NEP’s Bill Black on The Real News Network discussing his recent testimony in Ireland for a banking inquiry and the challenges the country faces in acknowledging its financial crisis. Video is below. For the transcript, click here.
Greetings from Quito, where I will be spending four months teaching at IAEN about effective regulation and building ties with UMKC.
The latest twists on the latest HSBC tax evasion and tax avoidance scandal is that it has come out that Stuart Gulliver, HSBC’s head, put his money where his mouth wasn’t. He personally used double tax havens – Panama plus Switzerland – to hide his income and wealth from view because his pay was so outrageous that even other HSBC executives would have been outraged by it. The New York Times’ account of this tale demonstrates that Gulliver needs to fire Gulliver as his spokesperson.
I’m in Kilkenny, Ireland where Kilkenomics V begins tonight. Kilkenomics is the economics festival in which economists and professional comedians combine to produce a blunt presentation of issues involving economics that have enormous effects on our lives. One of the traditions of Kilkenomics is that the travesty of some act by the Troika (the European Central Bank (ECB), the International Monetary Fund (IMF), and the European Commission (EC)) is revealed just in time to kick off the festival. This year, the Troika produced a double-barreled blast. First, the ECB’s November 2010 letter extorting the Irish government to inflict austerity and produce a second Great Recession in Ireland was leaked.
This is the second part of my discussion of N. Gregory Mankiw’s column asserting that governmental competition is desirable for the same reason that private competition is. Mankiw was Chairman of President Bush’s Council of Economic Advisors from 2003-2005. He was one of the principal architects of the perverse incentive structures that proved so criminogenic and drove the ongoing financial crisis. He gave no useful warnings of the necessity for containing the developing crisis – even after the FBI’s September 2004 warning that mortgage fraud was become “epidemic” and would cause a financial “crisis” if it were not contained. He is now Mitt Romney’s principal economic advisor. His column favors the “competition” argument that led him to support crippling financial regulation even as private sector competition led to endemic fraud. Mankiw is a moral failure as well as a failed economist. His infamous response to Akerlof and Romer’s 1993 paper (“Looting: the Economic Underworld of Bankruptcy for Profit”) was that it would be “irrational” for CEOs not to loot “their” corporations. He ignored all of the prescient warnings we made about how accounting control fraud drove our crises and he continues to ignore those warnings and the reality of our recurrent, intensifying financial crises. He wants the U.S. to move even more rapidly downward in the “competition in regulatory laxity” that is driving those crises.