David Dayen

David Dayen is a contributing writer to Salon.com and a weekly columnist for The Fiscal Times. His forthcoming book about foreclosures will be published by the The New Press.

Recent Articles

Why the DOJ Needs to Hold Individuals Responsible for Corporate Crime

The DOJ claims it wants to root out individuals responsible for corporate crime. The Volkswagen emissions scandal is a perfect test. 

AP Photo/Michael Sohn
AP Photo/Michael Sohn Volkswagen ornaments sit in a box in a scrap yard in Berlin, Germany, Wednesday, September 23, 2015. I t’s a bad time to be a Volkswagen executive. You’ve just been caught illegally installing software in nearly half a million TDI “clean” diesel cars in the U.S., and 11 million worldwide , designed to fraudulently pass smog emissions tests. Reports reveal that you lied about this , in the face of demonstrable evidence, for more than a year. Fines under the Clean Air Act could hit $18 billion . On Monday your stock lost $20 billion in value in the first two hours of trading, and another $20 billion or so since then. The stock only stopped falling when your CEO, Martin Winterkorn, decided to resign . But despite the damaging fallout, there’s a path for VW to, improbably, survive their deceptions. After the CEO resignation and a $7.3 billion set-aside to pay any penalties from the scandal, investment analysts rated stock in the company a “buy.” Shares rebounded on...

Yet Another Subsidy for the Big Banks

If Congress really wanted to save hundreds of billions of dollars, the Fed could stop paying interest on bank reserves.

(Photo: AP/Richard Drew)
(Photo: AP/Richard Drew) A television screen on the floor of the New York Stock Exchange in June. W hen Mitch McConnell wanted to pay for a transportation bill this summer, he targeted a subsidy the Federal Reserve automatically pays to banks. All 2,900 banks who purchase stock in the Federal Reserve system—a kind of membership fee for using services like check-clearing and the discount window—get a 6 percent annual dividend , costing the government $16.3 billion over ten years. McConnell used this pot of cash for his highway bill, which remains in limbo until the House passes its own long-term version. But there’s a bigger risk-free payout the Fed makes to big banks, one set to rise exponentially as the economy improves. In fact, according to the Congressional Budget Office, hundreds of billions of dollars that would otherwise go into the federal Treasury will leak out to banks, including branches of foreign banks, in the coming years. If Congress needs to find money to pay for new...

The Latest Indication of Obama's Lack of Commitment to Financial Reform

The new Fed nomination signals the administration's belief that Dodd-Frank solved everything.

(Photo: AP/Evan Vucci)
(Photo: AP/Evan Vucci) In this October 2014 photo, Obama sits with financial regulators including Fed Chair Janet Yellen (left). W ith the fifth anniversary of Dodd-Frank, you will hear a lot about the Obama administration’s commitment to financial reform. And you can certainly break down what the law did and find successes on discrete issues. But even supporters will agree that a financial regulatory law is only as good as the people conscripted to implement and oversee it. And so the Obama administration said more about their position on financial reform with a key nomination on the day before the anniversary than they did with any subsequent rhetoric. The White House nominated Kathryn Dominguez, a professor of public policy and economics at the University of Michigan, to fill the final open seat on the seven-member Federal Reserve Board of Governors. Dominguez teaches a class called “Jane Austen and Economics” along with courses in macroeconomics and international financial policy...

The IRS Will Close This Tax Loophole -- Unless Wall Street Gets Its Way

Hedge fund managers are fighting to keep a little-known tax cheat that saves them hundreds of millions, if not billions, of dollars. 

(Photo: Ray Tsang/Flickr)
(Photo: Ray Tsang/Flickr) F or nearly a decade, Democrats from President Obama on down have vowed to close the “carried interest” loophole, which allows investment managers to classify a substantial portion of their income as capital gains, benefiting from reduced tax treatment. But there’s another, even more audacious loophole hedge fund managers routinely use to further reduce their tax burden. It involves a form of laundering—cycling money through shell companies pretending to sell a specialized form of insurance. Using this technique, the nation’s biggest hedge fund managers have shielded hundreds of millions, if not billions, of dollars. A couple weeks before a deadline to comment on proposed rules to close this loophole, activists have gotten involved by demanding that the IRS act robustly. They want to highlight this elaborate tax evasion as an example of how hedge funds use whatever strategy they can devise to enrich themselves, to the detriment of ordinary workers and the...