By William K. Black
(Cross posted at Benzinga.com)
The last ditch efforts to save Larry Summers’ prospective nomination to run the Fed and the comments about his withdrawing from consideration have prompted further discussions of financial regulation. The thrust of the comments is that Summers’ big regulatory idea was that capital requirements are the key and other forms of rules are worthless because they are easy to evade.
Posted in William K. Black
Bill Black’s appearance on Huff Post discussing Eric Holder and the likelihood of prosecutions of banksters. You can view the video here.
Comments Off on NEP’s Bill Black on HuffPost: I Don’t Think Holder Takes Holder Seriously
Posted in William K. Black
By Glenn Stehle
[Part 1] [Part 2] [Part 3] [Part 4]
The events of the 1590s had suddenly brought home to more thoughtful Castilians the harsh truth about their native land – its poverty in the midst of riches, its power that had shown itself impotent… For this was not only a time of crisis, but a time also of the awareness of crisis – of a bitter realization that things had gone wrong. It was under the influence of the arbitristas that early seventeenth-century Castile surrendered itself to an orgy of national introspection, desperately attempting to discover at what point reality had been exchanged for illusion….
The arbitristas proposed that Government expenditure should be slashed…
By Dan Kervick
It was deeply gratifying to learn today that Lawrence Summers has withdrawn his name from consideration for Chair of the Federal Reserve Board of Governors. Summers was a key architect of the late 20th century neoliberal economic system that failed catastrophically in 2007 and 2008, and he was implicated in some of the most notorious regulatory misjudgments of that era. There is no evidence that Summers has substantially altered the economic philosophy that animated him when he was helping to design and implement that system, so if he had acceded to the job of Fed Chief he would have been well-positioned to block stronger financial regulation and extend the unreconstructed regime of too-big-to-fail banks, loose rules, hegemonic financial sector growth and systemic financial instability that he helped create.
Posted in Dan Kervick
This post by Lynn Parramore makes the point that the next crash is coming and probably will be blamed on the Democrats. It’s a great point, but it needs to be pursued further.
What if we have another Republican sweep in 2014, like 2010, but worse? Then we’re going to have more policies that increase inequality. Even less regulation, causing even more domination of our politics by corporations and the financial sector.
We’ll have more military spending and more wars, along with more shredding and privatization of the social safety net. We’ll have even less environmental regulation, and even more global warming; more drill baby drill, and less and less of public education. At the State level, we’ll have more of the war on women, blacks, seniors, and hispanics; more corruption from corporations and the rich giving “gifts” to officeholders; more voter suppression, even more police brutality and denial of first amendment rights, more religion in our schools accompanied by more guns everywhere, and more Scalias, Alitos, Thomases, and Robertses subjugating everyone to corporations.
This is the second installment in a three-part series correcting the NYT propaganda that seeks to transmute the SEC’s refusal to hold any of Lehman’s looters accountable for their myriad frauds. For the purposes of this article I assume that the reporters have accurately represented the SEC officials’ positions. I discuss the journalists’ analytical flaws. In my next column I’ll address critical facts excluded by the SEC and the reporters. Those facts demonstrate that Lehman was an “accounting control fraud.” The NYT article ends with this morality play about the SEC’s anti-enforcement “team”:
“The S.E.C. team also concluded that Repo 105 would not have been ‘material’ to investors because the firm’s leverage ratio was trending downward regardless of Repo 105.
That conclusion set off a wave of dissent inside the S.E.C. Senior accountants and the head of the S.E.C. unit that oversaw corporate disclosures questioned the findings. Ms. Schapiro urged Mr. Canellos to keep digging.
But Mr. Canellos, a former federal prosecutor who is now the co-head of the S.E.C.’s enforcement unit, did not budge. Despite the political pressure, he told colleagues at one of the meetings, they could not bring a case if the evidence was lacking.
‘Our job is to seek justice,’ he said.”
Posted in William K. Black
Tagged accounting control fraud, George Canello, Lehman Brothers, Mary Schapiro, SEC
By Dan Kervick
The Federal Reserve is the central bank of what is still the world’s most important economy, and its Board of Governors is responsible for regulating and stabilizing the financial engine of US capitalism. But to much of the world, that engine now appears to be both poorly designed and overhyped. The global economy has yet to emerge from its most devastating financial failure since the Great Depression. The hub of that radial disaster was Wall Street and the United States, where a combination of botched corporate governance, derelict regulators, open corruption, unhinged greed and sheer, manic stupidity helped run much of the developed world’s economic system into the ground. The economic model that for a brief period during the last two decades of the 20th century struck many as a shiny modern marvel of economic engineering now exhibits the corroded aspect of a shoddy and dangerous lemon hawked by fly-by-night hustlers to a world of ingenuous chumps. Continue reading
The New York Times has one of those “inside” stories that unintentionally demonstrate the collapse of justice and financial reporting. This genre involves the media reporting gravely (and uncritically) the administration’s claims that its failure to prosecute any elite for the largest and most destructive financial frauds in history actually demonstrates the exceptional ethical rectitude of the non-prosecutors and non-enforcers. Journalists, unlike alchemists, can transmute dross into gold. In the NYT’s account a pathetic failure of competence, integrity, and courage at the SEC is reimagined as a fantastic triumph of vigor and ethics on the part of the SEC enforcement attorney who refused to seek to hold Lehman’s senior officers accountable for their violations but otherwise became the scourge of elite frauds. In the end, he is promoted for his dedication to “justice” and is now the anti-enforcement leader of the SEC’s enforcement group.
By Glenn Stehle
In my last post I gave a brief history of the long tradition of religious austerianism in Western civilization, explaining that all too often what austerianism amounted to was austerity for the lower orders of society, and luxury and opulence for the upper orders. But is there a parallel tradition of secular austeriansim? In this post I will argue that there is.
Video from the Modern Money and Public Purpose series. This is Lecture 8 on economic rights and features Pavlina Tcherneva and Philip T. Harvey
Click images to view details
