Arnold Kling  

Caught My Eye

Consumer Warning on Drugs... Sumner on Why Friedman Was Too...

Esther (genius grant) Duflo and Abhijit Banerjee are interviewed. They are known for doing experimental tests of anti-poverty tactics.

In one project we gave away a kilo of lentils for each immunization given to a child, and it had a huge impact on getting parents to bring their children in for immunizations.

Pointer from Tyler Cowen.
Next, two pointers from Mark Thoma. Ezra Klein asks Representative Barney Frank what is most important about financial regulation. The Congressman says, "Limiting securitization."

Next week, Ezra interviews Timothy Geithner, who will tell us of the importance of sending tax cheats to prison.

Economics of Contempt says that AIG's position in the credit default swap market was not so opaque. I think this is an important point. Just because most well-informed people outside of the finance community had never heard of CDS's, CDO's, and SIV's before last summer, it's easy to overstate the lack of transparency.

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COMMENTS (4 to date)
Elvin writes:

Arnold, my guess is that you are half happy about Frank's comment. You like the idea, but what about all the other government incentives that surround housing? What good is eliminating securitization without limiting all the other government incentives for housing? Reducing securitization just transfers the risks around.

On the other hand, this raises a good question: what is the one thing we want to get out of financial regulation reform? I don't think I'd put less securitization on top. I think I'd start with less concentration, but I'll willing to hear other ideas.

Arnold Kling writes:

I don't disagree with Barney Frank's view of securitization now. My point is that back when it mattered, he was the world's biggest proponent of anything that made mortgage credit cheaper and more lenient, including securitization.

Yancey Ward writes:

And when the lack of securitization makes lending more expensive, we will see other interventions to bring the price back down...oh...wait... we are already seeing this. My bad.

mobile writes:

Interestingly, the second most important thing about financial regulation turns out to be limiting Barney Frank.

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