- Secretary Clinton is in Libya today to show support, and some aid dollars, to the transitional government there.
- Iranian President Ahmadinejad has denied Iran's involvement in the alleged plot to kill the Saudi Arabian ambassador to the U.S., saying the announcement by the U.S. was to distract from our country's economic troubles. **Editor's Note: Points for creativity** Meanwhile, Western diplomats and nuclear experts believe Iran's nuclear program isn't progressing quickly. In more bad press for Iran, a new UN report claims that hundreds of prisoners have been executed by the Iranian government without any semblance of due process.
- Gilad Shalit, the Israeli solider captured by Hamas in 2006, has been reunited with this family as the proposed prisoner swap takes place between the two parties.
- There are reports that al-Awlaki's teenage son, a U.S. citizen, was killed in a drone strike on Friday and the family is speaking out.
- The Venezuelan Supreme Court has barred a chief opposition figure from seeking the presidency, removing another potential challenger to Hugo Chavez.
Domestic
- There is yet another GOP debate this evening and your editors will be live blogging the whole affair. Here are five things to watch for. Meanwhile, Iowa has set their caucus date for January 3rd and Ron Paul has a plan to cut $1 trillion dollars in the first year of his presidency, eliminating five departments and the TSA.
- Bank of America earned $6.2 billion in the third quarter. Meanwhile Goldman Sachs reports a $428 million loss(NYT) in the quarter. But of course, this could all just be corporate fraud. **Editorial Note: If we should just trust in markets, and markets are built on information, but the people providing the information are lying, how can we just trust markets?**
- Is there a bait and switch going on with the end of farm subsides(NYT)?
2 comments:
because markets decentralize information. even if you assume the five big investment banks created and distributed all of the information in the market (which clearly isn't true, as the oft vilified short-sellers will attest), isn't that better than one firm doing so? clearly large firms attempt to establish monopolies so they can exploit information asymmetries, and there is a legitimate role for the state in breaking monopolies for that reason. But we shouldn't discount the mechanism of the market for getting information (and the ability to produce and signal information) into the hands of tremendous numbers of people.
i'll also take this opportunity to shamelessly plug a book from a professor I work for, on the political economy of trust. it has an excellent review of the literature on the role of trust in the economy.
http://www.amazon.com/Political-Economy-Trust-Institutions-Cooperation/dp/052188649X
First off, I am not sure we should just trust all markets. Some markets are more trustworthy than others. I have a lot more faith in the new car market than the used car market, where information asymmetries are greater.
The case for markets is that they work better than any alternative. This is similar to democracy, which I think suffers from any number of flaws, but is better than any other form of government. Markets aren't perfect, but they work better than anything else out there.
The better question to ask here is how markets can be improved. One way would be to legalize insider trading.
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