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  • Issue Brief posted May 18, 2016 by Justin Bogie, Norbert J. Michel, Ph.D., Michael Sargent Senate Bill Should Cut Wasteful Programs and Provide Long-Term Sustainability for Highway Programs

    The Senate will soon consider the Transportation, Housing and Urban Development (THUD) appropriations bill. The THUD bill provides funding for the Departments of Transportation and Housing and Urban Development. The 2017 bill provides a total of $56.5 billion in discretionary budget authority. This represents an $827 million decrease below the current funding level and…

  • Backgrounder posted April 28, 2016 by Norbert J. Michel, Ph.D. The Glass–Steagall Act: Unraveling the Myth

    The 1933 Glass–Steagall Act is still admired by many who believe its separation of commercial and investment banking banned the high-risk activities that caused the Great Depression. Yet there are so many myths and falsehoods surrounding this notion—and the Act itself—that it is difficult to comprehend how little supporting evidence Congress uncovered prior to passing the…

  • Backgrounder posted April 28, 2016 by Norbert J. Michel, Ph.D. The Myth of Financial Market Deregulation

    A persistent myth regarding the 2008 financial crisis is that it was caused by deregulation of financial markets. All such claims are wrong. From an aggregate perspective, the industry has always been regulated, and there has never been a substantial reduction in financial regulations in the U.S. during the past 100-plus years. Instead, this time period has included an…

  • Executive Summary posted April 26, 2016 by Norbert J. Michel, Ph.D. The Case Against Dodd–Frank: How the “Consumer Protection” Law Endangers Americans

    The Case Against Dodd–Frank: How the “Consumer Protection” Law Endangers Americans grew from a shared concern among the contributing authors about the direction that financial regulation in this country has taken since the 2007–2009 financial crisis due to the regulations of the 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act. Rather than dealing with the…

  • Backgrounder posted April 14, 2016 by David R. Burton, Norbert J. Michel, Ph.D. Financial Institutions: Necessary for Prosperity

    Financial intermediaries serve a key role in the U.S. economy. They are a central reason why the U.S. economy is as productive as it is. The term financial intermediary includes depository institutions (such as banks[1] and credit unions[2]); insurance companies;[3] investment banks;[4] investment companies (such as mutual funds and exchange-traded funds);[5] and venture…

  • Issue Brief posted April 1, 2016 by Norbert J. Michel, Ph.D. The Fed Needs Reform: Six Changes for Monetary Policy

    In the wake of the longest recession since the Great Depression, policymakers have contemplated many monetary policy reforms. While some of these ideas, such as the Fed Oversight Reform and Modernization Act of 2015 (the FORM Act), introduced by Representative Bill Huizenga (R–MI), have received support in the U.S. House of Representatives, the Senate has yet to undertake…

  • Commentary posted January 28, 2016 by Norbert J. Michel, Ph.D. Obama's Misguided Solution to the Keynesian Crisis in Puerto Rico

    Treasury Secretary Jack Lew has sent a letter to the U.S. House of Representatives to update Congress on the Puerto Rican “debt crisis.” Lew is referring to the fact that Puerto Rico has buried itself under a mountain of debt that it’s struggling to repay. Aided by a special tax status, the island’s total debt doubled in the 1980s and 1990s, and has tripled since…

  • Commentary posted January 13, 2016 by Norbert J. Michel, Ph.D. The Other Glass-Steagall: The FOMC And The FDIC

    Democratic presidential aspirants Bernie Sanders and Hillary Clinton have dueling financial reform plans. Sanders wants to resurrect the Glass-Steagall Act; Clinton opposes the idea. Sanders thinks the repeal of Glass-Steagall caused the 2008 financial crisis. Clinton denies it. As I wrote in October, one problem with the theory that “repeal of Glass-Steagall caused the…

  • Issue Brief posted December 15, 2015 by Norbert J. Michel, Ph.D. Fascination with Interest Rates Hides the Fed’s Policy Blunders

    The Federal Reserve (Fed) has not changed its federal funds target rate since 2008. Such a policy is unsustainable in the face of market forces that change interest rates. This statement may seem surprising given the widespread belief that the Fed sets interest rates, but, in fact, the Fed does not set interest rates. As a matter of fact, the Fed does not set even the…

  • Commentary posted December 10, 2015 by Norbert J. Michel, Ph.D. The Fed's New Emergency Lending Rules: Not Far Enough, Not Surprising

    The Federal Reserve has just finalized its new rules for making emergency loans, as required by the 2010 Dodd-Frank Act. Supposedly, the authors of Dodd-Frank wanted to prevent the Fed from ever again making the kinds of emergency loans – relatively cheap ones to failing financial firms – that it made during the 2008 crisis. The Fed initially proposed its rules in…

  • Commentary posted November 20, 2015 by Norbert J. Michel, Ph.D. Monetary Policy Devils Are In The Details: Easy To Dismiss Ideas Too Quickly

    During the last debate Senator Ted Cruz, Ben Carson, Mike Huckabee and Senator Rand Paul all waded into monetary policy, a hot topic since the 2008 crisis. Predictably, the last few days have seen a flurry of news articles attacking their views. Some of these stories, such as Greg Ip’s, are quite thoughtful. But on balance they are too dismissive of legitimate policy…

  • Backgrounder posted November 16, 2015 by Norbert J. Michel, Ph.D. Fixing the Dodd–Frank Derivatives Mess: Repeal Titles VII and VIII

    “[I]n the popular press and to the average citizen, ‘derivatives,’ much like speculation, has become a dirty word, hindering informed discussion.” —Roberta Romano, Maryland Law Review, 1996 The 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act was Congress’s response to the 2008 financial crisis.[1] Titles VII and VIII of the act dramatically altered the way…

  • Commentary posted November 4, 2015 by Norbert J. Michel, Ph.D. Feds Just Can't Allow People To Save And Invest

    Two events from last week exemplify federal officials’ refusal to let people live their own lives and earn money as they see fit. One deals with the Department of Labor’s (DOL) new fiduciary rule, the other with the Securities and Exchange Commission’s (SEC) new rules for crowdfunding. The 2010 Dodd-Frank Act required the SEC to study the need for a new, uniform…

  • Issue Brief posted November 4, 2015 by Norbert J. Michel, Ph.D. Dodd–Frank and the Consumer Financial Protection Bureau Put Squeeze on Private Payday Lenders

    The 2010 Dodd–Frank Act authorized the Consumer Financial Protection Bureau (CFPB) to impose new regulations on payday lenders and other short-term credit providers, and these rules will likely harm millions of consumers. The act compounded this regulatory burden by effectively creating a variety of taxpayer-subsidized alternatives to private lenders in this market.…

  • Commentary posted October 27, 2015 by Norbert J. Michel, Ph.D. Congress eyes a new pot of money

    History proves that the U.S. Congress consistently excels in at least one thing: spending other people's money. Lawmakers regularly budget to spend more than they collect, and it rarely occurs to them that they should spend less. The latest example is the U.S. Senate's plan to "save" the highway trust fund. Congress has mishandled the fund — which, technically, isn't…