Should New Financial Instruments Be Treated Like New Drugs?
My colleague Glen Weyl and Eric Posner at the University of Chicago Law School, argue in a recent white paper, that new financial products should be subject to regulatory approval analogous to that for new drugs by the Food and Drug Administration. Here is the abstract:
Read More »The financial crisis of 2008 was caused in part by speculative investment in sophisticated derivatives. In enacting the Dodd-Frank Act, Congress sought to address the problem of speculative investment, but merely transferred that authority to various agencies, which have not yet found a solution. Most discussions center on enhanced disclosure and the use of exchanges and clearinghouses. However, we argue that disclosure rules do not address the real problem, which is that financial firms invest enormous resources to develop financial products that facilitate gambling and regulatory arbitrage, both of which are socially wasteful activities.
Not Humanly Possible, Is It?
Close your eyes. Imagine what it would feel like to run a marathon. Now imagine that you’ve run not just one marathon, but two marathons in a single day. Seems crazy. Now imagine you’ve run two marathons in a day, every day, for 10 months straight without a day off!
Meet Pat Farmer. He’s an ultramarathoner from Australia who is in the process of running from the North Pole to the South Pole. He covers 50 miles a day, except when he is using snow shoes near the poles. He only manages 16 miles a day in snow shoes. Read More »
We Need More People in Government Like This
A blog reader sent a message to her congressman, Tim Walz, complaining about SOPA, the bill that aims to protect intellectual property rights online that has sent many internet folks into a tizzy.
Here is the response she got from Congressman Walz:
…SOPA approaches the problem as a criminal matter when in fact, study upon study shows that online piracy is best dealt with as an economic matter. Instead of using the Justice department as a sledgehammer amongst the delicate weeds of the internet, corporations must embrace the free market and adapt their business models to compete in a new reality. The ability to adapt and compete is the cornerstone of capitalism, we should promote this rather than rushing to insert ourselves in the market in ways that could severe disrupt internet commerce and progress.
Now, I don’t 100 percent agree with this answer, but I love the spirit of it – especially coming from a Democrat! That last sentence sounds like the argument you would get over faculty lunch in the University of Chicago department of economics. Read More »
The Mathematics of Magic
I don’t particularly like math. I’ve never been a fan of magic either. For some reason, however, when I heard about a new book entitled Magical Mathematics
I have to say that it is really good, and I would highly recommend it to any nerd. It is a really artful melding of card tricks that are remarkable, with explanations of the underlying math concepts that are at one level so simple and clear that almost anyone could get the basic intuition for what they are talking about, but at another level so deep and difficult that it is probably hopeless for someone like me to ever truly understand. Read More »
and 
. You can also watch it on 