Real Fiscal Responsibility I: Preliminaries

By Joe Firestone

This is the first in a lengthy blog series that will evaluate the US Government’s record on Real Fiscal Responsibility, Administration period by Administration period, since the Administration of Jimmy Carter in 1977. In evaluating the US Government’s record, it’s important to state clearly that I will be evaluating more than just each Administration and its activities.

The record of fiscal responsibility is not the product of the Executive Branch alone. It is the outcome of the interaction of the Executive with the two Houses of Congress and the Federal Reserve System, even on occasion the interaction of one or more of these with the Supreme Court. All bear joint, though not equal responsibility for the record of Government fiscal responsibility or fiscal irresponsibility, as the case may be, during each Administration period.

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The Wall Street Journal Claims that only the “Left” is Willing to Prosecute Banksters

By William K. Black

This is my third installment in my series of columns discussing the WSJ’s rant against even feeble actions by Attorney General Holder to hold the banks and (a pittance of banksters) even slightly accountable for leading the three epidemics of mortgage fraud that caused the financial crisis and the Great Recession.  The WSJ is enraged not at how feeble Holder’s efforts have been, but that Holder dared to take any action against the elite frauds.  The WSJ explicitly frames the question of accountability for the banks and banksters as a left v. right divide.  Only the “populist left” is in favor of not granting the banks and banksters immunity from the criminal and civil laws for leading the most destructive fraud epidemics in history.

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Keynotes for 12th International Post Keynesian Conference

There is still time to register for our upcoming Post Keynesian conference at the University of Missouri-Kansas City. Unfortunately, the program is full so we cannot accept paper proposals. However, there is still space for participants.

The registration is cheap, and includes all dinners and special events, some of which are listed below. For more information regarding registration, contact Avi Baranes: [email protected] 

THE 12TH INTERNATIONAL POST KEYNESIAN CONFERENCE
Kansas City, Missouri
September 25–28, 2014


Cosponsored by the University of Missouri–Kansas City, Journal of Post Keynesian Economics, and Levy Economics Institute of Bard College, with support from the Ford Foundation Continue reading

Hollande Channels Pétain and Chooses Economic and Political Suicide

By William K. Black

In a prior column I described how the finance ministers of Italy and Serbia committed financial malpractice and betrayed their nations and their heads of state by insisting on bleeding the economy through austerity to make it healthy.  “Two EU Finance Ministers Throw their Bosses and Nations Under the Bus.”

In France, however, Economy Minister Arnaud Montebourg risked his political life to try to prevent President Hollande from throwing France and the Socialist Party under the austerity bus.  Hollande and Prime Minister Valls proved that no good deed goes unpunished by forcing Montebourg out of his position and throwing the Nation and their Party under the bus.  Montebourg proved the truth of the proverb that warns that it is dangerous to be correct when those in power are desperately wrong.

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The WSJ Rages that Bank of America Was Sued for “Only” Committing a $9 Billion Fraud

By William K. Black

The Wall Street Journal is deeply upset that almost none of the banks and none of the banksters that became wealthy by leading the three epidemics of mortgage fraud that drove the financial crisis are being subjected even to prosecution-lite cases.  The WSJ wants us all to know that “almost none” and “prosecution-lite” are both excessive.  The WSJ rant demands that we bestow the thanks of a grateful nation to the banks and banksters that committed the frauds.  This financial crisis is the first Virgin Crisis – conceived without sin in the C-Suites.  This second column in my series on the WSJ rant responds to the WSJ’s claim that mortgage frauds that are “only” $9 billion in magnitude do not warrant even civil sanctions.

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The Wall Street Journal’s Choleric Rant about Cholera and Bank Fraud Epidemics

By William K. Black

I wrote this column in Bogota, Colombia where I was presenting five talks at the Universidad Central’s economics conference, so I was struck by the title of a choleric rant by the Wall Street Journal entitled “Banking in a Time of Cholera.”

The WSJ’s title is a play on words on the title of a novel, “Love in the Time of Cholera,” by Colombia’s greatest writer, Gabriel García Márquez (“Gabo”).  The novel is set in a city that appears to be based on Cartagena, the city famous for being looted repeatedly by pirates.  In this first of several columns responding to the WSJ rant I discuss its failed literary allusions and tie these failures to some of the WSJ’s analytical and factual errors that render their rant risible.

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Bill Black Helps Defendants win “Unprecedented Acquittal”

By Stephanie Kelton

I knew my colleague had been in Sacramento this summer, and I knew he was there to testify in a federal case involving mortgage fraud.  But I didn’t know the details of the case.  I didn’t know the defendants had been the homebuyers or that they were on trial for mortgage fraud. This morning, I learned these details and more in this story from the Sacramento Bee.  The whole thing is astonishing, and I doubt anyone but Bill could have helped to persuade a jury that, in spite of all the evidence, the real fraudsters were the elite bankers who looked the other way, even as borrowers falsified loan applications.

The jurors heard shocking testimony from ‘control fraud’ expert William Black that regular people who got loans they were unable to pay back did not (defraud) the banks. The elite bankers commit the fraud while prosecutors look the other way and prosecute the wrong people.”

Go Bill!

Europe’s Lousy Bank Loans Expose the “Recovery” Myth

By William K. Black

One of the great lies of the financial industry is that it is the engine of Main Street’s growth.  Giving the finance industry an enormous share of total business profits was supposed to super charge Main Street’s growth.  It has never delivered on this promise.  The truth is the opposite.  The efficiency condition for a middleman like finance is that its size and profits should be minimized.  Finance’s fraud epidemics blew up the world economy and devastated Main Street.  Finance is a parasite that saps Main Street.  The latest example of this comes in a New York Times article about European bank’s bad loans.

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Another Reason to Retire Sam Brownback: The Senate Subprime Car Loan Sleaze

By William K. Black

When Sam Brownback was a Senator he carried water for the sleaziest of auto lenders – the subprime lenders that specialize in making “liar’s” loans.  His successful mission was to carve out an exemption from the Dodd-Frank bill’s protection for borrowers.  We had just seen the CEOs controlling similar home lending specialists lead the three mortgage fraud epidemics that blew up the global financial system.  The bill’s drafters and President Obama strongly opposed the Brownback carve out, but Brownback’s brigade of auto lobbyists made road kill of their opponents.

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Italian’s Apology for German Austerity Diktats Lasts 24 Hours

By William K. Black

On August 13, 2014, the  International New York Times printed an op ed by Beppe Severgnini attacking Matteo Renzi, Italy’s Prime Minister.  Severgnini offered readers this classic question and answer.

“So why is Italy’s economy, the eurozone’s third largest, the only major one in Europe currently flatlining? Last week Istat, the national statistics bureau, reported that it had contracted in two successive quarters for the third time since 2007, plunging us into a triple-dip recession.

How did we pull that one off? Plenty of plausible explanations blame the feckless government of Silvio Berlusconi, or the acquiescent administrations of Mario Monti and Enrico Letta that followed, the latter two having imposed the European Union’s — or rather, Berlin’s — belt-tightening on a country needing to boost consumption and investment.

But blaming Brussels, or anyone else abroad, is wrong. The rest of Europe followed the German diktat, and yet Italy is the only one suffering.”

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