Moral Hazard and Its Victims

Hamilton Nolan · 07/13/15 11:25AM

After all of the boisterous noise about rejecting austerity, Greece has finally agreed to the outlines of a bailout to address its debt crisis: more austerity. Its future is grim(mer). At times like this, it is useful to ask which side has the morality, and which has only the hazards.

New York City Is Going to Stop Making Non-Violent Offenders Pay Bail

Gabrielle Bluestone · 07/08/15 11:05AM

Citing dismal conditions at Rikers Island and a 16-year-old who committed suicide after he was jailed without charges for three years, the city of New York announced Wednesday plans to eliminate bail requirements for non-violent and low-level offenders.

Hamilton Nolan · 11/19/13 04:54PM

Damon Silvers, an AFL-CIO official, sat on a congressional panel in 2008 that oversaw the bank bailout. "If I'd known what the consequences of the decision not to restructure the banks would be," he now says, "I would've set myself on fire on the Mall."

Hamilton Nolan · 08/27/13 03:59PM

Daryl Lane Woods, chairman of Missouri's Main Street Bank and an idiot, has pleaded guilty to using $381K in federal bank bailout funds to buy a condo in Fort Myers, FL, which sucks.

E.U. Demands Cypriots Pay Up

Max Read · 03/18/13 07:30AM

Eurozone finance ministers are demanding a one-time levy on bank deposits of all sizes—even on insured accounts—as part of a bailout package for Cyprus, which is teetering on the brink of bankruptcy. Cypriots sprinted to banks and ATMs this weekend, waiting in long lines to withdraw cash after hearing about the plan on Saturday; if approved by Cyprus' parliament, it would mark the first time ordinary European depositors would be asked to take a haircut for a bailout plan. The levy would take 6.7 percent for deposits of less than 100,000 Euros and 9.9 percent for those above, and while more progressive plans have been floated, as it stands right now "[t]his is a conscious choice to make poorer people pay to help richer ones," The Financial Times writes. Why lean on the little guy? In all likelihood to preserve the island nation's status as an offshore haven for, in particular, Russian businessmen. Still, the tax is far from being assured: it's unclear whether President Nicos Anastasiades has the necessary majority to approve the plan, and the vote has been delayed until tomorrow. [Financial Times | NYT | Reuters | image via Getty/AFP]

New York Fed Still Bailing Out Bank of America

Max Rivlin-Nadler · 02/17/13 04:00PM

When the banks got bailed out, people were reasonably upset — why should huge corporate banks be given public money to recover from the disaster of their own greed and incompetence? Others argued that letting those banks fail would send the economy into a further tailspin. Either way, it happened, and that was that. The banks weren't going to get even more public money, right? Not exactly.

It's All Just a PR Calculation for A.I.G.

Hamilton Nolan · 01/08/13 01:50PM

A.I.G., the backbone that runs one inch beneath the surface of the global economy, has gotten itself millions of dollars worth of free PR today by just considering joining a lawsuit against the U.S. government. To sue, or not to sue? To be ungrateful bastards, or to potentially miss a payday? It's not a complicated question, really.

Mitt Romney Looted a Dying Company For Executive Bonuses While It Owed the Government Millions

John Cook · 08/30/12 11:30AM

Rolling Stone's Tim Dickinson has a devastating story gutting one of Mitt Romney's origin myths as a "Turnaround Guy." Romney has always taken credit for rescuing Bain & Co., the consulting firm where he got his start (as distinct from Bain Capital, the private equity operation he later co-founded) from the clutches of bankruptcy by dint of fearless resolve, hard work, and common sense. The truth: He raided its coffers for executive bonuses even as it owed millions to the federal government, and used the resulting lack of cash as leverage to screw over the company's creditors.

Ask Former TARP Official Neil Barofsky How the Government Sold Out Citizens to Bail Out Wall Street

Hamilton Nolan · 08/07/12 12:45PM

Neil Barofsky was at the very center of the U.S. government's response to the 2008 economic collapse. He spent more than two years, until March of 2011, as Special Inspector General for the TARP program, overseeing and monitoring government bailout funds. Now, Barofsky has written a ferocious book detailing how, he says, "Washington abandoned Main Street While Rescuing Wall Street." And he's here to take questions from you, the Main Streeters.

Dov Charney Gets His Bailout

Hamilton Nolan · 04/22/11 08:25AM

Teetering teenage titty tableau titillator American Apparel has been wrestling this week with the question of how to get millions of dollars to keep itself alive while still being run by Dov Charney, a crazy person. They've done it! How? They found the minute handful of people in North America who A) have millions of dollars to invest, and B) do not think Dov Charney is a crazy person. What are the chances?

Which Is Worse: Bankruptcy, or Dov Charney?

Hamilton Nolan · 04/20/11 09:17AM

Fashion pimp of trendy hose American Apparel is in mortal financial peril at the moment; it needs an infusion of cash to stave off a possible bankruptcy. Investors have the cash, and the interest in the brand; what they don't have, in all likelihood, is an interest in handing a huge pile of cash over to the sole control of Dov Charney, who—despite his unshakeable confidence in himself—is the one who got the company in this situation in the first place.