Friday, April 30, 2010

Predator Nation "Shut the F Up US" - Goldman Sachs & Monster's Ball: Drawing Back the Veil on the 'Death State' - The Players Revealed In Their Glory

(EXTRA: If anyone could make a contribution to my PayPal account (or otherwise - contact me for further info), it would be sincerely appreciated as I've just gone off the cliff financially. I really appreciate everything that my kind readers have done for me in the past financially and otherwise. Now . . . back to your regular viewing.) Okay, first off (and I did not mean to talk about this again today, but I have no choice - and remember I said long ago that this could not go on forever - and I apologize that this essay is soooooo long - not my fault - everything's happening today!) Simon Johnson (author of 13 Bankers) says to please "Wake Up" Obama and this administration NOW (just skip this one if you're not worried about your money). I'm wondering if we can use our much-feared "nuclear terrorism" illuminated in the next article so well as a weapon against this Eurozone fever (emphasis marks added - Ed.).

Baseline Scenario - Most days we can coast along, confident that tomorrow will be much like yesterday. On a very few days we need to look hard at the news headlines, click through to read the whole story, and then completely change a large chunk of how we thought the world worked. Today is such a day.

Everything you knew or thought you believed about the European economy – and the Eurozone, which lies at its heart – was just ripped up by financial markets and thrown out of the proverbial window.

While you slept, there was a fundamental repricing of risk in financial markets around Europe – we’ll see shortly about the rest of the world. You may see this called a “panic” and the term conveys the emotions involved, but do not be misled – this is not a flash in a pan; financial markets have taken a long hard view at the fiscal and banking realities in Europe. They have also looked long and hard into the eyes - and, they think, the souls – of politicians and policymakers, including in Washington this weekend.

The conclusion: large parts of Europe are no longer “investment grade” – they are more like “emerging markets”, meaning higher yield, more risky, and in the descriptive if overly evocative term: “junk”.

This is not now about Greece (with 2 year yields reported around 20 percent today) or Portugal (up 7 basis points) or even Spain (2 year yields up 27 basis points; wake up please) or even Italy (up 6 basis points). This is no longer about an IMF package for Greece or even ring fencing other weaker eurozone economies.

This is about the fundamental structure of the eurozone, about the ability and willingness of the international community to restructure government debt in an orderly manner, about the need for currency depreciation within (or across) the eurozone. It is presumably also about shared fiscal authority within the Eurozone – i.e., who will support whom and on what basis?

It is also, crucially, about stabilizing the macroeconomic situation without resorting to more unconditional bailouts. Bankers are pounding tables all across Europe, demanding that governments buy out their position – or bring in the IMF to do the same. We again find ourselves approaching the point when the financial sector will scream: rescue us all or face global economic collapse.The White House did not see this coming – and the Treasury’s attention was elsewhere. The idea that we can leave this to the Europeans to sort out is an idea of yesterday. Today is very different and much more scary.

_ _ _ _ _ _ _ If you've been confused about how our "socialist" champion has been allowing Hillary to shake the death rattle hard about nonexistent Iranian threats of world domination (another reason for the early awarding of the Nobel Peace Prize?), this essay may be the best thing you've ever read about USA political corruption and many of its correlative ventures, leading me to ask: Why is the CIA (run by GHW Bush in the 60's, who had been recruited out of Yale in the 50's) always wrong or misled by bad intelligence or bad people or acting in criminally culpable ways under international law which made Cheney/Bush decide that the USA now must operate outside of all international agreements where it would be liable to the World Court? The answers are not difficult to grasp. I have several thoughts to share with you today on where we are financially as well as politically. I think you will be stimulated by the discussion. Please click on the links and go to the original sources for more information. I've also seen Jenna Bush's stating on The Today Show in adoring tones that Bill Clinton was her grandfather's favorite stepson. Now that'll stop you in your tracks if you haven't been keeping up since the 90's, but our wise group of readers knows that all the major players have been in the game together for a very long time (unbeknownst to us until the recent crash which gave away the secrets - not that it matters though as they've already spent all our money). And if you wondered why all those people blanched in dismay and resigned in droves before the Cheney/Bush tornado (giving a bad name to tornadoes):
And thus the Nobel Peace Laureate who is temporarily managing the Death State is now pushing hard for even more sanctions on the Iranians for the crime of . . . developing a nuclear energy program as allowed by international treaty and inspected to a fare-thee-well by international observers. The defenders of the Nobelist - I suppose we must call him the Death Laureate - point to his push for sanctions as proof of his "different" approach to the "threat" of Iran.

But what is the reality of such sanctions? Again, Arthur Silber nailed it well, in a piece from 2009: A sanctions regime is not an alternative to war: it is the prelude to attack or invasion. Moreover, sanctions murder a hideous number of innocent people as surely as more overt acts of war.

Silber then pointed to an excellent article by Stanley Kutler, detailing the last sanctions regime enforced in the Middle East by a hip, progressive president, a topic we touched upon here the other day. From Kutler:

We estimate between 500,000 to 1 million Iraqis died in the 1990s, a very large proportion being children. To what end? Not, Lando maintains, to destroy Saddam Hussein's WMDs but to force him out. . . . The CIA badly miscalculated that sanctions, coupled with Iraq's devastating defeat, would result in a military coup, toppling Saddam. Anything but. The sanctions and Saddam's heightened repression insured his survival - much to the frustration of Western leaders. . . . The sanctions worked only as partly intended: They imposed untold suffering on the population. Americans at the UN blocked a request to ship baby food because adults might use it. They vetoed sending a heart pill that contained a milligram of cyanide because tens of thousands of such pills could become a lethal weapon.

The banned list included filters for water treatment plants, vaccines, cotton swabs and gauze, children's clothes, funeral shrouds. Somehow, even Vietnamese pingpong balls found their way to the proscribed list. Sanctions devastated the country's medical system, once one of the best in the region. Sanctions insured that malnutrition would morph into virtual death sentences, as Lando notes. Babies died in incubators because of power failures; others were crippled with cerebral palsy because of insufficient oxygen supplies. . . . In late 1994 the New York Times reported on children in filthy hospitals, dying with diarrhea and pneumonia, people desperately seeking food, and Iraq's inability to sell its oil - the country faced "famine and economic collapse." Without doubt, the sanctions consolidated Saddam's power. UN Administrator Denis Halliday wrote that the people blamed the United States and the UN for their travails, not Saddam Hussein. Halliday resigned, refusing to administer a program that he called "genocide."

This is what "tough" sanctions by a progressive, humanitarian interventionist can do.

Colonel, U.S. Army (Retired) Lawrence Wilkerson, who was Chief of Staff at the Department of State from August 2002 to January 2005 (working for Colin Powell), thinks we shouldn't "forfeit our democracy" out of fear, and is not afraid (let's go viral with this one) to tell us the truth about what has happened within the government (and I don't want to get into an anti-Zionist rant today but it occurs to me that the government is top-heavy with people having dual citizenship and/or are outright members of the Likud party (like NeoCon war fixers Elliot Abrams (who is making speeches now saying the US should go to war against Iran before Israel does (and, of course, Israel (with its estimated 250 warheads) hasn't signed the NPT - but whatever)), Douglas Feith, Richard Perle and Rahm Emanuel who served in the Israeli army), who just may - may - have an agenda of their own - not to mention the financial institutions who have received all the "extra" taxpayer largesse for their various causes and will receive much more very soon):
Arthur Silber is back, with piercing insights that rip the veil which even self-proclaimed dissenters still draw across the blood-soaked reality of what Silber aptly calls the "Death State" that has long "wrapped the world in flames" (to quote the preferred method of resolving diplomatic conflicts famously voiced by Abe Lincoln's secretary of state) from its mephitic base on the Potomac. As always with Silber, you must read the whole piece (and follow the links) to get the full force of the argument, which is nuanced, multifarious and deeply considered, but here is just the briefest excerpt to send you on your way:
I repeat a few words I first wrote at the beginning of 2009. . .
For more than a hundred years, the foreign policy of the United States government has been directed to the establishment and maintenance of global dominance. To this end, violence, overthrow, conquest and murder have been utilized as required. . . . More and more, oppression and brutalization have become the bywords of domestic policy as well. Today, the United States as a political entity is a corporatist-authoritarian-militarist monstrosity: its major products are suffering, torture, barbarism and death on a huge scale.
I repeat the fundamental point to make certain there is no misunderstanding as to where I stand on this question: as a political entity, the United States is an endlessly destructive monstrosity. The overwhelming majority of people - including, I regret to say, even many of those who are severely critical of the United States government - fail to understand this point in anything close to the thorough and consistent manner required. This failure is the result of an earlier one: an inability to grasp fully what it means to revere the sacred value of a single human life.

There is more, much more in the original post -- "An Evil Monstrosity: Thoughts on the Death State," excerpting it actually does it an injustice. So go there, please, and read it. When you've done that, scoot on over to Truthdig, where you will find William Pfaff writing in a similar vein about the bloody deceptions of the Death State: past, present - and future. Some excerpts:

It is a dismaying reflection that the facilitators of major violence thus far in the 21st century have been lies told by democratic governments. The lies are continuing to be told, about the supposed “existential” menace posed by Iran to Israel, America and (if you believe some European leaders) Western Europe . . . Injustice and lies in the Middle East were responsible for unnecessary new wars in the new century, in which the United States took the lead. This time the lies were ideologically motivated and expedient lies — first, that Saddam Hussein bore responsibility for the September 2001 attacks on United States. He did not. Next was the fiction that Hussein’s government, during the period of U.N. sanctions before 2003, was able to secretly construct nuclear weapons, despite the efforts of Western intelligence to detect them or deter him, and the presence of U.N. inspectors. There were no such weapons. . . . U.S. Secretary of Defense Robert Gates reportedly sent a secret letter to President Barack Obama in January reviewing the military options available if diplomacy and the new American attempt to intensify international sanctions on Iran fail to produce the desired halt in Iran’s effort, if that is what it is, to build a nuclear deterrent. If Iran does pursue a nuclear capability, once again it is to deter attack. Precisely the same objection exists to theories of Iranian aggression as to those lies put forward in 2002-03 about Iraq posing a nuclear menace to the world. Once more, the threat is a polemical invention, intended to frighten American and Israeli (and European) voters and to prompt a preemptive attack on Iran

The release of Gates' memo was part of the usual factional cat-fighting among the militarist courtiers: some want to attack Iran now, some want to wait until later - or as that great liberal-progressive hero Admiral Fallon once said of the human beings in Iran: "These guys are ants. When the time comes, you crush them." For now, most of the factionalists lean toward the Fallon scenario: crush the insects later, when we don't have so much on our plate, and it will be more profitable.

And thus the Nobel Peace Laureate who is temporarily managing the Death State is now pushing hard for even more sanctions on the Iranians for the crime of . . . developing a nuclear energy program as allowed by international treaty and inspected to a fare-thee-well by international observers. The defenders of the Nobelist - I suppose we must call him the Death Laureate - point to his push for sanctions as proof of his "different" approach to the "threat" of Iran.

But what is the reality of such sanctions?

. . . For as we all know, Laureate Obama and his Pentagon warlord recently made the threatened nuclear destruction of the millions of human beings in Iran a centerpiece of their new, "more restrained" nuclear weapons doctrine. As John Caruso notes:

Obama is also on the record as stating that "I think we should keep all options on the table" with regard to Iran. That's the standard language in which US nuclear threats are couched, of course, and US politicians are careful to stick to that formulation in order to allow apologists to argue that they didn't mean what they clearly meant. But Obama's Secretary of Defense gave the game away in his remarks about the Nuclear Policy Review:
SEC. GATES: Well, I think that the - I actually think that the NPR has a very strong message for both Iran and North Korea, because whether it's in declaratory policy or in other elements of the NPR, we essentially carve out states like Iran and North Korea that are not in compliance with NPT. And basically, all options are on the table when it comes to countries in that category, along with non-state actors who might acquire nuclear weapons. So if there is a message for Iran and North Korea here, it is that if you're going to play by the rules, if you're going to join the international community, then we will undertake certain obligations to you, and that's covered in the NPR. But if you're not going to play by the rules, if you're going to be a proliferator, then all options are on the table in terms of how we deal with you.
To summarize: the Obama administration has just made an explicit nuclear threat against Iran and North Korea, for the political goal of coercing them into complying with the US interpretation of their NPT obligations. This is the Department of Defense's official definition of terrorism:
terrorism (DOD) The calculated use of unlawful violence or threat of unlawful violence to inculcate fear; intended to coerce or to intimidate governments or societies in the pursuit of goals that are generally political, religious, or ideological.

So the "threat of unlawful violence . . . intended to coerce or to intimidate governments or societies in the pursuit of goals that are generally political" is terrorism.

Or in other words, by the DoD's own definition, Barack Obama is a terrorist — and given that his threats involve the use of nuclear weapons, it follows straightforwardly that Obama is more specifically a nuclear terrorist. And not only is he a nuclear terrorist; as the one person who has access to a massive nuclear arsenal, the stated willingness to use it outside of the realm of direct self-defense, and the power to follow through on that threat, Barack Obama is currently the only nuclear terrorist on the entire planet.

_ _ _ _ _ _ _ Nuclear terrorism is of course the logical endpoint of a Death State. And as Caruso rightly notes, Barack Obama constantly, ceaselessly threatens Iran with nuclear destruction - and has done so from the very start of his campaign for the presidency. The continual, open threat to murder millions of innocent, defenseless human beings is indeed "an evil monstrosity" - one so gargantuan that very few people seem able to grasp its reality. But Silber sees through, and sees true. We are once more in his debt for fixing our eyes on the sulfurous essence of Death State, behind all the sound and fury of the factional squabbles of our most monstrous elites.

And the Goldman execs (compliments of Lloyd Blankfein, the man who believes he has done "God's Work") say they have "No regrets" for deals that accelerated the financial crisis. Hey, they made big money. It's all good! Also, we've now learned how those "young, smart boys made all that money." They stole it! Funny how civilization used to mean that young people went out into the world to help others and increase the prosperity of all instead of just figuring out how to rip the world off as quickly as possible and claim no responsibility for the devastation that lay in their wake.

WASHINGTON — Goldman Sachs traders who helped the firm rack up billions of dollars in profits from secret bets against the housing market told a Senate investigating panel Tuesday that they'd done nothing wrong.

Among the four present and former traders was Fabrice Tourre, the 31-year-old Goldman vice president accused by the Securities and Exchange Commission on April 16 of fraudulently helping a Goldman client rig an offshore deal that cost two European banks $1 billion. "I am saddened and humbled by what happened in the market," said Tourre, a Frenchman who took time off last week from his London-based job. "But I believe my actions were proper."

Dan Sparks, the former head of Goldman's mortgage department, told the panel that his team had no legal duty to tell investors that it was betting against its own products.

"Regret to me is something that you did wrong, and I don't have that," Sparks said. "That doesn't mean we didn't make mistakes . . . That doesn't mean we didn't do deals that didn't turn out the way we hoped they would . . . These deals performed horribly."

"You've got no regrets? You ought to have plenty of regrets," Michigan Democratic Sen. Carl Levin, the chairman of the Permanent Subcommittee on Investigations, told the four witnesses. During what was shaping up to be a day-long hearing, Levin and other panel members confronted the witnesses with more than 170 subpoenaed e-mails and documents selected to show that the firm safely exited the subprime mortgage market before the housing crash and simultaneously made billions of dollars from negative or "short" bets.

The bets Goldman took out involved purchasing exotic instruments called credit-default swaps. They work like an insurance policy, with a buyer being compensated if the underlying deal goes sour.

Beginning in December 2006, Goldman began a strategy to reduce its subprime risks by selling off its dicey securities and secretly making exotic bets against the market and the products it was selling to its clients.

Levin, who cited the witnesses' recalcitrance in sworn testimony as another reason for regulatory reform, pointed to an Oct. 4, 2007, Goldman response to an SEC inquiry as evidence debunking the company's proclamations that it made major bets against the housing market. In it, Goldman's chief financial officer, David Viniar, said that through most of 2007 the firm "maintained a net short subprime position and therefore stood to benefit from declining prices in the mortgage market."

Former Goldman trader Joshua Birnbaum indicated in his 2007 personnel performance review that he could capitalize on the "fear" in the market of a coming mortgage market collapse to reap profits for the firm. Because "the world would think" Goldman would continue to invest in the mortgage market for the long term, he wrote, the firm should "flip our risk" and bet on an impending crisis.

"We could use that fear to our advantage if we could flip our risk," wrote Birnbaum, who left Goldman in 2008.

Held before a packed, standing-room only Senate room, the hearing met was classic Washington theater, complete with protesters in prison uniforms demanding that Goldman executives do jail time and dozens of cameras trailing witnesses as they walked into the room.

When the four men took seats at the witness table — the first of seven current and former Goldman execs to testify, they quickly learned what it means to be in the middle of a full-blown tempest in the nation's capital. A crush of photographers encircled them, setting off a rat-a-tat of clicking cameras.

Missouri Democratic Sen. Claire McCaskill told them: "We're trying to home in on why so many people are unemployed in my state and why so many people lost money in their pension funds."

. . . Much of the questioning echoed reports by McClatchy last November and December that Goldman had marketed $57 billion in risky mortgage securities in a series of deals in 2006 and 2007, including $39 billion backed by mortgages that it bought from lenders without telling investors that it was secretly making bets on a housing downturn.

Goldman also sold billions of dollars in offshore securities that included subprime mortgages. Securities experts told McClatchy at the time that the practice might have constituted fraud because investors might have opted not to buy the securities if they knew that Goldman was betting on their collapse.

. . . One of the testier exchanges thus far was between Sparks of Goldman and Levin. It surrounded one of the offshore deals Goldman peddled called "Timberwolf," which included securities backed by subprime mortgages that were most at risk if the housing market dropped.

Goldman documents show that the firm's sales force was told to make selling Timberwolf a priority. In 2007, Goldman sold about $300 million of Timberwolf securities to a hedge fund that collapsed later that year.

A senior Goldman executive later described the deal as follows: "boy that timeberwof (sic) deal was one shitty deal." According to the subcommittee, 94 percent of the securities in the deal were from other offshore deals.

The hearing room then erupted in laughter — low titters at first, and then bigger laughs — as Levin repeatedly asked Sparks about the "shitty" deal and the e-mail.

Levin asked: Did you tell your clients that "this was a shitty deal?" "Your top priority was to sell that shitty deal." "Should Goldman be trying to sell a shitty deal?"

Levin later grilled Viniar about the e-mails or comments in which Goldman employees referred to specific deals as "crap" or "shitty" or "junk." What did he think about such disparaging comments — and how would clients feel about them? Levin asked.

"I think that's very unfortunate to have on an e-mail," he said. The hearing room erupted in laughter. Viniar realized his mistake and clarified that he meant it was unfortunate to have said in any format. In his testimony, Birnbaum said there was a vigorous debate within Goldman about which way the housing market was headed. He said that nobody from senior management told him to make an overall "directional bet" against the subprime market, but simply to reduce risk overall.

He said he is "very proud" of his tenure at Goldman. "We provided significant liquidity to our customers in a difficult and challenging market while also managing to post a profit during this period," he said.

Comparing his panel's investigation to inquiries into the causes of the Great Depression, Levin said that what investigators see now is similar to what they saw in the 1930s. "The parallels are unmistakable to today's events," Levin said. In his opening statement, Levin directly took on Goldman's contention — made repeatedly in recent weeks — that it did not profit at its clients', or the nation's, expense.

"The evidence also shows that repeated public statements by the firm and its executives provide an inaccurate portrayal of Goldman's actions during 2007, the critical year when the housing bubble burst and the financial crisis took hold," Levin said. "The firm's own documents show that while it was marketing risky mortgage-related securities, it was placing large bets against the U.S. mortgage market."

He later added that the actions Goldman took undermine the pretense that it was acting as a mere "market-maker" on Wall Street — or simply working to match buyers and sellers. "They represented major bets that the mortgage securities market — a market Goldman helped create — was in for a major decline," Levin said.

Read more here. And, wouldn't you know it?

Daniel Sparks lied and:

As U.S. cities and towns wrestle with financial problems, investors are finding a new way to profit on their misery: by buying derivatives that essentially bet municipalities will default.

Hey, it's a CASINO guys! What else do they do in casinos? Not build countries surely.

Alas, then there's this detail - The Big Six Banks are Shorting the American Dream.

April 28, 2010 -- The Big Six investment banks, Goldman Sachs, Morgan Stanley, JP Morgan Chase, Citigroup, Bank of America and Wells Fargo, are “shorting the American Dream,” according to economist Simon Johnson and entrepreneur James Kwak in an interview on April 16, “Financial Regulation and Regulatory Capture” on Bill Moyers Journal.

. . . The big ideas that emerge from the title of their interview are that financial regulators are not enough to deal with the Big Six banks, whose employees are very smart people, very hungry for financial opportunity, legit or not legit. Thus, very often regulators are sucked into large investment banks or affiliated financial institutions like the distinguished Michael Oxley, co-author of the Sarbanes Oxley Act. Oxley has joined the financial industry, along with some 124 former other members of Congress and their aides.

To Oxley’s undying credit, the Sarbanes-Oxley Act grew out of the debacle of Enron and made it a law that CEOs and other top managers were and are responsible for the policies and actions of their companies on their watch and can’t just shrug their shoulders, saying they didn’t know what was happening. What Johnson and Kwak are really calling for are more laws on the books that can safeguard against financial abuse.

Unfortunately, we have, as they point out, former Clinton Treasury Chief Robert Rubin now getting $100 million a year to consult for Citibank and he can’t explain how the company came so incredibly close to financial collapse. Yet, when Newsweek wanted someone of note to explain all this, the job was given to, guess who, Robert Rubin. Suddenly, he found religion?

Charles Prince, another former Citi CEO said: “Let me start by saying I’m sorry. I’m sorry that our management team, starting with me, like so many others, could not see the unprecedented market collapse that lay before me.” He must have seen it for years before that if he wasn’t blind or deaf, because it was reported on Internet news services at the very least, particularly Citi’s huge derivatives debt.

Both Rubin and Prince were accused by Democratic Chairman of the Bipartisan Financial Enquiry Committee Phil Angelides, “of either pulling the levers or being asleep at the switch.” This writer’s money is on pulling the levers.

Also, there is Washington Mutual’s CEO Dave Beck appearing before Senator Carl Levin, investigating how so many bad loans were made at WaMu. After all, this was the biggest “meltdown belly-up of a major investment bank in US history.Yet a blasé Beck said when asked what happened, “It’s a very real possibility that the loans that went out were better quality than Mr. Shaw laid out.” Levin rebutted, “And there’s a very real good possibility that they were exactly the quality that he laid out, right? Is that right?” Beck wavered, “That’s right.” A frustrated Levin answered, “Okay. And you don’t know and apparently you don’t care. And the trouble is you should have cared.” So it goes.

In keeping with Beck’s feigned ignorance, it’s interesting that the Johnson-Kwak interview aired the day before the NY Times broke the story U.S. Accuses Goldman Sachs of Fraud. The short version of the article is that Goldman profited from the sale of collateralized debt obligations (CDOs) that were packaged with garbage loans and peddled to hedge funds and investors.

This plan was the brainchild of Fabrice Tourre, a vice president at Goldman in London. The plan, cited in the SEC case as Abacus 2007-ACi, proved successful in having Wall Street hedge fund investors make a mountain of money on negative bets or “shorting,” betting on the bad loans to fail, which they did, thereby adding more disaster to the subprime lending market and helping to “short the American Dream,” that is, the market is not a level playing field for investors.

The follow-up Times article, Top Goldman Leaders Said to Have Overseen Mortgage Unit, indicates that “Mr. Tourre was the only person named in the SEC. suit. But according to interviews with eight former Goldman employees, senior bank executives played a pivotal role in overseeing the mortgage unit just as the housing market began to go south. These people spoke on the condition that they not be named so as not to jeopardize business relationships or to anger executives at Goldman, viewed as the most powerful bank on Wall Street.

“According to these people, executives up to and including Lloyd C. Blankfein, the chairman and chief executive, took an active role in overseeing the mortgage unit as the tremors in the housing market began to reverberate through the nation’s economy. It was Goldman’s top leadership, these people say, that finally ended the dispute on the mortgage desk by siding with those who, like Mr. Tourre and Mr. Egol, believed home prices would decline . . . .”

The reason for extending the chain of responsibility up to the top is precisely to invoke a law like the Sarbanes Oxley Act, so that Abacus is not seen as the random action of a greedy profiteer, which also occurs, according to Johnson and Kwak. Now, it is verified that Abacus was a corporate plan that had the blessings of the CEO and top management. Let’s see what shakes out of this or what dodges are made.

Another major problem that Johnson and Kwak see is that the six megabanks have become a financial oligarchy. In fact, their aggregate assets equal some 63 percent of GDP. Back in the 1990s, adjusted for inflation, their assets equated to less than 20 percent of GDP. This rise in financial power gives them the notion that they can go out and take more and more risks. After all, the taxpayer and Uncle Sam will be willing to bail them out if they fail. The Fed lending window is wide open to them. It encourages them to “distort the system . . . change the rules of the game to favor themselves. To that end, they spend a million dollars a day lobbying against reforms to fix the financial system.”

As asset power increases, the oligarchy’s power to twist arms in Congress increases. In fact, Johnson claims “the big banks got stronger as a result of the bailout . . . They’re turning that increased economic clout into more political power. And they’re using the political power to go out and take the same sort of risks that got us into disaster in September 2008,” when Lehman Brothers was allowed to fail and shook the international banking system.

The truth is Citibank alone, according to Johnson and Kwak, controls some $12.5 trillion in assets, so it can’t be allowed to fail without causing another catastrophe à la Lehman Brothers. Johnson and Kwak’s idea is to have the banks break themselves down to into entities with no more than a $100 billion cap each. That makes them and the other mega-banks small enough to fail. This is really a key point. And one wonders why the Glass-Steagall Act hasn’t been reinstituted as promised to help facilitate this division for break-down purposes.

. . . Or to have a toothier Commodities Futures Modernization Act, which former Commodities Futures Trading Commission Chair Brooksley Born wanted to protect against derivatives. The act was gutted by Senator Phil Gramm with Clinton’s blessings in 1999. The link above is to an article I wrote about Born’s travails, the intimidations by Greenspan, Rubin, and particularly Larry Summers, who called her, saying he had 13 bankers in the room who all said that if she proceeded with her CFMA, the financial system would totally collapse. She subsequently resigned, having done all she could to protect her fellow citizens from these financial predators.

Johnson and Kwak remind us to remember that fighting this fight is a long-term job and not a quick fix. As Johnson points out, Teddy Roosevelt faced the bankers for a decade and brought Morgan in tow as FDR did his corps of bankers. Early on Andrew Jackson faced down the national bank. It will take a president with backbone and conviction to tell these guys what to do, rather than seeking “consensus” in lieu of courage. I also believe there are intelligent Republicans out there who see and know what’s going on and need to act in unison with their Democratic counterparts.

Like the Marines, we need a few good men, maybe more than a few, to stand up and fight the Blankfeins, the Rubins, the Princes, etc. Kwak suggested that some people should go to jail for fraud. I’m for that, the more the merrier to make an example and save the financial system. Both Johnson and Kwak are practicing financial professionals who believe in the system, which can’t be run with a totally unregulated free-market hand, but with laws that keep the playing field level.

As a closer, Moyers pointed to the Republican leader in Congress, Senator Mitch McConnell from Kentucky who was being taken to task by reporters recently for “attending a fundraiser with hedge funds and other Wall Street poobahs.”\

This came, as Johnson shredded a recent statement by McConnell: “He [McConnell] says let the biggest banks fail, go bankrupt, don’t do anything, leave the situation as it is now and when they get in trouble, let them fail. If you do that, you’ll have catastrophe. The bankruptcy system clearly and manifestly cannot deal with the failure of a complex, global, financial institution. And we have the evidence before us in what happened after Lehman Brothers failed. That was bankruptcy. It caused chaos around the world, Bill. That’s what the Republicans are advocating. If we just leave things as they are and next time we’ll take that chaos and we’ll get a second Great Depression. We’re arguing for reform. We’re arguing for change. We’re arguing for ways to make those biggest banks smaller and safer. If they were small enough to fail, that’s a very different story. And that’s a much safer place to be.

When Moyers asked, “What do these big six banks think about what Senator McConnell is saying?” Kwak nailed it: “Well, the big six banks don’t want any reform at all, essentially. So, I think . . . there’s some evidence that Senator McConnell has been talking to the big banks and to other people on Wall Street.” So let’s leave it at another regulatory capture.

Hopefully, you’ve gotten an idea of what a brilliant and important interview this was. See or read it for yourself, before your American Dream gets shorted again in a new financial collapse.

Jerry Mazza is a freelance writer and life-long resident of New York City. Reach him at His new book, “State Of Shock: Poems from 9/11 on” is available at

Is this Kabuki Theater? Didn't these same hearings go on before looting the Treasury the first time? As you probably saw this before, here's the link and the video is below. These boys are great actors aren't they? In addition to all the dough, they all should get Academy Awards for Best Actor.

Carl Levin goes "Mano a Mano" with Lloyd Blankfein

Mike Whitney

Tuesday's hearings of the Permanent Subcommittee on Investigations laid the groundwork for future criminal prosecutions of Goldman Sachs Chief Executive Lloyd Blankfein and his chief lieutenants whose reckless and self-serving actions helped to precipitate the financial crisis. Committee chairman Senator Carl Levin adroitly managed the proceedings in a way that narrowed their scope and focused on four main areas of concern. Through persistent questioning, which bordered on hectoring, Levin was able to prove his central thesis:

1 - That Goldman puts its own interests before those of its clients.

2 - That Goldman knowingly misled it clients and sold them "crap" that it was betting against.

3 - That Goldman made billions trading securities that pumped up the housing bubble.

4 - That Goldman made money trading securities that triggered a market crash and led to the deepest recession in 80 years.

The hearings lasted for 8 hours and included interviews with 7 Goldman executives. Every senator had the opportunity to make a statement and question the Goldman employees. But the day belonged to Carl Levin. Levin was well-prepared, articulate and relentless. He had a game-plan and he stuck to it. He peppered Goldman's Blankfein with question after question like a prosecuting attorney cross-examining a witness. He never let up and never veered off topic. He knew what he wanted to achieve and he succeeded.

Here's a typical exchange between Levin and the former head of Goldman's mortgage department, Dan Sparks:

SEN. CARL LEVIN: June 22 is the date of this e-mail. "Boy, that Timberwolf was one shitty deal."How much of that "shitty deal" did you sell to your clients after June 22, 2007?

DAN SPARKS: Mr. Chairman, I don't know the answer to that. But the price would have reflected levels that they wanted to invest...

SEN. CARL LEVIN: Oh, of course.

DAN SPARKS: ... at that time.

SEN. CARL LEVIN: But you didn't tell them you thought it was a shitty deal.

DAN SPARKS: Well, I didn't say that.

SEN. CARL LEVIN: Who did? Your people, internally. You knew it was a shitty deal, and that's what your...

DAN SPARKS: I think the context, the message that I took from the e-mail from Mr. Montag, was that my performance on that deal wasn't good.

SEN. CARL LEVIN: How about the fact that you sold hundreds of millions of that deal after your people knew it was a shitty deal? Does that bother you at all; you sold the customers something?

DAN SPARKS: I don't recall selling hundreds of millions of that deal after that.

Levin was just as tough on Blankfein, reiterating the same question over and over again: "Is there not a conflict when you sell something to somebody, and then you bet against that same security, and you don't disclose that to the person you're selling it to? Do you see a problem?"

At first, Blankfein acted like he'd never considered the question before, as if "putting himself in his client's shoes" was something that never even entered his mind. His look of utter bewilderment was revealing. Then he launched into the excuses, the evasions, and the elaborate, long-winded ruminations that one expects from schoolboys and hucksters. But Levin never gave and inch. He kept pushing until Blankfein finally gave up and responded."No," he stammered, "In the context of market-making that's not a conflict." Blankfein's answer was a triumph for Levin, and he knew it. To the millions of people watching the sequence on TV, Blankfein's denial was as good as an admission of guilt. It showed that Wall Street kingpins don't share the same morals as everyone else.

In fact, Blankfein seemed genuinely confused that morality would even be an issue. After all, it wasn't for him. Levin covered some old ground, pointing to Goldman's dealings with Washington Mutual's Long Beach unit which was a "conveyor belt" for garbage subprimes which frequently blew up just months after they were issued. It's clear that Goldman knew the mortgages were junk that were “polluting the financial system”, but that made no difference.

Goldman feels that it's responsible to its shareholders alone, not the people who bailed it out.

All in all, it was a bad day for the holding company that's come to embody everything that's wrong with Wall Street. Goldman entered the hearings as the most successful financial institution in the country, and left with its reputation in tatters and its future uncertain. Its CEO came across as shifty and jesuitical while his executives seemed arrogant and uncooperative. At no point during the hearings did any of the Goldman throng look at ease with themselves or their answers. They remained rigid and sullen throughout. On top of that, they were unable to defend themselves against the main charge, that they don't mind sticking it to their clients if it means a bigger slice of the pie for themselves.

The truth is, the Golden boys were handled quite capably by an elderly statesman who took them to the woodshed and gave them a good hiding. Levin's stunning performance is likely to draw more attention to the upcoming SEC proceedings and, hopefully, build momentum for more subpoenas, indictments, arrests, and long prison sentences. Bob Chapman tells us that "Frauds And Scandals Follow The Collapse Of The Financial System" from "International Forecaster."

As the world faces an ongoing sovereign debt debacle we see an attempt to defuse an oncoming scandal involving Goldman Sachs, Paulson and perhaps others. The collapse of the fiat money system is underway and each day picks up momentum. The only question is how long it can survive? In the interim we are faced with inflation and perhaps hyperinflation as the privately owned Federal Reserve and other central banks add stimulus and money and credit into their financial systems.

Read on.

You don't have to read Bob and his brethren but you probably should just to protect yourself from the coming storm.

Suzan _____________

Tuesday, April 27, 2010

Imminent Crash of Oil, Change You Can't Believe In = Obama/Baker Pact & Ain't No Escape from Collapse (WIN! WIN! WIN!!!!)

(Please consider making a contribution to Welcome to Pottersville2 or sending a link to your friends if you think the subjects discussed here are worth publicizing. Thank you for your support. I really appreciate it. Anything you can do will make a huge difference in this blog's ability to operate.)

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Prepare yourselves for some coming very bad times (as I've been documenting here for years). Indeed, they may last for several years. And if you haven't already started your preparation by having moved into employment that will last through the coming bad times (the "greening revolution" in a solid company would be my suggestion), it may be too late to do anything except hunker down, cultivate your gardens, get to know your family again and raise some livestock. This advice is not for the gun-happy, no-mind, Tea-Party-er types (although they would also benefit from it) who expect the government to move in and "take the rest of their freedoms." That's been pretty effectively used on the poorly educated by the righties for decades now, culminating in the murder of doctors providing abortions and angry, alienated bomb makers hiding out in the mountains, in order to solidify power with the vital 20-30% of the electorate that don't bother to learn about any issues except their always-present fear of learning something new and concepts they don't understand but think they do due to the constant stream of misinformation from the LimpBeckO'Reil-em-up factor like "socialism," "communism" and "fascism."

I wrote papers back in my undergraduate days that began with sentences like "Ramparts Magazine says that the end of the oceans will occur in 1995, but even if it's a little bit later it won't matter because we know now that the people in power will not implement conservative (truly conservative) policies that will permanently safeguard our main source of water (as well as all the other natural resources) on this planet from dumping and the uses that increasing world population will bring to everything of value on this planet." Ramparts called its series Eco-Catastrophe and was poo-poo'ed as the crazy-eyed Left for years thereafter as the industries were allowed to become even more concentrated and profit-driven by mergers and acquisitions, which incurred enormous debt to be paid off; unions were either banished or decimated; and people were devastated at the damage that had occurred to the mountains (from the coal extraction) and the rivers rich with the runoff from the pesticides and hormones present in the food in the name of progress.

My comrade-in-arms at Reality Zone has some facts you may want to consider and use as a basis for your plans regarding self defense. And, yes, imminent doesn't have to mean "tomorrow." Just soon enough. (Oh, and do you see why they want to go ahead right now and stripmine Alaska and pollute the rest of the oceans?) (Emphasis marks added - Ed.)

The Imminent Crash Of Oil Supply: Be Afraid

Nicholas C. Arguimbau

23 April, 2010

What is going to happen and how it came to pass that we weren't forewarned

Look at this graph and be afraid.

It does not come from Earth First. It does not come from the Sierra Club. It was not drawn by Socialists or Nazis or Osama Bin Laden or anyone from Goldman-Sachs. If you are a Republican Tea-Partier, rest assured it does not come from a progressive Democrat. And vice versa. It was drawn by the United States Department of Energy, and the United States military's Joint Forces Command concurs with the overall picture.

What does it imply? The supply of the world's most essential energy source is going off a cliff. Not in the distant future, but in a year and a half. Production of all liquid fuels, including oil, will drop within 20 years to half what it is today. And the difference needs to be made up with "unidentified projects," which one of the world's leading petroleum geologists says is just a "euphemism for rank shortage," and the world's foremost oil industry banker says is "faith based."
The original graph is available here.

This graph was prepared for a DOE meeting in spring, 2009. Take a good look at what it says, assuming it to be correct:

1. Conventional oil will be almost all gone in 20 years, and there is nothing known to replace it.

2. Production of petroleum from existing conventional sources has been dropping at a rate slightly over 4% per year for at least a year and will continue to do so for the indefinite future.

3. The graph implies that we are past the peak of production and that there are 750 billion barrels of conventional oil left (the areas under the "conventionals" portion of the graph, extrapolated to the right as an exponentional). Assuming that the remaining reserves were 900 billion or more at the halfway point, then we are at least 150 billion barrels, or 5 years, past the midpoint.

4. Total petroleum production from all presently known sources, conventional and unconventional, will remain "flat" at approximately 83 mbpd for the next two years and then will proceed to drop for the foreseeable future, at first slowly but by 4% per year after 2015.

5. Demand will begin to outstrip supply in 2012, and will already be 10 million barrels per day above supply in only five years. The United States Joint Forces Command concurs with these specific findings. 10 million bpd is equivalent to half the United States' entire consumption. To make up the difference, the world would have to find another Saudi Arabia and get it into full production in five years, an impossibility.

See The Oil Drum,

6. The production from presently existing conventional sources will plummet from its present 81 mbpd to 30 mbpd by 2030, a 63% drop in a 20-year period.

7. Meeting demand requires discovering, developing, and bringing to full production 60 mbpd (105-45) of "unidentified projects" in the 18-year period of 2012-2030 and approximately 25 mbpd of such projects by 2020, on the basis of a very conservative estimate of only 1% annual growth in demand. The independent Oxford Institute of Energy Studies has estimated a possible development of 6.5 mbpd of such projects, including the Canadian tar sands, implying a deficit of 18-19 mbpd as compared to demand, and an approximate 14 mbpd drop in total liquid fuels production relative to 2012, a 16% drop in 8 years.

8. The curve is virtually identical to one produced by geologists Colin Campbell and Jean Laherrere and published in "The End of Cheap Oil," in Scientific American, March, 1998, twelve years ago. They projected that production of petroleum from conventional sources would drop from 74 mbpd in 2003 (as compared to 84 mbpd in 2008 in the DOE graph) and drop to 39 mbpd by 2030 (as compared to 39 mbpd by 2030 in the DOE graph!).
Campbell and Laherrere predicted a 2003 "peak," and the above graph implies a 'peak" (not necessarily the actual peak, but the midpoint of production of 2005 or before.

. . . So here we are, if the graph is right, on the edge of a precipice, with no prior warning from either the industry, which knows what it possesses, or the collective governments, which ostensibly protect the public interest.

As Colin Campbell, a research geologist who has worked for many large oil companies and studied oil depletion extensively ( says, "The warning signals have been flying for a long time. They have been plain to see, but the world turned a blind eye, and failed to read the message.",outlook.html

The world was completely transformed by oil for the duration of the twentieth century, but if the graph is right, within 20 years it will be virtually gone but our dependence upon it will not. Instead, we have


As far as I can fathom it was gauged to run out exactly when Dick Cheney's new artificial heart would.

If James Baker Likes Him, Obama Can't Be A Socialist

Gary Baumgarten Paltalk News Network

My conservative friends are all bemoaning that President Obama - in their view - is taking this country down the path of socialism. After all - he did push through a health reform bill - didn't he?

But a closer look at the president's record would indicate that he is acting more like a Republican than a Democrat. And now there's renewed proof of that in the form of James Baker's endorsement of Obama's foreign policy.

Let's look at the facts. Obama campaigned on an anti-Bush platform of promising to bring the troops home from Iraq. But as president he is following the very withdrawal strategy drawn up by his Republican predecessor.

He has decided that the best way to win the objective - whatever that actually means - in Afghanistan - is to add more troops. Where have we seen that strategy before? Oh, I remember now. In Iraq. During then-President George W. Bush's watch.

And domestically - this health care bill - in spite of the partisan breathless pronouncements to the contrary - falls far short of socialistic. There's no single payer option. Something that those who voted for Obama thought they were getting.

In fact, if you really look at the health reform legislation - it takes the form of something the Republicans previously supported. In fact - the requirement that you have to be covered by medical insurance is pretty similar to the health care law in Massachusetts. One that then-Governor Mitt Romney, a Republican takes credit for. But don't take my word for it. Listen to what James Baker has to say. You know, the guy who served as Ronald Reagan's chief of staff. As Reagan's treasury secretary. As George H.W. Bush's chief of staff. And as George H.W. Bush's secretary of state. That James Baker - the one with unimpeachable Republican credentials.

At a forum sponsored by the Texas Tribune, Baker had nothing but kind things to say about Obama's foreign policy. Baker likes the way Obama is handling Iraq. He likes the way he's handling Afghanistan. Why, Baker even likes the way Obama is standing up to Israel!

If Obama is far left-leaning and heading the nation down the path of socialism like some conservatives suggest - it certainly is something that has escaped Baker's attention. But it's not the right's unfair criticism of Obama that gets me. It's the lack of criticism from the left. Had John McCain been elected and had the Republican candidate for president initiated the same policies as Obama there would have been a hue and cry from the left - accusing McCain of just being another Bush.

Obama. Change that we can believe in? Hardly. From here

This should make us realize that that whole "standing up to Israel" on the settlements thing by Obama and then Biden was a very good insider joke on the rest of the populace. Notice the Israeli laughter? But you decide.

Joe Bageant has many words of wisdom to share. He mentions in passing the reasons why I've been covering the financial collapse of 2007-9 in such detail (that not many people seem to be really interested in understanding what happened and why as long as they aren't suffering too much yet), and there's even an echo from the Jim Jones/CIA-sponsored Guyana massacre too. There ain't no escape from collapse is there? Tell us like you've seen it for the last decade, Joe. (Emphasis marks added - Ed.)

Joe, In response to a letter from a reader (Joe, why did you crap out on us?), you wrote: "Places like Ecuador, northern California - all sorts of places - (are) creating little spots of sustainability as best as possible." Since the US is the nexus of all the fraud, empire, control, and will thus be the center of the pain in the upcoming financial collapse (AND contains a huge percentage of "useless eaters", i.e. superfluous workers) have you given any thought as to where the best places/countries in the world will be to "hang out" while the Collective Madness and Economic Collapse take over? Thanks, Kevin

------ Kevin, Well, I don't think it's possible to "hang out" until the collapse is over. For starters, it could take 50 years. Or it could take five years. If we knew, more people would probably get off their asses, even in America. But I don't think it will be all at once, or even recognizable at any given moment to techno-hybridized Americans on the ground. For example, most Americans STILL do not recognize the irreversible ecological collapse so well underway. More aware thinkers are calling this "denial," but it is not. They are simply experiencing the world they see before them, as honestly as their senses and experience permit. And that ain't much. Thanks to technology and layers upon layers of mediation by TV, movies, the Internet, etc., gadgets and manufactured imagery, we all live many steps removed from reality.

Collapse is symbolized to each of us in different ways. To some it would be the sustained malfunction and lack of access of the Internet, which is surely coming.
Incidentally, this will be capitalized upon by privatizing the net and selling access at a much higher price, just as with oil. Of course they will experience it as "the consumers" they have been reduced to. So they will see it as bad guys charging money for things that used to be free. Given that their consciousness is a product of technology and its false promise of solutions and endless plentitude, they can never understand that everything is a finite resource and that technology itself can reach such a point of complexity as to be unsustainable. Even your laptop and router is made of petroleum and both eat oil or coal.

Others might perceive collapse as banking failure, given their absolute belief that money is the blood of society - a capitalist hallucination if ever there was one. My point is that many will not even understand that collapse is going on because capitalism will provide excuses and more fake solutions at ever higher prices - mainly at the expense of the world's poor and defenseless of course - until it can no longer extract from them through banking, military force, or other means.

This slows down the inevitable and helps the western world maintain its disastrous belief systems.
None of which answers your question, but I just had to say it. There is really no "safe place" to run. For instance, the banking system may utterly fail; actually, it already has, yet no one is calling for an entirely new system. This shows you both the thoroughness of indoctrination of the American people, and the astuteness of the overlords who profit from the masses. Gasoline for cars can become nearly unavailable, and energy prices can become exorbitant, as they are becoming in the UK. And again, people will slowly learn to suck it up, and the system will roll on for a while longer.

The more perceptive among them will dream, and are now dreaming, of escape.
Escape as they conceive it does not exist. The ongoing collapse manifests itself in the least developed world too, and even harsher terms: hunger, lack of water, warfare, government corruption, infrastructure collapse, crime. It's a planetary problem and no one escapes that. They just experience it in different ways. The question is not so much where to do it as how to do it. The question is not "Where can I run to to escape?" It is "What sorts of problems can I best deal with?"

To my mind, you cannot deal with them alone, despite the romantic imagery of being "off the grid" on some homestead growing your own food. Yes, there are people doing that successfully. But it has been my experience that they are people who've wanted to do that for a long time, and that they are the kind of people suited to deal with the problems that come with that life. I've done it and believe me, it's not for the average American, who is, quite frankly speaking, incompetent in the ways of the earth. It's a very long learning curve, even if you grew up on a farm. You don't just stick seeds in the ground and wait for your food. Every spot on the earth is unique and you have to come to understand the place you are, which takes time, error and dedication.

Not to be a smart ass or snide, but let me ask: How much do you love your fellow man? Or do you merely want to save your own ass? By now you must know the answer. From what I've seen, a person can be honest with himself on this matter, then pursue either route more effectively. If you have the temperament and character to readily love other people around you, and the willingness to labor solely for sustenance, community and friendship, then there are countless options. Because that's what most of the rest of world's people do every day, if allowed to. So you could do that in any number of places on the planet, especially here in the New World south of the US. You can do it in literally thousands of places, some of which are in the US.

I get emails from all over. But I don't give out contacts anymore because I learned the hard way in Belize that human chemistry is a complex thing. And most Americans do not come into approximately sustainable situations with either the social skills or the willingness to sacrifice for the group. Hell, some Americans starting up such communities don't have those qualities.
Yet, believe me, just being in a place where life is more fundamental and simple, if hard, goes a long way toward peace of mind and discovering human normalcy. It's the learning ground. And usually one learns that people who escape at least some of the ravages of our slow collapse, always seem to do it in cooperation with a community of some sort. Either an already existing one, or an intentional one they create between themselves.

There's nothing new in this, of course. Latin America and the world have countless communities hundreds of year old. Governments come and go, rivers dry up, but the people always have tortillas, one way or another. Americans and Europeans usually see these people as poor, thanks to our heavy social conditioning, industrialization and commoditized consciousness - not to mention the denial of the effects of colonialism by Euro-American culture. We see no connection between our iPods, high speed wireless, and, say, the present condition of the Haitian or Dominican people.

Anyway, to me, this is the bottom line:  There is no escape in the sense Americans and European culture thinks of escape. Which is mainly running away to a place where you will get something for nothing in a new and different way - in this case, security and safety from the storm - and also keep some or most of the stuff and gadgetry and ease that has come to represent "quality of life." Unless you are rich, this is impossible. And rich these days, including here in Mexico, means so fucking well-heeled that even a 90% devaluation cannot hurt you.

Oh, there are retirees still living down here on the last shreds of the glory days of the empire. They will tell you there is nothing wrong up there, because they are still getting their checks. But I'm not seeing many newcomers join their ranks. Not at that level. Beyond that, the empire never goes away. It always claims you as its "citizen," which is to say its property. And lately the empire has been extending its tentacles toward expats, in order to extract new money for its failed system.
The rest of us, the non-rich who would prefer to take a shot at some different life - and just about anything will do in the dark of the night when it is gnawing at your guts - must choose another way to cross the border (the "gringo wetbacks"). But always we run up against the same barrier, the same closed gateway to what we suspect is greater satisfaction and peace of mind, but increasingly cannot afford the price of admission, if we play the same old brainwashed money game.

I have come to think the price of admission anywhere in the world, (except in America and Europe, where enough dough will get your ass kissed in any circles) is service to others. We have been indoctrinated by an earth devouring capitalist system to believe otherwise. Believe that giving only depletes. And that mankind and civilization came about through kings and warriors and "great men." But the essential glue of man the social animal, and society has always been on cooperation and sharing. That an endless stream of elite thieves have always managed to steal the fruits of that cooperation does not matter. And the best that is in man still rests on the same fundamentals - cooperation for the greater good of all. So I would suggest that in planning for the future, you first spend many days pondering the question: How can I best go about giving up the world as I have known it - which, after all, is the root of our pain and of our catastrophe - and serve others every day and in as many ways large and small as possible.

In other words, sacrifice. In truth, the sacrifice will not be sacrifice, but liberation, because Americans are buried under so much material shit and petty notions as to entitlement, that shedding such things is a blessing. A gift.
From that vantage point you can "watch the collapse" while you help put up a pole barn in Oregon or make love in a Patagonian mountain shack after a hard day of well digging, or smoke a joint in utter relaxation after rescuing orphans from the streets of Guadalajara. And chances are that the collapse of the empire will not much cross your mind. There is no escape, but there is freedom. And if our fellow Americans long ago forgot that, well, one can still get there alone. But its not for the faint of heart. In art and labor, Joe

Think about that. And then there's more fun below.

Might I suggest "Every Sperm Is Sacred?" A lark at the expense of the Pontiff for Perverts:
An internal Foreign Office memo about this September's papal visit to Britain which started as a Friday afternoon joke, today has resulted in a formal government apology to the Vatican. The memorandum, apparently written following a brainstorming session by a group of junior civil servants planning events for the four-day visit by Pope Benedict XVI, suggested among other ideas that he might like to start a helpline for abused children, sack "dodgy" bishops, open an abortion ward, launch his own brand of condoms, preside at a civil partnership, perform forward rolls with children, apologise for the Spanish armada and sing a song with the Queen.
One online commenter critical of the Foreign Office sniffed, "Once Oxbridge scrapped its Latin entrance paper and oiks began to be actively encouraged to apply, this sort of degeneration was almost bound to happen." I should say so - no reference to reinstatement of the Acts of Supremacy and Uniformity.

Thinking Circular Thoughts

So the Pentagon believes “surplus oil capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact.” This little gem was found in a Joint Operating Environment Report issued by the US Joint Forces Command. And of course, we all know what this is. It is “an intellectual foundation upon which we will construct the concept to guide our future force developments.” In other words, the Pentagon is prepared to burn more oil so it can use oil up so it will have a justification to invade even more countries to replace the oil they’ve burned up getting the oil they need to invade other countries. Or something like that. Of course, with the fully burdened cost of pumping a gallon of gas in Afghanistan averaging

$400 a gallon, this could do wonders for our deficit. While the Pentagon sends billions pouring out of its military tailpipes, the Chinese have discovered the pen is mightier than the sword, especially if the pen is signing contracts for future oil deliveries and joint ventures to develop future oil fields. “Future fuel supplies are of acute importance to the US army because it is believed to be the biggest single user of petrol in the world.” Gosh, could it be that if we put down the sword and picked up the pen, our army just might burn less fuel? It would be a hell of a lot cheaper and burn less fuel if we flew a trade delegation overseas to cut the best deal it could.

Perish the thought! The Pentagon doesn’t want oil, it doesn’t want victory and it sure as hell doesn’t want to spread democracy to the world. All it wants in a justification for its existence. And burning oil to justify fighting for more oil is all the justification it needs.

The report warns of the political upheaval that could accompany the economic a shortage of oil could bring. “One should not forget that the Great Depression spawned a number of totalitarian regimes that sought economic prosperity for their nations by ruthless conquest.” Gosh! Does that sound like somebody we know?

Well, does it?

Friday, April 23, 2010

Outsourcing - A Far Greater Danger Than Terrorism & Bullshit Racism Alive in South!

(EXTRA: If anyone could make a contribution to my PayPal account (or otherwise - contact me for further info), it would be sincerely appreciated as I've just gone off the cliff financially. I really appreciate everything that my kind readers have done for me in the past financially and otherwise. Now . . . back to your regular viewing.)

. . . the authors provide a devastating expose of the three "studies" that have been used to silence doubts about offshore outsourcing - the Global Insight study (March 2004) for the Information Technology Association of America, the Catherine Mann study (December 2003) for the Institute for International Economics, and the McKinsey Global Institute study (August 2003).

The ITAA is a lobbying group for outsourcing.

The ITAA spun the results of the study by releasing only the executive summary to reporters who agreed not to seek outside opinion prior to writing their stories.

I saw it coming. Yep, I didn't like what I perceived, but I did see it on the horizon for decades. What I failed to see was the "dumbing down" of the populace to the extent that "unreality" TV and a failed education system would ensure that very few others could see it in time.

In the early 80's when I was in grad school in Business Administration (yes, sorry, it was an MBA program originally, which switched its designation to M.S. before I graduated due to the bad reputation of MBA's in general (imagine that!)) and Reagan's policies of installing/strengthening fascist regimes in Central/South America, the destruction of unions and outsourcing of American jobs that had once had the admiration and emulation of the world to overseas sites (to enrich those "brilliants" at the top of corporations) were just beginning to be implemented, I wrote papers on why all this was a very bad course for the US to follow for the future.

Being young without much knowledge of how the world worked yet, it never occurred to me that it was a good thing to devastate your industrial/technical base in order to strengthen your country. The response from my professors (and this was a pretty good school, mind you) was generally one of disbelief or dismay at my out-of-the-box thinking (ha!) at that time as the accepted idea was "trickle down" economics (on the peons below) was the primary capitalistic way to riches for all, not empowerment of the workforce. I'm oversimplifying a bit when I say that I was confused and puzzled at their response. I worked in engineering (both hardware and software) that had already been overrun with foreigners being brought in (very cheaply) to do technical tasks that we should have been training our own workforce to do (and I was in charge of training them and figuring out what they could do for us at all). I could go on and on about what I've seen throughout the rest of my career, culminating in my being turned down for jobs by foreign bosses in stateside companies who were barely trained to do anything but, once again, were very cheap and looked very good to the people at the top. Like I said . . . I could go on. Want to know why this was such an overwhelmingly accepted fait accompli (done deal from the start) in the USA (as we ultimately gave away our technology edge and all our good jobs)? Read Paul Craig Roberts below (or click on the link) for the explanation of what exactly happened, who benefitted and why. (Hint - It was the only way for the people at the top to get absolutely, filthy rich quickly.) (Emphasis marks added - Ed.) And weep.

P.S. It wasn't you.

A Greater Threat Than Terrorism: Outsourcing the American Economy

Is offshore outsourcing good or harmful for America? To convince Americans of outsourcing's benefits, corporate outsourcers sponsor misleading one-sided "studies."Only a small handful of people have looked objectively at the issue. These few and the large number of Americans whose careers have been destroyed by outsourcing have a different view of outsourcing's impact. But so far there has been no debate, just a shouting down of skeptics as "protectionists." Now comes an important new book, Outsourcing America, published by the American Management Association. The authors, two brothers, Ron and Anil Hira, are experts on the subject. One is a professor at the Rochester Institute of Technology, and the other is professor at Simon Fraser University. The authors note that despite the enormity of the stakes for all Americans, a state of denial exists among policymakers and outsourcing's corporate champions about the adverse effects on the US. The Hira brothers succeed in their task of interjecting harsh reality where delusion has ruled. In what might be an underestimate, a University of California study concludes that 14 million white-collar jobs are vulnerable to being outsourced offshore. These are not only call-center operators, customer service and back-office jobs, but also information technology, accounting, architecture, advanced engineering design, news reporting, stock analysis, and medical and legal services. The authors note that these are the jobs of the American Dream, the jobs of upward mobility that generate the bulk of the tax revenues that fund our education, health, infrastructure, and social security systems. The loss of these jobs "is fool's gold for companies." Corporate America's short-term mentality, stemming from bonuses tied to quarterly results, is causing US companies to lose not only their best employees-their human capital-but also the consumers who buy their products. Employees displaced by foreigners and left unemployed or in lower paid work have a reduced presence in the consumer market. They provide fewer retirement savings for new investment. Nothink economists assume that new, better jobs are on the way for displaced Americans, but no economists can identify these jobs. The authors point out that "the track record for the re-employment of displaced US workers is abysmal: "The Department of Labor reports that more than one in three workers who are displaced remains unemployed, and many of those who are lucky enough to find jobs take major pay cuts. Many former manufacturing workers who were displaced a decade ago because of manufacturing that went offshore took training courses and found jobs in the information technology sector. They are now facing the unenviable situation of having their second career disappear overseas." American economists are so inattentive to outsourcing's perils that they fail to realize that the same incentive that leads to the outsourcing of one tradable good or service holds for all tradable goods and services. In the 21st century the US economy has only been able to create jobs in nontradable domestic services - the hallmark of a third world labor force. Prior to the advent of offshore outsourcing, US employees were shielded against low wage foreign labor. Americans worked with more capital and better technology, and their higher productivity protected their higher wages. Outsourcing forces Americans to "compete head-to-head with foreign workers" by "undermining US workers' primary competitive advantage over foreign workers: their physical presence in the US" and "by providing those overseas workers with the same technologies." The result is a lose-lose situation for American employees, American businesses, and the American government. Outsourcing has brought about record unemployment in engineering fields and a major drop in university enrollments in technical and scientific disciplines. Even many of the remaining jobs are being filled by lower paid foreigners brought in on H-1b and L-1 visas. American employees are discharged after being forced to train their foreign replacements. US corporations justify their offshore operations as essential to gain a foothold in emerging Asian markets. The Hira brothers believe this is self-delusion. "There is no evidence that they will be able to outcompete local Chinese and Indian companies, who are very rapidly assimilating the technology and know-how from the local US plants. In fact, studies show that Indian IT companies have been consistently outcompeting their US counterparts, even in US markets. Thus, it is time for CEOs to start thinking about whether they are fine with their own jobs being outsourced as well." The authors note that the national security implications of outsourcing "have been largely ignored."

Outsourcing is rapidly eroding America's superpower status. Beginning in 2002 the US began running trade deficits in advanced technology products with Asia, Mexico and Ireland. As these countries are not leaders in advanced technology, the deficits obviously stem from US offshore manufacturing. In effect, the US is giving away its technology, which is rapidly being captured, while US firms reduce themselves to a brand name with a sales force.

In an appendix, the authors provide a devastating expose of the three "studies" that have been used to silence doubts about offshore outsourcing - the Global Insight study (March 2004) for the Information Technology Association of America, the Catherine Mann study (December 2003) for the Institute for International Economics, and the McKinsey Global Institute study (August 2003).

The ITAA is a lobbying group for outsourcing.

The ITAA spun the results of the study by releasing only the executive summary to reporters who agreed not to seek outside opinion prior to writing their stories.

Mann's study is "an unreasonably optimistic forecast based on faulty logic and a poor understanding of technology and strategy.

"The McKinsey report " should be viewed as a self-interested lobbying document that presents an unrealistically optimistic estimate of the impact of offshore outsourcing and an undeveloped and politically unviable solution to the problems they identify."

Outsourcing America is a powerful work. Only fools will continue clinging to the premise that outsourcing is good for America.

Dr. Roberts was Assistant Secretary of the Treasury in the Reagan administration. His latest book, How The Economy Was Lost, has just been published by CounterPunch/AK Press. _ _ _ _ _ _ _

Obama opposition increasingly comes wrapped in the racial code that McDonnell revived in endorsing Confederate History Month. The state attorneys general who are invoking states’ rights in their lawsuits to nullify the federal health care law are transparently pushing the same old hot buttons.
Frank Rich nails the South - the racist South (which is not overwhelmingly present anymore). Hey, if it didn't work, you didn't actually witness it. I still think Beck is being groomed for the Hitler role, and that the SS shock troops are a mixture of anti-abortionists and racists (Emphasis marks added - Ed.)
It's kind of like that legendary stunt on the prime-time soap "Dallas," where we learned that nothing bad had really happened because the previous season's episodes were all a dream. We now know that the wave of anger that crashed on the Capitol as the health care bill passed last month — the death threats and epithets hurled at members of Congress — was also a mirage.

Take it from the louder voices on the right. Because no tape has surfaced of anyone yelling racial slurs at the civil rights icon and Georgia Congressman John Lewis, it’s now a blogosphere “fact” that Lewis is a liar and the “lamestream media” concocted the entire incident. The same camp maintains as well that the spit landing on the Missouri Congressman Emanuel Cleaver was inadvertent spillover saliva from an over-frothing screamer — spittle, not spit, as it were. True, there is video evidence of the homophobic venom directed at Barney Frank — but, hey, Frank is white, so no racism there!

“It’s Not About Race” declared a headline on a typical column defending over-the-top “Obamacare” opponents from critics like me, who had the nerve to suggest a possible racial motive in the rage aimed at the likes of Lewis and Cleaver — neither of whom were major players in the Democrats’ health care campaign. It’s also mistaken, it seems, for anyone to posit that race might be animating anti-Obama hotheads like those who packed assault weapons at presidential town hall meetings on health care last summer. And surely it is outrageous for anyone to argue that conservative leaders are enabling such extremism by remaining silent or egging it on with cries of “Reload!” to pander to the Tea Party-Glenn Beck base. As Beck has said, it’s Obama who is the real racist.

I would be more than happy to stand corrected. But the story of race and the right did not, alas, end with the health care bill. Hardly had we been told that all that ugliness was a fantasy than we learned back in the material world that the new Republican governor of Virginia, Robert McDonnell, had issued a state proclamation celebrating April as Confederate History Month.

In doing so, he was resuscitating a dormant practice that had been initiated in 1997 by George Allen, the Virginia governor whose political career would implode in 2006 when he was caught on camera calling an Indian-American constituent “macaca.” McDonnell had been widely hailed by his party as a refreshing new “big tent” conservative star when he took office in Richmond, the former capital of the Confederacy, in January. So perhaps his Dixiecrat proclamation, if not a dream, might have been a staff-driven gaffe rather than a deliberate act of racial provocation.

That hope evaporated once McDonnell was asked to explain why there was no mention of slavery in his declaration honoring “the sacrifices of the Confederate leaders, soldiers and citizens.” After acknowledging that slavery was among “any number of aspects to that conflict between the states,” the governor went on to say that he had focused on the issues “I thought were most significant for Virginia.” Only when some of his own black supporters joined editorialists in observing that slavery was significant to some Virginians too — a fifth of the state’s population is black — did he beat a retreat and apologize.

But his original point had been successfully volleyed, and it was not an innocent mistake. McDonnell’s words have a well-worn provenance. In “Race and Reunion,” the definitive study of Civil War revisionism, the historian David W. Blight documents the long trajectory of the insidious campaign to erase slavery from the war’s history and reconfigure the lost Southern cause as a noble battle for states’ rights against an oppressive federal government. In its very first editorial upon resuming publication in postwar 1865, The Richmond Dispatch characterized the Civil War as a struggle for the South’s “sense of rights under the Constitution.” The editorial contained not “a single mention of slavery or black freedom,” Blight writes. That evasion would be a critical fixture of the myth-making to follow ever since.

McDonnell isn’t a native Virginian but he received his master’s and law degrees at Pat Robertson’s university in Virginia Beach during the 1980s, when Robertson was still a rare public defender of South Africa’s apartheid regime. As a major donor to McDonnell’s campaign and an invited guest to his Inaugural breakfast, Robertson is closer politically to his protégé than the Rev. Jeremiah Wright ever was to Barack Obama. McDonnell chose his language knowingly when initially trying to justify his vision of Confederate History Month. His sanitized spin on the Civil War could not have been better framed to appeal to an unreconstructed white cohort that, while much diminished in the 21st century, popped back out of the closet during the Obama ascendancy.

But once again you’d have to look hard to find any conservative leader who criticized McDonnell for playing with racial fire. Instead, another Southern governor — who, as it happened, had issued a Confederate Heritage Month proclamation of his own — took up his defense. The whole incident didn’t “amount to diddly,” said Haley Barbour, of Mississippi, when asked about it by Candy Crowley of CNN last weekend.

Barbour, a potential presidential aspirant, was speaking from New Orleans, where the Southern Republican Leadership Conference was in full cry. Howard Fineman of Newsweek reported that he couldn’t find any African-American, Hispanic or Asian-American attendees except for the usual G.O.P. tokens trotted out as speakers — J. C. Watts, Bobby Jindal and Michael Steele, only one of them (Jindal) holding public office.

New Orleans had last attracted G.O.P. attention in 2008, when John McCain visited there as part of a “forgotten places” campaign tour to deliver the message that his party cared about black Americans and that “never again” would the city’s tragedy be ignored. “Never” proved to have a shelf life of less than two years. None of the opening-night speakers at last weekend’s conference (Newt Gingrich, Liz Cheney, Mary Matalin et al.) so much as mentioned Hurricane Katrina, according to Ben Smith of Politico. When Barbour did refer to it later on, it was to praise the Bush administration’s recovery efforts and chastise the Democrats’ “man-made disaster” in Washington.

Most Americans who don’t like Obama or the health care bill are not racists. It may be a closer call among Tea Partiers, of whom only 1 percent are black, according to last week’s much dissected Times/CBS News poll. That same survey found that 52 percent of Tea Party followers feel “too much” has been made of the problems facing black people — nearly twice the national average. And that’s just those who admit to it. Whatever their number, those who are threatened and enraged by the new Obama order are volatile. Conservative politicians are taking a walk on the wild side by coddling and encouraging them, whatever the short-term political gain.

The temperature is higher now than it was a month ago. It’s not happenstance that officials from the Sons of Confederate Veterans in Virginia and Mississippi have argued, as one said this month, that the Confederate Army had been “fighting for the same things that people in the Tea Party are fighting for.” Obama opposition increasingly comes wrapped in the racial code that McDonnell revived in endorsing Confederate History Month. The state attorneys general who are invoking states’ rights in their lawsuits to nullify the federal health care law are transparently pushing the same old hot buttons.

“They tried it here in Arkansas in ’57, and it didn’t work,” said the Democratic governor of that state, Mike Beebe, likening the states’ health care suits to the failed effort of his predecessor Orval Faubus to block nine black students from attending the all-white Little Rock Central High School. That battle for states’ rights ended when President Eisenhower, a Republican who would be considered a traitor to his party in 2010, enforced federal law by sending in troops.

How our current spike in neo-Confederate rebellion will end is unknown. It’s unnerving that Tea Party leaders and conservatives in the Oklahoma Legislature now aim to create a new volunteer militia that, as The Associated Press described it, would use as yet mysterious means to “help defend against what they believe are improper federal infringements on state sovereignty.” This is the same ideology that animated Timothy McVeigh, whose strike against the tyrannical federal government will reach its 15th anniversary on Monday in the same city where the Oklahoma Legislature meets.

What is known is that the nearly all-white G.O.P. is so traumatized by race it has now morphed into a bizarre paragon of both liberal and conservative racial political correctness. For irrefutable proof, look no further than the peculiar case of its chairman, Steele, whose reckless spending and incompetence would cost him his job at any other professional organization, let alone a political operation during an election year. Steele has job security only because he is the sole black man in a white party hierarchy. That hierarchy is as fearful of crossing him as it is of calling out the extreme Obama haters in its ranks.

At least we can take solace in the news that there’s no documentary evidence proving that Tea Party demonstrators hurled racist epithets at John Lewis. They were, it seems, only whistling “Dixie.”

I think Steele is also serving as the "cautionary tale" to the bigots (racists) that this is what you get when you elect a black to a high-level position. It's certainly what the Rethuglicans wanted.

And are flaunting.

Suzan _________________