Links 5/13/11


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P.S. – It’s Friday the 13th. Be careful out there and have a great weekend!

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About Edward Harrison

I am a banking and finance specialist at the economic consultancy Global Macro Advisors. Previously, I worked at Deutsche Bank, Bain, the Corporate Executive Board and Yahoo. I have a BA in Economics from Dartmouth College and an MBA in Finance from Columbia University. As to ideology, I would call myself a libertarian realist - believer in the primacy of markets over a statist approach. However, I am no ideologue who believes that markets can solve all problems. Having lived in a lot of different places, I tend to take a global approach to economics and politics. I started my career as a diplomat in the foreign service and speak German, Dutch, Swedish, Spanish and French as well as English and can read a number of other European languages. I enjoy a good debate on these issues and I hope you enjoy my blogs. Please do sign up for the Email and RSS feeds on my blog pages. Cheers. Edward


  1. DownSouth

    Re: “The Myth that the Banks are Solvent” Marshall Auerback

    Auerback asks:

    So why are we busy implementing policies that simply maintain a credit-based economy? All around the world, policymakers continue to foster the fiction that all we have a temporary illiquidity problem, not a problem of excessive leverage, excessive debt, and a legacy of assets that were vastly overvalued based on economic scenarios that had no chance of coming to fruition.

    Could it be they’ve been reading too much Milton Friedman?

    1. alex

      “Could it be they’ve been reading too much Milton Friedman?”

      No. While I’m no fan of the late Uncle Miltie, he was at least a relatively honest ideologue. The people you’re criticizing are just plain old crooks.

      While we’ll never now what Friedman (who died in 2006) would have said about the Great Recession, his former co-author Anna Schwartz has severely criticized the Bernanke Fed for pretending a solvency problem is just a liquidity problem.

      1. Eureka Springs

        Actually, you can read any number of books, including The Shock Doctrine and see what Milt did in his lifetime and the fact it is happening here now… and know old Milt would love to be alive to cheer on his old designs still running amok in both parties here and much of the rest of the world. What he would say in public is about as worthy as listening to Alan Greenspan or Henry Kissinger.

      2. DownSouth


        You and Friedman remind me of the “turtles all the way down” episode. According to the story, a bigname scientist was giving a lecture on astronomy. After the lecture, an elderly lady came up and told the scientist that he had it all wrong. ‘The world is really a flat plate supported on the back of a giant tortoise.” The scientist asked “And what is the turtle standing on?”

        To which the lady triumphantly replied: “You’re very clever, young man, but it’s no use — it’s turtles all the way down.”

        Except in your and Friedman’s case, instead of turtles it’s lies all the way down.

        Before reading the following Friedman quote, and in order to give some historical perspective on just how grotesquely insolvent the American banking system had become during the Roaring Twenties, I highly recommend a reading of chapters XI, XII and XIII from Frederick Lewis Allen’s book Only Yesterday: An Informal History of the 1920s, which can be found on the internet here.

        And with that fresh in mind, here’s Friedman’s claim that the Great Depression was caused by a “liquidity crisis”:

        The fact is that the Great Depression, like most other periods of sever unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy. A governmentally established agency—-the Federal Reserve System—-had been assigned responsibility for monetary policy. In 1930 and 1931, it exercised this responsibility so ineptly as to convert what otherwise would have been a moderate contraction into a major catastrophe.


        Because of its dramatic character, the stock market crash in October, 1929, which terminated the bull market of 1928 and 1929 is often regarded as both the start and the major proximate cause of the Great Depression. Neither is correct…


        Except on naïve post hoc ergo propter hoc reasoning, there is nothing in the economic situation as it stood in, say, September or October, 1930 that made the continued and drastic decline of the following years inevitable or even highly probable…

        The character of the contraction changed drastically in November 1930, when a series of bank failures led to widespread runs on banks, which is to say attempts by depositors to convert deposits into currency. The contagion spread from one part of the country to another and reached a climax with the failure on December 11, 1930 of the Bank of the United States. This failure was critical not only because the Bank was one of the largest in the country, with over $200 million in deposits, but also because, though an ordinary commercial bank, its name had led many both at home and even more abroad to regard it as somehow an official bank.

        Prior to October, 1930, there had been no sign of a liquidity crisis, or any loss of confidence in banks. From this time on, the economy was plagued by recurrent liquidity crises. A wave of bank failures would taper down a while, and then start up again as a few dramatic failures or other events produced a new loss of confidence in the banking system and a new series of runs on banks. These were important not only or even primarily because of the failures of the banks but because of their effect on the money stock.

        In a fractional reserve banking system like ours, a bank does not of course have a dollar of currency (or its equivalent) for a dollar of deposits. That is why “deposits” is such a misleading term. When you deposit a dollar of cash in a bank, the bank may add fifteen or twenty cents to its cash; the rest it will lend out through another window. The borrower may in turn redeposit it, in this or another bank, and the process is repeated. The result is that for every dollar of cash owned by banks, they owe several dollars of deposits. Any widespread attempt on the part of depositors to “get their money” must therefore mean a decline in the total amount of money unless there is some way in which additional cash can be created and some way for banks to get it. Otherwise, one bank, in trying to satisfy its depositors, will put pressure on other banks by calling loans or selling investments or withdrawing its deposits and these other banks in turn will put pressure on still others. The vicious cycle, if allowed to proceed, grows on itself as the attempt of banks to get cash forces down the prices of securities, renders banks insolvent that would otherwise have been entirely sound, shakes the confidence of depositors, and starts the cycle over again.

        This was precisely the kind of situation that had led to a banking panic under the pre-Federal-Reserve banking system, and to a concerted suspension of the convertibility of deposits into currency, as in 1907…

        As we have seen, one of the major reasons for establishing the Federal Reserve System was to deal with such a situation. It was given the power to create more cash if a widespread demand should arise on the part of the public for currency instead of deposits, and was given the means to make the cash available to banks on the security of the bank’s assets. In this way, it was expected that any threatened panic could be averted, that there would be no need for suspension of convertibility of deposits into currency, and that the depressing effects of monetary crises could be entirely avoided.

        The initial wave of bank failures died down and in early 1931 there were signs of returning confidence…

        The tentative revival was however short-lived. Renewed bank failures started another series of runs and again set in train a renewed decline in the stock of money. Again, the Reserve System stood idly by. In the face of an unprecedented liquidation of the commercial banking system, the books of the “lender of last resort” show a decline in the amount of credit it made available to its member banks.


        A temporary reversal of policy in 1932 involving the purchase of $1 billion of government bonds slowed down the rate of decline. Had this measure been taken in 1931, it would almost surely have been sufficient to prevent the debacle just described. By 1932, it was too late to be more than a palliative and, when the System relapsed into passivity, the temporary improvement was followed by a renewed collapse terminating in the Banking Holiday of 1933—-when every bank in the United States was officially closed for over a week. A system established in large part to prevent a temporary suspension of convertibility of deposits into currency—-a measure that had formerly prevented banks from failing—-first let nearly a third of the banks of the country go out of existence and then welcomed a suspension of convertibility that was incomparably more sweeping and severe than any earlier suspension…

        The Great Depression in the United States, far from being a sign of the inherent instability of the private enterprise system, is a testament to how much harm can be done by mistakes on the part of a few men when they wield vast power over the monetary system of a country.
        ▬Milton Friedman, Capitalism and Freedom

        This was published in 1962, one year before that other masterwork of historical revisionism that Friedman co-authored with Anna Schwartz, A Monetary History of the United States, 1867-1960.

        1. DownSouth

          From Frederick Lewis Allen’s book Only Yesterday: An Informal History of the 1920s, I’d also highly recommend chapters “VI. Harding and the Scandals” and “VII. Coolige Prosperity” as they dovetail very nicely with what Matt Taibbi had to say in “The People vs. Goldman Sachs” from today’s links. What is happening in the current episode, with the failure to regulate and to prosecute criminal fraud, is almost identical to what happened in the Roaring Twenties.

          1. Anonymous Jones

            Mistakes are not lies.

            Uninformed or mistaken opinions are not false statements made with deliberate intent to deceive.

            You discredit yourself with your choice of words, and it is terribly unfortunate because your ideas are so wonderful to read.

            This is not a subject susceptible to reasonable debate. The constant accusations around here (which are dependent upon knowing someone’s else intent, which, without a mens rea machine, is impossible) I find to be very tiresome.

            Is it not enough to destroy a man’s argument? What goal is served by making accusations regarding his intent that you do not, and *cannot*, support? It saddens me, and it devalues your overwhelmingly worthwhile contributions.

          2. alex

            Anonymous Jones: “The constant accusations around here (which are dependent upon knowing someone’s else intent, which, without a mens rea machine, is impossible) I find to be very tiresome.”

            Very well put.

          3. DownSouth

            Anonymous Jones,

            I’m a little bit amazed by this “you don’t know anyone else’s intent” kick that you’ve gotten off on. Combine that with your imperious “This is not a subject susceptible to reasonable debate” decrees, and I wonder if you’re the appropriate one to be asking: “Is it not enough to destroy a man’s argument?”

            For instance, here’s a comment where you lashed out at attempter a few days ago:

            Anonymous Jones says:

            May 3, 2011 at 2:11 pm

            “As I said, anyone who is so “interested” (using that word in its full connotation) as to turn to such ways of thinking and propagandizing in the first place is already demonstrating a malign intent.”

            We know you said it. The fact that it was previously uttered doesn’t make your thought any less stupid.

            As I said before, you don’t know anyone else’s intent. What goes on in anyone else’s mind is (and will always be) opaque to you, regardless of what you infer from others’ actions (or even their own statements about their intent).

            See, the difference between my reiteration and yours is that my thought is not stupid. It is in fact incontestable.

            That’s what’s important. Not whether you said it before, but whether or not it is stupid.

            Then there was this recent exchange between you and Hugh, where Hugh commented: “It wasn’t mistakes and bad judgment that got us into the mess we are in. These weren’t bugs. They were features. Our elites didn’t accidentally happen to rob us blind.” To this you responded:

            Anonymous Jones says:

            May 10, 2011 at 2:53 pm

            …you are ascribing intent to a creature that does not exist. There was no conspiracy on the grand scale you imagine; humans are not smart enough or capable enough to pull that off… People like money. They tend to spend their time on potential changes that would increase their wealth. They tend to ignore potential changes that would decrease their wealth. Water runs downhill. That’s the state of the world.

            [By the way, it’s so impressive that you are so far in front of the curve. Stock tips? What’s going to happen to Greece in 20 years? Keep ‘em coming. More judgments; more delusional assertions about your ability to understand the world and predict the future…I love it all. Can’t get enough.]

            There’s much more, but I think you get the gist of it.

            And speaking of alex, it’s not exactly as if this is the first time that he has engaged in these outrageous fabrications, or let his true colors be known. Take this comment from a while back, for instance:

            alex says:

            April 25, 2011 at 1:06 am

            @Transor Z said: Fine. We get it. The Revolutionary Council has convened and found Larry Summers guilty of financial cronyism and economic war crimes against the lower classes.

            Well said, Citizen Z.

            @DownSouth (in response to Z): I hope you realize there’s not a whole lot of difference between that and accusing someone of being a communist or socialist in order to not have to respond to their actual concerns.

            The whole problem with armchair revolutionaries is they have no sense of humor.

            Which brings us back to the whole issue about intent.

            Establishing intent is very important. “The reason for the insistence on a duty to forgive is clearly ‘for they know not what they do’ and it does not apply to the extremity of crime and willed evil,” Hannah Arendt writes in The Human Condition. She again addresses the issue in Eichmann in Jerusalem: A Report on the Banality of Evil:

            Foremost among the larger issues at stake in the Eichmann trial was the assumption current in all modern legal systems that intent to do wrong is necessary for the commission of a crime. On nothing, perhaps, has civilized jurisprudence prided itself more than on this taking into account of the subjective factor. Where this is absent, where, for whatever reasons, even reasons of moral insanity, the ability to distinguish between right and wrong is impaired, we feel no crime has been committed.

            And just by coincidence, Matt Taibbi speaks to the importance of proving intent in his article “The People vs. Goldman Sachs” from today’s “Links”:

            The question is, now that we’ve seen this report, there are a bunch of story lines that seem to be at least as egregious as Abacus. Are they going to bring cases?”

            Here is where the supporters of Goldman and other big banks will stand up and start wanding the air full of confusing terms like “scienter” and “loss causation” — legalese mumbo jumbo that attempts to convince the ignorantly enraged onlooker that, according to American law, these grotesque tales of grand theft and fraud you’ve just heard are actually more innocent than you think. Yes, they will say, it may very well be a prosecutable crime for a corner-store Arab to take $2 from a customer selling tap water as Perrier. But that does not mean it’s a crime for Goldman Sachs to take $100 million from a foreign hedge fund doing the same thing! No, sir, not at all! Then you’ll be told that the Supreme Court has been limiting corporate liability for fraud for decades, that in order to gain a conviction one must prove a conscious intent to deceive, that the 1976 ruling in Ernst and Ernst clearly states….

            In summation, I’ll make three quick points:

            1) As Arendt says, intent is a “subjective factor.” But in your defense of the bankers and their political water boys, you are demanding a standard of proof that, because intent is a subjective factor, is impossible to be met.

            2)This is not a courtroom. So is your invocation of all this legalese in order to exculpate the bankers and their puppets even appropriate?

            2) I think a little biblical wisdom (from which originates the very idea that intent is important) is in order here:

            You will know them by their fruits. Grapes are not gathered from thorn bushes nor figs from thistles, are they?
            Matthew 7:16

          4. Debra Steidel

            If you cut through all of the BS, Anonymous Jones has always defended the banksters and the status quo, that’s just what he does. Like water runs downhill, Anonymous Jones defends banksters, that’s the state of the world.

          5. DownSouth


            He’s not alone. There are a number of regular commenters who play the same cat and mouse game, striving to appear impartial, but in reality running interference for the bankers. But in order to cut through the smokescreen, it’s only necessary to apply the ancient wisdom I cited above: “You will know them by their fruits.” Or in other words, ditch all the fancy wordsmithing, just give us the evidence.

            Accurately assessing people’s true colors is quite important, because it’s too easy to have done to one what Belgium’s King Leopold III did to the allies in WWII:

            Blitzkrieg tactics confused the defenders. Glider troops seized bridges before they could be destroyed, and by the second day, Fort Eben Emael, considered impregnable, had fallen, taken by only eighty men led by a sergeant; their principal secret weapon was that they had rehearsed the operation endlessly on a replica of the fort. Britain and France responded to pleas for help by sending powerful forces that joined the Belgian Army on a strong defense line between Antwerp and Namur. Over most of the front they outnumbered the Germans, but that is exactly what the German high command had planned on. Nazi columns forced crossings of the difficult Meuse River, and a mighty army of tanks broke through the Andrennes Forest, which was lightly guarded because it was believed impassable by armor. Then, as the Allies struggled desperately to plug the gap, King Leopold III surrendered the Belgian Army on May 28 with virtually no warning to his allies, leaving their flank almost fatally exposed. The German panzers pushed onward to the Channel, and the Allied forces in the north, now cut off, retreated toward the one remaining port of Dunkirk.
            –C.L. Sulzberger, World War II

          6. Lloyd C. Bankster

            alex said: “Sacré bleu, I’ve been discovered!”

            Don’t worry about it son, Goldman executives make $50 million a year. Just keep doing God’s work. If necessary, you could always change your name.

        2. alex


          Even ignoring the childish turtle remark, you’ve still failed to make your point.

          Surely you’re not citing “Only Yesterday” as a reference on the solvency vs. liquidity debate about the Great Depression? If the author had intended it to be used as such, he probably wouldn’t have put the word “informal” in the subtitle. While (laudably for a work of popular history) he does include illustrative numbers, he doesn’t pretend to do anything approaching a full-blown economic analysis.

          You’ve also completely ignored my key point that Schwartz (as in “other masterwork of historical revisionism that Friedman co-authored”) calls the current problems more ones of solvency, although her earlier work concentrated on the liquidity problems of the GD. Maybe she’s one of those slippery types who tries to confuse the all-important ideological purity tests by looking at facts and numbers.

          Or perhaps my anal retentive obsession with mere facts, numbers and reasoning blinds me to the Greater Truth that you are trying to illustrate. Ah, an epiphany! Nothing else really matters because Milton Friedman was a Bad Guy. One of “them”. A Blue Meanie. Attempt to dismiss or ridicule anything he ever wrote, even though his work with Schwartz is admiringly cited even by economists who could pass your ideological litmus test with flying colors, and bears little relation to Friedman’s later ideological extremism.

          1. DownSouth


            If you want to jump on ‘the-banks-were-solvent-in-the-1930s’ bandwagon along with Friedman and Schwartz, and especially after reading what Allen had to say about the banks’ behavior, be my guest.

            And as to my statement to Anonymous Jones above that this is “not exactly as if this is the first time that he has engaged in these outrageous fabrications, or let his true colors be known,” I offer this comment as “Exhibit A”. You have just proved my point.

          2. alex

            “let his true colors be known”

            Sacré bleu, I’ve been discovered! Worse yet, I was once heard to speak admiringly of the king’s wig. Whatever will become of my head when the Revolutionary Tribunal hears of this? Nor is there any hope of destroying the evidence, for Madame Defarge has gone electronic and archived the counter-revolutionary sentiments expressed on Naked Capitalism.

          3. Lloyd C. Bankster

            alex said: “Sacré bleu, I’ve been discovered!”

            Don’t worry about it son, Goldman executives make $50 million a year. Just keep doing God’s work. If necessary, you could always change your name.

          4. nonclassical


            those of us in poly-sci, 70’s-80’s, lived the history of Friedman economic exploitation of South and Central America,
            completely documented and footnoted in several historical treatise; “Killing Hope”, by William Blum is perhaps most inclusive and exhaustive report. Perkins’, “Confessions Of An Economic Hit Man” fits well with, and with Naomi Klein’s already mentioned “The Shock Doctrine”.

            Those of us who knew 10 years ago what deregulatory legislation would cause have been vindicated, no matter what A.J. or fundamentalist idealogues purport.

            Neocons still attempt disinformation…

  2. DownSouth

    Re: “Officials: Bin Laden ‘complacent’ in Pakistan, no sign of escape plan” CNN

    The parallels between the situation here in Mexico and that in Pakistan are stunning.

    In Mexico you have two criminal states—-those of Mexico and the United States—-and the narcos, none of which ever tells the truth. The three are so inextricably intertwined that it frequently becomes impossible to tell where one ends and the other begins.

    The same is true of Pakistan, where there are two criminal states—-those of Pakistan and the United States—-and the Islamic fundamentalists.

    In this surreal world, it’s not surprising that brutal crime organizatons often get cast as freedom fighters.

    1. Peter Piper

      Somewhere around the year 2000, you stopped hearing anything at all about organized crime. That’s when organized crime crossed over and went “mainstream.”

  3. Lobo, from Telos IV

    @Obi-Wan Kenobi Is Dead

    Genius :) And look at the amount of comments under that article, from all over the Empire!

    1. Cedric Regula

      “In addition to Kenobi, two men and one wookiee were killed, one believed to be his young apprentice and the other two his couriers, according to an admiral who briefed reporters under Imperial ground rules forbidding further identification. A woman was killed when she was used as a shield by a male combatant, the Admiral said. Two droids were also reported missing.”

      So…the woman was Princess Lea? I’m assuming they did DNA testing to determine which one was the wookiee?

    2. ambrit

      This site, (Obi Wan Kenobi is dead…) is much more subtle than it at first appears. Consider that lead off photo; The Dark Lord of the Sith standing behind the Vice Regal podium. Now take the story arc from Lord Vaders life and apply it to a certain Leader of the Free World. A perfect match!
      Considering that Lucas accepted considerable input concerning mythic stories and cultural development from Joseph Campbell, it all makes a primal sense. Say it ain’t so Joe!

      1. nonclassical

        Much plagiorism by Lucas, from a variety of sources, most especially perhaps, “DUNE”, “DUNE MESSIAH”, “CHILDREN OF DUNE”…

        1. Cedric Regula

          True, but writers have a license to steal, and it happpens all the time. However, Lucas proved out to be a much better screenwriter than Frank Herbert. The Star Wars series was a huge hit, whereas Dune, The Movie, flopped. Lucas understood books needed to be dumbed down for the silver screen, and Herbert didn’t.

  4. NicOS

    That Eurozone grows more than expected, at about 5% on yearly basis, on Q1, seems it is not interesting to you.
    That even Greece grows by 0,8% in the same period, is also not interesting to you.
    However, you find interest in an internet pol (bloomberg), where noone knows who is voting for which reason.

    Yes, i understand…

    1. Jim Haygood

      ‘Rather than promoting a specific candidate, such a campaign would encourage voters to cast a protest vote for any 3rd party, independent, or write in candidate they wish.’

      To my recollection, the largest third party vote total in recent decades was for Ross Perot in 1992. And that was after Perot mysteriously withdrew his candidacy, bizarrely claiming that someone had threatened his daughter’s wedding.

      It seems easier to rally voters around a specific face than the wide array of fringe candidates who are on the ballot in every election.

      But it always will be the fate of any credible third party candidate to have his daughter’s wedding threatened, or some equally absurd menace. The 160-year-old Depublicrat duopoly will yield power when it is forcibly pried from their cold, dead hands.

      Friends don’t let friends vote Depublicrat.

      1. Matthew Johnson

        I would generally agree with you, but I think we’re at a unique time in history right now. People are fed up all across the political spectrum. Even better, my strategy is perfectly compatible with many folks rallying around a face, it just isn’t limited to that.

        In fact, if an independent or 3rd party populist face emerges they could coordinate with us and point to our campaign as a way to make a difference without “wasting” their vote. Further, we could rally voters around a few faces representing different points on the political spectrum and hold an “alternative” convention if this thing really gets going. This movement could be bigger than but coordinated with potential 3rd party and independent candidates.

        One additional point – Perot’s campaign was only possible because of his own personal fortune. I am hoping to design a strategy that can work via a grassroots movement that does not rely on a wealthy donor. Make sense?

        I will also share a comment that OhioGringo over at FDL made about the history of our current parties:

        “he Democratic Party under Andrew Jackson started out as protest votes against the remnants of the Federalist party and the then invincible Democratic-Republican Party. The Republican Party started out with protest votes against the pro-slavery Democrats and Whigs. The Populist Party was a protest vote against the excesses of capitalism that led to early 20th Century Progressive reforms. The one million votes that Communist candidates for President got in 1932 were protest votes that forced the Democrats to actually implement the New Deal.”

    2. Valissa

      I think the ‘no confidence vote’ is an excellent idea, and it’s great to see you promoting it. I have occasionally been doing that myself since the 2008 election, and so have many other people.

      The problem with your larger plan is that it is too complex and unworkable. From a strategic point of view there are too many points of organizational vulnerability and the political pros (from the legacy parties) are sure to attempt to disrupt/neutralize your intentions and effectivenss. It is dangerous to underestimate the power of political operatives who are dedicated to keeping the political status quo as is, and will most surely infiltrate your group and attempt to effect it’s direction.

      Your plan is based on what I believe to be a political style that is no longer in fashion… that of building up a large organization, from the ground up, to compete with the even larger legacy parties. It’s a wonderful idea in theory, but people don’t participate in politics in that way right now. I think the best you can do is encourage the protest vote idea to go viral and see what happens. I don’t think it’s something you can control or manage.

      The other problem you have is that many people have not given up their hopes and dreams about the Democratic party and liberalism in general. I think it will take a while longer before enough people are willing to stop choosing the lesser of two evils and try something else. In the meantime encouraging individuals to vote for 3rd parties or protest vote is a great idea, and certainly better than sitting at home in disapproval. Someone here in MA who works in the gov’t told me that they do count the votes in the “none of the above” and “writein” categories (though not sure how much attention they get).

          1. ambrit

            After reading an excellent book about Upton Sinclairs run for governor of California in 1934 on the EPIC platform, I’m thinking we should start thinking about the “General Strike” as a legitimate political tool. Hit ’em where it hurts, their wallets.

      1. Matthew Johnson

        “Your plan is based on what I believe to be a political style that is no longer in fashion… that of building up a large organization, from the ground up, to compete with the even larger legacy parties. It’s a wonderful idea in theory, but people don’t participate in politics in that way right now. I think the best you can do is encourage the protest vote idea to go viral and see what happens. I don’t think it’s something you can control or manage.”

        Thanks for your support. I may have not been clear in the presentation of my plan. This is precisely what I do not aim to do. It would involve a web based tool to centralize the pledge gathering but aside from that the goal would be to make things as decentralized as possible. I want it to go viral!

        I really think the pledge concept is a powerful one as many people have a fear of “wasting” their votes and this helps make it clear ahead of time that the vote will not be wasted. This is the primary idea I would like to add to the viral toolset. It is another tool in the social media / viral toolbox. Does that make sense?

  5. wunsacon

    >> Nearing 100 Million Views, Decorah Eagles Become The Most-Watched Live Stream Ever TechCrunch

    When ‘Murican Idol isn’t on, its viewers can watch the ‘Murican national bird.

  6. Capt'n Obvious

    “If the evidence in the Levin report is ignored, then Goldman will have achieved a kind of corrupt-enterprise nirvana. Caught, but still free: above the law.”
    –Matt Taibi article in today’s links


    –Capt’n Obvious

    1. ajax

      It was not that long ago (April 2010) that the SEC
      filed fraud charges in a civil suit against Goldman
      Sachs and Fabrice Tourre.


      I’m a bit disappointed that this was settled by a fine
      with no admission of wrong-doing.

      In my opinion, the purpose of a trial is to seek the
      truth. Without a trial, given no admission of
      wrong-doing, it’s open to speculation if what GS did
      was merely unethical or crossed the line into fraudulent

      1. squid

        I challenge anyone to think of something the GS could have done that would have been more fraudent than what they did.

        They couldn’t possibly have been more fraudulent. They had the best minds of the world thinking of every possible fraud they could perpetrate. And why shouldn’t they carry out every fraudulent scheme they possibly could? They’ve captured the government, so there’s no fear of liability.

        The only limit on their fraud was the amount of money in the world, and to a lesser degree the number of suckers.

    2. craazyman

      @ Matt Taibbi’s takedown of Goldman

      This is Proof of the Existence of God

      This solves it once and for all. You Don’t have to give yourself a migraine trying to read Pascal’s “Pensees” or any of those other soporific 5-pound hard-cover dust collectors that DownSouth is always quoting from. :)

      Not any more.

      I can’t believe I didn’t think of this before. But Taibbi says those Goldman dudes put their hand on the Bible when they said they’d tell the truth to Congress.


      It withstood the demonic energy radiating down through the palms. What more proof do you need?

      I’m going to church on Sunday. No more fooling around.


      1. craazyman

        “The Big Short 2.0”

        I just read Michael Lewis’s The Big Short.

        Man, this dude shreds with story structure, character development, plot lines, word rhythms. The man is good. No doubt about it. What an easy drink of water that book is.

        But the real question is how to profit from the inevitable criminal indictment of the Big Squid. I’m taking a lesson from a few of his protagonists, and thinking of some waaaayyy out of the money Puts. I’ll have to check with Chuck Schwab to see what’s up with this. This could be the Big Short v2.0. ha ha. Just don’t want lose too much or I might have to get a job at the Squid to recover my losses. LOL. (Just kidding).

        1. nonclassical

          no offense, really, but…

          “The Big Short” imo was several layers short of “ECONned”..

          1. craazyman

            I don’t think you can compare them in a competitive way.

            They were different books with differen goals. They were both outstanding.

            ECONNED was terrific. I read it and loved it. But it wasn’t breezy and it didn’t develop flesh and blood characters and bouncy storylines. It was a different genre of writing.

    3. psychohistorian

      Can you imagine the stress on the tectonic plates this is causing?

      We truly are living in interesting times. Up is down, black is white, in is out, etc.

      One could look at this like being in a slow motion train wreck. The reality of some of the pieces up front coming off doesn’t impede the rest of the train from careening forward willy nilly…..ah, to be the cultural anthropologist writing this time period up from our supposed future.

      1. nonclassical


        study a lot more chinese philosophy-begin with J. Krishnamurti…it’s all there.

  7. Susan Truxes

    If money has reached the end of its logic and represents only a store of debt and no longer serves as a store of wealth, but is still necessary as a utility to make the world of commerce go around, then clearly we need lots more of it. Like gazillions more. And if it is not a store of wealth it will not be hoarded. But then we also have to give up our favorite fantasy of a free market. There will be price controls. So then we will have to be vigilant about those new games. The old definition we have of money serves to impoverish people. We need a new definition. We need it before not just Greece, but the entire world, turns into Beirut. Wealth needs to be redefined as well. There are so many worthy candidates to use as synonyms I don’t know where to begin. I really like “Gross National Happiness.” (Nepal?)

    1. craazyman

      Gross Domestic Happiness sounds like a derivative to me. And too subjective for mathematical modeling.

      We need to focus on measurable underlying variables, like the Pub to Population ratio and the GDBP — Gross Domestic Beers per Person.

      This can be too high or too low. The purpose of government should be to keep it in a healthy range. Everything else flows from that. No pun intended.

      I’m not sure wine would work as well, because it makes people snobbish and it can amplify the Pilot Wave, unless it’s their own mud and their own grapes. It’s all a metaphor.

    2. Livello di vita

      synonyms I don’t know where to begin. I really like “Gross National Happiness

      good Juan

  8. pezhead9000

    “P.S. – It’s Friday the 13th. Be careful out there and have a great weekend!”

    Thanks for all your work – keep blogging!

  9. Tertium Squid

    Banks want piece of Frannie:

    “Wells Fargo and some other large banks would like private companies, perhaps even themselves, to become the new housing finance giants helping to bundle individual mortgages into securities — that would be stamped with a government guarantee.”

    I was going to make a comment, but that pretty much says it all.

    Wait, one comment – I am looking out the window and the mountains are starting to show their spring green. It’s very pretty. Whatever these crypto-GSE banksters do, that mountain will be there tomorrow. Pity I may not.

    1. MyLessThanPrimeBeef

      No pity.

      Be a butterfly.

      From Chiyo-Ni:

      Oh, Butterfly
      what are you dreaming of
      when you flap your wings?

      1. Cedric Regula

        I found this passage in the “coal humor” link in another thread. They are warning of the danger in windmills, but I see a disturbing parallel with turning over the mothballed F&F to the folks that brought us private label mortgage securitization and are asking for a government guarantee to boot.

        I mean, just a few days ago, I told craazyman that we really don’t appreciate it when we can see Wall Street’s pink elephants all the way from the other side of the country. Now this.

        But there are also much, much bigger potential problems associated with wind energy. Every science student has heard of the so-called “butterfly effect” from aptly-named “Chaos Theory”: namely, that the flapping of a butterfly’s wings in the wilds of Rio Grande do Sul, Brazil, can set off a massive, community-shattering tornado in Bunker Hill Village, Texas. If, as scientists state, a mere butterfly can cause a tornado so many thousands of miles away, imagine what a hill-full of wind turbines can do.

        Actually, a simple calculation shows precisely how much. Suppose a butterfly flapping its wings, producing about 12.5 W of energy, can unleash a tornado producing approximately 100MW of energy. By this measure, a large wind farm—producing 781.5 MW of energy, or the equivalent of approximately 63 million butterflies—could unleash the equivalent of 63 million tornados, or over 6 quadrillion watts of energy. That’s still less than one one hundred millionth the energy of an asteroid hitting the earth, but it’s nothing to sneeze at, either!

        1. MyLessThanPrimeBeef

          I thought it was ‘beans and flatulence in Brazil and tornado in Texas?’

          On a more serious note, instead of torturing butterflies, what about mini-wind windmills woven into our underwear to generate energy?

          1. Cedric Regula

            Might go well with a solar panel sun hat.

            But even more seriously, I just completed a study of our energy situation for a book chapter I was invited to write, and it looks like we are going to need the natural gas as well.

        2. craazyman

          we just need more wind turbines to capture it all!

          and then more turbines to capture all the new tornadoes the new turbines cause. this can go on forever and we can take over the whole galaxy.

          who said there was no such thing as free energy. It makes the Dirac Sea look like a bass pond.

          1. Cedric Regula

            Well, I’m not really sure.. you are starting to sound like Darth Vader….

          2. craazyman

            no i just started imagining all those tornadoes and it became a geometric progression of swirling cyclones like something before the Land of Oz.

            why is it they never say the butterfly’s wing flap would have stopped a tornado from forming? It always the wing flap causes the tornado. This gets complicated pyschoanalytically.

            I can figure that out myself, but I’ll need at least half a bottle of red wine and some xanax, just to get the channeling flowing to the point where I can SEE.

          3. ambrit

            Hey Kids!
            Would this mean there really is an economic driver based on the Zero Lower Bound Point? Free money just for vibrating!
            Oh, wait, the Government’s already doing that. That’s what that humming noise is.

        3. einem Luftschlag

          unleash the equivalent of 63 million tornados

          What would *chaos theory* say if you added 2 stators to balance the rotor? Would one stator behind rotor and one aft of rotor to balance the spin also improve the efficiency of energy transfer? Or would stators counter-productively slow down the air? Better yet, two rotors facing each other with opposite pitch to blades?

          Couple of years before the 1929 melt-down was year of many tornadoes. Cause/effect? Of dust-bowl?

  10. Corvadrin3

    Jane Hamsher Unplugged (And Unhinged): Dare To Criticize Hamsher’s Appalling Labor Record, And This Is What You’ll Get

    by Mike Elk

    “Yesterday I confronted Jane Hamsher, founder of Firedoglake, over her refusal to honor a labor boycott against the Huffington Post that two major writers unions, The Newspaper Guild (TNG-CWA) and National Writers Union (NWU), have called for.

    Here’s some background: HuffPo’s legions of bloggers are organizing a sort of electronic picket line of the Huffington Post in response to Arianna Huffington’s announcement that she earned millions in her sale of HuffPo to AOL, profits everyone knows were made off a site that relies mainly on unpaid labor. Huffinginton added salt to the wounds with dismissive, arrogant attitude towards those who felt fleeced. When she refused to meet with the heads of these two unions to discuss their grievances, the two unions decided to call for a picket line, or boycott, of contributing by unpaid bloggers of the Huffington Post.

    AFL CIO President Richard Trumka and the heads of nearly all the major unions have honored the picket line and refused to blog at the Huffington Post. These union leaders have been sacrificing badly-needed publicity for their labor causes in order to show their solidarity for writers like me who work in an industry with low pay and practically no job security.

    Meanwhile, people like Jane Hamsher–who already have well-funded sites with huge traffic volume– have continued writing on the Huffington Post, promoting their already high profiles without giving thought to the damage they cause to struggling writers and bloggers.

    But Hamsher wasn’t satisfied merely crossing the picket line: She went on the offensive against boycott organizers.”

    to read more:

    1. Valissa

      Great catch! Once upon a time I thought the netroots had such great potential and I came out of my personal exile from politics (had voted for too many sorryass Dems over the yeas and gotten tired of it) to jump on the bandwagon. I was cautiously optimistic. I even went to Yearly Kos 2 to see what kind of people were behind the movement. Then Obama became the crowd favorite and anyone who disagreed with the in-crowd was pointedly ostracized. It became clear that certain beliefs were in favor and others were not, and due to the peer pressure most of the netroots went along like the sheeple they really are. So I beat a hasty retreat and returned to my much more sensibly cynical attitude about politics.

      There is a great book which (in part) addresses the phenomenon of intellectual sellout in politics… The True Believer: Thoughts On The Nature Of Mass Movements by Eric Hoffer. Highly recommended – not long and easy to read! Despite the fact that he was a longshoreman and not an academic, this book received many accolades.

      Along with many other great observations on people in groups, Hoffer also discusses how the intellectual voices are co-opted by the power-elite via giving them access, low level leadership positions, and insidery-ness… or more simply put, by flattering their egos and seducing them with prestige/power and money. It seems that with human nature, principles are a ‘weak magnetic force’. Politics is about power and influence not ideology or utopian beliefs.

      1. ambrit

        Dear Valissa;
        Along with Hoffas magnum opus may I suggest the occasionally quoted here Hannah Arendts “Eichman in Jerusalem.” A better explication of the bureaucratic mind set you won’t find anywhere. Evil truly is Banal.

      2. Corvadrin3

        Thanks for mentioning the Eric Hoffer book, I’ll look for a copy this weekend.

        Back in February, to the best of my knowledge, Chris Hedges was one of the few voices to criticize Ariana Huffington for exploiting her workers:

        “This latest form of “liberal” exploitation exposes yet again the liberal class for who they really are — opportunists whose operating methods are as callous as those employed in the textile mills in southern China. Is it any wonder that working men and women, who have been abandoned and betrayed by these self-identified liberals, hate the liberal class and its transparent hypocrisy?”

        The complete article, entitled “Huffington’s Plunder”, can be found here:

      3. MyLessThanPrimeBeef

        We need more longshoresman writers.

        It seems, that concentration of wealth occurs not only in the private sector, but with public workers and in blogsphere as weel.

        1. Valissa

          In case anyone is interested in finding out more about Hoffer…

          Eric Hoffer

          Personally I really like his non-ideological style and use of aphorisms. Very wise man. A different sort of wisdom than the intellectual style, and more powerful for that.

          1. Corvadrin3

            Interesting article on Hoffer’s life. (“Snowed in for the winter, he read the “Essays” by Michel de Montaigne….etc”) And he went blind at age seven, yet inexplicably recovered his sight at age 15. That trauma may have been decisive for his creativity as an adult…..

      4. Das letzte Hurra

        giving them access, low level leadership positions, and insidery-ness… or more simply put, by flattering their egos and seducing them with prestige/power and money

        It is called, “Worse to have Johnson outside pissing inward than having him inside spraying outward.”! And it was no fun for the outsiders, especially The Hapless Vietnamienne.

    2. Hugh

      Firedoglake is one of the Trojan horse blogs on the left. It started out more progressive but with its success Jane Hamsher moved it more into the Democratic camp. It still criticizes more Democrats than the Huffington Post or dailykos, but like these two it keeps its criticisms very much within the two party framework. Jane Hamsher also fairly deliberately hired bloggers to the site who were Democratic tribalists. The site’s commenting community was always far more progressive than the bloggers she highlighted. This has led to a steady of progressives and progressive ideas leaving the site.

      The Michael Whitney kneejerk defense of his boss is something that is also well known to the site. I call it a swarm. Commenters who take on posters there will suddenly find themselves attacked by other commenters who are actually posters/staff to the site. It gives the impression that the commentariat is more firmly behind the poster than is really the case.

      Finally, Jane Hamsher has always run the site with close to zero transparency. Her connection to Andy Stern for instance is important considering that the site often cited the SEIU and what it was doing. That’s the kind of undisclosed conflict that would be criticized if it happened in the MSM.

      1. Corvadrin3

        Thanks, Hugh.

        And it sounds like you already saw the following update concerning the exiled article by Mike Elk, but in case anyone interested might have missed it:

        “Update from The eXiled Editor: Within minutes after this article was posted, Michael Whitney of Firedoglake sent Mike Elk, author of this article, the classic Hollywood death-knell: “You’ll never work in this town again.” Whitney, who once ran a labor blog for Firedoglake until it was taken down because it was so poorly put together and drew such anemic traffic, now serves as Vice President of the Membership Board for Firedoglake. Apparently one of his duties is acting as Hamsher’s hall monitor, policing the internet for anyone not sufficiently worshipful of his employer. Before working for Hamsher, Whitney worked for–ta-dum!– Hamsher’s ex-boyfriend at the SEIU.”

  11. Hugh

    The myth that banks are still solvent? It seems like some of us were saying in late 2008 that they were all insolvent. It reminds me of the SNL line: “And in other news, generalissimo Francisco Franco is still dead.”

    1. Peter Piper

      What does it mean for a bank to be insolvent when they create money out of thin air?

      1. F. Beard

        What does it mean for a bank to be insolvent when they create money out of thin air? Peter Piper

        It’s true banks create money (so called “credit”) out of thin air but they must nevertheless honor those obligations to other banks and to payout currency on demand.

        1. MyLessThanPrimeBeef

          I think a smart banker (one who earns billions a year) would create more thin air to honor those obligations.

          Call it ‘thin air squared.’

          1. ambrit

            Looks to me as if “modern economics” is the social equivalent of Non Euclidian Geometry. Tim Geithner as Heirophant of Imaginary Numbers anyone?

      1. ambrit

        C R;
        Slather a little dollop of the “saturated fats that keep the wheels of commerce turning” on the toast and you have an austere lunch.

        1. psychohistorian


          I almost got partially masticated carrot pieces on my keyboard…

          and then David’s below.

          Thanks for the humor. We all need it.

    2. David

      From Saturday Night Live, May 14 2025:

      “… and in other news, Osama Bin Laden is still dead.”

  12. Dean Sayers

    Brad DeLong is closed minded:

    “Look: Marx started his adult life with an adolescent oppositional stance, an Enlightenment confidence that he was living in the age of humanity’s liberation, and a big chip on his shoulder as a German Jew when all the real action seemed to be going on in the west in France (politics) and in Britain (industry).

    So he started out thinking he was going to change the world and liberate humanity by thinking clearly: built on top of material plenty created by British industrialists and the politically-aware people created by French revolutionaries, German philosophers could think clearly, and as if it were scales would fall from people’s eyes and they would see: free from their illusions and their prejudices and their misconceptions they would build utopia. So he writes books with titles like The Critique of Critical Criticism and begins what will become a lifetime flirtation with the rhetorical mode of The Revelation of St. John the Divine.

    Then he noted that nobody really cared about philosophy, especially not the Prussian secret police. And so he transformed himself from a German philosopher to a French-style political activist as his principal focus, and worked to create the political-revolutionary people necessary for the philosophy to do any good.”

    Anyone who simplifies the contribution of Marx in such a way is either ignorant of or willfully lying about the man.

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