Author Archives: William Black

Bill Clinton’s Blood Libel of the American People

Posted on April 18, 2016 | 9 comments

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

Hillary Clinton uses a rhetorical device that is too clever by half. Whenever Bernie Sanders points out that she continues to take millions of dollars for her campaign and over $650,000 personally from the infamous “Vampire Squid” whose frauds caused the financial crisis she responds that this means that Bernie is attacking President Obama too, for in 2008 his campaign’s largest donor was those same Wall Street felons. She then says that the Dodd-Frank Act proves that campaign contributions do not affect elected officials. Her devotion to Wall Street funding and her statement that campaign funds have no effect help explain why she does so poorly in the polls on credibility. As I explained in a prior column, academic research confirms what we all know from life – campaign contributions play a substantial role in the decisions of elected officials. Indeed, even Paul Krugman’s lecture notes show that he agrees with this point. (Disclosure: I am an adviser to Bernie on economics, regulation, and criminology.)

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Tagged Bank Whistleblowers United, BWU, clinton

The Austerity Beatings of Greece Will Continue Until Its Morale Improves

Posted on April 18, 2016 | 2 comments

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

The old joke, that conveys a critical truth, is the poster that says “The daily floggings will continue until morale improves around here.” The troika misses the irony in the poster, for it thinks that the answer to the eurozone nightmare problems caused by austerity is more austerity. The latest example is three IMF stories that ran contemporaneously. The IMF, again, lowered global growth forecasts. Two, the IMF is calling for fiscal stimulus rather than austerity. Three, the eurozone wants to inflict more severe austerity on Greece, purportedly to make the IMF happy. If you sense a logical disconnect, you are right. Continue reading →

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Tagged austerity, greece, troika

“Liberal” Economists Cheered the New Democrats’ Deregulation of Finance

Posted on April 13, 2016 | 7 comments

By William K. Black
April 11, 2016 Bloomington, MN

This is the second part of my series on how Hillary and Bill Clinton and Paul Krugman have pivoted in response to Bernie Sanders’ series of electoral wins and are racing hard right on finance and crime. In my first column I wore my criminology “hat” to explain how Bill was disinterring outrageous (false and racist) positions that Hillary and he had once championed. This was all the more bizarre because Hillary and Bill had recently repudiated those positions. In the mid-1990s, Hillary and Bill sought to spread a “moral panic” about subhuman black “super predators” in order to secure passage of the crime bill that led to mass incarceration and then to maintain the 100-to-one disparity in sentencing for crack v. powder cocaine once it was known that the scientifically baseless sentencing disparity was leading to a dramatic rise in the incarceration of blacks and Latinos. I also deplored Bill’s false claim that Black Lives Matter protesters were “defending” those who murdered black children.

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Tagged krugman

Hillary and Bill and Paul Krugman Race to the Right to Stop the Bern

Posted on April 9, 2016 | 12 comments

By William K. Black
April 8, 2016 Bloomington, MN

(Crossposted from Huffington Post. Postscript added for NEP)

Remember several weeks ago when Hillary Clinton was complaining that Democrats did not consider her a “progressive?” Bernie Sanders’ big win in Wisconsin ended that tactic and propelled Paul Krugman and Hillary and Bill Clinton to race to the right, inadvertently proving Bernie’s point that they are not progressives on the key issues.

In the last week, Hillary and her surrogates have pivoted hard right and retreated to their long-held positions on the major issues. Indeed, in several cases they have gone even farther to the right than the policies they pushed over a decade ago – even though those policies proved disastrous. They also inadvertently demonstrated the terrible policies that were produced by the Clinton’s vaunted “pragmatism” and compromising with the most extreme Republican demands. That was the story of Clinton’s infamous welfare “reform” – a policy both Clintons championed. Tom Frank details in his new book entitled Listen, Liberal how the Clintons’ “pragmatism” and zeal to work with the worst elements of the Republican Party led to the welfare “reform” bill. Zach Carter has just written the article I was planning to write about that travesty. He entitled it “Nothing Bill Clinton Said To Defend His Welfare Reform Is True.” I encourage you to read it.

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Tagged bernie sanders, bill clinton, Hillary Clinton, paul krugman

The Myth that Obama’s Taking Huge Contributions from Wall Street Was Fine

Posted on April 8, 2016 | 8 comments

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

I am now officially an economic advisor to Senator Sanders, and this column reflects some of that advice. Part of my advice is not to take money from Wall Street felons. (I am not taking credit for Bernie’s decision — at most I supported a decision he had already made over a year ago.) One of the reasons I reinforced Bernie’s decision was witnessing the problems President Obama experienced given his taking very large contributions from Wall Street. I channeled the prescient warning that Professor Thomas Ferguson (U. Mass, Boston) gave a group of us in 2008. He predicted, accurately, that Obama would not lead an effective crackdown on the endemic fraud by Wall Street elites that caused the financial crisis. Tom (he is a personal friend) is the expert on campaign finance. He authored the classic book on campaign finance entitled Golden Rule (as in the observation that he that has the gold makes the rules.).

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Tagged bernie sanders

The Fourth Whistleblowers’ Lemons Award Goes to DOJ for Ignoring Citi’s Criminals

Posted on April 8, 2016 | 4 comments

By William K. Black

We could, of course, retire the Bank Whistleblowers United’s Lemons title – for ignoring or trivializing elite fraud – by awarding it permanently to the Department of Justice (DOJ). The current award is particularly close to our hearts because it involves DOJ ignoring the sworn testimony of one our founders, Richard Bowen. DOJ did not ignore Bowen’s testimony because it was discredited, but because it was proven accurate – and should have led to the indictment of Citigroup’s top leadership team.

Two recent revelations prompt the timing our Lemon award to DOJ. First, it is five years since the release of the Financial Crisis Inquiry Commission (FCIC) report, so the criminal referrals that FCIC made were revealed. Citigroup’s senior managers were the subject of two, separate criminal referrals by FCIC. One of those two referrals was based on Bowen’s testimony. (Bowen’s explosive interview by FCIC’s staff was also made public.) The mainstream press has ignored the referral based on Bowen’s testimony.

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Tagged Bank Whistleblowers United, BWU

Krugman on the Corruption of our Nation via Perverse Incentives

Posted on April 5, 2016 | 5 comments

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

Paul Krugman April Fools’ Day column launched another attack on Bernie Sanders. In it he announces that he, a strong Hilary Clinton supporter, is “Dad” and gets to set the rules for candidates – “it’s time to lay out some guidelines for good and bad behavior.” This is a lot like John McEnroe giving lectures on tennis etiquette. Two sentences later, Krugman mocks voters for Sanders in “very white states,” which is a pretty clear example of “bad behavior.” Tellingly, Krugman is oblivious to his bad behavior. Krugman ends with this patronizing and insulting sentence: “Sanders doesn’t need to drop out, but he needs to start acting responsibly.” Krugman is obviously itching to instruct Bernie to “drop out” and hand the contest to his candidate.

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BWU Support for WARN Act

Posted on April 4, 2016 | Comments Off

April 3, 2016

Chairman Jason Chaffetz
House Committee on Oversight and Government Reform
2157 Rayburn House Office Building
Washington, DC 20515

Ranking Member Elijah Cummings
House Committee on Oversight and Government Reform
2471 Rayburn House Office Building
Washington, D.C. 20515

Dear Chairman Chaffetz and Ranking Member Cummings:

We, the founding members of Bank Whistleblowers United (BWU), write to express our support for the “Whistleblower Augmented Reward and Nonretaliation (WARN) Act of 2016,” introduced by Ranking Member Cummings and Senator Tammy Baldwin. We are co-signatories of the joint letter of support with the Bill of Rights Defense Committee/Defending Dissent Foundation, the Government Accountability Project, OpenTheGovernment.org, the Project On Government Oversight, and Public Citizen.

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Tagged Bank Whistleblowers United, BWU

White-Collar Criminologists Answer the call of Conventional Macroeconomists: An Open Letter to Dr. Kartik Athreya, Research Director of the Richmond Fed

Posted on April 3, 2016 | Comments Off

By William K. Black
April 3, 2016 Minneapolis, Minnesota

I want to thank two prominent “freshwater” macroeconomists, Dr. Narayana Kocherlakota (until recently the President of the Minneapolis Fed and previously the Chair of the University of Minnesota’s economics department) and Dr. Kartik Athreya (Research Director of the Richmond Fed) for their article (2010) and book (2013) , respectively, designed to convey the current status of macroeconomics. Reading their descriptions, and reviewing the work of Oliver Williamson, Roger Myerson, and Leonid Hurwicz in light of the discussion of macroeconomics has made it clear to me that the central difficulties in micro and macroeconomics are with concepts that are the core of what we study as white-collar criminologists and what I dealt with as a financial regulator. There is, therefore, an opportunity for substantial advances should economics draw on the findings of the discipline (white-collar criminology) and the insights of the professionals (successful financial regulators) with the preeminent expertise in these problem areas. Athreya also stresses the key role of law and how the effort to contain fraud explains significant portions of the legal rules for commerce. I also have expertise in law.

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Democrats Need to Give Up Being Deficit Hawks Even When it Feels Good Politically

Posted on March 24, 2016 | 23 comments

By William K. Black
March 24, 2016 Bloomington, MN

Representative Nancy Pelosi has just written the latest effort by a prominent Democrat to bash Republicans for the high crime of not being financially illiterate. The Republicans are frequently financially illiterate on budget issues and they bash Democrats for the high crime of not being financially illiterate. The leaders of both parties share the hypocrisy of bashing the rival party for supporting budgetary stimulus in circumstances in which stimulus is vital. Particular forms of budgetary stimulus can be simultaneously desirable (relative to austerity) and inferior relative to alternative forms of budgetary stimulus. The Republican‘s favored form of budgetary stimulus – large tax cuts for the wealthy – is a remarkably inefficient means of providing stimulus that makes income inequality worse. Those two points are the correct bases for criticizing their proposed tax cuts. Far too many Democrats, however, cannot pass up the political opportunity to bash the Republicans for supporting stimulus when further stimulus is vital. When Democrats like Pelosi launch these myth-based political attacks on Republican stimulus programs they help to enshrine economically illiterate austerity policies that make it even harder for Democrats to make the case for stimulus even when it is essential.

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