Oooh, some good stuff out there this morning. Economically, it’s better to be cold than hot. Jon Stewart goes off on GS. The Wall Street Journal says something actually worked this week without government intervention. And the Times of London says leave those bankers alone. Read on:
NPR had an thought-provoking story about temperature and economies. Why is it that almost all of the world’s poorest countries are in hot climates? A recent study looked at this issue:
“This stuff is not implausible,” Olken says, “If you look back at the U.S. before the advent of air conditioning, there were times when the federal government would shut down. It was too hot out…”
The results suggest that global warming could increase the gap between rich and poor.
“One of the takeaways I have from this paper is it seems like the economic impacts of increased temperature in poor countries are going to be very severe,” Olken says.
William Easterly, an economist at New York University, says the new study is fascinating, but he’s not convinced.
“It’s way too soon to take one statistical finding and say we have solved a 500-year-old problem of why temperature and per-capita income are associated with each other,” Easterly says.
Obviously, there are historical explanations, but the study’s author says the temperature-GDP correlations keep coming up.
The Wall Street Journal has an editorial called Signs of Capitalist Life which notes a couple of interesting developments this week — not bailing out lender CIT, for starters:
Washington’s decision to put away the defibrillator paddles and let nature take its course at CIT Group means that, finally, Beltway physicians have done no more harm. More good news came from Credit Suisse, which sold mortgage-backed securities with no government guarantees and no opinions from the credit-ratings agencies.
That’s right, someone has managed to finance mortgages without putting taxpayers at risk. Just as encouraging, it turns out that investors really can analyze bonds not rated by the government-anointed geniuses at Standard & Poor’s, Moody’s and Fitch…
Our guess is that without a credit rating as an excuse to avoid due diligence, investors demanded oceans of data on the underlying loans. This is as it should be, and banks are now working on ways to give investors the individual-borrower data that the likes of Moody’s never verified.
If you’re tired of reading about the evils of Goldman Sachs, the Times of London has a column titled: Leave the bankers alone to their bonuses. Antonia Senior says as cathartic as whipping bankers might be, it’s not useful:
History is littered with people who deserved better or worse than the fates delivered, and each incident is as galling as the last. Hence the enduring popularity of religions that deliver up a sucker punch to the wrongdoer on death. But financial regulators struggle where God delivers. It is an impossible task to satisfy our desire to make the bankers suffer, without inadvertently drawing down more suffering on ourselves. They got us into this mess, but we need them to help to get us out of it, with new lines of credit, new mortgages and growing profits at the state-owned banks.
If you’re tired of reading about the evils of Goldman Sachs, how about watching a video on the evils of Goldman Sachs?
| The Daily Show With Jon Stewart | Mon – Thurs 11p / 10c | |||
| Pyramid Economy | ||||
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Elsewhere, CNN Money has a collection of stories of people who’ve seen their unemployment benefits run out. It’s a nice, little window into the economic reality. And by nice, I meant discouraging. But along with the stories comes a helpful map of each state’s unemployment benefits.
And while I was reading The Nation, I came across this amusing ad:
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