Bill Black: Is Politico or Third Way More Divorced from Reality?


Naked Capitalism republished the article Bill Black: Is Politico or Third Way More Divorced from Reality?.

President Obama did not simply fail to prosecute the Wall Street CEOs who led the largest frauds. His Justice Department failed to prosecute even the not-so-elite mortgage banker CEOs and SVPs who led the making of millions of fraudulent mortgage loans. Even worse, to the extent Obama and his DOJ officials said anything about elite bank fraud they virtually always spoke to downplay it and to express their fear that prosecuting fraudulent bankers could harm the world. Obama’s unprincipled failure to restore the rule of law to Wall Street was terrible policy and terrible politics.
.
.
.
George Akerlof received the Nobel Prize in Economics in large part for his 1970 article on markets for “lemons” that introduced and named this perverse dynamic to economists.

[D]ishonest dealings tend to drive honest dealings out of the market. The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence.

.
.
.
That suggests that Hillary Clinton and the DNC have done a poor job of supporting each program and explaining how valuable each is in creating jobs.

Much of the focus of the article is how the Democrats’ non-prosecution of white collar crime has only fostered the feelings of racism and xenophobia in much of the voting public, The last sentence I quoted above shows how Hillary Clinton could have changed the political environment, but she actually encouraged it to be what she decried.

The article also focuses on how much of our economic and political problems derive from actual executive criminal behavior that the political elites allow to happen. Not only does it ruin the economy, but it gives the average voter the wrong impression of who is damaging the country. None of this is by accident from our political elites.

Leave a comment