My internet connection quit working today. Then suddenly started working again about the time to go to bed. I will answer emails tomorrow.
I attach a financial reform proposal by John Cochrane University of Chicago. I took a class with him some years ago. Shortly thereafter he married Eugene Fama’s teenage daughter — that may have helped him keep his job at Chicago. Fama’s 4 grandparents were Italian — that explains his Boston Italian accent. He would show up at professional meetings in a red shirt and motorcycle jacket. Sort of a flashy character with grandiose book titles such as “Foundations of Finance” helped him get his reputation and lengthy publication list and Nobel Prize. Plus the fact that his work is very politically correct to the powers that be, and well funded. Not much in that short book but it was in the right place at the right time.
Cochrane’s fix seems much more complicated than mine. But it may work. I am reading it carefully, and it is a long tedious read. At least it is a good summary of a lot of good related work. He is a standard University of Chicago Free Market proponent and Cato Institute Libertarian (founded by a Koch).
Clearly something needs to be done. 2008 could have spiraled out of control very easily. Then the economy has been weak since then, a slow recovery. Better to prevent crashes instead of trying to fix the problems resulting from crashes.