Here’s another reason—as if you needed it—as to why getting a reasonable bailout of the mortgage-backed securities market through Congress was so difficult. Below I reproduce an analysis from Gregg Easterbrook of the Brookings Institute: Supposing we assume the bailout is required, here is what bothers me about the plan so far: Taxpayers don’t get ... Easterbrook (Gregg, not Frank) Up a Creek
I want to respond to some of the comments on my blog regarding whether part of the ideological difference between liberals and conservatives can be explained by their differing estimations of the elasticity of various curves. First, Thom reminds us of Posnerâ€™s idea that the difference between liberals and conservatives is that liberals think that ... More on Liberals, Conservatives and Elasticities
One of my favorite intellectual puzzles is figuring out what deep conceptual presuppositions cause some people to be conservatives, others to be liberals. That is, on a range of issues that would seem largely unrelatedâ€”say, abortion, affirmative action, and gun controlâ€”it turns that peopleâ€™s positions are highly correlated. For instance, people who are pro-life tend ... Conservatives, Liberals and the Elasticity of Demand for Voting
Much discussion of corporate governance in the last few years has centered on reforms advocated by ISS and CII and indices of good corporate governance practice created and maintained by such groups. A new study by Roberta Romano, Sanjai Baghat, and Brian J. Bolton, however, concludes that there is “no consistent relation between governance indices ... Corporate Governance Indices and Shareholder Value
According to a news story from Reuters, a recent Tufts University study (available here) says that “if nothing is done to combat global warming,” then by the year 2100, “two of Floridaâ€™s nuclear power plants, three of its prisons and 1,362 hotels, motels and inns will be under water” because of rising sea levels. This ... The (Present) Costs of Global Warming
A story in the New York Times explains that in Germany booksellers are legally prohibited from discounting books below the price set by the publisher. Itâ€™s not clear from the story, but it thus seems that Germany has a legally-mandated system of minimum resale price maintenance. Not surprisingly, this favors small bookstores. “In the United ... Legally Mandated RPM in the German Book Market
Back in April, private equity fund J.C. Flowers, along with JP Morgan Chase and Bank of America, agreed to acquire Sallie Mae, the largest provider of student loans in the United States. Between then and now, Congress passed the College Cost Reduction and Access Act of 2007 (CCRAA), which reduced in various ways the subsidies ... MAE in the Sallie Mae Case
Steven Davidoff responded to my blog here last week regarding Merrill Lynch & Co., Inc. v. Allegheny Energy, Inc. and made the excellent point that just how bad for Merrill the representation I quoted really was depends in part on the limitations on indemnification that were included in the purchase agreement. For example, if the ... More on Merrill Lynch & Co., Inc. v. Allegheny Energy, Inc.
Last week the Second Circuit Court of Appeals decided Merrill Lynch & Co., Inc. v. Allegheny Energy, Inc. (available here), which involved fraudulent inducement and breach of warranty claims in connection with a business combination agreement. The case is a straightforward application of familiar principles of blackletter law. I mention it because of certain highly ... Merrill Lynch & Co., Inc. v. Allegheny Energy, Inc.