New Economic Perspectives

AEI Pushes Government Propaganda Telling Women to Marry Schlubs

Posted on April 6, 2016 by Devin Smith | 6 comments

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

I wrote a two-part column on the joint report by AEI and Brookings on poverty reduction. Part two of my column focused on the policy that report pushed most prominently – a government program of propaganda urging pregnant women to marry. My first article, however, criticized Eduardo Porter’s February 2, 2016 column in the New York Times for ballyhooing the supposed wondrous nature of Brookings and AEI working together. Porter portrayed them as “leading thinkers on opposite sides of the ideological divide.” I pointed out that a majority of the group had hard-right views and that the group had an exceptionally weak member pushing a single idea – marriage propaganda. I also pointed out that Brookings had, for decades, played the same very junior partner role of giving AEI cover for “joint” proposals with Brookings to cripple financial regulation.

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Tagged AEI, brookings, marraige

Is there a solution to Brazil’s crises?

Posted on April 5, 2016 by Devin Smith | 1 comment

By Felipe Rezende

This is the first of a series of posts on the Brazilian crises.

There are two major crises Brazil’s president Dilma Rousseff is facing: one is a political crisis and the other is Brazil’s sharpest recession in 25 years.

Brazil’s Political Crisis

The political crisis has two main pillars: a) a vast corruption scandal (with evidence of a kickback scheme funneling billions of dollars from state-run firms and, more recently, in a massive data leak over possible tax evasion, Brazil politicians linked to offshore companies in Panama leaks); and b) impeachment proceedings to move forward against President Dilma Rousseff.

The Federal Court of Accounts (TCU) announced in 2015 that it had rejected the accounts of Rousseff’s administration for the year 2014. In a unanimous vote, the federal accounts court, known as the TCU, ruled Dilma Rousseff’s government manipulated its accounts in 2014 to “disguise fiscal deficits” as she campaigned for re-election. The allegation is that Ms. Rousseff manipulated Brazil’s account books to hide a growing fiscal deficit.

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Tagged Brazil, Rousseff

Krugman on the Corruption of our Nation via Perverse Incentives

Posted on April 5, 2016 by William Black | 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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Money and Banking – Part 11: Inflation

Posted on April 5, 2016 by Eric Tymoigne | 6 comments

By Eric Tymoigne

We are done with the study of banking operations. The next step is to incorporate them into the analysis of macroeconomic issues and this post begins on such topic by focusing on inflation. When inflation is mentioned, it is usually in relation to the cost of buying newly produced goods and services for consumption purpose. Another type of inflation concerns asset prices, i.e. the price of non-producible commodities and old producible commodities. This post does not study asset-price inflation, which concerns theories of interest rate.

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Tagged money and banking

BWU Support for WARN Act

Posted on April 4, 2016 by William Black | 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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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 by William Black | 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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Posted in William K. Black

Fraud Key Profit Center for Wall Street

Posted on March 30, 2016 by Devin Smith | Comments Off

BWU/NEP’s Bill Black is interviewed by Greg Hunter over at USAWatchdog.com. The topic is fraudulent banking. You can view the post here.

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Tagged banksters, wall street

Money and Banking-Part 10: Monetary Creation by Banks

Posted on March 27, 2016 by Eric Tymoigne | Comments Off

By Eric Tymoigne

The last three posts have explained how the operations of banks are constrained by profitability and regulatory concerns, and how banks operate to try to bypass these constraints. It is now time to go into the details of how banks provide credit and payment services to the rest of the economy.

Monetary Creation by Banks: Credit and Payment Services

Bank A just opened for business and its balance sheet looks like this:

Now comes household #1 who wants to buy a house worth $100 from household #2. #1 sits down with a banker (a.k.a. loan officer) who asks a few questions regarding annual income, available assets, monetary balances, the downpayment #1 is willing to make, among others. The banker asks for documentations that corroborate the answers provided by #1.
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Democrats Need to Give Up Being Deficit Hawks Even When it Feels Good Politically

Posted on March 24, 2016 by William Black | 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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