(Thank You, Deeply Conflicted (and Taped) NY Fed!) What Happens When You Turn the U.S. Economy Over To Your Friends at Goldman Sachs (and the MIC) - Goldilocks Missing (Alarms Ringing?)

Carmen Segarra:  Secretly Tape Recorded Goldman and New York Fed

By Pam Martens and Russ Martens

The Trading Desk at the New York Fed Has Speed Dials to Wall Street Firms (Photo from Educational Video Released by the Federal Reserve)

Jake Bernstein has a financial blockbuster up today at "ProPublica" on the secret tape recordings made inside the New York Fed and Goldman Sachs by bank examiner turned whistleblower, Carmen Segarra, who was fired by the New York Fed after she refused to change her examination findings on Goldman Sachs.

Segarra is one gutsy bank examiner and lawyer:  according to the article, she went to the Spy Store, bought a tiny microphone, and proceeded to tape record two of the most powerful financial institutions in the world — 46 hours worth of tapes.

Read our past coverage of the Carmen Segarra story and the deeply conflicted New York Fed at these links:

Blowing the Whistle on the New York Fed and Goldman Sachs

The Carmen Segarra Case:  Welcome to New York, Wall Street and McJustice

A Mangled Case of Justice on Wall Street

Is the New York Fed Too Deeply Conflicted to Regulate Wall Street?

New Documents Show How Power Moved to Wall Street, Via the New York Fed

Intelligence Gathering Plays Key Role at New York Fed’s Trading Desk

Relationship Managers at the New York Fed and Citibank:  The Job Function Ripe for Corruption

As Citigroup Spun Toward Insolvency in ’07- ’08, Its Regulator Was Dining and Schmoozing With Citi Execs

At Last We Know the Real Purpose of the Federal Reserve Bank of New York:  It’s a Confessional for Traders Gone Rogue

New York Fed’s Strange New Role:  Big Bank Equity Analyst

As Criminal Probes of JPMorgan Expand, Documents Surface Showing JPMorgan Paid $190,000 Annually to Spouse of the Bank’s Top Regulator

New York Fed’s Answer to Cartels Rigging Markets – Form Another Cartel

Pay no attention to the bombing news!

Well, as long as things are going great here on the home front.

For them.

Goldilocks Economy? What Are They Smoking at the "Wall Street Journal?"

By Pam Martens and Russ Martens
September 25, 2014

 

Imagine historians 25 years from now looking back on one of the worst economic periods since the Great Depression and finding that the "Wall Street Journal" was calling this a “Goldilocks Economy” – “not too hot, not too cold.” (They can’t actually bring themselves to say “just right” to stay on script with the fairy tale.)

On September 7, 2014 the "Wall Street Journal" went with this headline:  “The Upside of August’s Jobs Report:  A Goldilocks Economy.” The next day, in a blog post, this appeared:  “Stocks rallied Friday following the disappointing jobs report as those hoping for a Goldilocks economy (not too hot, not too cold) cheered.”

During the Great Depression, headline writers were admonished not to use the phrase “Great Depression” but to go with the more benign “hard times.” The theory behind the use of the phrase “Goldilocks Economy” at the "Wall Street Journal" seems to be:  move along, nothing more to see here in the way of a depressed economy so just forget about extending unemployment benefits or increasing the minimum wage or helping homeless families.

That’s so not cool in the age of casino capitalism where the winner takes all – by hook or by crook.

On Monday, the U.S. Education Department released statistics showing that 1.3 million homeless children were enrolled in school in the 2012-2013 school year – an increase of 8 percent from the 2011-2012 period. And the numbers likely undercount the severity of the problem as the study notes that it does not include homeless infants, toddlers or children too young to attend school.

Last week, the U.S. Census Bureau reported the following on the number of individuals still living in poverty in our country: “In 2013, there were 45.3 million people in poverty. For the third consecutive year, the number of people in poverty at the national level was not statistically different from the previous year’s estimate.”

The same week the new poverty numbers for the U.S. came out, the latest data on newly minted billionaires was released by Wealth-X and the UBS Billionaire Census 2014. Naturally, the U.S., global haven of casino capitalism, boasted the most newly minted billionaires, adding 57 to bring its total to 571 billionaires out of a global total of 2,325.

The headline of a “Goldilocks Economy” at the "Wall Street Journal" reminded us of last year’s valiant effort by former Labor Secretary Robert Reich to tackle that very type of propaganda in his groundbreaking documentary, “Inequality for All.”

Reich reminds us of the stunning parallels between the leadup to the crash of 1929 and the two decades leading up to the 2008 crash. Wealth became dramatically concentrated in the financial sector and its titans.

Reich includes the graph below in the documentary, showing that in both 1928 and 2007 – the years before the two greatest financial crashes in U.S. history, income inequality peaked. The data comes from Emmanuel Saez, Professor of Economics at the University of California, Berkeley and Thomas Piketty, author of this year’s bestselling 700-page tome, Capital in the Twenty-First Century. As you might imagine, both Saez and Piketty have been denounced on the editorial page of the "Wall Street Journal."

And one other critical thing is true about both 1928 and 2007 – the Glass-Steagall Act, which barred banks holding savers’ deposits from engaging in speculative gambles by underwriting stocks and bonds – did not exist.

The Banking Act of 1933, known today as the Glass-Steagall Act, served our nation exceptionally well for 66 years until its repeal at the beckoning of Sandy Weill and his first lieutenant, Jamie Dimon – the twosome who headed Traveler’s Group and went on to merge it with Citibank to create Citigroup – a merger not allowed under the Glass-Steagall Act at the time.

Just nine years after the Glass-Steagall Act was repealed in 1999, the financial system crashed in an epic display of casino capitalism bearing all the hallmarks of the corruption inherent in the crash of 1929.

The U.S. Congress that passed the Banking Act of 1933 understood one thing that today’s Congress, blinded by corporate finance money and Wall Street lobbyists, fails to grasp:  by allowing the casino Wall Street banks to use the little guys’ savings to leverage speculative bets for the house – only the billionaires win.

When the bets fail, the shareholders pay. When the banks fail, the taxpayers pay. The taxpayers are forced to bail out the banks because they have been allowed to grow into bloated global giants that threaten economic stability.

Sandy Weill walked away from Citigroup in 2006 with over a billion in compensation for his tenure. The bank collapsed two years later and was propped up by the U.S. taxpayer. Weill didn’t pay back a penny of his outsized stock awards and bonuses.

When JPMorgan lost $6.2 billion of depositors’ money in the infamous London Whale derivative bets gone bad in 2012, the bank’s shareholders eventually paid over $1 billion in fines while CEO Jamie Dimon (long moved on from Citigroup) kept his job and eventually got another big raise – well on his way to eventually joining the billionaires’ club.

Goldilocks economy? Only in fairy tales.

Are the alarm bells ringing yet?

Quagmire? We're Specialists, It Seems (All Calling for Leadership Before Now Want Boots on the Ground?) Meltdown Political Theater In Action

Anyone who predicted that here is where we were headed long ago has now won the bet.

A very bad bet.

With a lot of casualties upcoming.

But lots of profits for the military-industrial complex.

And somewhere they are all standing and applauding.

Because they cannot lose now.

Almost everything that is happening now suggests this will end badly. We've failed to curb ISIS in Iraq because, for all the happy talk about its inclusive new government, Sunni Iraqis have yet to rally behind their new Shiite prime minister Haider al-Abadi any more enthusiastically than they did behind the despised Nouri al-Maliki.

- Frank Rich, New York Magazine

Seems that the U.S. is in a quagmire already?

It meets every definition of one.

wo weeks ago, President Obama addressed the nation on his plan to "degrade and ultimately destroy" ISIS, saying, “I want the American people to understand how this effort will be different from the wars in Iraq and Afghanistan."

Yesterday, the U.S. launched air strikes in Syria, targeting not only ISIS but the less-known terror network Khorasan. Obama insists that he has ruled out deploying combat troops to the region, but a growing chorus, from the chairman of the Joint Chiefs of Staff to former U.K. prime minister Tony Blair, has said they could be necessary. Could we be entering into another quagmire?

Yes. And no one knows this better than President Obama, whose political rise was tied to his opposition to “dumb wars” and who is nothing if not honest in warning that our new engagement in Iraq and Syria will last for an unspecified number of years, past his presidency. His open-ended, inchoate description of this war’s future is the very definition of a quagmire — and the very antithesis of an exit strategy. We are sinking into the quicksand even as we speak.

All summer the bipartisan Washington consensus had it that the president had to talk tougher, be “decisive,” exercise “leadership,” etc. etc. Well, now that that wish has come true, what have been the results? Even as America was poised to hit Syria this week, the Times reported that six weeks of airstrikes in Iraq had failed to dent ISIS there. Now that we’re bombing Syria, no one really knows exactly what is happening in the fog of war — we are still in the hazy, wishful thinking “coalition of the willing”/ “shock and awe” phase of that campaign.

Nor do we know what this campaign will accomplish beyond a whack-a-mole obliteration of small, fast-scattering terrorist groups like Khorasan (some 100 members as opposed to the 20,000-30,000 the CIA estimates for ISIS) — or, quite possibly, the shoring up of the criminal Assad regime that only yesterday we wanted to take out. And already the same Establishment — not just generals and Tony Blair — that begged all summer for more “leadership” from Obama is implicitly asking for ground troops. Typical is Richard Haass, the president of the Council on Foreign Relations, who could be found this morning on "Morning Joe" saying that we are fighting with “one arm tied behind our back.”

In truth, we already have boots on the ground in the form of “special forces” and “advisers.” The moment they start returning to America in body bags, or are seen being slaughtered in ISIS videos, is the moment when the recent polling uptick in support for this war will evaporate. That support is an inch deep, and Congress knows it, which is why members of both parties fled Washington for the campaign trail last week rather than debate Obama’s war plan. As Paul Kane of "The Washington Post" pointed out, the Senate could not even fill up the scant allotted time (five hours) for debating the war, and “so at one point a senator devoted time to praising the Baltimore Orioles for their successful baseball season.” Next to this abdication of duty, Congress’s disastrous rush to authorize war in Iraq in 2002 looks like a wise and deliberate execution of checks-and-balances.

Almost everything that is happening now suggests this will end badly. We’ve failed to curb ISIS in Iraq because, for all the happy talk about its inclusive new government, Sunni Iraqis have yet to rally behind their new Shiite prime minister Haider al-Abadi any more enthusiastically than they did behind the despised Nouri al-Maliki.  As for our expansion into Syria, even if we can find and train 5,000 Syrian “moderates” to fight the Islamic State, it will take a year to do so, according to our own government’s no doubt optimistic estimate.

And they’ll still be outnumbered by ISIS forces by at least four-to-one. Nor do we know all the unintended consequences that will multiply throughout the region — as they have in every other American intervention in the Muslim world — with each passing month.

 Not to be negative or anything.

As I'm sure the Pentagon has weighed all these factors already and decided that the toehold there is worth any price.

How's that for positivity? (H/t Barbara Ehrenreich)

. . . On Sunday, hundreds of thousands of demonstrators marched through the streets of New York to protest global inaction on climate change. Grim reports keep getting published. The president keeps talking about our responsibility to address climate change. And while he has pushed through carbon-cutting executive actions, it's clear that the U.S. — to say nothing of China — has a long way to go. What is it going to take for the hopes of the climate marchers to be realized?

As long as one of the two major American political parties aligns with the world’s No. 1 environmental offender, China, in refusing to address this crisis, nothing will happen. In the GOP, it’s not just a far-right fringe that is in denial about climate change but its Establishment.

The "Wall Street Journal" covered the march by relegating it to its local "New York" section and countering it with a long essay titled “Climate Science Is Not Settled” by a former chief scientist at BP.

Chris Christie pulled New Jersey out of a nine-state Regional Greenhouse Gas Initiative in defiance of his own legislature rather than risk offending the Koch Brothers and losing their bottomless Americans for Prosperity campaign cash should he run for president.

Perhaps it will take an environmental apocalypse to move the GOP on this issue, but then again, many thought that the surge in school shootings would move the party to end its intransigent opposition to gun control. This is going to be a long struggle, ultimately led by the same young Americans who have been forcing the Republicans to retreat on cultural issues like same-sex marriage.

The midterm elections are a little more than a month away, and — according to polling models at '538," the "Times," the "Washington Post," and "Huffington Post" — the GOP stands a better than even chance of taking control of the Senate. GOP challengers have so far managed to avoid any "Todd Akin moments," and red state Democrats are saddled with a president who is intensely unpopular among their constituents. Is this thing over?

Given Obama’s low numbers, and all the other metrics charted by the Nate Silvers out there, I would have thought so. Yet some Republicans are revealing a bit of anxiety. Take Karl Rove. His August 27 Journal column carried the triumphalist headline “Countdown to Kicking Out Harry Reid.” Last week in that same space, he could be found worrying that “a GOP Senate majority is still in doubt.”

There’s a touch of panic in his tone as he points out that Democrats are leading in fund-raising this year, and acknowledges that the “anti-women meme” is not so easily escaped by a party fielding candidates whose anti-choice extremism includes endorsing “personhood” amendments granting legal rights to embryos. Should Rove’s doubts prove justified, we can only hope that he will be spending election night at Fox News so we can be treated to an encore of his 2012 on-camera meltdown. That remains the most memorable bit of political theater so far this decade.

And is this legal?

No doubt about it.

US Involved in ‘Military Action’, But Not ‘War’–At Least Not Legally

Fliparc

WASHINGTON – President Obama is carrying out airstrikes in Iraq and Syria with the stated purpose “to destroy and defeat ISIL,”, or the Islamic State in Iraq and the Levant. The Pentagon has referred to US’ involvement as “military action” or “airstrikes”, but the administration is reluctant to call it a war.

“Under international law, one country can only launch attacks in another if it’s specifically invited by the government, if it’s acting in self-defense, or if the UN Security Council authorizes it,” said Peter Certo,  the editor of Foreign Policy In Focus at the Institute for Policy Studies, via email. “None of those conditions applies to ISIS in Syria, so by the letter of the law this war is illegal.”

Congress is the body of government with the Constitution-granted power of declaring war, and Congress has yet to authorize any action, beyond agreeing to equip and train Syrian rebel forces. Many Republican and Democratic members of Congress, like Sen. Tim Kaine (D-Va.) have been vocally opposed to the President’s independent action.

“Constitutionally, the matter is clear. The president does not have Article II power to go on offense against ISIL unless they are involved in an actual ongoing or imminent threat against the U.S., and there is no evidence that they are, as indicated by other administration testimony,” Kaine said Tuesday during a discussion forum at the Center for American Progress Action Fund, a think tank in Washington.

The White House is carrying out these airstrikes by citing a congressional resolution called the Authorization for Use of Military Force, signed by President Bush just days after Sept.11, 2001. The resolution authorizes the use of US armed forces against those responsible for the terrorist attacks of Sept. 11, 2001—which has been interpreted to mean al-Qaeda and its affiliates.

White House Spokesperson Josh Earnest told reporters on Sept. 22 during a press briefing that Obama believes “ISIL has declared war on the broader international community…And that means that the international community is a war with ISIL, and the United States is at war with ISIL in the same way that we are at war with al-Qaeda and its affiliates around the globe.”

But Certo and Kaine agree that citing the AUMF is a flimsy argument.

Obama Launches an Illegal War in Syria

President Obama’s decision to bomb Syria stands in stark violation of international law, the UN Charter, and the requirements of the U.S. Constitution.

Click the links above and read the essays.

(Irony Dead) Why Obama (Assumed the Least Likely) Bombs (Lone Nuts Assaulting In Battalions?) Employing Wimmenz Is Cheaper (Surprise Us!) Obamas Avoid NC (Like the Plague) Donald Trumps (Taxpayers/Workers Slump)

US Now Props Up Assad Regime. Irony Dies.

Apocalypse Now. Fighting in Iraq Until Hell Freezes Over.

Before we begin today's essay proper, Bob Reich has some words to keep in mind about what's still happening to people in the U.S. (During the "overseas" bombing runs.)

And I don't mean the Big Boys. (Our democracy is not for sale.)

No bankruptcy for you!

There’s no starting over for millions of people laden with student debt . . . .

Student loan debt has more than doubled since 2006, from $509 billion to $1.3 trillion. It now accounts for 40 percent of all personal debt – more than credit card debts and auto loans.

But the bankruptcy law doesn’t cover student debts. The student loan industry made sure of that.

If former students can’t meet their payments, lenders can garnish their paychecks. (Some borrowers, still behind by the time they retire, have even found chunks taken out of their Social Security checks.)

You might say those who can’t repay their student debts shouldn’t have borrowed in the first place. But they had no way of knowing just how bad the jobs market would become. Some didn’t know the diplomas they received from for-profit colleges weren’t worth the paper they were written on.

A better alternative would be to allow former students to use bankruptcy where the terms of the loans are clearly unreasonable (including double-digit interest rates, for example), or the loans were made to attend schools whose graduates have very low rates of employment after graduation.*

Many of us hope ("keep hope alive"?) that Obama's decision to all-out attack middle-eastern clearly designated bad guys is not really what he'd like to do to address this current propaganda-driven foreign affairs situation.

Some knowledgeable people think there are many other less transparent reasons for why he is driven to do this. And why George W. Bush was so evidently bumfuzzled as he marveled at the events of 9/11. (Makes you want to have another beer with him, doesn't it? Poor George.)

Russ Baker has written about the circumstances surrounding American presidents who differ from the decades-long corporate strategy of causing chaos and then declaring war to clear it up. (Click on the link and read the entire mind-boggling (if you haven't encountered these arguments previously) essay - get a tall drink first, friends.)

I recommend Russ' books and essays for deeper enlightenment. All of them. (Yes, I'm a big fan.)

Another person who suddenly became mentally ill was a fellow named George de Mohrenschildt. I devote a chapter to him in my book, Family of Secrets.

Like Hinckley, he was a longtime friend of the Bush family. De Mohrenschildt had, coincidentally, been a close friend of the former marine, Lee Harvey Oswald, another “deranged loner.” In 1976, de Mohrenschildt had written a letter to then CIA director George Bush, saying that he believed that some unknown parties, possibly FBI, were following him and tapping his phone, perhaps because of some things he was trying to write about Oswald. Bush wrote back that he had nothing to worry about. Shortly thereafter, de Mohrenschildt was forcibly treated for a period in a psychiatric institution — and within a year, he was dead, from what police said was a self-inflicted shotgun wound to the head.

Coincidentally, 1976 was in the period in which Congress was holding hearings on terrifying covert CIA experiments, including using LSD on unsuspecting citizens as part of tests on mind control — the so-called MKULTRA program. (For more on mind control experiments on unwitting and unwilling subjects, see our article on MKULTRA.)

It would be revealed that the CIA had effectively partnered with various hospitals in the research.

Now back to Dr. Torrey, the psychiatrist who told The Times that the recent White House shooter was likely schizophrenic. The following is from a Wikipedia entry on him:

He has been criticized by a range of people, including federal researchers and others for some of his attacks on de-institutionalization and his support for forced medication as a method of treatment. He has also been described as having a black-and-white view of mental illness and as being iconoclastic, dogmatic, single-minded and a renegade.

It’s worth taking a look at St Elizabeth’s where Dr. Torrey once worked, and where Hinckley is being treated. It came under criticism in an investigation by the Justice Department for a wide variety of practices.

St Elizabeth’s is especially interesting for its strong connections to the military, intelligence agencies, and historical association with mind control experiments. Its director in the 1940s, Winfred Overholser, headed a “Truth Drug Committee” and oversaw extensive testing of mind-altering substances in association with the intelligence services. One goal was to see if false personalities could be imposed on victims to make them susceptible to commands.

Such cooperation between St. Elizabeth's and the government continued over the years. Currently, the Department of Homeland Security is converting much of St Elizabeth’s “campus” —  which is only now partially used by the hospital — as its new headquarters. (For more on St. Elizabeth's and its role in mind control and “personality profiling,” see the book Search for the Manchurian Candidate, by John Marks.)

It is therefore interesting to note that the person the New York Times quoted identifying the White House shooter as a lone nut, Dr. Torrey, was himself associated for nine years with a hospital historically involved with experiments on the ability to make people do things they might not otherwise do. Dr. Torrey is an advocate of involuntary treatment and critics have contended for years that he exaggerates the threat that mentally unstable people represent for the rest of us.

The fact that Dr. Torrey’s own privately funded institute is in Arlington, near the Pentagon, brings to mind another fellow who seemed fine and then became increasingly deranged in recent years:   Jared Lee Loughner, the young man who opened fire at a political event in Tucson earlier this year, killing several, including a federal judge, and badly wounding Rep Gabrielle Giffords (D-AZ).

Loughner, like Ortega, is described as having listened to “conspiracy” type radio shows. Loughner had apparently tried to enlist in the military but been rejected. We never did see any releases of military files on the exact nature of his interactions with the Army that resulted in his rejection — or whether those grounds would have drawn interest of the authorities. Such disclosure is of course crucial in public assessment of the particulars behind such seemingly demented people involved in politically destabilizing events. 

I'm pretty sure that Obama of the Harvard education has no trouble understanding this. No matter how hard he may try to ignore it.
_ _ _ _ _ _ _

Ready for a surprise in "employment of wimmenz" literature?

Me too. Particularly after being employed for decades at far less money than paid to surrounding men . . . many far less qualified than I in technical acumen, education and background . . . and suffering throughout retirement for this under-paid employment.

Here's a guy patting himself on the back hard for his insight and brilliance (for a while, anyway).

“Like Men, Only Cheaper”:  Tech Exec Gives Shocking Reason for Wanting to Hire Women

Evan Thornley, multimillionaire founder of LookSmart, an online advertising company, explained at a tech conference in Sydney, Australia, why he hires women:  They’re cheaper.

He illustrated his point in a slide displaying the word, “Women: Like Men, Only Cheaper.”

“The Australian labor market and world labor market just consistently and amazingly undervalues women in so many roles, particularly in our industry,” he stated, according to Bloomberg Businessweek.

“Call me opportunistic,” Thornley continued. “I thought I could get better people with less competition because we were willing to understand the skills and capabilities that many of these woman had.”

Not only does Thornley acknowledge that there is a gender wage gap, but also basically states that he exploited it for less expensive labor.
“And [they were] still often relatively cheap compared to what we would’ve had to pay someone less good of a different gender,” he stated.

. . . Thornley later apologized for the comment. ”Yep, stuffed that up. What I was trying to say folks was ‘gender inequality sucks everywhere but esp in tech – I do what I can to combat it.’ Sorry it didn’t come out that way. ET,” he wrote online.

. . . As Bloomberg Businessweek points out, this falls in line with a recent Harvard University survey, published in the "Crimson," that found that women in tech and engineering made far less than men.

Comments:

WestchesterBill

@langley park @Bladernr1001  Gender pay disparities have been looked at many times. My sense of the literature is that gender pay disparities are explained by the differences in attachment to the job market. Some women do take time away from work to bear and raise children. Women who have backgrounds matching men tend to earn a tad more than men.

I hired two high GPA girls in my shop to take advantage of the pay differential. They were disasters. One was obsessed with wedding plans, and the other needed mental care.
The economic principle of equilibrium says that you can not sell the same good in the same market at two different prices. Greedy businessmen will bid up the lower cost items to get a share of the differential in price.

Marlowe28

@WestchesterBill @langley park @Bladernr1001  That is not true across the board. College-educated women who are in their 20's and live in a large city tend to make a small amount more than men. By the time they are in their 30's their salaries have been surpassed by men even when they are single and childless. In less populated areas of the country they always make less than men,

If you hired two disastrous employees, it's likely that you aren't very good at picking employees or training employees. The fact that they were both women means nothing. I have worked with men who were obsessed with football, golf, hunting and.or getting laid and I've certainly worked with and for men who needed psychiatric care. Those are not gender specific problems.

Ellemm

@WestchesterBill @langley park @Bladernr1001 But if you had hired two high GPA boys and they turned out to be disasters, you'd turn around and hire more boys, wouldn't you? You wouldn't say, 'well, that's it for boys."

That's the difference. 

And, you know, none of us has ever seen incompetent or lazy men in the workplace. None of them have ever been hired or promoted. Oh, no. 

Marlowe28

@Bladernr1001  The economic studies do bear this out. Did you not read the entire article? Clearly, it is you who has the agenda.

zoned

Old joke--"I was thinking of getting a sex change operation but couldn't afford the 30% cut in pay"

Both Obamas are keeping their distance from the North Carolina Senate race, which now has Kay Hagan with a fighting chance of survival against the Koch-funded Tillis money machine. Yay!

• President Obama told Democratic donors in New York on Tuesday that he’ll do whatever it takes to ensure that Democrats keep the Senate, but "Politico" reports this morning that the president has no plans to campaign with Senate candidates in any state besides blue Michigan, where Democratic Rep. Gary Peters has held a steady lead against GOPer Terri Lynn Land. The White House may deploy First Lady Michelle Obama to key Senate battlegrounds, however. Despite plans to steer clear of most Senate races, Politico reports that Obama is expected to campaign with Democratic gubernatorial candidates in Wisconsin, Connecticut, Pennsylvania, Florida, Illinois, and possibly Massachusetts.

*Wonder how the Big Boys in questionable finance/investment gambits continue to survive through hard times?

Come onnnnn. You know this game.

Thirty years ago, on its opening day in 1984, Donald Trump stood in a dark topcoat on the casino floor at Atlantic City’s Trump Plaza, celebrating his new investment as the finest building in Atlantic City and possibly the nation.

Last week, the Trump Plaza folded and the Trump Taj Mahal filed for bankruptcy, leaving some 1,000 employees without jobs.

Trump, meanwhile, was on twitter claiming he had “nothing to do with Atlantic City,” and praising himself for his “great timing” in getting out of the investment.

In America, people with lots of money can easily avoid the consequences of bad bets and big losses by cashing out at the first sign of trouble.

The laws protect them through limited liability and bankruptcy.

But workers who move to a place like Atlantic City for a job, invest in a home there, and build their skills, have no such protection. Jobs vanish, skills are suddenly irrelevant, and home values plummet.

They’re stuck with the mess.

Bankruptcy was designed so people could start over. But these days, the only ones starting over are big corporations, wealthy moguls, and Wall Street.

Corporations are even using bankruptcy to break contracts with their employees. When American Airlines went into bankruptcy three years ago, it voided its labor agreements and froze its employee pension plan.

After it emerged from bankruptcy last year and merged with U.S. Airways, America’s creditors were fully repaid, its shareholders came out richer than they went in, and its CEO got a severance package valued at $19.9 million.

But American’s former employees got shafted.

Wall Street doesn’t worry about failure, either. As you recall, the Street almost went belly up six years ago after risking hundreds of billions of dollars on bad bets.

A generous bailout from the federal government kept the bankers afloat. And since then, most of the denizens of the Street have come out just fine.

Yet more than 4 million American families have so far have lost their homes. They were caught in the downdraft of the Street’s gambling excesses.

They had no idea the housing bubble would burst, and didn’t read the fine print in the mortgages the bankers sold them.

But they weren’t allowed to declare bankruptcy and try to keep their homes.

When some members of Congress tried to amend the law to allow homeowners to use bankruptcy, the financial industry blocked the bill.

And do we need one more take on the rightwingnut Biblers? (H/t to Lawyers, Guns and Money.)

(No unintended snark. Please (for your daily snicker - okay - laugh out way too loud) read the comments.)

Reverend DUMBledore

Comment:

Malaclypse says:  September 24, 2014 at 11:33 am

In a just world, this would instantly go multi-media in a Jack Chick tract. Because if you must be raised in a world of batshit insanity, the belief that the Catholic Church is the Great Whore of Babylon and is run by actual demons at least lends a certain color to the worldview…

How about Eternal Lie?

(Click above link for answer to everything.)




Thanks, Bob, we needed that!

(Bombing Syria!) Running Out of Time: Were You At the People's Climate March Sunday? (There's Nothing Wrong With Kansas That Throwing Out the Right Wingnutters Won't Improve) Maligned Chimps

U.S. Bombing Syrian Targets

Hardly a surprise.

When will the entire Middle East (other than Saudi Arabia, Israel and other predator nations) become a target?

Soon is my guess.

And on another extremely important upcoming event . . . .

Were you able to

. . . march yesterday with the 310,000 and more who showed up for the People's Climate March to Change Everything . . . .

From my buddy Yas at the Rectification of Names:

AP photo via Huffington Post.

I hope everything really does start to change from here, as this is the year US carbon emissions started speeding up again (rising 2.9%) after four years of reductions, and that mean atmospheric concentration of CO2 continues to soar beyond the sustainable level of 350 ppm to monthly means of 397 and higher.

And thanks to New York City and Mayor Bill de Blasio for welcoming the climate summit not only with zero arrests of marchers (compared to over 2000 in Copenhagen 2009) but also with a solid program for greening the city.

Rebecca Solnit has some ancient (and now everyday) wisdom to share with us.

Hope it's not too late.

From the TomDispatch:

The Wheel Turns, the Boat Rocks, the Sea Rises

Change in a Time of Climate Change

There have undoubtedly been stable periods in human history, but you and your parents, grandparents, and great-grandparents never lived through one, and neither will any children or grandchildren you may have or come to have. Everything has been changing continuously, profoundly - from the role of women to the nature of agriculture. For the past couple of hundred years, change has been accelerating in both magnificent and nightmarish ways.

Yet when we argue for change, notably changing our ways in response to climate change, we’re arguing against people who claim we’re disrupting a stable system. They insist that we’re rocking the boat unnecessarily.

I say:  rock that boat. It’s a lifeboat; maybe the people in it will wake up and start rowing. Those who think they’re hanging onto a stable order are actually clinging to the wreckage of the old order, a ship already sinking, that we need to leave behind.

As you probably know, the actual oceans are rising - almost eight inches since 1880, and that’s only going to accelerate. They’re also acidifying, because they’re absorbing significant amounts of the carbon we continue to pump into the atmosphere at record levels.  The ice that covers the polar seas is shrinking, while the ice shields that cover Antarctica and Greenland are melting. The water locked up in all the polar ice, as it’s unlocked by heat, is going to raise sea levels staggeringly, possibly by as much as 200 feet at some point in the future, how distant we do not know.  In the temperate latitudes, warming seas breed fiercer hurricanes.

The oceans are changing fast, and for the worse. Fish stocks are dying off, as are shellfish. In many acidified oceanic regions, their shells are actually dissolving or failing to form, which is one of the scariest, most nightmarish things I’ve ever heard. So don’t tell me that we’re rocking a stable boat on calm seas. The glorious 10,000-year period of stable climate in which humanity flourished and then exploded to overrun the Earth and all its ecosystems is over.

Public servants.

Republican/Tea Party public servants.

Ha!

I'll bet the Kansans wish they weren't in Kansas anymore.

Let alone poor Dorothy.

You might recall that Sam Brownback was, in his days in Congress and the Senate, one of the most prominent national leaders of the Republican Party’s moral-purity wing; he even briefly ran for president in 2007. Matters of the spirit were quite the thing in conservative rhetoric in those days, and Brownback was always in that movement’s fore, crusading against offensive entertainment, stem cell research, and other abominations.

Put a man like Brownback in charge of an executive branch, however, and a different figure emerges. He wanted to build a “red-state model” in Kansas, he used to say, a community of righteousness that could “show the way back to being America again.” What he has constructed instead is a microcosm of everything that is wrong and disastrous with conservative governance.

It is as though Jack Abramoff and Tom DeLay had been transplanted to Topeka and given a free hand to sculpt the state however they chose. You’ve got runaway incompetence in the state administration; heavy-handed partisanship, with conservative Republicans crushing moderate Republicans after the familiar pattern; corporate money — Koch Industries is based in Wichita — sloshing around like a vast underground aquifer.

You’ve got privatization, deregulation, and an enthusiastic race to the bottom. (Gotta be more business-friendly than those people in Missouri!)

You’ve got tax cuts so severe they’ve brought on fiscal catastrophe and thrown the state’s school system into crisis. You’ve got bullying by state legislators against organizations that criticize Brownback’s healthcare plans, and hints of pay-to-play corruption just under the surface. And, of course you’ve got credit downgrades as all this becomes known to the outside world.

The wrecking crew is in full swing in Kansas, and for once the people there seem to be ticked off about it. Once the hero of the state’s sin-hating millions, Sam Brownback is unpopular today. Indeed, his situation is so bad that the only sure way he can be rescued is by a mass disregard for economic reality — by cognitive blinders strapped on simultaneously by millions of individuals.

Either that, or by the culture wars.

Very soon, I expect, the time will come for Brownback to rally Kansans around the fetus. For now, however, it is the mass-cognitive-blinder strategy that leaps out at you when you cast your eyes over his reign. In a 2013 speech about his red-state model, for example, he talked about the “principles” that undergirded his plan, and insisted they were not of the kind detectable by ratiocination:  “it can’t be mental principles, it’s got to be things that connect through the heart.”

And Brownback meant it. During the 2012 debate over whether to swallow his strychnine tax cuts, Brownback’s team brought to Topeka none other than economist Arthur Laffer, he of the repeatedly discredited theory that cutting taxes magically increases government revenues.

Laffer’s formula has been tried again and again at the national level and has famously failed, but the Kansas legislature jumped when presented with its very own chance to defy “mental principles.” Unfortunately, the rules of accounting prevailed and now Sam Brownback’s reelection campaign is begging voters to persuade themselves that everything they’ve read in the newspaper is a falsehood; that things are really and truly OK, despite the evidence of the senses:  “The sun is shining in Kansas and don’t let anybody tell you any different.”

That last is the tagline Brownback delivers in one of his TV commercials that you can watch yourself on YouTube. It is something to behold. I have never been in a cult indoctrination session, but I have started to think that this ad depicts the procedure. Here is this weirdly smirking man, Governor Brownback, telling you something he obviously doesn’t believe — and then he’s telling a different group — and then another.

Each of these audiences is nodding constantly; each of them is made up of clean, neatly-dressed people — some of them in a well-appointed suburban kitchen, some of them sitting on a pleasant veranda, some of them in a corporate boardroom. And the subject the governor is advising them on is how you get out of poverty!You know:  hard work, family structure.

“That’s the way out of poverty!,” he exults, with that odd smile of his. To judge by the clothes and the settings, however, these people have never even had cause to doubt the timely arrival of their next meal, let alone fear a lifetime of ill-paid toil. For practical purposes, Brownback might as well be giving them tips on how to land a spaceship on the surface of the moon.

It makes no sense. But the unspoken object of the session is obvious:   Don’t worry about what is happening. All these reports about economic disaster in Kansas — about the “poverty” that conservatism is supposedly inflicting on people — forget about them. It has nothing to do with the way you govern a state.

. . . Of the dozens of accounts of catastrophe-in-Brownbackistan that I have sifted through, however, the one I keep coming back to is the tale of Aaron Jack, a Tea Party Republican whom Governor Brownback appointed to run the Kansas Securities Commission back in 2011. A Tea Party financial regulator — oh, wouldn’t Rick Santelli be proud!

Can you guess how the Tea Partier played it? Yes, you can:  He played it exactly like the hack-n-crony regulators of the Bush Administration that the Tea Party was supposed to be so very different from.

Jack’s main agenda item, according to a withering account of his tenure that ran last year in the Topeka Capital Journal, was to get rid of a majority of the commission’s staff and replace them with political allies and, of course, lobbyists. His grand vision was to cut the regulated some slack, to remake the state as a place where hedge-fund types would no longer need to worry too much about “overzealous” supervisors — “to open Kansas as a destination state for hedge fund managers, private equity operators and venture capitalists.”

With the tools of deregulation they were going to build a Wall Street on the Plains — and along the way Mr. Jack somehow found money in the commission’s budget to air radio spots in which he himself told listeners about all the neat things he was doing. Finally, when things didn’t work out for him in politics, it was through the revolving door to a local brokerage. Or, as the Topeka paper put it, in a near-perfect Midwestern voice:

“His interest faded as he gained a sense his rightful place was at a Leawood investment firm.

“ ‘I got my cash-out job to the private sector,’ Jack said.”

Read the whole essay here. And cringe along with other reasonable people at the certainty of the rightwingnutters about what really matters to taxpayers.


Aren't we maligning innocent chimps (so to speak) by comparing their tribal behavior with that of humans?

From the beloved Washington's blog we meet Empire Slayer!

What is “war”?

It’s when a group of chimps gangs up on a smaller group of chimps, kills some of them, and takes their stuff.

A study in "Current Biology" finds that the closest primate relative to humans, chimpanzees, engage in “war-like” behavior to gain resources.

Groups of chimps, the study finds, go on the prowl, and when a group encounters another group with which it is fairly evenly matched, “the patrollers will either call loudly as they retreat immediately back toward their home territory, or a brief, indecisive battle will ensue.”

They don’t fully attack because they know there’s a chance they’ll lose. Hence, we are treated to decades of the chimps controlling the US corporate state ceaselessly screeching and screaming at countries that they can’t really fight because they might partially lose to, like Russia, nuclear North Korea, China, Iran, etc.

“If, on the other hand, the patrolling party [of chimps] greatly outnumbers the strangers, its members will generally attack.”

That’s because the big group knows a little, weak group of chimps can’t stop them, and therefore the big group stands to gain significantly by attacking the smaller group and taking its stuff.

Hence, the USA has constantly, throughout its history, attacked much smaller, weaker groups (like Africans, Native Americans, Cubans, Haitians, Filipinos, Nicaraguans, Vietnamese, Laotians, Cambodians, Indonesians, East Timorese, Guatemalans, Bolivians, Nicaraguans, Colombians, Salvadorans, Venezuelans, Panamanians, Haitians, Grenadians, Iranians [1953, 1982], Iraqis, Afghans, Syrians, Palestinians, and Libyans, to name a few) and gained from conquering land, raw materials, and US-repressed labor, as well as from the terrorizing mental affect the shocking displays of savagery have on other vulnerable groups.

Reconnaissance Prowl

Humans have added to gang-violence profiteering by creating a vast industry of making tools for carrying out gang attacks. Thus, the more gang attacks are perpetrated, the more that industry, particularly its owners, benefit. This is what Dwight Eisenhower, after vastly expanding it, referred to as the “military-industrial-congressional complex”, since Congress members also benefit from helping out the industry by voting “Yes” for more gang attacks, as they just did again last week regarding further US arming/training of terrorists to attack UN member state Syria.

Humans have also perfected the art of having other people do the actual gang fighting and dying for them. They send other people’s kids away to force open foreign markets at gunpoint while they sit back in air conditioned offices and regal estates and rake in the resultant dough.

Also unlike chimps, humans have found a way to direct gang violence profits into the pockets of only a tiny, tiny fraction of the gang’s overall population, while the people who finance the violence, the taxpayers, lose their meager freedoms. (The USA is about the most impoverished industrialized country, by some measures a “third world” country, despite also being the world’s richest country, thanks to the US constitution having been set up by and for the benefit of a tiny wealthy elite.  But even if gang attacks against defenseless groups did benefit the US as a whole, so what?  If child pornography was good for the economy, it doesn’t mean we should pursue it.  Car accidents benefit the economy.  Doesn’t mean we should try to have more car accidents.  Hitler was a shot in the arm for the German economy.  Enough said.)

More than enough tonight.

(The Loooooong Con Continues) Six Years After Wall Street Collapse, Banks Are Still Untamed (Dubya and Slick Lucratively Teach Genial Leadership To Stoopids) Change! (Right) Functional Stupidity Rewarded (If We Give Up On Politics, We’re Done For: Powerlessness Is Self-Fulfilling Prophesy)

"If you buy people," old Sambo used to say, "buy them thoroughly."

- John Le Carré
The Honorourable Schoolboy (p. 146)

It's good to know what the "big boys" say in private, isn't it?

The Big Boys.

They know to stay bought.

(You may want to refill your drink now.)

Robert Reich's blog

It's a private club.

And you are not a member.


Before I begin this essay proper I just wanted to point out that although nothing has changed (and we continue our downhill slide - but the stock market is, as usual, booming for the rich!) and the Recovery has continued to be (over and over again) officially exposed as false* for the 99%, we have some news about leadership skills training/insights being offered by two of our most successful "leaders." (But where could they successfully further lead us/US?)

To Hell (according to our next reporter).

Killing Joke:  The Presidential Leadership Scholars Program

Chris Floyd

Tuesday, 16 September 2014

Tweet

“And I was like, I killed 500,000 Iraqi children with my sanctions! And George here, yuk yuk, he was like — “

“And I was like, 500,000? Hellfire boy, I can do better than that! We bagged us more than a million of them ‘Rackies, har har har!”

“Yeah — haw haw haw —  you bigged it up, Texas style! And now Obama’s gonna get him some of his own!”

“Well, there’s plenty to go around, hee hee hoo! Them folks breed like jackrabbits! Hey, Bill, you were a bit of a jackrabbit yourself in your day, weren’t you, ha ha ha?

“Now don’t start with that stuff, George, hee-haw, har-har! Hillary might be in the audience, yuckity yuk yuk!”

“Reckon how many ‘Rackies she’ll rack up when she’s Prez, Bill? — Did you see what I did there? ‘Rackies, rack up? Ho ho ho!”

“Yee hee hee! This old boy’s a card, ain’t he folks? Well, I imagine she’ll get a passel of ‘em, George, don’t you worry! Har har hee hee ho!”

“As long as she leaves a few for Chelsea in 20 years, ha ha ha ha ha! Say, Bill, I’m a bit thirsty. Could you pass me some of that water?”

“Sure, George! Just lean your head back and I’ll pour it right down your gullet, haw haw heee-haw!”

“You know, Bill, I sure am BOARD of that joke, snickety snicker guffaw guffaw!”

“You slay me, George, you really do, hur hur ha ha! But seriously folks …..

***

Certainly the one word that comes to mind when you think of Bill Clinton and George W. Bush is “leadership.” That’s why the world is so lucky that these two sages for the ages have joined together to teach the secrets of their success to a whole new generation of leaders, as the NY Times reports.

The “Presidential Leadership Scholars Program" is a combined effort of the two men’s Presidential Libraries (those marble mausoleums where history goes to die), plus the libraries of two other great, great leaders: one-term wash-outs George Herbie Walkies Bush and Lyndon Bellyflasher Johnson.

With all expenses paid by corporate donors, participants — restricted to “mid-career professionals who generally have at least 10 years of experience and a strong record of professional achievement”. (“Yeah, I used to run a Radio Shack store at the West End Mall, then I managed a couple of Chik-Fil-A's in the greater Tuscaloosa area, but lately I’ve sort of branched out into the development and export of cutting-edge crowd-management technologies to police forces here in the Homeland and to our counterterrorism allies abroad, particularly in the volatile Middle East. Reckon I could sign up?” “Say, we like the cut of your jib! Just hold on a second while I write you a check!”)

In addition to offering carefully selected mid-career professionals the unique “insights from how each president addressed pressing challenges” — including the thrilling “participation of President George W. Bush and President Bill Clinton” — the programme also places a “strong emphasis on cultivating a lifelong network of participants, faculty and staff.” In other words, yet another corporate-paid vehicle for wanna-be courtiers to schmooze their way into the blood-stained porticos of the Beltway elite.

And thus do our mediocre murderous masters replicate themselves, generation after generation ….

Comment:

rjs 

[really though Bush, Clinton, Bush, Obama, Clinton, with all the money in politics you'd think they'd find more people going for the pocketful of silver at the expense of their soul than just a few families. Maybe the number of deep state plants is far smaller than we ever imagined, endangered species list small]

Foolish?

Brain damaged seems more like it.

But some are still winning at this game.

(Or think they're winning.)

Ask the North Carolina Thom Tillis/Pat McCrory touters!

(Pay no attention to the lies flying around the ether emanating from the Koch-funded TV/radio ads.)

The "Long Con"

By Philip A Farruggio

September 16, 2014

How foolish Americans are, or rather, until a few years ago, we Americans. This writer himself got caught up in the greatest of all confidence games:  The Two Party Monte!

Using an embedded media, the ‘Two Party, One Party' political system (created by our Military Industrial Empire) keeps chugging along.

Whether it is a Reagan or Clinton, a Bush or a Kerry, a Romney or an Obama, it matters not to the puppeteers who run things. They choose who the so-called ‘field of candidates' will be, and then most of the time let the suckers (we voters) make the final decision from Column A or Column B. Of course, sometimes, when the empire’s agenda is too urgent, they go ahead and fix the game a bit. Case in point the elections of 2000 and 2004. The movers and shakers decided that they needed a malleable dope in the White House sign off on what then followed:  The illegal and immoral invasions and occupations of Iraq & Afghanistan.

As if right out of a scene from Scorsese’s Casino, when the five Mafia leaders were discussing their puppet union leader Andy Stone’s future. Four of the dons stated how Andy was a good guy and could be trusted to not ‘flip ‘and turn against them with the Feds. They then all looked to the head of the commission, the fifth don, and he quietly offered: “Why take a chance? “  Soon after Andy Stone was murdered.

The Tuesday, September 9th, New York Times ran a brief story buried on page A 16, entitled ‘Laughs and Accolades as Clinton and Bush Introduce a Leadership Program’.

There was the usual fluff about the two former presidents collaborating with their respective presidential libraries etc. The picture that accompanied the article showed the two of them sitting side by side laughing hysterically.

What really got to this writer were the quotes from Clinton about Bush Jr.:  “I actually learned a lot watching him over the years…. the way he thought through things and tried to approach them with clarity and decisiveness.”

Clinton went on to say that he watched Bush with “great admiration.”

Bush would call him throughout his second term and they would talk for 30 to 40 minutes. The phone calls, Mr. Clinton said, “Made me feel good.”

He then said that “Both presidents benefitted from being underestimated”, as he placed his hand on Bush’s knee. The article reported that Bush has been living a comparatively quiet life in Texas, with a focus on his paintings. “I’m trying to leave something behind”, he said of his art.

If anyone reading this has not stopped to go and vomit in the toilet, what can I say?

Mad Magazine would have had a field day with that New York Times piece if it occurred back in the 60's or 70's. For all those out there who still hold to the theory that the Two Major political parties are at each other’s throats etc… Wake up!

Clinton and Bush together like Mutt and Jeff from the comics? Well, they should be, because the two of them did so well serving the empire and its masters.

Clinton made sure NAFTA and GATT and the WTO trade alliances were set and ready to help destroy our labor force. He signed the repeal of Glass Steagall, which opened the door to the Wall Street banksters and their sacking of any financial regulations worth their salt.

His Telecommunications Act (or the signing of such) gave us all the obscene cable bills we now have… along with other disgraces the phone and cable industries get away with.

His cutting of the safety nets for the underprivileged helped further destroy the family values both parties rail about.

As far as his successor, the guy he sat and laughed with, hand on knee, well, it would take a book to capture all of his crimes. It is a war crime to attack another country with no just cause, as Bush did concerning Iraq.

His actions, as we all should know, caused the deaths of tens of thousands of Iraqi civilians and over 4000 of our own soldiers.

The occupation of another nation, against its will, must also be a war crime, yes? Bush, as Commander in Chief, did all that… and more!

The Patriot Act, which he signed, is thought to be, by many astute constitutional experts, unconstitutional! His illegal use of the NSA to spy on American citizens is another obvious crime.

What about allowing his minions, Rumsfeld, Gonazales and Bibey, to circumvent the Geneva Accords and allow torture? All in all, under the leadership Clinton said he enjoyed watching, our nation went further into the abyss economically… except of course for the less than 1% that Bush himself once joked as “My Base“.

One wonders when ‘enough is enough’? When will the great majority of us, the working stiffs who get up each morning and punch out the hours to keep this country operating, see through the ‘Long Con’? Hope springs eternal.

(Philip A Farruggio is son and grandson of Brooklyn, NYC longshoremen. He is a free lance columnist (found on TheSleuthJournal.com, Worldnewstrust.com, Democratic Underground, The Intrepid Report, Nation of Change, The Peoples Voice, Information Clearing House, Dandelion Salad, Activist Post, Dissident Voice and many other sites worldwide). Philip works as an environmental products sales rep and has been an activist leader since 2000. In 2010 he became a local spokesperson for the 25% Solution Movement to Save Our Cities by cutting military spending 25%. Philip can be reached at paf1222@bellsouth.net)

But how can making millions on war be considered anything other than pure genius?

Oh, I see.

*  

What’s more, the political power of big corporations and Wall Street was offset by the power of labor unions, farm cooperatives, retailers, and smaller banks.

Economist John Kenneth Galbraith approvingly dubbed it “countervailing power.” These alternative power centers ensured that America’s vast middle and working classes received a significant share of the gains from economic growth.

Starting in 1980, something profoundly changed. It wasn’t just that big corporations and wealthy individuals became more politically potent, as Gilens and Page document. It was also that other interest groups began to wither.

Grass-roots membership organizations shrank because Americans had less time for them. As wages stagnated, most people had to devote more time to work in order to makes ends meet. That included the time of wives and mothers who began streaming into the paid workforce to prop up family incomes.

At the same time, union membership plunged because corporations began sending jobs abroad and fighting attempts to unionize. (Ronald Reagan helped legitimized these moves when he fired striking air traffic controllers.)

Other centers of countervailing power – retailers, farm cooperatives, and local and regional banks – also lost ground to national discount chains, big agribusiness, and Wall Street. Deregulation sealed their fates.

Meanwhile, political parties stopped representing the views of most constituents. As the costs of campaigns escalated, parties morphing from state and local membership organizations into national fund-raising machines.

I knew there was a good explanation for why there seemed to be some type of reasonable organization going on with this stupidity.

If only it had a cure.

Understanding Organizational Stupidity

By Dmitry Orlov

September 15, 2014

Is it morning in America again, or is the bubble that is the American economy about to pop (again), this time perhaps tipping it into full-blown collapse in five stages with symphonic accompaniment and fireworks? A country blowing itself up is quite a sight to behold, and it makes us wonder about lots of things.

For instance, it makes us wonder whether the people who are doing the blowing up happen to be criminals. (Sure, they may be in a manner of speaking — as a moral judgment passed on the powerful by the powerless — but since none of them are likely to see the inside of a jail cell or even a courtroom any time soon, the point is moot. Let's be sure to hunt them down once they try to run and hide, though.) But at a much more basic and fundamental level, a better question to ask is this one:

“Why are we being so fucking stupid?”

What do I mean when I use the term “fucking stupid”? I do not mean it as a term of abuse but as a precise, if unflattering, diagnosis. Here is as good a definition as any, excerpted from American Eulogy by Jim Quinn:

If you had told someone on September 10, 2001 that ten years later America would be running $1.5 trillion annual deficits, fighting two wars of choice in countries that despise our presence, and had not only not addressed the $100 [trillion] of unfunded welfare liabilities but added billions more with Medicare D and Obamacare, they would have thought you were a crazy doomster predicting the end of the world.

They would have put you away in a padded cell if you had further predicted that politicians would cut taxes three separate times, that the Wall Street banks that leveraged themselves 40 to 1 and destroyed the financial system [would be] handed $2 trillion of taxpayer funds so they could pay themselves multi-million dollar bonuses, and that the Federal Reserve would triple its balance sheet to $2.45 trillion by running its printing presses at hyper-speed and handing the money to those same Wall Street Mega-Banks.

Well, the evidence is in, and that crazy doomster in his padded cell has turned out to be amazingly prescient, so perhaps we should listen to him. And what would that crazy doomster have to say now? I would venture to guess that it would be something along these lines:

There is no reason to think that those who failed to take corrective action up until now, but remain in control, will ever do so. But it should be perfectly obvious that this situation cannot continue ad infinitum. And, as a matter of general principle, things that can't go on forever — don't.

Back to the question of stupidity:   Why are we (as a country) being so fucking stupid? This question has puzzled me for some time. It appears that the problem of stupidity is quite pervasive:   look at any large human organization, and you will find that it is ruled by stupidity. I was not the first to stumble across the conjecture that the intelligence of a hierarchically organized group of people is inversely proportional to its size, but so far the mechanism that makes it so has eluded me.

Clearly, there is something amiss with hierarchically organized groups, something that causes all of them to eventually collapse, but what exactly is it? To try to get at this question, last year I spent quite a while researching anarchy, and wrote a series of articles on it (Part I, Part II, Part III).

I discovered that vast hierarchies do not occur in nature, which is anarchic and self-organizing, with no chains of command and no entities in supreme command. I discovered that anarchic organizations can go on forever while hierarchical ones inevitably end in collapse. I examined some of the recent breakthroughs in complexity theory, which uncovered the laws governing the different scaling factors in natural (anarchically organized, efficient, stable) systems and unnatural (hierarchically organized, inefficient, collapse-prone) ones.

But nowhere did I find a principled, rigorous explanation for the fatal flaw embedded in the very nature of hierarchical systems. did have a very strong hunch, though, backed by much anecdotal evidence, that it comes down to stupidity. In anarchic societies whose members cooperate freely, intelligence is additive; in hierarchical organizations structured around a chain of command, intelligence is subtractive.

The lowest grunts or peons are expected to carry out orders unquestioningly. Their critical faculties are 100% impaired; if not, they are subjected to disciplinary action.

The supreme chief executive officer may be of moderately impaired intelligence, since it is indicative of a significant character flaw to want such a job in the first place. (Kurt Vonnegut put it best:   “Only nut cases want to be president.”) But beyond that, the supreme leader must act in such a way as to keep the grunts and peons in line, resulting in further intellectual impairment, which is compounded across all of the intervening ranks, with each link in the chain of command contributing a bit of its own stupidity to the organizational stupidity stack.

I never ascended the ranks of middle management, probably due to my tendency to speak out at meetings and throw around terms such as “nonsensical,” “idiotic,” “brainless,” “self-defeating” and “fucking stupid.” If shushed up by superiors, I would resort to cracking jokes, which were funny and even harder to ignore. Neither my critical faculties, nor my sense of humor, are easily repressed. I was thrown at a lot of special projects where the upside of being able to think independently was not negated by the downside of being unwilling to follow (stupid) orders. To me hierarchy = stupidity in an apparent, palpable way. But in explaining to others why this must be so, I had so far been unable to go beyond speaking in generalities and telling stories.

And so I was happy when I recently came across an article which goes beyond such “hand-waving analysis” and answers this question with some precision. Mats Alvesson and André Spicer, writing in Journal of Management Studies (49:7 November 2012) present “ A Stupidity-Based Theory of Organizations” in which they define a key term:   functional stupidity.

It is functional in that it is required in order for hierarchically structured organizations to avoid disintegration or, at the very least, to function without a great deal of internal friction. It is stupid in that it is a form (of) intellectual impairment:   “Functional stupidity refers to an absence of reflexivity, a refusal to use intellectual capacities in other than myopic ways, and avoidance of justifications.”

Alvesson and Spicer go on to define the various “...forms of stupidity management that repress or marginalize doubt and block communicative action” and to diagram the information flows which are instrumental to generating and maintaining sufficient levels stupidity within organizations.

What follows is my summary of their theory. Before I start, I would like to mention that although the authors' analysis is limited in scope to corporate entities, I believe that it extends quite naturally to other hierarchically organized bureaucratic systems, such as governments.

Alvesson and Spicer use as their jumping-off point the major leitmotif of contemporary management theory, which is that “smartness,” variously defined as “knowledge, information, competence, wisdom, resources, capabilities, talent, and learning” has emerged as the main business asset and the key to competitiveness — a shift seen as inevitable as industrial economies go from being resource-based to being knowledge-based. By the way, this is a questionable assumption; do you know how many millions of tons of hydrocarbons went into making the smartphone?

But this leitmotif is pervasive, and exemplified by management guru quips such as “creativity creates its own prerogative.” The authors point out that there is also a vast body of research on the irrationality of organizations and the limits to organizational intelligence stemming from “unconscious elements, group-think, and rigid adherence to wishful thinking.”

There is also no shortage of research into organizational ignorance which explores the mechanisms behind “bounded-rationality, skilled incompetence, garbage-can decision making, foolishness, mindlessness, and (denied) ignorance.” But what they are getting at is qualitatively different from such run-of-the-mill stupidity. Functional stupidity is neither delusional nor irrational nor ignorant:   organizations restrict smartness in rational and informed ways which serve explicit organizational interests. It is, if you will, a sort of “enlightened stupidity”:

Functional stupidity is organizationally-supported lack of reflexivity, substantive reasoning, and justification (my italics). It entails a refusal to use intellectual resources outside a narrow and “safe” terrain. It can provide a sense of certainty that allows organizations to function smoothly. This can save the organization and its members from the frictions provoked by doubt and reflection. Functional stupidity contributes to maintaining and strengthening organizational order. It can also motivate people, help them to cultivate their careers, and subordinate them to socially acceptable forms of management and leadership. Such positive outcomes can further reinforce functional stupidity.

The terms I italicized are important, so let's define each one:

Reflexivity refers to the ability and willingness to question rules, routines and norms rather than follow them unquestioningly. Is your corporation acting morally? Well it doesn't matter, because “what is right in the corporation is what the guy above you wants from you.” The effects of this attitude tend to get amplified as information travels (or, in this case, fails to travel) down the chain of command:   your immediate superior might be a corrupt bastard, but your supreme leader cannot possibly be a war criminal.

Justification refers to the ability and willingness to offer reasons and explanations for one's own actions, and to assess the sincerity, legitimacy, and truthfulness of reasons and explanations offered by others. In an open society that has freedom of expression, we justify our actions in order to gain the cooperation of others, while in organizational settings we can simply issue orders, and the only justification ever needed is “because the boss-man said so.”

Substantive reasoning refers to the ability and willingness to go beyond the “small set of concerns that are defined by a specific organizational, professional, or work logic.” For example, economists tend to compress a wide range of phenomena into a few numbers, not bothering to think what these numbers actually represent. Organizational and professional settings discourage people from straying from the confines of their specializations and job descriptions, in essence reducing their cognitive abilities to those of idiot-savants.

Functional stupidity can arise spontaneously, because there are many subjective factors which motivate people within organizations to narrow their thinking to the point of achieving it. A certain amount of closed-mindedness can be helpful in furthering your career. It helps you present yourself as a reliable organizational person — one who would never even question the validity of the organizational or occupational paradigm, never mind stray from it.

At the other extreme, your refusal to stray beyond a narrow focus may be prompted by feelings of anxiety, insecurity, and fear of jeopardizing your position. And while, just as you would expect, functional stupidity produces negative outcomes for the organization as a whole, it provides for smooth social functioning within the organization itself by suppressing dangerous or uncomfortable questions and by avoiding the awkwardness of calling into question the judgment of your superiors.

But such subjective factors are dwarfed by certain stupidity-generating features of organizations. At their highest level, organizations tend to focus on purely symbolic issues such as “strong corporate cultures and identities, corporate branding, and charismatic leadership.”

Corporate (and other) leaders try to project an identical internal and external image of the organization, which may have little to do with reality. This is only possible through stupidity management — the process by which “various actors (including managers and senior executives as well as external figures such as consultants, business gurus, and marketers) exercise power to block communication. The result is that adherence to managerial edicts is encouraged, and criticism or reflection on them is discouraged.”

As the people within the organization internalize this message, they begin to engage in stupidity self-management:   they cut short their internal conversations, refusing to ask themselves troubling questions, and focusing instead on a positive, coherent view of their environment and their role within it. But stupidity self-management can also fail when the mismatch between the message and reality becomes too difficult to ignore, ruining morale. The suppressed reality (“The king is naked!”) can spread as a whisper, resulting in passive-aggressive behavior and deliberate foot-dragging all the way to sabotage, defections and resignations.

The functions of stupidity management are to project an image, to encourage stupidity self-management in defense of that image, and to block communication whenever anyone lapses into reflexivity or substantive reasoning, or demands justification. Communication is blocked through the exercise of managerial power.

The authors discuss four major ways in which managers routinely exercise their power in defense of functional stupidity:   direct suppression, setting the agenda, ideological manipulation, and fetishizing leadership. Of these, direct suppression is by far the simplest:   the manager signals to the subordinate that further discussion will not be appreciated, threatening or carrying out disciplinary action if the signaling doesn't work.

Setting the agenda is a more subtle technique; for instance, a typical ploy is to require that all criticisms be accompanied by “constructive suggestions,” placing beyond the pale all problems that do not have immediate solutions (which are the vast majority). Ideological manipulation is more subtle yet; one common technique is to emphasize action, at the expense of deliberation, as expressed by the corporate cliché “stop thinking about it and start doing it!”

Finally, fetishizing leadership involves splitting each group into leaders and followers, where the leaders seek to make their mark, whatever it takes, and to get promoted quickly. To do so successfully, they must suppress the critical faculties of those around them, compelling them to act as obedient followers.

Functional stupidity is self-reinforcing. Stupidity self-management, reinforced using the four managerial techniques listed above, produces a fragile, blinkered sort of certainty. By refusing to look in certain directions, people are able to pretend that what is there does not exist. But reality tends to intrude on their field of perception sooner or later, and then the reaction is to retreat into functional stupidity even further:   those who can ignore reality the longest are rewarded and promoted, setting an example for others.

But the spell can also be broken when the artificial reality bubble protected by the imaginary film of functional stupidity is punctured by a particularly contradictory outcome. For an individual, the prospect of unemployment or the end to one's career can produce such a sudden realization:   “How could I have been so stupid?” Similarly, entire organizations can be shaken out of their stupor by a painful fiasco that subjects them to a barrage of public criticism.

Public hearings in which industry leaders are forced to appear before government committees and answer uncomfortable questions can sometimes serve as stupidity-busting events. A particularly daunting challenge is to pop the functional stupidity bubble of an entire nation, since there is no public forum at which objective outsiders can force national leaders to take part in a substantive discussion. Bearing witness to the fast-approaching end of the nation as a going concern may be of help here. How could we have been so fucking stupid? Well, now you know.

(Dmitry Orlov is a Russian-American engineer and a writer on subjects related to "potential economic, ecological and political decline and collapse in the United States," something he has called “permanent crisis”. http://cluborlov.blogspot.com)

Don't you feel good that you avoided saying anything intelligent at your job and weren't laid off?

And the following just occurred.

Guess what will happen to the banksters as a result of this careful analysis?

Six Years After Wall Street Collapse, Banks Are Still Untamed

By Pam Martens and Russ Martens

New York Post Cover, September 20, 2008

This month marks the six-year anniversary of the financial collapse of some of Wall Street’s most iconic names. As this New York Post cover of September 20, 2008 memorializes, rapper Sean Combs (P. Diddy) was stepping in dog excrement while the taxpayer was being dragged into something just as smelly – a government bank bailout that would grow to hundreds of billions in on-the-record cash infusions and $16 trillion in secret below-market-rate loans from the Fed.

Now it’s September 2014. Six years of crisis studies, hearings, reform legislation, rule-writing, stress tests, living wills, new bank scandals and no jail time for top dogs have darkened the public mood further about both Wall Street and the ability of Congress to meaningfully reform it.

The Senate Banking Committee is hauling all six regulators of Wall Street before it today to take the pulse on where reform has failed and where it’s working. (The fact that Wall Street still needs six regulators is your quick answer that these mega banks remain too big, too complex, and still too dangerous.)

Daniel K. Tarullo, a Governor at the Federal Reserve, will attempt to reassure the Senate panel that they have things under control with testimony that the Fed will be imposing capital surcharges on the most Global Systemically Important Banks or GSIBs.

In his written testimony, Tarullo writes:

“An important remaining Federal Reserve initiative to improve GSIB resiliency is our forthcoming proposal to impose graduated common equity risk-based capital surcharges on U.S. GSIBs.  The proposal will be consistent with the standard in section 165 of the Dodd-Frank Act that capital requirements be progressively more stringent as the systemic importance of a firm increases…By further increasing the amount of the most loss-absorbing form of capital that is required to be held by firms that potentially pose the greatest risk to financial stability, we intend to improve the resiliency of these firms.  This measure might also create incentives for them to reduce their systemic footprint and risk profile.”

SEC Chair Mary Jo White will attempt to put the best possible light on all the Dodd-Frank reform legislation rules that have still not been finalized – more than four years after Congress passed the law. And she’ll accentuate just how much has been done considering the stingy budget with which Congress has given the SEC to work.

White notes in her written comments:

“In 2004, the SEC had 19 examiners per trillion dollars in investment adviser assets under management. Today, we have only 8.  Additional resources are vital to increase exam coverage over investment advisers and other key areas, and also to bolster our core investigative, litigation, and analytical enforcement functions.”

As is now routine, White salutes the markets she oversees, writing:  “Our nation’s markets are the safest and most dynamic in the world…” Unfortunately, White is getting her information second hand. Those who have worked on Wall Street, or have spent years reporting on it, consider it “one vast dark pool,” or “rigged,” or “broken.”

Richard Cordray, Director of the Consumer Financial Protection Bureau (CFPB), an agency created under Dodd-Frank to protect consumers, will deliver a few rays of sunshine on the enforcement front, noting:

“To date, our enforcement actions amount to $4.7 billion in relief for roughly 15 million consumers who were harmed by illegal practices…Along with officials in 49 states, we took action against the nation’s largest nonbank mortgage loan servicer for misconduct at every stage of the mortgage servicing process [Ocwen Financial Corporation, and its subsidiary, Ocwen Loan Servicing]. A federal court consent order requires the company to provide $2 billion in principal reduction to underwater borrowers and to refund $125 million to nearly 185,000 borrowers who had already been foreclosed upon.

“We also partnered with 13 state attorneys general to obtain $92 million in debt relief for about 17,000 service members and others harmed by a company’s [Rome Finance] predatory lending scheme involving inflated prices for electronics where the actual annual percentage rate charged exceeded 100 percent more than six times the rate that was disclosed to service members and other consumers.”

The CFPB has also done outstanding work in getting students to write to it about their student loan experiences. Making those records public enabled Wall Street On Parade to report on the NYU student loan deal with Citigroup.

Read the full written testimony below:

Daniel K. Tarullo [view testimony]
Governor, Board of Governors of the Federal Reserve System
Martin J. Gruenberg [view testimony]
Chairman, Federal Deposit Insurance Corporation
Thomas J. Curry [view testimony]
Comptroller, Office of the Comptroller of the Currency
Richard Cordray [view testimony]
Director, Consumer Financial Protection Bureau
Mary Jo White [view testimony]
Chair, Securities and Exchange Commission
Timothy G. Massad [view testimony]
Chairman, U.S. Commodity Futures Trading Commission

Contagion – What the Next Wall Street Crisis Will Look Like

Elizabeth Warren: Jamie Dimon Gets $8.5 Million Raise for Illegal Conduct at JPMorgan

(HACK) George Effing Will

Powerful NSA Official Potentially Self-Dealing With Defense Contractor

Bob Reich explains it all simply.

(This should be going viral sometime soon if we're lucky.)