Category Archives: William K. Black

GOP Opposition to Lynch

Here is an excerpt from my most recent opinion piece at Al Jazeera.

Yesterday Loretta Lynch was sworn in as the nation’s 83rd attorney general. On April 23, the Senate voted to confirm her nomination after obstructing it for almost half a year. While their reasons were baseless and self-defeating, Republican leaders did not avail themselves of an excellent reason to reject her candidacy. That they ignored it speaks to our corrupt politics.

Shortly before confirmation, The New York Times ran with prominent placement an article titled “Republicans in quandary over vote on Loretta Lynch.” What was the dilemma GOP leaders faced?

Read the complete post here

President Obama Should Apologize for Labelling Americans a Murderous Mob

By William K. Black
Quito: April 28, 2015

This column was prompted by Charles M. Blow’s excellent column about the slanderous way that the term “lynch mob” is used by the right-wing to denounce Americans whenever we protest police violence against (primarily) people of color. The protesters want justice. They do not want to lynch anyone. The same is true of the American people’s demands that the banksters be brought to justice.

President Obama, however, began his term of office by slandering the American people who wanted him to restore the rule of law and bring the banksters to justice. Simon Johnson and James Kwak, the authors of Thirteen Bankers, cite Obama’s claim to the 13 bankers at the infamous March 31, 2009 meeting so close to the start of his term of office that he was all that was protecting them from the public’s “pitchforks” as the defining event of the administration on financial issues.

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James Galbraith Reminds Me That He Too Pointed Out Mankiw’s Error about Adam Smith

By William K. Black
Quito: April 27, 2015

My citation of one of New Economic Perspectives’ distinguished academic readers from the field of economics, Michael Meeropol, prompted another distinguished academic reader from the same field to note that he had made the same point about the distortion of Adam Smith’s views on topics like “outsourcing” through foreign investment. The context was N. Gregory Mankiw’s distortion of Smith to try to support the Trans-Pacific Partnership. Here is how Jamie made the point in his classic book The Predator State.

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Michael Meeropol on Mankiw’s Mendacity about Adam Smith

By William K. Black
Quito: April 26, 2015

One of our many distinguished readers of New Economic Perspectives is the economist Michael Meeropol. Mike contacted me after reading my columns about Mankiw pushing the Trans-Pacific Partnership (TPP) to alert me to another way in which Mankiw, who purports to be relying on Adam Smith, actually willfully misinterprets Smith through what Mike refers to as “pedagogical malpractice.” I thank him for bringing it to my attention.

Mike laid this out in an article in 2004. Reading Mike’s entire superb article is, of course, the best solution. For those with less time I have quoted extensively from the most relevant portion of his article, which includes a lengthy footnote. Mike’s major point can be summarized briefly: Smith believed fervently in emphasizing domestic manufacturing and agricultural production, domestic trade, and domestic investment as the essential means of building a Nation’s wealth. Mike’s article builds on the work of Joseph Persky. I’ve deleted two footnotes from his text.

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Mankiw Mendacity and Morality and his League of Failed Economists

By William K. Black
Quito: April 24, 2015

I met N. Gregory Mankiw for the first and only time in 1993 when he was a discussant for George Akerlof and Paul Romer’s paper on “Looting: The Economic Underworld of Bankruptcy for Profit.” The meeting was at Brookings, so it was attended by a wide range of economists. Brooking was by that time working closely with AEI on an anti-regulatory agenda, particularly in finance. Those of us old enough to recall when Brookings was referred to under Republican administrations as “the Democratic Party in exile” are very old. I attended as Akerlof and Romer’s specially invited guest because of my contributions to their article. The meeting taught me a great deal about Mankiw and the state of the economics academy.

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Obama & TPP: Every One That Doeth Evil Hateth the Light

By William K. Black
Quito: April 25, 2015

President Obama wants the world to know that he takes it personally that the Democratic Party’s base opposes his latest effort to sell out the people of the world to the worst corporations through the infamous Trans-Pacific Partnership (TPP) deal. Obama blurted out at a press conference a number of conservative Republican memes as his sole basis for pushing TPP. He then launched personal attacks on Senator Elizabeth Warren and labor leaders (without naming them). Obama, who is famous for keeping his cool when criticized by the GOP, is thin-skinned when criticized by Democrats. Obama never raged at the Republicans’ “death panel” attacks on him, but he raged at Warren as supposedly making an equivalently openly dishonest attack on TPP’s secret drafting process.

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Lanny Breuer’s Defense of Not Prosecuting HSBC and its Officers

By William K. Black
Quito: April 19, 2015

I have been researching the HSBC frauds for a column I am doing about Loretta Lynch, the U.S. Attorney who refused to prosecute HSBC or any of its officers for the largest and most destructive money laundering and anti-terror finance sanctions-busting in history and continues to fail to do so even though her own appointed monitor at HSBC reports that HSBC is not complying with the sweetheart deal Lynch gifted them and even though she is now aware (of something she should have been well aware of for years) that senior HSBC officials continued to violate the laws to aid the wealthy and criminal evade taxes while HSBC’s lawyers were negotiating the sweetheart deal with Lynch about other mass felonies.  That research caused me to reexamine Lanny Breuer’s statements at the press conference celebrating the great Department of Justice (DOJ) “victory” in failing to hold any HSBC officer or employee accountable and for the anti-regulators acting to ensure that the bank was not held accountable for those crimes in any meaningful fashion.

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La Lista Loca – Part 1

By William K. Black
IAEN, UMKC, U. Minnesota

This is the first column in a five-part series about money laundering. When you think about Ecuador and international financial regulation the fact that leaps out at you as bizarre is Ecuador’s presence on the short list of nations that purportedly have “strategic [money laundering/funding of terrorism] deficiencies that have not made sufficient progress in addressing the deficiencies….”  Algeria, Ecuador, and Myanamar (Burma) are the only three nations on the Financial Action Task Force (FATF) (GAFI, in Spanish) “gray” list.  There are two nations on the FATF “black list” for providing funding to terrorists – North Korea and Iran.

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The Media Fall for Hillary Clinton’s Gensler Gambit

By William K. Black
Quito: April 16, 2015

Richard Cordray (former Attorney General of Ohio), the head of the Consumer Finance Protection Bureau (CFPG) and Gary Gensler (a former disaster under Bill Clinton and Goldman Sachs) have been the two great appointments by President Obama in the field of finance.  Obama’s other appointments at Treasury, the financial regulatory agencies, and the (non) prosecutors who are supposed to specialize in financial prosecutions have been nightmarishly bad.

Gensler was another Rubinite from Goldman Sachs who, under Bill Clinton, helped destroy Brooksley Born’s effort to protect the nation from the financial derivatives that blew up AIG and much of the financial world through passage of the infamous Commodity Futures Modernization Act of 2000.  As Obama’s appointee to chair the Commodity Futures Trade Commission (CFTC), however, Gensler justly earned praise for attempting to restore effective regulation.  Gensler was a grave disappointment to Obama’s administration, which thought it was sending a reliably pro-finance Rubinite to run a fairly obscure agency he had helped emasculate.  When Gensler showed a spine Obama refused to reappoint him and replaced Gensler with Timothy G. Massad, a Timothy Geithner minion noted for his pro-industry views.  Massad’s claim to fame was being one of the principal unprincipled architects of the failed homeowner relief programs.  As I pointed out in my first Bill Moyers interview, failing (for the right political reasons) proves you are a reliable “team player” and gets you promoted in Washington, D.C.  As Geithner found out, succeeding gets you your walking papers.  Jesse Eisinger, as his norm, wrote a great piece about Massad when Obama nominated him in November 2013.  An alternative view can be found in the American Banker, which gave prominently space to an op ed praising Massad’s nomination written by the head of a firm that trains CFTC staff.

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How the “Super Crunchers” Became the “Super Torturers” of Finance Data

By William K. Black

Some books have spectacularly bad timing, like Moral Markets: The Critical Role of Values in the Economy, which was published in 2008 as a celebration of market and their nourishment of high ethical values.  The book has many interesting chapters and I recommend it, but even lifelong market apologists now refer to the “corrupt culture of banking.”  Ian Ayres, a brilliant professor of law and economics at Yale, published his book Super Crunchers: Why Thinking-By-Numbers is the New Way To Be Smart to critical acclaim on August 28, 2007.  Ayres’ book is an ode to how much better decision-making becomes when it is made empirically on the basis of very large data rather than through human judgment.  There is a great deal of support in the literature for that thesis, and the result is one of the reasons why behavioral economics has become increasingly dominant.  The general idea is that humans bring significant, unexamined biases to our decisions and that systems that rigorously examine the data are superior because they avoid these biases.  That general idea continues to have considerable support and I have no personal problem with the general idea.

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