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In RealTime posts, PIIE senior staff and colleagues discuss the fast-moving economic news, financial developments, and public policy choices confronting the United States and the world.
In a recent interview with PBS’s Frontline, Lanny Breuer—head of the criminal division at the Department of Justice—appeared to admit that some financial institutions were too big to prosecute. In the “too big to fail is too big to jail” controversy that ensued, lobbyists and other supporters of big Wall Street firms tried all kinds [...]
Note: This essay was also posted on Mr. Johnson’s blog Baseline Scenario. Two diametrically opposed views of Wall Street and the dangers posed by global megabanks came more clearly into focus last week. On the one hand, William B. Harrison, Jr.—former chairman of JP Morgan Chase—argued in the New York Times that today’s massive banks [...]
As the most anxious year in the history of the euro draws to a close, and with dire predictions about the euro’s fate in 2012, it is an irresistible option for this author to take stock in a more realistic way. Despite all this year’s drama, the value of the euro is almost exactly where [...]
On the fringes of the World Economic Forum meeting in Davos last week, there was plenty of substantive discussion—including about the dangers posed by our "too big to fail" and/or "too big to save" banks, the consequences of widening inequality (reinforced by persistent unemployment in some countries), and why the jobs picture in the United [...]
Most days we can coast along, confident that tomorrow will be much like yesterday. On a very few days we need to look hard at the news headlines, click through to read the whole story, and then completely change a large chunk of how we thought the world worked. April 28 was such a day. [...]
Bloomberg reports President Obama as commenting on the $17 million bonus for Jamie Dimon of JP Morgan Chase and the $9 million bonus for Lloyd Blankfein of Goldman Sachs with: “I know both those guys; they are very savvy businessmen,” and “I, like most of the American people, don’t begrudge people success or wealth. That [...]
I talked Sunday about Move Your Money with Guy Raz of NPR’s Weekend All Things Considered (summary; audio). We covered a lot of ground, from what’s in it for individuals to shift towards community banks and credit unions (better service and lower costs, in many cases) to how this could begin to reign in Too [...]
At this stage in the electoral cycle, Democrats should be running hard against big banks and their consequences. Some roots of our current economic difficulties lie in the Clinton 1990s, but the real origins can be traced to the financial deregulation at the heart of the Reagan Revolution—and all the underlying problems became much worse [...]
The Problem The underlying fiscal problems of the United States have significantly worsened as a direct result of how the financial crisis of 2008-09 was handled. The US economic system has evolved relatively efficient ways of handling the insolvency of nonfinancial firms and small or medium-sized financial institutions. A large number of these institutions have [...]
Whether to use public money to rescue financial firms because they are too big, too complex, or too interconnected to be allowed to fail is not a new issue. However, in the financial and economic crisis of the last year and a half, the number and nature of such rescues in sophisticated financial markets and [...]