Tag Archives: Mitt Romney

Mankiw’s Ode to the Governmental Competition that Made Romney Wealthy

By William K. Black
(Cross-posted from Benzinga.com)

This is the second part of my discussion of N. Gregory Mankiw’s column asserting that governmental competition is desirable for the same reason that private competition is.  Mankiw was Chairman of President Bush’s Council of Economic Advisors from 2003-2005.  He was one of the principal architects of the perverse incentive structures that proved so criminogenic and drove the ongoing financial crisis.  He gave no useful warnings of the necessity for containing the developing crisis – even after the FBI’s September 2004 warning that mortgage fraud was become “epidemic” and would cause a financial “crisis” if it were not contained.  He is now Mitt Romney’s principal economic advisor.  His column favors the “competition” argument that led him to support crippling financial regulation even as private sector competition led to endemic fraud.  Mankiw is a moral failure as well as a failed economist.  His infamous response to Akerlof and Romer’s 1993 paper (“Looting: the Economic Underworld of Bankruptcy for Profit”) was that it would be “irrational” for CEOs not to loot “their” corporations.  He ignored all of the prescient warnings we made about how accounting control fraud drove our crises and he continues to ignore those warnings and the reality of our recurrent, intensifying financial crises.  He wants the U.S. to move even more rapidly downward in the “competition in regulatory laxity” that is driving those crises.

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Say W-h-a-a-a-t?

Warren Buffet told CNBC reporter Becky Quick that he could fix our nation’s deficit problem real quick — in precisely five minutes. Problem is, the US doesn’t have a deficit problem. We do, however, have an aggregate demand problem, as MMTers have been arguing for more than two years. And we could fix that in five minutes too, if we could just circumvent Congress.

The Occupy Wall Street Protestors have announced that Nov. 5th is “Move Your Money Day.” A few folks started early and discovered an unusual new penalty for “early withdrawal.” You have to see it to believe it.

Prior to Sept. 17, 2011, no one would blink (or cringe) at a photo like this.  But with the Occupy Wall Street movement drawing so much attention to the cosy relationship between Wall Street and the politicians who serve them, this photo of Mitt Romney and his colleagues at Bain Capital just doesn’t seem very funny.

In this private letter from Charles Koch to Fredrich Von Hayek, Koch urges the grand poobah of free-market economics to be sure to take advantage of the benefits he is entitled to under Social Security.

Until today, the bloggers at New Economic Perspectives had ever heard of Ben Strubel. But he’s definitely got our attention (and our respect) now. He posted a very nice summary of our macro approach — often dubbed MMT — and made a strong case for increased deficit spending. Maybe it’s just easier for people like this (practitioners/traders who haven’t had their heads fuddled with mainstream economic theory) to grasp how the modern monetary system actually works.

Here’s a terrific parable on de-leveraging from an anonymous author.  We recommend using it the next time someone takes out a chart of outstanding debt (public, private, or both) and the money stock (monetary base, M1, M2, MZM) and tries to make the asinine point that we don’t have enough money to pay off all the debt.

CNBCs John Carney says that “very few people understand how the modern banking system really works.” He praises MMT for its more accurate depiction of finance and banking.
Here’s an incredible statistic on the FIRE economy Interest on mortgages is now over 20% of personal consumption expenditure vs. 5% in 1980.  And this is in spite of the fact that 60% of the housing stock is owned outright.