Links 12/13/10

Database on how ‘bees see world’ BBC

The real-life Da Vinci Code: Historians discover tiny numbers and letters in the eyes of the Mona Lisa Daily Mail (hat tip reader May S)

Afghanistan War: Public opinion turns sharply against US forces Global Post (hat tip reader May S)

Griftopia and complicity Lambert Strether

Federal Judge to Rule on Health Law’s Constitutionality Wall Street Journal. This is gonna get interesting.

Financial arms race underway in Washington Los Angeles Times (hat tip reader May S)

So what’s become of credit derivatives? John Dizard, Financial Times

Reconsidering Japan and Reconsidering Paul Krugman TruthOut

Jim Chanos: “Adam Smith will get his Revenge on China’s Real Estate Bubble” MIchael Shedlock

How a mini fiscal union could end instability Wolfgang Munchau, Financial Times. Clever, and the banking part has the further advantage of being more true to the underlying economic reality.

Pimco Total Return Among Biggest Losers as Bond Rally Fizzles Bloomberg

Has progress been made in fighting DDoS attacks? NetworkWorld

Twelve Theses on Wikileaks Le Monde diplomatique (hat tip Andrew Dittmer)

Antidote du jour:

Screen shot 2010-12-13 at 3.35.23 AM

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45 comments

  1. attempter

    Let’s be absolutely clear that if this health racket mandate stands, if it’s illegitimately ruled “constitutional” (as two corrupt judges already have, while at least one other has let a suit go forward), then there will be literally no limit on the government being able to arbitrarily define the legitimate limits of a market and then require the purchase of a private product.

    In this case, Congress has arbitrarily set up this pseudo-market based upon private health insurance, something which makes no sense in theory and has been a failure in practice. That’s why the rackets needed this bill to bail them out.

    Congress first gave them an antitrust exemption and rigged the market in other ways, to ensure they faced no market competition. Then, when this “market” failed badly enough that a critical mass of people were rationally (and morally) choosing not to participate at all, Obama and the Dems passed this bailout bill in order to force participation. (Starting next year, the Reps will become full partners and co-owners when they refuse to repeal it.) In effect, this bill was designed to extend the antitrust exemption against non-participation as well.

    I wrote an extended analysis of the first decision here:

    http://attempter.wordpress.com/2010/10/10/kangaroo-court-in-action-the-health-racket-mandate/

    describing in detail all its fallacies and policy malevolence.

    As for what this can mean in general, let’s consider an example from food policy. The FDA already persecutes the raw milk community based in part on its administrative definition of “milk” as pasteurized milk. So by definition raw milk is unmilk, and if you even call it milk you’re guilty of “misbranding”, and the product is “adulterated”.

    That’s part of their pseudo-legal rationale. Of course they really do it at the behest of the corporate dairies, as has been documented.

    This is widely considered to be just a trial run for a general assault on small food producers and distributors. The Food Tyranny bill now being pushed through Congress seems designed to give vast “authority” for this corporate assault. I’ve written extensively about that as well.

    So we see that the government already has the malign intent and the will to act in this oppressive way. The Food Tyranny bill will vastly extend its opportunity to do so. And if this health racket mandate stands, that too will add to the government power.

    The food bill already seems to invite the government to declare by fiat that only certain kinds of seeds, fertilizers, etc. are “safe”. That’s the hand of Monsanto (who both wrote and will enforce the bill, via revolving door cadres like “food czar” Michael Taylor) looking for a way to outlaw heirloom seeds and organic pest control.

    If the insurance mandate stands, Monsanto will certainly look for a way to mandate the purchase of GMO seeds and its synthetic herbicides.

    So there’s just one example. Anyone who thinks any of that is far-fetched simply hasn’t been paying attention. The health bill and the food bill are both radically reactionary bills. It’s extremely dangerous not to recognize that.

    1. Rex

      Not disputing any points, but a stylistic suggestion.

      The old style was — tell them what you are going to tell them, tell them, tell them what you told them. In this internet forum, I think the first part is often missed, to our detriment.

      Attempter and others often give us long detailed expositions on their views. I credit them for the efforts and their commitment, but let me be realistic. There is so much information flooding in just this one blog that any sane reader can’t digest it all.

      So my suggestion, please try to suss out the idea of “tell them what you are going to tell them” and begin with that short summary. The informed positions is why I come here, but I can’t read everything.

      Realistically, I skim and skip a lot of stuff that may be good, but I can’t take the time to digest. So I make a plea that the longer exposition authors try to begin by telling us what you are going to tell us, for those of us constrained either by time or cognition.

        1. MyLessThanPrimeBeef

          I remember now.

          Small is beautiful.

          Aside – compare Calculated Risk’s and Mish’s coverage on the Richmond Fed paper about strategic default, 1st vs. 2nd mortgage. The former is shorter and easier to digest.

      1. attempter

        I thought it was as long as it needed to be, and that it begins, middles, and ends with the main point, that there will be no pseudo-constitutional limits to the mandate power. (Which was struck down today. So we now have dueling decisions, two of them in the same circuit.)

        I’m sorry if it’s too long for you.

    2. Rex

      I think it was the documentary “Food Inc.” that made me aware of the deliberate efforts of corporations to squash any usage of non-corporate seeds for planting of crops in North America.

      http://www.foodincmovie.com/

      This is another totally horrible anti-reasonable tactic by big corporate agribusiness. I was dumbfounded when I saw what was happening to prevent local usage of any seeds that were out of the control of big agribusiness.

      Bankers aren’t the only scumbags in our oligarchary.

    3. DownSouth

      So if the rentier class can’t entice the proles through their toll gates “voluntarily,” they’ll just deploy the long arm of the state to force them through. The myth of “free” markets thus gets devoured by its own creators, a reenactment of this famous painting by Goya.

      This is a repeat of what happened during the Middle Ages. Between 1100 and 1300 the population of Europe almost quadrupled. This created a boon for the landed aristocracy, as Peter Turchin discusses in War and Peace and War:

      The population surge of the High Middle ages…brought impoverishment and increasing hardship to the great majority of the population. But the noble landowners, unlike the poor, generally profited from the economic trends of the thirteenth century. The value of their main product, grain, increased as a result of prince inflation, while their costs, wages to agricultural workers, declined. Alternatively, they could rent their land at the greatly inflated rates of the late thirteenth century. Furthermore, whereas the price of such basic consumption items as food and fuel, without which humans cannot survive, increased enormously, the price of manufactured goods increased much less, or even declined. This happened because demographic growth reduced the cost of human labor, which was a major part of the price of manufactured goods…..

      The thirteenth century, thus, saw two contradictory trends. On one hand the demographic pressure was rising, the standard of living of the great majority of the population was falling, and an ever-increasing proportion of people were pushed to the brink of disaster. On the other hand the wealthy and powerful were enjoying a golden age. The warning signs of the troubles to come were there, but were not perceived. Who cares what happened to the great unwashed magnitudes? Because the texts in the thirteenth century were written for the elite, and in a large degree by the elite, it is easy for modern historians to miss the signs of the impending disaster.

      Disaster struck with the arrival of the Black Death in the middle of the fourteenth century. Estimates are that 40% or more of Europe’s population got wiped out. But the plague did not fall as heavily upon the rentier class, whose ranks, as Turchin points out, had already become extremely bloated during the previous 250 years. The mortality of tenants-in-chief was only 27 percent. At the top of the social pyramid, the peers lost barely 8 percent of their number.

      As a result of the plague there was a surfeit of land, food and rentiers, and a dearth of productive members of society. As Turchin puts it, the rentiers found themselves exposed to “the other side of the wheel of fortune”:

      The post-Black Death increase in wages and decline of land rents was an unmitigated economic disaster for landowners. The worst hit were the lesser- and middle-rank landowners who relied on hired labor to farm substantial properties. As landless peasants took over the land made vacant by pestilence, the numbers of agricultural laborers shrunk, and they began demanding higher wages.

      The response of the 14th century elites was identical to that of today’s rent seekers. Turchin continues:

      “To preserve caste, the lord was compelled to draw more, on peasant production, and by other means,” concludes Guy Bois.

      [….]

      The landowners responded by passing in 1351 the Statute of Laborers in an attempt to fix wages and prices and to compel able-bodied unemployed to accept work when offered.

      1. Liminal Hack

        Re black death and rising returns to labour – I agree and have written and thought about it a lot.

        Of course the aging demographic means that exactly this scenario, falling return to capital and rising return to labour is returning after being absent for 700 years.

        Except laws to restrict wages are very unlikely to work in an age when mobile labour will find it as easy to evade attempts to hold down wages as international hot money finds ways to circumvent capital controls and attempts to tax it,

        As I said a long time ago (and Bill gross confirmed more recently), capitalism doesn’t work without population growth – not just because you can’t have growth without more consumers, but also because a population pyramid with its point pointing upwards is a pre-requisite of positive returns to financial and fixed capital.

        Give it twenty or thirty years and the asset side of bank balance sheets will be secured on equity stakes in clever young men and women whose education has been funded by elderly savers. That’ll work, but the young uns will be the winners in this deal, just like borrowers are in the driving seat when it comes to the current setup.

      2. attempter

        The Spanish government just used violence to coerce striking air traffic controllers back to work. (They were striking because their kleptocracy is directly stealing a huge chunk of their contracted compensation, including already-accrued vacation and sick days. There again we see how “sanctified” capitalism’s fraudulent “contracts” are. Only a fool still believes in contracts with anyone other than a fellow citizen.)

        The best part of the quote is the part about seizing vacant land. There’s enough of that in America for anyone and everyone who wants to become an autonomous gardener or farmer. So what are we waiting for? It would solve most of our problems right there.

    4. Cynthia

      Jennifer Washburn, investigative journalist and author of the report “Big Oil Goes to College,” has reaffirmed my suspicions that private corporations are hooking up with publicly-funded scientists in order to have scientific research skewed in their favor as well as to get “a research lab on the cheap”…

      http://www.democracynow.org/2010/10/18/big_oil_goes_to_college_bp

      This adds to a growing body of evidence that Big Business has become so intertwined with Big Government that corporate scientists and government scientists have become mirror images of each other. So it’s rather pointless for anyone to be arguing that government scientists are part of the fat and bloated world of bureaucratic socialism while corporate scientists are part of the lean and mean world of free-market capitalism. These two groups of scientists now coexist together in the corrupt and fraudulent world of crony capitalism.

      And about the only way to crack down on this type of corporate crime is to shut down K Street. But don’t expect this to happen anytime soon. And anyone who thinks otherwise has got their head buried in the sand!

      1. MyLessThanPrimeBeef

        If our government doesn’t work with corporate scientists, they will threaten to work with foreign governments.

        In the end, it’s better our government gives in and hands over research dollars for them to come up with the next discovery that will destroy the world. It’s much more comforting to know that we will have it than some rogue regimes.

  2. KFritz

    Re: Twelve Theses, #5

    I wonder where the authors place the blogosphere and the HuffPo in the evolving information/media continuum. In telling the story of the financial meltdown, the blogs are the primary source of information and interpretation for intelligent adults–the MSM is an addendum, an afterthought in keeping up w/ economic developments.

    On a humorous note the ‘Theses’ format conjured up a vision of Martin Luther standing before a large monitor (wide screen tv?) w/ a scroll and nailing up his ‘Theses.’

  3. dearieme

    “My third proposal would be a tax on excessive and persistent current account imbalances.” There’s an idea that would be supported only by the countries with an approximate balance already. My own inclination is to Let Germany Be Germany – it seems most unlikey that the Germany of the Kaiser or of Hitler will return: the RAF, the USAAF and the Red Army made pretty sure of that.

  4. fresno dan

    Reconsidering Japan and Reconsidering Paul Krugman TruthOut

    I can’t say it any better, so I will just repeat it:
    Throughout the 1990s, the Japanese unemployment rate was – ready for this? – about three percent.

    How, then, should we regard a country that has 5 percent unemployment, health care for all of its people, the lowest income inequality and is one of the world’s leading exporters? (Uh, pretty successful????)

    Krugman was commenting on Japan’s so-called “lost decade” of the 1990s, when the Japanese economy was considered sluggish and underperforming. But let’s look at some of the Japanese metrics during that time. Throughout the 1990s, the Japanese unemployment rate was – ready for this? – about three percent.

    During that allegedly “lost decade,” the Japanese also had universal health care, less inequality, the highest life expectancy and low rates of infant mortality, crime and incarceration. Americans should be so lucky as to experience a Japanese-style lost decade. (Interesting point – who sets the agenda that “growth” is the most important criterion for judging an economy?)

    But for the economic experts, apparently, it doesn’t matter if people’s needs are being met; what matters is whether their theories and equations balance. It’s no different with media outlets such as The New York Times, which has been getting it wrong for years – they also missed an $8 trillion housing bubble, as well as the lie on weapons of mass destruction in Iraq (prompting the Times to issue an unprecedented mea culpa to their readers). In the same way, the Times and the rest of the media have been missing the real story about what is occurring in Japan and Europe. (all I can say is ‘yup’)

    1. Diego Méndez

      “During that allegedly “lost decade,” the Japanese also had universal health care, less inequality, the highest life expectancy and low rates of infant mortality, crime and incarceration. Americans should be so lucky as to experience a Japanese-style lost decade.”

      Mmm… you could write all those things about Cuba, too. It still is an economic basket case.

      1. Rex

        “Mmm… you could write all those things about Cuba, too. It still is an economic basket case.”

        I was there once. Clearly the people were working around the economic basket case and were not happy with all the aspects of the communistic structure. But I would say, on average, most of the people I met, on all stratas, were happier than most people I knew in the US. They were poorer and struggling more to sustain their position than my experience of people in the US, but seemed 1950’s happy in their lives.

        Looking around at most people I see on a day-to-day basis around where I live (SF Bay Area) the messed up Cuba system ain’t looking that bad.

        1. Diego Méndez

          I’ve been there recently, too.

          Most Cuban people (outside typical touristic circles) can only speak badly about Communism and their government.

          I do share your impressions that they live a relaxed and, on the whole, happy life. Happiness and joie de vivre are not so related to economic performance as we tend to think.

          But we’re talking about economics here. TruthOut’s case is based on a phallacy. Of course you can (in fact, you should) redistribute your wealth towards higher equality, and Krugman supports that idea as far as I know.

          However, Japan lost a decade’s growth because of wrong policies, and the West may be in the same position.

          1. Rex

            Thanks for another observational opinion on Cuba.

            Maybe the joie de vivre is something that should not be balanced against other ratings of economic performance.

            I was thinking more about what I saw and I think it was clear that educated people like doctors and engineers had only a slight advantage over other people. Seems this isn’t good toward growth of the society.

            But now the US seems to have established the same philosophy toward the educated. Let’s denigrate their contributions and whack them down in favor of corporate or financial models that make them mere serfs.

            Any rational society would value those who can think inovatively, or turn creative thoughts into usable things, or to heal members of the society. But ours has shifted the focus to the transfer of wealth and those rational contributers become pawns in a short-term game that can be sacrificed. Corporatism accomplishes the same as communism but without the benefit to the middle.

          2. Robert Dudek

            Japan can’t and won’t grow robustly because:

            1) They are already a very wealthy society.

            and

            2) They have a very low birthrate, very little immigration and thus a static (and now declining) population.

            Per capita they aren’t doing all that badly.

            And comparing Cuba to Japan in any way is simply ridiculous.

          3. Diego Méndez

            Robert Dudek,

            no one is comparing Japan to Cuba. I’m simply stating that TruthOut’s case is based on a phallacy: universal healthcare and low crime don’t tell us anything about how well a country is faring.

            While you may be right that Japan can’t grow robustly, some economists (notably Krugman) think Japan could have grown faster with the right set of economic policies.

          4. Anonymous Jones

            We know Japan was once the second largest economy in the world. We know its relative income per capita was basically unequaled. The general thesis was that the US and Japan were relatively the same, *except* that Japan had less wealth inequality, universal health care, and less unemployment. It makes more sense to compare an apple to an orange than an apple to a mouse.

            Yeah, you made a point. The point was meaningless. Let’s move on…

      2. Doug Terpstra

        It might be fairer to contrast Cuba with Haiti or maybe Guatemala than with Japan. And for Cuba, of course, we would then have to adjust for a highly punitive, fifty year US trade and travel embargo, without which Cuba would have measurably higher standardas of living and productivity.

    2. Ignim Brites

      Does the recent strengthening of the Yen suggest that Japanese growth rates over the past couple of decades have to be revised up. You have to wonder whether annual GDP numbers can ever really be meaningful. That Japanese companies remain competitive in the world suggests that they really have not stagnated over the last couple of decades.

    3. sherparick

      Ah, but the problem is that the German, Chinese, and Japanese model depend on the U.S. being the consumer of last resort. As Steve Randy Waldman pointed out in one of the best blogs on political economy I have read, “[*] The caveat about financial arrangements is important with respect to Germany’s apparent prosperity. Germany, like China (and Japan (rickster)), is less prosperous than it seems, because its surplus production is geared to sale for claims that cannot credibly be redeemed for what the country’s citizens would want should they exercise their option to consume.” From Hangover Theory and Morality Plays, http://www.interfluidity.com/v2/1004.html

      Again, I really have to protest at the “grasshopper” Americans getting “their just desserts” meme that I find in blog comments in Naked Capitalism and The Big Picture. It is apparently only Americans in the lowest four quintiles of wealth and income who are getting these “just desserts,” the ones who work two or more minimum wage jobs (or if they are in a household perphaps four to five jobs, 60 hours a week, if they can find work, usually without overtime and sometime with a lot of “free hours” thrown in if they want to keep their jobs). It was not them who decided in 1995 to have an policy of an overvalued currency and loose immigration enforcement against employers, a double policy that devastated manufacturing, small farmers, and construction trade workers. Most people who end up broke have had either/or bad luck, a bad start, and/or bad health before they got to 65.

      Finally, I understand where Truthout is coming from, an Environmental anti-growth position, which paradoxically is echoing the calls right-wing Tea Partiers. But i wish they they would give it some more serious thought about why China, Japan, and Germany’s calls for austerity are really simpley calls for maintaining the current global imbalance with the U.S. simply praticing austerity not by reducing consumption of BMWs, Flat Screen TVs, and computers, but rather spending on Social Security and Medicare and overall lower U.S. real and nonmial medium wages.

    4. sherparick

      Unfortunately, in criticizing Krugman, this Common Dreams and Truthout piece defends some very common Oligarchic memes about our current problems.

      This echoes the meme that the “grasshopper Americans” are getting their “just desserts” and deserve more for their “reckless consumption” of all those Mercedes and BMWs Flat Screen TVs etc that those virtuous, prudent, Germans, Japanese, and Chinese are making. We should be like them and just stop consuming and only produce (although it was the grasshoppers who made the decision to have an over valued dollar and outsource most manufacturing and back office service operations overseas or to have an agriculture policy over the last 40 years that would favor large factory farms over small family producers because it would mean very cheap food for consumers),right? But then who would consume or surplus, Mars? (I also note that Krugman has always spoken very favorably about Japan and Germany’s health care systems and worker protections; he is only outraged about the oligarchic hold that the banks have over the Governments and monetary policy of the Governments in both of these countries.)

      Steve Randy Waldman put very elegantly in “Hangover Theory and Morality Plays,..”*The caveat about financial arrangements is important with respect to Germany’s apparent prosperity. Germany, like China, is less prosperous than it seems, because its surplus production is geared to sale for claims that cannot credibly be redeemed for what the country’s citizens would want should they exercise their option to consume.”

      Peter Dornan, in Econospeak, also eviscerated this specific article last month.

      http://econospeak.blogspot.com/2010/11/embarrassed-by-left.html

      “Allow one more indoctrinated economist to make these points:

      1. Japanese and German living standards depend on the debt-financed consumption of the US and other net importing countries. That doesn’t mean their social achievements are worthless—far from it—but it indicates that the sustainability problem is not all ours.

      2. The Japanese have kept going through the accumulation of a massive public debt. This has been possible only because they are a surplus country, so the debt can be domestically financed without cutting into finance for private investment. In other words, the economic policies Krugman criticized have not led to a Japanese meltdown only because of global imbalances, from which they benefit.

      3. Economic growth is essential. If you divide up the world’s output equally among the world’s people, it falls well short of how we want to live. We need redistribution and growth. Greening the economy will also entail tons of investment, which we will have to afford somehow. On top of this, enviro-austerians confuse the growth of value (economic growth) with the growth of stuff (physical throughput). In the economy, better is more, but not necessarily the other way around (if the costs of stuff exceed their benefits).

      I hate to say this, but reading the broad swath of opinion on websites like Common Dreams convinces me that the US left is nowhere near ready for prime time. There is a flippancy and anti-intellectualism that is as immature as anything you’ll find among the Tea Partiers. Did I mention that they have a conception of economics (slash the GDP!) that will relegate them to fringe political status in perpetuity?”

    5. Cian

      I’m not a huge fan of Krugman’s analysis of Japan as it tends towards the apolitical, but that truthout article was stupid.

      Relative to what it had, Japan’s economy has been getting worse. Yes it may have in some ways started from a better position than the US, but conditions have worsened. There has been a huge rise in homelessness (much of which is hidden, but its still there), job insecurity is now rampant. And many people are now effectively shut out of the economy.

      And there’s still a hangover from the crash. To mention just one, lots and lots of people are stuck in housing that will never be worth what they paid for it.

      1. ScottS

        Yes, I saw the homeless that officially don’t exist at Ueno station in 2001.

        The low unemployment comes from having ten intermediaries in the supply chain — massive, pointless inefficiencies and ridiculously high prices. If people stuck in the supply chain were employed in R&D, they’d be leading the world in innovation.

        The article misses the significance of restructuring (i.e., constant layoffs and the death of permanent employment), a declining birthrate, and a huge population of underemployed under-30-year-olds.

        And the huge current account surplus advantage is what’s keeping the poor fundamentals in check.

        Social cohesion is breaking down in Japan, and the entire country is built on social cohesion. They are truly, truly unhappy as a society.

        If the article’s point is that happiness is not correlated with GDP, they are right — but Japan is not a model to follow.

  5. justaperson

    As a former investigative journalist, I thought that Twelve Theses on Wikileaks was the most thoughtful single article I have read about it. I urge you all to check it out.

    1. Transor Z

      Agreed. Very thoughtful piece. It has some contradictory elements that I think reflect what the world is still hashing out: for example, why does a tiny technically advanced cadre of activists need to legally incorporate to become “legitimate” and less opaque?

  6. Conor

    Ms. Smith,

    (off topic) Your Twitter feed doesn’t have an icon (picture). Naked Capitalim not naked twitter! How about just using the little man on the tightrope that’s on the cover of Econned? That would look so cool.

    Cheers!!

  7. Hammersmiller

    I love Japan. Spent a lot of time there, and all around it’s a happy, prosperous place. It’s a miserable place to be in junior high and high school, and a miserable place to try to learn English. However, so far as just making friends and living life, it’s paradise. It makes living in the United States feel really banal sometimes, even if my standard of living may be a bit higher. There seem to be a lot fewer a holes in Japan than here too. Just my opinion. Much warmer culture.

    I just would never be able to make a long term career there, most likely, so I had to come back. I miss it everyday.

    1. MyLessThanPrimeBeef

      What did you do there?

      I think Sumo wrestling is one of the few industries open to foreigners.

  8. emca

    On the WSJ article on Health Law’s Constitutionality, it just got a little more interesting. From AP:

    Judge in Va. strikes down federal health care law

    “RICHMOND, Va. – A federal judge declared the foundation of President Barack Obama’s health care law unconstitutional Monday, ruling that the government cannot require Americans to purchase insurance.”

    This is going to the Supreme.

    1. Cynthia

      No need to worry, Obama will order that health care be put under the national security umbrella and then he’ll use his executive authority to override this federal judge’s decision or simply have him assassinated on the grounds that he is an enemy of the state.

      This is what could happen when we allow an American president to give himself the authority to run our country as though he were a dictator whose primary objective is to protect profits on Wall Street. And Obama knows damn well that if he fails to keep for-profit health care profitable, he’ll not only lose enormous campaign contributions from the health care industry, but he’ll also lose out on being appointed to various boards of directors in this particular industry.

    1. MyLessThanPrimeBeef

      Looks a little bit too healthy though.

      When was the picture taken, before or after the bailouts?

  9. AR

    Yves,

    Randall Wray’s latest at HuffPo connects Paul Jackson’s assertions with the current massive foreclosures.

    The banks are destroying the evidence of failing to convey the notes, robosigning their way through foreclosure court, and dumping the houses en masse at fire sale prices, in order to pay off and wind up the trusts before they can sue them. If they can rely on the nonexistence of the notes, and Jackson’s assertions, then they can get away with it, once the foreclosure sales are final and the trusts closed out

    http://www.huffingtonpost.com/l-randall-wray/post_1423_b_795802.html.

  10. Jim

    Justaperson:

    I agree with your sentiments about “Twelve Theses on Wikileaks.”

    Their analysis rasies many critical points on how a resistance to financial/corporate/bureaucratic elites should be organized,

    For example, in These 9 they raise the profoundly important issue of how power is to be exercised in opposition.

    In referring to Wikileaks lack of internal transparency they state: “You win from the oppostion but in a way that makes you indistinguishable from it.”

    They then add “…according to what playing rules will they(Wikileaks) operate?”

    The issue of the rules of resistance (often left vague, unspoken, or undiscussed) to the present strucure of power can make or break social mobilization.

    How does authority operate in the resistance to the authority of the status quo?

  11. emca

    Off topic, but Louise Story’s article in NYT’s Business Day on present and future relationship of derivatives and clearing houses was a first rate evaluation of that subject as it stands now (via TBP).

    A Secretive Banking Elite Rules Trading in Derivatives
    (log-in required?)

    In sum, while a clearing house for derivatives per Frank/Dodds is an improvement over none at all, it may not really make the market much more transparent, competitive, honest or less prone to future ‘difficulties’.

    As packaged, membership to those clearing houses is set by ‘risk committees’ composed of – drum roll – large banks (read TBTF and brethren) which set standards for admittance. It not a stretch to speculate that an interest exists in perpetuating of a ongoing profitable system, keeping it closed; a system that some see as the the most lucrative scheme on Wall Street going – derivative transactions and associate fees thereof.

    While TBTF enjoys the benefits of opaque trading, the actual investor, the buyer and seller are left scratching their heads. Story’s analogy to buying a house; neither buyer or seller know the price offers on a house by their counter party, the agent’s fees for the sale, or even prices of comparable houses in the area!

    Expense to investors? No one knows whose on the outside, but speculation runs into the tens of billions.

    So how much is the cost to society of bailing out TBTF again?

    1. kravitz

      And (Yves, not to beat a topic into the dirt…)

      “Yves Smith posted a dismissive retort that characterized my entire column “misleading” and “erroneous.”

      “I’m not interested in changing Smith’s mind. But I do feel pretty strongly that the issues surrounding securitization trust validity need to be discussed in the widest possible public forum, so this week I’ll do a bit more than simply gloss.”

      Yes, Paul Jackson!

      http://www.housingwire.com/2010/12/13/the-validity-of-securitization-redux

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