Category Archives: William K. Black

House Passes Deregulation Bill Written by Citigroup

Posted on November 1, 2013 by | 5 comments

The Latest edition of the Black Finance and Fraud Report on TRNN. The House of Representatives has passed a deregulation bill written by Citigroup – supported by both parties.

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The Taylor Rule: Ignore Fraud Epidemics and Worship Markets

Posted on November 1, 2013 by | 5 comments

By William K. Black

I recently posted a detailed article in response to Raj Chetty’s lament that scientists make fun of economics’ pretense to science.

The thrust of my article was that the problem was not that economics was inherently incapable of becoming more scientific.  The problem was that so many economists wear ideological blinders that recurrently cause them to perform a parody of the scientific method.

Chetty claimed that economists who are “testing precise hypotheses” in quantitative studies that exploit natural experiments are (finally, in 2013) “transforming economics into a field firmly grounded in fact.”  Chetty’s metaphor is that economics is like epidemiology.  (One assumes that his column is posted in the CDC’s common areas for the general amusement of epidemiologists.)

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The Oil Oligarchs Want Me to Know How Much They Hate President Correa

Posted on October 29, 2013 by | 4 comments

By William K. Black

Gustavo Coronel, a Venezuelan oil oligarch associated with Cato has written to let me know how much he despises Ecuador’s President Rafael Correa.  Coronel serves as his own “official scorer” so he has declared that one of my columns “made a failed attempt to whitewash the President of Ecuador, Rafael Correa, who is violating environmentally fragile areas of the Amazonia to drill for oil.”  This is a passing strange comment from a man whose professional life was spent growing wealthy by “violating environmentally fragile areas of the Amazonia [and elsewhere] to drill for oil.”  You may think that Coronel reached a late-life epiphany and is seeking to make up for a life violating environmentally fragile areas, but no such transformation occurred.  Coronel simply sees an opportunity to attack Correa, and Coronel has dedicated his remaining life to attacking any Latin American leader who opposes the oligarchs.

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Economics could be a Science if More Economists were Scientists

Posted on October 28, 2013 by | 34 comments

By William K. Black
(Cross posted at Benzinga.com)

Raj Chetty has written an op ed in the New York Times designed to counter the abuse the Sveriges Riksbank (Sweden’s central bank) rightly received for its latest embarrassment.  Economics does not have a true Nobel Prize, so a central bank decided to create a near-beer variant.  The central bankers have frequently made a hash of it, often awarding economists who got it disastrously wrong and inflicted policies that caused immense suffering.  This year, not for the first time, the central bankers decided to hedge their bets – awarding their prize to economists who contradict each other (Eugene Fama and Robert Shiller).  The hedge strategy might be thought to ensure that the central bank’s prize winners were right at least half the time (which would be an improvement over the central bankers’ batting average in their awards), but that is a logical error.  It is perfectly possible for both of the prize winners to be wrong.  I’ll explain why I think that is the case in a future article.

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The New York Times Authors the Most Ironic Sentence of the Crisis

Posted on October 24, 2013 by | 12 comments

By William K. Black

The author of the most brilliantly comedic statement ever written about the crisis is Landon Thomas, Jr.  He does not bury the lead.  Everything worth reading is in the first sentence, and it should trigger belly laughs nationwide.

“Bank of America, one of the nation’s largest banks, was found liable on Wednesday of having sold defective mortgages, a jury decision that will be seen as a victory for the government in its aggressive effort to hold banks accountable for their role in the housing crisis.”

“The government,” as a statement of fact so indisputable that it requires neither citation nor reasoning, has been engaged in an “aggressive effort to hold banks accountable for their role in the housing crisis.”  Yes, we have not seen such an aggressive effort since Captain Renault told Rick in the movie Casablanca that he was “shocked” to discover that there was gambling going on (just before being handed his gambling “winnings” which were really a bribe).

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JPMorgan: Fish Rot from the Head

Posted on October 23, 2013 by | 4 comments

By William K. Black

The New York Times’ spin of the tentative settlement of JPMorgan’s latest myriad felonies begins early and runs throughout the article.  JPMorgan and Attorney General Eric Holder have reached a common meme on their settlement:  the Department of Justice (DOJ) and Holder are stalwarts who have demonstrated their toughness and JPMorgan is a model corporate citizen.  The inconvenient facts that the senior officers of JPMorgan, Bear Stearns (Bear), and Washington Mutual’s (WaMu) grew wealthy through the frauds that drove the financial crisis and that JPMorgan’s senior officers will not be prosecuted and will not even have to repay the proceeds of their crimes never appear in the article.

A word of caution is in order: I am discussing an article that is the product of leaks from DOJ and JPMorgan’s press flacks about a tentative deal, so reality is certain to differ from the spin.  This article is a longer discussion of the settlement than my October 22, 2013 CNN op ed.

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Cowen Condemns the Corporations he Comes to Praise

Posted on October 21, 2013 by | 1 comment

By William K. Black

Tyler Cowen often seeks to defend corporations from what he views as unjust criticism.  He does not, however, evidence any understanding of the relevant criminology or economics literature on “control fraud” so his defenses sometimes actually represent indictments of the risks posed by corporations.  A good example is blog about libertarianism and the workplace.

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Why is The Economist Chortling over the Prospect of Oil Pollution in Ecuador?

Posted on October 18, 2013 by | 6 comments

By William K. Black

The Economist has increasingly been copying the descent of the Wall Street Journal into dogma.  One of it perennial hates is President Rafael Correa of Ecuador.  Correa, an economist, has committed the unforgivable offense of succeeding through economic policies that The Economist despises.  This is passing strange because Correa’s four foundational policies are expanded health care, expanded education, improved infrastructure, and encouraging entrepreneurs by reducing the time and cost of starting a business in Ecuador.  The Economists’ pages are littered with praise for right-wing governmental leaders and candidates who promise that they will implement those same four policies (but rarely do in practice).  Correa has actually delivered on his promises – quickly – and the improvements in the economy of Ecuador and the lives of ordinary citizens have been huge.  The result is that Correa is the second most popular head of state in the Americas.

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Would Janet Yellen as Fed Chair Mark a Shift in Economic Policy?

Posted on October 16, 2013 by | Comments Off on Would Janet Yellen as Fed Chair Mark a Shift in Economic Policy?

The latest episode of the Black Finance and Fraud Report from The Real News Network. Bill is discussing whether Yellen’s confirmation marks a victory for progressive democrats?

Or you can visit the TRNN site that includes transcripts.

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The Tea Party’s Tactical Brilliance and Strategic Incompetence

Posted on October 16, 2013 by | 5 comments

By William K. Black

The Tea Party and its (non) think tanks have proven that they are tactically brilliant in manipulating the Republican Party, but strategically incompetent.  Today’s Senate Bill, which will be forced down the House Tea Party members’ throats, is the result of that strategic incompetence.  The Tea Party has learned that there are a few things many GOP elected officials are still unwilling to do.  Specifically, once the admittedly slow-witted House GOP leadership realized that the Tea Party had marched it to the far edge of a bridge to nowhere and the choices were (Option One: suicide) to keep marching off the bridge into the river (doing grave harm to the Nation and the world, ruining the GOP “brand,” returning the House to control by the Democratic Party, and threatening their own seats or (Option Two: truce) to stop and beg the Democrats for a truce – the GOP leadership would abandon the Tea Party and blame it for the humiliating rout.

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