"Last week Thursday, Treasury Secretary Jack Lew visited the west coast and had a closed door meeting with key players from Silicon Valley. The meeting was held in Mountain View, California at the headquarters of Facebook. EconomicPolicyJournal.com has obtained the list of attendees. How would you like to be able to make your investment and business decisions after attending a meeting like this?" Continue reading →
"Has government waste become so bad that we need an encyclopedia to keep track? One watchdog group seems to think so and has started a publicly edited, crowdsourced website that compiles cases of fiscal abuse, modeled after the popular site Wikipedia. Spendopedia, launched this month, is an attempt to organize examples of fiscal waste into a central, easily searchable database. The site documents programs that have been labeled as wasteful by news organizations, members of Congress or federal investigators. The website catalogs more than 100 examples of waste, including a lavish conference of the GSA and excessive severance packages at the Energy Department." Continue reading →
"It’s a gold rush. People now come to Washington to get rich. That was never the defining ethic of the town, certainly 30 years ago. There is now so much money. It is now the wealthiest community in the United States. It is home to 7 of the wealthiest 10 counties in the United States. If you can sell yourself as someone who knows how Washington works, someone who has these relationships, someone who can get on the phone and get the president of the United States… that’s a very, very marketable commodity. I mean, if you are seen as someone who knows how this town works, someone who is a usual suspect in this town, you can dine out for years. That’s why no one leaves." Continue reading →
"Bill talks with journalist Mark Leibovich about his latest book, This Town, a city where money rules and status is determined by who you know and what they can do for you." Continue reading →
"We asked 'how much longer will the rule of law remain in Cyprus once the 99% are generously handed the list of the 1% who were 'informed' enough to pull their money from the flaming sovereign equivalent of Bernie Madoff?' We may get the answer much sooner than expected, as the first iteration of this list, one naming the beneficiaries of millions of loans written off by the now insolvent Cyprus banks and therefore indirectly responsible for the 'impairment' of the banks' depositors, was released yesterday by Greece's daily Ethnos newspaper. But what virtually assures substantial political fallout is that among the people listed is Cyprus' former president, George Vassiliou." Continue reading →
"The EU on Monday (13 May) said many Cypriot banks do not know who their customers really are, but wired Nicosia €2 billion anyway. Commenting on a recent study on money laundering in the Mediterranean island, eurozone finance ministers said in a joint communique that it must do better on 'customer due diligence by banks' and must fix 'the functioning of [its] company registry.' A branch of the Strasbourg-based Council of Europe and US accountancy firm Deloitte did the audit in March and April. Cyprus hosts about 12,000 shell companies which have no physical presence on the island. But its company registry has a 10-year backlog of paperwork on who owns what." Continue reading →
"Speculative bubbles based solely on cash have very short lifespans, as the bubble bursts violently as soon as the gamblers' cash has been sucked into the vortex. Truly devastating speculative bubbles require a vast expansion of credit and the corruption of the political class that feeds off the state. As Credit is ultimately managed by the state, central banks and the banking cartel, no speculative credit bubble can arise without the complicity and collaboration of all three. The destructive incentives, corruption and erosion of productive investment are masked by the rapidly rising phantom wealth created by the bubble in real estate and stocks." Continue reading →
"How will home builders react if the Fed decides their investments are bubbly and restricts their credit? How will bankers who followed all the rules feel when the Fed decrees their actions a 'systemic' threat? How will financial entrepreneurs in the shadow banking system, peer-to-peer lending innovators, etc., feel when the Fed quashes their efforts to compete with banks? Will not all of these people call their lobbyists, congressmen and administration contacts, and demand change? Will not people who profit from Fed interventions do the same? Willy-nilly financial dirigisme will inevitably lead to politicization, cronyism, a sclerotic, uncompetitive financial system and political oversight." Continue reading →
"Here’s the abstract from a new paper in the October 2013 issue of Economic Inquiry: 'During their meetings, the members of the Federal Open Market Committee (FOMC) make monetary policy, but they also make each other laugh. This article studies the amount of laughter elicited by members of the FOMC during their meetings. The study finds that a member elicits more laughter if he or she expects higher inflation, other things being equal. This finding suggests that members may use humor to cope with the threat of inflation. (JEL E52, E58, C23)' They use humor. One wonders what savers and pensioners use." Continue reading →
"The U.S. government's debt has been locked in at this implausible limit for three months: $16,699,396,000,000. The Secretary of the Treasury says that it will not hit the ceiling until mid-October. This warning is silly. The U.S. government has obviously been over the limit ever since late May. The world knows this. There is no way that the debt simply stopped growing. There is no good reason why the government cannot report this same figure from now on. If the government can legally cook the books from May 17 until today, and promises to cook them until mid-October, and no one in Congress asks how, then why not for two more months, two more years, or forever?" Continue reading →