Weekly Economic News Digest

Some stories you should be reading that might have slipped through the cracks:

  • The WSJ reported on Monday an unnamed administration official said, “You don’t need banks and bondholders to make cars.” Prof. Steven Bainbridge suggests: “that official–who’s probably never run any business more complicated than a lemonade stand–will soon discover just how wrong s/he was. It’s called CAPITALism for a reason, after all.” (via Jonathan Adler)
  • The evolving collectivist mentality of the banks has a Star Trek metaphor
  • Banks are struggling with credit card debt (via Noam Scheiber)
  • Trade deficit widens in March to $27.6 billion
  • Here’s a critical look at Canada’s health-care system (via Cafe Hayek)
  • The Federal Reserve’s stress test post:
    • “The exercise–conducted by the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation–was conducted so that supervisors could determine the capital buffers sufficient for the 19 BHCs (largest bank holding companies) to withstand losses and sustain lending–even if the economic downturn is more severe than is currently anticipated.”
  • A history of bankruptcy from David Skeel (via Megan McArdle)
  • Tyler Cowen discusses the “opt out” mentality of Congress when it comes to economic policy:
    • “While Congressional leaders are consulted on the major policies, Congress is keeping its distance, perhaps to minimize voter outrage. This way, Congress can claim credit if a recovery comes, but deny responsibility if the price tag ends up higher than advertised or if banks seem to be receiving unfair benefits from the government. The Fed and the FDIC have become the major tools for enhancing executive power and working around Congress.”
  • USA Today reports that the feds are borrowing 46 cents for every buck they spend this year. (via H&R)
  • Gavin Kennedy argues that Adam Smith’s invisible hand comment was just a passing thought:
    • “Smith had no ‘theory’ of invisible hands and […] he showed no inclination to treat it as anything more than an isolated, though well-known, 18th century literary metaphor.” Dan Klein takes the counter position.
  • How you can save money in this economy: a story in pictures from the Curious Capitalist
  • Timothy Geithner’s stress tests skewered on Saturday Night Live: