- The visible hand in economics has Credit crunch jokes.
- Gary Becker asks "Does the Free Market Corrode Moral Character?"
- Richard Posner comments on Does the Free Market Corrode Moral Character?
- Arnold Kling has his Anti-Democratic Thought for the Day.
- Thomas Sowell on Ego and Mouth.
- Freakonomics on The Iraqi Housing Boom.
- Luc Laeven on The cost of resolving financial crises.
A new IMF database, which covers the universe of systemic banking crises from 1970 to 2007, shows that the average fiscal cost was about 15% of GDP, or three times the US’s $700 billion. This column points out that quick action often lowers the ultimate cost. Moreover wishful thinking teamed with regulatory forbearance and bank liquidity plans often raises the cost by delaying vital, but politically painful, government action.