I am now officially an economic advisor to Senator Sanders, and this column reflects some of that advice. Part of my advice is not to take money from Wall Street felons. (I am not taking credit for Bernie’s decision — at most I supported a decision he had already made over a year ago.) One of the reasons I reinforced Bernie’s decision was witnessing the problems President Obama experienced given his taking very large contributions from Wall Street. I channeled the prescient warning that Professor Thomas Ferguson (U. Mass, Boston) gave a group of us in 2008. He predicted, accurately, that Obama would not lead an effective crackdown on the endemic fraud by Wall Street elites that caused the financial crisis. Tom (he is a personal friend) is the expert on campaign finance. He authored the classic book on campaign finance entitled Golden Rule (as in the observation that he that has the gold makes the rules.).
Tom pointed out that (then) Senator Obama was accomplishing something unprecedented. He was not only raising more money from Wall Street than the Republicans were, he was doing so in the context of a nomination battle with (then) Senator Hillary Clinton. The Clintons were both preeminent leaders of the “New Democrats.” They crafted the coalition of conservative (on economics and national security issues) Democrats. The New Democrat’s apparatus was funded overwhelmingly by Wall Street and President Bill Clinton was famous for championing the three “de’s” – financial deregulation, desupervision, and de facto decriminalization. Even if Wall Street was willing to reverse decades of contributing primarily to Republicans, why would they choose Senator Obama over their great ally, Senator Hillary Clinton? Tom predicted that Obama would win the nomination and the election – and would reject emulating President Roosevelt’s “New Deal” and its transformation of finance. All three predictions proved accurate.…New Economic Perspectives
The Myth that Obama’s Taking Huge Contributions from Wall Street Was Fine
William K. Black | Associate Professor of Economics and Law, UMKC
9 comments:
Bill Black does not yet comprehend that "The best way to rob is with a bank*"
*a government-privileged one, that is, and they all are, either explicitly** or implicitly***.
**eg. government-provided deposit insurance.
*** eg. only banks and other depository institutions may deal with a nation's fiat via convenient, inherently-safe accounts at the central bank. If/when physical fiat, aka "cash", is abolished, then citizens will not be able to use their nation's fiat AT ALL.
What do you presume Mr. Black doesn't "comprehend", precisely?
That the rich are the most so-called worthy of government-subsidized private credit and thus that such subsidies are WRONG.
Of course, he's not the only one; it's a common delusion that such subsidies are necessary.
"That the rich are the most so-called worthy of government-subsidized private credit and thus that such subsidies are WRONG."
It is, and that's why banks have to be narrowed on the asset side, not the liability side. What banks lend for and whom they lend it to matters. Making lending more expensive won't help.
"Its about price not quantity..." >>> Black has NO understanding/appreciation for this phrase...
Black thinks that if a bank finances something that is clearing markets at $100 and then runs into regulatory problems if the market clearing prices for the same item shortly drop to $80 that somehow fraud is being committed by the bank people...
Black thinks that if a bank finances something that is clearing markets at $100 and then runs into regulatory problems if the market clearing prices for the same item shortly drop to $80 that somehow fraud is being committed by the bank people...
I don't think that is his argument. He argues that fraud is a type of economic rent that distorts price, which eventually corrects when the scheme implodes. Then government steps in and bails out the fraudsters because they are TBTF, (read well connected politically as donors) and leaves the rest holding the bag.
So oil price collapses and that means the bank people have been committing fraud? Please....
Tom this is Salem Witch Trial stuff from Black....
Matt, you are drinking too much of that KoolAid again. The banks paid billions to settle out of court with no prosecution for the preps.
The banksters control the price of building materials? please....
"paid billions..." Who gets that munnie?????
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