Links 8/2/11


  1. ambrit

    My caption for the antidote: “Blast! Who would have thought Politicians would taste like that?”

    1. KFritz

      That’s actually a Kenyan lion, roaring in disgust at the Birther idea that BHO was born in Kenya. He’s expressing outrage at the idea that a Kenyan could put on a performance as craven as our POTUS’s behevior over the last few weeks of ‘debt crisis.’

    2. MyLessThanPrimeBeef

      I think the lion is saying, ‘This deal stinks.’

      I know it because I make the same face.

  2. attempter

    I like how the Greenwald headline seems to be a direct retort to the pernicious FDL headline.

    (Not that I disbelieve Obama could be that dumb at any particular point, but it’s pernicious because it’s meant to reinforce the “progressive” party line that Obama’s well-meaning-but-weak/stupid rather than malevolent.)

    Why all this angst over the lack of regressive tax increases in this thing? That’s the one silver lining which could possibly have been salvaged out of it, and it was.

    1. Valissa

      Both the Black Agenda Report article and the Greenwald one, make the key points. And both make the FDL post look lame, which it is. I don’t think anyone at the White House ever thought the Republicans would agree to the tax cuts (except maybe idealistic young interns), and it is so very convenient to name call and blame the “tea baggers” (taunting and insults are NOT a sign of intelligence). Incredibly they are blaming the “tea baggers” instead of the power elite who are using the tea partiers as their clueless front group (tea party = bunraku). Wow, you would think by now the folks at FDL would be better at spotting and dealing with political propaganda by now, after how hard they fell for it in 2008. At the end of the Greenwald post is a cartoon by vastleft that explains it best.

      1. attempter

        Wow, you would think by now the folks at FDL would be better at spotting and dealing with political propaganda by now, after how hard they fell for it in 2008.

        Are you sure you’re not falling for the same scam where it comes to FDL itself? ;)

        1. Valissa

          If you are saying that FDL is also propaganda, I agree on that :) One of the most interesting things I learned while studying up on propaganda is how easily “designed narratives” are taken in and propagated unconsciously, therefore appearing “natural.” The power elite have had many years to perfect their divide & conquer strategies. They use operatives to seed, plant and nurture their desired narratives into the various factions until they are taken up by the unaware who propagate them from there because they “sound right” (i.e. confirm conscious and unconscious biases).

          1. attempter

            The best example at FDL is how they installed a flack from a health insurance industry front group to coordinate FDL’s propaganda for not one but two bait-and-switch “health reform” scams.

            First the “public option” itself, and then the “Progressive Block” in the House which was going to guarantee that no bill without a “real public option” passed.

            Thus FDL did its part in herding the progressive sheep away from the Single Payer pasture (the only one with any grass).

      2. No Know

        If we accept the Black Agenda Report and Glenn Greenwald’s theories as correct, the question remains, why did Obama desert his party’s core principles. From the BAR’s perspective, it appears that they simultaneously cheer Obama’s brilliance at selling out their own constituency. I say O had more than enough cover to stand and defend principles by insisting that he would not participate with the Tea Party’s insane demand to hold the Debt Limit issue hostage to extort budget reform. There are numerous articles today that say O has put the entire economy in jeopardy with his brand of austerity. Does O think this is his “Nixon to China” moment? Sorry, I just don’t get it. Let’s agree with them that Obama is brilliant at getting what he wants. Now what? Completely ignore the fact that what he wanted was wrong? Wanting to show your brilliance with the risk of destroying our economy is not brilliant it’s nuts. The Tea Party and other conservatives will get the credit if it works and Obama will get the blame if it doesn’t. Brilliant! Please explain the calculus to me.

        1. Valissa

          Not sure if you will like my personal explanation of this…”desert his party’s core principles,” but I will give a shot at explaining some of my thoughts.

          Politics is not about core principles as far as I can tell from my research, although for some reason that is a commonly held belief.

          Here is a shorter definition I often use, “Politics boils down to who gets what, when, how… tribal bartering and bargaining, power & influence seeking.” Even shorter definition, it’s bout power and money and always has been. Suggest reading some basic political science textbooks whcih are generally avilable very cheap used at Amazon.

          Principles are important aspects of philosophy and religion, at least in theory, but in politics, not so much.

          I have recently been wondering why so many on the right and left have been complaining about the lack of principles, as if that was ever a major component of politics. History does not show this. Sure, there is the occasional politico who becomes legend for their supposed principles, but on closer look that generally falls apart.

          I wonder if the desire for “principles” is actually a subtle piece of propaganda so that the little people focus on principles and get distracted on arguments about those while the politicos wheel and deal and play power and money games (like they always have).

          From what I have read, it appears that every 30-40 years or so the political parties realign what they stand for. Also that people tend to hold onto political party definitions from early adulthood despite the fact that those are everchanging depending on current trends. My observation is the the current political crises reflects a breakdown in the definitions of what the parties supposedly stand for, which is why the numbers of independents are increasing. People are rejecting what the parties currently stand for but as of yet there is no real replacement. I think the whole left-right-center liberal/progressive-conservative labels are rapidly losing their meaning and value in the increasingly money based and authoritarian times we are in.

          1. Valissa

            Oabam is following his core principals however, which are the banksters and financiers that contribute heavily to his election campaigns. Rememer that the grandmother who raised him was a banker and that Penny Pritzker was one of his earliest backers in Chicago.

          2. Lidia

            Valissa, I buy your entire premise, but what catches me up short—always—is my sheer inability to grasp just How Destructive and How Wasteful these processes are.

            Grabbing something for one’s self: understood. Destroying something worth billions for a short-term gain of thousands: not so comprehensible.

            I figure “don’t shit where you eat” is something even the lowest of cretins can understand. I guess I am wrong.

          3. No Know

            I can’t disagree with Valissa on this. It’s just, deep down I can’t believe that the Democrat party is really just going to say, Oh well. I still (maybe naively) believe that the party’s core principles remain fundamentally intact (or am I just praying for it?) There seems to be a disconnect here.

          4. Valissa

            The Democratic Party has a “platform” of supposed principles as does the Republican Party. I guess the question we are all asking is how much do those principles (essentially the party platform) reflect reality. I’m sure that members of both parties to some extent or another “believe in” most items on their party platforms, esp. early in their careers. But then most of them end up conforming to group norms, and go along to get along and all that sociological stuff. And money is the name of the game today!

            These party platforms perhaps no longer represent reality, even if they once did (it’s all questionable). Let’s face it, once a politician is elected then they want to stay elected… you know, keep their job… and maybe even get promoted (move from house to senate or gov to president, or the like). And in today’s political climate it’s become all about the money.

            You know.. back in 2000 I could not understand when Naderites and others said their was no difference (or only cosmetic differences) between the parties. I could not see it then, for whatever reason. It took me until 2008 to see it, maybe because I had to time and inclination to follow things more closely and read some history too. I left the Democratic Party in the ’90s due to Clinton (even though, oddly, in some ways I like him) and other stuff. But even though I was officially an independent I still thought the Dems were the lesser of 2 evils until too many things became clear to me in 2008. Once I jettisoned the two-party belief system from my mind, it was a big relief.

            I have no idea how all of this is going to turn out, but history indicates there will be a downturn for some years before there is another upswing. I’m thinking by 2020 or so it will be whole new ball game, and even if there is a 15-20% lowering of the standard of living for Americans, it will not be the end of the world. Money is NOT everything. Other values are important too.

          5. Foppe

            If I may be so rude as to make a one-line suggestion. The frustration over the lack of principles flows forth from not understanding the fact that politicians are no longer representing them: They do not [yet] appreciate the fact that on certain areas of government policy, there is no longer a choice, because both parties want the same thing. They don’t [really] understand what’s changed yet, since US elections have almost always been centered on cultural rather than social issues, yet they do sort of appreciate that something fishy is going on. A principled politician represents; unprincipled politicians do not.

  3. Foppe

    Curious (if nice) news from Israel:

    Knesset report warned of ‘social time bomb’ three years ago

    A Knesset Research and Information Center report entitled “Israel’s housing shortage” is available on the Knesset’s website. It was written in March 2008, when Ehud Olmert and Kadima were in power and Ze’ev Boim was housing minister. “The government lacks a systemic, long-term perspective when it comes to housing and construction policy,” the report states in a bold font right at the top.

    “This is evident in many government decisions and moves that are inconsistent with the government’s declared policy, and ultimately achieve the opposite of what is needed,” it states, concluding, “This trend could result in social resentment, wider social disparities and even emigration.”
    The report ends with a practical suggestion: “These market flaws explain in large measure why the government needs to intervene in Israel’s housing market. Accordingly, the government’s construction and housing policy needs to be reevaluated, and must include a multiyear strategy to remove obstacles and ensure there is a supply of homes around the country, to be sold immediately when the need arises.”

    The Knesset Economic Affairs Committee met to discuss the situation in the wake of that report. Gilad Erdan, who is now environmental protection minister, was the committee’s chairman at the time. As a member of Likud, then an opposition party, he used the document to bludgeon the Olmert government.

    “Regrettably, the government is ignoring this social and demographic time bomb,” he said as the meeting began. “In light of both the Research and Information Center document and the impression gleaned by committee members, the current government’s policy will cause social resentment and encourage emigration. Unlike all other nations, including capitalist states, Israel currently has no effective plan to help people purchase homes, and rental aid has declined significantly as rents increase.”

    More than 150,000 take to streets across Israel in largest housing protest yet

    Demonstrations held in more than 10 cities across Israel in bid to lower spiraling costs of living; joint Jewish-Arab protest held for first time since demonstrations began 16 days ago.

    Everyone is blaming Bibi

    With the housing protest gaining momentum, the prime minister is facing largest domestic crisis since he took office; he now has the opportunity to come up with a new agenda, will he rise to the occasion?
    It has been two weeks since the tent protest began on Tel Aviv’s Rothschild Boulevard. “The state of Tel Aviv,” once scorned as a symbol of indulgence and alienation, has birthed a symbol of the diametric opposite of nouveau riche decadence.

    During this time, the political establishment has received an important lesson about modesty. Politicians who have been calling themselves socially oriented for years do not dare approach the tent encampment, for fear they will be kicked out. One such politician was smuggled in and out of his favorite fancy restaurant on the boulevard through its kitchen last week. And the parliamentary opposition has been stripped naked.

    The night I was proud to be an Israeli. (Gideon Levy)

    It was the night that Benjamin Netanyahu was tossed out of the Prime Minister’s Office in disgrace.

    Netanyahu will stay in office for a time, but his time is up. Finished. He will squirm and make promises, make declarations and turn tail, he will trot out a few more tricks, but it won’t help him an iota.
    As of yesterday, he is a lame duck. Last night, Israel’s 17th prime minister was handed his walking papers. When tens of thousands of Israelis across the country scream, “Bibi go home,” Bibi will indeed go home. Bye bye, Bibi, good-bye for good.

    It was the night that every Israeli can and should be proud of being Israeli, as never before. Israel’s true pride march took place yesterday. There can be no better public relations campaign for this despised, shunned country than the demonstration last night of this new Israel. The Foreign Ministry should broadcast the images to the entire world. Israeli democracy celebrated last night as it has not done in years, standing up against all those who would see it fall. Without violence, without superfluous police reinforcements, not Cairo nor even Athens, but something much more beautiful – a genuine light unto the nations.
    The protests went up a notch last night. Chants about high rents were rare. “The people demand social justice,” was the most common, followed by “Hoo ha, mi zeh ba? Medinat harevaha” (Who’s that coming? It’s the welfare state ). Socialism, today? Yes, with choked throats and emotional tones. The protest took flight last night. Forget the housing protest, it’s no longer alone. Those who feared that the protest was too narrow, too spoiled, yesterday watched it expand. Its goals are already way beyond a small rented apartment.

    1. sidelarge

      As I wrote in another comment, I can assure you that the whole thing is genuinely NEWS to many Americans, even though it has been going on and growing for a few weeks now. It’s borderline information blackout in the American mainstream media.

      It also seems that the protesters’ message graduated from the housing issue a while ago onto bigger ones.

      What’s somewhat unique with this is that Israel is supposed to be in the middle of an “economic boom.” I remember the WSJ publishing a rosy report about it not too long ago.

      1. Foppe

        Yeah, I was quite surprised by this, as I hadn’t read anything about it in the dutch newspapers either.
        Anyway, another nice article about it, guardian:

        This uprising is really that of Israel’s disfranchised secular middle class. Bogged down by exorbitant taxes and carrying the burden of Israel’s economy, they receive very little in turn. Israel’s school system is in the pits with class sizes of about 40; many Israeli women cannot afford going to work because childcare is very expensive; the public transport is that of a third-world country.

        The current uprising has given Israeli liberals a voice again. Its authenticity could not be disputed: to this day there is no clear leadership. The atmosphere on the boulevard, where hundreds of tents fill the tree-lined spaces, feels like a remake of Woodstock. The demands sound eminently reasonable to all sectors of Israel’s population.

        But the apolitical character of the protest is being challenged. Netanyahu is already claiming that the protesters are driven by political motivations. His intent is clear: he wants to delegitimise them and claim that their real goal is to topple his government. This, he hopes, will weaken nationwide support for their demands. On Monday, members of the Likud central committee started to say that the demonstrators are just a bunch of sushi eaters with nargilas (Arab pipes) – ie leftist radicals – and that the media was exaggerating their numbers.

        Because the process so far has been rather chaotic, it is very difficult to predict what it will lead to. If the Likud and Yisrael Beitenu step up their attack, the protesters will not have any choice but to confront the current coalition in the political arena as well.

        1. sidelarge

          As a Japanese, I feel flattered by the fact that “sushi eaters” means “leftists” over there, lol.

          The only thing that I knew about the Israeli economy was its not-so-nice widening gap between the rich and everyone else. The Great Moderation is always fragile, I guess.

        2. Francois T

          But the apolitical character of the protest is being challenged. Netanyahu is already claiming that the protesters are driven by political motivations. His intent is clear: he wants to delegitimise them

          Bibi has learned from the best (worst). The American Reichwing, the propagandists for the financiers, and the punditocracy.

          Yet, he’s toast. Couldn’t happen to a nicer bunch!

  4. Sock Puppet

    Thanks for the environmental and drone war links. These issues put the debt BS into perspective. Our economy incentivises war and environmental destruction. Those are the true debts that we’re creating for our children.

  5. Tony

    The elite have gone ‘meta’ on the other 99% of us. They used to fight us directly by providing the majority of the funding to their side (the right). Now, they’ve discovered that they can make much greater gains by nominally funding severe right-wing crackpots (Bachman, Palin, etc.). However, they make their real gains by providing the majority of their funding to DINOs like Obama.

    Obama is expecting to raise $1 billion for the 2012 election. I can’t imagine that much of that is going to come from ordinary folks.

  6. Foppe

    Bill Black:

    My prior column explained that Pratt, Texas, and California had (unintentionally) optimized the S&L industry as a criminogenic environment for accounting control fraud by deregulating, desupervising, leaving insolvent S&Ls open, ignoring extreme conflicts of interest among S&L acquirers and founders, approving federal deposit insurance for newly created (de novo) S&Ls in Texas, California, and Florida despite the total inability and unwillingness of these states to regulate, and debasing the accounting, concentration, and capital rules. Criminal referrals (and prosecutions) were virtually non-existent under Pratt. The Bank Board had no system for ensuring that criminal referrals were made, for monitoring the progress of the FBI in pursuing the referrals, or for training agency, FBI, and Department of Justice staff in how to detect, investigate, and prosecute elite frauds.

    The Bank Board did not have remotely adequate numbers of examiners and too many of its senior supervisors were unwilling to take vigorous action against major S&Ls. Texas and Louisiana were totally out of control. By 1983, there were hundreds of frauds growing at an average annual rate of 50 percent. Had Pratt’s anti-regulatory policies continued even a few more years that level of obscene growth would have soon led the frauds to dominate the entire industry and to hyper-inflate multiple regional real estate bubbles.

    Gray went to an emergency footing. He refused to grant federal deposit insurance to any California, Texas, or Florida de novos unless those states provided adequate examiners and supervisors. He doubled the number of examiners and supervisors within 18 months. He reassigned hundreds of examiners from outside Texas on temporary duty to examine Texas S&Ls. He fired the President of the Federal Home Loan Bank of Dallas. He ordered supervisory agents to certify that any violations of law or unsafe conditions or practices found by the examiners had either been fixed or that the supervisor had referred the matter to enforcement to force the S&L to fix the problem.

    Gray personally recruited senior banking regulators with reputations for competence, integrity, and vigor and put them in charge of every region with severe problems. He picked the two regulators he found most impressive, Joe Selby and Mike Patriarca, to be the top regulators for the regions responsible for regulating Texas and California S&Ls.

    Gray, over the opposition of his fellow Bank Board members, adopted a series of rules and orders in 1983-1986 that targeted the accounting control frauds. The rule restricting growth doomed the accounting control frauds. Gray also prioritized for closure the worst frauds identified by the examiners and the agency began to place S&Ls in conservatorship even when they were reporting profitability and adequate capital.

    1. No Know

      My cousin was Number 4 in the hierarchy of a large California S&L in the 70s & 80s. Numbers 1 and 2 were brothers and the family had controlled the federally chartered mutual S&L for years. At the time, Florida S&Ls were flush with cash from wealthy retirees who had moved there, but the banks had a shortage of viable real estate investments (S&Ls could only loan out funds for RE at the time). My cousin recounted a story that took place in that era. Number 2 was supposed to meet with two FL. S&L execs to discuss their purchase of a large amount of CA mortgages. Number 2 got ill and my cousin was asked to fill in. Since he had no experience with selling mortgages, my cousin told Number 1 that he was unsure he could handle the task. Number 1 said, just meet with them and don’t worry about it. The trio ended up on the infamous Broadway strip in San Francisco where they proceeded to spend the night in various nude bars and got completely shit-faced. Shortly after 2:00AM, the trio was staggering down Broadway when one of the FL. execs slurred, “Ya know, we haven’t even discussed the purchase and we’ve got to fly out tomorrow morning”. Before my cousin could respond, the other one says, “Look, we’ll take $10,000,000, just send us the paper work when we’re back home”. That was what “due diligence” consisted of in those days. I could spend a long evening (at a good watering hole would be best) telling other war stories I have heard and experienced first hand.

      For the record, Numbers 1 through 3 went to federal prison. My cousin, a fine Irish lad, used the luck of the Irish to avoid prosecution but, lost a lucrative career and never recovered financially. Unlike today, all four did the crime and, in one way or another, all four did the time. Apparently since examples such as this did not prevent a repeat of history, the powers that be have decided to forgo any punishment and take a “boys will be boys” approach (apologies to any female criminals out there)

  7. MyLessThanPrimeBeef

    Social Security Reform Bill Encourages American To Live Faster, Die Younger.

    I used to think that was the job of Rock ‘N Roll – to make Americans live faster and die younger.

    But then, I saw some 80 yr old touring rock musicians, and I thought, hmmmm, maybe, not. Maybe it’s acutally good for your health.

    So, here is the question.

    Which will we see first – the world’s first trillionaire or the world’s first 90 yr. old touring rock musician?

    1. Yves Smith Post author

      The best way to live a long time is seriously undereat (except you still need to get enough nutrients, so you need to be sure to get enough vitamins and minerals). Tons of animal studies on this one. And the older underfed animals look great and are very frisky.

      The best way to lower your biological age (as opposed to live longer, not as clear whether this extends lifespan) is to weight train or engage in activities that require and promote strength. Not only is there a lot of research that supports this conclusion, I’ve got some examples in my family. My great uncle (Olympic medalist, invented the spinning movement used universally in the hammer throw) hauled lobster traps without a winch into his 80s. I last saw him when he was 88 and he looked like a man in his late 50s.

      Neither of these appears to have anything to do with rock and roll, although maybe that motivate you to do one or both.

      1. MyLessThanPrimeBeef

        Thanks, Yves!

        I am going to try lifting more stuff. I think we all like to live to 100 and look 50, not to live to 100 and look 200.

    1. MyLessThanPrimeBeef

      Have you ever trid an all-you-can-eat buffet? What happens is you usually eat more than you normally do.

      That’s also what happens in an all-you-can-loot buffet.

      You loot more than you normally would. You pay a fixed bribe…sorry, lobbying and campaign contribution fee, and you get to loot all you can.

      That’s just human nature.

      1. Joe Rebholz

        It’s not human nature. It is the result of the neoliberal selfishness cult. Human nature is not fixed. What humans do, how they behave together at any time and place depends on their culture, the things they believe about themselves and the world.

        1. MyLessThanPrimeBeef

          Generally speaking, though, if it’s all you can eat, most humans will tend to over-eat.

          Cats are different, I think. When I put too much in their bowls, they will eat but leave plenty behind.

          1. Yves Smith Post author

            Bored indoor cats will overeat. Indoor/outdoor cats, from what I can tell, don’t.

  8. Eric Titus

    One other item that ought to be on here is the lawsuit against Icahn by XO minority shareholders. The court documents themselves make interesting reading:

    The situations is that Icahn’s ownership of 80% of the company allowed him to use NOLs (net operating loss) to offset profits elsewhere. So he deliberately kept the stock price at $2/share and ran the company into the ground in order to maintain ownership and significant losses. Not surprisingly, the other shareholders are pissed off.
    Telecom Ramblings also has a solid post on the matter.

  9. Jim Haygood

    While americanos obsess over their legislative drama (which Bill Gross says won’t even make a dent in restoring fiscal sustainability), the situation in southern Europe is degenerating into a flaming horror show:

    The yield on 10-year Italian bonds rose 13 basis points to 6.14 percent at 4:31 p.m. in London. It earlier surged to 6.25 percent, the most since November 1997. That pushed the difference in yield, or spread, over bunds, to as much as 384 basis points, the most since before the euro was introduced in 1999.

    Spanish 10-year yields rose eight basis points to 6.28 percent and reached 6.46 percent, the most since 1997. That pushed the spread over similar-maturity German debt as high as 404 basis points.

    This dismal debacle is a direct result of the latest ‘day late, dollar short’ Greek bailout. I don’t care what the rating agencies say — yield spreads of 400 bips over bunds imply a junk rating..

    Spain and Italy are going down, and it’s because Europe’s bankster buffoons refuse to swallow the bitter medicine of restructuring Greece, Ireland and Portugal with swingeing haircuts in the 50 to 80 percent range.

    As I said a few days ago, when the authorities insist on propping up Greek debt rather than doing the necessary and inevitable restructuring, the only rational response is to sell the debt of so-far unpropped peripherals such as Spain and Italy. Sell relentlessly, and sell remorselessly, until you can hear the bankster bastards puking behind their gold-gilded closed doors.

    Six percent yields on Italian and Spanish sovereigns fail to impress? Hang on till this autumn, when they’ll surpass seven percent.

    As Dostoyevsky used to say, ‘So things are bad? Well then — LET THEM GET EVEN WORSE!’

    Peripheral Europe is swirling down the toilet. As physics dictates, the angular momentum accelerates as the vortex approaches the bottom of the bowl.

    Flush twice; it’s a long way to Brussels!

  10. aeolius

    True to form, the online NYTimes has a headline on the debt vote balanced on the right side, also above the piucture of Obama
    Opinion »
    Op-Ed: Antebellum Myth.

    Guess thats what you call balancing the news.

  11. ScottS

    Re: Poll: 60% of Californians Support a Carbon Tax Los Angeles Times

    I don’t normally believe anything I read in the LA Times, but if this is true it’s one of the best examples of why Californians are so crazy. We love cars, we especially love fast cars, and we also want them to be extremely clean and green.

    If a Camaro wrapped around a tree is the unofficial flag of red states, then a Tesla Roadster parked outside a Starbucks is California’s.

  12. Externality

    From the New York Times

    [Anti-psychotic] [d]rugs widely prescribed to treat severe post-traumatic stress symptoms for veterans are no more effective than placebos and come with serious side effects, including weight gain and fatigue, researchers reported on Tuesday.


    The new study, published in The Journal of the American Medical Association, focused on one medication, Risperdal. But experts said that its results most likely extend to the entire class, including drugs like Seroquel, Geodon and Abilify.

    1. cwaltz

      I’m not sure why they’d be treating with antipsychotics to begin with. These guys need therapy to help deal with the things they saw and experienced, not a “magic” pill.

      The last thing someone without a chemical imbalance needs is to have a chemical introduced into their system to combat an imaginary psychosis.

  13. Bernard

    The Onion video was hilarious. too bad the MSM won’t play it. that’s exactly what they are pushing, of course. just too afraid to speak the truth.

    i love it. thanks for the laugh. after the last few days, it’s a wonderful use of bandwith.

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