Earn What You Spend

Blowback is a term coined by the CIA to describe the unintended consequences of military operations.  Virtually every covert operation suffers from some degree of blowback - it is simply impossible to understand in advance the innumerable implications of certain courses of action. 
Some of those at A.I.G. are now experiencing a situation best described as political blowback.  The federal [...]

[via Greg Mankiw]
Christina Romer, current Chair of the Council of Economic Advisers, presented this talk today at the Brookings Institute.  Although the adjective ‘Great’ is returning to our lexicon when describing the current crisis - Ms. Romer assures us that no, we’re not in another Great Depression.  The Great Recession, perhaps, but we are a [...]

Depending on whom you ask, the chief culprit for the credit crisis is either risky subprime mortgages or overleveraged banks.  In reality, it was a perfect cocktail of both going awry in unison, but today I spent a lot of time thinking about the bank portion. 
It started with reading Matthew Yglesias quote from Paul Krugman’s economic [...]