"countries like South Korea, Taiwan, and Singapore"
Dr. Feldstein,
Your Harvard colleague, Joe Nye, who also writes for Project Syndicate, can perhaps help explain why two of three countries you mention might have reasons beyond economic ones to hold U.S. dollars.
How likely are S. Korea and Taiwan to dump their U.S. dollar holdings given their dependence on the U.S. security blanket? Not very.
This article is another great example of how narrow economic thinking leads to incomplete analysis.
It sounds like you are not familiar with Simon's extensive writing (e.g., book titled 13 Bankers) and work over the past several years on the problem of Too Big to Fail megabanks. He has convincingly argued and documented the taxpayer subsidies provided to the very largest financial institutions, such as JP Morgan, and the resultant problems.
In terms of whether JP Morgan has cost taxpayers any money, do you really believe that JP Morgan would have avoided bankruptcy had the U.S. Government and Federal Reserve not bailed out Fannie, Freddie, AIG, Bear, etc.? Or how would JP Morgan be doing without ZIRP and what amounted to unlimited crisis lending from the Fed?
JP Morgan may not directly be costing taxpayers any nominal money (yet), but only a very narrow and improper accounting view would lead someone to conclude that the existence of Too Big to Fail institutions like JP Morgan presents no economic costs and therefore pose zero risk to taxpayers.
And if you're one of those who believe the myth that the U.S. bank bailouts were "profitable" for taxpayers then I would encourage you to read this:
I also encourage you to ask the Spanish or Irish, which have had to backstop their banking systems with taxpayers funds, how much their banks have cost taxpayers.
Two Dollar Fallacies
"countries like South Korea, Taiwan, and Singapore"
Dr. Feldstein,
Your Harvard colleague, Joe Nye, who also writes for Project Syndicate, can perhaps help explain why two of three countries you mention might have reasons beyond economic ones to hold U.S. dollars.
How likely are S. Korea and Taiwan to dump their U.S. dollar holdings given their dependence on the U.S. security blanket? Not very.
This article is another great example of how narrow economic thinking leads to incomplete analysis.
Predators and Professors
Mark,
It sounds like you are not familiar with Simon's extensive writing (e.g., book titled 13 Bankers) and work over the past several years on the problem of Too Big to Fail megabanks. He has convincingly argued and documented the taxpayer subsidies provided to the very largest financial institutions, such as JP Morgan, and the resultant problems.
In terms of whether JP Morgan has cost taxpayers any money, do you really believe that JP Morgan would have avoided bankruptcy had the U.S. Government and Federal Reserve not bailed out Fannie, Freddie, AIG, Bear, etc.? Or how would JP Morgan be doing without ZIRP and what amounted to unlimited crisis lending from the Fed?
JP Morgan may not directly be costing taxpayers any nominal money (yet), but only a very narrow and improper accounting view would lead someone to conclude that the existence of Too Big to Fail institutions like JP Morgan presents no economic costs and therefore pose zero risk to taxpayers.
And if you're one of those who believe the myth that the U.S. bank bailouts were "profitable" for taxpayers then I would encourage you to read this:
http://www.polycapitalist.com/2011/10/no-no-no-erin-burnett-government.html
I also encourage you to ask the Spanish or Irish, which have had to backstop their banking systems with taxpayers funds, how much their banks have cost taxpayers.