Barbara Kiviat

Volcker’s rule on rules

October 29, 2010

Former Fed chairman Paul Volcker has some advice for financial regulators writing rules to define new limits on banks’ ability to trade for their own accounts: be as vague as possible. At least that’s the message in this WSJ piece by Deborah Solomon (for which, to be upfront, Volcker declined to comment).

Why economists are(n’t) the answer to all our problems

October 27, 2010

Over at the Curious Capitalist, my former colleague Steve Gandel asks me to react to this NYT article about how economists manage to disagree on such fundamental questions as whether the government should spend more or less money in response to economic malaise. I’ve been perplexed by this sort of thing before. In this post from August, I worried about the influence of ideology, and then decided that maybe the bigger take-away is that we should spend less time listening to economists, who, after all, represent just one possible lens onto the world of human behavior, decision-making and social dynamics:

The U.S. Chamber of Commerce is not the same thing as American business

October 25, 2010

I don’t understand why everyone is so surprised to find out that large corporations are funneling massive amounts of money to the U.S. Chamber of Commerce. Last week’s NYT report has been making the Internet rounds, and while I appreciate the point that the Chamber is much more partisan than its non-profit status would suggest—70 of the Chamber’s 93 midterm campaign ads either support Republican candidates or attack their opponents, despite the Chamber’s promise to the Federal Election Commission that it only talks about issues—there’s also a curious amount of wonderment at big-company donations. Yes, Wall Street firms sent millions of dollars to the Chamber when financial re-regulation was on the table, and the insurance industry got out its checkbook when it was time to talk healthcare reform. Why would anyone be surprised?

The less you know about finance the better

October 25, 2010

Everywhere you turn these days, some bigwig policymaker is talking about the importance of financial literacy education. Here’s Ben Bernanke doing it. And there’s Tim Geithner and Arne Duncan. Even the President. It’s easy to understand why we feel like we need this, what with all the bad financial decision-making of recent years. The only problem is, there’s a fair amount of evidence that a lot of what we do to teach better financial habits, like courses in high school, doesn’t work. Some research has shown that financial education is more likely to stick if it’s focused on one topic and comes right before a person makes a related decision—learning about mortgages as you’re house shopping, say, or getting a lesson in compounding interest along with your credit card.

The real revolution in microfinance

October 22, 2010

People often talk (and write) about how commercialization is changing the nature of microfinance. Yet increasingly it looks like an even more fundamental shift is afoot. Microfinanciers are finally figuring out what their customers want.

Why do people care so much about the minimum wage?

October 20, 2010

Over at my old Time.com stomping grounds, Adam Cohen has written a fascinating article about the movement to have the federal minimum wage declared unconstitutional. This goes hand-in-hand with the emergence of the minimum wage as a campaign issue in the midterm elections. My question: Why do people care so much?

Congress forces Bank of America to offer better service

October 19, 2010

Remember back when the big banks were telling us that re-regulating consumer finance with legislation such as the CARD Act and Dodd-Frank bill would severely disrupt the banks’ business models, and lead to horrible outcomes for ordinary Joes? Well, in Bank of America’s event-packed earnings call this morning, executives laid out how, exactly, the company’s consumer finance business has been forced to change in response to the new regulatory environment. From the press release:

Is culture to blame for poverty?

October 18, 2010

Hello, Reuters readers. Thank you, Felix, for inviting me and Justin to guest blog while you’re away. I promise to make the most of my newfound form of procrastination.

Welcome

By Thomson Reuters Helpdesk
October 18, 2010

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