Readers of this blog familiar with my previous posts know that I love trains. Sure, they’re slow. And after about twelve hours the coach cars start to get a little, well, worn. But, as a mode of conveyance they offer one time to reflect, and if you are lucky a little time to explore a new city.
Source: Wikimedia Commons
Travelling from Kansas City to NYC via Chicago, I had the pleasure of visiting the Palmer House – a fine example of the workmanship of a bygone era. Upon entering the great hall I was immediately struck by the grandeur of its ceiling. I have had the privilege to experience similar wonder and amazement in travels elsewhere, and as far as ornate ceilings this was not my first time at the rodeo – I’ve been to the Sistine Chapel, after all. What struck me the most about that moment in the Palmer House was not driven by my taste for architecture or the fine arts (which is probably ‘vulgar’ by any convention), but that it serves as a lasting example of what society is capable of achieving. Continue reading →
People who understand how this country’s financial system works know the American dream doesn’t have to die. They know why the federal budget is not like a family’s budget or the budgets of companies and states. They know why the government can’t run out of money, default, or go bankrupt; and why Europe’s financial troubles won’t come here. They know the government can afford to do more to help educate young people, improve everyone’s health, provide income assistance as people age, foster a sound economy with good jobs, modernize the infrastructure, and protect the environment. And they also know that popular myths and deliberate misrepresentations of the system are hurting America. Continue reading →
Yiagos Alexopoulos at Credit Suisse estimates that Spanish capital outflows are currently running at an annualised rate of 50 per cent of GDP. No question, the bank run is clearly accelerating, and one can easily understand why. The country is turning into a Little House of Economic Horrors. The alleged “rescue” of Madrid’s banks is a non-starter. 100 billion euros won’t begin to cover the scale of the problem on any honest accounting or “stress test” (and that’s before we get to the next phase of announced austerity measures). Continue reading →
UT professor James Galbraith is drawing attention for his unconventional position on the U.S. deficit. Galbraith and his fellow “deficit owls” stand apart from the better-known deficit hawks and deficit doves. Hawks think we should act now to reduce the deficit; doves think we should act later. Owls, by contrast, think the deficit isn’t a problem, now or later; it’s just a natural part of growth. Continue reading →
“When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.” ~ Frederic Bastiat
Up with Chris Hayes is a remarkable show in which Chris Hayes and his guests have a two-hour discussion on a handful of issues. This allows in-depth discussions instead of sound bites. On Saturday, July 7, 2012, Hayes framed a discussion of Libor (London Inter-Bank Offered Rate). The segment was prompted by Barclays’ settlement with U.S. and UK authorities of claims based on the banks’ submitting false data to the British Bankers trade association so that they would announce manipulated Libor rates. Hayes used two similes for Libor to try to explain the fraud to an U.S. audience. He said it would be as if the gauge on the gas pump was tampered with by the seller so that he could over charge consumers. Let me add a few facts from my perspective as a white-collar criminologist. This is a very old problem. The bible and Talmud contain injunctions designed to forbid fraud in weights and measures. Those religious provisions are supplemented now with state inspections of gasoline pump meters. One common, sophisticated way that gasoline sellers continue to defraud their customers is a twist on something the ancient texts understood millennia ago – the actual quantity of fluids that are sold by volume is determined by their weight, not their volume. The ancients forbade pouring wine from a significant height because the admixture with air allowed the merchant to fill a glass with only two-thirds of a glass of frothy wine. A modern variant leads gasoline stations to sell their product without adjusting the fuel gages to reflect the actual (higher) temperature of the gasoline in their tanks. The higher temperature expands the fuel’s volume but not its weight or energy content. In the trade, this is known as “hot gas” or “hot fuel.” Continue reading →
The right has a reservoir of writers who can be relied on to defend and even praise elite white-collar criminals, but the center has managed to produce eager apologists for lies. This column discusses the BBC’s Business Editor, Robert Preston. The title of his article emphasizes his view that it is exceptionally difficult to know whether the banks’ lying about Libor was desirable: “The elusive truth about Barclays’ lie.” Preston frames the question in a fashion that favors finding Barclays’ lies desirable.
“Aside from the forensic analysis about who said what to whom, there is a very simple question at the heart of the furore of Barclays’ involvement in the LIBOR-rigging scandal: is it ever acceptable to lie?” Continue reading →