By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City.
Greetings from Davos! I’m actually writing this over the mid-Atlantic as I return from being a keynote speaker at the annual “Public Eye” “shame prize” awarded to Goldman Sachs for its abuses. The shame prize award was made in Davos during the World Economic Forum as a counter-WEF event. Shell also “won” a shame prize, but I spoke on Goldman Sachs, the role of epidemics of accounting control fraud, and the WEF’s anti-regulatory and pro-executive compensation policies. I explained that the anti-regulatory policies were intended to fuel the destructive regulatory “race to the bottom” and why the executive and professional compensation policies maximized the incentives to defraud. I also explained that WEF was a fraud denier. Collectively, these three WEF policies contributed to creating the intensely criminogenic environments that produce the epidemics of accounting control fraud driving our worst financial crises. Detailed written developments of these arguments can be found on our UMKC economics blog: New Economic Perspectives.
The self-described “Handmaiden to Capitalism’s” reaction to my critique of her work
Heidi Moore is the finance editor for The Guardian. She has also worked for the Wall Street Journal and Marketplace. Two of my columns have discussed the economic myths that Moore embraces to champion austerity. My first column cited her pro-austerity columns as an example of one of the central problems we face globally. Many prominent individuals who consider themselves progressives embrace austerity. Indeed, many socialists in Spain and Greece designed and inflicted austerity – producing Great Depression-level unemployment in both Nations. Much of the German left’s leadership supports austerity. The Guardian considers itself a progressive newspaper, but its financial editor is an austerian whose non-ironic, self-selected tag is “Handmaiden to Capitalism.” (Derivative of Forbes’ self-description: “Capitalist Tool.”) I entitled the column: “Deprogramming Progressives Indoctrinated into Supporting Austerity.”
My column quoted extensively from Moore’s arguments in favor of austerity and explained why her arguments, e.g., that a Nation with a sovereign currency is just like a household in terms of budgets and that cuts in U.S. federal spending were an essential response to the Great Recession were examples of harmful economic myths.
I didn’t believe that I could convince Moore to give up her passionate embrace of austerity. She has continued to push for austerity as she watched it devastate the Eurozone, so I knew I had no chance of changing her views any time soon. My second column focused on a January 4, 2013 Moore column on the so-called “fiscal cliff”, austerity, and the platinum coin. I entitled it: “The Most Embarrassing Financial Column of 2013.”
My second column was seven typed pages and, like the first column (“Deprogramming Progressives”) it quotes extensively Moore’s arguments so that the reader can evaluate their context. I then make detailed critiques, often clause by clause, of the errors of economics, logic, and fact that I believe she made in her January 4 column. Substantive criticism is a treasure, but it is a painful treasure that Moore is (understandably) not masochistic enough to treasure.
Here are Moore’s responses to my columns.
Moore’s response to substantive criticism is at least as revealing of Moore’s character and substantive abilities as were my columns. Her responses reinforce my point. She can “block” white-collar criminology and pretend that the fact that the U.S. has a sovereign currency is an “irrelevant” difference from Nations that use non-sovereign currencies such as the euro, but that will only further impoverish her understanding of the economy. That is a shame, because her pure ad hominem responses to my detailed critiques comments reveal that she is incapable of mounting a substantive defense of the austerity myths she spreads in her columns. She is disingenuous in claiming that she does know what my problem is with her work. In my columns I detailed my problems with her claims in ten pages of detailed comments. I have never met her and have no personal problems with her. My problems are with her analytics and policies, her indifference to the suffering of the tens of millions of people harmed by the austerity policies she champions, and her absorption of the dogmas of the one percent. Those austerity policies have done terrible damage to Latin America (via the Washington Consensus’ infliction of austerity) and the eurozone and would do terrible damage to America if we adopted Moore’s policies.
We will see whether Moore succeeds in blocking our critiques from reaching The Guardian’s readers and Marketplace’s listeners, but that is a sad and illegitimate goal for a journalist. Moore’s response demonstrates why many experts do not speak truth to powerful journalists who disagree with the expert’s views. When they react badly to having their dogmas exposed as untruthful their threat is that they will seek to block your views from being expressed to the public. I have recently written a piece discussing the Justice Department’s threat to Frontline because the documentary “The Untouchables” exposed the scandal of the department’s refusal to even investigate fraud by elite banksters. Like the Department of Justice, Moore does not engage in a public debate of the merits.
Moore and I have track records. Her track record on austerity is disastrously poor. Her indifference to the wholly avoidable human cost of the gratuitous damage she helps austerity spread is unworthy of her, The Guardian, and Marketplace. I will let readers judge my track record. There are several scholarly books and articles that discuss in some detail my actions as a regulator. My subsequent work and policy recommendations can be judged directly by the reader or by reading reviews of my work by George Akerlof and Paul Volcker available on line at the University of Texas Press (search for: “The Best Way to Rob a Bank is to Own One”).
My view is that our track records establish that neither of us is “irrelevant.” I believe we have been relevant, but that our policies and actions have had the opposite effect on the public’s interests and the banksters’ interests. Ms. Moore, the “filthy mud swamp [I] came from” is Detroit, Michigan. I was born in Detroit, so the “filthy mud swamp [I] came from” is one of the epicenters of the crisis. The banksters deliberately targeted less sophisticated borrowers, particularly in Detroit, to take out liar’s loans at premium yields. The banksters often mocked the borrowers they defrauded as savages in a tone that Moore mimics with her “filthy mud swamp” gibe. The banksters did this during the height of the bubble – and then grossly inflated the borrower’s income and the home’s appraised value. The banksters then fraudulently sold those fraudulently originated mortgages to Wall Street (and eventually Fannie and Freddie). Wall Street banksters then created fraudulent collateralized debt obligations (CDOs) and, with the eager aid of the rating agencies, Wall Street law firms, and auditors, they then fraudulently sold the fraudulent CDOs or the banksters fraudulently held them for the firm’s own account (which maximized the banksters’ bonuses but caused the failure of entities like Merrill Lynch – we call it “looting” for a reason). The banksters then used their political power to cripple and pervert programs that Congress intended to be for homeowner relief into programs that in the immortal admission of Treasury Secretary Geithner, were actually designed to “foam the runways” to bail out the SDIs. The banksters then committed over one million felonies in order to fraudulently foreclose on homeowners. Finally (one prays), the banksters used their political power and economic extortion to coerce immunity not only from criminal prosecution, but even meaningful criminal investigation and disclosure of their literally millions of crimes.
So, if you, Ms. Moore, want to insult where I come from as a “filthy mud swamp” – it is the banksters and the neo-liberal economic policies you have shilled for all too often during your career that made the suffering of the people of Detroit so acute and widespread. I have personally seen what your austerity policies are doing to Ireland, Spain, and Italy, and I listened at the Davos shame prize as Eurydice Bers, a Greek journalist sitting next to me on the panel, explained in detail the tragedy of what austerity is doing to Greece (including an epidemic of suicides).
I’m sure you live in a very nice place, that you interview overwhelming elite bankers who live and work in wonderful places, and that you often dine in exquisite places with them on someone else’s tab. Your contempt for those who come from or dwell in what you deride as “filthy mud swamps” is all too common among the people you have too often served so slavishly in your chosen role as the Handmaiden of Capitalism (HOC). The people of Detroit, Ireland, Spain, Portugal, Italy, and Greece do not “slither.” The trails of slime you see all about you are from your bankster buddies – elite bank fraudsters do (metaphorically) slither.
White-washing the crimes of the banksters’ and providing an anti-Greek chorus echoing their neo-liberal dogmas are the critical skills of a HOC. The chorus is often a Milli Vanilli lip-synching sycophants’ act because the banksters’ PR people always try to provide the chants that the HOCs mouth. The HOCs are proud to be “in hock” to Wall Street.
Ms. Moore, the banksters have no respect for their servants. The people you serve as a HOC hold HOCs in contempt. Once you are no longer useful to them they will make this clear.
96 comments
Comments are closed.
Join the club, Dr. Black!
I was blocked by her on Twitter too when the kindest words I could use to describe her when retorting her horribly flawed article on the platinum coin seignorage solution was “brainless bimbo”
You’re far more diplomatic than me :)
Well, sexism aside… In this case, Moore fired first, and Black responded. And in this case, Google would have been Moore’s friend; and surely Ritholtz had tweeted her a hint?
UPDATE Fixed butchered comment….
I am not a Twitter expert, but isn’t the revenge to start a hashtag? #HeidiMooreSucks is unfortunately stooping to her level. I think readers should agree on a suitable hashtag and launch a Twitter assault. Ping Ritholtz and make sure the UMKC crowd knows, at a minimum.
For someone who (I presume) has no advanced degrees to cop a ‘tude of superior knowledge is piss poor. If this is the same Heidi Moore, she is a Barnard grad, only and ever a journo, no real finance experience.
http://www.milkeninstitute.org/events/gcprogram.taf?function=bio&EventID=GC10&SPID=4646
@Yves,
You’re nearly there. I’d recommend #MarketplaceSucks, or #MarketplaceIdiots. I’m not an economist but I’m educated enough to know the nonsense I hear from Moore, Kai Whatsisname, and others is misinformed. Emails to the show over the past few months do no good. Time to shame all of them into putting down the snail tongs and using the little forks to turn some pages, or flip some screens on their iPads, since they don’t seem to spend time otherwise learning the basics of what they report on.
Oh, I have it, but still stooping to her level:
#HeidiMoron
#HeidGriefing
A griefer is a player in a multiplayer video game who deliberately irritates and harasses other players within the game, using aspects of the game in unintended ways.[1] A griefer derives pleasure primarily or exclusively from the act of annoying other users, and as such is a particular nuisance in online gaming communities, since griefers often cannot be deterred by penalties related to in-game goals.[2]
In the culture of massively multiplayer online role-playing games (MMORPG) in Taiwan, such as Lineage, griefers are known as white-eyed — a metaphor meaning that their eyes have no pupils and so they look without seeing. The behaviours which cause players to be stigmatized in this way include cursing, cheating, stealing and unreasonable killing.[3]
http://en.wikipedia.org/wiki/Griefer
http://www.ranker.com/list/the-13-greatest-moments-in-video-game-griefing-history/benjamin-dunn
Skippy… Hay I was just looking at the porn[!!!] – Bill Black … snicker & snort!
Why make it personal? That is the whole problem. Instead of talking about how progressives bought into neoliberalism and lend them a helping hand to get out, this turned into a nasty personal mud fight between Black and Moore. Waste of energy.
If one buys into that fiction — “this turned into a nasty personal mud fight between Black and Moore” — then Moore has definitely won.
One has to ask: “Who is it that is trying to turn this into a nasty personal mud fight”?
Please point me to one single instance of where Black has engaged in the sort of ad hominem attacks that Moore has.
Bill Wrote 2 full articles about one person instead of about the problem. You are surprised that this person feels personally attacked? So is the strategy to go and piss of every “progressive” who is wrong about economics by making them feel they are personally targeted? Good luck then.
No, he wrote two posts about her argument, one in response to PERSONAL attacks on him.
Anyone who writes for publication knows their work is fair game. Her thin-skinnedness and vitriol is unprofessional.
PeterP says:
Again, pure fiction.
Here are the links to Black’s two articles:
http://www.nakedcapitalism.com/2012/12/deprogramming-progressives-indoctrinated-into-supporting-austerity.html
http://neweconomicperspectives.org/2013/01/the-most-embarrassing-financial-column-of-2013.html
I challenge you to show me one single example of where Black speaks about her and not about what she says or asserts.
Yves, so if you want out to roll out an educational campaign by starting hashtags for every “progressive” #Xsucks, all I can say: your message acceptance will spread like a wildfire among progressives. Good luck. She responded stupidly and aggressively, learn that this method doesn’t work instead of jacking it up. But hey, whatever works for you guys. Maybe after this article Moore will suddenly get Keynesian econ, fingers crossed.
Barnard? That explains it…in-breeding is a bitch.
In general terms I agree… As would perhaps the right intern…
* * *
I’m trying to think through the success of #mintthecoin, not that I understand it. It really did turn into a successful campaign and while I have no data I will freely speculate:
1. Groundwork laid by MMT advocates through years of blogging and proselytization
2. “Coin” as fetish object
3. Verb in the hash tag — an action that is a response to an intolerable situation.
After 2004, when Bush was re-elected (OK, modulo Ohio) and immediately had a mandate, I managed to Google bomb “Bush Mandate” to the Mandate magazine site (IIRC, the cover model was a cheerful mustachioed gentleman wearing a sailor hat) by leaving comments in the right threads on the right blogs. The level of effort was low, and Google put a stop to games like that long ago, I believe.
So I wonder what level of effort would be required for the NC commentariat to turn hash tags into twitter trends (perhaps centered on the foreclosure series when it is complete….)
I vote for #comeondownHeidi!
just because that’s how I know her, from Matt Taibbi’s 2009 takedown:
Come on down, Heidi! I’m sorry, it still makes me laugh.
#comeondownHeidi!
I too was blocked for some minor criticism. She is one of these people who has managed to advance so far beyond her competence and intellectual level (the media is full of them) that she is ultrasensitive. I long ago (I’m 76) concluded that we criticize others ad hominem for traits and behavior patterns that we find loathsome in ourselves.
Lots of truth in that. I plead guilty.
It’s a fair cop, but society’s to blame.
..I suspect many of us fight this battle with resident local chroniclers of corporate dogma and their fundamentalist followers…
It took around 3 years for “ad hominem” providers of fundamentalist LIES to vanish and or name change their accounts, locally…now that people see their LIES, the pushback is vociferous…and the punditocracy is gathering in irrelevancy..
Nice piece but she’s entirely worthy of Marketplace, surely?
Sadly, most of the people listening/reading her think that they’re hearing the “liberal” perspective. ‘Tis NPR, afterall…
I don’t travel in the Social Circles where this Ms. Moore person travels. I can only guess that she is surreptitiously but obsessively searching for signs that Mr. Black is “crushed and humiliated” by Ms. Moore’s twitter tantrum ( or “twitter takedown” as she might flatter herself to see it). She actually cares very much what Professor Black thinks and especially what Professor Black thinks of her.
If she were really indifferent she would not have made such a twitter point of proclaiming her indifference. So perhaps she can be goaded into further snapping lunges by further pokes from further sharp sticks. She might even have friends reporting back to her on “what did he say, huh?” Just in case that is true, I offer her spy-on-the-internet friends this humorous little photocartoon.
http://imgur.com/80NZe4z
I’m coming to believe that Heidi is really a professional (as in paid for and deployed with that purpose) Troll. Most trolls prefer the anonymity that the online world (still to some degree) offers. But no, her antics are indeed purposeful, and designed for the kind of short-attention mind that lives and communicates in under 140 characters. I think I am going to ignore her from here on out, really. And while an old salty (online) dog like m’self usually recommends “not feeding trolls”, for the time being and given her interactions with Dr, Kelton and so on, someone will have to deal with her swill. But really… she’s awful. It’s like “Mr. Smith” getting out of the Matrix and taking a human body… Eeeew.
I used to be on Twitter, but then I closed my account for good. I learnt a lot about hashtags, and I even created some of my own. But what I have to say is quite simple: it’s possible to follow a Twitter account without being “on” Twitter. For example, in the case of Heidi Moore, it’s this Web page: https://twitter.com/moorehn .
I must say that her twitter feed was very enlightening. She appears to be somewhat of a narcissist and very impressed with her witty college-sophmore-level take on things like nipples and bug-out bags, while at the same time saying that she primarily posts on financial matters… but that’s all I got out of it.
Not being any sort of a “Twitter Person” I’m always a little surprised with the amount of time people find to post to Twitter. Don’t they have a real job?
Sorry Zyggy… I did not mean to give the impression that I was slagging off Twitter, per se – far from it. Twitter is just an alternate channel, and I follow Yves and Professor Black there too. What I meant by the 140 characters or less reference was that in a world where the discourse has the maximum capacity to be fruitful because of all the information available, she is a gad fly of sorts who is not looking to add anything meaningful to the discourse… an agent provocateur if you will. For people on her side of the fence it’s perfect, since they know that any meaningful discourse is not winnable by them. Her ridiculously empty retorts are proof enough to me. I know that given her position at the Guardian, Professor Black and others will feel compelled to reply to her nonsense, but I’m hoping someone does the once-and-for-all takedown so we can relegate her to the irrelevance she deserves.
She is a “Pro” allright as is most of the left and right these days.
“left.” Fixed it for ya.
Professional troll. Interesting point.
Notice that she’s spouting right-wing lies / propaganda *at The Guardian*, which is a traditionally left-wing, anti-elite newspaper.
This speaks of her being a *plant*. Paid by right-wingers to sneak into left-wing publications and then push right-wing memes.
Wonder if that’s actually the case. If so, she would quite literally be a professional troll.
a wee problem could be that the Guardian does appear to speak with forked tongue, look at Assange, so Ms. Moore has no doubt hopped into the right wagon – separately though for me it’s too bad about GG’s selection of choice…..
anyhow, so to read Black or Moore? – obviously more Black and no Moore….
It’s understandable how frustrating it is to see these well-paid, arrogant know-nothings move up and prosper in this corrupted collapsing country, but don’t take her personally or seriously. Just another of the economic elite’s handmaidens. In the end the only revenge is that your life isn’t boring and vacant and hers is, though she may not realize that yet.
I myself enjoy a good slither in a mud swamp. Who wouldn’t? It’s quite relaxing.
But one thing I will never do, and that is to slither in a “filthy” mud swamp, for I categorically refuse to do my slithering in a redundancy!
Note: I took my 1 trillion dollar platinum coin to the wishing well. Yup. Just me, my flatbed semi, and my hammerhead crane. And I hoisted that behemoth off the bed and dropped it in (the Pacific Ocean, that is, the only body of water large enough to accept my offering. Right Heidi?), and made a wish.
It was a simple wish. I wished that people like Ms Moore would just go away.
Yeah, why is it we can get complicated and expensive and dysfunctional very easily, and simple hardly at all?
My answer would be that the simple leads to the truth, and the truth, at this point, is too horrific for the commons* to contemplate.
Note: I hate to do it, dig at the roots of our dirty-slimy-muddy swamp, but I also have to mention money. After all, hyper-complexity and chaotic dysfunction do offer the best investment opportunities!
*The non-commons is either blissfully unaware, or more probably, completely cognizant, and quite satisfied with the horror –especially the meting out of it.
Off topic … although maybe not (the Archdruid does have some answers).
http://www.resilience.org/stories/2013-01-23/restoring-the-commons
Quite on-topic and well worth reading, imo!
I criticized Black’s piece on Davos because it failed to address kleptocracy. The kleptocratic perspective makes plain why calls for gatherings like Davos to get their acts together are pointless. They are manifestations of kleptocracy and are irredeemable.
As for Moore, there are two perspectives, one kleptocratic and an associated one of class. Kleptocracy is a system which depends on our institutions not just to loot but, as with the media, to propagandize for kleptocratic policies, distract from their destructive effects, and provide intellectual cover for them. If you take Moore as a propagandist of kleptocracy, it becomes easy to see why she would continue to promote austerity long after it has been shown to have failed in multiple countries.
Elites, and even elite wannabes like Moore, as a class, work for the rich, the looters. Austerity allows for accelerated looting even in the downward spiral it creates. It opens up the safety nets and the public assets of the commons to be looted. Moore is defending her class and the class it works for. She is more than another Upton Sinclair person: “It is difficult to get a man to understand something when his salary depends upon his not understanding it.” She is a believer. As I have pointed out many times in the past, having strong beliefs in no way is an impediment to acting in bad faith. Indeed strong beliefs often facilitate bad acts. Being or identifying with the elites only increases the responsibility for such beliefs. Our elites arrogate to themselves: power, prestige, position, and wealth precisely because they maintain they are more expert than we are and better able to act on our behalf. So as in kleptocracy, when they begin to act solely on their own behalf, when looting us becomes not just a sideline but the prime objective, they are not just acting hypocritically but criminally. Their beliefs no matter how strongly held are irrelevant. They have, as a class, declared war on those they were paid to serve, us, and in the process destroyed the whole rationale, dubious as it always was, for their system of privilege.
Far from there being anything unique about Moore, her beliefs are completely ordinary. Her position at a supposedly “progressive” paper like the Guardian means nothing just as the Guardian’s “progressiveness” means nothing. What counts is class identity and class allegiance. Engaging such people intellectually is futile. Reforming their institutions, like the Guardian, is meaningless, as meaningless as reforming the New York Times or changing Krugman’s mind. At the end of the day, their allegiance is not to us, their ties are not to us. They are with the looters. And that is what we need to keep foremost in our minds in any of our dealings with them.
A big +1 from me. Yet another minion defends his/her master – business as usual.
Good analysis, except where it concerns Black. I.e., do you seriously think the following fails to address kleptocracy: “WEF is one of the important architects and engineers that have made our financial system so criminogenic. WEF’s dogmas and policies are so perverse that they drive financial crises, create crony capitalism, and make WEF’s leading products … epic embarrassments.” “Criminogenic” and “crony capitalism” don’t do it for you? Also, did Black indicate there was something unique about Moore? Nope. Black is one of your and our best allies or leaders in any hoped-for fight against the kleptocracy. We might as well treat him that way; attack him on substance rather than on whether he said “kleptocracy” or wtf.
Black failed to expose kleptocracy because he didn’t use the word. *snicker*
#pedant
Heidi Moore’s pissy retorts to Dr. William Black’s reasonable arguments and her vindictive prissiness make her look pathetically thin-skinned. With such an embarrassingly juvenile attack on someone of Dr. Black’s credentials and achievements, she commits journalistic malpractice in public. It’s too weird. The Guardian should seriously reconsider her employment status.
Sorry, fairleft, the above was intended as a general comment, not a response to you. But WRT Hugh’s point, the WEP cartel’s existential raison d’être is to serve an undeserving criminal class and to protect them from the accountability to which we mortals are subjected. And because a scorpion cannot moderate its genetic imperative, what is needed is not reform of WEP but overthrow. I agree, Dr. Black’s intent is good, but he doesn’t go quite far enough in indicting the system itself—toward ending its existence.
Thanks. That makes good sense. It’s unlikely Bill Black disagrees with you.
He used the word criminogenic. Repeatedly. Are you complaining because he didn’t use kleptocracy?
@Fairleft and MRW
I think Hugh places enormous value on what the French call “le mot juste” (exactly the right word or expression). When former certainties are becoming obsolete and uncertain, precise use of language is necessary if you’re ever going to get anywhere or arrive at the truth.
And so, the the way I read them, the terms “criminogenic” or “crony capitalism” refer to a system that could still be reformed (at least in theory), whereas “kleptocracy” refers to a system that’s so corrupt there’s no longer the possibility of reforming it.
This is a critical difference, in order to fight against something, first you have to understand precisely what you’re up against, or what apparatus you’re being threaded through.
If the following — “And so, the the way I read them, the terms “criminogenic” or “crony capitalism” refer to a system that could still be reformed (at least in theory), whereas “kleptocracy” refers to a system that’s so corrupt there’s no longer the possibility of reforming it.” — comes from somewhere, please tell us about that. And since its meaning is critical to whatever meaning the preceding may have, I hope you’ll define what you mean by ‘reform’. Seems to me that almost anything can be reformed enough to make it right, if the reforms are severe and fundamental enough. If that’s so, maybe there’s no necessary or meaningful conflict between Black and Hugh.
It’s pedantic splitting of hairs that does harm to OUR cause. Hugh, chill buddy. Black is definitely on our side. That is unless, you’re a paid troll who seeks to cause disruption.
Hmmm… If kleptocracy is self-reproducing (aristocracy) in a way that criminogenic environments are not, or implies social relations that criminogenic environments do not, than we don’t have verbal quibbling but conceptual difference. And even
ifthough Black’s heart is in the right place, the concepts and ideas still need to be straight. That, and truth, and justice are all we’ve got going for us, since we don’t have access to funding from billionaires!* * *
Hugh’s no troll. That’s idiotic. Curb your tone, sir (or madam).
On the other hand, if kleptocracy and criminogenic environments and crony capitalism are all possibly self-reproducing (aristocracies) (or not) and none necessarily imply one set of social relations or another, then no problemo! Though Hugh’s heart probably is in the right place, his criticisms might be persuasive if he’d start by clarifying what ‘kleptocracy’ is for him and what he thinks ‘crony capitalism’ and ‘criminogenic environments’ mean for Black. Or at least provide readers a link or two.
@ citalopram
If Hugh is a paid troll, then I’m Emperor Talou VII, who used to reign over the kingdoms of Drelchkaff and Ponukele, before getting sawed in two by a demon in Count Valtguire’s dream.
Gladys? Is that you?
I offer this crude analogy to your 2nd paragraph ending about austerity. Bottom line; neither approach will work.
Imagine if you will for a moment please, the Economy of the US is like an automobile. Now, If that automobile engine was running smoothly and purring along in 1913, and just imagine it took a minimum 87 octane fuel to keep it purring along for many more decades; then you inject the Fed and MMT, and immediately they start diluting the fuel with water, to in essence lower that octane rating down to ..oh say 70..then each following successive year, they keep diluting, until you get down to 5 octane Today. (bear with me here) …
So now, what you have is an engine that barely, i mean b-a-r-e-l-y even putters along … downhill! (heh)…and the only two solutions being offered are;
a) Keynesian – pump in as much 5 octane fuel as possible, under high pressure, more and more into the tank, fuel injectors, as fast and as much as possible – hook up a tanker to the hitch!
b) Austerity – don’t put any more fuel into the tank, ..and as a matter of fact, start siphoning out what is left in there, even the sludge at the bottom..strip it for parts, sell ’em off, burn the wreckage and collect on the insurance.
Either way. that automobile ain’t going anywhere !
such is the false dichotomy that is so bandied about by the MSM et al; ..and sometimes even the best of us get suckered in.
The system is flawed; corruption and kleptocracy is rampant, and the myth is perpetuated… I know we all (well most ’round here) know this.
I also know my wit is sorely lacking today, and it shows in my choice of words, but using hyperbole at this point would be so obtuse.
There, i feel better now ;-)
Love
p.s. I do realize that atleast putting the brakes on the austerity loons will atleast hopefully allow the least of us to stay where we/they are for a while — so in that regard, i suppose it might be necessary to oppose austerity and publically and viahemently. It’s just too easy to get caught up in this false, irrational dichotomy. ..it self-perpetuates.
The analogy is wrong. Here’s a better analogy. Failing to find 87 octane gas, the owners (major banks, corporate CEOs, political enablers at the Fed, Congress, etc.) have been adding tetraethyl lead to the gasoline to boost the octane. The lead is ruining the engine, and driving the drivers insane and making them stupid.
And now the lead mine is running out of lead.
“Stimulus” through the banks proposes pouring straight 50 octane into the engine.
Redistributionary stimulus proposes giving the gas that’s left to a dozen motorcycles which are sitting idle by the side of the road. :-)
In case you were wondering, the “lead” represents the fraud, and the “motorcycles” represent the poorest 25% of the population who are stymied due to lack of funds.
well.. i do like the bit about leaded gasoline causing loss in IQ, but ..
the “stimulus” (and all the subsequent QEs -> infinitum absurdum) are more like granulated sugar, in the sense that sugar gums a gasoline engine (internal combustible, etc), so more than useless to the masses–BUT–the elite have gophers, rats, mice, …all matter of vermin powering their “vehicles”, ergo; the only benefactors are the elite themselves.
Love
Thank you, Hugh, for a very thoughtful and thought-provoking comment. I also thank Bill Black for his post here yesterday, and for what I view as a related article today.
There are many members of corporate media and academia who support the views and behavior of the kleptocracy and their damaging policies that include Austerity, financial deregulation, massive officially sanctioned fraud, looting, privatization, market manipulation, military actions of choice, the neutering of environmental laws, reduced public educational opportunities, the dismantling of the social safety net, etc. This is beyond frustrating.
However, I believe it is important to keep our eye on the ball that is the primary key to kleptocracy power. That key is their control of the markets for bonds, key commodities, stocks and derivatives. For it is control of the markets under the current debt-based monetary system that enables them to control not only the issuance and distribution of “money” (through government bond issuance through the primary dealers), but also the price of oil and other key commodities, stocks (for corporate stock options), and derivatives (as Buffett said, “financial WMDs”)… all of which in a sense both act as “money” and as levers of power.
I believe it was the CEO of Bill Black’s prize winner who said that his corporation was “doing God’s work”. I don’t know about that, but I do think they have violated the social contract which the basis of trust. And once lost, trust is not easily regained.
As for us, IMO we need to be very careful and thoughtful about what we wish for, including MMT.
Exactly. The struggle we all have with the press in general is “freedom of the press” is ingrained in our DNA – we believe in press as watchdog. But just as we have had to let go of our belief that hard work and honest dealings are the ticket to success, we have to let go of the fact that the press has become just another elite institution. The world is indeed a Kleptocracy; there is no left and right, right and wrong. Only the elites and their victims, most of whom are still stupid enough to believe themselves memebers of, to capable of joining, this glorified back of sociopaths and thieves. Who seriously thinks someone who went to Barnard is going to turn on her own?
Geli Tripping has it right. Kleptocracy is the admission that we have a system whose foundations are so rotten and corrupted as to be unreformable. This is the problem with Bill Black and the MMTers among others. They do a pretty good job at description, but when it comes to charting the way forward, they always end up with lame exhortations for the kleptocrats to reform themselves or for us to put pressure on them to reform. This completely misunderstands the power dynamic. The elites and kleptocrats have been extremely successful looting us. They have waged a relentless class war against us for decades which has cost the lives of millions of us and ruined the lives of hundreds of millions. In the face of a few lame petitions and stinging articles, they are not going to say, “Our bad”, change their ways, and disgorge the trillions they have stolen from us.
It is interesting and not a little ironic that Black criticizes Moore for championing austerity despite massive evidence that it has failed everywhere it has been tried. Yet he continues to push for reform of the current system despite similar massive evidence of the failure of calls for reform everywhere they have been made.
Hugh, I noticed no lame Black exhortations for the kleptocrats to reform themselves. Where do you see them? (Why do you see them if they’re not there?) And isn’t charting the way forward in this post-democratic 2013 a problem for everyone? Nobody I’ve read has any immediate, realistic, useful suggestions, but what have you got on your effective activism plate for 2013? Or can we all just agree not to criticize each other for being weak on ‘how to get there’ since we’re all weak on that?
Anyway, although there is no immediate prospect of ‘revolution’, when and if one someday overthrows finance capital, I think Black’s knowledgable descriptions, criticisms and suggested reforms will be extremely helpful toward creating a new financial/banking system for the U.S. and/or for reforming the system into something unrecognizable.
Bill Black’s concluding paragraph from his preceding post on Davos and WEF:
“The WEF survey is a mass of business prejudices collated and called science. If the CEOs, despite their close ties with the banks (indeed, many of them are bankers) cannot even spot the problems of banks in Ireland, Iceland, the UK, and Spain over a year after the bubbles have ceased expanding they are even more useless than scholars feared. It is time for WEF to get out of the business of being an apologist for and enabler of control fraud and to tell the likes of Goldman Sachs that a banker who sells its clients toxic mortgages the bank describe internally as “shitty” is a bank that is degrading the state of the world and it is unwelcome in Davos.”
http://www.nakedcapitalism.com/2013/01/davos-still-pushes-failed-global-vision.html
As I pointed out, the WEF is a manifestation of kleptocracy. After a very long post on the disasters wrought by world financial community and the WEF turning and continuing to turn a blindeye to them, this is the best that Black has. The WEF should do something about itself. Again as I pointed out, this is far from a one off but is typical of both Black and the MMTers. Read their work and you will see they always call for the offenders to change their ways or offer solutions that presume that the offenders are open to them even though these would diminish their power and wealth.
Well, it _is_ time, I think we can all agree, for the WEF to do exactly what Black suggests, so what’s the problem? I don’t think Black is naive and thinks he is making an actual recommendation to the WEF. It’s a rhetorical suggestion, to an institution he and we know is not listening, whose purpose is to describe to his readers what a public-spirited institution would do.
Please reread my comment. Black has a history of doing this. Are you saying he’s always being rhetorical? At some point wouldn’t his and our time be better served by his laying out realistic alternatives that did not depend on the perpetrators’ participation in carrying them out?
I personally am rather tired of the progressive need for heroes. For me, what is important are the ideas and I will pass Bill Black’s through the same analyses I use on everyone. And I am not sorry if that offends.
“Black has a history of doing this.”
Bill is starting to sound like “The Bobs,” Reich and Kuttner.
I agree that it is particularly disappointing to not see Black developing his specialty when there is so much good material out there.
It’s like he’s become just another trained monkey on the UMKC Departmental bus– which seems pretty well populated with parroting fanboyz already!– doing nothing in particular that adds anything to public discourse.
Bleh.
What a waste of a good resource. If you ask me, this is how you know when a group of people is not really serious.
Did someone in the UMKC Economics Department put a leash on Black? This is the question that must be asked.
As I said in an earlier comment to which you did not respond, all of us progressives are terrible about how we get ‘there’ from here. There are no realistic alternatives in the present political set up because there is no realistic path for changing the present system. That’s how post-democracy ‘works’. I don’t think Black is really naively beseeching the PTB to be nicer, but even if that were what he is doing, it’s no less realistic than developing and publishing into the void a very practical post-capitalist and/or social democratic way of organizing economic life or anything else. I’ve asked here what you propose activists should do or what you’re doing or plan to do that’s more realistic than what Black does in this column, but you haven’t responded. I hope you can share some great activism ideas that will lead to successful reform or overthrow of the present system.
1 – get people to understand the sort of electoral system we need in order to have a chance at a functional democracy (parliamentary, with proportional representation & approval voting)
2 – have a revolution in order to get it installed. Because if we don’t, someone else will have a revolution and install something stupider like a dictatorship.
The current system is not working, and refuses to reform, therefore it will collapse. There is a struggle for *mindshare* among ideas of alternative systems, and it is critically important to win the mindshare battle *before* the revolution actually starts. We want French Third or Fifth Republic, not Hitler.
Countries which already have (1) are quite capable of fixing the economic system simply by voting Merkel out of office. (Most of the other countries which actually hae (1) already did fix their problems.) Germans, however, seems to be less upset with the current nightmarish economic situation than the citizens of other countries.
I don’t see any innate conflict: Bill Black is Tacitus, an ethical Roman aghast at the corruption and degeneracy he sees. So is Paul Craig Roberts. Hugh is more like a burgher of Trier – he doesn’t think of himself as a Roman; he sees raggedy legions marching by and some assholes show up to extort taxes, but what’s it got to do with him? He’s on good terms with the so-called barbarians, who make a lot of sense. I’m with the barbarians too – these days defined as anarchists, or the G-77 + China, or CELAC, or the NAM, or the AU, or the ШОС – anyone in the world who wants to get rid of this criminal state that we’re stuck in.
Loved the Monty Python reference in your nom d’plume.
I agree with what I construed as your main point. In the context of personality types, to criticize honest, highly ethical analytical-investigative personalities for failing to possess leadership skills as change agents is to engage in wishful thinking.
I believe that political leadership will emerge, but those individuals are unlikely to be people who are at their heart honest, highly ethical investigative analysts.
Furthermore, I feel that the many contributions this article’s author has made over decades to understanding what has transpired, and specific actions he suggests to correct our present situation such as those he enumerated in his immediately previous article, are important aspects to developing a practical corrective framework.
Change is occurring in fits and starts, despite the efforts by the defenders of the status quo to lobby our legislators and corrupt our regulators, to punish those who recognize AND ACT to change it (think about the physical and mental brutality deployed against Occupy demonstrators and others), to get us to ignore what has happened, and (despite their behavior) to support their policies (think Austerity and Privatization going forward).
In the meantime, the “bread and circuses” are being kicked up a notch… so put out the guacamole, invite a few friends to join you, and enjoy… at least for a few hours on Sunday.
Great comment and so is the one you’re responding to. Wish I’d said something like them to Hugh above.
Progressives as we knew them in the 50s-60s don’t exist anymore. The new breed, in the US referred to as liberals, have nothing to do with working people. They are about foreign policy, drones, torture and the beauty of the Muslim Brotherhood.
These substitutes are arrogant, ignorant and elistist. This is where Moore comes from.
Did you know any progressives in the 50’s? Unless you were a child prodigy, that would make you about 80. I believe there were plenty of arrogant, ignorant, elitist liberals back then. Wasn’t Adlai Stevenson one? However, that’s irrelevant to any comment about Heidi Moore, who is by no stretch of the imagination a liberal.
Thanks MS. I think you have hit the nail here in commenting on the generational changes away from the older radical positions. I conincidentally alternate between the Guardian and NC a lot and so this spat is quite fascinating and informative.
Its clear that while the Guardian still has journalists who aspire to emulate George Orwell, there is another generation who seem more to still be aligned to new Labour who were almost as neoliberal as the Tories. And while Labour has gone now, these journalists are still there and 2008 has not changed their dogma one iota.
This contrast also helps me understand why one section of Guardian provides very good environmental coverage, while their business writers by in large seem completely oblivious to the issues around environmental economics which get a much better hearing here in NC.
My current understanding of the $1 trillion platinum coin issued by the US Mint, under orders from the US Treasury, is that it could be used to render moot any Congressional threat(s) not to increase the debt ceiling: just mint a coin a year, or as needed. Beyond that, would such a coin be legal tender? Could the executive branch act without Congres to pay for wars with it? Or, what use can be made of it after it’s minted? Lastly, realistically, if it were in limited circulation, anti-forgery issues seem to me to be a concern, but then I admit to having studied MMT, but not so much the $1 trillion platinum coin.
would such a coin be legal tender?
Yes. By law, 1996.
Could the executive branch act without Congress to pay for wars with it?
No. Congress authorizes all spending.
Or, what use can be made of it after it’s minted?
It sits in a vault at the Fed. It is non-circulating. It could be a $60T coin. Same deal. When it’s used up, it’s melted down.
if it were in limited circulation, anti-forgery issues seem to me to be a concern
It can’t circulate, by law, 1996.
—————–
Finally, Congress already approved it, 1996.
Thanks for the explanations. I guess I’m playing “devil’s advocate”: could the Federal Reserve system refuse it, as in “Go to hel* with that stupid coin!” ?
No.
* * *
It’s important to realize the stakes, which “small ball” discussion of the size of the coin obscures. The stakes are:
Democratic control of money creation
whether by the Fed (not elected, not transparent, not accountable, a private bank working for private banks yet with quasi-governmental powers) or the Treasury and ultimately Congress under Article I Section 8 (“regulate the value thereof”).
Bring on the Austrian shibboleths! To which I would respond it’s hard to conceive of a worse outcome than that which the den of thieves represented at the Fed have imposed on us. How about we try a Constitutional approach and treat the people as sovereign?
It’s limited by Obama’s poor understanding of how the monetary system works, aided and abetted by Geithner’s knowledge, which has proven to be substandard, and IMO, lacking in the level of moral authority that a Sec of the Treas should have, at a minimum.
In suggesting to Angus King, during the last election, that his man crush on Erskine Bowles might not be best for the country, I quoted Bill Black not Heidi Moore.
“Austerity during a serious recession is economically insane. It is a pro-cyclical policy that makes the recession more severe. A more severe recession is a mass destroyer of wealth and quality of life. It is pure waste. It is the primary cause of dramatic increases in public deficits and debt. Unemployment reduces tax payments and increases demands for public spending.”
I’d but Bill Black and Rolf Harris both in the relevant column.
http://www.youtube.com/watch?v=AFUQasY3stA
Baldacci still thinks the people love him (when only Democratic regulars do) and so he went to genuflect at the altar of Fix The Debt to prove he was Serious. ZOMG, give me the crazy loose cannon who isn’t corrupt that we can at least stand up and fight!
Whatever about swaps, sayings about mud-fights and pigs come to mind on this one.
So let me see, Moore is talking street trash and Black is making substantive arguments, and challengeing Moore to respond substantively, and you paint both parties with the same brush, calling it a “mud-fight”?
If Black would have responded with the same sort of ad hominem that Moore engages in, then you would have a “mud-fight”.
Please show me where Black engages in the kind of trash talk that Moore does.
I wouldn’t be surprised if corporate advertisers hold the Guardian hostage, insisting that the woman be on staff before they’ll pay to advertise in the paper.
She is not a very mature writer and readers would not be the ones to miss her.
Note the last 2 minues of this conversation, earlier this morning. Most particularly Richard Haas’ final comment, but also presumed progressive Democrat Wendell.
http://www.msnbc.msn.com/id/3036789/#50613650
Everyday that the likes of Heidi Moore can be coaxed to slither out from the rock from which she hides to make comments that expose her lack of intellectual capacity and integrity is a good day for the truth and a bad day for the propaganda machine of the vulture capitalists. I look at the Guardian now with parted eye. Ms.Moore, you have made yourself irrelevant. Thanks to Prof. Black for the heads up.
“Catch-22 says they can do anything we can’t stop them from doing.”
Hi Bill,
Loved your book. It could be made into a movie. Heidi Moore already has a movie about her. It’s called:” A Handmaid’s Tale”. Here is the movie trailer. As you can see, in the new world order, even a handmaid has her uses.
http://www.youtube.com/watch?v=SWQ4xnyLy1U
She doesn’t really matter. She just adds her voice to the austerity chorus. It would be interesting to do an Austerity List, like Angie’s List, and expose all the editors and their editing, whether subtle or blatant, in favor of austerity. The reason I suggest this is because I sort of liked the Guardian because of Greg Palast, but I did occasionally get the feeling that making the obvious point was obscured sometimes in the Guardian. As in so many publications. It is disappointing to discover yet another hidden agenda. It’s time for all the cards to be on the table. Editors simply pretend to be unbiased. The real opinions are not so dangerous as the pretense of unbiased journalism.
Basic “fundementalism”…..
“Government budget is not the same as the “household” one.
I feel so pure!
I feel so clean!!!!
Never have subscribed to or used “Twitter”!
My first “sign on” in the mornings is Marketwatch where I hone my skills on bad headlines and conditional phraseology writing. (My favorite terms for the words, “would”, “could”, “should”, “might”, “maybe”….etc,…..etc…..etc.
Next I hit “Zero-Hedge” with an eye to filter out the ridiculous………
Finally to serve up my “internet dessert” I end up at NC.
Thank you for you site!!!!
Do not interpret this as a defense of Ms. Moore, it is not.
It seems to me that both you, Dr. Black, and her agree that the existence of a sovereign currency is irrelevant, the difference being that she maintains that austerity is the policy that must be applied in both cases whereas you maintain that austerity can be avoided in both cases.
Southern countries in Europe, indebted in a virtually foreign currency, do not have the freedom to embark on deficit spending as a sovereign-currency country can do. For that to happen, northern European countries would have to allow the risks to spread over all EU nations. But the southern countries have a serious structural malaise of corruption and inefficiencies. Examples abound to anyone just reading the European national media.
So it seems to me that a program of reforms, which imply austerity (although not necessarily exactly the kind of austerity that is being implemented), is a necessary condition to be met before southern European countries can get austerity behind them.
Ruben, when the too big to fail banks control governments so that their quest to maximize profits is the number one goal of economic policy, that’s many many times a more serious structural inefficiency than whatever it is you think is holding back the peripheral European economies. Look how the banks screwed with these countries, that’s where the problem is. Corruption and inefficiency in the real economies are dwarfed in importance by the corruption and inefficiency of austerity and a banker-ruled Europe.
You might be right but that doesn’t solve the problem that Dr. Black is incosistent by pointing out the freedom of nations with sovereign currencies to avoid austerity and at the same time condemning nations for embarking on austerity when these nations do not have sovereign currencies. I guess he has to deal with this inconsistency eventually, I mean, come on, it got to be great reading all his fans applauding but hey intellectual consistency is something we all strive for, right?
Also, are you fairleft familiar with the national European press? Italy’s got a bigger than 60 billion euro annually issue with corruption, according to its own gov’t. Spanish politicians are flooding the news on a daily basis with new scandals. Greece is … well, Greece.
These countries need reform, seriously, any effort at expansion is premature right now. Any mutualization of debt will be suck down in a significant part by what honest European intellectuals call “rent extractive elites”. You don’t want to help these rent extractive elites do you?
Or maybe you know better, you good people?
There is no Heidi Moore. All the Internet photos labeled with that name and bio show the grotesque false lady head that Arnold Schwarzenegger wore in Total Recall. The question is, who’s wearing it now to attack Bill Black?
It’s been a while since I jumped up and down punching the air while reading a piece like this one.
All the HOCs should be in jail for calling the working people, parents, students, and seniors of Spain, Portugal, Ireland, Greece, and Italy PIIGS.
(Especially on NPR) That crap should never be tolerated, ever! Look what it leads to. And it’s intending for that outcome.
Bill Black, (Or anyone)
Where to go to read in detail the particular fraud that attacked Ireland?
(So much out there can’t be trusted as complete or accurate.)
And I wish there were links to articles you reference.
“Big Money Heidi” what a terrible #trash tag to live down!
hashtag?
art thou so juevenile?
i want to address fairleft, but not necessarily as a rebuttal to any particular comment, but atleast to the most recent ones in this thread. so here goes;
you ask what to do?
a) live and let live
b) Love thy neighbor as thineself
c) do unto others as you would have done to you
..if you’d like to continue, please let me know, thanks
Love
sigh.. i get dismayed sometimes when no one responds…would you care so much if i continue on myself? :-)
all the above is based upon and can only work if one truly embraces the Non-Aggression principle.
..so
…. someone will surely pipe up, and i’m sure many tangents will arise, ..but i hope somehow. someway, without detracting from this thread (if i haven’t already done so), the discussion might continue..(because it’s so important, and we all know it) here, or elsewhere–point me to the desired proper meeting place, and i shall appear.
Love