Category Archives: Uncategorized

Sutherland Explained in 1939 Why GM Killing Customers Isn’t Treated as “Real Crime”

By William K. Black

The New York Times headline was dominated by a seemingly strong word:  “G.M. Is Fined Over Safety and Called a Lawbreaker.”

As I will explain, however, the seeming strength of the label “lawbreaker” is undercut by the rest of the title, the text of the article, and the reality of the Justice Department’s refusal to apply the rule of law to powerful domestic corporations and their controlling officers.

The first discordant note is the word “safety.” The article reports that GM, for the purposes of avoiding the expense of repairing a design defect that endangered the lives of its customers, covered up the defect and caused the death and injury of a number of those customers. The article does not report the (minor) cost of GM fixing its design defect. The article does not report on the number of people who were injured and killed because GM designed a defective ignition system, knowingly hid the defect from its customers and the government, and once it knew that its defective design was injuring and killing its customers GM deliberately covered up the existence of the defect and the cause of the easily avoidable injuries and deaths. The article states that GM was finally required to recall 2.6 million vehicles due to the defective design of the ignition switches.

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A Fallacy of Composition

By J.D. Alt

The commentary on one my recent posts included the following statement: “It’s a fallacy of composition to imagine that what we can’t afford individually is affordable collectively.”

I cannot get this sentence out of my mind. It seems to pinpoint a central cognitive dissonance that enshrouds our thinking about money. The common-sense logic of the phrase seems to say, at first glance, that if each citizen of a nation cannot afford to pay for, say, a road from village A to village B, then collectively they cannot afford to pay for it either. However, if they pooled their money, with each citizen putting in a little bit, it seems clear they might be able to collectively cover the cost. So the person who wrote the comment cannot have intended to mean what, at first glance, the sentence seems to say. They must have meant something deeper.

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Why Minsky Matters

minskyAmerican economist Hyman Minsky died in 1996, but his theories offer one of the most compelling explanations of the 2008 financial crisis. His key idea is simple enough to be a t-shirt slogan: “Stability is destabilising”.

BBC Radio 4’s Analysis program has an episode on Minsky and looks at topics such as:

  • In the aftermath of the financial crisis, why did Minsky die an outsider?
  • What do his ideas say about the response to the 2008 crisis and current policies like Help to Buy?
  • And has mainstream economics done enough to respond to its own failure to predict the crisis and the challenge posed by Minsky’s ideas?

The Triumphant Return of NEP’s Podcast

By Stephanie Kelton

It’s been a long time, but I finally carved out enough time to record a new podcast. Although they’re my colleagues, Bill Black, Randy Wray and I see surprisingly little of one another these days. I did manage to catch up with Bill in Minneapolis last week, where I happened to be giving a talk (more on that in the coming days), but for the most part we’re all just trying to keep up with requests, which is a good problem to have when you think about it.

It was nice to slow down and talk with Randy this afternoon. We promised one another we’d do it more often. Anyway, here is today’s podcast.  We hope you enjoy it.

An AWESOME MMT Video

A big MMT thanks to Donna D’Souza aka Trixie aka @HaikuCharlatan. She has done an awesome job of animating J.D. Alt’s wonderful new ebook Diagrams & Dollars: Modern Money Illustrated. For your viewing enjoyment, Donna’s video is below.

12th Annual International Post Keynesian Conference

Conference dates have been announced for September 25-28, 2014 in Kansas City MO

Dan Kervick Discusses the Banking System with Tom O’Brien on From Alpha to Omega

By Dan Kervick

I recently joined Tom O’Brien as a guest on his terrific podcast From Alpha to Omega, and the interview is now available online. We discuss many of my favorite topics: the central banking system and the role of reserves, fiscal vs. monetary policy, capital requirements, differences between the US and European systems, and the need for healthy deficits and engaged government action to promote full employment and drive transformative change. Here is the link to the podcast:

Oh So Reserved – Dan Kervick on From Alpha to Omega

Enjoy!

Cross-posted from Rugged Egalitarianism

Follow @DanMKervick

Regulating Shadow Banking

The Economic Policy Institute (EPI) is holding a conference on shadow banking today (program here).  NEP’s own Randy Wray is on the afternoon panel.  You can watch the entire LIVESTREAM below.

 

Rugged Egalitarianism – Hope in the Ruins

By Dan Kervick

As I write, American conservatism has gone mad: openly, disturbingly and resoundingly bats. There is no mistaking it. But the furious imprecations and cracked laughter of the lunatic conservatives echoing loudly down the halls of our sad American bedlam have helped obscure the fact that liberalism in the United States is moribund.  While conservatives strive to tear down our rotten and unjust system and replace it with something even more terrifying, liberals offer nothing but a determination to patch up some of the superficial rot while approving the general injustice.

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Yellen Needs to Tell the Politicians to Stop Failing

By Dan Kervick

Evan Soltas is hoping that President Obama’s appointment of  Janet Yellen signifies a new administration commitment to jobs and economic growth.  Unfortunately, Soltas seems to be one of those folks who is convinced that our failures over the past five years have much to do with a monetary policy that has been insufficiently “accommodative”, and he strongly suggests that the national plague of mass joblessness and stagnation could be alleviated if the Fed would only do more aggressive quantitative easing without political pressure to taper prematurely.

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