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James Kwak
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James Kwak is an associate professor at the University of Connecticut School of Law and a fellow at the Harvard Law School Program on Corporate Governance. He is the co-author, with Simon Johnson, of White House Burning: The Founding Fathers, Our National Debt, and Why It Matters To You (available April 3), a history and analysis of deficits and the national debt. James and Simon also wrote 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown, a bestselling account of the financial crisis and the political power of the financial sector.

James and Simon blog at The Baseline Scenario. You can follow them on Twitter at @baselinescene. Before going to law school, James was a management consultant and co-founder of a successful software company.

Blog Entries by James Kwak

Because They Can

(209) Comments | Posted May 17, 2012 | 8:30 AM

It seems as if the Republicans, meaning both John Boehner and Mitt Romney, are trying to turn the national debt back into a major political issue. Now, a visitor from Mars might wonder how this is possible. How could a party that (a) passed the massive...

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Regression to the Mean, JPMorgan Edition

(4) Comments | Posted May 14, 2012 | 2:15 PM

I haven't been writing about the JPMorgan debacle because, well, everyone else is writing about it. One theme that has stuck out for me, however, has been everyone's reflexive surprise that this could happen at JPMorgan, supposedly the best and most competent of the big banks. For example,

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Fiscal Affairs: Mitt Romney Still Can't Do Arithmetic*

(231) Comments | Posted April 17, 2012 | 8:05 AM

From Mitt Romney's closed-door fundraiser yesterday, courtesy of NBC:

"I'm going to probably eliminate for high income people the second home mortgage deduction," Romney said, adding that he would also likely eliminate deductions for state income and property taxes as well.


"By virtue of doing that,...

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Fiscal Affairs: Someone Is Wrong in The Times*

(359) Comments | Posted April 6, 2012 | 8:30 PM

James Stewart has doubled down on his infatuation with Paul Ryan. Ryan's budget, he says, is a viable centrist starting point for budget negotiations, and attacks from "left and right" are mere "partisan rhetoric."

This is several different kinds of crazy. First, Stewart repeats his belief that Ryan's...

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Fiscal Affairs: The Impossibility of Defense Cuts

(259) Comments | Posted April 6, 2012 | 8:29 AM

Apparently the thing we need to keep ourselves safe is a fast, lightweight ship that can sweep mines, launch helicopters, fight submarines, and perform other assorted duties -- but can't withstand heavy combat. I don't claim to know if we really need the Littoral Combat Ship to ensure our national...

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Fiscal Affairs: How Long Can We Finance the Debt?

(56) Comments | Posted March 20, 2012 | 8:55 AM

Everyone should know by now that the Treasury Department can borrow money at historically low rates. That is a major reason why some very smart economists think that the federal government should borrow more money in the short term (i.e., this year and next) and use that money...

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Fiscal Affairs: The Fetishization of Balance

(97) Comments | Posted March 15, 2012 | 7:52 PM

I generally don't bother reading Thomas Friedman. A good friend gave me a copy of The World Is Flat, and I started reading it. Somewhere in the first one hundred pages Friedman has an extended discussion of workflow software (as a key enabler of globalization) and I realized that he...

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Fiscal Affairs: Who's a Freeloader?

(230) Comments | Posted March 14, 2012 | 8:53 AM

A year ago, Vanessa Williamson, Theda Skocpol, and John Coggin published a paper based on their in-depth interviews of Tea Party activists. A longer presentation of their research was published as a book a few months ago, and I was reminded of it by historian Daniel...

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Fiscal Affairs: Invisible Handouts and Anti-Government Conservatives

(45) Comments | Posted March 5, 2012 | 1:47 PM

Ezra Klein wrote a column for Bloomberg discussing research by political scientist Suzanne Mettler and some of her collaborators. Mettler studies what she calls the "submerged state" -- the growing tendency of government programs to provide benefits in ways that mask the fact that they come from the...

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Fiscal Affairs: Democrats and the Bush Tax Cuts

(127) Comments | Posted March 2, 2012 | 5:28 PM

Mark Thoma provides an excerpt from Noam Scheiber on Peter Orszag's attempt to let all of the Bush tax cuts expire. In short, Orszag wanted to extend the "middle-class" tax cuts for two years (letting the tax cuts for the rich expire); then he expected the middle-class tax...

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Fiscal Affairs: Beware of "Centrists" Bearing Consensus

(21) Comments | Posted March 2, 2012 | 7:21 AM

Floyd Norris has written another good column skewering the Republican candidates' tax proposals. It's not hard: all you have to do is list the many ways they want to cut taxes -- which make George W. Bush look like a veritable communist, out to confiscate all private wealth...

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Tax Cut Ironies

(110) Comments | Posted December 8, 2010 | 7:45 AM

From The New York Times:

Congressional Republicans in recent days have blocked efforts by Democrats to extend the jobless aid, saying they would insist on offsetting the $56 billion cost with spending cuts elsewhere.

Instead, as it turns out, they agreed to offset the cost with tax cuts...

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Dear Mr. President, Please Don't Extend the Bush Tax Cuts for the Wealthiest Americans

(4256) Comments | Posted November 14, 2010 | 6:58 PM

There have been (admittedly unclear) indications from your administration that you may accede to the Republicans’ demand to extend the Bush tax cuts for everyone. I urge you not to do this.

The question is: Is it better to extend the tax cuts for everyone or...

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Wall Street CEOs Are Nuts

(59) Comments | Posted May 26, 2010 | 12:42 PM

"Geithner's team spent much of its time during the debate over the Senate bill helping Senate Banking Committee chair Chris Dodd kill off or modify amendments being offered by more-progressive Democrats. A good example was Bernie Sanders's measure to audit the Fed, which the administration played a key...

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Regulation vs. Structural Change

(60) Comments | Posted May 25, 2010 | 11:01 AM

Robert Reich discusses a theme that I think I've discussed before (and first heard expressed by Ezra Klein):

"The most important thing to know about the 1,500 page financial reform bill passed by the Senate last week -- now on he way to being reconciled with the...

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'13 Bankers': Who's In Charge, The Banks Or The Government?

(129) Comments | Posted April 30, 2010 | 6:45 AM

Tyler Cowen agrees with our argument in 13 Bankers that there is a confluence of interests between the financial sector and the government that results in policies that are generally favorable to the banks. Cowen argues, however, that it is Washington, not Wall Street, that is...

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'13 Bankers': How Big Are The Biggest Banks? If Derivatives Aren't Counted We Won't Know

(31) Comments | Posted April 23, 2010 | 8:10 AM

One major proposal of 13 Bankers is setting caps on the size of financial institutions, with the goals of preventing the existence of banks that are too big to fail and of eliminating the competitive distortions created by megabanks. We propose that no institution should have assets greater than 4...

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SEC Charges Goldman With Fraud

(97) Comments | Posted April 16, 2010 | 11:44 AM

Press release here. Complaint here. The allegation is that Goldman failed to disclose the role that John Paulson's hedge fund played in selecting residential mortgage-backed securities that went into a CDO created by Goldman. Here's paragraph 3 of the complaint:

In sum, GS&Co arranged a...
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'13 Bankers' In 4 Pictures: Why Wall Street Profits Are Out Of Whack

(19) Comments | Posted April 15, 2010 | 7:00 AM

My three-year-old daughter, looking at 13 Bankers, said, "It doesn't have any pictures." (She was hoping for a book about yaks.) Actually, it has a few pictures, although they are just pictures of data. But those pictures themselves tell an interesting story.

The first part of the story...

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'13 Bankers': Beware Of Banana Peels

(17) Comments | Posted April 8, 2010 | 9:30 AM

According to many observers, the global financial system and economy slipped on a world-historical banana peel, causing the recent financial crisis and the most severe recession since the Great Depression. It was all a gigantic accident caused by mistaken models and excess optimism. In October 2008, Alan Greenspan...

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