Links 2/20/10

Teach Your Children Well: There Is No Law but Might and Murder Chris Floyd

The Mouth of Sauron The Epicurean Dealmaker (hat tip Richard Smith)

School used webcams to ‘spy’ on students at home Financial Times

More Hysteria On Iran About Nukes EconoSpeak

Retail sales plummet in January Independent

Dozens die in Morocco minaret collapse BBC

Greece set for critical test with bond issue Financial Times

For Olympic Bobsledder, Real Life Is a Downhill Slide Wall Street Journal

The Great Goldman Sachs Fire Sale of 2008 William Cohan

A Prisoner’s Dilemma: AIG and Goldman Sachs Game Each Other And PwC Francine McKenna

Man bulldozes his foreclosed home Tim Iacono

Premarital sex: An economic model of its rise and de-stigmatisation VoxEU

Tax Law Was Cited in Software Engineer’s Suicide Note New York Times

UBS Defers 60% of 2009 Bonuses on Pay Above $250,000 Bloomberg

Monsanto ‘faked’ data for approvals claims its ex-chief India Today (hat tip reader John D)

Controversial Diabetes Drug Harms Heart, U.S. Concludes New York Times. The appalling aspect of this story is how GlaxoSmithKline sought to suppress information that use of Avandia led to heart attacks and heart failure, including intimidating physicians and misrepresenting the unfavorable findings.

Antidote du jour:

And a bonus from Richard Smith. This reminds me of my first cat as an adult, an Aby that I trained to walk on a leash and who rode happily in cabs (yes, I know I should get a pet from a shelter, but a friend dragged me into a pet store, and the kitten picked me out and lobbied very hard to be taken home). But you have to get them very young to do that, and it is not good for their health to take them from their mothers before they are three months old, better yet, four.

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  1. attempter

    The Dealmaker piece discusses the same issue as the other post, Goldman’s bad PR vs. the (until recently) much better yet fraudulent PR of JPM and MS.

    Their tone-deaf defiance is hard to explain.

    I’ll add that any rep any of them has for “capitalist” success is fraudulent, since we know that all their so-called “profits” are the result of looting the taxpayer (as Taibbi’s new piece highlights, the money looted through AIG alone far exceeds Goldman’s alleged profits for 2009), accounting fraud, and criminal scams like HFT.

    So any conceivable “good” part of their reps would be based on a lie, which is all the more reason to be careful in your public relations. But Goldman’s sure not trying to be careful.

    Maybe they’re running another risk. Nak Cap recently linked the article, from Alternet I believe, which speculated that openly asserting the system’s criminal dominance is an attempt to permanently demoralize the people, to render it all the more unlikely they’ll ever reassert themselves.

    That does seem to be working so far, and all too many people are all too eager to join in the craven chorus of “abandon all hope, give up, we’re done for, nothing can be done”.

    I imagine that’s exactly the attitude Goldman wants to cultivate.

    But it is a big risk, as it risks triggering whatever tipping point is out there somewhere.

    But here in the United States, schizophrenic home to both the largest number of elite universities in the world and the broadest-based strain of anti-intellectualism known to Western democracy…

    I’m not sure if that seeming inconsistency is real. Are American universities really elite intellectual bastions, or more a combo of corporate think tank, corporate research facility (research costs mostly socialized, patents and other enclosures mostly privatized), and atomized (from a class consciousness pov) cog factory?

    Look at the university officials. Harvard had the rather thuggish Larry Summers, while it seems like whenever I hear from other university presidents they’re usually pimping for their pro sports teams.

    When I list the degraded, corporatized “institutions” of America, I usually put academia and the universities right after the MSM. They too seem relatively anti-intellectual. They’re definitely anti-truth.

    1. DownSouth

      ► “Tax Law Was Cited in Software Engineer’s Suicide Note” NY Times

      Really, you couldn’t make this shit up. Small professional contractors like Joe Stack are fed to the IRS wolves because IBM wanted a “$60 million tax break on its overseas business.”

      But it even gets better:

      On Wednesday, the day before Andrew Joseph Stack III left his suicide note and crashed the plane into the building in Austin, the Obama administration proposed a widespread crackdown on all types of independent contractors in an effort to raise $7 billion in tax revenue over 10 years.

      This comes at the same time Congress allows banksters special tax breaks so that they pay at a rate of only about half what the rest of us pay, this on their multi-million dollar compensation schemes made possible by the taxpayers.

    2. charcad

      When I list the degraded, corporatized “institutions” of America, I usually put academia and the universities right after the MSM. They too seem relatively anti-intellectual. They’re definitely anti-truth.

      Charles Murray is right. Replace baccalaureate college degrees with subject specific competency testing.

      The broader problem in “reform” is identifying and targeting the rentiers and rent-seeking behaviors, no matter where they’re found.

      This is why self-styled “progressives” and Democrats are getting squashed like bugs on windshield by an unreformed GOP. Progressives as a group are only willing to target GOP rent-seeking. When they talk about “budget cutting” they really mean reallocating government spending from “GOP” pockets to their own pockets.

      The classic example here is “cutting wasteful defense spending” to support “education”. Translation: shovel more money towards six and seven figure salaries for rent-seeking educrats. “For the children” has certainly become competitive with patriotism as a refuge of scoundrels.

  2. Ina Pickle

    That piece on Epicurean Dealmaker was all kinds of awesome. May I just call van Praag the mouth of Sauron from here on out?

    Not only was that dead on, but the description of the required lack of coherence, to say nothing of eloquence, in US politics was chillingly accurate.

  3. Kelli K

    Great piece by Epircurean Dealmaker, but he leaves unsaid the most important thing about Mr. Lucas Van Praag: his name itself causes a semi-conscious, visceral sense of dread. This makes the Sauron connection that much more relevant.

    Lucas Van Praag could be a generous and warm avuncular philanthropist, but his name would still make your blood run cold. People with names like this should under no circumstances be spokesmen for big heartless companies.

    Lucas subconsciously calls to mind “Lucifer” (can’t get no worse), while Van Praag is an almost comic evil-villain sounding name married to a gag reflux noise that also has the benefit of sounding like my favorite Brit-slur “prat.” Well, to be perfectly honest, prat comes in third, with second-place claimed by “git” and first-place going to the inestimable (but rarely used here) “pillock.”

    Sometimes names just don’t fit the person on whose shoulders they sit. This seems not to be the case with Van Praag. He earns his uber-pretentious name every day. Backs it up. Well done, Mr. Van Praag (ew, I just spit up a little in my mouth saying it)!

    If Goldman were smart it would send the human equivalent of Deputy Dawg out to greet the world every day. Instead it sends it own Dr. Evil. Not smart.

    1. anon

      Blankfien sounds like Porky Pig to me when he speaks, so maybe GS needs a non-WB character spokesperson. I vote for Boris Badinoff, or better yet Natasha

  4. charcad

    r.e. “More Hysteria On Iran About Nukes EconoSpeak”

    I think Saudi Arabia and Qatar are the mine shaft canaries to watch in this case. When they start talking aggressively on this issue – as the Saudi foreign minister recently was – it’ll be time to start filling up the spare fuel cans.

    1. NotTimothyGeithner

      The danger is that our whole policy is built around Iran having nuclear weapons when it might easily have atomic weapons. Remember a janitor told the Soviets how to build the damn bomb, both kinds. Fat Man and Little Boy were too different models, and Iran has everything they need to build them. They aren’t stupid people, and we did 70 years ago based on theoretical models that are almost 100 years old, without computers and without lasers.

      1. charcad

        US anti-nuclear proliferation efforts with Iran would be vastly more effective if they weren’t such a transparent extension of Judeo-Israeli nuclear proliferation.

        Remember a janitor told the Soviets how to build the damn bomb, both kinds.

        Design knowledge is no problem at all. And it hasn’t been for at least 40 years. Los Alamos conducted at least one experiment back in the 1960s on this subject. The goal was to see whether two fairly average physics major b.s. graduates could successfully design a fission bomb using only public domain knowledge. Two draftees were volunteered for this. The experts at Los Alamos gave them an “A” for their two-man group project.

        They have undoubtedly repeated this experiment multiple times. First to see just how small successful public domain designs can be. And secondly to see whether a public domain thermonuclear (“hydrogen”, “fusion”) bomb can be successfully designed.

        No one should imagine that precision guided weapons are that difficult to build any more. Look at the “$5,000 cruise missile” protoype project a New Zealand electrical engineer conducted. The US Department of Defense eventually goaded the New Zealand government into bureaucratically persecuting him on the basis of specious terrorism issues.

        In this case the main victims being “terrorized” were Raytheon, General Dynamics and Boeing. Absolutely petrified with fear that it might be widely publicized that guided missiles need not cost $600k – $2 million each.

  5. greenback

    The Cohan column is fascinating. How the heck can a high-ranking officer like Jack Levy sell calls on his employer’s stock and still have a job?

  6. charles

    In relation to the activities of GS and JP Morgan in France,une ou deux curiosités:

    Arrêté du 19 janvier 2010 autorisant la société Goldman Sachs International (GSI) à exercer l’activité de fourniture de gazé-JP-Morgan-fournisseure-de-gaz.pdf
    Arrêté du 5 janvier 2010 autorisant la société JP Morgan Markets Limited (JPMML) à exercer l’activité de fourniture de gaz naturel

  7. Dave Raithel

    Re McKenna: Isn’t that a game of “Chicken”, where PwC is a passenger riding with AIG, telling AIG to Swerve when Goldman says (through the Bluetooth in PwC’s ear) “Swerve” ….?

    1. Francine McKenna

      It’s a fine point which game theory you try to fit around the AIG/Goldman Sachs mess. I hesitate of putting PwC in the role of detective leaning on either, since they have truly been impotent pawns here.

      I’m proposing the prisoner’s dilemma is between AIG and Goldman Sachs. They are playing a game of chicken in a sense (which is actually defined in game theory!) and neither want to publicly shame the other or accuse of fraud or bad faith and yet neither want to give in to the other because of self interest. The best would be to compromise, but that’s where the prisoner’s dilemma comes in – a betrayal only works if only one does it. In this case, I believe Goldman was the betrayer by pushing PwC to say AIG was wrong.

      My point in simplifying the conflict is that AIG and Goldman Sachs had a conflict that could have been resolved earlier while it was a simpler conflict, with less implications to all if, in my opinion, PwC had not allowed it to get so out of hand. How many other examples of this situation exist, with their clients, with others? Instead of using standards to improving consistency, reliability and predictability of financial reporting, we have games of chicken that end in brinkmanship and dramatic actions to intervene or resolve at the last minute that affect us all.

      My use of these models, videos, music, etc is also to entertain. It makes difficult subject matter go down easier for my non-technical readers. And it’s fun for me…

  8. Anonymous Jones

    “There is no law but might and murder.” Well, in some sense, there really isn’t. Of course, that doesn’t mean you should teach anyone that “might and murder” is the best way to run one’s life (I understand that this was not being *proposed* in the link).

    I’m sure I could be very, very good at screwing my fellow man. I don’t see the real benefits, however. I’m sure my bank account would show a larger number when I logged in each day, but I don’t see how my enjoyment of life would increase.

    1. Jmd

      It seems to me that Yves does not have children or she would not have been so gullible as to link this piece…now what does this have to do with the economy?

      1. Richard Smith

        What a distillation of ill-will, non-sequitur and hypocrisy that is. Concise, but not at all classy.

        Now, a clear-thinking young female attorney really ought to be able to puzzle out some sort of connection between respect for the law and a well-functioning economy. Anonymous Jones gets it, why don’t you?

  9. MyLessThanPrimeBeef

    Yves, I wrote the other day on another website about a tree that owns itself.

    We Homo Not-So-Sapiens Not-So-Sapiens treat that piece of information like a curiosity item. But why shouldn’t trees and animals own themselves?

    So, in theory, I am against pet ownership, whether through adoption or buying at a pet shop/mill, unless our pets consent to it in writing and notarized.

    1. charcad

      unless our pets consent to it in writing and notarized.

      Sounds like a contract to me. So shouldn’t they have their own lawyers, too?

    2. Yves Smith Post author

      You apparently have never “owned” a cat. “Ownership” of a cat is a secret ruse devised by cats by which the “owner” must provide said cat with food, treats, and play time, but the cat is obligated to do nothing except look like a cat, which they are pretty good at dong. Most cats, understanding this relationship is exploitative, choose on their own to be nicer than the arrangement stipultes to their human slaves.

      1. another

        “Most cats, understanding this relationship is exploitative, choose on their own to be nicer than the arrangement stipulates to their human slaves.”

        Thus proving themselves smarter than most banksters.

      2. Ina Pickle

        Most, but not all cats. I have one who tolerates me only grudgingly. But for the record, he is absolutely gorgeous.

      3. NotTimothyGeithner

        Don’t knock cats. We are just repaying them for when black rats were the dominant rat species and the cats kept them from eating our food in the winter. A dog won’t bother something unless he sees it as a threat to him or his people or is hungry. A cat will kill anything and everything in its perceived territory if it can kill it.

        We owe cats. The Brown rat has replaced the black rat, and the cats are too small to deal with them. However, brown rats don’t carry fleas and don’t reproduce like black rats reducing the potential catastrophic effects on our food supply.

        1. Ina Pickle

          Cats do still kill rats – even the huge ones. But it requires a different technique than killing mice. Both techniques must be learned from a mother, though: you have to get the kitten of a mouser/ratter to have a guaranteed mouser/ratter. Several cats in my past, mine and those of neighbors, have brought me gifts of rats (bats, mice, voles, shrews, squirrels, birds, rabbits). Grow up in the country, anywhere near a hay barn, and you would be surprised what they take down.

          Women definitely understand the contract, and appreciate it in all its aspects. Might I recommend the Just So Stories by Rudyard Kipling for a clever take on this? I laughed out loud.

  10. charcad

    A smidgin of news from the world outside NYC & DC:

    Domestic US steel production in 2009 was 56 million tons. This was down from 91.9 mt in 2008 and 98.1 mt in 2007. Comparable Chinese steel production was 500 mt in 2008 and 550 mt in 2009.

    The aluminum commodity pdf is equally dismal. Or equally optimistic, depending on whether you are an American outside the financial-government complex hunting work or a Chinaman.

    In fact virtually all the USGS mineral commodity summaries paint the same picture. They can be accessed from this page.

  11. Jim in MN

    Anyone who has posted concerning the Austin IRS office plane crash should read and post the following from AP:

    ‘IRS worker killed in crash was a loyal family man’

    “Vernon Hunter grew up in Orangeburg, S.C. before joining the Army after high school in 1959 and served about 20 years. Though he liked his job at the IRS, he had just begun to hint at retirement and was talking about going back to school to get a degree teaching children with learning disabilities.

    Hunter and his wife, Valerie, each had three children before they were married and melded the large family together, Ken Hunter said. He also loved the Washington Redskins football team and eating good Texas barbecue.”


    “Standing outside Hunter’s house in the Austin suburb of Cedar Park, Ken Hunter said he wanted to tell people about his father after hearing about Stack’s life and his anti-tax crusade. He was alarmed by comments from Stack’s friends who said he was a good person and Internet postings calling the pilot a hero.

    “‘People say (Stack) is a patriot. What’s he a patriot for? He hasn’t served the country. My dad did two tours of Vietnam and this guy is going to be a patriot and no one is going to say that about my dad? That’s what got me started talking. I couldn’t stand it anymore,’ Ken Hunter said.”

    1. Francois T

      What Stack did was inexcusable. Furthermore, it is not the IRS who concocted the horrendous tax law targeting guys like him, but members of the only American native criminal class, a.k.a. Congress

  12. Francois T

    RE: Avandia concealed data.

    That GSK sought to hide compromising data is not surprising. Pfizer got sued by the GAO 4 (FOUR!!) times this decade alone and none of the execs have ever been personally bothered. Oh! And the monies from the settlement are taken directly from what the shareholders should have received, as it is the new SOP in the United Corporations of Amerika.

    To those who think this is overblown hard-core pinko commie rhetoric, just check this out before getting into a debate you’re certain to lose big time.

    It is only when the authorities of this country are forced by the people (because they’ll never do it on their own, since Congress will never allow it) to impose criminal sanctions that involve top executives that this kind of behavior will stop.

  13. Francois T

    Re: Teach your children well.

    An excellent and devastating analysis of the decision to basically absolve Yoo and Bybee can be read here.

    It is nothing less than an indictment of the entire legal profession which seem absolutely unwilling and incapable of setting up decent standards of conduct for its members. It is also a roasting of the Obama DOJ.

    1. Ina Pickle

      The state that licensed Yoo and Bybee may still yank their card. When you are a lawyer for a federal agency, your bar can be from any state in the union. The Justice Dept. doesn’t decide whether you keep your bar card, they just could have decided that these two sociopaths had committed an ethical violation (or crime) that would have been used in disbarment proceedings or sanctions.

      The problem is that they served the client, but not the legal system or the constitution that they swore to uphold. You are correct in that it is far more typical for lawyers to be punished for “malpractice” (disserving the client) than for damage done to the legal system. Which is a disaster as far as those of us who care about the legal system are concerned. But you should know that LAWYERS are very concerned about this problem. It is the shadow of official conduct, true state action, in fact, and a few political factors that make it especially difficult to go after these people. But I would point to the fact that Yoo was spectacularly unemployed – no decent lawyer would have him – for a very long time, as evidence that there are ways of dealing with people like this in the legal profession. Of course, some ideologue (who no doubt thinks what Yoo did was right) eventually gave him a job. But several decent lawyers resigned over that.

  14. i on the ball patriot

    Loved the cat in flight du jour! Nice little addition to the tension of landing an aircraft …

  15. abused pets

    Good afternoon, This is an outstanding write-up, and I can agree with what was written here. I will be back to check out the comments soon. Thanks

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