The Prosecution That Isn’t Happening

People keep asking why no senior executive has gone to jail for the misdeeds that produced the financial crisis—and cost the United States more than $6 trillion, or $50,000 per household, in lost economic output. The usual answers are that no one did anything wrong (oh, come on) or, more realistically, that it’s too hard to […]

Basel Committee Misses the Point in Redefining Leverage Ratios

The Basel Committee’s recent decision to change the definition of the leverage ratio is bad news for two reasons. There’s the obvious: A smaller denominator means less capital. The leverage ratio requirement says, in principle, that banks must have capital equal to at least X% of their total unweighted assets, where “assets” is supposed to include anything […]

Free-Market Reflexes

I’ve been reading a lot about education recently, for reasons that are not worth going into here. I don’t know that much about the area, so I’ve been reading some background stuff and review articles, including a Hamilton Project white paper by Michael Greenstone, Adam Looney, and Paige Shevlin. It’s pretty mainstream, self-professed “third way” stuff, […]

Why JP Morgan Is JP Morgan

Which is to say, a basket case. Along with Citigroup, and Bank of America. We all know that JPMorgan Chase is too big to fail. We all know that this means that it enjoys the benefit of a likely bailout from the federal government and the Federal Reserve should it ever collapse in a financial […]

Obamacare Rollout: Bad Government Software

Ezra Klein, one of the biggest supporters of Obamacare the statute, has already called the launch of Obamacare a “disaster,” and it looks like things are now getting worse: as people are actually able to buy insurance, the data being passed to health insurers are riddled with errors (something Klein anticipated), in effect requiring applications to be […]

The Wall Street Takeover, Part 2

Five years later, and things seem marginally better in some areas (the CFPB exists), significantly worse in others (LIBOR, money laundering, London Whale, etc.). There has been some debate recently about whether we have a safer financial system today than before Lehman collapsed. But the fundamental issue, as Simon and I discussed in 13 Bankers, is […]

Retirement Inequality

The Economic Policy Institute put out a series of charts detailing inequality in retirement savings across several different demographic characteristics. The most obvious picture is that the shift to 401(k) plans has produced vast increases in retirement inequality across income groups. Here’s one:   And that’s not just a product of increasing income inequality. As a percentage […]

How Venture Capital Firms Are Like Colleges

College application essays? They’re all the same. That’s according to Rick Clark, the head of admissions at Georgia Tech, who kicks off this past weekend’s episode of This American Life by, in part, mocking the tired trope of “idealistic teenager goes to Central America to help the people there but becomes transformed by the experience.” Clark, however, […]