Monthly Archives: June 2016

The EU’s Failed Neo-Liberal Policies and BREXIT

By William K. Black
June 28, 2016     Kansas City, MO

Andrew Ross Sorkin is back, so unintentional self-parody is again the order of the day.  Wall Street’s sycophant-in-chief, introduces his column with a 98 m.p.h. fastball aimed at the reader’s chin.

This isn’t meant to scare you, but let’s consider the absolute worst-case scenarios of “Brexit.”

Sorkin’s column then presents his specific example of his absolute worst-case scenario.  See if you can spot what is missing from that scenario.

Consider this: Italy’s government is considering pumping as much as $45 billion into its banking system after the Brexit vote. Shares of the biggest Italian banks have fallen more than 20 percent since the results of the vote were announced. And Italian banks are considered particularly vulnerable because they hold hundreds of billions of euros in bad loans. If Brexit forces a material economic slowdown across the Continent, Italy’s banks — without a rescue plan — could significantly suffer.

OK, Italy’s elite bankers made “hundreds of billions of euros in bad loans” that are still on their books nine years after the onset of the Great Recession.  That should have prompted deep analysis by Sorkin about why the bankers made the loans, what role they caused in producing Italy’s crises, and why the regulators have allowed the bankers to “extend and pretend” the bad loans as if they were good loans for nine years.

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BREXIT: Part 3: Tony Blair

By William K. Black
June 24, 2016     Kansas City, MO

Tony Blair

Tony Blair disgraced his office as Prime Minister and continues to disgrace it as lobbyist for murderous kleptocrats.  Blair’s column claims personal credit for a series of supposed triumph, blames the BREXIT vote on the Tories, and throws Jeremy Corbin, his successor as Labour Party leader, under the bus.  The title of Blair’s article refers to the democratic vote in favor of BREXIT as a “coup,” which helps explain why he specializes in getting ever wealthier by fronting for tyrants and kleptocrats who he presents as evolving democrats.  The English language is just one of the things Blair helps torture.

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The Terrible Cost to Democrats and Our Nation of Ignoring Tom Frank’s Warnings

By William K. Black
June 27, 2016     Kansas City, MO

Thomas Frank is a historian and writer.  He is also the man who tried to save the Democratic Party and our Nation from great harm.  He is the great chronicler of one of the most grievous, self-inflicted wounds in modern American history.  Twelve years ago, in What’s the Matter with Kansas? How Conservatives Won the Heart of America, Frank tried to warn the Democratic Party’s dominant elites’ that their policies and contempt for workers were pushing a large part of its base out of the Party.  Many of the workers that were the Democratic Party’s traditional base were leaving the Party and failing to participate in elections, but some were supporting the far-right wing of the Republican Party.  At the national level, the New Democrats’ candidates remained highly competitive, but the Republican Party was able to attain complete political domination of most states.

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BREXIT Part 2: Roger Cohen

By William K. Black
June 24, 2016     Kansas City, MO

Roger Cohen

Roger Cohen published a column decrying BREXIT.

Warnings about the dire consequences of a British exit from President Barack Obama, Britain’s political leaders, major corporations based in Britain and the International Monetary Fund proved useless. If anything, they goaded a mood of defiant anger against those very elites.

This resentment has its roots in many things but may be summed up as a revolt against global capitalism. To heck with the experts and political correctness was the predominant mood in the end. A majority of Britons had no time for the politicians that brought the world a disastrous war in Iraq, the 2008 financial meltdown, European austerity, stagnant working-class wages, high immigration and tax havens for the super-rich.

That some of these issues have no direct link to the European Union or its much-maligned Brussels bureaucrats did not matter.

Yes, “Project Fear” failed in its goal of intimidating voters.  It isn’t simply the “politicians” that failed, it was the “experts” – the elites that rig the system in finance and the ideologues who create the self-inflicted wounds of EU austerity – who designed the failed policies and grew wealthier and more powerful because of those policies.  Cohen ignores that obvious point, but much of the public has come to realize that the foreign policy and financial “experts” are dishonest and self-serving.  Their principal competence is making themselves wealthy at our expense.  I urge people to understand that ideology and self-interest rather than competence is what causes these elite “experts” to act as if they were stupid.  They are typically not stupid; they are skilled parasites.

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BREXIT: Populism and Democracy: Part 1

By William K. Black
June 24, 2016     Kansas City, MO

The UK vote in favor of BREXIT has stoked the fears of the New York Times to a fevered pitch.  Their greatest collective fear is the rise of “populism.”  The NYT fashions itself the last redoubt of “serious people” under siege by the rabble.  BREXIT is an opportunity to drive home to the rabble the folly of failing to fall in line with the policies of the serious people featured in the NYT.  The moral of the story is a simple one – when the electorate in a democratic election ignores the technocrats the result is an economic and social catastrophe.

Even for the NYT, however, their attacks on the UK electorate for daring to vote for BREXIT were extraordinary in their intensity and multiplicity.  At least seven articles, each of them negative about the UK voters, were featured in today’s paper.  (I had no strong views on the vote.  I think reasonable UK voters could disagree on the desirability of BREXIT.)

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Video

By J.D. Alt

I spent the last couple days reading and contemplating “Political Aspects of Full Employment”, the transcript of a lecture―given in 1942!!―to the Marshall Society by economist Michal Kalecki. This was recommended to me by Nat Uerlich in his May 2 comment to my post “False Choice or Real Possibilities.” Many thanks to Mr. Uerlich for taking the time to make the comment. I urgently recommend Professor Kalecki’s lecture to anyone who feels a little fuzzy (as I have lately been feeling myself) about what we are up against as a collective society as we now confront, once again, how collective society itself is structured to inexorably be its own worst enemy.

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The Myriad Mendacious Myths of “Market Regulation” of Finance

By William K. Black
June 7, 2016     Bloomington, MN

Representative Jeb Hensarling, Chair of the House Financial Services Committee has announced that he will introduce a Republican plan to repeal key provisions of the Dodd-Frank Act and replace them with “market-based” regulation.  I have explained in a prior column how theoclassical economists, for over 40 years, have created repeated criminogenic environments in finance due to their unholy ideological war against effective financial regulation.  The dominant policy view among economists and senior anti-regulatory policy advisers of every administration since President Carter embraced the myth that economists had invented means by which the “markets” will effectively “regulate” finance.

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An Argument Against Basic Income

NEP’s Pavlina Tcherneva speaks with Bloomberg’s Joe Weisenthal about Basic Income Guarantees. You can view the segment here.

The Lie That “China Wins” if the TPP Kangaroo Tribunals are Stopped

By William K. Black
June 5, 2016     Bloomington, MN

Proponents of the Trans-Pacific Partnership (TPP) know that they have a major problem.  Bernie Sanders, Hillary Clinton, and Donald Trump each oppose the deal.  CEOs, however, have not given up on their dream of being able to rig the international system through the creation of kangaroo tribunals that can, effectively, destroy effective regulation and the enforcement of rules to protect the public.  As I explained in my most recent column on this subject, “trade” is simply the pretext for this assault on the rule of law and national sovereignty.  President Obama plans to try to get the TPP approved by the lame duck Senate after the November elections.  Outgoing officials no longer must fear (or respect the will of) the voters and they are eager to cash in on the corporate largess that will reward politicians that vote for the international CEO impunity deals.

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Krugman’s Karma Forces Him to Feel the Bern and Attack the Kochs for “Buying Politicians”

By William K. Black
June 4, 2016     Bloomington, MN

When last we read Paul Krugman he was repeatedly demanding that Bernie Sanders cease criticizing Hillary Clinton for a lifetime addiction of taking tens of millions of dollars in political contributions and hundreds of thousands of dollars in speakers’ fees from Goldman Sachs and other business interests.  (I am an economic adviser to Bernie.)  While Professor Krugman consistently stressed that the data show that business campaign contributions do rig the system, Hillary Surrogate Krugman suddenly professed that business political campaign contributions and speaker fees have no corrupting effect on politicians.

Economists should be honest for all the usual reasons, but economists who wish to affect policy have an additional reason to embrace intellectual honesty.  Karma means that an intellectually dishonest economist is likely to be promptly confronted by the desirability of telling the truth in order to prevent disastrous policy on precisely the subject he or she just lied about.

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