Author Archives: David Dayen

About David Dayen

David is a contributing writer to Salon.com. He has been writing about politics since 2004. He spent three years writing for the FireDogLake News Desk; he’s also written for The New Republic, The American Prospect, The Guardian (UK), The Huffington Post, The Washington Monthly, Alternet, Democracy Journal and Pacific Standard, as well as multiple well-trafficked progressive blogs and websites. His has been a guest on MSNBC, CNN, Aljazeera, Russia Today, NPR, Pacifica Radio and Air America Radio. He has contributed to two anthology books, one about the Wisconsin labor uprising and another on the fight against the Stop Online Piracy Act in Congress. Prior to writing about politics he worked for two decades as a television producer and editor. You can follow him on Twitter at @ddayen.

Steve Keen: How Krugman Lost Equilibrium (Part 2)

Dave here. Big apologies, apparently I cross-posted the wrong post. This is going to get me thrown out of guest-posting school!

This article is the second half of a two-part series. To see the first half, click here. Cross-posted from Business Spectator.

Krugman’s explanation of our crisis today is straight from the pages of John Hicks’s 1937 explanation of the Great Depression (though curiously, Hicks himself didn’t mention the actual state of the global economy at all in his 1937 paper, which attempted to explain the relationship between interest rates, and real output in goods and services and money markets.

Links Pi Day

David Dayen: The Gradual Privatization of Medicaid

Over the past week, both houses of the Florida legislature have rejected the Medicaid expansion program endorsed by Governor Rick Scott. You may recall the huzzahs from the progressive world when Scott, a self-possessed anti-Obamacare warrior, decided to accept the Medicaid expansion. What didn’t get reported as much is that Scott’s announcement coincided with the go-ahead from the Administration for Florida to fully privatize their Medicaid system.

So what was up with the Legislature’s rejection? Tea Party politics? Some unlikely show of principle against crony capitalism and corporate welfare?

No. They just want a different kind of privatization.

David Dayen: Out of Control – New Report Exposes JPMorgan Chase as Mostly a Criminal Enterprise

There’s been an unlikely yet welcome resurgence of chatter about breaking up the nation’s largest and most powerful banks. Bloomberg’s story quantifying the too big to fail subsidy grabbed some eyeballs (and there’s an upcoming GAO report on the subsidy that will do the same). Sherrod Brown announced an unlikely pairing with David Vitter working on legislation on the subject. Dallas Fed President Richard Fisher is going to give a big speech on Friday on breaking up the banks… at CPAC, the largest conservative political conference of the year.

Cathy O’Neil: Black Scholes and the normal distribution

By Cathy O’Neil, a data scientist. Cross posted from mathbabe

There have been lots of comments and confusion, especially in this post, over what people in finance do or do not assume about how the markets work. I wanted to dispel some myths (at the risk of creating more).

Links 3/13/13

David Dayen: The Budget/Austerity/Catfood Moebius Strip

The Beltway wonkosphere spent most of yesterday shooting the fish in the barrel that is the Paul Ryan “Path to Prosperity” budget. Here’s a representative sample. From the looks of it, the Ryan budget for fiscal year 2014 looks mostly like the Ryan budget for FY2012 and FY2011, with the added extra of banking the tax hikes he didn’t vote for in the fiscal cliff deal. It includes the same vague goal of marginal tax brackets at just 10% and 25%, the same voucherization of Medicare, the same “repeal of Obamacare” while keeping all the revenue-raisers from Obamacare intact, the same block-granting of mandatory spending like Medicaid and food stamps (Ryan calling welfare reform a “success” because child poverty rates initially came down is completely disingenuous, ignoring the economic boom that happened at the same time), etc., etc. This year’s model balances the budget by 2023, but that’s largely a factor of the austerity already put into place over the last couple years.

Wolf Richter: Is The End Of The ‘Coercive Euro Association’ Taking Shape In Germany?

By Wolf Richter, San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Cross posted from Testosterone Pit.

Anti-euro movements were pushed aside or squashed by political establishments across the Eurozone. There is, for example, Marine Le Pen, of the right-wing FN in France—“Let the euro die a natural death,” is her mantra. Though she finished third in the presidential election, her party has next to zero influence in parliament. Austria has Frank Stronach, who is trying to get an anti-euro party off the ground, without much effect. Germany has the Free Voters, an anti-bailout party that has been successful in Bavaria but not on the national scene.

Bill Black: Which Aspect of the FDIC’s Litigation Failures is the Most Embarrassing and Damaging?

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. Jointly posted with New Economic Perspectives

Dave here (always wanted to say that!): I know Yves wrote about this yesterday, but it’s always worth getting Bill Black’s reaction on these regulatory matters – not to mention to further illustrate and amplify the FDIC’s conduct.

On March 11, 2013 the Los Angeles Times published a revealing article by E. Scott Reckard entitled: “In major policy shift, scores of FDIC settlements go unannounced.”

The article’s summary statement captures the theme nicely. “Since the mortgage meltdown, the FDIC has opted to settle cases while helping banks avoid bad press, rather than trumpeting punitive actions as a deterrent to others.”

Dave Dayen: Raj Date Retreats to “Sanctity of Contracts” Defense to Excuse CFPB for Suboptimal Servicing Rules

I want to start with a belated story from the weekend. I’m a fan of Chris Hayes’ show on MSNBC – it’s the only cable news I’ve seen outside of Election Night in the last year or two. He puts on issues that get virtually no attention elsewhere and he’s responsive to his audience. Over the weekend I noticed that he was to have Raj Date on, formerly number 2 at the Consumer Financial Protection Bureau. So I asked Chris on Twitter if he could bring up the CFPB’s servicing rules, which I chronicled at Washington Monthly. To review, the rules kind of nibble around the edges, but do nothing to fix the wrongheaded financial incentives that lead servicers to reap rewards from foreclosures and avoid principal reductions because it would hurt their bottom lines.