The Handmaiden of Capitalism v. the “Swamp” Denizen of Detroit

By William K. Black

A preliminary note:

Greetings from Davos!  I’m actually writing this over the mid-Atlantic as I return from being a keynote speaker at the annual “Public Eye” “shame prize” awarded to Goldman Sachs for its abuses.  The shame prize award was made in Davos during the World Economic Forum as a counter-WEF event.  Shell also “won” a shame prize, but I spoke on Goldman Sachs, the role of epidemics of accounting control fraud, and the WEF’s anti-regulatory and pro-executive compensation policies.  I explained that the anti-regulatory policies were intended to fuel the destructive regulatory “race to the bottom” and why the executive and professional compensation policies maximized the incentives to defraud.  I also explained that WEF was a fraud denier.  Collectively, these three WEF policies contributed to creating the intensely criminogenic environments that produce the epidemics of accounting control fraud driving our worst financial crises.  Detailed written developments of these arguments can be found here on our UMKC economics blog: New Economic Perspectives.

The self-described “Handmaiden to Capitalism’s” reaction to my critique of her work

Heidi Moore is the finance editor for The Guardian.  She has also worked for the Wall Street Journal and Marketplace.  Two of my columns have discussed the economic myths that Moore embraces to champion austerity.  My first column cited her pro-austerity columns as an example of one of the central problems we face globally.  Many prominent individuals who consider themselves progressives embrace austerity.  Indeed, many socialists in Spain and Greece designed and inflicted austerity – producing Great Depression-level unemployment in both Nations.  Much of the German left’s leadership supports austerity.  The Guardian considers itself a progressive newspaper, but its financial editor is an austerian whose non-ironic, self-selected tag is “Handmaiden to Capitalism.”  (Derivative of Forbes’ self-description: “Capitalist Tool.”)  I entitled the column: “Deprogramming Progressives Indoctrinated into Supporting Austerity.”

My column quoted extensively from Moore’s arguments in favor of austerity and explained why her arguments, e.g., that a Nation with a sovereign currency is just like a household in terms of budgets and that cuts in U.S. federal spending were an essential response to the Great Recession were examples of harmful economic myths.

I didn’t believe that I could convince Moore to give up her passionate embrace of austerity.  She has continued to push for austerity as she watched it devastate the Eurozone, so I knew I had no chance of changing her views any time soon.  My second column focused on a January 4, 2013 Moore column on the so-called “fiscal cliff”, austerity, and the platinum coin.  I entitled it: The Most Embarrassing Financial Column of 2013.” 

My second column was seven typed pages and, like the first column (“Deprogramming Progressives”) it quotes extensively Moore’s arguments so that the reader can evaluate their context.  I then make detailed critiques, often clause by clause, of the errors of economics, logic, and fact that I believe she made in her January 4 column.  Substantive criticism is a treasure, but it is a painful treasure that Moore is (understandably) not masochistic enough to treasure.

Here are Moore’s responses to my columns.

Moore’s response to substantive criticism is at least as revealing of Moore’s character and substantive abilities as were my columns.  Her responses reinforce my point.  She can “block” white-collar criminology and pretend that the fact that the U.S. has a sovereign currency is an “irrelevant” difference from Nations that use non-sovereign currencies such as the euro, but that will only further impoverish her understanding of the economy.  That is a shame, because her pure ad hominem responses to my detailed critiques comments reveal that she is incapable of mounting a substantive defense of the austerity myths she spreads in her columns.  She is disingenuous in claiming that she does know what my problem is with her work.  In my columns I detailed my problems with her claims in ten pages of detailed comments.  I have never met her and have no personal problems with her.  My problems are with her analytics and policies, her indifference to the suffering of the tens of millions of people harmed by the austerity policies she champions, and her absorption of the dogmas of the one percent.  Those austerity policies have done terrible damage to Latin America (via the Washington Consensus’ infliction of austerity) and the eurozone and would do terrible damage to America if we adopted Moore’s policies.

We will see whether Moore succeeds in blocking our critiques from reaching The Guardian’s readers and Marketplace’s listeners, but that is a sad and illegitimate goal for a journalist.  Moore’s response demonstrates why many experts do not speak truth to powerful journalists who disagree with the expert’s views.  When they react badly to having their dogmas exposed as untruthful their threat is that they will seek to block your views from being expressed to the public.  I have recently written a piece discussing the Justice Department’s threat to Frontline because the documentary “The Untouchables” exposed the scandal of the department’s refusal to even investigate fraud by elite banksters.  Like the Department of Justice, Moore does not engage in a public debate of the merits.

Moore and I have track records.  Her track record on austerity is disastrously poor.  Her indifference to the wholly avoidable human cost of the gratuitous damage she helps austerity spread is unworthy of her, The Guardian, and Marketplace.  I will let readers judge my track record.  There are several scholarly books and articles that discuss in some detail my actions as a regulator.  My subsequent work and policy recommendations can be judged directly by the reader or by reading reviews of my work by George Akerlof and Paul Volcker available on line at the University of Texas Press (search for:  “The Best Way to Rob a Bank is to Own One”).

My view is that our track records establish that neither of us is “irrelevant.”  I believe we have been relevant, but that our policies and actions have had the opposite effect on the public’s interests and the banksters’ interests.  Ms. Moore, the “filthy mud swamp [I] came from” is Detroit, Michigan.  I was born in Detroit, so the “filthy mud swamp [I] came from” is one of the epicenters of the crisis.  The banksters deliberately targeted less sophisticated borrowers, particularly in Detroit, to take out liar’s loans at premium yields.  The banksters often mocked the borrowers they defrauded as savages in a tone that Moore mimics with her “filthy mud swamp” gibe.  The banksters did this during the height of the bubble – and then grossly inflated the borrower’s income and the home’s appraised value.  The banksters then fraudulently sold those fraudulently originated mortgages to Wall Street (and eventually Fannie and Freddie).  Wall Street banksters then created fraudulent collateralized debt obligations (CDOs) and, with the eager aid of the rating agencies, Wall Street law firms, and auditors, they then fraudulently sold the fraudulent CDOs or the banksters fraudulently held them for the firm’s own account (which maximized the banksters’ bonuses but caused the failure of entities liked Merrill Lynch – we call it “looting” for a reason).  The banksters then used their political power to cripple and pervert programs that Congress intended to be for homeowner relief into programs that in the immortal admission of Treasury Secretary Geithner, were actually designed to “foam the runways” to bail out the SDIs.  The banksters then committed over one million felonies in order to fraudulently foreclose on homeowners.  Finally (one prays), the banksters used their political power and economic extortion to coerce immunity not only from criminal prosecution, but even meaningful criminal investigation and disclosure of their literally millions of crimes.

So, if you, Ms. Moore, want to insult where I come from as a “filthy mud swamp” – it is the banksters and the neo-liberal economic policies you have shilled for all too often during your career that made the suffering of the people of Detroit so acute and widespread.  I have personally seen what your austerity policies are doing to Ireland, Spain, and Italy, and I listened at the Davos shame prize as Eurydice Bers, a Greek journalist sitting next to me on the panel, explained in detail the tragedy of what austerity is doing to Greece (including an epidemic of suicides).

I’m sure you live in a very nice place, that you interview overwhelming elite bankers who live and work in wonderful places, and that you often dine in exquisite places with them on someone else’s tab.  Your contempt for those who come from or dwell in what you deride as “filthy mud swamps” is all too common among the people you have too often served so slavishly in your chosen role as the Handmaiden of Capitalism (HOC).  The people of Detroit, Ireland, Spain, Portugal, Italy, and Greece do not “slither.”  The trails of slime you see all about you are from your bankster buddies – elite bank fraudsters do (metaphorically) slither.

White-washing the crimes of the banksters’ and providing an anti-Greek chorus echoing their neo-liberal dogmas are the critical skills of a HOC.  The chorus is often a Milli Vanilli lip-synching sycophants’ act because the banksters’ PR people always try to provide the chants that the HOCs mouth.  The HOCs are proud to be “in hock” to Wall Street.

Ms. Moore, the banksters have no respect for their servants.  The people you serve as a HOC hold HOCs in contempt.  Once you are no longer useful to them they will make this clear.

 

 

 

23 Responses to The Handmaiden of Capitalism v. the “Swamp” Denizen of Detroit

  1. Dear Bill – I am an anthropologist and find myself working a lot within what might be called political ecology. I read your posts regularly and share them with other academics. Ms Moore’s response is shameful. If you haven’t already done so, might I suggest that you share this particular piece with a ‘real’ progressive Guardian writer – George Monbiot? I am sure that he already shares your views to a large degree, and might be persuaded to tackle Ms Moore on her own territory….

    Keep up the great work.
    Tony

  2. Wow. Keep it up!

  3. In addition to the very justified criticism that you level at Moore’s reaction, I think we also witness an all-too-common media phenomenon: criticism of one’s (more or less) professional statements is conflated with criticism of oneself.

    This can just be an unreflected emotional response – I myself instinctively react to most criticism of my professional work and my political statements as if the critic were attacking me as a person…I just manage to check myself most of the time.
    Or it can be a deliberate strategy – it allows to paint oneself as a victim of meanness and to attack people whose professional statements are unassailable with ad hominem attacks.

  4. “The few who understand the system, will either be so interested from it’s profits or so dependent on it’s favors, that there will be no opposition from that class.”

    – Mayer Amschel Bauer Rothschild

  5. Some people will adopt a position and not budge from it no matter what data shows it to be incorrect. Presumably Ms. Moore is one of those when it comes to economic policy.

    If so, there is simply no way anyone can persuade her to change her mind. Facts do not matter. The same is true of a substantial portion of the population, on any topic, at any time.

    Economic policy is an area where this often manifests. Global warming is another great example of this behavior – many people on both sides of the argument will not recognize data that conflicts with their view, or will try to find ways to make it seem irrelevant.

    As to Ms. Moore – disappointing that a journalist for the venerable Guardian would respond in such a thuggish manner to civil discourse. It’s a black eye for the Guardian.

    TXGM

    • Mark Robertson

      @TXGM: No one can change Ms. Moore’s mind, since Ms. Moore does not suffer from ignorance or stubbornness. Instead, she is a professional toady for the rich, just like everyone else in the corporate media who champions austerity.

      For these low-lifes, their career choice is between (1) calling for famine and genocide, i.e. austerity, or (2) working at Wal Mart or Taco Bell alongside the other peasants.

      Regarding Ms. Moore specifically, she is taking personal revenge on humanity for being born physically unattractive. In the 1980s she would have been an ultra-militant feminist. Today, austerity is the attack vector favored by losers that have low self-esteem, like Ms. Moore.

      • Oh, come on, Mark! NEP is a class act. Let’s not get down in the gutter with Ms. Moore to compete in name-calling. I wouldn’t attribute a woman’s physical appearance or self-esteem as the source of her political/economic views any more than a man. While it may be a temporarily satisfying put-down, its has no more predictive power than neoliberal economics. What about the bimbos on Fox? I suggest your other explanation is more than sufficient for virtually everyone caught in the corporate trap: kiss up or get kicked down. (Sorry, notwithstanding my gender, back in the ’80s I was one of those feminists, too — and I still am.)

        • “Let’s not get down in the gutter with Ms. Moore to compete in name-calling.”

          As an acknowledgement of this sentiment, it is important to remember that Black eloquently outlined their ideological differences regarding austerity. He has now addressed her outrageous derogatory remarks sufficiently, and rather admirably without prejudice, despite Moore’s defamatory tirade.

          The problem lies in people’s very knowledgable appreciation of Black’s very long career in economics, criminology, and regulatory oversight, and that many in Government/Regulatory/Economics often seek out his opinion and work on the subjects as one of the THE distinguished voices in such matters. Moreover, Moore’s title at the Guardian belies her response to said critique of her ideological difference to Black’s. In other words, its inconceivable and incongruent that The Guardian’s Finance Editor would so casually disrespect and dishonor the opinions of one of the most honored and respected S&L Crisis Regulators. http://law.umkc.edu/faculty-staff/people/black-william.asp

          Yes, we are all rather shocked to see Moore’s wildly unsettling response. Let’s let it “speak for itself,” as it most assuredly does just that.

          • My sentiments exactly! I regret any unintended implication that my reply referred to anyone other than the person to whom it was directly addressed. Thank you for so clearly reciting precisely the circumstances I had in mind while writing but that I failed to state.

            • Apologies. I was solely agreeing with your sentiment. Just thought I’d expand upon your idea, which appeared in this thread, and was articulated quite nicely, while it was presently being addressed. ;-)

  6. Good grief. Heidi has lost her mind. I posted this article as a quicklink to Opednews, where hopefully people will get incensed enough to write to the (un)Guardian about Ms. Less, er, Moore.
    Interestingly, Bill Black came up on a radio show I was just interviewed on WGDR, Vermont Radio: http://www.wgdr.org/ai1ec_event/house-at-pooh-corner/?instance_id=200880. I hope the plug of Mr. Black’s work (and book) will help overwhelm the austerian disaster train too.
    The low level of intelligence at the other end is why we have a wrecking ball economy, only capable of knocking things apart, not building anything. Gads…

    • Done. I posted a link with a brief comment on Ms. Moore’s most recent Guardian piece. Hereafter she will at least know who she’s dealing with. ; >

  7. A lot of folks in the UK seem to have come completely unglued on this austerity issue. What are they in now? Their third dip? I really can’t believe that they think austerity “works”. It’s more like they think that they need to keep practicing austerity themselves to set a proper example for their despised neighbors in Ireland and the Mediterranean lands.

    • The Conservative party are the descendants of the Puritans of a a bygone age, who defaced the great cathedral at Ely and burned witches at the stake.

      They think that Victorian England is a paradise to be regained, where underpaid workers know their place and doff their caps to the landed gentry as they ride by in gilded coaches. Such nostalgia makes them weep with joy. And so it is at number 10 Downing Street, where the Bullingdon Club reign supreme. God save the Queen.

  8. Also, why has Keynes become a prophet without honor in his home country?

  9. The whole edifice of fractional reserve banking is about to come tumbling down. So much debt has been created to make the few wealthy that the 99% can no longer pay it off. There are going to be massive defaults, which will cause deflation and austerity, so the conventional wisdom is to cut government borrowing, which actually create savings in the private sector. The problem is that these “savings” are just book entries on bank computers. It is a farce of epic proportions. How much longer can this charade go on ?

  10. If someone posted on the Guardian comment is free, using such language in an ad hominem attack on another poster, it would have been deleted by the moderator.

    Heidi Moore’s highly unprofessional attack on Professor Black are grounds for dismissal from her position at the Guardian in my view.

    I have been reading the Guardian since 1959 and I have to admit that this is the first time that I have come across anything quite so obnoxious from one of its journalists.

  11. Derryl Hermanutz

    Many people do not arrive at their beliefs through a rational process of information acquisition, analysis and logical construction. They adopt their beliefs from the truisms that form the groupthink of groups they want to join. People do not hold these beliefs “rationally”, supported by a preponderance of the evidence. They hold their beliefs “religiously”, taken on faith that is supported by agreement among the members of the group. You can’t penetrate faith with evidence, because faith is not built from evidence and it is armored to repel offensive evidence.

    People adopt whatever beliefs serve their interests, and few people are primarily interested in knowing the objective truth about things. So values other than a desire to know the truth induce people to adopt beliefs that serve their other interests. Ms. Moore appears to value conforming her beliefs with the economic dogmas that serve the interests of plutocrats. This successfully serves her interest in being treated as “one of them”. Reciting plutocrat serving economic dogmas is not necessarily an expression of personal “belief”, but it is certainly an expression of personal “interest”, and it seems to be working for Ms. Moore.

    Interest is in the realm of personal values, and unless you personally value objective truth over dining with plutocrats, then you will not really care whether the ‘economics’ you write is true or not. It is not designed to serve the interest of truth. It is designed to get dinner invitations. So the success or failure of her economic writing is measured in dinner invitations, not objective accuracy. Intellectuals tend to assume that everyone values knowing objective truth as much as they themselves value truth. Truth seekers readily “change their mind” when they discover they had been wrong about something, because they value above all having a true picture of reality in their mind. Bill is astonished that an apparently intelligent person can write such observably false economic hogwash. But most people prioritize other interests and don’t really give a rat’s rectum for objective truth.

    Austerity is economically indefensible, if the goal is to maximize the public good. Austerity that causes systemic price deflation that increases the purchasing power of plutocrats’ money is economically defensible, but politically toxic. So it has to be sold as a ‘mistaken’ effort to serve the public good. Sales jobs need salespeople, such as newspaper columnists, who can convincingly express belief in the sales propaganda. It is an alignment of interests between those who possess the means to reward, and those who seek the rewards. Which is why the plutocrats usually win.

    • Agreed. Here’s an excerpt from Glenn Greenwald, “Comment is free” Contributor at The Guardian, called

      “Film highlights the temptations and perils of blind obedience to authority:”
      (http://www.guardian.co.uk/commentisfree/2012/aug/26/compliance-authority-failure.)

      “But just observe how frequently these institutions (journalism and academia) side with power rather than against it, how eagerly they offer their professional and intellectual instruments to justify and glorify the acts of political authority rather than challenge or subvert them. They will occasionally quibble on the margins with official acts, but their energies are overwhelmingly devoted to endorsing the legitimacy of institutional authority and, correspondingly, scorning those who have been marginalized or targeted by it.

      (Me: The rarity of such experienced and educated voices speaking “truth-to-power” like Black and NEP contributors makes them even more vitally important to the “checks and balances” of plutocratic power IMO. Thus, Moore’s “twitter scorning” is characteristic evidence of her “…alignment of interests between those who possess the means to reward, and those who seek the rewards,” as you mentioned above.)

      Their collective instinct on any issue is to rush to align themselves with the sentiment prevailing in elite power circles. Most denizens in these realms would be hard-pressed to identify any instances in which they embraced causes or people deeply unpopular within those circles. Indeed, they judge their own rightness – they derive vindication – by how often they find themselves on the side of elite institutions and how closely aligned they are with the orthodoxies that prevail within them, rather than by how often they challenge or oppose them.

      It is difficult to overstate the impact of this authority-serving behavior from the very institutions designed to oppose authority. As Zobel, the writer and director of Compliance, notes, most people are too busy with their lives to find the time or energy to scrutinize prevailing orthodoxies and the authorities propagating them. When the institutions that are in a position to provide those checks fail to do that, those orthodoxies and authorities thrive without opposition or challenge, no matter how false and corrupted they may be.”

  12. Such immature comments only reflect badly on her employer. Moore is an editor at the Guardian?
    Unbelievable.

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