Author Archives: William Black

Web Site Devoted to Helping Customers Cheat Cheated its Customers

Posted on May 4, 2016 | 8 comments

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

To the shock of no one, with the possible exception of men who would use such a site, it is alleged that the website devoted to helping their customers cheat their loved ones cheated their customers.  (Yes, another example of the myriad forms and layers of “spontaneous order” that von Hayek does not want you, or any economist, to think about.)  This was reported in Corporate Counsel.  Plaintiffs are trying to bring a class action fraud lawsuit against the firm Ashley Madison (“Life is short.  Have an affair”).  The firm’s client list was made public by a hacker who expressed distress at the firm’s business plan of encouraging affairs.

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Free Markets Mean Zero Economic Profit – or a 99% Profit Markup

Posted on May 4, 2016 | 2 comments

By William K. Black
May 3, 2016     Bloomington, MN

Open up a conventional economics text and you will be taught that high among the glories of “free markets” is the “fact” that they lead to firms earning “zero economic profits.”  Economic profits are not the same as accounting profits.  An economic profit occurs when a firm receives greater profits than the minimum required to be able to raise capital in their industry.  A firm that receives a profit greater than that minimum requirement is receiving monopoly “rents” due to its market power.  Conventional economists used to believe that was a bad thing, but many conventional economists from the right are now openly hostile to antitrust concerns.

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Bloomberg Tells Michigan Grads They Must Defeat Bernie’s Plan to Jail Wall Street Felons

Posted on May 3, 2016 | 3 comments

By  William K. Black
May 2, 2016      Bloomington, MN

Michael Bloomberg has just published, in Bloomberg, what he describes as “an adaptation of an address to the University of Michigan’s class of 2016.”  Having graduated twice from Michigan, as did our eldest, I was intrigued.  Bloomberg’s title was “Here’s Your Degree.  Now Go Defeat Demagogues.”  What Bloomberg means is that he is frightened that so many young people supported the “Occupy Wall Street” movement and support Bernie Sanders.  I’ve written before about Bloomberg, a Wall Street billionaire, and the myths he tries to spread about Bernie.  Wall Street elites fear Bernie.  They know he won’t take their money, he will end the systemically dangerous banks, and he will imprison their leading felons.  Bloomberg’s hate for, and fear of, Bernie is perfectly rational.  Why he thinks that Michigan students will take his advice and learn to love Wall Street’s felons is a lot less clear.

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The German Right is Stunned that Plowing Wickedness Has Reaped Iniquity

Posted on May 2, 2016 | 1 comment

By William K. Black
May 1, 2016     Bloomington, MN

Republican Party leaders are shocked that their three decades of pursuing the racist “Southern strategy,” California Governor Pete Wilson’s desperate attacks on Latinos, myriad assaults on women’s rights, and repeatedly sponsoring gay bashing propositions designed to energize the (bigoted) base have created a base that champions Donald Trump’s serial hatred.  Key leaders of the hard right in Germany are shocked by the same dynamic.  The prophet Hosea has two verses that warned of this dynamic millennia ago.

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Obama’s Great Lie: What’s Good for Wall Street Felons is Good for America

Posted on May 1, 2016 | 4 comments

By William K. Black
April 30, 2016     Bloomington, MN

To no one’s surprise, President Obama lobs periodic attacks on Bernie Sanders’ plans to restore the rule of law to Wall Street elites.  Obama launched his latest attack, fittingly, through Wall Street’s sycophant-in-chief, Andrew Ross Sorkin.  Sorkin’s column expresses his shock at how Obama repeatedly extended their interview for hours beyond its scheduled length.  No one else is shocked that Obama, trying to make the case that bailing out the Wall Street felons was an act of supreme genius, would find Sorkin’s relentless sycophancy towards those felons and their political cronies so endearing.  This is the first segment of my response.  It focuses on the Obama administration’s great lie – the only policy “tools that work” in response to a financial crisis are getting “in bed with the banks” and making even wealthier through federal bailouts the bankers who grew wealthy by leading the fraud epidemics that caused the crisis.

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Paul Krugman and Holman Jenkins Shill for the Giant Banks

Posted on April 25, 2016 | 3 comments

By William K. Black
April 20, 2016     Bloomington, MN

Holman Jenkins, the ultra-conservative Wall Street Journal columnist who specializes in global climate change denial and elite financial fraud denial, has written recently to join Paul Krugman in defending the systemically dangerous banks.  Jenkins is a member of the WSJ’s loopy editorial board.  Jenkins’ title was “Big Banks Aren’t the Problem.”  Jenkins’ thesis raises obvious and vital questions – he ignores each of them because answering them would falsify his thesis.

The 2008 crisis did not begin in a handful of too-big-to-fail banks, but in incentives cast far and wide among home buyers, mortgage brokers, lenders and others to underwrite tax-advantaged, one-way bets on home prices.

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How Bernie’s Economic Policies Fit into Economic Theory

Posted on April 20, 2016 | 2 comments

By William K. Black
April 19, 2016     Bloomington, MN

The journalist Adam Davidson has written an interesting article about economics and Bernie Sanders.  As an economic adviser to Bernie I found his take on Keynesian and institutional economics of considerable interest.  Institutional economics, contrary to Davidson’s take on it, is thriving and the University of Missouri at Kansas City has long been a center of institutional economics.  (I am one of the scholars at UMKC that works largely in this field.)  Davidson treats institutional economics, which overwhelmingly studies microeconomics and the “micro foundations” of the economy as having been rendered obsolete by the transformation that Keynes’ insights sparked in the study of macroeconomics.

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The Old South Renews Its Assault on the LGBT Community

Posted on April 19, 2016 | 2 comments

By William K. Black
April 17, 2016     Bloomington, MN

In the first installment of this column I showed how radically the states of the former Confederacy are acting to destroy the policies of the “New South” and disinter the Old South.  I used North Carolina as my example.  This second column focuses on the renewed assault of the Old South on the LGBT community.  In particular, I discuss why so much of the business community reacts so strongly in opposition to this assault.  But what I am most interested in is explaining why the political leaders of the Old South’s renewed assault are flabbergasted by the business community’s opposition and respond to it in ways that reinforce the opposition.  The emerging leaders of the Old South simply cannot understand why national and global business leaders see the assault on the LGBT community as a problem.  I think the anti-LGBT political leadership of the reemerged Old South have three problems that explains this lack of understanding.

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The “New South” Reverts to the Old South

Posted on April 19, 2016 | 2 comments

By William K. Black
April 12, 2016     Bloomington, MN

The rise of the “New South” is generally dated to around 1970, when socially and economically conservative white Democratic politicians who were moderate on racial issues began to be elected as governors in many Southern states.  The timing was just right in that, due to hatred for the Republican Party’s role in stopping the spread of slavery and then winning the Civil War, that Party was still anathema to many Southern whites.  The Republican Party’s “Southern strategy” would soon reverse this process and lead to that party’s modern domination of the South.  Today, the New South is rapidly reverting back to the pathologies of the Old South.  This first column looks at North Carolina as an example of this reversion.  The second column discusses the most recent manifestation of disinterring the bigotry that defined the Old South – the atavistic assault on the LGBT community.

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Too Big to Fail From the Eyes of a Specialist

Posted on April 19, 2016 | 1 comment

By William K. Black
April 17, 2016     Bloomington, MN

Andrew Ross Sorkin has written a column lamenting that “For a Generalist, ‘Too Big to Fail’ May Be Too Tricky to Judge” about the district court opinion finding in favor of MetLife on the question of whether it would pose a system risk were it to fail.  Sorkin runs the NYT’s “Deal Book,” which is supposed to represent the paper’s specialized expertise with regard to Wall Street.  His column demonstrates that one of the areas of expertise required to understand Wall Street is legal, and that it is beyond his understanding despite having “read hundreds of pages of legal briefs from both sides, and talked to company and government officials and outside experts….”

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