Author Archives: William Black

The Worst of the Worst of the Worst: New Century and its Economics Shills

By William K. Black
Bloomington, MN:  August 8, 2015

I have often noted the existence of a primitive tribal taboo shared by virtually all economists against using the “f” word – “fraud.”  I have found a new example that sums up many of the pathologies of economics and economists.  It is an article entitled “Going for Broke: New Century Financial Corporation, 2004-2006.”  Given that New Century was a classic accounting control fraud, the use of the long-discredited gambling metaphor (our “autopsies” of S&L failures refuted it in 1984) demonstrates the crippling power of the taboo.  The three economists who authored the September 2010 article are Augustin Landier (Toulouse School of Economics) David Sraer (Princeton University) David Thesmar (HEC & CEPR) (collectively, “LST”).

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The Republican Candidates Agree that the System is Rigged for the Rich

By William K. Black
Bloomington, MN:  August 7, 2015

The Republican debate last night revealed one area of broad agreement among Americans – we now live in a system of crony capitalism that is systematically rigged to favor the ultra-wealthy.  That is all the more remarkable as an admission because the Republican candidates are overwhelmingly (and increasingly) funded by the ultra-wealthy.  It is also remarkable because the Republican policy prescription for crony capitalism is to make the ultra-wealthy wealthier at the expense of the American people.  This last point is logical, but obscene.

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The OSU Band Exemplifies Why Economists Err by Ignoring Culture

By William K. Black
Bloomington, MN:  July 31, 2015

The Ohio State University (OSU) marching band is back in the news, which is a very bad thing.  Sometimes a story that has no obvious connection to economics provides an understandable example of why economic analysis is often so poor.  The OSU band story is featured in the Wall Street Journal in an article entitled “Holocaust Victims Mocked in Ohio State Band Parody Songbook.”  The WSJ has a copy of the “OSU songbook” and the title is not an overstatement.  The lyrics mock the Jewish victims in graphic terms.  The lyrics are also juvenile and lame.  The author(s) of the songbook have no future in any creative activity.  The lyrics to other songs are homophobic and equally lame.  I won’t quote the lyrics and spread the hate.

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Murdoch Warns Pope Francis about Ecuador’s President Correa

By William K. Black
Quito: July 12, 2015

Now that Pope Francis’ visit to South America has ended we can reflect on the Rupert Murdoch’s effort to slam Pope Francis and Ecuador’s President Rafael Correa using the pretext of the Pope’s recent visit here.  The Wall Street Journal warned “Ecuador’s Correa Wants to Co-Opt Pope Francis: The pontiff risks leaving the impression on his visit that the church condones repression.”  Given that Pope Francis is Argentine, the idea that the Murdoch’s minions needed to inform and warn the Pope about President Correa is very funny.

Murdoch’s minions are always reaching for a thesaurus of insults when they write about Correa, and this article is no exception.  The title: “condones repression” gets the verbal assault going quickly.  But the minions are only warming to their task and are a bit repetitive, warning in the second paragraph that “the visit is likely to leave the impression that the church is in solidarity with the repressive Correa machine.”  Note the addition of “machine” at the end of that agitprop.

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LIBOR: History’s Largest Financial Crime that the WSJ and NYT Would Like You to Forget

By William K. Black
Quito: July 8, 2015

I read a BBC story about the LIBOR criminal trial in the UK and was going to write to criticize its woeful analytics. In preparation I checked the New York Times and the Wall Street Journal to see how they reported the devastating testimony in the trial. I could not, however, find any coverage in my electronic searches and viewing their web pages.

To review the bidding, the LIBOR bid rigging cartel was the largest cartel in history, manipulating the prices of an estimated $300+ trillion in assets. That is a figure considerably larger than the world’s combined GDP. Here are typical statements by the Department of Justice (DOJ) about the LIBOR cartel.

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The New York Times Urges the Troika to “Make an Example of Greece”

By William K. Black
Quito: July 7, 2015

It is often the moral and economic blindness of New York Times articles about the EU crisis that is most striking. The newest entry in this field is entitled “Now Europe Must Decide Whether to Make an Example of Greece.” That is a chilling phrase most associated in our popular culture with a Consigliere and his Don deciding whether to order a mob “hit.” It is, therefore, fitting (albeit over the top) as a criticism of the troika’s economic, political, and propaganda war against the Greek people. Except that the article is actually another salvo in that war.

Let’s start with the obvious – except to the NYT. “Europe” isn’t “decid[ing]” anything. The troika is making the decisions. More precisely, it is the CEOs of the elite German corporations and banks that direct the troika’s policies that are making the decisions. The troika simply implements those decisions. The troika consists of the ECB, the IMF, and the European Commission. None of these three entities represents “Europe.” None of them will hold a democratic referendum of the peoples of “Europe” to determine policies. Indeed, they are apoplectic that the Greek government dared to ask the people of Greece through a democratic process whether to give in to the troika’s latest efforts to extort the Greek government to inflict ever more destructive and economically illiterate malpractice on the Greek people.

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BBC Propaganda War v. Greece Reaches New Low After “No” Vote

By William K. Black
Quito: July 6, 2015

If you want to know why economic policy has gone insane in the UK you simply have to read the work of the BBC’s “Economics editor,” Robert Peston. I showed one example of his failed effort to terrify the Greeks into voting “Yes” in favor of continuing the self-destructive policies that have forced Greece into worse-than-Great Depression levels of unemployment in my most recent column. Peston argued that the Greeks had to submit to the troika’s demands that it make these policies even more economically illiterate and self-destructive because the troika would otherwise ensure that Greece’s economy was “utterly crippled.” As you know, the EU stands for “ever closer union.”

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Greece Proves Again Why Democracy is the Criminal Classes’ Great Fear

By William K. Black
Quito: July 5, 2015

The people of Greece have just shown great courage, and even greater common sense, in voting “No” in overwhelming numbers against the troika’s war on the Greek people and labor throughout the EU. In recent days we have seen the spectacle of the major media shamelessly lying globally about the referendum and the Greek government – cheered on by the troika. The troika openly sought to depose a second Greek head of state for the high crime of favoring a democratic vote on the troika’s economic malpractice and effort to extort the Greek people by threatening to destroy their economy. The tone and content of the propaganda were extraordinary – and reversed reality.

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The BBC’s Inept but Revealing Attempt at a Game Theoretic View of Greek Crisis

By William K. Black
Quito: June 25, 2015

The BBC came up with a good “hook” for a story on the troika’s assault on the Greek economy and people. “Yanis Varoufakis, the Greek finance minister, spent his academic career … studying game theory.” Professor Marcus Miller, a UK economist (U. Warwick) wrote an article for the BBC premised on how Varoufakis would apply game theory to Greece’s negotiations with the troika (the IMF, ECB, and the European Commission). Miller is a colleague of the great Robert Skidelsky and has co-authored with him an article explaining the economic illiteracy and self-destructive nature of the troika’s (and UK’s) infliction of austerity in response to the Great Recession.

The BBC, however, is such a great fan of austerity that one rarely reads why the vast majority of economists think that using austerity to respond to a Great Recession is akin to the quackery of bleeding a patient to make him healthier. Miller’s article in the BBC about game theory has the wrong title (recall that the author often does not get to choose the title), the wrong game, the wrong concept, and the wrong payoffs. The title of the article is: “Can game theory explain the Greek debt crisis?” The article does address that issue. It is limited to the issue of the new Greek government’s negotiations with the troika concerning a crisis that they inherited.

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A Harvard Don is Enraged that Pope Francis is “Opposed to the World Economic Order”

By William K. Black
Quito: June 21, 2015

A New York Times article entitled “Championing Environment, Francis Takes Aim at Global Capitalism” quotes a conventional Harvard economist, Robert N. Stavins. Stavins is enraged by Pope Francis’ position on the environment because the Pope is “opposed to the world economic order.” The rage, unintentionally, reveals why conventional economics is the most dangerous ideology pretending to be a “science.”

Stavins’ attacks on the Pope quickly became personal and dismissive. This is odd, for Pope Francis’ positions on the environment are the same as Stavins’ most important positions. Stavins’ natural response to the Pope’s views on the environment – had Stavin not been an economist – would have been along the lines of “Pope Francis is right, and we urgently need to make his vision a reality.”

Stavins’ fundamental position is that there is an urgent need for a “radical restructuring” of the markets to prevent them from causing a global catastrophe. That is Pope Francis’ fundamental position. But Stavins ends up mocking and trying to discredit the Pope.

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