LILA RAJIVA: The Mind-Body Politic
Individuals Not Ideologies
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Archive for April, 2009
Paul Volcker Praises the Grace of Government
The Bureau of Economic Analysis released the Q1 ‘09 GDP numbers.
The annual rate of decline came in at the expected 6.1% (a decline of 6.3% in real GDP).
Calculated Risk has an optimistic assessment of the Q1 numbers.
The optimistic case rests on the following:
- Declining residential investment contributed more to the GDP slump in Q1′09 than in Q4 ‘08 and will likely come to an end by Q2′09, in keeping with its role as a leading indicator of recession.
- Simultaneously, the contributions of lagging indicators (like unemployment, declining investment in equipment & software, and declining non-residential investment) have increased.
- The over-weighting of lagging indicators in the decline of GDP signals the end of recession.
- Real personal consumption expenditure (PCE) was up in positive territory (2.2%) in Q1′09, where it was negative (4.3%) in Q4′08.
Mish Shedlock is less optimistic. He says that the Q1 ‘09 rise in PCE is either an outlier or temporary, and will be followed by another dip in 2010-11 and more trough for a few years.
Meanwhile, former Fed chairman Paul Volcker, head of Barack Obama’s economic team, thinks the economy is “leveling off,” according to this Bloomberg report.
Highlights of what Volcker is reported to have said:
- Bernanke is “doing a great job”
- the economy is functioning “by the grace of government intervention”
- a strong recovery is “going to take a while”
- “systemically important institutions” are going to be kept afloat
- the expansion of the Fed’s balance sheet to more than $2.2 trillion as of last week will likely lead to inflationary problems in 2-3 years, but not immediately
- Glass-Steagall (repealed in 1999) isn’t likely to be resuscitated but proprietary trading and commercial banking activity should be kept apart (Lila: how?)
- no regulation of hedge funds is likely but in the case of those that get too big capital requirements and a cap on leverage might be imposed (Lila: this is vague and opens the door to selective regulation)
- regulation of executive compensation isn’t likely but there could be a “quid pro quo” for federal aid. It would have to be a “culture of exchange” with Wall Street (Lila: more weasel words that allow for selective regulation).
Altogether, I thought Volcker’s comments were evasive, inadequate, and temporizing.
Factory Farms and Swine Flu
I’ve been listening unmoved to all the hysteria about swine flu, feeling skeptical about some of the reporting. There was, after all, a 1976 swine-flu epidemic that never was, according to a piece by Patrick de Justo in Salon.
There’s no clear evidence of how this thing was triggered or how bad it is, but already the government is stocking up from the drug companies. You’ve got to wonder if all the alarmism isn’t just a distraction from the financial shenanigans in DC. And if it will just provide another excuse to clamp down on the population.To wit., the Massachusetts Senate passed a bill on April 28 that would let the public health commissioner “close or evacuate buildings, enter private property for investigations, and quarantine individuals” during an emergency, as well as impose fines of up to$1000 for not complying with public health orders. [Credit to Rady Ananda for providing the link].
Someone, somewhere is making a few bucks off those vaccines - you can be sure of that.
The New Scientist doubts that this is a genetically-engineered virus that was accidentally (or, as some cynics write, purposefully) let loose in the population. Swine-flu might still be man-made, it concedes, but the culprits are more likely to be factory-farms:
(New Scientist):
“Animal vaccines might seem like the answer, but vaccines that do not provide 100% protection can actually make things worse. When there is widespread vaccination, viruses can spread without any visible disease. Ineffective vaccines also create strong selective pressure driving the evolution of new strains that can dodge the immune attack provoked by the vaccine.
Already, attention is turning to the big pig farms in Mexico, and the role they may have played in creating this new strain of swine flu.
The fact is that we still know so little about flu, and what makes it capable of spreading from human to human, means that deliberately engineering a virus of this kind would be a huge challenge. Yes, it’s possible that this virus was created by a mistake at a research laboratory or a vaccine factory.
But by far the most plausible explanation is that this monster is the long-predicted product of our farming system....”
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Update: Here’s Ron Paul, as usual right on the money, cautioning against the scare-mongering and pointing out that last time around 25 people died of the vaccine, while only 1 person died from the flu itself. And 500 people also developed Guillane Barre syndrome, a serious neurological disorder.
Update: From The Independent, UK:
“Q What defence do we have against swine flu?
A Better than we did against the last pandemics in 1957 and 1968. We have a stockpile of anti-viral drugs – Tamiflu and Relenza – which we did not have then. We also have a pandemic plan, drawn up by the Government since avian flu became a threat in 2003, which sets out what is to be done – from distributing the drugs and setting up helplines to closing schools and banning public events.
Q Has the pandemic plan ever been tested?
A Yes, in one of the biggest emergency planning exercises since the end of the Cold War that took place in 2007. It involved hundreds of health officials across the country.
Q Are there enough anti-viral drugs?
A Not according to the Tories. The Government says it has over 30 million courses of the drugs, enough for half the population. The Tories say this is not enough if family members of an infected person are to be treated prophylactically. In that case, enough drugs to cover three-quarters of the population will be necessary, they say….”
My Comment:
That’s a lot of drugs. And a lot of money for the drug manufacturers. Food for thought…
Hilaire Belloc On Prophecy And Time
“On Anything,” Hilaire Belloc
Constable & Co., 1910“The truth is that men pass under strong influences of time that fill them more than with wine, rather with an entirety of life. The time in which a man lives may be an exalted time or a weary one, but it fills him altogether, whether it is on fire or drowned. He can conceive, as a rule, nothing in the future different from the temper of his time, though there is all the past to teach him his folly. If he makes a picture of the future, that picture is a mere extension of his own tiny and ephemeral experience, and the more confidently certain he is of that future the more rigidly is it seen by the critical onlooker to be a puppet dressed up in the clothes of the present.
All these things Dunoyer’s careful book upon two men of the Revolutionary Tribunal, a monograph characteristic of that ceaseless and immense research which dignifies the modern French School of History, has suggested to my mind.
Now, whenever I read of the Revolution, in general or in particular, while that lesson of the folly of prophecy perpetually returns to me, yet something else rises from the page. In a certain sense, almost in a mystical sense, the periods of profound faith in a particular future were right. Not because the picture that they saw was true, but because those things outside time upon which they relied were and are true. And even to-day in the sheer anarchy and welter of the time we suffer there is a method of thought which has anchoring ground in the permanent fate of mankind. But what that method may be there is no space to discuss here.”
My Comment:
Belloc is less familiar to me than Chesterton, but it’s an ignorance I mean to remedy swiftly. I encountered him during childhood through his nonsense rhymes and modeled an early unpublished collection of light verse on them. I always meant to get around to reading more of him.
It’s one of the horrid things about governments that we have to spend so much time figuring out what new imposition they mean to levy on us that we have no time left over for things we actually enjoy. Some days I wonder if we wouldn’t be wiser to simply ignore what’s going on and live “underground,” hiding as much of our lives as we can from the powers that be.
The Belloc passage I posted expresses a conundrum that often troubles me and surfaced in an article I posted a while ago by Naomi Wolf, in which she compares the US government to the Nazis. Joey Kurtzman correctly called this historically inaccurate. I concurred with Kurtzman, but still agreed that Wolf had said something “true,” even if partially inaccurate.
This I take to be the substance of what Belloc is saying. Our predictions are always intensely colored by the particular time in which we live and thus are always suspect. But at moments of crisis - revolutionary moments - we can nonetheless correctly predict the direction of the future, not because of any perspective lent to us by the time in which we live, but because of something outside time, some truth beyond particularity. That is what seizes us and speaks through us…
PS: I corrected the title of this post, from “Hilaire Belloc on the effect of time” to “Hilaire Belloc on prophecy and time” for the sake of clarity.
Tom Woods On Wealth Creation
Nice finale to Tom Woods’ piece at Taki Magazine, putting an end to some superstitions about labor and wealth:
“Leaving aside the odd view that only manual laborers engage in “work,” all the brawn in the world could never have produced a steam engine or a Pentium processor. Only when informed by the knowledge of inventors and supplied with the capital saved by capitalists can the average laborer produce the tiniest fraction of what he is today accustomed to producing. The central ingredient in a laborer’s physical productivity is the equipment and machinery at his disposal. There is nothing natural or inevitable about the availability of this productivity-enhancing capital equipment. It comes from the wicked capitalists’ abstention from consumption, and the allocation of the unconsumed resources in capital investment. This process is the only way the general standard of living can possibly rise. Hartmann thinks it’s just swell to tax it.
The increases in the productivity of labor that additional capital makes possible, by increasing the overall amount of output and thereby increasing the ratio of consumers’ goods to the supply of labor, make prices lower relative to wage rates and thereby raise real wages. That’s why, in order to earn the money necessary to acquire a wide range of necessities, far fewer labor hours are necessary today than in the past—say, 1950 or 1900. Thanks to capital investment, which is what businesses engage in when their profits aren’t seized from them, our economy is far more physically productive than it used to be, and therefore consumer goods exist in far greater abundance and are correspondingly less dear than before……
Hartmann’s argument runs, in effect: “Citizen, you need to be looted in order to stabilize the system [a nonsensical idea Hartmann came across in the popular Keynesianism that forms the entirety of his economic knowledge]. Let us hear no more anti-social talk about your so-called rights. All hail The System! Wherever would we be without the stabilizing power of violence!”
As for the nonsense about FDR’s New Deal “stabilizing us”—and the perverse argument that our economy will never be stable unless the people are violently expropriated—check out economist Robert P. Murphy’s new book The Politically Incorrect Guide to the Great Depression and the New Deal. Its playful title notwithstanding, this book mercilessly bludgeons thoughtless clichés like this.
At least the mafia has the decency not to put such transparently phony claims over on you. They’re honest: we’re taking your money because we have power, and you don’t.
What it all boils down to is this: one side of our political spectrum favors the central planning of Iraq, while the other favors the central planning of Americans. We can only hope for the continued growth of a third side, one that rejects as unworthy of a free people all the superstitious nonsense about the magical powers of our overlords, whether that power is exercised at home or abroad.”
Paul, Rockwell - Freedom Watch 2 PM EST Today
Rep Ron Paul, Daniel Hannan, Lew Rockwell, Jason Sorens, R.J. Harris, Cody Willard & Shelly Roche, Free State Project, Secession, Nationalization FREEDOM WATCH 2PM EST TODAY (Wed., Apr. 29th)! http://www.foxnews.com/strategyroom
Carson Versus Marks On Libertarianism And Scarcity
An interesting exchange from The Libertarian Alliance’s website on libertarianism and scarcity, with Kevin Carson responding to Paul Marks’ critique of his work:
[Marks]
“Neither land nor capital are [sic] “artificially scarce” - they are just scarce (period). There are billions of people and only a certain amount of land and machinery? .[T]he idea that land and capital are only scarce [emphasis mine] compared to the billions of people on Earth because of either wicked governments or wicked employers (or both) is false.”
[Carson]
First, simply to get the second part of Mr Marks’ statement out of the way, I nowhere asserted that all scarcity of land and capital is artificial. I argued only that they were more scarce, as a result of state-enforced privilege, than they would otherwise be, and that returns on land and capital were therefore higher than their free market values. In any case, as Franz Oppenheimer observed, most of the scarcity of arable land comes not from natural appropriation, but from political appropriation. And the natural scarcity of capital, a good which is in elastic supply and which can be produced by applying human labor to the land, results entirely from the need for human labor for its creation; there is no fixed limit to the amount available.
But getting to his main point, that land and capital are not artificially scarce, I’m not sure Mr Marks is even aware of his sheer audacity. In making this assertion, he flies in the face of a remarkable amount of received libertarian wisdom, from eminences as great as Mises and Rothbard. As a contrarian myself, I take my hat off to him.
Still, I wonder if he ever made the effort to grasp the libertarian arguments, made by Rothbard et al, that he so blithely dismisses. Is he even aware of the logical difficulties entailed in repudiating them? Does he deny that state enforcement of titles to land that is both vacant and unimproved reduces the amount available for homesteading? Does he deny that the reduced availability of something relative to demand is the very definition of “scarcity,” or that the reduction of supply relative to demand leads to increased price? Or is his argument rather with Rothbard’s moral premises themselves, rather than the logical process by which he makes deductions from them? I.e., does he deny that property in unimproved and vacant land is an invalid grant of privilege by the state, and thereby repudiate Locke’s principle of just acquisition?
It seems unlikely, on the face of things, that Mr Marks would expressly repudiate Mises and Rothbard on these points. After all, elsewhere in his critique he cites Human Action and Man, Economy and State as authorities. Perhaps he just blanked out on the portions of their work that weren’t useful for his apologetic purposes.
In any case, if he does not repudiate either Rothbard’s premises or his reasoning, Mr Marks has dug himself into a deep hole. For by Rothbard’s Lockean premises, not only the state’s own property in land, but “private” titles to vacant and unimproved land, are illegitimate. Likewise, titles derived from state grants are illegitimate when they enable the spurious “owner” to collect rent from the rightful owner - the person who first mixed his labor with the land, his heirs and assigns. And the artificial scarcity of land resulting from such illegitimate property titles raises the marginal price of land relative to that of labor, and forces labor to pay an artificially high share of its wages for the rent or purchase of land….”
Pete Peterson’s Not-So-Clean Crusade Against Entitlements
Peter G. Peterson, the co-chairman of the private equity firm, The Blackstone Group, is also president of the Concord Coalition , a bi-partisan group devoted to what it calls “fiscal responsibility,” which seems to be largely given to public advocacy of social security and medicare (entitlements) cuts.
I’m interested in Peterson, because of the way he keeps popping up into things.
First, as I noted in a blog post a couple of months back, he’s become the backer of the film, I.O.U.S.A., directed by Patrick Creadon, which is loosely based on the book, “Empire of Debt,” (Bonner & Wiggin, 2005). I noted at the time the difference between the libertarian arguments of the book (which critiques the Federal Reserve) and the film’s noticeable silence on the Federal Reserve. In fact, the film spends a great deal of time on some of the very people who enabled the current debt crisis, including Alan Greenspan.
Second, I notice that Peterson has been using the film to argue that entitlement spending is out of control and needs to be cut back, etc. etc., an argument that progressive economist Dean Baker correctly calls morally bankrupt, given that this administration just bailed out some of the most irresponsible gamblers in the banking industry.
Third, I notice that Tim Geithner has given BlackRock three no-bid contracts to manage the Fed’s portfolio of troubled securities, according to a NY Times piece yesterday (April 27). BlackRock has close connections to Blackstone (where it was once the asset management division) and to the NY Fed.
That prompted me to do some digging around and I came across this interesting piece on Peterson, “A Crusader in Clover,” by John Hess at FAIR (Fairness and Accuracy in Reporting).
“While he is reticent about his [Peterson's] income, Vanity Fair put his take-home in 1992 at $7 million, not an excessive sum for an investment banker of his rank. His partner Stephen Schwartzman, who is regarded in the financial press as the sparkplug of their firm, the Blackstone Group, said that year that investors in its venture fund should expect returns of 25 to 30 percent during the 1990s—again, not unreasonable, since the Dow Jones average rose more than 26 percent last year.
Such rates of return are, again, piquant, because Peterson has described the indexation of Social Security, which lately has raised benefits by roughly 3 percent a year, as “one of the greatest fiscal tragedies of American history.” Piquant? Wait. Peterson was at President Nixon’s side as his economic adviser and secretary of commerce when that “tragedy” was enacted in 1972. (Conservatives thought making the cost-of-living adjustment automatic would deter Congress from voting more generous benefits.)
Peterson denounces the “mad, drunken bash” of the Reagan years. That would be the time when the top income-tax rate was cut from 70 percent to 28 percent, military spending went sky-high, and trillions were made (and lost) on savings and loans and takeovers financed by junk bonds. He was himself, of course, making out like a bandit, hustling for his share of the action, and contributing his bit to Republican campaign funds. He also led a chorus of corporate executives who keened about the exploding federal deficit. His contribution was a key series of articles in the New York Review of Books in 1982 (12/2/82, 12/16/82) that prepared the intellectual climate for the 1983 Social Security “rescue,” which raised payroll taxes and lowered benefits.
The series purported to prove with mathematical certainty that the entitlements of the elderly were snatching food from babies and driving the nation toward bankruptcy. George Will called it “the most important journalism of 1982.” (Washington Post, 12/19/82). Its charts persuaded such liberals as Tom Wicker and Anthony Lewis. Leslie Stahl of ABC said Peterson “really began to educate me.” (She has since repaid the favor with appearances by her mentor on 60 Minutes.)
All the journalists he met seemed impressed by his expertise, and by his generosity in offering to surrender his own entitlements. It does not seem to have occurred to any of his interviewers that a rise of 1 percentage point in his income tax rate would cost him perhaps twice as much as his Social Security and Medicare benefits combined. Nor have any observed how policies he has supported have transferred the tax burden from the wealthy to the wage earner.
Indeed, in Facing Up, Peterson remarks with pleased surprise that nobody had clamored for a cut in the Social Security payroll tax to match cuts in benefits….”
Ivan Eland on Evaluating a President’s First Hundred Days
Ivan Eland of the Independent Institute has a piece at The San Francisco Chronicle on how presidents are evaluated….and how they should be evaluated:
“Surprisingly, Democrats Jimmy Carter and Bill Clinton actually reduced government spending as a fraction of GDP. Dwight Eisenhower, the best of the modern Republican presidents on this score, held spending roughly constant as a portion of GDP. Carter also deregulated four major industries - financial services, energy, communications and transportation - and eventually appointed a Federal Reserve chairman who set a precedent for a tight monetary policy, which ultimately led to national prosperity during the Reagan and Clinton years. Reagan continued Carter’s deregulation but weakened it.
Bias Toward Activism
The fact is: Most presidential scholars have a bias toward activism rather than outcomes.
A president who creates new government programs to deal with societal problems generally will be rated as a better president than one who deals more cautiously - and cost-effectively - with problems. This is true even if the activist president’s programs do little good or even exacerbate the problems they were intended to solve.
Thus, Johnson and Roosevelt receive high ratings from most historians, though many of Roosevelt’s economic-recovery programs were wasteful and ineffective, and many of Johnson’s Great Society programs increased government dependency and made poverty more intractable. Bush added a Medicare drug benefit - the first new entitlement program since the Great Society - to a system more insolvent than Social Security. And while Reagan is remembered by historians as an advocate of small government, he expanded government substantially.
Presidents should be judged on results. And results should be measured not by the number of new laws passed, the size of a stimulus bill or the number of jobs added or saved during the president’s term.
Results should be measured by the degree to which his actions, or his deliberate inaction, contribute to peace, prosperity and liberty.”
My Comment:
This is a very thoughtful piece and it highlights one of the worst traits of democracy - the incessant pressure from voters to act, to show results.
Interestingly, that’s also one of the underlying reasons behind the increasing volatility of markets today. Firms and analysts are more and more driven by quarterly performances, which results in all-kinds of short-term juggling of balance-sheets. In turn, that contributes to overall market volatility.
In politics, the relentless pressure to act- to take charge - is equally dangerous, because it feeds the delusion that the economy can be made to do what you want in some direct, hands-on fashion.
Well, what about leadership, you might ask? Isn’t there something a leader can do?
This again depends on what you think of the notion of leadership. I’ll reserve my thoughts on that for a separate post, but for now I’ll say that what seems to be required today is an appearance and demeanor acceptable to the masses of voters. That’s what “charisma” amounts to.
In practice, this means how well a person can read a teleprompter, how personable they are on TV, how personable their family is, how decisive their utterances seem, and so on.
Now, since that varies with the moods of the voters, it follows that opinion-testing (polls, focus groups) becomes very central to this notion of leadership.
And, opinion-testing is often nothing more than opinion-forming. The leader molds the crowd, and the crowd in turn molds the leader.
This two-way dynamic is also influenced by expert opinion. You would normally suppose that that would exert a moderating influence on the activism of a president. Experts, you’d think, would provide some of the ballast, the weighting to hold back the crowd - along the lines of the role originally conceived for the Senate, for instance.
But the expert class - and I’ve discussed this at length in The Language of Empire - also has an inbuilt bias toward activism.
Ergo, everything tends to make presidents more activist than it’s wise for them to be.
A Physician Owned Surgery Center
Thanks to a reader for sending this in:
The Surgery Center of Oklahoma
Check out the costs of different procedures below. They are far below standard costs.
I hope the information helps someone in need of inexpensive alternatives.
Please note that I am not a medical expert of any kind and have not checked this facility. I know nothing about the quality and posted it here simply to show readers that there are alternatives. It’s up to each person to check, do their research, and ask questions. I take no responsibility for anyone who uses this facility and is dissatisfied, injured, or hurt in any way.
From the website:
“It is no secret to anyone that the pricing of surgical services is at the top of the list of problems in our dysfunctional healthcare system. Bureaucracy at the insurance and hospital levels, cost shifting and the absence of free market principles are among the culprits for what has caused surgical care in the United States to be cost prohibitive. As more and more patients find themselves paying more and more out of pocket, it is clear that something must change. We believe that a very different approach is necessary, one involving transparent and direct pricing.
Transparent, direct, package pricing means the patient knows exactly what the cost of the service will be upfront. Fees for the surgeon, anesthesiologist and facility are all included in one low price. There are no hidden costs, charges or surprises.
The pricing outlined on this website is not a teaser, nor is it a bait-and-switch ploy. It is the actual price you will pay. We can offer these prices because we are completely physician-owned and managed. We control every aspect of the facility from real estate costs, to the most efficient use of staff, to the elimination of wasteful operating room practices that non-profit hospitals have no incentive to curb. We are truly committed to providing the best quality care at the lowest possible price.”
Activism: Audit the Fed
Sign up and call your representative on this important initiative:
Support HR 1207 and S 604 - AUDIT THE FED
Living Without Health Insurance
I have a new piece at Lew Rockwell, with some tips for people who might be interested in doing without health insurance for a couple of years:
(Legal Disclaimer:
I am not a medical or legal expert and anything written in the article should not be construed as medical or legal advice. Readers should consult their own physician and attorney before making a decision about their insurance or about self-medication.
I am not in anyway responsible for any harm or injury that might come to a reader as a result of reading this article or from following therapies mentioned in it.
Neither I nor any publisher of this piece on a website or in print form, is in any way liable for any injury or harm sustained from following any recommendation whatsoever in this article (or any recommendation arising from it) in this country, or any other, now, or in the future).
“I stopped carrying health insurance over five years ago for many reasons that I won’t get into here. It wasn’t a big decision, because I’d done without it for a couple of years when I was between jobs
In any case, when I had it, it was never much use. I was misdiagnosed on a couple of things and ended up having to treat myself. I got to resenting the way some doctors never really listened. I bridled at having my questions treated like the uninformed babble of a simpleton.
And since I had to pay most of the bill for “maintenance” items like vision and dentistry anyway, dropping insurance altogether seemed like the logical thing to do.
That doesn’t mean it will work for you, though. Especially if you have an on-going illness, be sure to do your own due diligence.
Still, if you’re a relatively healthy person, if you’re cash-strapped or need to pay off a debt, or if you want to strike out in a new direction on your own, you might find my tips useful in helping you go insurance-free for a couple of years.
Or even longer.
You’ll worry less about doing without those “bennies” you’ve got used to for so long. And the less worried you are over going it alone, the more you’ll be able to stand up to the big lie of modern life – that people need the government to survive.
Dollar Surprise
From Chris Gaffney, Vice-President of Everbank:
“As most would predict, the Mexican peso (MXN) has dropped significantly, moving down almost 3% versus the U.S. dollar overnight. Fears of a global pandemic have driven investors out of the high yielding currencies of New Zealand (NZD), Australia (AUD), and Brazil (BRL). Risk aversion seems to be back in vogue, with investors moving funds back into U.S. Treasuries and the Japanese yen (JPY).
I read a story over the weekend that suggested the U.S. dollar would continue to strengthen no matter what happens in the global economy. The story said that the U.S. dollar would increase if the administration’s efforts to stimulate our economy worked, and that we would lead the rest of the globe into the recovery phase. On the other hand, it said that the U.S. dollar would also strengthen if the global economy continued to weaken, as investors would purchase U.S. Treasuries as a safe haven.”
My Comment:
This insight about the performance of the US dollar has also been mine.
De-leveraging (which is the collapse of asset values as they’re sold to pay off debt) is going on now all over the world in different asset classes. And de-leveraging mostly needs the US dollar.
In spite of a few sharp corrections downward, that’s what has held the dollar index (DX) up for a bit longer than dollar bears had anticipated.
Holding up, of course, is not the same as “bull market”.
The dollar’s fundamentals are still bad.
I don’t have hopes for any currency tied to a government behaving so recklessly. I hesitate to write this, but some of the high-level corruption we’ve seen is actually beyond third-world.
I say this with no schadenfreude. It’s deeply, traumatically, disturbing to find so much rot at the heart of the global financial system. At the very core of the “international community, ” if you will.
The worst criticism of imperialism, or of statism, or of financial corruption didn’t prepare me for this.
And it makes me very afraid.
What example does such behavior set? What message does it send to a world which takes its cue from the West, and from the US in particular. Can we really expect better from other governments?
NY Times Wises Up to Banking Cartel (Update)
Finally. The New York Times is on the case.
(About a decade too late. But we’ll take an awakening whenever it comes and wherever, as we’ve said before).
At The Times, criticism of Tim Geithner’s insider status:
“A revolving door has long connected Wall Street and the New York Fed. Mr. Geithner’s predecessors, E. Gerald Corrigan and William J. McDonough, wound up as investment-bank executives. The current president, William C. Dudley, came from Goldman Sachs.
Mr. Geithner followed a different route. An expert in international finance, he served under both Clinton-era Treasury secretaries, Mr. Rubin and Lawrence H. Summers. He impressed them with his handling of foreign financial crises in the late 1990s before landing a top job at the International Monetary Fund.
When the New York Fed was looking for a new president, both former secretaries were advisers to the bank’s search committee and supported Mr. Geithner’s candidacy. Mr. Rubin’s seal of approval carried particular weight because he was by then a senior official at Citigroup.”
More at “Geithner, Member and Overseer of Finance Club,” Joe Becker and Gretchen Morgenson.
My Comment:
Here at The Mind-Body Politic, your diligent commentator makes it a point to cite people, even if they don’t reciprocate, so we will note appreciatively that Ms. Morgenson did the leg work that outed Goldman Sachs for its presence at the AIG bail-out (September 30, 2008). She deserves every credit for it.**
But that said, it still remains true that mainstream journalists today are moved less by the need to keep the public informed at the critical time than to bolster their reputations. That is really too bad and it’s why, increasingly, so many people disdain the press. Imagine doctors who watched the patient bleed and didn’t share information about his condition so they could “break” the case for themselves? What sort of professional ethic would that be?
Blogging and writing down intuitions as they occur is the only way of putting valuable information out into the public realm as fast as possible, so as many people can push back from as many angles as possible. That’s the only way to keep up the pressure on public officials. I could not ethically hold back on my insights, just to avoid having other people take them without acknowledgment. You’d think better positioned journalists would act with equal public spirit, especially as they - unlike bloggers - are paid rather well to do so.
Writing critically about Tim Geithner in 2009, after the milk’s been spilled, and when it’s public knowledge is one thing. Much better for the Times to have written about Geithner a few years ago, when it counted.
This is precisely why the reputation of the mainstream media among people who follow such things is a little below that of a loan officer at Fannie Mae.
Update:
Apparently, this piece provoked reaction elsewhere in the blogosphere, with Yves Smith at Naked Capitalism claiming that the piece is too kind to Geithner and Paul Kedrosky finding no smoking gun in all of it. Over at Portfolio.com, Ryan Avent sees it as evidence of Geithner being much less of an establishment figure, much less timid, than people think.
My own sense is that Geithner is more of a scape-goat, a convenient prop to beat up on. It’s the figures behind him, Rubin, Summers, Volker, (and a few others whom I’ll post on later), who are the important players.
As a further aside:
Note this sidebar from The Times (September 28, 2008):
The Reckoning: A Spreading Virus: Articles in the series are exploring the causes of the financial crisis
In the last two years, NRR , The New York Times , and a few other places, have repeatedly used the word “reckoning” for the financial crisis, as well as a a few other terms. They sound strangely reminiscent of my co-author’s very popular newsletter, The Daily Reckoning - well known to DC and NY financial circles. I’ve seen arguments from said missive (as well as from “Mobs”) lifted wholesale….
No one owns words or phrases or ideas. Or leads. There is no monopoly on them. And all writers are only too happy to have people read them, no matter what.
But political journalism is not simply any journalism. It plays a vital part in the creation and preservation of public memory. And that memory, that record, is essential to monitoring the state - which is the role of the fourth estate. Journalistic ethics, which cannot be enforced in the courts alone, demands a degree of personal integrity to function as it should in creating and preserving that record.
With notable exceptions, this integrity is not much in supply any longer.
So, while stoning the banking cartel for its sins, let’s keep a few chunky pebbles for the media cartel.
Footnote:
**[I wrote a piece on AIG and Goldman Sachs the week before Morgenson's piece. My piece was widely disseminated in the blogosphere (and to members of Congress, I learn from readers) and since Morgenson had never written critically about Goldman's insider ties with AIG before, I have more than a suspicion she took the lead from that piece -- "Lipstick On An AIG" (Counterpunch, September 18-19, 2008)].
PS. I wrote both Morgenson and Jim Pinkerton (who mentioned Morgenson’s story on TV the following weekend), requesting correct attribution. There was no reply.
To the reader who writes to me that such imitation is a form of flattery, I wish….
It has nothing to do with flattery. It’s an attempt to co-opt language. It’s a way of muddying the waters. It’s revisionism. And its goal is to steer your mind the way that opinion-makers (who only voice choices within a carefully vetted spectrum) would have it go. Don’t be misled by the apparent opposition between the left and the corporate class. Communists and capitalists have always colluded when necessary. Certain kinds of capitalists (corporatists) love the state and they love communism — for you.
They know they’re always going to get the perks and privileges of the ruling class, while equality for everyone else makes for a pliable, governable body politic…
Bernanke and Paulson Pressured BOA-Merrill Merger
More evidence of behind-the-scenes string-pulling in the banking crisis:
NEW YORK (Reuters) -
Bank of America Corp CEO Kenneth Lewis testified under oath that Federal Reserve Chairman Ben Bernanke and then-Treasury Secretary Henry Paulson pressured him to keep quiet about losses at Merrill Lynch & Co, which the bank was buying, the Wall Street Journal reported.
Testifying before New York Attorney General Andrew Cuomo in February, Lewis said “it wasn’t up to me” to reveal Merrill’s fourth-quarter losses as they were becoming apparent in December, the newspaper said, citing a deposition transcript.
Shareholders of Merrill and Bank of America voted to approve the merger on December 5, and the transaction closed on January 1. Bank of America subsequently reported that Merrill lost $15.84 billion in the fourth quarter.
At Bank of America’s April 29 annual meeting, shareholders will vote on whether to force Lewis to step down as chairman of the largest U.S. bank or leave its board, because of Merrill and a falling share price…”
Read more at Reuters
My Comment
Why do people think nationalization will improve matters?
We’ve nationalized already…. unofficially.
Making it official won’t improve anything. It will just get people to accept what’s going on and legitimize the swindle.
We’re like bystanders at a mugging fighting over who ought to get the money the mugger left behind when he fled.
No. See mugging, call cops.
That’s how it’s supposed to go.
IMF: G-20 Fiscal Stimulus On Target
In the news:
The IMF says the G-20 fiscal stimulus will reach its 2% target.
Bloomberg reports on the figures spent so far:
“The G-20 countries will spend $820 billion on stimulus measures in 2009, up from a March estimate of $780 billion, and will spend $660 billion in 2010, the fund estimated.
The IMF also revised its forecast for budget deficits in G- 20 countries as a result of fiscal expansion. Today’s report calculates that budget deficits in the G-20 this year will increase by 5.5 percentage points of gross domestic product relative to 2007 and 5.4 percent in 2010. In March, the fund forecast a 4.7 percentage-point rise this year and a 5.1 percentage-point jump next year.
Strauss-Kahn said yesterday that governments should start to discuss “exit strategies” from the emergency spending once the crisis passes.
The fund’s estimate for financial-sector support also increased today to 32.1 percent of GDP, up more than 3 percentage points from the March estimate….”
My Comment (check back for more):
Domininique Strauss-Kahn, a member of the Socialist party and a former finance and economy minister in Lionel Jospin’s “Plural Left” government became the new managing director of the International Monetary Fund on September 2007, replacing Spain’s Rodrigo de Rato.
Interesting things to note about Strauss-Kahn:
- He’s part of the European Council on Foreign Relations, launched in October 2007 (i.e. just after DSK became IMF chief), which in an expression of pan-Europeanism in world affairs. Rubbing shoulders with DSK, according to Source Watch are such notable globalists as George Soros (Chairman of the Open Institute), Stephen Wall (Chairman of the influential PR firm Hill & Knowlton, advisor to Tony Blair), and Timothy Garton Ash (whose influential book, The Magic Lantern, cheered on the 1989 revolutions in Eastern Europe). Note: Hill & Knowlton was the outfit that concocted the story about Iraqi soldiers killing babies that became a provocation for the 1991 Gulf War.
- Strauss-Kahn has been linked to the financial scandal around ELF Aquitaine, a state-owned oil giant through which former President Francois Mitterand allegedly channeled money to Germany’s Christian Democrats. Strauss-Kahn’s wrong-doing was apparently less serious than some of the fraud and corruption with which other French government officials and company heads were charged (including money-laundering, influence peddling, falsification of documents, and bribery)
- Money from the ELF oil company, as well as from the Taiwan frigates scandal, passed through “unpublished accounts” at Clearstream Banking, the clearing division of Deutsche Bourse, based in Luxembourg. The ELF affair and the Taiwan frigates scandal were the two major financial scandals that hit France in the 1990s. And in both, Clearstream was a platform for money-laundering and tax evasion.
Indian Business Students Drive Sales Of Mein Kampf
“Sales of Mein Kampf, Adolf Hitler’s autobiography and apologia for his anti-semitism, are soaring in India where business students regard the dictator as a management guru.
Booksellers told The Daily Telegraph that while it is regarded in most countries as a ‘Nazi Bible’, in India it is considered a management guide in the mould of Spencer Johnson’s “Who Moved My Cheese”.Sales of the book over the last six months topped 10,000 in New Delhi alone, according to leading stores, who said it appeared to be becoming more popular with every year.
Several said the surge in sales was due to demand from students who see it as a self-improvement and management strategy guide for aspiring business leaders, and who were happy to cite it as an inspiration.
“Students are increasingly coming in asking for it and we’re happy to sell it to them,” said Sohin Lakhani, owner of Mumbai-based Embassy books who reprints Mein Kampf every quarter and shrugs off any moral issues in publishing the book.
“They see it as a kind of success story where one man can have a vision, work out a plan on how to implement it and then successfully complete it”.
More at The Telegraph, UK”
My Comment
April 20 was Hitler’s birthday and I suppose the anniversary provides the justification for stories like these. Mein Kampf is a book that I’ve never read myself and haven’t felt curious enough to read, either . It’s apparently selling briskly to Indian students, not for its anti-semitism but for the inspiration it provides management students.
More mischievously, the article goes on to insinuate a link between Gandhi and the Nazis.
There was one, but nothing that would please any Nazi-hunter. Gandhi was not unusual in seeing the European war as intra-imperial and seemed to think that satyagraha would work on the Germans as well as it had done on the British.
He went so far as to advise Jews to let themselves fall before the Nazis as a kind of sacrificial gesture that would turn the consciences of their oppressors. Many scholars have - unsurprisingly - reacted to this with repugnance, but the advice was more a symptom of Gandhian quixotry than anti-Semitism - conscious or unconscious.
Solzhenitsyn On Conscience
Alexandr Solzhenitsyn on developing a point of view:
“In First Circle, the young diplomat Innokenty Volodin lived a life of prosperity and comfort. As the privileged child of a hero of the Revolution he had married into a prominent family and advanced in the Soviet diplomatic service. But he became alienated from it all: he “lack(ed) something: he didn’t know what” (p. 341).
Upon examining the old fashioned ideas of his deceased mother in her diaries, his perspective on life changed from one of an Epicurean pleasure-seeking to one of ethical regard. He developed a “point of view”: Up to then the truth for Innokenty had been: you have only one life.Now he came to sense a new law, in himself and in the world: you also have only one conscience. And just as you cannot recover a lost life, you cannot recover a wrecked conscience [p. 345]
Moral choices are often the consequence of accumulated culture, happenstance or social institutions, and as such judging others’ moral choices must be done with compassion and humility. Solzhenitsyn contemplates rather extensively his rejection of an offer to join the Soviet internal police force, the NKDV, when he was a young communist in Rostov in the late 1930’s:
“The NKVD school dangled before us special rations and double or triple pay …
It was not our minds that resisted but something inside our breasts. People can shout at you from all sides: “you must!”… inside our head can be saying also: “You must!” But inside your breast there is a sense of revulsion, repudiation. I don’t want to. It makes me feel sick. Do what you want without me; I want no part of it …. Without even knowing it ourselves, we were ransomed by small change in copper that was left from the golden coins our great-grandfathers had expended, at a time when morality was not considered relative and when the distinction between good and evil was very simply perceived by the heart.” –[Gulag Archipelago, p. 160].
This leads to a rather subtle and non-judgmental view of good and evil. Evil is very real and very wrong, but no human being is authorized to become too self-righteous in its condemnation: but for the grace of God go I.
In Gulag Archipelago Solzhenitsyn says quite emphatically:
“So let the reader who expects this book to be a political expose slam its covers shut right now. If only it were all so simple! If only there were evil people somewhere insidiously committing evil deeds, and it were necessary only to separate them from the rest of us and destroy them. But the line dividing good and evil cuts through the heart of every human being. And who is willing to destroy a piece of his own heart? During the life of any heart this line keeps changing place; sometimes it is squeezed one way by exuberant evil and sometimes it shifts to allow enough space for good to flourish. One and the same human being is, at various ages, under various circumstances, a totally different human being. At times he is close to being a devil, at times to sainthood. But his name we ascribe the whole lot, good and evil.
Socrates taught us: Know thyself!
“Confronted by the pit into which we are about to toss those who have done us harm, we halt, stricken dumb: it is after all only because of the way things worked out that they were the executioners and we weren’t.” [p. 169]
“To do evil a human being must first of all believe that what he’s doing is good, or else that it’s a well-considered act in conformity with natural law. Fortunately, it is in the nature of the human being to seek a justification for his actions. Macbeth’s self-justifications were feeble - and his conscience devoured him. Yes, even Iago was a little lamb too. The imagination and the spiritual strength of
Shakespeare’s evildoers stopped short at a dozen corpses. Because they had no ideology.Ideology - that is what gives evildoing its long-sought justification and gives the evildoer the necessary steadfastness and determination. That is the social theory which helps to make his acts seem good instead of bad in his own and others’ eyes, so that he won’t hear reproaches and curses but will receive praise and honors.”
Guantanamo Detainees Are Not “Persons”
From Raw Story, Friday, April 24, 2009
“A Court of Appeals for the Washington, D.C. Circuit ruled Friday that detainees at the U.S. military prison at Guantanamo Bay, Cuba, are not “persons” according to it’s interpretation of a statute involving religious freedom.
The ruling sprang from an appeal of Rasul v. Rumsfeld, which was thrown out in Jan. 2008. “The court affirmed the district court’s dismissal of the constitutional and international law claims, and reversed the district court’s decision that the Religious Freedom Restoration Act (RFRA) applied to Guantanamo detainees, dismissing those claims as well,” the Center for Constitutional Rights said….”
A Depression Ditty
Alan G, the banker’s man
Cut the rate and away he ran
The books were cooked,
The thieves have booked,
Now Ben Bernanke’s
On the hook…I’ve decided that treating this whole business as a tragedy/calamity doesn’t do it justice. Ridicule, taunting, and scorn are the proper responses.
And some of that needs to be directed at our own selves.
We’ve lived comfortably in a society where “branding” and “image” are everything - substance is nothing.
We’ve lived comfortably with a two-tier education where brilliant people are routinely overlooked in favor of empty suits with friends in high places.
We were comfortable with millions of people all over the world subsidizing “free markets”..
We were comfortable with the morals and manners of the gangsters who are our elites, as long as the pendulum was swinging our way.
Now that it’s stopped and hit us, we’ve changed our tune.
How Much Land Does A Man Need?
“How Much Land Does a Man Need?” — Leo Tolstoi
Sections VII - IX“Pahom lay on the feather-bed, but could not sleep. He kept thinking about the land.
“What a large tract I will mark off!” thought he. “ I can easily do thirty-five miles in a day. The days are long now, and within a circuit of thirty-five miles what a lot of land there will be! I will sell the poorer land, or let it to peasants, but I’ll pick out the best and farm it. I will buy two oxteams, and hire two more laborers. About a hundred and fifty acres shall be plough-land, and I will pasture cattle on the rest.”
Pahom lay awake all night, and dozed off only just before dawn. Hardly were his eyes closed when he had a dream. He thought he was lying in that same tent and heard somebody chuckling outside. He wondered who it could be, and rose and went out, and he saw the Bashkir Chief sitting in front of the tent holding his sides and rolling about with laughter. Going nearer to the Chief, Pahom asked: “What are you laughing at?” But he saw that it was no longer the Chief, but the dealer who had recently stopped at his house and had told him about the land. Just as Pahom was going to ask, “Have you been here long?” he saw that it was not the dealer, but the peasant who had come up from the Volga, long ago, to Pahom’s old home. Then he saw that it was not the peasant either, but the Devil himself with hoofs and horns, sitting there and chuckling, and before him lay a man barefoot, prostrate on the ground, with only trousers and a shirt on. And Pahom dreamt that he looked more attentively to see what sort of a man it was that was lying there, and he saw that the man was dead, and that it was himself! He awoke horror-struck.
“What things one does dream,” thought he.
Looking around he saw through the open door that the dawn was breaking.
“It’s time to wake them up,” thought he. “We ought to be starting.”
He got up, roused his man (who was sleeping in his cart), bade him harness; and went to call the Bashkirs.
“It’s time to go to the steppe to measure the land,” he said.
The Bashkirs rose and assembled, and the Chief came too. Then they began drinking kumiss again, and offered Pahom some tea, but he would not wait.
“If we are to go, let us go. It is high time,” said he.
VII.The Bashkirs got ready and they all started: some mounted on horses, and some in carts. Pahom drove in his own small cart with his servant and took a spade with him. When they reached the steppe, the morning red was beginning kindle. They ascended a hillock (called by the Bashkirs a shikhan) and dismounting from their carts and their horses, gathered in one spot. The Chief came up to Pahom and stretching out his arm towards the plain:
“See,” said he, “all this, as far as your eye can reach, is ours. You may have any part of it you like.”
Pahom’s eyes glistened: it was all virgin soil, as flat as the palm of your hand, as black as the seed of a poppy, and in the hollows different kinds of grasses grew breast high.
The Chief took off his fox-fur cap, placed it on the ground and said:
“This will be the mark. Start from here, and return here again. All the land you go round shall be yours.”
Pahom took out his money and put it on the cap. Then he took off his outer coat, remaining in his sleeveless under-coat. He unfastened his girdle and tied it tight below his stomach, put a little bag of bread into the breast of his coat, and tying a flask of water to his girdle, he drew up the tops of his boots, took the spade from his man, and stood ready to start. He considered for some moments which way he had better go - it was tempting everywhere.
“No matter,” he concluded, “I will go towards the rising sun.”
He turned his face to the east, stretched himself, and waited for the sun to appear above the rim.
“I must lose no time,” he thought, “and it is easier walking while it is still cool.”
The sun’s rays had hardly flashed above the horizon, before Pahom, carrying the spade over his shoulder, went down into the steppe.
Pahom started walking neither slowly nor quickly. After having gone a thousand yards he stopped, dug a hole, and placed pieces of turf one on another to make it more visible. Then he went on; and now that he had walked off his stiffness he quickened his pace. After a while he dug another hole.
Pahom looked back. The hillock could be distinctly seen in the sunlight, with the people on it, and the glittering tires of the cart-wheels. At a rough guess Pahom concluded that he had walked three miles. It was growing warmer; he took off his under-coat, flung it across his shoulder, and went on again. It had grown quite warm now; he looked at the sun, it was time to think of breakfast.
“The first shift is done, but there are four in a day, and it is too soon yet to turn. But I will just take off my boots,” said he to himself.
He sat down, took off his boots, stuck them into his girdle, and went on. It was easy walking now.
“I will go on for another three miles,” though he, “and then turn to the left. This spot is so fine, that it would be a pity to lose it. The further ones goes, the better the land seems.”
He went straight on for a while, and when he looked round, the hillock was scarcely visible and the people on it looked like black ants, and he could just see something glistening there in the sun.
“Ah,” though Pahom, “I have gone far enough in this direction, it is time to turn. Besides I am in a regular sweat, and very thirsty.”
He stopped, dug a large hole, and heaped up pieces of turf. Next he untied his flask, had a drink, and then turned sharply to the left. He went on and on; the grass was high, and it was very hot.
Pahom began to grow tired: he looked at the sun and saw that it was noon.
“Well,” he thought, “I must have a rest.”
He sat down, and ate some bread and drank some water; but he did not lie down, thinking that if he did he might fall asleep. After sitting a little while, he went on again. At first he walked easily: the food had strengthened him; but it had become terribly hot and he felt sleepy, still he went on, thinking: “An hour to suffer, a life-time to live.”
He went a long way in this direction also, and was about to turn to the left again, when he perceived a damp hollow: “It would be a pity to leave that out,” he thought. “Flax would do well there.” So he went on past the hollow, and dug a hole on the other side of it before he turned the corner. Pahom looked towards the hillock. The heat made the air hazy: it seemed to be quivering, and through the haze the people on the hillock could scarcely be seen.
“Ah!” Thought Pahom, “I have made the sides too long; I must make this one shorter.” And he went along the third side, stepping faster. He looked at the sun: it was nearly half-way to the horizon, and he had not yet done two miles of the third side of the square. He was still ten miles from the goal.
“No,” he thought, “though it will make my land lop-sided, I must hurry back in a straight line now. I might go too far, and as it is I have a great deal of land.”
So Pahom hurriedly dug a hole, and turned straight towards the hillock.
IX.Pahom went straight towards the hillock, but he now walked with difficulty. He was done up with the heat, his bare feet were cut and bruised, and his legs began to fail. He longed to rest, but it was impossible if he meant to get back before sunset. The sun waits for no man, and it was sinking lower and lower.
“Oh dear,” he thought, “if only I have not blundered trying for too much! What if I am too late?”
He looked towards the hillock and at the sun. He was still far from his goal, and the sun was already near the rim.
Pahom walked on and on; it was very hard walking but he went quicker and quicker. He pressed on, but was still far from the place. He began running, threw away his coat, his boots, his flask, and his cap, and kept only the spade which he used as a support.
“What shall I do,” he thought again, “I have grasped too much and ruined the whole affair. I can’t get there before the sun sets.”
And this fear made him still more breathless. Pahom went on running, his soaking shirt and trousers stuck to him and his mouth was parched. His breast was working like a blacksmith’s bellows, his heart was beating like a hammer, and his legs were giving way as if they did not belong to him. Pahom was seized with terror lest he should die of the strain.
Though afraid of death, he could not stop. “After having run all that way they will call me a fool if I stop now,” thought he. And he ran on and on, and drew near and hear the Bashkirs yelling and shouting to him, and their cries inflamed his heart still more. He gathered his last strength and ran on.
The sun was close to the rim, and cloaked in mist looked large, and red as blood. Now, yes now, it was about to set! The sun was quite low, but he was also quite near his aim. Pahom could already see the people on the hillock waving their arms to hurry him up. He could see the fox-fur cap on the ground and the money on it, and the Chief sitting on the ground holding his sides. And Pahom remembered his dream.
“There is plenty of land,” though he, “but will God let me live on it? I have lost my life, I have lost my life! I shall never reach that spot!”
Pahom looked at the sun, which had reached the earth: one side of it had already disappeared. With all his remaining strength he rushed on, bending his body forward so that his legs could hardly follow fast enough to keep him from falling. Just as he reached the hillock it suddenly grew dark. He looked up - the sun had already set! He gave a cry: “All my labor has been in vain,” though he, and was about to stop, but he heard the Bashkirs shouting, and remembered that though to him, from below, the sun seemed to have set, they on the hillock could still see it. He took a long breath and ran up the hillock. It was still light there. He reached the top and saw the cap. Before it sat the Chief laughing and holding his sides. Again Pahom remembered his dream, and he uttered a cry: his legs gave way beneath him, he fell forward and reached the cap with his hands.
“Ah, that’s a fine fellow!” exclaimed the Chief. “He has gained much land!”
Pahom’s servant came running up and tried to raise him, but he saw that blood was flowing from his mouth. Pahom was dead!
The Bashkirs clicked their tongues to show their pity.
His servant picked up the spade and dug a grave long enough for Pahom to lie in, and buried him in it. Six feet from his head to his heels was all he needed….”
From The Kreutzer Sonata and Other Short Stories, by Leo Tolstoi
Don’t Blame Obama….or Bush…for Octo-Potus
Brian Doherty writes at American Conservative magazine:
“No call for liberty and constitutional principle seems convincing when Obama is arguing that those relying on government giveaways should have to follow government-set rules. That is, once you’ve allowed them to go ahead with the handouts, the political game is almost over. Under the guise of “managing the taxpayers’ money,” Obama and his crew are rewriting mortgages, deciding executive compensation, tossing out CEO’s. And note carefully that his plans for where taxpayers’ money should go continue to swell, from healthcare to the environment to energy policy to expanded “national service” programs. When taxpayers’ money is everywhere—and Obama is doing his best to make sure it is—then Obama’s control is everywhere.
The Octo-potus is claiming his space and flexing his grip. As far as he’s concerned, it’s Barack Obama’s country. We’re just living in it.”
My Comment:
This would be much more plausible if it were true that the vast majority of people opposed either Obama…or Bush.
But they didn’t.
They could have stood up to militarism..and jingoism…and government hand-outs…and bail-outs…and subsidies..
But they didn’t - that’s the crucial point.
The Octo-potus rules, because, when all’s said and done, that’s exactly the way we (whoever that nebulous creature is) wanted it.
Lila
Momentum Traders Slaughtered By Value Investors
“April 20 (Bloomberg) — Companies with the most debt and lowest returns on assets are turning the biggest six-week rally in stocks since 1938 into a bloodbath for last year’s best- performing trading strategy.
Investors using so-called quantitative momentum strategies — which speculate that the worst stocks in the past 12 months will continue to decline — have become this year’s biggest losers after banks and companies that rely on consumer spending surged. Quant momentum techniques may have lost 27 percent this month in the U.S., the most since at least 1993, while those in Europe may have dropped 20 percent in March and 24 percent in April, according to data compiled by JPMorgan Chase & Co.
“Not in a million years would we have expected this gyration to be as vicious and enduring as it has been,” Steven Solmonson, the head of Park Place Capital Ltd., a hedge fund that oversees $150 million, said in an interview from New York. “The quants got whipsawed badly.”
The turnaround battering investors who use mathematical models to pick stocks is making heroes out of last year’s worst- performing money managers. Bill Miller, who lost 55 percent in 2008 running the Legg Mason Value Trust after beating the Standard & Poor’s 500 Index for a record 15 straight years, is topping the measure again. Value investors buy companies that are the cheapest relative to their earnings or assets….”
More here at Bloomberg.
Hat-tip for the lead to Eddie Elfenbein at Crossing Wall Street
Will Grigg On Tax Eaters and Tax Victims
“There are no “Blue” states, only blue cities. The rural and much of the suburban population in both “Blue” and “Red” states consists of net payers of taxes; what Steven Malanga of the Manhattan Institute properly calls the “tax eater sector” is overwhelmingly an urban phenomenon (and former “community organizer” Barack Obama is a pure product of the urban tax parasite constituency Malanga describes).What this means, of course, is that the schism between urban tax-eaters and rural/suburban tax victims will grow steadily wider until something – either the present political/economic system, or the people ruled by it – collapses altogether.
With the government now little more than a full-service plundering arm of Wall Street, now is the best time for states to withdraw from the corporatist unitary state and repudiate its system of taxation, fiat money, inflation, and debt.
Unfortunately, if there is one thing that both Red State national socialists and Blue State socialist nationalists enjoy more than hating and baiting each other, it’s nurturing the prospect of ruling the other side – and this simply can’t be done if the “other side” if permitted the option of exercising the right to peaceful secession.
So the exercise in mutual self-oppression continues, and the “New Unhappy Lords” ruling from behind the scenes continue to make us poorer and less free….”
Mankiw’s Negative Fed Rate Proposal
This excerpt from a column on April 18 by Greg Mankiw (”It May be Time for the Fed to Go Negative,” New York Times) has been raising howls in the blogosphere:
“At one of my recent Harvard seminars, a graduate student proposed a clever scheme to [make holding money less attractive].
Imagine that the Fed were to announce that, a year from today, it would pick a digit from zero to 9 out of a hat. All currency with a serial number ending in that digit would no longer be legal tender. Suddenly, the expected return to holding currency would become negative 10 percent.
That move would free the Fed to cut interest rates below zero. People would be delighted to lend money at negative 3 percent, since losing 3 percent is better than losing 10.
Of course, some people might decide that at those rates, they would rather spend the money — for example, by buying a new car. But because expanding aggregate demand is precisely the goal of the interest rate cut, such an incentive isn’t a flaw — it’s a benefit….”
My Comment
I didn’t see this until today because I haven’t followed the economics blogosphere very closely recently. Post-TARP, it’s been awash with all sorts of schemes and proposals built on very flimsy foundations.
The numero uno objection to all of them is the notion that the economy is something that can be manipulated like a board game. It’s not.
Objection two is also obvious and also foundational. Any grand scheme based on taking illegally from someone what they’ve earned honestly (and I think it’s safe to say at least a few people here and there have earned their livings honestly) is morally wrong. What’s morally wrong on an individual level cannot be morally right on a grand scale, even if we allow for all sorts of prudential calculations, reservations about “the public good” and so on.
Objection three is that a crisis caused by excessive borrowing and spending is not plausibly solved by more spending and borrowing.
Objection four is that degrees in economics do not give you an understanding of how proposals might actually work in the real world. That takes common sense and some experience of how human beings actually function and build businesses.
Objection five is that theories are only very nebulous and hazy road maps with no correspondence to the actual terrain underneath. A theory which has never been tried before, let alone produced the results touted, is a very flimsy guide to follow.
Mish Shedlock takes on Mankiw here in more detail but quite unnecessarily, since the proposal is on its face absurd and impracticable.
You can see, however, that on this, the New York Times (ostensibly more left-ish) and the Washington Post (ostensibly more centrist) are both singing from the same page.
In my previous blog post, “Bernays and Citizen Parrot” I cited a Wash Po article, “When You’re Flush But Acting Flat Broke,” by Michael Rosenwald (April 16) that referenced the work of Robert Cialdini, a scholar of marketing. The Post piece was slanted to getting the consumer to go out and spend.
So, keep that in your mind. The two things the establishment wants right now are:
(1) Increased consumer spending
(2) Nationalization of banks
More spending means what? Putting your money (one of the few forms of control you exert over your circumstances) into someone else’s pocket. (I’m not opposed to this if you’ve got plenty saved, are getting a good deal and need what it is you’re buying, but that’s not the kind of savvy spending the powers that be are looking for).
Nationalization means what? Allowing the government to control the people in charge of lending you money…who are also the people holding your savings….who are also the people mainly responsible for getting us into this mess.
Forget all the deep explanations, economics theories, and punditry.
Just focus on those two things. Do they make sense to you right now, right here?
No? I thought not…..
De Crevecoeur: Letters From An American Farmer
The following is a description of Nantucket from De Crevecoeur’s Letters From An American Farmer, a literary account of the political principles informing the Declaration of Independence and Paine’s Common Sense:
“My simple wish is to trace them throughout their progressive steps from their arrival here to this present hour; to enquire by what means they have raised themselves from the most humble, the most insignificant beginnings, to the ease and the wealth they now possess; and to give you some idea of their customs, religion, manners, policy, and mode of living.
This happy settlement [Nantucket] was not founded on intrusion, forcible entries, or blood, as so many others have been; it drew its origin from necessity on the one side and from good will on the other; and ever since, all has been a scene of uninterrupted harmony. Neither political nor religious broils, neither disputes with the natives, nor any other contentions, have in the least agitated or disturbed its detached society. Yet the first founders knew nothing either of Lycurgus or Solon; for this settlement has not been the work of eminent men or powerful legislators forcing nature by the accumulated labours of art.
This singular establishment has been effected by means of that native industry and perseverance common to all men when they are protected by a government which demands but little for its protection, when they are permitted to enjoy a system of rational laws founded on perfect freedom. The mildness and humanity of such a government necessarily implies that confidence which is the source of the most arduous undertakings and permanent success. Would you believe that a sandy spot of about twenty-three thousand acres, affording neither stones nor timber, meadows nor arable, yet can boast of an handsome town consisting of more than 500 houses, should possess above 200 sail of vessels, constantly employ upwards of 2000 seamen; feed more than 15,000 sheep, 500 cows, 200 horses; and has several citizens worth 20,000L. sterling! Yet all these facts are uncontroverted. Who would have imagined that any people should have abandoned a fruitful and extensive continent filled with the riches which the most ample vegetation affords; replete with good soil, enamelled meadows, rich pastures, every kind of timber, and with all other materials necessary to render life happy and comfortable, to come and inhabit a little sand-bank to which nature had refused those advantages, to dwell on a spot where there scarcely grew a shrub to announce, by the budding of its leaves, the arrival of the spring and to warn by their fall the proximity of winter?
Had this island been contiguous to the shores of some ancient monarchy, it would only have been occupied by a few wretched fishermen, who, oppressed by poverty, would hardly have been able to purchase or build little fishing barks, always dreading the weight of taxes or the servitude of men-of-war. Instead of that boldness of speculation for which the inhabitants of this island are so remarkable, they would fearfully have confined themselves within the narrow limits of the most trifling attempts; timid in their excursions, they never could have extricated themselves from their first difficulties. This island, on the contrary, contains 5,000 hardy people who boldly derive their riches from the element that surrounds them and have been compelled by the sterility of the soil to seek abroad for the means of subsistence. You must not imagine, from the recital of these facts, that they enjoyed any exclusive privileges or royal charters or that they were nursed by particular immunities in the infancy of their settlement. No, their freedom, their skill, their probity, and perseverance have accomplished everything and brought them by degrees to the rank they now hold.…”
“Letters From an American Farmer,” by J. Hector St. John Crevecoeur (1735-1813) reprinted from the original ed., with a prefatory note by W.P. Trent and an introduction by Ludwig Lewisohn. New York, Fox, Duffield, 1904.
Aurobindo On The Material Life
“Material things are not to be despised — without them there can be no manifestation in the material world.”
– Sri Aurobindo
The Gita On Equanimity
“Neither by study of the Vedas, nor by austerity, nor by charity, nor by ritual, can I be seen in this form as you have seen Me. (11.53)
However, through single-minded devotion alone, I can be seen in this form, can be known in essence, and also can be reached, O Arjuna. (11.54)
The one who does all works for Me, and to whom I am the supreme goal, who is my devotee, who has no attachment, and is free from enmity towards any being attains Me, O Arjuna.”Bhagavad Gita, translated by Ramanand Prasad, Chapter 11: 53-55
My Comment
Free from enmity…well, you try. And what if you free yourself of enmity, but your enemies don’t remember to free themselves?
The teaching of equanimity in the Gita is very hard for me. Very much in the western tradition, I like my emotions…and cultivate them. But there are times when the Gita’s teaching becomes overwhelmingly necessary. Now is one of those times.
Black Swans and Nationalization: More On Media Memes
(This is the second half of the earlier post on Taleb cut and reposted here so as to be more readable)
As I wrote in my earlier post, I agree with everything in Taleb’s list of “black swan proofing” the economy, except two points:
As I see it,
(1) This financial crisis had NOTHING to do with Black Swans (and Taleb himself says so elsewhere, so this piece confuses me).
(2) Nationalization (which he seems to be supporting here…and it may be he has a different understanding of what is involved) is not the the right response, in my opinion.
A Black Swan refers to an unpredictable event. The financial crisis was predicted repeatedly, was completely foreseeable, and was indeed foreseen by Austrian theorists in writings throughout this century.
The financial industry spin doctors (I’m not including Taleb in this group - but I think his writing may be put to that use) have been working overtime to associate this mess with the notion of “black swans,” hence the centrality given to accounts of the blow-up by industry insiders, who have acted as if it were something unforeseeable (Greenspan and others - I’ll find the links).
Why?
Saving face could be one reason. But considering the level of corruption and malfeasance that we’ve seen so far, it’s more likely that the angle is being worked as a diversion from the obvious fact that the whole business seems at least partly engineered.
Equally important: by emphasizing the “unknown risk” angle, the industry also makes more control, regulation and centralization the natural option.
Do you see that?
Taleb is right about risk and Black Swans otherwise.
He’s a very smart guy and he certainly warned a lot about unknown risks and the foolishness of conventional wisdom.But he didn’t give the kind of detailed specific step-by-step account that Austrian economists, journalists, and theorists have done, not just in the last two years but for decades, predicting what would happen once the country went off the gold standard.
My own suspicions about Fannie and Freddie had nothing to do with risk or financial models. They arose from the clear and widespread evidence of fraud oozing in every direction from Goldman Sachs and the rest of the banking cartel, with Fannie and Freddie at the center. It didn’t need rocket science to see that. Just common sense and the ability to see through jive talk. “Don’t dazzle me with bull shit,” as an acquaintance of mine used to say, making up for any lack of metaphoric aptness with dead-on accuracy about human nature.
I’m not knocking Taleb whom I greatly admire. I’m knocking what’s being pushed through his writing.
As I said in an earlier blog post, the whole establishment is for nationalization. The same fellows who drove the bus that just wrecked itself.
Why listen to them?
Stick your fingers into your ears - NO NATIONALIZATION
This is not about ideology. It’s about transparency.
Nationalization in a small, incorrupt, transparent state of Vermonters is one thing.
Nationalization in the American empire, circa 2009, is another. It’s cover for a power grab. The reason it’s being pushed so hurriedly is because something is unraveling and a few too many people are catching on.
Don’t take my word for it.
Ask yourself why one of the savviest investors, Warren Buffett, thinks that the banking industry is on the verge of tremendous profitability.
Buffett has a stake in the banks, of course. But is what he’s saying entirely about chatting up his investment?
Ask yourself why Nouriel Rubini first advocated nationalization as though it were diametrically opposed to the position (private-public partnership) held by Larry Summers and Tim Geithner.
Ask why he didn’t let the public know he was in business with Summers .
Ask why it is that since that business connection was revealed, Roubini has now started saying that “nationalization” can proceed even with “private-public partnership”?
[Note: Roubini’s warning about the economic crash, made in September, 2006 to the IMF doesn’t seem to be available on the IMF site and any links I found on the web didn’t work. The closest I got to the actual speech was a reference at the IMF website in September 2007 to the 2006 speech.
Here’s an extended bio of Rubini at the IMF site that mentions the 2006 speech, but again there are no links.
Rubini’s own site has a link to his September 2007 speech which warns of a hard landing but no 2006 link.
On wiki, as well, there are no links to any 2006 predictions although there is a NY Times interview with Roubini from Sept. 2006 about the housing bubble, where he anticipates a housing bubble burst, with prices down 5-10% in a year in New York and perhaps 20-30% nationally. Honestly, in September 2006, everyone was saying that. Yours truly is on record calling the peak of the housing bubble in July 2005, as you can check from this website. And was much more detailed about it too. And I’m not an economist in the heart of the global financial order like Roubini.
Bottom line, except for this 2006 piece, which is very narrow in scope, limited to the housing bubble and quite modest in its predictions, there really is no other prediction of apocalypse I could find from2006 that would qualify Roubini for the title Dr. Doom, a title that more appropriately belongs to the Asia-based fund manager and commodities guru, Marc Faber, who is an Austrian and who was far more prescient and detailed in his warnings. Again, you have to wonder if the “Doom” moniker wasn’t intentionally applied to Roubini to coopt the libertarian Faber’s argument into the statist Roubini’s policy prescriptions.
Roubini’s cv also rings some alarm bells for me. His thesis adviser was Jeffrey Sachs and Roubini still admires him the most of all his colleagues; he’s worked closely with Larry Summers; he’s been on Clinton’s advisory team at Treasury; he was involved in the Asian crisis; he’s worked in a number of positions at the IMF (which is being pushed as the new global central bank). Now he’s been brought in as “Dr. Doom” (effectively co-opting bearish commentary on the market) and he’s pushing nationalizatio,n like every other establishment figure.
This is not a confidence-builder.
To return to my caveat: why set up nationalization and PPP as as an either/or alternative if they can work as complements?
Either/or is the binary switch which propagandists use to turn individuals into mobs. Scare the public and tell them, either you do this…OR you suffer that.
Either/or provokes people into instinctive responses. It makes them scared or angry. It forces them into flight (panic) or fight (anger).
It’s us or them.
We’re seeing all that now. Some very clever people are pushing those two buttons over and over.
This is one of those snakes and ladders games where you move left, and a green snake swallows you and you’re back on square one.
So you move right and a ladder takes you up four rows and then a green snake swallows you and you’re back on square one.
Solution? Stay where you are and let the snakes sort it out for themselves.
Instead of rooting around for fixes for the problem, we should be investigating the chicanery that led to it, and finding out legal ways to undo or challenge the legislation that gave us TARP etc.
Bernie’s Web: Who Dunnit & Where’s the Dough
There have been some interesting developments in the Madoff business recently, all of which have confirmed my early insight that the Madoff fraud was much more than a solo effort.
[In my opinion, it is likely an international criminal conspiracy tied to the financial crisis. You can reference my Madoff posts through the search function and also through my last three articles at Lew Rockwell which indirectly address the issue].
The Madoff business is why I’ve come down squarely against nationalization. It’s not because of ideology. Or pig-headedness. Or from a desire to pander to the neanderthal crowd (is there any other kind?)….
It’s because as long as the ties between all these corrupt financial deals and dealers are not clear, any move made by the government is guaranteed to set precedents that will in the long run be against the public interest. To all the libertarians who will rush to tell me there is no such thing as the “public interest” but only the “aggregated individual interests of many people” - yes, of course, but we’ll do the abstract cud-chewing at another time. What I mean is that public money (tax money) will go to private interests.
Which is why unraveling the Madoff -banking cartel story is the most needful thing right now.
Here are some recent developments.
(1) Talking Points Memo, January 4
If the Feds ever get around to realizing Bernie’s brother and thirty-year business partner, Peter B. Madoff, was in on the scam, they might want to take look at his holdings.
Craig Kugel, a long time Madoff employee, is involved in Essex Realty Development LLC, registered in NYS on 12/10/07 to an address at 34 Pheasant Run, Old Westbury. 34 Pheasant Run is one of Peter Madoff’s primary residences along with a W. 53rd St apartment and a Palm Beach house.
While much has been made of Ruth Madoff, Bernie’s wife, being sole owner of her Palm Beach estate, no one has said anything about Peter and Marion Madoff transferring ownership of their Palm Beach property solely to Marion in 11/06 which is probably when the Madoffs got serious about giving it up.”
and
“David Kugel, I believe, is Craig’s father. They both live in the same North Shore neighborhood on Long Island and they may be related to the Madoffs.
Madoff Technologies, L.L.C. was registered in NYS in 10/98 in care of Craig Kugel at 885 Third Ave.
In 2003, Craig Kugel was identified in another Trader Magazine photo as being with Primex Trading. Primex was registered as Primex Holdings, L.L.C. in NYS in 10/98. Primex is a joint venture between Bernard L. Madoff Investment Securities, Goldman Sachs and other brokerage firms and involves a digital trading auction which operates out of Bernie’s 18th floor office at 885 Third Ave.
(2) The New York Daily News, March 12:
“The timing of her [Ruth Madoff's] $15.5 million in withdrawals - as he was becoming aware of his problems, and then on the day before his arrest - is very suspect,” Massachusetts Secretary of State William Galvin told the Daily News. Galvin, the top securities regulator in the state, calls Cohmad a feeder fund in Bernie Madoff’s empire. Representatives for Cohmad didn’t return calls. Galvin ridiculed Bernie Madoff’s claim of having executed the complex, decades-long global banditry alone. “There are only two questions that exist right now: Where’s the money? And was there anybody else involved?”
Ruth Madoff has not been accused of wrongdoing. Still, she has fueled outrage by trying to claim a $69 million personal fortune unconnected to her husband’s booty, which will be subject to court-ordered forfeitures….”
(4) Talking Points Memo, April 8
[Steve ] Labaton [of the New York Times] understates the NSX case. According to a 5/19/2005 SEC administrative ruling, NSX openly and flagrantly violated SEC regulations year in and year out for more than six years. As a result, NSX brokers made untold millions cheating their customers.
NSX encouraged the cheating by failing to enforce “compliance by its dealer firms (known as “designated dealers”) with two important provisions of its rules: the market order exposure (”MOE”) rule and the customer priority (or trading ahead) rule”.
On top of trading violations, NSX destroyed email correspondence that was supposed to be retained for five years.
What punishment did Eric Swanson “aggressively” mete out to NSX for cheating customers and destroying evidence? NSX was required to set aside a million dollar reserve for an independent audit and David Colker, NSX CEO, was censured. A slap on the wrist.
As an aside, anyone who claims the Madoffs operated the brokerage side of the business honestly is full of crap. Bernie and Peter knew NSX was violating SEC regulations and they profited from those violations. Destruction of email correspondence is right up the Madoff alley, too, as we now know.
Peter and Bernie were certainly closely associated with NSX. In January 2004, NSX sponsored a Swiss ski trip for the Madoffs and a dozen of their friends and business associates……..
Labaton again understates the case. Peter Madoff was a member of the A.G. Edwards board of directors. A. G. Edwards is headquartered in St, Louis and, outside of New York, Missouri is the only other state where Bernard L. Madoff Investment Securities LLC is registered.
Shana Madoff wasn’t on the compliance committee of just any old industry group. She was appointed to the NASD Market Regulation Commitee in 2003..”
(4) The New York Daily News, April 18:
“Hedge-fund founder Ezra Merkin was warned years ago that Bernie Madoff wasn’t on the level but still invested and lost tens of millions in his Ponzi scheme, it was charged in court papers unsealed Friday. Among the documents were e-mails from former Merkin employee Victor Teicher who said he told Merkin several times in the early 1990s that Madoff’s consistently high profits weren’t possible year after year. The claimed profits “were inconsistent with what could possibly take place in reality,” he said. Teicher, a former financial analyst and convicted felon, also said Merkin’s former accountant Andrew Gordon reported that Madoff’s investment scheme “looked like a fraud to him.”
Nassim Taleb On Black Swans and “Nationalization”
Thanks to Rolf Dobelli of GetAbstract for sending me the link to a post by Nassim Taleb at the Financial Times:
1. What is fragile should break early while it is still small. Nothing should ever become too big to fail. Evolution in economic life helps those with the maximum amount of hidden risks – and hence the most fragile – become the biggest.
2. No socialisation of losses and privatisation of gains. Whatever may need to be bailed out should be nationalized; whatever does not need a bail-out should be free, small and risk-bearing. We have managed to combine the worst of capitalism and socialism. In France in the 1980s, the socialists took over the banks. In the US in the 2000s, the banks took over the government. This is surreal.
3. People who were driving a school bus blindfolded (and crashed it) should never be given a new bus. The economics establishment (universities, regulators, central bankers, government officials, various organisations staffed with economists) lost its legitimacy with the failure of the system. It is irresponsible and foolish to put our trust in the ability of such experts to get us out of this mess. Instead, find the smart people whose hands are clean.
4. Do not let someone making an “incentive” bonus manage a nuclear plant – or your financial risks. Odds are he would cut every corner on safety to show “profits” while claiming to be “conservative”. Bonuses do not accommodate the hidden risks of blow-ups. It is the asymmetry of the bonus system that got us here. No incentives without disincentives: capitalism is about rewards and punishments, not just rewards.
5. Counter-balance complexity with simplicity. Complexity from globalisation and highly networked economic life needs to be countered by simplicity in financial products. The complex economy is already a form of leverage: the leverage of efficiency. Such systems survive thanks to slack and redundancy; adding debt produces wild and dangerous gyrations and leaves no room for error. Capitalism cannot avoid fads and bubbles: equity bubbles (as in 2000) have proved to be mild; debt bubbles are vicious.
6. Do not give children sticks of dynamite, even if they come with a warning. Complex derivatives need to be banned because nobody understands them and few are rational enough to know it. Citizens must be protected from themselves, from bankers selling them “hedging” products, and from gullible regulators who listen to economic theorists.
7. Only Ponzi schemes should depend on confidence. Governments should never need to “restore confidence”. Cascading rumours are a product of complex systems. Governments cannot stop the rumours. Simply, we need to be in a position to shrug off rumours, be robust in the face of them.
8. Do not give an addict more drugs if he has withdrawal pains. Using leverage to cure the problems of too much leverage is not homeopathy, it is denial. The debt crisis is not a temporary problem, it is a structural one. We need rehab.
9. Citizens should not depend on financial assets or fallible “expert” advice for their retirement. Economic life should be definancialised. We should learn not to use markets as storehouses of value: they do not harbour the certainties that normal citizens require. Citizens should experience anxiety about their own businesses (which they control), not their investments (which they do not control).
10. Make an omelette with the broken eggs. Finally, this crisis cannot be fixed with makeshift repairs, no more than a boat with a rotten hull can be fixed with ad-hoc patches. We need to rebuild the hull with new (stronger) materials; we will have to remake the system before it does so itself. Let us move voluntarily into Capitalism 2.0 by helping what needs to be broken break on its own, converting debt into equity, marginalising the economics and business school establishments, shutting down the “Nobel” in economics, banning leveraged buyouts, putting bankers where they belong, clawing back the bonuses of those who got us here, and teaching people to navigate a world with fewer certainties.
My Comment
I hesitate to critique something by Taleb, as smart and terrific a writer/trader as he is.
But since it’s my job here to examine the commentariat (this is not my own phrase, but I wish it were…) with skepticism, here goes.
I agree with everything that Taleb says here, except for the bit about nationalization and the implication that this financial crisis had to do with “Black Swans”. He himself has said clearly elsewhere that the financial crisis had nothing to do with black swans, so I think the heading (given by some one else?) is misleading.
Recent Review of “Mobs”
From a recent review of “Mobs, Messiahs and Markets”
It was an excellent read, similar in some respects to one of my all-time favorite investment
books: Extraordinary Popular Delusions and the Madness of Crowds
delves into human psychology and crowd behavior. Mobs, Messiahs & Markets is like a modern-day version with emphasis on investing and explores popular delusions like “real estate never goes down”, “stocks always go up”, “deficits don’t matter”, “you are either with us or against us”. When rational, intelligent human beings become part of a group, they are fine. However, as soon as they become part of a crowd, they lose all rationality and turn into blockheads! I found the book quite entertaining, with great wit and sarcasm to keep me amused. The book talks about people who were determined to make the world a better place by making it conform to their delusions. People like Hitler for example! The authors also talk about how crowd think leads to wars and how wars are futile and never worth the cost. There’s also a complete chapter making fun of Thomas Freedman and his banal book “The World is Flat”. I never liked that book and apparently neither did the authors. There’s also a full chapter devoted to Alan Greenspan which was particularly eye-opening….”
My Comment
There. That’s what I like to hear. And I’d like it even more if you decided to buy our book off this website, thus giving me a few measly pennies, via Amazon. I don’t need to mention that this will not support me in my old age, but it will make me feel appreciated and more inclined to take the sticks and kicks of public bloggery.
Liberals Prefer Bureaucrats to Citizens…
“A less publicized case of arrogant disregard for people occurred in Carmel Valley, California, during the 2008 fires. Ivan Eberle, a well-known wildlife photographer, was commended for heroism in saving the Monterey Institute for Research Astronomy observation station on Chews Ridge from a raging wild fire. A few days after the fire, he was visited by six Monterey County Sheriffs and charged with the crimes of battering a firefighter and interfering with a firefighting crew in the line of duty.
Calling the charges “ironic” and “truly bizarre,” Eberle said he felt that his “constitutional rights were violated to an egregious degree.” To him, the charges filed by the fire department were in retaliation for his public criticism, as he had spread the word that the firefighters refused to help him save the observatory, which is also his home. To Eberle, the firefighters were acting with “willful negligence or dereliction of duty.”
Eberle believes the bogus charges stem from his quick actions to save the observatory. When a large tongue of flames raced toward propane tanks next to a grove of pines, he unrolled a fire hose from the facility’s hydrant and bumped into a sleep-deprived firefighter. Although the observatory is the only structure on Chews Ridge, Eberle single-handedly saved it. Nobody from the fire department would help. Similar to the theme of Fahrenheit 451, the firefighters seemed to have forgotten their primary purpose.
So how could such arrogant misconduct occur? Some have pointed to the consolidation of local volunteer fire departments with more formal, government-operated ones. Years earlier in 2001, the Valley Volunteers Inc. in Carmel Valley Village merged with a government fire department in the Mid-Valley area. The merger quickly turned sour. In 2004, the volunteer fire department circulated a petition for “detachment,” arguing that their privately raised million-dollar fund had been squandered and that the two groups had different philosophies on how to operate a fire department. Although explicitly told that a detachment could easily be arranged if either side found the merger unsatisfactory, the LAFCO government agency in charge of such disputes refused to allow the separation. Many of the citizen firefighter quit the department, saying that they were being “treated as subordinates” by the new consolidated fire department.
The most dangerous threat from Vichy liberals is that they do not trust ordinary people to do the right thing. Instead, government control and bureaucracy are substituted to run society. Politics and officiality overshadow anything that citizens attempt to do, preventing society from self-organizing into a system to which people are willing to dedicate valuable time and money. Unfortunately, as consolidation grows, so does an attitude that only government can solve problems, leaving the citizenry defenseless and dependant. Obviously, government has gotten too big for it britches, and its arrogance is showing through….”
“The Arrogant Self-righteousness of Vichy Liberals,”
L.K. Samuels, Libertarian Perspectives, Dec. 28, 2008
Freddie Mac CFO dead…(Updated 9:13 PM)
“The acting chief financial officer of mortgage financier Freddie Mac, David Kellermann, was found dead this morning, police said. Police are investigating the death as an apparent suicide…”
ABC reports (http://abcnews.go.com/Business/story?id=7399376&page=1) that Kellerman was found hanging in his basement.
Notable point in the piece:
“Prior to this role, he served as senior vice president, corporate controller and principal accounting officer. ….Before that, Kellermann served as the senior vice president and business area controller. As business area controller, he led the organization responsible for all accounting and finance for Freddie Mac’s lines of business. Kellermann has been with Freddie Mac for more than 16 years….”
In short, he was the guy in charge of Freddie’s books.
He also got a bonus recently, for $800,000 (about $170,000 paid and with the rest to come).
My Comment
I’ll post anything pertinent as it comes up.
Meanwhile, here are the other deaths/suicides related one way or other to the financial crisis:
Thierry Magon de la Villehuchet, aristocratic French CEO of Access International Advisors, a money management firm that placed investors in Madoff vehicles. He was stabbed multiples times in the arms and wrists, apparently with a box-cutter, after taking sleeping pills. (December 22, 2008)
Adolf Merckle, German billionaire head of VEM, a corporate empire that included Ratiopharma, the leading European pharmaceutical producer, Cement Heidelberg, one of the world’s leading building materials suppliers, and 120 other companies. Lay down in front of a speeding train near his house in Blaubeuren village not far from the French-Swiss border.(January 5, 2009)
Update: Steven L. Good, the CEO of Sheldon Good & Co., the largest real estate auction in the country, found dead from a bullet to the head, at the wheel of his Jaguar in a Kane County wildlife preserve outside Chicago, who had commented on the challenging state of the country’s commercial real estate market the previous month. (January 6, 2009) [I came across this suicide only today and added it at roughly 9 PM April 22] Update: Patrick Rocca, an Irish property investor worth several hundred million who shot himself in the head after losing a large sum in Anglo-Irish bank, which was nationalized by the British government the week before his death (January 22, 2009)
William Foxton, retired British army major-general who served in the French foreign legion and then in the Balkans in the 1990s on the European Commission Monitoring Mission and as a spokesman for the Organization for Security and Cooperation in Europe. Died from a single bullet to the head in Southampton after reportedly losing all his money (six figures) in Madoff hedge funds. (February 14, 2009).
Huffington Post has an article about what it describes as the increasing levels of suicide related to the financial crisis. It names several less well-known money-managers or home owners who’ve taken their lives as a result of anxiety over finances.
However, this Columbia Journalism Review piece correctly cautions against drawing any conclusions about rising suicide rates and financial crises, noting that the image of ruined financiers throwing themselves out of windows during the crash of 1929 is strictly an urban legend. J.K. Galbraith, the best-known chronicler of the 1929 crash, points that out too. The CJR piece is also useful in warning against the dangers of copy-cat suicides/killings resulting from the irresponsible linking of deaths/killings/suicides to particular financial events.
(This is one of the reasons I’ve been wary of writing about farmer suicides in India. You would need a very detailed analysis of the statistical picture and demographics of the area to reach any broad conclusion about the suicides).
Update April 23,
I see that Vanity Fair has posted a piece on financial suicides at 4:52 PM April 22, an updated version of an older list.
Briefly, it includes the following:
October 23, 2007
Raymond and Deanna Donaca, of Portland, Oregon; Retired contractor for the U.S. Forest Service (Raymond)
Carbon-monoxide poisoning.October 24, 2007
James Hahn, Houston, Texas, Chemist.
Gun shotNovember 26, 2007
Rae Cowan, Toronto, Ontario. Nranch manager at IPC Investment Corp., and he also ran Gibraltar Wealth Management Corp.
Carbon-monoxide poisoning.January 18, 2008
Walter Buczynski of New Jersey; Vice president, Fieldstone Mortgage.
Jumped from the Delaware Memorial Bridge after killing his wife.March 5, 2008
Roland Gore of Ocala, Florida
Killed his wife and dog, set his house (in foreclosure) on fire and then took his lifeMarch 10, 2008
Rufus Shaw and Lynn Flint Shaw of Dallas, Texas.
Writer (Rufus); former chairwoman of the Dallas Area Rapid Transit board (Lynn)Rufus shot Lynn and then took his own life
April 11, 2008
Maurice and Natacha Pereira, Four Corners, Florida.
Gun.May 23, 2008
Barry Fox of Fort Lee, New Jersey.
Research supervisor, Bear Stearns.
Fox ingested a cocktail of drugs before jumping from his 29th-floor apartment.June 2, 2008
Scott Coles of Phoenix, Arizona.
C.E.O., Mortgages, Ltd, one of the largest private mortgage lenders in Arizona
Drug overdoseJuly 15, 2008
Ed Boesen of Davenport, Iowa.
Co-owner of the florist chain Boesen.
Drug overdose—Tylenol.Peter Thiel On The Incompatibility of Democracy and Capitalism
“. Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women — two constituencies that are notoriously tough for libertarians — have rendered the notion of “capitalist democracy” into an oxymoron.”
My Comment
Thiel’s essay is one of several at Cato Unbound on sea-steading, the Free State project in New Hampshire and cyberspace communities as possible routes of escape from statist interventions. I liked the piece because it captures my own sense that genuine libertarianism is still quite foreign to the masses of people who make up any democracy.
Thiel finds two constituencies particularly difficult - women and welfare beneficiaries. (Am I misreading something here?).
Really? I’ll wager that the majority of the beneficiaries of the recent government bail-out of the financial sector are male fund managers. I’d also say that most of the beneficiaries of defense subsidies are companies run by men, not women.
However, I’ll take his broader point that the more people depend on government, the less open they’re going to be to libertarian arguments.
As for women, I’d wager that they’d be very open to libertarianism if it didn’t come wrapped up in psychologically obtuse language.
More for another blog post.
Ten No-No’s In Indian Business Circles
In honor of elections in India (April 16 - May 13) I’m going to ignore politics and politicians there altogether and post something useful to anyone wanting to do business in India.
That, I think, is a more worthy activity than wasting one more second of precious time on figuring which set of incompetent, crooked, pompous, self-serving, supercilious, under-worked, overpaid set of bureaucrats is going to boss Indians around until the next set takes over.
I was just as even-handed with the American election. I avoided them altogether by legging it to Morocco.
[Unfortunately, I couldn't get away from the political process even there. On the appointed day in November, I woke up in a lush courtyard in a riyadh near Rabat to the sobs of a young American-born German who was apparently beside herself with joy that Obama had won, hard evidence of world-wide Oba-mania that's still a bit mystifying to me.....]
Anyway, digressions aside, here it is, a list of 10 don’ts in Indian business circles taken from CIO.com
General:
- Don’t use a person’s first name automatically. It’s bad manners in many parts of India. Lila: traditionally, names are thought to contain the essence of things/people. Speaking someone’s first name is therefore an intimate act, reserved for use by people who know you well, like your family, or for people who are superior to you hierarchically, like your boss.
- Take off your shoes before you go into someone’s home or into a temple or into a public meeting place. You should probably take them off before entering anywhere else too, especially if you see footwear lined up at the entrance.
- Don’t eat beef (Lila: cows have a special place in Hindu iconography and worship)
- Don’t accept or give anything with your left hand. (Lila: Traditional Indian culture - like many cultures - designates the right hand for eating food and the left hand for douching/cleaning up after using the toilet)
- Don’t expect overt disagreement. People often say yes to be polite. Lila: The Indian head wag, from side to side, looks like a no to Westerners. It’s actually okay/yes/alright/got it/I don’t know/maybe/whatever.
- Don’t say no to an invitation or to hospitality.
- Don’t be offended by argument or debate. All Indians like to argue. Lila: It’s not personal and it’s not about scoring points. Indians are prone to nit-picking analysis. They like lists…and distinctions…and categories. They’re chatty people.
- Don’t ignore hierarchy/pecking order in the workplace. Lila: Seniority is a big deal in India. Buddying up with your juniors won’t endear you to a lot of people. Keep some distance in most cases.
- Don’t recommend unconventional ideas/projects, since the notion of trying out things and failing isn’t highly regarded. Lila: There aren’t many social networks in India. Families have to take the hit for failure. India may have been socialist for a long time, but there’s little in the way of medical insurance, for example. So, telling someone to go adventure traveling or climbing the Himalayas isn’t the cost-free bit of advice it might be in the West, where insurance companies will pick up the tab for an accident.
- Write down instructions or requests, since verbal agreements aren’t considered final.
India’s Illegal Rendition?
Just saw this really interesting piece of news from early March 2009 on what looks like an illegal rendition (ala the CIA and Mossad) of an accused terrorist associated with the Bangalore blasts [July 2008]:
“In a top secret mission, a team of the Research and Analysis Wing tracked down an absconding accused in the Bangalore serial blasts case in Muscat, and sneaked him out of Oman, since India doesn’t have an extradition treaty with that
country .Sarfaraz Nawaz, 32, who allegedly played a major role in
financing the Bangalore blasts, had sought refuge in Muscat.Investigating officials told rediff.com that a RAW team managed to track down Nawaz in Muscat. They added that Nawaz was ’smuggled into’ Bangalore on a chartered aircraft.
The entire operation was so secretive that even the Air Traffic Control was taken aback when they received a message to help the chartered aircraft land at the Bengaluru [Images] International Airport.
After landing at the airport, officials of the RAW and the Intelligence Bureau called top Central Industrial
Security Force officials and directed them to escort the passengers in the aircraft.The officials handed over Nawaz to the Bangalore police, who are currently questioning him.
Abdul Sattar, the prime accused in the case, had revealed Nawaz’s role in the serial blasts during his interrogation.
Nawaz was reportedly close to Riyaz Bhatkal, a key Lashkar-e-Tayiba [Images] operative, who later took over the charge of the Indian Mujahideen [Images].
With Nawaz’s arrest, the Bangalore police are hopeful of tracking down the remaining suspects, who might have fled the country after the Bangalore blasts.”
More here at Rediff.com
My Comment:
Here’s a piece I did a few years ago on jihad in India, specifically, in Bangalore, Jihad and Cyberworld.
And here’s a perspective from the Indian left, by Pankaj Mishra.
I’m generally sympathetic to the view presented by Mishra’s pieces, but there are some angles that strike me as off-base.
What I agree with
As I wrote in another piece on the subject (”Operation Romeo: Lessons On Terror Laws In Indian Country”), terror laws in India haven’t worked very well. It’s unlikely that adopting CIA/Mossad-type renditions (what next? assassinations?) will do better. Whatever immediate successes Indians might hope to gain from them will be marginal and fleeting next to the precedent renditions set for more secrecy, coverts ops and violation of international and national laws. There’s just too much scope for abuse of power.
What I disagree with is a passage like this one
Mishra:
“Apparently, no inconvenient truths are allowed to mar what Foreign Affairs, the foreign policy journal of America’s elite, has declared a “roaring capitalist success story”. Add Bollywood’s singing and dancing stars, beauty queens and Booker prize-winning writers to the Tatas, the Mittals and the IT tycoons, and the picture of Indian confidence, vigour and felicity is complete.
The passive consumer of this image, already puzzled by recurring reports of explosions in Indian cities, may be startled to learn from the National Counterterrorism Centre (NCTC) in Washington that the death toll from terrorist attacks in India between January 2004 and March 2007 was 3,674, second only to that in Iraq. (In the same period, 1,000 died as a result of such attacks in Pakistan, the “most dangerous place on earth” according to the Economist, Newsweek and other vendors of geopolitical insight.)”
Here’s my caveat:
Comparing India’s death toll from terrorism between 2004-2007 (3,674) to the death toll from terrorists in Pakistan (1000) and in Iraq is disingenuous, given the vast difference in the population and size of the three countries.
Per wiki:
India: Area 3,287,240 sq. k. Population 1,147,995,904 (2008 estimate)
Pakistan: Area 803,940 sq. k. Population 165,900,000 (2008 estimate)
Even if Mishra’s death numbers are right, India is only about four times the size of Pakistan, but it’s roughly seven times as populous. Indian deaths from terrorism, however, are only about four times as many as Pakistani deaths. That is, the number of deaths from terrorism is a bit over half of what it is in Pakistan.
That’s quite a bit of a difference. India’s far from being free of terrorist violence as “India Shining” advocates would have you believe.
But it’s also not as riven with violence as Pakistan. And, for whatever reasons, terrorists do in fact find safe harbor and training grounds in Pakistan.
Reviving the IMF: Pieces In a Puzzle
Well, a few posts ago, in “Survivalists for Nationalization,” I noted that oddity of The Atlantic running a piece by a former IMF economist touting the benefits of nationalization just after an article praising doomsday mongering and survivalism. What gives, I asked.
Was one strain of libertarian thinking about to be coopted into the same old big-government vein of reasoning?
Now, reading through “Pieces of a Grand Puzzle” on Robert Wenzel’s blog I came across a few clues to understanding what that was all about. The IMF is getting a make-over . It’s going to be the new regulatory cop on the global beat.
PS: Thanks to Wenzel for linking to my blog. It’s much appreciated.
Greenwald Calls Out Right-Wing Amnesiacs
From Salon, the tireless Glenn Greenwald calls out the amnesiacs on the right for double standards:
“Conservatives have responded to this disclosure as though they’re on the train to FEMA camps. The Right’s leading political philosopher and intellectual historian, Jonah Goldberg, invokes fellow right-wing giant Ronald Reagan and says: ”Here we go Again,” protesting that “this seems so nakedly ideological.” Michelle Malkin, who spent the last eight years cheering on every domestic surveillance and police state program she could find, announces that it’s “Confirmed: The Obama DHS hit job on conservatives is real!” Lead-War-on-Terror-cheerleader Glenn Reynolds warns that DHS – as a result of this report (but not, apparently, anything that happened over the last eight years) – now considers the Constitution to be a “subversive manifesto.” Super Tough Guy Civilization-Warrior Mark Steyn has already concocted an elaborate, detailed martyr fantasy in which his house is surrounded by Obama-dispatched, bomb-wielding federal agents. Malkin’s Hot Air stomps its feet about all “the smears listed in the new DHS warning about ‘right-wing extremism.’”
Amazing chutzpah. Malkin’s, especially, considering that her magnum opus was a celebration of the internment of Japanese citizens during World War II, precisely the kind of violation of liberties she’s exercised about now.
No. Libertarians have to wash their hands off the two-party system entirely and admit that both parties are too compromised by their records to pose as civil libertarians and constitutionalists at this hour. Give the mic to the people whose record holds up, please.
Or to anyone else but these folks.
Spy State: NSA Surveillance Wider Than Ever
In the news:
“The New York Times revealed last night [April 15] that the National Security Agency has been illegally spying on legions of Americans’ email and phone calls. Congress vastly expanded the NSA’s surveillance purview last year - but the NSA has chosen to go much further.
The Times noted that the NSA may have spied on one congressman without a court warrant.
This is the only chance that this latest crime might get at least some fleeting attention on Capitol Hill.
The lack of response to these NSA spying outrages is a great example of how cowardly the media has become and how clueless many, if not most, Americans are. The media even refused to make a hubbub last year when it was revealed that the NSA had been wiretapping reporters without a warrant. Author James Bamford pointed out late last year that 2 Israeli companies are at the core of carrying out NSA surveillance on a subcontracting basis. But Bamford’s revelation have received almost no coverage in the print media. (Bamford is one of the most highly-respected critics of the NSA).”
More at Bovard.
Mexican Gun Trade Is Multicultural, Not American
In the news, Obama’s gun stats are cooked, say libertarians.
“ATF Special Agent William Newell tells Fox News that between 2007 and 2008, around 11,000 guns used in Mexican crimes appeared to come from the United States and were submitted to the ATF for tracing. Of those, only 6,000 could be successfully traced. Of those, only 5,114, according to testimony in Congress by William Hoover, were found to have come from the U.S.
Obama’s “90 percent” number refers, not to the percentage of “guns recovered in Mexico,” as Obama claims, but to the “percent of the traced firearms” according to a BATFE spokeswoman.
But Mexican authorities report that in those two years, a total of 29,000 guns were recovered at crime scenes. That means 68 percent of the guns recovered by Mexican police did not even appear to come from the United States.That means only 5,114 out of 29,000 guns used in Mexican crimes were found to have come from the United States. That figure would be 17 percent, not the 90 percent repeated by Obama.
Further weakening Obama’s case is the fact firearms manufacturers such as Colt legally shipped some of those United States-originated guns into Mexico for permitted uses, such as by the Mexican military.
Research finds most of the guns used by Mexican criminals come from overseas black markets, Russian crime organizations, South America, Asia, Guatemala and even the Mexican army.
“No reasonable person would think Obama didn’t consult the BATFE to get numbers before coming up with his talking points, and this information has been public for over two weeks. Barack Obama chose to intentionally spread fake information because he hopes to use fear to ram his anti-Second Amendment agenda through the Senate,” said Ferguson.
During his term in the Senate, Obama earned an “F” rating from Gunowners of America, as well as the National Rifle Association. …”
Correction: The actual figure seems more like 35% than 19%, according to FactCheck.org.
My Comment
This doesn’t surprise me at all. As some wag wrote, “There are lies, damn lies, and statistics….”
The conventional wisdom is that guns don’t deter crimes; that guns cause violence, that only semi-literate goons believe in self-defense, and that second amendment rights are pushed by a lunatic fringe of bible-thumping, arms-stockpiling David Koresh mutants. Well, whatever Koresh was or wasn’t, the remedy for lunacy, child-molestation, fundamentalism or any of his other sins in the eyes of the Feds was not to incinerate him and scores of human beings, including children.
Which is just what Bill Clinton’s AG Janet Reno did at Waco, Texas, 16 years ago, as Anthony Gregory notes in this article. It was one of the most infamous and pointless crack-downs of federal power on the heads of citizens. The usual line is that the Koresh group deserved to be burned to a crisp since they were cultists and child abusers – this from people who would fight to the death for the right of serial killers to endless appeals.
The second amendment of the Bill of Rights wasn’t meant just for state militias. It was meant for individuals.
And the reasoning behind it was impeccable: weakness invites abuse.
Right now, the citizenry has been all but disarmed.
Any wonder it’s being abused by the government?
Churches Object to US mandate of Frankenfood Research for Developing Countries
Advocates of food self-sufficiency have responded critically to the U.S. Senate Foreign Relations Committee’s hasty passage of the Global Food Security Act (S. 384) on March 31, which would mark a major shift in U.S. policy. The Act mandates foreign agriculture research for genetic engineering. Faith groups responded sharply too:
“Andrew Kang Bartlett of the Presbyterian Church (U.S.A.) said, “While the intentions behind the Global Food Security Act may be laudable, the question is whether poorer farmers left behind by the last Green Revolution will again be swept aside by a top-down approach that benefits mostly transnational corporations.” Dave Kane, of Maryknoll Office for Global Concerns, a Catholic missionary organization with priests, brothers, sisters and lay people working in Asia, Africa and Latin America, added, “We have found GM technology to be disastrous for small farmers and rural communities. Our missioners in Latin America and Asia have seen farmers get deeper and deeper into debt as they struggle to pay for all the seeds, fertilizers and herbicides that GMO technologies require. The result: farmers lose their land and with it, the ability to feed themselves and their families.”
The National Family Farm Coalition, a North American member of La Via Campesina, the international peasants movement, will be pressing the G8 to reconsider policies that advocate for food sovereignty. Ben Burkett, a Mississippi farmer and president of NFFC said, “Farmers both here and in Africa know that the current industrial agriculture model—and the push to fast-track trade liberalization—has failed to alleviate global hunger and denied family farmers a sustainable livelihood. A recently released report this month by Union of Concerned Scientists titled “Failure to Yield: Evaluating the Performance of Genetically Engineered Crops,” showed that despite 20 years of research and 13 years of commercialization, genetic engineering has failed to significantly increase U.S. crop yields while only driving up costs for farmers. In comparison, traditional breeding continues to deliver better results. The G8 needs to move away from Green Revolution monoculture practices and instead implement the IAASTD’s most promising options: support ecologically sound practices, more equitable trade rules and local food distribution systems to empower family farmers.”
The Shill World Order
From a face-book link, The Shill World Order: Pushers of the False Left-Right Paradigm
“Now with the election of Obama, we see the friends that joined us under Bush, retreat to their liberal corner and take on the role the neo-cons did, in order to shield Obama from criticism. Therefore under Obama, government dissent equates to fascist extremist who hate blacks. This is the standard program that the corporate left uses in order to quell government dissent by hyping militia groups and racists. Just think back to all the subterfuge associated with groups on the right, who were against government corruption under Clinton. An unbiased look at the political environment back in the 90’s would show that they were not all extremist, and the events hyped up in the media had the fingerprints of COINTELPRO all over it.
Just recently in Philadelphia, 2 undercover officers organized a KKK rally and they were the only ones who showed up. Several people showed up to protest these racist who were actually cops. The anti-racist activists smashed the car of the posing skinheads, after they antagonized the protesters. An excerpt of witness testimony to the court is below.”
My Comment
Well, this has been my experience too. When you step outside the box and tell it like it is (and since I am a true outsider it’s been easier for me to do), you’ll get trouble.
First, you’ll be ignored.
This will be enough to get most novice writers to shut up and move to some safer ground. Maybe give up writing anything except what fits the mold of the alternative press (they have a mold too).
If by chance you survive that and still manage to get heard, you won’t get attributed. You may be read, but you’ll be subtly tarnished as a possible kook, racist (it doesn’t matter that you’ve never written anything remotely racist) or whack-job. Expect to be called a “wing-nut” if you’re anything other than a socialist. Criticize any of the following: Israel, the Israeli lobby, the media, the financial industry, the banksters. the Federal Reserve, drug and money laundering through the stock market, and also be a believing Christian or sympathetic to Christians and you can expect to be called anti-Semitic. (And if you’re also an immigrant from a developing/third-world/less developed (take your pick of the label, I can’t keep track) country, you’re obviously even less welcome as a critic - I mean, don’t you have enough to criticize in your own country?)
Expect everyone to nonetheless take your work and leads and run right on ahead without a blush of shame. They will, because they can. Those are the kind of people who are in charge. Shame isn’t in their vocabulary. They would have all resigned and taken up jobs in the post office if it was.
No matter what your credentials or your credibility, you will be ignored and tacitly coerced into shutting up and conforming.
If that also doesn’t work, expect other kinds of pressure…. to steer you in ways different from what you would want.
Next comes provocation. You’ll get blatantly racist or antisemitic emails that seem to contain news-worthy items. The idea is to bait you into replying so that it looks as if you’re in close contact with or pick up your ideas from unworthy material or sources.
Then come attacks. Emails calling you various nasty epithets from mild (moron) to severe (crack-pot bitch) will land up in your mailbox. Your mail will vanish or get deleted or moved around in your mailbox. Blog posts will show up on forums. Old articles go missing or get subtly vandalized.
(Correction: I’m now told that wordpress blogs aren’t easy to hack at all. So I might be okay there …)
You may get death threats - real or simply malicious foolery (last week’s episode).
I don’t expect any sympathy for this. Journalists have had their heads blown off for doing nothing much different. I only mention it to keep people’s eyes focused where they should be - on the government, not on all the divisions - class, race, color, religion - that the media keeps bringing up…
Survivalists For Nationalization: What’s Up With the Atlantic?
From The Altantic, May 2009:
“[Cody] Lundin is not a racist; in fact, he’s an Obama supporter, and he resents the racist associations attached to survivalism. Nor does he wish for the grid to go down. He says he enjoys electricity and indoor plumbing. He tends to think, though, that civilization is a thin film, and that in times of economic distress, it’s smart to be prepared for the day when Safeway runs out of milk. “This isn’t something I hope for. But what if the illusion does really crumble, and we have to move as a society to something else?”
I asked Cody how he invests his money. “I don’t believe in the intangible economy; I believe in the tangible economy. When I have extra money, I buy tools, food, or land. I like to be able to see what I’m buying. And I really don’t like debt, so I’d rather not have certain things than be in debt to anyone. I just feel better knowing that I don’t owe money, and I feel good knowing that I can take care of myself. That’s the American way, to be able to be self-reliant.”
For the record, I don’t think the grid is buckling under the weight of consumer debt or the mistakes of AIG. But we’re in a strange moment in American history when a mouse-eating barefoot survivalist in the mountains of Arizona makes more sense than the chief investment strategist of Merrill Lynch.”
and
“Unconventionality makes me nervous, but less so than conformity. I’m finished with conformity. In picking an adviser, I’m also looking for someone who is unleveraged; someone who is putting his own money into the investments he’s recommending; and someone who can explain to me in a few sentences, in language easily understood by earthlings, his philosophy of investing….”
Jeffrey Goldberg at The Atlantic, May 2009
My Comment
My, my. Survivalism is finding its way into the stodgy halls of the establishment. A genuinely truthful, even humble, piece by Jeffrey Goldberg. Note: I don’t know if it adds to the surprise that Goldberg supported the Iraq war in 2002.
Of course, there’s the mandatory and utterly gratuitous swipe at the racism and anti-Semitism of survivalists (you’d think survivalists were the only racists of any kind around).**
But we’re not picky about the dawning of good sense.
We’ll take it wherever it comes, whenever, and however.
But then, we read what seems to the companion piece to the one above, The Quiet Coup, by Siimon Johnson, a former economist at the IMF. Johnson writes correctly, but rather belatedly, that the country has been taken over by what he gingerly terms ‘American oligarchs.’
Well, substance-wise this is somewhat tardy, now that the horse - indeed a whole team of horses - has fled the barn.
And style-wise, we much prefer the earthier feel of ‘bankster’ or ‘mobster’ to ‘oligarch.’
But it’s what Simon Johnson tells us to do in this piece that sets off our b-s detector.
Simon sez nationalize.
We’ve heard this before, from every economist in town. And the public said, thank you very much, but no.
But here it is again. Nationalization is obviously something the establishment badly wants.
[I say establishment, because that's exactly who's pushing it].
And that makes me have second thoughts about the Goldberg piece. Much as I like it, I begin to wonder about it…what end is it being put to?
Co-opting exactly the same mood (libertarian and survivalist) and the same economic argument (impending disaster) that characterized “Mobs, Messiahs and Markets” (down to citing behavioral economics and Kahneman) the Atlantic seems to be pushing an establishment big-government solution that’s directly opposite the libertarian small-government solution we advocate in the book.
That is, using the same arguments, The Atlantic gets to another place.
The Atlantic wants more of the same (big-government and nationalization)
Libertarians want change (non-intervention and self-reliance).
Libertarians read the Goldberg piece and go all warm and fuzzy, hoping the establishment is about to come around.
Still warm and fuzzy, we read the other piece and begin to give the argument a second thought. Maybe it’s not so bad, we mutter…
Maybe we should rethink some of our criticism…
Maybe they only mean some stop-gap measure..Maybe, in that next piece of mine I’ll tone down some of the rhetoric against nationalization….
We tone it down…
The naive undecided reader reads the libertarian blog and the mainstream press and likes what he reads. He sees two similar sounding arguments and recalls only the similarities. He forgets the differing conclusions. He starts to think the press can be trustedl. He hears the same solution touted all over the networks and begins to see no other way out but nationalization….
You see how it works?
**I’m philosophically a survivalist, but a bourgeois, urban, cosmopolitan one…….. more inclined to subsist on green drink powder than wild mice..
Bob Zoellick’s A Two-Bit Bore
A piece I wrote on Zoellick at MWC News :
April 2, 2009
Bob Zoellick is really, really sorry for poor people in Asia, who are really, really going to be hurt the most by a slow-down in global trade.
That’s what he told a Thomson Reuters Newsmaker ahead of the G20 meeting in London on April 1. According to Bobby Z, the global economy is going to contract by 1.7 percent this year, compared to growing by 1.9 percent last year.
He didn’t define growth.
He’s not suggesting that a decline in the velocity of derivative hot-potato is a decline in growth, is he? I hope not.
But he did define poverty. A buck twenty-five a day, he says.
Well, here’s what. A buck twenty-five in India is about sixty rupees. Which will buy you enough to eat for a day in India. Which is all that matters to a poor Indian.
That makes a poor Indian better off than a derivative big-shot in Manhattan, at the end of the day. He won’t be broke….. with other people’ money. Or, in the red…. up to infinity.
And that’s where you, me, and Bobby Z are now, after several trillion bucks.
I’ll take a buck-fifty in an Indian village, any day.
Maybe we need a new definition of poverty. Or, we need a new president of the World Bank.
Not yet another axe-man from the Sachs men.
Especially one who’s gone in and out of Treasury, the Department of State, and practically every US trade delegation in the last twenty years like a cheap suit through a Chinese laundromat and was - get this - an executive vice-president at none other than Fannie Mae.
That would be just around the time (1993-1997) they were shoving every one with a pulse (and many without) into subsidized housing.
Who else would we want cleaning up the nuclear fall-out from the housing bubble, if not one of the leading bubble-heads around, right?
Besides advising Enron on finance and screaming for war in Iraq, I don’t know if you could come up with a more radioactive resume than that.
Oh, that’s right, Zoellick’s got those two wrapped up, as well.
(Wiki: Zoellick signed the January 26, 1998 letter to President Bill Clinton from PNAC that advocated war against Iraq. During 1999, Zoellick served on a panel that offered Enron executives briefings on economic and political issues.)
What a busy fellow. Quite the boy wonder.
And oh - look. He’s into fancy innovations too. He’s the guy who’s been shoving genetically-modified food down European gullets, like it or not.
(The”Big Five” biotech companies–Monsanto, Dupont, Syngenta, Dow Chemical, and Aventis–control 937 out of 1085 biotech patents).
And he’s shown he can shove it down Asian gullets too.
He’ll do anything to get rid of poverty, will our Bobby, even if it means getting rid of the poor. From high-tech food to high-tech finance, Zoellick’s a big believer in force-feeding.
Now he wants the G-20 to endorse a new $50 billion Global Trade Liquidity Programme (translated from the Higher Financialeze that reads Got To Love These Pigs), which combines a billion from the World Bank with “financing from governments and regional development banks,” which gets “leveraged by a risk-sharing arrangement with major private sector partners.”
We hate to bring cold logic into such a touchy-feely, lovey-dovey arrangement, but does “risk-sharing” mean the private-sector partners could go broke too?
Or, at least, get a fatal SIV? Because that’s what sharing risk usually means. (Maybe we need a needle-exchange program for credit-heads, but that’s another story).
And all of this risk-sharing is just to help the poor in Asia out? It brings a tear to our cynical eye, Bobby.
Such sharing. Why, it’s chummier than anything since David and Jonathan, this private-public partnership.
Oh, that’s right. Tim Geithner came up with that brainwave recently too. (I guess that’s what being a Goldman alum does for you. It gives you the same sort of brainwaves).
And who would they be, these generous Fezziwigs of Finance, these Monetary Mother Theresas?
Standard Chartered, Standard Bank, and Rabobank, we hear. Rabobank? We feel a brainwave coming on ourselves. Wasn’t Rabobank one of AIG’s needle sharers…er…counterparties?
And doesn’t that mean that, one way or other, the Fed has already done one of their hot little private-public lapdances with Rabobank?
I mean, how many private-public partnerships do you get to go through before people start calling you.. you know….a two-bit bore..
More On Bobby Z….
From “A man-made famine,” Raj Patel:
“For anyone who understands the current food crisis, it is hard to listen to the head of the World Bank, Robert Zoellick, without gagging.
Earlier this week, Zoellick waxed apocalyptic about the consequences of the global surge in prices, arguing that free trade had become a humanitarian necessity, to ensure that poor people had enough to eat. The current wave of food riots has already claimed the prime minister of Haiti, and there have been protests around the world, from Mexico, to Egypt, to India.
The reason for the price rise is perfect storm of high oil prices, an increasing demand for meat in developing countries, poor harvests, population growth, financial speculation and biofuels. But prices have fluctuated before. The reason we’re seeing such misery as a result of this particular spike has everything to do with Zoellick and his friends.
Before he replaced Paul Wolfowitz at the World Bank, Zoellick was the US trade representative, their man at the World Trade Organisation. While there, he won a reputation as a tough and guileful negotiator, savvy with details and pushy with the neoconservative economic agenda: a technocrat with a knuckleduster.
His mission was to accelerate two decades of trade liberalisation in key strategic commodities for the United States, among them agriculture. Practically, this meant the removal of developing countries’ ability to stockpile grain (food mountains interfere with the market), to create tariff barriers (ditto), and to support farmers (they ought to be able to compete on their own). This Zoellick did often, and enthusiastically…..”
My Comment
Patel is right about Zoellick being a gag-worthy appointment, as this article of mine at MWC news a couple of weeks ago, noted.
(More later)
The Symbol Of the Rosy Cross
From the website of the Confraternity of the Rosy Cross:
“All manifestation exists by virtue of a process … a continuity of eternal existence that knows no beginning nor end.
This process must be one of transcendence and transformation that never permits gross stagnation or decay. It must ever be refining and improving upon itself and periodically shedding its outer skin of appearance and the density of its material expression. H. Spencer Lewis referred’ to this process early in his writings as the 108 year cycle and later alluded to it in the numerically higher degrees by allegorically referencing the well known analogy of the necessary relationship between Judas and Jesus. His referencing was to explain the necessity of a catalyst to induce necessary change and transformation.
The name ‘Rosicrucian’ seen from an initiatic perspective derives from the Latin words: ‘ros’ and ‘crucis’ and they are the true source of our name. In that they originate from the Latin also dates our history.
The process of our origins is alchemical in nature — alchemical in a spiritual sense and not material. It identifies a process of refinement and transcendence to a more evolved state not unlike the individual process of the obscure night and the golden dawn. Ros is Latin for ‘dew’ and in alchemical terms, ‘dew’ is the purity of essence refined through transcendent processes of working the power of vitriol in its highest state. Ros is the perfected result of grosser existence.
Crucis describes the attributes necessary for the process of transformation to manifest. ‘Crucis’ is a Roman instrument of torture made into a sacred symbol by the early founders of Christianity. Christians say that Jesus was tortured and died upon the cross and he sacrificed his life so that the human soul would be saved.
Our concern here is not with the religious connotations and symbolism for truly every great prophet or Saviour from each religion underwent a similar experience for the same reason.
It is that reason in which we are concerned and that reason is a PROCESS of transformation from a lesser to a higher state.
Sacrifice, represented by the color red, is the nature of crucis.
It is the state of sacrifice, of giving of one’s self for the purpose of greater evolvement which is the process. It is not for ourselves that is the primary reason why we seek truth.
We seek Truth so that ALL may be free to follow the Path of Light. That, brothers and sisters, is the greatest sacrifice and the most difficult attribute that we must learn. That process is the source of our name.
For those who have never sacrificed or learned the process may fear it. But for those who understand, they will never fear…..”
My Comment
It’s not well known that that the western esoteric tradition (of which Rosicrucianism is one branch) had a huge influence on the Indian independence movement, as well as on the Irish.
As a student in London, Gandhi ran into it. He also came into contact with American writers like Emerson and Thoreau, who had been influenced by eastern religions. Later, during India’s struggle for independence, when he was in prison, Gandhi revisited and absorbed Tantric and other esoteric Hindu texts, and their principles informed his political practice right to the end of his life.
On the Irish end, at the turn of the century, an esoteric group, the Order of the Golden Dawn, which had Rosicrucian and alchemical elements, had an enormous influence on William Butler Yeats, the Irish statesman, poet ,and mystic. The occult influence can be seen in poems like Mount Meru and The Second Coming. It can also be seen in Yeats’ system of “masks” and interlocking “gyres” (representing cosmic dualities, played out in recurrent cycles). The gyres interpenetrate each other and move closer and farther as different cycles unfold. (Yeats was also deeply interested in astrological cycles).
Why do I bring all this up?
To show that thinking of religious or spiritual belief as something radically apart from or irrelevant to political struggle is simply delusional, at worst, and disingenuous, at best.
Church-state separation is necessary…principally to keep religion from the corruption of state power (as Roger Williams wrote).
But Religion (or mysticism) and politics have never been separate.
Note: I include under religion, atheism - a noble, ascetic, and very worthy faith.
But, in my view, not all that creative or imaginative…..
The Verdict Is In….
“In Lafayette Park, Washington D.C., of all places to protest, the plan was to dump one million tea bags in the park, but the brave dissidents never did it because they forgot to get the proper permits. Are you kidding me? What is civil disobedience without civil disobedience? They even went so far as to say that they were willing to put down plastic tarps and clean up after themselves.
That’s like saying we don’t agree with your oppressive, unconstitutional despotism of our nation and to show our ire in no uncertain terms we’re going to break public law and disrupt the peace so take that, nah- nah-ne-boo-boo. But don’t worry because we’ll put everything back when we’re done as if nothing happened cuz we don’t want any trouble!
Videos on the Internet of Lafayette Park show people standing around in their trendy turtlenecks and Tommy Hilfiger and North Face jackets, chatting, socializing, drinking coffee and talking on their cell phones. Some dressed in colonial garb (how cute) and waving flags. Others even break into a rendition of the Star Spangled Banner followed by a chant of “USA, USA, USA.” What a terrific show of meaningless symbolism….”
My Comment
My fear is that it’s not meaningless symbolism. It’s meaningful…but in the wrong way.
It’s meaningful because it focuses energy away from action that works to dressing up, going out, socializing, talking, waving flags etc. etc.
Which is why, with all due respect, I sat it out…..
Propaganda State: America’s Mauryan Empire
Curiously, the state that the American empire more and more resembles is not the one described in early modern or classical political theory.
American empire is more like the notoriously spy-ridden empire of the 4th century (BC) Indian empire of the Mauryas.
“No-touch torture,” “silent airwar,” “shadow statistics,” “endless surveillance”: these resemble nothing more than the empire of Chandragupta Maurya, one of India’s most successful conquerors.
Chandragupta’s minister, Chanakya, (Kautilya is the Greek form), is a little known theorist in the West, where he is sometimes seen as a political realist because of his most famous dictum: “the enemy of my enemy is my friend” sometimes called the Mandela theory of foreign policy.
But if by realism one means the “balance of power,” this isn’t what Chanakya wanted.
Chanakya saw the goal of politics not as maintaining peace but as augmenting power.
He advocated a ceaseless growth in power through concealed means, the strategy that seems to underlie such differing aspects of the American empire as the “white noise” of its air-power (see my piece, “America’s Downing Syndrome,” Dissident Voice, 2006) and the increasing levels of electronic surveillance, propaganda and psyops (see another piece in 2006, “Kartoon-Krieg: War by Other Means,” Counter Currents, 2006)
Kautilya’s writing preceded by 2000 plus years the current theory of war of American empire - what some now call 5th Generation War.
5GWhas been described thus by one expert on it:
“Open source warfare. An ability to decentralize beyond the limits of a single group (way beyond cell structures) using new development and coordination methodologies. This new structure doesn’t only radically expand the number of potential participants, it shrinks the group size well below any normal measures of viability. This organizational structure creates a dynamic whereby new entrants can appear anywhere. In London, Madrid, Berlin, and New York.
Systems disruption. A method of sabotage that goes beyond the simple destruction of physical infrastructure. This method of warfare, which can burst onto the scene as a black swan, uses network dynamics (a new form of leveraged maneuver) to undermine and reorder global systems. It is through this Schumpeterian “creative destruction” that new environments favorable to opposition forces are built (often due to a descent into primary loyalties and pressure from global markets).
Virtual states (ala Philip Bobbitt). Unlike the guerrilla movements of the past, many of the 4GW forces we are fighting today have found a way to integrate their activities with global “crime.” No longer are guerrilla movements or terrorists aimed at taking control of the reigns of the state or merely proxies for states. A new form of economic sustenance has been found. This black globalization is already vast (a GDP of trillions per year), and gains momentum through weakening and disruption of states. This military/economic integration creates a virtuous feedback loop that allows groups to gain greater degrees of independence and financial wealth through the warfare they conduct.”
(more by blogger John Robb )
Robb describes 5GW as having been brewed in Iraq while Citizen Fouche at the Committee of Public Safety is blunt about the motives.
Time for the American people to quit “sleepwalking.” Instead of clinging to the naive belief that civil society should be free of the tactics and goals of war (and that war should be open and conducted justly and legally), the public should wise up.
5 WH proponents tell them what they need to wise up about:
War is not just violence and destruction. War is also anything you do to force someone to act against their will.
The first perspective is the perspective of Clausewitz, the second that of pre-modern theorists like Sun Tzu and Kautilya.
All this sounds very deep and sophisticated until you strip off the jargon. Despite the exotic aura of eastern classical texts to it, I don’t see how the new strategy is anything more than a very old temptation gone one better. The temptation of power. Absolute power.
Under classical rules of engagement, in limited war, ones moral sense can remain intact.
The new varieties of total war - which is all 5GW amounts to - leave nothing intact, even among people who don’t know it exists – because it creates a bubble of lies in which their minds are manipulated perpetually.
Turns out oriental despotism is what so-called patriots admire.
Maybe someone should point out that America’s own republican tradition, despite all its follies, hypocrisies and failures, did at least pay lip-service to truth and peace as the way of life proper to a society.
Lead Kindly Light: Newman, Scholl, Gandhi
An excerpt from a piece by Ryan Sayr Patrico in First Things about anti-Nazi heroine Sophie Magdalena Scholl (May 9, 1921–February 22, 1943):
”New documents unearthed by German academics have revealed that the writings of the 19th-century English theologian were a direct influence on Sophie Scholl, who was beheaded for circulating leaflets urging students at Munich University to rise up against Nazi terror. . . .
But behind her heroism was the “theology of conscience” expounded by Cardinal Newman, according to Professor Günther Biemer, the leading German interpreter of Newman, and Jakob Knab, an expert on the life of Sophie Scholl, who will later this year publish research in Newman Studien on the White Rose resistance movement, to which she belonged. . . .
Newman taught that conscience was an echo of the voice of God enlightening each person to moral truth in concrete situations. Christians, he argued, had a duty to obey a good conscience over and
above all other considerations. . . .Under questioning from the Gestapo Scholl said she had been compelled by her Christian conscience to peacefully oppose Nazism.
Sophie and Hans both asked to be received into the Catholic Church an hour before they were executed but were dissuaded by their pastor who argued that such a decision would upset their mother, a Lutheran lay preacher.
Fr Dermot Fenlon, a priest of the Birmingham Oratory who was given excerpts of Mr Knab’s findings to include in a speech on Newman in Milan last week, said the originality of the research was that it
showed the clear “centrality” of Newman to Hans and Sophie Scholl.He said: “Knab has identified the presence of Newman in correspondence, in diaries and in the analysis of correspondence, particularly between Sophie and Hartnagel. He has shown how that
influence became operative at a critical moment.”He added: “The religious question at the heart of the White Rose has not been adequately acknowledged and it is only through the work of Guenter Biemer and Jakob Knab that Newman’s influence . . . can be identified as highly significant.”
The 2005 German film Sophie Scholl: The Final Days (Die letzten Tage) shows Sophie’s adherence to a higher law than the one imposed by the state. The law of her conscience, brought out beautifully in this confrontation with Herr Mohr, the police agent who interrogates her and finds in himself an unwilling connection to her:
“Mohr: You may have used false slogans but you used peaceful means.
Sophie: So why do you want to punish us?
Mohr: Because it is the law. Without the law there is no order.
Sophie: The law you are referring to protected free speech before the Nazis came to power in 1933. Someone who speaks freely now is imprisoned or put to death. Is that order?
Mohr: What can we rely on if not the law? No matter who wrote it.
Sophie: Our conscience.
Mohr: Nonsense! [Grabbing two books, one in each hand, as though weighing them against each other.] Here is the law and here are the people. As a criminologist, it is my duty to find out if they coincide and, if not, to find the rotten spot.
Sophie: The law changes. Conscience doesn’t.”
My Comment:
As Wendy McElroy notes in this review at iFeminists.com, Sophie’s very existence is a reproach to the way of life of those around her because it forces them to confront their own responsibility for the way things have become. Ultimately that is the real reason she must be killed.
“The light shines in the darkness and the darkness did not comprehend it.” (John 1:5)
In “Transit of Venus” (”Mobs,” Chapter 3), we cite Sophie Scholl as one of the heroes who truly bring change. The messiahs of the state, on the other hand, don’t change anything, however much they may mean to.
They simply play out their assigned parts, driven by mass emotions and mass slogans.
Another Blogger Note
Sorry to keep posting on this subject.
I am not replying from my current email account altogether.
Mail that goes there will redirected and opened in another account.
My new email account will be private and not available publicly any longer.
I apologize and hope you will direct any mail to the blog from now on. If you do not wish me to publish it, simply write as much on top.I will also set up a new email contact for anyone wishing to reach me directly for professional or media inquiries of any kind.
Note:
(1) Cyberstalking is a crime(2) Hacking is a crime
(3) Impersonation, malicious posting, and net vandalism are crimes
(4) Slander and libel are crimes
(5) Violation of privacy and infliction of emotional distress are crimes
(6) Making threats (veiled or not) is a crime
They are also of course highly immoral behaviors that do little credit to the ideology of the people who engage in them.
Note also:
(1) I have a second amendment right to self-defense that I’m fond of.
(2) Several US states have concealed weapons laws.
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