Tag Archives: featured

Redistributive Credit Policies Won’t Fix Inequality

e21-imageEconomic Policies for the 21st Century
December 30, 2014
by Charles W. Calomiris and Stephen Haber

Mel Watt, Director of the Federal Housing Finance Agency, recently announced that he will reduce the minimum mortgage down payment requirement for Fannie Mae and Freddie Mac – the housing financing behemoths that he controls as their conservator since the financial crisis – to three percent. This marks a return to pre-crisis down payment standards, and a departure from the traditional 20 percent requirements that had been standard prior to the 1990s, and which had once again become the norm since the financial crash. The stated goal is to expand opportunities for low-income borrowers, and thus help to mitigate economic inequality. But intentions and consequences can be very different. Similar attempts to subsidize risky mortgages in the 1990s and 2000s ended up increasing inequality. Congress should be wary of allowing Director Watt to take such a step.

Read the entire article at Economic Policies for the 21st Century

FT’s best books of 2014

FT-best-books-2014Financial Times
November 28, 2014

Martin Wolf, chief economics commentator at the Financial Times, named Fragile By Design to his list of best economic books of 2014.

We get the banking systems we deserve or, more precisely, that our political systems choose. The US has had 12 systemic banking crises since 1840, while Canada has had none. Better awareness of how the political forces work might lead to superior bargains. But this informative book does not leave the reader optimistic. It is hard to shift bad political equilibria.

» See FT’s Best books of 2014.

New York Times

How Banks Fail
April 11, 2014

Reviewed by Liaquat Ahamed

Five years after the drama that began in 2008 — the failure of one bank after another, the decline in the stock market and the freezing up of finance — we still cannot seem to agree about the causes of the crisis. There are some who like to pin all the blame on the corrupt business practices of Wall Street and the greed of bankers…

» See full article in the New York Times Sunday Book Review.