Weekend Reading: The Long(er) Stuff

29 Jan

William Black: Why Our Fundamental Approach to Banking Regulation is Inherently Unsound. Naked Capitalism – I’ve argued in many a post that we need to re-think financial regulation and maybe even start over from square one.  Black makes several good points here, among others, that capital-based regulation is silly as equity capital is mrerely an accounting construct, subject to the virtually infinite # of ways banks can value assets and liabilities.

William Black: How Can The Architects of the Crisis Investigate It? The Big Picture – short answer: they can’t.

Raghuram Rajan: Income Inequality: Some Thoughtful Criticisms and a Response. The EconomistContinuing an excellent series of articles on (income) inequality (see last weekend’s weekly reads).  A must-read for anyone who fancies themselves qualified to speak on this topic.

Barry Ritholtz (via NYT): Highlights from the FCIC Report The Big Picture – for those too lazy to read the actual report.  I’m a few pages in, but I gotta tell you, it is not an easy read, especially since some of the “facts” quoted and “conclusions” reached make me very angry.

Calculated Risk: On the FCIC Report – Another good summary.
Harvard Business Schook Working Knowledge A Brief Postwar History of U.S. Consumer Finance – Some interesting information:

  • The authors identify four major consumer finance trends from the past 65 years: an increase in the number of available financial options including innovations; greater access to those options for more Americans; a trend toward a do-it-yourself approach in consumer financial services; and a resultant increase in household risk taking.
  • The type of debt households carry has changed dramatically over the past several decades. The share of household financial liabilities represented by mortgages increased from 59 percent in 1950 to 73 percent in 2008, while the share represented by consumer debt fell from 31 percent to 18 percent.

Derek Thompson: Unions & The End of Liberalism The Atlantic Business – I’m anti-union so I guess my views are a little more extreme than both Derek & Mike Konzcal, but this is a good read.

Think about it: Foreign automakers (BMW, Toyota, Honda etc) make cars & trucks in the south (North Carolina, etc) with non-union employees, yet the (formerly) Big 3 are almost entirely union-staffed.  The foreign automakers have had zero trouble finding people willing to work without being in a union.  What does that tell you?

That’s it for today, will surely add more by tomorrow!

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