In this radio interview, John Perkins, the author of Confessions of an Economic Hitman, discusses his book and its message.
The premise of an economic hitman is this: an agent of the US government, working through a private company (typically a construction company), goes to a developing nation that has resources. The economic hitman sells the developing nation an infrastructure construction project that is much too big (based on greatly inflated projections). The nation then takes out an enormous loan from the World Bank and other large banks to pay for the project. The economic hitman then uses money and power to corrupt (or further corrupt) those in power in the developing nation so that the nation defaults on its debt, allowing private corporations to buy up the public resources. The private companies then export the resources with little to no benefit to the developing nation.
An eye-opening and worthwhile watch.
Sunday, August 30, 2009
Tuesday, August 25, 2009
The Great American Bank Robbery - William Black
The Great American Bank Robbery is a lecture by William Black, a professor of economics and law, a former regulator, and author of The Best Way to Rob a Bank is to Own One. This video features about one third lecture, one third discussion with the moderator, and one third Q&A with the audience.
*(If you are unfamiliar with the with the subprime mortgage-CDO-CDS debacle check the primer below the video)
He covers the sheer insanity that we currently face in the realm of the subprime mortgages, their derivatives, and the total and complete fraud in the corporations, regulators, and government agencies involved.
*If you are unfamiliar with the with the subprime mortgage-CDO-CDS debacle check out this primer:
http://docs.google.com/present/view?id=ddp4zq7n_0cdjsr4fn
Although I despise Glenn Beck, he does a decent presentation of how Goldman Sachs is our Treasury department and the roles Goldman and AIG played in this whole mess
If all this seems just too much to be true, read any three articles from The Market Ticket and you will see that, in fact, not only is it true but it is still happening and it is accelerating.
Jaw-dropping, mind-blowing stuff. Ignore it at your own peril.
*If you are unfamiliar with the with the subprime mortgage-CDO-CDS debacle check out this primer:
http://docs.google.com/present/view?id=ddp4zq7n_0cdjsr4fn
Although I despise Glenn Beck, he does a decent presentation of how Goldman Sachs is our Treasury department and the roles Goldman and AIG played in this whole mess
If all this seems just too much to be true, read any three articles from The Market Ticket and you will see that, in fact, not only is it true but it is still happening and it is accelerating.
Monday, August 24, 2009
A Crazier Future - Nassim Taleb
A Crazier Future is a lecture by Nassim Taleb, a former trader, now a statistician with soul of epistemologist and the author of the Black Swan. He summarizes the premise and points of the Black Swan in the first half of the video then takes questions during the second half.
The title Black Swan refers to before the discovery of Australia, all swans were white. That is to say, time and time again in Europe swans were only white therefore it was inferred that all swans were white. But with the discovery of Australia, a black swan was discovered and the theory-thought-to-be-law that swans were white was proved wrong in a single instance.
This ties into the fact we often face low-probability events (like encountering black swan when none had previously existed) with high-impact outcomes in the world we live in, particularly in economics. Traditional statistics cannot forecast such events because it operates the same way the Europeans did with the swans - made an inference based on incomplete data.
Great video, enjoy.
The title Black Swan refers to before the discovery of Australia, all swans were white. That is to say, time and time again in Europe swans were only white therefore it was inferred that all swans were white. But with the discovery of Australia, a black swan was discovered and the theory-thought-to-be-law that swans were white was proved wrong in a single instance.
This ties into the fact we often face low-probability events (like encountering black swan when none had previously existed) with high-impact outcomes in the world we live in, particularly in economics. Traditional statistics cannot forecast such events because it operates the same way the Europeans did with the swans - made an inference based on incomplete data.
Great video, enjoy.
Friday, August 21, 2009
The Commanding Heights
The Commanding Heights is a PBS documentary, broken into 3 two-hour parts. It is an excellent and thorough look at the various economic theories and their role in shaping the world economy over the last century.
The Commanding Heights Part One: The Battle of Ideas
"A global economy, energized by technological change and unprecedented flows of people and money, collapses in the wake of a terrorist attack .... The year is 1914. Worldwide war results, exhausting the resources of the great powers and convincing many that the economic system itself is to blame. From the ashes of the catastrophe, an intellectual and political struggle ignites between the powers of government and the forces of the marketplace, each determined to reinvent the world's economic order. Two individuals emerge whose ideas, shaped by very different experiences, will inform this debate and carry it forward. One is a brilliant, unconventional Englishman named John Maynard Keynes. The other is an outspoken émigré from ravaged Austria, Friedrich von Hayek. But a worldwide depression holds the capitalist nations in its grip. In opposition to both Keynes and Hayek stand not only Hitler's Third Reich but Stalin's Soviet Union, schooled in the communist ideologies of Marx and Lenin and bent on obliterating the capitalist system altogether. For more than half a century the battle of ideas will rage. From the totalitarian socialist systems to the fascist states, from the independent nations of the developing world to the mixed economies of Europe and the regulated capitalism of the United States, government planning will gradually take over the commanding heights. But in the 1970s, with Keynesian theory at its height and communism fully entrenched, economic stagnation sets in on all sides. When a British grocer's daughter and a former Hollywood actor become heads of state, they join forces around the ideas of Hayek, and new political and economic policies begin to transform the world."
Commanding Heights Part Two: The Agony of Reform
"As the 1980s begin and the Cold War grinds on, the existing world order appears firmly in place. Yet beneath the surface powerful currents are carving away at the economic foundations. Western democracies still struggle with deficits and inflation, while communism hides the failure of its command economy behind a facade of military might. In Latin America populist dictators strive to thwart foreign economic exploitation, piling up debt and igniting hyperinflation in the process. In India and Africa bureaucracies established to end poverty through scientific planning spawn black markets and corruption and stifle enterprise. Worldwide, the strategies of government planning are failing to produce their intended results. From Bolivia and Peru to Poland and Russia, the free-market policies of Thatcher and Reagan are looked to as a possible blueprint for escape. One by one, economies in crisis adopt "shock therapy" -- a rapid conversion to free-market capitalism. As the command economies totter and collapse, privatization transfers economic power back into entrepreneurial hands, and whole societies go through wrenching change. For some the demands and opportunities of the market provide a longed for liberation. Others, lacking the means to adapt, see their security and livelihood swept away. In this new capitalist revolution enlightened enterprise and cynical exploitation thrive alike. The sum total of global wealth expands, but its unequal distribution increases, too, and economic regeneration exacts a high human price."
Commanding Heights Part Three: The New Rules of the Game
"With communism discredited, more and more nations harness their fortunes to the global free-market. China, Southeast Asia, India, Eastern Europe, and Latin America all compete to attract the developed world's investment capital, and tariff barriers fall. In the United States Republican and Democratic administrations both embrace unfettered globalization over the objections of organized labor. But as new technology and ideas drive profound economic change, unforeseen events unfold. A Mexican economic meltdown sends the Clinton administration scrambling. Internet-linked financial markets, unrestricted capital flows, and floating currencies drive levels of speculative investment that dwarf trade in actual goods and services. Fueled by electronic capital and a global workforce ready to adapt, entrepreneurs create multinational corporations with valuations greater than entire national economies. When huge pension funds go hunting higher returns in emerging markets, enterprise flourishes where poverty once ruled, but risk grows, too. In Thailand the huge reservoir of available capital proves first a blessing, then a curse. Soon all Asia is engulfed in an economic crisis, and financial contagion spreads throughout the world, until Wall Street itself is threatened. A single global market is now the central economic reality. As the force of its effects is felt, popular unease grows. Is the system just too complex to be controlled, or is it an insiders' game played at outsiders' expense? New centers of opposition to globalization form and the debate turns violent over who will rewrite the rules. Yet prosperity continues to spread with the expansion of trade, even as the gulf widens further between rich and poor. Imbalances too dangerous for the system to ignore now drive its stakeholders to devise new means to include the dispossessed lest, once again, terrorism and war destroy the stability of a deeply interconnected world."
The Commanding Heights Part One: The Battle of Ideas
"A global economy, energized by technological change and unprecedented flows of people and money, collapses in the wake of a terrorist attack .... The year is 1914. Worldwide war results, exhausting the resources of the great powers and convincing many that the economic system itself is to blame. From the ashes of the catastrophe, an intellectual and political struggle ignites between the powers of government and the forces of the marketplace, each determined to reinvent the world's economic order. Two individuals emerge whose ideas, shaped by very different experiences, will inform this debate and carry it forward. One is a brilliant, unconventional Englishman named John Maynard Keynes. The other is an outspoken émigré from ravaged Austria, Friedrich von Hayek. But a worldwide depression holds the capitalist nations in its grip. In opposition to both Keynes and Hayek stand not only Hitler's Third Reich but Stalin's Soviet Union, schooled in the communist ideologies of Marx and Lenin and bent on obliterating the capitalist system altogether. For more than half a century the battle of ideas will rage. From the totalitarian socialist systems to the fascist states, from the independent nations of the developing world to the mixed economies of Europe and the regulated capitalism of the United States, government planning will gradually take over the commanding heights. But in the 1970s, with Keynesian theory at its height and communism fully entrenched, economic stagnation sets in on all sides. When a British grocer's daughter and a former Hollywood actor become heads of state, they join forces around the ideas of Hayek, and new political and economic policies begin to transform the world."
Commanding Heights Part Two: The Agony of Reform
"As the 1980s begin and the Cold War grinds on, the existing world order appears firmly in place. Yet beneath the surface powerful currents are carving away at the economic foundations. Western democracies still struggle with deficits and inflation, while communism hides the failure of its command economy behind a facade of military might. In Latin America populist dictators strive to thwart foreign economic exploitation, piling up debt and igniting hyperinflation in the process. In India and Africa bureaucracies established to end poverty through scientific planning spawn black markets and corruption and stifle enterprise. Worldwide, the strategies of government planning are failing to produce their intended results. From Bolivia and Peru to Poland and Russia, the free-market policies of Thatcher and Reagan are looked to as a possible blueprint for escape. One by one, economies in crisis adopt "shock therapy" -- a rapid conversion to free-market capitalism. As the command economies totter and collapse, privatization transfers economic power back into entrepreneurial hands, and whole societies go through wrenching change. For some the demands and opportunities of the market provide a longed for liberation. Others, lacking the means to adapt, see their security and livelihood swept away. In this new capitalist revolution enlightened enterprise and cynical exploitation thrive alike. The sum total of global wealth expands, but its unequal distribution increases, too, and economic regeneration exacts a high human price."
Commanding Heights Part Three: The New Rules of the Game
"With communism discredited, more and more nations harness their fortunes to the global free-market. China, Southeast Asia, India, Eastern Europe, and Latin America all compete to attract the developed world's investment capital, and tariff barriers fall. In the United States Republican and Democratic administrations both embrace unfettered globalization over the objections of organized labor. But as new technology and ideas drive profound economic change, unforeseen events unfold. A Mexican economic meltdown sends the Clinton administration scrambling. Internet-linked financial markets, unrestricted capital flows, and floating currencies drive levels of speculative investment that dwarf trade in actual goods and services. Fueled by electronic capital and a global workforce ready to adapt, entrepreneurs create multinational corporations with valuations greater than entire national economies. When huge pension funds go hunting higher returns in emerging markets, enterprise flourishes where poverty once ruled, but risk grows, too. In Thailand the huge reservoir of available capital proves first a blessing, then a curse. Soon all Asia is engulfed in an economic crisis, and financial contagion spreads throughout the world, until Wall Street itself is threatened. A single global market is now the central economic reality. As the force of its effects is felt, popular unease grows. Is the system just too complex to be controlled, or is it an insiders' game played at outsiders' expense? New centers of opposition to globalization form and the debate turns violent over who will rewrite the rules. Yet prosperity continues to spread with the expansion of trade, even as the gulf widens further between rich and poor. Imbalances too dangerous for the system to ignore now drive its stakeholders to devise new means to include the dispossessed lest, once again, terrorism and war destroy the stability of a deeply interconnected world."
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