Chicago Daily Observer

ity Hall is putting a lid on Mayor Richard M. Daley’s favorite honey pot.

Facing apparent opposition from Gov. Rod Blagojevich, the Daley administration is abandoning efforts to extend the legal life of the massive Central Loop tax increment financing district, which covers a wide swath of Chicago’s commercial heart.

The decision means the district automatically will sunset on Dec. 31 — and it means that the more than $111 million it has been throwing off each year for development projects instead will return to the regular property tax pool.

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Two professors at the University of Chicago add some clarity to the failure of Lehman Brothers and AIG. Doug Diamond and Anil Kashyap give a dry eyed account of financial problems and the intervention into the market by the Federal Government. From the same blog, Freakonomics Author/Chicago Professor Steven Levitt asks the straight question, if investment bank assets are so cheap, why isn’t anyone in private equity buying them up?

Also from U of C Luigi Zingales has some legit criticism of the Paulson plan, though the criticism is rather inspecific, because the plan is not all that clear to begin with.

John Stossel and Richard Epstein hold the line on what has and has not been deregulated in the US housing market, persuasively arguing that we are nowhere near a deregulated market, nor have we been trending towards deregulation under President ... Read More...

In a TV ad, John McCain listed Bill Daley as a lobbyist which has drawn a shout of anger and resentment from Daley since he has never been registered as a lobbyist. The shout he gave off was that of a wounded animal, unjustly shot at, in a forest.

Dear me, as one who went to Washington weekly as a lobbyist for Quaker Oats for 27 years and would frequently see Bill Daley on the early morning UAL or American Airlines 7:30 a.m. Red Eye, I am utterly aghast that all the while, big firms were sending Bill Daley to D. C. because of his expertise on the technical end of Big Business…and not because his name was Daley, that he was the mayor’s son and mayor’s brother but because he was so expert in business economics.

All the time I thought it was because he was an expert ... Read More...

Chicago Sun-Times columnist Mary Mitchell, forever on guard against the white racism she’s expecting to spring troll-like from its ubiquitous hiding places, has managed again to twist a few facts to suit her nasty bigotry.

In her latest exercise in tedium, she cited an AP-Yahoo News poll that concludes that Barack Obama’s race could cost him “six percentage points—enough for him to lose in a closely contested race.”

I’m not sure what poll Mitchell is reading, since when I look at the one* she seems to be citing, I see different results. The poll finds that nine percent of all respondents said that Obama being the first black president would make them less likely to vote for him. Yes, this is wrong. But if you bother to read the survey’s next line, you find that another nine percent said that Obama being the first black president would make them more ... Read More...

This morning I was a guest at 10 am (by telephone from my home office) on Jerry Agar’s WLS-AM show. (On with us was Pat Cassidy who recently made the move to the talk radio station from anchoring at WBBM-AM.)

I took my dog out and then sat down at the kitchen table with the four newspapers—Chicago Sun-Times, Chicago Tribune, New York Times, Wall Street Journal—that are delivered every morning to my doorstep. I spent maybe an hour with them, clipped a few articles to read later, and then went to my office to take the producer’s call.

Things were going along just fine until Agar played a clip of Joe Biden; I expected that it would be Biden saying something outlandish because he so often does, but I had no idea how outlandish. I could not hear the tape; it wasn’t clear to me what Biden was ... Read More...

National Public Radio’s “Morning Edition” yesterday aired an interview with Ahmadinejad. His answers were not terribly revealing, but some of reporter Steve Inskeep’s questions were, especially this one:

I think it is fair to say that there has been rhetoric on both sides. I think it is fair to say that you have spoken of wiping countries off the map, and chopping off hands. Does that rhetoric, when you speak that way—do you, in fact, play into the hands of President Bush? You give rhetoric that reinforces his case. He says you are a certain kind of leader, and you pose as that leader.

It reminds us of something Howard Dean said at a Democratic debate in September 2003: “We need to remember that the enemy here is George Bush, not each other.” Dean at least was talking about a disagreement over domestic policy, but can we be sure Obama ... Read More...

once regulators slow down foreclosures, other potential homeowners are denied opportunities to purchase housing they can afford. The housing stock cannot recirculate. Banks that acquired this mortgage paper see their portfolios nosedive. That dicey paper, as William Isaac noted in last week’s Wall Street Journal, drives the entire economy over the edge by strict government regulations that require all financial institutions to “mark-to-market” the various instruments in their portfolio.

Unfortunately, there is no working market to mark this paper down to. To meet their bond covenants and their capital requirements, these firms have to sell their paper at distress prices that don’t reflect the upbeat fact that the anticipated income streams from this paper might well keep the firm afloat.

One bad regulatory turn leads to another, and lo, the bailouts come thick and fast. At the nth hour, wise heads often rightly conclude that some desperate measure has to ... Read More...

On campus this afternoon I overheard the following remark by a non-economist, trying to explain to another non-economist the Lehman failure and today’s stock market decline: “It’s a combination of deregulation and greed. Boy, if you deregulate enough, the greed will follow.”

If I had butted in, I would have made two points. (1) If an unusually large number of airplanes crash during a given week, do you blame gravity? No. Greed, like gravity, is a constant. It can’t explain why the number of crashes is higher than usual. (2) What deregulation have we had in the last decade? Please tell me. On the contrary, we’ve had a strengthening of the Community Reinvestment Act, which has encouraged banks to make mortgage loans to borrowers who previously would have been rejected as non-creditworthy. And we’ve had the imposition of Basel II capital requirements, which have encouraged banks to game the accounting ... Read More...