Author Archives: William Black

By William K. Black

The reason we have recurrent, intensifying financial crises is because we learn the wrong lessons from our prior crises and actively make things worse.  The consistent explanation for our making things worse is that dogmas lead to “doubling down” on failed faith-based policies.  The dominant ideologues in the U.S. and Europe on financial policies are theoclassical economists and their fellow choir members – neoclassical economists.  A small article in the Wall Street Journal provides a classic example of the continuing destruction driven by these dogmas.

The WSJ article, of course, sees none of this.  It fails to distinguish between two very different concepts.  The Office of the Comptroller of the Currency (OCC) is supposed to regulate “national banks” – the largest banks. The first concept is where examiners’ offices are located.  The OCC uses “resident” examiners in the largest banks.  This means that hundreds of OCC (and Fed) examiners have offices in the huge banks.  Resident examiners are a terrible idea because they invariably “marry the natives.”  When the Fed “marries the natives” it constitutes incest because the NY Fed (which examines many of the largest bank holding companies) has traditionally been one branch of the inbred Wall Street family. The OCC, under Presidents Clinton and Bush, was nearly as bad because it was engaged in a “race to the bottom” with the Office of Thrift Supervision (OTS) to see which could “triumph” as the worst federal banking regulator.

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