Huntsman and the GOP Debate on Too Big To Fail

There are a series of proposals, mostly surrounding taxes and caps on size, leverage and presumably complexity. The first bullet point, a cap on size relative to GDP, is similar to the SAFE Banking Act, which failed in the 2010 Senate with 33 votes. They all sound like good ideas, though they received little-to-no GOP support during the debates.

Mike Konczal sorts through Huntsman plan to end To big to Fail. Wonky but worth a read.

Collective bargaining for me, but not for thee

This brings to mind the phenomenon that’s sort of the obverse of union decline—the extraordinary level of solidarity manifested by the corporate executive class in the United States of America. There are plenty of individual firms that benefit from this or that public sector spending stream, but essentially all business organizations are solidly united in opposition to essentially all possible ways to enhance government revenue. On financial reform, it’s not merely that the big banks opposed the Dodd-Frank bill, but there was absolutely no counter-lobbying from firms in the non-financial economy in favor of it. And that’s not to say that Dodd-Frank was the greatest thing since sliced brad, but there were no proposals coming out of corporate America for any financial regulatory overhaul of any kind. Yet clearly something went badly awry in 2007-2008. But the business class united behind TARP, then united to oppose any regulatory reforms, and is now united against any return to pre-Bush levels of taxation on rich people.

From Collective bargaining for me, but not for thee

Collective bargaining works, that’s why they want to stop it.

QE Is Not CM

QE is basically expansionary monetary policy, no different in its effects (if it works) from reducing the policy interest rate. Yes, it tends to weaken the exchange rate; but it also increases domestic demand.

China is engaged in currency manipulation, that is, buying foreign currency to keep the yuan weak; meanwhile, it is actually moving to reduce domestic demand, among other things raising interest rates.

So the United States is moving to expand world demand, with a policy that may weaken the dollar; China is moving to reduce world demand, with a policy of deliberately weakening the yuan. America’s policy may annoy its trading partners, but they are not the target; China’s policy is predatory, pure and simple.

No equivalence here.

From QE Is Not CM – NYTimes.com

Clear explanation on differences between QE2 and China’s yuan manipulation.