Walker Todd

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Walker Todd, research fellow and conference organizer for the American Insititute for Economic Research, lives in Chagrin Falls, Ohio, near Cleveland, and has been affiliated with AIER in one capacity or another since 1995. An instructor in the AIER Summer Fellowship Program, he teaches a course on the history and origins of competing theories of property rights. He is an attorney admitted to practice in Ohio and New York and is an economic consultant with 20 years’ experience at the Federal Reserve Bank of New York and the Federal Reseve Bank of Cleveland. He has been an instructor in the Special Studies program at Chautauqua Institution, Chautauqua, NY, since 1997. He holds a Ph.D. in French from Columbia University and a J.D. from Boston University School of Law. A director and program organizer for the Committee for Monetary Research and Education, he was an adjunct faculty member of the Cleveland-Marshall College of Law, Cleveland State University, for 13 years. He has numerous publications, both for AIER and for others, on banking, central banking, monetary and property rights topics, including those related to international debt, the International Monetary Fund, and the regulation of the banking system and financial markets.

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Near Zero Interest Rates

by Walker Todd March 7th, 2012 6:41 pm

I was recently interviewed for the New York Times article 0.2% Interest? You Bet We’ll Complain.

Fed board governor Sarah Bloom Raskin said in prepared remarks:

[M]any households are benefiting from the low level of interest rates [...] [H]ouseholds have been able to refinance their mortgages into lower-rate loans, freeing up income for other uses.

My take on mortgage refinancing:

She blithely assumes that everyone who could refinance their mortgages at current interest rates has done so. She ignores effects of credit scoring and outrageous fees banks are charging for those refinancings.

The more general point:

We are rapidly approaching a situation where Congress and the administration are unwilling to confront bankers on the need of thoroughgoing reform of everything involving household finance and credit reporting/credit scoring because it would cost the bankers money to do so. Our policy makers do need to think about what we are transferring to the banks. Why is the public obligated to provide them with all those subsidies?