Monthly Archives: April 2014

Heard (but not understood) On the Street: The WSJ and Deflation

Posted on April 6, 2014 by William Black | 1 comment

A brief update is in order after my three part series on how the troika (the ECB, EU, and the IMF) was acting contrary to its stated policies on deflation, Mario Draghi’s (the head of the ECB) confession that he favored deflation in the eurozone periphery because he wanted these nations to have lower prices and wages so that they could increase exports, and the disgraceful reporting of the subject in the New York Times and the Wall Street Journal. The WSJ’s “Heard on the Street” feature is out with an April 3, 20014 story on deflation that epitomizes each of these defects. The title of the article foreshadows the analytical black hole that follows: “Inflation, Euro Test Draghi’s Resolve at ECB.”

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Posted in William K. Black

Tagged austerity, deflatioin, Draghi, ECB, eu, IMF, troika-trolls

Sorry, Kyoto Signatories, Emissions Traders, Carbon Taxers, Homo Oeconomicus Won’t Save the Climate – Part 1

Posted on April 6, 2014 by Michael Hoexter | 25 comments

By Michael Hoexter

[Part I] [Part II] [Part III] [Part IV]

1. Introduction: Context of Existing Climate Policy

Together, as a world economic system, we are currently on an emissions trajectory to achieve anywhere from 4 to 6 degrees Celsius (7 to 11 degrees Fahrenheit) warming by 2100. Global average temperature increases within this range mean catastrophe for humankind, with sea level rises of at least 3 meters (10 feet) and a vastly more hostile environment for human life and co-evolved species. Humanity may be, with these emissions levels either bringing about its own extinction as the effects of the resultant warming set in or, at least, so degrading the conditions of life that very few humans will be able to survive. We will have to reduce the currently escalating rate of increase of emissions to zero and then over a period of two to three decades reduce net greenhouse gas emissions to zero in order to have a chance of stabilizing the climate and not significantly endanger the welfare of future generations.

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25 Comments

Posted in Michael Hoexter

Tagged climate change, climate policy, global warming

The Kamikaze Economics and Politics of Forcing Austerity on the Ukraine

Posted on April 5, 2014 by Devin Smith | 6 comments

By William K. Black

We all understand why Russia is waging economic war on the Ukraine, but why is Obama doing so? The New York Time’ web site has posted a remarkable Reuters story (dated April 5, 2014) entitled “Ukraine PM Says Will Stick to Austerity Despite Moscow Pressure.”

“The Kiev government will stick to unpopular austerity measures ‘as the price of independence’ as Russia steps up pressure on Ukraine to destabilise it, including by raising the price of gas, Prime Minister Arseny Yatseniuk told Reuters.”

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6 Comments

Posted in William K. Black

Tagged austerity, economic war, Ukraine

Is the MSM Blackout on Inequality, Plutocracy, and Oligarchy Ending?

Posted on April 4, 2014 by Joe Firestone | 14 comments

By Joe Firestone

All of a sudden MSNBC cable commentators are talking about plutocracy and oligarchy. Surprisingly, the first occurrence of this I’m aware of was Chuck Todd, reacting on his Daily Rundown show to the spectacle of Republican candidates traveling to Vegas to seek funding from Sheldon Adelson and his group of hugely wealthy Jewish Republican donors. Todd began to explore the implications of that event. He seemed exercised, and more than the slightest bit upset, about its meaning for Democracy and used the words plutocracy and oligarchy. Andrea Mitchell also discussed it later and she, too, registered apparent dismay, while using the “p” and “o” words.

Chris Hayes has been on leave during this period, so we haven’t heard from him about this. But Chris Matthews, the “oh so very slightly left-of-center insider” has been making very unfriendly noises about Adelson, the Kochs, and the Supremes, culminating today (April 3rd) with nasty references to plutocrats, oligarchs, and candidates, kissing oligarchs somewhere or other, on both his program and Al Sharpton’s.

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14 Comments

Posted in Joe Firestone

Tagged Abby Hunstman, deficit spending, inequality, jamie galbraith, Krystal Ball, MMT, modern money theory, oligarchy, plutocracy, REAL fiscal responsibility, Susan Ochs, Thomas Piketty, threat to democracy

Three Passages From Akerlof & Romer’s 1993 Article That Should Have Prevented The Crisis

Posted on April 4, 2014 by William Black | 3 comments

By William K. Black

This is the first installment of a series of articles about the media, finance industry, political, and Department of Justice (DOJ) reaction to Michael Lewis’ new book about high frequency trading (HFT). The media ballyhooed the book as if it were an amazing revelation of a fact of surpassing importance. The industry demonized the book and Lewis. DOJ immediately announced it had begun a criminal investigation and the SEC it had multiple investigations pending. Whether the industry or Lewis is correct about HFT practices (which he asserts are lawful) is unimportant for some purposes. My series will focus on the difference between the frenzied DOJ, political, and media reaction to Lewis’ criticism of allegedly lawful HFT practices and the “yawn” reaction of these same groups to the vastly more damaging criminal frauds runs by our elite financial leaders that caused the financial crisis is astronomical, ludicrous, and disastrous. Similarly, the reaction of these three groups to the finding by multiple investigations that 16 of the largest banks in the world committed crimes by setting LIBOR rates through frauds and cartels (the largest cartel, by several orders of magnitude, in history) was less than a yawn, as I described in prior articles.

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3 Comments

Posted in William K. Black

Tagged accounting control fraud, Control Fraud, Financial crisis, Great Financial Crisis, HFT, high frequency trading, Michael Lewis

The Black Fraud and Finance Report

Posted on April 3, 2014 by William Black | 2 comments

The Black Fraud and Finance Report on the Real News Network. Bill is discussing Charles Keating.

2 Comments

Posted in William K. Black

Tagged accounting control fraud, Control Fraud

Ten Lessons We Must Learn from Charles Keating

Posted on April 2, 2014 by Devin Smith | 8 comments

By William K. Black

I knew Charles Keating, the head of Lincoln Savings, in my capacity as a financial regulator and as the subject of his wrath. His fraud schemes and the manner in which they targeted our system’s vulnerabilities in an era before Citizens United made the corruption of politicians by fraudulent CEOs child’s play remain the play book for the world’s most destructive financial frauds. Our failure to learn the ten lessons has caused immense suffering. Keating’s life, and the great harm he caused, will not have been in vain if we step back and use the occasion of his death to reflect on the changes we need to make.

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8 Comments

Posted in William K. Black

Tagged accounting control fraud, Control Fraud, Financial crisis

The New York Time’s Disgraceful Reporting about Deflation

Posted on April 2, 2014 by William Black | 6 comments

By William K. Black

This is the third and final installment of a series of columns discussing the latest harmful policies and articles about eurozone deflation. This column discusses the March 31, 2014 article in the New York Times entitled “Another Worrisome Drop in Euro Zone Inflation.” I have already discussed the extraordinary sentence in the article in which the head of the European Central Bank (ECB), Mario Draghi, is cited as claiming that deflation is desirable for eurozone nations suffering Great Depression levels of unemployment. Draghi claims that deflation will cause reductions in working class wages and prices that will lead to increased exports and economic recoveries. I explained in prior columns that this is contrary to the ECB’s written policies and economic theories and the views of virtually all economists. The NYT article does not report these facts.

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6 Comments

Posted in William K. Black

Tagged deflation, Draghi, ECB, spain

Dr. Draghi Prescribes a Dose of Deflation for Spain as his latest Quack Cure

Posted on April 1, 2014 by William Black | 4 comments

By William K. Black

I posted an article earlier today on the demented memes about eurozone deflation U.S. financial journalists parrot after talking to Brussels’ troika-trolls. That article used the latest AP story to illustrate my points.

I promised a second installment that used a New York Times article (not sourced to AP) that was posted last night to illustrate the meme. The NYT article is simultaneously more complex and more alarmingly analytically awful than the AP piece.

This morning brought two April Fools’ Day articles about France and Italy that are also about the gratuitous second Great Recession (in the core) and the second Great Depression (in Spain, Italy, and Greece) inflicted by the troika’s infamous austerity dogmas. This article discusses one sentence from last night’s NYT piece that notes the position on deflation of the head of the European Central Bank (Mario Draghi). The NYT article misses the significance of the passage. I show how the passage, particularly when read in conjunction with quotations from Draghi’s fellow troika-trolls in the articles about France and Italy, reveals the troika’s fanatical devotion to failed dogmas and the clueless nature of U.S. financial journalists covering the eurozone who continue to treat the trolls like savants.

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4 Comments

Posted in William K. Black

Tagged Austerity Doctrine, ECB, France, Italy, mario draghi, spain

The Village Still Ignores the Most Important Point

Posted on April 1, 2014 by Joe Firestone | 2 comments

By Joe Firestone

In recent posts I reviewed two commentaries by Abby Huntsman on Social Security and other entitlements, also noting points made in other critiques of her narratives. Abby’s commentaries are here, and here, and my critiques are here and here. The most important point I emphasized in my two rebuttals is that there are no fiscal solvency or sustainability issues related to Social Security, or other parts of the safety net, but that the issues involve only the willingness of Congress to appropriate entitlement spending, and either the removal of current constraints on Treasury to spend appropriations such as the debt limit, or the willingness of the Executive Branch to use its current legislative authority either to a) generate sufficient seigniorage from platinum coins to spend such appropriations; or b) use a type of debt instrument, such as consols, which aren’t counted toward the debt limit.

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