The Imperium Strikes Back: The Need to Teach Socioeconomics to Law Students

Black, who teaches microeconomics and financial regulation at the LBJ School of Public Affairs at the University of Texas, underscores the importance of socioeconomics as a critical component of modern economic reasoning. Black, who was a government regulator at the height of the savings and loan crisis, argues that knowledge of economics is critical to those who would influence public policy, and socioeconomists should not cede economics to the Chicago school

Economic Ideology and the Rise of the Firm as a Criminal Enterprise

Over the last 50 years, the institutions, ideology, nature, and power of firms in the United States have been radically transformed. Neoclassical economics has led that transformation, supplying an ideology that justified a dramatic increase in top executive compensation while dismantling the mechanisms that produced personal accountability tied to anything but relatively short term shifts in share prices. Yet, alongside the rise of the corporation, from the time of Adam Smith forward, has been concern that the separation of ownership and control creates opportunities to use the corporation as a “weapon” of fraud, and with the return of global financial crises, there has been renewed concern that finance has once again become an agent of crime that threatens the economic order. This article compares economic and criminological approaches to the corporation. Both approaches focus on incentives and assume that rational actors are responsive to changes such as the dramatic growth in executive financial compensation and the evisceration of other forms of corporate accountability. Both approaches study the separation of ownership and control, and the temptations that come from the ability to speculate with other people’s money. Yet, neoclassical economists assume that markets will police fraud and that fraud therefore need not be a serious subject of study while criminologists posit that the policies that neoclassic economists have championed have created “criminogenic environments” that encourage the use of firms as instruments of fraud. Criminologists call the use of seemingly legitimate firms to manipulate financial markets “control fraud,” that is, fraud by the persons in charge, most typically starting with the Chief Executive Officer (CEO). Modern executive and professional compensation has transformed the CEO and the independent professionals, such as accountants, who once served as sources of external discipline. Today’s CEO can disguise losses, eliminate underwriting, lay off needed workers and take other measures that boost share prices at the expense of a company’s long term viability. Moreover, if enough executives increase their companies’ apparent profitability (and their own bonuses) in doing so, the result creates a “Gresham’s dynamic” in which bad ethics drives good ethics from the industry and the professions. In these criminogenic environments, control frauds become so pervasive that prosecution becomes extremely difficult and markets do respond—with extremely destructive boom and bust financial cycles

Red Dragon: A Redshift-Evolving Gaussian Mixture Model for Galaxies

Precision-era optical cluster cosmology calls for a precise definition of the red sequence (RS), consistent across redshift. To this end, we present the Red Dragon algorithm: an error-corrected multivariate Gaussian mixture model (GMM). Simultaneous use of multiple colors and smooth evolution of GMM parameters result in a continuous RS and blue cloud (BC) characterization across redshift, avoiding the discontinuities of red fraction inherent in swapping RS selection colors. Based on a mid-redshift spectroscopic sample of SDSS galaxies, a RS defined by Red Dragon selects quenched galaxies (low specific star formation rate) with a balanced accuracy of over 90%. This approach to galaxy population assignment gives more natural separations between RS and BC galaxies than hard cuts in color--magnitude or color--color spaces. The Red Dragon algorithm is publicly available at bitbucket.org/wkblack/red-dragon-gamma.Comment: 17 pages, 14 figures; comments welcom

The Problem with Predators

Both corporate theory and sex discrimination law start with presumptions that CEOs seek to advance legitimate ends and design the internal organization of business enterprises to achieve such ends. Yet, a growing literature questions why CEOs and boards of directors nonetheless select for Machiavellianism, narcissism, psychopathy, and toxic masculinity, despite the downsides associated with these traits. Three scholarly literatures—economics, criminology, and gender theory—draw on advances in psychology to shed new light on the construction of seemingly dysfunctional corporate cultures. They start by questioning the assumption that CEOs—even CEOs of seemingly mainstream businesses—necessarily seek to advance “legitimate” ends. Instead, they suggest that a persistent issue is predation: the exploitation of asymmetries in information and power to the disadvantage of shareholders, creditors, customers, or employees. These literatures then explore how such CEOs may rationally choose to employ seemingly dysfunctional practices, such as “masculinity contests,” which reward employees more likely to buy into ethically dubious activities that range from predatory lending to sexual harassment. This Article maintains that questioning the presumption of legitimacy has profound and largely unexplored implications for corporate theory and anti-discrimination law. It extends the theory of “control fraud” central to white-collar criminology to a new concept of “control predation” that includes conduct that is ethically objectionable, if not necessarily illegal. This Article concludes that only by questioning the legitimacy of these practices in business terms can gender theory adequately address women’s workplace equality

Peer Review in Carnegie Research Libraries

The review of librarians by their peers is an elemental factor in advance­ ment and continuing appointment. This article reports the results of a survey on structure, support, and expectations in place for peer review of librarians. The authors provide comparisons to previous research and discuss new information on the value placed on individual contributions in the review process. Librarian status is reviewed to uncover important differences in the specific structure of the review process and in how professional activities are weighed

Statement by William K. Black

Statement by William K. Black Associate Professor of Economics and Law, University of Missouri – Kansas City before the Committee on Financial Services United States House of Representatives regarding Public Policy Issues Raised by the Report of the Lehman Bankruptcy Examiner April 20, 201

Notes from Interview of Prof. Bill Black

Linked is the audiotapes to this interview split into two different part