As if they didn't cause enough damage by espousing theories that failed to account for the inefficiencies and irrationalities of the real world, many economists are advocating aggressive spend-and-borrow policies to revive the financial crisis-hit U.S. economy that reflect an astonishing degree of naïveté and ivory tower hubris.

In...

Taking its cue, perhaps, from the Obama Administration's reported efforts to reach out to the political blogging community in the hopes of cultivating broad support for its ambitious agenda, the Treasury yesterday organized a meeting between various Department officials and a group of economics and finance bloggers.

Among the bloggers who attended the "discussion," which centered on financial reform, the...

I just got back from The Economist's "Buttonwood Gathering" in New York and thought I'd share a few of the more interesting (and, in some cases, quite enlightening) quotes (in no particular order) from the movers-and-shakers at the (well attended) conference:

Secretary Tim Geithner, United States Department of the...

America's over-reliance on consumer spending helped create the mess we are in. To finance our spendthrift ways, we borrowed more than we could afford. We also saved less than necessary and bet that rising home and stock prices would make up the difference. In addition, our willingness to consume more...

Since March, stocks have gone from strength to strength, recovering more than 40 percent of what they lost in the sell-off from the October 2007 peak. Not everyone is jumping on the bullish bandwagon, however. Reports indicate that many of those at Main Street's front lines are following the old...

Amid all their talk about a bottom in the housing market, the optimists are ignoring some key facts. For one thing, the costs of ownership remain high. Prices relative to incomes and rents are still above long-term averages. Mortgages are increasingly hard to come by, despite all...

There have been plenty of discussions about how much the bailouts of the financial system will cost U.S. taxpayers, with estimates ranging from $2 trillion to as high as $24 trillion. But maybe the focus should be elsewhere. Even if we assume that the lower number is closer to...

Stock prices have been on a tear lately, bolstered by quarterly earnings reports that have in many cases outpaced expectations and growing optimism that the worst of the crisis-cum-downturn is behind us.

The S&P 500 index, for instance, is up more than 40 percent since its early-March...

It's no stretch to say the Federal Reserve is garnering a lot of attention these days.

On Wall Street, there's a big debate over whether the Fed's next big move will come too soon or too late. In Washington, the Administration is promoting a plan...

On Monday, China reported that its manufacturing sector had expanded for a third straight month. Along with Premier Wen Jiabao's plan to revive growth with a $586 billion stimulus package, the news bolstered hopes that one of the world's fastest growing economies was back on track, which would...

In recent months, the spread between short and long-term bond yields has increased significantly, hitting record extremes. Many market-watchers believe the widening differential reflects two concerns.

The first centers on whether the market can absorb the tsunami of government bond sales needed to fund the various bailouts and stimulus measures...

At first glance, news that Standard & Poor's has placed the AAA rating of the United Kingdom under review for a possible downgrade would seem to have no real connection to the fact that U.S. bond yields jumped to six-month highs.

But that would be...

I had some time to kill this afternoon and sat down to watch the boob tube (like I said, I had time to kill).

After flipping through several channels, I landed on CNN, where a host of "Your $$$$$" announced that a guest would be joining them after the...

To the cynical observer, the history of government policymaking might also be called a chronicle of unintended consequences.

Take one classic example, detailed in The Concise Encyclopedia of Economics. In an effort to protect its pastoral vistas, Vermont in 1968 enacted a statewide ban on roadside billboards and large...

In discussions about misguided notions, the name of a particular animal often comes up.

If, for example, the facts suggest an outcome is next to impossible, the conversation can quickly turn to the subject of flying pigs. Alternatively, when a proposition makes little sense on its face, there may suddenly...

Yesterday, China's central bank posted an essay on its website calling for the creation of a new international reserve currency. Given that the Asian power now holds most of its $2 trillion of foreign currency assets in U.S. dollars, the news caused quite a stir on Wall Street and in...

In the award-winning ABC sitcom, "Spin City," fictional New York City Deputy Mayor Mike Flaherty (played by actor Michael J. Fox) and other staffers spent much of their time trying to convince the public that things were better than they seemed.

Demonstrating how life often imitates art when it...

All of a sudden, our president is being blamed for the selloff in share prices.

Yesterday, for example, the Wall Street Journal published an editorial by Michael Boskin, former chairman of the Council of Economic Advisers under George H.W. Bush, claiming that "Obama's Radicalism Is Killing the Dow." In...

Right now, all eyes are on Washington's latest efforts to try and "fix" our troubled economy.

Pretty soon, though, the focus is going to shift. Around the country, people will be turning their attentions to the next round of fallout from the burgeoning crisis. Only this time, the bad news...