Controlling Costs, “Lowering” Prices, and Naturally High Prices

By Christopher Espinal

It’s unfortunate that in general humans automatically associate a word with one idea or image. Why is that unfortunate? Rhetoricians and those gifted with illustrious and motivating words can abuse those humanly biased language patterns to paint a misleading image of the real world.

One of those misleading concepts is the idea of controlling costs. What do you think of when you hear the idea of controlling costs? You think of a lower price, a lower dollar sign – you think of having more money and more security – you think of living a life that’s a bit easier than before.

However, prices don’t have to be in the form of an invoice or dollar bills. Prices are simply measures of what you have to give up for something you desire. I have to walk a mile to get to class – that mile is a price. In matter of fact, It takes me 30 minutes to walk to class – that’s a price – in a different “currency.” Yet, the concept remains.

What if I had to walk that same mile to get to class but I must do so in 15 minutes? Are you so naïve as to accept the notion that the price of getting to class has been lowered? It may be true if I were given some form of transportation at little cost to me. What if I still had to use my body as transportation? That means I might have to run that mile to get to class – possibly arriving to class drained of energy that I could have used to pay attention.

Of course I wanted to illustrate an example of the final price of getting to class being the same or higher – despite a reduction in price by one type of currency - time. The implicit price of everything is not what it readily seems – for that is implied by the word implicit (clever huh?).

I brought up this concept for a reason: health care. There’s no point in me rewriting everything above to directly address the health care debate. I think you get the general point.

Regardless, what does it mean to lower costs so that life becomes a bit easier and more secure? Well that’s a question that has endless solutions – none of which can be guaranteed from this or any health care proposal.

To lower the cost of healthcare is to lower the costs of its inputs and/or to increase the level of competition. What can help lower the cost of the inputs? Several things can help achieve that goal: an improvement in technology, a sudden increase in the supply of inputs, a greater degree of efficiency in the means of production, etc.

Don’t be fooled into believing that only lowering the costs of inputs and productions will lead to a lower price of healthcare. Competition ultimately lowers the price unless a monopolistic firm can show benevolence to its consumers – a far stretching possibility.

That’s all boring stuff that everyone knows. Let me end this discussion with a provocative question. Do all prices have to be low? Is it always possible to lower prices at the discretion of the government? I wouldn’t say so.

Sometimes markets are bound to become centralized around one company. That’s because the initial costs to starting a business can be so high that only few firms to one can have access to such expensive resources. In other words it might be possible that it’s more efficient for few firms to produce a large quantity of a good than for many to produce few.

If we think about modern healthcare, people want to rid themselves of diseases and sicknesses using the best treatments – which may be equivalent to saying the most expensive forms of treatment. Those are high costs that medical centers – that wish to remain effective, open, and operational – must endure. It would be no surprise to me if the healthcare industry is one where centralization is natural – rather than a decree of government.

Christopher Espinal an economics student at the University of Chicago. He can be reached at espinalc@uchicago.edu

The Rise of Protectionism and It's Implications

By Christopher Espinal

Here, I made the case for free trade. I want to further extend the
argument eliminating the anti-left polemic.

Free trade on the global scene is the same as trade within a
market. There is a supply and a demand for goods. Nothing
complicated.

When an economy opens up its borders, one of three events
will follow. The price of some good produced in the United
States may increase, stay the same or decrease. What does
each of the consequences mean?

If a domestic price increases after opening borders, there
must be an implication for the global market equilibrium.
Demand is probably greater, or supply is relatively scarce
for a resource in the global market than in the micro-
market, making the relative scarcity of the good in question
increase. This can also happen with a competitive market
comprising of firms that have higher cost production
functions or with global markets that are more centralized.

In the middle of the spectrum, the domestic price may remain
the same implying a lack of increase in demand for a good,
or competitive global market economy where firms have
similar marginal costs.

On the other end of the spectrum a price can decrease
suggesting a more competitive economy with a more efficient
production process on the global scene than in the domestic
market.

Thus there are two components to the analysis – the
preferences of the global consumer and the comparative
advantage as illustrated in their production “functions” (or
the efficiency of their production process).

Now we can move into the policy aspect. Protectionist
policies artificially can artificially alter the demand or
the supply side of our global market through several
mechanisms. Politicians may utilize artificial price
manipulation through taxation, import or price caps,
creations of barriers to entry into the American economy
[for example], and outright trade restrictions. However, all
do one important thing – they alter the price clearing
condition of the market.

The obvious objective of these policies are to incentivize a
nationalistic motive (to some degree) to buy goods made in
the “homeland.” If people purchase more American goods, the
theory states, it will create more jobs at home causing a
rise in American production, all of which will contribute to
restoring confidence in the American economy.

However true this may be, there are side effects to these
sorts of policies. All goods that dropped in prices with
international trade will increase. All imported goods, that
now must incur taxation or supply caps, will face price
increases. These price increases will thus increase the
general price level of the American economy causing
aggregate demand to fall.

Taxing imports have other unintended side effects. A drop in
demand due to the protectionist country will cause a decline
in production from foreign companies and thus a decline in
profits. A decline in global production implies cutting
labor and capital input prices or firing workers and cutting
capital. Laying off workers and cutting capital happens more
often than cutting pay to keep high productivity workers and
capital inputs.

The potential for losses in profits for foreign companies
after protectionism creates an incentive for all those
affected by US protectionism to rally behind trade
restrictions for their own countries. Foreign companies and
workers will too demand price caps and other trade
restrictions for the same purposes of stimulating their own
economy. This creates even greater price increases, and thus
falls in aggregate demand for the American Economy and those
economies abroad.

One can make the argument that these restrictions, will
create American jobs and cause American firms to redevelop.
As shown, this argument ultimately ignores the additional
costs supplanted by foreign protectionism resulting from
American protectionism. It also ignores additional problems –
foreign investment in the American economy, and access to
global consumer demand after foreign protectionism.

When American products go abroad so does American cash. This
money supply of American dollars abroad creates an incentive
for foreigners to invest in American companies and US
government bonds. The real interest rate in the American
credit market will rise as a result of a decline in American
exports, and thus foreign investment in the American
economy. This means, that the supply side of the American
economy can also be affected by protectionism abroad. All in
all, the net affects of a decline in the demand and supply
side of the American economy can have drastic stagflationary
consequences.

The issue that worries me the most with the idea of
restricting trade to the US in an effort to create jobs at
home, is that companies may experience a negative change in
profits after being pushed out the market from foreign
protectionism. Companies will have to limit their production
abroad and focus more on the domestic market – likely a
smaller market for most companies. Since firms will have to
reduce their size to accommodate only a domestic market, it
may imply net zero affects and possibly negative affects for
firms, and thus jobs at home.

Jobs at home from foreign protectionism, and jobs abroad
from domestic protection, can also be negatively affected
due to the neglect of comparative advantages. We just might
be better at producing something than someone else, but
that “someone else” might be better at producing something
else. In the end, we both lose out on maximizing our
efficiency and its related benefits.

All in all, consider the impact of our trade restrictions on
other countries, their resulting trade restrictions on us,
and the loss of efficiency from the implicit limits on
everyone's comparative advantages.

Christopher Espinal is a regular contributor to EconomicPolicyJournal.com
and an economics student at the University of Chicago. He can be reached at espinalc@uchicago.edu

Obama's Cap on Executive Pay

By Christopher Espinal

President Obama has capped executive pay at $500,000 for all companies that will accept bailout money. I will outline the economic implications for this price cap.

The market will decide how to value the productive capacity of individuals. The expected or observed productivity of a worker, and the relative scarcity of the subject's skill set,will determine his or her worth to a firm.

To say that the market decides on the best allocation of workers is to imply that the pricing mechanism always clears the market. That also implies that artificial alterations in the pricing mechanism will cause supply and demand of labor productivity to readjust to new levels if a price ceiling is below the market equilibrium.

This is exactly the problem with placing a cap on pay. It will only cap the level of productivity exhibited by the executives – and perhaps cause a reallocation of this high productivity skill set to other industries. One must remember that compensation prices serve as signals of productivity, which also means that lower prices will indicate a need for lower productivity. This will affect the overall productive capacity of a firm – which determines its cost efficiency and thus its profit.

All of these negative effects of caps on executive pay conclude with an increase in the risk of failure for a firm,especially in a time of economic instability. The best way to turn around a failing firm is appoint smart, and therefore pricy, executives; not less experienced individuals with less human capital.

This idea applies even more to firms that need bailout money, although executives with good pay may have less of an incentive to accept money with strings attached.

All in all, better executives will be needed to keep firms alive, but that may require more money than caps on executive pay allow. Regardless of the importance of high productivity, it would be interesting to discover if firms are in this mess primarily because of low productivity executives. However, I would still be skeptical if the government can price their worth.

There is one interesting idea on the other side of the boat. If fewer companies accept this bailout money, because of this radical cap on executive pay, then that may induce firms to act more responsibly given the few non-governmental resources available to them.

Christopher Espinal is an economics student at the University of Chicago. He can be reached at espinalc@uchicago.edu

Prices and Information

By Christopher Espinal

We often assume that markets are efficient. In matter of fact we often assume that markets are efficient, because the underlying assumptions assist market interaction and market clearing.

However, recent studies have shown that information is not “complete” and therefore markets are not as efficient as we may think.

This critique of the underlying assumption of perfect information has become the center of a movement to a new form economics called New Information Economics, as named by economists Joseph Stiglitz and George Ackerloff.

Their efforts to alter the models offered by the neoclassical school may have some validity information asymmetry always exists everywhere, but we don’t necessarily have to consider
information as an institution that assists markets like contract laws. The New Information Economics models consider at the most basic transaction level, a consumer and a producer, one of whom holds more information than the other. In other words, asymmetric information is a central concern and can lead to non-equilibrium, or a point where markets don’t clear.

As an alternative to that alternative, we can consider information an input good subject to market conditions just like any other private good. Hence, when you decide to make a
trade or purchase, we consider the costs or price of information. If information is much too costly, less trades in the market will happen.

The most important example is that when we consider purchasing an item, we usually go with a well known brand that signals its high quality. This also means that we will pay a premium
to use a well known product that fits our demand for information.

Subjecting information to the demand curve has important implications. It means that information, like any other good, has a different opportunity cost for different people because
the readiness and ability to pay varies.

Car aficionados will pay a smaller price on information for vehicles since they know so much about vehicles. Purchasing a customized car will be no big deal for those who understand
the science since the price on information is low. For example, the less time in understanding a vehicle than a newbie. Thus, more Car aficionados are likely to enter the used car market.

On the other hand, a newbie who engages in the market must either take a risk, pay for a third party appraisal, or simply purchasing a new car fresh out of the factory. A new car would eliminate asymmetric information relating to potential defects or overused parts.

However, the price of information is falling because of the internet. Following this example, we have CarFax.com, which reveals information regarding used cars on the market. On Ebay, people look through the description section before purchasing an item and read reviews by previous customers. If you want to purchase a video game but aren’t sure about the system specifications you can visit this awesome website, Can You Run It, which matches your system to the video game’s requirements.

These solutions to asymmetric information are very important because the more information available, the more trades will happen in that market. Thus, it seems from this approach to
asymmetric information that markets are still efficient – but apart from the standard explanation, information serves as an implicit good in every market.

Furthermore, when the government decides to step in to solve problems of information asymmetry, as Stiglitz and Ackerloff would prefer, one can view this intervention as an information subsidy. They are artificially lowering the costs of information. Like every other bureaucracy, one must understand the side effects, such as distortions of incentives as a
result of subsidies.

For example, if an overseeing institution such as the SEC imposes laws on information distribution for public companies, although they are “subsidizing” information for shareholders,
that artificial drop in the price of information will cause an artificial increase in the price of a good elsewhere. Often, an example of a resulting artificial price increase will occur in the price of providing that additional information. To accommodate the example, Investment Banks not only require Global Research or Business Analysts to provide and analyze information on public companies, but must also hire Supervisor Analysts to read stock material for compliance with SEC laws.

At the end of the day, everything is a game of tradeoffs. Should we cause other prices to increase so that this price can lower? Will that devised optimal point result in greater efficiencies in the market, greater growth, and a more developed society? Should every person have a right to perfect information as if it were a public good? At what cost on everything else?

These are complex questions for a seemingly simple idea.


Christopher Espinal is an economics student at the University of Chicago. He can be reached at espinalc@uchicago.edu

The Espinal View

By Christopher Espinal

Warren Buffet’s methodology of choosing common stocks involves
one of several principles: there will be a point in time when
every company must return to a stock value such that it
reflects its true intrinsic value.

In a time of managerial testing that demands all energy from
all firms in Wall Street, it seems inevitable that the stock
value of these companies must reflect their true intrinsic
value. The problem is that some of these companies have
intrinsic values close to zero – we can see that the market is
weeding out these firms as we speak.

Now, every man and woman in America have put in place a new

mental guard, aimed at controlling the impulses that put
future incomes and comfort at risk; all probably too late. How
far can this go? What is next? Who will be affected by this
Irrational Exuberance once accommodated by Wall Street?

There may be a simple answer to that question. If we remember
possibly the only useful tool in macroeconomics, the circular
flow diagram of income and production, we remember that
savings and securities investment flows into the financial
system. That money then makes its way into firms that will use
that flow of capital for investment and expansion. As any
reasonable person would conclude, the financial system is the
heart of growth in any country.

Let’s garnish this network of economic systems with today’s
problems. Many households defaulted on sub-prime mortgages
that are putting mortgage institutions in a hot seat. This
develops into an issue for investment banks that traded and
sold securities, backed by these junk-bond-like mortgages, to
their clients. Now investment banks that heavily invested in
these securities are falling apart.

The result is only a declining confidence, which places our
financial system at risk. If people don’t pump money into the
very institutions that serve as trading centers for securities
in the private and public sectors, then they will collapse. We
are currently seeing Lehman Brothers and possibly Goldman
Sachs on life support.

If these companies collapse, everyday Americans will lose
their pension funds, mutual funds, and the various forms of
security derivatives their future depends on. This collapse
will then fall into the commercial banking sector.

The companies that use your money as loans to pay for all
sorts of management issues may not be able to pay back – just
as Lehman Brothers has filed bankruptcy. This will cause banks
to lose your money, and that may create another bank-run, just
like the beginning of the Great Depression.

Milton Friedman, along with several other economists,
concluded that the Great Depression resulted from a lack of
dispatch of liquidity from the Federal Reserve. Ben Bernanke,
whom many call a student of the Great Depression, will seek to
cure his inherited problem by doing just the opposite – making
available to the financial community the dollars necessary to
remain alive, as opposed to stable. Depending on whether
Bernanke believes our current situation to emulate the Great
Depression or the Stagflation era of the 70’s, he will decide
to keep interest rates low to evade a situation like the
former, but will raise interest rates to avoid the latter.

The Great Depression dealt with a banking crisis similar to
the one we are dealing with today. If this situation has a
closer fit to today, then interest rates will remain low. To
be honest, a collapse of the financial system is much worse
than Carter’s stagflation. With no financial system, and no
flow of capital, there will be no growth – just like in the
third world.

But expect one thing to happen as a result of this liquidity
expansion: inflation and thus prices will continue to rise. To
avert this problem, take your savings and exchange those 20%
cotton sheets of paper for commodities with stable values.

Christopher Espinal is an economics student at the University of Chicago. He can be reached at espinalc@uchicago.edu

What the Video Game Industry Really Needs!

By Christopher Espinal

It’s a brave new world out in the video game world. Every month all of these software developers make new high caliber games that provide an incentive for hardware companies to keep developing more powerful PC components. We always need more RAM with a higher bandwidth, a newer video card with a faster GPU, or larger amounts of video memory. Let’s not forget that we may need to update our CPU chip to something as fast as a Quad Core, with a higher front side bus speed for over-clocking capabilities. This stuff costs money!

Why do I complain? The graphics are improving as the video game environment becomes more real and picturesque. When I shoot my M1 Garand, the gun moves against the direction I prefer, making it tougher to grapple. When I look into the sun, the screen almost goes blank just like real human eyes. A breeze passes and the trees and weeds move. My Springfield sniper rifle requires that I hold my breath to improve accuracy. But there’s one problem that remains: the artificial intelligence of, say the Nazis in Call of Duty, remain with a greater number of holes and an unrealistic magnitude of predictability. Video game characters just aren’t human enough! I complain because the benefits of video gaming don’t necessarily outweigh or clear the costs. To me, this market just doesn’t clear.

This got me thinking, what about these characters just doesn’t make any realistic sense? Aha, I figured it out! These characters and video game developers just have flat out horrible economics!

If video game developers were to take a course in microeconomics, they would discover the almost God-like tool available to human beings: the incentive. As the opportunity cost of some good changes, human behavior changes as well:

I see the enemy run across the tall grass fields, knowing that I’m watching. He must be one risky fellow or one who demonstrates a future preference utility function such that he perceives the probability that he will survive the run despite my accuracy with automatic, the Thompson. But when he runs, he obviously has a constraint in his utility function – he’s flat footed or has a wound in his right leg. This constraint limits the maximum utility he receives by running to another corner or seeking to reunite with his unit. He just might not run since the probability of survival in his future preference function is small.

There’s another one of “Charlie,” kneeling underneath the window panel on the second floor of the destroyed barn. The enemy knows the true cost of raising his head just another inch – because the cost is nothing more than his life. So he crawls to another window rationally expecting another bullet to travel through his previous position. Why wouldn’t he know, when I’ve been shooting there for about 20 seconds trying to finish him off?

But there are some who are the opposite of risk averse, and will charge at you from behind regardless of the number of bullets flying across the field.

To raise the cost of my unit and I standing ground, and to lower the cost or the probability of death in advancing toward Allied trenches, Charlie tosses a smoke grenade in the middle of the field.

This game would sound tough wouldn’t it? The player must learn to outsmart the enemy. But in today’s games I can die again and “retry” by reappearing in the same corner, with the same enemies positioned just like before previous outing. The problem is that rational expectations would override the point of dying and starting over. I will remember the position of the enemy and then easily finish off that stage in the level until I reach unknown territory.

In today’s video games the enemy will shoot through the window regardless of the number of bullets flying through. In other words, the enemy hasn’t responded to the increased cost on his life from moving just a couple of inches. They will toss smoke grenades as “planned” by the video game developer – but not out of the mere intelligence and freewill of the enemy. Just as Friedrich Von Hayek argued that there exists a calculation problem with pricing in a centrally planned economy, the video game developer makes the same mistake – he or she can’t perceive the costs associated with the gaming environment. Just as centrally planned economies can’t manage to develop proper incentives for growth in an economy, the video gaming environment fails to do what it’s supposed to do – challenge the strategic and responsive abilities of the gamer.

All of this follows from the idea that economics aims to model human behavior, and software developers ought to understand that. Just as humans respond to incentives, the video gaming characters must do the same. Aiming to defeat a computerized opponent is comparable to the card game of I Declare War, but playing against another human seems closer to a game of Chess – because both are responding to incentives. It is the theoretical mission of video gaming developers to bring the game as close to chess as scientifically possible.

There is one objection that may follow: developers are constrained to the tools and technological capabilities available. Perhaps giving each character a unique utility function or set of ranked preferences is as committed, audacious, and grandiose of a task that it should be categorized as Godly.


Christopher Espinal is an economics student at the University of Chicago. He can be reached at espinalc@uchicago.edu

Taxes and their Effects on the Economy

By Christopher Espinal

I have to start off with this lame introduction: tax policy is one of the most highly politicized tools of local and national government. Everyone thinks the solution to the nation's biggest problems are cutting or raising taxes on the privileged cohort of American society. Fiscal conservatives believe that cutting taxes can actually lead to more revenues and liberals think that raising taxes will lead to greater government funds. You can actually take some of the words in the previous sentence, mix them up, and create more fallacious statements.

The art of tax policy is actually much more delicate than some may believe. Hopefully the following economics tutorial on taxes will help us understand why this tool of fiscal policy may or may not assist political goals.

The Laffer Curve

Firstly, economic fundamentals are a must when discussing taxes. Suppose we have a supply and demand model and the government wishes to impose a revenue maximizing tax. Here is our market situation:

What the government really wants to do is impose a tax with the biggest square area which represents larger government revenues. If you look at the picture carefully, the area of the box can go from small, big, and small again along the demand curve. This is a fundamental concept behind the main economic tool right wingers wrongly appreciate - the Laffer Curve. Here is what the infamous curve looks like in picture:

So why do right-wingers wrongly appreciate this tool: because it creates a greater incentive for government spending and intervention. If lefties want to make government grow at its quickest, they need to understand the theory behind maximizing revenues - not fiscal conservatives. Right wingers need to talk about pushing taxation to the left side of that revenue maximizing tax rate. People have an incentive to be more productive with a smaller government siege on their potential human capital.

It seems that the politically motivated religiously espouse ideas that accommodate, yup, just ideas- rather than reality. That's why fiscal conservatives get caught up in "lower taxation" and liberals the opposite, without realizing the true potential effects. My conspiracy theory is that Arthur Laffer knew this all along and secretly wants the US to emulate Europe as soon as possible. Just kidding, but it's important that people really know their science before using it to embellish their political debates.

Oh, we aren't finished with tax policy just yet. There's more!

Yes, People aren't that Stupid!

Remember that Permanent Income Hypothesis and Rational Expectations stuff? That applies to tax policy as well, which leads me a conclusion contradictory to the advice I just gave fiscal conservatives.

I will start off by saying that people assess their economic situation in the long run, as said by the PIH, and people also intuit activities that may disrupt their long run plans as said by RE.

Let's think of some things going on that everyday Americans feel will disrupt their future: borrowing trillions from overseas to fund huge projects as the War in Iraq and an increase in unbalanced budgets.

Just as people can rationally expect inflation from liquidity going out of control at the Fed, they will rationally expect a point in time when the US government will have to pay its bills - or the IOU's given to foreigners on interest.

Since people know that John McCain will want to remain in Iraq and the Middle East for quite some time,they know that McCain will continue to borrow beyond government revenues and further expand our unbalanced budgets. This means that a fiscal stimulus by cutting taxes will have very little to no effect on the economy in the long run - people will put their tax cuts in their bank accounts to prepare for future tax increases aimed at balancing budgets.

In other words, there may be no significant increase in consumption, and thus no shift in Aggregate Demand. Ronald Reagan's trick will not work this time. However, if people save their money it certainly improves the investment side of GDP - and probably the future productivity ofthe economy.

My point is the efficiency of a tax cut depends on government activity and it's relation to the magnitude of unbalanced budgets. The tax cut will create an incentive to limit government size as it will decrease revenues (assuming we are already on the left side of the revenue maximizing tax rate as Martin Feldstein suggests), but it will not help the economy in terms of a demand stimulus -which is usually the initial purpose.

Christopher Espinal is an economics student at the University of Chicago. He can be reached at espinalc@uchicago.edu

The Economics of Random Stuff: Bail-Outs

The following was written by EPJ contributor Christopher Espinal.

When a kid does something wrong, the worst response for a parent is to just “let it go.” The same logic follows here: when a grownup makes a mistake or an idiotic decision, the worst response for a parent is to intervene and bail them out. The reason follows from the same methodology as the previous articles of series, The Economics of Random Stuff. For the billionth time, the law of demand exhibits the idea of the incentive. It outlines the concept that there is an inverse relationship between price and quantity consumed. When the price of a good drops, expect consumption of that good to rise – elasticity will determine by how much.

That is exactly what happens in a bailout – some intervening force artificially lowers the cost associated with the occurrence of some event that had a negative impact on the subject. That price drop will only provide an incentive to consume that good, or in plain English, to do it again. Thus, we have a problem called moral hazard. Due to this artificial reduction in cost, in the future the kid rationally expects the parent to “let it go” again, and the grownup rationally expects his or her parent’s assistance in response to a costly event.

The chain reaction begins. Now the kid’s siblings will take advantage of Mom and Dad’s lack of disciplinary action.

Just as I once argued that individual market trade theory applies at the international level, I believe the energy of the family argument on bailouts is conserved on the economy-wide scene.

It seems that during a time when people are betting on widespread economic disaster, everyone wants a bit of security – including investment banks and other financial institutions such as Fannie Mae and Freddie Mac. To provide that bit of security the Federal Reserve makes history by intervening in markets outside of commercial banking. To piggy back on the Fed, Paulson’s Treasury makes history by nationalizing two of America’s largest mortgage creditor institutions. As far as Fannie and Freddie are concerned, there is a case to be made that they had a special privilege as government sponsored enterprises.

Regardless, financial markets now lay on the horrifying risk that the Fed and Treasury made the wrong signals to the remainder of the financial community. Just as the kid’s siblings knew they can take advantage of Mom and Dad, the financial community may believe that they are insured by the Fed and Treasury.

The remaining question that I just don’t know how to answer is: ultimately, how will the financial community perceive the artificially reduced cost of risky or bad corporate management. Let me ask a more refined question: has the cost been reduced to a degree that surviving financial institutions will continue risky security deals?

Christopher Espinal is an economics student at the University of Chicago. He can be reached at espinalc@uchicago.edu