Tag Archives: Great Financial Crisis

Why Minsky Matters

Posted on March 25, 2014 by | 7 comments

minskyAmerican economist Hyman Minsky died in 1996, but his theories offer one of the most compelling explanations of the 2008 financial crisis. His key idea is simple enough to be a t-shirt slogan: “Stability is destabilising”.

BBC Radio 4’s Analysis program has an episode on Minsky and looks at topics such as:

  • In the aftermath of the financial crisis, why did Minsky die an outsider?
  • What do his ideas say about the response to the 2008 crisis and current policies like Help to Buy?
  • And has mainstream economics done enough to respond to its own failure to predict the crisis and the challenge posed by Minsky’s ideas?

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NEP’s Bill Black appears on BBC’s Law In Action

Posted on March 6, 2014 by | Comments Off on NEP’s Bill Black appears on BBC’s Law In Action

Bill appears on an episode of BBC Radio 4’s series Law In Action originally broadcast on March 4, 2014. The topic of discussion is why no senior bankers have been prosecuted for their role in the financial crisis and whether companies should be able to avoid criminal prosecution by making a deal with a judge about how they work in future. Bill appears at about 13:30 on the timeline. You can listen here.

 

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When Will They Ever Learn: Uncle Sam is not Robin Hood

Posted on March 4, 2014 by | 10 comments

By L. Randall Wray

Memo to Obama: Don’t tie progressive spending policy to progressive tax policy. Each can stand on its own.

Reported today in the Washington Post:

Obama proposes $600 billion in new spending to boost economy

President Obama on Tuesday unveiled an ambitious budget that promised more than $600 billion in fresh spending to boost economic growth over the next decade while also pledging to solve the nation’s borrowing problem by raising taxes on the wealthy, passing an overhaul of immigration laws and cutting health costs without compromising the quality of care. Obama seeks to raise more than $1 trillion – largely by limiting tax breaks that benefit the wealthy — to spend on building roads and bridges, early childhood education and tax credits for the poor.

Here’s the conceit: Uncle Sam is broke. He’s got a borrowing problem. He’s gone hat-in-hand to those who’s got, trying to borrow a few dimes off them. But they are ready to foreclose on his Whitehouse.

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The AEI Takes its Regulatory Advice from Alan Greenspan

Posted on January 28, 2014 by | 3 comments

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

Mark J. Perry and Robert Dell’s February 24, 2011 article (“More Equity, Less Government: Rethinking Bank Regulation”) claims that the government caused the crisis and that the solution is to increase capital requirements and reduce government regulation.  The authors are at an ultra-conservative “think” tank (AEI) dedicated to protecting elite CEOs from the “regulatory cops on the beat.”

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The NYT Implies that Not Prosecuting JPMorgan Proves DOJ’s Vigor

Posted on November 26, 2013 by | 3 comments

By William K. Black
(Crossposted at Benzinga.com)

 

No one expects Andrew Ross Sorkin’s slavish “Deal Book” lackeys to demand that the elite Wall Street bankers whose frauds drove the financial crisis be imprisoned, but the slavishness to the banks revealed when major news stories emerge continues to irritate if not surprise.  A recent embarrassment can be found here.

The “Deal Book” Spinmeisters

The context of the NYT article was the expected settlement between DOJ, various states, and JPMorgan.  The spin comes fast and hard, which would be great in cricket (or quarks) but, sadly, exemplifies the national paper of record’s “Deal Book” devotional pages.  The “Deal Book” shows that cricket masters can impart very different spins.  The first substantive paragraph’s spin is to minimize JPMorgan’s fraud.

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Sorkin’s Paradox: Elite Bank Officers are “Worse” than “Repugnant” but Never Criminal

Posted on October 3, 2013 by | 9 comments

By William K. Black

This is the third installment in my Sorkin Saga.  The saga was prompted by Andrew Ross Sorkin’s (ARS) video in which he “outed” himself as the leader of an undercover effort by the journalists of the New York Time’s “Dealbook” and CNBC to discover and “out” the “criminal element” among the elite bankers.  Here is the key passage from his video.

“If there’s one question that I get just about more than any other, ‘So why didn’t anybody go to jail, and did nobody try?’ And there’s an answer to that too.

A lot of people had an incentive to try to find a way to bring not justice, but to put people away.  Prosecutors, law enforcement, journalists; it would have been a better story.  But for the last five years we’ve tried, all of us have tried, to find that criminal element.  And while things happened that were upsetting and frustrating and unethical and immoral sadly, it may not have been criminal.”

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The Divine Right of Bankers: Sorkin Proves Baroness Orczy Correct

Posted on October 2, 2013 by | 7 comments

By William K. Black

In yesterday’s column I discussed the fact that Andrew Ross Sorkin (ARS) of the New York Times and CNBC has unmasked himself in a video entitled “Two Myths and One Reality” as the scourge of Wall Street who had worked tirelessly for five years to find the “criminal element” that caused the financial crisis.

“If there’s one question that I get just about more than any other, ‘So why didn’t anybody go to jail, and did nobody try?’ And there’s an answer to that too.

A lot of people had an incentive to try to find a way to bring not justice, but to put people away.  Prosecutors, law enforcement, journalists; it would have been a better story.  But for the last five years we’ve tried, all of us have tried, to find that criminal element.”

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The “Lessons” that Wall Street, Treasury, and the White House Need You to Believe Five Years After the Collapse of Lehman Brothers

Posted on September 20, 2013 by | 9 comments

By Robert E. Prasch
Department of Economics
Middlebury College

Five long years have passed since the demise of the once venerable firm of Lehman Brothers. To mark the occasion, Wall Street, the United States Treasury Department, the White House, and their several political proxies and spokespersons have taken to the mass media to instruct the public in the “lessons” to be drawn from the financial crisis of 2007-09. Regrettably, we are witnessing the propagation of several self-serving falsehoods in the hope that the public can be induced to embrace them now that the immediacy of the events in question is in the past. Some of the lessons are so flagrantly false that they demand immediate correction.

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NEP’s William Black appears on HuffPost Live

Posted on August 22, 2013 by | 3 comments

The legal culture of big-time settlements can short-circuit the law, protecting wrongdoers from punishment, trial or even an admission of guilt. That’s just what the government has done for the major banks implicated in sweeping mortgage fraud. Is it too late to rectify the big banks role in the housing and financial crisis? Bill and other panelists speak with Alyona Minkovski on this subject.

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Why are Appraisers Furious at Fraud by their Peers while Corporate Lawyers are Complacent?

Posted on August 12, 2013 by | 3 comments

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

 

I have done a series of articles about the efforts of honest appraisers (which began in 2000) and loan brokers to alert the lenders, the markets, and the government to the twin fraud epidemics (appraisals and “liar’s” loans) committed by lenders’ controlling officers that drove the financial crisis.

Honest appraisers could have profited greatly by becoming dishonest appraisers who would be given the lucrative assignments by fraudulent lenders’ controlling officers and their agents.  Instead, honest appraisers suffered serious losses of income because they refused to succumb to the extortion efforts of the fraudulent lenders and their agents.  A national survey of appraisers in early 2004 found that 75% of them reported that they were the subject of attempted coercion designed to inflate the appraisal during the past 12 months.  A follow-up study in 2007 found that percentage rose to 90% and that 67% of appraisers reported losing a client and 45% did not get paid their fee because they refused to inflate the appraisal during the past 12 months.  Many honest appraisers were driven out of the profession by the blacklists the fraudulent lenders’ controlling officers and their loan brokers used to deny business to honest appraisers.

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