I wrote yesterday about the "control frauds" (in which the person controlling a seemingly legitimate entity uses it as a "weapon" to defraud) that target purchasers of bad quality goods ("lemons") and employees. The example I used to explain these concepts was the collapse of the building housing...

If you have studied economics at the university level in the last 35 years, it is likely you were introduced to the concept of "asymmetrical information" and George Akerlof's famous 1970 article on markets for "lemons" (American slang for an automobile of terrible quality). The Nobel committee that awards the...

I'm announcing the New York Times award for incompetence in macroeconomic reporting (IMR, pronounced like "screamer"). I suggest that the paper offer as a prize to awardees a two hour lunch with Krugman in which provides a remedial economics lecture. My premise is that it is impossible to be...

Slate's Matthew Yglesias writes columns about economics and finance. Yglesias has been writing about Cyprus, and my critiques of the policies he has been proposing are the subject of this column. The short version of the background one needs to understand the issues is that Cyprus is in a crisis...

On March 18, 2013, Lawrence O'Donnell stated that John Boehner's admission that the U.S. faces no current debt crisis vindicated Paul Krugman, whom O'Donnell described as "a lonely voice opposing austerity." It is true that Krugman has been a strong opponent of austerity and has been proven correct. It is...

Many readers doubtless shared my doubt that the SEC was capable of exercising the critical self-examination and sense of humor about itself as a flawed institution that would make it capable of deliberate irony. When I accessed the Wall Street Journal's home page I found the most delicious example of...

On March 11, 2013 the Los Angeles Times published a revealing article by E. Scott Reckard entitled: "In major policy shift, scores of FDIC settlements go unannounced."

The article's summary statement captures the theme nicely. "Since the mortgage meltdown, the FDIC has opted to settle cases while helping...

We have been strangling the economic recovery through economic incompetence -- and worse is in store because President Obama continues to embrace (1) the self-inflicted wound of austerity, (2) austerity primarily through cuts in vital social programs that are already under-funded, and (3) attacking the safety net by reducing Social...

A recent study confirmed that control fraud was endemic among our most elite financial institutions: Asset Quality Misrepresentation by Financial Intermediaries: Evidence from RMBS Market. Tomasz Piskorski, Amit Seru & James Witkin (February 2013) ("PSW 2013").

The key conclusion of the study is that control fraud was "pervasive."

We are in the midst of the blame game about the "sequester." I wrote last year about the fact that President Obama had twice blocked Republican efforts to remove the sequester. President Obama went so far as to issue a veto threat to block the second effort. I...

A preliminary note:

Greetings from Davos! I'm actually writing this over the mid-Atlantic as I return from being a keynote speaker at the annual "Public Eye" "shame prize" awarded to Goldman Sachs for its abuses. The shame prize award was made in Davos during the World Economic Forum as a...

On January 25, 2013, I made this comment on Frontline's web site discussing its documentary: "The Untouchables" and an accompanying (January 22, 2013) article by Jason Breslow entitled: "Were Bankers Jailed In Past Financial Crises?

I addressed two statements in that article. The first statement reads:

John Williamson, a Peterson Institute "senior fellow" coined the term "the Washington Consensus" at a conference in 1989.

Williamson joined the Institute in 1981 when it was founded. Pete Peterson is the Republican billionaire from Wall Street who has dedicated his life to proselytizing for lower taxes...

It is good to be Angela Merkel. Growth in Germany goes sharply negative in the last quarter of 2012 and press reports emphasize how sound the German economy is because it is a net exporter. This article analyzes how the Wall Street Journal and the New York Times presented the...

President Obama is getting ready to negotiate (or, if you believe him, not negotiate) an extension of the debt limit. The Republicans control the House and are promising to follow Donald Trump's suggestion that they use what he called the "nuclear weapon" to terrorize the U.S. economy and people in...

We are only two weeks in to 2013 and there is plenty of time for far more embarrassing financial columns to be written, but The Guardian's financial editor, Heidi Moore, has opened up an early lead in the competition. Moore's column represents five embarrassing elements. She entitled her

Austerity in response to the Great Recession has proven to be an economic weapon of mass destruction. On January 10, 2013, Paul Krugman (Nobel Laureate in Economics) and President Obama launched the same dangerous austerity myth in remarkably similar language.

January 10, 2013
Coins Against...

On September 15, 2011, a Wall Street lobbying organization known as "Third Way" proposed that the congressional "super committee" adopt a stringent austerity program.

Third Way's tag line on its web site is "Fresh Thinking," but it simply a mouthpiece for Wall Street's curdled...

The New York Times has just run two articles confirming that President Obama intends to appoint Jacob Lew as Treasury Secretary Geithner's replacement. Most people assume that Geithner is a creature of Wall Street through direct employment, but Geithner never drew a paycheck directly from Wall Street. Geithner worked for...

The New York Times' web version ran a story this morning (January 8, 2013) entitled "Unemployment Continues to Climb in Euro Zone."

Eurostat reports that Eurozone unemployment has reached the record rate of 11.7 percent, with 18.8 million unemployed (an increase of two million in a year). "[Y]outh...