Michael Hoexter: Loathsome Wall Street Deficit Hysterics: ‘Blame the Old and Sick, Not Us’ – Part 2

By Michael Hoexter, a policy analyst and marketing consultant on green issues, climate change, clean and renewable energy, and energy efficiency. Originally published at New Economic Perspectives.

[Part I]

Stated as above, the deficit hysteria-driven austerity campaign would have never gotten off the ground; no one outside the financial industry or its paid minions would choose to design society to facilitate the financial sector’s enrichment at the expense of the rest of the economy.  However, the engineers of this campaign, including Peterson and Rubin, have couched the deficit hysteria campaign as if Social Security and other social spending are simply financial transactions between members of the private sector, generalizing as it were from their experience on Wall Street.  In transactions between members of the private sector, credits and liabilities are assumed to balance.  Debts must be paid in full or the debtor is assigned a social or financial penalty and/or stigma.  This simple morality is supposed to apply to private sector to private sector business transactions (though often for Wall Street and the well-connected this morality is rarely compulsory) and is in most day-to-day interactions a workable rule of thumb for anonymous or largely anonymous business dealings between people.

However, even this morality, which is spoken about by some as if it is universal and unimpeachable, has limits to its scope in private-sector to private-sector transactions, if viewed over the entire ebb and flow of the business cycle.  As Steve Keen has argued, there exists in monetary economies the need for periodic debt jubilees, as described in the Judeo-Christian Bible, as wealth becomes increasingly concentrated in fewer and fewer hands.  Currently we are seeing now increasing numbers of people sink deeper into debt without hope for re-emergence, as our particular economic and financial trading regime “winds down”.  As Michael Hudson has written “debts that can’t be repaid, won’t be repaid”.  The ideal vision of a society composed of  mostly solvent individuals or a society in which most people can choose to remain solvent, assumed by the simple morality applied by deficit hysterics, cannot be extended to our current reality in many instances.  A broad social “reset” is required, as income and wealth become concentrated among the few, while the many become ever more cash-constrained. .

The deficit hysterics then extend this truncated transactional morality that ignores the unequal distribution of solvency and of political access to transactions between monetarily sovereign governments and the private sector, i.e. individuals, families and businesses.  Government’s unique role as issuer of the currency and stabilizer of an inherently unstable economy with a tendency towards widening inequality is, ignorantly or calculatingly, misunderstood.

So, while Peterson and Rubin have couched their campaign in the moral vestments of “fiscal responsibility”, they gloss over the macroeconomic financial reality of government and the requirement for deficit spending to maintain growth of the national and world economies.  The moral fervor that they apply is inapplicable to government programs: while it may seem real to them or the gullible politicians they influence, the moral outrage they hope to play on is based on false and inhumane premises.

The falseness of deficit hysteric morality is a clue to the predatory intentions of its promoters:  ultimately people like Peterson and Rubin are attempting to expand/protect the scope of the inefficient, rent-extracting business of private financial intermediation by gutting or weakening the stable government programs that “compete” with them.  They are preying on gullible politicians and laypeople who do not understand government finance and/or the business model of the private financial sector, from which they have made and make their private millions.  That they have already made “enough” money for themselves apparently hasn’t stopped them from advocating and self-justifying their own path to wealth. Many have already commented on the moral repugnance of the deficit hysteric position and I have previously pointed out its misleading use of moral terms to confuse and seduce its followers and the public.

However the moral turpitude of Wall Street deficit hysterics only sinks to lower levels.

Deficit Hysteria as a Diversion from Wall Street Culpability and Fallibility

The timing of the deficit hysteria campaign is not well explained by the pecuniary benefits that Wall Street hopes to gain from a privatized Social Security or other financial “private-public partnerships” that will arise from austerity.  The potential for these benefits have been there for decades, while the deficit hysteric campaign swelled from a preoccupation of a few Washington insiders to the hegemonic position in the Washington elite within a matter of a year (2009-2010).  Peterson and Rubin had already been campaigning for more than 15 years to gut the welfare state in the guise of “entitlement reform” and “fiscal responsibility”.

Rather than the prospective gains that Wall Street hopes to harvest from a Grand Bargain, we need to look to those factors that were present in the period 2007-2010 to understand the campaign’s timing and intensification.  The proximal causes or precipitating events for the deficit hysteria campaign can be summarized as follows : 

1)    The Global Financial Crisis of 2007-2008 and immediately following, for Wall Street and some investors, the receding into the past in early 2009 of the “sky is falling” period of late 2008.

2)    Growth of a quasi-libertarian anti “bailout” discourse on Wall Street, just as Wall Street had been conveniently bailed out after the “sky is falling” period had ended.

3)    The rise in government budget deficits and government spending as the economy tanked, tax receipts plummeted, automatic stabilizers like unemployment insurance kicked in, a stimulus package was implemented, and, in the US, a new Democratic Administration took office.

4)    After the election of a superficially left-of-center (in reality right-of-center) African American President, the old reactionary anti-Keynesian, racist, and crypto-racist Right rolled out an anti-Democrat and anti-Obama campaign of slander and exaggeration.

5)    Pete Peterson’s sale of the Blackstone Group and increase in his already considerable wealth, after which he promised to spend a good portion of it on his decades long anti-welfare state campaign

6)    With the Citizen’s United decision and a Supreme Court favorable to corporate and plutocratic power, a political atmosphere and legal environment of growing permissiveness for elites to manipulate elections and policy debates.

7)    President Obama’s shift or reversion to an anti-Keynesian, anti-stimulative economic policy soon after the implementation of the 2009 stimulus package.

Of these seven precipitating events, President Obama has played a pivotal role in providing intellectual and political support for the deficit hysteric campaign by applying his assumed but unjustified reputation as a liberal, as well as the powers of the office of the US President, to an intent focus on federal deficits.  President Obama had a critical role in the transition from a reluctant “Keynesian” stimulative approach to the economy of early 2009 to fiscal austerity thereafter.  Obama should be held accountable, at least in his reputation and legacy, for his abandonment of an expansionary fiscal policy targeting unemployment and boosting the real economy for policies tailor-made by and for Wall Street deficit hysterics over the last three years.  What would have been a line-up mostly of Wall Street and the far Right was made to seem a leadership “consensus” position via Obama’s measuring his economic performance by reference to reducing budget deficits and sponsorship, among other things, of a conclave of deficit hysterics in the form of his budget deficit commission.

While Obama’s role has been critically important, the primary constituency for his turn towards austerity was Wall Street and not the American people at large.  Wall Street’s sudden concern about governments’ “fiscal responsibility” in 2009 and beyond can be best understood as a combination scapegoating of government for Wall Street’s failings and misdeeds and an attempt to create a “balance of terror” at a very vulnerable time for Wall Street and its business model.

Wall Street had just crashed the world economy in a decade-long orgy of financial irresponsibility, systematic fraud, and predatory financial practices.  Wall Street had helped inflate a huge asset bubble and sold fraudulent financial instruments based on the notion, among others, that asset prices would continue their upward assent indefinitely.  Wall Street had used (private) debt, a.k.a. leverage, to take maximum advantage of the bubble that formed.  As the bubble burst, prominent Wall Street firms had become insolvent and more would have gone bankrupt if the financial system had not been bailed out by the Bush and Obama Administrations.

Via the false deficit hysteric narrative of government’s fallibility, liability, and potential insolvency, Wall Streeters and those who identify with them attempt to distance themselves from the bubble-prone, leverage-dependent nature of their business and exonerate the Wall Street perpetrators of financial mayhem and distract from the systematic fraud at the heart of the Global Financial Crisis of 2007-2008.  While there were and are calls for holding Wall Street accountable and restructuring the private securities business along the lines of the Glass Steagall Act of 1933, the deficit hysteria campaign has been counter-propaganda aimed at the would-be prosecutor and regulator of Wall Street, the US federal government.  The moral and political outrage that should have been directed largely at Wall Street and its enablers in government, was instead diverted or countered by the falsely-premised, “fiscal responsibility” discourse.

The deficit hysteria campaign then becomes compellingly attractive for Wall Street’s representatives when it is employed as a ruse to escape their own culpability and to deny the fallibility of the financial markets upon which they base their living.  Some of them have then poured their money into what is meant to seem a high moral calling but is in fact an elaborate and destructive excuse for their own largely vaporous and toxic contribution to the economy, and, in many instances, to society as a whole.

Deficit Hysterics’ Total Moral Bankruptcy:  Misdirecting the Frustrations of Youth onto the Welfare State and the Elderly

But there is still one rung of moral turpitude below the irresponsibility and opportunism of the deficit hysteria campaign as an evasion of responsibility for the global financial meltdown.  We have seen more recently Pete Peterson’s group “Fix the Debt” and now the Wall Street tycoon Stanley Druckenmiller call for a form of intergenerational warfare in favor of cutting Social Security.  Starting from the premise that there is a fixed amount of money which is then divided between generations, payments to the the old and aging are targeted as the main fiscal and social problem by the likes of Fix the Debt and its front youth group “The Can Kicks Back”.  As with many of the supposedly “popular” initiatives of Fix the Debt and Peterson front groups, the amount of spontaneous interest by the “people” or “youth” is often outweighed by reports of an orchestrated campaign by paid staff.

In a now fairly well publicized and widely condemned speech to Bowdoin undergraduates, Wall Street tycoon and Bowdoin graduate Stanley Druckenmiller, a long-time deficit hysteric and someone who profited handsomely from the subprime meltdown (as a contrarian), decried Social Security as “generational theft”.  Druckenmiller, treated by some in the media as a daring truth teller because he included himself as one of the Baby Boomers who was stealing (via Social Security) from youth, omitted to mention to his audience that the dire outlook for the young has much to do with how he specifically made his billions.  Yves Smith has documented Druckenmiller’s financial career and how he is implicated in severity of the Global Financial Crisis which influences the employment outlook and earning potential of a majority of young people, far more than any payments made by government to the elderly.

The misdirection and moral perversions of Peterson’s and Druckenmiller’s generational warfare campaigns is, in addition, a dangerous travesty of the very real accusations that the current generations of younger people might have against older generations be they of Gen X, the Baby Boom or before.  The young should be angry that older generations have, for one, supported or acquiesced to the neoliberal ideology that has given morally and intellectually bankrupt rich people like Druckenmiller an honored and largely uncontested platform from which to speak to them.  The neoliberal ideology of which deficit hysteria is the latest outcropping, has ideologically elevated and promoted the socially destructive activities of the financial sector, i.e. people like Druckenmiller, Rubin, and Peterson.  In equal measure, policymakers inspired by neoliberalism have helped hollow out the economy of well-paying jobs and downgraded productive work, dispersing that productive work throughout the world to lower wage countries.  Furthermore that ideology, despite heaping lavish praise on innovation and entrepreneurship, has gutted governments’ critical supports for small businesses and funding for innovation more generally.

Finally, and most importantly, the young might very reasonably be angry and alarmed that their older and “betters” have not acted in any appreciable way to stem the rise in carbon emissions from human society and brake or reverse the effects of anthropogenic global warming.  This is not exactly a theft but more an inherited catastrophe, for which the youth will bear many more of the consequences than the old.  Having known, since about 1995, that climate change was imminent, the Baby Boom and older generations have frittered much of the window of opportunity to stop irreversible damage to the climate.  Though I have devoted myself over the past 8 years to action on this issue, I count myself culpable in not doing more than I have or sooner.

If they were so inclined and well organized, the youth of today should be looking to shove aside anybody of an older or younger generation who does not stand for a proactive jobs and climate change policy.  I have argued that both of these policy goals require the power of monetarily sovereign governments to re-value economic sectors and lines of work via fiscal policy and ignore deficit hysteric fantasies that governments spend out of a fixed pot of money, that can run out.  Similarly public pension systems like Social Security are a useful tool in peaceably enabling increased youth employment, as continuing or increasing payments to their elders will help accelerate retirements and leave the field to those who are committed to building a sustainable future.

Ultimately, it would be better if we could solve social problems and face challenges like climate change with the aid of the wisdom of each living generation and not see the challenge as primarily one of conflict between generations.  We would hope that parents and grandparents would be concerned enough about the future to work for a livable future for their children and grandchildren.  However, as long as the theme of “generational theft” is on the table, the misappropriation of the concept of generational conflict by deficit hysterics must be called out.

Loathsome and Dishonorable

I am not one who enjoys describing others as “loathsome” (this is a first in my writing career) or dwelling on the faults of others.  There are many impersonal systems at work that make our lives less than they might be as well as our way of life less sustainable than it might be.  To point out the failings of individuals is not my strong suit.

On the other hand, our current plutocratic order gives inordinate space and accords respect to people simply by virtue of their wealth.  Plutocrats can dominate the public sphere and increasingly standards of personal morality and honor have become corrupted by the aging, now thirty five year old neoliberal, plutocratic order.  It becomes important to point out when privileged individuals abuse their privilege, exploit their position, and, additionally, become a bad example of what human behavior might be.  If they are aggressively trying to destroy something that is actually good in the world, all the more reason to point out their failings.  We currently have no organized counter-narrative, counter-movement to the grotesque gyrations of ignorant or malicious plutocrats on the public stage.

Peterson, Rubin and Druckenmiller might have made their millions and/or billions and then retired to a career of charitable giving, even of a political nature.  Instead of utilizing charity as a “second career” and new beginning for themselves, they have chosen a path of donations and political agitation that is aimed at depriving millions of people of small but necessary consolations that they receive from government, while attempting to create room to expand the business in which they, the few, made their fortunes.  They have attempted to veil this campaign in a perverted morality, which corrupts our understanding of transactional justice and the reality of our economy.  Their current campaign is based on an utterly false conception of how money and the economy works.  Their campaign functions as an excuse for their industry’s culpability in the collapse and ongoing decay of the economy.  They have tried to turn the young against the old, and blamed the latter and the sick for the loathsome plutocrats’ own failings, or the failings of the institutions though which these plutocrats have grown wealthy.

These acts would probably provoke loathing in many and it is each of our choices to decide to loathe these individuals or simply ask that they be stripped of the respectability and social status that they currently enjoy.  They have chosen a dishonorable course and they should be dishonored by those (audiences, universities, the media) who have or could accord them honor.  We do not need to loathe them, even though they might provoke it via their perversity, but we need to be sure to neutralize their effect on our polity and public discourse.

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  1. OpenThePodBayDoorsHAL

    I can’t think of any core value that is more associated with the Democratic Party than the social safety net. To see Obomba eviscerating it is appalling. Let’s just have a one-party state and stop deluding ourselves.

    1. sufferinsuccotash, stupor mundi

      Or instead of giving the game away with a one-party state, we can do what the Shah of Iran did at one point, namely create two parties, both dedicated to supporting his policies. The joke in Iran at the time: one party was called the “Yes Party” and the other “The Yes Yes Party”.
      But wait. Don’t we already have that?

      1. Sagebrush

        (“But wait. Don’t we already have that?”)
        Absolutely, the best parties and their politicians that money can buy. We even get to pretend they represent our best interests and actually, once in awhile when pigs fly they do.

  2. Bryan McKown

    So, it is not really hysteria; the problem is sophisticated, well funded, wedge politics. I did check out a few of the links including YS’ take down of Dreckmiller types, but I hope there is a Part 3 explaining who has or how to “neutralize” the propaganda.

    1. JaaaaayCeeeee

      I too hope to read a part three in this series. How to neutralize divide-conquer-distract-inflame-wedge issuer? The problem is we no longer have a sphere of public discourse, now that press, politics, and trust have been corrupted/bought (although the House Progressive Caucus and a few Senators fight still).

      No bonus army or Norman Rockwell tractors would be tolerated, descending on DC, either – they’d get evicted, caged off, pepper sprayed, bought, blackmailed and snafu’d.

      With 90% of Americans’ media coming from 6 companies, our free press is about as robust as our purchased democracy. When it’s easier to imagine wiping out the species and planet than restoring democratic representation from capitalism, I see two problems:

      First, the wealthy can justify ladder pulling up as survivalism. Shifting from tax avoidance to freeporters, as the Economist notes that people worth more than $30 million are increasing 6% a year.

      Second, your only other option is tuning out or being exiled to the blogistan of liberal economists or professional left (Obama’s slur). There are no new Bangedesh’s to hide the race to the bottom, but the media can distract, while the costs of global warming escalate the longer we ignore it.

      Without a public discourse, apart from campaign messaging and bumper stickers, people can’t even share ideas until they agree on some common terms. The Roosevelt Institute’s four freedoms are still better known to voters, than the phrase predatory capitalism.

      This post alone covers so many (rightly if provocatively) that don’t fit on bumper stickers. Too wordy for T-shirts, so maybe we need rappers? Viral video re-mixes?

      Otherwise, how do we refine concepts for regular voters, like debt hawksters, privatizeers, cronies for cartels, corporate welfare queens, courtier press, thy-not-my skin in the gamesters, financializeers and fraudsters, moraliness masters, public good fire sale pushers, stabilizer slanderers, poor bashers (whether it’s the homeless’s shopping carts or banning breadlines from public view), vote suppressors, neoliberals, bashers of Keynes/stimulus/labor, disaster capitalists, trust-in-government busters (to grift more sweet, sweet overhead for agri/military/security industrial complexes), external cost shifters, evidence obsfucators, astroturfers, shills, hacks, culture and generational warriors for profit, villagers, regulatory and trade capturers, social darwinists, supply siders …?

  3. RoboCommenter

    Any nation whose population spends as much time as the people of the United States do watching sitcoms, sporting events, and internet porn is going to get ripped off. It really is as simple as that.

  4. JTFaraday

    “They are preying on gullible politicians and laypeople who do not understand government finance and/or the business model of the private financial sector, from which they have made and make their private millions.”

    Someone is bound to insist this is semantic quibbling on my part, but is it really accurate to state that these banks make “private millions”?

  5. tongorad

    “Peterson, Rubin and Druckenmiller might have made their millions and/or billions and then retired to a career of charitable giving, even of a political nature. Instead of utilizing charity as a “second career” and new beginning for themselves, they have chosen a path of donations and political agitation…”

    Charity is political agitation. Case in point Bill Gate’s “charitable” efforts to dismantle public education.

    The aims and actions of the billionaires are all of a piece. It really is a case of Us vs Them, and we shouldn’t quibble even for a micro-second about describing them as loathsome, or doubting the validity of the feelings of hate for them that grow in our hearts every day.

    1. Banger

      While I don’t agree with many of the things the Gates Foundation has done in education I believe Bill and Melinda Gates do want to do something positive for American education. One of the problems with private charity is that billionaires attract courtiers, flatters and opportunists only too happy to party at the expense of the Lord and Lady.

      The very rich are not, in themselves, “bad” because they have money–I don’t think that’s a good way to fight the enemy. Part of the problem with the left in this country is that they adopt simplistic models of the world, i.e., rich=bad and poor=good or at least poor=victims. The actual situation is far more complex and more connected to the cultural as a whole than a particular economic/social class.

      1. tongorad

        Bill Gates’ grand, just-swell intentions, hmmm…and what of democracy?

        “..Three funders—the Bill and Melinda Gates Foundation, the Eli and Edythe Broad (rhymes with road) Foundation, and the Walton Family Foundation—working in sync, command the field. Whatever nuances differentiate the motivations of the Big Three, their market-based goals for overhauling public education coincide: choice, competition, deregulation, accountability, and data-based decision-making. And they fund the same vehicles to achieve their goals: charter schools, high-stakes standardized testing for students, merit pay for teachers whose students improve their test scores, firing teachers and closing schools when scores don’t rise adequately, and longitudinal data collection on the performance of every student and teacher.”


        The problem with philanthropy is that it is mainly a way for the sugarcoat their privilege (in this case, bull-dozing democracy in order to impose the policies they want/demand).

        And as for the so-called left thinking in so-called simplistic terms, I see scant evidence of that in the current field.

        You have to look to our past – our successful past, when we had a left/labor movement that was effective – to see examples of vigorous rhetoric to fight the class war.

        Mealy-mouthed apologies for the rich won’t help us fight the enemy much either, dontchathink?

        1. Banger

          With all due respect, the rich certainly will pursue their class interests and what you say is correct as far as it goes but what about the non-rich? Aren’t they undermining democracy by not asserting their interests? And they clearly have not done so. My point is, within their frame of reference which is clearly shared by the vast majority of Americans they think they are doing the right thing.

          1. skippy

            “My point is, within their frame of reference which is clearly shared by the vast majority of Americans they think they are doing the right thing.” – banger

            skip here… They are ***indoctrinated*** to – think – that their betters are doing the right thing – fixed.

            skippy… Seriously banger, did you miss the last 40 years of careful and deliberate quasi-religious neoliberal grooming of the American consumer.

            1. Doug Terpstra

              Indeed, Skippy, indeed. They know not what they do. But the High Priests, Pharisees, and moneychangers certainly do; they know exactly what they are doing. Those who don’t understand the power of propaganda have already lost the war.

      2. Alejandro

        “Part of the problem with the left in this country is that they adopt simplistic models of the world, i.e., rich=bad and poor=good or at least poor=victims.”

        “left” v. “right”?

        “The actual situation is far more complex and more connected to the cultural as a whole than a particular economic/social class.”

        Can this be true of the “left/right” paradigm as well?

        “I believe Bill and Melinda Gates do want to do something positive for American education.”

        I agree…but maybe, just maybe, big biz would be better served by trying to learn from, instead of trying to “teach” the teachers.

        Does standardization breed mediocrity? Maybe there are alternative ways of thinking about “Education”.

        1. Banger

          Of course, my view of education, is almost diametrically opposed to the current mainstream view shared by Bill and Melinda and most of the rest of the oligarchs–but they are doing “something” what are the rest of us doing?

          1. Alejandro

            I can’t speak for the “rest of us” and I personally can’t solve the world’s problems. However, I can use some practical advice once given to me, which is “do what you can with what you have wherever you are today regarding whatever is important to you”. This person defined it as “initiative”, some people call it “activism”. Whatever you call it, I think it comes from the same primal impulse. However, I do believe that true education should precede motivation, and this gestation should not be forced to fit some “standard”.

      3. Patricia

        Most on the genuine left understand that when a society becomes deeply unequal by putting vast amounts of money in the hands of a few, the results are much worse for all than when it is more equally divided. This is basic.

        Why should we allow a handful of people who’ve made gobs and whose ethics and logic are of less quality than many (which is partly why they obtained their wealth), take the reins of public education? Why live with “it’ll do” and “better than worst” when we have had, as an ideology, a democratic republic? Why not improve the ideology and make it functional? Do people think every wealthy person is evil? I don’t know many who do. But the power that comes with wealth is corrupting. A truism.

        And it is obvious that the poor, as a group, have to endure slogs of crap without recourse, so they are indeed victims and not primarily culpable for the situation. Do people think that makes every poor person a good person? I don’t know any who do.

        So yes, it is a cultural thing, but that is the point. Those who run our society have gone awry and one sign of it is the meme that such as Bill/Melinda do ok for public education, and better than the rest of us could.

        I really wonder why I am saying this to you, Banger. You know it.

        1. Banger

          Of course I know it Patricia but if things were that simple wouldn’t we be engaged in a project to change the situation in a real way? I don’t agree with the Gates version of what education or even software is but they are making a difference doing what they think is best for society. My point is that they are well-meaning. Are they opposed to the sorts of things you and I would favor? Of course! But one thing I learned in martial arts is that if you want to have a better chance against your opponent you have to give them their due and not view them as cardboard figures.

          Do you have a useful answer to why these rich people are able to gain so much favor? My answer is that most Americans believe that their achievements (riches) are laudable and the progressives pointing our fingers at them isn’t going to change that–if we want to do better let’s give them something better to chew on.

          1. JTFaraday

            “My point is that they are well-meaning.”

            I disagree with this and the tell for me is that Bill Gates is not a cracker. He has a pretty good idea what it takes to create deeply literate and self motivated persons who can adapt to a changing society, whether those persons are specialists like himself or those with more traditional liberal educations.

            And yet, his ideas about education are all geared to a superficial industrial era training model as if every kid in the country was nothing more than a future user of his dopey software tools, in whatever country they’re shipping customer service to next week.

            Without even engaging in too much hyperbole, I think you’d get better curriculum reform from Glenn Beck. That’s how superficial Bill Gates’ idea of an educated person really is and, even worse, how maladaptive it is to the current historical moment.

            Even a cracker should be able to see that Gates and others who would model schools to the requirements of a job interview–only one the most inane experiences anyone will ever have– aim to superficially train people to “jobs” that aren’t there, while rendering them obedient to evaluative regimes that Gates was never willing to tolerate himself.

            The fact that the crackers don’t see that they’re being educated for the 1950s, only with computers this time, is some of the best evidence there is of that collective hallucination you keep going on about.

            Only some of the hallucinators don’t know any better and some are pernicious.

    2. skippy

      Did someone say Bill and MElinda Gates –

      Exxon Mobil Corp., or ExxonMobil, is an American multinational oil and gas corporation headquartered in Irving, Texas, United States. It is a direct descendant of John D. Rockefeller’s Standard Oil company,[4] and was formed on November 30, 1999, by the merger of Exxon and Mobil (formerly Standard Oil of New York and Standard Oil of New Jersey.) It is affiliated with Imperial Oil which operates in Canada. The company’s largest shareholder is the Bill and Melinda Gates Foundation.[5]

      The world’s third largest company by revenue, ExxonMobil is also the second largest publicly traded company by market capitalization.[6][7] The company was ranked No. 5 globally in Forbes Global 2000 list in 2013.[8] ExxonMobil’s reserves were 72 billion BOE (barrels of oil equivalent) at the end of 2007 and, at then (2007) rates of production, were expected to last more than 14 years.[9] With 37 oil refineries in 21 countries constituting a combined daily refining capacity of 6.3 million barrels (1,000,000 m3), ExxonMobil is the largest refiner in the world,[10][11] a title that was also associated with Standard Oil since its incorporation in 1870.[12]

      ExxonMobil is the largest of the world’s supermajors[13] with daily production of 3.921 million BOE. In 2008, this was approximately 3 percent of world production, which is less than several of the largest state-owned petroleum companies.[14] When ranked by oil and gas reserves, it is 14th in the world—with less than 1 percent of the total.[15][16]

      ExxonMobil has been subject to numerous criticisms, including the lack of speed during its cleanup efforts after the 1989 Exxon Valdez oil spill in Alaska, widely considered the number one spill worldwide in terms of damage to the environment. ExxonMobil has drawn criticism for funding organizations that are skeptical of the scientific opinion that global warming is caused by the burning of fossil fuels. Questions have been raised about the legality of the company’s foreign business practices. Critics note that ExxonMobil increasingly drills in terrains leased by dictatorships. The company has also has been the target of accusations of improperly dealing with human rights issues, influence on American foreign policy, and its impact on the future of nations.

  6. TimR

    I don’t blame older generations for being skeptical of climate scientists, since those guys have been bleating since the 70s about imminent catastrophe and it ain’t happened yet. Also too, coffee bad one month, good the next. So much for the Experts.

    And I don’t know how people who fervently believe in the reality of climate change can think on the one hand that virtually every institution in our society is corrupt and fraudulent, yet somehow scientific institutions (supported by and affiliated with those same corrupt institutions) are themselves bastions of enlightenment and disinterested truth-seeking. Maybe so, but it doesn’t seem likely.

    So it does grate a little when people assume that they’re obviously right in their second-hand, layperson’s assessment of possibly fraudulent data (or selective or misleading data.) Don’t get me wrong, I’m all for what might be called traditional environmentalism: wise stewardship of the land and resources, minimal impact, conservation, etc. But the grandiose claims and high stakes battle, “you’re either with us or against us”, fever pitch cataclysm between two existential forces is a bit much.

    Also remember that our form of science is reductive and atomistic, it doesn’t handle systems all that well.

    1. Banger

      I certainly did not think our cultural institutions were dead in the 70s particularly science. Yes, there is an element of science that has played the bureaucratic game and diminished its standing. But, since I have spent time with academics and scientists they are, if somewhat rigid and self-serving in their general intellectual habits, collectively they have done a pretty good job (within somewhat narrow confines) of describing the physical world. The advances speak for themselves even though many of them seem pointless on the whole scientists are pretty honest compared to say, cops, politicians, lawyers, RE agents and so on.

      You offer no argument as to why, somehow, methane and CO2 do not have the properties of greenhouse gases nor that they are produced in large enough quantities etc. But that’s ok, my own training is only in college biology and systems theory (has important connection to ecology).

      I always say this: the consequences of not acting on what the vast majority of scientists believe to be the case seem rather foolish–of course they could be wrong–but the likelihood, using logic is that the fact they totally miss the real facts is unlikely. Thus taking some kind of action even if we aren’t sure about the details seems prudent. If we’re wrong we really will not have lost anything much (I believe we can retool our economy but that’s another discussion). If we’re right then we will have a chance to save quite a lot of Earth’s life.

      Personally, I believe that wasteful use of energy and materials is a moral issue and I’m not going to make that argument here because I’m sure that would be an absurdity to you–but I would just ask you to look at it within a risk-analysis matrix.

      1. TimR

        Banger- I’m not really impressed by the idea that “vast numbers of scientists” believe in AGW. I prefer quality over quantity when it comes to intellectual analysis. Quantity is great for collecting all the data, doing field-work, etc. but how many people, even among scientists, really have great “scientific minds” in the sense that they’re going to be able to free themselves of the shackles of ideology (of all sorts), to get outside consensus paradigms and see things with radical clarity?

        Not just scientific history, but recent scientific history, offers examples of establishment paradigms that are entrenched due to powerful bureaucracies in government and academia. People make their careers on a certain POV, become powerful figures, and prevent outsiders from mounting challenges. I’m not sure that AGW doesn’t tie into various elite agendas involving social planning for the masses, and that they might not seek to promulgate it by funding scientists who hold the “right” views. For examples of how science has gone astray recently just in the field of nutrition, see Gary Taubes’ _Good Calories, Bad Calories_. The principle is the same.

        In that case, if we are being led sheeple-like into some fleecing operation, the consequences of listening to Experts who say “just trust us” could be steep indeed. It’s suspect to me that all the establishment types (ex the “crazy” TP arch-libertarian types) genuflect at the church of AGW — is it really about the good of all, and this time we should trust them, or might it not be about *their* good and our further immiseration?

        I don’t know why you think I’d consider it absurd to view waste and pollution as a moral issue — as I said, I support “traditional” environmentalism. What I object to is what seems to be, possibly, a hyped-up global crisis, which could be a convenient way to further reshape the world along starkly class-based lines.

        1. Banger

          Tim, you make reasonable arguments–however you don’t deal with the probability issue. Is it worth it for me to take a chance that you are right and the scientific community (as a whole) is wrong? This is not a casual issue–even if there’s a slight chance that an asteroid were to hit our planet wouldn’t you want to take some kind of action?

        2. different clue

          Reality is the stuff that stays real no matter how hard you try to talk it away or wish it away or deconstruct it away.
          Is the global warming? If so, is mankind warming the global. It either is or it isn’t, and it is or it isn’t.
          If the global is warming, it could care less whether you believe otherwise.

          1. F. Beard

            Global warming beats global cooling by many miles! TWICE the Earth has been completely covered with ice from the Poles to the Equator.

            Me, I prefer cold weather to hot but I’m not willing to let people die over that preference and if the Earth is heading into a new ice age then CO2 is helpul not hurtful.

            What the wicked fears will come upon him, but the desire of the righteous will be granted. Proverbs 10:24

            And we know that God causes all things to work together for good to those who love God, to those who are called according to His purpose.

            “All things” presumably means CO2 too. But who loves God when so few even know what He’s said?

        3. Blunt

          TimR sez: ” I prefer quality over quantity when it comes to intellectual analysis. … How many people, even among scientists, really have great “scientific minds” in the sense that they’re going to be able to free themselves of the shackles of ideology (of all sorts), to get outside consensus paradigms and see things with radical clarity?”

          What a wonderful and hopelessly idealistic notion. Intellectuals, or just regular humans using minds that have been trained and conditioned by infinite circumstances are able to break free of said teaching and conditioning in order to “see things with radical clarity.”

          Yep, like fish can understand an atmosphere of air. That notion is purely brilliant, TimR. This comes from toiling in industrial paradigms in the schools you’ve attended?

          You should have tried Liberal Arts, perhaps?

    2. Patricia

      Of course, if a person is going to condemn a whole group for the fallacies of a few in the group, that person would have to condemn himself too, even if only for making such an fallacious argument.

  7. Banger

    We currently have no organized counter-narrative, counter-movement to the grotesque gyrations of ignorant or malicious plutocrats on the public stage.

    They have chosen a dishonorable course and they should be dishonored by those (audiences, universities, the media) who have or could accord them honor.

    I think you have written a thoughtful and intellectually honest piece but the quotes above are central to any discussion of the dilemma we face and it is a dilemma. First, despite the growth of information and the ease with which we can debunk deficit hysterics, they still dominate the discussion. Second, that despite the passage of five years we do not have a coherent counter-narrative on the left not only on this issue but almost any public-policy issue on the left.

    Let me address the issue of “honor.” This one is central to this discussion. The reason these people do not face the universal condemnation they deserve is that the concept of honor and virtue has, for the most part, disappeared from public life. Yes, it exists in movies and in moist-eyed sentiments of military life (“thank you for your service” and so on) but it is sheer hypocrisy and cant. In our efforts to “entertain ourselves to death” we have made the collective decision to live on “Pleasure Island” of Pinocchio fame and now we are growing donkey-ears. For bringing up this I am viciously attacked on this forum, btw. Sorry folks, but without common standards of morality there can be no concept of honor or virtue–you an call the oligarchs loathsome and evil but you do not define your terms–you assume them as if they were obvious. Many people in our culture honestly believe that you should acquire wealth by any means necessary, porn, drug-dealing, con-games, theft, are increasingly ok as long as one of “our” tribe is doing the crime as we can see from the obsession with characters like Walter White, etc., etc.

    You can appeal all you want to the American people about the 1% or, more accurately the .1% but you don’t get much interest or passion from the average person who believes that the goal of life is, chiefly, to be a 1% person. The fatal flaw of the left is to imagine that if we just say that the rich are bad and broadcast that fact to the People they will follow us–well, guess what? I don’t see them following us–so maybe, just maybe that tactic won’t work.

    That comes to the first quote about a counter-narrative. This is the key to this whole discourse. Ok, we have a basically amoral/immoral public but we also know (or should know) that human beings are, by nature, deeply moral creatures because they are social creatures and there is no society without morality. So the counter-narrative you imply is needed has to be, above all, a moral narrative. The fact the left has been unable to present a moral narrative is that the left, like the right, lives in a world of fantasy. We are fish swimming in a sea of fantasies and we can’t see them because we believe they are inherent–that there is no life outside of these fantasies. As such, we ignore rules of evidence, science and reason–all of us, btw, not just Obamabots or right-wingers.

    I will suggest, again (probably to the scorn of most here), that we start with broad moral issues and I don’t know how to do that but I can suggest some possible approaches.

    **There is such a thing as society–this means those that follow Ayn Rand cannot be in this dialogue.**

    **If we want to live in a coherent society we need to agree to common moral codes without having to violate our personal or tribal codes.**

    **We need to arrive at these codes through dialogue not force. (note here that I favor dialogue once we get an agreement on dialogue–getting to dialogue will require hard-nosed realpolitik)**

    **We need to establish what is good for our social order and what is bad. So we need to decide, for example, if greed is a virtue or a vice or neither.**

    **We cannot cut ourselves off from history. We have something called the Western Tradition which includes both what we call Humanism and the Judeo-Christian religion though now this has, thankfully expanded. The most dynamic part of that tradition is science/technology and, in the United States, the philosophy of pragmatism. These values are, currently in the process of dissolving and we need to decide whether to consciously embrace them or modify them–allowing them to just pass away is not an option. We won’t be able to deal with issues like Global Warming, education (currently based on counter-scientific principles), prison practices, health-care and so on.**

    How can we, for example, say that it is wrong to favor a wasteful and perhaps ultimately fatal model of an economy if we don’t have common standards of reason or science? How can we deal with Climate Change when people actually would rather live on Pleasure Island and forget about the future? How can we create a sane health-care system when the facts are ignored by both political parties and the mainstream media?

    What I see, and what I object to, is a left in America that does only one thing–it waves its collective fist at the “rich” while the oligarchs jeer knowing full well that for every fist-wave they can count more profits and more power in Washington because people who get their hands dirty playing realpolitik ignore bootless people who play at politics like children not potent men and women.

    Having said that, there is hope, in my view, that something of the sort I envision will happen probably in an oblique manner because the current situation is un-sustainable and we already have the beginnings of a sense that the public is fed up with our broken institutions and maybe open to alternative view–we should act more boldly now I think the budding donkey-ears people are noticing will spur interest.

    1. Jim


      I strongly support your sentiments.

      The probable foundation for our current crisis seems, to me, to be largely cultural/spiritual rather than simply economic/financial/political.

      Its highly likely that some kind of cultural transformation is an essential precondition for political/economic change–though not a substitute for it.

      Unfortunately progressive/left thinking presupposes the existence of a functioning morality which no longer seems operable.

      Consequently, the progressive/left community has sophisticated plans for repairing the material infrastructure of our country but is largely mute on how to repair our cultural infrastructure.

      One key cultural issue, which is rarely explored by the progressive/left community, is the philosophic problem of goodness.

      For example, is virtue a gift of grace, something not achievable through human effort, or can virtue be at least partially nurtured through spiritual exercises of some sort?

      1. Banger

        Good, agreement with me on this particular outlook is rare around here. To answer your question about virtue–let me answer very quickly–virtue is, in my view, hard-wired in the human psyche. In my view, it is through a series of perversions culturally induced based on cultivating stress (see Skinnerian studies on stress in rats), fear and so on that induces people to adopt extremely bizarre ideologies that demonize the “other” and valorize the repressive state or the repressive and self-seeking corporation or organization. Thus natural community is disperesed through “growth” as well as ethnic cleansing or repression.

        1. Jeremy Grimm

          I must disagree! I believe the sentiments you expressed above (initially) are shared by the larger part of those who read these blogs and probably by the large part of Americans — at least I hope that’s the case. There are many who read Yves blog but fewer who have the time and fewer still who feel comfortable participating in the counterpoint. [Frankly, some of the comments can become more savage than I feel comfortable with or believe contributes to the discussions here, although Yves and Lambert do an excellent job at minimizing the acrimony.]

          1. Banger

            I’ve received a lot of abuse for suggesting that pointing the fingers at oligarchs and calling them evil is as unproductive as saying the 99 per cent are victims of oppression and therefore blameless.

  8. nothing but the truth

    as the govt can supply endless cash, all kinds of freeloaders hang on to the govt.

    most of the deficit has been used to finance the military open ended misadventures – ie, the military industrial complex, which is is the most wasteful of resources.

    since the govt writes the law, it can (and has) given itself a place of privilege in the economy. that is no guarantee it will not waste the money (proxy for limited resources) on govt employees, their pensions and pointless wars.

    by repeatedly saying that money can be created ad infinitum to create prosperity is to fall into the money illusion. many countries have tried that and faced chaos.

    resources are limited and money is a token used to manage those. once you understand and agree on that there can be some reasonable discussion.

    most “MMT” crowd does not seem to understand/acknowledge this basic fact of political economy. they are confusing the technical aspect of money (computer reserve entry) with its real human function – trust. this is like an engineer saying he can build a bridge with two people, by changing the definition of a meter of length.

    politicians do understand that money is not just a token. and that is why they are careful before going the full monty.

    1. anon y'mouse

      sure they do. that’s why they give banksters billions every month to play the stock/commodities and other markets.

      because, to them money is more than a token and you can’t just go giving it away to all and sundry who need tokens, to, like, actually pay the rent or buy shoes with.

  9. TomDority

    Tax predatory, rent extractive gains back into public use.
    You can’t vote on private money use.
    Base tax upon land, monopoly and economically rent extractive activities.
    Be clear that wealth is not money…never was.
    Wealth production always requires labor in its creation, as such, our revenue system should stop taxing wealth creation and aim it at wealth extraction.
    A hedgie or asset stripper who earns a billion a year taxed at 90% would still make 100,000,000 dollars – that 900,000,000 brought back into public use could be used to shore up our ultimate infrastructure (planet earth).
    Taxation is the gallows upon which plutocracy, tyranny, fascism… can be hung as, the ill-gotten gains of the plutocracy would be brought back into public use and, public money can be voted upon in service of the common good.

  10. F. Beard

    On the other hand, our current plutocratic order gives inordinate space and accords respect to people simply by virtue of their wealth. Michael Hoexter

    Well, that would make some sense if that wealth were honestly earned. But the government-backed banking cartel favors the rich since they are deemed the most so-called creditworthy. That is, btw, violation of Equal Protection under the Law.

    So then, why don’t we abolish it? Ans: Because many wanna-be wealthy would object.

    1. JTFaraday

      “But the government-backed banking cartel favors the rich”

      Maybe we should back up. To what end is the government backing up a “banking cartel”?

      1. F. Beard

        Government-backed banks are a rapid if cruel and unjust way to create wealth or at least military power and maybe that was necessary or at least justifiable to counter Stalinism.

        But IF we had had ethical money creation all along would Commununism ever have gotten any traction? I doubt it seriously.

    2. Jeremy Grimm

      I’ve heard it said, and read many times, that everyone wants to be wealthy, that is have a large amount of money. And, further there is no limit where they might have enough to be happy.

      I wonder whether that’s actually true. Of course the first question I have to ask is when someone says they want to be rich, wealthy, famous and so on — what exactly do they mean by that? Do they mean that they want to have enough wealth to buy up all the news outlets and assure that their favorite ideology dominates all thought and discourse? Do they mean that they want to control the selection of our government, personally select the next President, or their state’s governor? Do they want to be wealthy enough to have people fawn on them, to have servants and an army of sycophants to drool over their every word, to tie their shoes for them and button their shirts?

      I don’t mean anything of that sort when I dream of being rich, wealthy or famous. I’d very much like to be wealthy so I could own my time, get up when I want to, decide how to spend the too few hours I have on this earth. I’d like to live comfortably, a warm dry house, with clean water, good food, and most important, a profound sense of security. I’d like to have enough money so I could tell my kids to pick any college or university they want to go to AND can qualify for, and study whatever they would truly love to learn. I’d like to have enough money to comfortably help my friends and neighbors, my relatives and as many others as I can, to find the same comfort and security in their lives that I feel. … I don’t envy Bill Gates his fortune or how he arrived at that fortune. I don’t want the power that goes with money, like the Koch brothers have. It holds no interest for me. I would like the power to speak or write and have my words considered for their wisdom, knowledge and acuity alone — if I can arrive at these values in what remains of my life. [I’ve been watching too many Frank Kapra movies lately…] In my wildest dreams I might have such wealth that I felt I could help those outside my country to enjoy the same ownship of their lives that I long for.

      What do people mean when they say they want to be wealthy? I strongly suspect it’s a very few that envision the kind of wealth and power that our incredible imbalance in the distribution of wealth and income gives to the very few in our society.

      1. F. Beard

        I think you’re correct. Most people’s desires are rather modest. I know mine are.

        However, we are in a desperate rat race for a life style that should mostly be a given. Instead, being homeless is a very real possibility for a large percentage of Americans.

        So defense of the banks is mostly from ignorance, desperation and the mistaken belief that TINA.

        Still, there are a few who wish to save the banks UNTIL they become filthy rich.

      2. Banger

        There have been a number of studies that show that money is motivator to accomplish tasks only up to a point and that’s pretty much accepted in social-science circles. Yet, people want more and more why? The answer is obvious as well as traditional–social status. The bigger boat (I had a boss who has a goal of not only upgrading his house and his wife but, perhaps even more, his boat (he was honest about it so hats off to him).

        Money buys status and power and that’s what it is for in our society where we equate what is left of the idea of virtue with wealth–despite the usual platitudes which are worthless “money makes the world go round” in the USA and nothing else comes close other than the strange obsession with “winning” which is pure status. Thus a champion athlete gets to strut his/her stuff when they win despite their actual income from winning.

        1. skippy

          Banger if you go back far enough, you will find the ex nhilio conceptualization, for economic wealth, in its most reductionist terms. Let just go back far enough for brevity’s sake, Says Law.

          So on the side of the market makes everything right side you have – that hording is irrational and on the other side – that hording is rational as future claims on wealth.

          skippy… get the picture now.

  11. TomDority

    So then, why don’t we abolish it? Ans: Because many wanna-be wealthy would object.

    True, but so did King George to our rebellion.

    F Beard, thought you were above TINA… I know you are :)

    1. F. Beard

      You’re right. There is an alternative and a very painless one too: Something along the lines of Steve Keen’s “A Modern Debt Jubilee” plus genuine reform along ETHICAL lines.

      But I’m getting tired of this battle. Even God Himself appreciates a little help (even from just one person!) and except for Him I’m getting close to none. Of course with God helping no other help is needed still I often wonder why I should bother to fight an uphill battle for a society I don’t particulary like.

  12. ThroxxOfVron

    “So then, why don’t we abolish it? Ans: Because many wanna-be wealthy would object.
    Read more at http://www.nakedcapitalism.com/2013/11/michael-hoexter-loathsome-wall-street-deficit-hysterics-blame-the-old-and-sick-not-us-part-2.html#xQzyu8KjpsSQoREg.99“-F.Beard

    Rubbish. This is just another canard trotted out by rentier apologists and fools.
    The GINI coefficient and easily obtainable wealth disparity/distribution data clearly show that wealth is being aggregated and that ( upward ) class mobility is a all but impossible within the context of the present paradigm of economic repression.

    1. F. Beard

      Well, that’s hopeful, that the wanna-be filthy rich are being cut off from hope. :) But I doubt they are, at least not the more intelligent ones. And let’s also include among the “save the banks crowd” the already filthy rich who think making the counterfeiting cartel more prudent constitutes making it moral – an impossibility.

      But now that I think about it, it’s the folks who can’t envison a life without artificially (because subsidized by the poor via government priviledge for the banks) cheap credit to buy a home, car, education, etc who also wish to save the banks from themselves. And then there are the folks who have not yet realized the thieving nature of the banks DESPITE centuries of testimony from some of the most important men in history.

      But who would need credit if we received just RESTITUTION for the thefts that have already occured? And yes, wealth disparity data is a rough estimate of how much theft has already occured.

      But before restitution can occur, we must be firmly convinced of the thieving nature of government-backed banks. Don’t take my word for it, just google “banking quotes”.

      1. skippy

        Can you identify which banks draw your ire or is it, all of them, and do you hate oil company’s or other large cap corporations too?

        1. F. Beard

          ALL of them and the credit unions too!

          What part of government-backed credit creation violates Equal Protection under the Law eludes you?

          As for corporations I see nothing INHERENTLY wrong with people pooling their resources in a democratic (at least per share) manner to benefit from economies of scale and the division of labor. Do you?

          It’s corporations PLUS government-backed credit creation that is so noxious since corporations are often among the most so-called creditworthy.

          Yves herself let the cat out of the bag when she said that issuing new equity was more expensive than borrowing. How can that even be unless the interest rate is artificailly low since a non-profitable company cannot pay interest either? And stands to lose assets if it can’t pay?

          The extreme irony is that I should have to lecture Progressives about sharing and oppressing the poor. You don’t want to share and you’d rather rule the poor than grant them justice!

          Hint: God respects the poor, I suggest you do too:

          Proverbs 14:21: He who despises his neighbor sins, but happy is he who is gracious to the poor.

          Proverbs 14:31: He who oppresses the poor taunts his Maker, but he who is gracious to the needy honors Him.

          Proverbs 28:8: He who increases his wealth by interest and usury gathers it for him who is gracious to the poor.

  13. susan the other

    If the wealthy among us were a diverse class, some being socially dedicated, some being selfish, we would hear from those dedicated to society. THey would be outspoken. Other than self-serving “charity”, all I hear from them is deafening silence.

  14. sharonsj

    These fuckers never mention all the corporations that pay little or no Federal income tax. And I bet they don’t pay anything like what the rest of the “little people” pay either.

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