By William K. Black
May 16, 2016 Bloomington, MN
John Cochrane is a theoclassical economist. I struggle to explain to readers how radical theoclassical economics has become. The more their anti-regulatory policies prove disastrous the more extreme their policies become. Cochrane wrote a column recently in the Wall Street Journal that exemplifies this pattern. We are just emerging from the worst financial crisis since the Great Depression. The three “de’s” (deregulation, desupervision, and de facto decriminalization) caused the three most destructive epidemics of financial control fraud in history. Much of this was driven by the perverse financial incentives that CEOs crafted to rig the system and produce an intensely criminogenic environment.