Abstract

This paper presents a theoretical framework for determining the ownership stakes held by financial investors in companies competing in the same product market, or, in other words, the level of common ownership. In our model, the primary motivation for these investors is the anticipation of capital gains resulting from the impact of common ownership on product market competition, which leads to increased profitability for the firms involved. On the other hand, common ownership undermines effective corporate governance by reducing monitoring, increasing extraction of private benefits by the manager, and inhibiting investments that contribute to firm value. These negative effects on corporate governance act as limiting factors, ultimately determining the equilibrium level of common ownership.

Sen. Richard Durbin (D-Ill.) recently introduced legislation to regulate how credit-card transactions are routed that, if passed, would hinder competition between credit-card issuers, reduce benefits for consumers, and impede fraud detection and prevention.

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We learned this week that July 4’s average global temperature of 62.92 degrees Fahrenheit was the world’s hottest day since at least 1979, when the U.S. National Centers for Environmental Prediction began keeping records, and potentially the hottest in about 125,000 years.

And yet, in a world in which even ExxonMobil concedes the reality of climate change and touts that it is “playing a leading role in the transition to a lower-emission future,” it appears that insurance “consumer advocates” constitute the group most steadfast in their refusal to come to grips with what adapting to a warmer planet inevitably entails.

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Democratic lawmakers like Illinois Sen. Dick Durbin and the Justice Department’s Antitrust Division want to impose new rules for credit-card transactions that would reduce competition, harm consumers and crush small banks.

Abstract

This article sets out a philosophy for money in this new digital age. Specifically, we propose two descriptive and two prescriptive theories relating to cryptocurrency.

On the descriptive side, we first introduce a novel classification scheme to categorize cryptocurrencies. Distinct terms like “central bank digital currency” and “cryptocurrency” are often interchanged, so a precise typology is necessary in setting the parameters of debates over monetary policy. Secondly, the article explains the ideological roots of private digital currency and specifically focuses on the impact of the Austrian School of Economics on Satoshi Nakamoto, the creator of bitcoin.

On the prescriptive side, we argue that governments’ plans for central bank digital currencies are neither novel nor good policy. The reality is that most of today’s central bank currencies are already digital, and any attempts to disintermediate the banking system—that is, to allow individuals to hold accounts directly with the central bank (and not private banks)—will result in a dangerous temptation for governments to micromanage the finances of their citizens.

Our second policy conclusion is a positive one. We recommend that central banks in developing nations adopt private, decentralized digital currencies or fixed money supplies to encourage foreign investment and increase the economic well-being and stability of their citizens.

Sen. Richard Durbin (D-Ill.) earlier this month introduced legislation that aims to manufacture competition in the routing of credit-card transactions. If enacted, the measure would require that merchants be able to choose from at least two networks when processing most credit-card transactions.

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Abstract

Student loan servicers are the face of the U.S. student loan system, and they are not well-liked. Using the Consumer Financial Protection Bureau’s (the CFPB) consumer complaint database, we study borrower perceptions of the student loan system. We qualitatively analyzed a sample of complaint narratives drawn from every student loan complaint ever filed with the CFPB. Our analysis of these complaint narratives reveals clear patterns of discontent in four primary areas: 1) a mismatch between ability to repay and repayment options, including problems with forbearance, deferments, the public service loan forgiveness program, income-driven repayment plans, and loan cancellation options; 2) customer service, including sudden and unexplained changes in payment obligations, 3) inappropriate payment processing, such as misapplying payments; and 4) unauthorized loans or outright scams. The first issue was, by far, the most common. Our results high-light areas where better regulation, whether through contract with the government, ex ante supervision by regulators, or ex post lawsuits in court, has the potential to improve the function of the student loan ecosystem.

The traditional Boy Scout oath was that each scout should “do his duty.” Unfortunately, in the bankruptcy case dealing with the fallout from the horrendous sexual abuse scandal, the bankruptcy court failed to do its duty. Instead of looking out for those who were victimized, the case has turned into another feeding frenzy by class action lawyers. To rectify this miscarriage of justice, appeals courts should take a second look.

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