixing prohibitions are decidedly not a good thing for consumers?
Popular Media Many useful summaries of Williamson’s (and Ostrom’s) contributions are appearing online, such as those by Ed Glaeser, David Henderson, John Nye, Jeff Ely, and Alex Tabarrok. I think the first . . .
Many useful summaries of Williamson’s (and Ostrom’s) contributions are appearing online, such as those by Ed Glaeser, David Henderson, John Nye, Jeff Ely, and Alex Tabarrok. I think the first few pages of my “make-or-buy” chapter in the NIE Handbook provide a decent overview too. I also have some slides on transaction cost economics (part 1, part 2) that may be helpful for those seeking more detail.
Popular Media Today David Henderson has penned the traditional Wall Street Journal commentary on yesterday’s Nobel award to Elinor Ostrom and Oliver Williamson. He provides an excellent summary of . . .
Today David Henderson has penned the traditional Wall Street Journal commentary on yesterday’s Nobel award to Elinor Ostrom and Oliver Williamson. He provides an excellent summary of the importance of their work, and I recommend it to you highly. In fact, David’s theme reconciles what some commenters have observed as a political or ideological contradiction. For example, Cheryl Morgan notes that both Henry Farrell and I are thrilled at the prize, and that…
Scholarship Abstract The U.S. Department of the Treasury has submitted the Consumer Financial Protection Agency Act of 2009 to Congress for the purpose of overhauling consumer . . .
The U.S. Department of the Treasury has submitted the Consumer Financial Protection Agency Act of 2009 to Congress for the purpose of overhauling consumer financial regulation. This study has examined the likely effect of the Act on the availability of credit to American consumers. To do so we have examined the legislation in detail to assess how it would alter current consumer protection regulation, reviewed the rationales provided for the new legislation by those who designed its key features, considered why consumers borrow money and benefit from doing so, and reviewed the factors behind the expansion of credit availability over the last thirty years. Based on our analysis we have concluded that the CFPA Act of 2009 would make it harder and more expensive for consumers to borrow. Under plausible yet conservative assumptions the CFPA would:
By reducing borrowing the Act would also reduce consumer spending that further drives job creation and economic growth. In addition to restricting the availability of credit over the long term, the CFPA Act of 2009 would also slow the recovery from the deep recession the economy is now in by reducing borrowing, spending, and business formation.
The financial crisis has surfaced a number of serious consumer financial protection problems that were not dealt with adequately by federal regulators. Rather than proposing expeditious and practical reforms that can deal with those problems, the Treasury Department has put forward a proposal that would disrupt current regulatory agency efforts to deal with these issues.
This paper focuses on the CFPA Act that the Administration introduced in July 2009. House Finance Committee Chairman Frank has proposed changes to this Act which the Treasury Secretary Geithner appears to be willing to accept. However, given that these changes could be reversed or other changes could be made as the legislation works its way through Congress, we focus on the Administration’s original bill rather than a moving target. Chairman Frank’s proposed changes do not significantly alter any of our conclusions.
TOTM Some serious reading first on American Needle, Inc. v. National Football League, No. 08-661 (U.S. S. Ct.)… Read the full piece here.
Some serious reading first on American Needle, Inc. v. National Football League, No. 08-661 (U.S. S. Ct.)…
TOTM The possibility of new Merger Guidelines has been much discussed in the antitrust community, particularly in light of appointment of the two new chief agency . . .
The possibility of new Merger Guidelines has been much discussed in the antitrust community, particularly in light of appointment of the two new chief agency economists, Carl Shapiro and Joe Farrell, who have done substantial work on the economics of horizontal mergers and market definition. Today, the FTC and DOJ announced a series of workshops and period for public comment to explore potential revision of the Guidelines…
Scholarship Abstract The creation of a new Consumer Financial Protection Agency (“CFPA”) is a very bad idea and should be rejected. The proposal is not salvageable . . .
The creation of a new Consumer Financial Protection Agency (“CFPA”) is a very bad idea and should be rejected. The proposal is not salvageable and cannot be improved in substance or in form. The foundational premise of the CFPA is that a failure of consumer protection, and specifically irrational consumer behavior in lending markets, was a meaningful cause of the financial crisis and that the CFPA would have or could have averted the crisis or lessened its effects. To the contrary, there is no evidence that consumer ignorance or irrationality was a substantial cause of the crisis or that the existence of a CFPA could have prevented the problems that occurred. The CFPA is likely to do more harm than good for consumers. In this article, we highlight three fundamentally problematic truths about the CFPA: (1) The CFPA is premised on a flawed understanding of the financial crisis, (2) the CFPA will have significant unintended consequences, including but not limited to reducing competition, consumer choice, and availability of credit to consumers for productive uses; and (3) the CFPA creates a powerful bureaucracy with undefined scope, risking expensive and wasteful regulatory overlap at both the federal and state levels without any evidence of its own expertise in the core areas it is designed to regulate.
Popular Media Today’s installment of our series featuring statements so self-evidently absurd you wonder how anyone could have made them with a straight face focuses on US . . .
Today’s installment of our series featuring statements so self-evidently absurd you wonder how anyone could have made them with a straight face focuses on US Trade Representative Ron Kirk. Here’s Captain Kirk failing Economics 101…