Welcome Dylan Ratigan, (DylanRatiganShow) and Host William Black, (NewEconomicPerspectives.com)

[As a courtesy to our guests, please keep comments to the book and be respectful of dissenting opinions.  Please take other conversations to a previous thread. - bev]

Greedy Bastards: How We Can Stop Corporate Communists, Banksters, and Other Vampires from Sucking America Dry

Dylan Ratigan is well positioned to author a book, designed to be an enjoyable and informative read by normal humans, on the ongoing financial crisis. He is the wunderkind who became Global Managing Editor for Corporate Finance of Bloomberg, the premier news service that specializes in finance, at an exceptionally young age. He was at CNBC while that network was hyping the housing bubble as a non-bubble offering fantastic investment opportunities.

Now an anchor for MSNBC, Ratigan is a fierce critic of prominent politicians in both parties for what he views as their destructive policies and slavish efforts to aid the wealthiest and most politically powerful at the expense of the best interests of America and its people. He is passionate about these subjects and far less predictable than many of his peers because he is not a political partisan.

In finance, the most important question is why we suffer recurrent, intensifying financial crises. That question is really two questions. Answering it requires that we determine what causes our crises and why we fail to learn from these crises, but instead make the incentive structure ever more perverse after each crisis. Anyone from a finance background is likely to conclude that perverse incentives cause financial crises, so I was surprised by Ratigan’s choice of book title (“Greedy Bastards”). I think that greed is unlikely to have changed greatly over the last quarter century in which the U.S. has suffered three recurrent, intensifying financial crises.

I don’t call people bastards, even the self-made ones, because my mother reacted poorly to Speaker Wright referring to me as the “red-headed SOB.” Ratigan’s view on these points turns out to be similar to mine. He argues that the issue is not greed, but perverse incentives. When CEOs have incentives adverse to the public and their customers they tend to act on those incentives and harm the public and their customers. This observation is one of those essential points so often overlooked by writers about this crisis. A CEOs’ principal function is creating, monitoring, and adjusting the corporation’s incentive structures. There is a massive business literature on this function and CEOs uniformly believe that incentive structures for officers and employees are critical in shaping their behavior.

There is only one (disingenuous) exception to this rule – when officers and employees act criminally because the CEO has created perverse incentive structures. Suddenly, the CEO is shocked that his officers and employees acted criminally in response to the CEO’s incentive structures that encourage criminal conduct. Ratigan focuses on precisely this exception. Anyone that has had the misfortune to listen to compulsory business ethics training by his or her employer will have learned that the key is the “tone at the top” set by the CEO. True, but that always ends the discussion. No employee is going to be trained by his employer as to what to do when the tone at the top set by the CEO is pro-fraud.

As Ratigan demonstrates, our most elite financial CEOs typically created and maintained grotesquely perverse incentive structures that encouraged their officers and employees as well as “independent” professionals to act criminally in a manner that harmed customers, the public, and shareholders – but made the controlling officers wealthy. Is there any CEO of a lender incapable of understanding that when the loan officers and brokers’ compensation depends on volume and yield – not quality – the result will be catastrophic? Is there any CEO of a lender incapable of understanding that if the loan brokers’ fees depend as well on the reported debt-to-income and loan-to-value ratios and the broker is permitted to make liar’s loans the result will be that the brokers will engage in endemic, severe inflation of the borrowers’ incomes and their homes’ appraised values? Is there any reader that doubts that the CEOs intended to produce precisely what their perverse incentives were certain to produce? A CEO cannot send a memo to 50,000 loan brokers instructing them to inflate appraisals and use liar’s loans to inflate the borrowers incomes’ but he can, and does, send the same message through his compensation system. Each of these perverse incentives produces precisely the result that the CEOs expected and desired.

Ratigan gets right two of the essentials to understanding why we suffer recurrent, intensifying financial crises. First, cheating has become the dominant strategy in finance. Second, cheating is dominant because finance CEOs create such intensely perverse incentives that fraud becomes endemic. The Business Roundtable (the largest 100 U.S. corporations), had to react to the Enron era frauds. It chose as its spokesperson a CEO who embodied the best of American big business. This was the response he gave to Business Week when their reporter asked why so many top corporations engaged in accounting control fraud:

“Don’t just say: “If you hit this revenue number, your bonus is going to be this.” It sets up an incentive that’s overwhelming. You wave enough money in front of people, and good people will do bad things.”

How did the CEO know about the “overwhelming” effect of creating incentives so perverse that they would routinely cause “good people [to] do bad things”? He knew because he directed and administered such a perverse compensation system. An SEC complaint would soon identify that compensation system as driving accounting control fraud at his firm. His name was Franklin Raines, CEO of Fannie Mae.

What Ratigan does in this book that differs so importantly, and accurately, from nearly every other account of the crisis by a prominent writer is to say in plain English that our most elite financial institutions caused the crisis, that they did so because their controlling officers caused them to cheat, and that the senior officers cheated their own shareholders for the purpose of becoming wealthy.

Ratigan shows that the self-described “productive class” is actually a group dominated by “greedy bastards” who win by cheating. As George Akerlof and Paul Romer said in their famous 1993 article (“Looting: the Economic Underworld of Bankruptcy for Profit”), accounting fraud is a “sure thing.” Ratigan shows that while looting begins with accounting fraud it ends with tax fraud, political domination and scandal by the wealthy frauds, and crony capitalism. Indeed, Ratigan shows how far we have fallen since 1993. Fraudulent CEOs who control systemically dangerous institutions (SDIs) can now become wealthy by looting, cause the SDI to become insolvent, get bailed out by their political lackeys, resume looting, pay virtually no federal income tax, and do so with nearly complete immunity from prosecution. He shows that rather than being “productive”, the greedy bastards are destroying America’s middle and working classes, hollowing out our economy, and destroying wealth and employment.

180 Responses to “FDL Book Salon Welcomes Dylan Ratigan, Greedy Bastards: How We Can Stop Corporate Communists, Banksters, and Other Vampires from Sucking America Dry”

BevW January 15th, 2012 at 1:53 pm

Dylan, Welcome to the Lake.

Bill, Welcome back to the Lake and thank you for Hosting today’s Book Salon.

dakine01 January 15th, 2012 at 1:58 pm

Good afternoon and welcome to FDL this afternoon Dylan! Welcome back Bill!

Dylan, it looks like I’m going to have to find your book and read it based on this introduction.

What Ratigan does in this book that differs so importantly, and accurately, from nearly every other account of the crisis by a prominent writer is to say in plain English that our most elite financial institutions caused the crisis, that they did so because their controlling officers caused them to cheat, and that the senior officers cheated their own shareholders for the purpose of becoming wealthy.

This has been glaringly apparent to most of us outside the Beltway Village bubble and no amounts of Romney saying “Envy!” or the idiots hollering “job Creators” will change the facts.

How do we get these people responsible for the economic collapse into either a courtroom or the stocks of Colonial days?

(One of the more irritating things is all the articles quoting banksters whining about how no one luvs them and why can’t they just be treated nicely and not have people say such mean things about them)

Ratigan Dylan January 15th, 2012 at 2:00 pm
In response to BevW @ 1

Hi Bill and Bev! Thanks for hosting me. We’ve been looking forward to it all week.

William Black January 15th, 2012 at 2:02 pm
In response to Ratigan Dylan @ 3

Hi Dylan, Hi Bev,

Thanks for hosting this talk.

Dylan,

When did you realize we were experiencing a massive housing bubble, and what was it that caused you to realize it was a bubble rather than “fundamentals”?

eCAHNomics January 15th, 2012 at 2:03 pm

“Perverse incentives” begs the issue.

Why are there perverse incentives?

I’ll start with my personal fave. What to do about economically dysfunctional U.S. medical industry?

otchmoson January 15th, 2012 at 2:04 pm

Dylan, Welcome–and thanks for your efforts to give the common man hope. It seems our President forgot the “hope” part of the hope-and-change message, and many of us are wallowing in depression. I know depression is not the answer. (Or, perhaps that is what we are all facing.)

Dakine–I think you have it right; it’s not envy, it’s the lack of fairness and justice that have so many of us outraged.

Ratigan Dylan January 15th, 2012 at 2:07 pm
In response to dakine01 @ 2

The power structure on both the D and R side is so dependent on the $ and belief system, that they refuse to see the elephant in the room you described. I believe our best mission is to spend this year informing others outside the beltway through municipal organizing and the web. As we help the rest of the 311 million americans wake to the truth it will become impossible for the Beltway Power and Money Bubble to sustain. At that point we will be in a position to restructure with a Marshall Plan and re-vitalized capital markets

Ratigan Dylan January 15th, 2012 at 2:11 pm
In response to William Black @ 4

Prof Black, I was late to realize — as I had been brought up as a financial reporter in the 90′s under the influence of Rubin and others and naively trusted their rhetoric.

It was only when the carcass of the underbelly of the fraudulent credit markets began to expose itself in ’07 and then ’08 that I realized that what we had was not a capital market at all — but a fraudulent multi-trillion dollar, debt market, propped up with accounting tricks and complexity that not only needed to be better understood, but resolved, as it still does today.

Ratigan Dylan January 15th, 2012 at 2:13 pm
In response to eCAHNomics @ 5

Incentives are being perverted many ways, but the most glaring is the relationship between money and policy, that threatened industry’s exploit to preserve their interests at the expense of patients, doctors and health. This is seen in banking, trade, health, education, energy and the government itself, as illustrated at greedybastards.com

nataliaa January 15th, 2012 at 2:13 pm

Can you explain in more detail how the Plaza Accord helped end trade issues with Japan and how that can be applied to our dealings with China?

eCAHNomics January 15th, 2012 at 2:13 pm
In response to Ratigan Dylan @ 8

That answers a Q I wouldn’t have asked. Thanks.

marymccurnin January 15th, 2012 at 2:14 pm
In response to Ratigan Dylan @ 8

Is there any hope that these bums who sold out the global economy will ever do time?

eCAHNomics January 15th, 2012 at 2:14 pm
In response to Ratigan Dylan @ 9

So your A to all the dysfunctional U.S. inds is that they own the pols.

If so, how to change that, esp post-Citizens United.

HotFlash January 15th, 2012 at 2:18 pm

Dylan and Bill, thanks for being here. I am interested in your idea
“As we help the rest of the 311 million americans wake to the truth it will become impossible for the Beltway Power and Money Bubble to sustain. At that point we will be in a position to restructure with a Marshall Plan and re-vitalized capital markets”

To Dylan, I guess: All this sounds *great* to me, but how to do it? re waking the rest of Americans up, my righter-wimg friends seem to think they understand the status quo and don’t need more info. Reasons include “He’s a good man” “He’s honest” and (I do not kid!) “Nostradamus says…” I don’t know where to start! What do you suggest? BTW, yr book is on order, so if you deal with this there, just point me to chapter or somethin’.

To Bill, or Dylan — whomsoever or both: The scariest thing to me is the lack of oversight, or rather, the determined prevention of oversight, by the govt. IMHO, it’s too late to do anything. After a huge effort, G the 43 was dethroned and a new set of rascals was installed. What with lag time and all that, is it really possible to fix this situation before it implodes?

otchmoson January 15th, 2012 at 2:18 pm

But resolution is the problem. Those already on the inside are captured; the power, prestige, money are just too hard to walk away from. Then those on the outside seem to be of two sets: the party animal (party above all, WINNING, not governing well is the goal; the other are those who have not been too severely affected, but who do have the time to participate. They choose not to. Only when any of these become part of the jobless, homeless, in need of assistance do they recognize the dire straits. But, by then, they are too busy fighting off the alligators to think about, or participate in draining the swamp. It appears to me that a catastrophic event–European bank failure followed by domino-effect is the only way to wake those inside the game up. OWS has been a good start, but by starting in the fall, not only has momentum slowed, the PTB’s have codified the way to handle these non-violent protesters.

PeasantParty January 15th, 2012 at 2:18 pm

Hi Dylan and Bill,

I’ve enjoyed your show and your travels to hunt the jobs with Steel on Wheels, Dylan. Looking forward to this Book Salon.

Bill, I’ll ask again. Will you please run for President? You are the only one that I know of that knows what this mess is and can get us out of it. Oh, and you definitely don’t have a problem telling Congress the truth!

readerOfTeaLeaves January 15th, 2012 at 2:19 pm

I believe our best mission is to spend this year informing others outside the beltway through municipal organizing and the web. As we help the rest of the 311 million americans wake to the truth it will become impossible for the Beltway Power and Money Bubble to sustain. At that point we will be in a position to restructure with a Marshall Plan and re-vitalized capital markets

re: “municipal organizing”: what strikes me is how this resonates with Nick Hanauer (and Eric Liu’s) strategies for revitalizing what I’d call ‘civic engagement’ by becoming more localized — yet keeping one eye on the global system.

re: ‘re-vitalized capital markets’: if anyone asked me to explain the difference between a capital market and a debt market (and a fraudulent one at that), I couldn’t distill it enough to make sense. I think it is pretty common for people to confuse the two, since they thought all those ‘securities’ *were* a form of capital. Am I mistook?

eCAHNomics January 15th, 2012 at 2:19 pm

BTW, if it is inds owning pols that is the problem, another implication is that there will be no more creation in ‘creative destruction,’ bc new inds don’t have the bucks to buy pols.

Ratigan Dylan January 15th, 2012 at 2:19 pm
In response to nataliaa @ 10

The Plaza Accord in 1985 was simply a meeting in which the US, using the leverage of its position as the worlds biggest consumer and capital market, reached an agreement to re-value the Yen. ( We had agreed to a mercantilist trade policy after WWII with Japan to deliberately drive capital to rebuild Japan after the war. The Plaza Accord was the end of that deal in ’85) A similar meeting is necessary now with China. It is important to understand that China is simply lending the US consumer money to buy Chinese imports at rigged prices.

This allows the Chinese to ensure high employment levels for a massive and poor young population. And export their unemployment to the USA. It is in effect an agreement between the 1% in the USA and China, to acquire access to Cheap labor in China, and offer, cheap consumer products in the US, while helping Chinese power maintain stability through full employment. The US need to leverage China’s dependance on the USA to buy its product and pay back our debt to them, by using that leverage in a Plaza Accord-style negotiation.

spocko January 15th, 2012 at 2:19 pm

Thrilled to have a chance to talk with Black and Ratigan.

If there something that the Financial Press, or Citizen Financial press could do to raise some of these issues on financial con calls or other events were they talk to the CEOs?

HelenaHandbasket January 15th, 2012 at 2:21 pm

If capital can easily cross borders when workers can’t, is there anything to stop the race to the bottom for us 99%’s?

eCAHNomics January 15th, 2012 at 2:24 pm

Local pols are cheaper to buy off than national ones. I don’t see much future by starting at the local govt level.

I referred to one benefit of Occupy earlier as marketing ideas we knew about all along. And those are local, so I’ll grant that. But the ones more visible to corp media are in the big cities, where they are easily erased by PTB.

Ratigan Dylan January 15th, 2012 at 2:24 pm
In response to otchmoson @ 15

How to turn despair, rage and depression – into joy, empowerment and resolution. 1. Use 2012 to find others near you in your towns and cities that agree and assert municipal resolutions that declare Money is Not Speech and Corporations are not People. The more municipal clusters we have the better, as they will be the fuel to build states in 2013 and put ourselves in a position to alter the Constitution in 2014. These same municipal clusters can organize around other issues as well, but the key is to make the biggest possible tent first and get small victories all over America in 2012, so we can build and bring the Haymaker of Truth in ’13 and ’14

Gitcheegumee January 15th, 2012 at 2:24 pm
In response to eCAHNomics @ 5

Perverse incentive?

Same incentive that motivates every criminal…

It’s not what’s right or wrong…it’s what(and how much) they can get away with!!

readerOfTeaLeaves January 15th, 2012 at 2:25 pm
In response to Ratigan Dylan @ 3

FWIW, fortunately Audible.com has your book so I could listen to it last week.

Most revelatory and/or helpful for me was the story about how digitization took the profit out of banking and brokerage. I’d had some of the pieces to that puzzle, but had never had a clear, simple storyline before. Incredibly helpful as it seems like that piece was the ‘headwaters’, if you will, for so much trash that’s come after. And that **bankers**, traditionally the privileged East Coast version, had the money and connections to control government to maintain their position, as the marketplace was devolving.
Really helpful.
Hope you repeat a version on your show at some point — or a podcast — so more people get the history.

Prof. Black – what can we do to get Audible to carry “Best Way to Rob A Bank Is To Own One?” (I’ve not yet found time to read it… )

PeasantParty January 15th, 2012 at 2:25 pm
In response to Ratigan Dylan @ 19

I agree with that. But how to stop borrowing money from China while we are waging wars openly and in secret?

nataliaa January 15th, 2012 at 2:25 pm

It sounds like we need to increase tariffs for Chinese imports and figure out a way to pay our debt down – is that doable with out increasing tensions between the two countries?

William Black January 15th, 2012 at 2:26 pm
In response to Ratigan Dylan @ 19

Bizarrely (I know, I’m such a nerd), I spent my early afternoon (after playing soccer) reading the 100 page transcript of Federal Open Market Committee (FOMC)in September 2004. (I wanted to confirm my prediction that they utterly ignored the FBI’s warnings the week before that mortgage fraud had become “epidemic” and threatened to cause an economic “crisis.” My prediction proved correct.)

Anyhow, the FOMC was discussing whether the U.S. should enter into a “Plaza II” agreement (presumably with China) for the express purpose of reducing the value of dollar relative to other currencies. They decided that they didn’t know how to accomplish that objective.

eCAHNomics January 15th, 2012 at 2:27 pm
In response to Ratigan Dylan @ 19

Hmmm. Plaza Accord. 1945 to 1985. 40 years. Suggests U.S. will ‘succeed’ in convincing China to become a consumer rather than producer nation by roughly 2050. Not to mention China’s need to create 25 million new jobs/year and est sky high reserves so it won’t fall into the maw of the IMF/WB.

eCAHNomics January 15th, 2012 at 2:28 pm
In response to Gitcheegumee @ 24

Two As that cover almost every Q:

1. BC they can.
2. BC they have to.

Ratigan Dylan January 15th, 2012 at 2:28 pm

Only transparent markets with real capital requirements. Capitalism with out Capital is Stealing. Our govt. is printing money rather than canceling debt and restructuring western banking. Which is they can avoid they will, cause it makes them look bad and it is much harder to organize than printing $30 Trillion at the Fed to cover it up. It is why we are all so important in be ruthless and compassionate in demanding these reforms

readerOfTeaLeaves January 15th, 2012 at 2:28 pm
In response to eCAHNomics @ 22

Well, I read Hanauer’s “The Gardens of Democracy” last weekend, and LOVED it.

And I read it b/c Ratigan had interviewed him on the show.
Basically, it offers up a new paradigm for ‘what an economy *is*’, and I tend to agree with Hanauer’s view.

As for local gov’t — it’s one of my former bailiwicks. But there is in a sense more ‘accountability’ when people know each other, etc, etc. I follow your point, but I think there’s still a possibility for traction at the local level. Besides, it’s a place where people can get involved at no real financial expense, and learn a lot.

Ratigan Dylan January 15th, 2012 at 2:29 pm
In response to nataliaa @ 27

Everything is possible with Ruthlessness and Compassion:

Ratigan Dylan January 15th, 2012 at 2:29 pm

Yes!!

nataliaa January 15th, 2012 at 2:30 pm

or with Militant, Non-Violent tactics.

PeasantParty January 15th, 2012 at 2:31 pm

William,

Have you had any responses from members of Congress after you told them during the committee meeting what caused it, why, and that the oversight was looking the other way. If I remember correctly, you told them the Fed said they looked at with two people?

William Black January 15th, 2012 at 2:32 pm

I have a new article on this point that was prompted by Apple’s release of “audit” information on its suppliers (overwhelmingly in more corrupt Asian nations). The audits (which were none to rigorous and resisted vigorously by Apple), showed that anti-employee control fraud (theft of workers’ wages by the employers) were the NORM and unlawfully dangerous working conditions, even financially coerced abortions, were common. The anti-employee control frauds locate in fraud-friendly nations, creating a Gresham’s dynamic in which bad ethics drives good ethics out of the markets. Bain and entities like it then use this competition from defrauded foreign workers as their excuse for demanding wage cuts and looting pension funds for workers.

BevW January 15th, 2012 at 2:32 pm
In response to eCAHNomics @ 30

As a courtesy to our guests, please keep comments to the book and be respectful of dissenting opinions.  Please take other conversations to a previous thread. – bev

Gitcheegumee January 15th, 2012 at 2:33 pm
In response to eCAHNomics @ 29

Well, the US populace has been brainwashed into seeing themselves as consumers first,and citizens last.

We know how THAT has worked out,don’t we?

otchmoson January 15th, 2012 at 2:33 pm

North Dakota has its own state bank. I’ve read that several (perhaps 20) states have proposed legislation along this line. (1) Would that help each state that has its own state bank? and (2) Would this impact the Big Banks to any degree, perhaps make them more competitive, more responsive?

eCAHNomics January 15th, 2012 at 2:34 pm

Good points. I’ve moved from city to small town, so am observing govt more carefully.

Gitcheegumee January 15th, 2012 at 2:35 pm

Mr. Black, I recall participating in your last Salon here. And Mr. Ratigan,you rock!!

Could either of you gentlemen express an opinion on the offshoring of taxes that SHOULD be rightfully repatriated here?

Ratigan Dylan January 15th, 2012 at 2:36 pm
In response to otchmoson @ 40

The special privilege given to TBTF/AAA rated financial institutions and their use of the off-exchange swaps market give them a unique power to extract us, as the fund both parties. The more you can participate in TBTF by-pass capital markets like local banks the better.

William Black January 15th, 2012 at 2:36 pm
In response to PeasantParty @ 36

You can see my oral testimony on Lehman, with the chair trying to gavel me down, on Youtube. You can read the transcript of my testimony and the (minimmal) questions I was asked — which overwhelmingly ignored my testimony about fraud — on the House committee site that held the hearing. Neither the Dems or the Republicans wanted to explore Lehman’s broader fraud involving its liar’s loans and overall refusal to recognize losses. The only fraud they were interested in was the one involving quarter-end REPO transactions designed to understate Lehman’s leverage.

marymccurnin January 15th, 2012 at 2:37 pm
In response to William Black @ 37

You might want to listen to “Mr. Daisey and the Apple Factory”. Very grim and informative about Shenzhen, China and American tech companies.

PeasantParty January 15th, 2012 at 2:37 pm
In response to William Black @ 37

That reminds me so much of the Nike story in Indonesia. If more people were aware they would not buy the shoes, but then those people would starve!

I have thoughts of those corporations no longer being welcome back to America, even if we do end up with wages in the area of 5 dollars a day.

skolion January 15th, 2012 at 2:37 pm

Dylan,

Thanks for educating us (me!) about the important contrast between extractionary and value-creating activities. I see your efforts being reflected, unexpectedly, in the criticism that Mitt is currently facing regarding Bain’s activity. Are you hopeful that the 2012 campaign might allow the MSM and the country in general to have a real discussion about the varieties of capitalist activity— productive versus extractionary?

Ratigan Dylan January 15th, 2012 at 2:37 pm
In response to Gitcheegumee @ 42

I personally believe that off-shore profits should be repatriated exclusively into National Infrastructure Bonds.

STTPinOhio January 15th, 2012 at 2:38 pm

As someone who works with retail investors, I can’t tell you how disgusted I am with the casino that Wall Street has become. Because of the outsized use of leverage and extremely cheap borrowing costs, fundamental investment concepts (p/e ratios, new product pipelines, etc.) have become worthless.

No, you can do all the homework you like, but when a few guys in Connecticut decide to use cheap money and 40-1 leverage to short the S&P 500, there goes all of your gains for the (choose one: quarter, year, decade).

And don’t get me started on the scam that is oil prices. We shouldn’t be paying any more than $2.50/gal given the glut of oil in this country these days.

HelenaHandbasket January 15th, 2012 at 2:39 pm
In response to William Black @ 37

The US didn’t abolish slavery, we just outsourced it.

http://www.businessinsider.com/apple-child-labor-2012-1

“But, of course, the reason Apple assembles iPhones and iPads in China instead of America, is that assembling them here or Europe would cost much, much more–even with shipping and transportation. And it would cost much, much more because, in the United States and Europe, we have established minimum acceptable standards for the treatment and pay of workers like those who build the iPhones and iPads.

Foxconn, needless to say, doesn’t come anywhere near meeting these minimum standards.”

readerOfTeaLeaves January 15th, 2012 at 2:39 pm
In response to Gitcheegumee @ 42

Boy, howdy… how on earth do you impact oil or banking-finance oligopolies without addressing tax havens? It may not be possible.

I actually don’t have a problem offshoring money, but I do think at some point the tax revenues need to cycle back to the origination points. Tax havens obliterate social responsibility, IMVHO, and that is a good example of Greedy Bastardism.

spocko January 15th, 2012 at 2:39 pm
In response to William Black @ 37

I really want to read this piece! I was working on a piece titled:

“I’d rather kill myself than make your Ipad for Foxconn” based on the 150 person mass suicide protest that happened in Taiwan last week.

nataliaa January 15th, 2012 at 2:39 pm

Do you mind defining “ruthless compassion” in your own terms?

blackbeary January 15th, 2012 at 2:40 pm

Talk about perverse incentives when the US government borrows with interest from the Federal Reserve (private banking) but “has to” recapitalize them when they screw-up. Eliminate the middleman.

PeasantParty January 15th, 2012 at 2:40 pm
In response to William Black @ 44

I will go look at the transcripts. I watched the session on CSpan.

How do we get Congress to understand that we want foreclosures stopped, especially since we the taxpayers have paid for those mortgages about 10 times over now?

William Black January 15th, 2012 at 2:40 pm
In response to Gitcheegumee @ 42

Mr. Ratigan’s book discusses taxes extensively. He explains how the tax laws (here and abroad) create incentives to ship jobs elsewhere.

The story I told about Apple’s suppliers just came out and is obviously not in Mr. Ratigan’s book but if you watch his program or read his book you will see that the hollowing out of U.S. manufacturing is his single greatest focus.

Ratigan Dylan January 15th, 2012 at 2:41 pm
In response to skolion @ 47

I hope so! I view Romney as a blessing for more to learn the difference between extraction and capitalism. Value-creation through aligned interests of investors, entrepreneurs, workers and customers, versus the exploitation and value-destruction represented by Bain and modern finance, which has grossley mis-aligned incentives and pays govt to keep it that way. Remember, experimentation and collaboration to create value is much harder than borrowing other peoples money and using it to destroy others value.

Gitcheegumee January 15th, 2012 at 2:43 pm

Those tax havens have been a real bete noir for me for a long time…and when you consider the phrase dark liquidity,offshoring and laundering come immediately to my mind…

A big enough TARP can conceal a LOT of opaque lquids….

William Black January 15th, 2012 at 2:43 pm
In response to PeasantParty @ 55

The old fashioned way, with a citizen movement, except that we use modern tech/communications to get the word out.

nataliaa January 15th, 2012 at 2:44 pm
In response to William Black @ 59

Which should accelerate the time frame in which we can achieve change.

spocko January 15th, 2012 at 2:44 pm

I’m at a real computer now where I can ask again to Dylan.

You were part of the financial press for a long time. During that time did you ever ask questions that were about the fundamental issues of account control fraud that Prof Black has brought up? Especially during quarterly financial conference calls. If not, why not? If you did, what were the responses.

Could you please describe for the readers here what holds back financial reporters from asking really challenging questions and why the mainstream press doesn’t ask these questions either. Thank you.

PeasantParty January 15th, 2012 at 2:45 pm
In response to William Black @ 59

I guess so! The Occupy movement has been occupying foreclosed homes and trying to keep the banksters away from the families.

Ratigan Dylan January 15th, 2012 at 2:45 pm
In response to nataliaa @ 53

An aspiration in every decision I make to ensure shared visibility with all involved, which enhances the integrity of the information, which when combined with choice increases the probability that each decision I make will have aligned interests. The compassion comes from the acknowledgement of my own breaches and a focus on forcing resolution through a culture of Discipline and Encourage.

Gitcheegumee January 15th, 2012 at 2:46 pm
In response to William Black @ 56

Thank you for that info,sir.

I don’t know if you are familiar with Lucy Komisar,but she has been researching and reporting on these tax sams going all the way back to BCCI.
And she is one of the founders of an organization that tracks international tax havens and their effects.

Lucy Komisar – Wikipedia, the free encyclopedia
en.wikipedia.org/wiki/Lucy_Komisar
Lucy Komisar is a New York City-based investigative journalist. … Komisar is a founder of the international Tax Justice Network and author of its report, Citigroup : …

Tax Justice Network: Lucy Komisar scoops Headliner award
taxjustice.blogspot.com/2010/03/lucy-komisar-scoops-award.html
Mar 24, 2010 – Congratulations to tax justice campaigner Lucy Komisar who has been awarded the National Headliner Award for the story on Ponzi-schemer …

When Congress is exempt-themselves’ from insider trading laws-what hope do we have of any REAL reform?

spocko January 15th, 2012 at 2:47 pm
In response to William Black @ 37

For those of you who didn’t see it. Here is the story that I was referring too:

‘Mass suicide’ protest at Apple manufacturer Foxconn factory
Around 150 Chinese workers at Foxconn, the world’s largest electronics manufacturer, threatened to commit suicide by leaping from their factory roof in protest at their working conditions.

readerOfTeaLeaves January 15th, 2012 at 2:48 pm

I view Romney as a blessing for more to learn the difference between extraction and capitalism.

Ditto. Last week was so much fun, I even watched clips of Newt Gringrich, and watching the GOP reaction was just wonderfully humorous.

But what’s fascinating is how Romney absolutely believes that he IS a capitalist, and a good one.

I am a big fan of making money, but not if it requires looting someone’s pension plan (i.e., extraction). However, I know plenty of people who think that I’m a rube for my views.

The whole conversation about what an economy is, and what ownership is, and what actually creates wealth needs to change IMVHO.

I can attest, and I’m sure plenty at FDL can join me, that whole ‘creating value’ thingy can be really exhausting and is filled with uncertainty, setbacks, and you always have to scramble keeping up with The Next New Thing. Stealing is a far simpler strategy, no doubt about it.

nataliaa January 15th, 2012 at 2:48 pm

So the ruthless part is VICI and the compassion comes from recognizing you are human.

William Black January 15th, 2012 at 2:49 pm

Mr. Ratigan, I understand (and expect) bad economics out of an administration that continues to view Rubin as a savant. I don’t understand the politics of the Obama administration’s key appointees dealing with the financial crisis.

Why did President Obama promote and reappoint failures like Timothy Geithner and Ben Bernanke? Didn’t he gratuitously make Bush’s crisis his crisis when he chose Bush’s architects of the crisis to be leaders of his economic team?

PeasantParty January 15th, 2012 at 2:50 pm
In response to Gitcheegumee @ 64

Yep, and don’t forget Nick Shaxton and his revelations in “Treasure Islands”.

Ratigan Dylan January 15th, 2012 at 2:50 pm
In response to spocko @ 61

I did not ask as many questions as I should have. When I did ask them, they were dismissed as having been resolved by the “new math” of distributed risk that had been invented with the Swaps Market, Rubinomics.

I believe the primary barrier to more good questions along these lines is the financial press’s focus on Stock Prices and CEO’s, which are easier understood — and make for better copy than credit markets and accounting control fraud. In effect ignorance is bliss.

William Black January 15th, 2012 at 2:50 pm
In response to spocko @ 65

Thanks.

HelenaHandbasket January 15th, 2012 at 2:51 pm

Are there members of the Republican party that see the contradiction within their ranks where so many of them parade their faith in Christ (who preached compassion and help for the less fortunate) and their unwavering support of cannibalistic capitalism?

Ratigan Dylan January 15th, 2012 at 2:52 pm
In response to nataliaa @ 67

Yes, and most bad decisions, by most people are made out of fear, not malice.

readerOfTeaLeaves January 15th, 2012 at 2:52 pm
In response to PeasantParty @ 69

Former FDL Book Salon pick “Treasure Islands” is also available on Audible.
As is “Greedy Bastards.”

PeasantParty January 15th, 2012 at 2:54 pm

Dylan,

Much has been said here at FDL and other places about a more direct democratic style of Capitialism. One where there is a worker owned or Co-operative base so that employees not only have a vested interest, but share in the profits. Do you see that as something we could do to fix some of the problems?

Also, I noticed that immediately after Obama was elected, not even in office yet, the remnants of big manufacturing could not get out of the country fast enough. Do you think the republican pull to neuter this President caused that?

joe_common89102 January 15th, 2012 at 2:55 pm

what constitutes the public resources of a country and who should own them when? answer that question and your path is clear.

BevW January 15th, 2012 at 2:55 pm

FDL Book Salon – Treasure Islands

econobuzz January 15th, 2012 at 2:56 pm

Why did President Obama promote and reappoint failures like Timothy Geithner and Ben Bernanke?

Because he’s a bad man.

William Black January 15th, 2012 at 2:56 pm
In response to Ratigan Dylan @ 70

For a classic statement of this dogma, complete with fictional history, see: http://www.federalreserve.gov/boarddocs/speeches/2005/20051012/default.htm
Remarks by Chairman Alan Greenspan
Economic flexibility
Before the National Italian American Foundation, Washington, D.C.
October 12, 2005

Greenspan explains that deregulation and financial derivatives don’t just make our economy more efficient, they make financial crises far less likely and produce ultra prompt recoveries when there are problems.

Gitcheegumee January 15th, 2012 at 2:57 pm
In response to William Black @ 68

Aren’t they ALL out of the Chicago School of Economics-lest we forget the guru ,including Mr. Alan “I have found a flaw” Greenspan?

((((Did I put foot in mouth with that one?)))

Timothy Geithner’s Badly Timed Greenspan Tribute: ‘You’re Pretty …
http://www.huffingtonpost.com/…/timothy-geithner-alan-greenspan-tribute...
3 days ago – “I have found a flaw. …. “The former boss of the Federal Reserve, Alan Greenspan, said the reason Gen-Xers are unemployed and suffering …

Greenspan Concedes to `Flaw’ in His Market Ideology (Update2 .
http://www.bloomberg.com/apps/news?pid=newsarchive&sid..
Oct 23, 2008 – “Yes, I found a flaw,” Greenspan said in response to grilling from the … “We have to do our best but not expect infallibility or omniscience.” …

Ratigan Dylan January 15th, 2012 at 2:58 pm
In response to William Black @ 68

In my opinion, President Obama went with the Rubinomics continuation strategy out of his own belief in that system. Additionally, I believe that the Democratic leadership was so excited to have power back and that they had decided that they were going to “DO” Healthcare First, (a necessary cause) — but in so doing the President and Dems, indulged their own agenda as opposed to observing and prioritizing the obvious need to resolve the then exposed corrupt credit markets and accounting fraud causing the multi-trillion dollar extraction that continues to this day and is one of the root of symptoms like poverty, unemployment and the housing crisis. In a nutshell, I think they found it easier to believe the fairytale of money-printing, which also allowed them to do what they wanted (HCR) rather than address the still unaddressed core crisis that is our corrupted capital markets

joe_common89102 January 15th, 2012 at 2:59 pm

just a caution for all… NDAA + SOPA + WAR AGRESSORS + ROMNEY AMBITION & GREED + BANKSTERS = ??? do the math

otchmoson January 15th, 2012 at 3:00 pm

I haven’t read your book yet, but expect since I view almost daily you have covered all the industries to a degree. When you get to BigMedicine and BigInsurance, isn’t part of the problem with our skyrocketing costs similar to BigFinance. Everyone wants to point a finger at “the other” and insist that a haircut needs to be taken. Consumers/patients point to doctors and hospitals and pharma, and say, “Prices need to be less.” Doctors point to consumers and insurers, “Consumers need more skin in the game,” and “BigInsurance should not be making medical decisions.” Everyone wants their Medicare (if they have it), but those who see it as a future benefit, first worry that it will be there for them and/or don’t want to pay for a benefit they are not and may not receive. (If these same people had to care for Granny instead of consign her to a nursing home–or pay for nursing home care–they might change their minds.) Sadly, like most of the other Bigs, medical has a history of guiding policy, insuring status and money for its members.I read a report from last year’s AMA ‘aniversary’ report that said “AMA created its Council on Medical Education in 1904 with the goal of shutting down more than half of all medical schools in existence.. . Since AMA’s creation of the Council a century ago, the U.S. population (75 million in 1900, 288 million in 2002) has increased in size by 284%, yet the number of medical schools has declined by 26% to 123.”

It seems monopoly, oligopoly and TBTF has very deep roots in most industries.

spocko January 15th, 2012 at 3:01 pm
In response to Ratigan Dylan @ 70

I’ve worked with some of the CFOs and CEOs to prep for those calls. They are trained to dismiss any real questions that go beyond the scope of the quarterly statements, so that is no surprise.

What I and a few folks have been taking about is have a team of people working to inject some serious questions to some of these events. Imagine 5 people who have been trained by Prof. Black asking the kind of questions of CEOs that he would ask himself if he had the chance. They can shut down one or two but the questions would keep coming back to the issues of accounting control fraud and other control fraud issues. These questions could come on behalf of the press or the shareholders.

I know how the press plays follow the leader, if this team started down the rabbit hole others would follow.

Alas, I’m not smart enough to train the teams in content (but I can train them in technique ) and I don’t see any desire by the financial press to focus on anything other then CEO stories and horserace stock upticks.

Ratigan Dylan January 15th, 2012 at 3:02 pm
In response to PeasantParty @ 75

Yes, Look at the fan-owned Green Bay Packers! It is only if investment, entrepreneurs, align WITH workers and customers that we can create the most value. Every breach of that alignment moves toward value destruction and away from creation. Our goal has to be the nobility of collective creation, rather than the pursuit of dominance at all costs. Only strict and transparent capital requirements will force investors to align in such a way.

William Black January 15th, 2012 at 3:02 pm
In response to Gitcheegumee @ 80

Nope. Neoclassical economics is the drug of choice of the great bulk of U.S. economists.

The efficient market hypothesis (which criminologists are proud to say that our field falsified 25 years before finance scholars proclaimed it) was standard dogma throughout academic finance. (Real world finance folks rarely believed it.) The implications of the efficient market hypothesis are extraordinary, e.g., accounting control fraud and financial bubbles are impossible. If you believe the hypothesis, then regulation is unnecessary and harmful.

otchmoson January 15th, 2012 at 3:05 pm
In response to Ratigan Dylan @ 81

Agree . . . it appears the leadership spent their political capital on HCR, but without the ability to advocate for the greater good. There are certainly aspects of the ACA that are beneficial . . . but we got much less than hoped for. And the debacle that ensued saw political capital dissipate . . . and whether it was finance or justice, we were told to look forward not back. Without understanding and acting upon the unsteady pillars that hold the State in place, we can now witness the crumbling of values that truly gave voice to (the now disappearing) American Exceptionalism.

William Black January 15th, 2012 at 3:06 pm
In response to Ratigan Dylan @ 81

The yield on the 5 year T Bill just hit a 50 year low.

Gitcheegumee January 15th, 2012 at 3:06 pm
In response to William Black @ 86

Well, I guess Mr, Glass and Mr. Steagall had a different take on it-as did FDR.

William Black January 15th, 2012 at 3:09 pm
In response to otchmoson @ 87

Since we are doing this on Firedoglake, I would be remiss if I failed to note that it was Jane who performed miracles to keep the public option alive as long as she did.

Ratigan Dylan January 15th, 2012 at 3:09 pm
In response to William Black @ 88

Wow — How dangerous is it that normal market balancing factors like interest rates and currency aren’t being felt due to our reserve currency status?

And what would happen if China agreed to buy all oil from the Middle East in non-dollar currency?

STTPinOhio January 15th, 2012 at 3:09 pm
In response to William Black @ 88

Yeah. Just imagine what the yield would be if it was an AAA security.

Ratigan Dylan January 15th, 2012 at 3:09 pm
In response to William Black @ 90

Amen!!

PeasantParty January 15th, 2012 at 3:12 pm
In response to Ratigan Dylan @ 85

With that said, I’d like to ask you both about the European debt problem.

I think that the US is way more tangeled up than they want to say. I think that the European branches of our US TBTF tried to pull the rug out from under those countries thinking they would get away just like here. Do you see the Rothschild part of the European money monsters as a part of it, or do you think they will push back?

otchmoson January 15th, 2012 at 3:12 pm
In response to William Black @ 90

Thanks for acknowledging Jane’s efforts . . . I believe most of the FDL community were supportive (and consequently disappointed tremendously when not only public option but single payer were not given a seat at the table.)

PeasantParty January 15th, 2012 at 3:13 pm
In response to Ratigan Dylan @ 91

Sheesh! Isn’t that what they are already doing with Iran and Venezula? I think the US is upset because those countries want the proceeds to benefit them and their people.

William Black January 15th, 2012 at 3:14 pm
In response to Gitcheegumee @ 89

Yes, only in economics has our scientific understanding fallen sharply over the course of the last 75 years. We have lived during the Dark Ages, except that in the dark ages people knew they had lost knowledge and understanding. Of course, if they succeed in weakening the teaching of evolution we may achieve a similar move backwards in the life sciences.

Gitcheegumee January 15th, 2012 at 3:14 pm

Gentleman, this may sound off the wall,but with the electioneering going on now, and the two ususal factions are again warring-finance and religious fundamentalism..does anyone address the cognitive disssonance bewteen those who beat their religious breasts- yet at the same time endorse the most profane und uncharitable goals of the greedy bastards?

Did that make any sense,whatsover?

spocko January 15th, 2012 at 3:14 pm

I should have put that comment in the form of a question.

Do you think we could have an impact on corporate policy if we had a team of people working to inject serious questions into financial conference calls and shareholder events?

Could we create a team of people trained by Prof. Black to ask the kind of questions of CEOs that he would ask himself if he had the chance?

If not, is it because tough questions really aren’t effective? Or is it because the CEOs are too slippery to ever answer anything that doesn’t come with a threat of perjury? If that is the case, should we develop a team of lawyers/prosecutors to do develop these questions?

Ratigan Dylan January 15th, 2012 at 3:15 pm
In response to PeasantParty @ 94

I look at it more as an out of control system, that politicians and banisters are simply trying to keep up with, like a spinning plate. The only real answer is to stop and restructure the debt, starting with the naked swaps market and the realization that it is nothing more than tax-payer subsidized on-line gaming. We need a legit Marshall Plan to address this.

PeasantParty January 15th, 2012 at 3:16 pm
In response to Gitcheegumee @ 98

It made sense to me. They will probably all be partying together nekkid at Bohemian Grove in October. (grins)

Gitcheegumee January 15th, 2012 at 3:17 pm
In response to William Black @ 97

Our scientific understanding has not fallen, dear sir, it was unceremoniously PUSHED off a very high cliff.

Ratigan Dylan January 15th, 2012 at 3:17 pm
In response to Gitcheegumee @ 98

It is the 19th Century insanity of two-party politics, we have to move to issues-based debates and coalitions around those issues.

otchmoson January 15th, 2012 at 3:18 pm
In response to Ratigan Dylan @ 100

Could this be handled through the executive branch, via regulatory rules . . . or will it require legislation (an impossibility with the current dysfunctional Congress)?

PeasantParty January 15th, 2012 at 3:18 pm
In response to Ratigan Dylan @ 100

I agree with that Marshall Plan. However, what they have done to families and home buyers is the most cruel ever. I would rather see people stay in those homes than having a family of 4 or 5 living out of a car. The children have been especially harmed in this sick game of money.

Gitcheegumee January 15th, 2012 at 3:19 pm
In response to PeasantParty @ 101

Wow-surprised anybody understood it with all my typos.*G*

William Black January 15th, 2012 at 3:21 pm
In response to Ratigan Dylan @ 91

That’s a useful thought exercise. Recall that the U.S. has been actively seeking a cheaper dollar to aid exports, so the Fed and the administration would be happier (as would U.S. exporters) and the other currency (presumably the euro) would increase its over-appreciation, increasing the problems of the periphery (each of those nations has an export driven recovery strategy). Moreover, China holds so many dollars (and assets denominated in dollars), however, that this concern makes it even more unlikely that China would find a strategy of reducing the dollar’s relative value desirable.

Ratigan Dylan January 15th, 2012 at 3:21 pm
In response to otchmoson @ 104

Richard Grasso, former NYSE Chief and GB, explained to me in the book that much can be done by rule changes at Treasury and the SEC

Here he is on Page 54 of Greedy Bastards on Swaps Market Reform:

Grasso — “I believe regulators should require the product (swaps) to be registered with a central clearing agent (like an exchange) and thus able to be monitored globally to prevent contracts being written in excess of the debt obligations they are designed to insure (corporate or sovereign). This is easily accomplished by [regulators] and Treasury issuing a cross- markets rule adopted by non-U.S. counterparts. Any contracts written outside these requirements would be deemed null and void by regulators as simply online gaming.”

blackbeary January 15th, 2012 at 3:21 pm

Not to mention the double standard justice system, where the rich are seldom held to comply.

Ratigan Dylan January 15th, 2012 at 3:22 pm

Prof Black – Your thoughts on the Richard Grasso suggestion that naked-swaps be re-classified as online gaming and declared null and void as a Treasury market rule change?

HelenaHandbasket January 15th, 2012 at 3:23 pm
In response to Gitcheegumee @ 98

Thanks for rephrasing my question at #72. :-)

Ratigan Dylan January 15th, 2012 at 3:23 pm
In response to PeasantParty @ 105

Obscene.

Gitcheegumee January 15th, 2012 at 3:24 pm
In response to Ratigan Dylan @ 103

Ah yes…the Gilded Age..but pray tell how to have sensible and intelligent discourse when the educational system has failed so badly?

It is a conundrum to me that all the marvelous technology of the past quarter century has not elevated the quality of thought or discourse,but quite the contrary.

otchmoson January 15th, 2012 at 3:25 pm
In response to Ratigan Dylan @ 108

Then it is a lack of will to change rather than the inability to create such an exchange?

PeasantParty January 15th, 2012 at 3:25 pm
In response to Ratigan Dylan @ 108

Hmmm. The old REIT’s didn’t have the problems. I think since we have seen ALL the regulatory agencies turn their heads, either the banks need to stop this type of gambling, or create a new agency specifically to watch over their derivitive strategy.

William Black January 15th, 2012 at 3:26 pm
In response to Gitcheegumee @ 98

The major religions all warn that great wealth and power is destructive of morality. There is is an evangelical movement that argues that Christians should be good stewards of the environment and committed to the needs of the poor. The Catholic Church’s position on capitalism is downright hostile.

Gitcheegumee January 15th, 2012 at 3:26 pm

Gosh,I don’t even remember seeing that,Helena. Glad you pointed that out. Now I don’t feel like its just me thinking that way.

otchmoson January 15th, 2012 at 3:26 pm
In response to Gitcheegumee @ 113

No, but we know how to push buttons really fast!

sadlyyes January 15th, 2012 at 3:27 pm
In response to Ratigan Dylan @ 110

me likey!

Gitcheegumee January 15th, 2012 at 3:28 pm
In response to William Black @ 116

Take away churches tax exempt status and see if they feel the same way,then.

Start with the Televangelists (like Hagee),go on to the Catholics,and on down the food chain,imho.

sadlyyes January 15th, 2012 at 3:29 pm

the average American,has no idea how deep the corruption is

Ratigan Dylan January 15th, 2012 at 3:29 pm
In response to otchmoson @ 114

That’s right. The off-exchange swaps market is the last bastion of big money making on wall street aside from legit investment and development. Technology has already destroyed profits in stocks, bonds, and they are protecting this dark market by funding both parties and we are paying for it through massive lack of investment and development

otchmoson January 15th, 2012 at 3:31 pm
In response to Gitcheegumee @ 120

Here! Here! (or is it Hear! Hear!)

William Black January 15th, 2012 at 3:32 pm
In response to Ratigan Dylan @ 110

We knew that Dodd-Frank was going to be both weak and wordy when it failed to include two sentences:

The “Commodities Futures Modernization Act” is repealed.
The “Gramm-Leach-Bliley” Act is repealed.

The CFMA expressly exempted CDS from state gambling and “bucket shop” laws. Dodd-Frank did not remove those provisions.

Gitcheegumee January 15th, 2012 at 3:33 pm
In response to Ratigan Dylan @ 100

I asked this ealier but I think it got lost under some links;

HOW can we expect real reform when the Congress Critters themselves are immune to insider trading laws?

HotFlash January 15th, 2012 at 3:34 pm
In response to Gitcheegumee @ 120

I have been wondering about that more and more in the last few months. As Frank Zappa recommended, “Tax the churches.” I cannot think of any reason why a church should be tax-exempt. It is only a tax on profits, so no profits, no tax. What could anyone possibly object to about that?

eCAHNomics January 15th, 2012 at 3:34 pm
In response to William Black @ 86

Neoclassical economics is the drug of choice of the great bulk of U.S. economists.

Something like 3%, according to survey done by AEA in last decade.

Ratigan Dylan January 15th, 2012 at 3:35 pm
In response to Gitcheegumee @ 125

Only through our ongoing efforts to educate, organize and inform!

chicagogal January 15th, 2012 at 3:35 pm
In response to Ratigan Dylan @ 23

Sorry I’m so late to the party!

Do you have any suggestions for those of us who have been pushed off the edge and no longer believe that we will survive until 2013 or 2014, assuming we are successful with our efforts this year?

PeasantParty January 15th, 2012 at 3:36 pm

Dylan,

Which Industry Sector do you think during your book research showed to be the biggest Greedy Bastard, Banking or MIC?

Ratigan Dylan January 15th, 2012 at 3:36 pm
In response to chicagogal @ 129

Look to work with those closest to you in your community on all fronts.

Ratigan Dylan January 15th, 2012 at 3:37 pm
In response to PeasantParty @ 130

Banking, only because of the relative scale of their Greedy Bastardism. The values of GBism are everywhere. Only banks have managed to map it a $700 trillion proposition.

Mauimom January 15th, 2012 at 3:38 pm

Welcome to the Lake, Dylan.

Following up on Spocko’s question @ 61 above, how do you see yourself utilizing the forum you have at MSNBC to increase public awareness of these financial issues.

For example, I’m fairly well-read on financial matters, but I hadn’t heard of Richard Grasso’s proposal that you described above.

Do you ever identify 5-7 good proposals like that one, and just hit them again and again, hoping that they’ll sink in and get some following? [E.g., financial transactions tax]

That seems to me one way to both educate the public AND make some progress towards getting the reforms we need. Yes, we all know that Schumer et al. are completely bought off [as is Obama], but if a groundswell of protest and demand develops, reform might be harder to resist.

William Black January 15th, 2012 at 3:39 pm
In response to PeasantParty @ 130

Adam Smith famously argued a paradox — it is the butcher and the baker’s greed that ensures they provided us with safe, good-tasting food. Why has greed so often become perverse in modern finance?

Gitcheegumee January 15th, 2012 at 3:39 pm
In response to HotFlash @ 126

Well, maybe some of those entities have exceptional laundromat facilities?

After all don’t they say that “cleanliness” is next to Godliness? *G*

Mauimom January 15th, 2012 at 3:39 pm
In response to William Black @ 124

Both of your proposals are good candidates for focus on Dylan’s “educational” program.

econobuzz January 15th, 2012 at 3:40 pm
In response to eCAHNomics @ 127

Something like 3%, according to survey done by AEA in last decade.

Neoliberal is the problem.

PeasantParty January 15th, 2012 at 3:40 pm

Dylan,

I’m very proud of your newest trials on the show in telling the truth to America, even when you yell. I don’t wish for you to lose your job, but remember your real job is to inform America with the truth.

William,

I plan to write you in as my Presidential candidate choice. Get ready. (grins)

Ratigan Dylan January 15th, 2012 at 3:41 pm
In response to Mauimom @ 133

Grasso’s proposal is new information, from interviews I conducted in the book. I am seeking to use all platforms to focus on the desperate need for capital requirements above all else, which leads to debt cancellation and restructuring. I view all else as treating symptoms but leaving core issue of accounting fraud and lack of capital intact. And that is the core factor creating mis-aligned interests between finance and the economy.

Here is the book exempt on bank reform: http://www.bloomberg.com/news/2012-01-09/encouraging-right-kind-of-greed-among-banks-commentary-by-dylan-ratigan.html

doggid January 15th, 2012 at 3:42 pm

Do you think some of our problems are from a general malaise of Western Society? Being a baby boomer I was part of President Kennedy’s Health Initiative in Public Schools, his Space Program that brought in the Computer Ages. It just doesn’t seem that We as a Society have something to aspire too. This is why I can’t understand why our President doesn’t present something of imagination and inspiration to our country.

Ratigan Dylan January 15th, 2012 at 3:42 pm
In response to William Black @ 134

Because of the elimination of capital requirements which then perverts all the incentives for butchers, bakers and candle stick makers.

PeasantParty January 15th, 2012 at 3:42 pm
In response to William Black @ 134

Hmm. I’d say that the Fox was watching the hen house.

econobuzz January 15th, 2012 at 3:42 pm
In response to William Black @ 134

Smith was referring to perfect competition in that statement, I think.
And certainly not taking into account control fraud.

mswinkle January 15th, 2012 at 3:42 pm

HI Dylan,

just wanted to say hello and how much I enjoyed your show. One of the few on MSM talking the truth. I have a few questions not sure if you can answer them LOL

In your book you highlight the Vampires but fail to mention the dumbing down of the population by MSM. The reality is apart from shows like yours most just filter the issues of the day through the two party illusion filter and what they talk about is just irrelevant distraction. This is the same be it CNN, MSnBC, or fox. Although some are more offensive than others. Do your talk show colleagues know they are part of the dumbing down the people process or do they also dumbed down? LOL

I had a hard time continuing to watch your show when commentators such as Ed Rendel show up as frequent guest to comment on corruption and bought political system etc. Honestly he is a recipient of such a system and to me it feels like having a wolf to comment on the missing chickens. It would be one thing if he was blowing the whistle and giving examples but he is not, and for me it takes away from your message.

That said you have done a lot to wake people up and I am sure you have to work within certain confines to stay on air. Yours is one of the few shows I watch and shame not more like it

thanks for all you try to do

JamesJoyce January 15th, 2012 at 3:43 pm

Dylan,

Have the fears expressed by Jefferson and Madison concerning corporations and the undue influence on the political process and the detriment to the republic, given, today realities, been realized? Shouldn’t we revisit their wisdom(s)and ideas?

eCAHNomics January 15th, 2012 at 3:43 pm
In response to econobuzz @ 137

Same thing, diff spelling.

Mauimom January 15th, 2012 at 3:44 pm
In response to Ratigan Dylan @ 132

Do you think the “move your money” campaign will have any effect on the banks, or will they just be glad to get rid of those annoying “small” customers?

Gitcheegumee January 15th, 2012 at 3:44 pm
In response to William Black @ 134

Adam Smith didn’t know about the perversion of our very foods,namely GMO’s…Frankenfoods.

Hey can anyone top Monsanto and ADM as uber GB’s,folks??

blackbeary January 15th, 2012 at 3:44 pm
In response to HotFlash @ 126

They have a lot of real property, especially medical, which I am sure is very profitable.

Ratigan Dylan January 15th, 2012 at 3:46 pm
In response to mswinkle @ 144

I address the media at length in Chapter 7….the media does little to reveal and explain, and much to info-tain and play softball-for-access with sources. It is a huge problem, that the web and other by-pass mechanisms are seeking to solve as we speak.

otchmoson January 15th, 2012 at 3:46 pm

Do you think your ‘mission’ is contagious? Do any of your guests leave, thinking they could do more–encourage real journalism among their contacts, etc.? I know you and Jimmy Williams appear to be simpatico, particularly in the ‘Get Money Out’ drive . . . but are there other empathetic guests?

William Black January 15th, 2012 at 3:47 pm
In response to Ratigan Dylan @ 141

I’d be cautious about relying primarily on capital requirements. Capital is an accounting residual and accounting control frauds massively overstate their assets and understate their liabilities, creating fictional “capital” when they are massively insolvent.

The three Icelandic banks that destroyed that nation’s economy illustrate another danger. I can self-fund “capital” by lending the money to purchase my stock to shills. This allowed the Icelandic banks to report exceptional capital at times when they were deeply insolvent.

doggid January 15th, 2012 at 3:48 pm

Dylan watch your show often. Your Network meltdown would be appreciated a few more times.

I’m totally confused about the Amend Process. There seems to be 3 or 4 proposed amendments. How does this process work and do these multiple proposals diminish the effort or will these all be messed into one proposal?

Ratigan Dylan January 15th, 2012 at 3:48 pm
In response to otchmoson @ 151

Yes, more and more every day!

PeasantParty January 15th, 2012 at 3:48 pm
In response to Mauimom @ 147

Bank of America is having a really hard time with it. They abused their little customers so badly that moving to credit unions during that week was spectacular and a hard hit to that specific bank.

Ratigan Dylan January 15th, 2012 at 3:49 pm
In response to doggid @ 153

We are in the winter of awakening and consensus on the Amendment, at this point I encourage all exploration, so we can move to consensus this spring and align to bring a haymaker of truth to bear.

dakine01 January 15th, 2012 at 3:49 pm

Capital is an accounting residual and accounting control frauds massively overstate their assets and understate their liabilities, creating fictional “capital” when they are massively insolvent.

“Goodwill” being booked as capital equal to or greater than the actual book values of the company

econobuzz January 15th, 2012 at 3:50 pm
In response to William Black @ 152

I’d be cautious about relying primarily on capital requirements.

Absolutely. Capital requirements are a joke.

mswinkle January 15th, 2012 at 3:51 pm

hi Bill,

and welcome. What can I say but wish you were given more air time 24/7 to get the truth out, and wake people up. It is a joke to hear the POTUS go on tV and say bankers did nothing illegal and he doesn’t get push back. In some ways I like to think that Obama has done us a favor because he has shown the political system for the sham it is and more and more are waking up to the fact that both parties are puppets for MIC. I know Dylan’s solution is to get money out of politics but I think it would take too long, and without fixing our monetary system it would not solve our underlying issues. I think we need to move to a more direct democracy model, change how money works, and have a judicial system that actually works. Frankly, we do not need that many laws, and I am sure if we thought about it we would realize how few we need. Thus we could simplify the whole process.

Thank you for all you do keeping us informed and educated even if for now those you speak out about are still not being held accountable.

BevW January 15th, 2012 at 3:52 pm

As we come to the end of this great Book Salon,

Dylan, Thank you for stopping by the Lake again and spending the afternoon with us discussing your new book and taking back our economy.

Bill, Thank you very much for Hosting this great Book Salon.

Everyone, if you would like more information:

Dylan’s website (DylanRatigan.com) and book (GreedyBastards.com)

Bill’s website (NewEconomicPerspectives.com)

Thanks all, Have a great week and Holiday.

If you want to contact the FDL Book Salon: FiredoglakeBookSalon@gmail.com

Ratigan Dylan January 15th, 2012 at 3:52 pm

Lack of capital requirements with accounting controls is the end of all productive investment, so I prefer the “joke” of requiring capital of banks and economy, plus additional. I am saying making financial rules, while not requiring capital in the marketplace is doomed.

tuezday January 15th, 2012 at 3:53 pm

Dylan, what was your reaction to the NYT’s “vigilante reporter” editorial?

I suspect I know the answer but the greedy bastards wouldn’t get away with half of what they do if reporters did, in fact, ask tough questions. I realize this was touched upon up thread. If you did a show on it sorry, I don’t get cable.

PeasantParty January 15th, 2012 at 3:53 pm
In response to econobuzz @ 158

Zactly!

Owner Joe could say he contributes his years of experience as capital, and co-owner Tom could say, well I’m too sexy for my shirt and that is my capital. Harrumphh!

Gitcheegumee January 15th, 2012 at 3:53 pm
In response to econobuzz @ 158

Old Italian proverb:

“You can steal more with a briefcase than you can with a gun.”

William Black January 15th, 2012 at 3:54 pm
In response to Gitcheegumee @ 148

Herr Hummler is one of the leading banking commentators in Europe (his montly letters go out to 100,000 recipients and major financial papers frequently quote him. He is the CEO of Switzerland’s oldest private bank (i.e., a bank specializing in aiding foreign tax evasion). He blames the Swiss crisis on America and he blames the U.S. crisis on lending to racial and ethnic minorities. He has a favorite metaphor, but he fails to understand that it destroys capitalism. That’s strange because he’s a theoclassical economist who got his Ph.D at U. Rochester (a bastion of U.Chicago economics). His metaphor is that the investment banks knew they were buying bad mortgages, so they treated them like sausage and hid the bad loans in financial derivatives (CDOs) that they then sold to the world. This reverses Adam Smith’s claim and makes capitalism criminogenic.

otchmoson January 15th, 2012 at 3:54 pm
In response to Gitcheegumee @ 148

I think that list would be tooo-o-o-o-o- long. ADM, Monsanto, Pfizer, Lilly, American Petroleum Institute (and insert your favorite gasoline producer)? How about the GB’s that “guide” our hospital/medical complex–lose millions, close hospitals and get another bonus. Of course, big finance, GS, Citi, BOA, Chase. Throw in the for-profit educators who are sinking young people so deep in debt their “American Dream” is really a nightmare. Finally, name your media . . . and I’m sure there are names there, too. IOW, if you posted all these name on post-it slips, plastered them on your wall, and played pin-the-tail-on-the-donkey, there’s little likelihood that your tail would hit uncovered wall.

Ratigan Dylan January 15th, 2012 at 3:55 pm
In response to BevW @ 160

Thank you Jane and Bev! And thank you for everything you have taught me and others Prof. Black. And thanks to all of you for enlisting and aspiring to solve these generational problems we all face together!

econobuzz January 15th, 2012 at 3:55 pm
In response to BevW @ 160

Yes, thanks Bill and Dylan. Great discussion.

William Black January 15th, 2012 at 3:55 pm
In response to dakine01 @ 157

I write extensively about goodwill in my book. You are correct that it often adds to fictional capital.

Gitcheegumee January 15th, 2012 at 3:56 pm

Is my spouse gonna be pea green upon being told that I blogged with Dylan Ratigan…AND Bill Black!!

Thanks to all,once again,for the opportunity for an informative ,intelligent and entertaining interlude.

Will stay tuned,Dylan…..

William Black January 15th, 2012 at 3:57 pm
In response to BevW @ 160

Thank you Bev, Dylan, and all who choose to visit the Lake.

PeasantParty January 15th, 2012 at 3:58 pm
In response to Ratigan Dylan @ 167

Thank you, Dylan. Keep spreading the truth and have Jane back on to help you with it.

William, we all have great respect for you.

Ratigan Dylan January 15th, 2012 at 3:58 pm

Bill and I are frequently on Twitter @WilliamKBlack and @DylanRatigan! Thanks for today!

Gitcheegumee January 15th, 2012 at 4:00 pm
In response to otchmoson @ 166

Couldn’t agree with you more..however, we all NEED food..and that is the most basic and sacred of our requirements.

The sanctity of our food and water are the common denominators of mankind.

JamesJoyce January 15th, 2012 at 4:05 pm

Dylan, America needs a history lesson.

http://www.veteranstoday.com/2010/02/17/like-lincoln-jefferson-madison-americans-fear-corporate-control-of-public-policy/

“America’s founders were men of the late enlightenment, a period of rebellion against the oppression, the spiritual and intellectual confinement of the church, the monarchies, the economic exploitation of past feudalism. They recognized early, the dangers in the rise of corporations. They were exceptionally wary of large and powerful corporations like East India and the threats they posed to the public good.”

You are an effective teacher. The “Greedy Bastards,” mentality or mindset is a disease. Like alcoholism, its rooted in a misguided, myopic self interest, at life’s expense.

Gitcheegumee January 15th, 2012 at 4:09 pm
In response to William Black @ 165

Perhaps we should send der Herr some Vienna sausages?

(Doesn’t Austria and Switzerland border one another?)

jyllyj January 15th, 2012 at 4:19 pm

Dylan and Bill, Do either of you have any insight as to litigation that is directed at collateral managers, like the SEC’s lawsuit against Brian Stoker? Do you think that the current trend of settling without admitting/denying guilt and paying a financially meaningless fine will be the continuing trend? I am particularly interested in collateral managers that I find re surfacing at private equity firms managing the same properties that went into foreclosure (commercial property and resi). It seems that the same collateral managers are able to profit on the rise and fall of the credit market bubble and have no consequences. Do you see any way to slow that down?

blackbeary January 15th, 2012 at 4:22 pm
In response to econobuzz @ 158

Depends if the reserve is real or phoney. China is running over 20%, the US, about 5%. The best insurance, better than hedged securitization, which actually relies on market performance. Capital requirements are a prudent counter-cyclical investment that has great returns when sooner becomes later.

econobuzz January 15th, 2012 at 4:27 pm
In response to blackbeary @ 178

Uh, they can’t even be defined — much less regulated.

blackbeary January 15th, 2012 at 4:34 pm
In response to econobuzz @ 179

But it is nice if it is there when needed. What kind of capitalism is it when it is all debt?

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