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American Crisis Part Two

The first part of our crisis was the one caused by years of neglect, deregulation, complacency, bad economic theory, rising income inequality, wage stagnation, political ineptitude, rotten management of business, over-indebtedness, and post cold war drift. Did I leave anything out? Oh yes: multiple wars we decided to pay for not with cash, but with […]

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Bank Capital: More Please

Our banks remain chronically undercapitalized. That is to say they run on too narrow a cushion of equity capital that can be extinguished by losses before they have to be bailed out or allowed to fail.There seem to be two causes for this. First: it benefits management to have as little capital as possible. The […]

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Village Economics

I doubt that Joel Mokyr had this in mind, but one of my reactions to his excellent economic history of Britain – The Enlightened Economy – is that the development of economic theory has sorely lagged the development of actual economies. I doubt that many of you find this surprising, but to read history and […]

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