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New Economic Perspectives

The 2016 Nobel Prizes in Economics Go to those Who Pushed Criminogenic Policies

By William K. BlackFebruary 27, 2017     Bloomington, MN How has the Swedish Central Bank’s committee that awards prizes in Economics in honor of Nobel responded to the field’s abject failures regarding the recent financial crisis and the Great Recession?  A lesser group would display humility, acknowledge its failures, and promise a fundamental rethink of the field.  Neoclassical economists, however, are made of sterner stuff.  The committee’s response is to praise the discipline for...

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MINSKY AND MODERN MONEY THEORY: Was Minsky a “forefather”?

By L. Randall Wray A few weeks ago, a video of a lecture that Hyman Minsky gave at Westminster College on Oct 30, 1991 was made available. Although the Levy Institute has some audio of Minsky, this is the only video I know of. The audio of this one is not great, but you will get some flavor of his style. In truth, it was always a bit hard to follow his presentations as he had a tendency to lower his voice and mumble near the end of sentences as his mind raced ahead to the next point. He...

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Why Was Tom Perez Willing to be the New Democrats’ DNC Stalking Horse?

By William K. BlackFebruary 22, 2017     Bloomington, MN Hillary Clinton did not lose the presidential race because she is stupid.  The New Democrats have dominated the Democratic Party’s presidential candidates for decades.  This means that they are extremely good at internal Democratic Party politics.  The New Democrats faced a major challenge after Hillary’s loss to the worst presidential candidate in our Nation’s history.  The loss discredited the New Democrats’ leaders, policies,...

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Kenneth Arrow’s (Ignored) Impossibility Theorem

By William K. BlackFebruary 22, 2017     Bloomington, MN Kenneth Arrow, one of the giants of economics, has died at the age of 95.  He became a Nobel Laureate in 1972.  As a young lawyer in 1977, I saw him in action as an expert witness on the subject of risk.  The context was setting the rates for shipping oil through the Trans-Alaska Pipeline System (TAPs).  Arrow testified about the risks of oil prices falling.  The FERC administrative law judge thought such a scenario was...

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Quis custodiet ipsos custodies? Jean Tirole’s Proposal to Appoint Felons to Monitor CEOs

By William K. BlackFebruary 18, 2017     Roma, Italia (5th in my series on Jean Tirole) When in Rome, trot out a venerable Latin quotation from Juvenal: “Who will guard the guards?”  I have “buried the lead” in this series of article about Jean Tirole by relegating my discussion of his proposal for fixing the problem of the criminal CEO – appoint a criminal “monitor” – to the fifth article in this series.  His proposal is in his 2001 article titled “Corporate Governance.” Tirole’s...

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Jean Tirole’s Core Contradiction of Corporate Governance

By William K. BlackFebruary 14, 2017     Bloomington, MN (4th in a series on Jean Tirole) In my second article in this series I began to discuss Tirole’s 2001 article (“Corporate Governance”), which contains this remarkable admission about orthodox economists’ ‘group faith’ (no thinking involved) that results in the “implicit assumption” that some unexplained force “perfectly” protects employees, creditors, and the public from predation by firms. The economists’ implicit assumption is...

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Andrew Ross Sorkin’s Attempt to Make Tim Geithner a Hero

By William K. BlackFebruary 12, 2017       Bloomington, MN I am watching the film Too Big to Fail based on Andrew Ross Sorkin’s book of the same name.  It led me to check out the price of the used book, which has fallen to $1.02, which is low enough that I am willing to buy a copy of the book, particularly since not a penny will go to Andrew Ross Sorkin.  The financial analytics displayed in the movie and the book are so poor and dishonest that I need to have a copy by my keyboard as an...

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Jean Tirole Proves Why Heterodox Economists are Essential to Save the Field

By William K. BlackFebruary 12, 2017     Bloomington, MN (Part 3 in my Tirole series) I discussed Jean Tirole’s 2001 article (“Corporate Governance”) and this remarkable admission about orthodox economists in my second article in this series. The economists’ implicit assumption is that employees, suppliers, customers, and other natural stakeholders are protected by very powerful contracts or laws that force controlling investors to perfectly internalize their welfare…. [The] details of...

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