The Great Moderation Currently, the Central Bank of China lends money to American consumers so they can buy Chinese goods -- think of it as vendor financing courtesy of China, Inc. Unfortunately the American consumer is overdrawn, and so has to reduce his consumption (and work out some of his debt). China is preventing this from happening by buying US treasury bills at an incredible rate and the US is politically and financially incapable of handling reduced consumption. Nonetheless, dollars spent eventually have to equal dollars spent, and Mark Thoma/Tim Duy has an excellent post detailing how the runup in commodity prices could be the mechanism for that adjustment.

But wait – that capital is gaining traction, but in such a way that forces the inherit overconsumption of the US economy to light. Pick a channel, speculative investment, portfolio rebalancing, or fundamental demand, and you find financial markets trying to drive a rebalancing by forcing up the cost of key commodities. What US policymakers are unwilling to allow directly, the markets are forcing indirectly.

Consider that the current account deficit will need to correct by some mixture of import compression and export expansion. The weaker Dollar encourages that correction, but Dollar-pegs prevent the full adjustment. But where currency adjustment fails, commodity price adjustment steps in as, for example, higher transportation costs support import competing industries. Indeed, we are learning that cheap oil, not just cheap wages abroad, was the critical force supporting offshoring of US production.

Worth reading in full.
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True story Honestly, you cannot make this stuff up.

(06-30) 19:49 PDT San Francisco -- An effort by San Francisco to shield eight young Honduran crack dealers from federal immigration officials backfired when the youths escaped from Southern California group homes within days of their arrival, officials said Monday.

Open borders by 2028?
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Smart equity, dumb debt? I liked this writeup of a recent distressed real estate conference in Vegas.

Aside from say multi-family and really solid income producing properties (producing solid verifiable income now, not projected income) there is no debt available. There is lots of equity looking for 20% and up returns. Since these will have to be largely unleveraged, the asset price required to deliver the return is abysmally low. Further driving down implied valuations is the fact that the equity is Wall Street money with 3 to 5 year time horizons. No one thought that was achievable (with the exception of the Wall Street boys in the audience, of course).

Be sure to read a follow-up piece here. What interested me was the comment that these is lots of equity sitting on the sidelines, waiting for prices to be right before moving back in. I think this is exactly right. There is a huge amount of money looking for safe investment opportunities (as it runs from US treasuries to mortgage backed CDOs to commodities) and it is ready to step in when prices are right. The problem is that the right prices would reveal that the US banking system is insolvent, and arguably significant chunks of the US as well. The Fed and Treasury are in a difficult place as they try to lower prices enough so this money steps in, without actually revealing that the financial system as a whole, if it recognizes its losses, is at zero equity.
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Yahoo? Like rats leaving a sinking ship, top execs are abandoning Yahoo! in droves. In the great debate over whether well compensated managers, loaded to the gills with stock options, actually add value or are simply lucky, the inability of Yahoo!'s execs, and President Susan Decker in particular, to generate organic growth or organize a sale, is an exhibit for the prosecution. (Exhibit B would be eBay, which has not created any shareholder value since 1999, although I'm sure Meg has drawn a salary in the past decade.)

Not that I believe a MSFT acquisition would have helped users, or MSFT at all, but surely Yahoo! shareholders deserve a break after having made no progress in 8 years? I expect that Jerry Yang will be asked to step aside, he's clearly the wrong leader for the company at this juncture, but I don't know who the "adult supervision" will end up being. As of 06-20-08 YHOO is trading at 23. Is now the time for a bold, contrarian play betting that MSFT will come back? Or, like LEH does the stock have 30% (and counting) downside left in it?

At this juncture in time it's fitting to consider Google, a company whose search product delights me more today than it did a decade ago when I abandoned altavista. The current CW is that Google is run by geniuses with a culture that is innovative, fluffy, and fantastic. When the tide goes out, we will see how true this is, for there are few second acts in the tech world. One of the most notable exceptions is AAPL of course, up a mighty 200x (that's 2000%!!) since 1985. The truest of true believers have been handsomely rewarded.
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Excellent graph {Blogger sucks and once again, has broken its picture posting ability. Here's the link}

Source: Thomas Picketty and Emmanuel Saez, via WSJ

I love this graph. Next time folks talk about "taxing the rich", ask where "the rich" start. The top 10%-1% have seen almost flat income growth (1%-2%) over the past 6 years. So, up to $190K, no improvement.

From the top 1%-0.01% it's better, 7%-8.5% income growth. We're now at the $2.5M mark though. All the serious growth has been at the higher than 0.01% ($2.5M+) -- 22.2%!
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Macro makes no sense One area of economics that U Chicago shed no light on for me was macroeconomics, and monetary policy, which is ironic since it's the home of Milton Friedman who founded Monetarism. I don't think Megan understands it all that well either in this post

1. It would involve a massive, massive credit contraction. Hello, Great Depression.

2. Actually matching pool credit to particular loans would be a much more expensive business than the current banking system.

3. The expansion of credit has historically enabled a lot of things we like, such as homeownership and entrepreneurship.

4. How many people want to pay the bank to hold onto their money?

5. A smaller credit system will not ultimately prevent inflation/deflation. Without interest bearing accounts, savings become a wasting asset.

6. To the extent that it does prevent inflation, this is not necessarily a good thing--a little inflation greases the labor market, mitigating the effects of demand shocks.

1. It sure would. That said, the US$ has lost over 90% of its value in just three generations, and if that's a feature of the system, how great is that system?

2. Matching pool credit would be more expensive than maturity mismatched accounting as you would switch to, essentially, a multiple year cash accounting system. Other costs would be lower though -- no more FDIC. Other costs would be much lower, remember the US taxpayer is on the hook for almost $1T (yes, T) shoring up bad housing loans and the shadow banking system via recent Treasury and FNMA intervention.

3. Entrepreneurship would go on unimpeded. Remember, VC funding (a key driver of entrepreneurship) *is* maturity matched. Speculation would be less well supported though, and that is a feature, not a bug.

4. Suppose money did not lose value such that it became near worthless in three generations? Suppose you were hiring someone to protect gold? If we lived in a world of mild deflation (zero currency dilution + technological improvement) then paying a modest fee to have our cash stashed someplace safe would be fine.

5. You are correct that a smaller credit system will not, in and of itself, impact inflation/deflation. Monetary dilution (or concentration) is what drives inflation/deflation. Credit is part of this, and a bank's ability to extend credit (print money) via brittle maturity mismatched instruments is certainly dilutive. But there is also the government's dilutive ability to run the presses, and that element is quite independent of whether maturity mismatching is allowed or not.

6. The standard line is that some inflation makes it easier to cut wages, which has beneficial impacts on the labor market. I used to believe this also, and I still think it has some truth. I also think that, in an environment of mild deflation, over time people would make their peace with nominal wage cuts in the face of demand shocks.
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The last financial crises of the 19th century Brad DeLong has a reasonable capsule summary of the current financial crises, which he calls the last financial crises of the 19th century. It's true, this crises has its roots in Greenspan's excessive interest rate cuts after the .com bubble popped, but that happened in 2000, which would make it the twentieth century, no?

Two slides I'll point you to. The first is what Brad calls a "liquidity tsunami". As this blog has pointed out, "increasing liquidity" -- which means the government printing press increasing credit -- is by definition inflationary, and the inflationary forces the Fed has unleashed are quite extraordinary.

- $400B of treasury securities
- $500B via FNMA
- Guaranteeing the unsecured debt of every investment bank in the US

The goal of this money printing is to create a "leading sector", or bubble, to drive investment demand. I don't see anyone talking about what this leading sector should be, and if our last leading sector -- building houses no one wants in towns no one lives in -- lead us anywhere we wanted to be.
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Financial regulation Megan has an excellent post asking exactly what financial regulation should be enacted given the problems the US has had with the mortgage market, commodities mortgage, credit derivative market, prime broker market, etc. She correctly identifies the key issue

If you borrow short and lend long--and all banking is some variant on this--you will at least occasionally be caught out. There's no real evidence that the problem in the housing market was supply-side, rather than demand-side, fraud. Bear Stearns wasn't taken down by its SIVs. And it's not really clear that the originators would have behaved much differently had they been keeping a piece of the loans they packaged.

Agreed. She also goes on to say, correctly, that the Motherhood and Apple Pie recommendations would not have solved the problem

Here is, as far as I can tell, a comprehensive list of all the regulations that most economists could probably agree to:

1) Increased capital requirements for investment banks
2) Cracking down on fraud in the mortgage brokerage market
3) Less off-balance sheet activity
4) Requiring originators to keep a piece of the loans they package

The problem is, it's not really very likely that these four would have prevented the current crisis.

Given that the problem is maturity mismatching, the surely the answer is to simply outlaw maturity mismatching. Such banks have existed in the past, and there are similar financial structures today, such as VC funds. If real US productivity growth comes from actual real inventions and improvements, say from tech companies, and VC funding can supply us with that, is it worth having 3.5% saving accounts at the price of systematic instability and effective nationalization of the banking sector every 8 years?

The arguments raised over whether or not investment banks should be regulated are beyond the point. The moment investment banks became "too big to fail" was the moment became (informally) part of the Government, and as such, will be directed by the Government to the extent that any one government entity can direct another.
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Small violins Angry Bear has a "soak the rich" post arguing that it's OK to raise taxes on "the rich" since they've made off like bandits during the last 10 years, while salaries elsewhere have stagnated or fallen (if one ignores healthcare). His target is a $300K/year doctor, with $160K in debt from med school, saving for his kids education, and not looking forward to higher tax rates.

The thing is that $300K/year puts one in about the 3% income percentile, and that group has experienced wage stagnation just like everyone else over the past 10 years -- you need to get into the 1% income percentile to see actual dramatic income increases. Top 1% income in the US begins at $1M, and that top 1% pays 90% of taxes currently.
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If your Momma says you're ugly... Ed Glaeser, an academic at Harvard, is conflicted about Boston's City Hall. On the one hand, the building is hideously ugly and hated by the People. It also works poorly, and is hated by its Boston city government inhabitants. It is surrounded by a anti-human wasteland, rendering a huge swathe of prime downtown realestate uninhabitable, making it wasteful as well.

On the other hand academic architects like it. Glaeser himself says it "sears his soul", although I've found that it turns my stomach. Here's a picture of the poured concrete Vogon love poem, so you can make up your own mind. Please note that it's much worse in real life.

What does one do when the People disagree with the Academics? Glaeser lays out the plan

City Hall is a great building, and the building's advocates can convince the public of that fact. A democratic process will give architects the right incentives to make the public case for the building, and in making that case, they will help others to experience the masterwork's magic.

One must Educate the People! I thank the Boston Globe for this important public service announcement.
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Almost there... Bruce Webb lays out some clear, but little known, facts about Reactionary politics:

When we talk about a Reactionary today we generally mean nothing more than 'very Conservative'. But the term has a specific historical reference, it describes those who lined up behind the forces of Reaction in the years on either side of the nineteenth century. This Reaction was to specific events, notably the American and French Revolutions which were perceived, and rightly, as being systemic risks to the political, economic, and religious structure of society as it existed, not just to crowned monarchs (though Louis XVI showed that had to be taken into consideration), but to the aristocracy, the merchant and industrial class, and to the landowners. The key point to understand is that for the original Reactionaries 'Democracy' was quite literally a dirty word, it was considered and called 'Mob Rule'. Then further consider that the forces of Reaction did not at all believe that 'All Men are Created Equal' and rejected all three parts of the French slogan 'Liberte, Egalite, Fraternite', at least as they pertained to the working class in relation to them....

Which leads to the second point. In nineteenth century it was nearly impossible to draw any kind of clear lines between the drives for universal franchise, for the right to organize and bargain collectively, and for socialism. Indeed when the British Labour Party came into being at the end of the century it was organized specifically on all three lines.

All excellent points. I would add that today, even very conservative Conservatives are not Reactionary. I don't hear any calls to disenfranchise women, or to re-institute slavery. Infact, today's conservative Conservatives are the Progressives of the 1930s, and mere Conservatives are the Progressives of the 1950s. "Mainstream" is the Progressives of the 1960s. The trend is quite clear, as is the fact that Reaction, as a political position, has been utterly eradicated. So at this point, Bruce loses the plot a little:

Which leads to two questions. One was the classical economics stemming from Adam Smith shaped by the fact that its practitioners by and large lived in a society where exclusive privilege was a societal norm and where democracy was seen as an existential threat to that society? Two can the continued hostility to Social Security be explained as a simple continuation of a politics and an economics formed within a framework of Reaction?

His first point is a historical question, and although he thinks the answer is "yes" it is, in fact "no". Economics is called the dismal science because arch-Reactionary Thomas Carlyle, rightly, noted that it supported things like freedom of slaves, giving men the right to vote, and then ultimately, giving women the right to vote. He felt that all of these developments would be disasters. So "classical economics stemming from Adam Smith" was shaped by the fact that its practitioners by and large lived in a society where exclusive privilege was a society norm and where democracy was seen as an existential threat to that society and was working, along with other Progressive ideas, to bring about that very extinction. A task that was completed entirely successfully.

This fact answer's Bruce's second question, economists opposition to SS is not a continuation of Reaction politics as economists, really, are not at all Reactionary (although they may be conservative, or even Conservative). Also given the success of Reaction, conservatism, and Converatism over the past 200 years, SS in it's current, highly Progressive form, is not going anywhere.

Although economics today is scene as a force working on the side of conservatism, it began its life firmly on the side of Progressivism. The fact that Bruce sees classical economics as being Conservative tells us nothing about the origin of classical economics, and everything about how today's Progressives are much much more Progressive than yesterday's Progressive.
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Gang up on Mankiw Greg Mankiw got his spot in the Gray Lady's son by making an impish call to reduce the corporate income tax. He suggested paying for this tax cut by increasing the gasoline tax, thus striking a blow for environmental crusaders at the same time.

Steve Waldman takes issue with Greg saying that a gas tax is insufficiently progressive, and questions whether the US has the wisdom to deploy cheaper capital wisely.

I think that Steve should extend his compassion to polar bears, but am intrigued by his argument that when firms have more money but no new projects, they spend the money on stupid stuff instead of returning it to shareholders.

In theory, when firms do not have productivity-enhancing new projects at the ready, they return funds to investors. But, in the aftermath of first the dot-com bubble, and then a massive credit & housing bubble, it's worth asking what actually happens when the economy experiences positive shocks to the supply of capital.

Given that America invented the internet 10 years ago, it's shocking how much value it has also destroyed to find itself, 10 years older, with Google but no richer. It's even more shocking to consider that after this lost decade, the next 10 years look even worse.
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Stated HELOC dischargeable This write-up by Tanta on Calculated Risk underscores a key, obvious point on what drove the lax lending standards during the recent housing bubble, namely that ability to pay did not matter so long as the debt was collateralized by a rising asset. It did not matter if the borrower had a job, so long as the house the loan was secured against kept rising 20% a year.

That said, both the lender and the borrower to placing the same bet. Here, the borrowers lost, and will go bankrupt. Maybe the lender should do the same?
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Rethinking capital flows Brad DeLong has a good paper detailing how the reality of international capital flows has been different from what economists expected in 1990. In particular, economists expected rich countries (such as the US) to be net capital exporters to poor countries (such as Mexico and China) where low wages made the marginal return to capital favorable.

In practice this has not been the case. While the US has invested in factories in Mexico and China, those countries have found reason to send even more capital back to the US. Net net, money flows from poor countries to the US. Part of the reason for this is that the people with money in poor countries do not trust those countries, and so would prefer to bank their pesos in US$. While Mexico has a central bank, dollar/peso convertibility has rendered it dependent on the Fed. Another part of the reason is a "vendor financing" strategy by low wage manufacturers (China) to boost exports and support employment by giving money to Americans.

Brad is not sure what to do about this turn of event, and ends the paper tentatively suggesting that the US should boost aggregate demand by higher government spending, higher deficits, lower taxes, lower interest rates, and encouraging businesses to bear more risk.

Given that the US is in its current position because of low interest rates and excessive business risk, suggesting that the government tries to turn that handle again simply points to the damaging boom-bust cycle that's been instituted by the Treasury and the Fed. His other recommendations are flat out inflationary. Since the US has been able to manage it's enviable position by being the world's reserve currency, it seems risky to inflate it further. There are other reserve currencies waiting in the wings.

There is an excellent discussion of this dynamic on Naked Capitalism.
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Dilution vs Supply and Demand Megan has a somewhat tortured discussion with Matt Steinglass on inflation, whether it should be targeted, etc. As I've mentioned before, I simply cannot understand Macroeconomics as it's taught in school. IS-LM, AS-AD, et al made no sense to me then, and don't make any sense to me now. I have come to suspect, however, that my confusion comes more from the fact that these concepts do not actually make any sense, than they simply lie outside my intellectual abilities. Others may agree.

I think that Megan, Matt (and even Joe Stiglitz, who I found very disappointing in person) would have a better conversation if they separated inflation into two parts: price changes as a consequence of currency dilution (print more dollars, each dollar is worth less, so prices go up) and price changes as a consequence of changes in supply and demand.

I don't think it is interesting or useful to talk about what the net effect of these two dynamics is. Who cares if the net impact of dilution (government printing money) and rising demand is 5%? I want to know 1) how much has the government diluted the currency, and 2) how much has demand risen (or fallen). In fact, netting out these two variables clouds dilution, which is at the very heart of the monetarism that Stiglitz and Matt say is "dead".

I do not understand why inflation is necessary to a healthy economy. Suppose you had a fixed money supply (no dilution) and rising technological productivity which drove lower prices. Would it really be so bad to know you would have to work less in the future because all the clever technologies humans came up with were actually making us all richer and better off? Isn't that how things are meant to work? Instead, we have a dollar which has lost 95% of it's value in three generations, and 40% in just the past 6 years (against the Euro. It's done even worse against oil and gold. And it's a mere 20% down against the Yen). A system that needs such dramatic transfers from savers to debtors on a permanent basis simply seems broken to me.

If people who want to save are fed-up with their money being taken from them and given to debtors, is it any surprise that they are moving out of fiat currency and into something with more tangible value? Cassandra decries this behavior as evil speculation and wants to see commodities no longer be a financial asset class and return to a market that treats them as actual physical goods to be traded between real produces and consumers.

I'm on board with this, and would consider extending this to a whole host of other financial arrangements which now exist as financial assets classes only, not real products to be bought and sold by real produces and consumers. One example would be the 30 year bond, the 20 year bond, the 10 year bond, and heck, even the 5 year bond. What is the real demand for a financial instrument that pays out after 30 years, but not before, and cannot have its term changed through maturity mismatching? Does anybody really believe that the yield on a 30 year treasury bond reflects in any way on what the market expects in the year 2038? How meaningful is the yield curve if everything from year 5 onwards is really just an artificial construct enabled by maturity mismatching, which guarantees bank runs, and destroys any information on what the demand 5 years out really is.

Waldman lays it out very clearly:

Some of us think that some thing's wrong, and these guys we're drinking with aren't serious enough to fix it. We know that trillions of dollars in presumed housing wealth have disappeared, but we don't know who's ultimately going to bear the loss. Americans know that as a nation, we cannot afford our clothes, furniture, or gas, unless the people who are selling it to us lend us our money back. Economists fret about "imbalance" and "adjustment", but we've yet to see a serious plan, other than let's-keep-this-party-going.

So, we lose faith. When we lost faith in Northern Rock, Bear Stearns, Citigroup, or Lehman, the central bankers stepped into the fray, and stood behind them. So, we ask, who stands behind the central bankers? We take a peek, and all we see is our own money. Which we quickly start exchanging for something else.

Right now there is no ETF that is a perfectly hedged basket of major planetary fiat currencies. That leaves us with GLD
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Interest rates and qualification The chat I linked to in a recent post on what better regulation of the financial sector might look like has a table showing at a combination of lower interest rates, lower down payment requirements, etc. all combined to massively increase a home buyer's ability to spend money on a house. This increase was completely captured by existing homeowners who saw the prices for their property skyrocket, new homeowners just took on additional debt at the same monthly payment.

I had thought that the Fed was complicit in the 1% interest rate, but that other parameters were driven by mortgage lenders. I was wrong, lower credit standards was also driven by the financial industry as a response to the Fed's (near) Zero Interest Rate Policy (nZIRP). Hear the whole story on This American Life.
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Closing the window, opening the corridor I strongly recommend reading both the post, and the comment thread regarding the Fed's recent request to begin offering (and taking) interest on bank reserves.

Last week, the Fed decided to ask Congress for the right to pay interest on bank reserves. (Hat tip Barry Ritholtz, see also William Polley, Mark Thoma, Brad DeLong) This is a very big deal.

Don't be misled into thinking that the Fed's proposal is just some arcane, technocratic change. The Federal Reserve is asking taxpayers for a big pile of signed, blank checks. That's far too much power to put in the hands of a quasipublic organization with little democratic accountability. This authority should not be granted without some strong strings attached.

I don't share Steve Waldman's optimism that democratic accountability will help the situation at all. We are talking about a highly technical area in the field of financial regulation, which is probably as arcane as it gets from a policy perspective, and. I cannot fathom how inviting The Mob to the table will help anything.

That said, the ongoing financial crises is making some informal rules formal, and that can only be good (even if, or especially if, the informal rules were bad ones).

1) The Fed will extend essentially FDIC insurance to all deposit holders, not just those keeping their money in commercial banks. The TSLF makes that explicit.

2) The Fed will shift financial losses to tax payers by swapping good collateral for bad collateral. This is more formal than saying they will not shift losses to tax payers by swapping good collateral for bad collateral, and then doing it anyway, but it is not as formal as simply writing out a check to Bear Stearns bond holders, JP Morgan, Lehman Brothers, Goldman Sachs. So I see this as an improvement, but it still has a way to go.

3) The US has the latitude to do what it wants monetarily because of "vendor financing" (great analogy) from PBOC and GCC. Both countries have taken significant amount of their citizen's wealth and given it to Americans. This may actually be the right thing to do since employment is more important than amenities (gotta keep them off the streets!)

4) Risk management in finance is pointless. They key variable ends up being political risk (how big will my bailout be?) Consider this: financials are trading at where they were back in 2000, just coming out of the Internet bubble with 8 record years of profitability in front of them.

5) The Internet bubble gave us Google, Amazon, eBay, Yahoo!, and a whole host of new services and technologies that create real value. What new service or technology that's created real value has come out of the housing bubble, or associated financial bubble of the past 8 years? Does this matter? The US economy seems to need a leading sector -- what will the next one be?

6) The US government will subsidize mortgages, no matter what. $900K homes in California are now underwritten by taxpayers.

7) I expect to see Fannie Mae and Freddie Mac nationalized before all of this is over -- there is an informal arrangement that should certainly be formalized post-haste.
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Tax incidence The WSJ op-ed says that the housing crises is over, and prices will stop dropping. Why is that?

[I]f one buys a house with a mortgage, the most important factor in deciding what to pay for the house is how much of one's income is required to be able to make the mortgage payments on the house. Today the rate on a 30-year, fixed-rate mortgage is 5.7%. Back in 1981, the rate hit 18.5%. Comparing today's house prices to the 1970s or 1980s, when mortgage rates were stratospheric, is misguided and misleading.

I'm not sure if this is actually true (would you pay more for a stock of Amazon.com if your broker gave you a great deal on your margin account?) but it certainly is how people have behaved. All of the cheaper financing that financial "innovation" created for house prices went directly into the price of those assets, so buyers were no better off before, and all the benefit was captured by previous owners. Similarly, when you hear about new government plans to help the first time homebuyer, all they will do is transfer more money to current homeowners, since the benefit will directly be factored into a new (higher) price. See this in action in my favorite graph below:



The other part that's kinda neat is how expected future appreciation makes current cash flow considerations unimportant. In the Real Bay Area, where I live, you cannot make up the price of a house in rent, buying a house and renting it out is a cash flow negative exercise, but price appreciate has more than made up for that. What happens when price appreciation stops, or goes negative? (Note: that has not happened in the Real Bay Area yet) No one knows, the graph only goes to 3% annual appreciation.


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Better regulation As the US housing bubble deflates, there is an outstanding question of what different regulatory environment would have 1) kept the housing bubble from appearing, but 2) supported "good" financial innovation. Two points on this.



Firstly, the chart above shows how borrowing power increased from 3x leverage to 9x at the peak of the bubble in 06. You can see how a combination of low interest rates, lower down payments, interest only loans all played their part in fueling the boom.

Secondly, I recommend this piece on VoxEU. Key points:

1) Better disclosure does not help to prevent financial crises. They were called "subprime"!
2) Prudential controls never work either, certainly not at a system level
3) Risk management does not work, as it ignores "off model" events which end up being the problems.

Instead, he recommends:

1) Capital controls should be counter-cyclical. So as the risk premium falls, the capital charge should rise
2) Forget about "bank" vs "non-bank". Look at maturity mismatch and leverage. The more an organization has of both, the more it should be regulated. A zero leverage, maturity matched lending institution, for example, would probably need zero regulation. Hmmmm.
3) Banks should pay an insurance premium so taxpayers do not get fleeced too much when they bail banks out.

I think this last suggestion is unworkable as we've seen what a good job social security and medicare premiums have done keep future tax increases down. Any premium collected will be, instantly, spent.
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Traffic in Dubai As horrific as this story is, I also find it quite believable. It seems the morning was foggy
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