Spy’n in Zion

Posted on April 2, 2012 by camelotkidd

Not dead yet. Been really busy with work, so sporadic posting.

There’s an interesting story relating to the ongoing deep security state  happening in my own backyard. It seems that the National Security Agency is building a huge facility at Camp Williams, a National Guard training site on the south-west side of the Salt Lake valley. The NSA has gone through a rough patch since the end of the Cold War, going from focusing on large nation states like the Soviet Union to having to keep track of small stateless terrorists. To do this they are vacuuming up enormous amounts of data to be analyzed at this new facility. And they are not just collecting this data from foreigners. Driven by the “war on terror,” the NSA is also turning this vast surveillance apparatus on the US and its citizens.

James Bamford, author of the definitive series of books on the NSA: The Puzzle Palace, The Shadow Factory, and Body of Secrets, gives you all the details.

Posted in Uncategorized | Tagged , , | Leave a comment

Minsky Moment

Posted on March 10, 2012 by camelotkidd

Why is it, that we never really attempted to script a convincing narrative of the 2008 financial crash? What really happened? Was it rogue traders gone wild with hookers and blow? Was it a once in a lifetime “black swan” event that no one foresaw? Or was it something more systemic, related to the mania of deregulation? So far we don’t know. No one has been held accountable, with the exception of Bernie Madoff, who was so greedy he ripped-off his wealthy friends.

Lets look at this a little closer. Now, of course, it’s true that young traders were snorting coke and banging hookers. Shit, that’s what young traders do, especially when they have all that bonus money burning a hole in their pocket.

But a once in a lifetime event that no one saw? Please!

The answers are there, but they’re politically and economically inconvenient among a cast of bipartisan elite. Robert Rubin, Alan Greenspan, Timothy Geithner and others have defended themselves, asking–who could have known?

Well, for starters, the FBI, in 2004, warned of an “epidemic of mortgage fraud,” and it predicted an economic crisis if it were dealt with.

Economists who studied the Great Depression could have told you. One such economist, who understood this was Hyman Minsky. Minsky’s “Financial Instability Hypothesis”, states that, “A fundamental characteristic of our economy is that the financial system swings between robustness and fragility and these swings are an integral part of the process that generates business cycles.”

Boston Globe correspondent, Stephen Mihm, summarized Minsky’s theory in his article “When Capitalism Fails”: “In the wake of a depression,” he noted, “financial institutions are extraordinarily conservative, as are businesses.” With the borrowers and the lenders who fuel the economy all steering clear of high-risk deals, things go smoothly: loans are almost always paid on time, businesses generally succeed, and everyone does well. That success, however, inevitably encourages borrowers and lenders to take on more risk in the reasonable hope of making more money. As Minsky observed, “Success breeds a disregard of the possibility of failure.”

A “Minsky moment” – would create an environment deeply inhospitable to all borrowers.

The speculators and Ponzi borrowers would collapse first, as they lost access to the credit they needed to survive. Even the more stable players might find themselves unable to pay their debt without selling off assets; their forced sales would send asset prices spiraling downward, and inevitably, the entire rickety financial edifice would start to collapse. Businesses would falter, and the crisis would spill over to the “real” economy that depended on the now-collapsing financial system.

Stability leads to instability.  By zeroing in on capitalism’s genetic flaws, Minsky countered the prevailing orthodoxy that markets are fundamentally efficient and rational. He not only showed that capitalism was inherently crisis-prone, but also, that it was most vulnerable during those periods which seemed to be most stable. (Like during Greenspan’s “Great Moderation”.) Stability invites speculation and risk-taking. Investors are buoyed by market euphoria and fat returns; borrowing to purchase dodgy equities turns into a mania which distorts prices and leads to massive credit bubbles. Eventually, the foundation cracks and debts cannot be rolled over. Then markets tumble.

So it wasn’t a once in a lifetime “black swan” event, but the prevalent economic orthodoxy does not want to admit this, because that would wreck their beloved efficient and rational market hypothosis, that underpins their argument for the radical deregulation of financial markets we have witnessed in the last few decades. And this ideology helps explain why there have not been any real prosecutions, unlike the 1980’s Savings and Loan scandal.

William K. Black, former regulator and criminologist, who helped investigate the Savings and Loan scandal, has been a constant advocate for prosecutions, of white collar criminals as well as blue collar ones. He wrote a book entitled–The Best Way the Rob a Bank is to Own One, explaining the lure of  “control fraud.”

“Fraudulent lenders produce exceptional short-term ‘profits’ through a four-part strategy: extreme growth (Ponzi), lending to uncreditworthy borrowers, extreme leverage, and minimal loss reserves. These exceptional ‘profits’ defeat regulatory restrictions and turn private market discipline perverse. The profits also allow the CEO to convert firm assets for personal benefit through seemingly normal compensation mechanisms. The short-term profits cause stock options to appreciate. Fraudulent CEOs following this strategy are guaranteed extraordinary income while minimizing risks of detection and prosecution.” (William K. Black, “Epidemics of’Control Fraud’ Lead to Recurrent, Intensifying Bubbles andCrises”, University of Missouri at Kansas City – School of Law)

And what does Professor Black say we should do?

“The government is reluctant to admit the depth of the problem, because to do so would force it to put some of America’s biggest financial institutions into receivership. The people running these banks are some of the most well-connected in Washington, with easy access to legislators. Prompt corrective action is what is needed, and mandated in the law. And that is precisely what isn’t happening.”

Posted in Uncategorized | Tagged , , , | Leave a comment

Pot Getting Hotter

Posted on March 8, 2012 by camelotkidd

WTF!

No, that doesn’t stand for President Obama’s Orwellian re-election slogan, Winning The Future, but I am starting to feel like the character Winston Smith in the novel 1984.

The war on terror non-stop fear campaign has been operational for over ten years now, with both Republican and Democratic administrations enabling a national security state that is increasingly sublimating our democracy. Every week brings a new outrage, but my fellow citizens barely notice.

Last week, Congress passed legislation, doing away with First Amendment rights to peaceably protest. The US House of Representatives voted 388-to-3 in favor of H.R. 347 late Monday, a bill which is being dubbed the Federal Restricted Buildings and Grounds Improvement Act of 2011. Know informally as the Anti-Occupy, the bill passed the Senate unanimously in February, and had only three dissenters in the House–all Republicans. Almost unnoticed in the mainstream media, this bill demonstrates what passes for bipartisanship in our congress. “The virtually unanimous passage of H.R. 347 starkly exposes the fact that, despite all the posturing, the Democrats and the Republicans stand shoulder to shoulder with the corporate and financial oligarchy, which regarded last year’s popular protests against social inequality with a mixture of fear and hostility.”

And on Monday, Attorney General Eric Holder gave a speech at Northwestern Law School, laying out the legal justification for executive order assassinations, where he trotted out some impressive “newspeak.” Said Holder, to the assembled law students: “Some have called such operations assassinations. They are not, and the use of that loaded term is misplaced. Assassinations are unlawful killings.”

Isn’t it nice to know that the President can kill an American citizen without charges or a trial and, by definition, it is legal.

Recent polling shows that Americans approve these authoritarian practices being carried out in their name. Conservatives typically support authoritarian policies, and liberals who screamed bloody murder when former President Bush made the claim of unfettered executive power, are cool when these dictatorial practices are carried out by the President with a D after his name.

It isn’t hyperbole that I am starting to feel like the proverbial frog as the water temperature rises degree by degree.

Posted in Uncategorized | Tagged , , , , | Leave a comment

Rock Stars

Posted on March 3, 2012 by camelotkidd

I believe that there is an alternative to finance driven capitalism as the only way to organize an economy. This system, let’s call it neoliberalism, insists on a market culture as the master design for all human affairs. Profit making and market freedoms are viewed as the essence of democracy. Consumerism is citizenship and capital is sacrosanct. Banks are allowed to monopolize the money supply, using these funds to speculate rather than financing the real economy, then when their bets go bad, taking billions in bailouts, while insisting on savage austerity for the citizens of western democracies as the way to pay for it.

From Greece, to Spain, to Romania, ordinary people are reacting with dismay as the results of this experiment in mass suffering play out. They are required to pay for the bailouts, thereby rectifing bankers sins, and, also asked to sacrafice pay and benefits. Among them there is a real hunger for an alternative to neoliberalism.

There is a school of economic theory, based out of the University of Missouri at Kansas City, UMKC, entitled Modern Monetary Theory, or MMT, that articulates an alternative to this banker feudalism. One of the prominent economists who advocates MMT is Michael Hudson. Hudson, with his colleges from UMKC, was recently in Italy, to lecture on MMT, where he and his colleges were greeted like rock stars by Italian citizens who packed a stadium to hear this alternative articulated.

Essentially, MMT posits that a country with a sovereign currency. like the United States, need not borrow from banks, or even sell bonds, to finance their spending. All money is created with the click of a mouse, whether by commercial banks or the Treasury. Allowing commercial to create money rather that a central bank is a political decision not an economic one.

And what is the solution? According to Dr. Hudson. “It is to have a central bank that does what central banks were founded to do: monetize government budget deficits so as to spend money into the economy, in a way best intended to promote economic growth and full employment.”

But that would hurt the bankers little feelings, and cause David Brooks and Megan McArdle to rend their garments. And, more saliently, it would take away a huge chunk of campaign cash from both Republicans and Democrats.

Posted in Uncategorized | Tagged , , , | Leave a comment

Cult Studies

Posted on February 27, 2012 by camelotkidd

There is a new book entitled: Ayn Rand Nation: The Hidden Struggle for America’s Soul, by Wall Street reporter Gary Weiss, coming out this week. Ayn Rand created a cult of followers, including former Federal Reserve Chairman Alan Greenspan, around a philosophy of selfishness that she labeled–Objectivism. As luck would have it my brother has written an essay attempting to make sense of why Ayn Rand and her philosophy of selfishness remain so relevant today.

Take it away Wart.

I recently picked up a promotional copy of Ayn Rand excerpts from a box outside my library.  While I enjoyed the Fountainhead, I only knew of “Objectivist” philosophy secondhand.  Opening to the chapter entitled “Man’s Rights” from the Virtue of Selfishness, I read the following:

If one wishes to advocate a free society –that is, capitalism—one must realize that its indispensable foundation is the principle of individual rights. If one wishes to uphold individual rights, one must realize that capitalism is the only system that can uphold and protect them.  And if one wishes to gauge the relationship of Freedom to the goals of today’s intellectuals, one may gauge it by the fact that the concept of individual rights is evaded, distorted, perverted and seldom discussed, most conspicuously by the so-called “conservatives.”

I finished the chapter, delighted by how easy it was to spot the logical errors and the conceptual fudges.  Even so, I confess I admired her style, sharing as a I do her weakness for rhetorical finesse over inductive proof.

And as I meditated on her life experience, the sincerity of her belief and the reaction formation of her politics made sense.  Moreover, I found myself awed by her self-discipline and force of personality.  She’s not the first—or only one–to have felt these things, though she expressed herself rather better than most.   She’s entitled to prefer certainty and absolute distinctions, whatever I happen to think.

What is confusing—a source of enduring mystery to me—is how she assembled a circle of very smart people to expound, develop and celebrate her third rate philosophy, which is not, strictly speaking, philosophy at all, but polemic and persuasion masquerading (perhaps even to itself) as argument.

But perhaps a brief analytical demonstration is in order.  I’ve forgotten most of the vocabulary from my study of logic as a philosophy major, but insofar as you may not

know them either, I’ll use layperson’s terms.)

A)   In the very first sentence of the paragraph above, she presents capitalism (“that is, capitalism”) as the example of what a free society is.  Here, she blithely assumes the conclusion required to advance her argument.  (Free society –or capitalism, as she defines it, has for its “indispensable foundation” the principle of individual rights, which can only be upheld and protected by capitalism.) She’s neither subtle nor slippery. It’s just bald assertion instead of argument, with no consideration of alternatives.

B)   Who are “today’s intellectuals.” Isn’t that nebulous, catchall category a straw man?  All intellectuals alive today? The so-called conservatives?  The so-called liberals? Which ones?  They can’t all agree, or else they wouldn’t be intellectuals.

C)   Has she monitored discussions by “so-called” conservatives such that she can make this claim with any objectivity or credibility?   And if they’re only “so-called,” who calls them that?  Not her, it would seem.  Now, insofar as the identity or even existence of these putative conservatives is in doubt, how can they be said to have evaded, perverted and distorted much of anything at all?

The rest of the essay continues in a similarly logic-free manner.  It would be tedious and not any more instructive to consider her flawed or false reasoning paragraph by sorry paragraph.

And yet, I remain puzzled by and curious about (rather than disgusted by or indifferent to) Ms. Rand, a writer of popular potboilers who in her “serious” writings seems unwilling to distinguish between denotation and connotation, denies the existence of an entity called society, and asserts that America was more civilized during its first 150 years of existence (when slavery was the law of our land and women were disenfranchised!) than it is today.  Since she is not a fool, I conclude that she’s either willfully obtuse or piously vicious.  She is, undeniably, an interesting character.

But whereas her life, literature and political scribblings entertain me, the passionate intensity and impact of her acolytes, fills me with contempt.  Her arguments are not sufficient to win a high-school debate; how then did she attract eminent, well-educated persons and influence policy decisions at the national level.  Given that her circle and reputation developed before she published her opinions, she must have been more than charismatic; she must have been a mesmerer.   Or perhaps, she told people what they wanted to hear, propounded an ethical system that was neither, but which bamboozled the undiscerning or persuaded the willing to be convinced of the virtue of their vice.    Wart

Editors note–After reading some of the excerpts from Ayn Rand Nation, I think Weiss offers a pretty good explanation to why Rand has proved so durable. “…perhaps it is simply that Objectivism has no practical purpose except to promote the economic interests of the people bankrolling it…regardless of its potential to bring ruin to everyone else…”

There have been a spate of articles on Ms Rand in the last couple days. Maybe it’s something in the water. Anyway, this story points out who the real moochers are in America.

Posted in Uncategorized | Tagged , , , | Leave a comment

In My Tribe

Posted on February 25, 2012 by camelotkidd

Any honest accounting of President Obama’s policies, in regard to his management of the American empire, would have to conclude that there is little substantive difference between him and his predecessor. (What was that guys name again?) This ratchet effect, where as a Republican administration moves us radically to the right, followed by a Democratic administration that makes that right ward move bipartisan, appear to be a feature rather than a bug.

The other day, discussing the state of politics with co-workers, I had a moment of spite. I said what our country deserves is a president Santorum, in that it would go a long way in clarifying where we really are. With President Santorum we wouldn’t have to pretend anymore that we care about our fellow Americans. We could just come out and say it–we don’t give a shit about anyone except rich assholes. We wouldn’t have to pretend that we care about women, or human rights, or torture, or indefinite detention, or drone strikes, or spying on Americans, or rule of law.

Because, right now on the left there’s a lot of pretending going on. With the election coming up, liberals have been rallying around the President and portraying the Republican candidates as crazy or rich-dicks. Which, of course, they are. But here’s the thing–with their support of Obama, the Democrats are just as tribal as the Republicans were with their support of Bush. Liberals vociferously opposed all these horrible policies when Bush was president, but now they’re fucking hunky-dory. My head spins! They can’t root for Team Blue when they support the same evil policies that Team Red advocates. All that does is make them look like hypocritical idiots.

With a President like Rick the Pious it would be obvious, once again, that the United States is an empire, and President Obama was a fully complicit manager during his administration. If you have not noticed, Democratic Administrations hide the empire management better than Republicans, who like to flaunt it. A President like Santorum would rub America’s face in it, not like President Obama, who issues stirring bromides attesting to “American leadership on behalf of aspirations held by people in all nations.”

This rightward movement in American politics has consequences. Both Democratic and Republican Administrations have helped turn our country into a fucking Banana Republic, with their economic and foreign policy decisions.

Well, I’m sick of the subterfuge–of a black progressive community organizer bravely confronting entrenched power. Lets just have it out in the open where everyone knows what a monster the president is. Where the Google will always describe what President Santorum represents–“A frothy mixture of lube and fecal material.”

America the Beautiful. Man on dog.

Posted in Uncategorized | Tagged , , , , , | Leave a comment

Ownership Society

Posted on February 15, 2012 by camelotkidd

Since the bank crash and economic meltdown that began in 2007, I have been struck by the disparity in coverage.

Relying on television or print media, one might have come to believe that the crisis was brought on by government and, or greedy homeowners, and the banks made some remediable mistakes that are now solved with the latest settlement between the federal government and the banks.

The blogosphere, however, has been providing a much different narrative. Yves Smith at Naked Capitalism, David Dayen at Fire Dog Lake, and Duncan Black, aka–Atrios, among many others, have been doing a superlative job of illustrating this crisis, especially in identifying the true perpetrators of the crash and deconstructing this “shit sandwich” of a settlement, which now appears to be fucking over investors of the mortgage backed securities, in addition to the illegally foreclosed upon homeowners.

Pam Martens, long time internet economic blogger and former Wall Street investment professional, maintains that there appears to be another rational for the US Justice Departments lack of prosecution against the too big to fail banks and this latest charade of a settlement. “The banks are the Federal Governments bond brokers, the primary dealers who contractually agree to buy Treasury Bills or notes or bonds at every US Treasury auction. They may be serially corrupt, but the Uncle Sam needs those contractual guarantees of its primary dealers to be sure it can pull off its debt auctions. And the US government cannot engage in contracts with convicted financial felons.”

And, of course, there could always be a more simple explanation.

In what has to be one of the most telling episodes in the crisis, Illinois Senator Dick Durbin, blurted out what more than a few of us have long suspected in regard to the banks. Said Durbin–“frankly, they own the place.”

Posted in Uncategorized | Tagged , | Leave a comment

It’s Their World, We just Live In It

Posted on February 11, 2012 by camelotkidd

The Federal Government and 49 States have agreed to a tentative settlement with the five largest banks for their robo-signing practices. While we still don’t know all the details, one thing has become clear–we officially have a bifurcated rule of law. The 5 big banks that are part of this settlement have their own rule of law, and the rest of us a much different one. Can you imagine if you stole a shipment of TV’s, but rather that getting arrested and going to jail, you were able to pay a small fee, and go on about your business?

If you want a deeper analysis of why this settlement sucks, see Yves Smith at Naked Capitalism.

Posted in Uncategorized | Leave a comment

Izzy

Posted on February 9, 2012 by camelotkidd

If there is a north star for this blog, it has to be the iconoclastic investigative reporter, I.F. (Izzy) Stone, with his independent newsletter–I.F. Stone’s Weekly.

Using this weekly newsletter, started in 1953,  Stone campaigned against the Cold War, McCarthyism, racial discrimination, and the Vietnam War. The weekly content contained essays, articles, and other peoples stories–kind of like a blog. Stone also based his reporting on close reading of obscure government documents available in the public domain, and eschewed insider political reporting.

“I made no claim to inside stuff. I tried to give information which could be documented, so the reader could check it out himself…Reporters tend to be absorbed by the bureaucracies they cover; they take on the habits, attitudes, and even accents of the military or diplomatic corps. Should a reporter resist the pressure, there are many ways to get rid of him…But a reporter covering the whole capital on his own–particularly if he is his own employer–is immune from these pressures.”

Like today’s political bloggers, writing contra “conventional wisdom,” Stone wrote in a critical environment that required his stories meet an “extremely high burden of proof” to be considered credible.

And contrary to todays timid news, Stone passionately made the case that, if accurate in their reporting, journalist didn’t have to be neutral. “A newspaperman ought to use his power on behalf of those getting the dirty end of the deal.”

Stone, of course, had no illusions about the powers he faced. “If you want to know about governments, all you have to know is two words–Governments Lie.”

Posted in Uncategorized | Tagged | Leave a comment

March to War

Posted on February 7, 2012 by camelotkidd

As we march towards war with Iran, with one alarming news story after another, it is useful to turn our attention to some recent history.

Ten years ago the neo-cons stampeded the US into a disasterous war with Iraq, using a nonstop propaganda campaign. In August 2002, President Bush’s chief of staff, Andrew Card, made the connection of war to another product being sold explicit. “From a marketing point of view, you don’t introduce a new product in August.”

It is also useful to remember that some things are timeless.

Herman Goering, in a jailhouse interview at Nuremberg, stated an obvious truth on the ease of marshaling a populace for war.

“Naturally the common people don’t want war; neither in Russia, nor in England, nor in America, nor in Germany. That is understood. But after all, it is the leaders of the country who determine policy and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought along to do the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in any country.”

Posted in Uncategorized | Tagged , , | Leave a comment