Wanted: Finance Industry A Team

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WANTED: FINANCE INDUSTRY A TEAM….One of the things that makes our current financial crisis even scarier than it might otherwise be (at least to me) is that no one really, truly, seems to be entirely sure of what’s going on. Even genuine experts appear to be sort of baffled by the whole thing — though that hasn’t stopped them from producing hundreds of different theories. Ezra Klein points out one of the causes of this problem, which has been at the back of my mind as well:

One sidenote of the past few months is that folks turned to economists when what they needed were finance experts. But there are relatively few finance experts who aren’t affiliated with financial institutions, and so much of their commentary is tainted.

….Asking folks who have a general education in matters of macroeconomy to evince a complete knowledge of opaque financial instruments developed in the past few years is a bit odd. But asking the folks who developed and traded those instruments to give unbiased commentary on them is little better. It’s a weird situation, and it’s why, I’d argue, you’ve had a lot more commentary on things like the bailout bill, which are fairly general in nature and can be understood using tools from traditional economics, than the specifics of the financial crisis.

I second that motion. More finance experts, please. And mortgage and securitization experts. And ratings agency experts. And central banking experts. All stirred together with a bunch of top notch macroeconomists. Unfortunately, I suppose we’d probably all have to chip in and guarantee these guys $10 million bonuses to do real analysis for us, wouldn’t we? Maybe George Soros could bankroll them.

UPDATE: Speaking of finance analysis, I wrote yesterday about a Fed paper suggesting that there was, in reality, no credit crisis at all. In fact, banks are lending like crazy! I was skeptical, but said, “Even if it turns out to be wrong, reading the explanation of why it’s wrong should be instructive.”

Mark Thoma and friends oblige with an explanation here. It’s not conclusive, I think, but it certainly suggests that the original paper I linked to was woefully simplistic.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

If you can, please support the reporting you get from Mother Jones—that exists to make a difference, not a profit—with a donation of any amount today. We need more donations than normal to come in from this specific blurb to help close our funding gap before it gets any bigger.

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