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If space shuttle is doomed, do you tell the crew? Seattle Times

Twitter: 250,000 Users Were Hacked Clusterstock

Bill Gates is naive, data is not objective mathbabe

Health Care’s Trick Coin Ben Goldacre, New York Times. Glad to see him being featured prominently in the US.

BP tried to manipulate gas market, alleges trader Guardian. Not a surprise that this happened, what is surprising is that BP didn’t pay the trader enough to shut him up.

Morgan Stanley Is ‘Getting Worried’ About Europe Again Clusterstock

No Security Firms for African Refugees Counterpunch (Carol B)

Defense Secretary Panetta Says Iranian Threat Is Spreading Wall Street Journal. Wonder why the uptick in saber rattling?

A ‘dark money’ push behind Obamacare? Columbia Journalism Review

Social Security: Just the Facts on Finances, Benefits, and Public Opinion NASI (Paul Tioxon)

Assistant Attorney General Lanny Breuer on Whistleblowers and Prosecuting Bankers for Fraud YouTube (Chuck L). Wish they’d done a better job of matching dialogue to the visuals, but still amusing.

Destiny USA developer claims $56 million tax credit under controversial pollution cleanup program Syracuse (bob)

America’s Baby Bust Wall Street Journal. Help me. When these people who are pearl-clutching start worrying about high unemployment, burgeoning student debt, and high health care costs, all of which make it hard to afford childrearing, then I might take them seriously.

Feds file lawsuit against directors Bainbridge Review (Mark H). Link to the FDIC complaint. Mark’s comment:

I know American Marine Bank’s former director, Rex Townsend. In the early 1990s, he turned me down for a construction loan. I was pissed about that and still am. Despite that, I think he’s getting a raw deal compared to the big banksters. He’s of course an idiot, but if idiocy was a crime, at least a third of the small-town bankers in America would be behind bars.

This is the kind of case the Feds bring against the officers of failed, itty bitty banks—losing $18 million on bad loans when the officers of the megabanks cost us more than 10,000 times that much? I guess even dwarves started small, but do the Feds have no sense of proportion?

Tips are not optional, they are how waiters get paid in America Guardian (John L). The worst is the priggishness of the person who got her fired. I trust there is a special circle in hell reserved for people like him.

When Labor Supports the Enemy Counterpunch (Carol B)

NY Fed President Wants To Subsidize Shadow Banking More, Or Get Rid Of It, One Or The Other Matt Levine, DealBreaker

Wall St. Feeling Better but Far from Bullish Barry Ritholtz

US seen to plod along despite data clash Financial Times

As U.S. Growth Lags, Some Press the Fed to Do Still More New York Times. Gee, weren’t the hawks saying rates would be rising by year end just a few weeks ago?

House price rebound cruising for a fall Financial Times

Hasbara and the Control of Narrative as an Element of Strategy Middle East Policy Council (Carol B). Important.

The Master Meme James Howard Kunstler (Carol B). Today’s must read.

Antidote du jour (furzy mouse). Is this the equine answer to a Breck commercial?

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161 comments

  1. Skeptic

    Financial System as Columbia Space Shuttle:

    If the Financial System is doomed, do you tell the citizens?

    “You know there is nothing we can do about damage to the (Financial System),” Smith quotes Bernanke a decade later. “If it has been damaged, it’s probably better not to know. I think the citizens would rather not know. Don’t you think it would be better for them to have a happy successful time consuming and go bankrupt unexpectedly during a Depression than to stay on orbit, knowing that there was nothing to be done until their Credit Cards ran out.”

    I have always believed that the fallback for all these folks if ever called to Judgement would be: “It was a National Security issue, we were doomed unless we acted as we did.”

    1. JustMeAgaiN

      Excellent!

      And to carry it one step further: What do you tell the people when you know that the entire cheap fossil fuel enabled industrial capitalism experiment is doomed, and that the 7B human mouths it has enabled to be brought into existence ain’t all gonna get fed without it? Never mind the fact that releasing all that concentrated stored energy into the atmosphere has unleashed environmental effects that will probably make all that a moot point as well?

      Talk about your awkward conversation.

          1. craazyman

            whenever I read something he writes I feel as if I’ve died and gone to hell.

            If you like his stuff, you’ll love the sermons of the unjustly anonymous Revered Samuel Treat, Calvinist pastor of Eastham Mass. in the late 1600s:

            “Consider, thou art going to a place prepared by God on purpose to exalt his justice in, — a place made for no other employment but torments. Hell is God’s house of correction; and, remember, God doth all things like himself. When God would show his justice, and what is the weight of his wrath, he makes a hell where it shall, indeed, appear to purpose…. Woe to thy soul when thou shalt be set up as a butt for the arrows of the Almighty….

            “Consider, God himself shall be the principal agent in thy misery, — his breath is the bellows which blows up the flame of hell forever; — and if he punish thee, if he meet thee in his fury, he will not meet thee as a man; he will give thee an omnipotent blow.”

            Some people, I think, watch too much TV and go to too many book salon parties. If they would take the subway one stop to Vernon Boulevard in Long Island City and get out and walk they’d see a whole new world. It’s amazing.

            however, despite my gentle ridicule, I am a poster child of Reverend Kunstler’s advice. To wit: for me, a bottle of wine from the vineyards of my beloved Virginia, in the western counties outside DC, is superior in every respect to even the finest Bordeaux. Because it contains something that no foreign wine (and by that I mean California wines, too) will ever have. The spirit of my native land, the soft and gentle hills, the warm blue sky of summer, the memories of the woods and fields, the hot humid sun of August, even that, and early summer evenings with family and loved ones opening a bottle for fun and pleasure. It’s all there, the memories alive as light itself in every sip. You could offer me a $300 Bordeaux and I’d still say “No thanks, I prefer the simple and slightly awkward $15 red, from home.”

          2. from Mexico

            Thanks for that craazyman.

            You give us a little dose of humor to save us from the doom and gloom preached by the austerians.

            I’m always at a loss to know what motivates these people. Have they been overcome by some strange sadomasochistic curse? Or do they believe redemption comes through the practice of self-imposed sacrifice and suffering?

            One thing you can be sure of, now just as in the Dark Ages, and that is that while the princes of the Church hold out the ascetic saints of the late and post-Roman worlds as examples for the masses, they themselves go about living the high life.

          3. JustMeAgaiN

            craazyman,

            Well put! Spoken like a typical first worlder. Drop down a few socio-economic rungs overnight and me thinks your tune might change just a bit.

          4. JustMeAgaiN

            from Mexico,

            Actually we’re mostly just motivated to tell it like it is, rather than as wealthy first world intellectuals would like it to be. Granted, Kunstler is himself a wealthy first world intellectual himself, as I am myself (well, reasonably wealthy anyway), by world standards at least, but the point remains.

            Calling out a failed way of life by name for what it is, is not, contrary to popular belief insane. In fact, it’s the most sane thing that any of us can do at this point in time, whether or not the progress of our current system has left us any possible way out of our predicament. If that scares you, I understand completely. Unfortunately, fear of the consequences of our current actions is no longer a luxury we have to entertain.

          5. craazyman

            Are your insights always this sharp and subtle?

            Just a rhetorical question. No need to fulminate up an answer. :)

          6. JustMeAgaiN

            craazyman,

            So much “wit,” so little substance. Congrats.

            A laazyman’s intellectual, no doubt.

          7. JustMeAgaiN

            craazyman,

            I apologize in advance after rereading your comments above. I think the subtlety of your comments may have eluded me. Mea culpa either way!

      1. F. Beard

        Wow! You think mere technical considerations are what is of parmount importance?

        Fission alone can supply all our energy needs for the next thousand years or so. And once fusion is made practical then mankind’s energy concerns are obsolete.

        You’d do better to focus on a money system that is inherently unethical and that REQUIRES exponential growth just so the compound interest can be paid to rentiers. And which is responsible for the deaths of 50-86 million in WWII alone.

        1. JustMeAgaiN

          And yet another unbridled Utopian optimist reappears. Nothing wrong with optimism, as long as it’s grounded in reality. Utopia will just have to wait.

          1. Roland

            Nuclear fission power, with a closed fuel cycle, is not Utopian in the least.

            Perhaps it’s undesirable–but it’s not impractical.

    1. Garrett Pace

      Without the religious angle I don’t think this story would have had any legs from the start.

      What’s fascinating about Ms. Welch’s account is how rotten she and other servers are treated at these restaurants, but her ire is for the flinty customers that don’t generously appreciate how poorly they are treated.

      This is straight out of Marx – pitting lower and middle class against each other while the wealthy profit from the situation. Why pay your workers when you can make them pester customers for tips?

      It doesn’t have to be that way. When Ms. Welch complains:

      “In light of the situation, I would like to make a statement on behalf of wait staff everywhere: We make $3.50 an hour. Most of my paychecks are less than pocket change because I have to pay taxes on the tips I make.

      After sharing my tips with hosts, bussers, and bartenders, I make less than $9 an hour on average, before taxes. I am expected to skip bathroom breaks if we are busy. I go hungry all day if I have several busy tables to work. I am expected to work until 1:30am and then come in again at 10:30am to open the restaurant.”

      That’s dreadful! But she should be complaining to the management that can do something about it rather than just complaining to an ungenerous public. There are two side to this problem. Applebees execs have cold hearts too.

      1. from Mexico

        How you can read some kind of an ideological underpinning, such as Marxism, into the waitress’s comments is beyond me.

        Quite the contrary, her comments come across as being eminently pragmatic, ideology free. She didn’t even state what her own religious convictions were.

        The only message that came through to me is that religious ideology should not be invoked to weasel out of paying the tip. And in fact, do you believe what that customer did was a very Christian thing to do? Do you think that Marxists are the only ones in history who have raised their voices for the poor? Have you never heard of Jesus’s admonition that: “If you would be perfect, go, sell what you possess and give to the poor, and you will have treasure in heaven; and come, follow me.”

        1. Garrett Pace

          Then I need to explain myself further. Am I mistaken – was it not Marx who observed that the upper class pitted the bourgies and the proles against each other? I see that in action when Ms. Welch complains just about customers (who as a group are the reason the restaurant exists, but as individuals each have a very small involvement and effect in the system) and not the owners and managers who govern the “applebees” system and decide how much to pay their employees.

          Elsewhere I see you agree with me; the crux of the story is the religious element. People are used to expecting more from ministers, and if had just been some annoyed lady we never would have heard about this. I myself don’t think much of the anonymous pastor’s conduct. I also don’t think much of the conduct of Ms. Welch’s employers. If the pastor is offended by the (voluntary!) tip-line addition (put on there as a corporate policy, not some bizarre requirement by the servers!) she should perhaps stay home. As it is, she paid in full to the people she was really annoyed at, and stiffed the nobodies that depended on her generosity.

          I myself am a horrible tipper; my salvation is in signing the slip and letting my Sweetie decide how much to tip. She is much more generous.

          1. JTFaraday

            Yes, Marxists are always pointing out the many ways in which the bourgeois/middle classes are soon found throwing the peons further under the bus.

            They even read Martin Luther’s response to the German Peasant Rebellion of 1525 this way, which just goes to show that the anti-theoclassicals are correct: not all motivations are pecuniary in nature!

            This Marxist idea is pure analytical gold.

    1. Jim Haygood

      Today is no ordinary Groundhog Day. It’s the first day in more than twenty years that neither Clinton is preening, pontificating and haranguing us from a post in public office, as is their wont.

      Naturally Hillary couldn’t resist indulging in a final pugnacious lecture:

      WASHINGTON — Secretary of State Hillary Rodham Clinton left office Friday after delivering a parting slap at critics.

      She told The Associated Press that critics of the administration’s handling of the [Benghazi] attack don’t live in an “evidence-based world,” and their refusal to “accept the facts” is unfortunate and regrettable for the political system.

      She said she “absolutely” still plans to make a difference on issues she cares about in speeches and in a sequel to her 2003 memoir, “Living History,” that will focus largely on her years as secretary of state.

      http://www.newsday.com/news/nation/hillary-clinton-knocks-critics-as-she-leaves-office-1.4549891

      And so the Permanent Campaign marches grimly on — ‘making a difference,’ polishing her hagiography, bashing her critics, collecting fawning endorsements from Israeli war criminals.

      http://www.youtube.com/watch?feature=player_embedded&v=cgIK3LBc-GI

      Nevertheless, let us be thankful for this day. Free at last — thank Bog Almighty, we’re FREE AT LAST from these greasy grifters!

      1. Ms G

        … she can also get back to railing about that “vast right-wing conspiracy” thingy she was so obsessed with during her husband’s traitorous tenure!

        1. CB

          During a documentary on American presidents, not all were included, a history professor commented that “Most American presidents have been mediocre [or mediocrities, don't remember which].” And the instant I heard it, I knew it was true. Some are just worse than others. I’m not sure where Bill Clinton fits into that pantheon, but going on living memory leaves out too many (un)worthy candidates–and the competition is fierce.

          I’m coming to believe there is no such thing as a high information voter if “information” means demonstrable fact. We all choose what we “know.”

          1. Ms G

            Bill Clinton = Repeal of Glass Steagall (*after* Citi merged with Travelers)

            Bill Clinton = Bankruptcy Law reform (student loans no longer dischargeable in bankruptcy)

            Bill Clinton = “Welfare to Work”

            and the least of our concerns (though not so as you would have known it back then) = Monica Gate

          2. CB

            By Yves Smith, the bill that repealed Glass-Steagall was simply the formal burial of a law that had died long before in repeated exceptions granted: there wasn’t anything left of the actual practice.

          1. Ms G

            N-o. She’s had her allotted time occupying our political space (and then waay some). I’m forbidding her from doing anything that is considered newsworthy by shill (or non shill) media for — let’s see, 50 years. Yes, effectively a life-ban. But it’s called for!

          2. CB

            I voted for Clinton in the primary because I thought her the best of a dismayingly bad lot. I voted for Obama in the general because I thought him somewhat better than McCranky. Wrong on both counts, but what were the alternatives? I disagree with the Hillary fans who go on about how much better she would have been: how would anyone know, it’s all conjecture. I believe she would have been different, not necessarily better, domestically. In foreign policy and implementation, who the hell knows; but she has a history that suggests she’s in step with Obama and that is not good.

            Stewart Alexander in the last election. His was the only program that made sense to me.

        1. Ms G

          Do you really think that Hillary’s economic team would have been any different from Obama’s? She comes from the Rubin camp, which means, Summers, Geithner, and the rest of the neo-lib people. I have no idea what she would have done with “Washington Consensus,” Peter Peterson and the Cat Food Commission.

          1. nonclassical

            ms. G.. needs several history lessons-Glass-Steagal slipped into Clinton OMNIBUS BILL (had no idea he was signing) by repubLIEcon Senator Phil Gramm, whose wife earned seat on Enron, for…

            here’s the truth behind the “vast rightwing conspiracy” which was just as true then as now, BY the conspirator turned whistleblower who wrote said propaganda:

            http://www.amazon.com/Blinded-Right-Ex-Conservative-David-Brock/dp/1400047285/ref=sr_1_1?s=books&ie=UTF8&qid=1359874572&sr=1-1&keywords=blinded+by+the+right
            ………….

            not that the “professional left” (me included) need Hillary-DLC, or any variety more BUSHIT…how would I know? My sister (PhD Stanford, international Ed.) accompanied her on China educational study tour…

            meanwhile, Ms G has lots of opine…

          2. skippy

            Glass–Steagall developments from 1935 to 1991

            Commercial banks withdrew from the depressed securities markets of the early 1930s even before the Glass–Steagall prohibitions on securities underwriting and dealing became effective.[53] Those prohibitions, however were controversial.

            A 1934 study of commercial bank affiliate underwriting of securities in the 1920s found such underwriting was not better than the underwriting by firms that were not affiliated with banks. That study disputed Glass–Steagall critics who suggested securities markets had been harmed by prohibiting commercial bank involvement.[54] A 1942 study also found that commercial bank affiliate underwriting was not better (or worse) than nonbank affiliate underwriting, but concluded this meant it was a “myth” commercial bank securities affiliates had taken advantage of bank customers to sell “worthless securities.”[55]

            Senator Glass’s “repeal” effort

            In 1935 Senator Glass attempted to repeal the Glass–Steagall prohibition on commercial banks underwriting corporate securities. Glass stated Glass–Steagall had unduly damaged securities markets by prohibiting commercial bank underwriting of corporate securities.[56] The first Senate passed version of the Banking Act of 1935 included Glass’s revision to Section 16 of the Glass–Steagall Act to permit bank underwriting of corporate securities subject to limitations and regulations.[57]

            President Roosevelt opposed this revision to Section 16 and wrote Glass that “the old abuses would come back if underwriting were restored in any shape, manner, or form.” In the conference committee that reconciled differences between the House and Senate passed versions of the Banking Act of 1935, Glass’s language amending Section 16 was removed.[58]

            Comptroller Saxon’s Glass–Steagall interpretations

            President John F. Kennedy’s appointee as Comptroller of the Currency, James J. Saxon, was the next public official to challenge seriously Glass–Steagall’s prohibitions. As the regulator of national banks, Saxon was concerned with the competitive position of commercial banks. In 1950 commercial banks held 52% of the assets of US financial institutions. By 1960 that share had declined to 38%. Saxon wanted to expand the powers of national banks.[59]

            In 1963, the Saxon-led Office of the Comptroller of the Currency (OCC) issued a regulation permitting national banks to offer retail customers “commingled accounts” holding common stocks and other securities.[60] This amounted to permitting banks to offer mutual funds to retail customers.[61] Saxon also issued rulings that national banks could underwrite municipal revenue bonds.[62] Courts ruled that both of these actions violated Glass–Steagall.[63]

            In rejecting bank sales of accounts that functioned like mutual funds, the Supreme Court explained in Investment Company Institute v. Camp that it would have given “deference” to the OCC’s judgment if the OCC had explained how such sales could avoid the conflicts of interest and other “subtle hazards” Glass–Steagall sought to prevent and that could arise when a bank offered a securities product to its retail customers.[64] Courts later applied this aspect of the Camp ruling to uphold interpretations of Glass–Steagall by federal banking regulators.[3]

            As in the Camp case, these interpretations by bank regulators were routinely challenged by the mutual fund industry through the Investment Company Institute or the securities industry through the Securities Industry Association as they sought to prevent competition from commercial banks.[65]

            1966 to 1980 developments

            Increasing competitive pressures for commercial banks
            Regulation Q limits on interest rates for time deposits at commercial banks, authorized by the 1933 Banking Act, first became “effective” in 1966 when market interest rates exceeded those limits.[66] This produced the first of several “credit crunches” during the late 1960s and throughout the 1970s as depositors withdrew funds from banks to reinvest at higher market interest rates.[67] When this “disintermediation” limited the ability of banks to meet the borrowing requests of all their corporate customers, some commercial banks helped their “best customers” establish programs to borrow directly from the “capital markets” by issuing commercial paper.[68] Over time, commercial banks were increasingly left with lower credit quality, or more speculative, corporate borrowers that could not borrow directly from the “capital markets.”[69]

            Eventually, even lower credit quality corporations and (indirectly through “securitization”) consumers were able to borrow from the capital markets as improvements in communication and information technology allowed investors to evaluate and invest in a broader range of borrowers.[70] Banks began to finance residential mortgages through securitization in the late 1970s.[71] During the 1980s banks and other lenders used securitizations to provide “capital markets” funding for a wide range of assets that previously had been financed by bank loans.[72] In losing “their preeminent status as expert intermediaries for the collection, processing, and analysis of information relating to extensions of credit”, banks were increasingly “bypassed” as traditional “depositors” invested in securities that replaced bank loans.[73]

            In 1977 Merrill Lynch introduced a “cash management account” that allowed brokerage customers to write checks on funds held in a money market account or drawn from a “line of credit” Merrill provided.[74] The Securities and Exchange Commission (SEC) had ruled that money market funds could “redeem” investor shares at a $1 stable “net asset value” despite daily fluctuations in the value of the securities held by the funds. This allowed money market funds to develop into “near money” as “investors” wrote checks (“redemption orders”) on these accounts much as “depositors” wrote checks on traditional checking accounts provided by commercial banks.[75]

            Also in the 1970s savings and loans, which were not restricted by Glass–Steagall other than Section 21,[47] were permitted to offer “negotiable order of withdrawal accounts” (NOW accounts). As with money market accounts, these accounts functioned much like checking accounts in permitting a depositor to order payments from a “savings account.”[76]

            ***Helen Garten concluded that the “traditional regulation” of commercial banks established by the 1933 Banking Act, including Glass–Steagall, failed when nonbanking firms and the “capital markets” were able to provide replacements for bank loans and deposits, thereby reducing the profitability of commercial banking.[77]***

            While he agreed traditional bank regulation was unable to protect commercial banks from nonbank competition, Richard Vietor also noted that the economic and financial instability that began in the mid-1960s both slowed economic growth and savings (reducing the demand for and supply of credit) and induced financial innovations that undermined commercial banks.[78]

            Hyman Minsky agreed financial instability had returned in 1966 and had only been constrained in the following 15 years through Federal Reserve Board engineered “credit crunches” to combat inflation followed by “lender of last resort” rescues of asset prices that produced new inflation. Minsky described ever worsening periods of inflation followed by unemployment as the cycle of rescues followed by credit crunches was repeated.[67] Minsky, however, supported traditional banking regulation[79] and advocated further controls of finance to “promote smaller and simpler organizations weighted more toward direct financing.”[80]

            Writing from a similar “neo-Keynesian perspective, Jan Kregel concluded that after World War II non-regulated financial companies, supported by regulatory actions, developed means to provide bank products (“liquidity and lending accommodation”) more cheaply than commercial banks through the “capital markets.”[81] Kregel argued this led banking regulators to eliminate Glass–Steagall restrictions to permit banks to “duplicate these structures” using the capital markets “until there was virtually no difference in the activities of FDIC-insured commercial banks and investment banks.”[82]

            Comptroller Saxon had feared for the competitive viability of commercial banks in the early 1960s.[59] The “capital markets” developments in the 1970s increased the vulnerability of commercial banks to nonbank competitors. As described below, this competition would increase in the 1980s.[83]

            [edit]Limited congressional and regulatory developments
            In 1967 the Senate passed the first of several Senate passed bills that would have revised Glass–Steagall Section 16 to permit banks to underwrite municipal revenue bonds.[84] In 1974 the OCC authorized national banks to provide “automatic investment services,” which permitted bank customers to authorize regular withdrawals from a deposit account to purchase identified securities.[85] In 1977 the Federal Reserve Board staff concluded Glass–Steagall permitted banks to privately place commercial paper. In 1978 Bankers Trust began making such placements.[86] As described below, in 1978, the OCC authorized a national bank to privately place securities issued to sell residential mortgages in a securitization[87]

            Commercial banks, however, were frustrated with the continuing restrictions imposed by Glass–Steagall and other banking laws.[88] After many of Comptroller Saxon’s decisions granting national banks greater powers had been challenged or overturned by courts, commercial banking firms had been able to expand their non-securities activities through the “one bank holding company.”[89] Because the Bank Holding Company Act only limited nonbanking activities of companies that owned two or more commercial banks, “one bank holding companies” could own interests in any type of company other than securities firms covered by Glass–Steagall Section 20. That “loophole” in the Bank Holding Company Act was closed by a 1970 amendment to apply the Act to any company that owned a commercial bank.[90] Commercial banking firm’s continuing desire for greater powers received support when Ronald Reagan became President and appointed banking regulators who shared an “attitude towards deregulation of the financial industry.”[91]

            Reagan Administration developments

            State non-member bank and nonbank bank “loopholes”
            In 1982, under the chairmanship of William Isaac, the FDIC issued a “policy statement” that state chartered non-Federal Reserve member banks could establish subsidiaries to underwrite and deal in securities. Also in 1982 the OCC, under Comptroller C. Todd Conover, approved the mutual fund company Dreyfus Corporation and the retailer Sears establishing “nonbank bank” subsidiaries that were not covered by the Bank Holding Company Act. The Federal Reserve Board, led by Chairman Paul Volcker, asked Congress to overrule both the FDIC’s and the OCC’s actions through new legislation.[92]

            The FDIC’s action confirmed that Glass–Steagall did not restrict affiliations between a state chartered non-Federal Reserve System member bank and securities firms, even when the bank was FDIC insured.[45] State laws differed in how they regulated affiliations between banks and securities firms.[93] In the 1970s, foreign banks had taken advantage of this in establishing branches in states that permitted such affiliations.[94] Although the International Banking Act of 1978 brought newly established foreign bank US branches under Glass–Steagall, foreign banks with existing US branches were “grandfathered” and permitted to retain their existing investments. Through this “loophole” Credit Suisse was able to own a controlling interest in First Boston, a leading US securities firm.[95]

            After the FDIC’s action, commentators worried that large commercial banks would leave the Federal Reserve System (after first converting to a state charter if they were national banks) to free themselves from Glass–Steagall affiliation restrictions, as large commercial banks lobbied states to permit commercial bank investment banking activities.[46]

            The OCC’s action relied on a “loophole” in the Bank Holding Company Act (BHCA) that meant a company only became a “bank holding company” supervised by the Federal Reserve Board if it owned a “bank” that made “commercial loans” (i.e., loans to businesses) and provided “demand deposits” (i.e., checking accounts). A “nonbank bank” could be established to provide checking accounts (but not commercial loans) or commercial loans (but not checking accounts). The company owning the nonbank bank would not be a bank holding company limited to activities “closely related to banking.” This permitted Sears, GE, and other commercial companies to own “nonbank banks.”[48]

            Glass–Steagall’s affiliation restrictions applied if the nonbank bank was a national bank or otherwise a member of the Federal Reserve System. The OCC’s permission for Dreyfus to own a nationally chartered “nonbank bank” was based on the OCC’s conclusion that Dreyfus, as a mutual fund company, earned only a small amount of its revenue through underwriting and distributing shares in mutual funds. Two other securities firms, J. & W. Seligman & Co. and Prudential-Bache, established state chartered non-Federal Reserve System member banks to avoid Glass–Steagall restrictions on affiliations between member banks and securities firms.[96]

            http://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Act

            Or as Barry sez…

            “The past 50 years have seen a dramatic financialization of the American economy. Wall Street has morphed from serving industry to a Titanic leaving a damaged economy in its wake.”

            http://www.ritholtz.com/blog/2012/08/repeal-of-glass-steagall-not-a-cause-but-a-multiplier/

            Skippy… innovation … snicker…

  2. Central Premature Burial Agency

    Yes, Hasbara is the water in our aquarium of government lies. It is with narrative that John Bennett hopes to take Abu Zubaydah buried alive in his coffin, the undeniable epitome of torture, a crime with no statute of limitations, and change it into an episode of a fast-paced grrl-power action thriller. And none of the servile Senate figureheads will dare to ask John Brennan whether he directed this torture as part of a military-civilian command structure, or acquiesced to it.

    1. Brindle

      Yes, Hasbara effectively describes the behaviors of the “inside the beltway-conventional (non)wisdom” crowd–most of congress and the executive branch.

      —”Unlike its progenitors, however, hasbara does not seek merely to burnish or tarnish national images of concern to it or to supply information favorable to its theses.

      It also seeks actively to inculcate canons of political correctness in domestic and foreign media and audiences that will promote self-censorship by them.
      It strives thereby to decrease the willingness of audiences to consider information linked to politically unacceptable viewpoints, individuals, and groups and to inhibit the circulation of adverse information in social networks.”—

      1. Jagger

        If you have ever posted a critical comment on a major blog concerning the actions of Israel and promptly been gang attacked by 10-12 people with some of the most vicious slurs possible, then you must read the Hasbara article. Clearly as the article explains, it is orchestrated activity with the intention of silencing any discussion.
        The best defense of the indefensible is silence.

        Note the use of committed volunteers for these actions. The article doesn’t mention paid commenters but the Israeli government does use them. So next time you make a perfectly legitimate comment on immoral Israeli activity and you are gang attacked, just supply a link to this Hasbara article.

        Also interesting is that the author Ambassador Freeman is retired.

        1. from Mexico

          That’s certainly been my experience.

          Just the mention of Hannah Arendt, for instance, in whatever context, sends the right-wing Isralies on The Guardian’s “Comment is Free” forum ballistic.

          Arendt became Israel’s state enemy #1 as a result of some things she said critical of the Israeli regime in Eichamann in Jerusalem, as well as her later criticisms of how the Israeli government was dealing with the Palestinians.

          1. knowbuddhau

            Happened to me , too. During the Bab al-Shams eviction, Haaretz tweeted that the “Palestinian outpost evacuation [was] complete, no arrests reported,” even while detainees were live tweeting their arrests from the IDF buses! I’d been watching arrests on livestream, so I started trolling Haaretz, asking, how could you know the “evacuation was complete,” but not know about arrests? I used the hashtag, #HasbaraFail.

            Almost immediately, I was followed by this:

            IDF Rabbi (IDFrabbi) on Twitter
            twitter.com/IDFrabbi
            IDF Rabbi. @IDFrabbi. Friend of the Israeli soldier and Mossad agent. Champion of the victory forces of Ha Shem. The Voice of Israel and Prophet of Israel.

            It’s a bot, I believe, that perverts the power of myth by using quotes from religious sources to justify Israel’s actions. Following me! You think I’m always on about the perversion of the political power of myth here, you should see my Twitter TL.

            Just a few days ago, another Hasbarist tried a different tact. The fool actually tried to misuse dharma to intimidate me into a pointless debate over whether Israel is an apartheid state or not.

            It was the first time I’d seen with my own eyes the perversion of even Buddhist beliefs in an attempt to psyop someone. So foolish, I told him, to think he could misuse dharma on a guy with a handle like mine (knowbuddhau), and expect it to work. That kind of thing only amplifies my resolve.

            Hasbara is the perfect example of what I mean by the weaponization of the power of myth into MYTHOP.

          2. Susan the other

            I like that Hasbara is a more complex word than Propaganda. It is an Achilles heel. So here’s a word about God’s Chosen, wherever they think they reside: That genetic imperative was lost millenia ago – because there were already no more truly isolated populations. I can only deduce that “Israel” is now a political device (willing for the most part) of the USA. The obvious solution, the best one, is for the Israelis and the Palestinians to intermarry and mix it up. The strongest love is genetic love. Which makes me think that sophisticated lies can only be countered by unseen knowledge.

          3. CB

            Every time one of those Who Would You Like to Lunch with? surveys comes up, I always vote, or write in, Hannah Arendt.

          4. nonclassical

            ..meanwhile, 6 actual Israeli Shin Bet security agency chiefs expose Israeli war crimes vs Palestinians:

            “Amidst a spate of killings by Israeli forces of unarmed Palestinians in the occupied West Bank, we turn to the stunning Oscar-nominated documentary, “The Gatekeepers.” The film brings together six former heads of Israel’s internal security agency, the Shin Bet, collectively speaking out for the first time ever. They detail their methods against Palestinian militants and civilians in the Occupied Territories, including targeted killings, torture, recruiting informants, and the suppression of mass protests during two intifadas. But in doing so, they also criticize the occupation they were assigned with defending and warn that successive Israeli governments have endangered their country’s future by refusing to make peace. “We are making the lives of millions unbearable, into prolonged human suffering, [and] it kills me,” Carmi Gillon says in the film. “[We’ve become] a brutal occupation force similar to the Germans in World War II,” adds Avraham Shalom. We are joined by the film’s director, Dror Moreh.”

            http://www.democracynow.org/2013/1/29/the_gatekeepers_in_new_film_ex

  3. AbyNormal

    Kunstler, among his many talents also paints…(to my eye) his broad strokes amplify bristles within his writings.

    “It’s in the nature of this world that things cycle and pulse, and we have entered a certain phase of the cycle that demands certain responses. We have to make the scale of human activities smaller, finer, simpler, and more rooted to the local particulars of place. We have to let go of WalMart and globalism and driving cars incessantly and attempting to manage the affairs of people half a world a way… and we just can’t imagine engaging with this endeavor.***That is true poverty of imagination***.”

    (glad it made The Links…earlier it went poof when i tried to post it)

    1. Susan the other

      I like JHK alot too. This post was too short. I agree with almost everything he says. Let’s figure out a way to rejoice in our reality. They used to say that necessity was the mother of invention but now I’m beginning to think that boredom was the mother of invention because so much of what has been “invented” is just kluged together without much vision. It is not progress, it is simply dysfunctional. So, I say, let’s champion necessity in a new way – take a closer and more respectful look at it. One of JHK’s commenters suggested communal living to bridge the gap so we have what we need and I like that suggestion except that I don’t like communal dogma. Don’t barrage me with your patriotic and religious opinions and I can live and work with you forever! But don’t come over unless I invite you, OK?

      And also I thought JHK was a little paranoid about ZIRP. All zirp is is a very pwerful tool to keep the bond vigilantes at bay. Maintain a monetary system in a serious crisis. What that money is spent on wil make all the difference – as Robert Frost once tried to tell us. He was no twit. There really is a state of truth out there somewhere.

      1. Glenn Condell

        Kunstler has been writing basically the same column every week or so since about 2006. This is not a criticism; he feels he has an urgent message to impart and he is right. The events change but the conclusion always involves our inability to deal sensibly with reality, which as a result will soon be dealing with us. People like Ezra Klein and Chris Hayes don’t approve of his ‘Cassandrism’ so he must be doing something right.

        He is often placed in the ‘doomer’ category and the eloquently apocalyptic weekly bulletins and ‘The Long Emergency’ I guess are the genesis for that, but his post-catastrophe World Made By Hand novels are gently reassuring in the main; sure there are lots of problems but life for most has devolved back to a 19th C DIY town and country existence not without comforts, many of which we do not enjoy now. If he is a doomsayer he is an unusually optimistic one.

        He was one of the first to alert me to the coming crash; not an expert himself he was discerning enough to be reading Taleb, Roubini, Nicole Foss, Orlov, Martenson, Doug Noland and various others who were qualified to be worried. None of them could write like he can though, he put real rhetorical meat on the bones of their concerns.

        I listen sometimes to his podcast as well, and interviews with Max Keiser, C-Realm etc. He is great talent verbally too; and opines with wit and wisdom on many things, urban planning and architecture in particular.

        Having said all that, we all have our blind spots and his is Israel. Gaza was simply the Powell doctrine in action so far as he is concerned and some of his Islamophobia has veered very close to outright racism:

        http://mondoweiss.net/2009/01/jim-kunstler-is-an-important-writer-his-blog-has-a-huge-following-and-he-public-jew-hating-has-made-a-comeback-in-the-usa-am.html

        Phil Weiss’s blog used to be a target for hasbarists; the Chas Freeman affair saw some pitched battles between America-firsters and the hasbara peddled by the ‘sayanim’. It felt to an outsider like me that I was witnessing the real, bare-knuckle ‘third rail’ conflict that festers beneath all US political activity that touches upon Lobby concerns, the genuine offence taken by Americans who perceived and were angered by the lock the Lobby had on issues vital to US interests, and the unfortunate and sometimes dangerous consequences that resulted.

        1. CB

          Yes, he has and I only read him once in awhile. I thought this column a worthy summation. I don’t entirely agree with JHK but I think he has important points to make and does so in very readable prose. Monotonously. Or maybe monomaniacally. Whatever……….

  4. Brindle

    Former military prosecutor at Guantanamo ties torture and drone strikes together.

    —”Morris was critical of both the Bush and Obama presidencies, speaking against the use of drones to kill suspected terrorists and the failure to close the prison at Guantanamo Bay, Cuba.

    He said the difference between drone strikes and torture is “six of one and half a dozen of another.”—

    http://www.fayobserver.com/articles/2013/02/01/1234504?sac=fo.military

    1. Crimes of concern to the International community Agency

      With the US diplomatically isolated and discredited and forced to rely increasingly on coercion (even with its satellites,) a subtle difference is emerging. In a UNSC resolution referring charges against criminal US officials to the International Criminal Court, it would be six of Article 7.1.a or a half dozen of Article 7.1.f. Follow up the US veto with a UNGA resolution affirming the concern of the international community, and Puppet Leader in Chief Barack Obama is out on his ass, Scapegoat in Chief.

  5. David Lentini

    Mathbabe forgot to add that Gates is arrogant–supremely arrogant–in addition to being naive. In fact, I’d argue that Gates’s arrogance is the driver behind his naivete.

    Like many in the computer business, Gates looks at every problem as if the solution to any problem is simply a matter of solving some equation (or set of equations), which of course computers do quite well. Like all utopians, Gates acts like he knows the answer, and all we have to do is march to his drum beat. So, of course after we’ve bought into his vision (oh, and bought his software and hardware too) we’ll have the focus and energy to do what needs to be done–because we’ll have the nicely calculated answer in our hands!

    If only real life, as Mathbabe points out, was that simple. (Then, I suspect we’d all be Bolsheviks. Sorry, Bill.) The problem, as Mathbabe points out, and I agree, is that all power flows to the Supreme Soviet to the model builder owner. That’s a recipe for back-door tyranny. But that’s not all. I think an even bigger problem is the arrogance that all problems can be reduced to mathematical models having computable solutions. We’ve been stuck on this road for over a century now, between the Marxist-Leninists and the Chicago School of economics. Life’s just not that simple. (Again, if it was, the we could live by reliable five-year plans and sing the International.)

    One great example happened some years ago, when then-Sun Microsystems then-CTO, Bill Joy, announced that since DNA was “just one great computer program” and Silicon Valley was full of crack programmers, then programmers would start solving problems like cancer and other diseases. You, see, Joy claimed, medical and biochemical science just we’re getting the job done; we needed a fresh look by a lot of brilliant hackers who could get to the “real” heart of the problem–DNA. Well, that was quite some time ago, and I still haven’t seen a cure for cancer.

    So, perhaps the old adage needs to be revised: it’s to an arrogant carpenter that every problem looks like a nail. To an arrogant computer Mogul, every problem looks like just another minimax or simplex optimization. To the rest of us, it looks like tyranny and incompetence.

    1. from Mexico

      David Lentini said:

      I think an even bigger problem is the arrogance that all problems can be reduced to mathematical models having computable solutions. We’ve been stuck on this road for over a century now, between the Marxist-Leninists and the Chicago School of economics.

      For another example of math gone wild, see my comment below regarding the Giuliani doctrine.

      Maybe one of the reasons we cannot break out of this dogma is because of what you say: both the right and the left, the yin and the yang, accept these highly simplistic and reductionist mathematical models as sure truth; as if somehow, magically, they had more than just a passing resemblence to reality.

      Perhaps if we looked at the similarities between the Marxist-Leninists and the Chicago School, instead of our all-encompassing obsession with their differences, we might come up with better solutions.

      1. from Mexico

        For those interested in how the Giuliani doctrine fits into the larger, over-arching historical and ideological framework which Lentini speaks of, Adam Curtis does a great job of explaining in The Trap. The most germane part begins at minute 38:00 of Part Two:

        http://thetrapdoc.blogspot.mx/

    2. kevinearick

      when the Fed prints every time they recycle back into Microsoft, the “don’t fight the Fed” crowd always sees simple answers. The G in GDP falls, the DOW hits 14, Boeing still can’t get out of the Microsoft black hole, and Russia is having babies. What is a robot to do?

  6. J Sterling

    The baby bust article hits the usual population denialist points: the world population isn’t *reeelly* growing (yes, it is), it’ll stop growing 60 years from now, honest (when it doesn’t, most of today’s denialists will be dead and the remainder will say “Huh. Who could have known?”)

    “For decades we’ve been lectured about overpopulation”. This is a way of claiming we haven’t been lectured for decades about how growing population is no big deal, and kind of awesome actually. Meanwhile the seas are emptied of fish to feed the hungry.

    “The real threat is omigod depopulation!” Climate denialists similarly like to say “Won’t someone think about the coming ice age!?” It’s a way of messing up the discourse to inject the exact opposite of what’s actually happening into the mix.

    If depopulation of any country was an issue, more country’s populations would be, you know, coming down. The British have recently noticed they acquired half a million cheap Polish workers in just a few years. That’s half a million salaries that Brits could have started a home and family with, making half a million new children, also half a million rentpayers driving up the price of a new home. And yet it’s supposedly the middle and working class at fault for viciously not getting pregnant, forcing their rulers to bring in replacements.

    Poland’s own population is going down as a result of emigration by all of 0.075% a year (Wikipedia), so they’re making up the numbers fine. Most sources of population growth in labor-employing Western countries don’t show any slowdown at all in their own population growth. But they certainly put a crimp in new household formation in their destination countries.

    1. Larry

      Nobody should be worried about a slowing birth rate. That is to be cheered if it happens, and as you well note it’s not happening. Economists need to put a constant into their equations, the fact that Earth is a closed system with limited resources. Population decreases will improve everyone’s standard of living and prevent a catastrophic collapse that is inevitable if we keep living the way we are currently.

      1. J Sterling

        I agree. Leaving aside for a moment the external natural environment, and considering only the economic interaction of labor and capital, a lower standing army of surplus labor and a lower base of would-be tenants can only be good for the majority of people.

        So who’s for a higher population in their countries and in the world? A small minority class of labor employers and rent collectors. It’s all there in Ricardo, Marx, and Henry George.

      2. Tiresias

        How about a nice rerun of the Black Death:

        “The Black Death is estimated to have killed 30 to 60 percent of Europe’s population. All in all, the plague reduced the world population from an estimated 450 million to a number between 350 and 375 million in the 14th century.

        The aftermath of the plague created a series of religious, social and economic upheavals, which had profound effects on the course of European history. It took 150 years for Europe’s population to recover.”

        http://en.wikipedia.org/wiki/Black_Death

        1. J Sterling

          I’d prefer an alternative to periodic horrible death, especially if the only outcome is that people think it’s okay to breed again. If that happens, we’ll just be back to wishing for another awful plague a hundred years after the last one.

          Paul Krugman’s old thesis advisor, Evsey Domar, had a theory that, while a massive preponderance of labor over assets ran the risk of wage oppression, a massive preponderance of assets over labor ran the risk of slavery. He used as one example the discovery of the “empty” Americas (what we now know was a recently-depopulated, post-plague, environment), where the European asset owners “needed” labor so much they kidnapped Africans to work on the land rather than have to pay high wages to the few workers available. Russia, in the same time frame as England was losing thralldom in the years after the Black Death, was enserfing its workers to stop them taking advantage of the scarcity of labor. (Domar’s theory doesn’t account for the medieval England story, where slavery was killed by population loss, not caused by it)

          This is not to say we should be scared of a decreasing population, just ready for the ownership class to start finding reasons to legally compel workers instead of giving them the “freedom” to work for low wages or starve. And ready to stop them.

        2. Ms G

          Except can we, the 99%, decide that only they, the Peter Pinguid Society people (.01%), get the plague? :)

          Well, massive population-destroying events like the Black Death were the sort of thing Malthus used to consider as “part of nature” over time and in cycles, no?

          1. CB

            Listen, if I had a disease that only attacked the top of the governing class, I loose it in a heartbeat. There is such as thing as too much stupid.

    2. heresy101

      While Japan is a special geographic and cultural case, a 30% drop is population is no insignificant!

      http://www.cnn.com/2012/01/30/world/asia/japan-population-decline/index.html
      Tokyo (CNN) — Japan’s population will shrink by a staggering 30% by 2060, according to a new estimate by the country’s government.

      The current population will shrink from the current level of 128 million to 86.74 million, as the graying nation’s aging accelerates and the birthrate continues to stay low.

      1. J Sterling

        That’s a story. I say it won’t happen, and then the people who told it will say (as they said about the Iraq invasion story) “who’d a thunk it!?”

        Currently, in the middle of a contraction in the economy of over two percent per annum, the actual population is contracting a mere 0.2 percent per annum (no country in the world not racked by disease or massive emigration is shrinking by even that much). I predict the population will grow again as young people are encouraged to have children by lower house prices and higher wages, and the predictions of Japanese population collapse will go the same way the predictions of Japanese world supremacy in the 1980s did: just so much story-telling.

        But suppose the prediction is right: it means the population will, by 2060, be what it was in 1960. There were no stories about how Japan was an empty waste in 1960: all the stories were about how incredibly crowded the country was.

        1. diptherio

          +10

          Weather forcasts can’t be reliably made more than a few days in advance, but we’re supposed to believe that population levels 50 years hence can be reliably predicted. Sure….

          I remember my dad freaking out when I was a kid, “The Japanese are buying everything! They’re going to take over the country!” Haven’t heard much about that lately. If anyone’s taking-over in my part of the country, it’s Monsanto and Cargill.

    1. AbyNormal

      damn Howard…i didn’t breath thru the entire list. it reads like a karl rove new improved hit list :-/

      the NRA motto: Pile them All to the Sky

  7. AbyNormal

    re: When Labor supports the enemy…we all puke.
    example:
    On Jan. 28, the Fulton County Department of Health and Wellness issued a warning to residents and families about a new strain of norovirus, a very nasty and highly contagious stomach bug, that is spreading like wildfire throughout the county. Twenty cases have been officially confirmed, but officials say that there could be hundreds, if not thousands of other cases. The outbreak is raging all across the country as well.

    On Tuesday, Jan. 29, health dept. officials met to discuss the norovirus outbreak in Atlanta and decided to ask local restaurants for their help. ****Although one-third of the norovirus cases have been linked to food service establishments, no particular restaurant has been named as a source****. (profits before people)
    http://www.examiner.com/node/58168161

  8. jsmith

    Another great read on the anniversary of Hitler’s rise detailing the capitulation of the Left, the labor unions and how this capitulation came to bite them in the a$$ once Hitler assumed power:

    http://www.wsws.org/en/articles/2013/02/02/pers-f02.html

    “Under these conditions, Hindenburg decided to entrust Hitler with the reins of government. The Nazis were needed to crush the workers’ movement. They had mass support among desperate layers of the petty-bourgeoisie and the lumpen proletariat, which they mobilized against the organized labor movement. The destruction of the labor movement was the prerequisite for the preparation of the war of conquest that German business so urgently demanded.

    Hindenburg’s decision was supported by the heads of the army, by big business and by the bourgeois parties. Hitler did not have to conquer power; it was handed to him by the ruling elite. The claim, however, that the majority of Germans supported Hitler is patently false.

    snip

    These words once again take on burning and immediate significance. The international crisis of capitalism, which has worsened dramatically since the financial crisis of 2008, places explosive class struggles on the agenda. In Egypt, Greece, Portugal and Spain workers are rebelling on a daily basis against the brutal austerity measures and political attacks being carried out by their governments. The governments resort in response to authoritarian methods and encourage the growth of fascist organizations, such as Golden Dawn in Greece, the National Front in France, and Jobbik in Hungary.

    A host of pseudo-leftist organizations together with the trade unions are doing everything in their power to lead the struggles of workers into a dead end and defend bourgeois rule. The most urgent task today is to build a new revolutionary leadership that unites workers internationally and mobilizes them in the struggle for workers’ power and the construction of a socialist society.”

    In other news, Israeli is claiming that Obama gave the “green light” for Israeli attacks on Syria.

    The official motto of the international neoliberal elite vis a vis world leaders’ blind support for the fascist US hegemon?

    We must all hang together, or assuredly we shall all hang separately.

    1. from Mexico

      jsmith said:

      A host of pseudo-leftist organizations together with the trade unions are doing everything in their power to lead the struggles of workers into a dead end and defend bourgeois rule.

      This is one of the things I recall Michael Hudson complaining about, that the biggest neoliberals these days are the unions and so-called “socialists.”

      I guess it’s not unlike when Nixon declared: “We’re all Keynesians now.”

  9. Mary Bess

    Regarding “Health Care’s Trick Coin,” lack of transparency relating to clinical trials may be one reason that “the vast majority of drugs, more than 90 per cent, only work in 30 to 50 per cent of people,” according to Dr. Allen Roses, a senior executive with GlaxoSmithKline.

    Here’s the link: http://www.abc.net.au/worldtoday/content/2003/s1006644.htm

    Off shoring clinical trials to areas where the poor and uninformed can be more easily exploited and standards are lax seems to be the trend. Wikileaks exposed a Pfizer trial in Nigeria which resulted in the death of 11 children and serious injury to many more in 2010. The popular health website, mercola.com, summarized the situation, collating information from several news sources:

    http://articles.mercola.com/sites/articles/archive/2011/01/18/pfizer-accused-of-massive-corruption-in-killing-african-children.aspx

  10. ohmyheck

    America’s Baby Bust. Warning—do NOT read the comments. I am looking for the brain-bleach, must be around here somewhere…

    First the author claims that for Ameikkka to maintain it’s global power, we need to stop the declining birthrate. But, elsewhere in the article, the author writes:

    “…the phenomenon of fertility collapse has spread around the globe: 97% of the world’s population now lives in countries where the fertility rate is falling.”

    So if the fertility rate is declining everywhere else, then what’s the problem? The author defeats their own argument, imo.
    I see it as a break-even, just with less people.

    1. J Sterling

      One commenter in that column makes the sensible point that more people to take care of more people is a runaway process. A less sensible commentator retorts that what’s needed is a, quote, “healthy spread of ages”. But what the second commentator means in his head is “like the spread I’ve known all my life”. But it’s been an *unhealthy* spread all his life: it’s been multiple children and hordes of grandchildren for every oldster. That works if either (a) old people die nice and early, and their children and grandchildren do too, preferably mostly with no children of their own, or (b) you can let the population increase exponentially without end.

      Option (a) kind of sucks as a life, both as the dying oldster and as the childless descendants. Option (b) is literally a pyramid scheme, and like other pyramid schemes it’s the last entrants that suffer when it collapses.

      Living a long time is a good thing: I plan to. It’s great that people are living longer and healthier, we should have more of that. But if any of us is dreaming of a comfortable old age traditionally supported by more than two children and four grandchildren, it’s got to be at the expense of someone else we’re wishing childlessness on. All those big families of historical times were either on the Western frontier, or were an illusion of prosperity, with most of the children just dying without ever having a long life and a big family themselves.

      I saw a TV show that interviewed a woman of a tiny African tribe, who had had eight kids. This tribe, instead of carpeting the world with descendants, is as tiny today as it’s always been. Either this woman was a big man’s wife and can have more kids than the other women in the tribe, or everyone’s having eight kids and they’re just dying all the time. Limits on the kids and grandkids you can have will happen either way, whether by law or by wealth or by the old Four Horsemen. The only difference is the latter, crueler gentlemen let you bear the children, only to snatch them away from you.

      1. CB

        Walking thru an old graveyard, as I have a few times, is instructive: parents buried with several, five is the most I’ve counted, children under the age of two. The boost in average age is largely the decrease in infant mortality. And the discovery and management of Rh factor and better nmanagement of pregnancy and delivery. Mathbabe?

  11. F. Beard

    re “Tips are not optional, they are how waiters get paid in America”:

    1) If you can’t afford to tip, you can’t afford to eat out.
    2) The generous man will be prosperous, and he who waters will himself be watered. Proverbs 11:25

    1. CB

      My guess is they can afford to tip, they choose not to. And if they call themselves Christians, I call them liars.

  12. jsmith

    From Kunstler’s Master Meme:

    “It’s in the nature of this world that things cycle and pulse, and we have entered a certain phase of the cycle that demands certain responses.”

    After lumping Leninism – and thus all of Marxism, gee how clever – in with Nazism, Kunstler once again jumps to the front of the line to pick up his elite lickspittle paycheck.

    Cycles, huh, James?

    Gee, now which thinker had repeatedly addressed the “cycles” of capitalism?

    Y’know, James, how there’s an inherent tendency for the rate of profit to fall in capitalist societies?

    And that this phenomenon – left unaddressed – would create cyclical occurrences of crises in the capitalist economies much like the one we’re seeing at present worldwide?

    Gee, James, who thought that about that?

    Could it be the boogeyman: Marx?

    Oh, excuse me, James, you probably know him better as MarxLeninStalinMaoPolPot?

    What, you never heard of MarxLeninStalinMaoPolPot, James?

    Why it sure seems as if you know a lot about the man who not only thought up the ideas of the cylical crises of capitalism etc but who also SINGLE-HANDEDLY slaughtered millions of people world-wide and suckered millions more into mistakenly believing that there was something inherently wrong with capitalism over his 150 year+ reign of superhuman terror.

    No, instead of invoking accurately descriptive theories that Marx put forth so long ago and which would help people today better understand what is happening to them via the system they are subjects to, Kunstler joins the long list of elite lickspittles and just scratches his head and wonders why oh why can’t we just stop being consumers, why we just can’t imagine being outside of our system:

    “We have to let go of WalMart and globalism and driving cars incessantly and attempting to manage the affairs of people half a world a way… and we just can’t imagine engaging with this endeavor.”

    Gee, what thinker also addressed the idea of worker alienation and how the capitalist superstructure as paradigm “enforcement” apparatus keeps the exploited from becoming “conscious” of their exploited plight, James?

    Any ideas, James, you f*cking pathetic placater?

    Yup, it’s just MarxLeninStalinMaoPolPot, once again rearing his supra-human and supra-evil head.

    Pathetic drivel.

    1. diptherio

      It looks to me like you’re the one lumping all of Marxism in with Leninism and Bolshevism. He only mentions Hitler/Naziism and Lenin/Bolshevism and likens them in that they both “seemed like a good idea at the time,” which is much different from what I think you think he said. Kunstler nowhere mentions Marxism or the relationship between Marxism as a whole and Bolshevism, which is unsurprising since that isn’t what the article is about.

      I don’t know what Kunstler’s ideas about Marxism in general are, but based on the linked to article your critique seems awfully wide of the mark.

      We live in a delusional time among delusional people and this is likely to lead to catastrophe, sooner or later: that’s what I got out of it. Sounds about right to me.

    2. Glenn Condell

      I wish you’d stop getting so upset that anyone who opens their mouth to comment about anything doesn’t reference your hero specifically.

      I agree that especially in the US there is a childish incapacity to engage with and admit his influence and maybe JHK falls prey to that to a minor degree (having grown up breathing that air), but the column is really quite unexceptional both in his own oeuvre and those of like-minded contemporaries. What do you expect, a hat tip in every piece? That’s a bit, er, totalitarian!

      Isn’t at least possible that the failure to mention Marx as the source of so many sensible ideas means that they have been to some degree internalised, indeed have become for many simply conventional wisdom? Isn’t that a form of respectful homage, if not explicit acknowledgement?

  13. Ms G

    Conference event at NYU February 5, 2013 at 6pm.

    Hedrick Smith (“Who Stole the American Dream”) and others in a panel discussion called “Reclaiming the American Dream.” (It appears to be free and only requires registration.)

    http://www.nyu.edu/global/global-academic-centers/washington-dc/nyu-washington–dc-events/reclaiming-the-american-dream.html

    See this brilliant History in a Timeline by Hedrick Smith (which was posted by Skippy here yesterday):

    http://hedricksmith.com/timeline-who-stole-the-american-dream/

    1. Ms G

      Here is a description of the program:

      “This program will examine the linkage between our political and economic problems including the topics of reviving our economy, the politics of inequality, money in politics, the role of political parties, recommended systemic changes and how to effect change. NYU Washington, DC welcomes Alice Rivlin, Hedrick Smith, Mickey Edwards and Ray Suarez.”

        1. Lambert Strether

          I’ve been trying to think of the right epithet for Lanny Breuer, along the lines of Spy Magazine’s “short-fingered vulgarian” for Donald Trump.

          Something along the lines of “multi-pronged yet ectoplasmic.”

          “The multi-pronged yet ectoplamsic Lanny Breuer was sighted dining at Per Se, trailed by waiters with mops.”

          Still, that’s not quite right.

          1. Ms G

            I think Homer got it right sticking with 2-word epithets (grey-eyed Athena, rosy-fingered dawn). In that vein (and in homage to Homer), what about:

            Shifty-Eyed Breuer

            (I think Multi-Pronged — simpliciter — works just fine too!)

          2. craazyman

            and Homer’s “wine-dark sea”.

            How about “foam-headed” Breuer. Get it “brewer” har har.

            I don’t know. I generally flinch away from ad-hominems. Mr. Breuer seemed to me to be completely sincere. I have to credit his integrity for even sitting for the interview, after Mr. Ferguson’s film showed what can happen. I Mr. Breuer honestly believes in the virtue of everything he says. I believe he believes what he did was right for justice and for America, not just for himself. So did Robert E. Lee. I am not comparing the two as historical figures. I am simply observing the human mind’s capacity for inculcating the value system that nourishes it.

          3. Ms G

            @Craazy.

            You are right about ad hominems generally.

            They are bad for karma.

            And I’ve been indulging far too much.

            Thank you for the re-calibration.

      1. nonclassical

        ..try this one Ms.G;

        German minister, asked how German “alternative energy” resources could have accomplished by last year, aggressive goals to be accomplished by 2020 (30% renewable energy) stated, “Germany has publicly financed elections”…

    2. nobody

      And so it came to pass that the Errand in the Wilderness begat Manifest Destiny, and Manifest Destiny begat the American Dream, and the American Dream begat the American Nightmare, and the American Nightmare begat the call for renewed slumbers, perchance…

      Maybe, instead of a reclamation, it is time to write the conclusion and the afterword to the book of Puritan ideology, and find better stories to tell and live by.

  14. from Mexico

    @ “Feds file lawsuit against directors Bainbridge Review” (Mark H). Link to the FDIC complaint. Mark’s comment:

    This is the kind of case the Feds bring against the officers of failed, itty bitty banks—losing $18 million on bad loans when the officers of the megabanks cost us more than 10,000 times that much? I guess even dwarves started small, but do the Feds have no sense of proportion?

    This is what I call the Giuliani doctrine. Before becoming mayor of NY City, Giuliani served in the United States Attorney’s Office, for the Southern District of New York, eventually becoming U.S. Attorney.

    In 2002, for an agreed $4.3 million, the government of Mexico DF contracted Giuliani to come to Mexico City and tell it how to solve its crime problem. So the Giuliani road show came to Mexico.

    The Giuliani doctrine is law enforcement by the numbers. It’s quantity that counts, not quality. Catching and convicting some kid of stealing a taco, or ducking under the gate at the Metro, counts just as much as catching and convicting a mass murderer. A system of quotas, cash bonuses, as well as promotions and career advancement — all based on the numbers — was formulated and implemented.

    The end result was that police, prosecutors and judges went for the low-hanging fruit. They filled up Mexico City’s jails to three times their designed capacity with poor people who had committed minor property crimes or who were innocent, but who lacked the money to mount a proper defense. Meanwhile, those who committed major property offenses, who had the wherewithall to mount proper defenses, or who were violent and posed a real threat to the arresting officers, were allowed to operate with impunity.

    The outcome of the Giuliani doctrine put in practice was documented very poignantly in this video (And it has English bilines! That should make Lambert happy.)

    http://www.youtube.com/watch?v=CAvLDNscVXs

    It’s nine minutes long, but gives a pretty accurate picture of what criminal justice in the United States and Mexico looks like these days due to the triumph of the Giulianai doctrine. Between 2002 and 2005, the number of persons incarcerated in Mexico city soared from 18,500 to 31,000. Seventy percent of those incarcerated were for petty theft. Confidence in the criminal justice system has sunk so low that 75% of felonies in Mexico City go unreported because people view it as a complete waste of time.

    The Giuliani doctrine is now the dominant law enforcement doctrine in both Mexico and the United States. It’s ubiquitous. It sets the agenda at every federal law enforcement agency across the land, its tenacle extending to far more areas of law enforcement than just the prosecution of financial crime that Mark speaks of.

    For instance, the PBS Frontline program Lost in Detention shows how thoroughtly the Giuliani doctrine has vitiated immigration law enforcement in the US:

    http://www.pbs.org/wgbh/pages/frontline/lost-in-detention/

  15. Chauncey Gardiner

    Thank you for the post on hasbara. The speech was appropriately delivered by a former senior American diplomat in the capital of Putin’s Russia.

    To those who actively engage in hasbara, and particularly psy-ops, false flag operations and the use of Shock and Fear to manipulate the People, I can only respond that the level of respect is mutual.

  16. scraping_by

    Kunsler and Applebee’s? an odd juxtaposition at first, but not so.

    Political insiders Douglas Sosnik, Matthew Dowd, and Ron Fournier wrote a book, Applebee’s America: How Successful Political, Business, and Religious Leaders Connect with the New American Community. In it, the authors describe a media-spread, focus group shaped, psuedo-personalized state called Gut Values Connection.

    The idea is to create a media image that people feel emotional connection with, based on everyday traditional values that inform most decisions in American life. The vast majority of people outside of prison and the boardroom hold these values, even if they don’t live them.

    Applebee’s is the symbol of this GVC since it was this traditionalist, American feeling that was the base of planning the chain, not a particular menu item or style of cuisine. And it works, the focus groups and upscale bar and grille menu and the farmhouse decor. The book describes buy-in from customers treating the place as a social center rather than a local outlet of a national business. My local Applebee’s is known for cockroaches in the salad bar, but the parking lot’s always still full.

    Sosnik et al claimed the Shrub’s success at national elections was the trope that, “He doesn’t pretend to be smart, but he’s not arrogrant.” Logically, factually fabulous, it was this GVC that kept even 20% of the nation on his side to the end. The authors don’t mention electronic voting, voter purges, unconstitutional court decisions, and patsies from the Dems.

    “Despite all the blather about his graying hair, and the wisdom of age, and the supposed music of his rhetoric, I couldn’t detect a single idea in Mr. Obama’s inaugural address that wasn’t either self-evident, or devised to flatter some “identity” bloc, or an imitation of old tropes out of the “Great Speeches” book.”

    There are still those who take the GVC with kindly wise Barry. Thus, imitations of old tropes as the focus group attempt at GVC with all the middle Americans he’s out to screw over this term. Thus the identity politics lying that ethnic, not financial politics is important. Politics at once anodyne and menacing.

    Apparently, one traditional American value is stiffing the servers when you go out to eat. It’s a dog-eat-dog value, competition among the working class, goes along with welfare bashing and sneering at the unemployed. Trumpeting microscopic differences in economic status as an ego boost, or comfort for pain, or whatever.

    As an aside, while I’ve known many Protestant ministers who are just barely fed, housed, and clothed, they don’t take groups of more than eight out to dinner at a restaurant. She was probably paying with church money, or had a parishoner backing her. If this was her treat, she’s probably a megachurch CEO and manufacturing connection for the New American Community.

    1. Ms G

      “She was probably paying with church money, or had a parishoner backing her. If this was her treat, she’s probably a megachurch CEO and manufacturing connection for the New American Community. …”

      She was more than probably paying with church money and not unlikely is the “CEO” (they like using those corporate titles in that “space”) of a prosperity gospel “church” (if you hang with me and give me your money you will prosper). The name of it (it’s a ridiculous one with 7 or 8 words in it) is in the story. In the fraud prosecutions world this environment is known as being thick with “affinity crime” — people of certain ethnic/demographic groups preying on fellow members of the same groups. It’s hideous and very widespread.

      Read more at http://www.nakedcapitalism.com/2013/02/links-groundhog-day-4.html#bSrpXVyEudKujiWL.99

      1. CB

        Is this another turn on the Calvinist Inward Manifestation of Outward Grace doctrine? Because it sure sounds like it. Self-justification more like it. By me, the root of much evil, perhaps the original sin.

          1. Ms G

            I never heard that expression — it’s quite beautiful. In the event, however, it seems to apply to the Good Pastor (barf) only as sarcasm :)

        1. Ms G

          If you’re referring to “prosperity gospel” it’s not the same thing. Google “p/g” … it’s so vast, from our US mega churches, to the ones in Africa (that have been funded by ours), to the storefront “churches” and myriad “pastors” … it’s just another one of the big world-wide looting schemes.

          1. Ms G

            Though I don’t think “Private Equity” (Asset Stripping) firms or GS, JPM, Deutsche, HSBC, Barclays, et al. have gotten into securitizing in this space. Yet. The hilarious (and gruesome) possibilities are endless, though.

  17. Garrett Pace

    Doomed Space Shuttle

    If NASA had realized how bad the heat shield had been damaged on the Columbia:

    “We would have pulled out all the stops. There would have been no stone left unturned. We would have had the entire nation working on it…”

    Oh, I believe it. I think in their heart of hearts, lots of the tech nerds at NASA want to re-live their finest hour:

    http://www.youtube.com/watch?v=Z3csfLkMJT4

    1. diptherio

      Confirmed, the Alperovitz talk is well worth the listen. He addresses the promise and possibilities of worker-owned businesses, co-ops and credit unions with exciting real-life examples. Good stuff. My personal antidote of the day.

  18. bayoustjohndavid

    Re: “Health Care’s Trick Coin”

    “The Food and Drug Administration Amendments Act of 2007 is the most widely cited fix. It required that new clinical trials conducted in the United States post summaries of their results at clinicaltrials.gov within a year of completion, or face a fine of $10,000 a day. But in 2012, the British Medical Journal published the first open audit of the process, which found that four out of five trials covered by the legislation had ignored the reporting requirements. Amazingly, no fine has yet been levied.”

    Can I assume this will be included in any future accounting of the sins of the Obama/Holder Justice Department?

  19. frosty zoom

    “Wonder why the uptick in saber rattling?”

    well, if the swords start a rattlin’, “investors” start to get “nervous” and the price of oil goes UPPY-UPPPP!!!!!!!!!

    gotta make ‘em real happy in both houston and tehran.

    plus, ol’ bennie bernank gets to achieve his 2% goal and prove that deflation couldn’t possibly be happening here.

  20. Jim S

    Saber rattling indeed. I’m a little surprised NC hasn’t given more attention to recent developments, what with Israel and Russia making statements about war preparedness, as well as Europe seeming to give up hope of ousting Assad. The Israeli strike on Syria doesn’t make much sense to me in light of stories Israel’s deep ambivalence toward regime change in Syria, and the choice of target doesn’t really fit the official story of attacking Hezbollah’s supply lines, but the notion that Israel is trying to bait Iran into something is plausible.

      1. Jim S

        Oh I know, and there are many good blogs dedicated to the Middle-Eastern beat, but I like hanging out here!

  21. Jim

    While the winners of history want the conservation of the world the way it is–do the losers demand a different interpretation–or do they end up endorsing the logic of the winners?

    Is the logic of the scientific socialists and the market rationalists the same?

    Is the politics of description(using the paradigm of the truth) the philosophy of winners?

    Do descriptive impositions desire to acquire power by pretending to become identical with the object of knowledge?

    Is the hermeneutical attitude in the intellectual world what democracy is in the political world?

    Can the opponents of the weak–the powerful–be defined as those who consider themselves the bearers not only of “true’ knowledge but also of “just” democratic institutions, economic systems and humanitarian wars?

    Do only the strong determine the truth?

    Does our intellectual community support the disciplines of the empirical sciences which have maintained a central role within our contemporary structure of power?

    Do the power of the empirical sciences revolve around revealing the ultimate truthful context of whatever subject matter is under analysis?

    But if we are urged to accept that there are no facts but only interpretations are we not left with only the sensation of vertigo and the fear of open and indeterminate space that suddenly appears on every side?

    And are we simply then left with the will to power?

    1. from Mexico

      @ Jim

      I’m amazed you didn’t have a heyday with the Kunstler link today, and statements like this:

      You can be sure that when a nation is led by the reality-deficient, unhappy outcomes are a sure thing. They will systematically destroy trust in the way things actually work and beat a fast path to either tyranny (where reality doesn’t matter) or anarchy (where reality cannot be managed at all).

      Later Kunstler elaborates on what he believes “reality” is:

      We see the comforts and conveniences of modernity slipping away and we’ll do anything to try to hang onto them, including lying to ourselves to such an immersive degree about what is really happening that we suppose we can manufacture a happy counter-reality.

      And what is it that is “really happening”? Kunstler doesn’t leave us in suspense very long:

      I maintain that things would go a whole lot better for us if we acknowledge what is actually going on, namely: a major shift of direction into economic contraction after 200-plus thrilling years of expanding energy resources and easy-to-get material riches.

      You couldn’t find a more pessimistic statement from someone who has elected to wear the straight-jacket of tradition-bound empricisism than that. Kunstler has managed to convince himself (and by looking at this thread apparently a lot of other people) that he not only knows the current reality, but the future reality as well. But here’s the rub: With his sort of deterministic materialism there’s no place for the human spirit or the human will. There’s no place for notions like this one put forth by the evolutionary biologist David Sloan Wilson: “Confront a human group with a novel problem, even one that never existed in the so-called ancestral environment, and its memebers may well come up with a workable solution.” And just like with von Mises and the other austerians, what there is is all that can be or ever will be. And then to top it all off, heaping irony upon irony, he has the audacity to accuse others of a “true poverty of imagination.”

      As an antidote to Kunstler’s pessimism, I would prescribe a dose of Susan Neiman, director of the Einstein Institute:

      Einstein was a man who knew exactly what he was doing in the world. This is not Don Quixote, well meaning but looking backwards; if some of his views seemed weltfremd at the time, the world has been catching up to him ever since… Though we know that Einstein first read the Critique of Pure Reason at the age of thirteen, standard discussion of Einstein and Kant concentrates on space and time. At least as worthy of further scholarship would be Einstein‘s own remark in the Schilpp volume: “I did not grow up in the Kantian tradition, but came to understand the truly valuable which is to be found in his doctrine… quite late. It is contained in the sentence: the real is not given to us, but is put to us (by way of a riddle).“ To view reality as a riddle that is put to us is to question statements like Fritz Stern‘s, which I quoted in beginning, and with them the picture of Einstein as far from reality. Such statements assume that we know what reality is: what certain and what is not, what can be known and what can only be dreamt or intuited, what is given to us from objects outside us and what we contribute to their structure, what can be confirmed by experience and what calls experience into question. To view reality as a riddle that is put to us is to ask all these questions, and more. Kant‘s major reason for doing so was to call attention to the difference between way the world is and the way the world should be. The first is the object of science, the second is a matter of ethics, and we confuse them at our peril. Those whose only reality is what we experience leave no room for experience to be changed by ideals of justice and progress that challenge the authority of experience itself. Yet those whose lives are guided by ideals without regard to experience are in danger of becoming merely utopian, or even totalitarian. Both in science and in ethics Einstein was aware of the risks of tradition-bound empiricism as well as of foolish idealism. More than anything else he was a Kantian idealist: with a commitment to maintaining ideals that are not derived from experience but that shape it. While maintaining a clear-eyed view of the way the world is, he never forgot the way it should be – and always acted according to the latter. Did this make him unrealistic? Telling someone to be more realistic is a way to say: decrease your expectations of the world. Einstein never did.
      http://www.susan-neiman.de/docs/t_subversive_einstein_druck.html

    2. from Mexico

      @ Jim

      Also, if you buy into the notion that all knowledge is socially constructed, and only the strong determine the truth, then how do you respond to this?

      Leo Alexander, in his 1949 article “Medical Science Under Dictatorship” (NEJM), suggested that, “Science under dictatorship becomes subordinated to the guiding philosophy of the dictatorship (28).” I am proposing the inverse, that Politics under Science becomes subordinated to the guiding philosophy of that Science. This article also touches on a potentially dangerous relationship between science and society that we tend not to recognize. As Ludwick Fleck noted in 1935 in Genesis and Development of a Scientific Fact, “This social character inherent in the very nature of scientific activity is not without its substantive consequences. Words which formerly were simple terms become slogans; sentences which once were simple statements become calls to battle. This completely alters their socio-cognitive value. They no longer influence the mind through their logical meaning—indeed, they often act against it—but rather they acquire a magical power and exert a mental influence simply by being used (29).”

      http://www.fasebj.org/content/22/2/332.full.pdf+html

      1. skippy

        “Also, if you buy into the notion that all knowledge is socially constructed, and only the only the strong determine the truth,” FM

        Truthieness… Cough… deceit/deception + truth = trickle down ignorance.

        Skippy.. knowledge has got nothing to do with any of it…

  22. Mary Bess

    Compare the video “Social Security: Just the Facts…” with the Modern Monetary Theory Bears 2.0 video featured here January 31st. The former is highly effective, the latter, a mess.

  23. Jim Haygood

    NASI (from linked article):

    Yearly surpluses have been accumulating in the [Social Security] trust fund since 1984.

    Bruce Krasting:

    [Social Security's] $46.7B annual cash deficit is the third in a row. The 2012 shortfall confirms it; SS will never see a cash flow surplus again.

    http://brucekrasting.com/social-security-2012-results/

    Who you gonna believe??

    Hey, let’s be charitable. Maybe NASI hasn’t updated their website for a few years.

    No worries; party like it’s 2007!

    1. from Mexico

      Krasting uses a play on words to make things seem worse than they are. Why anybody would listen to this guy is beyond me.

      The Trustees of the Social Security Trust Fund publish a report each year. In 2010 the SS Trust Fund had income of $677.1 billion and outgo of $584.9 billion, for a net increase in assets of $92.2 billion.

      http://www.ssa.gov/history/reports/trust/trustreports.html

      The “cash deficit” figure Krasting uses assumes that the interest income on the $2336.8 billion in assests in the SS Trust Fund is $0.0.

    2. AbyNormal

      rjs post are disappearing…i’ll give it a swing

      rjs says:

      krasting pulls that shit where ever he thinks he can get away with it; he’s correct that social security spent $47 billion dollars more in benefits than it received from payroll tax revenues in 2010, but he conveniently omitted the fact that it also earned more than $117 billion in interest on the government bonds in the trust fund, resulting in a net surplus..a similar net surplus exists today.

      1. LucyLulu

        rjs,
        I had a post disappear, too. I thought maybe I did something wrong and was being punished. I’m so relieved (not that your posts disappeared, but that I’m not in trouble….. for a change).

    3. LucyLulu

      “Who are you going to believe?”

      NASI. I’ve seen the books.

      Payouts for benefits have exceeded taxes collected at a rate of ~$50B/year over the last three years. However, surpluses are STILL accumulating in the SS trust fund, also about $50B/year the last three years. The discrepancy is accounted for by the ~$100B/year in interest collected on the bonds in the trust fund.

      Kasting probably is one who erroneously claims that because the money received from the sale of the bonds was spent to run government, and the bonds and interest must be redeemed from general revenues, the lockbox is empty. As opposed to the money received from the sale of bonds to China and private investors, which wasn’t spent, and which bonds/interest don’t need to be redeemed from general revenues??? Unless he is advocating selective default, and prioritizing foreign and private investors over pensioner debtholders……

      1. jrs

        Yea, gets it right without complexity, selective default is what they advocate but of course won’t dare say as much, as it would amount to: “bondholders can’t be defaulted on no matter what, but social security recipients must be defaulted on no matter what”.

  24. rich

    In the second half of the show, Max Keiser talks to former Scotland Yard fraud squad detective, Rowan Bosworth-Davies of Rowans-Blog.blogspot.co.uk about justice departments and regulators going after the ‘little guy’ because he is ‘easier’ to get than the too-big-to-fail.

    http://youtu.be/-iswT3PfMec?t=12m4s

    1. Synopticist

      We’ve got outrage fatigue over here towards our banks. Most people hate them so much already that newly publicised outrages make no difference at all to how they’re percieved.

      The idiots who’ve swallowed the plutocrat propoganda still think bankers are wonderful except for a few bad apples, while the rest of us just shrug our shoulders and grumble about it in the pub.

    2. Ms G

      Great link, thanks. At least the UK fraud squad guy is honest about why they don’t go after the big fish. Wish we could say the same about our own fraud squad.

  25. Synopticist

    From the link to CounterPunch…

    “In fact, Mali is the perfect ground for such opportunists, who will spare no effort to exploit its massive economic potential and strategic location. ”

    Actually, Mali is a hydro-carbon free desert dump, and unless you’re interested in a direct route from Chad to Senegal it’s hard to imagine a less strategically important place.

      1. Roland

        Northern Niger has large uranium deposits which important for France. Most French electrical generation is nuclear, and much of France’s uranium comes from Niger.

        Since the Touareg national state could encompass northern Niger as well as northern Mali, that means there is definitely a uranium link to the war in Mali.

        However, there could also be a fossil fuel aspect to the whole Touareg/Azawad matter:

        http://en.wikipedia.org/wiki/Taoudeni_basin

        Taoudenni in northern Mali has hitherto only been known for its salt mines and infamous penal colony.

  26. Ms G

    Taibbi follows up re MJ White with previously undisclosed details of her role in the SEC squelching investigation of Mack (her client) and firing Aguirre, the SEC lawyer who was just doing his job properly.

    Great stuff, including long excerpts from her deposition testimony by the SEC Inspector General looking into the circumstances of Debevoise Plimpton (MJ’s Firm) eventually hiring a certain SEC enforcement attorney.

    http://www.rollingstone.com/politics/blogs/taibblog/new-sec-chief-mary-jo-white-thinks-the-government-should-bring-cases-to-a-point-20130130

    Someone has to do a youtube for her like the Lanny Breuer one. The script is practically written for him/her (creator of MJW Youtube)!

    1. Ms G

      Epithets for our Villains …

      “Shifty-Eyed Breuer”

      “To-A-Point White” (see Matt T’s update on our new chief of SEC enforcement – cough – Department of the Satin Glove)

    2. Yves Smith Post author

      This is Yves and now the site is not only not showing my name it’s not me put it in as a handle. Grr. I am about to kill my tech person.

      To the substance: I am pretty gobsmacked that you are equating White and Breuer.

      You are omitting a pretty basic fact.

      Breuer is in the employ of the Federal government and I believe swore an oath of office.

      White is working for a law firm and was engaged to represent Mack.

      White was acting aggressively to help her client. You may not like the results, but she was doing her job. Breuer was doing everything he could not to do his.

      If there is any problem with the Mack/Aguirre story, it’s with the SEC’s conduct (letting White call the person she knew, having that person not refer her back to the examiner, calling examiner off, etc).

      I have also had a law professor who is no fan of big banks describe why the Taibbi/Aguirre charges are off base, but I did not take them down at the time and have not gone back to him to have him go over it again.

      1. Ms G

        In my view splitting what the SEC did and what Ms. White did is somehwhat misleading because it took two to tango (as it would in all similar scenarios), and it also oversimplifies the “zealous representation” issue. I’d rather not have this discussion on the board.

  27. Jim

    From Mexico:

    You seem to be raising in your 2nd comment the issue I raised in one of my questions from above– that if we begin to understand the variants of authoritarianism that are embedded in concepts like law of nature, truth as correspondence, human essence, sacrosanct tradition, or divine revelation one then seems to find oneself hanging in a void where truth is largely subject to interpretation.

    And isn’t then this condition just a short step to the struggle of all against all and to the pure conflict of competing interests? How are we able, if we take an interpretive stance, to register our disgust at our lying politicians.

    It strikes me that one way out is to see the validity of the discourse of truth more as opening than as correspondence. We cannot swallow the lies of the Republicans and Democrats or the traditional left and right or the market and the state because they violate our moral principles–which appear true to us–not because they correspond directly with some supposedly objective datum.

    Truth as absolute objective correspondence seems more of a danger than a blessing. It paves the way for the republic of philosophers, the experts, the technicians and the impositions of the State or Market, both of which claim to be able to decide what our true good is–even in defiance of our own opinions and preferences

    It seems that the value of objective truth and the awareness that what we call reality is the play of interpretations in conflict–has become impossible to ignore.

    It also seems that it is impossible to any longer win such conflicts by claiming to have found how matters truly stand.

    1. AbyNormal

      in the book, The Art of Happiness, the Dalai Lama suggest the exercise of putting our shoes on the wrong feet. im too slow to note my own comfortable perspectives…so the exercise comes in handy. my brain sweats sweetly when critical thinkers like You, Mexico and others appear on the scene. Thank You Both

      for Mexico
      http://www.youtube.com/watch?v=M4qotiEk3X8
      you rank up there with my favorite acoustical guitarist in the world!

    2. from Mexico

      Jim said:


      We cannot swallow the lies of the Republicans and Democrats or the traditional left and right or the market and the state because they violate our moral principles–which appear true to us–not because they correspond directly with some supposedly objective datum.

      Truth as absolute objective correspondence seems more of a danger than a blessing. It paves the way for the republic of philosophers, the experts, the technicians and the impositions of the State or Market, both of which claim to be able to decide what our true good is–even in defiance of our own opinions and preferences.

      When it comes to moral truths, I certainly agree that claims to objectivity are more of a danger than a blessing.

      Descartes gave human beings the scientific weapons with which to reclaim the world from the epistemic free-for-all of the last half of the 16th and first half of the 17th centuries (in which anywhere from 25% to 50% of the populations of several northern European countries and Britain were killed off), and reconstruct it according to human measure and for human purposes. Hume’s frontal attack on rationalism, however, opened a breach in the Cartesian walls and threatened the entire enterprise. Kant was able to reconstruct these walls, but only by narrowing their compass. Only if all speculative judgments about God, morality, and freedom were excluded could the consistency of the understanding be guaranteed. What man can know, Kant wrote, is only “an island, enclosed by nature itself within unalterable limits. It is the land of truth — enchanting name! — surrounded by a wide and stormy ocean, the native home of illusion, where many a fog bank and many a swiftly melting iceberg give the deceptive appearance of farther shores, deluding the adventurous seafarer ever anew with empty hopes, and engaging him in enterprises which he can never abandon and yet is unable to carry to completion.”

      Moral truths are true because, as you say, they “appear true to us.” They are purely subjective. “What’s absolute” when it comes to moral truths, says Cornell West, “is what I’m willing to die for.” This is the definition of Kant’s hero: one who risks one’s life rather than resign oneself to injustice. “Here virtue is worth so much because it cost so much,” he said. And as Susan Neiman explains, “facing gallows

      is one thought experiment anybody can perform; ergo, the moral law. It’s the universality of the experiment that carries its weight. For it’s an answer to conservative critics [like James Howard Kunstler], today as in the past, who believe the mass of humanity is driven by crude desires. Perhaps, they argue, a few great souls act on moral principles. But most of us have nothing more noble in view than bread and circuses. Our appetites for refinements of gluttony and varieties of entertainment remain nearly insatiable, and nothing else really moves us. If our lives revolve around consuming the objects of these simple passions, a benevolent despotism which manages those passions is the best form of government…

      This argument was used to defend despotism in the 18th century, and then as now it depended on the premise that people don’t want to be challenged, but happy… But if most of us can imagine wanting to be Kant’s hero, even for a moment, then a government that appeals to our best instincts can’t be dismissed out of hand. If each of us can imagine a moment in which we want to show our freedom by standing on the side of justice, each of us should work towards a world in which freedom and justice are paramount. The bread and the circuses would take care of themselves.

      Kant’s successors, however, were not satisfied with Kant’s tiny island of scientific truth and set sail on Kant’s stormy seas.

      Einstein, it should be pointed out, was not one of these. “For the function of setting up goals and passing statements of value transcends [science's] domain,” Einstein wrote. “While it is true that science, to the extent of its grasp of causative connections, may reach important conclusions as to the compatibility and incompatibility of goals and evaluations, the independent and fundamental definitions regarding goals and values remain beyond science’s reach.” Einstein was a socialist, for instance, as he declared in his essay “Why Socialism.” But, as Susan Neiman explains,

      What’s unusual in Einstein’s arguments are first, his unequivocal rejection of Soviet-style communism: “No purpose is so high that unworthy methods in achieving it can be justified.” Equally unStalinist was his claim that socialism can never be scientific. Einstein’s socialism was a moral commitment, the only one he thought could give life meaning.

      James Howard Kunstler, with his consistent pessimism in regard to man’s rational capaciaty for justice, has definitely set sail on Kant’s stormy seas. I’m sure Kant’s way of thinking, which leaves little space for the constructions of the imagination and speculative reason, seems arid and colorless to him.

      When it comes to the MMTers, I’m not sure whether they’ve set sail on Kant’s stormy seas or not. MMT is a combination of analytic truth claims, empricical truth claims and moral truth claims. The moral truth claims revolve around issues such as unemployment (high unemployment is bad), inequality (inequality is bad), price stability (inflation and deflation are bad), corruption (corruption is bad) and maximizing aggregate utility (failure to maximize aggregate utility is bad). I certainly don’t have any problem with anyone who makes moral truth claims. The rub comes, however, when they try to pass them off as being objective or scientific.

      1. JTFaraday

        “inequality (inequality is bad)”

        They may say that– lots of people cite commonly held values when they want to manipulate the public into doing something it’s not sure it wants to do– but their one single policy idea having anything at all to do with the “stooopid public,” ie. the sickeningly neoliberal minimum wage “job guarantee buffer stock” reserve army of labor, is a veritable state sponsored pogram of inequality.

        How many mind altering drugs do I have to do before I start to find this hot rot convincing?

        It’s not like you can talk them into something else. People–stooopid people, probably, because if you’re not in the cult that’s what you are– have already been there and back.

  28. CB

    Perhaps the pearl clutchers understand that people who have no children are not as easy to stomp as un/underemployed, debt burdened, high health care costs anxious parents? Many parents take their responsibilities to their children quite seriously and that sense of parental responsibility makes them extremely vulnerable and exploitable. I believe the platform for control has not escaped the pearl clutchers notice.

  29. Ms G

    Spot on.

    That platform for control has resulted in what I have (purely anecdotally) noticed to be a big increase of “you do what you have to do” (i.e., keep your mouth shut about illegalities/violations and/or put up with massive abuse) among with-children employees (even at high managerial levels).

    1. Lambert Strether

      I noticed that at least ten years ago, and for all I know it’s universal. The technical people with family photos were far less disposed to critical thinking, or at least uttering. Hostages to fortune.

    2. CB

      Has always been so for people under the heel. Getting thru today and into tomorrow becomes the only end. If you’ve ever heard the testimony, it’s how people get thru gulags and torture and prison, and any other crushing circumstances. (Which reminds that a documentary on Louisiana’s Angola prison noted that at one time, the average prisoner lived five years; so even hardened survival instincts don’t prevail in some environments. The warden had commented that there were always more, no lack. Such are the pearl clutchers.)

    3. JohnL

      I see the same thing. For those playing the game for the sake of the kids the cognitive dissonance can be crippling. It’s why I stopped being a corporate employee many years ago. It was killing me.

  30. Susan Pizzo

    FYI – The Transnational Institute has just released its annual “State of Power” report. The link provided below pulls together the most powerful infographics, drawing on the Network of Global Corporate Control research released back in 2011, which isolated in terms of concrete data for the first time exactly who rules the world (banks and oil companies mostly). While NC readers will find much in the report merely confirmatory, there are some fascinating details – eg, 40 of the top 100 economies in the world are corporations…

    http://roarmag.org/2013/01/corporate-power-transnational-institute-report/

  31. JGordon

    That’s right mathbabe: poor people are “uninformed” by definition. Because those scumbag motherfers in the top quartiles of the income spread just couldn’t live with themselves if they thought they were only there by pure, dumb luck. So of course they are more informed than the poor and consequently know what’s best for everyone else, by virtue of their “superior abilities”.

    That’s why I get so sickened whenever these rich crackers whine about people having the right to bear arms, and patronize those who decide to keep their hard earned savings in a currency that Ben Bernanke and like criminals in the private banking cartel and its subordinate government can’t devalue on a whim.

    In the end it all comes down to power. It comes down to the richies thinking that they know what’s best for everyone and imagining that they have the right, no God-given power, to snatch away the ability of poor people to defend themselves (from the powerful elites) because it’s “for their own good”. According to the elite thinking such as that advocated on certain internet sites, any smidgeon of self-respect, resilience, and personal responsibility must be ground out of the uppity peasants, no doubt so that those peasants will know how to properly bow and scrape whenever the upper quartile betters (and government) deign to bestow their gracious generosity upon the enfeebled poor. In the end, that’s what it’s all about.

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