Category Archives: economics

Back in the 2008 financial crisis, the US propped up a number of banks and financial firms that would otherwise have gone under. They were “too big to fail,” so large their collapse would do unacceptable damage, even if their bad judgment brought it on themselves. Critics said that gave the same companies a free hand to act without consequences — the government wasn’t going to let them fail, right?

And now we have Silicon Valley’s SVB collapse and the government’s promise to cover deposits way above the $250,000 federal bank insurance limit: “On a call with reporters, a Treasury official emphasized that the federal intervention would not bring SVB or Signature back to life, as the enormously controversial bank bailouts during the 2008 financial crisis had done for banks that were close to failing. Their executives would not retain their jobs. These new safeguards were aimed at protecting people and businesses who had made a reasonable decision to put their money into an accredited and regulated bank — not investors who bought risky securities.”

What reasonable? Everyone who has that kind of money should know they were putting in more than the limit; the idea they should get insurance anyway doesn’t work for me.

Republicans are screaming, inevitably, that the bank died because it was too woke, because they always scream that. Possible insider trading by bank management might have been a bigger issue, or the bank pushing for looser regulations. Fox News’ Jesse Watters claims SVB collapsed because of Pride Month. And here’s a goody the Wall Street Journal saying it’s because SVB didn’t have an all-white board.

The bank did a lot of business with venture capitalists and unsurprisingly venture capitalists were furious the government might not reimburse depositors. That includes (as noted at the link), a number of VCers who talk a lot about moral hazard and the dangers of things like student-loan forgiveness, but suddenly want the welfare state to prop up their industry.

Don’t get me wrong, I don’t think SVB is an outlier. We have a right-wing business group opposing tighter rail regulations in the wake of the Ohio disasters. Florida insurers have dealt with massive payouts in the aftermath of Hurricane Ian by rewriting damage assessments: ” “In one claim reviewed by The Post, a nearly $500,000 damage estimate on a house with a mostly tarped roof was reduced to about $13,000. In another, the desk adjusters blamed roof storm damage on past wear and tear, meaning it would not be covered.”

That the rot in American business is widespread does not, however, mean it’s excusable anywhere.

Hospice is now dominated by for-profit corporations. Unsurprisingly some of what they do to generate increasing amounts of profit is unscrupulous, illegal and harmful to patients.

Companies that buy up cheap housing make it harder for people to afford housing.

“As crypto’s self-appointed ambassador to Washington, Bankman-Fried was pressing for federal regulation even as he dodged U.S. oversight from his corporate headquarters in the Bahamas.” — a look at the now toppling crypto-kingdom of Sam Bankman-Fried. Who insists that when his FTX gambled with depositors’ money he didn’t realize that’s what he was doing. Reuters reports the company also bought Bankman-Fried a vacation home. LGM weighs in.

“Time and time again, Americans fall prey to the myth of the billionaire genius, the man (because it is almost always a man) who is better than us mere mortals, able to solve any business or political or philanthropic problem that comes his way — till, suddenly, he is not.” — Helaine Olen. See also Elon Musk running Twitter into the ground and (though she’s not a man) Elizabeth Holmes.

While this Forbes article on Trump’s secret debts to a Korean company is good, but I don’t buy the assertion that most people of Trump’s wealth could be corrupted by a mere $20 million debt. Trump has, after all, allegedly cheated contractors of much less money. I’ve seen this argument before — billionaires have too much money to be tempted — but the billionaire mind doesn’t seem to see it that way.

Alex Jones loves money and he has a lot of it. He’s doing his best to make sure the Sandy Hook parents who won their lawsuit against him don’t get any.

“A nudge is ultimately a highly conservative approach to the question of how a society should think about the public good.”

“The shooter who terrorized a Colorado movie theater in 2012 charged more than $9,000 worth of guns, ammunition and tactical gear in the two months leading up to his attack that killed 12 and injured 70. The man who shot up the Pulse Nightclub in Orlando, killing 49 people, put more than $26,000 on credit cards.” Nevertheless, crediit-card companies refused a proposal to create a unique code for firearm sellers which would help flag suspicious purchases.

Amazon’s policy of letting readers buy an ebook, then return it after a week, means some authors end up with negative royalty balances.

First some good news: while community activists have struggled to reform the police, insurers for PDs and cities are imposing changes.

Abbott Laboratories has faced multiple allegations of selling tainted baby formula. Here’s how their lawyers protect them from scandal.

Are you ready for fast-food restaurants that are exclusively drive-through?

As a reporter in Florida I covered multiple conflicts involving beachfront owners vs. tourists. Colorado’s facing the same thing.

“More than anything, they have succumbed to a mindset where “winning” means earning enough money to insulate themselves from the damage they are creating by earning money in that way. It’s as if they want to build a car that goes fast enough to escape from its own exhaust.” — a look at how billionaires have decided rather than avert the apocalypse, they’ll just save themselves.

A cash infusion for Trump’s Truth Social network may be falling through.

“They were clearly pumping their prowess as a crypto hedge fund after they already knew they were in trouble.” No surprise given their guiding investment principle apparently didn’t go beyond “cryptocurrency will go up for years!”

When turnover becomes high, it’s always someone’s first day at work.

“But it turns out that running a publicly traded company, with its attendant fiduciary duties, analyst calls and slog of quarterly earnings, is a far cry from the hustle and thrill of start-up life.” Which is why so many Silicon Valley stars are riding off into the sunset.

Republicans think corporate America should fight harder against efforts to reduce climate change.

Some links about wealth, and occasionally the lack of it. The title’s a quote but I’m not sure of the source.

“​​As soon as anyone who’s antiracist or curious about equity hears the word[s] tax breaks, it is so obvious to us that that’s immediately going to be racially inequitable,” — a look at the good and bad of private individuals paying for government operations.

“This sort of crusade is exactly what we often see when powerful business executives champion a passion project. The causes chosen are often capricious — and almost never threaten their benefactor’s elevated position in our economic and societal firmament.” — Helaine Olen, pondering that Carl Icahn has become a moral crusader for the more humane treatment of pigs. Not that she objects to compassion for animals, but are their better causes out there?

Then we have Peter Thiel, a billionaire who does not even pretend to use his great power for good.

“Basically, [Americans] are afraid of strangers,” she says. “It was considered beyond the pale that you would install a public toilet that didn’t practically burn itself down and rise from the ashes every time someone used it.” — on the rise and fall of the public toilet

“Whether you’re British royalty, a bulge-bracket bank or a venture-capital-funded food delivery start-up, there is often some way to make the wheels of justice in civil cases grind to a halt — if you have the resources. Settlements in civil cases are a feature of our legal system available to those who can afford it.” Case in point, the Sacklers and oxycontin.

For some, however, helping arrange those settlements isn’t half as awful as letting innocent people out of jail.

Then there’s the major league baseball owners. When players strike, however reasonable their demands or unreasonable the owners’ position, you can count on people ranting about how greedy and unreasonable the players are — my god, they’re getting paid to play baseball! Don’t they know millions of people would have their jobs for free?

Well, the owners of these teams are multimillionaires who still get big government handouts for building new stadiums. I’m quite sure lots of people would happily take ownership of a baseball teams for free so why do the owners never get the same grief? Do people really think they’re just in it for fun?

And of course, there’s our own government. The Supreme Court just shut down a lawsuit from Abu Zubaydah, who was tortured for information even after the CIA decided he didn’t know anything. The Supreme decision is part of a several-decades-long history of assuming our leaders should not be sued even for crimes.

“The Montessori method routed disproportionately to rich white kids because good things do, but also because she increasingly viewed her project as, in Kramer’s words, “a patentable business.” The method was not only something to be taught; it was something to be sold.”

To ened on an upbeat note, Marvin Skreli, the pharma douchebag millionaire who jacked up the price of one life-saving drug by more than twenty times, has been permanently barred from serving as director or officer of a publicly traded company.

From a Democratic Party email listing 10 positive items I wasn’t aware of. If you feel you could use some upbeat news, read on.

10. Paid Sick Leave: Thanks to Democratic leadership, New Mexico joined 15 other states in passing landmark paid sick leave legislation. And as of this year, Mainers, Coloradans, and Connecticans are now eligible for the benefit.

9. Anti-Discrimination: This year, Virginia, Vermont, Oregon, and Maryland all banned the so-called “gay panic defense” that’s been used to excuse violent hate crimes against the LGBTQ community. Six Dem-majority states banned hair discrimination, which dispoportionately targets, shames, and punishes Black and indigenous students and workers.

8. Housing Assistance: Access to safe and affordable housing has always been a challenge, but a global pandemic only heightened the threat. Democrats in states like New York and Virginia allocated billions of dollars in federal COVID relief to help renters struggling to pay the bills.

7. Gun Reform: While Republican-controlled state legislatures spent the year making it easier than ever to purchase and carry a gun, Democrats doubled down on efforts to prevent senseless violence and keep dangerous weapons away from people who intend to do harm. Virginia banned convicted domestic abusers from having a gun, as did Colorado – which also implemented a waiting period for gun purchases and passed a law requiring gun owners to lock up their weapons.

6. Cannabis Legalization: This year, New Jersey, New York, New Mexico, Virginia, and Connecticut all legalized marijuana, addressing long-standing racial inequities in our criminal justice system and benefitting the states economically through increased tax revenue.

5. Education Investments: This year, California approved funding to establish universal pre-K. Virginia Democrats gave teachers a 5% raise and made community college free for tens of thousands of low and middle-income students pursuing jobs in high-demand fields.

4. Police Reform: The legacies of George Floyd, Breonna Taylor, and other victims of police violence continued to inspire major reforms in blue states this year. Maryland’s Democratic legislators overrode the Republican governor’s veto to pass a police reform package that included the establishment of a civilian review board, restrictions of no-knock warrants, and mandated body cameras. California passed its own package of reforms, raising standards and aiming to take badges away from police who lie, use excessive force, or display racial bias.

3. Voting Rights: While Republicans are in the midst of a well-funded, well-coordinated effort to roll back voting rights, Democratic majorities in the states moved quickly to expand access to the ballot box. Virginia became the first state in the South to enact a Voting Rights Act. Democrats passed automatic voter registration in Delaware, Hawaii, Connecticut, and Nevada, which also pushed through legislation to permanently expand mail voting after a successful 2020 election administration during the pandemic.

2. Going Green: Hawaii became the first state in the nation to declare a climate emergency. New York, Rhode Island, and Massachusetts passed legislation setting a net-zero carbon emissions target by 2050. In all, at least 12 Democratic-majority states passed legislation this year to tackle climate change and create clean energy jobs.

1. Abortion: With the Supreme Court dangerously close to overturning Roe v. Wade, Democratic state legislatures are increasingly our last line of defense when it comes to defending reproductive freedom. This year, New Mexico repealed a law criminalizing abortion. Virginia, Washington, and Colorado all made insurance coverage for abortion far more accessible, while Hawaii and Maine expanded access by widening the category of health care workers who can administer abortion care.