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Showing posts with the label Department of Labor

Fiscal and Monetary Policy Need to be Coordinated Globally

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AT almost that three times the level reported in December, 2019, Friday's Black unemployment rate number is surprising and unfortunate, no matter what partisan policymakers and economists say. Remember, our expectation (and hope) was that fiscal and monetary policy actions would limit the initial damage. The Paycheck Protection and Economic Injury Disaster Loan programs certainly helped keep May's unemployment rate below 20%, but the numbers show that more focused fiscal and monetary policy actions, coordinated on a global level, are needed. In our comment on the Economic and Social Costs of "Reopening" America, we estimated that U.S. small businesses would need $6 trillion on an annual basis to ensure their survival through the coronavirus crisis. This was confirmed by the head of the Federal Reserve Bank of Atlanta. (See: https://twisri.blogspot.com/2020/04/economic-and-social-costs-of-reopening.html ). Unfortunately the unemployment numbers sho

Financial Conflicts of Interest

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We define a financial conflict of interest as a situation in which a person, institution or organization has more than one financial  interest in a particular investment vehicle or asset. The problem occurs when parties whose interests are singular, and thus not compromised, depend upon a conflicted individual or institution for primary advice concerning the purchase, sale or retention of the conflicted financial asset. The conflict "corrupts the motivation of the individual or organization" providing advice.  According to the White House's Council of Economic Advisers, "conflicted retirement investment advice costs investors $17 billion each year," The US Department of Labor recently held a hearing on conflicts of interest in the provision of retirement investment advice. The goal of the hearing was to gather testimony on the  Employee Benefits Security Administration's (EBSA) proposal to reduce conflicts of interest  in the retirement advice marketpl