Times have changed

by on April 11, 2009 at 12:23 pm in Economics | Permalink

Remember the good old days, when economists used to write papers about how firms — most of all public utilities — would under-report profits, to minimize regulation and control?  These days we have firms over-reporting profits to minimize regulation and control.

(As an aside, Wells Fargo was the most responsible of the major banks, so we shouldn't regard the profit report as a complete lie or illusion.)

We also have economists saying that banks should essentially be turned into public utilities.

And the major regulator is saying the firms shouldn't be reporting so much at all.

Times indeed have changed.

Andrew April 11, 2009 at 3:51 pm

Well, you can’t hold back the dyke by blogging homosexuality issues.

Andrew April 11, 2009 at 5:53 pm

The stress tests were a joke from the beginning. Maybe what they should have done was given them one year loans and then FDIC’d the ones who couldn’t repay.

Hugo Lindgren April 11, 2009 at 9:56 pm

Tyler, I’m curious about your assertion that ‘Wells Fargo was the most responsible of the major banks.” How do you know this? They certainly push this line, and it doesn’t hurt to have Warren Buffet as a major shareholder. But what truly independent analysis have you read that demonstrates their responsibility? How could any bank have remained competitive over the last 5 years if they had been responsible? The whole industry was cheating.

Yan April 12, 2009 at 1:35 pm

My favorite is the old world maps.

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