Professor Cochrane is on the faculty at the University of Chicago Booth School of Business.
John Cochrane - 11/07/12 [edited]
New regulation will be the big story. ObamaCare and Dodd-Frank (financial) are not specific, but are mostly authorizations such as "the secretary shall write rules governing xyz" with a timetable that starts today. A metastatic expansion of regulation is already mandated and pending.
New EPA regulations will cost hundreds of billions per year. I'm all for clean air, but there is a question of just how clean and at what cost. A funny (for non-farmers) example is limits on Farm Methane Emissions (cow farts). [See the list]
Obamacare unfolds in the next four years: Medicaid expansion, Exchanges, the insurance mandate, preexisting conditions, and "accountable care organizations”.
Dodd-Frank requires hundreds of rules. Just the three days Dec 31 - Jan 2 requires nine final rules to be published.
Who knows what this means? Certainly, hundreds of billions of dollars are at stake. Industries, lawyers, and lobbyists are furiously helping to write all these rules.
We are sitting on a debt bomb. A few warned in 2004 that the huge mortgage debt could default, damaging the banks. Remember how that worked out?
That is our situation now with government debt. Who is now holding 10-30 year treasuries at slightly negative real rates of interest, bearing the risk of increased inflation and interest rates? Not me.
I really, really hope I'm wrong.