Category Archives: William K. Black

The Three Impossible Things Trump’s Base Must Believe before Breakfast

By William K. Black
July 19, 2018     Bloomington, MN

The Republican Party, for over 70 years, did not simply oppose the Soviet Union; it demonized Democrats as ‘soft’ on Russia.  This history makes the Republican Party’s increasing embrace of Putin’s Russia particularly bizarre.

Forty percent of Republican’s now consider Russia “friendly” or an “ally” of the United States.  That percentage is nearly twice as large as in 2014 despite a large number of Russian attacks on the U.S. and the West (and Russians) since 2014.  Seventy-nine percent of Republicans had a positive response to Trump and Putin’s infamous (to most Americans) Helsinki press conference.

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Bill Black: Trump Sees Europe as a “Foe” Because of Key Misinformed Advisor

President Trump’s belief that the European Union’s trade policies are more unfair towards the United States than just about any other trading partner is woefully misinformed and the result of his reliance “nutcase” trade advisor Peter Navarro, says NEP’s Bill Black. You can view with transcript here.

Executive Coaching Achieves Miracle Success, and Self-Parody, at Nortel

By William K. Black
July 10, 2018     Bloomington, MN

Economists generally focus on increasing productivity as the driver of development.  Among the most troubling economic developments in the West in the last decade is the weak gains in productivity, particularly in a time of rapid technological advances.  Neoclassical economics pictures firms as engaged in a fierce, endless battle for survival where failure is certain for firms that are even slightly less efficient that their rivals.  This struggle is supposed to produce relentless, rapid advances in productivity.  Something has gone very wrong with the neoclassical narrative of competition, productivity, and growth.

Weak productivity and efficiency is supposed to remedy itself.  The neoclassical (and Austrian) economics claim is that it creates a profit opportunity for entrepreneurs to enter who either will run a more productive firm or serve as consultant to explain to existing firms’ CEOs the secret of improving efficiency.  This series of articles focuses on one of these supposed examples of Austrian “spontaneous order” – executive coaching.

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Fed Lets Goldman Sachs and Morgan Stanley Off Hook, Investors Profit Billions

Even though Goldman Sachs and Morgan Stanley failed the so-called ‘stress test,’ to determine whether these banks can weather a financial crisis, the Fed allowed them to pay billions in dividends and stock buybacks to investors. Former financial regulator and NEP’s own Bill Black explains the consequences. You can view with transcript here.

Most Ignored and Most Far-Reaching Supreme Court Ruling Yet: Anti-Trust Law Hollowed Out

A major Supreme Court ruling, Ohio vs American Express, was completely ignored by most media outlets, even though it will have potentially devastating repercussions for consumers in the so-called ‘platform economy’: Uber, Lyft, AirBnB, Facebook, etc. NEP’s Bill Black explains the consequences. You can view with transcript here.

Bitcoin Does Not Protect Against Fraud

There is a common misconception that the cryptocurrency Bitcoin is safe and secure and will protect those who trade in it from fraud. However, NEP’s Bill Black explains, Bitcoin is just as susceptible to fraud as any other type of transaction and complacency makes the likelihood of fraud only greater. You can view with transcript here.

Kill the Hastert Rule: A Pedophile’s Indefensible Rule Harms America

By William K. Black
June 20, 2018     Kansas City, MO

The House Speaker is the answer to the trick question:  “Who is the second most powerful elected official in the United States.”  The importance of the Speaker is obvious to anyone with even a modestly sophisticated understanding of U.S. politics and government.

One of the reasons for this astonishing level of sycophancy of Republican House candidates that run for office by presenting themselves as moderate conservatives is the ‘Hastert rule.’  They run as moderates, but they vote consistently in favor of legislation that creates the most radically right policies in modern American history.  If you have never heard of the Hastert rule or do not know what it is, blame the Democrats (and the media).  The fact that the Hastert rule is not infamous with the public proves (again) the ineptness of Democrats as politicians (and the failure of most of the media as journalists).  The rule bears the name of then-Speaker of the House Dennis Hastert, who decreed and implemented the rule.  If you do not know that Hastert is infamous, and why he is infamous, blame the Democrats (and the media).

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Bithumb: Hackers ‘rob crypto-exchange of $32m’

This article from the BBC. NEP’s Bill Black has warned about these issues…

A leading crypto-coin exchange has halted trade after declaring that hackers had stolen some of the digital currencies it stored.

Seoul-based Bithumb said that 35bn won (£24m; $31.6m) worth of cyber-cash had been “seized” overnight, adding that it would fully compensate affected customers.

The values of Bitcoin, Ethereum and Ripple all fell on the news.

It is the second time in less than a year that Bithumb has been breached.

Last July, it acknowledged an employee’s PC had been hacked – exposing users’ personal details.

South Korea’s spy agency later accused North Korea of being responsible after the stolen information was used to carry out scams.

Cold wallet

Bithumb notified a local regulator – the Korea Internet and Security Agency – of the latest attack, shortly before alerting the public via social media.

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Bitcoin Frauds Keep Growing

By William K. Black
June 18, 2018     Kansas City, MO

One of the prime myths that white-collar criminologists have to refute repeatedly is that blockchain makes fraud impossible.  Blockchain, in some settings, is a costly means of making some frauds much more difficult.  Blockchain is useless against the most important frauds.  The primitive worship of blockchain as a supposed garlic capable of warding off evil breeds complacency, and complacency produces increased fraud and greatly extends the life of fraud.

The difference between making fraud impossible and (in a few specialized settings) ‘much more difficult’ brings to mind the critical difference explained in The Princess Bride between ‘dead’ and ‘mostly dead.’  Blockchain is useless in stopping, for example, any or the three epidemics of ‘control fraud’ that drove the 2008 financial crisis and the Great Recession.  Lenders’ executives extorted appraisers to inflate appraised values of homes, creating a Gresham’s dynamic in which bad ethics tends to drive good ethics out of the markets and professions.  The second fraud epidemic in loan origination was ‘liar’s’ loans, which were designed to aid lenders and their agents to inflate the incomes of borrowers.  Note that both of these primary fraudulent loan origination schemes involve lenders deliberately seeking to provide false (inflated) data designed to inflate the market value of homes.  The third fraud epidemic that drove the U.S. financial crisis was the fraudulent sale of these mortgages to the secondary market through false “reps and warranties” about loan underwriting – principally the fraudulently inflated appraisal values and borrowers’ incomes.

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Defiant Trump Ignites Trade War with Canada and G-7 Allies

Citing national security issues to get around WTO rules, Trump ordered tariffs of 25 percent on steel and 10 percent on aluminum imports from Canada and EU countries. NEP’s William Black and Gerald Epstein discusses the implications of these tariffs on the different economies. You can view transcript here.