Wednesday :: Jan 6, 2010

Open Thread

by Mary

James K Galbraith asks who were the economists that understood the problems in the economy, because so many economists have no clue. And one point that jumped out from this paper was this:

In the present crisis, the vapor trails of fraud and corruption are everywhere: from the terms of the original mortgages, to the appraisals of the houses on which they were based, to the ratings of the securities issued against those mortgages, to gross negligence of the regulators, to the notion that the risks could be laid off by credit default swaps, a substitute for insurance that lacked the critical ingredient of a traditional insurance policy, namely loss reserves. None of this was foreseen by mainstream economists, who generally find crime a topic beneath their dignity. In unraveling all this now, it is worth remembering that the resolution of the savings and loan scandal saw over a thousand industry insiders convicted and imprisoned. Plainly, the intersection of economics and criminology remains a vital field for research going forward.

So, just how many people have been convicted and imprisoned in this cycle of corruption and financial scandal? From what I've seen, hardly any. (via)

Mary :: 12:03 AM :: Comments (4) :: Spotlight :: Digg It!