Category Archives: William K. Black

IRS Private Debt-Collection Program is ‘Indefensible’

Using private debt-collection firms to collect debt from low-income Americans is not only morally reprehensible, but it’s also terrible business, says NEP’s Bill Black in his latest appearance on The Real News Network. You can view here with transcript.

Warren Buffett Wins $1 Million Bet That Hedge Funds Are a Rip-Off

Billionaire investor Warren Buffett bet that hedge funds were a bad investment. Ten years later, Buffett’s wager proved that hedge funds earn only one third of what a stock index investment does. NEP’s Bill Black explains the numbers on The Real News Network. You can view here with a transcript.

Corporations Hoard Their Trump Tax Windfall

After President Trump signed the GOP tax plan into law, some of the bill’s corporate beneficiaries have offered workers minor bonuses. But NEP’s Bill Black says they’re keeping most of the money for themselves — and starting a new global race to the bottom for corporate taxes. You can view here with a transcript.

Trump, GOP Pull Off Their Tax Heist

NEP’s Bill Black appears on The Real News discussing Congressional Republicans have approved their tax bill, a massive upward transfer of wealth that fulfills a decades-long right-wing goal of permanent tax cuts for corporations. You can view here with a transcript.

John Cochrane Loves the Rule of Law (Some Exceptions Apply)

By William K. Black
December 22, 2017     Bloomington, MN

As Brad DeLong aptly puts it, John Cochrane was once an economist.  Cochrane is now a right wing ideologue surrounded by similar ideologues at Hoover.  He is pushing his new chapter in a Hoover book entitled American Exceptionalism in a New Era.  His chapter’s title is “Law and the Regulatory State.”  I will be writing several articles responding to Cochrane’s chapter, but this first piece concentrates on one key belief that Cochrane said he held that we all agree with.  My point is that Cochrane is not living up to his claimed beliefs, which he summarized in his introduction.

To be a conservative—or, as in my case, an empirical, Pax-Americana, rule-of-law, constitutionalist, conservative libertarian—is pretty much by definition to believe that America is “exceptional”—and that it is perpetually in danger of losing that precious characteristic. Exceptionalism is not natural or inborn but must be understood, cherished, maintained, and renewed each generation—and its garden is always perilously unattended.

This first column shows that under Cochrane’s own reasoning the “danger” to the “precious” “rule of law” has never been greater in the last 50 years.  Instead of “cherish[ing]” and “maintain[ing]” the “garden,” Cochrane has chosen to leave it “perilously unattended” because of his fanatic partisanship.  Trump is ripping up and sowing salt in Cochrane’s “precious” “garden” and Cochrane stirs himself primarily to attack Trump’s critics.  Brad’s description requires amendment.  Cochrane was once an economist and once a self-described “rule-of-law constitutionalist, conservative libertarian.”  Now, he is an unexceptionable apologist for Trump’s authoritarianism, venality, and corruption.  Whatever remains of Cochrane is what you get when you burn a substance and retain only its most noxious waste gases. Continue reading

Modern Macro Got the 2008 Crisis Painfully Wrong

By William K. Black

December 19, 2017     Bloomington, MN

Lawrence J. Christiano was the lead author of the article announcing the Dilettante doctrine that I discussed in the first column in this series.  His ‘dilettante article’ claimed that modern macro got the last crisis so wrong because it ignored the ‘shadow’ financial sector.  I have found a 2008 article by him and two Minneapolis Fed co-authors that illustrates modern macro’s blindness to the shadow financial sector.  The article is entitled “Facts and Myths about the Financial Crisis of 2008” and the first footnote says that they wrote the article based on information available on October 25, 2008.  The purpose of the article was to demand that proponents of fiscal and monetary stimulus prove a specific “market failure” justifying stimulus.  Christiano and his co-authors agree that the Nation is in a “financial crisis” and that it could lead to a serious recession, but see no reason for the government to act.

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DSGE Dilettantes v. ADM God Devotees

By William K. Black

December 18, 2017     Bloomington, MN

The truly exceptional thing about ‘modern macroeconomics’ devotees is not that they are so consistently and horrifically wrong or that they persist in their errors – but their exceptional combination of arrogance and disdain for those who have dramatically better records and broader and more relevant expertise.  Kartik Athreya, the Richmond Fed’s Research Director, led the modern macro parade on June 17, 2010 with his blog (which he later withdrew in embarrassment) when he announced the Athreya Axiom of Absolute Arrogance.

So far, I’ve claimed something a bit obnoxious-sounding: that writers who have not taken a year of PhD coursework in a decent economics department (and passed their PhD qualifying exams), cannot meaningfully advance the discussion on economic policy. Taken literally, I am almost certainly wrong. Some of them have great ideas, for sure. But this is irrelevant. The real issue is that there is extremely low likelihood that the speculations of the untrained, on a topic almost pathologically riddled by dynamic considerations and feedback effects, will offer anything new. Moreover, there is a substantial likelihood that it will instead offer something incoherent or misleading.

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Children’s Health Insurance Program to Expire Under GOP Tax Bill

Nine million children will go without health insurance under the new GOP tax bill, says NEP’s Bill Black in his latest appearance on The Real News Network. You can view here with a transcript.

Trump’s Coup on Consumer Protection

The Consumer Financial Protection Bureau is in limbo as two people claim to be its new acting director. The outgoing head tapped Leandra English as his successor, but Donald Trump then appointed Mick Mulvaney, who has called the CFPB a “sick, sad” joke. NEP’s Bill Black appears on The Real News Network discussing the attack on CFPB. You can view here with a transcript.

Trump’s CFPB Pick Will Likely Spell Bad News for Consumers

The good news is that President Trump has been slow to nominate heads for regulatory agencies, says NEP’s Bill Black in his appearance on The Real News Network. The bad news is that Trump will pick someone eventually to replace Richard Cordray. You can view here with transcript.