Monthly Archives: January 2013

Goldman Sachs: Doing “God’s Work” by inflicting the Wages of Sin Globally

Posted on January 26, 2013 by Devin Smith | 8 comments

The central point that I want to stress as a white-collar criminologist and effective financial regulator is that Goldman Sachs is not a singular “rotten apple” in a healthy bushel of banks. Goldman Sachs is the norm for systemically dangerous institutions (SDIs) (the so-called “too big to fail” banks). Impunity from the laws, crony capitalism that degrades democracy, and massive national subsidies produce exceptionally criminogenic environments. Those environments are so perverse that they produce epidemics of “control fraud.” Control fraud occurs when the persons who control a seemingly legitimate entity use it as a “weapon” to defraud. In finance, accounting is the “weapon of choice.” It is important to remember, however, that other forms of control fraud maim and kill thousands.

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8 Comments

Posted in William K. Black

Tagged accounting control fraud, banskters, criminogenic environment, crony capitalism, goldman sachs

The OCC’s Tragic Response to the Frontline expose: The Untouchables

Posted on January 26, 2013 by Devin Smith | 7 comments

By William K. Black

On January 25, 2013, I made this comment on Frontline’s web site discussing its documentary: “The Untouchables” and an accompanying (January 22, 2013) article by Jason Breslow entitled: Were Bankers Jailed In Past Financial Crises?

I addressed two statements in that article. The first statement reads:

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7 Comments

Posted in William K. Black

Tagged accounting control fraud, criminogenic environment, The Untouchables

Why the World Economic Forum and Goldman Sachs are Capitalism’s Worst Enemies

Posted on January 26, 2013 by Devin Smith | 9 comments

By William K. Black

It is fitting that Goldman Sachs is the recipient of this year’s “Public Eye” designation, but it is even more fitting that it is being announced during the World Economic Forum (WEF) at Davos. Goldman Sachs exemplifies the travesty that WEF has created. It is not the worst of the worst. It is representative of the financial world of systemically dangerous institutions (SDIs) that are spreading crony capitalism through the West. The SDIs are the so-called “too big to fail (or prosecute)” banks.

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9 Comments

Posted in William K. Black

Tagged accounting control fraud, banksters, criminogenic environment, crony capitalism, Davos, goldman sachs, WEF, World Economic Forum

Downsides to the Platinum Coin; or Just Defense of the Status Quo?

Posted on January 25, 2013 by Devin Smith | 34 comments

By Joe Firestone

As part of a wonderful discussion thread on the legal basis for using Platinum Coin Seigniorage (PCS), following a post by beowulf (Carlos Mucha), the first to propose the Trillion Dollar Coin (TDC). Michael Sankowski, one of the founders of the Monetary Realism approach to economics offered a very long reply directed at High Value Platinum Coin Seignorage (HVPCS), and the TDC itself. Mike’s reply is a good example of the many misgivings people have about using PCS with face values in the trillions. Since Mike is a supporter, rather than opponent of PCS and believes that PCS is legal, I thought it would be worthwhile to deconstruct his long comment and show that his downsides are pretty speculative and don’t provide good grounds for supporting incrementalism is using PCS.

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34 Comments

Posted in Joe Firestone

Tagged $60 T coin, austerity, Fiscal Policy, HVPCS, incrementalism, Mike Sankowski, MMT, Modern Monetary Theory, Monetary Realism, platinum coin seigniorage, Trillion Dollar Coin

Beowulf and Diehl Embrace Trillion Dollar Coin Incrementalism!

Posted on January 25, 2013 by Devin Smith | 30 comments

By Joe Firestone

A wonderful discussion thread has been going on at Monetary Realism (MR) after a very good new post by beowulf (Carlos Mucha), who first brought forward the proposal for the Executive Branch to use the authority provided in the 1996 Platinum Coin Seigniorage (PCS) legislation to fill the public purse, on whether the Fed had a legal basis for turning down PCS in the form of the Trillion Dollar Coin (TDC). I’ll leave the legal discussion for another blog post, since I agree with beo on these, and also need to review some legal arguments against the TDC by some George Washington University Professors. Here I want to write about some of the MR discussion relating to PCS options.

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30 Comments

Posted in Joe Firestone

Tagged $60 T coin, austerity, beowulf, Carlos Mucha, Fiscal Policy, HVCS, HVPCS, incrementalism, MMT, Modern Monetary Theory, Philip Diehl, platinum coin seigniorage, Trillion Dollar Coin

From Central Bank Independence to Democratic Public Finance

Posted on January 25, 2013 by Dan Kervick | 121 comments

By Dan Kervick

Effective governance in any country requires a well-designed system of public finance through which that government can achieve its various purposes and pursue the public interest. If the system of public finance is poorly structured, the public interest will be poorly served. So, badly designed systems of public finance must be altered or abolished. [1]

We have reached that point in the United States. The present system of public finance in the US is inefficient and antiquated: its fusty architecture hampers the capacity of the national government to respond to economic fluctuations and crises in a timely and effective manner; its byzantine operational complexity thwarts democratic governance and generates pervasive public confusion about the full range of public policy options; and its over-reliance on government bonds means that wasteful and unearned profits flow to some of the most affluent members of US society, as they are paid service fees for intermediating what ought to be routine operations of the government.

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121 Comments

Posted in Dan Kervick

Tagged Fiscal Policy, MMT, Modern Monetary Theory, Monetary policy

It Was Not a Free Lunch: The True Cost of the AIG Bailout

Posted on January 24, 2013 by Devin Smith | 12 comments

James Tilson and Robert E. Prasch

“If it’s too good to be true, it probably is.” This old adage came to mind on December 11, 2012 when the U.S. Treasury made the announcement, reiterated unthinkingly by the press, that the AIG bailout was coming to an end with American taxpayers making a tidy profit on the deal. In an effort to capitalize on the news, AIG has spent millions of dollars on a primetime ad campaign thanking America for the bailout, highlighting its success: “We’ve repaid every dollar America lent us. Everything, plus a profit of more than 22 billion.” Unfortunately, this cleverly designed public relations maneuver deceives the taxpayer by distorting the perception of what has been a contentious use of government funds.

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12 Comments

Posted in robert e. prasch

Tagged AIG bailout, Financial crisis

Good Luck Stopping Austerity With Incremental Platinum Coin Seigniorage!

Posted on January 21, 2013 by Devin Smith | 144 comments

By Joe Firestone

Some have responded to the recent boomlet for using Platinum Coin Seigniorage (PCS) as a solution to the debt ceiling problem, by reacting to the ridicule visited upon PCS advocates by know-nothings like Heidi Moore of the Guardian and Matt O’Brien of the Atlantic, by proposing “smaller ball” PCS than the clearly inadequate Trillion Dollar Coin (TDC) itself. This post will focus on J. D. Alt’s interesting post which makes five points about the TDC debate as it was addressed on a recent Chris Hayes show.

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144 Comments

Posted in Joe Firestone

Tagged $60 T coin, austerity, Fiscal Policy, HVPCS, incrementalism, MMT, Modern Monetary Theory, platinum coin seigniorage, Trillion Dollar Coin

Our Leaders Are Mistaking the Modern Money System for a Fistful of Dollars – Part 2

Posted on January 21, 2013 by Devin Smith | 26 comments

By Michael Hoexter

An Adjustable Liquidity Source and Liquidity Sink

While it may seem obvious and a tautology to treat money as a “liquidity source”, sometimes, especially in an area of life where there are many unexamined assumptions, it makes sense to rehearse the obvious. “High-powered” state-issued money is treated within accounting as an individual’s or a businesses “most liquid” asset but anything that functions as money confers “liquidity” on any individual who possesses that instrument or thing. Liquidity means that that object or instrument can be readily traded for wished-for goods and services. This liquidity can extend to “money-objects” other than state issued currency but the latter is in most contexts the most liquid money technology that we have.

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26 Comments

Posted in Michael Hoexter

Tagged fiat currency, functional fiinance, liquidity, MMT, Modern Monetary Theory

Our Leaders Are Mistaking the Modern Money System for a Fistful of Dollars – Part 1

Posted on January 20, 2013 by Devin Smith | 36 comments

By Michael Hoexter

When looking down at earth from space, you would be able to see the shapes of continents and even, if you are aware of geological history, the way, for instance that Africa and South America fit together as they were once part of the same mega-continent. When living on the surface of the earth, as we most often experience it, one gets an entirely different perspective in which the individual contours of the land, vegetation, buildings, and coastlines look much larger and have different proportions relative to the viewer. Both perspectives are real and equally valid but in each, different information is revealed or becomes salient to the viewer/participant.

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