Top UK regulator supports transactions tax to shrink financial sector

Share Button

A year ago, it occurred to me that if the popular blood lust against the financial sector was to be given vent, one could do worse than adopt a small (but global) tax on financial transactions.    On August 27 it was reported that Adair Turner, head of the UK Financial Services Authority, had come out in support of just such an idea, arguing that the financial sector is too large.   The Financial Times editorializes against the proposal, pointing out the importance of the sector to Britain, and arguing that “bonus-bashing is a distraction.”  Willem Buiter is with Turner in believing that the financial sector is too large, but views the transactions tax as the wrong policy tool for the job. read more

Share Button

Good News, Finally, in the “Hours Worked” Statistic

Share Button

In the July employment report released by the BLS this morning, August 7, the labor market shows its first encouraging signs. Most commentators will focus on the jobs numbers, which show a decline of less than half the rate that the economy experienced in the “freefall period” of late 2008 and early 2009.

Employment tends to lag behind production. For this reason, as readers of this blog will know, my preferred indicator is total hours worked. The latest numbers show that the length of the workweek has begun to rebound from its record low of two months ago. As a result, the BLS reports that total hours worked in the economy did not decline at all in July, for the first time since the financial meltdown of last September. read more

Share Button

An Evaluation of the First 200 Days of Obama Economics

Share Button

Friday marks 200 days in office for President Obama.   “How has he done?” asks Fortune.

The first thing to say is that Barack Obama took over the presidency at an extremely difficult time. A variety of analogies suggest themselves: He is Harry Houdini who has been thrown in the river, in a straitjacket, with chains wrapped around him. Or he has taken over as the captain of a ship with a rotting hull, while the ship is under attack in a hurricane. To capture the state of the economy, perhaps the best metaphor is that Obama took over as pilot of an airplane in the middle of a steep dive. For a president precedent, he is Lincoln, who takes office as the South secedes. Or he is Roosevelt, who takes office at the depth of the Great Depression. read more

Share Button