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The Financial Stability Oversight Council is rumored to be on the verge of designating MetLife as a systemically important financial institution. Through the FSOC’s bureaucratic eyes, designating MetLife may appear to be a safer course than leaving it undesignated and facing questions later if the company runs into trouble. But designation brings its own problems-problems that are likely to be ignored in the FSOC’s broken designation process.Thanks to Dodd-Frank, regulators are fully engaged in the business of picking out and propping up individual firms. Dodd-Frank gives the FSOC authority…

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Agricultural lobbies often make economists who care about the general economic wellbeing of society clutch their heads in their hands. Not only do these lobbies seek subsidies that will mainly flow to farmers who are much wealthier and have much higher incomes than the average U.S. household, but they also generally appear to pay little attention to any ancillary damage that may spillover to other sectors of the economy. In addition, many of the subsidy programs they support potentially violate U.S. commitments under international trade agreements which are helpful to consumers and other…

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The tale of the Internal Revenue Service missing emails gets more curious day by day. Thanks to a Freedom of Information Act request filed by Judicial Watch, a conservative, non-partisan educational foundation, it was revealed on Friday that the emails of Lois Lerner, director of exempt organizations at the IRS, were backed up on federal government equipment and have been available to congressional investigators all along-if the administration had only chosen to produce them.Congressional committees are interested in the emails because Lerner’s office delayed granting tax-exempt status to…

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The disastrous financial crisis of 2007-2009 underlined the serious damage our economy suffers from booms and busts in the financial system. The harm from busts is obvious, with credit crunches inhibiting business investment and consumer purchases while falling asset values destroy confidence and lead to further cutbacks. As a result, serious financial busts produce severe recessions. The excesses of boom times do harm as well, mostly by setting up the inevitable bust, but also by encouraging activities that are a poor use of resources, simply because money is so cheap and readily available….

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It’s been said about legendary defensive coordinator Buddy Ryan that his analysis of potential football players most prominently took place at locker room sinks. Word is that he would watch the players shave: if they let the water run throughout then they were spoiled, and too soft. On the other hand, those who turned the sink off in between swipes had grown up familiar with scarcity, and as such, would be willing to play through pain.
Ryan’s sometimes unconventional scouting techniques came to mind amid the intensive investigations done on former Texas A&M quarterback Johnny Manziel. It…

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It’s a Democratic campaign consultant’s dream: a study from two respected academic economists concluding that, since the late 1940s, the economy has consistently performed better under Democratic presidents than under Republican ones. The gap is huge. From 1949 to 2013 - a period when the White House was roughly split between parties - the economy grew at an average annual rate of 3.33 percent, but growth under Democratic presidents averaged 4.35 percent and under Republicans, 2.54 percent. Jobs, stocks and living standards all advanced faster under Democrats.
Not surprisingly, one of the…

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The government and the Federal Reserve have spent trillions of dollars and tried many old and several new monetary policies in mostly futile attempts to stimulate the economy and increase the speed and strength of the recovery from the 2007-2009 recession. One aspect of all these actions has been the approximately zero interest rates that the Fed has been using in the hope of increasing credit. Now, finally, a growing chorus of voices is calling for a quicker return to more normal interest rates.Officially the Fed is still putting language in their statements that interest rates will be held…

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Monetary Policy: The Federal Reserve’s annual Jackson Hole confab has turned into a grumbling session about the failure of the world economy to respond to central bank stimulus. But no one should be surprised.
Fed Chairwoman Janet Yellen’s speech Friday at the bankers’ yearly Wyoming get-together focused mainly on the labor market - her main preoccupation as an economist.
She worries that a decline in unemployment from 10% in 2009 to just above 6% now doesn’t reflect how bad the economy is. And she’s probably right.
While she suggested that the economy is getting “closer to Fed objectives,”…

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Behind in the polls, he’s rekindling class warfare against banks, corporations, and rich people.
The $16.65 billion settlement by Bank of America over financial-crisis-era mortgage securities “highlights a pattern of the government extorting the banks,” Dick Kovacevich said on CNBC this week. (Italics mine.) Kovacevich is the former Wells Fargo chairman and CEO. I’ve known him for years. He ran a great bank. He kept Wells Fargo clean during the credit meltdown. And unusual for a big-bank CEO, he strongly supports free-market principles.

Kovacevich went on to say, “It’s definitely politics….

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The history of the John Hancock Tower in Boston is quite colorful, to say the least. Begun in the 1970’s skyscraper boom, there were problems really from the start. In trying to lay the foundation, retaining walls meant to keep Back Bay’s unstable soil from intruding weren’t up to the task, creating damage throughout the local neighborhood. Even historic Trinity Church was impaired, as the transept part was nearly collapsed before the deficiency was discovered and repaired at some great expense for John Hancock. The building’s windows were overly prone to detaching and falling to the…

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Every day, individuals make decisions — some of them little and unimportant, others hugely important and life changing. Over the course of their lives, people make countless decisions about careers, education, relationships, investments, and places to live. Many of these decisions involve an investment of time, money and effort, and some of them inevitably turn out to be mistakes that need to be undone.
It would be rational to evaluate the outcomes of all past decisions exclusively on their expected future payoffs and costs and not on the past, which should be irrelevant. Reality proves…

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Anyone trying to harm the governor of one of the most successful states in America might take guidance from one of Saul Alinsky’s Rules for Radicals. One of the rules was “Pick the target, freeze it, personalize it, polarize it.” Go after people, not institutions. Alinsky may be the best explanation for the indictment of Texas Governor Rick Perry. Why go after Rick Perry? Perry, governor since 2000, might run for president in 2016, and Texas has been one of the most economically successful states. As a laboratory for democracy, Texas has created every liberal’s worst nightmare: a prosperous…

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Achieving a secure retirement is a complex endeavor. Working-age households are charged with saving the right amount to enable a similar standard of living in retirement as that enjoyed during their working years. Upon retirement, households are faced with another daunting challenge-turning their accumulated wealth into security and spending down their wealth in a way that allows them to deal with a host of risks such as uncertain health costs, the risk of outliving assets, and variable returns to both financial assets and housing. Ultimately, a sound retirement means adept choices about…

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What we are witnessing in the spreading turmoil around the world - in Iraq, in Ukraine, in Gaza - is the silent rejection of a central tenet of U.S. post-World War II foreign policy: that global prosperity would foster peace and stability. Countries would rather trade than fight. Promoting economic growth would suppress the divisive forces of nationalism, ideology, religion and culture. So we thought.
It’s an idea with a long pedigree in American thinking, going back to at least Thomas Jefferson. The purpose of free trade, he and his followers believed, “was not merely to promote commercial…

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In the U.S. labor market today a battle is being waged over the purpose of a job. One might think the point of a job is that the employer needs tasks completed and is willing to pay someone to perform said tasks. However, a fierce challenge is being mounted to such an idea and the outcome is currently uncertain.
According to Obamacare, jobs are supposed to be a vehicle for providing health insurance. According to a push for paid sick leave around the country, jobs also exist to help support workers even when they do not work. According to those pushing for a living wage, or at least a higher…

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