Tag Archives: crony capitalism

The Vampire Squid has feelings and Obama is no longer her BFF

By William K. Black

Matt Taibbi famously dubbed Goldman “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” Taibbi knew his metaphor worked a deep injustice on Vampyroteuthis infernalis, a small animal that feeds on carrion and excrement (I will let the reader explore the metaphorical possibilities).    Goldman Sachs’ leaders were always secretly flattered by Taibbi’s metaphor.  They like being thought of as hyper-aggressive and intimidating.  Saying that an investment banker’s goal is to make money is to state the obvious and causes no embarrassment. Continue reading

Washington Post and the AIG Bailout

The Washington Post (9/10) published an article on the the “success” of the AIG bailout. NEP’s William Black explains the issue of perverse incentives created by the successful bailout.


Charles Murray: Panderer to Fraudulent Plutocrats

By William K. Black

Murray’s Divine Rights of Plutocrats

Charles Murray believes that the wealthiest person should be made President of the United States.  “Who better to be president of the greatest of all capitalist nations than a man who got rich by being a brilliant capitalist?”

If the standard is wealth makes right, then the wealthier the person, the more appropriate that he should be made President.  There is no need for elections or fixed terms of office under this standard of political governance.  Whoever tops the Forbes list becomes President – that will create the appropriate competitive incentives.  Wealth being the full measure of a man there is no need for that the wealthiest person to be a U.S. citizen.  Under the Murray governance standard Mitt Romney’s problem is that he is not wealthy enough to be our ruler.  Carlos Slim can run all of North America south of Canada.

Continue reading

Reinventing Crony Capitalism: the Context of Geithner’s Obscene Rant against Barofsky

By William K. Black

Neil Barofsky, the former Special Inspector General for the Troubled Asset Relief Program (TARP) (SIGTARP), was one of the officials that made one proud of America.  Naturally, Treasury Secretary Timothy Geithner detested him.  Barofsky discusses Geithner’s antipathy for him in a newly published book: “Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street.”  The juicy parts that have been discussed in the media involve Geithner’s epic “f” word rant against Barofsky in fall 2009 in response to Barofsky’s recommendations for greater transparency about TARP. Continue reading

Corruption and Crony Capitalism Kill

By William K. Black

The recent Turkish earthquake, as with its modern predecessors, has shown that the witches’ brew that crony capitalism produces is a leading cause of death and severe injury. Control fraud, the use of a seemingly legitimate entity by those that control it to defraud, exists in all three major sectors – private, public, and non-profit. Crony capitalism typically involves the interaction of public and private sector control fraud. I have written primarily about accounting control frauds, which are property crimes of mass destruction. Anti-customer, anti-public, and anti-employee control frauds can all cause mass casualties. Earthquakes and the tsunamis they produce can kill hundreds of thousands of people. Government programs have been exceptionally successful in reducing the loss of life from natural disasters. Early warnings, evacuation routes, barriers, and training can greatly reduce the losses caused by tsunamis. Seismic building codes, if properly enforced, can reduce direct deaths from earthquakes to exceptionally low levels even in severe seismic events. The saying is: earthquakes don’t kill people; collapsing structures do.