Links 12/9/10

Please join or help publicize this West Palm Beach rally, Homeless for Holidays Rally Protesting Foreclosure Fraud, at the West Palm Beach courthouse Thursday, December 9, from 2 p.m. to 5 p.m..

Mountain gorilla numbers increase BBC

The Most Counterintuitive Theorem EVER Steve Landsburg

Faiseurs d’Euro Arte TV (hat tip reader Swedish Lex) I listened to only the first five minutes, but it seems solid.

Hackers Give Web Companies a Test of Free Speech New York Times

‘Hacktivists’ take revenge for WikiLeaks Financial Times

War on WikiLeaks and Assange: 6 Ways the Whistleblower Is Being Attacked and Suppressed AlterNet (hat tip reader furzy mouse)

The crux of the WikiLeaks debate Glenn Greenwald. Sadly, the propagandizing against Assange is working.

Cables: Libya threatened trade consequences if Lockerbie bomber wasn’t released Raw Story (hat tip reader furzy mouse)

China takes a short-cut to power John Gapper, Financial Times

Iceland rises again as Ireland sinks Guardian (hat tip reader May S)

The European Council is once again at each other’s throat Eurointelligence

Ron Paul Claims Chairmanship of Monetary Policy Subcommittee, Prepared to Subpoena Fed Michael Shedlock. Oh, this is gonna be FUN!

Shawn Richard of Astarra enters a guilty plea John Hempton. They send financial bad guys to jail in Oz. Why not here?

Morgan Stanley Aims to Rein In Executive Pay New York Times

Europe slithers towards fiscal union Financial Times (hat tip reader Swedish Lex)

Tax Appeals Swamp U.S. Towns as Property Prices Dive Bloomberg

Firms, Funds Feel Squeeze of Low Rates Wall Street Journal

MBA Releases Letter to FHA Criticizing Indemnification Proposal DSNews (hat tip Lisa Epstein). Aargh.

Trapped in foreclosure maze, homeowners say banks went after the wrong people Associated Press

A Foreclosure Fiasco: The Case of Tandala Mims v. Wells FargoAbigail Field, Daily Finance (hat tip MBS Guy)

Why the Obama tax deal with Republicans is insane Tony Wikrent, Corrente. Today’s must read.

Antidote du jour:

Screen shot 2010-12-09 at 4.06.46 AM

This is an variant antidote of sorts, and has been attributed to John Cleese, but I can’t find confirmation….amusing nevertheless (hat tip reader furzy mouse):

The English are feeling the pinch in relation to recent terrorist threats and have therefore raised their security level from “Miffed” to “Peeved.” Soon, though, security levels may be raised yet again to “Irritated” or even “A Bit Cross.”

The English have not been “A Bit Cross” since the blitz in 1940 when tea supplies nearly ran out.

Terrorists have been re-categorized from “Tiresome” to “A Bloody Nuisance.” The last time the British issued a “Bloody Nuisance” warning level was in 1588, when threatened by the Spanish Armada.

The Scots have raised their threat level from “Pissed Off” to “Let’s get the Bastards.”
They don’t have any other levels. This is the reason they have been used on the front line of the British army for the last 300 years.

The French government announced yesterday that it has raised its terror alert level from “Run” to “Hide.” The only two higher levels in France are “Collaborate” and “Surrender.”

The rise was precipitated by a recent fire that destroyed France ‘s white flag factory, effectively paralyzing the country’s military capability.

Italy has increased the alert level from “Shout Loudly and Excitedly” to “Elaborate Military Posturing.” Two more levels remain: “Ineffective Combat Operations” and “Change Sides.”

The Germans have increased their alert state from “Disdainful Arrogance” to “Dress in Uniform and Sing Marching Songs.” They also have two higher levels: “Invade a Neighbor” and “Lose.”

Belgians, on the other hand, are all on holiday as usual; the only threat they are worried about is NATO pulling out of Brussels .

The Spanish are all excited to see their new submarines ready to deploy. These beautifully designed subs have glass bottoms so the new Spanish navy can get a really good look at the old Spanish navy.

Australia , meanwhile, has raised its security level from “No worries” to “She’ll be alright, Mate.” Two more escalation levels remain: “Crikey! I think we’ll need to cancel the barbie this weekend!” and “The barbie is canceled.” So far no situation has ever warranted use of the final escalation level.

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  1. prostratedragon

    Heard this years ago. Almost positive it’s Cleese.

    People might want to know where to send remonstrances.

  2. SJ

    Very unlikely to be Cleese. According to Snopes, “Just as most any anonymous piece of cynically humorous satire about American politics and culture ends up eventually being attributed to comedian George Carlin, so the same kind of material gets credited to English comic John Cleese when it evinces a British viewpoint on American affairs. Unlike his fellow Monty Python trouper Terry Jones, however, Mr. Cleese doesn’t generally pen this sort of political levity.”

  3. Daniel Plainview

    Cleese hasn’t wrote that well since he stopped writing with his wife who was the young blonde maid in “Fawlty Towers”. That was a great show though. I think his wife was the better scribe and he was good at facial expressions.

  4. Daniel Plainview

    In other words—I would nearly bet my life Cleese didn’t write it without the help of his wife at the time of “Fawlty”. That’s coming from a mild sexist (myself). But it’s curious Yves doesn’t provide a link though. I guess it’s one of those “here, here, and here” things that goes to nowhere that Yves likes so much as she’s clipping and pasting stuff.

  5. BenCorp.

    I think these surrender monkey gags have become bad taste. Amerikans mocking other countries for not being violent and warlike enough makes me think of nazis and the kind of jokes they must have made. Killing hundreds of people a month is eventually going to come back to the USA. The USA used to inspire admiration and hope for a better future, these days all you inspire is hate and fear.

    1. bbot

      I would bloody well have liked to see how well America would have done against Germany if they shared a 450 kilometer land border with them.

        1. Antifa

          America has not actually won a war on any nouns (like drugs or crime or poverty or terrorism) nor a war on any nation since helping the Russians beat the Nazis in WWII.

          Yet the business of America is wars without end, wars all over the globe for as long as the Treasury’s printing presses last. Wars on nouns domestically, as long as the money lasts.

          The only beneficiaries of America Inc’s day to day operations around the planet are the ultra-rich persons and corporations who hope to straddle the planet economically, and ride us all into their version of the future.

          Don’t ask where to sign up for this trip — it’s one of those fly now pay later plans.

      1. Guicciardini

        Christ, I hate these kinds of jokes.

        Max Hastings’ Armageddon needs to be required reading for every American – and probably every Britisher.

        And any American who wants to mock the French should be forced to watch Paths of Glory (great movie, by the way) on an endless loop.

        We were amateurish provincials with a great knack for logistical improvisation and naval/aviation technology. But the only reason the Sovs stopped in 1945 was that they were still a few years from getting a bomb. Even then, there’s a damn good chance we still wouldn’t have been able to beat them.

        And without the Russian blood price we wouldn’t have won. Period.

    2. F. Beard

      Agreed. The “surrender monkey” business is distasteful.

      The LORD tests the righteous and the wicked, and the one who loves violence His soul hates. Psalm 11:5

    3. ChrisPacific

      “I think these surrender monkey gags have become bad taste.”

      I agree (although if you’re implying there was a time when they weren’t in bad taste, I disagree with that part).

      They were very popular at the time this piece was originally circulated though, which I believe was shortly after September 11 when the government introduced the five levels of terror alert. These were widely mocked at the time (I believe Saturday Night Live did a sketch correlating them to “risk of losing the next election”). This piece is one such example.

      The French-bashing may be jarring to read now, but it’s an accurate reflection of the public discourse at the time, which was frankly and openly hostile to any parties that opposed the Iraq war (domestic or foreign).

  6. Richard Kline

    The FT piece tipped by Swedish Lex is well worth a read to any who busy themselves with long-term models or perspectives. The author, a European Parliament Member, makes a comprehensive summary of what an _effective_ consolidation of fiscal policy would look like, and it’s interesting to see that some folks there have really been giving the matter cool, clear thought. He proposes to have the map-out schematic of treaty changes and policy charges prepared in three years time. While that would be desirable in some respects, I’d bet more on twenty years being necessary to get all the moving parts mentioned in place.

    Two things follow from a read of the summary: what are its selling points, and who would lead opposition to the deal? I can’t map all that out, but have a few gabs off the top of my noggin for each. Part of the approach envisaged is a call to significantly augment the spending powers of the EU governing bodies. That is in part as a ‘third-party’ means of revenue transfer to balance rich and poor without having to have individual ‘rich’ states accountable to their own electorates be seen to give money to—i.e. bail out—poor(er) states. This is crucial as a way around parochial objections to the transfers necessary for _collective_ stability. A further point proposed for the increase in spending by a centeral authority is to kick big-ticket expenese upstairs to it, such as ‘defense,’ R & D, large infrastructure projects which are often necessarily inter-state already, and the like. This goal has the benefit of masking the redistributive aspect of said fiscal ‘synchrony’ while also being potentially popular at the state level for relieving local fiscs of these existing ‘burdens.’ Whether such things would be done more or less competently with more or less corruption by the center than by the periphery may be mooted, but I see the ‘push the burden up-chain’ as being an important public selling point in the program of fiscal synchrony. There’s much more to chew on, here.

    Well, who’s going to cavil? The author lists a few who cavil now: the UK, Ireland, Italy, some others. Get the drift? The debtors on the short end are most likely to be the objectors to fiscal consolidation, IF the process is framed as something other than bail outs. This is not an endorsement from me toward bilking the Irish citizenry over their rotten banks; these things aren’t simple. The point I would make is that insforar as the scheme outlined in the piece is concerned, resistance to it is likely to be lead by states with poor political leverage. That is a prescription which suggests success. Sell the ‘successful’ states on kicking big-ticket costs and malodorous financial regulatory necessities up-chain with some (initially) modest revenues to take them off the successful states hands, and the whole thing sells better. I see that as a likely path of argument.

    A central authority in the EU can fail or offend just as much as the local ones, and perhaps more—but such a power platform is both nascent and unloved by existing parochial powers, so the potential for more popular movements to entrench themselves in its workings is real. Seize the day! Don’t say no, say go big. Hmmm.

    An interesting article in all respects . . . .

    1. Swedish Lex

      An interesting and technically workable plan, albeit two years late. The European Parliament has missed the opportunity to step in and take over the leadership role where the Member States and the Commission have left a vacuum (see today’s post from Eurointelligence in links on how our Dear Leaders continue their sniping while the house is burning).

      It is interesting to note that the writer is a British MEP and that German and French MEPs (to start with) are essentially unable to put forward any proposals on how to move the EU and the euro forward (i.e. preventing disintegration). The Parliament actually used to be better at these things.

      My personal pet idea would be to create a common EU fiscal resource/stimulus to invest in order to make the EU energy independent over 20-25 years. That would be the most ambitious European project ever and would, probably, make sense in the eyes of most citizens.

      I will now continue to dreaqm on.

      1. Richard Kline

        So Swedish Lex, I concur that the EParliament used to be better. Stress degrades conceptual remove, so the high-quality talking shop of it has been degraded by having actual politics thrust upon them. That’s not a knock on them, good and forward-looking ideas have come out of that body.

        I think your concept of a broad-spectrum energy independence program is an excellent one. There is no greater brake on Europes future than energy dependence. But to me, the problem with that scheme is the same with Europe as a whole: who administers it? The EU is a body without a head, so to speak, as I’m sure you know. The European Commission cannot function as such; all techno-bureaucrats and no dealmakers, by design. And the ‘college of prime ministers’ is a structural guarantee of inaction because, as we see in the present crisis, each member is electorally accountable to distinct constituencies and so unable to make deals for broader results. We blame Merkel and Sarko for not being ‘presidential’ but the context makes it next to impossible for _anyone_ to function as such; even van ‘Grumpy’ is virutally invisible, and has a miniscule brief to begin with.

        EU needs a body of governance, without which we get all froth and no brew, as at present. The thing I found interesting in this particular proposal was the idea that resources-and-tasks might be aggregated in one place, whereupon the ability to plan and spend long-term on a particular set of issues _attracts_ governence: where there’s money, power follows, and those that want it show up and step in. Mabye/probably won’t happen, but it would be an interesting way to ‘grow’ a common government if so.

  7. bbot

    The second antidote looks like a classic e-mail forward, and if it’s an e-mail forward, it is almost certainly a pack of lies. Attributing it to any one single author is almost certainly pointless, since it will have been anonymously modified numerous times while being forwarded, and any professed attribution will be, as SJ pointed out, the highest-status celebrity that could plausibly be attached to it.

    Searching on the first paragraph gets 17 thousand hits. This post from 10/8 seems to be the first occurrence, and has several paragraphs yours doesn’t.

    I, of course, wrote a post about this effect.

  8. attempter

    Wikrent’s disproof of trickle-down (and therefore of conservatism and modern liberalism) is superb and definitive. The best I’ve read in a long time.

    1. Trickle down doesn’t work.

    2. It actually causes economic collapse.

    3. It’s morally and politically malevolent.

    Case closed. Now let’s start by agreeing we need a completely different dispensation.

    1. Sufferin' Succotash

      It’s twu it’s twu! I’ve never seen the connections between lower taxes on high incomes/parasitic rent-seeking and higher taxes on high incomes/productive investment explained as clearly and concisely.
      Why the hell is it that Ms. Minerva’s owl only takes off after you lose 63 House seats?!

    2. Yearning to Learn

      Why the Obama tax deal with Republicans is insane Tony Wikrent, Corrente. Today’s must read.

      yes it is.

      I find it a pity it can’t be given a “guest post” status so that we can have the NC regulars post about this. I’d love to hear their input.

      it was a very well reasoned attack on “conventional wisdom” and I wish we could get this to go more viral.

  9. London Banker

    Wonderful tour d’Europe of threat levels! It is the quiet good will that Londoners show when they are bombed that endears them to me, among many other qualities. I am glad to be home.

    I am thinking of reprising my blogging hobby after an absence of two years. As Yves was kind enough to crosspost some of my writings here, I invite Yves and anyone else with a view as to whether I should write again to express themselves in the comments of my first post in two years.

  10. DownSouth

    Re: “Why the Obama tax deal with Republicans is insane Tony Wikrent, Corrente”

    A superb article. Nothing to dispute here, but it could be framed in a much larger historical context. Without a doubt excessive inequality is the kiss of death to any great empire.

    Peter Turchin observes in War and Peace and War that “history usually does not develop linearly; there is also a strong cyclic component to it.” Turchin traces the ups and downs in equality in the Roman Empire. Equality, along with a closely related phenomenon, vertical integration, ebbed and flowed throughout the 1200-year history of the empire. Both tend to increase during times of major external threats and decrease during periods of peace. But the overall trend was downward. “[T]he richest 1 percent of the Romans during the early Republic was only 10 to 20 times as wealthy as an average Roman citizen,” Tuchin says. And as he goes on to explain:

    By around A.D. 400, just before the collapse of the empire and when the degree of wealth inequality reached its maximum value, an average Roman noble of senatorial class had property valued in the neighborhood of 20,000 Roman pounds of gold. There was no “middle class” comparable to the small landholders of the third century B.C.; the huge majority of the population was made up of landless peasants working land that belonged to nobles. These peasants had hardly any property at all, but if we estimate it (very generously) at one tenth of a pound of gold, the wealth differential would be 200,000! Inequality grew both as a result of the rich getting richer and those of middling wealth becoming poor, indeed destitute.

    Over the centuries Rome’s military also transitioned from a civilian force to a professional army, as Turchin points out:

    Unlike the selfish elites of the later periods, the aristocracy of the early Republic did not spare its blood or treasure in the service of the common interest. When 50,000 Romans, a staggering one fifth of Rome’s total manpower, perished in the battle of Cannae, as mentioned previously, the senate lost almost one third of its membership. This suggests that the senatorial aristocracy was more likely to be killed in wars than the average citizen. Add this to the peculiarly Roman practice of “devotion,” which was always performed by a member of noble lineage, and it is easy to conclude that generally Roman aristocrats led the commoners in battle, and were the first to die.

    Equality in the United States, like in the Roman Empire, has also ebbed and flowed. The United States began as a fairly egalitarian society. By the end of the 19th century equality had fallen to dangerous lows under the banner of the Gilded Age. But as Wikrent shows, things were to degenerate even further during the Roaring Twenties. Equality rebounded to all-time highs during the New Deal and in the years following World War II. Jim Crow, as has been argued by David Montejano and others, fell as a result of WWII.

    But once again the U.S. finds itself at dangerously high levels of decadence and inequality. Is regeneration possible?

    The answer I believe is a resounding “Yes!” This conclusion of course flies in the face of the historical determinism of a Marx or a Tolstoy. But even if we accept the historical inevitability proselytized by Marx or Tolstoy, what is to say the end has to be now? As Bryan Ward-Perkins wrote in The Fall of Rome and the End of Civilization:

    All empires have, sooner or later, come to an end; so it is a reasonable assumption that the Roman empire was destined at some point to fall or to disintegrate. But this does not mean that the fall of the West had to occur during the fifth century; indeed, at a number of points along the line, things might have gone differently, and the Roman position might have improved, rather than worsened. Bad luck, or bad judgment, played a very important part in what actually happened.

    One must always keep in mind what Tiberius Gracchus said:

    The wild beasts in Italy had at least their lairs, dens and caves whereto they might retreat; whereas the men who fought and died for that land had nothing in it save air and light, but were forced to wander to and fro with their wives and children, without resting place or house wherein they might lodge… The poor folk go to war, to fight and to die for the delights, riches and superfluities of others.

    But Gracchus said that not in the fifth century A.D., but in the second century B.C. After 100 years of the class wars of the Gracchi, Marius, Catiline and Caesar, Augustus restored greater equality and social integration in Roman society and the empire endured another 500 years.

    1. Cynthia


      Extending tax cuts for the wealthiest Americans fits quite nicely into this recent news that more U.S. billionaires are pledging to give their wealth away to charitable organizations (see link below).

      I don’t know about you, but I see several problems with redistributing wealth via charitable contributions rather than through raising taxes…

      First of all, it creates situations where some groups of schools in need or some groups of needy people receive charitable donations while others of them are left out in the cold. This not only creates an unlevel playing field when it comes to distributing charitable donations, but it also pits recipients of charity against one another.

      Second, many charitable contributions aren’t geared towards helping people in need or making their lives better. Instead, they are geared towards pushing a political agenda. Think of the numerous think tanks in Washington who receive charity whose only purpose is to push a pro-war or a pro- Wall Street agenda and you’ll know what I’m talking about.

      Third, many wealthy people or wealthy corporations give to charitable organizations not because they want to improve the lives of those in need, but they do this as a way to indirectly boost their own personal wealth. For instance, Bill Gates gives away computer products to impoverished people in Africa not necessarily because he wants to improve their knowledge of computers, but because he wants to turn them into loyal consumers of Microsoft products.

      Finally, very few charitable contributions go towards improving the quality of life among middle-class Americans and their kids, unless you honestly believe that having movie theaters and bowling allies at your place of worship adds to your quality of life. And because our middle-class kids are getting the short end on the stick when it come to receiving charitable donations aimed at improving their education, this more than anything explains why our country is falling behind the rest of the developed world in terms of math and science.

      1. DownSouth

        If we really believed in a meritocracy and not inherited privilege, inheritance taxes would be 100%.

        As to rich people getting to decide where to donate their money, there’s this wacky belief in the United States that people who are talented at making money or other things are also morally superior. This comes down to us as part of our Puritan heritage, as Robert H. Nelson explains in Economics as Religion:

        Calvinist theology had decreed in the sixteenth century that those predestined by God for salvation might be identified by their success in a business or other calling. This notion would be carried over into social Darwinist thought where, as historian Robert McCloskey once commented, the economically successful—-the survivors of the evolutionary struggle in the marketplace—-constituted “the elite, the saints of the new religion.” The market winners “had proved their native superiority by their survival value. This will be recognized as the Puritan [and Calvinist] idea of ‘election ‘ in modern dress.”

        Since I am an avid art collector I find this New Puritanism especially galling when applied to those talented at making art. I mean, can’t I enjoy reading Tolstoy without buying into his Christian Pacifism or appreciate a Diego Rivera mural without buying into his Communism? As Robert Hughes wrote in Culture of Complaint, “the idea that people are morally ennobled by contact with works of art is a pious fiction.”

        One sees it in full bloom in the weekly editorials in “The Crayon,” New York’s main art magazine in the 1850s. It was the voice of the American artist’s profession and, as such held strong views on artists’ character and conduct. As the editor bluntly put it in 1855, “The enjoyment of beauty is dependent on, and in ration with, the moral excellence of the individual. We have assumed that Art is an elevating power, that it is in itself a spirit of morality.”


        But this proposition, one may be fairly sure, would have been news to most artists—-let alone patrons—-of the Renaissance. Nobody has ever denied that Sigismondo de Malatesta, the Lord of Rimi, had excellent taste. He hired the most refined of quattrocento architects, Leon Battista Alberti, to design a memorial temple to his wife, and then got the sculptor Agostino de Duccio to decorate it, and retained Piero della Francesca to paint it. Yet Sigismondo was a man of such callousness and rapacity that he was known in life as Il Lupo, The Wolf, and so execrated after his death that the Catholic Church made him (for a time) the only man apart from Judas Iscariot officially listed as being in Hell—-a distinction he earned by trussing up a Papal emissary, the fifteen-year-old Bishop of Fano, in his own rochet and publicly sodomizing him before his applauding army in the main square of Rimini.

        That is not the way trustees of major American cultural institutions are expected to behave.

        1. F. Beard

          Calvinist theology had decreed in the sixteenth century that those predestined by God for salvation might be identified by their success in a business or other calling. Down South

          Maybe. However, borrowing from or being a member of the government backed counterfeiting cartel (the fictional reserve banking system) rather muddies the moral waters.

          The God the Calvinists worship has strong commands against theft and oppression of the poor.

          1. Cynthia

            “The God the Calvinists worship has strong commands against theft and oppression of the poor.”

            This still would be so had most Calvinists in America not devolved into warmongering fascists, who only worship wealth and power. Sarah Palin and Mike Huckabee come to mind.

    2. Cynthia

      Oh, I can’t leave without also mentioning that in order for us as Americans to remain leaders in the global economy, our public infrastructure across the board, from our roads and bridges to our schools, libraries and parks, must be among the best in the world. And this can only be accomplished by raising taxes. Charitable contributions are far too fragmented both in the way they are collected from donors and distributed to recipients to ever effectively fund, build and maintain our public infrastructure, which must be highly cohesive in order to function properly. Needless to say, fragmentation is a killer to all types of public infrastructure.

  11. Jim Haygood

    ‘If you look under the hood of the industrial economy, you easily see why there is this counter-intuitive relationship between tax rates and economic growth. With high taxes, the only way to retain the bulk of the wealth created by a business is by reinvesting it in the business — in plants, equipment, staff, research and development, new products and all the rest. But if tax rates are low, then there is more incentive to pull the wealth out, by declaring it as profits that are taxed at what turns out to be too low a rate. In other words, low taxes create an incentive for profit taking. — Tony Wikrent

    Has Tony Wikrent ever actually run a business, or is he just a white-collar pundit on some corporate payroll? (I don’t know; I couldn’t find any bio info on him.)

    But this idiotic assertion that one needs high tax rates to incentivize corporate investment really takes the cake. If this were true, Hong Kong with its low flat tax rate would be a poverty-stricken backwater. And how about Europe in the 1970s and early 1980s, during the bad old days of ‘eurosclerosis’? What a puzzle — confiscatory taxation didn’t make them rich!

    Wikrent’s anecdotal analysis doesn’t hold any water. He blames the 1929 stock bubble on the Coolidge tax cuts, completely ignoring Federal Reserve policy. He asserts an inverse relationship between the tax rate and GDP growth, but fails to prove it with any solid math.

    Economic ideologues and state-worshipers such as Wikrent and Kurgman are so, so tiresome. Wonder what they’ll do when their insolvent welfare-warfare Leviathan finally collapses? Tony’s prolly too old to dig ditches, but I might can put his sorry ass to work chopping salad greens in the kitchen.

    1. DownSouth

      Good grief! Talk about hypocrisy! You of all people—-Mr. Gold Standard himself—-blasting others as being “economic ideologues”???

      Low wages and high rents bring unparalleled, ephemeral wealth to the upper classes and falling per capita incomes for the commoners. Do you really believe this situation is conducive to maximizing GNP? If not, and if you are so adamantly opposed to taxes, what alternatives do you propose? Do you believe the current situation to be sustainable? Acceptable?

    2. Tertium Squid

      “He asserts an inverse relationship between the tax rate and GDP growth, but fails to prove it with any solid math.”

      Hey, I know I always work way harder when taxes go up. Doesn’t everyone?

      I say tax the rentiers, not genuine productivity. Though the US has precious little of THAT right now.

    3. Hugh

      Changing the subject is not answering the point. Wikrent was talking about the US, not Hong Kong, not Europe. But sure, if you want to talk about these places, let’s. It wasn’t Hong Kong’s low taxes that attracted investment it was, as in many developing countries, its cost of doing business, that is its low taxes on foreign investment, low wages, poor worker’s rights, and poor environmental controls. If we were going to expand this say, to a China, we could add in currency manipulation. Now what Wikrent could have added is restrictions in capital flows.

      In our case, taking limits off capital flows allowed companies and the wealthy to go where the cost of doing business was lowest. This increased their profits but had a corrosive effect on the industrial base and the middle class back here in the US. Not only did jobs go abroad but wage competition with foreign workers, the decimation of unions, and Fed policy to treat any wage increases as inherently and unacceptably inflationary decreased the quality and stability of the jobs that remained. But the story doesn’t end there, cuts in taxes on corporations and the rich transferred wealth from the middle class to them. At the same time, corporations and the rich took this increasing pile of money and accelerated the outsourcing of jobs, but equally damaging they used it to blow bubbles whose bursting also tended to destroy what wealth the middle class possessed.

      As I said, controls on capital flows is the one thing I would add to Wikrent’s piece because with them it makes all this more of an American-only story. And yes, I know that the Eisenhower picture was helped by good exports. But overall Wikrent is right. Cut back on the capital flows and reduce the opportunities for going for the lowest common denominator in business costs, and I would add in bubble blowing. Increase the taxes and you give less to the corporations and the rich and you force them to behave more responsibly. Not only does the system come out stronger, but more importantly ordinary Americans do. That is a point that gets lost in all this. Increases in corporate profits or GDP don’t mean that the society that produces them is healthy. The history of the last 30 years and more particularly the last 3 has been an ample demonstration of this.

      As for Europe? It had slower growth but it also had less wealth inequality. That sclerosis actually funded a social safety net while now partially dismantled that insulated ordinary Europeans from the shocks of the last few years far better than their American counterparts.

    4. emca

      Your assertion that Mr. Wikrent needs to be business owner to understand the nature of taxes and motive is tenuous; certainly not based on ‘solid math’ or any precise analytical of substantiation.

      And I don’t think digging ditches or chopping lettuce makes you an adherent to your don’t-tax-the-rich ideology.

      chief ditch digger extraordinaire.

  12. EmilianoZ

    Some Wikileaks goodies:

    1)Shell’s grip on Nigerian state revealed
    “The oil giant Shell claimed it had inserted staff into all the main ministries of the Nigerian government, giving it access to politicians’ every move in the oil-rich Niger Delta, according to a leaked US diplomatic cable.”
    I’m sure the bankers here can make the same claim about the US government.

    2)The US and China Joined Forces Against Europe in Copenhagen,1518,733630,00.html

    1. Sundog

      Jeremy Scahill’s testimony before the House Judiciary Committee combines Wikileaks and unembedded reporting from Afghanistan. I’ve long been suspicious of this guy for pandering to the left but this is well worth a read if America’s way of war concerns you.

      “Jeremy Scahill Testifies Before Congress on America’s Secret Wars”

      Der Speigel discusses Wikileaks on China in sub-Saharan Africa. How many Chinese workers do you think are in Africa today? — 10,000? 100,000? 500,000? Left to the reader is comparison between China & the West; still worth a look.

      Horand Knaup, “Investments with Strings Attached”,1518,733870,00.html

      Just one more, via journalism scholar Jay Rosen….

      In its look back the Times declared itself insufficiently skeptical, especially about Iraqi defectors. True enough. But the look back was itself insufficiently skeptical. Radical doubt, which is basic to understanding what drives Julian Assange, was impermissible then. One of the consequences of that is the appeal of radical transparency today.

      Jay Rosen, “From Judith Miller to Julian Assange”

  13. Anonymous Jones

    “Sadly, the propagandizing against Assange is working.”

    We live in a country in which middle and lower class voters do not just vote for, but actively campaign and get angry in support of, a party that will hold every single policy held dear by such same voters (socially conservative positions like finding new ways to discriminate against homosexuals and people of other religions as well as fiscally conservative positions like reducing the deficit) hostage in order to transfer more money to the wealthy (wait, not just the wealthy, but the super-rich).

    How can anyone be surprised that the propaganda is working for any policy? If they can do this, have people actively campaign to elect representatives who will stop at nothing to redistribute money from such people to the super-rich, they can fucking can do anything. There are no fucking limits anymore. If anyone out there is watching this and thinking there’s some possible way out that isn’t catastrophic, you’re not optimistic, you’re fucking delusional.

    1. Anonymous Jones

      Which is the bigger fallacy? The logical fallacy indicated above or the idea that you can dismiss every point in that article with just five Latin words?

    2. Hugh

      In the absence of supporting evidence, this is an inappropriate application of a logical principle. The scientific method and inductive reasoning generally is Post hoc propter hoc, that is they draw conclusions based on experience. It is also part of both that if a better explanation comes along they defer to it. Do you have one? Not just an explanation, but a better one?

    3. attempter

      I think it proves beyond a reasonable doubt that trickle-down is actively destructive.

      And it absolutely proves (not that we needed more proof for the self-evident) that trickle down doesn’t work.

    4. emca

      The low taxes = economic growth mime does not to even make it as far as correlation, let alone causation.

      1. ScottS

        I don’t understand — if low taxes are so great, wouldn’t negative taxes be even better? So aren’t the anti-tax crowd supporting welfare?

        Damn lazy welfare queens!

    1. scraping_by

      A province once again!
      A province once again!
      And Ireland long a nation be
      A province once again!

      Seriously, this shows (1) why national politics pervades a blog on economics (2) why there can be no purely financial solution to this financial problem and (3) why debt can be converted to slavery only if the law courts agree.

      Currently the Eurobankers exercise control over the Irish populace through local employees. Could they do it if no locals agreed to carry out their orders, if they had to control directly? Yet to be seen.

  14. ScottS

    Fantastic! Really Ohio, such a wonderful Christmas gift!

    “The biggest winners of Ohio and Wisconsin’s money were California, which will receive another $624 million on top of the nearly $3 billion it has received so far toward the construction of a high-speed train from Los Angeles to San Francisco…”

    All aboard the wine train! Going through airport security just to spend 45min in the air on the way to San Fran is ridiculous. I can’t wait.

    Any other states want to shoot themselves in the foot? We’ll be happy to take your stimulus money.

    1. emca

      Unfortunately the first planned leg of the project will only be from Fresno to just north of Bakersfield. Not exactly a route which will see heavy use.

      But don’t get me wrong, people in the San Joaquin are singing in the rain. Work for people in construction in any part of the state is in short demand. This is somewhat a godsend to local economies.

      Besides, you have to start somewhere with what you have. If we keep the 29% at bay, then this should eventually be a fine addition to a state that has traditionally invested heavily in infrastructure.

      1. ScottS

        Fantastic! Ohio, Wisconsin; on behalf of our middle-class construction industry, I thank you.

        And if anyone’s bored, they can go work on the 10. That thing is a nightmare. My car’s alignment is wrecked because of it.

        Hey red states! More stimulus, please! Trickle-down doesn’t seem to work, but trickle-sideways makes my day.

  15. ScottS

    “House Democrats Balk Even As Tax Deal ‘Gains Steam'”

    Too bad someone opened the door and let the steam out around noon.

    NPR’s David Welna reports from the Capitol that after interviewing about a dozen House Democrats, “what they’re almost all demanding is that the estate tax provision (in the deal) be replaced with what the House passed last year — a 45% tax on everything over $3.5 million for individuals and $7 million for couples. There were also demands that the Social Security payroll tax break be offset (or “paid for” so that it doesn’t add to budget deficits) and that there be no extension of the Bush tax cuts for the top two income tax brackets.”

  16. gordon

    It’s a pity that Yves Smith is moved to comment “Sadly, the propagandizing against Assange is working” in her link to the Greenwald piece “The crux of the Wikileaks debate”. I’m pleased to note that Wikileaks has considerable public support in Australia, as indicated by this piece on the ABC’s website:

    This difference in national reaction probably just indicates that Australians haven’t been subjected to the level of constant brainwashing and propaganda that Americans have.

  17. charles 2

    “Faiseurs d’Euro” Arte TV : I managed to listen to the whole stuff, and it is a blatant propaganda exercise. It is like doing a documentary on securitisation with only interviews of Alan Greenspan, Lewis Ranieri and Dick Fuld, without any mention of the 2007/8 crisis!

  18. ScottS

    “The United States is pleased to announce that it will host UNESCO’s World Press Freedom Day event in 2011, from May 1 – May 3 in Washington, D.C. UNESCO is the only UN agency with the mandate to promote freedom of expression and its corollary, freedom of the press.”

    “The theme for next year’s commemoration will be 21st Century Media: New Frontiers, New Barriers. The United States places technology and innovation at the forefront of its diplomatic and development efforts. New media has empowered citizens around the world to report on their circumstances, express opinions on world events, and exchange information in environments sometimes hostile to such exercises of individuals’ right to freedom of expression. At the same time, we are concerned about the determination of some governments to censor and silence individuals, and to restrict the free flow of information. We mark events such as World Press Freedom Day in the context of our enduring commitment to support and expand press freedom and the free flow of information in this digital age.”

    For your reference:
    “Irony (from the Ancient Greek εἰρωνεία eirōneía, meaning dissimulation or feigned ignorance)[1] is a rhetorical device, literary technique, or situation in which there is a sharp incongruity or discordance that goes beyond the simple and evident intention of words or actions. Ironic statements (verbal irony) often convey a meaning exactly opposite from their literal meaning.”

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