Tuesday, July 24, 2012

Towards a Broader Definition of Slavery

A new paper in the forthcoming Columbia Law Review argues that the 13th amendment to the US Constitution is interpreted too narrowly in the context in which it was written.  The amendment reads:
Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.Section 2. Congress shall have power to enforce this article by appropriate legislation.
From the abstract:

Through most of its history, the Thirteenth Amendment has been interpreted extremely narrowly, especially when we compare it to the Fourteenth Amendment and the Bill of Rights. Modern lawyers would never read the Fourteenth Amendment in the way that they read the Thirteenth — as limited to close analogies to specific historical practices. The Thirteenth Amendment has been read in this way because it is “dangerous.” The demand that “neither slavery nor involuntary servitude . . . shall exist within the United States,” taken seriously, potentially calls into question too many different aspects of public and private power, ranging from political governance to market practices to the family itself. 
Our contemporary association of “slavery” with a very limited set of historical practices is anachronistic and the result of a long historical process. The language of the Thirteenth Amendment is taken from the 1787 Northwest Ordinance. Yet at the time of the founding the concept of “slavery” was far broader than we currently understand it. ”Slavery” meant illegitimate domination, political subordination, and the absence of republican government; “chattel slavery” was only the most extreme and visible example of slavery. For example, American colonists repeatedly argued that the British Empire had made them slaves because they lacked political freedoms and representation in Parliament.  
The broader, anti-republican concept of slavery was narrowed during the fight for the abolition of chattel slavery for political and strategic reasons. Abolitionists wanted to avoid awkward comparisons to the economic and political subordination of wage laborers and women. Once chattel slavery was abolished, labor activists and suffragists sought to revive the older, broader concept of “slavery.” But emancipation allowed defenders of the status quo to insist that American society was now “free.” Everyday aspects of economic and family life could not be “slavery,” which was by definition the worst of evils and had already been eradicated by law. Even today, calling an injustice “slavery” is generally seen as overheated hyperbole and even a presumptuous insult to the memory of the victims of African American chattel slavery. This essay concludes by asking how our political imagination has been limited as a result of this history.

Thursday, July 19, 2012

Life as a Cartoon: Ann & Mitt Romney Edition, Volume CXVII

Ann Romney makes it crystal clear to the peasants American people: "We've given all you people need to know!"
I believe her next task will be helping Mittens craft his concession speech.

Monday, July 16, 2012

When Blog Comments are as Good as the Posts!

A great example from a piece by Aaron Carroll on why the arguments against universal health coverage are so hollow.  The commenter writes,
I recently met a lawyer who starts out her class with an assignment to go online and make a recommendation based on quality and cost to purchase a wide screen tv. Easy. Next, the students are told to go out and find a pediatric neurologist on the same basis. Forget it, it’s impossible. There are lots of reasons for this, and plenty of blame to go around. But a key tenet of capitalism is that markets function when there is transparency and symmetric information between buyers and sellers. That is not the case here, and it never will be. So markets fail and there is a role for government. This is non-controversial everywhere in the world except in the Republican Congress, and for four radical Supreme Court judges. Guess what Justice Scalia, you’re not smarter than the rest of humanity, you’re a laughing stock.
The asymmetry of healthcare knowledge has been known for some time, ever since the classic 1963 paper UNCERTAINTY AND THE WELFARE ECONOMICS OF MEDICAL CARE by economist KENNETH  J. ARROW.  He concludes

It its the general social consensus, clearly, that the laissez-faire solution for medicine is intolerable.
This was 1963 and we're still arguing about this shit.

Romney Built His Fortune with Socialized Losses

A shocker.
What’s clear from a review of the public record during his management of the private-equity firm Bain Capital from 1985 to 1999 is that Romney was fabulously successful in generating high returns for its investors. He did so, in large part, through heavy use of tax-deductible debt, usually to finance outsized dividends for the firm’s partners and investors. When some of the investments went bad, workers and creditors felt most of the pain. Romney privatized the gains and socialized the losses.
And this isn't some lefty source, this is Bloomberg News!
While Bain Capital wasn’t alone in using financial engineering to turbo-charge its returns, it was among the most aggressive under Romney’s leadership. Enriching investors by taking leveraged bets isn’t a qualification for a job requiring long-term vision and concern for public welfare. It is appropriate to point that out to voters.

Saturday, July 14, 2012

Is the LIBOR Scandal The Proverbial Straw?

It seems that the United States is preparing both civil and criminal charges against several banks and their traders over the ongoing LIBOR scandal.

The department’s criminal division is building cases against several financial institutions and their employees, including traders at Barclays, the British bank, according to government officials close to the case who spoke on the condition of anonymity because the investigation is continuing. The authorities expect to file charges against at least one bank later this year, one of the officials said. 
The prospect of criminal cases is expected to rattle the banking world and provide a new impetus for financial institutions to settle with the authorities. The Justice Department investigation comes on top of private investor lawsuits and a sweeping regulatory inquiry led by the Commodity Futures Trading Commission. Collectively, the civil and criminal actions could cost the banking industry tens of billions of dollars.
The phrase "about f'ing time" comes to mind here.  The fines could top $10 billion or more.  The scandal continues to unfold so there is no telling where this will ultimately lead.  No doubt, the shredders are working overtime.

Thursday, July 12, 2012

Peek-a-Boo, We See You Mittens!

Soundtrack for the Romney - Bain non-departure!

We see what you did there, Mittens... You said you left Bain in 1999 before all that unfortunate abortion medical waste and outsourcing naughtiness. But wait... Maybe not!

Bond Vigilantes: Still Just Over The Horizon

We're all just waiting for the Bond Vigilantes to come and destroy America.  I guess it'll be another day.  US 10 year bonds hit an all-time low.
The US yesterday sold 10 year bonds at a record low yield of just 1.459%, with a bid to cover ratio of 3.61 times, higher than June’s 3.06 times. Analysts had expected the notes to be sold at a yield of over 1.51%. A difference between the actual yield of the auction and forecast yields is virtually unheard of. Yields were at 1.622% at the last 10 year auction in June this year. 30 year bonds are due to be auctioned today. The demand, particularly at these yields, is not a good sign for the equity markets
Until then, we'll just have to make due with the Love Vigilantes...

Nothing to See Here! Move Along, Citizens!

Everything's fine.  I'm sure there's nothing to see here...
Sometime after final testing of Waukesha County's election software - but before the April election - County Clerk Kathy Nickolaus mysteriously changed something in her office's computer programming, according to a consulting firm's report released Tuesday. 
Only Nickolaus knows what she did. The consultants can't figure it out, and she's not talking.


"It is unclear what changed in the programming of the (election) software, but something was changed in the ballot program," the report says. "The county clerk acknowledged that a change took place, but did not specify what was changed."
Yeah, I'm sure everything is fine.  Nothing to worry about.  Her competence has already been recognized.

Your Republican Party

Ladies and Gentlemen, the Rubicon of Crazy has finally been crossed with Senator Lindsey Graham in the vanguard.

“It’s really American to avoid paying taxes, legally,” said Senator Lindsey Graham, Republican of South Carolina, on Tuesday. He was defending Mitt Romney, who, as this morning’s editorial in The Times notes, appears to have the most elaborate history of tax avoidance – offshore tax havens, disputed sheltering mechanisms, complex trusts – of any major presidential candidate in history. 
Invest in the Cayman Islands, Mr. Graham seems to be saying. It’s the patriotic thing to do.
Party before Country.  It's the Republican way!
[T]here is no longer any civic pride in paying [taxes], even among officials supposedly dedicated to public service. As Senator Graham put it, Congress created tax loopholes, so why not take advantage of them?
Without a properly funded government offering services for the people, what precisely is their vision of America?  What exactly is "America" absent her Republic and our democratic practices?  Rollerball-world, I suspect.

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, and 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 anyone 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 them? 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.

Econ 101: It's the Demand, Stupid!

This is not a hard problem to work out.

Recently I went to a well-known restaurant in Evanston, Illinois. This restaurant has a reputation for providing excellent food and service. But the night I was there, it was less than half full. I asked the manager if he would he hire more waiters and chefs if his taxes were reduced and/or government removed the existing regulations controlling the way his restaurant could operate. His answer was that even if his taxes were reduced and regulations eliminated, he would only hire more staff if more customers came in for dinner. On the other hand, if there were twice as many customers for dinners than there were on this night (and there were many more customers before the recession began in 2007) he would gladly double the number of workers he employed even if his taxes were not reduced or regulations changed. 
That’s how things work in the Real World. This simple case illustrates clearly that entrepreneurs will have confidence to expand and hire more workers only if they find the market demand for their products and services strong and growing.
Demand.  It's all about demand.  When conservatives tell you it's a lack of business confidence, too much regulation, too much taxation, they're lying.  Worse yet, they know very well that they're lying.  They just don't care.

If the federal government were to let contracts for at least $1 trillion to private enterprise to rebuild failing highways, bridges, municipal water and sewage systems, and provide resources for our shrinking public and higher education systems, the entrepreneurial expectations of continuously ringing cash registers as firms are awarded these government contracts would quickly restore entrepreneur’ial confidence. The profit opportunities made available by this large government spending program would encourage firms to hire more workers and buy materials needed from other US firms. 
The number of unemployed workers would shrink substantially. When these newly hired workers go out and spend their wages to rebuild their households and lives, the confidence of US retailers would immediately surge as these additional customers were breaking down the doors to get at the merchandise on the shelves.

New York Times Editorial Board Calls for I.R.S. Investigation of ALEC

I must say, I couldn't agree more!
For all its right-wing political muscle, ALEC has long enjoyed tax-exempt status as a nonpartisan charity under section 501(c )(3) of the tax code, which is supposed to bar it from influencing legislation as a substantial part of its activities. And because it is a charity, its donors are allowed to deduct contributions from income taxes. 
This outrageous situation has to be reversed. Marcus Owens, the former chief of the I.R.S. division in charge of tax exemptions, has recently filed a complaint with the I.R.S. charging ALEC with illegal lobbying and partisan violations that should lead to revocation of its tax exemption. We agree. “ALEC has deliberately and repeatedly failed to comply with some of the most fundamental federal tax requirements applicable to public charities,” Mr. Owens said in the complaint.
The complaint contains some very juicy information about how ALEC flaunted the tax exemption laws.
The complaint, filed on behalf of Clergy Voice, a group of Christian clergy in Ohio, notes that ALEC denied engaging in lobbying activity in its federal tax filings covering the years 2008 and 2009. At the same time, two of its lawyers were registered to lobby in at least one state, North Dakota. False reporting on these forms has been found to be a criminal offense considered perjury in at least four recent cases, Owens said.

Wednesday, July 11, 2012

Spain is the New Greece

Judging by the ongoing Spanish "bank jog" (a slow-motion bank run)... the capital flight from Spain is underway and gaining.

James Kenneth Galbraith on Economic Mythology

In an interview with the University of Texas alumni magazine, The Alcalde, economist James Kenneth Galbraith identifies what he thinks is the biggest myth about the American economy.

The Alcalde: What’s the most common misconception about the economy? 
Galbraith: The fear that we will go bankrupt. The concept of bankruptcy doesn’t apply to a country like us; the U.S. is going to be just fine, long-term. Europe is another story, because the coordinating mechanisms between countries there are dreadful. The U.S. is more resilient than it may look. 
My message is the financial position of the U.S. government is far stronger than a great many people think it is. Recently we’ve been seeing this notion that we’re heading toward some unprecedented, apocalyptic territory. You saw that with the panic over the debt-ceiling issue last summer. But the people who were actually buying and selling treasury bonds weren’t flustered in the least. In fact, bond rates went down.
As I've been saying for some time now... Nations with a sovereign currency cannot go bankrupt.

The gold bugs, bond vigilantes and deficit hawks can suck it.

Tuesday, July 10, 2012

Troubled Times

Our betters know best, I guess.  Corruption of the sort which brought us to the brink of financial ruin is OK.
According to the survey, 24 percent of respondents reported a belief that financial services professionals may need to engage in unethical or illegal conduct in order to be successful, while 26 percent of respondents indicated that they had observed or had firsthand knowledge of wrongdoing in the workplace.  Particularly troubling, 16 percent of respondents reported that they would commit a crime—insider trading—if they could get away with it.   

Monday, July 9, 2012

The Cost of Incompetence...

...is apparently $256,300.
A consultant's report traces problems in reporting Waukesha County election results directly to mistakes by outgoing County Clerk Kathy Nickolaus - mistakes that will cost county taxpayers more than a quarter of a million dollars to fix. 
SysLogic linked the April problems to an upgrade that Nickolaus ordered in the county's election software before the balloting. The firm found that Nickolaus was the only person trained to program the upgraded software, but she "did not follow the proper protocol, resulting in the failure of the functionality to compile election results," the fund transfer ordinance says. 
Both in the April election and in the 2011 high court race, the problems were compounded by the lack of backup for Nickolaus and her system, the firm found. That echoes long-standing complaints from Cummings about the way Nickolaus has managed her computer systems. 
"She didn't allow anyone to help," Cummings said. "With every election, there's a huge risk that something will go wrong."

Punk Economics 5: The World Slows & Euro Crisis Far From Over

Sunday, July 8, 2012

Nouriel Roubini is The Prince of Darkness

Nouriel Roubini is pessimistic. And when Nouriel Roubini is pessimistic, the shit is really going to hit the fan. Soon...

Republican Dancing Bears

In his review of Polarized America: The Dance of Ideology and Unequal Riches (Walras-Pareto Lectures), Daniel Little observes
What is really interesting about this analysis is that it implies that the sizzling rhetoric coming from the right -- personal attacks on the President, anti-gay rants, renewed heat around abortion and contraception -- is just window dressing. By the evidence of voting records, what the right really cares about is economic issues favoring the affluent -- tax cuts, reduced social spending, reduced regulation of business activity, and estate taxes. This isn't to say that the enraged cultural commentators aren't sincere about their personal belief -- who knows? But the policies of their party are very consistent, in the analysis offered here. Maybe the best way of understanding the extremist pundits is as a class of well-paid entertainers, riffing on themes of hatred and cultural fundamentalism that have nothing to do with the real goals of their party.

A Visit to "The Bubble"

It was the remodel of a Starbucks that sent me hurtling into The Bubble this morning  Had they not decided to ruin my favorite Starbucks by removing all the comfortable seating and replacing it with bent-wood chairs and tables, I might never have had the chance to visit The Bubble this morning.

Now you know The Bubble.  It's that strange world of semi-lucid fictional reality generated by the various conservative reality-distortion systems.  Systems like Townhall.com, Fox News, The Daily Caller, The National Review and the various corporate funded "think" tanks: Cato, Heritage and the American Enterprise Institute.  Their job is to ensure the uniformity of thought among The Bubble's inhabitants.  There can be no dissension among the ranks of The Bubble faithful.  Apostasy is not tolerated.  Ever.

Normally, I hang out with a a mixed group of folks at that Brookfield Starbucks, some liberals some moderates and a few conservatives.  But with this awful remodel, the group has been fragmenting.  So with my favorite Starbucks effectively off-line, I was forced to relocate west from Brookfield (where the Starbucks is conveniently located adjacent to an Einstein's Bagels) to the Starbucks on Highway 18 near Walgreens.  They have not (yet) been subjected to a remodel so their old, broken-in chairs are still as comfortable as ever.

I picked up my Venti Pike's Place and performed the various ritual ablutions on it to make it sweet and creamy and looked for a seat.  I spotted an open chair next to a side table.  The chair adjacent was occupied by a yellow shirted gentleman reading the New York Times and chatting with another guy.

So I sat down and proceeded to fire up my iPad and get to reading my book.  I listened in on their conversation (a polite way to say "eavesdropped") and when it turned to food, I chimed in.  We talked about seafood and steaks and such.  The conversation turned to real estate and I mentioned that I was selling my house and that we were buying a new one in Madison.  That's when yellow shirt said that he didn't think real estate was a good investment.  I agreed and said that as long as we had the level of income disparity we have now, fewer people would be able to buy houses and the bubble would take a lot longer to deflate.  Much of the construction boom we see now is in multi-family apartment-style buildings and not single-family homes.

You would have thought that I had taken a big crap in his cappuccino because that just sent him spiraling down into a rather incoherent rant about how it was Jimmy Carter's fault that all this happened because in 1977 Congress passed the Community Reinvestment Act.  This was a problem because it encouraged people who should own homes to own homes.  Now, in a way, I agree with him.  But I disagree that you can trace the whole mortgage crisis back to 1977 since the original act never led directly to the bubble.  It was the various changes in the law over the years that caused the bubble to inflate.  This point caused much wailing an gnashing of teeth among the three of them because of FANNIE and FREDDIE... or something.

So this went on, back and forth and spanned a wide range of subjects, all of which proceeded from assumption derived from The Bubble.  Here's a brief list of things I learned from my brief sojourn into The Bubble.

  1. Because we didn't see a massive recovery from the stimulus, it failed.  Never mind that most reputable economists (i.e. those who do not earn their living reinforcing the prejudices of The Bubble) argued that the stimulus worked in that it prevented a further slide into depression but that it was too small to do anything more than putting on the brakes.
  2. Public Spending always crowds out Private Spending.  When I tried to point out that this was only true in times of full employment (like in the late Clinton years), they said I was making things up.  I asked them to explain to me the mechanism of crowding out in a time of 10% unemployment assuming the natural rate was 4%.  How is the public sector crowding out the private sector when 6% of the people can't find work.  There was much wailing an gnashing of teeth but no real answers.
  3. Only business owners are capable of talking about economics.  I was asked if I ever owned a business because what did I know if I never owned a business.  I responded that my sister-in-law had uterine cancer but she went to a male doctor who never had uterine cancer.  Did that make him ill-equipped to diagnose and treat her?  Many Major League umpires have never played baseball, does that make them unsuited to be umpires?  Basically, they're lapping up the frothy mixture of Obama is a Socialist Community Organizer combined with the Romney is a business guy who can create jobs.
  4. Food stamps are always bad.  When I pointed out that there were plenty of examples of government programs that can help drive demand in a depressed economy, they were incredulous.  How do food stamps contribute to the GDP they asked?  I explained the fiscal multiplier effect.  They were incensed!  It's all hokum.  Mumbo-jumbo!  What they cannot (or will not) recognize is the veracity of the demand-driven economic model.  By stimulating demand, you create a ripple effect through the whole economy.  They refused to believe it.  They disbelieve the money multiplier effect as well.
  5. FDR caused the Great Depression to be prolonged.  Apparently one of them read Amity Shlaes widely debunked The Forgotten Man: A New History of The Great Depression and believed it.  Most reputable (i.e. non-Bubble) economists and historians find it amusingly inadequate and poorly researched.  Krugman, among others, have called it revisionist history of the worst sort.
  6. The debt will kill us!  The bond vigilantes are coming!  The treasury is keeping bond rates artificially low.  They're going to explode any day now.  I explained how bond rates were a market-driven function.  Bond rates are set at auction and, in fact, yield rates have never been lower.  The high demand for government bonds produces low interest rates.  It's the market.  No, no, no they said.  It was the Fed doing it.  I explained that the Fed sets the overnight rate, not the interest rates on bonds.  No, they replied, the overnight rate is tied to the bond rate… Or not.

    In 1929, the U.S. Treasury shifted from the fixed-price subscription system to a system of auctioning where 'Treasury Bills' would be sold to the highest bidder. Securities were then issued on a pro rata system where securities would be allocated to the highest bidder until their demand was full. If more treasurys were supplied by the government, they would then be allocated to the next highest bidder. This system allowed the market to set the price rather than the government. On December 10, 1929, the Treasury issued its first auction. The result was the issuing of $224 million three-month bills. The highest bid was at 99.310 with the lowest bid accepted at 99.152. 
I could go on, but what's the point?  Fortunately, the subject of healthcare came up only briefly when I tried to explain how the government's Medicare program works more efficiently than the private sector Medicare Advantage.  At one point, one of them got up and said that it was idiots like me who didn't know what the hell I was talking about and then he stormed out, his prejudices and his bubble intact.
I can't wait until next Sunday!

Friday, July 6, 2012

What is the LIBOR Scandal and Why You Should Care

Al Jazeera breaks it all down for us. So much for the concept of a "pure market." Turns out it's a huge cartel of price-fixing banks.

Putting the "Lie" in LIBOR

the LIBOR scandal is simply amazing. It's exposing the rotten-to-the-core global financial system.

Like the monsters in the campy Vin Diesel Sci-Fi romp Pitch Black, even the slightest touch of light causes the creature to shrivel up and turn to dust.  So too with the global financial system.  Every time we shine a light on some part of this thoroughly corrupt enterprise, it shrivels up and turns to dust.
So this isn't about Libor - this is about Lie-More

That seems to be the business model for the big global finance houses. They like to call themselves "banks," but they aren't banks in any traditional sense. They are global behemoths that are not just too-big-to-fail, but also too-big-to-regulate and too-big-to-manage. Take JP Morgan Chase for example. It has a $2.35 trillion balance sheet, more than 270,000 employees worldwide, thousands of legal entities, 554 subsidiaries and, as proved by the recent trading losses in London, a CEO, CFO and management team that has no idea what is going on in their own bank.

Let's hope for the sake of the global financial system, the global economy and taxpayers worldwide that Mr. Diamond's resignation is the first of many.

Karl Marx in Philadelphia

Wow, who knew that Benjamin Franklin was such a Communist!
The Remissness of our People in Paying Taxes is highly blameable; the Unwillingness to pay them is still more so. I see, in some Resolutions of Town Meetings, a Remonstrance against giving Congress a Power to take, as they call it, the People's Money out of their Pockets, tho' only to pay the Interest and Principal of Debts duly contracted. They seem to mistake the Point. Money, justly due from the People, is their Creditors' Money, and no longer the Money of the People, who, if they withold it, should be compell'd to pay by some Law.

All Property, indeed, except the Savage's temporary Cabin, his Bow, his Matchcoat, and other little Acquisitions, absolutely necessary for his Subsistence, seems to me to be the Creature of public Convention. Hence the Public has the Right of Regulating Descents, and all other Conveyances of Property, and even of limiting the Quantity and the Uses of it. All the Property that is necessary to a Man, for the Conservation of the Individual and the Propagation of the Species, is his natural Right, which none can justly deprive him of: But all Property superfluous to such purposes is the Property of the Publick, who, by their Laws, have created it, and who may therefore by other Laws dispose of it, whenever the Welfare of the Publick shall demand such Disposition. He that does not like civil Society on these Terms, let him retire and live among Savages. He can have no right to the benefits of Society, who will not pay his Club towards the Support of it.
In other words, you own what you can carry, everything else is open for discussion. Property is theft. Pay your taxes!

Wednesday, July 4, 2012

I hope everyone has a safe Independence Day!

Jasper Johns Flag 1954-55
"One night I dreamed that I painted a large American flag," Johns said, "and the next morning I got up and I went out and bought the materials to begin it." Those materials included three canvases that he mounted on plywood, strips of newspaper, and encaustic paint - a mixture of pigment and molten wax that has formed a quivering surface of lumps and smears. The legible newspaper scraps beneath the tactile surface - some dating from 1955 and 1956, when Johns repaired the painting - lend the timeless, public icon historical specificity. While this image is something "the mind already knows," Johns acknowledged, its execution complicates the representation and invites close inspection. A critic of the time encapsulated this painting's ambivalence by asking, "Is this a flag or a painting?"

Tuesday, July 3, 2012

Matt Taibbi asks "Where's the Outrage?"

The LIBOR scandal rolls on... Where's the outrage? I know it's obscure, but remember when nobody knew what CDOs were? How about Credit Default Swaps? Yeah, those are part of our daily vocabulary now. It would be good if LIBOR joined them sooner, rather than later.
But to me what’s missing from all of this is the “Holy Fucking Shit!” factor. This story is so outrageous that it shocks even the most cynical Wall Street observers. I have a friend who works on Wall Street who for years has been trolling through the stream of financial corruption stories with bemusement, darkly enjoying the spectacle as though the whole post-crisis news arc has been like one long, beautifully-acted, intensely believable sequel to Goodfellas. But even he is just stunned to the point of near-speechlessness by the LIBOR thing. “It’s like finding out that the whole world is on quicksand,” he says.

Herman Cain is Coming to Your TV

There are no words.

The Most Important Article You Will Read This Month

If you loathe the phony freedom offered up by the libertarians, then this is a must-read for you on how libertarianism fails so completely in the workplace. It dovetails quite nicely with this piece from Alternet on the effects of job insecurity on American workers.

Let It Bleed: Libertarianism and the Workplace by Chris Bertram, Corey Robin and Alex Gourevitch.
Libertarianism is a philosophy of individual freedom. Or so its adherents claim. But with their single-minded defense of the rights of property and contract, libertarians cannot come to grips with the systemic denial of freedom in private regimes of power, particularly the workplace. When they do try to address that unfreedom, as a group of academic libertarians calling themselves “Bleeding Heart Libertarians” have done in recent months, they wind up traveling down one of two paths: Either they give up their exclusive focus on the state and become something like garden-variety liberals or they reveal that they are not the defenders of freedom they claim to be.
Go forth and read.

Bankster Corruption: It's All in Your Mind... er, Your Brain

Senior bankers are power-hungry, greedy bastards because of evolution... or something.
Senior bankers hold enormous power, greater than that of many elected national leaders. Largely unaccountable except to occasional shareholders meetings and often quiescent boards, their power is much less constrained than that of democratically elected leaders. And given that power is one of the most potent brain-changing drugs known to humankind, unconstrained power has enormously distorting effects on behaviour, emotions and thinking.

The "masters of the universe" who have arisen out of a deregulated world financial system were given unprecedented power that inevitably must have caused major changes to their brains. While power in moderate doses can make people smarter, more strategic in their thinking, bolder and less depressed, in too-large doses it can make them egocentric and un-empathic, greedy for rewards – financial, sexual, interpersonal, material – likely to treat others as objects, and with a dulled perception of risk.
So perhaps the answer to this is to nationalize banking. Put it back, nominally at least, in the hands of the people. The author writes about a neurological state called "approach mode." "Approach mode," akin to the "fight" reflex in the "fight or flight" mode, is where the brain "biases attention, memory, action and emotions towards thoughts and feelings linked to success and conquest." The other mode, "avoidance mode," is akin to the flight mode and "mood is low and anxiety high because of worries about threats and future uncontrollable events."

The authors of the original academic paper How Power Influences Moral Thinking, Joris Lammers and Diederik A. Stapel, conducted 5 studies looking at how power affects cognition and action.
The first 3 experiments show that thinking about power increases rule-based thinking and decreases outcome-based thinking in participants’ moral decision making. A 4th experiment shows the mediating role of moral orientation in the effect of power on moral decisions. The 5th experiment demonstrates the role of self-interest by showing that the power–moral link is reversed when rule-based decisions threaten participants’ own self-interests.
Returning to the original article, we see, in part, the origins of some of our big banker problems: Deregulation and Bonuses.
The problem with several decades of financial deregulation and rising profits and bonuses is that the brains of an entire financial industry became locked into the neurological "approach mode" and it became difficult for them even to conceive of the downside. It is a feature of these mental modes that even remembering events or facts which run counter to the prevailing mood is hard – hence depressed, anxious people find it difficult to remember good things that have happened to them, making it even harder to escape the depression. Significantly, those in a buoyant "approach" mode of thinking, find recalling negative events and facts difficult.
I believe we see many of these same characteristics in our elected officials (I'm looking at you, Paul Ryan and Scott Walker!) The old adage holds true:
"Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men." John Emerich Edward Dalberg Acton, first Baron Acton
Or, in its more familiar formulation:

Power Corrupts.
Absolute Power Corrupts Absolutely.

It is, in the end, all in your brain.