Category Archives: Politics

Gillian Tett’s Astonishing Defense of Bank Misconduct

I don’t know what became of the Gillian Tett who provided prescient coverage of the financial markets, and in particular the importance and danger of CDOs, from 2005 through 2008. But since she was promoted to assistant editor, the present incarnation of Gillian Tett bears perilous little resemblance to her pre-crisis version. Tett has increasingly used her hard-won brand equity to defend noxious causes, like austerity and special pleadings of the banking elite.

Today’s column, “Regulatory revenge risks scaring investors away,” is a vivid example of Tett’s professional devolution.

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Why America Needs More Lawyers

Reader Deontos sent a link to a provocative article on SSRN, The Lawyer-Rent Seeker Myth, by Teresa Schmid. Schmid focuses explicitly on the impact of economic theory on how legal services are delivered. Using county-level data in Oregon, Schmid make a persuasive case that lack of access to legal representation isn’t just a social justice issue but is also an economic problem, since it exacerbates poverty and inequality.

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New Zealand Prime Minister John Key, the Whale Oil Blog, and International Organized Crime

A new book is causing a stir in New Zealand. It’s called “Dirty Politics“. From the blurb:

Early in 2014 Nicky Hager was leaked a large number of email and online conversations from Cameron Slater’s Whale Oil blog. Many of these were between Slater and his personal allies on the hard right, revealing an ugly and destructive style of politics. But there were also many communications with the prime minister’s office and other Cabinet ministers in the National Government. They show us a side of Prime Minister John Key and his government of which most New Zealanders are completely unaware.

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How Significant is the BRICS New Development Bank?

Yves here. Quite a few readers have contended that the commitment by the BRICS countries to create a developing country challenger to the World Bank represents a serious blow to the dollar hegemony.

While rising anger against the US use of its currency/banking system dominance to further geopolitical ends is well warranted, translating that into effective counter-measures is something else completely.

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Patrick Cockburn: Why Washington’s War on Terror Failed – The Underrated Saudi Connection

Yves here. While this is an informative piece, quite a few readers are likely to take issue with the notion that the war on terror is as failure. US foreign policy appears to be run by Saudi Prince Bandar and the military-survelllance complex, and the war on terror caper looks to be working out just fine for them. And the super wealthy and the domestic policy elites get the added bennies of having a political justification for full-spectrum-coverage of ordinary citizens’ activities and authoritarian policing.

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Lambert Talks With Tim Wu, Net Neutrality Pioneer and NY Lieutenant Governor Candidate

Yves here. Lambert interviewed Tim Wu, who is campaigning with Zephry Teachout to upset politics as usual in New York. Both are running in the New York State primary against Andrew Cuomo and his candidate for lieutenant governor, Kathy Hochul. The Teachout/Wu campaign against Cuomo has gone from quixotic to the most interesting state race […]

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Pending Suit Against Countrywide’s Angelo Mozilo: Yet More Politically-Driven Selective Enforcement

Let’s be clear: we are fans of going after bank execs who bear significant responsibility for damage to borrowers and the economy, rather than just the footsoldiers. We also prefer criminal prosecutions. But in this era when the elites just don’t think of white collar crime as criminal, at least if performed by people who have big titles are large institutions, we have to highlight whatever progress we do see on the “get tough with the bad guys” front.

One deserving target is Angelo Mozilo, head of Countrywide, the biggest and most efficient subprime originator.

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Bank Settlement Grade Inflation: High Bullshit to Cash Ratio in $17 Billion Bank of America Deal

Over the last year, the Administration has entered into a series of bank settlements over various types of mortgage misconduct. The sudden rush to generate headlines from misdeeds that have been covered in the media in lurid detail during and after the crisis looks an awful lot like an effort to stem continuing criticism over the abject failure to punish banks and more important, their execs for blowing up the global economy for fun and profit, particularly since the Dems are at serious risk of losing control of the Senate in the Congressional midterms.

But as much as the media dutifully amplifies the multibillion headline value of these pacts, we’ve reminded readers again and again that all of these agreements have substantial non-cash portions which are ludicrously treated as if they have the same value as cold, hard cash.

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Merging Finance and Health Care Leadership – Robert Rubin Proteges Running DHHS, Spouse of Hedge Fund Magnate Running the FDA

Yves here. This post describes a pair of examples in the mistaken assumption that financiers, or at least people with connections to financiers, are the best people to put in charge of anything. Of course, whether people actually believe that assumption, or use that as a cover to curry favor with the 0.1% remains to be seen. But there is evidence that at least some people in positions of influence actually do believe it. For instance, during the famed auto bailouts, for instance, that the government brought in a dealmaker, Steve Rattner, whose investment banking experience was concentrated in media companies. And the crisis showed that the Masters of the Universe were better at lining their pockets rather than doing the job that ostensively justifies their elevated position and outsized pay: allocating capital efficiently, to the best outcomes for society as a whole.

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