Italy and Spain are suffering Great Depression levels of unemployment. Collectively, there population is roughly 105 million, which is nearly one-third of the eurozone’s total population of roughly 330 million.
Today, John Boehner bowed to the inevitable logic of the impending political season and placed a “clean” debt ceiling increase bill on the floor of the House. At this writing, the bill passed with 28 Republican and 193 Democratic votes. Now it moves on to the Senate, where it is expected to pass in time to allow the Treasury to keep issuing debt instruments.
This year is the 75th anniversary of Edwin Sutherland’s presidential address to the annual meeting of the American Sociological Association in 1939. In the course of beginning to write a book from a white-collar criminological perspective about our modern financial crises I decided to reread Sutherland’s address (which was published as an article in 1940) to see how it stands up in light of modern white-collar criminological research and theory. It reads exceptionally well today. It is not even archaic in tone.
Anyone who follows the news periodically, if not more often, wonders about the criteria making certain issues or persons “newsworthy,” and others substantially less so. One reliable indicator of newsworthiness is that the story happens in Washington, D.C. A second is an unusual or counter-intuitive event (“Man bites dog”). A third is the prospect of large losses. This last quality, however, renders the relative neglect of Puerto Rico’s debt crisis an interesting anomaly.
An economy like Spain is suffering from grotesquely inadequate demand. Monetary policy can make things worse, but it cannot produce a rapid recovery in such circumstances. Fiscal policy can.
I have often written and spoken of my frustration that economists refuse to read George Akerlof and Paul Romer’s classic 1993 article (“Looting: The Economic Underworld of Bankruptcy for Profit”) and apply it to an analysis of the current financial crisis. Note that their title expresses the paradox they were reporting – the best way to loot the bank is for its controlling officer to cause it to make extraordinary amounts of terrible loans that will typically cause the bank to fail.
Andrew Ross Sorkin (and his “Deal Book” team at the New York Times) seemed to have built an insurmountable lead in the race to be declared the most unctuous panderer to the financial plutocrats who grew wealthy by leading the frauds that blew up our economy.
I campaigned for you in the primaries and general election of 2008, write about the economics of climate change, work in the area of energy efficiency and renewable energy, and am a climate activist in Northern California.
By William K. Black On January 19, 2014 I posted a column entitled “Deflation: The Failed Macroeconomic Paradigm Plumbs New Depths of Self-Parody” that discussed the insanity of the Eurozone’s approach to “the threat of deflation.” The EU’s troika cannot … Continue reading →
My title extends the humorous theme of I found in an article by Dr. David S. Pisetsky’s (M.D., Ph. D). Pisetsky’s riff is that he was eager to become famous by announcing “Pisetsky’s Rules” about rheumatology treatment risks and discovered to his great disappointment that Sam Peltzman had got their first and the risk phenomenon Pisetsky wished to warn about was already known as the “Peltzman effect.”