LILA RAJIVA: The Mind-Body Politic
Individuals Not Ideologies
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Archive of "Cognition" Category
John Gatto On State-Controlled Consciousness
Toward the end of this video, John Taylor Gatto, the iconoclastic critic of compulsory education and state schools and ardent advocate of “unschooling,” has an especially memorable passage.
He points out that while the state can violently coerce a few people at a time (through arrest and shooting), there’s no way (outside war or genocide, I presume) to coerce large masses of people over time, except through controlling their minds.Or more accurately, through creating the habits and attitudes that make them obedient to puppet strings in their own minds.
Compulsory schooling by the state, he argues, is a way to colonize the minds of children to make them their own police-force, eager to report other deviants.
[Preparing them to become tax snitches, as I blogged earlier, or political informants, or supporters of biometric ID legislation].
In “Dumbing Us Down”, Gatto argues that state schooling causes the following in a child’s mind:
1) Confusion, with its jumbled ensemble of tests, memorized and then forgotten
2) Dependence on class position
3) Indifference/apathy
4) Emotional dependency
5) Intellectual dependency
6) Provisional self-esteem that needs the assurance of experts to maintain
7) Habituation to constant surveillance and the denial of privacy
Bastiat On The Virtues Of Misers
In my view, the moral problem at the root of socialism is actually not envy, as many libertarians contend. I grew up among socialists, and they were, by far, motivated by honorable concerns: a sense of injustice, grief for the poor, compassion.
(I’m not talking here about political activists, some of whom do, in fact, have much baser motives).
The principal flaw in the socialist world view, as I see it, is a too great concern with appearances and an inability to see cause and effect in any complex way. It’s not the ‘materialism’ of dialectical materialism I object to. It’s the lack of ‘mind’ in the materialism. The reasoning is limited, superficial, and inaccurate. It lacks sufficient particularity, as Michael Oakeshott argued in “Rationalism in Politics” (1962).
And as Oakeshott argued there, that can be a problem in Hayek, as well.
Libertarian theorist, Frederic Bastiat, makes much the same point in his acute analysis of the superiority of the miser over the spendthrift, an analysis that would be iconoclastic from the point of view of traditional religious morality, where the miser’s avarice would usually be condemned and the spendthrift’s generosity praised:
Israel-Palestine Problem Exhibits Wound Of PTSD
At Forward, Leonard Fine puts his finger on the emotional trauma underlying the intellectual and political impasse in the Middle East:
“From time to time in this space, I’ve made passing reference to the post-traumatic stress disorder that afflicts Israelis (and the Palestinians, too). It may be a bit of a stretch, but there is a growing literature that suggests that not only individuals, but social institutions, can suffer from PTSD. Thus, for example, Loren and Barbara Cobb, in an article entitled “The Persistence of War,” argue that “specific symptoms of untreated PTSD are particularly troublesome for the social institutions of a society suffering from epidemic levels of these disorders. These symptoms are: hypervigilance, emotional numbing, denial and avoidance, seeing the world in black and white, magical thinking, and apocalyptic thinking.”
They go on to quote Dr. Jonathan Shay, widely regarded as among the giants in the study of PTSD: “Democratic process entails debate, persuasion, and compromise. These presuppose the trustworthiness of words. The moral dimension of severe trauma, the betrayal of ‘what’s right,’ obliterates the capacity for trust. The customary meanings of words are exchanged for new ones; fair offers from opponents are scrutinized for traps; every smile conceals a dagger.”
In the American military experience, PTSD most often arises when a soldier has witnessed the deaths or terrible wounds of his or her comrades. That happens in Israel, too, of course.
But in Israel, whole societies are the witnesses, and the word “post” is, alas, premature. The traumas are very much ongoing, and we do not yet have the clinical vocabulary to comprehend them.
For Jews, the great trauma is, of course, the Holocaust itself, the systematic and ultimately incomprehensible slaughter of one-third of world Jewry. That left a wound that will never quite heal, but that might by now have formed a bearable scab.
But mini-traumas ever since have picked at that scab, rendered the wound ever-raw. The excruciatingly painful list of suicide attacks, the hateful rhetoric, Sderot and the entire aftermath of the withdrawal from Gaza, and now, around the corner, Iran.
And then there have been and are the politicians who whether out of conviction or for purposes of dreadful exploitation pick at the scab and refresh the trauma. For Menachem Begin, Beirut was Berlin and Yasser Arafat was Adolf Hitler; for Benjamin Netanyahu, this is 1938, Tehran is Berlin, Mahmoud Ahmadinejad is Hitler. It was ever thus, it will ever be thus, hence it is here, now: They hate us. “Never again” may be our common oath, but “always, everywhere” is our common belief. The wound will not heal.
And the Palestinians? Betrayed by the corruption of their own leadership, theirs is not only the Nakba of defeat and displacement in 1948 and again in 1967; it is daily humiliation both thoughtless and intended, new bypass highways for the Jewish settlers in their midst, still more than 500 checkpoints and barriers to clog or block their own roads and travel, a security fence that slices and snakes through their fields and their farms and their villages and their cities, reminding, reminding, insulting.
Over Gaza, a sky from which at any moment death may be launched; in the streets of the West Bank, raids and roundups. Ongoing trauma, ongoing disorder. The wounds will not heal.
The Palestinians say: Without justice, there will be no peace. The Israelis say: Without peace, there will be no justice. Both sides are stuck with their wounds and their traumas; they need not only diplomacy, they need therapy. Their empathic capacity has been battered. They cannot place themselves in the shoes of the other, nor can they see themselves as the other sees them.”
Vandana Shiva on Nishkama Karma
Physicist and environmental activist Vandana Shiva on the practice of Right Attitude, or in Hindu terms, devotion to work without attachment to reward (nishkama karma):
“If you do anything with a narrow mindset, it makes you think according to a calculus of success and failure. Obviously when you are up against powerful interests, there are greater chances of failure than success. But when your work is inspired by a way of life and thinking, that process becomes a reward unto itself. That’s also what the Gita says, that you don’t count the results, you do the right thing according to your context. A spiritual outlook helps you see what the right thing in your context is. What matters is fulfillment, and that cannot be measured by the yardstick of society and its view of you, but by how your soul feels. Then the awards don’t matter, the brickbats don’t matter, the lousy rumors don’t matter. Nothing affects you.”
Maya Angelou On What People Remember
“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”
— Marketing saw, quoted by Maya Angelou
My Comment:
This quote led me to think of the way in which political debates these days have become entirely devoid of emotional intelligence. I’m convinced that the way we debate things is at least as important as what we debate. Maybe even more important.
There’s something fundamentally wrong with the media when it humiliates public figures, either directly and anonymously on the internet, or indirectly though misrepresentation and innuendo in print. There’s nothing funny, liberated, or “free speech” about any of it. It’s an abuse of speech… a form of violence.
Now if you cuss out someone who’s provoking and attacking you directly, that’s one thing. Turn about is fair play.
But using sexual humiliation as a tool to demonize political candidates (Sarah Palin) or feeding public voyeurism about prominent figures with no political relevance (David Letterman, John Edwards, Tiger Woods) is morally wrong and socially dangerous. It feeds a constant cycle of partisan retaliation that drives everyone but the most insanely ambitious out of politics.
Then, of course, the media turns around and complains without irony about how insanely ambitious politicians are.
Reporters are professionals. They have standards to adhere to. It’s not their job to simply supply a demand. It’s one thing to follow stories that interest people (within certain boundaries of what’s relevant to public discourse). That’s fair enough. But reporters can’t just cave into whatever it is they think people want to talk about.
You could, after all, argue that people also like watching snuff movies. Does that mean the media feeds that appetite too?
Demand doesn’t just come into being. It’s also created. And that’s not a one-way thing. There’s a feedback loop. Demand feeds supply, which feeds demand….. There’s an addictive element to the whole thing.
Which means writers can’t just give up their own moral freedom to feed a demand for immoral things. They have to make a conscious choice to go against what’s in their (or their publisher’s) economic interest and, instead, do what’s right. Admittedly, it’s hard.
As for the so-called hypocrisy of politicians, politicians and entertainers aren’t meant to be moral exemplars, so the question really shouldn’t arise at all.
Since the public expects a certain image, politicians have to conform if they want to get elected. Wanting that image to reflect reality strikes me as an example of the foolishness of the public, not of the hypocrisy of politicians.
Public figures are more and more simply the victims of mob mentality. From that perspective, John Edwards did quite right to deny the scandal until the end. It’s no business of the mob’s to know everything about a politician’s marriage and demand a standard from him that the vast majority of people don’t hold to.
Now, Edward’s team members are a different issue. They sacrificed money and time and they might naturally feel betrayed. That’s a different matter. Perhaps they should have researched him a bit more before latching onto him. That they didn’t suggests they have a problem - mindless hero worship.
People can have extraordinary talents but it doesn’t follow they’re perfect human beings, and there’s something deeply troubling about the urge to demand perfection from mere human beings…. and then attack them when they can’t supply it.
If I were Edwards, I would have banged the door on reporters who hounded me, a long time back. I would have turned the tables and started asking them a few questions about their private lives.
I suppose that’s why I have a degree of sympathy for people who’ve played the game back at reporters, like CEO Mark Cuban..and lately, Patrick Byrne.
Cuban has used Web 2.0 to his advantage against regulators as well.
A New York Times article in 2007 described how John Mack Mackey of Whole Foods and even disgraced and convicted financier Conrad Black of Hollinger International posted anonymously on message boards to counter negative posts about their companies. The articles noted that they ran the risk of violating securities laws, especially if they disclosed company business in their posts.
Perhaps that’s where the problem lies. We have laws to stop CEO’s of companies from defending themselves against attacks, but none for the people who do the attacking, even if they have a financial motive for it and even if their attacks are founded on semi-truths and lies indistinguishable by casual or lay readers.
Mack Mackey used the handle rahodeb, an acronym of Deborah, his wife’s name, and he even commented on how cute he looked with a new hair-cut. Byrne, on the other hand, has used a pseudonym Hannibal (the ruler of Carthage, not the star of “Silence of the Lambs”), but always signs his name underneath. Both took up the pen to counter attacks on their companies by anonymous internet posters.
It seems to have become a real problem.
In 2008 Apple CEO Steve Jobs finally had enough of the rumor mongering about his health and called Joe Nocera of the New York Times a juicy epithet I will chastely refrain from repeating.
[Since I've begun contributing to Deep Capture and enjoy a degree of bloggeraderie with them, I'm refraining from commenting directly on Byrne's running battle with the media, about which I've written before. I will just admit to being on their side versus Goldman and the short-raiders. I think they tell it like it is. But any obscene rants at reporters' expense don't earn brownie points with me. And I maintain a neutral rating on Overstock, since I just don't know enough about that end of things].
Either journalists act like a responsible press, or they are paparazzi, in which case they should expect to be hounded and harassed in turn. If reporters want access to the highest levels of business and government, if they want to report on subjects that are socially and politically important, then they should show some respect for their jobs, qualify themselves, adhere to professional standards of behavior, and avoid tormenting other human beings just to make their names.
Remember these are the same reporters who failed to report accurately or in time on one of the biggest stories in a hundred years, and why was that? Because (with honorable exceptions) they were either too comfortable with Wall Street, too lazy to do the research, too ignorant to know where to look, too provincial to read the people who could tell them, and too venal to go against their interests…. or all of the above..
This kind of public exposure we subject people to is not a one-time business. There is a record of the Edwards saga for ever on the net, visible to the whole globe….every little painful detail. What kind of sensitivity to a sick woman does that show, just to take one angle. Or consider their children..
Isn’t it a kind of torture?
And doesn’t it make us, as it makes any kind of torturer, bestial?
Meanwhile, the victims never forget…The Mental Gulag Is Here (Update)
Mind-reading passengers for terrorist potential - (note, potential) i.e. “thought crimes” - is here, folks, and seriously being batted about by Homeland Security:
“The aim of one company that blends high technology and behavioral psychology is hinted at in its name, WeCU — as in “We See You.”
The system that Israeli-based WeCU Technologies has devised and is testing in Israel projects images onto airport screens, such as symbols associated with a certain terrorist group or some other image only a would-be terrorist would recognize, said company CEO Ehud Givon.The Machinery of Habit
A piece I wrote four years ago, The Burgh: Downsizing,” examines the nature of change and habit in relation to urban economies transformed by globalization and war.
“The boys come in and the beer flows. Ricardo tells us about training. Four-mile runs, 200 push-ups every morning, wall-climbing. “They break you, man,” he shakes his head. “They make you tough.
“I said I hoped so, considering where he was going. But Melanie, who studies the theology of the medieval anchoress Juliana of Norwich and sells papers on a corner in Oakland for the Socialist Worker, is more worried about his getting into what she calls killing mode. I ask her if a mode is the same as a habit. It takes time after all to form a habit. A mode on the other hand sounds like a gearshift on an Audi. And if you can shift into a gear, you can shift out. Maybe it’s really a question of what sort of habits. Learning, retraining, moving need effort. They don’t come easily. But war is a machinery that moves on its own and blood-lust, like a winter flu, might be easy to pick up and impossible to get rid of.
War and demolition come too easily to human nature. And take away too much. Anything worth pursuing, on the other hand, needs to be stalked through the years with the patience and vigilance of a hunter, cultivated through seasons of scarcity and remembered in times of forgetting. In our sophistication we laugh at those who buy dear and hold dearer. Who stay when they should have left. Bag holders. Fools. Who step into the river and expect the waters to stay the same. The immobilized in our mobile society. What is the value of an abandoned church, an obsolete mill, an aging worker? Flux, we shrug, is the only certainty. Change is the first law of nature.
“People talk about joining but they don’t,” says Ricardo, “I’m the only one who did.” He sounds proud.
“I ask him if he thinks good health insurance and tuition money are worth risking his life for. He laughs.
“Look — I ain’t gonna die. Most of the guys who teach me, they’ve been there. They got through. More chances I’d get shot in a ghetto. So some guy’s lost an arm…or a leg. So what? All this new technology now, reconstruction…they can make you another leg; it’s really no big deal.”At 26, you can think of that as a good trade. An amputation of the body or the mind is all it takes to keep up with change. Like those translucent lizards which shed their tails seasonally as they wait immobile and vigilant for flies on dusty window sills, we might grow new limbs just as good. New memories to replace old ones. Here in the hills, at the confluence of three rivers, we have learned not to resist the laws of nature.
“But perhaps we don’t live by nature alone. Perhaps, as Juliana of Norwich said, we also need mercy and grace.”
“The need to change and the machinery of habit that makes it difficult - a theme I find myself returning to , over and over, especially when I’m confronted with the depressing spectacle of people going back to the same propaganda, the same bogus assertions that caused this global catastrophe in the first place.
Going back, like dogs to vomit.
I’m sorry if that sounds ugly, but what’s happening now in DC is ugly….and very very dangerous.
MindBody: Reading Between The Tea-Leaves
When I was young - around 11 or 12 - I recall having very strong hunches about things that would pan out. Nothing weird, simply day-to-day things. I’d lose my stamp album and then I’d go to sleep and in my dreams I’d see it was in the bottom drawer of a cupboard. And when I woke up and went to the drawer, I’d find it. I would have very strong feelings I’d pick up from other people’s emotions. When someone said something, I’d feel the emotion from which they spoke. I’d hear anger, and overlaid on that, jealousy or envy. I’d often have a sense of what someone was going to say before they said it.
None of this was overtly alarming. It blended very easily into what I considered normal and never made me feel different. I didn’t talk about it to anyone, except my mother, who dismissed it as “just imagination.” But I always knew it wasn’t either “just” or “imagination.” (more…)
Why We Believe Propaganda
From a piece I wrote in 2005, “America´s Downing Syndrome,” about why the airwar in Iraq was never represented in media coverage:
“And how does the public conscience square with all this? Simple. The civilians who are fair game are not American civilians. The skies that are threatened are not American skies. It may take a village to raise a child, but given enough air power, we now know also that it only takes a child to raze a village. Our children, their villages. And in return for our invulnerability, we make cultural icons out of bomber pilots, turning a blind eye to their ravages abroad. While the grunt that kills and is killed on the scorched ground bears the burden of public backlash against any horrors of war making that might elude censorship, his mates in the clouds are untouchable. Atrocities are always only committed on earth. So a Lieutenant Calley is court-martialed over My Lai and a Charles Graner is imprisoned for Abu Ghraib, but the bombers who wreak havoc on a magnitude far grander not only walk free, but are feted by a society in which for many reasons the air force is substantially white and the officer corps even whiter.
But there’s more. Strategic bombing directed broadly against a country´s will or morale rather than military targets has nearly always been associated with civilian not military control. Pen-pushers in think tanks and journals, couch-crusaders on Wall Street and Main Street are the most hysterical groupies for total war from the skies. (9) Remote from actual bloodletting, they’re still the quickest to tote up grand calculations of its necessity in bringing about their favorite utopia. It was Lyndon Johnson, not the generals, who first ratcheted up the air war against North Vietnam to genocidal proportions.
And because the civilian leadership unlike the military is always indebted to public opinion for its existence, it´s ultimately public approval rather than military need that drives air war against civilians, which is why the corporate media obligingly does its bit to keep that approval going.
Media and government duplicity, widespread intoxication with technological wizardry, a deadly sense of impunity combined with a deadlier sense of omnipotence, cultural myth making, and socio-economic class are the causes of America’s fundamentally diseased relationship with air power and thus with the raw foundation of imperial might. It is the cognitive disease which periodically manifests itself in redundant “smoking-guns” and “exposes” about memos whose sole purpose apparently is to maintain our illusion of ourselves as eternal naifs duped by an endless procession of charlatans in government.
Clearly, it’s not merely war propaganda so much as the public´s receptivity to war propaganda that’s the problem. The addiction to war-as-Grand Theft Auto reveals an insatiable craving in the bowels of the military-industrial leviathan for physical violence. Air war feeds that craving while disarming us with its technical virtuosity and its remote-controlled, surreal impersonality.
Air war works because it displays naked aggression masked as defense, hard core furtively masquerading as family viewing in the American living room. It’s the secret fix that lets us look like good guys but act like bad guys; it’s the other face of the double-eagle, the predator behind the mask of the protector.
Air war is the white noise of a consumer society so narcotized that only violence makes us feel alive. If we no longer see it, hear it, or talk about it in the heart of empire, it’s ultimately only because for more than fifty years now, we’ve never really done without it.”
Edward Bernays On Why Conspiracies Work
“In almost every act of our lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons [...] who understand the mental processes and social patterns of the masses. It is they who pull the wires that control the public mind, who harness old social forces and contrive new ways to bind and guide the world.”
– Edward Bernays
Peter Boettke On Paul Samuelson
Peter Boettke writes a sobering obituary for Paul Samuelson:
“John Hicks once wrote that the story of economics in the 1930s was the battle between Hayek and Keynes. I think Hicks is right, and that this battle continues to this day as witnessed in our current policy debates. But I think there is a deeper debate that goes at the very project of economics as a scientific discipline. And that battle is the one between Samuelson and Mises, and the fateful choice was the late 1940s. Rather than following Mises’s Human Action, the economics profession went the path of Samuelson’s Foundations. Formalism was interepreted as synonymous with logical rigor, and in the subsequent decade positivistic testing was interpreting as synonymous with empirical analysis. By the 1960s, formalism and positivism transformed the science of economics so that the Misesian understanding of “theory” and “history” was actually completely dismissed as a relic of a pre-scientific age.
Since then a large part of the great efforts by economists have been directed at recapturing insights that Mises-Hayek possessed already by mid-century — whether we are talking about cognitive limits of man, the role of property rights (and legal and political institutions in general and behavior related to them), and the microfoundations of all macroeconomic phenomena. New institutional Economics, New Classical Economics, New Economic History, Experimental and Behavioral Economics, etc. all deviate in significant ways from the scientific and policy project that Samuelson initiated in the late 1940s and which dominated economic thinking from that time until the 1980s. The Samuelsonian project had to be pecked away at for progress in economic understanding to take place. Yet the ’scientific’ allure of the project still remains — unfortunately even among many of those who pecked away at the Samuelsonian project. The pretense of knowledge (see Hayek’s Nobel) and the claim to the mantle of science (see Rothbard’s paper of that title) have a much stronger grip on the minds of economists and intellectuals than what might be reasonably expected in the wake of repeated failures.
Samuelson argued that like all great scientists he was only concerned with the applause of his peers. And he received great praise in his lifetime and will be celebrated in the short-run in his death. But I have stated on more than one occasion that I believe Samuelson will be remembered in the same way as Sir William Petty is remembered, not as Adam Smith is remembered. His substantive contributions (as oppopsed to the form in which he stated arguments) are not immediately obvious to pinpoint. We must always remember that Samuelson was the great anti-Misesian of 20th century economics, and in my book that translates into a force for anti-economics despite all the scientific accolades, awards, honorary degrees, and reverence by his peers he was granted in his lifetime.”
Psychic Income Versus Real Income (Updated)
John Mauldin in Frontline Thoughts on one off balance sheet vehicle that might get us out of this crisis faster than we think: psychic income, our dreams for our future…
“Every night we go to sleep on our psychic income, and every day we get up and try to figure out how to turn it into real income……The future is never easy for all but a few of us, at least not for long. But we figure it out. And that is why in 20 years we will be better off than we are today. Each of us, all over the world, by working out our own visions of psychic income, will make the real world a better place.”
My Comment:
In response to RobertinDC, my loyal reader, who politely calls this a “crock,” I should add the context of Mauldin´s note, which is technological change.
Mauldin argues that even if the market stays flat or depressed in real terms, even if unemployment increases and the standard of living falls, none of us can know for sure what the future holds. In ten years time, the world may very well be a better place.. in terms of possibilities… than it is today because of technological innovation.
Is this implausibly “feel good” stuff?
Well, yes.
Of course.
It takes no great courage or imagination to imagine plausible scenarios.
Imagination is the ability…the very creative and fundamentally life-giving ability..to imagine implausible..even unbelievable scenarios and then make them not only plausible but inevitable.
And, again in a fundamental sense, that is how creativity in all fields works. Focusing solely on the negative is itself a form of delusion.
I don´t mean by this that you can wish yourself into any outcome you want. There are also physical laws at work that you have to accept. You cannot wish away a contraction of the economy because of overspending, for instance. The economy has to correct.
But the effects of the contraction, the extent, and its resolution can in fact be ameliorated by a change in attitude.
And by staying alert to every possibilty, we can also sense when deterministic interpretations - such as, “this is the way capitalism is“ — are being used to cover up what is in truth a very manipulated reality.
In that case, what we should focus on is an imagined ideal, the way capitalism should be, which may be implausible or even a crock, in some views, but is our only true guide to a way out of this debacle.
This is why I wrote, in 2007, that the economy didn´t have to crash. It was in a PR piece for the book.This wasn´t because I lacked a healthy sense of reality. But reality in the sense that physicists understand it is a very different thing from the “common sense” understanding of reality. The physicists´view is actually closer to what might be called implausible or even unbelievable. But it´s none theless true. The same divergence between common sense perception and underying reality exists in the economy. Cynicism is often right. But not always. Pessimism is often warranted. But not always.
There were fundamental problems in the economy in 2006-2007, but the way the crash occured struck me then as very strange.
I suspected at the time that some of the indices were manipulated…and now the deepcapture team (and others like Pam Martens) have shown how they could have been (see prior posts).
In time, you are going to find that this is true of many of the indicators we use to read the mood of the investing public. Markets are driven by emotions. And smart crooks with the ability to manipulate that emotion can make big money from the manipulation….
And if they can, it stands to reason they will.
What is surprising is only why it took so long for supposedly tough minded financial reporters to figure that out.
In any case, whether manipulation is proved or not, what ordinary people can do is to take for their model the good trader. Good traders are people who can “keep their heads when all around you are losing theirs and blaming it on you”..as Kipling said.
The hall mark of expert trading is to control the emotions and rein them in from succumbing to mass moods. What does that mean in practical terms?
It means when everyone is panicking, look for silver linings, and when everyone is complacent, learn to worry…
Bank Chief Admits He Didn’t Know…
John Thain now admits no one at Merrill had any idea what their CDOs (collateralized debt obligations) were worth. They created them on computer programs. Not only was the global economy rear-ended by a bunch of greedy corporate hacks, it turns out they were too dumb to know what they were doing and too reckless and arrogant to ask. It’s bad enough being scammed by psychopaths. It really hurts to be scammed by morons.
“We think it’s good news that Thain is now emphasizing the knowledge problem when it came to banking–highly paid, well-educated people at the top of their field just didn’t understand the credit derivative products they were buying and selling. This is important as much of our financial reform seems to ignore this problem, focusing instead on fixing incentives in compensation.
It also undermines the idea that the Fed–or any other regulator–will be able to properly assess the risk of these kinds of derivatives.”
My Comment:
I’ve always suspected this, because in graduate school one of my close friends was working on a PhD in finance (where he’d ended up after starting out in mathematics). He was very smart and believed that you could quantify decision- making at all levels. He wanted to turn the social sciences into the hard sciences. We had passionate arguments about this, since I thought the hard sciences were a very faulty (if useful) model for the arts and humanities. I was flabbergasted to find out one day that he didn’t understand what a mortgage was - he lived in such a rarefied world of theory and had been a student for so long. It wasn’t that he lacked empathy or emotions. He didn’t. What he lacked was any experience of the practical world. [He ended up becoming a trader for JP Morgan and had an office at the World Trade Center. Fortunately he wasn't in on 9-11].
Libertarian Living: Neuroeconomics and Cooperation
“The Science and Ethics of Cooperation,” by Michael Townsey, Prout Institute:
“The cooperative system is fundamental to the organization and structure of a Prout (the Progressive Utilization Theory) economy. It is an expression of economic democracy in action - cooperative enterprises give workers the right of capital ownership, collective management and all the associated benefits, such as profit sharing.[i] Prabhat Ranjan Sarkar, the propounder of Prout, goes further and argues that an egalitarian society is actually not possible without a commitment to the cooperative system.[ii] The commitment is not just to an economic order but also to a cooperative ethic and culture. This essay explores some of the scientific evidence that humans have a predisposition to cooperation and in particular to economic cooperation. The evidence comes from a new and exciting field of research known as neuro-economics. We then turn to those insights provided by sociological studies.
Neuro-economics
Neuro-economics is the study of the neuro-physiological underpinnings of economic decision making. The field is new and providing unexpected insights into human economic behavior. Classical economic theory requires individuals to make complex calculations to maximize their personal advantage or utility. Utility, however, is a strangely ambiguous concept. On the one hand it is given a numerical value which implies the counting of something but on the other it is entirely abstract and not anchored to anything in the real world that can be counted. The advent of neurophysiology led to the idea that utility was really a surrogate for some chemical currency inside the brain, with most interest focused on serotonin molecules because these are known to be responsible for the experience of pleasure.
It turns out that a wide range of molecules of emotion[iii] impinge on the mental cost-benefit calculations that are supposed to take place inside the brain and they have unexpected effects. For example, in a ’sharing experiment’, person A was asked to share a sum of money with person B. These experiments demonstrated behavior inconsistent with neoclassical theory. People appear to put a high value on fairness. In a follow up experiment, persons A and B were placed in the same experimental scenario as before, but they were (unknowingly) given an intranasal administration of oxytocin. Oxytocin is a neuropeptide that plays a key role in social attachment and affiliation in animals and causes a substantial increase in trust in humans. In these experiments the effect of oxytocin was to increase the amount of money that A gives B. The experimenters concluded that “oxytocin may be part of the human physiology that motivates cooperation.”[iv] It is worth adding that such hormone-mediated interactions are not confined to human relationships but are also likely to be involved in human-animal relationships.[v]
Oxytocin is not the only neuro-chemical to promote cooperation. Recent observations of bonobo monkeys in the jungles of the Congo reveal fascinating contrasts with chimpanzees.[vi] Bonobos are matriarchal and show little aggression compared to the patriarchal chimps. Chimps respond to strangers with aggression, while bonobos demonstrate curiosity. When under stress, chimp tribes degenerate into fighting while bonobos respond to stress by engaging in collective sexual activity. Scientists have concluded that bonobos demonstrate higher levels of trust both with each other and with strangers. Of most interest, however, from a neuro-economics point of view, is the ability of the monkeys to perform a simple task requiring cooperation in retrieving some bananas that are out of reach. Although both species are intelligent enough to work out a solution (for example, by one climbing on the shoulders of the other or by one holding a ladder for the other), the chimps fail because they cannot trust one another. On the other hand, bonobos have no trouble cooperating to retrieve the bananas.[vii]“
The Spectacle of General Secrecy
Political theorist Guy de Bord on the spectacle of public life:
“The concentrated spectacle
The spectacle associated with concentrated bureaucracy. Debord associated this spectacular form mostly with the Eastern Bloc and Fascism, although today mixed backward economies import it, and even advanced capitalist countries in times of crisis. Every aspect of life, like property, music, and communication is concentrated and is identified with the bureaucratic class. The concentrated spectacle generally identifies itself with a powerful political leader. The concentrated spectacle is made effective through a state of permanent violence and police terror.[edit]
The diffuse spectacle
The spectacle associated with advanced capitalism and commodity abundance. In the diffuse spectacle, different commodities conflict with each other, preventing the consumer from consuming the whole. Each commodity claims itself as the only existent one, and tries to impose itself over the other commodities:
Irreconcilable claims jockey for position on the stage of the affluent economy’s unified spectacle, and different star commodities simultaneously promote conflicting social policies. The automobile spectacle, for example, strives for a perfect traffic flow entailing the destruction of old urban districts, while the city spectacle needs to preserve those districts as tourist attractions.
The diffuse spectacle is more effective than the concentrated spectacle. The diffuse spectacle operates mostly through seduction, while the concentrated spectacle operates mostly through violence. Because of this, Debord argues that the diffuse spectacle is more effective at suppressing non-spectacular opinions than the concentrated spectacle.
The integrated spectacle
The spectacle associated with modern capitalist countries. The integrated spectacle borrows traits from the diffuse and concentrated spectacle to form a new synthesis. Debord argues that this is a very recent form of spectacular manifestation, and that it was pioneered in France and Italy.
According to Debord, the integrated spectacle goes by the label of liberal democracy. This spectacle introduces a state of permanent general secrecy, where experts and specialists dictate the morality, statistics, and opinions of the spectacle. Terrorism is the invented enemy of the spectacle, which specialists compare with their “liberal democracy”, pointing out the superiority of the latter one. Debord argues that without terrorism, the integrated spectacle wouldn’t survive, for it needs to be compared to something in order to show its “obvious” perfection and superiority.”
My Comment:
Thanks to reader J. T. Gordon for reminding me of this. I’ve posted before on de Bord and the notion of the spectacle of society. Like so much powerful analysis, this one too has roots in the ideas of Friedrich Nietzsche, one of the most productive thinkers of the last 150 years.
What should be noted here is that in the spectacle of secrecy, the greatest emphasis is placed on openness. Thus, “freedom of speech” occupies a central position in the culture. By this means, all barriers to privacy are brought down, all psychological barriers between the individual and the crowd. Yet, this openness at one level (in public culture) operates side-by-side with secrecy at the highest level (governments and corporate leaders).
(More later)
Back…
Reading through this again, I feel I need to question De Bord’s division, which corresponds to communist, capitalist and liberal democratic. It’s too neat. In fact, things are much more muddy
Prechter - Debt Is the Problem, Not Paper Printing
Goldseek radio has an interview with Robert Prechter here.
Prechter’s 2002 book, “Conquer the Crash,” predicted the current economic collapse and this is an interesting and wide-ranging interview. Prechter is a renowned Elliot Wave theorist and a long-time prophet of depression.
Summing up his most important points:
*We have been in a developing deflation since 2002
*Debt is the problem, not paper-printing.
*Gold will hold value and do well, but it won’t go to the moon
*Cash is a good place to be
*The market will go down for a replay of 2008, in spades
Friedrich Hayek on the Pretence of Knowledge
Friedrich Hayek on “the pretence of knowledge:”
“Unlike the position that exists in the physical sciences, in economics and other disciplines that deal with essentially complex phenomena, the aspects of the events to be accounted for about which we can get quantitative data are necessarily limited and may not include the important ones. While in the physical sciences it is generally assumed, probably with good reason, that any important factor which determines the observed events will itself be directly observable and measurable, in the study of such complex phenomena as the market, which depend on the actions of many individuals, all the circumstances which will determine the outcome of a process… will hardly ever be fully known or measurable.”
Thanks to Kevin Duffy.
Mandukya Upanishad on the Ego and Dream States
The Upanishads are Sanskrit texts of commentary on the four primary Vedic religious classics of Hinduism (the Rig, Sama, Yajur, Atharva).
This passage is a commentary on dream analysis contained in one of them:
“Dreams, therefore, are due to repressed desires. This is one of the causes behind dreams. This is the only factor that the psychoanalysts of the West emphasise. But Indian psychologists and psychoanalysts, like the Raja Yogins and the philosophers of the Vedanta, have touched another aspect of dream. The dreams may be, to some extent, of course, the results of complexes created by frustrated desires. But, this is not wholly true. Dreams may be due to other reasons also; one such reason being the working of past Karma. The effects of past Karmas, meritorious or unmeritorious, may project themselves into dream when chances are not given to them for expression in waking life. Also, a thought of some other person may affect you. A friend of yours may be deeply thinking of you; and you may have a dream of him, or you may have a dream with experiences corresponding to his thoughts. Your mother may be far away, crying for you, and her thought can affect you; you may have a dream. All this is equal to saying that a telepathic effect can produce dreams. In the case of spiritual seekers, Guru’s grace can cause a dream; and catastrophic experiences that one may have to pass through in the waking world may pass lightly as a dream experience by his grace. Due to the power of the Guru, one may have a dream suffering, instead of a waking one…….. The reason is that you oppose their function in waking life, due to the assertions of the ego. You counteract Isvara’s working and Guru’s blessing by the action of your own egoism. But, in dreaming, the ego subsides, to some extent. You become more normal, one may say, and you approximate yourself more to reality, rather than to artificiality, in dream. Thus, it is easier for these powers to operate in dream than in waking. .”
— The Mandukya Upanishad on dreams, elucidated by Swami Krishnananda
Solzhenitsyn On Why We Don’t See the Truth
“It is not because the truth is too difficult to see that we make mistakes… we make mistakes because the easiest and most comfortable course for us is to seek insight where it accords with our emotions - especially selfish ones.”
-Solzhenitsyn
(Thanks to reader, Sean)
Theodore Roethke On Learning Where to Go
One of my favorite poems, and certainly my favorite American poet.
The Waking
- Theodore RoethkeI wake to sleep, and take my waking slow.
I feel my fate in what I cannot fear.
I learn by going where I have to go.We think by feeling. What is there to know?
I hear my being dance from ear to ear.
I wake to sleep, and take my waking slow.Of those so close beside me, which are you?
God bless the Ground! I shall walk softly there,
And learn by going where I have to go….etc.
Thought Control and the Sex Police
The media these days has an unhealthy and strange preoccupation with the sex lives of politicians and “public figures”… especially when they’re adulterous.
All this, despite journalists’ protests that they’re interested in “privacy”…
The issue becomes doubly important because of the role sexual blackmail…or worse yet, sexual libel.… plays and has played in controlling political mavericks, reformers, or even whistle-blowers, whether in government or elsewhere.
I call it strange, because modernity is supposed to have removed itself so far from oppressive mores and bourgeois conventions….and yet in most commentary on the subject, one finds nothing more than the same hideous cliches - about guilt, predation, sex-pots, cheating, and high drama….
In point of fact, most spouses wander (or more accurately, cultivate fantasies of wandering) because of lack of emotional connection in their marriage.That’s clear from Mark Sanford’s tepid (yawn) revelations..
Now, as a good Tory-Bohemian, I find myself often on both sides of this issue.
On the one hand, the nostalgic popular imagery of It’s a Wonderful Life, and Father Knows Best…..
And, as a Christian - even an unorthodox one, the fact that one is supposed to admire the impossible standard set in the Sermon On the Mount…
A standard that no normal human could follow to the letter..
A standard that perhaps no normal human should follow to the letter.
[I wonder if that was the point Jesus was trying to make?]Yet, while no one casts stones at anyone for not giving away all his belongings, or for failing to keep the sabbath, or for slandering or lying, or for fraudulent business practices, strange that even the most benign friendship should bring out the sex police.
(As an example, think of McCain’s supposed affair with a lobbyist - an affair both of them denied and for which no proof existed beyond the media’s fervent desire for a little dirt…and mind you, if one were to be precise, it was McCain’s marriage itself that was grounded in adultery…Cindy being a former ‘other woman’).
Stranger yet, the sex police these days are usually so-called leftists and liberals.
Their modus operandi would have made the gestapo proud…If there’s anything calculated to keep women out of public life, it’s this intensely misogynistic and pornographic scrutiny. If you don’t think that’s what all this is, why haven’t we been treated to sexualized nudes of, say, George Bush, as we have of Hillary?
Why wasn’t Ralph Nader lynched by the media mob in the same way as Cindy Sheehan?
So my sympathies are with scarlet women (and men), then and now, paraded up and down while the public stones them symbolically. Even Eliot Spitzer has my sympathy. The man after all did try to cordon off his extramarital life from his wife and children. He had that much concern for them. It was the guardians of public morality who had none.
I admit it. When there’s a stoning, I’ll take the side of Hester Prynne and Anna K.
I prefer Tolstoi’s intelligent, ambitious, restless, sexual, and deeply moral adulteress, to either her vain, shallow lover or her wooden, hypocritical husband….or even to her brother’s long-suffering wife, the plaintive, babied-out Dolly - so aptly named.
Tolstoi, being a man, could give Anna no credit for anything except beauty or sexuality, but the fact is, you read the novel for her. ..and not for Dolly, or for Levin, or for Karenin, or for Vronsky. She’s worth them all.
The other woman…..
Who’s to say how much this unspeakable she profited countless miserable marriages, neutered husbands, and pathetic, damaged children…by taking up the slack (physical or emotional) of the immoral “business arrangement,” by which I loan you my body to make babies and play with, and in return you fork over 50% or more of everything you make, or will ever make, while we endlessly bait, hurt, rob, insult, control, extort, blackmail, bore, manipulate, wound, sue, demean, abuse, and torture each other verbally, emotionally, and physically….all in the name of holy matrimony.
What a fraud….
And that’s how many children are raised today. Any wonder they became traumatized adults, easily manipulated by propaganda?
Where would respectable Victorian marriage have been without the brothel, asked Shaw..
And where would the nuclear family be without countless other women, whether they were only friends, sisters, neighbors, and “office wives,” or whether they crossed the boundary into a physical relationship?
Thank God for other women….and for other men.
It takes a village to raise a married couple…..
We all have an image of the other woman in our heads: the calculating predator who moves in on happily coupled men. The cloistered, diamond-draped mistress. The office sexpot who’s always just a little too close to your guy at his holiday party. She’s a staple of novels, movies, tabloids, even history books - from the restless Emma in Madame Bovary to Fatal Attraction’s bunny boiler to, most recently, Eliot Spitzer’s hotel call girl. And if you’ve never seen it, go YouTube the legendary clip of Marilyn Monroe purring “Happy Birthday, Mr. President” to her rumored lover, J.F.K. That’s the other woman as we usually imagine her.
More at Glamour, via Truth to Power blog.
Leonard Cohen On How Light Gets In
“There is a crack, a crack in everything/That’s how the light gets in.”
– Canadian poet and song-writer, Leonard Cohen (via Truth to Power blog)
Libertarian Living: Mirambika - Schooling with Emotional Development
“Fantasy and imagination should be allowed to flower in the child. Talk that may seem without logic may not necessarily be irrational- it could be suprarational,” informs [sic] Dr Ramesh. He further mentions that one of the serious flaws with today’s educational system is that, “emotions are most often ignored in our rigidly regulated and tightly controlled system. But it is essential to transform them to retain the best of the emotions- vitality, love and enthusiasm. This manifestation of our divine essence cannot be nurtured through rote learning. We have to create such situations where this part is also brought forward. Thus, training of the psychic voice is an important task of the teacher”. However, mainstream education completely overlooks this aspect and hence, manufactures emotionally underdeveloped children, who are made to fit into the industrialized society. These children do not question authority, they only follow suit. The result is masses of people who do not think for themselves but blindly obey. It was in reaction to this mass-production approach that the alternative education movement began.
This movement gave an impetus to those people who believed that the child had to be driven by his/her own need to learn and know. “We believe that nothing can be taught. Education is inherent in the child, we only help in stimulating it to bring out the best in him/her”, asserts Sulochana Di, one of the teachers who have spent more than 20 years at Mirambika.”
Chesterton on the Supernatural and the Unnatural
“Take away the supernatural and what you are left with is the unnatural.”
- G. K. Chesterton
Codex Alimantarius Disinformation?
A few months ago I blogged a youtube video by one Rima Laibow on globalist control of food.
But recently I came across this article by Robert Singer at Dissident Voice, which argues persuasively that Laibow is part of a disinformation campaign aimed at discrediting food security advocates by peddling exaggerated accusations against Monsanto, the main agri-culprit of the New World Order.
Here’s the money part from the Singer piece:
“The Natural Solutions Foundation (NSF) originated the Linn Cole articles.
The Organic Consumers Association and other legitimate heath advocates have been questioning the NSF for several years, and the criticism is universally the same: Why does the NSF keep turning out factually inaccurate, hysterically grim articles such as Linn Cole’s?The answers start with the NSF founders, husband-wife team Albert Stubblebine and Rima Laibow. Now, when I accuse these people of being disinformation professionals, let me explain. I’m not saying they’re doing sloppy research, and I’m not saying they’re being overzealous. What I am saying is that they are working, for pay, to spread false information and to make their organization look like a legitimate activist group.
My conclusion is Stubblebine and Laibow are using the Natural Solutions Foundation—and Linn Cole—to undermine the health freedom community by spreading disinformation about HR 875.
Stubblebine is a retired U.S. Army major general who designed AEGIS, “a major Homeland Security private initiative.” Given this background and his ties to the U.S. intelligence community, eyebrows were raised in the health freedom community in early 2005 when, along with Laibow, Stubblebine launched the NSF website and began to promote his wife as an expert on Codex Alimentarius, the commission working to adopt strict new guidelines for vitamin and mineral supplements.
Dr. Rath, founder of the 4.dr-rath-foundation, a legitimate health advocacy group, and the author of A Modern Major General Exposed? writes: “It quickly became apparent to experienced health freedom observers that Stubblebine either hadn’t done his homework properly, or that he and Laibow were intentionally spreading inaccurate and misleading material about Codex and other related dietary supplement issues via their website and press releases.
Moreover, despite repeated concerns being expressed by more experienced health freedom observers, Stubblebine and Laibow continued to disseminate this material, and pointedly ignored requests to remove it from their website.”
In my “Scared to CodeX Death” article, I refer to Dr. Rima Laibow when I write: “And although the effects of Codex are devastating and will result in humans dying from starvation and preventable diseases from under-nutrition, any claims that WHO or FAO have released epidemiological projections are untrue.”
Dr. Rima Laibow, to the consternation of those fighting Codex, is the source of the untrue claims about the “epidemiological projections” in her YouTube video “Codex Alimentarious & Nutricide.”
The NSF pair want to discredit HR 875, because when the cleverly worded HR 875 finally goes to committee, Monsanto will unleash a massive PR campaign aimed at, guess who? Linn Cohen-Cole and the other lefties who, according to Monsanto, are spreading false and misleading information about an innocent food safety bill.Later, the headlines such as “HR 875 doesn’t criminalize small agriculture” will warn the population about health freedom activists who, by spreading misinformation, are threatening our food safety and free speech. Then, HR 875 and the real threat, HR 859, are passed without fanfare.
….My Comment:
I know Stubblebine from my research into the CIA and mind control. He’s a leading figure in Jon Ronson’s “The Men Who Stare at Goats” - a book I cited in The Language of Empire. Unfortunately, I came across the book rather late in writing LOE, and was able to use it only tangentially. It’s written in an apolitical narrative style - which both gives it its power and also defuses its political content. (It’s no surprise to me that Ronson ended up with a gig in entertainment TV in Britain. The powers that be would no doubt prefer that any one who connects those sorts of dots ends up talking about aliens and shape-shifting lizards).
And why do CIA men stare at goats? Because yogic texts tell us that if enough psychic energy is brought to bear on a living creature, it can be killed. And the CIA apparently thought goats were the place to start practicing so useful a skill.
All this is not bizarre to anyone who has a long standing interest in parapsychology, as I do. In my teens, I spent a lot of time experimenting with lucid dreaming, color-sensing, psychokinesis, and all sorts of other “mind-control” phenomena. At one point, I taught extension classes in what is sometimes called transpersonal psychology. Some of my best reading was drawn from books about the CIA’s research in that area. And the CIA was itself playing catch up with the KGB in that area.
The Neurolinguistic Programming of Reality
“An excellent example of globalist
redefinition of a common term
is the use of the word “state” in place of “country”
. When the media and leaders
refer to a country like Iran as a “state”
this has the same or similar effect as the
British globalists referring to the United States
as “the colonies”, which is off-handed at best.
This type of redefinition of terms is
designed to belittle the conception of a
supposed and/or perceived enemy by making
them appear less important and smaller in perspective
to the aggressors. Most soldiers would be
more willing to attack a “rogue state” than an “enemy
country”. The actual usage of this type of
terminology actually creates a mass perception
that the said country has already been assimilated
into the globalist empire and is simply acting out of
turn and is deserving of punitive damage whether
compensatory or offensive or both.
However, the true modus operandi
of the globalists is essentially Hegelian
in nature. Time and time again as a
species we can observe the workings of “thesis,
antitheses and synthesis”.An excellent example would be the attacks on
the World Trade Center of 2001.
Thesis: “terrorists are a continual threat
to our liberty”. Antitheses: the
attack on the World Trade Center. Synthesis:
the Patriot Acts and Office of Homeland
Security, also known as: the loss of liberty
in the name of security…….There are many conclusions to be drawn when
looking at the cycle of empires, but one
stands clearly: ruling is a science, and it
involves coercion whether via induced
suffering, psychological
torture and/or destabilization….”— Max Mitchell, “Foundations of War:
Terminology of the New World.”Reiki Therapy at Maryland Trauma Center
Alternative medicine gets some recognition at the University of Maryland:
“At one of the nation’s top trauma hospitals, a nurse circles a patient’s bed, humming and waving her arms as if shooing evil spirits. Another woman rubs a quartz bowl with a wand, making tunes that mix with the beeping monitors and hissing respirator keeping the man alive.
They are doing Reiki therapy, which claims to heal through invisible energy fields. The anesthesia chief, Dr. Richard Dutton, calls it “mystical mumbo jumbo.” Still, he’s a fan.
“It’s self-hypnosis” that can help patients relax, he said. “If you tell yourself you have less pain, you actually do have less pain.”
More in this AP report.
Jill Bolte Taylor on Rebuilding Your Own Mind
Jill Bolte Taylor on rebuilding your own mind (thanks to NonE from Sunni Maravillosa’s blog):
My Comment
Ignore the canned laughter. How amazingly similar this is to the religious experiences of neti-neti (not this, not this) and samadhi... (back with more later)
Do Wise Latina Women Judge Differently from White Males?
There’s a lot of discussion in the blogosphere about likely Supreme Court nominee Sonia Sotomayor’s remarks in 2001 when she was an appeals court judge.
““I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn’t lived that life,” said Judge Sotomayor.”
(Published by the Berkeley La Raza Law Journal)
At The Volokh Conspiracy, Jonathan Adler finds the implication of her remarks troubling. He suggests that they go beyond simply stating that each individual’s perspective matters to negating the existence of an objective stance altogether.
Ho hum. This is such a tired battle. No one ever seems to say anything new or insightful. It all seems to boil down to a power struggle. Those upholding objective standards claim they do so because indeed standards are “out there” - i.e. objective.
Those arguing for identity as the trump card claim that the objective standard merely disguises power relations and the (white, male) identity of the powerful.
Can I say anything new? I don’t know, but it’s worth a try if only to spare myself future boredom reading the reasoning on both sides of these kinds of debate.
Back later with more.
******
OK. Here’s how I see it.
Experience always alters perception, so, to that extent, Sotomayor is not saying anything inaccurate.I think the part that bothered Adler is this one (and I can see why): He says she “quotes approvingly” law professors who have said that “to judge is an exercise of power.”
Again, note the problem with reasoning in the social sciences here. There is an elision, a gap, in which changes in meaning are lost.To say something is an act of power is not the same thing as saying it’s only an act of power. Moreover, power has a connotation in today’s political lingo that’s inherently negative.
Supposing then you were to substitute the word “will,” for the word “power,” what then?
Sotomayor would then be saying that people’s experiences influence the way they think, which informs their judgment. Their judgment is as much an act of will as it’s the logical conclusion of reasoning independent of the actor who performs it.Instead of discussing power relations (politics), we’d end up in a much more fruitful arena, exploring the relationship between our will and our perceptions and reasoning. We’d be in the territory of cognitive science and philosophy. And we’d be much more likely to come up with something useful.
And all from looking at our language a bit more critically.
Of course, I have no idea whether that’s what Sotomayor meant. I’m just saying that a nuanced reading of words might be a place where both sides of the debate could start.
Instead, the debate ends locked in what I think I’ll label a Catholic (God is all-knowing*) versus Protestant (God is all-powerful) polarity, with judge substituting for God.
* I originally wrote all-rational, which seems to have led to a misunderstanding. I meant “reason” (as in ‘right reason’ rather than Reason, as in Enlightenment rationality)
C. S. Lewis on Habit and Will
“No amount of piety in his imagination and affections will harm us if we can keep it out of his will. As one of the humans has said, active habits are strengthened by repetition but passive ones are weakened. The more often he feels without acting, the less he will be able ever to act, and in the long run, the less he will be able to feel.”
C. S. Lewis, “The Screwtape Letters,” p. 71.
That Darn Elusive Black Swan
“The profit motive is a good thing when it operates in an environment where bad bets are punished with losses and good investments are rewarded. Only government can distort that healthy profit-and-loss system, giving people incentives to make bad decisions. And it’s in this environment that greed is no good to anyone. It turns out, however, that greed—or better, rational self-interest—can help our economy stabilize faster than government ever could. As the lubricant of our economic system, self-interest will cause a million market actors to recalibrate and to direct resources to projects that create value in our society. We the people will temper our irrational urges and mitigate our risks if government restores the rules that let profit and loss bring discipline. But if government continues to change the rules to bias the market in favor of irrational behavior, rent-seeking, and corporatism, the chaotic aspects of the system will continue to wobble out of equilibrium. Black swans will become commonplace.”
Thanks to Mike Martin for pointing out the piece.
Comment:
This is a nice piece pointing out how metaphors govern our thinking - we talk about the economy as it were a machine when it’s actually more like an eco-system. Interestingly, Tom Wolfe made a similar point about the misuse of metaphors in Freudian psychology (for eg. the term repression, as though the body were in need of an outlet to blow-off steam).
But there are at least two things I object to here.
One is - greed isn’t rational self-interest. That’s a complete confusion of terms. Gordon Gekko-like greed is anything but rational. It’s compulsive. The self has many other interests and drives besides doing down other people. Rational self-interest is the prudent self-interest of “right reason,” as the Catholics call it. A well-ordered reason. Not one that’s the slave of your drives. It’s self=governing reason which produces genuine self-interest.
And two: sigh. None of this was a black swan. Taleb himself doesn’t claim it was, either. Black swans only make sense in talking about an un-manipulated world, I would think. Taleb was talking about the way risk is modeled. He says on his website that he uses the banks in his book as an illustration and then gives some quotes in support, which, he says he wrote between 2003-2006 (the book was published April 2007).
But Felix Salmon at Portfolio.com points out that his actual comments on Fannie in an interview before they went bust were quite vague.
However, the author of this piece is spot on in the rest of this comments.
I’ll try to post my calls on this, not to prove I can predict the markets (I can’t), but to prove that we don’t have a market. We have a kind of rigged puppet show, which you can (sort of) predict, not because of any genius on your part, but because of the obviously crooked motives of of several leading actors. The only special skill you need for this is the ability to recognize propaganda.
I know I came across Fannie’s corruption when I was researching Goldman Sachs in July 2006 from the Washington Post which had a long series of excellent articles on it from 2004. So, how was this crisis unexpected?
Here’s my piece (from 2006)
“Most recently, regulators are looking into claims that Goldman (among others) helped managers at the US Federal National Mortgage Association (known as Fannie Mae) prettify their books to maximize performance bonuses at the company entrusted with keeping US home loans afloat. Which means that Goldman was center-stage not only in the credit and derivative booms, but in the housing boom too. (Goldman and the other firms deny wrongdoing.)”
My original investment report on which this article is based had much more on Fannie and I will post it here. I’m pretty sure there were plenty of prominent people in the financial world who had already decided that Fannie was going to go bust. In fact, I think a lot of people had taken short positions on it. I’m not sure how on that basis you could argue this crisis was a Black Swan.
MindBody: Mirror Neurons And The Notion of Souls
Thanks to Leslie Marsh of Sussex University for a video at his highly-recommended site, manwithoutqualities, for this passage by neuroscientist V. S. Ramachandra, Mirror Neurons and The Brain In the Vat:
“Iaccomo Rizzolati and Vittorio Gallasse discovered mirror neurons. They found that neurons in the ventral premotor area of macaque monkeys will fire anytime a monkey performs a complex action such as reaching for a peanut, pulling a lever, pushing a door, etc. (different neurons fire for different actions). Most of these neurons control motor skill (originally discovered by Vernon Mountcastle in the 60’s), but a subset of them, the Italians found, will fire even when the monkey watches another monkey perform the same action. In essence, the neuron is part of a network that allows you to see the world “from the other persons point of view,” hence the name “mirror neuron.”……….Dissolving the “self vs. other” barrier is the basis of many ethical systems, especially eastern philosophical and mystical traditions. This research implies that mirror neurons can be used to provide rational rather than religious grounds for ethics (although we must be careful not to commit the is/ought fallacy)……
Intriguingly, in 2000, Eric Altschuller, Jamie Pineda and I were able to show (using EEG recordings) that autistic children lack the mirror neuron system……
Mirror neurons also deal a deathblow to the “nature vs. nurture ” debate (I like Matt Ridley’s suggested replacement “Nature via Nurture”) for it shows how human nature depends crucially on learnability that is partly facilitated by these very circuits. They are also an effective antidote to sociobiology and pop evolutionary psychology; the assertion that the human brain is a bundle of instincts selected and fine-tuned by natural selection when our ape-like ancestors roamed the savannahs…… But, the notion that human talents and follies are governed mainly by instincts hard-wired by genes is ludicrous.
Thanks to mirror neurons the human brain became specialized for culture, it became the organ of cultural diversity par excellence. It is for this reason (rather than moral reasons or political correctness) that we need to cherish and celebrate cultural diversity. To be culturally diverse is to be human…..
I will conclude with a metaphysical question that cannot be answered by science. I cannot decide whether the question is utterly trivial or profound. I call it the “vantage point” problem foreshadowed by the Upanishads, ancient Indian philosophical texts composed in the second millennium BC, and by Erwin Schrödinger. I am referring to the fundamental asymmetry in the universe between the “subjective” private worldview vs. the objective world of physics………
…… It’s a fair assumption that the identity of your conscious experience (including your “I”) depends on the information content of your brain, “software” representing millions of years of accumulated evolutionary wisdom, your cultural milieu, and your personal memories; not on the particular atoms that currently constitute your brain…… [Lila: atoms that are replaced regularly]
Now imagine speeding up this replacement process so that I destroy your present brain and replace it with a replica/simulacrum with identical information. There would be no reason to believe your conscious experience would not continue in that other brain…..
….The possibility of multiple “minds” in a single brain is not as bizarre as it sounds. It often happens in dreams. I remember having a dream once in which another guy told me a joke and I laughed heartily even though the “other guy” was my mental invention, so I must have already known the joke all along!
The question of whether “you” would continue in multiple parallel brain vats raises issues that come perilously close to the theological notion of souls, but I see no simple way out of the conundrum. Perhaps we need to remain open to the Upanishadic doctrine that the ordinary rules of numerosity and arithmetic, of “one vs. many”, or indeed of two-valued, binary yes/no logic, simply doesn’t apply to minds — the very notion of a separate “you ” or “I” is an illusion, like the passage of time itself.
We are all merely many reflections in a hall of mirrors of a single cosmic reality (Brahman or “paramatman”). If you find all this too much to swallow just consider the that as you grow older and memories start to fade you may have less in common with, and be less “informationally coupled”, to your own youthful self, the chap you once were, than with someone who is now your close personal friend. This is especially true if you consider the barrier-dissolving nature of mirror neurons. There is certain grandeur in this view of life, this enlarged conception of reality, for it is the closest that we humans can come to taking a sip from the well of immortality….
Will you choose the vat or the real you? This exercise might not provide an obvious answer, but fortunately none in this generation or the next will have to confront this choice. For those in the future who are forced to answer, I hope they make the “right” choice, whatever “right” means….”
NB: Again, apologies for a bit of splicing and reduction of the original passage in the interests of clarity. No meaning is altered by it, and the original is easily compared from the link.
Robert Pirsig On Platypi (Updated)
“Early zoologists classified as mammals those that suckle their young and as reptiles those that lay eggs. Then a duck-billed platypus was discovered in Australia….
The platypus isn’t doing anything paradoxical at all. It isn’t having any problems. Platypi have been laying eggs and suckling their young for millions of years before there were any zoologists to come along and declare it illegal…
Quality is in the same situation as that platypus.
Because they can’t classify it the experts have claimed there is something wrong with it….
Should reality be something that only a handful of the world’s most advanced physicists understand? ”
That’s Robert Pirsig in “Lila,”
Update: I thought I should add this to make it clear what Pirsig was trying to do. It’s from an Amazon reviewer, Ralph Blumenau, who, from his profile is a retired teacher (his students were lucky - the review is spot on).
“He had felt that the two modes of western thinking, the classical and the romantic, were both unsatisfactory. The romantic, which will not come to grips with the underlying meaning of phenomena, is basically superficial. The classical mode, with its analytical procedures, often destroys what it investigates. The romantic mode stresses the subjective impact on the observer; the classical stresses the objective nature of the things observed. Both are part of what, in Lila, Phaedrus calls the subject-object metaphysic; and the concept that the world can be understood in terms simply of subject and object has been deeply embedded in western thought ever since classical Greek philosophy. However, the pre-classical Greeks, through their concept of arete, held out the possibility of a richer understanding. Phaedrus translates arete as “Quality” (and sometimes as “Value”), and it is by Quality that the conclusions reached by the classical or the romantic processes need to be judged.”
Group Mind and the Stopping of Thoughts…
“John McMurtry writes that the first rule of the “Group-Mind” is that it cannot adopt itself as an object of critical reflection:
“When the most self-evident line of thought has been blinkered out across a people, only an a priori thought system can account for it. As with other great problems of our era, the group-mind disconnects by stopping thought before it arises.”
Christian ascesis is the practice of giving attention to thoughts as they first appear, thus it is a practice wholly at odds with a priorism and with all forms of mechanical, psychic or associative activity which masquerades as “thought.” According to Father Sylvan, a hundred, a thousand times a day, thoughts that challenge or contradict assumptions and beliefs, thoughts that might provoke self-questioning or discomfort about some fact or emotion or received wisdom, thoughts that might force one to confront one’s own laziness, anger, lack of love, lack of integrity — such thoughts are continually circling the perimeter of the mind and sometimes even penetrate its arena. And yet they come to nothing, they are quickly repelled, conveniently forgotten, dispersed, and covered over by compulsive action, rationalization, explanation, or emotional reaction. Father Sylvan calls this incessant activity of covering over the Question the “First Dispersal of the Soul.” It means that the force of attention is wasted, degraded by absorption into one part or another of the psycho-physical organism, and rendered useless for the growth of the soul. Man becomes trapped in an “automatism of non-redemptive experience,” which he likens to
The struggle of Christian ascesis is to contain the energy of the Question within oneself so that the Soul can come into being. Thus, the existence of the Soul is not a given, not an a priori assumption. It is an energy formed through the confrontation with question and contradiction, an energy that has to be sought, recognized, collected and accumulated - “pondered in the heart.” This is why “God can only speak to the soul,” according to Father Sylvan, “and only when the soul exists.”
Comment:
This is a fascinating post. The teaching of Philokalia is not different from that of Raja Yoga texts, or, for that matter, from the writings of Jiddu Krishnamurthi, if you put aside the doctrinal content and focus on the psychological observation. Thoughts that arise in the mind involuntarily seem to correspond to the samskaras of Hinduism and Buddhism, those predispositions and unconscious impulses which attract us to the situations in which karma (fate, moira) plays out.
What has all this to do with politics and the markets?
Much….
i) Being “embodied minds,” the nature of our thinking alters what we perceive - both in the past and in the present. That alteration in perception allows us to strategize action, anticipate problems, and to form coalitions, none of which we would be able to do if we remained obsessed with rigid mental constructs.
ii) Self-awareness of our own internal contradictions permits us to be more generous in our assessments of our antagonists and cures us of the rancid self-righteousness and inflamed dogmatism with which we approach every issue….That, in turn, gives our opponents space to rethink their own self-righteousness…..and draws thoughful people out of neutrality…
Brainy Bingers….
“Research by Dr G. David Batty and colleagues at the University of Glasgow, published in the American Journal of Public Health, compared the mental ability scores of 8,170 British boys and girls at the age of 10 with their alcohol intake and any alcohol problems when they were 30.Whereas most of the clever children grew up to drink as most people do, reasonably and moderately, the likelihood of developing a drinking problem if one were unusually bright increased 1.38 times in women and 1.17 times in men. …”
Hat tip to Lew Rockwell.
Mobs: Male Consumption Patterns Related to Reproductive Strategy
And more research vindicating the premise of “Mobs, Messiahs, and Markets,” from the Journal of Evolutionary Psychology.
“Darwin was initially puzzled by costly traits such as peacock tails that could not be
accounted for by survival advantage; he later concluded that these were features that led to
reproductive advantage (1871). For humans, male displays of wealth may literally be a
costly signal analogue to the peacock’s tail (Miller and Todd, 1998). Displays of
prestigious consumer goods could be an honest signal of male mate value, as they would
indicate available resources as well as skills at acquiring wealth (Colarelli and Dettman,
2003). Veblen (1899/1953) remarked on the relationship between prestige and the
consumption of consumer goods and even suggested that inherited psychological
mechanisms were responsible for this relationship. Colarelli and Dettman (2003) note that
advertisers are well aware of the importance of prestige when marketing products, and will
try to associate a product with prestige even when there is no functional relationship. An
ethnographic study of Amazonian foragers and slash-and-burn farmers found that those
who had greater monetary resources allocated a greater portion of expenditures towards
luxury goods, and this tendency was stronger in men than in women (Godoy et al., 2007).
Male displays of wealth and social status may facilitate mating competition. During
ancestral times, men with greater resource control married younger women, married more
women, and produced offspring earlier (Low, 1998). Males who did not have substantial
resources or status may have been unable to establish long-term relationships. Across a
wide variety of societies, male reproductive success is a function of social and economic
status (Hopcroft, 2006). Even in current foraging societies that are relatively egalitarian,
men with higher status have more mating opportunities (Chagnon, 1992; Hill and Hurtado,
1996).
Several laboratory studies have demonstrated that situational primes making mating
effort salient can induce male intentions to increase economic power as well as allocate
financial resources to conspicuous products. Roney (2003) found that men reported
stronger ambition and desire to earn money when in the presence of attractive women. This
effect was even seen when the men simply viewed photographs of attractive women. In
another study, men who were shown photographs of attractive women had intentions to
allocate more money to conspicuous products, but not inconspicuous products
(Griskevicius et al., 2007). Neither men who viewed photographs of unattractive women,
nor women who viewed photographs of attractive or unattractive men exhibited this
pattern. In a third study, men who viewed photographs of attractive women discounted the
future more so when choosing between small monetary rewards than men who viewed
unattractive women or women who viewed pictures of men (Wilson and Daly, 2004)….”
Comment:
Marketers target our basic drives, where we tend to act with the crowd. For example, some middle class Americans try to buy the “lifestyles of the rich and famous” in response to aggressive marketing by realtors and bankers.
But once the rise in price begins, even those who’ve adopted a more individual and rational approach are compelled to buy or rish being priced out of the market. In the Indian farming crisis, as well, farmers were lured to buy expensive seeds by very aggressive marketing that played on religious sentiment and dazzled them with the prospect of extraordinary gains. (Link to follow).
One of the things I want to explore is to whether and how libertarian language (about ”free choice” and “free speech”) needs to take into account these complexities.
Trader Psych: Incredible Dollar-Swissie Reversal
“USDCHF – Recent US Dollar/Swiss Franc price action is a testament to the effectiveness of Speculative Sentiment Index-based currency forecasts. Forex trading crowds had remained heavily net-short the USD/CHF since July, and the pair went on to mount an impressive multi-month rally. Most recently, that same crowd capitulated and actually went net-long the USD/CHF near the 1.2000 mark. The US Dollar subsequently went on to post its biggest monthly loss against the Swiss Franc in history—incredible by any standards. Looking to very short-term trading, the crowd is currently net-short the pair, with short positions outnumbering longs by 1.08 to 1. Such a flip gives us reason to look for a reversal, but a sharp drop in open interest gives us little conviction in our forecast. Our forex trading signals previously went short the USD/CHF for sizeable profits, but the strategies now hold a weaker bias….”
Comment:
This was quite a move up for the Franc and it shows why trading currencies in a regular (non-trading) account is hard to do.
I had planned to buy Swissie at the end of last week and then decided that the dip in the dollar from 86 - 83 on the Dollar Index had already priced in a Fed cut. So I held off, waiting to do it on Monday.
Then came Madoff. And on Tuesday, a Fed rate cut that was historic.
And as a result, from Monday to Wednesday, the dollar lost more than half the gains it made this fall. The Swissie shot up. A great trade on Friday looked almost risky by Wednesday. What if the Swissie fell back after that surge? Trader sentiment switched to shorting the dollar.
As if to confuse sentiment again, at Thursday close, the dollar had recovered some of its footing against the majors.
In Forex, trying to look for a bottom (as I was trying to do with the Swissie) takes just a little too much time for action that quick. Crowd sentiment out there is as volatile as it could possibly be.
Now the crucial thing is if GLD (the ETF, as a proxy for the spot price) can hold above 850 and the dollar over 80 by Friday close. If they do, a trend reversal of the pair will be confirmed technically.
Note: I am talking about GLD and the dollar as inversely correlated, once again. They had decoupled for a while but have returned to their inverse relationship recently.I don’t know how long that will last though. Not very long, I suspect. Notice that GLD is moving out of synch with other commodities. Oil, for instance, is down at 41/2 year lows. GLD’s move, in step with the Swissie, typified a rush to safety.
Website Rankings on Google
I’d hate to think the Powers That Be have so little to occupy their minds that they might actually waste time censoring my site.
So, let me put down to the Whims of the Web, such things as broken links, comments that vanish….and the mysterious problem I’ve had with my old free wordpress site, lilarajiva.wordpress.com, showing up at the top of google searches of my name, but not this one.
Some algorithm or other?
But today. I really am beginning to wonder. I did a search with Altavista and Yahoo and sure enough, this site appears at the very top as lilarajiva.com.
Hmmm. What is going on? And what to do about it? The old site is one I can’t access and free wordpress blogs can’t be redirected.
Ken Wilber On the Dangers of Magical Thinking
A welcome antidote to the magical thinking of many New Age gurus from writer Ken Wilber:
“The New Thought schools, of which Christian Science is the most famous, mistake the correct notion “Godhead creates all,” with the notion, “Since I am one with God, I create all.”
This position makes two mistakes, I believe, which both Emerson and Thoreau would have strongly disagreed with. One, that God is an intervening parent for the universe, instead of its impartial Reality or Suchness or Condition. And two, that your ego is one with that parent God, and therefore can intervene and order the universe around. I have found no support for that notion in the mystical traditions at all.
Advocates of the new age themselves claim that they are basing this idea on the principle of karma, which says that your present life circumstances are the results of thought and actions from a previous lifetime. According to Hinduism and Buddhism, that is partially true. But even if it were totally true, which it isn’t, the newagers have, I believe, overlooked one crucial fact: According to these traditions, your present circumstances are the results of thoughts and actions from a previous life, and your present thoughts and actions will affect, not your present life, but your next life, you next incarnation. The Buddhists say that in your present life you are simply reading a book that you wrote in the previous life, and what you are doing now will not come to fruition until your next life. In neither case does your present thought create your present reality.
Now I personally don’t happen to believe that particular view of karma. It’s a rather primitive notion subsequently refined (and largely abandoned) by the higher schools of Buddhism, where it was recognized that not everything that happens to you is the result of your own past actions. …
And so where does that notion itself come from? Here I am going to part ways with Treya and spin out my own pet theories on the people that hold these beliefs. I am not going to relate compassionately to the suffering these notions cause. I am going to try to pigeonhole them, categorize them, spin theories about them, because I think the ideas are dangerous and need to be pigeonholed, if for no other reason than to prevent further suffering. And my comments are not addressed to the large number of people who believe these ideas in a rather innocent and naive and harmless way. I have in mind more the national leaders of this movement, individuals who give seminars on creating your own reality; who give workshops that teach, for example, that cancer is caused solely by resentment, who teach that poverty is your own doing and oppression something you brought on yourself. These are perhaps well-intentioned but nonetheless dangerous people, who in my opinion, because they divert attention away from the real levels - physical, environmental, legal, moral, and socio-economic, for example - where so much work desperately needs to be done.
In my opinion, these beliefs - particularly the belief that you create your own reality - are level two beliefs. They have all the hallmarks of the infantile and magical worldview of the narcissistic personality disorder, including grandiosity, omnipotence, and narcissism. The idea that thoughts don’t influence reality but create reality is the direct result, in my opinion, of the incomplete differentiation of the ego boundary that so defines level two. Thoughts and objects aren’t clearly separated, and thus to manipulate the thought is to omnipotently and magically manipulate the object.
I believe that the hyper-individualistic culture in America, which reached its zenith in the “me decade”, fostered regression to magical and narcissistic levels. I believe (with Robert Bellah and Dick Anthony) that the breakdown of more socially cohesive structures turned individuals back on their own resources, and this also helped reactivate narcissistic tendencies. And I believe, with clinical psychologists, that lurking right beneath the surface of narcissism is rage, particularly but not solely expressed in the belief: “I don’t want to hurt you, I love you; but disagree with me and you will get an illness that will kill you. Agree with me, agree that you can create your own reality, and you will get better, you will live.” This has no basis in the world’s great mystical traditions; it has it basis in narcissistic and borderline pathology….”
Comment:
I posted this quote just after the quote I posted from Deepak Chopra, one of the most popular dispensers of New Age thought. I think it provides a corrective to some aspects of that thought. It’s not that I dislike Chopra or his brand of popular Hinduism. I don’t….at least, what I’ve read of it, which isn’t all that much. I think it has its uses. And apparently, millions of people agree with me on that. I also don’t think his comments about terrorism to CNN in November - which provoked a sharp reaction from Dorothy Rabinowitz of the Wall Street Journal - are as off-base as she writes. They aren’t. He probably knows more about terrorism in India than she does.
But there is a tendency in a lot of New Age thought - one that gets amplified by the narcissism and consumerism of mass culture - to relate everything to the “inner” world of the self (the model of the self as “inside” and apart from its relation to the material world… and to others… is itself problematic). This tendency to dismiss logic, rationality, and the sheer materiality of life; to refuse harsh emotions, physical facts, and the intractability of things - this is problematic.
I’ve written elsewhere on the dangers of magical thinking. Here, for example, is a piece I did on Ward Churchill’s description of 9-11 as “roosting chickens.” It’s an interesting read, today, after the latest wave of terrorism in Mumbai.
In any case, here is the rest of Wilber’s critique in “Grace and Grit.”
(Note: I only know one book of Wilber’s - “Spectrum of Consciousness.” I thought its synthesis of elements from different religions tended to gloss over differences, in an effort to systematize, although it was fairly interesting and useful in other respects. It’s actually been some time since I read it, though, so perhaps I am doing it an injustice. It’s not the kind of thing I like to read any more. I prefer books that are more experiential, biological, and/or psychological.
Right now, in fact, I read a lot of peak performance literature.
Mind-Body: Making Fish Into Dragons
” At the three-tiered Dragon Gate, where the waves are high,
fish become dragons,
Yet fools still go on scooping out the evening pond water.“
Commentary from Zen Mountain Monastery:
There is a Chinese legend about a great dragon gate though which the mighty Yellow River flows, where the waves at the gate are high and the three tiers of the gate are treacherous. On the third day of the third month when the peach blossoms bloom and heaven and earth are ready, if there’s a fish that can get through the dragon gate then horns sprout on its head, it raises its bristling tail, catches hold of a cloud, and flies away becoming a dragon.
But you see, the conditions have to be right. How are the conditions made ready for us to pass through the gate? No one can predict. Yet they don’t become correct by creation, by will, or intent. When the wind of our mind ceases to blow, when the god of fire truly comes looking for fire, then “the sky can’t cover it; the earth can’t support it.”
Yet fools still go on scooping out the evening pond water.
Somebody watches as a fish leaps free of the dragon gate, is zapped by a lightning bolt, and is transformed into a dragon. Then they hurriedly run down to scoop out some of the water to drink, thinking that will make them into a dragon. It must come from deep within. We can’t live another’s life, practice another’s barriers, realize another’s true nature.
Where do you find yourself? What do you need to do before you can live and die completely, unreservedly? Who is asking? How much does it matter? What are you willing to let go of? These are the conditions. They are real and they come to life when we bring them to life. What is Buddha? Please, find out for yourself…”
Propaganda State: Can a Market Panic be Manipulated?
“In a report published in March by the Bank for International Settlements, economists Jacob Gyntelberg and Philip Wooldridge raised concerns that banks might report incorrect rate information. The report said that banks might have an incentive to provide false rates to profit from derivatives transactions. The report said that although the practice of throwing out the lowest and highest groups of quotes is likely to curb manipulation, Libor rates can still “be manipulated if contributor banks collude or if a sufficient number change their behaviour.”
Thanks to Naked Capitalism.
Comment:
Libor stands for the London Interbank Offering Rate. It is the interest rate at which banks agree to lend to each other over various time periods, including overnight, three months and 12 months.
The post at Naked Capitalism is concerned about Libor being unreliable because of banks understating the rates they are paying (to conceal their desperation). The rate is an estimate set at the HQ of the British Bankers’ Association at 11 a.m. every morning in London on the basis of offers from 16 member bankers. The possibility exists that it could be manipulated.
Mind-Body: Krishnamurti on health and sickness
“It is no measure of health to be well adjusted to a profoundly sick society.” –Jiddu Krishnamurti
Voltaire on the link between beliefs and actions
“Those who can make you believe absurdities can make you commit atrocities.”
-VoltaireVoltaire was talking about the church. But the dogma of the modern state is probably even more absurd.
Mind Body: Credit crunch also driven by panic…
“Household debt-service ratio is near a record high 14.3%, while the personal savings rate hovers near a record low 0.5%. Still, it is worth noting that in many cases debt service is as much about perception as reality. Optimistic social mood creates the right conditions for enhanced credit appetites and an optimistic view of how much debt one can service without stress. That is one reason the high-debt service ratio and low savings rate has been able to persist, and to grow to unimagined heights, for so long. A negative social mood can take things to an opposite extreme, where debt is repudiated or shunned…..”
More at Minyanville.com.
And this from The Big Deal.com:
“What makes me even more skeptical about the solidity and cogency of the financial market as a whole is the fact that this disaster was largely caused by panic, or “sentiment”, if you prefer.
Bear Stearns prime brokerage business, providing admin services to hedge funds with a fixed income bent, was the main source of liquidity for the now-moribund financial institution. Last week a rumor, which later led to rampant speculation, was put out about Bear Stearns fragility and its excessive exposure to US mortgages. Obviously all the hedge funds using Bear Stearns to deposit their assets panicked and were quick to terminate their relationship with the bank.
Without the funds’ liquid assets in its “vaults” Bear Stearns was not able to meet its running costs.The worst part is that just a few days later, on March 27th, the bank would have been able to exchange its gigantic portfolio of mortgage backed securities for high quality, liquid US Treasuries…”
Amazon Blog: Do-Gooding Do-Do
“Those who now speak of decoupling used to talk of globalisation. This is oxymoronic, you can believe in one or the other but not both,” says analyst James Montier.
Montier thinks that the world is bound to go the way of the American economy - down. If you pumped for globalisation and global growth when the going was good, he says, you can’t now argue for decoupling. You can’t now say that the global economy doesn’t depend on what happens here. That would be cognitive dissonance.
Here, I’ll take the part of cognitive dissonance. It’s what makes the world go round.
Mobs, Messiahs, and Markets is chock-full of it.
Critics have called that a terrible thing…..or terrific, depending on where they stand,
But if our detractors rested their case against us only on this, they’d have a non-starter on their hands. Anyone who’s sniffed a grand theory up close knows better.Why?
Because the real world is a jungle and logic cuts only a very narrow track in it; we’d be foolish to mistake our little wayward path for the woolly thickets our machete didn’t get to.
There is no logical structure that doesn’t rest on a blind spot….there is no sense that does not have a foundation that is nonsense. (That’s from a piece I did on Tom Friedman).
In fact, a bystander watching the way we mangle language could be pardoned for thinking it our original sin. He’d see that we’re fooled not just by our theories, but by words themselves. Their sense and their nonsense.
“Mobs” is a book about words.
On my part, it started from my critical work on language; from studying propaganda and from my popular writing on the subject .
In “Do Gooding Do-Do” and “Developmentally Disabled,“ two pieces used in the book (incorrectly attributed in several places), I took a look at some common words used about economics … and got into trouble with progressive and conservative friends.
What did I say that was so bad?
I said that “free market” language is used a lot to support what’s essentially managed trade. And that “social uplift” language is used the same way.
But how can you not take a position, asked the critics, a la Montier. Isn’t globalisation
A Very Good Thing? Or A Very Bad Thing?
Is it?
Perhaps it’s neither…or both….
Perhaps it’s sometimes one thing..sometimes another.
Perhaps it’s just too complicated for slogans. Sometimes government regulations are the lesser evil. And sometimes the greater. Perhaps you can talk about globalisation….and also talk about decoupling. Perhaps, on most things with any complexity the best response is not the one the mob wants to hear - Yes or No.The best response is - It Depends.
Trader Psychology: The Dash for Trash…
“The most important thing to do is to stick with the processes that have served you well, but appreciate that the environment we are operating in may be altering. If in doubt, as I wrote last week, inaction and hence holding cash may well be the safest bet.”
Read more by James Montier in Mind Matters.
Comment
Montier is talking about 20%-40% cash.
He also recommends purchasing value stocks with good dividend yields, rather than growth stocks, since he thinks valuations of US stocks - while off from their bubble peaks - are still far too optimistic.
As the piece indicates, Montier is no fan of the “decoupling” thesis - the idea that global growth can continue despite a recession in the US. He asks how it is that the same people who once talked most enthusiastically about globalisation are now endorsing decoupling - just as enthusiastically. He calls it cognitive dissonance.
He has a point.On the other hand, I happen to be a fan of cognitive dissonance. Mainly because our cognitions aren’t as pure and simple as we think they are. They are just points of view.
To assert both globalisation and decoupling at the same time strikes me as quite plausible. Certain aspects of trade are global. Others are not. Some countries depend more heavily on the US consumer - either directly or indirectly. Others do not. It makes perfect sense that US stocks should be overvalued and not likely to go anywhere for years……and that emerging markets stocks, even if relatively overvalued and due for a correction, should do better - even much better - over the long-term.
But the piece is still worth studying for those investors in whom hope for their favorite growth stock springs eternal….
MindBody: Are you a mouse or are you a man?
“if a rat is a good model for your emotional life, then you’re in big trouble.”
Robert Sapolsky, author of “Why Zebras Don’t Get Ulcers,” (Holt, Owl, 2004), in
“Stress, Neurodegeneration, and Individual Differences,” explaining why scientific modeling can mislead.
Thanks to ianonthedot.com
A nice plug for “Mobs, Messiahs, and Markets”
“Just finished reading the book “Mobs, Messiahs, and Markets“. It is a great read and I’ll definitely have to read it again not just because there is so much material to digest but because the writing is deliciously beautiful and brimming with wit….”
Now, that’s a nice way to start the week…
Many thanks to the blogger, Ianonthereddot.
Mind Body: Acting and Feeling
We do not always demonstrate what we think; but we always demonstrate what we feel.
Mind Body: Feelings….nothing more than feelings..
Nov. 27, 2007 — Amputees given prosthetic limbs could soon “feel” with their new hands or feet, after a team of scientists successfully rerouted two patients’ key nerves.
Scientists at the Rehabilitation Institute of Chicago and Northwestern University announced late Monday they had rerouted through their chests the nerves of two patients that had transferred sensation from the hand to the brain.
After several months during which the nerves re-established themselves in the chest muscles, physical pressure, heat and cold, and electrical stimulus were applied to the areas of the nerves and the patients said they could feel the effect.
More at Discovery News.
Comment: (What has any of this to do with politics and the economy? More later today…)
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