Advance Warning

The economic commentary of the day comes from Bryan Caplan:

If we really wanted advance warning (and a chance to mitigate) the next financial crisis, we wouldn’t be banning short-selling; we’d be legalizing insider trading.

Read the full post.

Also, David Brooks does some myth-busting in The New York Times:

In the first place, the idea that our problems stem from light regulation and could be solved by more regulation doesn’t fit all the facts. The current financial crisis is centered around highly regulated investment banks, while lightly regulated hedge funds are not doing so badly. Two of the biggest miscreants were Fannie Mae and Freddie Mac, which, in theory, “were probably the world’s most heavily supervised financial institutions,” according to Jonathan Kay of The Financial Times.

Again, read the full piece.

(Caplan link via email from Prashant Kothari.)