Links 1/29/15

Stranger gave mum £10 to piss off Daily Mash

AI will not kill us, says Microsoft Research chief BBC. I don’t think Microsoft is capable of knowing whether it is incubating SkyNet until too late.

Our Overreaction to Terrorist Attacks Like Paris Is Only Making Things Worse Defense One (furzy mouse)


Greek markets hit as debt fears grow Financial Times

Germans Are In Shock As New Greek Leader Starts With A Bang Business Insider. I hate to be a voice of sobriety, but notice the part buried in the piece that Germans are no longer worried about contagion risk from a Grexit. Whether that view is well founded or not, it will make them pretty non-negotiable on debt writedowns. The most you can expect is an extension of maturities and maybe some lowering of the already back-end-loaded interest rates.

Clash Over Sanctions: Syriza Opposes Sanctions on Russia, Calls Them “Neocolonial Bulimia”; Negotiation Rules Michael Shedlock (EM). This is great theater, but Syriza needs to rally support in the rest of Europe (and that means getting the technocrats on board, or at least afraid of the anti-Euro, anti-austerity parties) to make a dent on the Germans. I’m not saying Syriza can’t get there, but we need to recognize that this is very much an uphill battle with a short time window. The odds are high that they lose the critical battle (the bailout terms) while setting the stage for others to win the anti-austerity war.

Carney attacks German austerity BBC. Important as one of many calls for the Germans to relent, but England is seen as being Euro-skeptic, so not sure it will have the impact it should. Recall that Geithner, who had more clout than Carney does now, tried talking the Troika out of its punitive orientation towards the periphery and got nowhere.

Ian Bremmer on Greece’s Challenge to European Cohesion Council on Foreign Relations


“When the word comes ‘it’s time’” — Zakharchenko’s geopolitical analysis Vineyard of the Saker. Chuck L: “The strategic situation in eastern Europe as seen by the Novorussian prime minister, Aleksandr Zakharchenko.”

Death Toll in Ukraine Over 5000 as the Ceasefire Breaks Down Real News Network

What Would Exclusion From Payment System SWIFT Mean For Russia? Moscow Times (furzy mouse)

Russia considers creation of ‘bad bank’ to aid financial sector Financial Times

Russia And China’s Growing Energy Relationship Oil Price

Sorry, Ukraine, You Can’t Beat Putin Bloomberg

Russian Defense Ministry Releases Trove of Secret Auschwitz Documents Moscow Times (furzy mouse)

Raul Castro: US must return Guantanamo for normal relations Associated Press


U.S. Goes Quiet on Aid to Afghan Forces New York Times

JOURNAL: Did ISIS just enter Saudi Arabia? Global Guerrillas (furzy mouse)

Big Brother is Watching You Watch


Panama’s ex-president’s hunger for gossip at center of wiretap probe McClatchy (Tim F)

Spy agency employee was flying drone that crashed at White House Reuters (EM). A world-class example of a career-limiting move.


Up to Six Million Households Facing Penalty for Skipping Health Insurance Wall Street Journal

Obama dropping plan to tax college savings Reuters. Yesterday’s news, which I chose to skip, but I like EM’s take: “Translation of article gist: ‘Disproportionate impact on hedge fund managers.'”

Obama’s First Surrender on Inequality Bloomberg. “First”? They haven’t been counting.

US Senate refuses to accept humanity’s role in global climate change, again Guardian (furzy mouse)

Enbridge Gets Another Federal Tar Sands Crude Pipeline Permit As Senate Debates Keystone XL Steve Horn. While you were presumably not looking…

How Roy Cohn Helped Rupert Murdoch Robert Parry, Consortium News (furzy mouse)

The Petulant Entitlement Syndrome of Journalists Glenn Greenwald, Intercept

Black Injustice Tipping Point

Video: Seattle Police Jail Elderly Military Veteran for “Walking in Seattle While Black” The Stranger (neo-realist)

Seattle man needed state official’s help to avoid charges for ‘walking while black’ Raw Story (YY)


Bearishness Continues Among Oil Industry Experts OilPrice

Bonds: Caught in a debt trap Financial Times. Important, and consistent with our discussion for some time on how the Fed has painted itself in a corner. I remember the moment in the crisis when the Fed dropped the Fed funds rate below 2% (after having engaged in too many “75 is the new 25” point cuts) and knew that was a move they’d come to regret.

Too late: We’re already in a bear market Yahoo (furzy mouse)

S&P Close to $1.37 Billion Crisis-Era Lawsuit Settlement Wall Street Journal

What Failed in 2008? Brad DeLong, Project Syndicate (David L)

Second-Liens and the Leverage Option Adam Levitin, Credit Slips. Useful for mortgage and housing policy junkies.

Big banks eye peer-to-peer lending push Financial Times. Finance for the people brought to you by Wall Street. Charming.

Harsh Words for Caesars in Court Wall Street Journal

Class Warfare

“While the capitalists are winning every battle between the two classes, they are nonetheless losing the war.” New Inquiry

How a Two-Tier Economy Is Reshaping the U.S. Marketplace Wall Street Journal. Good, if depressing, detail on the gap between the “haves” and the “have nots”.

Antidote du jour:

dog leading duckings links

See yesterday’s Links and Antidote du Jour here.

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      1. different clue

        This seems to be at least as good an explanation for various oceanside “life-kills” we have been seeing as the ” rad-waste from Fukushima” theory. Whenever masses of dead animals hit the Eastern Pacific beaches, perhaps H2S should be searched for in the area. Also H2S traces in the dead animals themselves, if it would stay there?

  1. sean

    The vineyard of the saker link has been verified as having been written by another person.
    The content is still illuminating, just not authentic.
    Thought you should know.

  2. dcb

    The delong article while not bad misses a central point, and that is the nonsense of inflation targeting.the intellectual blind spots it produces. This i best illustrated by an editoral of John Kay
    “Why worry about deflation?

    28 January 2015, Financial Times

    Our perception that inflation is the normal condition is no more than a reflection of the experience of people alive today. In 1913, unlike now, a pound or a dollar would have bought the same goods as a century earlier. The longest semi-official price series we have reports a 140 fold rise in prices in the UK since 1750 — but even then all the increase up to 1938 is accounted for by inflation during the Napoleonic and first world wars. Indeed, while the price level roughly doubled during both these episodes, it fell slightly over the rest of the period.

    me: continual targeting of inflation leads to a buildup of systemic leverage because each time prices fall they are met with lower interest rates until you hit zero bound. more frequent small episodes of deflation (no net inflation over all) discourage borrowing for speculation as you require a larger safety net (higher capital) in the system. It’s not just the efficient market nonsense, and deregulation. the inflation targeting enables and encourages over leverage. So, we had a build up over many years and the adoption of inflation targeting as a policy directly encouraged that

    1. Jim Haygood

      Central banksters miss the good old days of the late 20th century, when they could jerk the economy around like an 11-year-old yoyo virtuoso. Slash real short rates a couple of points negative, and watch it take off with a whoosh. Yank real rates back to positive, and listen to the air hiss out. It was easier than tying your shoes — no training needed!

      Trouble is, without at least 2% inflation, they can’t do the ‘negative real rates’ part of the trick. All their friends walked away going ‘nya nya nya,’ and left them sitting there like an idiot with a busted yoyo. So now they’ve escalated to their new trick, high wire walking without a net.

      1. MyLessThanPrimeBeef

        The fetish with inflation is not healthy.

        Still, I can understand why they worship that particular idol. For them, food inflation is not inflation and as long as wage inflation is contained, asset inflation – that evil creature – can be tolerated, or at least ‘the people’ can be, uh, educated to tolerate that.

        And so we need asset inflation, sorry, inflation to get things trickling down again, check that, to get things going again.

        1. curlydan

          I too think the ‘bugaboo’ of deflation is often over-stated (or inflated haha). Is a perception of a 1%-2% price decline going to cause a consumer to hold off a purchase? Generally, no. I think only once deflation hits wages (e.g. sorry, pal, we’ve had to decrease your wages 2%) would it really start to affect the consumer mindset. But industries have deflation frequently (oil today, housing 5 years ago), and these markets adjust and recover.

          1. MyLessThanPrimeBeef

            Their Goldilocks dream is asset inflation so, for example, the new apartment complex buyer will have to charge those renters, whose wage inflation is under, more to make up for the appreciated asset purchase price.

            How can the renter cope?

            By being, in econ lingo, more efficient and more productive, of course. That is, by working harder.

            Notice that you and me must always to ‘disciplined’ to work harder, with the assumption that we are naturally lazy and the incentive must be kept in place for the little people to work harder.

            It’s the same assumption that new money created is to be for the government to spend, but not for the little people to use. Heaven forfend we little guys get ‘free money!’

            How will they get us to work?

            1. ambrit

              “They” will get us to work the traditional ways; by starving us, or cutting off our access to healthcare, or making us homeless ‘tramps.’

              1. MyLessThanPrimeBeef

                One is never too lazy to point out that the only way to get those lazy retired seniors to shape up is go negative yields on them.

                “I see, you have $10,000 with us at WorkTillYouDrop Bank.. That means you will owe us $300 every year, you lazy old geezer. Get a job!!!!!!!!!!!!!!”

                1. ambrit

                  “But, Walmart wants $100 a week for their Greeter Intern position! Seven days a week! At least Hobby Lobby gives you Sundays off. Is this what they meant by the shearing economy?”

  3. diptherio

    Researchers at McGill University have been working on autonomous killing robots for some time now. They’ve got un-manned air, land and water vehicles that can all talk to each other and coordinate to kill stuff without a human even being involved. True story…

    1. MyLessThanPrimeBeef

      The convention wisdom is that the internet took off due to sex.

      Perhaps, the funding from MIC came before that.

      So it will be with robots.

      I had previously mistakenly thought robots will take off when we have sex robots.

      Now, we know, killer robots will be here before that.

      1. ChrisPacific

        This comment and the Microsoft story remind me of the short story ‘Second Variety’ by Philip K. Dick. You can read it online for free via Project Gutenberg. He was ahead of his time.

        1. skippy

          i don’t think the people that brought us windows 8 are competent enough to opine on any kind of intelligence at all, artificial or otherwise.

  4. Jim Haygood

    Spot the false premise in the FT article ‘Caught in a trap’ (I can’t walk out):

    ‘Central banks … have to prove to financial markets that they can put economies back on long-term, sustainable growth paths.’

    Wrongo, lads: they don’t, and they can’t. Growth depends on investment, and investment depends on stable monetary conditions. That’s all that central banks can aspire to do.

    Their other, usurped role — daytrading the economy by manipulating interest rates to non-market levels — only serves to introduce instability and sequential bubbles. Just as our current plight is the inevitable result of Bubble II (2003-2007), the even grimmer later part of this decade will be the predictable result of the current QE-fueled Bubble III. Even the FT got this bit right:

    ‘If government bonds are overpriced, then so is pretty much everything else.’

    Yep. And when things come tumbling back down to realistic prices and yields, it’s gonna hurt like hell.

    1. MyLessThanPrimeBeef

      I am reminded of the discussion on football the other day.

      Central bankers should be like referees – you don’t notice them when they’re calling a good game. They are sort of just in the background, to make sure everyone gets a fair chance.

      Governments should be like that too. They don’t have to be big muscular guys like the linemen or the linebackers. They can be small, little and skinny, but they will be powerful when they enforce the rules all agree to play under.

      1. fresno dan

        How many of the people who ran the financial system lost most of their wealth???
        How many of the people who ran the regulatory institutions and government oversight panels were fired or lost elections???

  5. Kokuanani

    If you go behind the WSJ paywall to read the article on our “two-tiered economy” [really about home sales], don’t under any circumstances read the comments there. You’ll go nuts.

    You can, of course, scale the paywall by Googling the title of the article.

    1. sleepy

      My 2 cents:

      In my Iowa town of 28,000, Penney’s is closing down next month, Sears is only doing automotive repair, appliance sales, and tools, while Dollar General and the Dollar Store are holding their own as are the pawnships and payday lenders. Houses are cheap and there are plenty vacant, but rents are sky high by small-town Iowa standards. Lots of jobs paying $8-$10/hr and many folks make the 60 mile roundtrip to the Winnebago RV factory for jobs paying $13/hr. as production line workers. The hospital here does well though. That’s about it.

      The city has sunk a bunch of tax breaks into spiffing up downtown with a high-priced hotel and a couple of high-end restaurants. There’s some money here, but probably not enough to sustain much beyond that, and it certainly won’t sustain the city as a whole.

      This used to be a strong union town when there were still manufacturers around. Sanders will probably carry the local caucuses, but local pols are mostly rightwiners.

      Oh, and did I mention the local Sheriff’s office is now the proud owner of a free explosive resistent armored personnel carrier?

      1. ambrit

        Hey, you’ve got a lot of underutilized heavy industrial skills going to waste. I’m sure you could get up the right cadre to do something about that APC.

  6. financial matters

    I like this headline because I think they are losing the war but not sure about the two classes.

    “While the capitalists are winning every battle between the two classes, they are nonetheless losing the war.”
    New Inquiry

    I think concentrating on the ‘working class’ vs the ‘capitalist class’ stays too much in the economic realm without taking into account more social and cultural factors.

    I like the recently deceased Free Lee’s ideas on social provisioning:

    “Because heterodox economics involves issues of ethical values and social philosophy and the historical aspects of human existence, heterodox economists make ethically based economic policy recommendations to improve human dignity, that is recommending ameliorative and/or radical, social and economic policies to improve the social provisioning and hence well-being for all members of society and especially the disadvantaged members” (from Social Provisioning, Embeddedness, and Modeling the Economy (Studies in Economic Reform and Social Justice , edited by Frederic S. Lee)

    (Also this set of articles edited by Lee emphasizes the role of social realities in modeling and references Varoufakis)

    So the struggle is for the social and cultural context of well-being and not purely economic which would more reflect the neoliberal philosophy.

    and from Polanyi:

    “Labor and land are made into commodities, which, again is only a short formula for the liquidation of every and any cultural institution in an organic society.”

    1. Ed

      I liked the headline as well, but unfortunately the article is another article filled with academic jargon about why the left should embrace globalization. The substance of the article is incorrect, where left-oriented governments have survived it has been through isolation, which is why Cuba is starting to play hardball with the US over normalization of relations (the leadership realized that this benefits the US more than it does Cuba).

      As for the headline, see the link posted by Tyler in the first post. The capitalist agenda is now a nihilist one, so their victory is not something that can really be “enjoyed”. Short of that, if you think about it for awhile, there is a minimal distribution of money that is needed to keep money circulating and used in transactions (think about a world where a single person literally owned everything), so a point is reached where increased concentration of wealth is self-defeating for the wealthy and signs are we will blow past that point.

      1. financial matters

        As you’ve mentioned climate change is definitely a big factor. As society evolves there can be new foci of concern. A successful new ‘class’ would show that it can benefit many people. Culture is often considered based on nations or religions or tribal identities, even gangs but I think it could also be based on something as important as climate change.

        I thought Kurt Sperry emphasized a good point below with needing more of a transnational response to the transnational culture of corporate neoliberalism.

        Blockadia comes to mind. Groups like 360 dot org and Grist also relate to this.

        With Syriza it’s good to see heterodox economic ideas gain more prominence with Varoufakis and Rania Antonopoulos, who has been appointed deputy minister of Labor and Social Solidarity. (Rania Antonopoulos – Responding to the Unemployment Crisis in Greece)

        This is the sign of a strong Prime Minister to bring on strong cabinet members.

        From Rania Antonopoulos’s video “You are going to end up with a primary surplus (referring to austerity) which will allow you to make payments but in the meantime you will have killed off the economy and its people” “Austerity has to stop”

      2. Tony Rantala

        I agree. The article seems to be based on Marxist ideology. They claim, for example, that globalization is inevitable and the nation state can not control economy. It should be noted that before the wars the world was very much globalized, yet nation states took control of economies when the working people asserted themselves.

        They also use the term ‘Keynesian fascism’. This is the common Marxist mode of thought of reducing the world to a simple dichotomy and calling everything they dislike fascism.

  7. Garrett Pace

    White House Drone

    Secret Service has come under scrutiny after several incidents involving White House security. Its director resigned in October, and an independent review concluded that it needs to build a better fence and hire more officers.

    Bureaucracy’s answer for everything is the same thing, but more and bigger. No new paradigms.

    1. ambrit

      Presidents like Lincoln held open house at the White House. The public was welcomed, if watched carefully while there, which is what bodyguards are supposed to do. Lincoln was shot while in a private box at the theatre, supposedly being protected by a bodyguard. When the ruling class in America stopped trusting the general public, the game shifted from representative government to autocratic government.

  8. Garrett Pace

    Raw Story “Walking while black” article has a magnificent freudian slip in the first paragraph:

    Seattle police defended arresting a 70-year-old black man last year without justification before a top Black official intervened, the Stranger reported.

    1. Katniss Everdeen

      Right up front in the comments on this article is an apparent statement from “Officer” Cynthia Whitlatch’s facebook page:

      “If you believe that blacks are NOT accusing white America for their problems then you are missing the point of the riots in Ferguson and the chronic black racism in this country. I am tired of black peoples paranoia that white people are out to get them. I am tired of hearing a black racist tell me the only reason they are being contacted is because they are black. I am tired of black people saying poor poor me when other races and genders and homeless and gays suffer far more prejudice than any black does in the US.”

      Now I can’t confirm this since I’m not on FB, but I’m sure someone can.

      This situation is getting WAY out of hand.

  9. Jay

    Although pessimism is a prerequisite when speculating about the problems in Greece, I wouldn’t underestimate the importance of Russia’s cutoff of gas from Ukraine pipelines and subsequent rerouting through Greece. Most of Eastern Europe’s natural gas comes through there and once it gets routed through Greece, Greece will have the whip hand and possibly be able to create friction between the Eastern EU nations and the core. All of which redounds to Russia’s benefit. It’s a gambit. Will it work? Who knows. But given the bizarre Ukraine policy coming out of the oval office, it seems like a good calculated risk, more pragmatic, more level-headed. Note also the piqued reaction of Turkey’s Erdogan to the anti-Muslim sentiment after the Paris shootings. What a crazy world it would be if Greece and Turkey were allied by common interests against the EU core.

    1. Dino Reno

      How soon before Greece is labeled a pariah state by the EU/USA? Very soon I think now that they have played the Russian card. Forget debt renegotiations. Greece will now be used as an example to other wobbly EU members should they entertain the notion of independent thought. First they will be thrown out of the EU and then sanctioned like their Russian partners. Take your Greek vacation soon because this is about to get ugly.

      1. Ken Nari

        Possibly very, very ugly.

        Every time Greece has tried to gain independence there has been a blood bath.

    2. plschwartz

      I was reviewing post war history of Cyprus. Greece wanted Cyprus to join it. The Turks wanted protection for the 30% who were Turkish.Although there had been communal strife, Greece Turkey and Britain worked out a deal and independence followed. Very soon the Greeks started chipping away until basically the Cypriot Greek President basking tore up the agreement. Union with Greece soon was planned. It was only at this point that the West allowed Turkey to invade and partition the country.
      Syriza is doing the same thing. Except the deal was for money and not land. They made an agreement, got the money and then did everything within their power not to live up to their agreement by dragging out reform. Finally they are now completely taring up their agreement and insist on negotiations on their own terms. Blocking sanctions on Russia will be a weapon Greece will use in its haggling on debt repayment.
      Germany didn’t bail out Greece to save Greece. It needs to save the Eurozone. It is fantasy that
      to believe that any of the newer monetary policies can be used to blackmail the EU again.
      The election of a Marxist government fulfills the Marxist victory denied them by Western intervention in the 1945-49 Civil War.
      It is ironic that just as Cuba is ending its role as an anti-Western enclave, that Greece will likely force the EU to oust it and will fill Cuba’s shoes.

  10. cwaltz

    The college savings thing really pisses me off.

    Congress had absolutely no problem cutting benefits for the poor by cutting food stamps to balance the budget. Meanwhile it is beyond the pale to suggest cutting upper middle and upper class tax benefits. In other words, we need to balance the budget but not on my give mes like my tax free investment vehicles.

    1. LucyLulu

      But not on subsidizing college educations, which we need as a nation, to do more of, not less.

      Remember when tuition was free at state universities to all California residents? Now it costs over $50,000 to spend 4 years at Berkeley if you attend as an in-state resident. The tax burden on state residents, in all states, has been shifted from the population at large, and onto its youngest generation, in the form of draconian student loans. But hey, attend a private school, e.g. MIT, Harvard, Princeton, Yale, and you’ll pay $42,000 – $45,000 annually for the privilege.

      Tuition at World’s Top 10 Universities

      1. cwaltz

        The average owner of a 529 has an income of $150,000 and 25 times the assets the average person has…….so essentially we’re subsidizing the kids of the top 20%. Meanwhile the middle class and bottom are taking out loans they can’t afford. While Obama’s plan was not perfect it would have possibly allowed those in the bottom middle and bottom to get the education that is needed to pull them from only qualifying for entry level lower income jobs. Can’t have that though because then it might actually do something about inequality by giving the bottom options.

      2. Jess

        Begging your pardon, but I think the tuition fees you quoted are way off on the low side. $50K for 4 years at Berkeley? Maybe $50K per year. For my niece at UC San Diego, base tuition + room and board (meal card) was $32K a year. As for the private schools, USC is now $58K a year for tuition + R&B. Stanford is even higher, and I gotta think that the Ivy League institutions are also farther up there. (Of course, IIRC, Harvard’s endowment is so large — even after Summers screwed the pooch — that it could allow every undergrad to attend free.)

        1. LucyLulu

          The numbers cited were only for tuition, which doesn’t include room and board. Room and board is variable even within institutions, depending upon the type of housing and meal plan chosen. If you throw in room and board in a dorm, the cost at Berkeley goes up to $109K for four years.
          UC Berkeley Tuition and Housing Rates

          See the link provided in my original post for the verification of tuition charged by Harvard, MIT, and Princeton. Stanford charges $44K/year annually for undergrad tuition. This does not include room and board.
          Stanford Tuition Rates

  11. Jef

    WRT “What Failed in 2008?” It is truly amazing how everything, everywhere, all the time is treated as if it were nothing but a banking/finance issue.

    What happened in 2008 was that the world started to have diesel shortages This happened after several years of oil and fuel prices steadily increasing, diesel faster than gas. This killed the global economy. Oil is the life blood of the Global Economy and diesel is the life blood of commerce. Anybody remember Walmarts warehouse on wheels? Anyone remember how and why that worked? Agriculture inputs went up 10 fold in addition to their diesel going up 5 fold and shortages across the east coast during harvest. The rest of the world was hit even harder. Producers were making more but cost of producing was also climbing. The world was increasingly being told in no uncertain terms that the planet was showing the negative effects of industrial civilizations waste stream

    Banking/finance did try and address this oncoming convergence of constraints by deregulation and extreme bubble blowing in hopes that money could over come all these …predicaments and their efforts obviously failed but they didn’t fail because they didn’t throw enough money at it. It failed because the constraints that are causing global disruption exist in the REAL world and banking/finance does not, just the opposite.

    1. Ed

      This is really one thing that can’t be restated enough. This is quite properly a finance oriented blog, but there are hard resource constraints on the economy that have been coming into play. The finance stuff seems to be a way to paper over them and to keep society and the social order as static as possible.

      The resource constraints started showing up in the 1970s, during the height of the worldwide population explosion, but its no coincidence that worldwide liquid crude production peaked (2005) right before the most recent crash (2008).

    2. Yves Smith Post author

      Please read ECONNED. There I document how the housing crisis alone was insufficient to produce a global financial crisis. We would have had at most an S&L level crisis.

      CDS on the worst tranches of mortgage bonds, drove demand to the very worst mortgage. The mispricing that allowed that to occur persisted because what amounted to BBB/BBB- credit risk was dressed up and sold as primarily AAA risk vis heavily synthetic CDOs. Those CDS also created exposures way in excess of the size of the subprime market and concentrated them at levered, systemically important financial institutions.

      The subprime market started to go down at the end of 2006. We had two acute phases of the credit crisis BEFORE the oil price spike of 2008.

      Oil was not a primary driver.

      1. Jef

        Yves – The pressures of the converging constraints and TPTBs response and reaction began around 1998, the year of the lowest price, highest volume of cheap almost free energy. Read the Council on Foreign Relations manifesto for a “New American Century ” and what little factual information that came out of the Chenney Closed Energy Summit where they outlined what needed to be done to maintain the FFs that the US and the developed world required. This is not conspiracy it is fact and the fact that you conveniently forget it is suspect.

        What you say indeed did happen but was entirely an after effect of Banking/finance being cut loose in an all out effort to curtail the negative effects of reality. The effects of the constraints which started squeezing the global economy way ahead of your housing/mortgage debacle are 1000 times more relevant.

        With due respect to your “consulting efforts” you have never come close to consuling anyone that would be considered TPTB, anyone either in power or with enough money and push to significantly effect power.

        1. Yves Smith Post author

          With all due respect, you clearly do not begin to comprehend that the crisis was a global financial crisis, concentrated in highly interconnected, fragile financial institutions. We has more frequent and severe financial crises well before 1998,as financial deregulation progressed and international capital flows rose way way way beyond the level needed to facilitate trade. We had the S&L crisis, the derivatives crash of 1994, which destroyed far more value that the stock market crash of 1987, the Asia-Russian crisis of 1997-1998 (culminating in the forced rescue of LTCM). The dot com bubble and bust was not systemically important but Greenspan reacted as if it was, making a bad situation worse.

          I clearly lay out how the roots of the crisis go back to flawed financial models and macroeconomic ideology, and the deregulatory vogue that started taking hold in the early-mid 1970s.

          You are seriously out of your depth here, and citing “The New American Century” is hardly proof of insight.

  12. cwaltz

    My problem with capitalism is not the globalization of production, it’s a problem of exploitation of the production force. As long as the goal of capitalism is to treat it’s resources poorly then I see no reason whether I should care that it can’t survive within the confines of a nation state. I’m not even convinced that it shouldn’t be replaced if multinational profitability is placed above anything and everything, including the rights of a nations citizens to determine what the multinationals allowed to do within the confines of its borders.

    1. MartyH

      I find it particularly galling that Globalists feel comfortable colonizing the world and then brow-beat the Nation States they avoid paying taxes to “protect their interests” with diplomatic and military force. Then they play the politicians they’ve corrupted to “race to the bottom” in all but protection of Globalist Corporate “Property” and “Interests.”

  13. c1ue

    Did you read the Bloomberg “article” on Russia? I expected it to have Voice of America credentials, it was so bad.

    1. diptherio

      All that talk of Russian tanks but no pictures, funny that. You’d hardly know it was a civil war going on in the Ukraine from reading the article…they make it sound like some kind of invasion.

      1. ambrit

        I got exactly that feeling by reading several stories carried by Reuters. The bias is blatant.
        How dare those Kremlin Autocrats even surreptitiously help the russo-phone denizens of the East Ukraine. Why, you’d think they wanted to be independent or something!

  14. Kurt Sperry

    “While the capitalists are winning every battle between the two classes, they are nonetheless losing the war.”

    Supranational global corporate neoliberal hegemony will require supranational countermeasures. Attempts to counter globalization will fail until a coherent resistance is organized that matches the audacity of the global capitalists. They will divide and conquer until we unite and conquer. It’s time for the left to coordinate policies and goals across national boundaries in the same way the neoliberal globalists have.

    Syriza has too little leverage to effectively act against the troika, but a joining of forces with Podemos and the Italian (and Portugese, and possibly Irish) left could perhaps create an opposition that would not be so easily marginalized and bullied. Imagine if an organized American populist movement of the left were to come into being and link up and coordinate strategies and policies with a nascent European movement in the same way the American neoliberals have. That prospect would surely give the global neoliberals cold shivers of fear, which any effective opposition must be able to do to actually accomplish anything concrete.

    1. rich

      House of Cards: A DC Real Estate Column

      In October of 2014, former Democratic Senator Majority Leader Tom Daschle and his wife sold their seven-bedroom, seven-bathroom house on Foxhall Road for $3.25 million.

      It was not an unusually large haul for a member of Washington’s political elite, but it was a big step up from his financial circumstances in 2003. Daschle’s financial disclosure form—filed a year before he lost a race to John Thune, marking the first time in more than half a century that a Senate party leader failed to win reelection—showed his net worth to be between $400,000 and $1.2 million. It was a pitiful amount by congressional standards and led CNN to disparage him as a senator of “modest means.”

      After leaving office, however, Daschle immediately began making millions by advising corporations. During the two years prior to his failed nomination to head Health and Human Services he netted $5.2 million, mostly from healthcare, energy, private equity and telecommunications companies. That included big compensation for speaking appearances (he is, according to his speakers’ bureau profile, “a tireless fighter for the common man”) and for authoring such works as, Getting It Done: How Obama and Congress Finally Broke the Stalemate to Make Way for Health Care Reform, which was subsequently found to induce narcolepsy in laboratory rats.

      There’s a common perception that government doesn’t work and that “partisan gridlock” has made things worse than ever. But when it comes to fundamental economic questions, there is no partisan divide in Washington and the system is “broken” only if you’re part of the growing slice of the population that’s poor or middle class, for whom average income has been stagnant for decades.

      For those at the top of the economic pyramid, like Tom Daschle, government is ruthlessly efficient at funneling money upward via tax cuts and loopholes, corporate subsidies, deregulation and other business-friendly policies. The richest 400 Americans now own more than the bottom half of the population combined and inequality “is greater now than it has been at any time in the last century, and the gaps in wages, income, and wealth are wider here than they are in any other democratic and developed economy,” historian Colin Gordon writes in “A Political History of American Inequality.” Meanwhile, a new report by Oxfam predicted that, by next year, the world’s richest 1 percent will command more wealth than everyone else.

      it’s working for those that count…and count…etc….

      1. hunkerdown

        Syndicated from The Daily Caller, a Republican identity-politics periodical. As we know, “fair and balanced” is a common plank in the ideology of said identity politics, and ideologies without some plank of counterfactual nonsense to which to desperately cling for life tend to be traded off and therefore not to propagate.

        To claim Yahoo is Internet News Media is about as sensible as to claim any three people meeting while black is a gang — it’s occasionally true, and it kinda matters on the front end, but it assumes a lot about common interests and relationships and about the righteousness of the status quo. In fact, it’s just the corporate media + “on the internet” (which was good enough for a patent in the late Nineties, y’know). This site right here where I’m posting this, on the other hand, is Internet News Media.

        (Oh for bloody sake. Why is this down here? Should have been a response to ambrit @1:22p, below)

        1. ambrit

          I hear you hunkerdown. I do the mismatched comments game myself. Agreed on the ‘stretching’ of the limits of meaning when the term News is used. I think what I meant to highlight was that this “News” media is the primary source of information for countless people today. Is it any wonder people today live in anomie?

  15. Katniss Everdeen

    It’s time to celebrate! January 25-31, 2015 is NATIONAL SCHOOL CHOICE WEEK!

    In honor of that auspicious american educational “innovation,” here are 5 facts about charter schools of which you may not be aware:

    And be sure to follow the links, in which some of the “innovative” details are fleshed out. Apparently the “disciplinary” practices in these institutions are not only exemplary but profitable. To wit:

    ” One of the most egregious groups, a charter authorization organization called Noble, earned $200,000 a year in net profits simply from enforcing its severe discipline code, in which each minor infraction costs $5.”

    And what ARE some of these “minor infractions?” I’m glad you asked:

    “Noble requires that children sit up straight and maintain eye contact with the teacher when addressed. Briefly averting eyes? That’s a demerit. Students can earn demerits for speaking faltering English or speaking in black or Southern dialect, as they are required to “articulate in standard English” at all times. New English learners are not exempt from this policy. The study found that families were being charged for “any infraction on a list of prohibited conduct…that pretty much describes the full gamut of teenage behavior including such minor issues as having a shirt button unbuttoned or being seen with a bag of chips or sharpie.” Twelve demerits means children must take a discipline class that costs an extra $140. At more than 12 infractions? That’s two discipline courses at $280. Noble’s schools “will not waive these fees, even for low-income families, and about 90 percent of Noble students are low-income.”

    Thank you, Michelle Rhee, for all you’ve done and continue to do.

    1. MLS

      and yet parents continue to line up to get their kids into Noble schools.

      If you don’t like how they treat their students, don’t send your kid there. That’s kind of the point.

      1. hunkerdown

        Why? Nobody is entitled to the ongoing availability or currency of their favorite status symbol. Paint those furs red!

  16. Jess

    Department of “Stupid and Disconnected from the Outside World: Democratic/Fauxgressive Division”:

    Got an invite from to attend a “Run, Warren, Run” houseparty. This Sunday, 1:45 pm PST.

    Super Bowl Sunday.
    Less than two hours before kickoff.

    Regardless of what you think of pro football and/or the waste of watching TV, the fact remains that the Super Bowl is the pinnacle of TV viewing, the single biggest annual event on American TV. IIRC, either 9 out of 10 or all 10 of the most watched TV programs in history are Super Bowls, outstripping the Apollo moon landing, JFK’s funeral, etc. (Of course, lots fewer viewers and TV sets in those days, but still…).

    What’s the word I’m looking for…moronic. Yeah, that’s it. Moronic.

    1. MyLessThanPrimeBeef

      The contribution to the economy is enormous though.

      You have the event itself.

      And you have money poured, over decades, to condition the minds of the consumers.

      Of course, we can make more contributions by more brain-conditioning so we get the economic boost more than just once a year.

      We can, for example, have billions watch breathlessly over a mammal crawl out of its hole every February. As any good advertising executive will tell you, done right, you can get a lot of people to want the thing you want them to want.

      And we can have another one where more billions of people stare into a TV watching trees grow. (Yes, it’s possible – but we have to stimulate the economy more by pouring more money into brain research, particular the area of brain manipulation).

    2. hunkerdown

      The word I’d be looking for is “transference”. The Democratic Party is an evangelical (small e) church, and evangelical churches like to pollute leisure activities with outreach and politics.

  17. hunkerdown

    The drone pilot thing is a whole new low for pretexts: our own employees’ recreational activities are now cause to restrict individuals’ access to technology?! First they came for the acetone…

  18. Propertius

    Fortunately, if it’s Microsoft that’s incubating Skynet, it’ll crash almost immediately.

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