Prof. Simon Johnson writes for The Los Angeles Times about the Federal Reserve’s decision to raise interest rates despite the recent instability in the banking sector. “Increasing the deposit insurance cap and focusing on small-business transaction accounts could stabilize midsize banks, reduce more deposit transfers out of those institutions, and shore up confidence in the banking system,” writes Johnson.
Prof. Aleksander Mądry’s testimony before a House subcommittee was highlighted by Politico fellow Mohar Chatterjee in a recent newsletter exploring how large tech companies are dominating how generative AI technologies are developed and utilized. During his testimony, Mądry emphasized that “very few players will be able to compete, given the highly specialized skills and enormous capital investments the building of such systems requires.”
Prof. Simon Johnson writes for The Los Angeles Times about the impact of government support during a financial crisis. “The immediate banking crisis may have been tempered, but it isn’t over,” writes Johnson. “As concerns about moral hazard rise again in Europe, will European regulators succumb to the temptation to make an example of some bank or other? One thing is certain: What they do will have global consequences, including for the U.S., and we will need to be prepared for them.”
Prof. Gang Chen speaks with Times Higher Education reporter Pola Lem about how “government interference has created an atmosphere of fear for foreign-born academics in the US.” Says Chen, “I don’t expect myself to go back to what I was before, but I’m also determined. I’m not going to be beaten in my science. I’m going to become stronger through this ordeal.” He adds, “I hope basic science can remain open.”
Writing for The Los Angeles Times, Prof. Simon Johnson outlines how regulation and supervision of the banking industry should be strengthened following the collapse of Silicon Valley Bank. “A well-regulated system is still the right goal,” writes Johnson. “The Federal Reserve needs to overhaul and improve its bank supervision — and to make that consistent with its macroeconomic policy for interest rates.”
Prof. Emeritus Peter Diamond speaks with Boston Globe reporter Scot Lehigh about the future of Social Security. “Given the large past differences in the approaches of the two parties, it is important that citizens press members of Congress to be specific about their views on fixing the program,” says Diamond. “And it’s just as important that voters let their members of Congress know their own views.”
A new report co-authored by MIT researchers finds that the “US lead in advanced computing has declined significantly over the past five years—especially when measured against China,” writes Will Knight for Wired. The report’s authors emphasize that the US “needs to make sure that the CHIPS Act spending reflects the importance of developing novel ideas in advanced computing, as opposed to just propping up existing technologies,” Knight notes.
Prof. Emeritus Olivier Blanchard speaks with New York Times opinion writer Peter Coy about the U.S. policy towards federal debt. “Blanchard pointed out in the [his] book that if the interest rate the government pays on its debt is lower than the economy’s growth rate, the existing stock of debt will feel lighter over time because it will shrink as a share of gross domestic product even if the government isn’t running surpluses,” writes Coy.
In an article for The Hill, Vincent Quan, co-executive director of J-PAL North America, outlines how new governors should rely on evidence when investing in government programs. “Governors should invest in programs that are most likely to improve the lives of their constituents,” writes Quan. “However, determining which programs work and which do not is far easier said than done. Not all programs work as intended.”
Alex Padilla ’94 has become the first Latino from California to be sworn into a full Senate term, reports Rafael Bernal for The Hill.
Writing for The Hill, President L. Rafael Reif emphasizes the importance of “enabling universities to undertake the use-inspired research that will seed future innovations.” He adds: “To secure national leadership and prosperity over time, the U.S. needs to be the birthplace of the new ideas that will determine the future — including the future of semiconductor technology, design, and manufacturing.”
Prof. Jonathan Gruber speaks with GBH hosts Jim Braude and Margery Eagan about why Democrats are pushing to raise the debt ceiling. “This is really about paying off the money that Congress approved to spend for all of the things the government does,” says Gruber.
Democratic Senator Alex Padilla ’94 has become the first Latino elected to represent California in the U.S. Senate, reports Seema Mehta, Hannah Fry and Terry Castleman for The Los Angeles Times. Padilla “graduated from MIT and returned home to work in engineering. But his career plans changed because of his outrage over Proposition 187, the successful 1994 ballot measure that sought to deny many taxpayer-funded services to immigrants in the country illegally.”
Prof. Christopher Knittel speaks with Wall Street Journal reporter Andrew Duehren about how European governments are beginning to experiment with new ways to control energy prices.“Especially with the European energy-market policy interventions, what policy makers do not want to do is exacerbate these problems with their policies, and my fear is that is what these proposals would do,” says Knittel.
At MIT’s AI Policy Forum Summit, which was focused on exploring the challenges facing the implementation of AI technologies across a variety of sectors, SEC Chair Gary Gensler and MIT Schwarzman College of Computing Dean Daniel Huttenlocher discussed the impact of AI on the world of finance. “If someone is relying on open-AI, that's a concentrated risk and a lot of fintech companies can build on top of it,” Gensler said. “Then you have a node that's every bit as systemically relevant as maybe a stock exchange."