Regrettably this is one of the stupidest, most damaging arguments that one can make.

It is the argument that if only the USA were ruled by wise philosopher-kings, they would run it better than the USA electorate.

Which is ridiculous. The problem with the USA is not that the ruling class is corrupt instead of being wise ehtical philosopher-kings, but that the USA voters and in particular the campaign donors are even more corrupt than those they elect or nominate.

USA voters and campaign donors have enthusiastically endorsed by convincing majorities all the abuses of the law, all the scams and frauds, of the past 25-35 years, and the more corrupt has the government and the business community been, the more enthusiastically it has been endorsed.

When the majority of USA (and UK) voters have seen scamming and looting going on, they have admired it, and just hoped that they would get their chance too.

People like Mozillo, Fuld, Cayne, Prince, Greenberg are celebrated as role models, people who got theirs by doing whatever it takes, and their admirers just wanted a chance to do the same, and make money fast too.

There is looting an looting; bustout/takeout is a particular form of nonviolent looting, or fraud, based on agent-principal conflict of interest and early recognition of income and late recognition of expenses.

It is the principal and subtlest form of the common technique called “tunneling”; and the “Capital Decimation Partners” strategy is another variant identified by Taleb and others.

I have called it for many years the age old sharecropper problem, because it is age old, and it is about share cropping.

Whether the crop is cash/securities or corn.

The general idea is that a sharecropper is given control of a productive asset for a fixed period of time in exchange for a share of the proceeds.

Given this, the overriding self interest of the sharecropper is to “mine” the asset by overexploiting it and/or underproviding against future losses, so as to liquidate as much as possible of the capital value of the asset into profits, as the sharecropper gets a share of the profits but 100% of the asset equity stays with the owner.

This can be done in a number of different ways; for example the mob typically does it where the beneficial asset owner is not the ostensible owner of the asset, but the creditors; for example create a shell company, buy a lot on credit, tunnel that out by selling it cheap to another shell company, and then declare bankruptcy. Here the real asset owner are the creditors.

If you see a resemblance between mobsters doing bustout fraud above and upright middle class smarties “buying” houses with 0% down loans…

No you cannot. It was a “bunch of homeless pioneers with crude tools” and a large amount of oil in the ground, ample water in the acquifers and lots of ready-for-the-taking fertile land.

Those things are gone. The difference between Depression 1 and Depression 2 is that in 1929 there was still a chance of an oil fueled productivity boom left underground in Texas. That’s gone.

Very insightful but we must not confuse profit for stealing. Confusion (fear) is the strongest reagent to facilitate stealing. Much like when a felon points a gun before robbing a 7-11 convenience store. This is not profit he possesses but stolen assets of the business.

Confusion designed for abetting theft has been elevated to a global scale. The aforementioned theft being perpetrated by the oil thugs. They gained access to our White House and we lived through 9-11, Iraq War, and continuous threats (Cheney, Rumsfeld) orated by the Administration of possibilities of more terrorism on US soil to a panicked American citizenry. Add to this the system of high alert alarms sounded by the Department of Homeland Security. Now Bush, Jr. is being credited with preventing more attacks here in the States (such sh*t).

I saw through the plan then and I still see through it now. For those (Republican or Democrat) who did not see the crime you are a fool (less free; dumbed down).

A functioning Justice Department and a character driven President can establish ‘rule of law’ again. If they do former President(s) will be prosecuted. A long order but necessary. We must punish these crimes and start anew.

American Poet

The great genius Emerson wrought this:
“Where is the American poet?”
Walt Whitman guided by cowardice
Responded by composing free verse (don’t covet)!
Contemporary America’s literature is weaker
Because of free verse: our literary canker.

Today I read abundant poetic failure.
A poetic character of least resistance.
Reminds me of our past abuse of color,
Only recently truly feeling repentance.
We must cease this poetic illusion.
Begin anew and drive away the confusion.

The American Poet – literary leader.
The American Poet – literary rhyme.
The American Poet – truest dreamer.
The American Poet – the new global sign.
We will again create a national literature
That will respect, inspire, and satiate Nature.

Free, adventurous, rugged, and beautiful souls.
The nation of many nations.
English, German, African, Asian, and Aboriginals
Our melting pot of relations.
We fought tyranny to find our truest selves
And forged a nation where the free man dwells.

A national republic and a free society.
A national genius vested in our courage (to again appear).
A genius that is guided with truth and piety
Igniting a torch of Liberty for all to see and revere.
Reach back America to understand and to inspire.
Surge forward to mend and extinguish our tyrannical fire.

The great economist Friedman authored this:
“Free to Choose”
The power of choice from education to cannabis.
Free to win and free to loose.
A man who revered fierce debate and criticism.
Who expounded the critical value of capitalism.

This thinker understood the supreme economic value of labor.
Fought all takers with intellectual breadth and stamina.
A champion of the free market that always wants more
That transcended the towering thinkers of Vienna.
A Jew of anemic physical stature.
A scholar finished; the rarest creature.

These Jews who earn great scholarly respect.
True as the fox has learned to be cunning.
Grand stewards of America’s national intellect!
America’s future depends on their creating.
These little people think for today’s Hollywood
Because of this we all can learn and be understood.

The great capitalist Gates gained this:
“America’s greatest and fairest personal fortune”
A gift which adds to America’s bliss.
The entrepreneur of historic opportune.
This economist with ambitions of much
Created an empire inaccessible to the human touch.

America’s past happiness rested with these
Astor, Stanford, Carnegie, Morgan, and Rockefeller.
An animal not bent to help or to please.
Their determination to create their reputations of grandeur.
These men we needed to think, to lead, and to create stability.
Our wise Sherman Act completed them and staved the monopoly.

The great actor Hanks orated this:
“To contribute today you must help”
An overture as critical as a lover’s kiss.
A message for his daughter (us) I deeply felt.
A platform stationed at a colloquium of scholars (college).
A place devoted to our past utterances and our homage.

We now are entering our greatest adult season.
A time of fear and actions with reason.
We have seen this before: the civil war of treason.
Our Creator readied us then with literary cohesion.
Whitman, Thoreau, Longfellow, Poe, Field, and Dickinson.
Today’s cause is a war of greed and of confusion.
We must come together to again create poetic unison.

BoA is as insolvent as Citi and they are crooked at BoA as they are at Citi (and JPMorgan). I cannot stop the government from taking my tax dollars and giving them to the crooks at BoA, etc, but I can close out my accounts at BoA so that the funds no longer exist as part of their capital. I’ve been with that bank since 1985, but now I am bailing out forever and going 100% credit union. No more focus on “shareholder value” at the expense of everyone else: as a depositor, I AM a shareholder.

They also tend NOT to have greedy CEOs that seek to pad their nests or decorate their arms with high-priced callgirls, and pay out big bonuses regardless of actual performance.

I would encourage EVERYONE and ANYONE with money in accounts with any of these zombie banks to BAILOUT and help sink them faster.

Not only in the Commonwealth Countries, but in the US as well, Boards of Directors are personally liable for their malfeasance. But there is a wrinkle here that requires attention. You may recall that after the Enron debacle, Treasury Secretary Paul O'Neill urged that Congress pass legislation to outlaw the virtually universal practice of corporations purchasing Errors & Omissions Insurance for their officers and directors (usually called O&D Insurance). Such insurance covers any legal settlements and court costs if officers and directors are found to have harmed stockholders by their malfeasance. Incredibly stockholders are thus put in the position of paying for the damage that irresponsible management inflicts upon them. Moreover, almost no one who is not an corporate officer or director is even aware of this insurance. Alas, Mr. O'Neill was quickly dismissed from his post.

Unfortunately whenever legislation is proposed to improve corporate governance, an army of lobbyists descends upon Congress to stymie the effort. While this lobbying advances the interests of corporate management, it is certainly not being advancing the interest of the stockholders on whose behalf the management is supposed to be acting. It is time for prosecutors to treat such corporate lobbying expenditures for what they are: employee theft.

Bankruptcy for profit occurs because we are cowards. Although over 2.4 million people have Googled the phrase “Thomas Jeferson and Revolutions” so maybe things will change?

My main complaint about the New Atheism is that it’s not offensive or any of that, it’s just bad science.

http://thesciencenetwork.org/programs/beyond-belief-enlightenment-2-0/david-sloan-wilson

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As tempting as it is to resort to "those me are bad, so they loot us," it is critical to insist that Greenspan and Rand are simply wrong to align self-interest with law-abiding and morally upright behavior. Reality demonstrates that is, at best, a hopelessly naive myth, at worst, a malicious deception.

The S&L crisis and the present crisis demonstrate that management can and will use companies and the legal system as weapons to loot. They do this because they can, and because they are aided and abetted by government. It is difficult to know how many of those involved in enabling this in government are simply cognitive captives, and how many are simply fellow criminals – there is clearly a grey area.

But it is telling that modern economics deals with the question of looting by explaining that it can't happen because looting doesn't align with the CEOs Randian self interests. The canard that the large stock grants to CEOs create this morally upright incentive has been clearly demonstrated to be an utter lie. We saw this indisputably in the S&L crisis and we see it now.

I therefore have to conclude that the blindness of modern economic theory to crime is willful. Most are paid to lend august ceremony and lay down a confusing smokescreen to the wheelbarrow parade.