Category Archives: Politics

Mark Ames: Why Finance is Too Important to Leave to Larry Summers

By Mark Ames, author of Going Postal: Rage, Murder and Rebellion from Reagan’s Workplaces to Clinton’s Columbine who writes regularly at The Exiled.

If you’ve been reading Naked Capitalism for any period of time without giving back in donations—and most of us have been hooked from the time we discovered Yves Smith’s powerful, sharp voice and brilliant mind—then you you’ve been getting away with murder. Naked Capitalism is that rare blog that makes you smarter. Smarter about a lot of things, but primarily about Yves’ area of expertise, finance.

By a quirk of historical bad-luck, the American Left has gone two generations without understanding finance, or even caring to understand. It was the hippies who decided half a century ago that finance was beneath them, so they happily ceded the entire field—finance, business, economics, money—otherwise known as “political power”—to the other side. Walking away from the finance struggle was like that hitchhiker handing the gun back to the Manson Family.

The End of Loser Liberalism: An Interview with Dean Baker Part I

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Dean Baker is co-founder of the Center for Economic and Policy Research. He previously was a senior economist at the Economic Policy Institute and an assistant professor of economics at Bucknell University. He has a Ph.D. in economics from the University of Michigan. His latest book, The End of Loser Liberalism, has recently been released to download free of charge on the CEPR website.

Interview conducted by Philip Pilkington, a journalist and writer based in Dublin, Ireland.

Philip Pilkington: The overarching thesis of your book The End of Loser Liberalism is quite a provocative one. This isn’t just a book about economics as such. Instead, if I were to venture using a term that appears to be coming back in fashion, it’s a work of political economy. You write that the current political debate – wherein the left are seen as restricting and constraining the ‘free market’ while the right are seen as letting it free to work – is completely skewed. You write that liberals and progressives need to take a different line on this. Could you explain this basic premise in a little more detail, please?

Dean Baker: The conventional view is that conservatives place a huge value on market outcomes. It is common for progressives or liberals to deride them as “market fundamentalists”, as though they worship the market as an end in itself. By contrast, liberals/progressives are supposedly prepared to use the hand of government to override market outcomes in order to promote goals like poverty reduction or equality. I argue in the book that this view is completely wrong, and worse that it plays into the hands of the right.

I argue that the right has quite deliberately structured markets in a way that have the effect of redistributing income upward. The upward redistribution of the last three decades did not just happen, it was engineered.

Marshall Auerback: The Road to Serfdom

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By Marshall Auerback, a portfolio strategist and hedge fund manager. Cross posted from New Economic Perspectives.

The markets are again in free-fall and, once again, a lazy Mediterranean profligate is to blame. This time, it’s an Italian, rather than a Greek. No, not Silvio Berlusconi, but his fellow countryman, Mario Draghi, the new head of the increasingly spineless European Central Bank.

At least the Alice in Wonderland quality of the markets has finally dissipated. It was extraordinary to observe the euphoric reaction to the formation of the European Financial Stability Forum a few weeks ago, along with the “voluntary” 50% haircut on Greek debt (which has turned out to be as ‘voluntary’ as a bank teller opening up a vault and surrendering money to someone sticking a gun in his/her face).

Doug Smith: One Way Journalism Paints Flawed Picture Of Poverty

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By Douglas K. Smith, author of On Value and Values: Thinking Differently About We In An Age Of Me

As a subscriber and well wisher for the critical role that might be fulfilled by The New York Times, I’m always disappointed when Times’ journalists substitute personal agendas for accuracy. This was glaringly on view last week when three reporters butchered the chance to shed light on the Census Bureau’s new “supplemental poverty measure”.

Denial in the Mortgage Industrial Complex

I just came back from the AmeriCatalyst conference in Austin, which was a packed two days focused on the state of the housing and securitization market. The panels were very informative, and it was also good to see some of the people I’ve read or heard about, in particular the leading analyst, Laurie Goodman of Amherst Securities. She gave a talk that where she went through a very persuasive (and conservative) analysis that there are 8.3 to 10.3 million more foreclosures baked give how underwater borrowers are. And she had some striking bits of information. One is if you take out the homes where no one has made a mortgage payment in a year or more, homeownership in the US is 61%. In addition, Judge Annette Rizzo discussed a successful program she had developed in Philadelphia to do remediation. The success rate on modifications that come out of her court is 85% after 18 months.

I had quite a few people come and commend me on my comments. I think the main reason was that the viewpoint presented on this blog, that there are deep seated problems resulting from chain of title issues, and that servicers have engaged in a lot of abuses, was sorely underrepresented. I don’t blame the organizer, Toni Moss, who has an exceptionally well organized and prepped effort; I think this reflects the nature of who has expertise in this industry.

Taleb: End Bonuses at Too Big to Fail Banks

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The fact that the New York Times is running as its lead op-ed a piece by Nassim Nicholas Taleb arguing against any bank bonuses points to a hardening sentiment among the elites against the banks.

EuroCrisis Spotlight Moves From Greece to Italy

http://www.telegraph.co.uk/finance/financialcrisis/8875444/France-cuts-frantically-as-Italy-nears-debt-spiral.html

Matt Stoller: 50 State Settlement Chatter – $65 Million of Fundraising and the Kamala Harris Network

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By Matt Stoller, the former Senior Policy Advisor to Rep. Alan Grayson and a fellow at the Roosevelt Institute. You can reach him at stoller (at) gmail.com or follow him on Twitter at @matthewstoller.

California Attorney General Kamala Harris is one of the key players involved in the 50 state negotiations. The state was the seat of a good proportion of mortgage fraud nationally, and the California Attorney General’s office is one of the only state AG offices with enough legal resources to impact the national housing framework. Understanding how she thinks about politics matters, because this is how critical decisions are made. Harris’s decision-making seems to be driven by personal connections and fundraising networks. This is not at all unusual, but it does contrast a bit with other types of public servants, who often see their job as serving the law itself. So what do her personal connections and fundraising networks look like?

Is Greece About to Derail the Bailout Yet Again?

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Germany found it hard to conquer and control Greece in World War II. History seems to be repeating itself.

Bank CEOs Lying When They Say They’ve Stopped Robosiging

Readers may recall that we posted on the credibility-straining claim by the former GMAC’s, now Ally’s CEO, that his bank was no longer engaging in robosigining.

Now in fairness, we might have a little clever use of terminology at work. Robosigning narrowly speaking, refers to the use of low paid staffers to execute documents used in court filings by the hundreds per day. This created a huge scandal when it broke because it was a flagrant violation of court procedures. Affidavits, for instance, are used in place of testimony and are required to be based on personal knowledge. A $12 an hour functionary churning out signatures clearly has not even read the paperwork, much the less has any knowledge of the various foreclosures he is pushing through the pipeline.

Ally and other major servicers now piously claim that these systematic abuses of legal procedures that date back to the 1677 Statute of Frauds were mere “sloppiness” or “paperwork errors” and they’ve cleaned up their act. Should we believe them?

While services like #5 Ally may well have dispensed with factory-style signing procedures. there is evidence on the ground that says that the banks have not made meaningful changes.

Steve Keen: Harvard Starts its Own PAECON Against Mankiw

By Steve Keen, Associate Professor of Economics & Finance at the University of Western Sydney, and author of the book Debunking Economics. Cross posted from Steve Keen’s Debtwatch.

Several correspondents have just told me that some of Greg Mankiw’s students at Harvard are staging a walkout from his first year class. They’ve written an open letter to Mankiw to explain why: