Naked Capitalism has an article today that reports a view of William Black, now a professor of economics and law at the University of Missouri (Kansas City. Prof. Black was a senior bank regulator during the savings loan crisis (his claim to fame was his pursuit of Charles Keating of Lincoln Savings, in which he was removed from the initiative and more management friendly investigators were assigned, and events later proved Black correct). Black has seen a lot of bad behavior at close range.

Naked Capitalism reports:

"He is not at all impressed with how the Treasury has handled AIG. Via e-mail:

This is the consequence of six things on the Treasury end of things:

(1) the failure to use Chapter 11 bankruptcy/pass-through receivership to deal with deeply insolvent financial institutions

(2) the failure to expose, and to the extent possible, remedy through restatements the massive accounting fraud that AIG was/is engaged in that triggers the bonuses

(3) the failure to bring criminal charges against the control frauds

(4) the failure of Treasury as negotiators -- they had all the leverage when they bailed out AIG and could have conditioned the aid on at least the VP tier and above giving up their bonuses

(5) the weakness of Treasury's current lawyers who, if press reports are accurate, couldn't think of any way for the U.S. government to take effective action against what it reportedly views as a scandal,

(6) (and I haven't seen this discussed) why was Treasury blind-sided by this? It confirms that they did not conduct even the most obvious due diligence on AIG's assets and contingent liabilities."

Odds are China will be an innovation powerhouse in my lifetime (and I am old). Already, a Chinese company, Huawei Technologies, has become the biggest filer of a type of international patent application, called a "PCT." I was in China a couple of weeks ago, meeting with scientists, engineers and patent attorneys. I was surprised by the large number of ex-pats that I met, people who obtained a gold plated, ivy league education in the U.S. and decided to move to China because there are now more opportunities there for scientists and engineers than there are in the U.S.

The Chinese government is devoting a lot of its wealth of R&D and has a much longer view than any company in the US or the US government. The nature of Chinese R&D right now is a bit different from the U.S. or Western Europe. Chinese companies are focused on low cost, high tech products, ranging from netbooks to pharmaceuticals, that a significant portion of their population can afford.

China has big problems, too be sure. The air pollution in Beijing is still pretty bad. I took Godiva chocolates as gifts because the chocolate in China is not edible. But a bunch of crooked bankers do not run the government in China, as they do here. I'll bet on the Chinese to solve their problems. We don't seem to be able to do that anymore.

the gangsters know that they can game the system and stick the taxpayers with the bill. This is really sickening.

The local paper has had several articles about young Somali men disappearing from Minneapolis. One hypothesis proferred is that they went back to Somalia to attend pirate school.

I don't understand how Obama, a student of history, a brilliant politician, and a really good analytical thinker, could have cast his and our lot with Summers, Rubin and Geithner. The arrogance, cronyism, and greed of these guys is perhaps the only thing that is transparent in this financial crisis. What is the endgame here? When are we going to see some perp walks?

The innovation and tech portions of the economy are dying. Small high tech companies cannot get funding from anywhere. Large high tech companies cannot sell their products. Patent application filings are down 10-20% compared to last year at this time. Innovation and making things is the only way to re-build the economy. Yet, nothing is being done to help this sector.

I think people are getting desperate and when that happens, they don't have a lot to lose by taking out their rage on the group responsible for the mess. If the laws regarding fraud are not enforced, people may extract vengence in other ways.

This outcome is completely predictable. Banks are not things. They are aggregates of people. The cause of the banking failure was that people went amok in the absence of sound regulation. Giving more money to the same people that went amok must have been like Christmas for them. We are now learning that a lot of the money was stolen. Big surprise.

Judge Posner's writings used to drive me crazy in law school. He was worshipped as the second coming from the Chicago School. He must have "lost his shirt" in this economic downturn because he just wrote a book, entitled, "The Failure of Capitalism."

One of the prominent jurists of our time, and an apostle of the Chicago School of Economics is Judge Richard Posner. The Chicago School of Legal Theory and J. Posner have been anti-any regulation. Posner has also been a big proponent of moral relativism.

Posner must have "lost his shirt" in the stock market last fall because he has just written a book, entitled, "A Failure of Capitalism." This is equivalent to Lenin writing a book, entitled, " Jesus Christ Is My Personal Savior."

I was quite old when I was in law school and found Posner's articles and decisions to be infantile and lacking any common sense. I thought he was a gasbag. My much younger, mindless Republican peers were enamoured of him.