Category Archives: William K. Black

Brown-Vitter Will Not and Cannot Work but it is Criminogenic

Posted on May 10, 2013 by Devin Smith | 12 Comments

Introduction

Senators Sherrod Brown (D-OH) and David Vitter (R-LA) have introduced a bill entitled “Terminating Bailouts for Taxpayer Fairness Act of 2013.” It is a miracle of modern staffing that Vitter, who loves polluters as much as his prostitutes, was able to pull himself away from demanding that President Obama’s nominee to run the EPA answer over 600 questions and join Brown in proposing the bill. Under Obama, bipartisan bills have a dismal fate because the Democrats negotiate away key elements necessary to create a good bill and add provisions that make parts of the bill harmful – just to pick up a few token co-sponsors – and then the Republicans kill good parts of the bill anyway and try to enact the bad parts. Continue reading →

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Posted in William K. Black

Tagged accounting control fraud, Brown-Vitter, criminogenic, SDI, too big to fail

William Black at CFIA Conference

Posted on May 7, 2013 by Devin Smith | 1 Comment

South-South News interviews NEP’s William Black at CFIA Conference. He provides his extended dispair with Eurozone policies.

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Posted in William K. Black

Tagged Eurozone, south-south

Niall Ferguson’s Latest Gay Bashing is the Least of His Problems

Posted on May 6, 2013 by Devin Smith | 32 Comments

By William K. Black
(Cross posted at Benzina.com)

It is always a disaster when devotees of theoclassical economists speak their minds in front of what they think are friendly audiences. Mitt Romney’s attack on 47% of Americans as leeches that it was his job not to represent were he elected President was the final nail in his self-constructed electoral coffin. We now have Niall Ferguson, a history professor at Harvard and Hoover fellow whose theoclassical views have proven so influential with Prime Minister Cameron’s government’s adoption of austerity policies that have killed the UK recovery. Continue reading →

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Posted in William K. Black

Tagged Niall Ferguson

The Broader Costs of Lethal Lemons: “We Have so Many Ranas”

Posted on May 1, 2013 by Devin Smith | 3 Comments

By William K. Black

This is the third article in a series on some of the additional lessons we should learn from the mass murder of Bangladeshi garment workers by anti-employee control frauds. I discuss new allegations about the senior executives involved in producing the terrible loss of life and maiming of so many workers because they are relevant to the broader harms that control fraud can cause that I discussed in the first and second articles in this series. Continue reading →

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Posted in William K. Black

Tagged Bangladesh, Control Fraud, criminogenic environment, crony capitalism

The Lethal Lemons on the Road to Bangladesh

Posted on April 30, 2013 by Devin Smith | 5 Comments

By William K. Black

I wrote yesterday about the “control frauds” (in which the person controlling a seemingly legitimate entity uses it as a “weapon” to defraud) that target purchasers of bad quality goods (“lemons”) and employees. The example I used to explain these concepts was the collapse of the building housing garment factories in Bangladesh. Continue reading →

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Posted in William K. Black

Tagged austerity, Bangledesh, criminogenic, neoclassical economics, troika, wages

What if George Akerlof had written about Lethal “Lemons?”

Posted on April 29, 2013 by Devin Smith | 7 Comments

By William K. Black
(Cross Posted at Benzinga.com)

If you have studied economics at the university level in the last 35 years it is likely you were introduced to the concept of “asymmetrical information” and George Akerlof’s famous 1970 article on markets for “lemons” (American slang for an automobile of terrible quality). The Nobel committee that awards the prize in economics singled out that article for special praise in deciding to make him a Nobel Laureate in 2001. The article discusses the implications of asymmetrical information in a number of contexts, but at least two of the contexts involved what criminologists call “control fraud” and a third involves the risk of fraud by borrowers. Most of the examples Akerlof discussed involved fraud. The frauds he analyzes concern deceit about the quality of goods being sold or the borrowers’ ability or willingness to repay a loan. Continue reading →

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Tagged Akerlof, asymmetrical information, Bangledesh, Control Fraud

Robert Reich has a Good Heart but an Inadequate Grasp of Economics

Posted on April 17, 2013 by Devin Smith | 6 Comments

By William K. Black
(Cross posted from Benzinga.com)

Robert Reich has written a column entitled “Why this is the Worst Recovery on Record.” It’s an odd title because the article makes no reference to this being “the worst recovery on record.” Unlike a newspaper column, we know that Reich chose the title, because it comes from his own blog.

The current U.S. recovery is not “the worst recovery on record” – it is not faintly close to the worst recovery on record. Rhetorical claims like this are dependent on highly selective choices of what years one compares. In 1937 and 1938, President Roosevelt listened to the incoherent claims of his economic advisors that stimulus was bankrupting the Nation and that it had spurred a sufficiently robust recovery that the private sector could now be relied upon to lead the Nation promptly back to prosperity. The advisors recommended that FDR act urgently to impose austerity. FDR cut spending and increased taxes and the Federal Reserve tightened the monetary supply. The result was that a robust recovery from the Great Depression that reduced unemployment by two-thirds during FDR’s first term from a high of 25%. Real GDP growth averaged 12% during that term. Continue reading →

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Posted in William K. Black

Tagged austerity, MMT, Modern Monetary Theory, reich

“Nobody in Europe” sees a “contradiction” between austerity and growth

Posted on April 10, 2013 by Devin Smith | 4 Comments

By William K. Black

The two most revealing sentences about the gratuitous Eurozone disaster – the creation of the deepening über-Depression – was reported today. The context (rich in irony as I will explain) is that U.S. Treasury Secretary Lew spent his Spring Break in Europe meeting with his counterparts. The Wall Street Journal’s article’s title explains Lew’s mission and its failure: “U.S. Anti-Austerity Push Gets Cool Reception in Europe.” Here are the sentences that capture so well why Germany’s destructive economic policies caused the über-Depression: ““Nobody in Europe sees this contradiction between fiscal policy consolidation and growth,” said Mr. Schäuble. “We have a growth-friendly process of consolidation.” Continue reading →

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Posted in William K. Black

Tagged austerity, contraction, debt reduction, depression, lew, obama, Rehn, Schauble, über-Depression

The New York Times Thinks Bleeding Cyprus is “Strong Medicine”

Posted on April 8, 2013 by Devin Smith | 3 Comments

By William K. Black
(Cross posted at Benzinga.com)

I’m announcing the New York Times award for incompetence in macroeconomic reporting (IMR, pronounced like “screamer”). I suggest that the paper offer as a prize to awardees a two hour lunch with Krugman in which he provides a remedial economics lecture. My premise is that it is impossible to be a NYT reporter and fail to know that the paper has a Nobel Laureate in economics who writes a regular column for the paper and frequently discusses making economic downturns worse by inflicting self-destructive austerity. Even the most casual reader of Paul Krugman’s columns would know that opposition to austerity has long been the dominant view among economists and that over the last five years events here and in Europe have again confirmed that view. Continue reading →