2:00PM Water Cooler 5/11/15

By Lambert Strether of Corrente.


Obama, on TPP critics: “They’re making stuff up” [Guardian]. He should know.

Elizabeth Warren on TPP secrecy and ISDS [WaPo]. She’s so clear and concise.

PLUM LINE: But don’t you get 60 days to review it after the deal is finalized, with the authority to revoke fast track?

WARREN: The president has committed only to letting the public see this deal after Congress votes to authorize fast track. At that point it will be impossible for us to amend the agreement or to block any part of it without tanking the whole TPP. The TPP is basically done. If the president is so confident it’s a good deal, he should declassify the text and let people see it before asking Congress to tie its hands on fixing it.


PLUM LINE: Is it theoretically possible to write ISDS in a way that precludes it from overriding regulation?

WARREN: It doesn’t directly tell countries to repeal regulations. It imposes a financial penalty, which has caused countries to change their regulations…[ISDS mechanisms] never had the authority to override regulations. What they had was the authority to impose a monetary penalty directly against the government and its taxpayers. That’s the point at which governments have backed up and said, “we can’t afford this, we’ll just change the law.”

Sounds like a fine operational definition of loss of sovereignty to me.



Sanders, “Face the Nation”:  [CBS (transcript)]. I don’t know about you, but I like hearing the word “socialism” on national television used as something other than a term of abuse, and I like hearing policy proposals that go beyond “visionary minimalism,” which in practice boiled down to handing Democratic apparatchiks walking around money:

SENATOR BERNIE SANDERS: When we talk about Democratic socialism, I think it’s important to realize that there are countries around the world like Denmark, Norway, Sweden, Finland, who’ve had social democratic governments on and off for many, many years. And we can learn a whole lot from some of those countries. For example, the United States is the only major country on earth that doesn’t guarantee health care to all people as a right. And if you look at the health care systems in those countries, you know what? Not only do they cover all their people, much more cost effective than we are. We end up spending almost twice as much as they do. In terms of education, Bob, all of those countries; in Germany, Austria, many other countries. You know what they say? They’re in a highly competitive global economy. All people, regardless of their income, should be able to get a college education. College education is free in those countries. That makes a lot of sense to me. In terms of childcare, our childcare system today, talking about Mother’s Day, is a total disaster. Those systems are much better by and large. What they do is many of these countries have higher voter turnouts than we do. They have governments which do a lot better job representing their middle class, rather than a billionaire class, which have so much power today in our economic and political system.

(Granted, this is social democracy, and not “All power to the Soviets.” But wait! Insiders tell me the 2020 Democratic “sheepdog” is Vladimir Ilyich Lenin. Kidding!) Interesting that Sanders uses the term “middle class,” a euphemism for which campaign strategists are seeking to invent a meta-euphemism (hat tip allan).

Bloomberg Politics/Saint Anselm New Hampshire Poll: Sanders first choice of 18% of likely voter New Hampshire Democrats [Bloomberg]. A different poll had him at 13% last week (but doubling from 6% in February).

“Calling your opponent an “isolationist” serves the same function in foreign policy that calling her a “socialist” serves in domestic policy” [Peter Beinart, National Journal]. Except that’s not quite so easy now, is it?

The S.S. Clinton

No member of the Clinton dynasty is off limits. Including Chelsea [Telegraph]. And Tony Rodham [New York Times]. Because it’s a dynasty, duh.

George Clooney to assist Clinton, a “tremendous candidate,” in “whatever way [he] can help” [Fusion].

Bloomberg Politics/Saint Anselm New Hampshire Poll: 86% of likely voter New Hampshire Democrats say they had either a “very favorable” or “somewhat favorable” opinion of Clinton, virtually unchanged from her 88 percent favorability rating among Democrats last November and an 89 percent rating in February [Bloomberg].

The Big Dog: “Senior aides say he does not plan to do any campaign activities for his wife in 2015” [WaPo]. And 2016?

“During a focus group led by GOP pollster Frank Luntz at the South Carolina Freedom Summit, the mother-in-law of Citizens United president David Bossie compared immigrants to rats and roaches, to the delight of the audience” [HuffPo].

Republican Establishment

Jebbie: “What you need to know is that who I listen to when I need advice on the Middle East is George W. Bush” [CNN]. Um.

Jebbie: “I would have [authorized the invasion], and so would have Hillary Clinton, just to remind everybody” [Time]. Doubling down: “And so would almost everybody that was confronted with the intelligence they got.” He’s right on Hillary, though whether Hillary would have faked evidence for the WMDs, as Bush did, is open to question.

Republican Principled Insurgents

Scott Walker on Friday abruptly dropped his proposed merger of the state’s top two jobs agencies shortly after the release of an audit that found one of them had again failed to follow state law and its own policies in awarding taxpayer-funded incentives to state companies” [Journal-Sentinel]. Seems a little whiffy.

Republican Clown Car

Marco Rubio is a squillionaire car dealer’s boy toy [New York Times]. “Even in an era dominated by super-wealthy donors, [Norman] Braman stands out, given how integral he has been not only to Mr. Rubio’s political aspirations but also to his personal finances.”

Ted Cruz’s squillionaire owner backer, hedgie Robert Mercer, sued model railroad builder RailDreams for $2 million [New York Daily News]. The comments at Model Railroader are hilarious. Here’s the first one:

Now, see, if he’d built the thing himself, he wouldn’t be dealing with this at all.

Exactly. Of course, hedgies never build anything. Incidentally, this thread is from 2009, and there’s little better proof of the possibilities for full-throttled populism. Model railroaders don’t tend to be wild-eyed radicals, and there’s no support for Mercer’s position whatever. Oh, and Mercer’s also been sued by his domestic staff: “[T]he fund manager didn’t pay overtime and docked wages for not replacing shampoo bottles or straightening pictures.” Well, Mercer should know what a crooked picture looks like, I suppose.

Black Injustice Tipping Point

“The reparations ordinance is the result of months of negotiations…  Under the ordinance, survivors of [Chicago Police Department] torture will be paid from a $5.5 million city fund. Individual payments will be capped at $100,000″ [Chicago Reporter]. I haven’t done the math, but suppose we could clean up the whole reparations thing for a few F-35s. If so, what are we waiting for? Adding: I sound snarkier on this than I am. In fact, $100K seems low, but establishing the principle is huge, and the result of years of work by dedicated activists bucking the local oligarchy in every way possible. Yay!

How live-streaming promotes justice [Wired]. The tradition of witness.

Dane County, Wisconsin, DA to announce Tuesday whether he plans to file criminal charges against Matt Kenny, the Madison police officer who fatally shot Tony Robinson, Jr. [International Business Times]. And this is nice: “Tony Robinson family no longer staying at home after WISC-TV released address” [Madison Journal].

Becky Morgan, the sister of Jennifer Morgan-Tyra, a 38-year-old woman shot by St. Louis police officers responding to a report of an intruder, is disputing the law enforcement account of the incident, saying police of fired 16 bullets her sister’s back [St Louis Today]. Morgan-Tyra is “the wife of a lieutenant with the St. Louis city sheriff’s office.” So we’ll see if this one plays out any differently.

Most police vans in Baltimore lack seatbelts [Baltimore Sun]. An open invitation.

Big Brother is Watching You Watch

Cellphone tracking devices used by Justice: “IMSI catchers, and known by various names like Stingray, Hailstorm, and dirtbox” [Wall Street Journal, “U.S. Will Change Stance on Secret Phone Tracking”]. They’re deployed on Cessnas. Alert readers will remember Cessnas over Baltimore, recently.

“Sweden’s Supreme Court upholds Assange detention order” [Reuters].


“NYC buildings show connection between Albany corruption and real estate industry, with developers saving millions on taxes” [Daily News]. 421-a tax abatement and Glenwood Management. “Top beneficiaries of Glenwood LLCs have included Gov. Cuomo ($1.2 million), two Senate Republican Committees ($1.45 million), three Democratic committees ($780,000) and Attorney General Eric Schneiderman ($215,000).” How cozy!

With gridlock, spending on lobbying decreases at the Federal level, and increases at the state level [WaPo].

“Secrecy is as essential to corruption as it is to spying. Clinton’s penchant for secrecy in matters foreign and domestic endangers her and us” [Bill Curry (!), Salon].


The green lawns of Kim Kardashian, Barbra Streisand and Petra Stunt, among others [Daily Mail]. “for the residents of Los Angeles’ wealthy enclaves, a $100 fine for wasting water is chump change and a fee they are apparently glad to pay in order to maintain their almost fluorescent green lawns.”

U.K. Election

The case for proportional representation in one chart [The Economist]. How 900,000 people can vote for a party and get no representation.

Identity politics based on “English-ness” will fail; writers identifies as English speaker, [Guardian]. “At the centre of English culture lies neither institutions, nor customs, nor sports teams, but a global language. This global language, whose base layer is a medieval mixture of Latin and German, has acted like a sponge, drawing foreign cultural influences so deep into our brains that they have taken root in our identity.”

Class Warfare

Squillionaire Zuckerberg’s FWD.us execs to laid-off Southern California Edison workers: Suck it up [Slash.dot]. To bad they can’t get H1B visas and get re-hired that way, eh?

“Homeowners get more time to take advantage of HAMP, HARP” [WaPo]. For anybody who remembers the horror that was HAMP, this headline must afford some grim amusement.

News of the Wired

  • Church vegetable gardens [Alaska Dispatch]. Very creative, especially “a local group called Yarducopia, [which] matches up yard owners with people who need space to garden to learn how to garden, build gardens, and co-garden.”
  • “It was the reactionary Republican Party’s monopoly on the government that led to the rise of the Progressive Republicans,” starting in 1884 [Salon]. Hence, trust-busting, conservation.
  • Wittgenstein’s Tractatus adapted as comic opera, with sound clips [Open Culture].
  • Junk food kills the good bacteria that live in your gut [Telegraph]. Ka-ching.
  • Transformer blows at Indian Point nuclear power plant, 35 miles up the Hudson from Manhattan [Daily Mail]. What could go wrong?

* * *

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, the first of Garden Week (joe6pac)


Blueberries in Joe’s garden.

I’d like yet more pictures of people’s gardens; I have some, but not really quite enough. They don’t have to be pretty! (And they don’t have to show your whole garden.)

If you enjoy Water Cooler, please consider tipping and click the hat. It’s the soil, seeds, Fedco Tree sale, and planting season!


(Readers will notice that I have, at long last, improved the hat!)

Talk amongst yourselves!

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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. Bottom Gun

    My wife, the granddaughter of Swedish immigrants, demanded that I write out a check after seeing Bernie Sanders praise her ethnic compatriots in the mother country. Next thing you know he’ll be choking down lutefisk in small-town Minnesota (which I refuse to do: I love my wife, but a man has his limits). Bernie’s TV appearance was a thinly veiled ethnic appeal — but one that works!

    1. Lambert Strether

      Thinly veiled ethnic appeal? Not sure that “there are countries around the world like Denmark, Norway, Sweden, Finland, who’ve had social democratic governments on and off for many, many years” is such. Or is that not what you’re talking about?

      I’m picturing small crowds of activists gathering round the statue of the Unknown Norwegian….

      1. Paul Tioxon

        Ikea is a 5th column that has been marching from sea to shining sea in the land of the brave and the home of the free for decades. It’s tentacles are nearly complete. Can’t you see! It all started with Danish furniture stores and slowly expanded. And now, Aker Shipyard in Philadelphia run by, who else? Norwegians!!! That’s who!!! And why do the Norwegians need to build ships on our shores? Why do you think?!! Can’t you see??

        1. Bottom Gun

          That’s the sentiment Bernie put his foot down to stop, and I for one am all for it. All the TV talking heads just assume those herring-breath Scandinavian hordes are hell-bent on bringing unspeakable evils to America, like affordable child care, universal health care, and high-quality education regardless of family income. As if it weren’t bad enough that my poor wife is already assailed with complaints about cheap, self-assembled furniture. Thanks, Bernie!

          1. Jack

            The concept of vilifying a bunch of cold Northern European countries that seem to have largely spent the last couple centuries not doing much to bother anyone else is certainly bizarre. I wonder if they’ll stretch back to the Vikings for smear material?

            1. steviefinn

              Especially those pesky Icelandic descendants of Vikings who are still know enough about looting to not let it be done to themselves.

  2. steelhead23

    God bless Liz Warren. I have an old fashioned view of corporations. In large measure, corporations exist to limit the liabilities of individuals. To gain this limit to personal liability, a corporation is to act in the public interest. In the event the public, as represented by our government, determines that a corporation is not acting in the public interest, it could have its charter revoked (Citi anyone?). That our government would offer up a treaty that would turn that system on its head and allow corporations to sue governments is simply nuts. Nuts to you Mr. Obama. Go Liz.

  3. timbers


    Yes Liz is clear and precise which is good for her to avoid getting flamed by the Obots. But…IMO what jumps out in this interview with Liz Warren is Greg Sargent. It’s worth skimming through each question Greg Sargent asks, if only to see what a blatant propagandist he is for Obama/TPP. Almost every questions is a variation of “But LIZ! Isn’t it just POSSIBLE even in the teenyist tinyist way that TPP can be changed for the good/or is already OK/or Obama is telling us the truth?”

    What is the purpose of Sargent’s relentless repetition of the presumed possible perfection and innocence of Obama and his TPP? Was Sargent trying to bait Liz to stray from the facts of TPP and personalize her back and forth with Obama and say something Obots could use as an excuse to attack her and distract from TPP itself by baiting her to say something like “Obama is lying” (which he is)?

    1. Lambert Strether

      Well, Sargent is who he is. The point is to seek advantage given the givens which Warren did very well, I thought.

      1. hunkerdown

        Beautiful. Ever happen upon one of those Frequently Asked Questions documents about non-mainstream lifestyles or religions? Since Sargent can be depended upon to unimaginatively recite Administration talking points (and doesn’t disappoint here), the Administration and WaPo/TPL might well be loading its own footgun by writing and broadcasting one for us. Look at him! He’s wheedling like a tween, just begging her to say something that could be construed as an endorsement before Dad gets home. I wonder if he cried as he was forced to reveal what the other hand was doing to the American worker (!) from across the other ocean.

    2. Strangely Enough

      “something Obots could use as an excuse to attack” seems to be anything less full frontal fealty…

    1. jo6pac

      I live in the central valley of Calif. near Tracy. It’s not only dry but been very warm my cherries are weeks ahead normal but then again I guess this is the new normal and I don’t like it at all;)

      It took me awhile to figure out how to grow them.

        1. jo6pac

          The well at the house I’ve rented for 40yrs is only 40ft deep and hopefully it makes this yr. My LL are the nicest people in the world and would have a new well done but the waiting in some areas is 1yr. It’s not fun, the farm land around me only half was planted for crops and I live in the oldest irrigation supply system in Calif. and they have rights over everyone. It doesn’t mean anything at this time.
          The amazing thing is we are getting rain during the summer and snow in the mountains but not enough to help much.
          Back to drinking whine;)

  4. grayslady

    Regarding Bernie Sanders mentioning the middle class, notice that he mentioned the term only with respect to the Scandinavian countries. Bernie knows as well as anyone that we don’t have a “middle class” in this country anymore. Later in the interview, Bernie mentioned his record of continually standing up for the interests of “working families”. That term is also a favorite descriptor used by Elizabeth Warren, and I don’t think most people would associate Warren with hardcore socialism. Anyone using the term “workers” would almost certainly be identified as a textbook socialist, but “working families” strikes me as strategic, as well as carefully nuanced. I could be wrong, but I believe “working families” is a term that Sanders has used for years and that Warren has picked up on because it sounds more like FDR than Eugene Debs.

    1. diptherio

      “Working people” would be better. Do I not count because I’m single? And what if you’re out of work–just not included at all, I guess.

      So the rhetoric is getting better (i.e. more inclusive), but I think we’ve still got a ways to go. Has any D candidate (or R) used the 99% meme yet? That one’s probably “too radical”…

      1. grayslady

        If you’re single and under 65, no, you don’t count–at least you don’t count to Republicans, who voted to cut off food stamps to struggling singles. More heart strings are apparently tugged by referencing families, since no one wants to be accused of taking the food out of a child’s mouth.

        Sanders frequently refers to “the 1%” and “the billionaires” versus the 99%. Very clever, in my opinion, since surveys show vast numbers of Americans would love to become rich, but I suspect most of the dreamers imagine millions, not billions.

    2. ira

      Ever since the age of Reagan it has been illegal to mention poor people in political discourse. Part of this is the re-branding of the word ‘poor’ as a code for ‘black’; thus to be for the interests of poor people has been seen as a totem for advocating for the rights of black people, an absolute political no-no. It’s unfortunate that even Sanders follows the script, but you take what can you can. Ditto for the term ‘working people’, which is completely verboten, as it has been re-branded as a totem for Stalinist repression. ‘Working families’ is ok, since ‘families’ conjures up mothers, a word no one can argue with. Part of the job of political emancipation is regaining control over the vocabulary of everyday life, since actions stem from thoughts, and thoughts are structured in language.

  5. rich

    The Origins, and Future, of Rebellion Monday, May 11, 2015

    Pulitzer Prize-winning journalist Chris Hedges discusses the social and psychological factors that cause revolution, rebellion, and resistance. In Wages of Rebellion: The Moral Imperative of Revolt, Hedges tells the stories of rebels from around the world and throughout history, and investigates what it takes to be a rebel in modern times.


  6. diptherio

    On the Renting of Persons: The Neo-Abolitionist Case Against Today’s Peculiar Institution ~Prof. David Ellerman, Economic Thought

    Liberal thought (in the sense of classical liberalism) is based on the juxtaposition of consent to coercion. Autocracy and slavery were supposedly based on coercion whereas today’s political democracy and economic “employment system” are based on consent to voluntary contracts. This paper retrieves an almost forgotten dark side of contractarian thought that based autocracy and slavery on explicit or implicit voluntary contracts. To answer these “best case” arguments for slavery and autocracy, the democratic and antislavery movements forged arguments not simply in favor of consent but arguments that voluntary contracts to legally alienate aspects of personhood were invalid “even with consent”—which made the underlying rights inherently inalienable. Once understood, those arguments have the perhaps “unintended consequence” of ruling out today’s self-rental contract, the employer-employee contract.

    1. Lambert Strether

      This is the parallelism of great minds at work — Just this morning, I was mulling something like “neo-abolitionism,” which would abolish human rental.

  7. Tom Allen

    If you’re interested in hearing socialist policy proposals, there’s an actual Socialist Party in the US that you could cover — the Socialist Party USA. If you want something between the Socialists and the Democrats, there’s the Green Party, as I know you’re aware. Perhaps Naked Capitalism could squeeze news from third parties into its 2016 election coverage? (More than a fleeting mention once every month or two would be nice.)

  8. timotheus

    Re: the sophistic debate about whether TPP supersedes statute: “The power to tax is the power to destroy.” Chief Justice Marshall, 1821.

    1. hunkerdown

      The opposite is true, as well, as both US foreign policy and the few successful riots have shown.

  9. Oregoncharles

    ‘Morgan-Tyra is “the wife of a lieutenant with the St. Louis city sheriff’s office.” So we’ll see if this one plays out any differently.”
    Race? I think emphasizing some white victims would be a really strong strategy; the root problem is police impunity, and the majority are not immune.
    Otherwise, we tend to leave African-Americans hanging out there by themselves.

  10. Carolinian

    Re Hollywood water hogs: As it happens I just returned from a road trip to the left coast and was struck by the lushness of Beverly Hills….reminded me of my native SC.

    Other takeaway: to drive across America is to love America. Just ask all the Europeans cramming into the Grand Canyon etc. As a place, we are magnificent. It’s a pity, therefore, that our leaders are such wackos.

    1. jrs

      People are getting jealous of the rich for this. It seems silly to me. Hate the rich for 101 reasons including your job sucking or your unemployment, the state of government, the TPP, etc.

      But I’d think planting more drought tolerants or even trees instead of grass would be something people would want to do, either that or edibles. Grass sucks anyway.

  11. Skippy

    Shenanigans abound…

    Prior to 2000, the majority of securitization was done by the GSEs. This began to change around 2001.

    In the early 2000s, GSE securitization of mortgages dropped to less than half of the market, then dropped to about 1/3 by the mid-2000s.

    I mentioned earlier that the driver behind the mortgage boom was not interest rates set by the Fed (although Greenspan had dropped the fed funds rate in 2000 in part to encourage home sales, he began raising them again, yet mortgage rates continued to fall), but by demand for the securities pumped out at the other end of the securitization process. In other words, interest rates and/or federal guarantees were not driving the market. It was the other way round: the market for derivative products was driving interest rates down in order to keep a flow of mortgages coming, and the GSEs were being driven out of the mortgage market.

    Throughout the 2000s, mortgage originations and securitization migrated away from commercial banks to investment banks, which developed vertically integrated conduits designed with only one purpose in mind: to produce high-grade tranched securities to feed what was, at the time, a limitless worldwide demand for them (these things weren’t just punted around Wall Street, they were being sold to investors worldwide). The US trade deficit was so high that foreign banks couldn’t buy enough Treasuries with the dollars they had acquired in foreign trade, and were looking for some sort of similar, high-grade securities as substitutes. Wall Street stood ready to provide that: collateralized mortgage obligations. The problem was getting enough mortgages to develop the liquid markets they needed, and to make those markets deep enough to satisfy foreign banks as to their suitability vis a vis Treasuries.

    Deregulation had allowed investment banks into the banking business in a big way, but without the restrictions placed on the banks, and their underwriting and purchase standards were not hampered in any of the ways the GSEs were.

    Merrill Lynch, Goldman Sachs, Lehman Brothers, Bear Stearns, all of the big investment banks, bought independent originators in order to integrate their mortgage mills without having to deal with the GSEs or federal regulators – the GSEs were competition, making money securitizing mortgages. This was a profit center which investment banks did not want to cede to them. They weren’t thinking about federal guarantees in case things went wrong, they were thinking about profits now.

    This is where subprime and Alt-A originations found their home. There simply weren’t enough qualified buyers out there to feed the hungry maw of the mortgage securitization and derivative mill, so underwriting standards had to be lowered, and homeowners had to be encouraged to refinance early and often – refinancing not only provided grist for the mill (while only affecting the junk tranches of existing issues of CDOs) – it allowed bad underwriting to be covered through the new issue of loans before an existing loan had to be written off for nonperformance. This worked as long as demand for housing remained high enough to keep home prices rising (it was the increase in a homeowner’s equity that allowed them to refinance out of one nonperforming loan into another that was just as unlikely to perform). In order to make this happen, they had to ignore the fed funds rate and make mortgage loans at rates that would keep housing demand high. This, again, explains the proliferation of nontraditional loans, which kept interest rates low for a time but recaptured money from the borrower later.

    This is not a story of moral hazard caused by federal guarantees. It is not a story of the Fed keeping interest rates low, or lending too freely to banks (these investment houses couldn’t get loans from the Fed, they were relying on commercial paper for short-term financing, creating a bubble in that market as well). The credit expansion, the moral hazard, and the outright fraud were all products of a market that was not being manipulated, but was doing its own manipulation.

    The subtext to this is that the individuals – the traders, managers, and CEOs who were doing this did not own the companies they were running. They were perversely incentivized to take HUGE risks on behalf of their companies for personal gain. By showing profits in the short term they kept stockholders satisfied – stockholders who had no hope of understanding the products these firms were selling. The idea that moral hazard was created by federal guarantees depends on the thesis that those who were making the risk decisions would be bailed out if their companies failed. But the fact was that those who were making those decisions were employees who received their compensation in the short term, and didn’t care about bailouts. As employees, the problem of ultimate company failure wasn’t one that particularly worried them.

    When you say you want government out of the markets, it is exactly this sort of result that you are begging for.

    H/T LET

    Skippy…. Bon appetit~ Mr. Creosote… the meal can never end now…. from M – M to C – C~~~~ w/ a palate cleanser of NPV between courses….

      1. Jackrabbit

        Skippy, I believe that Yves has made statements that agree with what you wrote. Also, this blog publishes William Black, a frequent critic of control fraud.

  12. Jack

    I never could shake the sense that Wittgenstein was just spouting nonsensical, pretentious gibberish and people were embracing it as genius even though they never understood it, and never could, since it was a bunch of crap that never had much of a coherent meaning to be understood in the first place. A supreme irony, since the core message, such as it was, was that philosophy was filled with pretentiousness and meaningless word games. So you have people embracing one pretentious work that derides everyone else for being pretentious.

    The philosophical equivalent of James Joyce, though Joyce at least was coherent, just not good. Joyce is a mountain to be climbed, and the few who suffer all the way through his unformatted nonsense feel compelled to claim how genius it is, even though it was in reality tedious and mostly unenjoyable. You get to the top of the mountain but don’t want to admit it was a mountain of garbage and you wasted your time.

    1. Paul Tioxon

      “I think this question also motivated much of Wittgenstein’s later work. He did after all say, “Philosophy is a battle against the bewitchment of our intelligence by means of our language.” (Philosophical Investigations §109) Surely then his work could offer insight into the danger posed by these dangerous phrases, and assistance in avoiding and overcoming the danger? I want to approach Wittgenstein with the aim of discussing our tendency as humans to turn our words into slogans – to be bewitched by dangerous phrases – and to think about the means at our disposal for overcoming this tendency.”


      The above quote is from an article about Wittgenstein, which shows the usefulness of his writings. The Tractatus was published when he was alive and gave him his reputation, his influence and invited him into a circle of philosophers he could contend with as an intellectual. After he died, PHILOSOPHICAL INVESTIGATIONS was published which seemed to run counter to his first work. It seems he evolved. As the above quote suggests, he was mindful of the impact of language on a person and society. People mistake books for experience, ideas for reality and thinking with action. By talking about language, he stepped back and viewed communication as a tool and how it was used, abused and misused. It is not that deep. By the time his work reached Western Academia, other influences with similar messages were making inroads to wake people out their mental torpor induced by language. Using simple and short messages, aphorisms, he built up an method which showed how language was distinct from experience with simple examples. The pain of hitting your thumb with a hammer is different than saying or writing about hitting your thumb with a hammer. You will not feel the pain talking or writing about it. Go ahead, get a hammer and see for yourself if you don’t believe me.

      1. MikeNY

        I am a huge admirer of LW. He is one philosopher whose grip on me has never lessened. Another is Kant. I’m sure that sounds pretentious, but it’s true. (That said, I think that “comic opera” is simply atrocious.) I you want to read a very clear stylist who was heavily influenced by the later LW, read Rorty. I agree that the Investigations mark essentially a U-turn from the Tractatus.

        I read Joyce’s Ulysses and rather enjoyed it. There is sense to it. I have not attempted Finnegan’s Wake, because its reputation (even among Joyce fans) put me off. Joyce is not one of my favorite novelists, but I can clearly see his genius. The riff on ‘water’ alone (about 2/3 through the Ulysses) is breathtakingly good.

        1. Skippy


          You could add Mises…

          “A prioris and categories for Kant then are the conditions of the basis of our experience. A category in the Kantian system has the same status as our lived experience of time and space in that it is needed in order to comprehend reality (this is important, we will return to this in a moment). Now, what Mises is trying to do in his Human Action and his doctrines of so-called Praxeology is to derive something similar to Kant’s categories but which rather than form a basis for understanding the conditions that allow thought to be possible, they set out the conditions that allow action to be possible.

          Kant’s was an epistemological project. The idea was to try to figure out the base-determinants of our thinking. Mises’ was more so a neurosis; an obsessive search for justifying the “correct” manner in which people should act. Actually, we can call such a project by its name: it was an attempt to form a rigid and codified doctrine of ethics and morals. I hesitate to call this moral philosophy because that’s not what it was at all. Moral philosophy tries to hit at Universal principles by which to evaluate Particular choices we must make. What Mises was doing was more so laying out a guide to life. Again, we can and should call this what it was: Mises was trying to write a Bible.

          But back to Kant for a moment. What was fundamentally wrong with his project? Simple: it was too rigid. The question of time and space is interesting in this regard. Kant’s ideas about time and space, relying as they did on Newtonian physics, were basically overturned by Einstein and his relativity theory. Kant enthusiasts claim that it is unfair to criticise him on this; after all, they say, how could he have known? Well, actually the philosophical issues that Einstein’s theory raised were already there in George Berkeley’s De Motu. Naturally, Berkeley was (and is) usually ignored in these debates as parts of his theories were picked up and vulgarised by David Hume who then suppressed all the really interesting questions that these questions raised.

          What does this tell us about the weakness of Kant’s approach? Again, it is all about its rigidity. Although we can break this down in a Berkeleyian manner and show that such rigid systems ultimately rely on what Berkeley called “occult qualities” — that is, overly abstract terms — it was, as I have shown before, Hamann that really nailed down the meta-problem with Kant and his ilk: it was their use of language that produced the rigidity. In trying to treat human language, which is the only real a priori that exists, as an overly precise tool it quickly becomes hard and fragile and loses all expressive power. It loses, in a very real way, its flexibility; and that is what is the key problem with Kant’s theory: it is in large part inflexible, trying always to subsume the New under its musty old categories and a prioris.”


          Addtionaly –

          “Bishop George Berkeley is, in my opinion, the most profound philosopher ever to have written. He came up with many ideas in the early modern period — that is, around the beginning of the 18th century — that were only integrated into modern science around the beginning of the 20th century. What is more, most Anglophone philosophy today still operates under notions that have been stale in scientific discourse since Mach and Einstein and which should have been overturned by Berkeley nearly four hundred years ago.

          Modern Anglophone philosophy, for example, usually operates under Kantian notions about space and time as a priori givens. Later in a philosophy course it is often admitted that Kant was operating in a Newtonian paradigm that has since been overthrown but this is simply a handwave; it is rarely, if ever, integrated into the teaching of philosophy. Thus Anglophone philosophy today operates in a strange slipstream: these philosophers at once know that absolute notions of space and time are incorrect but they nevertheless teach philosophy as if they were not.”

          Now to top all that off its the present view that the cat is both a bit a alive and a bit dead.

          Skippy…. lets not forget Kant’s views on democracy shall we…

          1. MikeNY

            I agree that Kant’s was basically an epistemological project — as was LW’s, particuarly in the Tractatus. Both had has their core problem: how can anything be known with certainty. One of the fascinating things about LW to me is how he ultimately seems to come down against such certainty, even the certainty of the laws of mathematics — hence his ‘finite constructivism’. And hence his huge differences with Russell on the subject.

            Re Kant and Einstein: I don’t see General Relativity as fatal to Kant’s 1st critique; what is important is that the physical world be governed by law. Einstein was as much a determinist as Newton, hence it’s simply a matter of tweaking the law. The Quantum, on the other hand, is very problematic if it is interpreted to mean there is a fundamental indeterminacy (or even — gasp — freedom!) in the observable universe. That is incompatible with the Kantian categories of perception, so K would reject it. As Einstein also rejected it!

            BTW, I remember reading somewhere that Einstein listed Kant as one of his formative influences.

              1. MikeNY

                If I understand you correctly, I entirely agree: freedom admits of no explanation.

                1. skippy

                  As such the dead descend from mountain tops only to smash the equations… in a tanty… in antiquity…

                  Successive generations attempt to extrapolate their meanings from the shards…. hilarity ensues… praxeology.

                  Don’t know what to say, but after thousands of years and this is the best that some can come up with…. whats the bloody point.

                  Yet with advances in psychology and neuroscience [ loved the “pop” neuroscience reference in a recent link] are besmirched from the usual quarters.

                  Skippy… How many times can you rewrite the old testament to give it that ***new cranium smell*** seriously.

    2. Skippy


      Skippy…. abused child syndrome… reoccurring theme – especially with some males…

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