I will again remind you that the opposite of love isn’t hate, its apathy. We’ve noted the lower volume during rallies and the higher traffic during the declines — a sign of distribution — but a simpler truth may be emerging, that of burnout. After four — or five, or six — bubbles and bursts, folks are both bitten and shy by the gamesmanship in the marketplace.
Read the article on MarketWatch: History doesn’t always repeat itself but it often rhymes
“Ms. Romer argued last year that this “multiplier” for government meant every dollar spent created about $1.50 worth of demand.
Some economists say that’s too high. Valerie Ramey of the University of California at San Diego, initially thinking as a Keynesian, developed doubts after sifting through historical examples. During the military build-ups of World War II, the Korean War and the Reagan era, a dollar spent added roughly a dollar of growth, she says. Although Ms. Ramey supported stimulus in 2009 because the economy was so weak, she doesn’t advocate more now. “We just don’t have enough evidence to prove that it’s good.”
Robert Barro, a Harvard economist, found even smaller multipliers: A government dollar spent creates about 80 cents worth of growth, or possibly less, he says. Government spending, he says, crowds out private sector spending that would otherwise be taking place.”
Follow the debate on The Wall Street Jounal here.
“There is probably no regulator who was more asleep at the wheel than the Federal Reserve Bank of New York. Yet, in what must be a new twist on the Peter Principle, the New York Fed’s leadership during the crisis, Timothy Geithner, was promoted to Treasury secretary and placed in charge of Obama’s financial reform efforts.
But then such a promotion, in the face of repeated failure, pales in comparison to the reappointment of Ben Bernanke as Federal Reserve chair.”
Read the article here: Why can’t we fire failed regulators?