Backgrounder posted September 12, 2014
Understanding Thomas Piketty and His Critics
Thomas Piketty’s Capital in the Twenty-First Century is a treatise on how wealth inequality evolves in capitalistic economies. It is the most talked-about and most critiqued economics book of 2014 because Piketty’s timing was perfect: He released the English edition when income inequality was being actively debated in the United States. President Barack Obama brought…
Backgrounder posted September 4, 2014
What Contributes to Gas Prices and Solutions to Help
Drivers recently received a bit of welcome news when the Energy Information Administration projected that gasoline prices would likely decline throughout the rest of 2014 to around $3.30 per gallon after reaching a high of $4 per gallon in March. For several years, paying more than $3.50 for a gallon of gasoline had been the new normal, and for many drivers that price…
Backgrounder posted September 4, 2014
Business Inversions: Tax Reform Is the Only Way to Curb Them
A recent surge of interest in U.S. business inversions—a process whereby an American company merges with a foreign business and moves the combined business’s headquarters to the foreign country—has precipitated calls for Congress to put an end to the practice.
The American public and lawmakers are rightfully concerned about businesses moving their headquarters abroad.…
Backgrounder posted August 20, 2014
The Fed’s Failure as a Lender of Last Resort: What to Do About It
It is not obvious that the Fed should be involved in emergency lending, however, since expectations of such lending can increase the likelihood of crises. Arguments in favor of this role often misread history. Instead, history and experience suggest that the Fed’s balance sheet activities should be restricted to the conduct of monetary policy.
—Renee Haltom, Research…
Issue Brief posted August 19, 2014
Reining in the EPA Through the Power of the Purse
While significant criticism is rightfully directed to the Environmental Protection Agency (EPA) on issues such as greenhouse gas (GHG) regulation, Congress itself is to blame for not reasserting its lawmaking power over an agency that is supposed to be implementing the will of Congress, not the will of the agency.
Through the appropriations process, Congress can rein in…
Issue Brief posted August 14, 2014
Federal Reserve’s Expansion of Repurchase Market Is a Bad Idea
The Federal Reserve has been expanding a new “test” program it calls the Overnight Reverse Repurchase Facility (ON RRP). This program is a drastic departure from its regular open-market operations and potentially expands the federal financial safety net to the entire money market.
Such an expansion increases systemic risk and increases the likelihood of unintended…
Backgrounder posted August 14, 2014
Quantitative Easing, The Fed’s Balance Sheet, and Central Bank Insolvency
More than five years after the 2008 financial crisis, the Federal Reserve’s role is still the subject of much debate. One source of controversy has been the extent to which the Fed allocated credit directly to possibly insolvent institutions. Critics argue that the Fed should have allowed insolvent firms to restructure through bankruptcy and should have provided credit…
Issue Brief posted August 11, 2014
Five Guiding Principles for Housing Finance Policy: A Free-Market Vision
The two government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, remain under government conservatorship with the federal government standing behind all of their obligations. Housing finance reform is likely to be addressed during the next congressional session, but it appears the House and the Senate may offer very different reform proposals.
Testimony posted August 7, 2014
Mismanagement of Export-Import Bank Invites Fraud
Testimony before the Committee on Oversight and Reform
Subcommittee on Economic Growth, Job Creation
and Regulatory Affairs
United States House of Representatives
July 29, 2014
Chairman Jordan, Ranking Member Cartwright, and Members of the Subcommittee, thank you for inviting me to testify this morning. My name is Diane Katz. I am a Research Fellow in Regulatory…