Teach the Debate! Teach the Debate!

Welcome to the logic of the zealots.

A Buyers Strike in Eurozone Bonds?

Financial Times:

“Buyers’ strike,” for a number of reasons, is a good way to describe the state of Europe’s sovereign debt market at the moment. It has really affected the lack of liquidity even in prime long-dated AAA bonds like those of France — see those vaulting spreads to German debt — but we think that it must really end up hurting sovereigns’ short-term refinancing needs, in the primary market (auctions) in particular. Spain had a T-bill auction on Tuesday with the same problems. Italian T-bills in the secondary market were (sorry to bring out the cliche) canaries in the coalmine before last week’s carnage.

What this means is that European countries seeking to raise short-term capital are, in a word, screwed.  Their cost of borrowing is going to go through the roof as they must offer higher and higher yields to attract bond buyers.

The Cognitive Dissidents

Some people...

Barry Ritholtz:

I have frequently referenced the idea of Cognitive Dissonance. This has been traditionally described as the “uncomfortable tension which comes from holding two conflicting thoughts in the mind at the same time.”

However, where we see an even greater discomfort is when a person of a given mindset or ideology is confronted with facts that directly contradict their previously held beliefs.

As we have seen, there is a cynical attempt to falsify the narrative of what actually occurred before, during and after the credit crisis. The data is overwhelming as to what did and did not cause the financial collapse. The belief that markets can self regulate, that bankers can be trusted to act int heir own best interest, even that people are rational, have all been shown to be siilly nonsense.

The conflicts within the minds of the people who believe these fallacies is overwhelming. 

The attempt at reconciling facts with beliefs leads them to a painful conflict: Either they significantly modify their belief system — a challenge when its a defining characteristic of their personas — or, they utterly disregard the facts in order to construct a new narrative.

Some people have recognized their belief system was overrun by reality. They are chastened, have begun searching for a new or modified ideology.

Many others refuse. Facts be damned, they double down, sticking with their beliefs, regardless of all evidence to the contrary.

I have a new name for these folks: They are Cognitive Dissidents. They will continue to dissent from reality for as long as it takes to get everyone else to believe as they do, no matter how much evidence there is to the contrary.

If you engage with a Cognitive Dissident, it is futile to try to use facts or data, for theirs is a belief based upon Faith. You cannot convince a person of a fact if it conflicts with their deeply held, nearly religious convictions.

Thus, when confronted with someone who has a fervent belief based not on evidence or reason or data or logic, do not waste your time convincing them the earth is not flat; their cognitive facilities simply will not allow them to recognize the world is round.

A farmer — or was it Robert Heinlein? — once passed along this slice of wisdom; I repeat it now for your benefit: Never try to teach a pig to sing; it wastes your time and annoys the pig.

Amazing Video of Earth from the ISS

Just spectacular!

Get 'em While They Last!

Yes, you too can own a slice of cinematic offal!  Among the worst rated films in the history of cinema,   Atlas Shrugged: Part 1 is now available on DVD (and, god help me, Blu-Ray!)

Before you rush out to buy it, you might want to check out Rotten Tomatoes for the reviews...

As the reviewer for The New York Times said,

“Atlas Shrugged: Part I” is in many ways charmingly oblivious to its inherent contradictions and the fact that its capitalist titans appear to be squatting in old, abandoned “Dynasty” sets, eating food-court baked potatoes.

It Never Occured to Me!

That von Misses, Hayek, Marx and Ron Paul all share the same delusional value proposition never crossed my mind before.  Thanks Brad!

The point of view underlying von Mises's--and von Hayek, and Marx, and Ron Paul--complaint against fiat money in general and monetary management of the business cycle in particular is this: that value comes from human sweat and toil, not from being clever. Thus it is fine for money to have value if it is 100% backed by gold dug from the earth by sweat and machines and muscles (even if there is no state of the possible future world in which people actually want to exchange their pieces of paper for the gold that supposedly backs it). But it is not fine for money to have value simply because it is useful for buying things. There is, von Mises--and Marx, and von Hayek, and Ron Paul--think, something profoundly wrong on an economic and on a moral level with procedures that create value that is not backed by, in Marx's case, human labor, and in von Mises's and von Hayek's case human entrepreneurial ingenuity. And in its scarier moments this train of thought slides over to: "good German engineers (and workers); bad Jewish financiers".

Libya: The Backstory

Libyan Leader Colonel Muammar Gaddafi in 1971,
two years after he seized power in a coup d'etat

In a very comprehensive review of Libyan history and politics over at The London Review of Books, Hugh Roberts points to some very inconvenient truths in the overthrow of Gaddafi.

Spend an Hour with Tim Wise

The best hour you'll spend learning American history this month...

Occupy Wall Street Trickles Into the SEC

This is fascinating...

As far as we can tell, Occupy Wall Street made its SEC-filing debut yesterday, at least by name, in two separate filings. The first, in an 8-K from Strategic Hotels & Resorts (BEE) — a $943-million market-cap real-estate investment trust that concentrates on luxury hotels — landed on the SEC’s virtual desk a few minutes before noon. More on them in a moment. 

The second instance came not two hours later, when CME Group (CME) filed its 10-Q. CME Group, of course, runs the Chicago Mercantile Exchange, the Chicago Board of Trade and the New York Mercantile Exchange. So it’s not surprising that it would take a dim view of the protests in New York’s financial district and see itself as a potential target of any nefarious foes of the financial system.

The 10-Q filing from CME is really interesting.  Remember, these are the clowns who posted a sign that said "We are the 1%" in the windows above the Occupy Chicago protests.

“In connection with the continued economic uncertainty, groups such as Occupy Wall Street and Anonymous, have targeted the financial services industry as part of their protest against the perceived lax regulation of the financial sector and economic inequality.” 

It's working, Occupy, it's working.

Krugsandra Makes a Funny

Hilarious...

The sad irony here is that the euro is, in reality, essentially an Italian creation. If you were part of the dialogue in the late 80s and early 90s, it became clear that the euro was best understood as a plot by Italian technocrats to get themselves German central bankers.

This was not, it turns out, a good idea.

Meet Maria Svart from the DSA!

Thom Hartman interviews Maria Svart from the Democratic Socialists of America.

Rockin the Souq!

Damn, these guys rock! An awesome fusion of Middle Eastern and symphonic metal music.

Spain misses Q3 GDP Target

And you'll never guess why...

The Bank of Spain blamed stagnant growth on a number of factors, including a drop in domestic demand in a country with a 21.5 percent jobless rate. 

It said domestic demand fell because of lower government spending as a result of deficit-reducing austerity measures taken by regional governments and because of a moribund real estate market.

So what's the solution to this drop in aggregate demand caused by the severe austerity measures the Spanish government has imposed?

Why more austerity, of course!

The Bank of Spain said there is still time to meet the deficit reduction target by the year's end but warned that fresh measures may be necessary.

Because repeating the same action over and over again while expecting a different result must be the right solution.  It simply must!


Prepare for a longer, deeper and more pronounced recession in Europe.  It's coming, kids.  It's coming.

"By the pricking of my thumbs, Something wicked this way comes!"

If you Give a Credit Rating Agency a Cookie...

...he'll love you bestest of all (and drink all the milk in your fridge)!

Credit-rating companies routinely award higher rankings to debt issued by banks and corporations that pay them the most, a conflict of interest that may escape Congressional efforts to change the way they do business.

Bonds from countries and cities that pay about half as much as issuers of less creditworthy debt are “rated more harshly,” according to a study by scholars at Indiana University in Bloomington, Washington, D.C.-based American University and Rice University in Houston. Sovereigns rated A had no defaults over a 30-year period, compared with 1.8 percent of corporate bonds and 27.2 percent of securities backed by debt such as mortgages and loans assigned that ranking, the study of Moody’s Investors Service data said.

Why We Don't Have Al Jazeera English on American Cable TV

Because of hard-hitting journalism like this excellent take-down of the Koch Brothers and their destruction of American democracy we aren't allowed to watch Al Jazeera on American cable networks.

The Madness of King Finance

Start at 21:45 and watch Simon Johnson of MIT tear into the global financial system.  Brilliant.

We have built an entire banking system on illusion.  The illusion of risk free assets.  We did it in the United States on mortgage backed assets. ...  The whole thing is a house of cards.

Capitalism is now 147 Transnational Corporations

Behold the face of Global Capitalism Today!

The 1318 transnational corporations that form the core of the economy.
Superconnected companies are red, very connected companies are yellow.
The size of the dot represents revenue (Image: PLoS One)

In a study entitled The network of global corporate control by Stefania Vitali, James B. Glattfelder, and Stefano Battiston, they find that 1318 TNCs (Transnational Corporations) represent more than 60% of the world's revenue (out of 43,000 TNCs drawn from a database of more than 30 million economic actors).  As New Scientist reports,

The idea that a few bankers control a large chunk of the global economy might not seem like news to New York's Occupy Wall Street movement and protesters elsewhere. But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world's transnational corporations (TNCs). 

"Reality is so complex, we must move away from dogma, whether it's conspiracy theories or free-market," says James Glattfelder. "Our analysis is reality-based."

Being reality-based, the TeaOP will immediately dismiss it as a fiction.

But wait, it gets better...

When the team further untangled the web of ownership, it found much of it tracked back to a "super-entity" of 147 even more tightly knit companies - all of their ownership was held by other members of the super-entity - that controlled 40 per cent of the total wealth in the network. "In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network," says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.

And there are people who really wonder why the 99% are Occupying Wall Street?  Really?

We are all living in the world of Rollerball now...

The most powerful men in the world are the executives. They run the major corporations which fix prices, wages, and the general economy, and we all know they're crooked, that they have almost unlimited power and money, but I have considerable power and money myself and I'm still anxious.

What can I possibly want, I ask myself, except, possibly, more knowledge?

I consider recent history -- which is virtually all any-one remembers -- and how the corporate wars ended, so that we settled into the Six Majors: ENERGY, TRANSPORT, FOOD, HOUSING, SERVICES and LUXURY. Sometimes I forget who runs what -- for instance, now that the universities are operated by the Majors (and provide the farm system for Roller Ball Murder), which Major runs the universities? SERVICES or LUXURY?Music is one of our biggest industries, but I can't remember who administers it. Narcotic research is now under FOOD, I know, though it used to be under LUXURY.

Anyway, I think I'll ask Mr. Bartholemew about knowledge. He's a man with a big view of the world, with values, with memory. My team flings itself into the void while his team harnesses the sun, taps the sea, finds new alloys, and is clearly just a hell of a lot more serious.

Here's the Top 50 of the 147 Corporations that Rule The World:

1. Barclays plc
2. Capital Group Companies Inc
3. FMR Corporation
4. AXA
5. State Street Corporation
6. JP Morgan Chase & Co
7. Legal & General Group plc
8. Vanguard Group Inc
9. UBS AG
10. Merrill Lynch & Co Inc
11. Wellington Management Co LLP
12. Deutsche Bank AG
13. Franklin Resources Inc
14. Credit Suisse Group
15. Walton Enterprises LLC
16. Bank of New York Mellon Corp
17. Natixis
18. Goldman Sachs Group Inc
19. T Rowe Price Group Inc
20. Legg Mason Inc
21. Morgan Stanley
22. Mitsubishi UFJ Financial Group Inc
23. Northern Trust Corporation
24. Société Générale
25. Bank of America Corporation
26. Lloyds TSB Group plc
27. Invesco plc
28. Allianz SE 29. TIAA
30. Old Mutual Public Limited Company
31. Aviva plc
32. Schroders plc
33. Dodge & Cox
34. Lehman Brothers Holdings Inc*
35. Sun Life Financial Inc
36. Standard Life plc
37. CNCE
38. Nomura Holdings Inc
39. The Depository Trust Company
40. Massachusetts Mutual Life Insurance
41. ING Groep NV
42. Brandes Investment Partners LP
43. Unicredito Italiano SPA
44. Deposit Insurance Corporation of Japan
45. Vereniging Aegon
46. BNP Paribas
47. Affiliated Managers Group Inc
48. Resona Holdings Inc
49. Capital Group International Inc
50. China Petrochemical Group Company

"If Americans Want to Live the American Dream They Should Move to Denmark!"

An eye-opening and important TED talk from Richard Wilkinson, author of The Spirit Level, on how inequality harms societies.

FDR on the Balanced Budget

More Wisdom from America's Greatest 20th Century President.

To balance our budget in 1933 or 1934 or 1935 would have been a crime against the American people. To do so we should either have had to make a capital levy that would have been confiscatory, or we should have had to set our face against human suffering with callous indifference. When Americans suffered, we refused to pass by on the other side. Humanity came first. 

No one lightly lays a burden on the income of a Nation. But this vicious tightening circle of our declining national income simply had to be broken. The bankers and the industrialists of the Nation cried aloud that private business was powerless to break it. They turned, as they had a right to turn, to the Government. We accepted the final responsibility of Government, after all else had failed, to spend money when no one else had money left to spend. (From a 1936 campaign speech in Pittsburgh)

Barefoot & Pregnant? Not so much! Explaining Fertility Rates in the Developing USSR

To cap off a weekend of rather more maximum lefty blogging than I usually do, I thought I'd give you a little taste of the book I'm currently enjoying, Farm to Factory: A Reinterpretation of the Soviet Industrial Revolution by Robert C. Allen.

Yes, I did say "enjoying."  Stop laughing.  It's really interesting!

The RED Heart of Capitalism: Secret Socialism in our Midst!

I work for a big company.  A very, very big company.  You know this company, trust me.  You are likely to see the logo for this company at home or at your office every day.  Let's call it BigCo™ to protect the innocent.

BigCo™is usually positioned as a paragon of capitalist virtue and a model of how to run a large, global business.  The CEO of BigCo™ appears regularly with important political leaders and his advice is sought by the Administration and Congress as a voice of know-how to solve the problems of the most complex capitalist systems.  BigCo™ also happens to be a massive socialist bureaucracy with a planned economy and a pathological fear of competition.

False Consciousness and the Analytical Power of Karl Marx

Karl Marx & Freidrich Engels

It's easy to dismiss Marx, certainly easier than trying to engage his complex and often overwrought ideas.  Yes, he got some stuff wrong (or at least incomplete) in his analysis of capitalism (the labour theory of value comes to mind).  But he got some other important stuff very, very right.  One of his key observations is that the capitalist system acts an efficient obstacle to class reality.  This is why The Matrix is such an interesting critique of capitalism (even though it has Keanu Reeves in it!).

You might be a #WIUnion troll if...

With apologies to Jeff Foxworthy...

You might be a #WIUnion troll if...

• You think that unions and collective bargaining are the biggest problem with Wisconsin's budget
• You believe that capitalism isn't broken
• You ever attend a Tea Party rally non-ironically
• You believe "expansionary austerity" is the way to go
• You question Richard Trumka's salary
• You've ever referred to President Obama as a "mulatto"
• You've every tweeted "But Michael Moore is fat! LOL! ROTFL!"
• You've ever used LOL in a tweet more than once in a 60 minute period
• You think that the #WIUnion protesters caused $1,000,000,000 worth of cleanup costs
• You actually believe that the "Voter ID" bill is about preventing fraudulent votes
• You believe that Kathy Nicklaus is a great County Clerk
• You've never traveled aboard and lack any frame of reference but you know America is the BESTEST COUNTRY EVAH!
• You think that Keynesian economics is a "failed socialist plot"
• You think that #OccupyWallStreet is all about killing capitalism
• You've ever called someone a "dirty hippie"
• You think President Obama is a "socialist"
• You think that Reagan created an "economic miracle."
• You simply can't decide between Herman Cain and Michelle Bachmann for President
• You think that FANNIE and FREDDIE caused the housing bubble
• You've ever questioned the President's citizenship
• You think that the TARP program was initiated by President Obama
• You know that one day soon, you'll be part of the 1%

Feel free to add your own in the comments!

I'm shocked, SHOCKED! GAO Reports Conflict of Interest at the Fed!

Who would have believed it?  It's shocking!  A new GAO report finds rampant conflicts of interest among the Directors of the Federal Reserve System.

From the creation of the Federal Reserve System, the Federal Reserve Act has required the Reserve Banks to include Class A directors on their boards to be representative of the member banks, as each of the Reserve Banks is owned by the member banks in its district. While Class A directors are not required to be officers or employees of member banks, in practice, most Class A directors are officers or directors of member banks in the district. The requirement to have representatives of member banks creates an appearance of a conflict of interest because, as noted previously, the Federal Reserve System has supervisory authority over state-chartered member banks and bank holding companies. Conflicts of interest involving directors have been historically addressed through both federal law and Federal Reserve System policies and procedures, such as by defining roles and responsibilities and implementing codes of conduct to identify, manage, and mitigate potential conflicts. Nevertheless, directors’ affiliations with financial firms and former directors’ business relationships with Reserve Banks continue to pose reputational risks to the Federal Reserve System. When the Federal Reserve System played a key role in providing assistance to financial institutions during the 2007-2009 financial crisis, Reserve Bank board governance came under scrutiny because, among other things, a number of director-affiliated banks and nonbank financial institutions participated in the Federal Reserve System’s emergency programs. Since then, Congress, the Federal Reserve Board, and Reserve Banks have made a number of changes to the policies and procedures that address Reserve Bank governance. However, without more complete documentation of the directors’ roles and responsibilities with regard to the supervision and regulation functions, as well as increased public disclosure on governance practices to enhance accountability and transparency, questions about Reserve Bank governance will remain.

Ron Paul Can't Do Math!

Yeah, I'd trust him with the largest, most complex economy in the history of the world.  Why do these idiots struggle so mightily with facts???  I mean to complain about the facts, easily checkable facts, about the GOP Teabate seems to me to be the height of arrogance.  The assumption that nobody is smart enough to go back and check.  Wow...

Ron Paul.  What an assclown...

Is Capitalism Dying (Redux)?

"Nyah, nyah, nyah, nyah! Told you so!"

The sociopolitical organism known as Capitalism appears to be coming apart at the seams.  In a move designed to further the enslave Americans to the will of the debt overlords, Bank of America has shifted more than $53 trillion (yes, trillion; no that was not a typo) worth of potentially toxic derivatives out of their unprotected investment bank and into their retail bank where it will be covered by the FDIC in the event the economy goes pear-shaped again.

Bank of America Corp. (BAC), hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation… 

Bank of America’s holding company — the parent of both the retail bank and the Merrill Lynch securities unit — held almost $75 trillion of derivatives at the end of June, according to data compiled by the OCC. About $53 trillion, or 71 percent, were within Bank of America NA, according to the data, which represent the notional values of the trades. 

That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show.

Oh. My. Fucking. God... Yves Smith is appalled...

This move reflects either criminal incompetence or abject corruption by the Fed. Even though I’ve expressed my doubts as to whether Dodd Frank resolutions will work, dumping derivatives into depositaries pretty much guarantees a Dodd Frank resolution will fail. Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. So this move amounts to a direct transfer from derivatives counterparties of Merrill to the taxpayer, via the FDIC, which would have to make depositors whole after derivatives counterparties grabbed collateral. It’s well nigh impossible to have an orderly wind down in this scenario. You have a derivatives counterparty land grab and an abrupt insolvency. Lehman failed over a weekend after JP Morgan grabbed collateral.

How can this possibly be allowed to happen??? Where are the regulators? Oh, that's right!

"Regulators? REGULATORS? We don't need no steenkin' REGULATORS!"

The irony? It'll be the capitalists and not the protestors in the streets who put the final stake in the heart of the vampire squid known as capitalism.  Irony, anyone?

Our Dumb Nation

We're hopelessly unprepared to compete globally.  This is what happens when you destroy your educational system with the folly of privatization.


Created by Knewton and Column Five Media

The Financial Times in Favor of The Occupy Movement

In a shocking editorial, Pravda The Financial Times comes out in support of the Occupy Wall Street movement.  Be aware, this is an editorial and not an opinion piece.  This is the official stance of the editors of The Financial Times.

Today only the foolhardy would dismiss a movement reflecting the anger and frustration of ordinary citizens from all walks of life across the world. 

So far the protests in the US have been largely peaceful. They may be diffuse and inchoate. But the fundamental call for a fairer distribution of wealth cannot be ignored. What is at stake is the future of the American dream. The bargain has always been that all who work hard should have an opportunity for prosperity. That dream has been shattered by a crisis brought about by financial excess and political cynicism. The consequence has been growing in­equality, rising poverty and sacrifice by those least able to bear it – all of which are failing to deliver economic growth. 

Whether or not the protests evolve into a more coherent set of demands, or even become a more lasting political force, remains to be seen. But the cry for change is one that must be heeded.

This is indeed shocking for a paper that is the insider's guide to the City of London's financial world for more than a century.  Founded in 1888, it went pink in 1893 and has been pink ever since.

The Perils Representative Government

From John Stuart Mill, Considerations on Representative Government, 1861:

Representative institutions are of little value, and may be a mere instrument of tyranny or intrigue, when the generality of electors are not sufficiently interested in their own government to give their vote, or, if they vote at all, do not bestow their suffrages on public grounds, but sell them for money, or vote at the beck of someone who has control over them, or whom for private reasons they desire to propitiate.

The Bet on Doom

There was a time that Bill Gross believed in the 2% growth, 2% inflation plan for the developed world (he called it the "New Normal") and bet that way.

Remember how much attention PIMCO's Bill Gross got when he went short Treasuries earlier this year? 

He made a big call about how the end of QE would lead to a demand vacuum for Treasuries, causing rates to soar.

Now? Not so much...

The simple fact is that the portfolio at midyear was positioned for what we call a “New Normal” developed world economy – 2% real growth and 2% inflation. When growth estimates quickly changed it was obvious that I had misjudged the fly ball: E-CF or for non- baseball aficionados – error centerfield.

Now? He's going looooooooooooooong on treasuries because he's sure the economy is totally doomed.

So where do we go from here? Our internal growth forecast for developed economies is now 0% over the coming several quarters and the portfolio more accurately reflects this posture. Yet even so, can the golden glove regain its magic? Well, as I’ve indicated, we’re showing up early every day at the ballpark – in this case for a little fielding practice. And perhaps importantly, we recognize the majesty of the stadium we’re playing in. This is big league ball, where your ticketholders come to the park expecting not a circus Willie Mays catch but more wins than losses and a yearend performance that places your bond assets near the top of the standings.

Facepalm Economics

Krugman must be tired of hitting his face with his palm by now.

But then, this kind of obliviousness [to facts] is very widespread, and my experience is that if you try to point out the problem — if you try to explain that my spending is your income and vice versa — you get a belligerent response. Y=E is seen as a political statement, which in a way it is if one side of the political spectrum insists on believing things that can’t be true.

It is truly remarkable how, in a world that looks very Keynesian, anti-Keynesian views have taken over. I do sort of understand why. Part of the story is the perceived failure of the Obama stimulus, which is seen as a refutation of Keynesianism even though those of us who took our Keynes seriously predicted that this would happen. 

I run into this constantly on Twitter.  The anti-Keynesian talking points are so well embedded into the TeaOP zombie unconscious that any attempts to point out that the math doesn't support their policy positions, all you get back is "Keynes is wrong!"  Heaven forbid they actually try to figure out why Keynes and his disciples might have been wrong about some things but quite right about others.  Just the way the supply-siders are right about some things (supply side investment grows the economy in the long run) and wrong about others (tax cuts pay for themselves).

I understand that Friedman made economics political by drawing a too-sharp line between the private and public sectors, but the time has come to put away the knives and figure out what the right policies are to draw our economy back from the brink of another recession.  We've lived with a divided economic house long enough.  Time to pull together and synthesize a useful solution to our ailing economy.

Libertarians Choose Authoritarian Capitalism over Social Democracy

Hayek & Friedman's Pet Dictator Augusto Pinochet of Chile

They hate democracy.  Libertarians will always side with capitalist autocracy. Every time.

From von Misses' admiration of Mussolini...

It cannot be denied that Fascism and similar movements aimed at the establishment of dictatorships are full of the best intentions and that their intervention has for the moment saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history.

...to Hayek's love of Pinochet

Hayek glimpsed in Pinochet the avatar of true freedom, who would rule as a dictator only for a “transitional period,” only as long as needed to reverse decades of state regulation. “My personal preference,” he told a Chilean interviewer, “leans toward a liberal [i.e. libertarian] dictatorship rather than toward a democratic government devoid of liberalism.” 

the libertarian admiration of dictatorial leaders is well documented.  In what perhaps represents the most egregious example of ends-justify-the-means, Patri Friedman, Milton's grandson had this to say at a Cato Institute event:

Democracy Is Not The Answer

Democracy is the current industry standard political system, but unfortunately it is ill-suited for a libertarian state. It has substantial systemic flaws, which are well-covered elsewhere,[2] and it poses major problems specifically for libertarians:

1) Most people are not by nature libertarians. David Nolan reports that surveys show at most 16% of people have libertarian beliefs. Nolan, the man who founded the Libertarian Party back in 1971, now calls for libertarians to give up on the strategy of electing candidates! …

2) Democracy is rigged against libertarians. Candidates bid for electoral victory partly by selling future political favors to raise funds and votes for their campaigns. Libertarians (and other honest candidates) who will not abuse their office can’t sell favors, thus have fewer resources to campaign with, and so have a huge intrinsic disadvantage in an election. 

I'm appalled.  This is so un-American I don't know where to begin.  No wonder nobody take them seriously.

Hand me my Shotgun!

Nice piece today that will finally, I hope, deliver the head-shot to the zombie lie that tax-cuts will pay for themselves.

Can tax cuts “pay for themselves,” inducing so much additional economic growth that government revenue actually increases, rather than decreases? The evidence clearly says no.

Nevertheless, a version of this idea, under the guise of “dynamic scoring,” has apparently surfaced in the supercommittee charged with deficit reduction — the joint Congressional committee with 12 members. Dynamic scoring sounds technical or perhaps even scientific, but here the argument means simply that any pro-growth effect of tax cuts should be stressed when assessing potential policy changes (e.g., reforming the tax code). For anyone seriously concerned with fiscal responsibility, this is a dangerous notion.

No bad idea ever escapes the event horizon generated by Republican black hole ideology.

Anatomy of a Collapse: Inside the BoSox September Implosion

I've rarely seen a more penetrating and perceptive look at the failure of a hometown baseball team in a hometown paper, but Bob Hohler at the Boston Globe dissects the corpse of the BoSox 2011 season and finds a team that rotted from the inside out.

I've taken to calling the implosion of the BoSox's 2011 season simply, The Slide.  So what happened?  How did things go from great to a catastrophic, systemic failure of an entire MLB team?  Some of it rests on the management, some on the manager and a lot on the players.

Team sources also expressed concern that Francona’s performance may have been affected by his use of pain medication.

The closer the Sox inched toward September, the more their ill temperaments surfaced.

In order to prevent a rainout from the impending Hurricane Irene, management decided to play a double-header instead of playing on Sunday.  The players freaked out.

The players accused management of caring more about making money than winning, which marked the first time the team’s top executives sensed serious trouble brewing in the clubhouse.

After winning the series and

getting two days off, the Sox spent the rest of the season playing uninspired, subpar baseball, losing 21 of their final 29 games. 

How bad was that slide? It was the worst September tumble in Major League history.

The seeds of this catastrophic self-destruction were sown early in the season as the team failed to achieve the kind of cohesion you expect from a championship club.  The starting pitchers formed a little club and spent more time drinking beer and playing video games together than working out with the team.  And the prima donna syndrome became more and more a fact of life in the clubhouse.

“It’ s hard for a guy making $80,000 to tell a $15 million pitcher he needs to get off his butt and do some work,’’ one source said.

Manager Francona was also responsible for a chunk of The Slide too.

As he completed his eighth year as manager - a historic run in which he guided the Sox to two World Series titles - Francona by his own admission grew less capable of motivating the team. His losing influence with some former leaders came into sharper relief after he convened a closed-door meeting Sept. 7 after a 14-0 victory the previous night to address the clubhouse malaise. His players responded by failing to adjust their attitudes or improve their slipshod performances. 

The team's fate was sealed in September when even the veterans withdrew into the solitude of the looser.

In the end, only Pedroia and a few other players appeared to remain fully committed to winning, according to team sources. They said the veterans who no longer actively exerted their leadership included the captain, Jason Varitek, who was saddled with injuries and ineffective on the field (he batted .077 in September). 

As a long-time Yankees fan, I have mixed feelings about this.  Am I happy that the Yankees made it to the NLDS instead of the BoSox?  Absolutely.  But nobody who loves the game of baseball wants to see a championship-level team suffer this kind of indignant end to what could have been a 100 win season.  Yes, I'm always happy to see the BoSox loose.  No question.  But this kind of annihilation? It's not healthy.  The self-destructive clubhouse atmosphere, the toxic relations between players and management, none of that is good for the game.  The only good thing that will come from this will be a careful examination of the causes of the slide and what management can do to fix it going forward.

The BoSox will have to do a lot of winter cleaning, some of which has already begun.  The Yankees made it to the NLDS but couldn't overcome a surging Detroit Tigers team this year.  Would the BoSox have fared any better?  We'll never know.

Their Stupid Lasts Forever! Afghanistan War at 10!

The Internet has a long memory...  I'll bet this guy, John Hawkins, wishes he hadn't written this little rah-rah rant on how cool war in Afghanistan would be. (Note: We're on year 10 and at $463BN and counting!)

In Afghanistan, we were told going in that the war would be long, difficult, and perhaps even unwinnable. A lesser man than George Bush might have gotten weak kneed at the prospect of sending our troops into a "mountainous Vietnam" and found some sort of excuse not to go. But, not only did we take the fight to our enemies in Afghanistan, we bombed Al-Qaeda's camps, decimated the Taliban, drove them out of power in less than two months, and sent our enemies running to Pakistan and remote caves on the Afghan border, where they live even today as hunted men. This is even more impressive than it sounds since our defeatist press was crying "quagmire" & "Vietnam" as we bombed our enemies into oblivion.

So how's that whole "long, difficult and perhaps even unwinnable" thing working out for you, asshole?

American exceptionalism: Not what you think!

Yesterday in Twitter, I was accused by the author of Don't Take my Lemonade Stand: An American Philosophy, one Janie Johnson (@jjauthor on Twitter), of, among other things, not believing in American Exceptionalism (side note: she also accused President Obama of the same thought-crime).

Yes, I agree we do differ, Janie.  In many ways.  I, for one, chose not to use the phrase American exceptionalism because of it's origin.  An origin so strange that I'm surprised American conservatives can bring themselves to ever utter the phrase.  Let's be clear here, the origins of this phrase are well documented and, placed in historical context, make perfect sense.  So where did the phrase come from?

Can The Wealthy Learn Before It's Too Late?

Maybe they'll learn this time... maybe.

"The top 1 per cent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn't seem to have bought: an understanding that their fate is bound up with how the other 99 per cent live.  Throughout history, this is something that the top 1 per cent eventually do learn. Too Late." 

Joseph Stiglitz

FDR: Now More than Ever!

The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it comes stronger than their democratic state itself. That, in its essence, is fascism - ownership of government by an individual, by a group.

Statistical Meaning in the 99% Movement

Sherlock Holmes and the quest for knowledge!

Those of you who know me know I live or die by data.  One of my favorite movie quotes comes from the extraordinarily awesome re-invention of Sherlock Holmes with Robert Downey Jr. in the lead role.  He's investigating the death of some famous occult leader (not important) but he utter a line that is his mantra:

Sherlock Holmes: Data, data, data. I cannot make bricks without clay.

Indeed, Mr. Holmes.  It explains why so many conservative edifices collapse under the weight of their own incompetence.  Building policy without clay is a pointless exercise.

Which brings me to the 99% and the oligarchical reaction to the Occupy movement.  Recalling the reactionary response to the Vietnam war, some of the very same words and phrases are being trotted out and hurled at the protesters.  "Get a job, hippie!" "You wouldn't have what you have without capitalism!" But they are responding to charges that haven't even been leveled yet.

Howard Simons: Did you call the White House press office?
Bob Woodward: I went over there; I talked to them. They said Hunt hadn't worked there for three months. Then a PR guy said this weird thing to me. He said, "I am convinced that neither Mr. Colson nor anyone else at the White House had any knowledge of, or participation in, this deplorable incident at the Democratic National Committee."
Howard Simons: Isn't that what you expect them to say?
Bob Woodward: Absolutely.
Howard Simons: So?
Bob Woodward: I never asked about Watergate. I simply asked what were Hunt's duties at the White House. 

The reactionary right is responding to what they feel is coming down the pike: a frontal assault on all they hold dear; capitalism itself and the inequalities and misery it causes.

This is a long lead into the ultimate point which is this, so clearly articulated by Mike Konczal over at Rortybomb who has done a statistical analysis of the messages posted on the 99% Tumblr feed.  Here are the words he finds:

These people aren't looking to overthrow capitalism, they want jobs!  They want to be a part of the capitalist system not be owned by it!

Scanning the entire text, what is equally interesting is what is missing.  There’s no signs of a luxury fever or cascading consumption heading downhill.  These aren’t the signs of people envious of their peers going off to the high-end financial sector and then getting bailed out.  The only time luxuries are mentioned are in a mode of denial (“We do not own HD TVs, expensive automobiles, use cable TV, or indulge in other..”).  The only time unions are mentioned are in retreat and defeat (“No union”, “threatend [sic] by funding cuts and union busting”).

Indeed, their desires are much, much smaller than that.  What do they want? Freedom from a system that more closely resembles a feudal lord-of-the-manner relationship than a free market.

The people in the tumblr aren’t demanding to bring democracy into the workplace via large-scale unionization, much less shorter work days and more pay.  They aren’t talking the language of mid-twentieth century liberalism, where everyone puts on blindfolds and cuts slices of pie to share.  The 99% looks too beaten down to demand anything as grand as “fairness” in their distribution of the economy.  There’s no calls for some sort of post-industrial personal fulfillment in their labor – very few even invoke the idea that a job should “mean something.”  It’s straight out of antiquity – free us from the bondage of our debts and give us a basic ability to survive.

So while the talking heads on Fox go on about hippies and showers, American's suffer in much the same way the serfs of Czarist Russia suffered, in bondage to a system over which they have no control.

To become a serf was a commitment that encompassed all aspects of the serf’s life. 

Moreover, the condition of serfdom was inherited at birth. By taking on the duties of serfdom, serfs bound not only themselves but all of their future progeny.

America! Fuck yeah!

Taking Back the Flag for #OccupyWallStreet

Love it!

SNL Nails Fox & Friends on #OccupyWallStreet

Hilarious!

Steve Jobs - Candid Photos

I stumbled on this last night.  Time has a collection of candid photos of Steve Jobs taken by Diana Walker. They're quite interesting.  As they say, a picture is worth a thousand words...

Steve Jobs on the phone with Bill Gates

More photos from the collection can be found here.

Going Underground [UPDATED]

This blog will be going dark for a bit while I settle in at a new home over at Blogging Blue.  Come on over and check it out.  I need to figure out what kind of split between BB and The Masses will be appropriate.  So for now, most of my attention will be focused over at BB.

UPDATE: One thought I've had is to use The Masses as the place where I post longer pieces, more research papers / dissertations and use BB for the more snarky short pieces.  I welcome feedback.

Dirk: So Wrong in So Many Ways

I couldn't resist...

I love it when Teabaggers try to use those elusive fact-y things that they don't really understand.  They're so bad at it...

"Dirk: OC Patch please keep up the good work; sorry for the political intervention from militant unionists. Like the decaying cities they once ran, like Gary, Newark, Detroit ;et al, they will eventually fade away. I understand the romanticism of when unions mattered, but this dinosaur way of thinking is counter-productive to today's society as Greece, Italy, and Portugal further illustrate. The only true change occurred in 2010 and will fortunately continue into next year."

I think the only thing this individual said that is true was "OC Patch please keep up the good work," for indeed, Patch does offer a good service, though their choice of things to cover can skew rightward, it's still an interesting way to deliver local news.  As for the rest of it, oh how wrong can one post be?

1. Militant Unionist:

Notice the thuggish demeanor and the snarling lips poised to shout obscenities at the peace-loving Teabaggers.  Yes, this militant unionist is in desperate need of a serious beat-down and the Teabaggers are just the ones to do it.
2. Cities decaying because businesses decided it was more profitable to ship the jobs to China, Indonesia, India and Pakistan where near-slave labor can work in an environment that someone like Dirk, who's probably never left the shores of America, and, if he has, ventured to Canada or maybe Europe, could not possibly imagine.  I've been there, I've seen the sweatshops and the "factories" in India that "employ" (read: enslave) children, some as young as 8 or 9 to make the shoes Dirk puts on his privileged feet and the shirts he drapes across his broad, patriotic shoulders. So instead of productive American factories with workers paid a living wage, we have a race to the bottom.  And Dirk appears to take twisted and perverted pride in that, as if America's decline, our growing enfeeblement were a badge of Tea Party honor.
3. Romanticizing unions?  If it's romantic to dream of a time when Americans only had to work one job to pay the bills, where being a member of a brotherhood was a cherished right, where the hard work of labor was coupled with the investment of capital to produce a benefit to all, then I'm a romantic.  While most Teabaggers don't let facts get in the way of their ideology, you might like to observe that unionization correlates quite tightly with income.   As unionization rates declined, so did middle-class income.
   

   

   Data from the BLS via ThinkProgress

   Is this the kind of America that Dirk thinks we should have? One where the wealthy grow their fortunes without bounds while the workers and laborers who put the money in the pockets of capital get poorer and poorer? Is that really the "Jeffersonian Democracy" envisioned by our Founding Fathers? Unless Dirk is making a lot more money than I wager he is (like more that $10MM/year), he's simply another "useful idiot" for capital.  Another victim of "Stockholm Syndrom" who identifies so well with his captors, the wealthy.  I know he imagines that one day he'll be one of them if he works hard enough.  It's kind of sad, really.
   
4. Dirk's understanding of the Eurozone situation is as shallow as his understanding of the history of his own nation.  The Eurozone crisis is a crisis of divorcing fiscal policy from monetary policy, of borrowing at rates far below what they should have been for the Greek and Portugese economies and of a huge revenue gap in Greece caused by the inability of the central government to collect taxes on the wealthy (sound familiar?).  If Dirk understood anything about macroeconomics, he would understand that it is not Greece we are in danger of becoming, but Japan.
5. His belief in the national retrograde of 2010 represented anything other than a knee-jerk reaction to economic circumstances combined with the slick marketing of the Teabagger movement by Koch brothers front groups like American's for Prosperity (paid for, no doubt, by illegal proceeds from the Koch criminal empire and the terrorist state of Iran) means he's a bigger fool than I thought posible.  Well done, Dirk, you've earned this...

Ben "We're All Gonna' Die" Bernanke's Recent Utterances

Ben Bernanke in the ritual robes of
Supreme High-Priest of Monetary Policy
& Federal Reserve Chairman

From the darkened and mysterious Sacred Chambers of the Federal Reserve comes this assessment, plumbing the depths of our collective doom.

Recent revisions of government economic data show the recession as having been even deeper, and the recovery weaker, than previously estimated; indeed, by the second quarter of this year--the latest quarter for which official estimates are available--aggregate output in the United States still had not returned to the level that it had attained before the crisis. Slow economic growth has in turn led to slow rates of increase in jobs and household incomes.

The pattern of sluggish growth was particularly evident in the first half of this year, with real gross domestic product (GDP) estimated to have increased at an average annual rate of less than 1 percent.

Time to start building an ark?  Perhaps...  Certainly time to go to Home Depot and price the wood and nails to build one.  How many cubits in a foot again?

#OccupyWallStreet - Remembering the Port Huron Statement

On June 15th, 1962, a group of 45 students under the banner of the SDS (Students for a Democratic Society) released the The Port Huron Statement, named for the town in Michigan where it was completed.  The key figures in the creation of the Port Huron Statement was political activist and politician Tom Hayden.  Continued below the fold...

Colorado Honors the Troops by Disenfranchising Them!

Colorado Secretary of State and Dedicated Patriot
Scott Gessler

Can you feel the strength of their patriotism?

Pueblo County Clerk Gilbert “Bo” Ortiz will comply with Secretary of State Scott Gessler’s order not to send ballots to soldiers out of state who are legally registered Pueblo County voters but who failed to cast ballots in 2010. The news came Friday afternoon in a carefully worded release that came after hours of deliberation.

“Pueblo County will honor Secretary Gessler’s order but this is not over,” Ortiz is quoted to say. “Pueblo County is currently weighing [its] legal options, including taking the issue to court. The Secretary of State effectively has denied 64 active military personnel the opportunity to vote.”

Gessler unveiled a new interpretation of state election law last week, when he filed a lawsuit to stop Denver County from mailing ballots to “inactive” voters as it had done for the last five years. An inactive voter in Colorado is a voter who is legally registered but who has failed to cast a vote in the previous general election– in this case the election of 2010.

I suppose Mr. Gessler can make up for it but putting an eagle, flag and statue of liberty on his Twitter account (@ColoSecOfState).  That will show his true patriotism...

A Brief History of Corporate Whining

Heh... (from Barry Deutsch)

#GOP Signs their own Electoral Death Warrant

Mary Stuart's Death Warrant signed by Elizabeth I

The Wall Street Journal (actual news bits, not the worthless OpEd section):

President Barack Obama’s $447 billion jobs bill was declared dead in Congress Monday, as Majority Leader Eric Cantor (R., Va.) said he did not expect the House to take it up as a package.

By all means, Teahadists, do nothing to make the economy better.  Nobody will hold it against you.  Good luck with that.

Spotted on Facebook: NOW You Get Mad???

Prime Snark from Gregory McFadden:

After The 8 Years Of The Bush/Cheney Disaster, Now You Get Mad?

• You didn't get mad when the Supreme Court stopped a legal recount and appointed a President.
• ... You didn't get mad when Cheney allowed Energy company officials to dictate Energy policy and push us to invade Iraq.
• You didn't get mad when a covert CIA operative got outed.
• You didn't get mad when the Patriot Act got passed.
• You didn't get mad when we illegally invaded a country that posed no threat to us.
• You didn't get mad when we spent over 800 billion (and counting) on said illegal war.
• You didn't get mad when Bush borrowed more money from foreign sources than the previous 42 Presidents combined.
• You didn't get mad when over 10 billion dollars in cash just disappeared in Iraq.
• You didn't get mad when you found out we were torturing people.
• You didn't get mad when Bush embraced trade and outsourcing policies that shipped 6 million American jobs out of the country.
• You didn't get mad when the government was illegally wiretapping Americans.
• You didn't get mad when we didn't catch Bin Laden.
• You didn't get mad when Bush rang up 10 trillion dollars in combined budget and current account deficits.
• You didn't get mad when you saw the horrible conditions at Walter Reed.
• You didn't get mad when we let a major US city, New Orleans, drown.
• You didn't get mad when we gave people who had more money than they could spend, the filthy rich, over a trillion dollars in tax breaks.
• You didn't get mad with the worst 8 years of job creations in several decades.
• You didn't get mad when over 200,000 US Citizens lost their lives because they had no health insurance.
• You didn't get mad when lack of oversight and regulations from the Bush Administration caused US Citizens to lose 12 trillion dollars in investments, retirement, and home values.

You finally got mad when a black man was elected President and decided that people in America deserved the right to see a doctor if they are sick.
Yes, illegal wars, lies, corruption, torture, job losses by the millions, stealing your tax dollars to make the rich richer, and the worst economic disaster since 1929 are all okay with you, but helping fellow Americans who are sick...Oh, Hell No!!

A Perspective on #OccupyWallStreet - Not What You Think!

@wheeliesmom on Twitter sent me a link to a really interesting blog post from someone who's been wandering through the massive crowds at the Occupy Wall Street... what shall I call it? A protest? A flashmob? A be-in? A happening? An event? See, I don't even know what to call it.

 It's more than a flashmob (flashmobs are more organized, and the choreography is immeasurably better!) and less than a protest (there's aren't dense clouds of tear gas obscuring the view, no truncheon wielding cops beating back wave after wave of molotov cocktail throwing youth in bandana masks with burning overturned cop cars in the background... ahhh, the good old days... but I digress).  Let's let Marty Weinstein (aka @luckymw) tell the story.

Much has been made about the lack of media coverage of Occupy Wall Street (OWS), but the people involved in the protest don’t really care. What the rest of the country has been seeing in 2 dimensions on television or reading about from an extremely snarky print media can’t possibly transmit the level of intelligence, energy, commitment and humanity being produced by this assembly. This is an amazingly diverse crowd, I had a long talk with an economist from Bakersfield California, a blogger from Philadelphia, a teacher from Albany, as well as a collection of old school radicals who’ve been waiting almost 40 years for something like this to reappear.

I spoke about [the apparent lack of focus and organization] to everyone I engaged with, and that’s where I learned what can only be gleaned by direct by direct conversation with any of these folks. What we’re seeing here is almost totally unique, a magnetic sense of unity amongst disparate people from many different places and eras, finally feeling like they got permission to give voice to the burning frustration of living in a country that has lost its moral compass and given itself over to commerce, profit, and convenience. These people have had it. And they’ve finally gone active.

So much of what is happening seems remarkably similar to the events in Spain this past summer where huge groups of the unemployed, mostly young people, gathered in the squares of Madrid and Barcelona to protest the government's ongoing austerity measures. As the Spanish protesters expressed in May,

On the statue of King Carlos III, somebody had pinned a sign that read: "We are anti-idiots, not anti-politicians." Other placards read: "We aren't against the system, we want to change it", "Democracy, a daily fight", and "Take your money out of the bank!"

The ongoing struggles against the forces of global consumptive capitalism and for the rights of men and women to be free seem to know no boundaries, nor should they. As the "Occupy" movement spreads like wildfire across the major cities of America, we may bear witness to a once-in-a-generation tectonic political shift in American government.  And unlike the astroturf Tea Party movement, driven by the very corporate greed mongers who are the source of the problems we face, the Occupy movement is an authentic grassroots uprising.

And I can say, without reservation, that the #WIUnion protests of February to today are a major inspiration for this global uprising against forces so dark, they'd label Darth Vader a liberal hippie communist.  I'll let Marty close us out here, with the most prescient line in his posting, a line that we on the left need to take to heart going into 2012 but more importantly, into 2016:

ANY president becomes part of the machinery

And that, dear friends, is the real problem.