Apr 13 2016

Our First “Black” President’s #BLM Fail And Neoliberal Apologist Tour

Black Lives Matter Activist: Bill Clinton’s Defense of “Superpredator” Policies Dehumanizes Us

Hillary and Bill and Paul Krugman Race to the Right to Stop the Bern
By William K. Black, New Economic Perspectives
April 8, 2016

In the last week, Hillary and her surrogates have pivoted hard right and retreated to their long-held positions on the major issues. Indeed, in several cases they have gone even farther to the right than the policies they pushed over a decade ago – even though those policies proved disastrous. They also inadvertently demonstrated the terrible policies that were produced by the Clinton’s vaunted “pragmatism” and compromising with the most extreme Republican demands. That was the story of Clinton’s infamous welfare “reform” – a policy both Clintons championed. Tom Frank details in his new book entitled Listen, Liberal how the Clintons’ “pragmatism” and zeal to work with the worst elements of the Republican Party led to the welfare “reform” bill. Zach Carter has just written the article I was planning to write about that travesty. He entitled it “Nothing Bill Clinton Said To Defend His Welfare Reform Is True.” I encourage you to read it.

Bill’s defense of his policies that helped feed the mass incarceration of blacks and Latinos for drug offense came in the same April 7, 2016 campaign speech in Philadelphia that led to Zach Carter skewering his defense of welfare “reform.” Bill’s speech was strongly protested by Black Lives Matter members, which led to unscripted, angry attacks by Bill on some of the protesters and prompted his defense of his crime bill and Hillary’s attack on “superpredators.”

Bill made four key points about crime in his attempted defense and attacks on the protesters. First he claimed that his 1993 crime bill led to a huge decrease in crime. The reality is that street crimes were declining before his bill and the trend continued after the bill passed. (Elite financial crimes were surging due to the Clinton’s championing of the three “de’s” – deregulation, desupervision and de facto decriminalization of finance – but the Clintons and the authors creating and spreading the myth of the black and Latino “superpredators” ignored them.)

Second, Bill claimed that the bad parts of his crime bill were caused by Republican demands. Tom Frank’s book shows how the Clintons’ “pragmatism” and promises to work with the hard right led to him crafting a bill that produced the mass incarceration of Americans. This problem was compounded by his sentencing provision that punished crack cocaine users 100 times more severely (by weight) than powder cocaine users. When the bill was drafted it seems likely that the drafters did not know that crack cocaine was used overwhelmingly by blacks and Latinos and powder cocaine overwhelmingly by whites. A wide range of people eagerly created what social scientists call a “moral panic” about crack cocaine even though its effects were the same of powder. Bill’s crime bill achieved bipartisan support, including Bernie.

What Bill did not discuss, but what Tom Frank’s book emphasizes, is that the immense racial disparity in sentencing – and the lack of any basis for it given the chemical equivalency of crack and powder – became clear within a year after passage of the act. By 1995, the U.S. Sentencing Commission had gathered the data, conducted the analysis, and done all the drafting to repeal the disparity – and Bill and the Republican Congress promptly worked pragmatically and in a bipartisan manner to block the repeal of the racist sentencing disparity. After he left office, Bill repeatedly apologized for his Crime Act, but a few days ago in Philadelphia he reverted to praising his disastrous law. He is moving exceptionally hard right back to his natural instincts when he gets off script.

Third, Bill moved so far right that he resurrected a racist position Hillary had enunciated (and later repudiated). Hillary attacked blacks who used crack as “super predators.” That phrase was crafted as part of the effort to generate a moral panic in order to produce the mass incarceration of blacks.

Hillary was quoting phrases from three ultra-right authors that were Reagan officials. None of them was a criminologist, yet they claimed that overwhelmingly black “super predators” were growing at such epic rates that we should be so terrified by them that we would support a full scale “war” against black and Latino drug users. They did not simply coin the term “super predator” and stress that they were primarily black – they called them “feral.” That is the word used for a once tame animal that reverts to a wild animal. Black crack users were demonized as subhuman – wild animals whose ancestors had once been tame (as slaves) and who, as Hillary demanded, must be brought “to heel” like trained dogs.

Hillary eventually (in 2016) recanted her adoption of the racist “super predator” phrase and meme. Bill is disinterring it now because he got flustered and angered by the Black Lives Matter protesters and reverted in an unscripted fit to what came reflexively.

Fourth, Bill attacked the Black Lives Matter protesters in a way that was unworthy of him. Indeed, his attack on them came directly from his bizarre effort to support Hillary’s use of the term “super predator” months after she had repudiated that term. Bill invoked the same racist myths, using the same racist language that was employed over a decade ago even though they have been completely discredited by criminologists.

Plainly, Black Lives Matter protesters never suggested that “good citizens” “murder” “children.” Bill’s claim that they did so shows how panicked he was by Bernie’s big win in Wisconsin. Bill’s story that “gang leaders … got 13-year old kids hopped up on crack, and sent them … to murder other African-American children” is a racist myth. Even the ultra-hard right authors that invented the term “super predator” and described black crack users as akin to animals abandoned the term and their claims over five years ago. Bill has gone far to the right of the ultra-right wing by disinterring these racist myths, claiming that they were and are accurate, and making the preposterous claim that Black Lives Matter protesters support those who murder black children.

How badly did Bill do on crime in his Philadelphia speech? I’ve just found a Wall Street Journal editorial that they have posted entitled “In Defense of Bill Clinton.” The WSJ’s editorial team praises the Clintons for “telling the truth” about the “super predators,” falsely asserts that the crime bill is what reduced crime, and applauds his claim that Black Lives Matter members seek to defend those who murder black children. Murdoch’s minions then instruct Democrats and Black Lives Matter “agitators” (another racist meme buried 30 years ago that the WSJ dug up for this editorial) on why they should be praising Bill’s disinterring the racist fiction of “gang leaders who got 13-year-olds hopped up on crack and sent them out onto the street to murder other African-American children.”

Why Krugman’s Latest Attack on Sanders’ Economic Plans Is Wrong

“Liberal” Economists Cheered the New Democrats’ Deregulation of Finance
By William K. Black, New Economic Perspectives
April 11, 2016

This is the second part of my series on how Hillary and Bill Clinton and Paul Krugman have pivoted in response to Bernie Sanders’ series of electoral wins and are racing hard right on finance and crime. In my first column I wore my criminology “hat” to explain how Bill was disinterring outrageous (false and racist) positions that Hillary and he had once championed. This was all the more bizarre because Hillary and Bill had recently repudiated those positions.

In this second column I provide context essential to understanding Krugman’s race to the right on finance. Readers are unlikely to understand how ultra-right wing the economic policies were of the Clinton administration. Bill Clinton and Al Gore were two of the most powerful leaders of the “New Democrats” – a group of Democrats determined to move the party strongly to the right on economics, budget, national security, regulation, and crime. The New Democrats’ policy apparatus was funded overwhelmingly by Wall Street but its ideological support came from economists who were “liberal” on some social issues. The Clintons and Gore delivered for Wall Street by embracing the three “de’s” – deregulation, desupervision, and de facto decriminalization that encouraged and allowed twin bubble to rapidly expand. The “dot com” bubble was the first bubble to burst. The housing bubble burst in late 2006, leading to the financial crises of 2008 and the Great Recession that began in 2007.

It is important to understand the intersection of the economic and political contexts in spring 1999 in the United States. Clinton took the extraordinary step in 1996 of nominating Alan Greenspan to continue to run the Fed. Greenspan was an Ayn Rand acolyte originally appointed to run the Fed by President Reagan. Greenspan was infamous as a supporter of Charles Keating, the most notorious fraud of the savings and loan debacle. All of Greenspan’s praise of Keating’s operations and predictions of success for Lincoln S&L proved catastrophically wrong. Greenspan had long led an unholy war against Glass-Steagall, seeking to eviscerate through dozens of rule changes and interpretations designed to destroy its protections. Greenspan was also hostile to using the Fed’s unique statutory authority under the Home Ownership and Equity Protection Act of 1994 (HOEPA) to prohibit all lenders, including what Krugman now stresses were “shadow” firms not normally subject to federal regulation that specialized in making predatory and fraudulent liar’s loans. Greenspan refused to use HOEPA to stop the predatory and fraudulent lending even as it grew massively. Greenspan’s successor Ben Bernanke (another Republican who would be appointed by President Obama to continue to run the Fed after the financial crisis made indisputable his regulatory failures) also refused to use HOEPA to protect the American people from these predatory and fraudulent loans. He finally used the HOEPA authority to adopt a rule banning liar’s loans only in May 2008 – roughly a year since the secondary market had died and liar’s loans had virtually ceased. Even then, he delayed the effective date of the rule until November 2009, lest he inconvenience any active fraudulent and predatory lender.

The Clinton administration had already shown its intense hostility to financial regulation at the SEC, working with Republicans to block key reform efforts by SEC Chair Arthur Levitt. Beginning in 1998 and continuing in spring 1999 the administration successfully blocked the efforts of Brooksley Born to protect the global economy from coming problems involving financial derivatives – and later in 1999 passed an act that forbade any future regulator from providing such protection. The Clinton administration was working with the most conservative Republicans in Congress to effectively repeal the Glass-Steagall Act. In 1999, Citigroup and Travelers Insurance agreed to the largest merger in financial history – in open defiance of the Glass-Steagall Act in order to successfully extort Congress to repeal the Act. Robert Rubin, the former CEO of Goldman Sachs, the government leader in destroying Glass-Steagall, announced that he was stepping down as Clinton’s Treasury Secretary. He promptly joined Citigroup. By 1999, even before the effective statutory repeal of Glass-Steagall, the banks that were first to take advantage of Greenspan’s evisceration of Glass-Steagall and began to trade securities were already suffering severe losses.

“Liberal” economists were the critical supporters of the Clinton administration’s destruction of effective financial regulation. Part of this effort was deregulation, but desupervision was its even more destructive handmaiden.

The economist’s speculation that English-speaking nations had much faster growth because they put exceptionally brilliant economists like Greenspan, Summers (both appointees of Bill Clinton), and the economist authoring the column in charge of economic policy is revealing and humorous. It is hardly surprising that unsurpassable arrogance and Anglo-Saxon triumphalism became fellow travelers. Similarly, it will surprise no one that an elite economist would champion the idea that the special brilliance of the author and a few of his fellow elite economists explained the unique success of the Anglo-Saxon nations.

While MIT economists, Greenspan, and Summers are so brilliant that they explain America’s high growth, regulators and government officials’ are fools “whose only expertise is in office politics.” Fortunately, America places economic policy in the hands of Greenspan, Summers, and MIT economists and removes all authority from the inept bureaucrats.

But what was most wondrous from the self-described “liberal” economist was his ode to Margaret Thatcher and Milton Friedman as a likely explanation for (asserted) Anglo-Saxon superiority.

What the economists never even considered was that the relatively high U.S. growth rates they were considering in 1999 could be the product of the inflating dot com and real estate bubbles.

The villain in the (next) piece is Galbraith because he is a “progressive thinker.” The CEOs of big corporations are the “man in the gray flannel suit” – too bland to be evil or even worthy of blame. The old-style CEOs who built firms like GM are dismissed with the economist’s classic insult – as “business bureaucrats.” The hero of the piece is the “entrepreneur.” (The author channels Ayn Rand and the most anti-governmental economists.) The ultimate hero for the author was the CEO of one of the “dot com” firm staffed with geniuses.

Note the non-persons in his tale – the “ordinary workers.” They rate only two sentences. There is no sense that they are important to the economy or even the success of the firm. Instead, there is the muted recognition that the old system that Galbraith described led to a career for “ordinary workers” in which “your life was secure.” Implicitly, the author is acknowledging that this will become a thing of the past in the new economy that he gushes about. Rendering the lives of hundreds of millions of ordinary workers (and their families) insecure is not important enough to warrant express discussion. The economist treats their fates as simply inevitable in order to achieve the brave new world.

The author’s gold standard of expertise is Goldman Sachs. The greatest compliment he can pay Enron’s leaders is that their firm is so superior to its competitors that it is the Goldman Sachs of energy. Enron paid the author $50,000 annually for what he would later describe as “an advisory panel that had no function that I was aware of.” Right, who would say no to trading on his (self-described) reputation for brilliance as an MIT economist to get $50,000 from Enron for performing “no function?”

The economist then explained what made possible this brave new world that he wrote to champion – deregulation. He explained that deregulation was driven by “a change in ideology.” He explained to his readers that “Adam Smith” was right. The problem – the bloated, bureaucratic corporation – was caused by the government interfering with the markets through regulation. With deregulation, Enron was leading the way and “making freewheeling markets possible.”

The economist who authored the April and May 1999 columns is, of course Paul Krugman. The Enron energy trading operation he gushed about was a leading center of Enron’s frauds, particularly those that caused the California energy crisis. Goldman just admitted to what the United States found to have been massive fraud. Enron was indeed the Goldman of the energy industry just as Goldman was the Enron of finance. The reader can now see Krugman’s actual views when he found it profitable to pander openly to the plutocrats defrauding the public and rigging the system against the consumer and the worker. The reader can also see why he is so dismissive of criticism of Hillary taking enormous speaking sums from Goldman for performing “no [real] function.”

Krugman’s prediction that we were seeing the death of market power by huge firms proved as accurate as his claim that Enron and Goldman were the gold standards of their industries. He is one of exemplars we use in the book we are writing that explains that economics is the only field in which one can be awarded a Nobel for proving wrong in predictive ability.

Bill Black is now an economic advisor to the Sanders campaign. I quote “Herr Doktor Professor” when he emphasizes a point I agree with and mostly ignore him when he doesn’t.

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