— Gawker Media has launched a new blog devoted to gossip about the Federal City side of the District. Despite their innovative reputation, let it not go unsaid that in this instance Gawker is derivative. Swamp City has been covering the same beat for some time now, with panache. You should add it to your blogrolls forthwith, so that the Swamp City chick will stop pestering me.
Doing it First, Doing it Best
Will Wilkinson 
If Calpers and other pension plans are significantly invested in Fannie, Freddy, Lehman, B of A, and/or etc., eliminating safety nets for “billionaires” constitutes eliminating safety nets for everyone else. D’oh!
priceless part about turtles all the way down…
the most insightful comment of all (not just in your post, but of all the commentary everywhere) is about externalizing and internalizing responsibility.
while everyone else is worrying about what regulation to have, you have to wonder what role regulation plays in creating a false sense of security.
the real world is risky and imperfect, the sooner we learn that lesson, the less risky and imperfect it will be, because we will all act responsibly.
can start by letting go of the illusion that government can solve all our problems (collective and individual ones)
speaking of better regulation, where the hell were the disclosure requirements on this one? a lot of this mess seems to have revolved around a sequence of events like
(a) Institution A makes big bets on Complex Risky Instrument I, which has big profit potential but also big, big downside potential
(b) Instrument I, being Complex and Risky and all, is hard to value
(c) so Institution A doesn’t put anything on its books about the potential upsides and downsides of its investment in Instrument I, it just shovels the cash from its profits onto the books in the good times
(d) and oblivious investors keep on putting their money into A.
What I want to know is, WHY THE HELL IS STEP (c) LEGAL??? That just seems like outright fraud. “You have to inform your investors of the potential risks and benefits of what you’re doing with their money” is, like, Market Rule #5. Why aren’t the people who did this on trial for fraud?
“But let’s also not pretend that the government’s attempt to “guarantee” that you will get your retirement income, or that you will get your heart surgery in a timely fashion, or that a functioning financial system will endure, actually makes these events more likely than they would be under alternative institutions that make no such guarantees”
Well I guess the bit about the financial system is fair enough but the rest is just rubbish. Outside of the US there are a large number of countries where the Govt. guarantees the well being of its citizens and honours this promise. I suspect that your ability to comment is handicapped by the fact that you reside in the US. Citizens in Australia look with horror on a country that has been unable to institute a low cost or free health care system for all its citizens. Not only do these kinds of schemes deliver services they also create a sense of collectivity that the US appears to lack (except perhaps with regard to war) and is contributing to the fracturing and disengagment of it’s population and its ruling classes.
Agree with patrict_b. You’re making a factual claim here, against a lot of empirical evidence, but you present it as if it’s an a priori truth.
This is a first , John Quiggin discussing empiricism in economics. Does John still think heavily regulated labor markets offer superior outcomes?
patrict_b:
:Citizens in Australia look with horror on a country that has been unable to institute a low cost or free health care system for all its citizens. Not only do these kinds of schemes deliver services they also create a sense of collectivity that the US appears to lack”
The US is not unable to institute a socialised health care system. It has chosen not to. As for the creation of a sense of collectivity, in Australia at least that’s a stupid fantasy, and ironic with it because the standard leftist complaint about australians is that we are mcmansion inspired bogans who voted for john howard for 10 years because of our loathing of the other.
And let’s not forget the constant complaints here in australia about the crappiness of the public health system.