2:00PM Water Cooler 9/26/14

By Lambert Strether of Corrente.

Cognitive Regulatory Capture at the Fed


Michael Lewis writes in Bloomberg on “the secret Goldman tapes” to air on  “This American Life” tonight [Bloomberg]: 46 hours of tape recordings from Fed whistleblower Carmen Segarra obtained by [ProPublica]. Lewis:

In early 2012, Segarra was assigned to regulate Goldman Sachs, and so was installed inside Goldman. (The people who regulate banks for the Fed are physically stationed inside the banks.)

The job right from the start seems to have been different from what she had imagined: In meetings, Fed employees would defer to the Goldman people; if one of the Goldman people said something revealing or even alarming, the other Fed employees in the meeting would either ignore or downplay it. For instance, in one meeting a Goldman employee expressed the view that “once clients are wealthy enough certain consumer laws don’t apply to them.” After that meeting, Segarra turned to a fellow Fed regulator and said how surprised she was by that statement — to which the regulator replied, “You didn’t hear that.”

This sort of thing occurred often enough — Fed regulators denying what had been said in meetings, Fed managers asking her to alter minutes of meetings after the fact — that Segarra decided she needed to record what actually had been said. So she went to the Spy Store and bought a tiny tape recorder, then began to record her meetings at Goldman Sachs, until she was fired.

Lewis concludes:

You sort of knew that the regulators were more or less controlled by the banks. Now you know.

(Actually, NC readers know this already very well. And the cognitive regulatory capture so evident in the tapes was described and named by then FT columnist Willem Buiter in 2008. Everybody knows.)

ProPublica, based on report commissioned from Columbia professor David Bein, diagnoses the problem as “cultural” [ProPublica]. I’m not so sure. After all, the Fed is, at the very best, a “weird entity,” created by legislation, but not in any of the three branches of government, a “public/private hybrid.” So, we might ask, is the “culture” at the Fed simply the unlucky residue of structural forces, of a gross power imbalance between the Lords of Finance and regulators?

In any case, I’ll be happy if Goldman gets thrown under the bus, thanks to Carmen Segarra’s courage. I’ll be even happier if, in an election year, the political class is lightening the troika. However, in the event of such happy outcomes, our question to the political class must be “What have you done for me lately?” Goldman is, after all, one player in a grossly distended and parasitical FIRE sector. Hedgies and private equity are riding that troika too.

NOTE [1] The phrase “Cognitive regulatory capture” appears in Buiter’s famous paper delivered at Jackson Hole.

I’ve been waiting years to use “I can’t believe it’s not Buiter”! And now I can!


Kerry cuts deal with King Abdullah, Prince Bandar in attendance, enabling strikes on ISIS as other Arab nations follow Saudi lead [WSJ]. Ka-ching!

$15 billion seems like a lot to pay for 5,000 “moderate” mercs, even in Saudi Arabia [HuffPo]. Ka-ching!

One F22 strike in Syria costs more than the Indian mission to Mars. And that’s before we get to the cost of the planes [Daily Beast]. Ka-ching! Mission accomplished

Prince Khaled bin Salman, son of Crown Prince Salman bin Abdulaziz, flew a Tornado jet and bombed ISIS [Daily Mail]. What fun. But not an F22?

Khorosan threat ZOMG!!!! being rolled back (“nuanced”), having served whatever its momentary purpose was [AP]. As it turns out, “imminent” is a day, a week, or a Friedman Unit.

Obama gave a great speech on the war on terra Yogi Berra at the UN, as usual, but “a former cabinet official from U.S. President Barack Obama’s own party” (I wonder who?) says that backstage “things are bad, very bad” [Foreign Policy]. Well, things never looked all that good from the cheap seats, either.

Stats Watch

GDP, Q2: Final revision up to 4.6 percent from 4.2. “Upward revisions primarily came from nonresidential fixed investment, residential investment, and exports.” And a rebound from weather-related decline in Q1, so expect Q3 to moderate [Bloomberg]. (Question: So am I going to see this in my paycheck?)

Corporate profits, Q2: Revised up, “gained an annualized 27.1 percent [Bloomberg]. (Question: Ditto.)

Consumer sentiment for September: 84.6, exactly at expectations. Expectations component up, current component down [Bloomberg]. (Answer: Jam tomorrow, but never jam today.)


A spectre is haunting Europe: A deflationary death spiral [Salon]. So why not have a debt jubilee? [Guardian].

UK: Ex-boss of civil service: “[U]nder any government, we face up to a further five years of austerity in public sector spending” [BBC].

Italy: Deflation will result in debt default if not addressed [Wolfgang Munchau, “Italy debt burden is a problem for us all”, FT].

Greece: Government to attempt exit from bailout. Merkel offers generic praise, says nothing of exit [Reuters].


Misssouri cops now wearing “I am Darren Wilson” wrist bracelets [Gawker].

More protests (“scuffles”) in Ferguson [Reuters].

News of the Wired

  • Concerns over “shellshock” bug in BASH as exploit reported “in the wild” [Ars Technica (CL)]. Important especially if you run a server.
  • Calling out snowclones beats back a tide of falsehood [Language Log]. Given time.
  • Kid shares lunch, put in detention [KRCR].
  • Hero rats clear minefields [CNN].
  • Kim Jong-Il suffers from “discomfort” [ABC Australia].
  • US Forest Service to Ansel Adams: Drop dead! $1,000 fine proposed for taking pictures in the wilderness areas [Esquire]. The public’s wilderness areas, I might add.
  • “Invisible art” sells for millions in Manhattan gallery (pictures) [CBC]. Like CDOs! Unless this is an example of that really, really dry Canadian humor. Readers?

* * *

Readers, feel free to contact me with (a) links, and even better (b) sources I should curate regularly, and (c) to find out how to send me images of plants. Vegetables are fine! Fungi are deemed to be honorary plants! See the previous Water Cooler (with plant) here. And here’s today’s plant (furzy mouse):


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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. McMike

    Goldman thrown under the bus over some stupid audiotape.


    Hint: it was released on Friday, yes? Watch for this non-event to slide under the tide of ISIS by Sunday am.

    And watch for the intrepid leaker to face the full wrath of the justice system and smear machine. Pretty sure we’ll find out that secretly recording bank meetings or Fed meetings or something is a violation of the Patriot Act. Or at least theft of trade secrets: http://en.wikipedia.org/wiki/Sergey_Aleynikov

    1. Lambert Strether Post author

      45 hours, though. That’s a pretty rich source. And while I grant the principle of the 5:00PM Friday release, this will be on This American Life, and that’s a drip feed directly into the liberal zeitgeist and in time for the talk shows and the sunday papers. So, could be buried, but I doubt it. More likely a mid-terms brouhaha, to be followed by “reforms.”

      1. Banger

        Lambert–you actually think the revelations will hit the Sunday shows or the mainstream media? As for me, I don’t know–it is not impossible but these kind of revelations usually aren’t covered or if they are they are in the news for a day and never mentioned again. If this story has legs–and you’re right to put an emphasis on it–it could signal a major change within the media. But why would they want to focus on that? Are there people in the media who actually care about this stuff other than Bill Moyers?

        1. Lambert Strether Post author

          I’m not a prophet. This doesn’t strike me as a usual 5:00 dump, however. If Bloomberg is going bury a story, putting Michael Lewis on it probably isn’t the best way. Deflect, perhaps, or minimize. But not bury. We’re also seeing some co-ordination between NPR, Bloomberg, and ProPublica. This again is not a sign of burial.

          1. McMike

            By Monday we’ll all know which way it is covered.

            However, I agree with the other posters, this story, while a blatant smoking gun, won’t really get legs outside certain circles.

            Now, if one of the Goldman execs had punched her….

              1. McMike

                Yessir. I preach to the choir every day, and twice on Sunday.

                Banks getting fined billions for laundering money for drug cartels didn’t break through the public yawn. Banks admitting they sold junk to their muppet clients and then bet against them didn’t lead to reforms.

                I am curious what you think is special about this story.

                Lapdog regulators sat around and stopped taking notes while egotistical Goldman managers spouted off about how they were the kings of world. That’s still dog bites man.

                The GOP of course won’t touch it, unless they perversely try and smear it on Obama. Still, just a single cycle story or so. Dems won’t touch it, since it would rain on Holder’s going away party.

                1. lambert strether

                  45 hours of tapes from a whistleblower of supposedly private Fed/Goldman deliberations don’t strike you as “special”? You’re certainly setting the baseline high.

                2. Yves Smith

                  Tapes. People can deny that things are as bad as they are purported to be in the absence of solid evidence. That goes double when the party under attack is powerful and connected. Most people defer to authority.

                  Look at how videos of police shootings make all the difference in terms of whose story is believed. The cops ALWAYS prevailed in the absence of evidence that they misbehaved.

            1. Banger

              You never know–if it serves some purpose within the structure of palace intrigue then it may well become a weapon in the hand of some faction–that’s how stories emerge and get “legs.”

              1. Paul Niemi

                Warren is calling for full hearings into it. That is something. I seem to have noticed that it was only after Geithner left as Sec Treas, that Justice started getting settlements from big banks. Maybe they were ongoing, but I get that impression.

                1. Lambert Strether Post author

                  Yes, that’s interesting. After the mid-terms, of course:

                  “When regulators care more about protecting big banks from accountability than they do about protecting the American people from risky and illegal behavior on Wall Street, it threatens our whole economy,” she said in a statement. “Congress must hold oversight hearings on the disturbing issues raised by today’s whistleblower report when it returns in November — because it’s our job to make sure our financial regulators are doing their jobs.”

                  Well, that seems just a little careful to me.

              2. lambert strether

                The Marquis de Lafayette was a revolutionary. On two continents. I don’t see ruling class splits as sufficient, but they may well be necessary.

      2. JGordon

        I suppose this will be a litmus test for our civilization, showing how close to moral/ethical bankruptcy, and thus collapse we are. My guess: few will care about it and thus nothing will happen. Which may be taken as empirical evidence that America is pretty much done for. So now would be a good time to get a jump on organizing smaller political units that can fill the gap after. For those who chose to stick around.

        1. different clue

          Many of those who will appear not to care will in fact be wearily resigned and feel hopelessly defeated. It would be confirmation of what they have long felt. Non-action against any of this will confirm to them the accuracy of their suspicions of what the DC FedRegime really is and really stands for.

          They will not ever raise a hand against the government. But neither will they raise a hand to protect the government if it is threatened with internal opposition or internal collapse.

    2. Kim Kaufman

      Yes, LOL over something happening. But maybe if someone like Matt Taibbi got a hold of the tapes, he could make something of it. Oh, darn, isn’t he editing a humor column or something over at Omidyar’s place? I just downloaded the episode to listen to but you can go here to see the questions and answers from them and Pro Public to and from the Fed and Goldman. http://www.thisamericanlife.org/blog/2014/09/our-questions-for-the-new-york-fed-and-goldman-sachs

  2. Bill Smith

    “One F22 strike in Syria costs more than the Indian mission to Mars. And that’s before we get to the cost of the planes.”

    Hope that whomever came up with this line isn’t doing any real accounting…

  3. Vatch

    I know yesterday was the day for discussing Eric Holder’s legacy, but I didn’t think of something until today. He has been effusively praised for his efforts to protect the rights of minority voters, but I’m wondering whether that praise exaggerates what he has really done. We know that he is completely full of hot air on other issues, such as financial crimes. Is he also blowing empty air about voter rights? Has he actually done anything aside from spouting platitudes?

    1. Cocomaan

      Can you name a single thing he did about voter rights? I can name things about DOMA, but not voter rights.

      1. Vatch

        As far as I know, he just complained about the laws in some states. That’s my question. Did he file federal lawsuits against those laws?

        1. different clue

          I sort-of think that he has filed at least a couple or even a few. And he has had the appropriate
          arm of Justice Department begin a “patterns and practices” investigation of the Ferguson Police Department’s general function and behavior.

          Does this make up for him high-handedly arrogating Absolutistly Monarchical powers on behalf of the Unitary Executive President to kill any American at any place and any time with any weapon whenever Mr. President may happen to feel like it? Well, I don’t know . . . .
          Perhaps that’s a debate worth having, as President Obama would say.

    2. ifthethunderdontgetya™³²®©

      Holder stinks. He was hired to bail out the banksters, and that’s what he (and his deputy, Lanny Breuer) did.

      And then there was the egregious use of the 1917 Espionage Act.

      Among the most egregious actions cited in the report for having a chilling effect on the press are the prosecution of eight government employees or contractors under the 1917 Espionage Act, more than twice as many as all previous administrations combined; the restriction of normal reporter-source relationships by aggressively pursuing leaks, using secret subpoenas and by implementing a program requiring federal employees to monitor one another for signs of unauthorized disclosures; hostility to press inquiries and reluctance to release information; and the use of the administration’s own internally created media to bypass the press.

      To hell with Holder. He belongs in prison.

  4. Jim in SC


    That’s David Beim. He’s a straight shooter. Been teaching at Columbia for over twenty years, but previous to that was head of investment banking at Banker’s Trust.

      1. Kim Kaufman

        Yes. Culture of getting away with criminal behavior. It’s called arrogance and corruption, I think.

        1. Uncle Bruno

          Yes, ironic that the Fed employees question Goldman’s conflict of interest policy as they apply for jobs at Goldman. Just plain crooked.

    1. jrs

      At that point why even have health insurance at all, since hospitalization and it’s cost is probably THE major reason to have health insurance IMO. It costs a fortune and if it doesn’t even cover the one thing you want it to cover what’s the point. I do in my more dystopian moments (which is ALL of them!!! :)) see things evolving to the point where pretty much nobody actually has any real healthcare in this country, and it might as well be a few hundred years ago in terms of medical advances because although medical advances may exist, noone can actually afford any of them, so everyone just makes do on herbal medicine and when that isn’t enough dies.

      1. jrs

        Not *even* that :(. According to the article they can’t *EVEN* get ACA subsidies if their employer provides garbage coverage.

        1. jrs

          Of course that leaves non-subsidized ACA coverage, or just buying outside the ACA marketplace and since there is no subsidy, buying outside the ACA isn’t always worse.

          But since it is predicted it will be the lowest wage workers that will have this poor coverage (at least at first it will be them, eventually maybe everyone), I don’t think many will be able to afford entirely unsubidized coverage unless they’re young when coverage is cheap. So rather than going to the ACA most are probably just NOT going to have hospitalization coverage, one of Obamacares classes of citizens, those without hospitilization coverage (especially unfair as if these employees worked for say a company too small to be under the ACA mandate they’d probably be eligible for subsidized ACA premiums or Medicaid but since they work for a company under the mandate they just have to accept coverage with no hospitalization). And least that’s how I interpret it??

    2. jrs

      Such a damning article, must read. Worst thing I’ve read about Obamacare yet (worse than narrow networks, and multi-layer generic prescriptions). It has much debate over it whether it was a mistake or not. Who cares? If it was a mistake Obama could fix it, never mind the kabuki, because he single handedly delayed the employer mandate for a year right? He’s been single handedly modifying the ACA for awhile hasn’t he? Because I fully expect it to turn into another act of: “yes we would fix it but – Republicans they have the majority, sorry, we would but …”. Even though the law wasn’t passed initially by Republicans.

      The focus is on how it will be better coverage than the non-coverage low wage employees have now. That may be, but could you possible come up with a better plan to divide the middle class from low wage workers? Because anyone with a healthcare plan that covers hospitlization now (iow that isn’t complete garbage), knows that their plans may be headed for lowest common denominator land. So the plan of the Dems is to get the people left in the middle class to be deeply divided agains the poor? The more effecitve evil indeed.

      Meanwhile I did not know those who had employer plans but fell within the income range for ACA subsidization were not eligible for it. Not really suprising, but gives a lie to all those who thought the ACA would allow people to not be dependent on employers etc. (always mostly fantasy as people depend on jobs for much more economically than health insurance but AT LEAST true in marginal cases (early retirement, etc.) if we had universal coverage). Aparently not true at all with the ACA. And really sad in that people can’t even get subsidized on the ACA if they get employer coverage, making the employer mandate a bit of a knife in the back.

      1. LifelongLib

        The need for (hopefully) decent health coverage is probably the biggest single factor tying people to conventional employment (well that, and maybe the need for SS later in life). If the federal government guaranteed health care and old-age pensions a lot of us would choose more fulfilling ways of making a living.

  5. sleepy

    Concerning the article about fines for photography in wilderness areas—

    It’s obviously a stupidly thought out law if it bans hikers and photo-enthusiasts from using their cameras. However, commercial shoots in wilderness areas need to be banned–I believe all commercial use of wilderness areas is banned anyway (well, maybe aside from hunting guides). My concern isn’t a photographer taking shots and selling them, but a film crew doing beer commercials–“Budweiser went to the River of No Return Wilderness Area to see if Bud goes with an active lifestyle!” That may sound far-fetched, but I bet it’s occured to someone somewhere.

    Though not a wilderness area, Yellowstone NP has had a problem with drones for awhile, and just put in a temporary ban. Though the incidents cited don’t appear to be commercial, I certainly wouldn’t want to see drones circling overhead as I was camping in the backcountry.


    1. chris

      would that Koons took it seriously. I’d rather look at a wall, the banality of which is authentic, than to go to the Whitney just now. Mind you, I am in the minority as it seems that the connoisseurs of anti-art hoardes are eating it up like free ice cream.

    2. Vatch

      It can be rather difficult to distinguish between reality and parody. An example is the “musical composition” 4’33” by John Cage.

  6. abynormal

    In a horrific new video (embedded at the end of this post), Sandra Amezquita, a 5-foot-4, five months pregnant Sunset Park resident, is thrown to the ground belly-first by a police officer.

    The cops had been arresting her 17-year-old son, Jhohan Lemos, for possession of a knife he had clipped on his belt. Amezquita and her husband responded to Lemos’ cries as he was being beaten. Photographs obtained by New York Daily News show Lemos with a swollen shut eye and a number of serious scrapes and bruises.

  7. TimR

    continuing talk with hunkerdown from yesterday:
    me— ” seizing on the opportunity presented by a faux problem, that some scientists were being allowed to busy themselves with, in previous decades, precisely because it was harmless to power”

    hd—-So if we exterminate all the climate scientists, you seriously don’t think that the PRopaganda machinery would have found something else to seize on to achieve their clients’ objectives? Are you one of those people who believes that, if Einstein had never existed, the atom could not possibly have been smashed?

    The world has seen many discoveries made by multiple people contemporaneously, back when communication latency was a couple of orders of magnitude higher.

    But anything can be misused.

    me— I really think if you have functioning antennae for media propaganda, you don’t even need to address the science, because it’s clearly too politicized and agenda-driven to be trusted.

    hd—The best propaganda incorporates just enough truth to satisfy someone too busy to weigh two competing narratives.

    Now, prove you’re not an American: what’s your take on climate science before the hype, when it was just a bunch of NASA propellerheads trying to make sense of the weird data series they got back from their R/C spaceships?
    I don’t entirely follow you.. It’s bizarre to think that I just blame the scientists? Of course, I think the oligarchs and propaganda machinery is a (or the) problem.

    I agree about propaganda incorporating elements of truth… that seems to support my view that the AGW “science” is pretty flimsy, but good enough for mass media exploitation. If anyone disagrees, I refer them to Denis Rancourt’s critique of the science (and, more interesting still, his analysis of the sociology of the scientists and their relation to power and society.) ( ActivistTeacher.blogspot.com )

    Re the climate science before the hype… As I said yesterday, it may be that this whole “greenhouse gases” business was a pretty safe bet for socially minded, yet middle class and well-socialized, scientists to play around with — it demanded no immediate or particular action, was rather vague and would need “more studies.” As opposed to more concrete and pressing environmental issues, specific damage to the environment. It was/is an issue that could be picked up by Power at will, or ignored if it did not fit the agenda.

    1. optimader

      It seems a rather vacuous notion that anyone would perceive humans at their most elemental level, nothing than an evolved component in Nature, are somehow immune from influencing climate w/ their behavior.

    2. LifelongLib

      But nobody really benefits from AGW being true. It blocks conservatives from pursuing business as usual, and progressives from encouraging the kind of development that would help the world’s poor. In fact, it’s in everyone’s interest that AGW not be happening so we could all get on with our agendas. But it is happening, and chances are nothing effective will be done about it, and God knows what the consequences will be.

      1. optimader

        “But nobody really benefits from AGW being true. ”
        That’s not quite right, it enables all manner of commercial opportunities, as well for those operating in the realm of conventional energy sources, it benefits those that are most profitable/efficient, like XOM.

        The logical disconnect is that just because people one might consider unsavory or exploitive may find an angle to benefit from climate change doesn’t mean the science is wrong.
        Just because Watson/Crick lifted Rosalind Franklin’s X-Ray research images, doesn’t mean the structure of DNA is different than as is accepted in science.

    3. wbgonne

      Baking the planet is a very bad idea. Period.

      Yes, all the scientists are crooked except the ones paid by Big Oil. Arguing with AGW-Deniers is pointless because they win simply by arguing, just as Big Oil plans it: doubt is their product and they have a cadre of useful idiots spewing nonsense, carrying their water and cooking the planet in the name of free-dumb (or whatever). Waste of time. Makes me want to puke.

      Good news for you, however: Russia just discovered a huge pool of oil in the Arctic so now we can burn that too. Future generations and your own children will curse you so I hope you really enjoy that free-dumb. Now please continue spewing whatever nonsense you like but expect no further response from me.

    1. Banger

      The whole “anti-Semetic” thing ruffles too many feathers. To those interested read or listen to Norman Finlkelstein who maps out the issue very well.

      For me, I believe the term “anti-Semitic” I absurd and stupid because there are non-Jews who are Semitic peoples.

      1. different clue

        I need to read that posted article and thread much more carefully and slowly than the speed-skim I gave it. I will probably have something of immense gravity and deep wisdom to say here after this thread is long forgotten and abandoned for newer shinier threads.

        So let me just say, in the (paraphrased) words of the Great Helmsman . . . ” Let a hundred feathers ruffle. Let a thousand schools of thought contend.”

          1. different clue

            Well, the Great Helmsman was actually tricking a hundred flowers into blooming so all the tall poppies would be spotted and cut down. Is there a concern over possible analogous outcome here in the event of “let a hundred feathers ruffle” . . . ?

    2. ewmayer

      Being both a Left Cosater and one who doesn’t typically do any “online playtime” until after noon, it was closed before I even got to it — but here something about the NYT’s highly selective bigotry worries: Black writes:

      Thilo Sarrazin, a member of the executive board and head of the [German Central] bank’s risk control operations, told Europe’s culture magazine Lettre International that Turks with low IQs and poor child-rearing practices were “conquering Germany” by breeding two or three times as fast.

      “I’d rather have East European Jews with an IQ that is 15pc higher than the German population,” he said.

      I wonder if NYT is blind to the evident bigotry because it is suitably bipolar: anti-ignorant-Muslim-Turks, but flattering to highly-intelligent-East-European-Jews?

      1. Banger

        Some groups are powerful some aren’t and that reflects in the coverage of those groups pretty closely. NYT content is politically determined–it is a propaganda organ for certain factions of the ruling class as are all mainstream media outlets.

  8. Jim


    Paul Craig Roberts commentary yesterday (Sept. 25–Institute For Political Economy) “Will Russian and China Hold Their Fire Until War is the Only Alternative?” understands what kind of leverage is probably necessary to begin to deter U.S. aggressive foreign policy moves across the world (think Ukraine and Middle East).

    For example, Roberts states:

    “As far as I can tell neither the Russian nor the Chinese governments understand the seriousness of the threat that Washington represents….If Russian and China understood the deadly threat that Washington presents both governments would operate according to the time honored principle that “the enemy of my enemy is my friend” Russia and China would arm ISIS with surface to air missiles to bring down American planes and with military intelligence in order to achieve American defeat. With defeat would come the overthrow of Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Jordan, Egypt and all of the American puppet rulers in the area.”

    This man was once an Assistant Treasury Secretary in the Reagan administration

    With such courageous and serious suggestions he better watch his back.

    1. optimader

      “With defeat would come the overthrow of Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Jordan, Egypt and all of the American puppet rulers in the area.”
      But so what? Replaced with what?
      Status quo is advantage China right now. Why undermine their market until it works its way through the gordian knot of developing an indigenous market.
      US is Europe biggest market as well, Russia is better off waiting for the kiss and make up than undermining it’s captured energy client states ability to afford fuel.
      Anyway, Chinese and Russian conventional military resources are comparatively threadbare.

      1. ambrit

        As Giap taught us, oh, how long ago, that’s why it’s called UNconventional warfare. As we were supposed to have learned ten years ago, boots on the ground trumps all. Anti air rockets can kill drones as well as they kill man carrying jets. They’re a lot cheaper too, and easy to use. Now if, say, Assads people started having drones of their own, which you can really never figure out with courtroom certainty just whom is guiding them, things start to go all pear shaped. Then you might get some “moderate” Middle Eastern powers sending emissaries to Damascus on the sly to “talk things out.” The devious possibilities are a Kissingers Nightmare.

  9. ewmayer

    Re. the Fergie-Fuzz’s “I wear my conscience on a wristband” fashion accessories, if one rotates the band does the inside continue “…’s killer, yo”?

    [Aside: Maybe they saved on production costs by rebranding a bunch of LiveStrong wristbands — “deep discounts available for bulk purchases.”]

  10. peppsi

    I have a lot of respect for Carmen Segarra, and anyone with the morals and fortitude to do their job even when the culture and all their bosses says not to.

    Excuse another awful metaphor: The fish rots from the head but it takes immense strength from people in the middle to cut that rot away.

  11. different clue

    About “everyone knowing” that which is on the Goldman Sachs tapes and shall be revealed on This American Life . . . . no. Very few people know. The people who read NaCap know. The people who read very carefully and in great detail the work of others know. A lot of working class people “suspect”. But an awful lot of nice
    NPR liberals refuse to know and refuse to suspect. They are the kind of people who insist on believing that Lee Harvey Oswald killed President Kennedy. Acting alone. They will be very hurt and troubled by that upcoming episode on This America Life. After they hear it, some of them will know it. But only a few percent of those who come to know it will come to KNOW-know it. Will those few be enough when added to the few who are here?

      1. different clue

        That’s a very fair question. I don’t have a very fair answer. But if enough millions of people clearly see eachother seeing eachother coming to KNOW-know this stuff, then they will discuss the question amongst themselves. And discussing the question might lead to provisional answers, perhaps various experiments being run by various theory-action groups.

  12. optimader


    Race & Ethnicity
    Daniele Watts Denounced by Black Leaders
    By Dennis Romero Fri, Sep 19, 2014 at 7:03 AM
    Categories: Race & Ethnicity

    The tide of public opinion seems to have fully turned against actress Daniele Watts after she suggested racial profiling was behind her police stop in Studio City last week.

    Her white boyfriend, self-proclaimed “rawk star chef” Brian James Lucas, went so far as to say cops questioned Watts and himself as if they were “ho and trick.” Los Angeles Police Department audio of some of the confrontation, however, revealed absolutely zero racism at play. And TMZ photos of the pair appeared to show them having sex in a car, or something close to it, which was the reason for a police response all along, according to the LAPD.

    See also: Daniele Watts’ Story About a Racist LAPD Stop Is Falling Apart

    Now some of L.A.’s most prominent African American leaders are denouncing Watts:

    Project Islamic Hope President Najee Ali, Los Angeles Urban Policy Roundtable President Earl Ofari Hutchinson and other local civil rights leaders have lined up against Watts’ claims that her race drove police to single her out for an investigation on the afternoon of Sept. 11.

    The leaders will officially call her out during a 9:30 a.m. press conference today at the studios of KTYM 1460 AM in Inglewood, according to a statement. They also “demand” that the actress to apologize to the LAPD.

    The leaders say new information has “cast doubt” on Watts’ claim against the cops.

    The actress, known for her work in Django Unchained and Weeds, told a sergeant who stopped her for questioning, “Do you know how many times the cops have [been] called for being black?”

    She repeatedly refused the cop’s request for her name or identification, saying that she didn’t have to give up her identity, a claim that’s disputed by interpretations of the law from some of the largest District Attorney’s offices in California.

    1. Lambert Strether Post author

      Look, I hate to say this, because NC is a family blog, but if people having sex in their car was a police matter, there are an awful lot of “lover’s lanes” and (if they still have them) drive-in movie theatres that ought to have their own police substations.

      1. different clue

        Does it depend on what pains they take to do it at night with the car hidden in a dark and/or anonymous place, and behind closed car doors? It appears the couple in question here took not one single precaution to avoid the prying eyes of busybody neighbors in broadest daylight.

      2. ambrit

        I’m not as sanguine as you about this. If the dreaded TMZ could get steamy pictures of the incident, I’m not so sure that public indecency statutes did not apply. ‘Lovers Lane’ and ‘Drive In Beach’ are traditional venues for adolescent experimentation. Even there, the cops can be called to throw cold water on the fire. (I remember a lovers lane section near 79th Street on Miami Beach with fondness.) It was the deployment of the ‘race card’ by the woman that started it all. If she had deployed a ‘sex’ card as a defense, that would be different, more, shall we say, Avant-Garde.
        Giving the aggrieved couple the benefit of the doubt, perhaps the inter-racial nature of the ‘offense’ was a precipitating factor. The fact that the Black establishment in California is divided on this issue gives some reason to pause. I have met many, oh, extremely opinionated Black people concerning matters of sex and sexual orientation. It doesn’t seem to matter what your racial or ethnic profile is when these subjects come up. People are people when the subject is sex.
        It’s time for some of My Lord, the Earl of Rochesters scurrilous verse.
        http://www.druidic.org/roc_sat.htm#Dildo (Not “family friendly entertainment”.)

      3. optimader

        I’m all for people having sex, and maybe Americans should have more of it? And I appreciate your sense of sarcasm. Bizarrely this country is anesthetiized to ultraviolence, as well it seems to me, we have rather unhealthy sensibilities when it come to sexuality, nudity ect. .

        That said, this was media and blog worthy when it was a titillating sex and discrimination story. When it turned out to be more about two idiots that lack some minimum level of common social courtesy, the story is thrown in the memoryhole, leaving the original inaccurate narrative to settle in.

        Beyond the idiocy of these two people’s judgment, the larger point is it is yet another example of the superficial media narrative style our society tolerates.
        This started as a promising LAPD exploitation meme, hit MSM and international wire services, black actress from DJ Unchained discriminated against, but ohhh wait.. maybe not, and the story doesn’t pass the smell and boom , nothing left but inaccurate impressions.

        So, had police not responded to the complaint, what would the narrative have been if it were “Black DJ Unchained Raped and Brutalized in Front of Witnesses at Noon on Busy LA Street, Police Don’t Respond”
        LAPD did exactly what they should have done. And yeah, if I were LAPD I would restrain someone that is hysterical that wont identify themself until I could at least establish who they are. At a minimum, hysterical people tend are rational and often do things they may later regret, whether or not they “have a Publicist!!”

          1. Lambert Strether Post author

            I kinda liked my reading of your first version:

            1) Hysterical people tend to be rational (that is, having your hair on fire is a perfectly rational response)

            2) Hysterical peopleS tend to be irrational (that is, the rational hysteria of a few individuals could drive successful collective action, but if the collectivity is itself hysterical, well, that would be bad).

        1. different clue

          This couple did it in the street and frightened the horses. Then the woman decided to play the race card to divert attention from that basic fact. The LA Black Establishment would like to keep a distance between real racial grievance and played race cards.

  13. Clifford Johnson

    You are right. Everybody knows. Remember how, in March, 2009, after five years as head of the New York Fed, Timothy Geithner famously told the House Committee on Financial Services that:
    “I just want to correct one thing. I have never been a regulator, for better or worse.”

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