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James Delmore | 2015-10-07

After having only been in existence for a little more than five years, Airbnb has attracted the indignation of several powerful enemies. Politicians who are eager to collect more tax revenue, city activists who claim that Airbnb will lead to more gentrification and higher rental costs, and hotel chains that resent the perceived loss of profits, are all lobbying the government to regulate and tax the new company as hotels in order to achieve their goals. 

Peter Wehner and Robert P. Beschel, Jr. | 2012-03-22

The issue of income inequality has never before been central to American politics. Though concern for the poor, disputes over welfare programs, and complaints about "the rich" have of course featured prominently in our public debates, Americans have generally avoided open class warfare, to the nation's great credit and benefit. But in the 2012 presidential election — one of the most consequential contests in decades — the divide between rich and poor in America promises to be a focal point.

Jason Delisle and Christopher Papagianis | 2012-03-12

The Republican presidential primary elections have sparked a show trial about whether a candidate’s experience as a private equity investor effectively disqualifies him to be the president of the United States. In this debate, private equity experience is linked to some of the industry’s failed investments, lay-offs at restructured companies, or lucrative distributions from successful investments. It is held up as an example of privilege, income inequality and evidence that private equity’s business model is anathema to the role or mission of the federal government. But there is at least one area where Washington is in desperate need of someone with private equity experience.

e21 Team | 2012-02-16

The failures of the Administration’s industrial policy in the energy sector have been recently documented. It’s not just an unlucky streak for the Department of Energy that Solyndra and other targets for subsidies have failed, but a fundamental problem of the government trying to do a better job than the market in directing investment flows.

Jason Delisle | 2011-10-07

Last month, the solar energy company Solyndra went bankrupt and defaulted on a $534 million federally-backed loan. Many were quick to label it a lesson in the inherent failings of government directed investment. The Obama Administration guaranteed Solyndra’s loan under an American Recovery and Reinvestment Act program that expanded a prior initiative to subsidize clean energy. But critics of the Department of Energy program that backed the loan haven’t realized that the program is set to quietly impose billions of dollars of losses on taxpayers, all of which will be hidden from the federal budget thanks to a massive accounting gimmick.

e21 Staff Editorial | 2011-08-17

Over the weekend, Jackie Calmes penned an “economic memo” in the New York Times that was critical of conservatives’ opposition to tax increases. The piece relied on selective quotes from conservative economists, sell-side forecasters, and some academics to undermine the basic conservative approach to fiscal policy. The piece suffers from two main flaws: (1) it suggests a consensus where none exists on the potential benefits of near-term stimulus; and (2) it treats all forms of revenue increases the same, despite the dramatic differences in economic consequences and the potential revenue gains from the economic growth unleashed by broad-based tax reform.

Charles Blahous | 2011-07-12

Recent reports indicate that the budget/debt negotiations will not produce a “grand bargain.” At best they will produce a smaller set of targeted reforms slightly improving but not correcting the unsustainable trajectory of federal finances. But whether the budget discussions produce a big deal or a small one, however, both sides would do well to implement a more accurate measure of economy-wide inflation, namely the “chained” C-CPI-U.

Jennifer Pollom and Jason Delisle | 2011-07-11

Until now, FHA’s single-family mortgage insurance program, which provides default guarantees to lenders making home mortgages to first-time and lower-income homebuyers, existed in the budgeting equivalent of the fourth dimension. The program provided homeowners with subsidized mortgages but also appeared profitable for the government. That meant that Congress wasn’t required to come up with any funding in an annual appropriation to cover the subsidies taxpayers provide to homeowners through the FHA. The subsidies appeared “free” and lawmakers treated them as such.

Arpit Gupta and Christopher Papagianis | 2011-06-13

The Dodd-Frank bill failed to address the key issues of prudential regulation that sparked the crisis. Instead, the FDIC was granted unlimited bailout capacity moving forward. Policymakers need to fundamentally rethink the value of regulatory capital ratios and discretionary bank interventions. Market-based metrics of bank performance that guide the recapitalization process may provide a far more robust and durable mechanism for preventing and handing future financial crises.

Charles W. Calomiris and Richard J. Herring | 2011-04-21

Although debates still rage over the causes of the financial crisis of 2007 - 2009, one thing is clear: several of the world’s largest financial institutions had amassed huge and concentrated asset risks relating to sub-prime mortgages and other risky investments, but they maintained equity capital that was too small to absorb the losses that resulted from those risky investments. Why did the regulatory system perform so badly – and how could it be fixed?

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