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231. The Ideological Origins of American Federalism

Author:
Ilya Somin
Publication Date:
12-2011
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
As has often been the case in American history, federalism is once again a major focus of political debate. Numerous recent political conflicts focus at least in part on the constitutional balance of power between the states and the central government. The lawsuits challenging the recently passed Obama health care plan, the federal bailout of state governments during the current economic crisis, and the conflicts over social issues such as medical marijuana and assisted suicide are just a few of the more prominent examples.
Topic:
Government
Political Geography:
America

232. The Economics of Microfinance

Author:
Bryan Barnett
Publication Date:
12-2011
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
It is one of the sad facts of recent human history that the economic prosperity enjoyed by so many remains unknown to most of the rest. The causes of poverty have long been debated and much has been spent in the effort to ameliorate it. Reliable estimates suggest as much as $2.3 trillion has been spent over the last several decades, most of it in the form of sponsored aid programs conceived and pursued by governments and large foundations in developed countries. Despite this investment, however, poverty remains widespread and has worsened in many places, especially in Africa. These basic facts now fuel a vigorous debate over the scale and ultimate value of traditional aid programs and a search for more effective solutions.
Topic:
Government
Political Geography:
Africa

233. Editor's Note

Author:
James A. Dorn
Publication Date:
09-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Part 2 of Restoring Global Financial Stability, based on the Cato Institute's 27th Annual Monetary Conference, held in Washington, D.C., on November 19, 2009, contrasts the current discretionary government fiat money regime with alternatives designed to improve global financial stability. Those alternatives range from constraining the power of central banks by imposing some type of monetary rule to replacing them with private competing currencies convertible into one or more commodities. Even if it is unlikely that the Federal Reserve and other central banks would be abolished any time soon, it is useful to consider the properties of private, rule-based, market-friendly monetary regimes.

234. Privatizing Money

Author:
Leland B. Yeager
Publication Date:
09-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Restoring global financial stability requires attention to the currencies themselves that circulate at home and abroad. I'll focus attention on that aspect of the problem.

235. Alternatives to the Fed?

Author:
Bennett T. McCallum
Publication Date:
09-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
I must begin by saying that I have been extremely disappointed— the word “appalled” may be more accurate—by several developments over the last two years involving the Federal Reserve. It was, I believe, appropriate that the Fed would respond with expansionary monetary policy in the face of a major macroeconomic downturn, which it did. But it did not have to do so by means of operations that incorporated major excursions into credit policy, as well as monetary policy, and thereby into the unauthorized exercise of fiscal policy. By engaging in such operations on a very large scale, the Fed's actions are almost certain to have detrimental effects on the Fed's independence—and thereby on its resulting ability to focus attention on what should be its principal objective, namely, price level stability. Furthermore, the Fed has not been moving quickly—if at all—to explain and correct this situation.
Topic:
Monetary Policy

236. The Rule of Law or the Rule of Central Bankers?

Author:
Lawrence H. White
Publication Date:
09-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Economists often prescribe that countries seeking economic development should embrace the principle of the rule of law. I want to suggest that we listen to our own advice and apply it to our monetary and financial system. The principle of the rule of law could usefully guide us in resolving the extraordinary situation we have been in for the past two years or so, and even more importantly help us to avoid future crises.

237. The Futility of Central Banking

Author:
George A. Selgin
Publication Date:
09-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
It has been more than three decades since Arthur Burns (1979) gave his famous Per Jacobsson lecture on “The Anguish of Central Banking.” In it he declared that Coming from a recently retired Fed chairman, this was a remarkable statement. It amounted to an admission that the Fed was quite incapable of performing its most fundamental task, and that the problem was, not any lack of material means on the Fed's part, but simply the will to do what needed doing given political incentives then at play.

238. Role of the IMF in the Global Financial Crisis

Author:
Miranda Xafa
Publication Date:
09-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
More than two years on, the impact of the financial crisis that erupted in August 2007 is still being felt as the global economy emerges from the Great Recession. The crisis intensified dramatically after the bankruptcy of Lehman and the rescue of insurance giant AIG in September 2008, which narrowly avoided a near-simultaneous failure of multiple counterparties. The International Monetary Fund's early forecast of the severity of the resulting economic downturn (IMF 2008a) helped mobilize concerted official action to address quickly and forcefully these extraordinary economic and financial events by providing fiscal stimulus to sustain growth, as well as capital injections and guarantees to ease the credit crunch. Following the emergency summit of G20 leaders in Washington in November 2008, support packages for banks were put together in a hurry in the United States, Europe, and elsewhere to prevent the dis- orderly failure of systemically important institutions and to restore confidence in the financial system.
Topic:
Financial Crisis
Political Geography:
United States and Middle East

239. Crisis Prevention through Global Surveillance: A Task beyond the IMF

Author:
Swaminathan S. Anklesaria Aiyar
Publication Date:
09-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
In early 2008, the future of the International Monetary Fund was in doubt. The world was awash with dollars since the United States ran an enormous current account deficit, the mirror image of which was trade surpluses in most other countries. Hence, few countries had balance of payments problems, and the IMF had few borrowers. IMF income was insufficient to meet its costs, and so it retrenched hundreds of economists, and both its relevance and legitimacy were questioned. But that episode now looks like a temporary historical blip. After the collapse of Lehman Brothers—and the global financial system—in September 2008, the IMF was suddenly in more demand by governments than ever before to help finance stricken countries across continents. The G20 agreed to triple IMF resources to $750 billion, the four BRICs (Brazil, Russia, India, and China) agreed to subscribe to the IMF's first bond issue of $80 billion, and India has bought 200 tons of IMF gold. So an IMF role seems assured in future crises.
Topic:
International Monetary Fund
Political Geography:
United States and Tamil Nadu

240. The IMF and Its Barbarous Relic

Author:
Judy Shelton
Publication Date:
09-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
The International Monetary Fund has a wonderful heritage, a priceless legacy. It was created for the loftiest of economic purposes—to provide a stable monetary foundation to facilitate free trade and international capital flows—and to provide hope to a world beset by vicious and destructive war. Its architects, Harry Dexter White and John Maynard Keynes, surmounted personality clashes and political strains to carry out the mission that garnered their mutual respect: to establish optimal conditions for achieving world prosperity and world peace.
Topic:
Economics and International Monetary Fund