Links 10/20/10

Sorry for thin links, I did a lot of posts yesterday, plus a little day job work.

China Halts Shipments to U.S. of Tech-Crucial Minerals Live Science. Ohh, predictable but still not good. This has high odds of leading to real escalation. This may be short lived just to prove a point, but I fear not.

The Perfect Storm Robert Reich

deflation, technology, and political economy Joe Costello

Will Bankers go to Jail for Foreclosure-gate? Steve Gandel, Time. At least the question is being asked.

The Normalization of Sociopathology in America Of Two Minds (hat tip reader May S)

Lie of the Tiger Foreign Policy (hat tip reader May S)

Antidote du jour:

Picture 15

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    1. alex

      While US based MNC’s export products made from rare earths from China to the US? Not likely.

      A major difference between between Japanese mercantilism of the 1980’s and today’s Chinese mercantilism is that the latter involves a lot of foreign direct investment (i.e. foreign MNC’s in China), whereas the Japanese almost entirely discouraged that. It dramatically changes the politics.

    2. MyLessThanPrimeBeef

      A little lesson in history here might be helpful.

      Imperial China used to ban silkworms being sold abroad but allowed the export of silk.

      Then one day, a princess hid some in a bambool container as she was being married off to some distant barbarian chieftain in the Western Region. She instinctively knew that her future home could not prosper through debt-based consumption (probably financed by the Son of Heaven) but only through manufacturing of silk and for that she needed silkworms (plus some indigenous mulberry trees and clean water, of course).

      The moral of the story? American men need to make important Chinese women, perahps the Red princesses of Beijing, fall in love with them.

      America expect every man will do his duty!

      1. alex

        Maybe we need more Eastern Orthodox monks too. The version of the story I’ve heard had them smuggling silk worms out of China and founding the Byzantine Empire’s silk industry. I’m not sure which story is true, but it couldn’t hurt to cover all our bases.

  1. attempter

    Re sociopathy:

    Good analysis, except for the lack of explicit acknowledgement of how sociopathy has trickled down from the elites to the non-rich. (But it implicitly says that, since almost all the examples it gives for the working and middle classes involve top-down propaganda and acculturation, directly or indirectly.)

    The only part I didn’t understand was this:

    I recently attended a Food Summit – all about supporting sustainable locally produced food. At the end of the conference, a blanket announcement went out for any of us eligible for food stamps to not hesitate to sign up. “It’s good for Oregon!” they announced. It brings in more money from the federal government!

    And you know what? I’m considering it. If I don’t have to lie to get it, I just might do it.

    If someone’s eligible for it, and as she says is not lying to get it, how would that be an example of sociopathy?

    Not to mention, if it’s a sustainability group suggesting it to people who are involved with them, then their emphasis will be on healthy foods, not the sodas and junk food everyone’s so riled up about where it comes to food stamp recipients buying them.

    So I don’t get the beef there.

    Since there’s no link on the French national strikes, may I submit my own piece on the subject:

    1. Bruno

      At first I thought the article would be interesting. After reading the first testimony I had the exact same feeling as when I read or hear rightwing or leftwing populism: envy dressed up in morals.

      There’s so much of this in France nowadays, and I’m so sad to see it is the same in the US.

      I believe the problem is not to cure society (as the author suggest by using pathological jargon) but to defend society (as Michel Foucault once taught). It certainly isn’t sacrifice we need to achieve that.

      1. BondsOfSteel

        Ah yes… those crazy French. Rioting to keep their retirement age at 60 instead of 62! With their 35 hour work week and their standard 6-8 weeks of vacation it’s a wonder they can afford to have universal health coverage and better public schools than us.

        What a bunch of lazy whiners. Don’t they know that on average they’re richer than us?:

        Oh wait… they have horrible unemployment, right… it’s like 10%.

        1. Bruno

          If you work 35 hours a week you only have the basic 5-week vacation (I know it’s already much more than the regular 2 weeks across the pond).

          For managers, the rule is different, it’s 218 working days per year, no matter how many hours per day or week. This adds more or less two weeks on top of the basic five.

          Just FYI :)

      2. reslez

        The CHS article is one of the worst things I’ve read in a long time. “Kiss up, kick down” indeed. He claims sociopathy has taken hold at all levels of society, but when he recites anecdotes to support his so-called argument they all target the lower class. Based on this post (I did not read others) this man scorns the poor and middle class. He pays the briefest possible lip service to the idea of sociopathy among the rich; his focus of rage is whatever pittance the poor can get away with and whatever attempts the middle class make to improve their lives. Look how he removes all volition from the middle and lower class and assigns it to the rich: the middle class “cling to totems” of status (as if the rich do not) and the working class a “programmed”, while the rich are “confident” and “paternalistic” and have “noblesse oblige”. He appears to be one of those people who secretly approves of the billions harvested annually by titans of finance, who engineered a 15% tax rate on top of every other imaginable abuse of justice. This man is a clown.

  2. Ina Deaver

    Read the Reich piece yesterday, and found myself totally agreeing on the one hand, and feeling like it missed the point on the other. Reich of all people should know that these factors have been in place for a long time – they’ve been growing, yes, but it is a quantity not quality issue.

    I do feel like we’re reaching a level of cynicism regarding whether normal people can get a fair shake – or whether things are rigged against them – that is of a different type.

    But I think “plutocracy” is entirely too a mild term, for that reason. I prefer “cleptocracy.”

    1. curlydan

      I also agree that we’re reaching a new level of cynicism. In many blogs and comment sites I read, the level of Democrat/Republican bashing is way down, and the amount of “system” bashing is way up. This is encouraging although it’s still discouraging at the ballot box where Tweedle Dee and Tweedle Dum still dominate.

  3. eric anderson

    The conclusions of Robert Reich’s The Perfect Storm and conservative Angelo Codevilla’s classic American Spectator piece this summer about “The Ruling Class” are oddly similar in their basic assertion that the government is no longer serving serving the majority, but a slim wedge of special interests tied to the class of power and money. Codevilla has a slightly different take, believing that a certain ideological outlook can gain a person entrance to the club.

    As long as we keep reelecting the people who brought us this plutocracy (I like to call it an oligarchy, but why quibble?) we’ll have more of the same. Both parties are corrupted and need new blood.

    1. Art Eclectic

      The parties are not the problem. The problem is our system that enables wealthy interests to in effect “buy government policy.”

      We can make up all the new political parties we want, but the end result will always be regulatory capture and the buying of government. The cost of running a modern day election campaign is so vast that our political class happily sells their souls in exchange for campaign contributions.

      Politicians need money, high wealth donors need lawmaking in their favor. It is a corrupt marriage that needs to be broken up and until we are willing to do so, we get the government that the wealthy and large corporations purchase for us.

      1. Kevin de Bruxelles

        Robert Reich describes the symptoms all right. But he dares not mention the disease.

        Which entity is taking our tax dollars and syphoning them to Wall Street?

        Which entity is blocking universal health (either single pay or public option)?

        Which entity is wasting our tax dollars on foreign invasions and complex weapons systems?

        Which entity runs interference for Big Oil?

        Which entity is destroying the currency of the Nation?

        That’s correct it is the Federal Government and friends. But Mr. Reich and company cannot attack this institution because he and his liberal troops are too busy digging in to protect this very same captured tool of the wealthy elite from Tea Party attacks funded by this same wealthy elite who so benefit from this tool? Pretty confusing huh?

        Something isn’t adding up here. While not a perfect analogy, the wealthy elite funding attacks on the Federal government is kind of like if Hitler had declared his intention to invade his own capital in Berlin during the middle of WW2. Would Stalin, Roosevelt, and Churchill have sent paratroopers in to save the German capital or would a rocket scientist among them have pointed out the obvious fact that actually Berlin was already enemy territory, in fact the headquarters of the Nazi war machine and so Hilter’s call to invade it was an obvious diversion. And so it is with Washington DC, the wealthy corporate elite own it and the last thing they want to do is drown it; although they wouldn’t mind getting rid of some parts of it.

        It is time, whether tactically or seriously, (and I totally admit I haven’t thought this out too much) for the left side of the aisle to start seriously thinking about abandoning the Federal government, a form of strategic withdrawal, by opting out wherever possible, and start devolving more and more responsibilities to the states, even if it means constitutional revisions.

        Instead of pushing back against the Tea Party we should push it forward. There should be high profile left-leaning conferences discussing the wisdom of the political architecture of the Articles of Confederation, for example.

        The Tea Party wants to cut Federal spending? I have an idea, let’s transition America back to regional power status by cutting military spending by 80%. We then demolish four of the five wings of the Pentagon and call it the Unigon. In the footprint of the other four demolished sides we could place an outdoor exhibition in honour of fiscal restraint.

        The first and most critical move would be to demand publicly funded elections at the state level, at least in the blue ones.

        Then we can get rid of the 16th Amendment and transfer all social spending to the states. And then universal health care would be a possibility in some blue states, while ObamaCare gets consigned to the dustbin of history. Social Security might stop an oxymoron in some places. Paid parental leave, maybe even pre preschools are a possibility. Even such heretic thoughts as industrial strategies and protection from cheap third world labor would suddenly be on the table.

        Even MMT-type experiments would be possible as the states started even starting launching their own currencies since the dollar will be soon trashed.

        And yes things would really really suck at first for people in the red states. But as certain states started to thrive, other states would follow. Currently with a huge autocratic corporate controlled Federal government, no such experimentation or social evolution is possible in America.

        It’s a bit wild I admit but I just don’t see how the people of America are ever going to manage to take Washington back from the oligarchs.

        1. Externality

          “the states started even starting launching their own currencies since the dollar will be soon trashed.”

          As to the idea of state and local currencies, it is possible under the Constitution for states to issue currency on a gold or silver standard. “No State … make any Thing but gold and silver Coin a Tender in Payment of Debts…” A state with large gold or silver reserves, such as Alaska or Idaho could, in theory create a currency such as the “Palinero” that would trade against the dollar. Since the states often have private mints that create “coins” called rounds for precious metal dealers, the infrastructure already exists. These are often produced by US-based companies such as Sunshine mint in Idaho.

        2. Externality

          I am glad that progressives are finally seeing the benefits of devolving power to the states. LGBTs, for example, have far more influence in state and local politics than we do at the national level. The Democrats and Obama administration have made it clear that they will take our money and, not only ignore us, but often reverse our community’s hard won gains to satisfy their political objectives.


          1. Ezekiel Emmanuel, Rahm’s brother, wants to cut AIDS funding to redirect it to what he considers more cost-effective programs for women and young children. The LGBT community has spent decades lobbying for funds for the US and international AIDS epidenics. Creating a zero sum situation where LGBTs compete with hetero women and children would end badly for us.

          2. The administration wants to standardize health insurance policies, barring state and local mandates for services beyond those covered by Medicare. Since Medicare Parts A & B will not cover transgender health services, this would have the effect of eliminating hard won state and local requirements that insurers cover gender confirmation surgery. San Francisco, for example, provides TG healthcare (including SRS) to its employees and free TG healthcare (excluding SRS) to indigent San Franciscans. San Francisco residents who become eligible for Obamacare (or Medicare Parts A&B) would have less access to TG healthcare than indigents do now.

          3. LGBT-friendly provisions of Obamacare were stripped out to ensure passage, creating several scenarios were LGBTs, but not similarly situated heterosexuals, would see increased health care expenses and tax obligations.

          At some point, LGBT people would be better off with health care policy being provided at the state and local level where the interest of community groups can be considered.

  4. John

    How important are China’s rare earths to the ‘high-tech’ U.S. economy? Would the high-tech U.S. economy essentially collapse without them?

    1. alex

      Rare earths, like other minerals, are only important if you manufacture things. Since we no longer engage in such pedestrian pursuits in the US, it’s a non-issue.

      Note that China is restricting exports of rare earths, not finished products made from rare earths. Another blatant violation of WTO rules, but blatant Chinese violations are so common that it’s like noting that it will get dark tonight.

      1. Cynthia

        I was thinking the same thing, Alex. There is no need for the US to import rare earths from China when most American tech firms have most of their products manufactured in China and other Asian Pacific countries. But Japan is a different story. Many Japanese tech firms, especially especially the very high-tech ones, still manufacture their products in Japan. I imagine that the Japanese have kept a stockpile of rare earths for themselves because they have sensed for quite some time that China has been making plans to block shipments of rare earths to them.

        This clip reminds us that Japan leads the world in robotics, possessing more than half of the world’s industrial robots used for manufacturing:

        So it seems pretty obvious to me that the Chinese want to dethrone Japan as the world’s leader in robotics, and the easiest way for them to do this is by cutting off the very stuff that makes Japanese robots tick.

    2. emca

      Don’t know if this is in league with rare earths, but here’s another commodity China, via Sinochem, has been eying:

      Worrying Over China and Food

      Complicating the situation is BHP Billiton’s (an Australian concern) hostile bid at take control of Potash Corporation of Saskatchewan Inc. As the article ends the question is asked, is this an attempt by corporate China to prevent BHP from gaining the edge in World trade of potash, or is it part of an aggressive state ploy to further dominance in international commodity markets?

      Which might lead me to ask, “is this dualism of corporate and state a realistic suggestion in Chinese economic life when one and the other appear so exactly the same?”

  5. Eagle

    What does it even mean to say that we are normalizing sociopathy. If sociopathy can be “normalized,” it’s not sociopathy, it’s humanity. And indeed, the essay reads as written by someone who has finally seen humanity for what it is.

    Unfortunately, it seems clear the author will react to this realization by pursuing harsher laws in a vain attempt to force humans to behave in the moral way he desires. Another reason to despise the religious.

  6. jimmy james

    I read that CHS essay and one more of his and can only conclude that he’s just a kiss-up, kick-down conservative with a slightly larger vocabulary than most.

    Anyone who uses the term “productive class” hates either America or her citizens.

    1. DownSouth

      I just got the time to read the second essay, and I tend to agree with your conclusion.

      One thing I picked up on is that Smith conflates the lumpenproletariat with the proletariat and the middle class, and paints the latter two with the values and ethics of the former. In the second essay he gives an example of a friend of his who he believes chose lumpenproletariat life over the middle class life. I very much doubt this. I know some people who have fallen out of the working or middle class into the lumpenproletariat, but never by choice. One’s job is a very integral part of one’s self-identity, and losing that job can be devastating to one’s self esteem. People from the working and middle class might want to work less, but I know of no one who is a member of those classes who doesn’t want to work at all.

      Since he makes reference to Gonzalo Lira, I would love to hear what Lira has to say.

  7. arby

    The esteemed Senator Daniel Patrick Moynihan in 1993 once wondered about the impact of our economic intellegentsia and their pursuit of “defining deviancy down” to the extent that very few behaviors are considred deviant at all. Certainly in the realm of honest dealing at the largest corporations and among the cream of the legal profession, the defenition for deviancy has not much further to fall.

  8. Ellis

    “Lie of the Tiger” by CLYDE V. PRESTOWITZ. Wasn’t our dear Clyde the one in the 1980s who kept on warning that Japan had crushed the U.S. Now he is onto China. How does he have any credibility at all?

    1. Yves Smith Post author

      That thought did occur to me.

      One of the reasons was that he was the USTR (US Trade Representative) when that role was pretty powerful, and did a lot of direct negotiating with the Japanese.

      Japanese bureaucrats are all products of the most elite schools in Japan. Both the competence of their negotiators and their degree of preparation was vastly superior to what was on the US side of the table. It fed into the “Japan as Number 1” myth of the era.

      Having worked for its most respected and profitable commercial bank, by contrast, the top people there were very impressive as individuals, but Japan was 20 years behind the West in terms of banking, which meant they could be played by Wall Street like fools. And they had no notion of cash flow based lending, none, which was the perfect breeding ground for a bubble. And the US pushed Japan to deregulate its banks in the early 1980s.

  9. DownSouth

    Re: “The Normalization of Sociopathology in America Of Two Minds (hat tip reader May S)”

    I very much like the discussion here because Smith 1) emphasizes groups instead of individuals and 2) he delineates those groups along class lines instead of along lines of race, ethnicity, religion, sexual orientation, etc. It’s great to hear people talking about class again, a subject that has been all but taboo for the past several decades.

    And when Smith gets down to describing the three groups, there’s not a whole lot to take issue with there. So the rub comes with what is not there. There’s no mention, for instance, of the fact that Americans from all walks of life are highly religious. And while much of this religious participation is undoubtedly hedonistic and ego-centric, I think it would be untrue to classify all of it as such. Not all Americans, not even those that make up the middle class, are label queens. There are those seeking greater meaning and fulfillment in life, and they hail from all socio-economic strata.

    Also missing is any mention of the horrible double standard that is operative in American life. The very rich and the very poor tend to be welfare queens. But the various excuses used to justify this behavior on both ends of the socio-economic spectrum do not extend to the working and middle classes. For the working and middle classes it’s reach and get it, and straying from this standard is met with severe consequences. The work ethic is very much alive in the working and middle classes of the United States.

    Also missing is any map forward. “Moral will ‘must be cultivated and it demands truthfulness and willingness to sacrifice for its actualization,’ ” Smith concludes. “Until we are prepared to make those sacrifices, then the rot will only deepen.” But sacrifices for what? So that the rich and the poor can continue to live at the public trough? And there’s no mention of punishment, the role punishment plays in holding society together, and the fact that punishment comes at a price too. The meting out of punishment also requires “sacrifice,” and sometimes significant sacrifice.

    1. Anonymous Jones

      Great comment. I had similar feelings on the article.

      As I love to say, Justice is expensive. The search for Justice is time consuming, and time is money. Justice requires sacrifice indeed.

      The only thing I’d like to add is that sometimes the costs of enforcement are not necessarily worth the enforcement. Devoting all the system’s resources to rein in the sociopaths at either end of the spectrum may not be a rational preference. You might end up with the tail wagging the dog.

      In the end, you can’t have Justice. You *can* hope to get a sufficient amount of actions that seem to be a reasonable approximation of Justice, but you can’t have Justice. The search for perfection, utopia, whatever, is probably one of the leading causes of misery in the history of humanity.

      Ah, Voltaire. Do not let the perfect be the enemy of the good.

      1. DownSouth

        Much of the social choice and public choice literature, with its assumption of universally opportunistic behavior, simply seems out of touch with the real world, in which there is a great deal of honesty and sense of duty. If people always engaged in opportunistic behavior when they could get away with it, civilization as we know it would not exist. We should not assume that the only task of politics is to devise institutions that can harness opportunistic self-interest to socially useful purposes. An equally important task is to create institutions that embody a valid conception of justice. If people do not feel theat they are being taken advantage of, the temptation to take advantage of society will be greatly reduced.
        –Jon Elster, Solomonic Judgements: Studies in the Limitations of Rationality

        1. Anonymous Jones

          That is a great quote. It really gets to the heart of what is so poignant about what many consider society’s failures: that despite so many with a “great deal of honesty and sense of duty,” there happens to be a few who ‘ruin it for the rest of us.’

          It seems to me that if we could only convince those with a “great deal of honesty and sense of duty” to focus their sacrifice on reining in those who are ‘ruining’ it, we could improve the lot of most. Alas, that solution does not seem close to fruition.

  10. MVW

    How can we possibly believe in any growth stats that come out of China? PLEASE- THEY ARE A COMMUNIST COUNTRY!!. We can not even believe the Government Stats HERE!! So many Investment firms, and large capital players, believe the “official” Chinese Government statistics as released! When the TRUTH is really uncovered it will bring markets, and high and mighty “market players” DOWN!!

    1. Anonymous Jones

      China is not really communist. It is a single party state with a single party that calls itself communist, but it is not really communist.

      I could hop around and call myself a kangaroo, but I wouldn’t really be a kangaroo now, would I?

      1. micr line

        Their ruling party still calls itself ‘the communist party’ so I dont know.

        I mean you could argue that the soviet union was not a ‘real communist’ country, and you could argue america is not a ‘real democracy’ or even a ‘real republic’.

        but what the poster i believe is referring to is the widespread hisotry of self-proclaimed communist countries of having a bureaucray impose ‘target production numbers’ on lower bureaucrats, who have to lie and fudge and jive those numbers to keep them from being sent to prison labor camps or executed (and their families being banned from working and moved outside of the cities, and banned from university and etc etc etc)

        and a funny i think i read, about western economists who visisted the Soviet union to talk to Soviet economists, all of whom said ‘you cant study our system, we cant even study our system. everything is informal arrangements, everything described in policy is not followed, and if anyone wrote down what actually happens, theyd be in big trouble’

      2. micr line

        my previous post disappeared but i wanted to say that people claim every communist country was not ‘truly communist’. what the OP is referring to if i may put words in their mouth, is that many communist countries had a bureaucracy that pushed down ‘quotas’ to terrified bureaucrats who made up numbers to meet those quotas, or else the were sent to prison or executed and their families banned from living in cities, going to university, working, etc etc.

        just like there is no free press or meaningful court system to ‘check and balance’ the powerful, thats why their milk factories can turn out poison milk that kills babies, and their toy factories can turn out lead painted choo-choo-trains and why they can build substandard schools that fall apart in a eqarthquake and kill thousands of children.

        Now their companies are churning out securities, and growth statistics, and.. who is watching them to make sure their numbers aren’t made up? In the US we can’t even get the SEC or the FDA or OSHA or the EEOC to do their jobs, but at least we know how badly they are screwing up. Over there it could be ‘inciting subversion of state power’ to criticize a state owned enterprise’s treatment of it’s workers.

      3. emca

        China is keeping name tags to herself, in line with the larger function of being inscrutable.

        the thornier problem is: if a autocratic country rules to the greater good of a majority of its citizens, is that government not fulfilling the ultimate obligation to the governed, perhaps better so than a country with a democratic label?

        Too bad Plato isn’t around to address that question.

        1. EmilianoZ

          I wouldn’t worry too much about that. I’m sure the Chinese have their own corporate oligarchs, or will have soon.

  11. ptuomov

    Do you really believe this claim in the article “Lie of the Tiger?”: Japan’s GDP average pa GDP growth 1990-2000 was that of the US minus 0.2%? And that Japan’s per capita GDP grew faster in the 1990’s than US’s?

  12. Cynthia

    Has it occurred to anyone here that perhaps one reason why we’ve seen a sharp reduction in the number of white collar criminals, especially the ones on Wall Street, serving time in prisons is because most of our for-profit prisons have been built with the intent to incarcerate our blue-collar criminals, but not our white-collar criminals?

    Not to sound conspiratorial, but I think that there’s a distinct possibility that our prison-profiteers on Wall Street are lobbying Washington to have most of our tax dollars spent on building mostly blue-collar prisons in order to reduce the chances of their Wall Street criminal friends ever being locked up. Think about it, Damon Hininger, the CEO of Corrections Corporation of America (NYSE: CXW), would never lobby to have more white-collar prisons built not only because white-collar prisons are more costly to run, but also because having more white-collar prisons around would increase the chances of one of his fellow CEO criminals like Lloyd Blankfein or Jamie Dimon being locked up in one of his prisons — something that he would regard as an act of corporate disloyalty. I imagine that corporate CEOs are so tight with one another that most of them would rather see their grandmothers sent to prison than one of their fellow CEOs!

    1. alex

      In the current economy everybody is looking for some sort of growth industry. You’ve found one! And I do think that more white collar prisons would serve a social purpose.

      1. micr line

        funny story i was in rural middle america one time and this towns economy was entirely based on jobs at the local prison. it was a halloween and there were little ‘prisoner statues’ set out, like in other towns you have witches and gouls.

  13. Ed

    I’ve been reading CHS for some time, and he is prone to veer off into moralistic, pull-your-self-up-by-your-bootstrap rhetoric that sometimes conflicts with the (often quite good) analysis earlier in the same essay. Unfortuntately this tendency has been increasing of late.

    I wonder what CHS’ background is. I’ve often heard similar attitudes expressed by working class and lower-middle class Americans but never anywhere else. I’m inclined to think that this is a cultural tic that he never really lost.

    1. Bill White

      I have to say I agree with his conclusion, but I find his argument eccentric. I think the American problem is at heart a moral problem. The middle class is feeling squeezed by the economy, and has less and less fellow-feeling for the lower class, and the upper class has no fellow-feeling for anyone at all.

  14. micr line

    not understanding why my comments keep disappearing, i only tried to point out that Chinese factories produce bad products and they probably produce bad numbers too.

  15. Hugh

    Re China, Yves brought up the use of the word “miscalculation” a few days ago. The world economy and its component economies are a tattered, tottering house of cards. Yet despite this, there continues to be a lot of grenade throwing going on. Rare earths in itself may not bring down the world economy but that there are so many other potential bombs out there and they are being tossed around so casually make it likely that one of them will do the job.

    1. MyLessThanPrimeBeef

      Isn’t there a saying that goes like, there is a season for bulls and there is time for bears, but it’s always winter for pigs?

  16. Jim


    I couldn’t agree more with most of your arguments about the necessity for decentralization. When you say “Instead of pushing back againstd the Tea Party we should push forward.
    There should be high-profile left-leaning conferences discussing the wisdom of the Articles of Confederation, for example”

    This is exactly the type of innovative thinking which offers the potential for a serious future realignment of U.S. politics. The liberal/Left end of the poilitical spectrum has never had a theory of the state and these times desperately call for one.

    In addition the cultural issues, raised by the Smith essay and Down South’s comments are also of critical importance to any future political realignment.

    We swim in a culture of pathology and none of our personalities, from whatever social strata, are immune.
    Concrete suggestions for a way out of this moral rot is also now imperative,

    We need new models for governing ourselves and our country.

    1. Kevin de Bruxelles

      Thanks, and I just want to add that I was very, very impressed with DownSouth’s comment (as well as the article discussed for at least trying to bring up difficult matters) and I worked for an hour to reply to him but I never got to anything coherent.

  17. Roger Bigod

    The Smith piece is incoherent. The discussion of social class is like a clumsy summary of Fussell’s “Class” without the humor and close observation. It’s hard to see how it relates to the idea of sociopathy.

    “Sociopath” is a psychiatric diagnosis for people who lock remorse for behavior that damages others. It’s probably biological and there’s probably a constant number of sociopaths. People don’t “become” sociopaths from environment or culture any more than they become autistic. It may be that psychopaths can get into positions of control more easily nowadays (e.g. Madoff, a randomly chosen bank CEO). It also appears that there’s less altruistic behavior now, and we’re slipping in the league tables of “high trust” vs. “low trust” societies. But that’s different from an increase in the incidence of psychopathy.

    Single motherhood encouraged by the welfare system has been a problem for decades. Bringing it up regarding present ills is like lamenting the shocking prevalence of double parking in Manhattan’s financial district.

    1. Hugh

      If you read a bunch of DSM-IV diagnoses to an audience, many of them will start looking around at each other because they either share many of the characteristics or know someone who does. A psychiatrist once remarked on this, that just because you have the trait doesn’t mean you have the disease. I think what is being discussed here is the trait.

      If I remember correctly, psychopathy was displace by sociopathy which was in turn changed to the current anti-social personality disorder. Personally, if I had to choose a DSM diagnosis as an analogy for Wall Street I would opt for narcissism.



  19. Jeff

    The piece on deflation and technology makes an excellent point. The importance of technological innovation in deflation is vastly underestimated and ignored.

    The problem is that it is GOING TO GET WORSE…because technology is accelerating.

    For an excellent overview of the risks we face in the future, check out this book (available as a free PDF or on Amazon):

    The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future


    Also see the author’s blog at

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