The Exciting World of High Finance
While I'm uncomfortably content to obliviously ignore the economic travails coming our way, I'm afraid that I'm not going to be able to get away with that forever. While I'm not fascinated with economics, I can hold my own in math in general, so I assume that it's just the fact that I don't want to know that makes my eyes glaze over when I start writing. That's not good for me, though, so I'm going to have to work my way through it.
And there's no better way to start than making a visit to Dr. Krugman. Earlier today, he responded to John Taylor's piece in the Wall Street Journal:
Taylor's argument against the obvious answer — government spending as stimulus — is pure gobbledygook:The theory that a short-run government spending stimulus will jump-start the economy is based on old-fashioned, largely static Keynesian theories. These approaches do not adequately account for the complex dynamics of a modern international economy, or for expectations of the future that are now built into decisions in virtually every market.
Translation: la la la I can't hear you.
It's good to see he's putting that Nobel Prize to good use. He's also questioning a recent move by the Fed:
OK, so the Fed is planning to buy obligations of the GSEs — as well as securities guaranteed by the GSEs. This is in an effort to lower spreads. The Fed will in effect pay for these purchases by having the Treasury issue U.S. government debt.
But the GSEs have been nationalized. Their obligations are already U.S. government debt. What's going on here?
Funny, that's how I feel most of the time around these subjects. Meanwhile, over at Calculated Risk, we learn that the FDIC's "problem list" of banks has grown by 50 percent--up to 171 from 117. Good times.