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More strange arguments about Cyprus

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  • Thursday, March 21 2013 @ 12:04 PM CET
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Yves Smith at Naked Capitalism has reposted Cyprus Bailout: Stupidity, Short-Sightedness, Something Else?, an article by Antonis Polemitis and Andreas Kitsios that originally appeared at Cyprus.com.

The article has a number of problems, not least of which is that it suggests that "this was not something that the Cyprus government invented - it was forced on them by the Troika", despite the fact that it was Cyprus's representatives in the negotiations who rejected plans that did not hit small depositors. But it is more confused on a deeper level.

Cyprus is a bit like Ireland, but not because of the EU

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  • Wednesday, March 20 2013 @ 01:07 PM CET
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In a posting at the Guardian, Costas Lapavitsas compares the banking crises in Ireland, Iceland, and Cyprus, claiming that "Ireland followed a certain path, determined by the troika and membership of the EMU", and that "[t]he deal currently offered to Cyprus by the troika is along the path of Ireland", whereas "Iceland followed a radically different path, as it is free of the troika and not a member of the EMU."

I submit that, while there is a great deal of similarity between the cases of Ireland and Cyprus-- and difference from that of Iceland -- such similarity has little or nothing to do with the EU.

"Leverage" in online education

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  • Monday, November 26 2012 @ 02:34 PM CET
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"Online education" has become a hot topic recently, with major universities as well as new startups jumping onto the bandwagon. Not without reason, of course. That said, a great deal of the discussion seems to me to be misguided.

Perhaps I am out of line, being neither a professor nor even an educator, but I found Alex Tabarrok's recent Why Online Education Works to capture much of what is misguided in that discussion.

Bailing out foreign banks

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  • Wednesday, March 04 2009 @ 12:14 AM CET
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Over at Angry Bear, there is a quote that relates to an issue that I find interesting, and where I added the comment that follows.

[Robert Haines, senior insurance analyst at CreditSights] said. "The counterparties on most of the book are (European) banks that would be hammered if the U.S. walked away."

I've seen comments like this a few times now -- often attached to complaints about bailing out foreign banks -- and there is something about this particular meme that I don't quite follow. Of course, I'm no economist, so it may be just my own ignorance, and I would very much like to hear an explanation of how my own understanding is faulty.

Economics and Science

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  • Monday, February 02 2009 @ 09:51 PM CET
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In "The War of the Economists", Will Wilkinson comments on the question of 'economics' and 'science', saying

There is a reason extremely smart economists are out there playing reputation games instead of trying to settle the matter by doing better science. The reason is that, on the questions that are provoking intramural trashtalk, there is no science.
Wilkinson is at least partly right, but not terribly helpful.

It seems to me that discussions like this -- about the status of 'economics' as a "science" -- often generate much more heat than light, at least in large part because people fail to recognize or acknowledge that 'economics' is not actually a discpline (as a professor of mine once said regarding 'political science'). Rather, 'economics' (generally stated) is a subject matter, studied by (at least) three different disciplines, which can be broken down into 1) economic science; 2) economic theory; and 3) economic practice.

Has bank lending 'dried up'?

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  • Saturday, October 04 2008 @ 11:23 AM CEST
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In a recent comment relating to the $700B banking bailout, "Bank Loans Have Not 'Dried Up'", on the Forbes web site, Alan Reynolds presents a strangely abbreviated set of data on total bank lending as support for his conclusion that Everyone knows that U.S. banks have virtually stopped lending, deeply slashing their loans to U.S. consumers and firms. As is so often the case, however, what everyone knows is probably not true.

I am not a strong supporter of the bailout plan, largely because I believe that it will do little, if anything, to solve the real problems in the financial system. Perhaps the best thing that could be said about the bailout plan was that it was something that could be passed quickly, and might serve to keep the financial system going until after the election, at which point real solutions might be possible.

That said, when I see a data set like that presented by Reynolds, I tend to be suspicious. I also tend to be suspicious when I see data presented that is not immediately relevant to the conclusion. In this case, that would be data regarding total outstanding loans in relation to a conclusion regarding new loans.

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