Thanks to Ezra Klein of the Washington Post for the timely resurrection of this admirably clear, jargon-minimal primer on financial derivative regulation [Download Here], written last year by Congressional Research Service analyst Rena Miller. In particular, Miller outlines the costs (as well as the pretty obvious benefits) of reducing AIG-style counterparty risk by requiring derivative contracts to be funneled through a clearinghouse. The big issue here – one that’s been much on Warren Buffett’s mind of late – is whether to exempt the most creditworthy contract writers from obligations to put up wads of capital in advance.
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Everything You Wanted to Know |
Professor Dieter Helm (Oxford) is a very fine fly fisherman, and an even better economist. If you haven’t done so, take a look at his new book “The Carbon Crunch: How We Are Getting Climate Change Wrong — and How to Fix It” for a bit of unconventional wisdom. He argues that politicians and the general public have not shown any real interest in addressing climate change. Helm argues that places like Europe should focus on setting a price for carbon that would cover consumption (and not just production), and that fracking could be a good “bridge” technology for reducing consumption of coal. The book is readable and insightful for those interested in the inside track on climate policy. 
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