Economic Roundup

Economic Roundup

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In a February 10 commentary, MIT economist Simon Johnson discusses a January working paper by economists Sanjai Bhagat and Brian Bolton, which found that the compensation structure at large financial institutions encouraged excessive risk-taking that was at the heart of the financial crisis.

On February 9, The Hill newspaper reported that Wall Street firms are protesting Republican budget cuts at the Securities and Exchange Commission. They are concerned that the SEC already doesn’t have the resources to issue regulations pursuant to the Dodd-Frank financial reform law, leaving them without guidance as to how many provisions of the law should be interpreted.

On February 9, the House Committee on Oversight and Government Reform published a staff report on the regulatory impediments to job creation. On February 10, the committee held a hearing on this same topic.

On February 8, the Federal Reserve Bank of New York published a study on the impact of the 2005 bankruptcy reform on subprime foreclosures. It finds that foreclosures increased because debtors were prevented from discharging non-mortgage debts that would have freed up cash flow to cover mortgage debts.

Also on February 8, the New York Times sponsored a roundtable on why Americans don’t save as much as they should.

And on February 8, the Columbia Journalism Review published an article taking issue with market analysts who were quick to blame Obama’s policies when the stock market was weak but fail to credit his policies now that the market is strong again.

On February 8, the Center for Progressive Reform published a study that is highly critical of the methodology used in a September 2010 report commissioned by the Small Business Administration, which calculated the cost of government regulation at $1.75 trillion per year. Comparing the SBA estimate with those calculated by the Office of Management and Budget, the CPR study finds the SBA figures grossly exaggerated.

On February 1, the Economic Policy Institute published the latest edition of its State of Working America.

On January 31, the Bureau of Labor Statistics published a report analyzing state and local government employee benefits. It finds that state government benefits are considerably better than local government benefits. No comparison is made to private sector benefits.

On January 17, the Federal Reserve Bank of San Francisco published a working paper on the natural rate of unemployment – the level below which further monetary and fiscal stimulus would likely stimulate inflation. It finds that the natural rate has risen to about 6.25 percent.

The January issue of the Monthly Labor Review contains an article on the growing gap between labor productivity and labor compensation, which in theory should move together.

Bruce Bartlett is an American historian and columnist who focuses on the intersection between politics and economics. He blogs daily and writes a weekly column at The Fiscal Times. Bartlett has written for Forbes Magazine and Creators Syndicate, and his work is informed by many years in government, including as a senior policy analyst in the Reagan White House. He is the author of seven books including the New York Times best-seller, Imposter: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (Doubleday, 2006).

Bruce Bartlett’s columns focus on the intersection of politics and economics. The author of seven books, he worked in government for many years and was senior policy analyst in the Reagan White House.