Charles Ferguson on Glenn Hubbard
Hubbard's behaviour falls into the realm of evaluation for positive economics not normative economics. He and others like him should be disavowed en masse for their lack of professional integrity and the call is not even close. And we need to get to a point in society where we stop giving people a pass for unethical behaviour just because it is legal. We are seriously undermining the case for democracy when we allow elites to fix the rules and dance around their edges.
For the record - I have only voted against the conservative party once in my eighteen years of voting eligibility. But everything conservatism stood for when I was young - pro family pro small business- is being undermined by current catering to oligarchy elites by the right.
In line with what I have been telling my students since 2010. The FT article:
"Here, for example, are the thoughts of Brian Reynolds, chief market strategist at Rosenblatt Securities, regarding what’s going on:
A little more than a year ago we picked up on a trend that we termed the “sub-priming” of commodities. Wall Street has been increasingly been doing structured finance deals wrapped around commodities, and this has added a bid for them while also making them vulnerable to downdrafts.
We know that many equity investors think (or at least hoped) that, after the disastrous record of wrapping pipeline and telecom assets in the 1990’s and sub-prime housing in the last decade, financial market reforms such as Dodd-Frank would have eliminated structured finance as a macro driver. When Dodd-Frank was proposed it envisioned standardized derivatives being placed on exchanges and clearinghouse. We felt it would encourage more non-standardized, exotic, and opaque structures to be created, and in the two years since it was enacted that’s what seems to have happened.
As he concludes:
In the case of a downdraft, it leaves people with unwanted long positions in a declining market, prompting even more sales. This has happened to gold a few times in the last year and anecdotally we get the sense that there such support in the $95 and $80 dollar areas for oil. A breaking of those areas might prompt further sales from structured finance participants."