Good morning. Hope you all had a nice holiday and are ready for your daily reads.
Rakoff challenges Justice Department's explanation
After the junk bond bubble of the 1970s and the savings and loan crisis of the 1980s, federal prosecutors brought some high-level perpetrators to justice. Not this time. In a lengthy article for the New York Review of Books, U.S. District Court Judge Jed Rakoff asks, why? Among the usual reasons given by the Justice Department: Fraud is hard to prove; the buyers of dubious mortgage securities were sophisticated investors; the institutions were "too big to jail." Rakoff isn't buying it. He offers an alternative. "The government was deeply involved, from beginning to end, in helping create the conditions that could lead to such fraud, and that this would give a prudent prosecutor pause in deciding whether to indict a CEO who might, with some justice, claim that he was only doing what he fairly believed the government wanted him to do."
The cockeyed optimists at the Fed
Like a stopped clock, at some point the Federal Reserve will get it right, writes the Manhattan Institute's Diana Furchtgott-Roth. She's talking about policy makers' perpetual forecast for stronger growth. . .next year. She says that if you can believe it, Fed forecasts are actually worse than its policies. I would agree on the forecast part, but I'd hate to see what economic growth would look like absent the Fed's aggressive stimulus measures.
An alternative to Obamacare
Everyone agrees that the U.S. health-care market is dysfunctional. But gloating over the botched rollout of Obamacare isn't the answer. University of Chicago economist John Cochrane outlines the components for an alternative. He says the system needs deregulation, competition and innovation. Health insurance should be individual and "portable across jobs, states and providers," he writes in a Wall Street Journal op-ed. "Rather than a mandate for employer-based groups, we should transition to fully individual-based health insurance." How can you call something that fails to address the two biggest problems -- fee for service and an employer-based system -- health-care reform?
Untangling the mess Jordan Belfort made
This article caught my eye because I happened to see Martin Scorsese's "The Wolf of Wall Street" yesterday. The Wall Street Journal has a story on how lawyers managed to untangled the fraud perpetrated by the pump-and-dump operation in order to compensate investors for the $200 million in losses. It took nine years, which is three times longer than the sentence served by Jordan Belfort, the perpetrator and master salesman behind the operation. Oh, and Leonardo DiCaprio is great as Belfort. The New York Times had an interesting review of the movie and of Wall Street in general.
Before you ring out the old year, see if you were paying attention
The Wall Street Journal has a 2013 news quiz to test your knowledge of the year's hottest stories. For example, which of your favorite fatty snacks still contains trans-fat? If health and wellness isn't your beat, try ranking the year's hottest initial public offerings. OK, I bet you can get this one. Which billionaire bought the Washington Post? The answers are at the bottom of the quiz.
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