Jeff Madrick Jeff Madrick is a regular contributor to The New York Review of Books and a former economics columnist for The New York Times. He is currently editor of Challenge Magazine, visiting professor of humanities at The Cooper Union, and senior fellow at the Schwartz Center for Economic Policy Analysis, The New School. He is the author of several books, including Taking America , and The End of Affluence , both of which were New York Times Notable Books of the Year. Taking America was also chosen by Business Week as one of the ten best books of the year. He is also the author of Why Economies Grow . He has written for many other publications, including The Washington Post, The Los Angeles Times, Institutional Investor, The Nation, The American Prospect, The Boston Globe, Newsday and the business, op-ed, and Sunday magazine sections of The New York Times. He has appeared on Charlie Rose, The Lehrer News Hour, Now With Bill Moyers, Frontline, CNN, BBC, CNBC, CBS, and NPR. He was formerly finance editor of Business Week and an NBC News reporter and commentator. His awards include an Emmy and a Page One Award. He was educated at New York University and Harvard University and is a fellow of the Century Foundation and The World Policy Institute, and a board member of Economists for Peace and Security. His latest book is The Case for Big Government . He is also working on a history of the U.S. economy since 1970, to be called The Age of Greed .

Defanging Already Weak Financial Regulation

Prop trading is alive and well despite the Volcker Rule, and it will continue to cost us dearly.

I sure hope somebody is going to notice the fine piece on the front page of Thursday’s New York Times about how easy it is to get around the Volcker rule. Remember how the Obama team that came up with its reregulation proposals seemed to push Paul Volcker aside? The former Federal Reserve chairman was supposed to be running a committee on the subject for the president, but even he let it be known no one was talking to him much. Volcker was concerned…

Stimulate Now: On Inflation and Deficits

The debate about deficits continues (see Ezra Klein for a handy breakdown of 4 different perspectives) with Paul Krugman recently outlining his view, followed by an exchange between ND20 contributor James K. Galbraith and Krugman. Below, Roosevelt Senior Fellow Jeff Madrick, also an ND20 contributor, gives his take.

Some have suggested that if a country nears the point that it must consider default, that is, it can’t generate enough tax revenues to pay debt and meet other minimal commitments, then all it need do is create reserves if it has a sovereign (aka ‘fiat’) currency.

But in most such circumstances, such a thing will incur inflation. Now, the…

BP Lesson: Big Government Myths Are Undermining America’s Future

Government does the most damage when it fails to act. ND20 ALERT: Jeff Madrick will be addressing this topic at the upcoming Hamptons Institute/Roosevelt Institute symposium July 16 - 18. RSVP today - seats are limited.

We have had two towering examples of the failure of unregulated private enterprise before us, but still the push-back against government intervention continues. The oil rig explosion in the Gulf and the collapse of credit around the world in 2008 have demonstrated more than at any time since the Great Depression the importance of bold, intelligent government. Yet we are treated time and again to all…

The Meltdown Men: Greenspan, Rubin, & Prince to Testify before Financial Crisis Commission

The men who stoked the financial meltdown will testify before the Financial Crisis Inquiry Commission. Don’t expect any mea culpas.

This week, Robert Rubin, Chuck Prince and Alan Greenspan will testify before the Financial Crisis Inquiry Commission. We know that they will duck blame and likely slip past the courteous questions of their inquisitors.

But let us hope the commission keeps firmly in mind that all three were at the passionate greedy heart of the crisis. As head of Bill Clinton’s Economic Security team and soon after Treasury Secretary, Rubin presided over an administration hell-bent on financial deregulation. The New Deal…

Did Obama’s economists do their homework on the Volcker rule?

Senator Chris Dodd is right to wonder, as he said yesterday, why the Obama administration waited so long to support something like the new “Volcker rule” — and then throw it into the mix to complicate the legislation. But that’s not the biggest problem.

What is disturbing is how poorly the Volcker rule has been thought through. When first announced, it sounded like a worthy and needed step in the right direction, and a suggestion the Obama team was waking up to reality. But I also expected more sophisticated details to come.

So far, there are none. The main proposal is to separate…

Obama Bank Proposal a Beginning

The Obama proposal to rein in banks is overdue. That it required the wake up call in Massachusetts Tuesday is unfortunate. It again leaves the Obama team appearing to be behind, not ahead, of the issues. Many well-informed and well-intentioned analysts, not just Paul Volcker, have been advocating a similar paring down of bank activities– a modern Glass Steagall – for a long time. We should all eagerly await the details of how it will work. But at first glance, the proposals appear to be well thought out. Savers’ deposits, insured by the federal government, cannot be put on the…

Wall Street bankers offer flimsy excuses at FCIC hearing

Jeff Madrick argues that the ‘bad judgment’ excuse doesn’t cut it when millions of Americans have been conned and defrauded.

“Panel rips Wall Street titans,” said the WSJ headline. Hardly. The Times was closer to the mark: “Few burns for four bankers…”

The Wall Street bankers know very well how to defend themselves. It was all a matter of bad judgment, they said. And they know you can’t be held responsible for that, legally or even (arguably) ethically. Lloyd Blankfein of Goldman Sachs admitted they had “rationalized” about some of their products. Rationalizing does not make you culpable. “If you’re going to do…

To Bankers and Regulators: Why the risky business?

Roosevelt Institute fellow Jeff Madrick poses tough questions to bankers and regulators on the irresponsible practices that helped sink the economy.

The Angelides Commission should focus on why the financial institutions represented took excessive risk. The questions should be designed to enable Americans to understand how this occurred. Here is what we should know.

To the bankers and regulators:

Many of your commercial and investment banks had their own mortgage-originating subsidiaries — their own Countrywides and New Centurys, in other words. Citigroup, for example, was almost as active as Countrywide in writing subprime mortgages through its subsidiaries. Merrill bought a big originator as…

New Agenda for America: Emergency Checklist

To mark the 80th Anniversary of the Great Crash of ‘29, we asked 15 progressive thinkers to write about lessons learned and what lies ahead. Together, their reflections constitute a New Agenda for America — a message of how the ideals of a fair society should apply to the economic and social policies of our time.

We have lost a generation in America to a simple ideology that government is at best a necessary evil whose influence is to be minimized. Going forward, there is much to do: reform healthcare; re-regulate finance; build a universal pre-k system; build a light rail and…

Money for Nothing

Roosevelt Institute Braintruster Jeff Madrick explains how giant profits on Wall Street are not justified by contributions big firms make to the economy–and why it matters. This article appeared first in The Nation.

Quite a media hullabaloo was raised when the New York Times reported a week ago that Citigroup’s head energy trader, Andrew Hall, was possibly collecting a $100 million bonus for the profits his group earned in 2008–most if probably not all of it made trading on the price of oil. Hall is one of those independent-minded, nervy traders who generate enormous profits when they are right. Remember, the price of…