Lately I’ve been doing a lot of my favorite activity: sitting on my couch and watching documentaries on Netflix. One of the recent suggestions that came up was the documentary produced by former US Secretary of Labor under Bill Clinton, Robert Reich, called “Inequality for All.” In this film, Reich presents a compelling case that economic inequality has been the cause of two major economic crises in American history, the Great Depression of the early 1930s and the Great Recession which began in 2008 and which many in the US are still living through.
While Reich is speaking with the best of intentions, I believe his argument suffers from one of the most common logical fallacies: confusing cause and effect. This fallacy is especially pernicious because it systematically keeps us from asking important questions about how our economy is organized. Continue reading →
For the better part of the past four years, Jamie Dimon has been known as the “King of Wall Street.” The company he leads, JPMorgan Chase, emerged from the carnage of the 2008 financial crisis with two new acquisitions: Bear Stearns and Washington Mutual. It is the largest bank holding company by total assets in the world. According to Ezra Klein, Dimon has been using the political capital he built up during the crisis to fight against the Volcker Rule, part of recent financial regulation efforts: “Paul Volcker by his own admission has said he doesn’t understand capital markets,” Dimon told Fox Business earlier this year. “He has proven that to me.”
And then, last night, Dimon announced that JPMorgan Chase had lost $2 Billion so far this quarter on some very big hedges. I find this story to be a very illuminating case-study in the volatility of the American economy at the present moment, so I want to highlight some important aspects of it in this post. Continue reading →
On November 4th, 2008, I found myself in a room full of my friends openly weeping. That was the night President Barack Obama was elected to office. I felt I had somewhat of a personal stake in the Obama campaign. That, and I was a little drunk. I don’t claim to be an activist, but I had read his books. I had donated to his campaign back in May of 2007 when it looked like Hillary would win the nomination. Most importantly, I had just gotten back from Egypt, where I had spoken to dozens of Egyptians who liked Obama. I thought his election would send a great signal to the world after 8 years of Bush.