naked capitalism Mon 2010-09-20 09:24 EDT

Theoclassical Law and Economics Makes the Law an Ass

William Black

...The Supreme Court's Citizens United decision allows businesses to make unlimited political contributions to judges and politicians. When judges are elected, the need for these contributions inherently turns judges into politicians. Sympathetic judges are corrupt businesses' most valuable allies. Corporations and their senior officials can commit civil or criminal wrongs with impunity if their case is assigned to a friendly judge...Yves noted that the Chamber of Commerce was leading the effort to elect CEO-friendly judges...The Chamber distributed a plan for a hostile takeover of university departments of economics and finance (and the courts and the media) proposed by Lewis Powell (the soon to be Supreme Court Justice). Extremely conservative ``law and economics'' proved to be central to this effort. The law and economics movement began as a non-ideological approach to explaining and aiding judicial decision-making. The scholars leading the movement had diverse views. The Olin Foundation transformed law and economics into an ultra ideological field dominated almost exclusively by passionate opponents of government ``interference'' in ``free enterprise.'' Olin specialized in creating well-funded positions in academia for scholars that had an ``Austrian'' approach to economics...Law and economics has, for over two decades, been dominated by theoclassical economic dogmas that have proved false...There are now tens of thousands of law and economics graduates that have taken a class in theoclassical law and economics. They were taught that theoclassical economic assertions (often falsified decades ago) were objective facts devoid of ideological content. They have been taught that economics has proven that regulation is unnecessary, hopeless, and harmful...

ass; economics make; Law; naked capitalism; Theoclassical Law.

Mon 2010-08-23 11:11 EDT

Hussman Funds - Valuing Foreign Currencies: Currency is both a means of payment and a store of value. [2000-09-22]

John P. Hussman, Ph.D

Any currency is both a means of payment and a store of value. So when you try to determine what it's worth, you have to consider both what it can buy in terms of goods, and what it can earn if you hold it as an asset. An exchange rate is just the price of a currency...If you look at a currency as a means of exchange...you can get a reasonable idea of the "long term" tendency of the currency by tracking the movements of price indices in two countries. This is what traders refer to as the "Purchasing Power Parity" (PPP) value of the exchange rate...But PPP is only a tendency that holds loosely over the long term. Over the short term, there's another important factor: interest rates...anytime long term interest rates, after inflation (i.e. real interest rates) are expected to be higher in the foreign country than in the U.S., the foreign currency will be above PPP...

2000-09-22; currency; Hussman Funds; meaning; payment; store; valued; Valuing Foreign Currencies.

Tue 2010-06-01 14:35 EDT

World Order, Failed States, and Terrorism, Part 2: The privatization wave

Henry C K Liu

[Henry Liu considers privatization] ...privatization, a movement to abdicate government by declaring the people out of the government's protection and placing them at the mercy of the market, has since gathered much ideological support in the name of liberty...Ronald Reagan viewed government as an enemy of the people. Instead of allowing government to protect the weak from the strong, Reagan wanted to protect the strong from government...

failed state; Part 2; private wave; terror; World ordering.

Satyajit Das's Blog - Fear & Loathing in Financial Products Mon 2010-04-05 15:01 EDT

Mark-to-Make Believe: Living on a Prayer

Satyajit Das

...Recent research indicates that MtM accounting may, in fact, distort the price of assets...The research highlights that MtM accounting is pro-cyclical and creates volatility of asset values through complex positive and negative feedback loops. Under normal market conditions where asset markets are liquid, MtM accounting works benignly. In volatile markets, where behaviour becomes linked by a common factor such as disclosure required by MtM accounting, co-ordinated actions of market participants can easily lead to sharp movements in asset prices. The process distorts market prices and ultimately the firm's financial position and value.

fears; financial products; lively; loath; Make-Believe; marked; prayers; Satyajit Das's Blog.

Fri 2010-03-19 20:42 EDT

Breaking the chain: The antitrust case against Wal-Mart

Barry C. Lynn (Harper's Magazine, July 2006)

...It is now twenty-five years since the Reagan Administration eviscerated America's century-long tradition of antitrust enforcement. For a generation, big firms have enjoyed almost complete license to use brute economic force to grow only bigger. And so today we find ourselves in a world dominated by immense global oligopolies that every day further limit the flexibility of our economy and our personal freedom within it...what should concern us today even more is a mirror image of monopoly called ``monopsony.'' Monopsony arises when a firm captures the ability to dictate price to its suppliers, because the suppliers have no real choice other than to deal with that buyer. Not all oligopolists rely on the exercise of monopsony, but a large and growing contingent of today's largest firms are built to do just that...today we have one of the best illustrations of monopsony pricing power in economic history: Wal-Mart...Wal-Mart has grown so powerful that it can turn even its largest suppliers, and entire oligopolized industries, into extensions of itself...the firm is also one of the world's most intrusive, jealous, fastidious micromanagers, and its aim is nothing less than to remake entirely how its suppliers do business, not least so that it can shift many of its own costs of doing business onto them. In addition to dictating what price its suppliers must accept, Wal-Mart also dictates how they package their products, how they ship those products, and how they gather and process information on the movement of those products...Rather than speed up the random motion and serendipitous collisions that have for so long propelled the American economy, Wal-Mart and other monopsonists are slowly freezing our economy into an ever more rigid crystal that holds each of us ever more tightly in place, and that every day is more liable to collapse from some sudden shock. To defend Wal-Mart for its low prices is to claim that the most perfect form of economic organization more closely resembles the Soviet Union in 1950 than twentieth-century America...

Antitrust case; break; chain; Wal-Mart.

Thu 2010-01-07 19:31 EST

Capital City | Mother Jones

Kevin Drum

A year after the biggest bailout in US history, Wall Street lobbyists don't just have influence in Washington. They own it lock, stock, and barrel...This is a story about politics. It's about how Congress and the president and the Federal Reserve were persuaded to let all this happen in the first place. In other words, it's about the finance lobby--the people who, as Sen. Dick Durbin [5] (D-Ill.) put it [6] last April, even after nearly destroying the world are "still the most powerful lobby on Capitol Hill. And they frankly own the place."...It's about the way that lobby--with the eager support of a resurgent conservative movement and a handful of powerful backers--was able to fundamentally change the way we think about the world. Call it a virus. Call it a meme. Call it the power of a big idea. Whatever you call it, for three decades they had us convinced that the success of the financial sector should be measured not by how well it provides financial services to actual consumers and corporations, but by how effectively financial firms make money for themselves. It sounds crazy when you put it that way, but stripped to its bones, that's what they pulled off.

capital city; Mother Jones.

Blog entry Tue 2009-10-13 20:30 EDT

Movement To Block Bernanke Gathers Steam

Isaiah J. Poole

The renomination of Ben Bernanke as chairman of the Federal Reserve should not be rubber-stamped by the Senate until Bernanke and the Fed are more transparent and accountable to the public, says a growing coalition of activists roused by Reps. Alan Grayson and Ron Paul, who have asked the Senate to put a hold on Bernanke's nomination...all it takes is for one member of the Senate to object to moving Bernanke's nomination to the floor of the Senate. The tactic of placing a hold on a Senate nomination has been frequently used by Republicans against Obama administration appointees for for less consequential reasons than what is happening with trillions of taxpayer dollars in the name of staving off the next Great Depression. What's unclear is whether a member of Congress will be bold enough to stand up to Wall Street and to what William Greider calls "the temple."

Block Bernanke Gathers Steam; blog entry; movement.

Sun 2009-10-11 18:07 EDT

Cassandra Does Tokyo: Mourning Rally

...it is most curious that I should find myself experiencing very visceral negative reactions to the upward movements in the gold price...the rallying Gold price signifies more monumental failures at multiple levels for society, in politics, for nations, for our individual and collective ability to measure our wants and desires with our means. So despite my skeptical exoskeleton about most things (financial innovation perhaps first and foremost), the aforementioned bothers me intensely, for I am, at heart, both an idealist, and a closet optimist about humanity...So when I see Gold rally, my visceral reaction is the result of my incredulous beliefs confronting contrary evidence, and the mourning for said failures (both real and imagined) that it represents.

Cassandra; Mourning Rally; Tokyo.

Tue 2009-06-16 00:00 EDT

The peasant mentality lives on in America

by Matt Taibbi; teabag movement; ``youre a peasant when you worship the very people who are right now, this minute, conning you and taking your shit''

America; peasant mentality lives.

Sun 2008-11-23 00:00 EST

The Institutional Risk Analyst: New Hope for Financial Economics: Interview with Bill Janeway

A New Hope for Financial Economics: Interview with Bill Janeway; Institutional Risk Analytics; modern economics ``a kind of religious movement, a willed suspension of disbelief''

Bill Janeway; Financial Economics; Institutional Risk Analyst; interview; new hope.

Mon 2008-08-04 00:00 EDT

John McCain can't stand sucking up to the Christian right. Is this the end of the GOP's unholy alliance?

by Matt Taibbi; "The Bible-thumpers...would seem to have had little in common with the archpriests of the neoconservative movement...But they did: They shared an almost equal disdain for democracy, free speech and learning, and paradise for both groups was an intellectually mute America of vast malls, prisons packed full of ungrateful blacks, shitty TV programming to keep the brains chilled and 200-foot-high electrified fences along the Rio Grande."

Christian Right; ending; GOP's unholy alliance; John McCain; stand sucking.

Sun 2008-05-04 00:00 EDT

A Special Report: The Right's America-Hating Preacher

by Robert Parry | The Smirking Chimp; Reverend Sun Myung Moon "has invested billions of dollars in financing the U.S. conservative movement and put fat wads of cash into the pockets of many prominent Republicans, including members of President George W. Bush's own family." Rev. Moon's lurid sex scandals, espionage, media empire, drug trafficking, gun-running

Right's America-Hating Preacher; special report.