By William K. Black
Deal Book, Andrew Ross Sorkin’s ethics-free paean to painless elite bank frauds – all the wealth and none of the accountability – has plumbed new depths in its coverage of Citi’s latest frauds. It has literally written that Citi “cannot afford” to run an honest bank in Mexico.
I’ll put aside for another day the obvious point that Citi does not run an honest bank in the U.S. so the authors’ implicit assumption that Citi’s problems arise from a corrupt Mexican culture is false and bigoted. For purposes of analysis only, I will discuss the logical implications of the Deal Book’s “Blame it on Mexico” thesis. That thesis does not lead the NYT authors to ask Citi’s leaders to discuss which of three options it chose given that it cannot afford to run an honest bank in Mexico.
- To run an honest bank in Mexico anyway, or
- To lead a movement to clean up banking and politics in Mexico, or
- To stop banking in Mexico
By Felipe Rezende
If you’ve been tracking the news on Brazil’s presidential election, you already knew that incumbent Rousseff will face Neves in a runoff election for Brazil’s presidency on October 26th. The tight election reflects the perception of a downward trend of the nation’s economic outlook augmented by news that Brazil’s economy has fallen into recession in the first and second quarters of 2014. This really isn’t looking like the election the Workers’ Party expected. Brazil’s unemployment rate has hit record lows, real incomes have increased, bank credit has roughly doubled since 2002, it has accumulated US$ 376 billion of reserves as of October 2014 and it has lifted the external constraint. The poverty rate and income inequality have sharply declined due to government policy and social inclusion programs, it has lifted 36 million out of extreme poverty since 2002. Moreover, the resilience and stability of Brazil’s economic and financial systems have received attention as they navigated relatively smoothly through the 2007-2008 global financial crisis. Brazil’s response to the largest failure of capitalism since the Great Depression included a series of measures to boost domestic demand.