By Arnold Kling
Tyler Cowen is everywhere. Here he gives what I call (borrowing the term from Steve Roach) the tallest pygmy theory of America in the world economy.
The major Austrian banks, for instance, have loans to eastern Europe equal to as much as 70 percent of their country’s gross domestic product. The two largest Swiss banks, taken together, have assets four times larger than Switzerland’s GDP. Even in the relatively large economy of Germany, the liabilities of Deutsche Bank have been measured at 80 percent of German GDP. These banks have grown too large to be handled or bailed out by their national governments. In the United States we talk about institutions that are “too big to fail,” but in many parts of Europe it might be more apt to speak of those “too big to be saved.”
Here he takes on Brad DeLong in a rather unilluminating debate on fiscal stimulus. Brad would rather debate a straw man than engage an opponent.
Finally, here he talks about blogging and his thought process. You can see that, unlike Brad, he is not focused on win-lose in economic arguments. Instead, he wants people to see the strengths and weaknesses of various positions.
Nick Szabo criticizes but takes seriously my imperialist/militarist theory of the originas of money.
We both seem to agree that the traditional economists’ explanation of money emerging from a barter market that otherwise obeyed the principles of efficient modern markets is not historically sound (although I do believe it is theoretically and empirically sound as a theory of the way things can happen — money-like intermediate commodities can and have been observed to emerge from barter markets). Where we may differ, and perhaps not by much, is on the role of coercion. I believe that both coercive and voluntary transactions (and transactions that partook of both components) were important, and that the voluntary transactions were not efficient market exchanges
Lawrence Kotlikoff and Jeff Sachs on the bailouts.
The Geithner-And-Summers Plan (GASP) to buy toxic assets from the banks is rightly scorned as an unnecessary give-away by virtually every independent economist who has looked at it. Its only friends are the Wall Street firms it is designed to bail out.
There was no significant effect of estrogen or testosterone on any of the studied behaviors.
I still believe that gender affects decision-making, particularly at the executive level. As I said in an earlier post, if I were the systemic risk regulator and could control one variable at financial firms, it would be the gender of the CEO.
Perhaps the next experiment could be to take CEO’s of failed financial firms, not necessarily as volunteers, and randomly castrate half of them. I suspect that this experiment would find significant effects on risk taking, particularly if it were announced in advance as applying to firms that currently are healthy.