Obama Sends Lew to Europe Preaching Growth While Practicing Austerity at Home

Obama Sends Lew to Europe Preaching Growth While Practicing Austerity at Home

Bill Black: Treasury Secretary Lew tells Europe to ease up on austerity while Obama makes major cuts at home -   April 10, 2013
Members don't see ads. If you are a member, and you're seeing this appeal, click here

Share to Facebook Share to Twitter

Since I happily discovered TRNN, I have noticed the great strides it has made with having numerous reporters on the ground in important sites - Jennifer Humiston
Log in and tell us why you support TRNN


William K. Black, author of The Best Way to Rob a Bank is to Own One, teaches economics and law at the University of Missouri Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics.

Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement.

Black developed the concept of "control fraud" frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management.


Obama Sends Lew to Europe Preaching Growth While Practicing Austerity at HomePAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay. And welcome to an edition of The Black Financial and Fraud Report with Bill Black, who now joins us.

Bill is an associate professor of economics and law at the University of Missouri-Kansas City, a white-collar criminologist, and a former financial regulator, author of the book The Best Way to Rob a Bank Is to Own One.

Thanks for joining us again.


JAY: So President Obama delivered his budget. What's your take?

BLACK: Oh. Well, to really appreciate the full insanity, you have to go back one day to Tuesday, April 9, where President Obama--the same president, you might note--sent our Treasury secretary, the intrepid Jacob Lew, to Europe. And his mission was to convince the Europeans, stop doing this insane austerity, because you're throwing Europe back into not simply a recession but Great Depression levels of unemployment.

So they have levels of unemployment in the periphery that are multiples of what unemployment was like during the Great Depression in the core European countries. And indeed, even in a place like France, unemployment today is higher than what it averaged in 1930 to 1938 in the heart of the Great Depression.

So good thing to do, right, because austerity in Europe has in fact been insane.

But, of course, the Europeans ignored Jacob Lew. And they ignored him first because they're insane, the European leaders. They produced this disaster. And, of course, they could either admit they produced a disaster or pretend that there was no disaster. And unsurprisingly they decided to go with there is no disaster.

And so the finance minister of Germany, one Wolfgang Schauble, famously said to Jacob Lew, no one in Europe believes that austerity has any problem in terms of reducing growth. Now, of course, he didn't use the word austerity, because austerity is a word that causes tens of millions of Europeans to go into the streets and protest. So they have a euphemism for this.

Anyway, Jacob Lew's unconvincing on European leadership, no surprise. But part of the reason Jacob Lew is of course a terrible spokesperson against austerity is he's one of the leading proponents of austerity. And I have a column explaining how when he was head of OMB under Obama, he produced all of this insane explanation for proposed budget that was going to inflict austerity on the United States, saying austerity was great for growth--in other words, the same insanity of Wolfgang Schauble. And Jacob Lew was also one of the leading people in the Obama administration pushing for the grand betrayal, which, in addition to being obscene on multiple levels, is an act of austerity as well. So they want to cut Social Security and Medicare and Medicaid and all kinds of social programs and increase taxes, and all of this while they're simultaneously telling the Europeans, don't do this; it's producing a disaster.

So what do we have? We have complete incoherence, complete incompetence, massive hypocrisy, and a belief in budget magic, because what does the administration [incompr.] what did Jacob Lew go over specifically to tell them they should do? That they should practice austerity, but then they should have a goal, a target for positive growth. See? So if you substantively do things that are going to produce negative growth, but if you say, I'm trying to achieve positive growth, that acts like magic and it produces positive growth. That's what Jacob Lew thinks. That's what President Obama thinks.

JAY: Well, wouldn't President Obama argue that the cuts to Social Security are further out? And in the shorter term he is increasing spending some. They have--you know, they're adding program--he wants to have this national kindergarten program available to all. There is a program, $260 million in funding for science and technology, $100 million in funding for something called Promised Neighborhoods, $850 million for Race to the Top. I mean, there is some spending going on. So, I mean, isn't that--.

BLACK: That's the magic part. That's the magic part. Right? So the magic part is: overall we can do austerity, including, by the way, Social Security--yes, much of it's farther out, but it starts way too early and it's a disaster in all of those forms, but net we're having austerity. But the president thinks you can have austerity, but then if you have some good programs within it, like the ones you mention, somehow that takes away austerity.

That's not how economies work. Those may be good programs, but you still have this small little thing called a recession, where you have inadequate demand, and if you adopt austerity in it, just as he went and sent Jacob Lew to warn the Europeans, you produce a disaster.

And so what you're talking about--all of those programs, right, they all added up to a few billion dollars in the context of where we're producing much greater overall austerity, so they're going to be swamped by the austerity. And all of these things net produce a dramatically weakened recovery. And you've seen it in the job numbers, where essentially the entire reduction in unemployment can be explained by people leaving the workforce because they're so discouraged.

JAY: Alright. Thanks for joining us, Bill.

BLACK: Thank you.

JAY: And thank you for joining us on The Real News Network.


DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


Our automatic spam filter blocks comments with multiple links and multiple users using the same IP address. Please make thoughtful comments with minimal links using only one user name. If you think your comment has been mistakenly removed please email us at contact@therealnews.com


Latest Stories

Behind the Music with TRNN's Stephen Janis
The Blind Spots in Alberta's Climate Change Plan
Vulture Capitalists Are the Real Winners of Argentinas Elections
Eddie Conway Talks Indigenous People's Day and Political Prisoners
Indigenous Peoples' History is More Complicated Than a Holiday Myth
The Iraqi Pissing Match - John Kiriakou on RAI (4/10)
Turkey's Intentions Behind the Downing of a Russian Jet
Policing on Trial as Freddie Gray Case Set to Begin
Is America Powerless to Stop Pfizer Merger?
The Unbreakable Spirit of Gilmor Homes
My Reports on 1995 Human Rights Abuses in Bahrain Ignored by State Department - John Kiriakou on Reality Asserts Itself (3/10)
Wilkerson: The Hypocrisy of U.S. Syria Policy (1/2)
"Being a Founding White Father Ain't What It Used To Be:" Student Protests on College Campuses
Days of Revolt: Militarizing Education
Historic Win for the Right in Argentina's National Election
How I Joined the CIA - John Kiriakou on Reality Asserts Itself (2/10)
Sanders Defines his Social Democracy
MD Among Lowest Number of Hate Crimes in the Nation
Report: The Population of Women in Prison Has Tripled Since the '90s
Native American Genocide & Survival with Roxanne Dunbar-Ortiz
History Will Judge America on Syrian Refugee Crisis As "Shameful"
I Believed America Could Do No Wrong - John Kiriakou, Former CIA Official, on Reality Asserts Itself (1/10)
N Don't Stop - Brook Park + TBB on Rooftop Live
The Black Panthers: A Revolution In Review
What's Fueling Boko Haram Attacks in Nigeria?
Is Obama Walking Into COP21 With An Empty Hand?
Back to Square One, Obama Says Assad Must Go
Towson President Agrees to Students' Demands After Eight-Hour Occupation
The Pentagon and Bernie Sanders Agree: Terrorism Linked to Climate Change
"They Think They've Won"

RealNewsNetwork.com, Real News Network, Real News, Real News For Real People, IWT are trademarks and service marks of IWT.TV inc. "The Real News" is the flagship show of IWT and Real News Network.

All original content on this site is copyright of The Real News Network. Click here for more

Problems with this site? Please let us know

Linux VPS Hosting by Star Dot Hosting