The Great Debate

Andrew Harrer/Bloomberg News

Economist Kenneth Rogoff – photo by Andrew Harrer/Bloomberg News



OK, I’m kind of punting on this post, just so you know.  I’ve been ludicrously busy with other developments this past couple of weeks and haven’t had time to do much writing of my own.  Hopefully that will be changing relatively soon, but in the mean time, please allow me to direct your attention to some excellent writing by someone else:

In addition to being a remarkably prolific writer (some of his articles take me upwards of an hour to get through!), William K. Black is a criminologist, a former banking sector regulator, and an associate professor of Economics and Law at the University of Missouri – Kansas City.  He shows up in a lot of places online, but almost everything he does also winds up on the blog New Economic Perspectives.  His book about the Savings & Loan crisis, called “The Best Way to Rob a Bank is to Own One,” is an excellent account from the trenches of the fight over financial deregulation in the 1980s.

This article of his isn’t too long, and it’s a good blow-by-blow of one of the more heated debates in modern economics.  I can’t say I’m a fan of any of the economists in the piece, but the plain fact is that their viewpoints have a lot to do with shaping US and international economic policy, and that isn’t likely to change anytime soon.  With any luck, you’ll find it informative and only minimally painful.

Rajan Calls Krugman “Paranoid” for Criticizing Reinhart and Rogoff’s Research

Please, enjoy!  And, as always, let me know what you think.

Quick Final Note:  On balance, New Economic Perspectives (and the Econ Dept. at UM-KC in general) is closely aligned with a (relatively) new framework for post-Keynesian economic policy called Modern Monetary Theory, or MMT.  MMT generally exists well outside the boundaries of the mainstream economic debate, though a recent NYT hit piece on economist Warren Mosler suggests that might be changing (first they ignore you, then they ridicule you…).  That said, one of the dirtiest secrets of current mainstream economic thought is that most of it is based on commodity-backed currencies that (at least in the U.S.) don’t actually exist anymore, and while I’m not really an expert on MMT, I’ll give it credit for any attempt to acknowledge and correct that particular issue.  The point, for now, is that UM-KC and Mr. Black have a dog, even if it isn’t in this particular fight.


A Premature Sigh of Illusory Relief

You wish you were as brave as this kid…


 Bradley Manning won’t rot in prison for aiding al-Qaeda,  just for standing up for the interests of the American public.


Last Tuesday, Pfc. Bradley Manning was found guilty of *only* 20 of the 22 charges brought against him in THE Show Trial of the 21st Century (thus far, at any rate).  The Judge, Col. Denise Lind, handed down a “Not Guilty” on the most severe charge of “aiding the enemy,” but found Manning guilty on most of the other charges, including 6 under the ridiculous 1917 Espionage Act.

Seeing that Manning had plead guilty to most of the lesser charges, those findings are relatively unremarkable, and most of the media chatter has come in the form of relief over his “aiding the enemy” acquittal (Yes, your precious, hand-picked confidential sources are safe, for now).   All the same, I’m having a hard time considering this anything but a serious blow to government transparency and the rule of law.  There are probably a dozen reasons to think this, but three in particular stand out from the crowd.

#1. The 1917 Espionage Act:

The fact that charges were brought at all under this ancient bit of legal code is disturbing, and seeing them upheld in judgment is a very bad sign for anyone trying to expose government incompetence, let alone corruption.  The law has an ugly history of being used for purposes of political persecution, and the Obama administration has held fast to that conceit.

Additionally, many legal scholars consider the Espionage Act a relic, designed to deal with threats that disappeared decades ago, and there’s been more than a little argument over its constitutionality, even at the time it was passed.  It’s tough to imagine a law more ripe for a repeal, or at least a serious reworking.  And yet, this law has been one of the main weapons in the Obama DOJ’s arsenal of persecution against whistle-blowers.  Under their watch, more than twice as many people have faced charges under this act than during it’s entire previous history.  After this ruling, that strategy is unlikely to change.

#2.  The Obscene Double-Standard in Criminal Prosecution:

Significantly more telling than even the sheer mass of the book that was thrown at Bradley Manning is the relative non-existence of legal consequences for other types of blatantly criminal behavior, both in military and civilian circles:

“Did the bank you run launder billions of dollars for drug cartels and known terrorist affiliates over several years?  That’s OK, we won’t bring criminal charges, or even make you admit any wrongdoing.  Just pay us a month’s worth of revenue or so, and we’ll call it even.”

“You say your infantry unit systematically massacred scores of civilians in an occupied country?  Between you and me, that’s pretty messed up, but let me tell you what:  We’ll protect you from local courts and police, but we will have to do an ‘internal investigation,’ just so everyone knows that Justice has been served…”

“What’s that, now?  You’ve been accused of rape and harassment by a fellow soldier?  Well, now, we’ll definitely have to do…  something…  about that…  eventually…  In the mean time, how good are you at keeping your mouth shut?”

Had Manning engaged in this sort of despicable behavior, he would likely be looking at a small fraction of the legal penalties he currently faces.  Powerful  institutions in America tend to protect their own from even the most heinous of accusations.  Of course, that all changes the second you question their own adherence to the high ideals they preach.  Barack Obama seems to wear a particularly smug look when he boasts of his status as a “Constitutional Scholar,” or when he lauds the U.S. as “…a Nation of Laws.”  I can’t tell if that is because he actually believes these things he says, or if he merely finds a sardonic thrill in serving millions of Americans helping after steaming helping of pure, unsullied horseshit.

#3.  Intimidation of Future Whistle-Blowers:

One of the more remarkable things about the Snowden leaks, at least in my estimation, is the fact that they still happened in spite of the type of horrendous treatment that had been heaped on Pfc. Manning during his pre-trial incarceration.  A year and change of 23-hour-a-day solitary confinement under constant supervision, forced to sleep naked in full light, and refused any sort of physical or mental diversion, including reading and exercise.  All, you know, “for his own protection.”  PR aside, these were obviously punitive measures, taken just publicly enough to scare off other military personnel with similar ideas.

(**LATE NOTE** ~ Prosecution claims during sentencing hearings of a “chilling effect” on State Dept. activity and reporting of human rights abuses are a master class in unintentional irony.)

Now that Manning has had his day(s) in court and will likely spend a significant proportion of his life behind bars, anyone else with possibly damaging information on government malfeasance is less likely than ever to come forward, regardless of how said information was obtained.  Anything potentially implicating or humiliating is immediately and systematically classified by an administration obsessed with secrecy.  And the cost of challenging this gross abuse of authority?  Nothing short of your life as a free citizen.

Any and all private information is now fair game for collection and catalogue, but the actions and communications of the security state, funded by our taxes and nominally in our interest, must be shielded from any public knowledge or accountability by any means and at any cost.  The logic behind this situation is perverse beyond any account, and makes endemic corruption a foregone conclusion.

This verdict didn’t throw our pathetically under-utilized system of investigative journalism into chaos. It was simply a crippling blow against any effort to even inform Americans of the ethical depths to which  their country has been dragged, let alone reverse that sickening descent.

Man, we really dodged a bullet there, huh?