3/28/23 The efficiency of financial markets depends, at least in part, on a high level of transparency as to the credit quality of market participants; and credit rating agencies have an important role to play in that regard. At the moment I’m not sure the crop of credit rating agencies…

3/22/2023 Along with the heightened sensitivity about the health of the banking sector, business media have reflected a heretofore under-appreciated recognition of the importance of interest rate risk management in banking. Recent reporting and editorializing leaves the impression, however, that we wouldn’t be facing this onslaught of failures and rescues…

3/14/2023 I’ve been struggling to understand how and why the recent spate of bank failures happened and what the appropriate policy response should be. Elizabeth Warren seems to hold bank regulators responsible. I’m not so sure. By way of background, as a rule, banks hope to earn the spread between…

3/9/23 From my perspective as an economist, Federal Reserve Board Chairman Jerome Powell is striking exactly the right note — for now. Appreciating that the Fed has the dual mandate to foster full employment and price stability, at this point concerns about inflation are justifiably taking precedence; and Powell’s posture…

3/2/23 It wasn’t so long ago that the hallmark of conservative Republicanism was the call for smaller government. Those days seem to be over. …

2/10/23 With few exceptions, throughout my working life, I’ve actively eschewed stock picking and allocated a portion of my savings to investment vehicles that mimic the S&P 500 index — originally by investing in mutual funds and then later by buying the SPYD ETF. No regrets about that strategy. Ample…

2/5/23 “If something can’t go on forever, it will stop.” I wish I could take credit for that line, but I can’t. It’s attributable to Herbert Stein, who was the Chairman of the Council of Economic Advisors in both the Nixon and Ford administrations. This pithy aphorism informs a lot…

1/28/23 My first job as an economist was at the Board of Governors of the Federal Reserve System in Washington, where I served in the research department, concentrating on the housing sector. As a particularly credit sensitive sector, the Board was especially attentive to intelligence about the health of this…

1/22/23 I’ve recently become enamored with the idea of expanding the applicability of the alternative minimum tax (AMT). To understand the AMT, we need to start with an appreciation of taxable income, which, by definition, is the amount of income to which the tax rate is applied. …