Tim Fernholz is a former staff writer for the Prospect. His work has been published by Newsweek, The New Republic, The Nation, The Guardian, and The Daily Beast. He is also a Research Fellow at the New America Foundation.
Senate Republicans are holding up all the chamber's business to push their top priority of giving the wealthy an unpaid-for tax cut. Meanwhile, the Build America Bonds program, which I have defended before, is set to expire at the end of the year. The bonds are unlike those normally issued by states and cities because they aren't tax-exempt, but rather have a tax credit, lowering costs and opening up the bond market to nonprofits; they also eliminate the incentives that have made many typical tax-exempt muni bonds into little more than glorified tax shelters.
We've talked before about critiques of the loan underwriting at the heart of the financial crisis; basically, the judgment needed to do good borrower evaluation dissappears when you take the human element out of underwriting, a problem compounded by the monetary incentives to produce and sell as many mortgage-backed securities as possible, regardless of the quality of their content. Even J.P. Morgan chief Jamie Dimon agrees:
According to Pat Garofalo's research, it can! Ireland has long been a favored economic example for conservatives, who loved its ridiculously low tax rates -- so low that the country's role as a corporate tax shelter actually distorted measures of its economic growth. Now that Ireland has been caught up in the financial crisis, conservatives are changing their tune and saying Ireland's big government led to disaster. Here's CATO's Dan Mitchell, in 2002: