GM, Banks, Bailouts and Incentives

With the GM IPO having succeeded so well this past week, the critics and nay-sayers have had to change tunes.  I don't know that I really see the government investment in GM's bankruptcy and restructuring as a "bailout".  I see more as the kind of strategic government intervention that helps the economy that a good … Continue reading GM, Banks, Bailouts and Incentives

Moral Hazard and How to Reform Our Financial System – NYTimes.com

Former Chair of Federal Reserve, Paul Volcker notes both the need for banking industry regulatory reform and that one of the needs to address the "moral hazard" that currently exists in the system.  "Moral hazard occurs when a party insulated from risk may behave differently than it would behave if it were fully exposed to … Continue reading Moral Hazard and How to Reform Our Financial System – NYTimes.com

Does insurance raise prices?

A former student asks: I have a quick question for you. I would like your take on how insurance affects price in a particular market. My understanding is insurance would increase the number of people of are ABLE and willing to use a good/service. Where I am going with this is... Do you think eliminating … Continue reading Does insurance raise prices?