Demirgüç: one of the culprits was the duo of Fannie Mae and Freddie Mac

In "Life After the Crisis: Where do we go from here?", World Bank Chief Economist Asli Demirgüç-Kunt says:

[...] while the recent global crisis had multiple causes, one of the culprits was the duo of Fannie Mae and Freddie Mac. U.S. policymakers encouraged these financial institutions to increase the availability of mortgages to borrowers with questionable ability to repay. Subsequent relaxing of standards, the increase in home prices due to a larger pool of “qualified” borrowers, and their eventual default in large numbers during the downturn all added to the severity of the crisis.

I asked her (first comment to her post above):

hi, can you provide references for that part of your post? Stiglitz [2] is very adamant that this is a red herring.

I know that AEI's Peter J. Wallison has persuasively shown arguments putting guilt on the GSEs, the CRA and lawmakers and the Executive [3], but I'd like to see analyses a bit less political and clearly academic about the subject, replying to Stiglitz's comments and his references:

Those that want to believe in the market have struggled to find someone else to whom blame can be shifted. One often heard candidates are government efforts to encourage lending to minorities and underserved communities through the Community Reinvestment Act (CRA) requirements and to increase home ownership through Fannie Mae and Freddie Mac. Default rates on CRA lending are actually lower than on other categories of lending, and CRA lending is just too small, in any case, to have accounted for the magnitude of the problem.14

His reference #14 is a note:

See Canner and Bhutta (2008) and Kroszner (2008).

Those references, in turn, are [4] and [5]. Both Stiglitz's comments and his references are preivous to July 2009, that is a bit old.


References

[1]  Asli Demirgüç-Kunt: "Life After the Crisis: Where do we go from here?", Sep 17, 2010, http://blogs.worldbank.org/allaboutfinance/life-after-the-crisis-where-do-we-go-from-here

[2]  Joseph Stiglitz: Interpreting the causes of the great recession of 2008. Lecture prepared for the Eighth BIS Annual Conference, Basel, 25–26 June 2009.

[3]  Peter Wallison: "The True Origins of This Financial Crisis", in "Getting the Story Right: The True Origin of the Financial Crisis", AEI Online, Feb 2009, http://www.aei.org/issue/100012

[4]  Canner, G. and N. Bhutta, “Staff Analysis of the Relationship between the CRA and the Subprime Crisis,” memorandum, Board of Governors of the Federal Reserve System, November 21, 2008.

[5]  Kroszner, R.S., “The Community Reinvestment Act and the Recent Mortgage Crisis,” speech at Confronting Concentrated Poverty Policy Forum, Board of Governors of the Federal Reserve System, Washington, D.C., December 3, 2008.

Press Briefing

Sep 17, 2010

U.S. Can't Risk Slow START
http://www.state.gov/t/us/147267.htm

Wealth and Poverty - How's that inequality thing working out?
WSJ, Sep 17, 2010
http://online.wsj.com/article/SB10001424052748703440604575495933472536928.html

If there is a single unifying principle behind the Democratic agenda of the last two years, it is this: Reduce income inequality. So yesterday's annual Census Bureau review of American incomes is a kind of progress report on how this agenda is working out. In a word, our wealth isn't spread any more equitably, though more of us are poor.

The Current Population Survey shows that in 2009 the poverty rate climbed to 14.3% from 13.2% in 2008—the highest since 1994. That figure translates into 43.6 million Americans living below the poverty line, the largest absolute number in the half-century for which comparable data are available. At $49,777, the real median household income fell slightly, though not in a statistically significant way. It declined 1.8% among families and rose 1.6% for individuals.

In a statement yesterday, President Obama attributed these results to the financial panic and recession, and that's true in part. The Census data also overstate the true level of poverty because they don't include noncash government payments like housing subsidies, food stamps, the earned income tax credit or entitlements like Medicaid.

But then Mr. Obama couldn't resist adding that "Even before the recession hit, middle class incomes had been stagnant and the number of people living in poverty in America was unacceptably high, and today's numbers make it clear that our work is just beginning." So to address the rising poverty on his watch, the President wants to plow ahead with the same policies that aren't reducing poverty.

We draw a different lesson, which is the continuing imperative of rapid economic growth. Census Bureau figures over the last 50 years show that poverty falls most rapidly during times of the most sustained growth—the 1960s, 1980s and second half of the 1990s. The poverty rate also fell in the mid-2000s before heading up again when the recession hit. The most important goal of economic policy should be to increase society's overall wealth. This helps the poor and everybody else.

Yet starting with his first budget proposal, Mr. Obama has made clear that his main policy purpose is reducing inequality. As the White House budget scribes put it, "There's nothing wrong with making money, but there is something wrong when we allow the playing field to be tilted so far in the favor of so few. . . . It's a legacy of irresponsibility, and it is our duty to change it."

Thus the 2009 stimulus was assembled around social programs and redistribution, defying even Keynesian precepts about immediate job creation. Among its many other goals, ObamaCare is intended to produce "a leveling" of the "maldistribution of income in America," as Senate Finance Chairman and chief author Max Baucus put it. Even now, amid a mediocre recovery and 9.6% unemployment, the inequality imperative is driving Democrats to insist on a huge tax increase—no matter the impact on growth.

The irony is that, while there has been a modest widening of the income gap in recent decades, the Census (as measured by the "Gini index") shows that inequality has remained mostly unchanged since the early 1990s—regardless of which party is in power. The reasons are many and rooted in larger economic and social forces that can't be fixed with higher taxes and White House social engineering.

More important, this preoccupation with inequality is actively harmful because it leads to economic policies that inhibit growth. That's the real warning in the new Census data. Democrats are succeeding in their goal of punishing business and the wealthy, but to the extent that this has produced anemic growth it is also punishing the poor and middle class.

The moral claim of Obamanomics is that it ensures that everyone pays his "fair share," but its early returns show this agenda is producing more poverty. In their obsession with income shares and how many people have how much wealth, the Obama Democrats are imposing policies that ensure only that there will be less wealth for everyone to spread around.


China's Currency Policies and the U.S.-China Economic Relationship. Sec Timothy F. Geithner
http://www.treas.gov/press/releases/tg858.htm

Constitution Day and the Perilous Future: "The federal government, yes, can do most anything in this country."
http://blog.heritage.org/2010/09/17/morning-bell-constitution-day-and-the-perilous-future

Is Google a Monopolist? A Debate
http://online.wsj.com/article/SB10001424052748703466704575489582364177978.html

China's Real Monetary Problem - Focus on yuan sterilization, not the yuan-dollar rate
http://online.wsj.com/article/SB10001424052748703743504575493120916038074.html

The U.S. at the U.N. and Beyond: A World of Transnational Challenges
http://www.state.gov/p/io/rm/2010/147232.htm

On Wind Power: : Where’s the Empirical Proof?
http://www.instituteforenergyresearch.org/2010/09/16/overblown-wheres-the-empirical-proof-part-iv/

NASA Ready to Send Humanoid Robot to Space
http://spectrum.ieee.org/automaton/robotics/humanoids/nasa-ready-to-send-humanoid-robot-to-space

The Uninsured Numbers Are Bad, but Obamacare Can Make Them Worse
http://fixhealthcarepolicy.com/in-the-news/the-uninsured-numbers-are-bad-but-obamacare-can-make-them-worse

Press Briefing

Sep 16, 2010

President Obama on Small Business Jobs & Tax Cuts: "We Don't Have Time for Any More Games"
http://www.whitehouse.gov/blog/2010/09/15/president-obama-small-business-jobs-tax-cuts-we-dont-have-time-any-more-games

Rooting for Redistribution - Are Americans easily fooled about their real interests? Review of Jacob S. Hacker and Paul Pierson's "Winner-Take-All Politics"
http://online.wsj.com/article/SB10001424052748703897204575488730182039948.html

White House - New Plans Underway to Increase Contracts to Small Business
http://www.whitehouse.gov/blog/2010/09/15/new-plans-underway-increase-contracts-small-business

The Case for a 'Repeal Amendment' - Virginia will consider proposing a constitutional amendment that would allow two thirds of the states to repeal a federal law
http://online.wsj.com/article/SB10001424052748703466704575489572655964574.html

President Obama's Message to Veterans on Retroactive Pay Due to 'Stop Loss'
http://www.whitehouse.gov/blog/2010/09/15/president-obamas-message-veterans-retroactive-pay-due-stop-loss

Principles for Economic Revival - Our prosperity has faded because policies have moved away from those that have proven to work. Here are the priorities that should guide policy makers as they seek to restore more rapid growth.
http://online.wsj.com/article/SB10001424052748703466704575489830041633508.html

Republican Tax Plan Doubles Nation's Deficit in Just Ten Years
http://www.whitehouse.gov/blog/2010/09/15/republican-tax-plan-doubles-nations-deficit-just-ten-years

Conservatives: The New START Rubberstamp Threat to National Security
http://blog.heritage.org/2010/09/16/morning-bell-the-new-start-rubberstamp-threat-to-national-security

Conversations With America: Meeting the Millennium Development Goals
http://blogs.state.gov/index.php/site/entry/conversations_with_america_mdgs

Too Much Progress - D.C. voters give a reform mayor, Fenty, the boot
http://online.wsj.com/article/SB10001424052748703743504575493841164082512.html

Update: U.S. Response to Pakistan's Flooding Disaster
http://www.state.gov/r/pa/prs/ps/2010/09/147200.htm

It's the Spending, Stupid - A chronic voter 'concern' has now exploded into a broad public movement
http://online.wsj.com/article/SB10001424052748703743504575493953591176476.html

Press Briefing

Sep 15, 2010

Speech by Assistant Secretary for Financial Institutions Michael S. Barr, Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprise of House Committee on Financial Services
http://www.treas.gov/press/releases/tg854.htm

Tax Cuts vs. 'Stimulus': The Evidence Is In - A review of over 200 fiscal adjustments in 21 countries shows that spending discipline and tax cuts are the best ways to spur economic growth
http://online.wsj.com/article/SB10001424052748704271804575405311447498820.html

The President's Forum With Young African Leaders
http://www.state.gov/p/io/rm/2010/147154.htm

Conservatives: The Obamacare and Obama Tax Hike Double Whammy on Seniors
http://blog.heritage.org/2010/09/15/morning-bell-the-obamacare-and-obama-tax-hike-double-whammy-on-seniors

Ayman al-Zawahiri: Nine Years After the Start of the Crusader Campaign
http://worldanalysis.net/modules/news/article.php?storyid=1476

OVERBLOWN: Windpower on the Firing Line (Part I)
http://www.instituteforenergyresearch.org/2010/09/14/overblown-windpower-on-the-firing-line-part-i/

Working To Expand Opportunities in Tajikistan
http://blogs.state.gov/index.php/site/entry/blake_tajikistan

Federal President's Proposed Oil and Gas Tax Hikes to Cost U.S. Economy 154,000 Jobs in 2011
http://www.instituteforenergyresearch.org/2010/09/14/obama%E2%80%99s-proposed-oil-and-gas-tax-hikes-to-cost-u-s-economy-154000-jobs-in-2011/

A Discussion on the New START Treaty
http://www.state.gov/t/vci/rls/147120.htm

Conservatives: Holding Economic Recovery Hostage
http://blog.heritage.org/2010/09/13/morning-bell-holding-economic-recovery-hostage

Statement by President Obama on the Small Business Jobs Bill
http://www.whitehouse.gov/the-press-office/2010/09/14/statement-president-obama-small-business-jobs-bill

Obamacare: The Real Price Tag is a Moving Target
http://blog.heritage.org/2010/09/13/obamacare-the-real-price-tag-is-a-moving-target

Intensifying Diplomacy in the Lead up to the Referenda in Sudan
http://www.state.gov/r/pa/prs/ps/2010/09/147103.htm

Short Sales Bans: Shooting the Messenger?
http://www.cato.org/pub_display.php?pub_id=12131

Press Briefing

Sep 14, 2010

US-Vietnam Relations
http://www.eastwestcenter.org/fileadmin/stored/pdfs/apb067.pdf

Remote Control: A Blind Man Goes Sailing With Help From Afar
http://online.wsj.com/article/SB10001424052748704358904575477612698984010.html

Advancing U.S.-Ukraine Partnership
http://blogs.state.gov/index.php/site/entry/advancing_ukraine_partnership

Europe Reverts to Type - The EU's response to anti-Semitism? "No comment."
http://online.wsj.com/article/SB10001424052748703466704575489453411397686.html

Federal President Embraces the 'Pre-emption' Doctrine - Will federal law trump state law when it upsets the trial lawyers?
http://online.wsj.com/article/SB10001424052748703466704575489571017923434.html

Jennifer Rubin on the reports that Obama aide Valerie Jarrett is the leading candidate to replace White House Chief of Staff Rahm Emanuel
http://online.wsj.com/article/SB10001424052748703466704575489891398680882.html

Can Turkey Defuse Iran's Nuclear Challenge?
http://www.idga.org/article.cfm?externalid=3133

Basel's Capital Illusions - The 2008 meltdown was not the result of lax regulation but of abuse of the U.S. financial system by the political class in Washington
http://online.wsj.com/article/SB10001424052748703466704575489592929851132.html

Boehner's Tax Bungle
http://online.wsj.com/article/SB10001424052748703466704575489834263214218.html

Back Door Card Check - Big Labor's man at the NLRB tries to rewrite labor law by fiat
http://online.wsj.com/article/SB10001424052748703597204575483882585485368.html

Update: U.S. Response to Pakistan's Flooding Disaster
http://www.state.gov/r/pa/prs/ps/2010/09/147084.htm

Obamanomics Meets Incentives - Why cuts in marginal tax rates increase economic growth, but cash for clunkers merely created a boom and bust cycle in auto sales
http://online.wsj.com/article/SB10001424052748703597204575483562048654780.html

Message of Felicitation Amir-ul-Momineen Mullah Mohammad Omar Mujahid, on the Eve of Eid-ul-Fitr
http://worldanalysis.net/modules/news/article.php?storyid=1465

The 1099 Insurrection - The White House fights an effort to ease a burden on small business
http://online.wsj.com/article/SB10001424052748703897204575488272691514074.html

Realities of Biopharmaceutical Research & Development
http://www.innovation.org/index.cfm/NewsCenter/Newsletters/Newsletters?NID=185

Obamacare vs. the Rule of Law
http://blog.heritage.org/2010/09/14/morning-bell-obamacare-vs-the-rule-of-law

Press Briefing

Sep 13, 2010

Prez Obama & Gov Kaine: Moving America Forward
http://www.youtube.com/watch?v=tMGhMbg5IGY

To Pressure Iran, Squeeze Russia and China - European governments have joined the international sanctions effort. But Beijing and Moscow aren't going along
http://online.wsj.com/article/SB10001424052748703453804575479791919603272.html

White House - Another Government Shutdown?
http://www.whitehouse.gov/blog/2010/09/10/another-government-shutdown

Darth Boehner - Democrats want voters to fear the GOP leader more than their policies
http://online.wsj.com/article/SB10001424052748703897204575487914103984430.html

U.S. Responds to Mudslides, Flooding in Guatemala
http://blogs.state.gov/index.php/site/entry/guatemala_mudslides

Sebelius Has a List - Political thuggery from HHS
http://online.wsj.com/article/SB10001424052748703597204575483900330728436.html

The U.S. Needs Its Own Industrial Policy - China's government incubates business with capital and other incentives. So should America's.
http://online.wsj.com/article/SB10001424052748703597204575483580272717818.html

The Size of Government and the Choice This Fall - In polls, Americans overwhelmingly prefer small government and low taxes to the alternative. Yet they've been given big government, one program at a time.
http://online.wsj.com/article/SB10001424052748704358904575478141708959932.html

China's 'Finlandization' Strategy in the Pacific - Beijing is moving aggressively to counter US power projection in Asia to bring our allies under its sway.
http://online.wsj.com/article/SB10001424052748704164904575421753851404076.html

The Afghanistan Study Group Report: An Exercise in Determined Ignorance
http://www.registan.net/index.php/2010/09/11/the-afghanistan-study-group-report-an-exercise-in-determined-ignorance/

Feed-In Tariffs Are Good for Expensive Renewables, But Are They Good for Consumers?
http://www.instituteforenergyresearch.org/2010/09/10/feed-in-tariffs-are-good-for-expensive-renewables-but-are-they-good-for-consumers/

Remarks by the First Lady at September 11th Memorial Service
http://www.whitehouse.gov/the-press-office/2010/09/11/remarks-first-lady-september-11th-memorial-service

Don't Expect Much From the R&D Tax Credit - Apple does little of the kind of research that would be eligible. Nor do the thousands of companies that develop applications and accessories for iPhones and iPads.
http://online.wsj.com/article/SB10001424052748704644404575481534193344088.html

IMF Working Paper: Bank Capital and Uncertainty
http://www.imf.org/external/pubs/cat/longres.cfm?sk=24199.0

Mr. Obama hit Republicans hard for not passing his $42 billion Small Business Jobs Act
http://online.wsj.com/article/SB10001424052748703882304575465401201669056.html

Ambassador-at-Large for Global Women's Issues Melanne Verveer Travels to India and China
http://www.state.gov/r/pa/prs/ps/2010/09/146983.htm

Questions for Imam Rauf From an American Muslim - He may not appear to the untrained eye to be an Islamist, but by making Ground Zero an Islamic rather than an American issue he shows his true allegiance
http://online.wsj.com/article/SB10001424052748704644404575481882969581708.html

The President's Press Conference: From the Economy to the Middle East and "What This Nation Was Founded On"
http://www.whitehouse.gov/blog/2010/09/10/presidents-press-conference-economy-middle-east-and-what-nation-was-founded

The ACLU Is Dismissed - Obama wins one for the Presidency on the state-secrets privilege
http://online.wsj.com/article/SB10001424052748704644404575481802981541076.html?mod=WSJ_newsreel_opinion

Press Briefing

Sep 10, 2010

Strengthening U.S.-Russia Relations
http://blogs.state.gov/index.php/site/entry/strengthening_russia_relations

Why We're in for a Long, Hard Economic Slog - Evidence from 14 U.S. recessions shows that the economy doesn't recover until housing recovers
http://online.wsj.com/article/SB10001424052748704358904575478083619331668.html

Pakistan Relief Fund Helps Bring Clean Water to Flood Victims
http://blogs.state.gov/ap/index.php/site/entry/pakistan_relief_fund_clean_water

Half-Billion Dollar Schools Can’t Fix American Education
http://blog.heritage.org/2010/09/10/morning-bell-half-billion-dollar-schools-cant-fix-american-education

Treasurys and the Danger of Short-Term Debt - More than 60% of U.S. debt is set to mature within the next three years
http://online.wsj.com/article/SB10001424052748703632304575451580887189818.html

We'll Always Have Basel - In the fight over bank capital, more is better
http://online.wsj.com/article/SB10001424052748704644404575481921638936434.html

From Zombie Banks to Zombie Mortgages? - Japan misallocated capital during its lost decade. How the U.S. can avoid its mistakes
http://online.wsj.com/article/SB10001424052748704358904575478072373684644.html

Guiding Principles for Managing Sovereign Risk and High Levels of Public Debt ("The Stockholm Principles")
http://www.imf.org/external/np/mcm/stockholm/principles.htm

ObamaCare 'Amnesia' - Long ago, in a political galaxy far, far away, Democrats passed . . .
http://online.wsj.com/article/SB10001424052748704358904575477683320736458.html

Brookings: Five Myths About U.S. Exports
http://www.brookings.edu/articles/2010/0905_exports_katz_rothwell.aspx

President Obama Discovers Incentives - The president's proposed tax cuts for business are a welcome departure from Keynesian stimulus
http://online.wsj.com/article/SB10001424052748703453804575479981552545968.html

President Calderón is serious about restoring law and order. Here's how the U.S. can help.
http://online.wsj.com/article/SB10001424052748704358904575477472352890934.html

The White House - The Affordable Care Act Did Not Cause Unjust Premium Increases
http://www.whitehouse.gov/blog/2010/09/08/affordable-care-act-did-not-cause-unjust-premium-increases

The Obama Heyday Is Over - With so many Democrats running against the president's agenda in the midterm, change will come in the next Congress, regardless of which party is in control
http://online.wsj.com/article/SB10001424052748704644404575482122517174884.html

The White House - Fighting Foreclosures and Strengthening Neighborhoods
http://www.whitehouse.gov/blog/2010/09/08/fighting-foreclosures-and-strengthening-neighborhoods

Can You Smell What Is He Cooking? - Why the president's new stimulus won't work
http://reason.com/archives/2010/09/08/can-you-smell-what-obamas-cook

Press Briefing

Sep 09, 2010

In "Origins," Annie Murphy Paul explores current scientific thinking about how our lives are shaped by what happens to us in utero
http://online.wsj.com/article/SB10001424052748703447004575448773639436854.html

Dr. Seuss and the Afghan Military - Afghan soldiers and police are plenty intelligent. Literacy will help them become a modern force
http://online.wsj.com/article/SB10001424052748704358904575478070008208694.html

The White House Blog - Boehner's Budget Gimmicks: Another Attempt to Hold Middle Class Tax Cuts Hostage
http://www.whitehouse.gov/blog/2010/09/08/boehners-budget-gimmicks-another-attempt-hold-middle-class-tax-cuts-hostage

How ObamaCare Guts Medicare - The president's pledge that 'If you like your health plan, you will be able to keep it' clearly does not apply to America's seniors
http://online.wsj.com/article/SB10001424052748703649004575437311393854940.html

Joint Statement of Secretaries Geithner and Clinton on the Republic of Korea's Announcement of Sanctions on Iran
http://www.treas.gov/press/releases/tg848.htm

The Federal Heath-Care Tease - Minnesota's Governor declines to take the ObamaCare bait
http://online.wsj.com/article/SB10001424052748704358904575478160851816780.html

Importance of Investment in the Global Economy
http://www.state.gov/e/rls/rmk/2010/146894.htm

Caricature in Cleveland - You can't restore business confidence by bashing business
http://online.wsj.com/article/SB10001424052748703453804575479982836215238.html

Symposium: What Should the Federal Reserve Do Next?
http://online.wsj.com/article/SB10001424052748704358904575477580959771188.html

In Guyana, Saying Farewell to the HSV Swift 
http://blogs.state.gov/index.php/site/entry/guyana_swift_farewell

The health-care overhaul enacted last spring won't significantly change national health spending over the next decade compared with projections before the law was passed - government figures
http://online.wsj.com/article/SB10001424052748704362404575480161749608830.html

First Lady Michelle Obama Delivers Call to Action for Improved Childhood Nutrition and Physical Fitness
http://www.whitehouse.gov/the-press-office/2010/09/08/first-lady-michelle-obama-delivers-call-action-improved-childhood-nutrit

A President's Class War - Where on the income scale does Mr. Obama divide the country between us and them?
http://online.wsj.com/article/SB10001424052748703453804575479831591176068.html

Corruption and Finance: Are Innovative Firms Victims or Perpetrators?
http://blogs.worldbank.org/allaboutfinance/node/614

Federal President's Foreign Policy: Neglecting Allies and Appeasing Foes
http://blog.heritage.org/2010/09/08/morning-bell-neglecting-allies-and-appeasing-foes

Update: U.S. Response to Pakistan's Flooding Disaster
http://www.state.gov/r/pa/prs/ps/2010/09/146899.htm

Tax Contradictions - Obama says the economy needs a tax cut—and a tax increase
http://online.wsj.com/article/SB10001424052748704358904575477661420876100.html

Press Briefings

Sep 08, 2010

From Children's Grief, Signs of Growth
http://online.wsj.com/article/SB10001424052748703720004575477614058976560.html

Salvation in Small Steps - With the collapse of various ideologies and totalizing nostrums, human rights became ever more important in world affairs. Moyn's "The Last Utopia: Human Rights in History"
http://online.wsj.com/article/SB10001424052748704358904575477571192822084.html

Time for Emergency Economic Reform - How about a payroll tax holiday, funded by a federal spending, hiring and pay freeze?
http://online.wsj.com/article/SB10001424052748703632304575451211979331930.html

Time for Emergency Economic Reform - How about a payroll tax holiday, funded by a federal spending, hiring and pay freeze?
http://online.wsj.com/article/SB10001424052748703632304575451211979331930.html

Our Spontaneous Universe - I have never quite understood the conviction that creation requires a creator
http://online.wsj.com/article/SB10001424052748703946504575469653720549936.html

Politics and the Cult of Sentimentality - Wilde said that sentimentality is the desire to have the luxury of emotion without paying for it
http://online.wsj.com/article/SB10001424052748703417104575473932096641548.html

New START: Security Through 21st-Century Verification
http://www.armscontrol.org/act/2010_09/Gottemoeller

Conservative: New Start Is Unilateral Disarmament - The treaty's little-noticed limits on conventional weapons systems will reduce our ability to project power around the world
http://online.wsj.com/article/SB10001424052748703618504575459511831427690.html

External demand shocks are not historically associated with sharp declines in output growth in Low-Income Countries
http://www.imf.org/external/pubs/cat/longres.cfm?sk=24190.0

'Sword of Damocles' - A welcome White House legal rebuke to the mass climate tort
http://online.wsj.com/article/SB10001424052748704147804575455630272135688.html

Are Ethicists More Attentive Daughters and Sons?
http://schwitzsplinters.blogspot.com/2010/08/are-ethicists-more-attentive-daughters.html

Iran's Shadow Games - Now you see a nuclear proliferation threat, now you don't
http://online.wsj.com/article/SB10001424052748704358904575477761797589920.html

Wild chimps outwit human hunters
http://news.bbc.co.uk/earth/hi/earth_news/newsid_8962000/8962747.stm

The German Miracle: Another Look - Germany has cut government spending and its economy is growing smartly. It's not the first time that market-friendly policies have led the nation out of crisis.
http://online.wsj.com/article/SB10001424052748703369704575461873411742404.html

Nongoloza's Children: Western Cape prison gangs during and after apartheid by Jonny Steinberg
http://www.csvr.org.za/docs/correctional/nongolozaschildren.pdf

Housing Crisis? Look to Canada for Answers
http://www.cato.org/pub_display.php?pub_id=12115

Greenspan Calls for Repeal of All the Bush Tax Cuts
http://www.nytimes.com/2010/08/07/business/economy/07greenspan.html

Orszag: Let’s continue the tax cuts for two years but end them for good in 2013.
http://www.nytimes.com/2010/09/07/opinion/07orszag.html?_r=1&pagewanted=all

Press Briefing

Sep 07, 2010

The Right Comparison Between Recoveries
http://www.whitehouse.gov/blog/2010/09/06/right-comparison-between-recoveries

The Hazards Of Doing Good - From Live Aid in the mid-1980s to today, Western attempts to help famine-plagued Ethiopia have had little effect. Peter Gill's "Famine and Foreigners"
http://online.wsj.com/article/SB10001424052748703618504575460680218948348.html

Global Shale Gas Initiative: Balancing Energy Security and Environmental Concerns
http://blogs.state.gov/index.php/site/entry/global_shale_gas_initiative

In Defense of Physician Autonomy - Politicians hurt patients when they make doctors follow bureaucratic algorithms
By SAUL GREENFIELD
WSJ, Sep 07, 2010
http://online.wsj.com/article/SB10001424052748703467004575464071972916464.html

The auditorium was filled with young, newly minted physicians sitting nervously in white jackets. When the chairman of surgery mounted the stage to address me and my fellow surgical interns, we immediately hushed and gave him our attention. I don't now recall most of what he said, but one remark has stayed with me through my 25 years of surgical practice: "You can't practice medicine by committee."

He didn't mean that we shouldn't listen to associates or seek their advice, or that we shouldn't be aware of scientific literature conveying the opinions and research of others. He meant that every physician must, at some point in the patient-care process, make decisions and take responsibility for them. And unless the doctor does so, the outcomes will be compromised. He was warning against groupthink and telling us that patients often present challenges that cannot be solved by easily consulted algorithms.

The chairman's admonition was a succinct definition of the parameters of the doctor-patient relationship. And in the eyes of many contemporary medical thinkers—those who seek to reorder the universe of medical care in this country—it would be heretical.

In recent political debates, the autonomous physician has been portrayed as a problem to be solved, an out-of-control actor motivated by greed—and a major cause of rising health-care costs. Insurance companies and the federal government have sought to control physician behavior with the dual aim of decreasing costs and improving care. In their view, individual and regional disparities in rates of medical testing, hospitalization and surgical procedures are ipso-facto demonstrations of physician autonomy run amok.

In the United Kingdom, the National Institute for Clinical Effectiveness (NICE) provides guidelines for clinical care in order to ensure greater uniformity of practice and, it claims, better care. In this country, the recent health-care reform law established a Comparative Effectiveness Institute with the same aims.

Such institutions are illegitimate and undesirable. My field of pediatric urology is only a small subset of medicine, but recent experience demonstrates the dangers of bureaucratic, committee-based practice.

In 2007, NICE published guidelines for the care of children with urinary tract infections. A committee of diverse specialists reviewed the literature and voted on the final recommendations. Without going into great detail, these guidelines enacted a significant departure from then-current practice by recommending against thorough radiographic evaluation in many instances.

One member of the committee who was out-voted on the final guidelines publicly castigated NICE and accused the committee of misusing statistics, failing to involve the proper specialists, and seeking mainly to decrease costs. The criticisms were correct.

Since the NICE recommendations were promulgated, publications in peer-reviewed journals have shown that many children with significant underlying conditions—some leading to serious kidney disease—would go undiagnosed if the NICE guidelines were followed.

Over a decade ago, researchers at Dartmouth College documented disparities in rates of tonsillectomy in children. They famously asserted that certain high rates of tonsillectomy were inappropriate and did not improve health outcomes. To do this, they relied only on insurance claims and hospitalization rates; they had no data on the prevalence of recurrent tonsillitis or long-term cardiovascular morbidity from obstructive sleep apnea. In fact, they had no data comparing the quality of life of individuals denied the procedure with that of individuals who underwent surgery. Their broad statistical overview was simply unable to answer many important questions.

Physician autonomy is a major defense against those who comfortably sit in remote offices and make calculations based on concerns other than an individual patient's welfare. Uniformity of practice is a nonsensical goal that fails to allow for differing expression of disease states.

This is not to say that clinical research, randomized controlled trials, literature meta-analyses and guidelines are not necessary and useful. They are all essential. It is also not an argument against rigorous oversight of physician behavior, licensure and training. But we must recognize that many physicians will often make decisions that deliberately do not conform to "community standards"—and that patients will be better for it.

Dr. Greenfield is director of pediatric urology at the Women and Children's Hospital of Buffalo and a professor at the State University of New York at Buffalo School of Medicine and Biomedical Sciences.


Europe's Bank Stress Tests Minimized Debt Risk
http://online.wsj.com/article/SB10001424052748704392104575475520949440394.html

Whatever Happened to Walking to School? - Those of us who remember using our own legs for transit now run the risk of sounding Abe Lincolnesque
http://online.wsj.com/article/SB10001424052748703946504575469542721199832.html

Learning From Experience on Arms Control - Russia and the United States have made steady progress on verification since the 1980s
http://online.wsj.com/article/SB10001424052748704206804575467654209460656.html

School Voucher Breakout - A bipartisan endorsement in Pennsylvania
http://online.wsj.com/article/SB10001424052748704147804575455782883586338.html

Statement by President Obama on the Passing of Jefferson Thomas
http://www.whitehouse.gov/the-press-office/2010/09/06/statement-president-obama-passing-jefferson-thomas

Washington and the 'Recovery Summer' That Wasn't - The nation's capital endures recessions with less discomfort than anywhere else, and that's truer than ever today
http://online.wsj.com/article/SB10001424052748704206804575467900196619676.html

Krueger Op-Ed: Measure Succeeds in Promoting Private-Sector Hiring
http://www.treas.gov/press/releases/tg845.htm

The Obama Economy - How trillions in fiscal and monetary stimulus produced a 1.6% recovery
http://online.wsj.com/article/SB10001424052748703444804575071281687927918.html

Press Briefing

Sep 06, 2010

President Obama to Announce Plan to Renew and Expand America’s Roads, Railways and Runways
http://www.whitehouse.gov/the-press-office/2010/09/06/president-obama-announce-plan-renew-and-expand-america-s-roads-railways-

Rocks, YouTube Undergird Kashmiri Protests
http://online.wsj.com/article/SB10001424052748704855104575469850119145276.html

How Government Unions Became So Powerful - While politicians have opposed the right to strike, public-sector labor leaders have focused on pay increases and constitutional guarantees
http://online.wsj.com/article/SB10001424052748704206804575467642879738582.html

Eugene Robinson: The American people are acting like a bunch of spoiled brats
http://online.wsj.com/article/SB10001424052748703946504575469663663590510.html

The Wages of Stimulus - More spending, higher unemployment
http://online.wsj.com/article/SB10001424052748703946504575469702542446716.html

Okada and Westerwelle: The Moral Challenge of a Nuclear-Free World
http://online.wsj.com/article/SB10001424052748703959704575453900642425906.html

In 2007, 239 patients died of malnutrition in British hospitals
http://online.wsj.com/article/SB10001424052748703467004575463772676581084.html

Update: U.S. Response to Pakistan's Flooding Disaster
http://www.state.gov/r/pa/prs/ps/2010/09/146825.htm

The Diviner of System Risk - Ben Bernanke as Carnac the Magnificent
http://online.wsj.com/article/SB10001424052748704206804575467872819971324.html

Special Envoy for Middle East Peace George Mitchell Briefs on Israeli-Palestinian Negotiations
http://blogs.state.gov/index.php/site/entry/mitchell_israeli-palestinian_negotiations

On Employment Numbers, Romer and Econometric Models
http://blog.heritage.org/2010/09/03/morning-bell-the-audacity-of-failure

Statement at Round Table 1: Article 19 - Living Independently and Being Included in the Community. By Judith Heumann, Special Advisor for International Disability Rights
http://www.state.gov/g/drl/rls/rm/2010/146772.htm

Second Gulf Explosion Doesn’t Take Away Need for Drilling
http://blog.heritage.org/2010/09/02/second-gulf-explosion-doesn%E2%80%99t-take-away-need-for-drilling

Press Briefing

Sep 03, 2010

The White House - West Wing Week: "Dispatches from Iraq"
http://www.whitehouse.gov/blog/2010/09/03/west-wing-week-dispatches-iraq

Federal President Is Still AWOL on Sudan / The country may soon return to war, and the perception of U.S. indifference isn't helping
http://online.wsj.com/article/SB10001424052748704476104575439274119871804.html

The White House - Making Preparations Prior to the Impacts of Hurricane Earl
http://www.whitehouse.gov/blog/2010/09/02/making-preparations-prior-impacts-hurricane-earl

Want Middle East Peace? Deny Iran Nukes / Israeli-Palestinian talks are good, but Tehran's nuclear drive continues
http://online.wsj.com/article/SB10001424052748703467004575464062562925390.html

The White House - Two New Studies: Health Reform Benefits Small Business
http://www.whitehouse.gov/blog/2010/09/02/two-new-studies-health-reform-benefits-small-business

Tony Blair on the Panic - Britain's former prime minister understands better than most the origins of the financial crisis
http://online.wsj.com/article/SB10001424052748704206804575467523488193204.html

The White House Blog - There’s Courage in Our Country’s Classrooms
http://www.whitehouse.gov/blog/2010/09/02/there-s-courage-our-country-s-classrooms

The Small Business The 97% Fallacy - The president's plan to raise top marginal rates is holding back the very people who should be leading the economic recovery
http://online.wsj.com/article/SB10001424052748703959704575454061524326290.html

Three Software Tricks for Sorting Through the Barrage of UAV Footage
http://spectrum.ieee.org/tech-talk/computing/software/three-software-tricks-for-sorting-through-barrage

Democratic Salvage Plan - How Nancy Pelosi might save her majority
http://online.wsj.com/article/SB10001424052748704206804575467353597659766.html

The French ambassador to Iraq says it's "the true laboratory of democracy in the Arab world."
WSJ, Sep 02, 2010
http://online.wsj.com/article/SB10001424052748703467004575463900304368796.html

Boris Boillon, the French ambassador to Iraq, in an interview with Le Figaro, Aug. 31:

The tactic of al Qaeda, which aims to put the country in fire and blood, to rekindle the civil war, has failed. The specter of partition in Iraq is behind us. . . . The record has improved since we passed a hundred deaths per day four years ago, to ten deaths per day today. In fact, the trend reversed itself when U.S. troops began leaving the cities, in June 2009. With the final withdrawal, this trend should continue and stabilize. . . .

Of course, the Iraqis say that the allied intervention of 2003 cost them dearly in lives and destruction of infrastructure, but they are aware also that it has liberated the country. The picture is therefore both positive and negative. Iraqis enjoy the fruits of democratization: the blossoming of the press, the emergence of a civil society, the free political parties, the exemplary nature of elections. These are all facts.

It is absolutely necessary, when one speaks of Iraq, to reason nonideologically. Iraq is the true laboratory of democracy in the Arab world. It is there that the future of democracy in the region will play itself out. Iraq could potentially become a political model for its neighbors. And, whether one likes it or not, all this has come about thanks to the American intervention of 2003. . . .

That no consensus has emerged around a [new] head of government proves that the political game occurs in Iraq and no neighboring country is able to impose its choice on Iraqi politics.

Even if the door is broken open, it must be restated that the last election constituted a victory for democracy. There are not many other countries in the region where results are not known before the vote.


In Sudan and Kenya, Grassroots Diplomacy
http://blogs.state.gov/sudan/index.php/site/entry/in_sudan_grassroots_diplomacy

Hooray for the U.N. - A dispute tribunal vindicates a whistleblower, Artjon Shkurtaj
http://online.wsj.com/article/SB10001424052748703882304575465882341825778.html