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OpenMarket: Subsidies and Bailouts

  • Let Private Markets Finance Aircraft Sales

    June 7, 2017

    For years, the Export-Import Bank seemed like a permanent fixture of Washington. But last year’s dispute over renewal of its charter ended that perception, hopefully for good. Now its biggest beneficiary, aircraft maker Boeing, is seeking financing alternatives for some overseas sales. Unfortunately, much of it...
  • Big Changes to Banking and Finance Regulation on the Horizon

    April 25, 2017

    Major reform of banking and finance regulation could be coming soon to Washington, D.C. Last week President Trump issued a presidential memorandum directing Treasury Secretary Steve Mnuchin to review the process by which companies are designated as systemically important financial institutions (SIFIs), better known as “too big to fail.” My colleague John Berlau commented on the move last week, urging the administration to go even further:

    Some firms have embraced this designation [as systemically important], and some have fought it. But this should not matter for public policy, as government in a free market should not target certain firms...

  • A '21st Century Glass-Steagall' Would Be Bad for the Financial System

    April 13, 2017

    This post is the third in a 3-part series on banking regulation and the Glass-Steagall Act. The first two parts are “Lawmakers Should Shun Long-Repealed Bank Restrictions,” and “Glass-Steagall Would Not Have Prevented the Financial Crisis.”

    Director of the National Economic Council Gary Cohn (a former Goldman Sachs executive) told Bloomberg TV on Friday that “If we come up with a 21st Century, modern Glass-Steagall, we may be able to tailor regulation for different aspects of the financial markets and different aspects of the financial institutions...

  • White House Should Drop Support for Cronyism of Export-Import Bank

    April 12, 2017

    The Export-Import Bank (Ex-Im for short) is one of the few federal agencies to have been shut down in the last 40 years or so. Even then, the shutdown was temporary, and far from total. It was revived in 2015 after a six-month shutdown, and it will stick around until at least 2019. Trump...
  • Mnuchin Must Bring Transparency to Fannie Mae and Freddie Mac

    February 20, 2017

    Now that he has been confirmed, Treasury Secretary Steven Mnuchin has a lot on his plate. He needs to do what he can administratively to reduce the crushing burden of...
  • Financial Regulation Executive Order a Step in the Right Direction

    February 7, 2017

    Last Friday, the President issued an executive order on what he called “core principles” for regulating the American financial system. They are:

    (a) empower Americans to make independent financial decisions and informed choices in the marketplace, save for retirement, and build individual wealth;

    (b) prevent taxpayer-funded bailouts;

    (c) foster economic growth and vibrant financial markets through more rigorous regulatory impact analysis that addresses systemic risk and market failures, such as moral hazard and information asymmetry;

    (d) enable American companies to be competitive with foreign firms in domestic...

  • Harry Potter and the City Council Chambers

    January 27, 2017

    Our friends at the MacIver Institute in Wisconsin have a new video out on local government budgets and the temptation to spend taxpayer money on questionable “economic development” projects and tourist events like the town of Edgerton’s Harry Potter Festival.

    In the end the town Edgerton declined to spend $200,000 to pay for amenities for the festival, and the organizers were free to continue hosting on their own dime.

  • Congress Needs to Fix America's Broken Financial System

    December 19, 2016

    Whole forests have been cut down to print the books written about the financial crisis of 2007/8 and America’s response to it. Far fewer have been written on what’s wrong with the financial system now. Yet there’s a lot wrong with it. Despite historically low interest rates, banks aren’t lending to businesses or individuals, smaller and community banks have had to close or merge, low-income customers have seen free checking accounts disappear and their fees rise. The financial system is dysfunctional and not fit for purpose.

    Most of the blame for this can be laid directly at the feet of the Dodd-Frank Act, passed in 2010 supposedly to stop another financial crisis happening by reining in the big banks with regulatory compliance. Yet the effect of the law has been to strengthen the position of the Wall Street banks most at fault for the crisis, while punishing the Main Street...

  • Treasury Nominee Mnuchin Promising on Volcker Rule and Fannie and Freddie

    December 1, 2016

    Steven Mnuchin would bring to the Treasury Department valuable experience managing entrepreneurial ventures and company turnarounds. He has expressed some encouraging sentiments on housing policy and the regulatory burden on Main Street. CEI looks forward to a comprehensive confirmation hearing at which Mnuchin can share his...
  • Obamacare Policies Are Costly and Unpopular

    November 8, 2016

    Obamacare policies are unpopular, and people often dump them months later. That’s John Graham’s conclusion at the National Center for Policy Analysis’s Health Policy Blog. Taxpayers pay billions of dollars a year subsidizing policies on Obamacare’s health insurance exchanges, including an estimated $75 billion in subsidies for 2017. Yet the Obamacare exchanges are providing little lasting coverage:

    There is a significant discrepancy between the four million Obamacare beneficiaries estimated by the NHIS and estimates produced by the U.S. Department of Health & Human Services and the Congressional Budget Office, which estimate about 11 million...


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