By William K. Black
John Coates, a former derivatives trader at Goldman Sachs is now a researcher. He wrote a column in the New York Times entitled “The Biology of Risk” that I hope will be widely read.
In this column I explain why his most important conclusions cannot follow logically from his own description of his research finding. While he relies on blood tests, his account of trading when it goes horribly wrong is curiously bloodless and disingenuous. As a Goldman and Deutsche Bank refugee he knows better, but he presents a sanitized version of the crisis portraying the controlling officers and traders at the largest banks as helpless victims of raging hormones rather than fraud perpetrators and facilitators.
By Michael Hoexter
With the release of Obama’s much heralded EPA regulations on coal fired power plants we are encountering once again the ongoing tragedy of low expectations with regard to climate action. While compared to other Presidents, and there have been only three in the era of pressure for climate action, Obama’s proposal that coal-fired power plants reduce their carbon dioxide emissions by 30% from 2005 levels by 2030 is the most ambitious climate rule to be implemented, even the relative journalistic “friend” of the Obama Administration, Ezra Klein pointed out, this is a less ambitious path to cut carbon than that proposed by the Republican McCain/Palin candidacy in 2008. Of course, there is a difference between campaign proposals and a President setting into motion energy and climate regulations but the degree to which expectations have been lowered even in the course of 6 years (despite the appearance of obvious changes in the climate itself) is frightening. In the best case scenario, the ruling establishes a precedent that may be reinforced in the future.
By William K. Black
“‘I won’t be letting G.M. leadership, or federal regulators, escape accountability for these tragedies,’ Senator Claire McCaskill, the Missouri Democrat who is chairwoman of a Senate subcommittee on consumer protection, said in a statement.”
Senator McCaskill’s statement makes the correct points. GM’s leadership and the federal regulators have, to date, “escape[d] accountability.” I want to extend an offer of assistance to Senator McCaskill. The key to understanding GM’s otherwise incomprehensible actions is to understand the perverse effects of the compensation system that GM’s leadership designed. This is one of our areas of expertise.