Floyd Norris’ Apologia for Citi’s Frauds

Posted on September 3, 2014 by | 1 comment

By William K. Black

I have just written a column about the New York Times’ financial journalist, Floyd Norris’ August 20, 2014 column decrying attacks on those who detect and seek to sanction elite frauds.  Norris’ focus was on the Chinese government attacks on whistleblowers who “detect” elite frauds.  Norris bemoaned that those who detect elite fraud suffer far more than those that commit it.

My column pointed out that the practice of elite frauds, in league with their protectors in government and the media, attack those that detect and seek to sanction elite frauds in every country.  Indeed, I showed that Norris had aided and abetted the SEC’s leadership’s smears of Gary Aguirre, the SEC whistleblower who detected evidence of what he (and his superiors) considered likely fraud by elites.  His SEC superiors, however, blocked the investigation when they discovered it would lead to John Mack, the soon-to-be CEO of Morgan Stanley, one of the world’s largest investment banks.

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We Require Less a “Climate Freeze” More a Great “Climate Activation”

Posted on September 2, 2014 by | 4 comments

By Michael Hoexter

The psychiatrist and social commentator, Robert Jay Lifton had a far reaching and oddly hopeful op-ed in the New York Times, in which he comments upon a “climate swerve” in public opinion. While the United States still leads the world in climate denial and Republicans are seemingly still united around denying the human contribution to climate destabilization, Lifton points out that recent polls have shown that:

“Americans’ certainty that the earth is warming has increased over the past three years”

And

“those who think global warming is not happening have become substantially less sure of their position”

Lifton outlines the social psychology of the moment:

“Falsification and denial, while still all too extensive, have come to require more defensive psychic energy and political chicanery”

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Real Fiscal Responsibility 4; Carter: Education Reform

Posted on September 2, 2014 by | 2 comments

If you’re reading this you’ve landed near but not at the beginning of my very lengthy series evaluating the fiscal responsibility/irresponsibility of the Governments of the United States (mostly the Congress, the Executive Branch, and the Federal Reserve) by Administration periods, beginning in 1977 – 1981 with the Jimmy Carter period. My first post explained why I chose to start my evaluation with the Carter period, and also laid out my related definitions of fiscal sustainability, and fiscal responsibility.

It explained why fiscal responsibility is closely connected to the idea of public purpose, which I laid out in this post prior to beginning the series. You may want to consult that post, if you want to know what I mean by “public purpose.” I also claimed that the Government of the United States has been fiscally irresponsible in every Administration period since 1977.

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How to Eliminate the Scourge of Unemployment: Jobs Now at a Living Wage

Posted on September 2, 2014 by | 5 comments

By L. Randall Wray

It is amazing no one has thought of this before. Seven years after the GFC began, we’ve still got up to 25 million people who want jobs but cannot find them. Of course that’s far more than the official unemployment numbers—which don’t count anyone who worked just an hour or so, or who gave up looking altogether.

Gee, I wonder how on earth we can find a solution to joblessness, or to low pay? It is all so complicated. How can we stroke the business class in just the right way to get them to create a job or two? How can we prevent our corporations from taking jobs abroad?

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Floyd Norris’ Hypocrisy: Elite Fraud is More Dangerous to Detect than to Commit

Posted on September 2, 2014 by | 4 comments

By William K. Black

Floyd Norris, who I once respected, has written an interesting column titled “In China, Detecting Fraud Riskier Than Doing It.”  Norris states that China’s hostility to those who expose fraud is so unusual that it is worthy of a column:  “It can be very risky to do things in China that are taken for granted in other countries.”

China is different from some other countries.  China has no domestic rule of law and no respect for the rule of law in its dealings with other nations.  The same is true of Russia.  It is important to understand such differences.

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Real Fiscal Responsibility 3; Carter: Inflation and Health Care

Posted on September 1, 2014 by | 14 comments

By Joe Firestone

Here’s the third post in my series evaluating the fiscal responsibility/irresponsibility of the Governments of the United States (mostly the Congress, the Executive Branch, and the Federal Reserve) by Administration periods beginning in 1977 with the Jimmy Carter period. My first post explained why I chose to start my evaluation with the Carter period, and also laid out my related definitions of fiscal sustainability, and fiscal responsibility.

It explained why fiscal responsibility is closely connected to the idea of public purpose, which I’ve laid out here. I also claimed that the Government of the United States has been fiscally irresponsible in every Administration period since 1977.

In my second post, I began by examining the problems of ending economic stagnation, and providing full employment at a living wage, and, I hope, by showing that the Government, during the Carter period, failed to solve either problem because of its commitment to deficit reduction, and budget balancing, in the service of hoped for inflation moderation. The remaining posts in this series will continue to document the claim that all the US Governments since 1977 have been fiscally irresponsible. This, one, the third in the series, will examine how the US Government failed in its efforts to create and maintain price stability, and also failed to provide a solution to the problem of providing the right of receiving health care to every American in need. Continue reading →

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Where Danger Lurks: The Dark Recesses of the Orthodox Mind

Posted on August 31, 2014 by | 14 comments

By L. Randall Wray

Ah, the Eternal Sunshine of the Recessed Mind!

Here’s an unintentionally–but riotously–hilarious mea culpa by Olivier Blanchard.

Here’s the CliffsNotes version: Yes, we didn’t see nothing coming. But that isn’t our fault. The Global Financial Crisis—the biggest calamity since 1929—was invisible to us because it had been lurking in the dark corners of the financial system.

However, we had been creating highly sophisticated economic models in which there were no financial institutions—at least nothing like those in the real world. Ours were transparent. They were well-capitalized. Their risks were perfectly hedged. There was no uncertainty. There was no chance of financial instability because the market forces always—inevitably—drove toward equilibrium. We had very nicely behaved DSGE models—models with no default risk. Where everyone was civilized and played nice. No one ever missed a payment. All debts were always paid. On time.

In our world, even Lake Woebegone would have been impossibly unruly.

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Real Fiscal Responsibility 2; Carter: Stagnation and Unemployment

Posted on August 31, 2014 by | 15 comments

By Joe Firestone

This post continues my series evaluating the fiscal responsibility/irresponsibility of the Governments of the United States (mostly the Congress, the Executive Branch, and the Federal Reserve) by Administration periods beginning in 1977 with the Jimmy Carter period. My first post explained why I chose to start my evaluation with the Carter period, and also laid out my related definitions of fiscal sustainability, and fiscal responsibility.

It explained why fiscal responsibility is closely connected to the idea of public purpose, which I’ve laid out here. I also claimed that the Government of the United States has been fiscally irresponsible in every Administration period since 1977. The remaining posts in this series, and they will be many, will document that claim with analysis.

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Real Fiscal Responsibility I: Preliminaries

Posted on August 29, 2014 by | 16 comments

By Joe Firestone

This is the first in a lengthy blog series that will evaluate the US Government’s record on Real Fiscal Responsibility, Administration period by Administration period, since the Administration of Jimmy Carter in 1977. In evaluating the US Government’s record, it’s important to state clearly that I will be evaluating more than just each Administration and its activities.

The record of fiscal responsibility is not the product of the Executive Branch alone. It is the outcome of the interaction of the Executive with the two Houses of Congress and the Federal Reserve System, even on occasion the interaction of one or more of these with the Supreme Court. All bear joint, though not equal responsibility for the record of Government fiscal responsibility or fiscal irresponsibility, as the case may be, during each Administration period.

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The Wall Street Journal Claims that only the “Left” is Willing to Prosecute Banksters

Posted on August 28, 2014 by | 4 comments

By William K. Black

This is my third installment in my series of columns discussing the WSJ’s rant against even feeble actions by Attorney General Holder to hold the banks and (a pittance of banksters) even slightly accountable for leading the three epidemics of mortgage fraud that caused the financial crisis and the Great Recession.  The WSJ is enraged not at how feeble Holder’s efforts have been, but that Holder dared to take any action against the elite frauds.  The WSJ explicitly frames the question of accountability for the banks and banksters as a left v. right divide.  Only the “populist left” is in favor of not granting the banks and banksters immunity from the criminal and civil laws for leading the most destructive fraud epidemics in history.

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