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William Black

William Black

William Kurt Black (born September 6, 1951) is an American lawyer, academic, author, and a former bank regulator. Black's expertise is in white-collar crime, public finance, regulation, and other topics in law and economics. He developed the concept of "control fraud", in which a business or national executive uses the entity he or she controls as a "weapon" to commit fraud.

Articles by William Black

Bank Whistleblowers United Told DOJ to use 4506-T as Kryptonite v Banksters

August 6, 2018

Steven Krystofiak Warned the Fed 12 Years Ago
By William K. Black
August 6, 2018     Bloomington, MN
Steven Krystofiak formed the Mortgage Brokers Association for Responsible Lending, a professional association dedicated to fighting mortgage fraud and predation.  On August 1, 2006.  He tried to save our Nation by issuing one of the most prescient warnings about the epidemic of mortgage fraud and predation and the crisis it would so cause.
The context was Congress’ effort to empower and convince the Federal Reserve to take action against what the mortgage lending industry called, behind closed doors, “liar’s” loans.  A liar’s loan is a loan in which the lender does not verify (at least) the borrower’s actual income.  The industry knew that the failure to verify inherently led to

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How Democratic Party Mendacity about Deficits and Banksters Lifted Trump

August 3, 2018

By William K. Black
August 2, 2018     Bloomington, MN
Peter Suderman, the managing editor at Reason.com (hard right) has published an op ed in the New York Times entitled “How Republican Hypocrisy Lifts Social Democrats.”  His subtitle is “By its astoundingly cynical approach to deficits and debt, the G.O.P. has opened the door to an expansive left.”  What is actually astounding is that Suderman never mentions, much less discusses; the situations in which a Nation with a sovereign currency should run deficits.
Stephanie Kelton and I have been trying hard to keep Democrats from, again, rushing into the trap of denouncing Republicans for running federal deficits.  Yes, Republicans are hypocrites about debt and deficits.  That does not mean that Democrats should repeat Clinton and

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Mankiw Whiffs on “Learning the Right Lessons from the Financial Crisis”

August 1, 2018

By William K. Black
July 31, 2018     Bloomington, MN
I am writing a major article on myths about the causes of the financial crisis, so I read with special interest N. Gregory Mankiw’s column “Learning the Right Lessons From the Financial Crisis.”  (HT: DCJ.)  The context of Mankiw’s article, as he appropriately discloses, is to do a favor for a friend by plugging the friend’s new book in Mankiw’s column in the New York Times.  I have no criticism of that purpose and applaud him for alerting readers to it.  The problem is substance, both the book’s and his column.
Mankiw is the leading author of economic textbooks in the world, so his views and his ideology are enormously influential.  The first sentence of his book review asks the right question:  “What caused the financial crisis

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Trump is the World’s Most “Expensive Lobbyist” for Google’s “Huge Antitrust” Problem

July 24, 2018

By William K. Black
July 22, 2018     Bloomington, MN
Trump’s language problems do not end with his double negatives and his endless contradictions of what he has just said or tweeted about Putin’s assault on our democracy.  Trump lies about everything, all the time.  His lies, however, frequently reveal the greater truth – he lives to betray America, his responsibilities as President, and his base.  One classic example is the illegal abuse of monopoly power used against Americans and people globally.  Trump has managed to embrace, contemporaneously, polar views on monopoly power – and both views are wrong.  That takes some doing.  One would think that taking opposite views would help you be right half the time.
Under United States law, the intentional abuse of monopoly power is both

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The Three Impossible Things Trump’s Base Must Believe before Breakfast

July 20, 2018

By William K. Black
July 19, 2018     Bloomington, MN
The Republican Party, for over 70 years, did not simply oppose the Soviet Union; it demonized Democrats as ‘soft’ on Russia.  This history makes the Republican Party’s increasing embrace of Putin’s Russia particularly bizarre.
Forty percent of Republican’s now consider Russia “friendly” or an “ally” of the United States.  That percentage is nearly twice as large as in 2014 despite a large number of Russian attacks on the U.S. and the West (and Russians) since 2014.  Seventy-nine percent of Republicans had a positive response to Trump and Putin’s infamous (to most Americans) Helsinki press conference.
Vox reported the results of a recent (highly regarded) poll on public opinion about Russia’s attempt to interfere in our 2016

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Executive Coaching Achieves Miracle Success, and Self-Parody, at Nortel

July 11, 2018

By William K. BlackJuly 10, 2018     Bloomington, MN
Economists generally focus on increasing productivity as the driver of development.  Among the most troubling economic developments in the West in the last decade is the weak gains in productivity, particularly in a time of rapid technological advances.  Neoclassical economics pictures firms as engaged in a fierce, endless battle for survival where failure is certain for firms that are even slightly less efficient that their rivals.  This struggle is supposed to produce relentless, rapid advances in productivity.  Something has gone very wrong with the neoclassical narrative of competition, productivity, and growth.
Weak productivity and efficiency is supposed to remedy itself.  The neoclassical (and Austrian) economics claim is

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Kill the Hastert Rule: A Pedophile’s Indefensible Rule Harms America

June 22, 2018

By William K. Black
June 20, 2018     Kansas City, MO
The House Speaker is the answer to the trick question:  “Who is the second most powerful elected official in the United States.”  The importance of the Speaker is obvious to anyone with even a modestly sophisticated understanding of U.S. politics and government.
One of the reasons for this astonishing level of sycophancy of Republican House candidates that run for office by presenting themselves as moderate conservatives is the ‘Hastert rule.’  They run as moderates, but they vote consistently in favor of legislation that creates the most radically right policies in modern American history.  If you have never heard of the Hastert rule or do not know what it is, blame the Democrats (and the media).  The fact that the Hastert rule is

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Bitcoin Frauds Keep Growing

June 19, 2018

By William K. Black
June 18, 2018     Kansas City, MO
One of the prime myths that white-collar criminologists have to refute repeatedly is that blockchain makes fraud impossible.  Blockchain, in some settings, is a costly means of making some frauds much more difficult.  Blockchain is useless against the most important frauds.  The primitive worship of blockchain as a supposed garlic capable of warding off evil breeds complacency, and complacency produces increased fraud and greatly extends the life of fraud.
The difference between making fraud impossible and (in a few specialized settings) ‘much more difficult’ brings to mind the critical difference explained in The Princess Bride between ‘dead’ and ‘mostly dead.’  Blockchain is useless in stopping, for example, any or the three

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Democrats Should Reject Bernanke’s ‘Wily E. Coyote’ Criticism of Trump’s Deficits

June 12, 2018

By William K. Black
June 11, 2018     Kansas City, MO
Ben Bernanke recently gave a speech predicting that President Trump’s deficits will cause the economy to “go off a cliff in 2010.”  Many Democratic Party politicians, of course, will rush to embrace the criticism and prove that they are the true party of fiscal responsibility.  They can then get back to pushing for increased taxation and cuts to the safety net “to save it” from collapse – and feeling virtuous.  These Democrats will glory in their supposed virtue and gravitas as they oppose ‘excessive’ stimulus, cut the safety net to ‘save it,’ oh-so-judiciously cut funding for social programs, and push for higher taxes.  They know this is bad politics, but that adds to their faith that the more bitter the medicine the greater the

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The New York Times Editorial Board’s Incoherence on Italian Austerity and the Euro

June 4, 2018

William K. Black
June 2, 2018     Bloomington, MN
(Third in a series of articles on Italy, Austerity, and the euro)
The New York Times’ editorial board published a May 29, 2018 editorial about Italy’s ongoing political and financial issues that praised austerity in Italy.  The board cheered the anti-democratic appointment of “Carlo Cottarelli, a solidly pro-Europe and pro-austerity economist and former official of the International Monetary Fund, to form a nonelected government.”  In particular, the board expressed its horror that Italy (which continues to have unemployment levels one expects to find in a severe recession) would have adopted “grandiose spending plans” (fiscal stimulus) if the Italian establishment had not sought to block the results of the recent Italian election.

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The EU Commission’s In-House Bigot Invites Financiers to Extort Italian Voters

May 31, 2018

By William K. Black
May 30, 2018     Bloomington, MN
The European Union’s (EU) leadership continues to prove our family rule that it is impossible to compete with unintentional self-parody.  “EU leadership” is an oxymoron, largely composed of regular morons.  Consider only two examples — European Commission (EC) President Jean-Claude Juncker and Commissioner and Budget and Human Resources Minister (one of the EC’s most powerful leadership positions) Günther Oettinger.
Juncker heads the EC because he led the most infamous EU tax giveaway to wealthy corporations as Luxembourg’s finance minister and then prime minister.  Whistleblowers and the International Consortium of Investigative Journalists (ICIJ) eventually exposed the fact that for over a decade the wealthiest companies in the

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The New York Times Praises the Italian Establishment’s Economic Illiteracy and Assault on Democracy

May 29, 2018

By William K. Black
May 29, 2018     Bloomington, MN
Italy’s establishment has just revealed its truest beliefs and priorities.  The context was the two parties that received the most votes in the last election forming a coalition government.  The two parties seeking to form a coalition government won a majority of the seats in both houses of Italy’s parliament in the most recent election.  The New York Times reported many of the key facts, but missed the key analytics.
Italy’s populists seethed and the European Union sighed with temporary relief on Sunday night after an anti-establishment alliance poised to govern the bloc’s fourth-largest economy imploded at the last minute amid concerns that it was planning to sneak out the back door of the eurozone.
Less than a week after Italy’s

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Fair Seas and Following Wind John McCain

May 16, 2018

William K. Black
May 15, 2018     Bloomington, MN
As a savings and loan regulator, on April 9, 1987, I experienced Senator John McCain at his very worst.  He, and his four Senate colleagues, collectively, the “Keating Five,” pressured my colleagues and me to withdraw our recommendation that our agency place Charles Keating’s Lincoln Savings and Loan into conservatorship.  Keating was looting Lincoln Savings and would soon defraud thousands of widows.  Lincoln Savings became the most expensive failure because the combination of the ‘Keating Five’ and Speaker of the House James Wright, Jr. successfully intimidated the new leadership of our regulatory agency.  The cowardly new leadership team refused even to consider our conservatorship recommendation and took the unprecedented action of

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John Cochrane Loves the Rule of Law (Some Exceptions Apply)

December 22, 2017

By William K. Black
December 22, 2017     Bloomington, MN
As Brad DeLong aptly puts it, John Cochrane was once an economist.  Cochrane is now a right wing ideologue surrounded by similar ideologues at Hoover.  He is pushing his new chapter in a Hoover book entitled American Exceptionalism in a New Era.  His chapter’s title is “Law and the Regulatory State.”  I will be writing several articles responding to Cochrane’s chapter, but this first piece concentrates on one key belief that Cochrane said he held that we all agree with.  My point is that Cochrane is not living up to his claimed beliefs, which he summarized in his introduction.
To be a conservative—or, as in my case, an empirical, Pax-Americana, rule-of-law, constitutionalist, conservative libertarian—is pretty much by

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Modern Macro Got the 2008 Crisis Painfully Wrong

December 20, 2017

By William K. Black
December 19, 2017     Bloomington, MN
Lawrence J. Christiano was the lead author of the article announcing the Dilettante doctrine that I discussed in the first column in this series.  His ‘dilettante article’ claimed that modern macro got the last crisis so wrong because it ignored the ‘shadow’ financial sector.  I have found a 2008 article by him and two Minneapolis Fed co-authors that illustrates modern macro’s blindness to the shadow financial sector.  The article is entitled “Facts and Myths about the Financial Crisis of 2008” and the first footnote says that they wrote the article based on information available on October 25, 2008.  The purpose of the article was to demand that proponents of fiscal and monetary stimulus prove a specific “market failure”

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DSGE Dilettantes v. ADM God Devotees

December 20, 2017

By William K. Black
December 18, 2017     Bloomington, MN
The truly exceptional thing about ‘modern macroeconomics’ devotees is not that they are so consistently and horrifically wrong or that they persist in their errors – but their exceptional combination of arrogance and disdain for those who have dramatically better records and broader and more relevant expertise.  Kartik Athreya, the Richmond Fed’s Research Director, led the modern macro parade on June 17, 2010 with his blog (which he later withdrew in embarrassment) when he announced the Athreya Axiom of Absolute Arrogance.
So far, I’ve claimed something a bit obnoxious-sounding: that writers who have not taken a year of PhD coursework in a decent economics department (and passed their PhD qualifying exams), cannot meaningfully

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It is Impossible to Compete with Unintentional Self-Parody: Trump and Opioids

October 23, 2017

By William K. Black
October 22, 2017      Kansas City, MO
This is the first in a series of columns I will write that are prompted by the joint 60 Minutes and Washington Post investigations of the role of Congress and the White House in making it far harder to sanction effectively companies selling massive numbers of opioids that they know will go largely to those addicted to opioids.  I will use the case study to illustrate many important points that criminologists know about elite white-collar crime and how to limit it and sanction perpetrators.
In this column, I introduce one of the most important concepts in white-collar crime – “seeming legitimacy.”  The most elite predators use the seemingly legitimate entities in the business, government, and non-profit sectors that they run as

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Cheap Sexism and Intellectual Dishonesty about Marriage

October 3, 2017

By William K. Black
October 2, 2017     Kansas City, MO
This is the second column in my series about win-win strategies to strengthen the family and countering the conservative culture warriors who use the family as a means to oppose win-win solutions that bring people together.  Mark Regnerus is one of the most notorious of these hard right culture warriors.  He is the disgraced pseudo-scholar who right-wing groups funded to try to gin up evidence that same sex marriage harmed children.  His efforts collapsed in an embarrassing spectacle that made clear that his dogmas rule his work.
Regnerus is back in the Wall Street Journal flogging his new book in an op ed entitled “Cheap Sex and the Decline of Marriage.”  He introduces his thesis with the claim that because unmarried

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The Job Guarantee Should Unite Anyone Interested in Strengthening Families

October 2, 2017

By William K. Black
Kansas City, MO     September 25, 2017
The University of Missouri – Kansas City recently hosted the first conference on Modern Monetary Theory (MMT) and a closely associated idea, a federally-backed job guarantee for everyone willing and able to work.  On September 25, 2017, the New York Times published an article exemplifying one of the applications of the job guarantee that would provide a win-win that should unite anyone interested in strengthening the family.  The title is “How Did Marriage Become a Mark of Privilege?”  Claire Cain Miller authored the column, and her key takeaway are in these two passages.
Fewer Americans are marrying over all, and whether they do so is more tied to socioeconomic status than ever before. In recent years, marriage has sharply

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Jared Bernstein Shows the Costs of Not Understanding Sovereign Currencies

September 27, 2017

William K. Black
September 26, 2017      Kansas City, MO
UMKC has just hosted a well-attended conference on Modern Monetary Theory (MMT) and job guarantee (JG) programs in which the federal government would provide the funds for employer of last resort programs.  In conjunction, MMT and JG allow full employment to become the norm.  MMT is based on reality, it explains how the monetary system in a nation with a sovereign currency actually functions.  Most monetary theory taught in conventional economic classes is a fiction arising from carryovers from the era of the gold standard in which nations lacked a sovereign currency.
Jared Bernstein has just published an op ed in the New York Times entitled “Do Republicans Really Care About the Deficit.”  Republican elites, of course, have not

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Trump Proves Again that it is Impossible to Compete with Unintentional Self-Parody

September 12, 2017

By William K. Black
September 5, 2017      Kansas City, MO
In my immediately prior article I discussed how Politico fell for Third Way’s dishonest discussion of how Democrats should brand themselves as the party committed to jobs.  I explained that progressive Democrats were the party of good jobs in part because they opposed fraudulent for-profit schools while President Trump, the Republicans, and the New Democrats were anti-jobs because they supported the rip offs.  Trump, having run a for-profit “university” so fraudulent that.it was not even a real university, is the most glaring patron of these frauds.
Trump appointed Betsy DeVos as Secretary of Education because she is a fierce enemy of public education and loves the for-profit frauds.  Recently, however, DeVos has taken a step

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Is Politico or Third Way More Divorced from Reality?

September 12, 2017

William K. Black
September 6, 2017     Kansas City, MO
The Wall Street wing of the Democratic Party (Third Way) is relentless in trying to bring back the days in which the Democratic Party’s leaders buried the Party in Wall Street’s pocket under the label “New Democrats.”  That period led President Clinton and Vice President Gore to implement disgraceful policies that made Wall Street executives fabulously wealthy at the expense of people.  To deliver on their promises to Wall Street, Clinton and Gore had to betray much of what the Democratic Party stood for.  Clinton and Gore’s destruction of effective financial regulation, which President Bush exacerbated, created the massively criminogenic environment that blew up the global economy.
I have written several times and documented that

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The Right Wing’s Fake Fake News of Hate

September 6, 2017

By William K. Black
September 4, 2017      Kansas City, MO
When people do awful things and know they are doing awful things and want to continue to do them they compound their awfulness by playing cute.  The cuteness demonstrates that they know that what they are doing is indefensible to moral people.  The political “dog whistle” is an example of this cutesy tactic.  Rachel Maddow’s September 4, 2017 program presented a classic example.  She showed video of a white supremacist/Neo-Nazi praising Donald trump’s election victory to an all-white audience.  The speaker ended his talk by proclaiming “Hail Trump” and extending his arm in a Nazi salute – except that he was holding a glass of water.  His audience understood the “dog whistle” immediately.  A number of them leaped to their feet

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GOP and Democrats Push Trump on Tax Reform

August 7, 2017

NEP’s Bill Black appears on The Real News and says the Democrats’ demands are the result of bad economics and bad politics, while Trump’s vision is “the type of thing that comes from ingesting too much peyote”. You can view with a transcript here.
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Trump vs. Sessions: A One-Sided Twitter War

July 27, 2017

“All of this is particularly bizarre because the Trump administration is having enormous difficulty getting any of its supposed agenda done, and the only person who is actively implementing the Trump agenda is Jeff Sessions,” says NEP’s Bill Black. You can view here with a transcript.
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Dear Professors Uribe-Teran and Vega-Garcia…

July 27, 2017

More than fifty economists signed onto an open letter, written by professors Ha-Joon Chang of the University of Cambridge and James K. Galbraith of the University of Texas at Austin, ahead of this year’s presidential elections in Ecuador. The letter noted:
Over the past ten years, Ecuador has achieved major economic and social advances. We are concerned that many of these important gains in poverty reduction, wage growth, reduced inequality, and greater social inclusion could be eroded by a return to of the policies of austerity and neoliberalism that prevailed in Ecuador from the 1980s to the early 2000s. A return to such policies threatens to put Ecuador back on a path that leads not only to a more unequal society, but to more political instability as well. It is important to

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Jamie Dimon: You Make Us Embarrassed to be Americans

July 24, 2017

By William K. Black
July 24, 2017     Kansas City, MO
Jamie Dimon talked about his personal pain recently using the exact phrase that many of us have used to explain his personal anguish that “It’s almost an embarrassment to be an American citizen traveling around the world and listening to the stupid sh—t we have to deal with in this country.”  The Wall Street Journal’s “Market Watch” described Dimon’s fervor.
“J.P. Morgan Chase & Co.’s outspoken CEO on Friday broke into an impassioned, expletive-tinged rant.”
The WSJ, in the introduction of an online video interview of Paul Gigot, its editorial page editor, termed it a “remarkable diatribe.”
Most United States readers share Dimon’s embarrassment at President Trump’s actions and words and can empathize with Dimon’s rant.  Except,

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The CFPB Arbitration Rule is Pro (Honest) Businesses

July 12, 2017

By William K. BlackJuly 11, 2017     Bloomington, MN
Politico has just published a column with a title and analytics that drive white-collar criminologists nuts:  “In a major setback for businesses, CFPB opens door to consumer class actions.”  Logically, the title should have read: “In an important step forward for consumers, investors, and honest bankers and lenders, CFPB begins to restore the rule of law to banking.”
The CFPB is the acronym for the Consumer Financial Protection Bureau.  The problem that led to CFPB to issue its new rule has six parts.  First, it is often profitable for lenders to abuse and defraud borrowers.  Second, lenders are able to do this because financial understanding is highly asymmetric.  Third, even if the borrower eventually spots the fraud or abuse it

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Wall Street: It’s “Icky and Un-American” to ‘Short’ Frauds

June 28, 2017

By William K. BlackJune 27, 2017     Bloomington, MN
The president of the New York Stock Exchange (NYSE) launched a coordinated attack on “shorts” that mirrored his rival’s (Nasdaq) attack.  The NYSE assault, however, used bizarre rhetoric.
“It feels kind of icky and un-American, betting against a company,” NYSE Group President Tom Farley told lawmakers in Washington Tuesday.
The heads of the NYSE and Nasdaq have appropriated the word “transparency” to support the effort to reduce the shorts’ effectiveness.  When the NYSE purports to champion “transparency” – the key to reducing fraud by the CEOs of the companies whose stocks they exchange – it is time for investors to grab their wallets and hold them tight.  The stock exchanges are very far from being champions of transparency when

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