Felix Salmon gives it up to William Black—a blogger at MichaelMoore.com—for making “mincemeat of the idea that the government can and should keep a top-secret list of systemically-dangerous institutions which are subject to ‘heightened prudential standards.’ ” The Fed and the Treasury have proposed legislation to respond to systematically dangerous institutions (SDIs) by creating a list of SDIs that “can receive special federal bailouts when they get in trouble,” says Black. But the legislation proposes that this list be kept secret, as noted in these two clauses of the legislation:

“(f) NO PUBLIC LIST OF IDENTIFIED COMPANIES. The Council and the Board may not publicly release a list of companies identified under this section.

(b) CONFIDENTIALITY. The Committees of the Congress receiving the Council’s report shall maintain the confidentiality of the identity of companies described in accordance with paragraph (a)(3) and the information relating to dispute resolutions described in accordance with paragraph (a)(4).”

Both Black and Salmon find this proposal to be absurd and implausible. Salmon says, “In any case, as Black says, it’s hardly the job of regulators to keep from investors the fact that their bank is looking shaky … The plan as it stands is just idiotic.”

Barry Ritholtz also focuses on big banks. He wrote a post about the bill that got overshadowed by health care reform this past weekend. The Volcker Plan was proposed by Sen. Bernie Sanders (I-VT) and would give the government the power to break up banks or other financial institutions deemed “too big to fail.” Specifically, as Sanders writes in the Huffington Post, the legislation would “give the secretary of the Treasury 90 days to identify every single financial institution and insurance company in this country that is too big to fail and to break up those institutions within one year.” Ritholtz didn’t offer his opinion, and it is still unclear whether or not Sanders’ bill will receive support.

Over the weekend, Paul Krugman refuted the belief that the economy has performed better since 1980 than it ever did before (read: because of Reagan). Today, he continues his debunking rampage on two fronts: economic productivity since 1980 and third-world financing. On productivity, Krugman responds to commenters who assert “that Ronald Reagan, financial liberalization, or both ushered in an age of much faster economic growth.” He offers this one piece of data: Labor productivity between 1950 and 1980 rose on average by 2.3 percent per year, and 2.0 percent between 1980 and 2007. Then he provides a bit of context, saying, “Postwar productivity growth had three eras: a period of rapid growth from the late 40s to the early 70s, then a big slowdown that lasted until the mid 90s, then an acceleration that continues to this day.” On his next refutation, Krugman responds to comments saying that you can’t attribute China’s growth to modern finance, as it didn’t receive much capital from abroad, but many other fast-growing developing countries did. Krugman notes the “three big waves of capital flows to developing countries,” since 1980: to Latin American countries in the '80s, Southeast Asia in the '90s, and Eastern Europe this decade. None of the success experienced in these areas, Krugman says, have been driven by international finance.

Brad DeLong finds the decision about how to move forward and begin to repair the U.S. economy simple. He says, “From my perspective, deciding whether to tighten or ease is easy.” The answer for DeLong comes down to a short series of questions about unemployment and the key options to lighten its drag on the economy. Larger short-term fiscal deficits, will “almost surely” work, says DeLong. And, he says, they won’t exceed the country’s debt capacity. He writes, “You know that the debt capacity of a country is about to be exceeded when the term structure of interest rates slopes upward very steeply—when interest rates on government debt are high and expected to keep rising. There is no sign of that right now.”