Search Results for : william Black


Fraud Key Profit Center for Wall Street-William Black

USA Watchdog has the interview Fraud Key Profit Center for Wall Street-William Black.

Dr. Black, who is also a professor of both economics and law at UMKC, says, “Obviously, it is the worst possible thing to do in terms of stability. The way you rig these things doesn’t just make you wealthy, it creates asset bubbles, massive asset bubbles, the biggest in history, and it’s not just in the United States. . . . The biggest asset bubble right now has to be in China. . . . The estimated loss for the United States over the course for ‘The Great Recession’ (or 2008 meltdown) is $24.3 trillion. . . . This has been a catastrophe for much of the world.”


If you don’t know the information in this video, then you haven’t a clue about how massive is the fraud from the likes of Wall Street and their political enablers.

If you don’t know this, then you don’t know that most of Hillary Clinton’s campaign funds are donated from the proceeds of massive financial fraud.

If you don’t know this information, then you do not understand why Bernie Sanders puts fixing the rigging of the system as his most important issue in the campaign.

If you think there are more important issues than the rigged system, then you haven’t a clue as to how badly the system is rigged.

It is all laid out here in this video from a very reliable and expert source. No conspiracy nuts nor wacky conspiracy theories are here.


William Black: Je Suis Oncle Bernard

New Economic Perspectives has the article Je Suis Oncle Bernard by William Black.

it is my sad responsibility to note the murder of Bernard Maris, a prominent French economist and opponent of financial terrorism via austerity, in the terror attack on Charlie Hebdo.

I doubt the attackers even cared that they killed an economist who probably was one of the few  who spoke up for the needs of the middle and lower classes in France and Europe.  Of course, I don’t know what kind of satire Maris wrote, so I cannot vouch for that part of his public life.  As if someone needed vouching for as a precondition for not being murdered.


Greece Is Tearing Europe Apart Politically, Socially and Economically: William Black

The Daily Ticker on Yahoo has the story and interview headlined Greece Is Tearing Europe Apart Politically, Socially and Economically: William Black.

I think the headline is slightly off in that it might give you the impression that William Black thinks Greece is at fault here.  More to his point is the remark:

“Austerity…is an inconceivably awful policy,” Black says. The European periphery nations are suffering great depressions — not recessions – he notes, and the region’s best and brightest are emigrating from Europe because of high unemployment and economic uncertainty.

One thing about William Black, a former senior financial regulator and author of the book The Best Way to Rob a Bank is to Own One, he doesn’t mince words.


William Black: Why Nobody Went to Jail During the Credit Crisis

William Black: Why Nobody Went to Jail During the Credit Crisis is an interview with the man who wrote the book The Best Way To Rob A Bank Is To Own One.  I also mention Black and his book in the post The Best Way To Rob A Bank Is To Own A Politician.

The link to the article that is the focus of this blog has both an audio of the interview and a transcript.  To try to give you a sense of the magnitude of the fraud being discussed and to whet your appetite to read the article, I have selected some parts of the transcript to quote.

Remember I told you there were over a million cases of mortgage fraud a year and that overwhelmingly it’s lenders who foot the fraud, the lie in the liars loan.

To give you a comparison, at the peak of the Savings and Loan Crisis, there were 1,000 FBI agents working the cases.

Eight times more FBI agents than were working the cases in fiscal year 2007. And this crisis is forty times bigger and worse than the Savings and Loan Crisis. So you would have required massively more people. To give you another idea of scope, to investigate Enron, and Enron was complex, but it was nowhere near as big and as complex as Washington Mutual. It took 100 FBI agents. So you can see that with 120 nationwide, at most you could have done one major case.

Every year, with a million plus cases of fraud a year, if you prosecute a thousand of them or two thousand of them or three thousand of them, you are a million cases further behind every year, right. It is just insane. So the FBI says we got to start going after the big guys at which point Bush’s Attorney General Mukasey says no, he refuses to even create a National Task Force against mortgage fraud, saying famously, this is simply the equivalent of, and I am quoting again, “White Collar Street Crime,” little tiny stuff. Well of course he has assigned the FBI to only look at little cases and they report back, hey we’re finding little cases. And the Mukasey interprets from that, hey only little cases exist.

Is it any wonder that one of the signs I am going to hold up in the Occupy Boston march is Justice For Wall StreetSharon The Two Fisted Protester is holding this sign plus another.

For some reason, people cannot understand what the Occupy … movement really wants.  They must have very short memories.

I found the link to the William Black article on the Occupy Boston Facebook page, but I’ll be darned if I can figure out how to create a direct link to that specific post.  If someone else makes a comment after I did, I may receive an email with the link.


Oral Testimony of William K. Black – Joint Committee of Inquiry into the Banking Crisis

New Economic Perspectives has the article Oral Testimony of William K. Black.

The article points to a transcript of the testimony Joint Committee of Inquiry into the Banking Crisis. Rather than read the article’s summary of the testimony, I went right to the transcript. The transcript is long, so even the lengthy excerpts below are only a small part of the transcript. (I wish I had found the link to the promised video.)

Marc MacSharry

Okay. In terms of the likelihood of a repeat, does Professor Black think that the set of parameters that currently exist make it quite likely that it will all happen again?

Professor William Black

Yes, and it will be worse. This is not just Ireland and Europe – this is the United States. There has been no accountability for the bankers and no accountability for the regulators. So, it will take the next boom before this happens again. In the savings and loan crisis, as the committee heard we got over these 1,000 felony convictions. None of those people, to my knowledge, participated in the current crisis precisely because they had criminal records. That is what we call specific deterrence. There will be no specific deterrence out of this crisis. The worst actors who know exactly how to use these four ingredients of the recipe that I told the committee are out there, and what they have learned from this crisis is that it is a sure thing and not much of anything happens to one. That is a really perverse incentive structure. It is critical that one reverses that.

Notice the mention of Stephanie Kelton and her current position. This is a name that I have been trying to get readers of my blog to burn into their memories. It is going to be extremely important for people to know who she is, and to remember who hired her – Bernie Sanders.

Marc MacSharry

Would Professor Black feel that the euro, therefore, is arguably unfit for purpose because of the smaller economies on the periphery like Ireland, which are less than 1% of the eurozone?

Professor William Black

The euro is a disaster. It never made sense in terms of the economic literature on an optimal currency area. My colleague, Professor Stephanie Kelton, who is now the chief economist on the Senate budget committee, is one of a number of scholars who wrote this in advance and their predictions have proven absolutely correct.
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Professor William Black

We have not set this up but I thank Deputy Doherty. My answer is not in response to Ireland. I am not talking about Ireland. I am responding to the generic question. Here is an example of that dated 15 July 1987 from Charles Keating, our most notorious fraud in the savings and loan crisis to his chief political fixer. “Highest priority – get Black. Good grief – if you can’t get Wright [the Speaker of the House] and Congress to get Black – kill him dead – you ought to retire.” That is the kind of thing I am talking about. Our joke in the savings and loan crisis was the highest return on assets was always a political contribution for any banker. In our context, the Speaker of the House held hostage our Bill to get funding to close the institutions, to extort special favours for several fraudulent Texas savings and loan branches. Five US Senators who became known as the Keating Five sought to keep us from taking enforcement action against the worst fraud. The President of the United States attempted to appoint two members, chosen by Charles Keating, to run the agency. I told the committee it was a three presidential appointee agency that ran it. A Mr. Phelan, doubtless a distant cousin, was hired by the House ethics committee to investigate the ethics complaints against the Speaker of the House, James Wright. He did resign at the end of this process, but three of the recommended charges by Mr. Phelan after his investigation were that an ethics case should be brought against the Speaker of the House for his effort to fire William Black, his effort to fire Joe Selby, who was one of those two top regulators I told the committee about, and because he held hostage our funding to extort favours on behalf of folks.

In the United States context, these people do not go quietly. If you bring cases against powerful bankers, they will enlist their political allies and they will give very large political contributions to do that. In our context, Alan Greenspan was used to recruit the Keating Five, the five US Senators. He was hired as a lobbyist initially by Charles Keating to recruit those Senators. The United States is not unusual in those terms. If you take on really powerful bankers you will find that you get political push-back. If you do not pick regulators who will stand up to that – this is what I referred to as the Mike Patriarca level – Mike Patriarca was asked by a US Senator, one of the five who was meeting with us, whether he was saying that Arthur Young & Company, then one of the top tier audit firms, would prostitute itself for a client. Committee members, as legislators, know that if they ask that of a bureaucrat what the only possible answer is. When there are five Senators the only possible answer is, “Oh no sir, I would never say that.” The actual answer from Mike Patriarca was “Absolutely, it happens all the time.”
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Professor William Black

When I was an enforcement and litigation director I negotiated these things all the time and here is the key that you need to understand. Bankers make the decision and their priorities are not to go to jail, not to lose their job and not to have their bonuses clawed back. To accomplish those three things they also have a fourth priority to not throw anybody junior to the wolves. In the United States we have much broader plea bargaining powers than exists in most of Europe. If you throw the junior person to the wolves we will flip him which means we will get him to plead and to testify about the more senior people. The committee will note that in all of these major deals in the United States nobody got named, loses their bonus, loses their job or goes to jail and they are happy to trade off fines.

The fines sound large. They are large in absolute terms but relative to JP Morgan Chase, to pick a non-random example, they are literally a few weeks’ revenue so they do not care. Also, bankers do not pay the fines; it is the shareholders. This is the third in a triple whammy hit if you follow the recipe to the extent that the banks have followed this recipe. First, they have caused huge losses to the shareholders directly by making bad loans intentionally. Second, they have taken a whole lot of money that should have gone to the shareholders in the form of bonuses for destroying the institution or at least causing huge losses. Third, they come along and are happy to sign an agreement in which the shareholders pay the fines to make sure that they have no accountability. Therefore, this is an utterly useless exercise in terms of deterrence.

I think I understood a lot of the testimony because I am a regular reader of the New Economic Perspectives blog and of the book, “The Best Way to Rob a Bank Is To Own One”. I wonder how much is understood by ordinary people and perhaps even the members of the committee that took the testimony.

I take particular interest in the talk of Gresham’s Dynamic, which I am not sure Black did justice to in explaining it to the uninitiated.

Back in the late 1980’s and early 1990’s I was remarking on the Gresham’s Law as it applied to Mutual Fund Managers. The only ones who could keep their jobs were the ones who were taking insane risks and achieving insane (if temporary) returns for their funds. It was hard to find a mutual fund that was still being managed by prudent investors. I even had to keep reminding myself that it was not how much money that I was making on paper, but it was about how much of it that I would eventually get to keep.

The American public still does not get what a crucial failure of the Obama administration it was and still is in the failure to prosecute the bankers (fraudsters.) This is why I keep harping on this issue to the same extent that Bill Black does.


What Happened When Pete Buttigieg Tore Down Houses In Black And Latino South Bend

BuzzFeed News has the article What Happened When Pete Buttigieg Tore Down Houses In Black And Latino South Bend.

Regina Williams-Preston got into politics so that the city wouldn’t do to anyone else what the mayor’s big redevelopment plan did to her.

His program to knock down hundreds of homes in black and Latino neighborhoods like hers smacked of gentrification and ultimately cost her family several investment properties they hoped to repair but couldn’t after Williams-Preston’s husband suffered a serious illness.

This is the kind of report I wanted to see when I heard about the “1,000 homes in 1,000 days” program. The article is not a hit piece, but it does show what can happen with well meaning, but inexperienced people get aggressive. There have been plenty of experienced people who did things like this, but I am not sure they were well meaning.

I would not be surprised if what Pete Buttigieg thought when he took on this project is some of what goes into vulture capitalists thinking when they take over a company and strip it of its assets, leaving the company’s debt holders and employees with nothing. This is what they may teach in business schools as just maximizing shareholder values. That sounds like a laudable goal until you think about the collateral damage.

Here is how CNN handled the story. Their article is Pete Buttigieg pushed an aggressive plan to revitalize South Bend. Not everyone felt its benefits.


Bill Black: Hillary’s Threat to Wage Continuous War on the Working Class via Austerity Proved Fatal

New Economic Perspectives has the fabulous article Hillary’s Threat to Wage Continuous War on the Working Class via Austerity Proved Fatal by William K Black. The article was republished on Naked Capitalism as Bill Black: Hillary’s Threat to Wage Continuous War on the Working Class via Austerity Proved Fatal.

This is a great explanation of what my Politics Blog is largely about. It explains why I am so adamantly opposed to Hillary Clinton and so disappointed by Barack Obama. It explains why I have come to realize just how bad Bill Clinton’s time in office was for this country.

It is hard to select a few excerpts from the article to give you the gist, but the following is my feeble attempt.


Here is the excerpt I should have chosen first.

Timothy Geithner, a proponent of austerity, is famous for remarking that he only took only one economics class – and did not understand it. In the same review of Geithner’s book by Krugman that I have been quoting, Krugman gives a concise summary of Geithner’s repeated lies about his supposed support for a larger stimulus. Jacob Lew, the Rubinite who Obama chose as Geithner’s successor as Treasury Secretary, was also trained as a lawyer and is equally fanatic in favoring austerity. In 2009, no one with any credibility in economics within the Obama administration could serve as an effective spokesperson for [against?] austerity as the ideal response to the Great Recession.


But Romer, Summers, and Bernstein experienced the same frustration as 2009 proceeded. The problem was not simply the Rubinites’ fervor for the self-inflicted wound of austerity – the fundamental problem was President Obama. Obama’s administration was littered with Rubinites because Obama was a New Democrat who believed that Rubin’s love of austerity and trade deals was an excellent policy. Of course, he had campaigned on the opposite policy positions, but that was simply political and Obama promptly abandoned those campaign promises. Fiscal stimulus ceased to be an administration priority as soon as the stimulus bill was enacted. Romer and Summers recognized the obvious and soon made clear that they were leaving. Bernstein retained Biden’s support, but he was frozen out of influence on administration fiscal policies by the Rubinites.
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Final Cautions

Each of the economists speaking on these subjects in Kilkenny opposed Trumps election and believe it will harm the public. Fiscal stimulus is critical, but it is only one element of macroeconomics and no one was comfortable with Trump’s long-term control of the economy. I opined, for example, that Trump will create an exceptionally criminogenic environment that will produce epidemics of control fraud. The challenge for progressive Democrats and independents is to break with the New Democrats’ dogmas. Neither America nor the Democratic Party can continue to bear the terrible cost of this unforced error of economics, politics, and basic humanity. I fear that the professional Democrats assigned the task of re-winning the support of the white working class do not even have ending the New Democrats’ addiction to austerity on their radar. They are probably still forbidden to read Tom Frank.

This information in this article is exactly why I feature a picture on my Facebook page of L. Randall Wray’s book Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems.

image from my Facebook page

Image from my Facebook page


Bill Black appears on The Real News Network discussing Greece

New Economic Perspectives has the article Bill Black appears on The Real News Network discussing Greece which features The Real News Network video. On YouTube, the video has the explanation:

Professor William Black says the people of Greece won in spite of mainstream medias’ efforts to bury their plight and force them into a Great Depression

From the YouTube post, it is not clear if The Real News Network wants to discourage me from making these posts.  I have been avoiding posting such items recently because of these admonitions.  However, I think this one is too important to pass up.


I feel that this video is important because it is a good antidote to the fiction that has been printed as news in so-called reliable media such as The New York Times. The so-called experts that The New York Times uses to write its stories are just not qualified to offer their opinions on the subject as if it were expert testimony.


Jeffrey Sachs Channeled His Inner Bill Black – and Obama and Holder Ignored Him Too

New Economic Perspectives has the article Jeffrey Sachs Channeled His Inner Bill Black – and Obama and Holder Ignored Him Too by William K. Black.   The article quotes from the appearance by Professor Jeffrey Sachs, Columbia University at The  31st Annual Monetary & Trade Conference
in Partnership with Drexel University’s LeBow College of Business: Fixing the Banking System for Good, Wednesday, April 17, 2013, Pennsylvania Room at the Federal Reserve Bank of Philadelphia, 100 N. Sixth Street Philadelphia, PA 19106.

Jeffrey Sachs: ‘Well, thank you very much for saying it and practicing it. I do believe – by the way, I’m just going to end here because I’ve been told I have to run to the U.N. in fact right now – I believe we have a crisis of values that is extremely deep, because the regulations and the legal structures need reform. But I meet a lot of these people on Wall Street on a regular basis right now. I’m going to put it very bluntly. I regard the moral environment as pathological. And I’m talking about the human interactions that I have. I’ve not seen anything like this, not felt it so palpably. These people are out to make billions of dollars and nothing should stop them from that. They have no responsibility to pay taxes. They have no responsibility to their clients. They have no responsibility to people, counterparties in transactions. They are tough, greedy, aggressive, and feel absolutely out of control, you know, in a quite literal sense. And they have gamed the system to a remarkable extent, and they have a docile president, a docile White House, and a docile regulatory system that absolutely can’t find its voice. It’s terrified of these companies.

For those who don’t know Jeffrey Sachs, William Black quotes the following from the article Jeffrey Sachs Calls Out Wall Street Criminality and Pathological Greed.

Jeffrey Sachs, Columbia professor and director of the Earth Institute at Columbia, is a controversial figure for his neoliberal stance on macroeconomics and his role in promoting the use of “shock therapy” in emerging economies. But it is also important to recognize that criticism from a connected, respected insider has more significance than that of someone like Bill Black, who has made a career of taking on bank fraud but has never reached a top policy-making level.

Now, perhaps you get the point of why I am so disappointed in our “docile president”.  It may even be worse than what we have been hearing from Elizabeth Warren and William Black.  You should also read what Sachs had to say about the Clintons.