Links 1/7/12

‘Tomato skin’ pill could cut risk of strokes, heart attacks and cancer Telegraph

Clean Tech Investments Plunged in 2012 OilPrice

Peer-to-Peer Hucksterism: An Open Letter to Tim Wu Tom Slee (Lambert)

Melbourne home sales hit 16-year lows MacroBusiness

Bushfires in Australia leave path of destruction Guardian :-(

China blazes trail for ‘clean’ nuclear power from thorium Ambrose Evans-Pritchard, Telegraph

Exclusive: Financial Times shops for China buyer South China Morning Post

City Setting, but Village Mentalities New York Times. May S:

It is more than patriarchy that is involved in India’s big rape case and epidemic of rapes. It is caste culture. Rape and ubse of women is a a part of caste discrimination and caste punishment. Then the people who face this society everyday come to cities when they find no more work in rural areas.

Delhi is known as rape capital I assume because it is a magnet for migrants from Northern India the most (this is the most casteist part of India).

Obama set to nominate Hagel for defense despite opposition Guardian

Catfood watch:

Cracks widen in US debt ceiling debate Financial Times. Pelosi starts 14th Amendment saber-rattling.

The Big Fail Paul Krugman, New York Times

US joins misguided pursuit of austerity Wolfgang Munchau, Financial Times. This is a really good piece, particularly in its discussion of austerity as a “multi-annual program”. The CBO should be indicted for malpractice for producing forecasts that show that budget cuts will produce an initial six month slump, then lead to a nice rebound due to confidence fairy effects. “Hockey stick” forecasts are a staple of dubious business forecasts, and are now being emulated in official circles.

Trillion Dollar Coin: Posts on Legality and Constitutionality New Economic Perspectives

FDR: Advice to Young Progressives Jesse

The Desperate, Outnumbered Neo-Confederacy Continues Its Fantasy of Rising Again Pam Spaulding, Firedoglake

Bullets Are Safety Net as 64 Mentally Ill Die at Hands of Police Bloomberg (May S). From the end of last year, still worth reading.

Banks at risk of ‘perpetual’ cycle of bankruptcy, warns Alix Telegraph (May S). Why should they care if the government won’t let them fail?

Banks win victory over new Basel liquidity rules Independent. This is one of multiple sightings of Basel III being watered down to homeopathic doses.

Deal in Foreclosure Case Is Imminent, Officials Say New York Times. Pathetic. The Fed wanted an additional $300 million and backed down.

OCC lowers JP Morgan Chase’s CRA Grade to Satisfactory Consumer Law & Policy Blog (Deontos)

Small business lending is profitable as long as lenders stay away from the really small businesses Sober Look. So guess where these small fry who on average are bad bets for lenders will go? To sucker equity investors, thanks to the JOBS Act.

How bad language can catch financial rogues Financial Times. What I cannot get over is how much dubious behavior is commemorated in e-mails.

Less Pay for New M.B.A.s Wall Street Journal. That bubble may be coming to an end.

Law-Firm Partners Face Layoffs Wall Street Journal. By contrast, this is cyclical rather than secular.

The state of macroeconomics: it all went wrong in 1958 John Quiggin

Antidote du jour:

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  1. fresno dan

    ‘Tomato skin’ pill could cut risk of strokes, heart attacks and cancer Telegraph

    Mike Knapton, associate medical director at the British Heart Foundation, said: “Although this small study showed that lycopene improved blood flow in people with heart disease, that’s a long way from demonstrating that taking lycopene could improve outcomes for people with heart disease.

    “We still say the best way to get the benefits of a Mediterranean diet is to eat plenty of fresh fruit and vegetables.”

    That’s why I eat plenty of tomatos….with ketchup
    Steak -with ketchup. Eggs – with ketchup. Chocolate ice cream – yup, with ketchup…

    Oh, and because if is fresno dan’s code to note the daily crimes of bankers:

    1. David Lentini

      Lycopene has been touted for years as a new “wonder nutraceutical”. I’d love that to be true–I love tomoatoes–but I don’t see the point in wasting time writing and reading about studies too small to prove the point. As with most of the research in the filed of diet and health, the studies are too small to be useful.

      1. CB

        I’m a tomatoholic, myself, but the hype meter is pegged on this one. The fountain of youth/eternal life fantasy grinds on. You don’t know how many times I’ve wished I had no scruples. There are many fortunes to be made.

      2. Paul Tioxon

        These small studies follow in the wake of the clinical evidence of thousands of years of direct human experience in choosing which foods to domesticate and incorporate widely into their diet, in this case the Mediterranean Diet.

        As more specifics are found to be reliable components, eg Lycopene from tomatoes, the preponderance of scientific evidence continues to corroborate what is conclusively established by thousands of years and millions of people who eat this way to their everlasting benefit. Our direct experience through culture wide trial and error pre dates the in vitro truth propositions of the scientific method.


    2. Dave of Maryland

      From the dawn of the printing press, up to about 1900 or so, there were many published “cookbooks” of proven medical remedies. Just about every ailment you could think of, and more. Among the authors/books include Nicholas Culpeper, Joseph Blagrave, Richard Saunders (he of “Poor Richard” fame), the Smiths Family Physician, Brother Aloysius, and, I presume, many others. These are all the ones I’ve run down so far.

      Medicine has traditionally been divided between city doctors, who had money and books and training, but who were riddled by fads and whose medicine was largely ineffective and useless,

      Versus country doctors, who grew up on the land and knew herbs and animals and tricks and techniques. Lots of hand-me-down, traditional cures, some of which will flatly amaze you. But they were rural, isolated and often poor and traditionally were sneered at by their city cousins. The movie, The Ciderhouse Rules, played this out.

      This came to a head a century ago. At the time Eclectic Medicine was all the rage. It was based on gonzo country-doctor herbalism, plus whatever else seemed to work. It was cheap, it was effective, it was wildly popular and universally hated by city doctors.

      Who struck back with the Flexner report. I don’t normally give Wiki as a source, but if you want the origins of modern medicine, such as it is, read this carefully:

      Flexner not only stamped out herbalism, he eliminated medicine as a whole. All those books I mentioned were thrown away wholesale. Or, to be precise, were locked up in medical libraries, where no one has seen them since. Enterprising reprint houses and various used book vendors have them for sale. Having reprinted one or two of them myself, I can report surviving copies are nearly black from constant use, which is testimony you can’t buy with controlled studies.

      You wanna strengthen your heart? Do this: Five minutes after sunrise on Sunday morning, clip a marigold blossom from a living plant. Combine that with sprigs of lavender and sage, taken directly from living plants at the same time, sunrise on Sunday. (Nurseries at Home Depot and Lowes have all three.) Wrap them up in a small piece of cloth (linen is suggested, I in fact use a paper towel) and wear it around your neck, 24/7. This is one of Blagrave’s more trivial cures, and it works wonders.

      Here’s another. First thing every morning, get up half an hour early and run a drippy wet (cold) hand towel over your entire body. Including the soles of your feet. Takes less than a minute. Do not dry. Wrap yourself in a terrycloth robe, jump back into bed and stay there (watch TV) for half an hour. I set the electric blanket to high. Do that every day for 2-3 weeks. You will be surprised. This from Aloysius.

      In one of the Star Trek movies, McCoy accused 20th century doctors of being “medieval.” He was wrong. Modern medicine is worse than medieval. Here it is directly: The worse medicine gets, the more expensive it will be. Direct relationship. Medicine that cures is quick and cheap. Anything else is quackery.

      1. craazyman

        I liked the one where they went back in time and beamed down on earth during the 1600s. Some dude dressed in a Walter Raleigh outfit heard Kirk call McCoy “Bones” and decided he was a witch. I think they put him in jail, until Scotty beamed him up.

        Edgar Casey’s cures are so weird they defy any sense, but they apparently worked.

        My GP is no-nonsense med school by-the-book on the surface, but he’s a thoughtful guy underneath. Occasionally I’ve talked to him about alternative healing ideas and modalities. He’s not a skeptic at all. He told me once as a grad student resident he’d go to the pysch ward when a local drunk with mental problems came in for emergency treatment. The guy would entertain staff by making pictures appear on Polaroid film with his mind. This is a true story.

        Doctors have such malpractice risk they’re constrained to what they can say. He acknowledged the reality that bio-energetic and related modalities can work wonders, but there is little systematic evidence of how they work and they don’t always work. Neither do drugs, of course.

        Some of this stuff will be 21st and 22nd century science.

        I think the halos and raised palms in ancient paintings of religious figures may have suggested possession of such healing energies, possession of energies enabling “laying on of hands” cure so to speak.

        1. Aquifer

          Folks with mental problems ….

          It struck me doing my psych rotation in med school that there was a very fine line between who was in and who was out of a mental ward – and that line was probably a cultural one … In a different time/place/society the “ins” and “outs” would be switching places ….

          1. craazyman

            Indeed. he might have been a shaman or a healer himself in another culture. Or even a “psychopomp”. It’s a weird word. it sounds like something you might see at drag queen Halloween parade, but if somebody googles it they might surprised. Our culture has nothing like this. You just go poof.

    3. run75441


      And ketchup is a source of sodium (two tbls) which is not good for the heart. Better to eat cooked or raw tomatoes than ketchup unless you can find the no sodium version.

      1. Antifa

        Hunt’s Tomato Paste is the only brand I’ve found that has no added salt, just the 20 mg of natural sodium that comes with the tomato.

      2. Invient

        You can increase the lycopene by cooking the tomatoes for at least half an hour on medium to high heat…if your lazy like I am just incorporate
        E tomatoe paste in your recipes

        1. Lidia


          In Italy, I bought some ketchup to make BBQ sauce, and the “McDonald’s”-brand ketchup on the shelves there was full of saccharin, if you can believe that. Truly disgusting.

          My husband’s a big ketchup fan, so I make it from scratch. Takes a lot of tomatoes and patience (a slow-cooker is also helpful) but it tastes phenomenal. I use the recipe from Fannie Farmer’s CB.

          My version doesn’t use the smoked paprika found here:

  2. ArkansasAngie

    Re — Small business lending is profitable as long as lenders stay away from the really small businesses

    Since it starts in 1998 … it also includes the dot com bubble. Distorted on the front end and back.

    1. Yves Smith Post author

      Dot coms were not funded by debt. Graduating MBAs with a 5 page business plan could get $5 million from VCs. And that is not an exaggeration. $5 million was a pretty standard number. And that was expected to fund 6 months of operations, if you needed more, you came back to the VCs and got more if they liked your progress.

  3. Yonatan

    “Obama set to nominate Hagel for defense despite opposition”

    Nice deceptive headline by the Guardian. Opposition from whom? It is clear that opposition comes from supporters of a foreign country. Why is it an “incredibly controversial choice” to choose someone for US Sec Defense who actually believes he should act in the US interests? Hagel has received wide support, even from Jewish groups.

    Geez, it’s about time the US appointed people who put its interests first.

    1. Jim Haygood

      Unlike many European and Asian nations, Israel has no formal mutual defense treaty with the United States. Why would its lobby focus so intently on the nominee for defense secretary?

      Former Rep. Paul Findlay wrote in They Dare To Speak Out:

      The [administration] official recalled one day when he received a list of military equipment that Israel wanted to purchase. Noting that “the Pentagon is Israel’s ‘stop and shop,'” he took it for granted that the Israelis had obtained clearances. So he followed usual procedure by circulating it to various Pentagon offices for routine review and evaluation.

      One office instantly returned the list to me with a note: ‘One of these items is so highly classified you have no right to know that it even exists.’ I was instructed to destroy all copies of the request and all references to the particular code numbers.

      I didn’t know what it was. It was some kind of electronic jamming equipment, top secret. Somehow the Israelis knew about it and acquired its precise specifications, cost, and top secret code number. This meant they had penetrated our research and development labs, our most sensitive facilities.

      Of course, this quote is from 1985. But as the subsequent Jonathan Pollard and Lawrence Franklin spying cases showed, nothing really changes.

      The Lobby fears that Hagel as defense secretary would out dozens of Pollards in the heavily penetrated U.S. Defense Department.

      1. Bill the Psychologist

        Your last line clinches my suspicion that the oppositon to Hagel is because he is too principled.

        I sent him a donation when he was making noises about running for Pres in ’08 (I’m a lifelong Dem, god help me), but he decided not to. I would have voted for him.

        He is being portrayed as antisemitic and homophobic, though I’m not familiar enough with his record to evaluate those labels.

    2. Paul Tioxon

      Chuck Hagel is no ivory tower fabrication, but socialized in the everyday life that most Americans can identify with. He is the mirror image of Joe Lieberman, a dem who is republican in everything but name. This is the kind of steel cage match of political will that makes the dumbed down news reporters drool in delight, as they can gossip in public about who was chosen and who will smear the presidents choice and by proxy, the president himself. But Hagel has his own reputation that many can sense because he has spoken up more freely than the impulse controlled mannequins we are served up on the TV. These small moments of leakage are so noticeable that entire political careers can ride a wave of recognizable human characteristics that is at least something other than the lies and bullshit we are force fed.

      Today, the daily beast actually had something usefull to say for me at least. In a long piece, and not just a puff piece about Hagel, but a history of the republican party and its never ending promotion of one war after another,and of course, now Iran. We can only hope, because it is difficult to have measurable influence, that Iran is glossed over as an object of our unmatched war machinery. We may squeeze them every other which way until they explode like a crushed melon, but holding out AGAINST the invasion with the 100,000s of troops it will take to exterminate nuclear weapons in Iran is vital to stop our country from committing suicide. There is no nation that we can not pulverize in 48 to 72 hours, but the fallout will kill us. Iran is a war that must never happen under any circumstances. And since the Iranians are incapable of massing troops and a fleet to hurt us directly, there are no circumstances to attack.

      Chuck Hagel seems to be flag that Obama is waving to let the world know that he is not a peacenik, it is the flag to let them know that we no longer use military invasion as a unilateral and primary policy to obtain our objectives. Making it the last and final possibility after all else is exhausted is the message. That does not mean peace is the way, it just means that the massive power of American military might is going on hiatus. It is a little more of the certainty that the business community wants and needs to plan a decade of so into future without a war disrupting deal making with other nations who will retaliate in commercial embargoes, and other diplomatic and profit killing means.

      It isn’t just the uncertainty over domestic tax policies that throws a monkey wrench into business growth, but the global blowback of war that damages the ability for multinational corporations to roam freely without the animus of nations who would rather not make blood money and would rather not be on the receiving end of a war party that decides, further down the road, that a new menace to America is rearing its ugly head. If America is seen as little more than a heavily armed menace with no impulse control against the waging of war, we are not a nation among nations but a giant extortion racket that can turn against anybody, for any reason at anytime. That is too much uncertainty for many in the American business community to bear. It is also too much for the world to bear. There comes a time when war has to take a break and that time has come right now.

      1. petridish

        “If America is seen as little more than a heavily armed menace with no impulse control against the waging of war, we are not a nation among nations but a giant extortion racket that can turn against anybody, for any reason at anytime.”


        Also, it is not just the republican party that promotes perpetual war. We currently have a democrat in the White House who, despite our high expectations, would no more give peace a chance then the man in the moon.

        As for “the ability for multinational corporations to roam freely,”–what’s THAT done for the USA lately?

        1. Eureka Springs

          Dipping my foot into the gossip section for just one moment. Why can’t Obama appoint Dems? I guess it’s harder out there to find Hillary Obama Lieberman type neonuts in the Dem party than I may think.

          Why Chuck Hagel is irrelevant… worked for me.

          I would also suggest, Paul, that there is no credible evidence Iran has a nuclear weapon. So it doesn’t matter how many bombs or troops we utilize… we probably can’t destroy something which doesn’t exist.

          1. Paul Tioxon

            I agree, there is no bomb, not now, not soon, maybe, not ever. That does not stop the war party. They want wars, not evidence. You sound like the kind decent person that most people are, throughout the entire world, even in Iran, and Russia and Germany and Israel. Unfortunately, I am not commenting on the decency of humanity, but its worst animal nature in acting out violent bloodbaths. We are in this world and not some other that exists as vague notions of ideals and morals. War is a part of this world, and needs to be pushed back and chained down and avoided.

            I do not have the power to stop the people, who are in a dominant position in our society, from starting a war and lining up all of the support they can, using the awesome power of the federal government to push aside all critics and destroy even those tasked to protect us from real dangers in order to pursue their policies of war, war and more war, in every dimension by full scale military invasion, aerial bombardment and air craft carrier battle group sorties. Valerie Plame should be enough of an object lesson for those who wonder exactly what it is I am getting at when I talk of war as the unilateral and primary instrument of state policy. We seem to be retreating from the New American Century policy of military domination, the correlate to the Washington Consensus on economic policies on the domestic front.

        2. Gerard Pierce

          The one thing Hagel has going for him (that no Democrat can match) is his ability to tell the neo-cons to STFU.

          They started out to attack Hagel, but the criticism is muted. Senate Republicans are not going to permit the kind of tactics that the nut-jobs have used so successfully against Democrats.

          And as a wanna-be Republican, Obama is perfectly happy with Hagel’s political positions.

      2. Roland

        Funny that Hagel’s appointment looks like a scaledown of ambitions.

        But this comes right after news of a very audacious, very forward, deployment of US “advisors” in 35 more countries (i.e. over almost the entire CONTINENT of Africa). To put it in perspective, that’s much bigger than the US presence in Latin America during any period of the Cold War.

        Moreover, a significant overt conventional Western Bloc military intervention is soon to begin in Mali. Since the enemy will be the Touareg, a Saharan nation spread among many countries, that means the war must also inevitably involve Mauretania, Algeria, Niger, Chad, and Libya. Indeed the latest renewal of the international Touareg rebellion came after the fall of Qaddafi, who had brokered the last peace deal between the Touareg and the Niger gov’t. The demise of Qaddafi prompted Niger and other Sahelian governments to renege on promises made to the Touareg, since they figured that now the Touareg had lost their backing. The Touareg exiles in Libya were forced to leave after the revolution there (in fairness, some of them had fought on the loyalist side). Al-Qaeda and its financial backers in Arabia then saw an opportunity to broaden their support among the Touareg, by promising to make up some of the financial aid the Touareg had lost since Qaddafi’s fall.

        Don’t you love an open market where everyone pursues “opportunities”? The Sahelian gov’ts saw an opportunity in the Touaregs’ loss of Qaddafi’s support. The Al-Qaeda saw an opportunity in the Touaregs’ importunity. And the Western Bloc is happy to capitalize on this splendid intersection of exciting opportunities, in order to restore their geopolitical influence in the region, which had waned after WWII–and thus stick it to the Chinese, who had been negotiating to buy Nigerien uranium (that fabulous yellowcake!), Malian phosphates, and petroleum from Chad.

        Out of all this, we’re supposed to become all impressed with the Emperor’s latest pet, because this SecDef is better housetrained?

        Or perhaps we should be wonkishly delighted that Himself can spontaneously mint a trillion-dollar coin, to offer in exchange for all the bombs he is going to drop on the most impoverished people to be found anywhere on this planet?

        Moral of the story: during the Cold War we needed to learn “Kremlinology,” to try to discern what was going in the capital of the Eastern Bloc. Today we need to master the art of “Beltwayology” to try to understand what is going on in the capital of the Western Bloc.

    3. LeonovaBalletRusse

      Y, Bill Abrams was rabid this evening on NPR news against the “anti-semitic” Chuck Hagel — and he backed it up with hostile third-party accusations from the “Jewish Community of Nebraska.”

      Can Chuck sue for slander, defamation of character, libel? Does the Abrams Military Dynasty have “conflict of interest” in every Pre-Emptive War? I don’t have to tell you Bill Kristol’s position on Hagel, who may be too American.

      We must check for dual passports (Which Homeland is your Homeland?) among the hurlers of vitriol against Chuck Hagel. Also, the link below from Alternet may be related to the smear campaign that’s bound to pick up fire and thunder in short order. Now they want an “anit-Christian” RELIGIOUS TEST for MCs. The Destroyers of Worlds march on, gutting our Constitution, and DICTATING.

  4. dearieme

    Macroeconomics went wrong in ’58? Did it ever make sense, I wonder? Microeconomics makes sense but it is an analytical study. Macroeconomics deals with aggregates that make little sense to me.

    1. David Lentini

      I don’t understand why Quiggin and other economists ignore the strong influence of politics on the choices of economic policy. The fact is that Friedman was not only an economic theorist, he was a political philosopher as well. Friedman’s championing of laissez-faire capitalism under the banner of his “libertarian” politics was music to the ears of the reactionaries FDR described in his 1939 address reprinted by Jesse among today’s links. I can’t believe for a moment that Friedman’s work as an academic economist was not influenced by his libertarian ideas, and the strong support they received from the very wealthy.

      The sad fact is that much of the support for Friedman came from people who cared nothing about economics, but wanted simply to return society to the Gilded Age. These folks were so terrified of communism and so hated socialism that they had no qualms of ginning up phony “Nobel prizes” in economics, running leftist economists out of academia and staffing econmics departments and business schools with “friendly” econmoists, making sure the most inane research supporting laissez-faire theory was trumpeted throughout the academic literature and the lay press. As Steve Keen and other on this ‘blog have noted, the most seminal papers in macroeconomics, written by the most celebrated economists, contain the such basic errors in mathematics in logic that the field can only be considered a sham.

      In short, to answer the question why macroeconomics is such as cesspool of intellectual incompetence we have to start by understanding that the field is far too political to be viewed solely as an academic discipline. To borrow from Clemenceau, macroeconomics is too important to be left to economists. Becuase at its heart macroeconomics deals with issues central to politics and even society itself, it’s too vulnerable to intellectual corruption by outside forces to be considered just another branch of economics. When we accept that economists can be corrupted, both directly and indirectly, then we can understand why macro is such a failure.

      1. from Mexico

        It’s the irony of ironies that a discipline that asserts that economics can be depoliticized has become so completely and thoroughly politicized.

        1. from Mexico

          Or to put it in biblical terms, a great many economists are “wolves in sheep’s clothing.”

          1. ex-PFC Chuck

            And, to paraphrase Churchill’s remark about Clement Atlee, quite a few economists are sheep in sheep’s clothing.

          2. Glenn Condell

            I can think of a prominent politician who is more ‘sheep in wolf’s clothing’

            David, I think it is a stretch to call Friedman a ‘political philosopher’. He is no more a sage than Greenspan, who worked the same territory from another angle, with the same goals, for the same people.

            ‘The sad fact is that much of the support for Friedman came from people who cared nothing about economics, but wanted simply to return society to the Gilded Age’

            He did too, so did (and does) the Maestro. So did Ayn Rand.

            You can call it ‘political’ I guess, but in the end it just lust for power and wealth.

      2. diptherio

        Here’s a little-known tidbit about Milton Friedman:

        While doing undergrad research I came across a paper he had written in some journal or another wherein he purports to prove that the marginal utility of income increases with greater wealth. His “proof” for this facially ridiculous and utterly counter-intuitive statement was this:

        The rich are willing to risk large amounts of money in order to marginally increase their income. The poor, conversely, are not willing to risk much to gain a little extra income. Therefore, the rich must gain more utility from an additional dollar of income than the poor do, since they are willing to risk more in order to obtain it. The marginal utility of income therefore, unlike every other thing known to man and economists, increases. QED

        There was no indication that he was joking.

        1. David Lentini

          And from what I’ve read over the years, there’s plenty more where that came from. And yet all critcisms of Friedman are in hushed tones. Economists are just cowards.

          1. Antifa

            There’s actually a kernel of truth in Milton’s mad little statement, and we saw it demonstrated during the years leading up to the Crash in 2007-2008.

            When a rich person lays a big pile of money on Wall Street’s finance people during a bubble economy, there are all sorts of people waiting there to receive it and use it to make money for themselves and others and even the original investor. The machine kicks into action.

            Bankers take bigger risks with that capital in the vault, traders make crazy derivative bets in various directions backed by those funds, Ponzi operators will feed back funds straight from later investors, hedge funds work both sides of the street, banks buy, bundle, insure and sell multiple tranches of fraudulent mortgages that real estate brokers sold to greed-stricken coma patients — everybody makes some money with that money and has no problem letting the original rich investor have some profits, too.

            Even poor people, in a bubble, wish they could put some money into the upward spiral of a bubble economy. It’s a sure thing, Mac. Better even than the race track.

            Of course, after the bubble economy pops, investors pull their money and profits out, sit on their cash and take few risks. If they risk money now, it is more likely to simply be absconded with: (“Mr. Worthington — dude — did you even READ our Prospectus? This was a gold mine located IN the La Brea Tar Pits!”)

            Milton was describing the Happy Days of an up-spiralling bubble economy when he wrote this.

          2. diptherio

            The rich are willing to gamble more for small gains because even large losses will not affect their standard of living. The poor, meanwhile, mostly look to protect what little they have, since any size loss will result in a lowered standard of living (unless they don’t understand math very well, in which case they buy lotto tickets and/or play keno).

            There is no truth whatsoever in Friedman’s conclusions. The reason the rich are willing to gamble vast sums for small gains is not because they value money more than the poor, but because they don’t value it at all. It’s all just a game to them, with little in the way of real, physical consequences.

            Friedman stated directly that his purpose was to argue against the general assumption that MUY (marginal utility of income) is greater for the poor than for the rich. Few people in economics even discuss MUY much, since it’s too “normative” and difficult to measure, but most assume that MUY is basically downward sloping, just like every other MU curve. By claiming to show that MUY is actually upward sloping, Friedman was implicitly making an argument against any policies which would tend to re-distribute wealth downwards. Instead, his implicit argument is that wealth should, if anything, be re-distributed up!

            He was a piece of shit, plain and simple. The fact that he was a clever piece of shit, and was able to snow-job a couple generations of academic nincompoops does nothing to redeem him in my eyes.

          3. Glenn Condell

            The rich risk more because they can. They have the extra to risk, and the poor don’t so they, uh, don’t. It’s not like there is a choice.

            Of course this generalises and there are plenty of poor who as a percentage risk far more each week on horses or lotteries or one armed bandits.

            It’s called gambling, and for the rich yes it is a game but for the poor something rather more hopeful, or desperate.

            One other factor might be that whereas when the poor lose they lose, period (to the rich, natch) – when the rich lose, the poor, via their political representatives, bail them out!

            As Matt Taibbi might say ‘is this a great country or what?!’

      3. LeonovaBalletRusse

        DL, don’t forget that the “economic mystic” Leo Strauss prepared the soil for Milton Friedman’s poisonous flower of Shock Doctrine Rentier Capitalism, at the University of Standard Oil. Kissinger/Friedman executed their religious “agenda” in Chile, and the rest is “Hit Man” History.

        1. Glenn Condell

          Ha! I forgot about him, Another ‘political philosopher’.

          Who was it that came up with that motto ‘by way of deception thou shalt do war’? Yet another semi-mystical seer no doubt.

    1. Alfreda Frances B.

      Reward for a job well done! Ask Judge Colleen McMahon, who actually knows a thing or two about binding international law. ACLU busybodies wanted to know about the government’s double secret extrajudicial-killing criteria, especially the superWNINTEL Eenie Meenie Mynie Mo Annex.

      But if Judge Colleen lets the cat out of the bag, she wins a deluxe spa getaway in the plush Abraham Bolden suite of Saint Elizabeth’s, and she comes out with holes in her head and a name on the tip of her flycatcher tongue. Tough spot, huh?

      So Judge Colleen tells herself, Sure, public legal analysis justifies Freedom-of-Information release of US death squad procedures… But Holder’s speech wasn’t public legal analysis, it was pathetic garbled bullshit! Or rather, in the careful language of a judge with a horse head in her bed,

      (U) “No lawyer worth his salt would equate Mr. Holder’s statements with the sort of robust analysis one finds in a properly constructed opinion addressed by a client to a lawyer.”

      (TS/SCI) “So, See? The government didn’t reveal its secret law, all they did was babble nonsense! I mean, you wouldn’t think NCS could further humiliate servile dimbulb Eric Holder, but wow, they made him parrot stuff that even he could see was crap! So it’s not like they gave anything away, Right? Everything’s all still secret! So Mister Brennan, can I have my dog back? You have to ask Mister Bennett? OK, please I miss my little Foofie.”

      1. Brindle

        La Times won’t use word “torture” to describe torture.

        Torture is something that obviously cannot happen if an American govt official is doing it, it becomes a “brutal interrogation technique” or perhaps “those policies” (Brennan).

        —“Shortly after Obama was first elected, Brennan asked the president to take him out of contention for the CIA position.
        At the time, liberal critics said that Brennan, who had served in a senior intelligence position under President George W. Bush, was too closely tied to that administration’s use of brutal interrogation techniques that critics said were torture. Brennan strongly denied that he had ever supported those policies.”—,0,4544987.story

        1. Brindle

          Glenn Greenwald weighs in….”Brennan is merely a symptom of Obama’s own extremism”…

          —“Although I actively opposed Brennan’s CIA nomination in 2008, I can’t quite muster the energy or commitment to do so now.
          Indeed, the very idea that someone should be disqualified from service in the Obama administration because of involvement in and support for extremist Bush terrorism polices seems quaint and obsolete, given the great continuity between Bush and Obama on these issues.

          Whereas in 2008 it seemed uncertain in which direction Obama would go, making it important who wielded influence, that issue is now settled: Brennan is merely a symptom of Obama’s own extremism in these areas, not a cause. This continuity will continue with or without Brennan because they are, rather obviously, Obama’s preferred policies.”—

      2. Alfie Frannie Bavootsky

        Extreme, Ha Ha. I drew eyes and a mouth on a sock and I shake it around and look, it’s extreme like Obama is extreme, I got it on my extremities, that’s how extreme it is. I make a Senor Wences fist with lipstick and twist my thumb like so and look how very extreme it is.

        Obama is the lipstick face on Brennan’s hand, torture S’aright, murder, S’aright, aggression, S’aright. The interesting question is, Who steps in next to wave Obama around?

        1. Antifa

          President Geithner is leaving, so whomever Wall Street appoints will run our Empire for its owners.

  5. David Lentini

    Munchau: “There is a deeper reason why we are all in this mess. It has become more difficult for political systems to defend the collective interest . . . it can . . . occur at the level of sovereign nation states when society lacks broad consensus over economic policy.”

    A really craven conclusion to an otherwise good article. I continue to be amazed at how the economics and business press refuses to either admit or understand that laissez-faire capitalism requires the abandonment of any sense of a “collective good”. Unfettered capitalism is based on the idea that (enlightened) self-interest will of its own operation create ex nihilo a stable and prosperous society. The only problem with that proposition is that it’s simply not true. First, as we all know, few if any individuials are sufficiently “enlightened” to satisfy the essential proposition of Adam Smith’s utopia: Most follow Ayn Rand’s conflation of selfishness with self-interest. Second, many problems require collective action and management as even Smith himself recognized.

    The real problem in the U.S. and Europe is that austerity benefits the very rich and the banks, both of whom obtained their wealth through corruption of our public institutions. Having great wealth, they can use their money to further the courruption of public institutions to suit their selfishness. In fact, if we look at society in capitalist terms, then every poilitician should be selling their votes in order to maximize their own wealth.

    And so we have the essential–but ignored–absurdity of a capitalist society. But it’s hard to see how we’ll get any change if our press won’t recognize the 800-pound gorilla in the room.

    1. David Lentini

      Further to my comment above, Munchau should read FDR’s speech reprited by Jesse today. FDR understood that basic coupling of wealth and reactionary politics; he also understood that the key issue was “democracy”, a word that seems to have all but disappeared from our current discourse.

    2. from Mexico

      David Lentini said:

      Unfettered capitalism is based on the idea that (enlightened) self-interest will of its own operation create ex nihilo a stable and prosperous society. The only problem with that proposition is that it’s simply not true.

      Yep. Those secular faries, just like the sky fairies they ostensibly replaced, are alive and well in Modernity.

    1. MyLessThanPrimeBeef

      There’s assaying in the Middle Kingdom: No bamboo curtain can keep a hungry panda in.

      Thus it was no surprise one escape from the Great Helmsman before many humans did.

  6. Lena

    Re: MBA pay. IMHO, the MBA’s that are churned out today from all these schools are in no way trained or educated to the same level as they were as recently as the mid 90’s. I don’t see any critical thinking or creative problem solving skills in newly released MBA’s where I work.

    I think an MBA program has become a factory, similar to 4 year undergrad in this country, with an objective of just obtaining and graduating the most students possible. I think this is the case even for some of the top tier schools, which bring on these “rich kids” with elite backgrounds who have no concept of reality. Most of these graduates don’t deserve a cushy job – they don’t contribute any value to an organization other than spewing hot air.

    1. Montanamaven

      Nobody really needs a MBA or BA degree to sell people stuff especially junk. You need to be good at flim flam. Rockefeller U. was established to sell free market flim flam all over the world. The MBA makes it look like it actually is scientific. John Perkins “Confessions of an Economic Hit Man” chronicles how he used a bunch of mumbo jumbo stats to sell governments on projects they didn’t need so their elites could loot their economies. If you actually want to invent and manufacture things you don’t need a degree either. Apprenticeships are how you learn things. How did the Romans build those aqueducts?

      I feel lucky to have gone to school in the days of cheap tuition and strong emphasis on dialectic thinking. I loved the discovery of new ideas and the challenging of my beliefs. But then my Dad always made me think for myself and he also loved history, so maybe I didn’t even need to go to college. But I was going to be a professor, so at the time you needed a degree to do that. When it came time to apply for a job, I realized I knew little about making a living in theater and film and so I ran off to NYC to get some practical experience. Then ended up in the business end (agenting) after being in the creative end. Nobody I worked with had a business degree until they transferred me to LA and there was one guy that had a business degree but decided he didn’t know anything about acting so he would sit in casting waiting rooms talking to actors to get a feel for what they went through. Super smart.
      I have to admit I was influenced to re look at education by reading John Taylor Gatto’s “The Underground History of Education of American Education”.
      Like reading Stephen Zarlenga’s “The Lost Science of Money” and David Graeber’s “Debt: The First 5000 Years”, history has much to teach us. People sitting around in offices trying to figure out how to game the system does not interest me so much.

    2. diptherio

      I’m pretty sure the ugly specter of grade inflation first appeared at the Ivy League schools. I think the first concerns were expressed by a professor at Harvard, if I remember correctly. I mean, come on, GWB managed to graduate from Yale (Yale, right?) with a C average.

      1. Maximilien

        Yeah, but Bush got an A in creative writing. His prof praised his “highly original syntax”, and singled out Bush’s surrealistic short story “You’re Working Hard To Put Food On Your Family” as exemplary.

        The prof also favorably mentioned Bush’s poem “Families Is Where Our Nation Finds Hope, Where Wings Take Dream”.

        Said the prof: “When George showed up in my class, I honestly didn’t think he’d amount to much. But he surprised me. Apparently, I misunderestimated him….damn, there I go, talking like that idiot again. I mean to say, I underestimated him.”

    3. LeonovaBalletRusse

      But Lena, elite kids need lots of money beyond the trust fund, and mums & daddums want somebody else to pay for their standard of living. You need that elite diploma to get into the best elite criminal enterprise going.

  7. where's that silver bullet??

    Have any fellow readers read up on thorium, thoroughly? What do you think?

    1. Zog

      All I know about Thorium is that its a great reason to buy an SUV and block any attempts to combat climate change.

      1. Mark P.

        The thorium molten salt reactor has some of the most fascinating, poignant history of the 20th century attached to it, though it’s little known. A few facts –

        [1] Alvin Weinberg, the physicist who, with Eugene Wigner, held most of the patents on the boiling water reactor design — which is what ninety percent of the world’s current reactors are — never thought his own BWRs were the best design for civilian power.

        Furthermore, Weinberg ran Oak Ridge National Lab from 1945 till 1973, and 25 percent of the Lab’s work during the 1950s was the Air Force’s NEPA (Nuclear Energy Propulsion for Aircraft) project. When NEPA was killed, Weinberg – who’d always though the idea of nuclear-powered aircraft was “daft” – moved it over to being a civil-power project.

        Oak Ridge ran various versions of the molten salt reactor for twelve years on and off. It’s a perfectly viable technology; it just doesn’t produce bomb-building material under ordinary circumstances. (It can be done, but I’m not going to talk about it here.)

        [2] Weinberg was an early prophet of climate change, so the story gets more poignant at this point.

        Weinberg was fired by the Nixon Administration as the lab’s director in 1973 because he continued to advocate increased nuclear safety and the molten salt thorium reactor, and opposed developing the fast-breeder reactor that the Nixon administration wanted.

        After being fired by Nixon, therefore, the man went off and co-authored a paper in 1976 warning of a scenario whereby, unless civil nuclear power was rationalized and the connection with military bomb-building broken, the public could turn against nuclear power and no more plants would be built in the U.S. after 1985. If so, Weinberg and company warned, fossil fuels would be burned, till in 2010 global warming would become sufficiently problematic that people would have to get interested in nuclear power again.

        And so it has turned out. In the 1976 paper, Weinberg and co. even nail the price of oil in 2000. Here’s the paper, “Economic & Environmental Implications of a U.S. Nuclear Moratorium, 1985-2010” – A. Weinberg et al”–

        [3] The technology originated, as I say, for the United States Air Force NEPA (Nuclear Energy for the Propulsion of Aircraft) project. As early as the mid-1950s, they’d got reactors working on the ground and were flying a testbed model across the country in this adapted B-50 (conventionally propelled, but note the radiation sign on the tail) –,_1955_-_DF-SC-83-09332.jpeg

        Why nuclear aircraft?

        Because Curtis LeMay wanted a supersonic bomber for SAC that could cruise round the world in the stratosphere for months without landing. Yet there’s no way any reactor could easily provide enough thrust to get an aircraft with the necessary tonnage in shielding off the ground, let alone up to supersonic speeds. Told this by the colonel running the program, Bernard Schriever, LeMay went into “kill the messenger” mode and tried to destroy Schriever’s career.

        Schriever, a far smarter man than LeMay, went off and initiated the U.S. IBCM program in 1955-56, in retaliation, and this ended up by sidelining LeMay and SAC by 1960. Schriever’s ICBMs effectively killed the nuclear aircraft project, therefore, though elements of it straggled on till they were finally shut down by Kennedy and Macnamara in 1961.

        [4] Molten salt reactors had already been built and operated, however, and were perfectly feasible. Hyman Rickover’s first test reactor on land at Shippingport, Pennsylvania, operated experimentally as one. So did the second U.S. nuclear submarine, the USS SEAWOLF (though not on the thorium cycle).

        This latter application was, in fact, incredibly dubious: the SEAWOLF’S reactors overheated on its maiden voyage in 1957 and if the molten sodium had leaked and then come into contact with water, the whole sub could have gone up instantly. Lieutenant James Earl “Jimmy” Carter was to have been the SEAWOLF’s Engineering Officer, but resigned his commission upon the death of his father.

        So Rickover concentrated the Navy’s nuclear efforts on the BWR (boiling water reactor) and shut down naval molten salt reactor research. Between Rickover’s dominance of nuclear energy development and the AEC (Atomic Energy Commission) being essentially a civil subsidiary of the Pentagon at that time – a subsidiary charged with producing enough plutonium for U.S. nuclear weapons – boiling water reactors were what the world got.

        [5]In Pritchard-Evans’s piece, he garbles the technology, confusing a “standard” molten salt thorium reactor such as Alvin Weinberg presided over at Oak Ridge with an experimental particle-accelerator driven reactor – which may be perfectly possible, but isn’t what the LFTR is.

    2. LucyLulu

      If they work out the last of the kinks in the process, thorium is leaps and bounds a major improvement in nuclear energy. First, it offers a much better safety profile. If the reactor becomes overcritical and gets too hot, it automatically shuts down, without the need for human intervention. The physics of the reaction itself causes the shutdown. A meltdown such as happened at Fukushima, Chernobyl, or Three Mile Island is impossible. Second, the problem of waste byproducts and their storage is eliminated for the most part. Thorium fuel is recycled and reused multiple times. Third, thorium is available naturally in abundant quantities. Fourth, there is no significant nuclear proliferation concerns. The lack of plutonium extractable to build weapons was a key reason that the US abandoned thorium technology back in the 1960’s in favor of uranium. Finally, like all nuclear energy, thorium is a green energy in that no greenhouse gases are emitted.

      1. Antifa

        Two of thorium’s best features are that it will “eat up” all the uranium and plutonium wastes created by our nuclear weapons and “conventional” reactors. Those reactors created many deadly isotopes that should not be, not here on our planet.

        Second, it is easily distributable, eliminating the expense and energy waste of our electrical grid. It is feasible to imagine small, self-contained thorium reactors providing power to individual homes, though it is more likely they will be most efficiently built to power entire neighborhoods, small towns, farms, factories or skyscrapers.

        My fondest hope is that thorium reactors will be used to power tens of thousands of towers that will extract CO2 directly from the atmosphere, directly reducing our emissions overload.

        Like goldfish, we humans are swimming in our own toilet. It behooves an intelligent species to clean up our crap, rather than die in it while wondering ‘how could we do this to ourselves?’

        1. JohnL

          Still produces some long half life transuranic elements, and some of its fission products are strong gamma emitters and need remote handling. Not a silver bullet.

          1. Thor's Hammer

            I guess if you consider 300 years “long life” compared to 10,000 years for plutonium. And those high gamma emitters have half lives measured in days, not decades.

            But don’t worry, there is no chance that the world will completely rebuild its energy infrastructure around LFTR reactors before burning up enough of the remaining coal and oil to tip the world into a climate regime unlike any humans have experienced in their brief history as a species.

    3. davidgmills

      Best video on Thorium Salt Reactors, and in particular on Kirk Sorensen, the NASA engineer who is the person most responsible for bringing the idea back.

      I have watched the video at least a half dozen times and am totally engrossed every time. Pissed as well. To think what we could have had. Thorium flouride salt reactors whould have meant no Chernoble, no three mile island and no Fukishima. And they are the only feasible solution to large stockpiles of nuclear waste because they can burn up these stockpiles as part of the kick starting of the thorium process. Thorium produces less than one percent of the waste of present nuclear power with no threat of meltdown and much of that one percent waste is very useful. It is also very difficult to make atomic weapons with it.

      1. Thor's Hammer

        Don’t worry, David;

        The Chinese have budgeted 350 million dollars for the immediate research and development of liquid fluoride thorium reactors, with a staff of 140 scientists.

        When Jiang Mianheng, son of the former premier, visited the Oakridge National Laboratory he didn’t ask to see what the US scientists were doing with solar panels or windmill technology. Instead he was interested in the old documents from the four year operation of a prototype LFTR reactor that had been abandoned by the Americans because it didn’t produce plutonium for weapons of mass destruction. Hardly anybody still working at Oak Ridge even remembered the project— after all where is the possibility for career advancement in a militarized society if you study a technology that has been abandoned as of no use to the military?

        Using thorium as a reactor fuel in the US makes no sense to the players in the energy sector. How could GE continue to make money from 50 year old reactors if they didn’t have a monopoly on the manufacture of solid fuel rods? And where is the profit potential in building decentralized and inexpensive plants instead of 10 billion dollar boondoggles?
        And what if we could utilize our own rare earth resources to build electric car batteries that are now locked away because there is too much thorium in the deposits?

        So don’t worry. In a few years we will be able to buy assembly line built LFTR’s from China, assuming that we can find enough gold to pay the asking price. Because you can be damn sure that the US dollar will not be the dominant reserve currency for international trade, and the US can’t simply buy all the energy it needs by printing more dollars like it does now.

  8. joebhed

    Krugman’s piece has a title of The Big Fail.
    Read it and compare to this:

    This was the nation’s first private commercial bank. At that time, the nation’s constitution was the Articles of Confederation. Article 9 of the Articles gave Congress the power to “emit bills of credit” — to create debt free money. By a single vote, Congress voted to transfer their authority to issue money to the The Bank of North America when it approved its charter on December 31, 1781. Thus, the Bank served as a quasi central bank (which created money as loans, called “debt money”). Why did Congress willingly give up their money power? The public argument was that the business of finance could not be competently conduced by a public body (Congress) — only by a small number of private financiers. The first head of the Bank was Robert Morris, the richest merchant in America.

    Then the Second Bank.
    Then the Third – whose Charter should be up this year.

    Whadda ya say?
    More of the same?

    For the Money System Common

    1. from Mexico

      joebhed said:

      At that time, the nation’s constitution was the Articles of Confederation. Article 9 of the Articles gave Congress the power to “emit bills of credit” — to create debt free money.

      This is where you and I part ways on the money question, because I believe to “create debt free money” is an impossibility.

      The creation of money, and this is true whether it be Treasury bonds, currency, coin, bank-created debt or me writing you an IOU, implies a moral and social obligation — that is a debt.

      For hundreds of thousands of years, man managed to keep track of these moral and social obligations without the use of a formal, written accounting system, such as “money.”

      In the following paper, Hillard Kaplan & Michael Gurven explain how these primitive accounting systems, and the moral and social obligations they entailed, might have worked in pre-money societies:

      “The Natural History of Human Food Sharing and Cooperation: A Review and a New Multi-Individual Approach to the Negotiation of Norms”

      1. MyLessThanPrimeBeef

        Thanks, from Mexico for that link on sharing (which came before borrowling). I will try to read it when I have time.

        I believe Sharism (and Neo-Neanderthalism, which does shrink the GPD, but the fact is many of us are closet GDP shrinkers/contractors who should be encouraged to come out in the open) represents progross forward to our egalitarian past.

      2. F. Beard

        Actually, if the US never ran a budget surplus and sometimes ran budget deficits then debt-free money equal to the sum total of those deficits wouild accumulate in the non-government sector.

        Don’t be fooled by the debt-pushers; debt-free money for all practical purposes is possible.

          1. davidgmills

            Ditto. Lincoln did it with greenbacks which were so successful that the bankers put a stop to it with the banking act of 1864 (bought out Congress again). In 1865 with $450 million greenbacks still in ciruclation the per capita income in the US was $50. Twenty years later after the greenbacks had been successfully recalled, the per capita income was $6. When the bankers control the money supply, there never is enough to go around.

      3. diptherio

        So much to think about…

        Is it possible to create debt-free money? On the one hand, as David Graeber argues convincingly, money has always been a way of structuring human relations within a society, a mechanism for recognizing (and later, for quantifying) obligations, i.e. debts, between people. In this sense then, debt and money cannot be separated, since if we owed nothing to one another we would have no need for money.

        In the modern context, we could think about it like this: the money in your bank account is a representation of the debt that society owes you for contributing to society through your labor, intellect, criminality, what have you. This debt is repaid you when you exchange your money for goods or services. The consumption of these goods and services then creates a obligation on your part to repay society for providing you with these things through your on-going contribution. Thus the social debt cycle is never-ending, and hopefully virtuous, one. Note that the debt itself is not monetary in nature, but only denominated monetarily.

        So Mexico would seem to be right, since all money represents a debt owed by society-at-large to the holder of that money, there can be no such thing as debt-free money.

        On the other hand, modern finance has so abstracted money from real human relations and obligations, so severed the tie between the abstraction of money and the social obligations it is meant to facilitate, that we may now be able to consider money apart from debt. If banksters are using money as a means of enforcing illegitimate social relations, then maybe something like debt-free money is possible.

        Here’s a thought experiment: Say the Treasury exercises its trillion-dollar coin option and uses the proceeds to pay every defrauded homeowner enough to pay-off their mortgage in full. After this happens, the Gov’t then reclaims the money from the banks through fines, settlements, taxes, etc. So long as the Treasury ends up getting all the money back from the banks, one way or another, the amount of money in the system (i.e. the amount of social debt) will not increase. So money will have been created and then, essentially, extinguished, while the illegitimate debt (fraudulent mortgage) is merely extinguished. The net change in money is zero and the net change in debt is negative.

        In this way, I think it might be possible (theoretically) to create debt-free money, or maybe better, negative-debt money. Of course, a Jubilee (along with criminal indictments for banksters) would accomplish the same thing quicker. The problem with the Jubilee, however, is that it raises people’s feelings of injustice; the sense that someone is getting out of a social obligation for free. Creating, using, and then quickly extinguishing currency might short-circuit these reactions a little.

        1. F. Beard

          Creating, using, and then quickly extinguishing currency might short-circuit these reactions a little. diptherio

          There’s a better way that should not create resentment – a universal and equal bailout of the entire population, including non-debtors. And instead of taxes to destroy that new fiat, why not use it instead to back all desposits with 100% reserves? The way to do that is to ban further credit creation (but not honest 100% reserve lending) and then meter the universal bailout to just replace existing credit money as it is repaid (destroyed). That way, the money supply would remain constant (or slowly growing, if desired, since even honest lending requires that some of the interest be created) so no one could complain of either deflation or inflation.

        2. Aquifer

          Hmmm – paying off every defrauded home owner enough to pay off their mortgage in full – how is that not getting “something for free”? Seems to me to keep it “fair” in the same vein one might object to a jubilee, one would need to pay only the difference between a “fair” price at a “fair” interest rate, for the house and the “unfair” amount produced by the fraud …., then tax THAT amount back from the banks ..

      4. Glenn Condell

        ‘I believe to “create debt free money” is an impossibility’

        Yes, a bit like moisture-free rain. But surely it’s not debt per se that is the issue, it’s interest – compound interest – which turns increment into exponent, and that is where a public banking option makes sense to me. Depositors, mums and dads, small business would flood into this safe haven with relief, both to save and to invest, and indeed to find seed money for viable projects with a societal benefit. This phenomenon in itself would provide confidence and ballast to the system as a whole, partly by balancing a dangerously skewed GINI co-efficient. The government would use these funds along with any interest-free fiat required, to build infrastructure, provide high-quality education and health, and generally plan for a prosperous future for all it’s citizens – this in addition to providing finance for ‘non-insider’ start-ups starved of a chance these many years.

        Only those with spare capital they are willing to risk would enter the world of private banking, where you pays your money and you takes your chance (as in the olden days) No bailouts because they’re no longer TBTF. Rich rewards to be had for ‘savvy businessmen’ not satisfied by the staid yield paid by the state, but sharp downsides too. Creative destruction once more. When ‘animal spirits’ blow bubbles that burst they won’t bring the whole shebang down with them, and importantly the bruised and battered buccaneers would have the safe haven to beat all sitting there waiting to take their remaining capital and preserve it, while they plan their next assault.

        The great boon here seems to me the fact that the public safe haven would be perceived as safe (even by those who decried it as socialism) because (a) rather than investing in mirages of derivative speculation 11 times per second it would be investing in people, bricks and mortar and other tangible assets, ie a plausible future, and (b) its ultimate guarantor, the full faith and credit of the people of the US represented by their government would not be prey to bond market speculation because said government would not have had to spend its people’s patrimony bailing out the fucking banks!

        Ally this to abolition of the absurd primary dealer situation where the private banks get govt created money for almost nothing and then go about bankrupting the same government (talk about biting the hand that feeds you) while enriching themselves, and you have a setup which would encourage a diminution of the private interest load (I read somewhere 40% of every dollar nowadays) that is crippling the chances of avoiding depression, let alone encouraging green shoots.

        ‘progress forward to our egalitarian past’


        Re diptherio’s thought experiment: ‘Say the Treasury exercises its trillion-dollar coin option and uses the proceeds to pay every defrauded homeowner enough to pay-off their mortgage in full. After this happens, the Gov’t then reclaims the money from the banks through fines, settlements, taxes, etc. So long as the Treasury ends up getting all the money back from the banks, one way or another, the amount of money in the system (i.e. the amount of social debt) will not increase.’

        Wouldn’t this mean that the banks concerned, who still have billions of unmarked-to-market dogshit on their books and remain ‘solvent’ by the skin of their teeth thanks to FASB and other govt favours, would go under? Not that there’s anything wrong with that (!), but they would be made whole for five minutes when the loans are repaid, and then hit the rocks when the feds take it all back again. The whole TBTF thing rears again, no? I am probably missing something here.

        ISTM Beard’s (or Keen’s) jubilee avoids this scenario. Everyone gets an equal share of the amount required to rid the system of the growth-inhibiting overhang. Debtors pay back their loans… Aquifer’s objection could perhaps be accommodated by having each loan passed through a panel of govt inspectors made up of the sort of public-minded expert who wrote here the other day about his/her experiences as part of that govt program to sort out problem mortgages – which of course was actually run by and for the banks. This process would be transparent and public, determining a fair price to which the amount must go toward payment of. Anything left over is cream, to be spent or invested into the demand-starved economy, or saved for a rainy day. Non-debtors get to do the same, only more so.

        There is no government clawback which would cripple the banks – more’s the pity, eh? But they would lose all that delicious lolly they earn as interest on the debt, bringing them back to the field with the rest of us rather than unmoored into plutocracy as has been the case.

        The rest of Beard’s prescription I’m not so sure of, but that is down to ignorance and a lack of time to think it thru than any intellectual or philosophical objection. Would reserve lending only inhibit the animal spirits which even Steve Keen subscribes to as part and parcel of capitalism’s advantage, in that it encourages productive innovation?

  9. toxymoron

    Last time I checked, the Russians have been running a thorium ‘lab’ reactor for over twenty years. They use it to ‘burn’ some nuclear waste, not! to generate energy.

    I don’t know for molten salts, but the absolutely brilliant French started a nuclear reactor cooled with liquid sodium (which indeed has some very interesting characteristics for that purpose). They stopped the project in ’96, but the reactor is still running, as they have no idea how to stop it.
    (Liquid) sodium explodes when it comes into contact with water, and solidifying the sodium leads to overheating.
    A Frankenstein reactor anybody?

    1. MyLessThanPrimeBeef

      I would love to know about that Frankenstein reactor.

      Perhaps space exploration might be useful after all – we can either ship that reactor to Mars or leave the whole mess here so we can repeat the mess elsewhere.

  10. AbyNormal

    i just backed into a history (of sorts) on the ‘grandfather’ of fracking.

    to test your stomach/timing for article & video:

    “Mitchell is really the giant here,” says Diana Davids Hinton of the University of Texas-Midland. “In terms of the recent industry, George Mitchell’s significance is both national and global. What his work did opened up possibilities that are mind-boggling.”

    Mitchell began poking in shale in the early ’80s, in a picked-over spot in east Texas called the Barnett Shale. Shale is dense, tight rock that traps hydrocarbons inside. Back in the day, some even pondered exploding atom bombs underground to get the energy out.

  11. change agent

    Bank of America says it will spend more than $10 billion to settle mortgage claims resulting from the housing meltdown.

    Under the deal announced Monday, the bank will pay $3.6 billion to Fannie Mae and buy back $6.75 billion in loans that the North Carolina-based bank and its Countrywide banking unit sold to the government agency from Jan. 1, 2000 through Dec. 31, 2008. That includes about 30,000 loans.

    Its shares edged up 14 cents to $12.25 in premarket trading after the announcement.

    CEO Brian Moynihan said the agreements were “a significant step” in resolving the bank’s remaining legacy mortgage issues while streamlining the company and reducing future expenses.

  12. Eureka Springs

    BBC world service (radio) just did a short piece on The Trillion Dollar Coin, the debt/cliff and the coin petition in circulation which they reported has 4k signatures. The one fellow interviewed whose name I missed described the whole US debt/cliff debacle with the same word he used in re the proposed Coin solution. Crazy! He repeated that word emphatically several times.

    1. AbyNormal

      It’s difficult to get a man to understand something if his salary depends on him not understanding it.~upton s.

  13. run75441

    The tomato is also a good source of potassium which you “do need” for a healthy heart (potassium drips are not fun and burn). I would not write off the tomato and lycopene because of a small study as there are many other nutients in the tomato which are vital to a well functioning body and heart. A daily source of minerals are also provided in fruits and veggies.

    Other fruits providing a good source of lycopene are grape fruit and water melon. Dried parsely and basil are fairly good sources also.

  14. Ron

    “neo-Confederates to continue with its bold revolt”
    Its easy to point the race finger at the deep South but the article misses the critical attachment of the social conservative movements to the South’s political power. The John Birch Society agenda has been a guiding light for social conservatives outside the South years but never was a major political movement until it latched itself onto the South’s take over of the Republican Party. The South’s political base is about bringing Federal money to Southern States the fact that it has always had a race element is not news but the region has no interest in re-living the civil war as consumerism and leisure activities have moved to the forefront.
    Look beyond the South at various Tea Party members and most come from outside the South in various rural districts. These tend to reflect extreme social conservative views but they are a tiny minority on the political landscape but by attaching themselves to the Republican Party’s Southern wing then have gained power far beyond there numbers.

    1. MyLessThanPrimeBeef

      300 years and 28 generations?

      The story is wonderful though.

      The key is keeping it for 300 years in the family.

      Did they have to pay property taxes during all those years?

      1. AbyNormal

        hehe 28 gens…good catch Primed
        i was also looking at the food forest in Morocco,2000yrs
        not sure how the property is handled…i’ll look around

    1. Jackrabbit


      “The Big Fail” may have seemed appropriate back in 2009, but given what we have learned since, it is woefully inadequate.

      First, it labels the singularity. Second, as a descriptive term it seems static and lifeless.

      Better to name the period before and after the singularity (or in addition to).

      For example:

      BEFORE: The Great Insurance Scam
      (knowing that government would back up the Banks & assume losses)

      AFTER : The Great Con
      (diffusing blame and selling the bailouts to the American people)

  15. financial matters

    Clean Tech Investments Plunged in 2012 OilPrice

    Mainly using this headline as a platform for a few thoughts..

    From Michael Hudson’s 2009 ‘Debt Peonage and the Neoliberal Road to Serfdom’ chapter 20 in the 2009 update to his 1992 ‘Trade, Development and Foreign Debt’

    “The problem is that although finance has become the critical element in production, most credit today is extractive, not productive. Analyzing its carrying charges requires an updated conceptual framework to distinguish between direct investment (capital formation) and speculation in already-existing property and financial securities in search of capital gains (asset-price inflation).”

    And an interesting quote from Elon Musk, CEO of an electric car company and solar panel company.. “We need to figure out how to have the things we love, and not destroy the world.”

    His brother Kimbal is trying to improve childhood nutrition..

    1. AbyNormal

      ive seen the ‘learning gardens’ demonstrated on discovery ch.
      the participation from the kids is unanimous…they soak it up.

      frontline did a special ‘poor kids’…around the middle of it there’s a very young girl who is usually hungry…she can’t understand why she gains weight and gets made fun of…her diet consist of .99cent pizza’s (2 divided by family of 4)

      i posted the frontline doc. along with other stats at the 6s…one needs to hear these children to ‘feel’ the magnitude of this epidemic

    2. AbyNormal

      this one drives me batshitcrazy:

      Despite the safety net’s record of lifting children out of poverty, the amount of federal spending on children in 2011 dropped from $450 billion to $445 billion, according to an analysis from The Urban Institute (pdf).
      The study accounted for spending on programs such as Medicaid and the Children’s Health Insurance Program, and tax expenditures like the Earned Income Tax Credit and the Child Tax Credit. In all, the decline marked the first time that spending on children fell since the 1980s, and came in a year when total federal spending rose to $3.6 trillion from $3.52 trillion.

    1. davidgmills

      Actually though a photon beam is mentioned as the source of neutrons in the British article, a photon beam is not what was used at Oak Ridge. Uranium 235 was used as the source of the original neutrons. Then when thorium converts to uranaium 233 then uranium 233 is used as the source of protons as something similar to a catalyst in chemical reactions. So the author of this article needs to do further reading on how the thorium reactor was done at Oak Ridge.

  16. Aquifer

    On FDR’s advice –

    I thought it quite fine – and i did like his definition of “liberal” … Why is it we can’t use that today ….

  17. scraping_by

    The term ‘Neo-Confederate’ is a bit misleading.

    At the end of the Civil War, with the Union Armies moving at will and nowhere to hide, the planters and traders who’d begun the war were ripe for the hanging. Events tended otherwise. The slogan in the South was that it was “a rich man’s war and a poor man’s fight,” the poor whites drafted from almost the beginning of the war, the well-connected officers usually kept in non-combat positions.

    Lincoln’s assasination was an operation of the otherwise inept Confederate Secret Service, as documented in William Tidwell’s Come Retribution . It took away the moderate corporate Lincoln and put Southerner Andrew Johnson in his place. Johnson’s policy was to appoint the very planters who’d begun the rebellion and officered the Confederate Army back into government positions. And those he didn’t appoint took those positions by the simple technique of terrorizing and killing anyone who stood in their way.

    The Federal indifference to civil rights violations, up to and including armed coups against nonwhite elected governments and officially sanctioned death squads, allowed pretty much the same people, their sons and followers, their grandsons and heirs, to continue running Dixie up until the 1950’s.

    Indeed, Jimmy Carter’s initial claim to fame was his opposition to these entrenched gangsters. He didn’t work out as the second FDR, but he bumped heads against the good old boys.

    The right wing needs enemies. Their only appeal is being dangerous to those who are dangerous. The danger of different lifestyles might be akin to convicting a ham sandwich, but it’s the only game the hereditary Confederate planter class has got.

    1. JTFaraday

      Nope. They will go hard against the unemployed if you come up with a jobs plan that is punitive enough.

      And it’s the one thing they share with 99% of the rest of the country.

  18. Lambert Strether

    Wake Up Progressives: The Bad Guys Are Trying To Steal the Trillion Dollar Coin to Save the Financial Status Quo!

    For “realists” like Cullen Roche, it’s fine to use the Coin to reinforce the banks power over fiscal policy by forcing us to borrow our own money from them and then paying interest on it.

    However, for these “realists,” it’s not fine to use the Coin for “public purpose” — for example, to “provide for the general welfare.”

    Pretty shameful.

    1. diptherio

      True, but if the TDC option is utilized, with whatever rationale, it will make absolutely clear to everyone that the gov’t can create as much currency as it needs to. Once that becomes common knowledge (and common sense), it will be much more difficult to avoid the question of why that power can’t be used to maintain and expand social welfare programs like Medicaid, Medicare, Social Security, Head Start, etc.

      Once the small ball gets deployed, to use Firestone’s terminology, the big ball is going to be much harder to avoid.

  19. Tai Game Mien Phi

    If they work out the last of the kinks in the process, thorium is leaps and bounds a major improvement in nuclear energy. First, it offers a much better safety profile. If the reactor becomes overcritical and gets too hot, it automatically shuts down, without the need for human intervention. The physics of the reaction itself causes the shutdown. A meltdown such as happened at Fukushima, Chernobyl, or Three Mile Island is impossible. Second, the problem of waste byproducts and their storage is eliminated for the most part. Thorium fuel is recycled and reused multiple times. Third, thorium is available naturally in abundant quantities. Fourth, there is no significant nuclear proliferation concerns. The lack of plutonium extractable to build weapons was a key reason that the US abandoned thorium technology back in the 1960′s in favor of uranium. Finally, like all nuclear energy, thorium is a green energy in that no greenhouse gases are emitted.

  20. Glenn Condell

    ‘few if any individuals are sufficiently “enlightened” to satisfy the essential proposition of Adam Smith’s utopia: Most follow Ayn Rand’s conflation of selfishness with self-interest.’

    Yes. In the history of political and economic thought, Rand stands in relation to Smith in much the same way as Obama does to FDR, or Lance Armstrong to Jesse Owens.

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