Good Reads on a Sunday while sipping your Coffee or Tea
“Two Cheers for Corruption” and Bill Black’s Response
Plunder has become a way of life for many elite Corporate CEOs, Bill Black argues in response to Deirdre McCloskey supposition:
“But corruption can be efficient and just, too. It can be good for efficiency if, say, bribes are paid to get around bad laws (such as most of the building codes in American cities) or to smooth the course of sales by U.S. businesses to the Egyptian military. And the turkey at Christmas supplied by Tammany Hall justly helped the poor—if they voted right.”
Bill Black reviews the reviewer Deirdre McCloskey’s Wall Street Journal supposition of corruption being beneficial to the economy overall as it short circuits the law and government agencies by promoting economic growth. It is only ethical behavior and ethics, which can change the corporate culture. Firing back, Bill Black cites Frédéric Bastiat;
“When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.”,
and takes apart McCloskey’s review potentially (Deirdre denies it) favoring corporate bribery, fraud, and extortion through deregulation removing laws governing corporate behavior, desupervision by government watch dogs, and de facto decriminalization of actions by corporations and management. Without which or the subversion of such creates the environment for a corrupt corporate culture. A good back and forth by Bill and Deirdre in this and other posts on Bill’s site and worthy of a Sunday morning coffee.
Would a Car Which Can Read Speed Limit Signs Go Over in Michigan?
“The speed-limiting tech can be activated via the steering wheel and briefly overridden by pressing firmly on the accelerator. Ford suggests the facility will help drivers avoid fines and could reduce the number of accidents.”
Hmmm, many drivers in Michigan have no problem doing 80+ MPH on 96, 23, and 696, etc. marked at 70 MPH. The state was going to increase the speed limit to 80 MPH because of the claim the majority of drivers do 80 MPH. I guess I creep along at 72 -75 MPH. This more an effort to increase road revenue from gasoline purchases as cars and light trucks are less efficient the faster they go.
However, there is a plan afoot to beam speed limits to your car’s computer thereby giving control of the speed to the car rather than the driver. I can see a whole new industry developing, computer chips which would not be impacted by state speed-limit-beams. “No one is going to impede my speed on the highway!”
The new “Ford technology will become available to the public this August, when it launches the second generation of its S-Max cars in Europe.” This represents just a start in new auto-technology. It will progress to being able to identify humans and bike riders as well as animals in the way and apply the brakes as well as other areas such as heart attacks.
Banks may Not Donate to the Dems?
Banks are having temper tantrums over Senator Elizabeth Warren declaring banks should be broken up as they are a threat to the economy . . . no surprise there! The most recent compromise with the budget removed the barrier to banks making riskier investments and having them tied directly to the main bank. Dodd-Frank originally forced banks to spin those investments off to a 3rd party company to whichthe banks had no financial liability. Pres. Obama signed the legislation as developed by Jamie Dimon and staff allowing those investments to be associated directly to the banks. Hence, Main Street is liable for bank gambling again.
Citigroup, JPMorgan, Goldman Sachs (remember when Goldman Sachs was just an investment house?) and Bank of America recently had a meeting to discuss way in which to urge the Democrats to be kinder and gentler to TBTF. GS became a bank when it was poised to fall on its own sword from risky ventures and never went back as the Fed makes cheaper loans available to them now.
Senator Warren has openly stated Citigroup is one “banking-company” to be broken up under Dodd-Frank. She also blocked the appointment of banking friend Antonio Weiss which has angered bankers.
Suggested donation amounts by banks to political Senatorial candidates are said to be as low as $15,000.
Reducing the Prison Population . . . Duh!!!
In 1994, Newt Gingrich’s model legislation “Taking Back Our Streets Act” and Biden’s “Violent Crime Control and Law Enforcement Act” put into play a doubling of the prison population of which almost half are non-violent which I wrote about here; One in 31 in 2010.
Today Gingrich writes:
“There is an urgent need to address the astronomical growth in the prison population, with its huge costs in dollars and lost human potential,”
I would wonder if it is more the former than the later? An odd consortium made up on Repubs, Dems, the ACLU, and the Koch Brothers(?) besides Gingrich are looking into reducing the prison population by 50% and agreeing it needs to be reduced.
I would suspect it is more the rising cost to house a prisoner in state and federal prisons which is ~$30,000 and growing. I would also suspect the Koch Brothers (they have a concern about prisoners?) and the law and order crowd could give two hoots about “lost human potential.” Prisons are typically placed in out of the way places like Muskegon, Kingsley, and Iona Michigan and employ the locals as guards and in other occupations. Close a prison and you affect the local economy and that costs votes in traditional Rep districts. I also suspect this prison population is getting older and the government has to take care of them beyond yanking a tooth needing a new filling. Those interested in reducing the prison population are more concerned about the aging of the prison population, the need for healthcare, and the associated costs.
Speaking of good reads. After reading yours, I came across another by William K Black.
On 24 March 2015, I left a comment which touched on the housing bubble and the resultant total household debt.
Unbeknownst to me, Bill Black had left a post on 23 March 2015 which addressed the housing bubble from another frame of reference.
It is long and challenging in one or two places. But this is a very good read.
If you want to understand the basis of the housing bubble, there is no better teacher than William K Black. He has a nuts and bolts understanding of regulating the banking industry.
I believe that his ‘Liar’s’ loans are an irreverent reference to ‘No Doc’ loans. His reference to Alt-A loans and Subprime loans are reminders of the newspeak used to proceed with the game when prudence should have called a halt.