Sunday, January 31, 2016

Tina Does Sarah Press  (Krugman Dissected, Rejected, Neglected?)  Ted Cruz, Canadian Born, Would Be King? (Just Give Him the Chance)  Paul Kantner's Revolution

Tina Fey gets down.

On Sarah.

I just adore Ian Welsh's savvy economics reporting. He delineates the confusion many feel about Paul Krugman's political journey, ending in his recent Bernie Bash.

It must be pretty comfortable in bed with Hillary, or maybe it's just that all the serious people are in that bed.

So, Paul Krugman has a column in which he says he thinks Clinton has better policy proposals than Sanders:

As far as I can tell, every serious progressive policy expert on either health care or financial reform who has weighed in on the primary seems to lean Hillary. (emphasis mine)
Ah.  Serious.
Ok, Paul. Let’s bring up some history, Paul.

You supported Bernanke, strongly. Not just in his appointment as Federal Reserve Chairman, but during his tenure – during which he refused to do anything about the housing or financial bubbles.

Bernanke, for those who don’t know, was the man who plucked Krugman out of MIT and moved him to Princeton, where Krugman was a star. MIT had a lot of very brilliant economists, Princeton had very few.

Then, let us return to that word “serious.” For years, the word “serious” has been used to freeze out outsiders. “Serious” foreign policy experts are the most pernicious: They were virtually unanimous in their support for the Iraq war, for example.

We know how that went.

“Serious” almost always means you are part of the establishment.

Because of this, the “serious policy experts” are almost all wrong. Take Obamacare (ACA). It’s done some good, but a lot of problems have resulted in which people can’t use it because the deductibles are too high.

The serious people (like Krugman) who supported the ACA somehow didn’t predict this.

The un-serious people who opposed the ACA did predict it.


Read it all here.

Paul Krugman Against Bernie Sanders

January 28 2016
Meanwhile, Krugman links to Paul Starr of "Politico" ("Politico," ok), who attacks Bernie’s “Medicare for All” policy.

Starr’s attack has three prongs:

  1. Bernie’s not viable in a general election because he is a “socialist” and Americans will never vote for that because they say they don’t like the word. Might be true, but head-to-head polls show Bernie doing just fine.
  2. Medicare-for-All can’t be passed, because it would involve a large tax increase.
  3. Medicare- for-All is a bad idea because it is inefficient and pays only 80 percent of costs.
It’s a bad sign when you’re misleading your readers. Here’s what Aetna has to say about Medical Cost Ratios:
In general, the minimum percentage of premium health plans must spend on health care is 85 percent for large groups and 80 percent for small groups and individual policyholders.
So, at most, a 5 percent difference.
Starr also suggests that Medicare is less efficient. This is untrue. In fact, Medicare spends about 2 percent on administrative costs. Private health care plans spend about 17 percent.
So, Medicare is more efficient and its ratio is only slightly less than the private ratio. If the US switched to a Medicare-for-All system, it would be simple enough to go to 85 percent and would still cost less.
The international experience for single payer is that it costs about two-thirds what US healthcare costs.
Even in a non-single payer system, Medicare has kept costs down better than private insurance:
Ok. So, Medicare-for-All would cost the Americans less than private insurance + ACA has. To try and deny this is like saying the sun doesn’t rise in the morning. It’s not not just wrong, it’s not just a lie, it is delusional.
Would taxes have to be raised?
Absolutely. But since Americans pay, y’know, premiums, if the tax raises were distributed properly (a.k.a. if corporations paid their fair share), most people would have more take-home money in the end, or corporations would be paying less for insurance. There have been cases of corporations going to Canada just to avoid having to provide medical insurance.
That leads to the feasibility argument. Can Medicare-for-All be passed? Probably not. But it won’t be passed if the President doesn’t try, that I guarantee.
It can be sold, however; Medicare is popular. And it is popular with the Republican base, I might add.
Starr’s argument really comes down to obfuscation (that’s the polite word) and, “It’s not likely to pass so we shouldn’t try.”
Sanders has been a member of Congress for a long time. If he can’t get what he wants, he’ll negotiate–that’s how it works. And he’ll get more because he’s starting from a stronger position.
Meanwhile Clinton won’t even try.
As for financial reform, it is hard to even . . . Sander’s position is “break up the too-big-to-fail banks” and “restore Glass-Steagall.” That includes breaking up the too-big-to-fail shadow banks. The Clinton position is that shadow banks should be regulated, but not broken up or subject to Glass-Steagall. Her position is the weaker position, and arguments otherwise are obfuscation, at best. Krugman obfuscates this in his actual post, suggesting that Sanders doesn’t think shadow banks are too big to fail.
Krugman appears to have become so much a creature of the status-quo and New York elites he isn’t worth more than a casual dismissal.
I feel bad about Krugman. I remember when he was essentially the only national columnist willing to take on George W Bush.
But one can, I suppose, only expect so much from a man who spent his life at MIT, then Princeton, then writing for the "New York Times." I had hoped Krugman would be an exception.
So, Paul:
Or it could be because they are, one and all, corrupt corporate lackeys. I report, you decide.
If it barks like a dog.
I was right about Iraq. I was ahead of the “serious financial experts” on the housing boom and financial crisis. I predicted correctly that the economy would never recover for most people after 2008. I said the next crisis would start in China. I said that America was ripe for a man-on-horseback many years ago (presaging Trump.)
I’m not a “serious” analyst in the way people like Krugman mean it, because I’m a nobody.
Not a member of the club.
But regarding financial reform, I say Sanders is better than Hillary. And regarding health care reform, well, judge for yourself if Sanders proposal is impossible, but it is better policy as policy.
Paul Krugman. Well, he did have one extended period of bravery when it mattered greatly. For someone who is a member of the establishment, that is remarkable. I will remember it, honor its memory, and not be too harsh on him.  Given the world he lives in, his beliefs are not surprising.
I had hoped he would prove to be more than a creature of his circumstances, that he could sustain his bravery and insight, but it was an unreasonable and unfair expectation.
Goodnight Paul. Thank you for standing up when you did.

Sorites Problema 
January 28, 2016 
Norman Solomon did a fine job on both David Trilateral Commission Brooks and Paul. It ran in a couple of places. I salute Norman’s tone as there is an Alice in Wonderland quality to both these guys this week. 
Paul is becoming the NYT’s personal lap dog for Hillary’s “policy” .. and I just am curious what the payoff for his support is going to be. The what’s-in-it-for-me agenda seems less than covert to my little eyes. 
Has his overpaid position at CUNY really really gone to his head and he forgets about us wee folks? 
If it weren’t a waste of time I’d send him a Venn diagram of his “logic” and point out he needs a refresher in soriteses. I love your deconstruction, Ian.
Some Guy  
January 30, 2016
Hard to say at this point how the primaries will turn out and if the establishment will have its way , but I think what is telling is how hard the establishment folks are having to work and how they are having to throw so many illusions to the wind in their fight. Any establishment victory this time around will be pyrrhic, with Krugman’s credibility just one of many establishment victims. 
For Krugman, I sense that this last week or two will mark a permanent shift in how he is viewed on the left side of the aisle, not by everyone of course, but by a significant chunk of people – Ian’s reaction is similar to my own. Like so many in the establishment, it seems Krugman is failing to see how the world is changing outside the Beltway and how little patience and tolerance is left for triangulating bs that pretends to care about the 99% but somehow finds a reason to ignore/mock/lash out against anyone who actually threatens to make a difference. 
Bruce Wilder  
January 30, 2016 
Vichy Left is a good way to label Paul Krugman, Paul Starr and Hillary Clinton, not to mention Jonathan Chait, Ezra Klein and a number of other mainstream pundits with Democratic coloring, who have weighed in over the last couple of weeks with rationalizations for rejecting Sanders in favor of Clinton. Health care, where Sanders advocates single-payer and finance sector reform, where Sanders advocates Glass-Steagall, are the issues. Foreign policy, where Clinton has blood on her hands goes unmentioned for the most part. 
The arguments seem to come down to a combination of learned helplessness in the face of the triumph of the plutocracy and an interesting (to me) fear of system collapse. The reason not to try structural reform of health care is that the system may unravel, according to Paul Starr, if the industry is starved of predatory profit. The rationalizations of Mike Konczal for why Glass-Steagall is the wrong remedy for shadow banking problems has a similar underlying theme. 
I find it hard even to paraphrase the arguments of Krugman and Starr, or Konczal on financial reform. The arguments have, to my ear, an Alice-in-Wonderland quality, which may be more telling than their ostensible substance. They express a desire to give up on re-structuring our economic dystopia:  the dismantling of the New Deal that got us our plutocracy and new Gilded Age should not be reversed. Such a thing should not even be attempted..
Why? Because the System, as dysfunctional as it is, is also fragile..
Well, duh, I say. The wealth of the plutocrats derives from processes of disinvestment, of dismantling. (In contrast, in the first gilded age, the plutocrats were assembling the systems of an industrial economy; building things — doing it badly and recklessly in many cases to be sure — but adding to the stock. The refusal to share ran the potential for mass prosperity onto the shoals of the Great Depression and World War.) Disinvestment is a path where the road eventually runs out.
The New Deal, whose promises of egalitarianism based on institutions of countervailing power and initiative in popular and technocratic government, has remained a fading memory that there is an alternative to the neoliberal program. It is not surprising that Sanders is 74; he remembers more clearly for it.
Krugman is saying there is no alternative. Those who read him closely know that, though he claims to be a political liberal in the sense the term was invented by FDR, he is a conventional, even conservative economist. Vichy Left indeed.
I expect the establishment will rally for another round of extend and pretend. We will get neither Sanders nor Trump. Reversing our course before the road runs out will be rejected.
The consequences . . . will be serious. The world will confront constricting and shrinking global resource limits with an elite that wants to party on.

Without the rest of us.
_ _ _ _ _ _ _

Vladimir Lenin said, "There are no morals in politics; there is only expedience. A scoundrel may be of use to us just because he is a scoundrel."

Thank you, Ted.

It's always good to hear from the seriously delusional.

We need to be constantly reminded of those who are already irredeemably on the wrong track and in positions of power.

And the debates have served us well in this regard.

Who Is the Real Ted Cruz?

I can't think of a better description of Ted Cruz's relationship with the DC-Wall Street Establishment – Cruz being the scoundrel of course. Cruz's claim of not being a tool of the political elite is like Bill Clinton telling the world, "I did not have sexual relations with that woman."
Webster's definition of a scoundrel is a dishonest or unscrupulous person, and Cruz has become quite adroit at saying one thing while his history shows him doing the other. Rather than the outsider he claims to be, Ted Cruz is the ultimate insider, former top Bush 41 policy aide and globalist, Ivy Leaguer, and establishment insider.

Not many conservatives coming out of Princeton and Harvard. "I'm just sayin,'" Ted, as said in the debate.

There is no better example of this than Calgary Ted's actions surrounding the big Wall Street banks and their secret funding of his political ascension. Cruz has been gorging at the table of the ultimate insider of all insiders – Goldman Sachs and Citibank.

You may recall in a recent Fox Business Network debate that Cruz, in Mr. Haney from Green Acres voice, declared to one of the moderators, "The opening question [moderator Jerry Seib] asked — would you bailout the big banks again — nobody gave you an answer to that. I will give you an answer — absolutely not."

What else would you expect a scoundrel to say who had secretly secured big sweetheart loans from Goldman and Citibank — by leveraging his retirement accounts – to fund his 2012 U.S. Senate campaign. Loans which the Calgary Ted conveniently forgot to disclose to the Federal Election Commission. These are the very retirement accounts that he said he and his wife said he cashed in to fund his senate race. In other words, Ted lied.

At the same time Ted's bulging 2016 campaign accounts and supporting Super-PACs are stuffed with big oil and gas money. He knows how to play the game.

And perhaps the ultimate hypocrisy of the native born Canadian is that his spouse, Heidi, by all accounts a lovely wife and mother, has been employed by Goldman Sachs since 2005. She is on leave as managing director and regional head of private wealth management.

Heidi is a proud member of the lefty Council on Foreign Relations, advocates of one world government and the New World Order.

Heidi is not a bit player in the Cruz campaign with those credentials but rather an integral part of the campaign's fundraising efforts. As reported by CNN last year, "She works the phones the way she worked them when she was at Goldman," said Chad Sweet, the Cruz campaign's chairman, who recruited Heidi to work at the giant investment bank."

Yet we are to believe that the big Wall Street banks have no leverage over Ted Cruz? Why didn't Heidi Cruz resign from Goldman Sachs instead of taking a leave of absence? That's like saying Bill Ayers and Saul Alinsky have had no influence on Barack Obama.

The other inside connection that hits one like a baseball bat is the Bush connection. Ted was George W.'s brain when he ran for President. A top policy adviser. Ted maneuvered for Solicitor General in Bush World but settled for a plum at the Federal Trade Commission. Ted's a Bushman with deep ties to the political and financial establishment.

Ted and Heidi brag about being the first "Bush marriage" – they met as Bush staffers which ultimately led to marriage. Cruz was an adviser on legal affairs while Heidi was an adviser on economic policy and eventually director for the Western Hemisphere on the National Security Council under Condoleezza Rice.

Condi helped give us the phony war in Iraq.

Also conveniently missing from Heidi's Wikipedia bio is her service as Deputy U.S. Trade Representative to USTR head Robert Zoellick.

At USTR Heidi worked on U.S.-China trade policy - the one Donald Trump talks about so much.

And Chad Sweet, Ted Cruz's campaign chairman, is a former CIA officer. Michael Chertoff, George W. Bush's former Secretary of Homeland Security, hired Sweet from Goldman Sachs to restructure and optimize the flow of information between the CIA, FBI and other members of the national security community and DHS. Chertoff and Sweet co-founded the Chertoff Group upon leaving the administration.

A known tactic of the intelligence community is the use of strategic communications as a "soft power" weapon against it adversaries — the creation of false narratives by the effective use of all media — social, digital, newspaper, print, etc. Combined with denial and deception, it can be a potent force. Glenn Beck and Mark Levin are abetting this.

Despite his ability to lie with a straight face (sadly Nixonian) on his support for amnesty and TPP, he got nailed by Senator Marco Rubio on the debate. Acting like a prick in the U.S. Senate was the core of Ted's disciplined effort to bury his old school ties and reinvent himself as a modern-day Jesse Helms and supposed Conservative outsider. It's a ruse.

As we get closer to the Iowa Caucus and New Hampshire Primary, Cruz and his establishment puppet masters are engaged in an aggressive strategy against Trump. The false narrative of course being that Cruz is the outsider while Trump is the insider. Nothing could be farther from the truth.

In its most simplistic terms – the power elite have no leverage over Trump – nothing.

Cruz, on the other hand, is the establishments quisling, spawned by the Bushes and controlled by Wall Street, who became a strident "outsider" only four years ago.

The U.S. Constitution does not defined "native born" citizen, nor have the courts. That Ted was eligible to run for office as a citizen only 15 months ago is weird. Trump's right the Democrats would have a field day with Calgary Ted, the Manchurian, Canadian Candidate.

Don't get me wrong. Ted Cruz is a smart, canny, talented guy who has run a great "long race" campaign. He aspires to be Reagan but trust me he's Nixon. Right down to the incredible discipline and smarts playing the political game. Ted Cruz is not who he appears to be. As the bible says, "Beware of false prophets, who come to you in the clothing of sheep, but inwardly they are ravening wolves." In this case we must beware a Canadian bearing gifts.

(Written with Paul Nagy)

Saturday, January 30, 2016

We'ze All Just Lovn US Some Sarah? (A Whole Lotta Bad Sarah!)  Bill & Thom's Great Adventure (Kristen & Trey (-R's) Too!)  Bill Moyers Exposes Obama's Past/Asks Him To Repent and Tell All

Our buddy, Coyote Prime, just loves him some Sarah.

And don't we all?

(OK. Not so much Trumpf.)

My guess is that she and the rest of the klown korp kandidates will run the Republican kar off the road and into a deep ravine if not head-on into a Bernie locomotive.

Or a Hillary handshake.

It is time to take seriously the role that stupidity is playing in shaping GOP politics. We have followed the rampant lying of candidates, and we have followed the rhetoric of anger and hostility. Maybe it is time to look more closely at the role of stupidity. And there is no better figure to help us think about that problem than Sarah Palin.
Throughout her entire career she has surprised us with her stupidity. Remember when she couldn’t answer Katie Couric’s questions about which magazines she reads or when she wrote on her hand to help her remember her talking points at a Tea Party Nation event? And yet, in comparison to the nonsense that came out of her mouth at her Trump endorsement speech, those moments seem relatively lucid.

Almost everyone covering the story of her Trump endorsement was absolutely astonished by her incoherent blathering. The "New York Times" covered “the most mystifying lines” of her speech.

Of course it has to be said that seemingly on "Fox News," Palin gets treated like a serious statesman rather than an incoherent wingnut. Megyn Kelly might have had a hard time choking back chuckles when she interviewed Brit Hume about the speech, but she still conducted a straight interview where Hume simply talked about how the endorsement would affect the Ted Cruz campaign. For "Fox News" the speech was a significant political moment, not a blathering of embarrassing nonsense. But then again "Fox News" once used a picture of Tina Fey impersonating Palin as a graphic on a story on Palin — when Palin actually worked there.  So there is little reason to trust their coverage of her.

Thankfully, the late night comedy crowd was prepared to correct the failures of "Fox News" reporting once again. Larry Wilmore asked on “The Nightly Show” if Palin was drunk:  “I’m not even joking, you guys. She sounds wasted, right?” Wilmore claimed that Palin’s rambling, nonsensical speech couldn’t even be compared to a “word salad.”

James Corden compared her speech to a Dr. Seuss book — if Dr. Seuss “wanted to deport all of the Woozles.” Corden called her speech “particularly confusing,” and reminded his audience of the role that Palin played in destroying John McCain’s run for the presidency:  “You just know that John McCain is on his couch at home watching the TV being like, Donald – dude – this is a bad idea.”

Conan O’Brien referred to her speech as “rambling,” “strange” and “nonsense.

Even Jimmy Fallon, who typically side steps any serious political comedy went after Palin’s inane blather, saying that he “thinks” that Palin was endorsing Trump, but wasn’t sure. He then showed some of the highlights of her stupidity only to look confused and say “What?” He then poked fun at Trump who stood by Palin and looked like a fool.

Palin’s stupidity led to one of the very best bits yet in Trevor Noah’s career as host of “The Daily Show.” He reminded viewers that there was a perfect synergy between Trump and Palin: “Trump is not the first American candidate to get so far in politics knowing so little.  He is the second.” He then went on to describe Palin as the “original” He described the speech as “all over the place.” And then said that it was “as if a bag of Scrabble tiles had grown a body and come to life.”

In one of his best lines yet, he claimed that: “It’s like the only thing Sarah Palin hates more than Obama is punctuation. Nobody talks like that. It’s almost like she’s a malfunctioning robot.” He then went on do to a pretty hilarious impersonation of her talking to the people of Iowa as though they were cavemen who didn’t understand English.

And to the delight of many, Tina Fey reprised her Palin impersonation on “Saturday Night Live.":

Her angle? Just basically repeat verbatim what Palin said. That simple comedic tactic worked to effectively destroy the McCain-Palin campaign in 2008 — and it is working again now. When the nonsense Palin spews is repeated through Fey’s impersonating parody, it immediately reveals the depths of Palin’s stupidity.

The best Palin comedy came from seasoned Palin-basher Stephen Colbert who referred to Palin as “the original material girl” — since every time she makes a public appearance she offers more easy comedy material. “God, I have missed you! It’s like a magical eagle made a wish on a flag pin, and it came to life,” he exclaimed.  He, too, keyed in to the incoherence of her remarks: “Sarah Palin just guaranteed Trump the evangelical vote, because I think she was speaking in tongues.”  He then went on to Tase the part of his brain that understands sentence structure so that he could speak in Palin about the other candidates.

When Colbert hosted “The Colbert Report,” Palin was a frequent target. Recall when he called her “a f$%king retard” in reference to her support of Rush Limbaugh referring to liberals as retards on his show. That was the segment that also called her out for her use of a “hand-o-prompter” — notes written on her hand to help her in an interview.

One of Colbert’s best Palin takedowns took place back in 2011 when he mocked Mika Brzezinski for daring to wonder how long the media was going to let Palin continue get so much attention. Colbert’s rant — where he lectures Brzezinski on how she needs to buck up and cover Palin anyway– may be the best attack on her stupidity yet:  "I know you think this story has no purpose other than keeping Sarah Palin’s name in the headlines for another news cycle. I know you think she has nothing to offer the national dialogue and that her speeches are just coded talking points mixed in with words picked up at random from a Thesaurus.

I know you think Sarah Palin is at best a self-promoting ignoramus and at worst a shameless media troll who will abuse any platform to deliver dog-whistle encouragement to a far right base that may include possible insurrectionists. I know you think her reality show was pathetically unstatesmanlike and, at the same time, I know you believe it represents the pinnacle of her potential. And that her transparent desperation to be a celebrity completely eclipsed her interest in public service long ago.

I know that when you arrive at the office each day you say a silent prayer that maybe, just maybe, Sarah Palin will at long last just shut up for ten f******g minutes. And yet, here we are, five years later, and Palin is even less coherent than before and she’s back in spotlight supporting a candidate who has been shown to speak to his audiences at a fourth-grade level.

Exactly how long is the stupid epidemic going to spread within the GOP?  It’s like stupidity is the Ebola of GOP politics — a metaphor you know "Fox News" would use if they weren’t so busy promoting the stupidity themselves."

As Lee Camp explained on last week’s episode of “Redacted Tonight,” Trump’s level of speech is the lowest of any presidential candidate. He cites Trump in what seems like a direct channeling of Palin-speech “We have to build a fence. And it’s got to be a beauty. Who can build better than Trump? I build; it’s what I do. I build, I build nice fences, but I build great buildings. Fences are easy, believe me.” Camp explains that Trump “represents the continued dumbing down of America.” Trump’s moronic comments are also wrapped in lies. As Camp points out, Trump isn’t just talking like a fourth grader: “He is a dumb, dumb, lying fourth grader.”

Back in 2008, George Monbiot of "The Guardian" asked why morons are allowed to succeed in U.S. politics. “How did politics in the U.S. come to be dominated by people who make a virtue out of ignorance? … How did Sarah Palin, Dan Quayle and other such gibbering numbskulls get to where they are?” Monbiot notes that Bush and Palin were candidates that flaunted their stupidity. He notes not just the dumbing down of the U.S. electorate, but also the celebration of stupidity that has emerged in force in U.S. politics.

Don’t forget that in the first GOP debate, Trump remarked that “We need brain.” He literally used a totally stupid phrase to argue for intelligence in government. How exactly does such a completely moronic statement go unchecked? Well it doesn’t, of course. After the debate there was a flurry of memes that emerged to mock Trump’s comment. And Twitter blew up with a host of citizen-satire that mocked Palin’s idiotic comments.

The Daily Currant highlighted Palin’s stupidity by running a satiric piece that compared her to a dumb school kid: “Sarah Palin has reportedly been stuck for several hours after licking a frozen flagpole outside a rally in Des Moines, Iowa this morning.” The piece went on, “I know Sarah Palin isn’t the brightest politician in the world,” says one Iowa Republican attending the rally. “But you would think that being from Alaska she would at least understand the concept of metal being cold.”

And, as mentioned, the professional TV comedians weighed in too. Every time we get GOP nonsense, someone calls it out. But so far, calling out the stupidity and laughing at it, isn’t hurting Trump or Palin. It doesn’t hurt because over time we have watched the GOP become dominated by the idea that truth, reason, and critical thinking are a liberal agenda designed to destroy our nation’s core values.

Here’s the irony though. Intelligence is actually a core value of U.S. politics, or at least it used to be. Elvin Lim has found that over time our political rhetoric has relentlessly declined. In fact, he notes a nosedive in intelligence in public speech since the founding fathers. President George Washington’s “Farewell Address” in 1796 was written at graduate-degree levels:  Grade 17.9, while President Abraham Lincoln’s “Gettysburg Address” in 1863 was at an 11th-grade level. Now we have Trump coming in at fourth grade. I’m guessing Palin doesn’t even rate that high.

It seems that the only way to understand Trump and Palin is to Tase not only the part of the brain that understands sentence structure, but also the part that understands anything at all.”

(Sophia A. McClennen is professor of international affairs and comparative literature at Pennsylvania State University. Her latest book, co-authored with Remy M. Maisel, is, "Is Satire Saving Our Nation? Mockery and American Politics." She can be found on Twitter at @mcclennen65.)

Oh, it's just too easy sometimes... lol
- CP

_ _ _ _ _ _ _

. . . the Sunlight Foundation has discovered that over one recent five-year period 200 of the most politically active corporations spent a combined $5.8 billion on federal lobbying and campaign contributions and, in return, got $4.4 trillion in federal business and support. Yes, $4.4 trillion - with a "t." That's an enormous return on their investment in lobbyists and politicians.

What's been going on in this country since Ronald Reagan agreed to the continued sequestration of the hostages in Iran, denying President Carter the ability to have them released prior to the 1980 election (and happening even before and afterward considering the CIA-directed murders in Asia, South and Central America (and the Iran-Contra guns/money for drugs Oliver North deals) has been so much more corrupt than anything most citizens can imagine that when they read the documentation of the massive amounts of money that has changed hands fairly recently in the pursuit of power and control, they are undoubtedly left in a state of nonsuspended disbelief.

Which probably leads to even fewer voters who can stomach entering the voting booths.

And no wonder.

(And how many years will pass before they get any relief?)

Let's Ask Obama to Give This Speech Next

Friday, 29 January 2016
By Bill Moyers, Moyers & Company

Barack Obama once confessed to politics' original sin but has yet to atone for it. He now has an opportunity to do so.

I speak of his promiscuous relationship with money in politics. During his 2008 race for the White House, Obama opted out of the public funding system for presidential campaigns - the first candidate of a major party to do so since the system was created in 1976, after the Watergate scandals. His defection chilled hopes that public funding might enable everyday citizens to check the power of the super rich and their super PACs, countering the influence of "dark money" - contributions that cannot be traced to their donors.

A friend of mine, a prominent conservative Republican who champions campaign finance reform (yes, there are some and we get along marvelously!) recently told me he believes Obama's decision was a significant blow to the cause for reform. Six years ago, the conservative majority on the Supreme Court tried to finish it off when they ruled for Big Money - unlimited amounts of it - in their "Citizens United" decision.

In his first State of the Union in 2010, President Obama denounced "Citizens United," saying that it would reverse a century of law and open "the floodgates for special interests." He was just as blunt last year when he declared flatly that "Citizens United" was "wrong" and had caused "real harm to our democracy." Right on all counts. Public interest advocates Lisa Gilbert of "Public Citizen" and Stephen Spaulding of "Common Cause" recently reminded us that since "Citizens United" "special interests have spent over $500 million from secret, undisclosed sources."

Think of it as poison poured into the mainstream of democracy, just as toxic as the lead released in Flint, Michigan's drinking water.

Americans of every stripe know money corrodes our politics. In a poll last year, The New York Times and CBS found that 85 percent of us think the system for funding political campaigns should be fundamentally changed or completely rebuilt.

President Obama knows it, too. Despite his own apostasy, he has spoken eloquently over the years against the present system.

Unfortunately, he has done nothing about it. He's gone AWOL in our biggest battle for democracy.

Which brings us back to his confession. During that first campaign for president, the "Boston Globe" reported that "In Obama's eight years in the Illinois Senate, from 1996 to 2004, almost two-thirds of the money he raised for his campaigns - $296,000 of $461,000 - came from PACs, corporate contributions, or unions…and many other corporate interests…"

Confronted with this by Tim Russert on "Meet the Press," Obama replied: "I have said repeatedly that money is the original sin in politics and I am not sinless."

Far from sinless, he has in fact been a serial sinner. From repeated campaigns for the state legislature, through his one campaign for the US Senate, to his last campaign for president in 2012, money from organized interests poured into his coffers. The finance industry, communications industry, the health industry - they all had a piece of him, sometimes a very big piece. In his defense, Obama said he could not "unilaterally disarm." So like the young Augustine of Hippo, who prayed, "Lord, grant me chastity… but not yet," Barack Obama was saying that when the time arrived, he would sin no more.

Well, Mr. President, it's time. You have no more campaigns to wage. With a little less than 12 months left in the White House, you have the opportunity to atone for exploiting a system that you have deplored in words if not deeds. You can restart the engine of reform and even demonstrate that "Citizens United" can be tamed. Just take out your pen and sign an executive order compelling federal contractors to disclose their political spending. In one stroke you can put an end to a blatant practice of political bribery that would be one small step for you and one giant leap for democracy.

It's an open-and-shut case. In fewer than five minutes, you could face the cameras and announce your decision:

My fellow Americans. I have today signed an executive order requiring any company with a federal contract to disclose how much they spend on politicians and lobbyists, and who is receiving their money.
There are several reasons for this.

First, federal contracting is big business. In 2013 alone, the United States government spent about $460 billion dollars on contracting, with $177 billion of that going to just 25 companies. Since the year 2000, the top 10 contractors have raked in $1.5 trillion in federal contracts.

That's your money. All of it comes from taxpayers. And as the economic analyst Robert Reich reminds us, you are footing the bill twice over. You pay for these corporations to lobby for those contracts. Then you pay for the stuff they sell us. It's only fair that you see how much it costs for corporations to buy influence.

Second, there is a direct relationship between what a corporation spends on campaign contributions and the amount it receives back in government spending. Federal contractors have long been banned from contributing to federal candidates, parties or political committees, but that ban does not apply to their executives, shareholders and political action committees. In fact, since the "Citizens United" decision in 2010, contractors have been free to contribute unlimited amounts of undisclosed money to super PACs and the shadowy operations known as "social welfare organizations."

It's now possible for companies that get government contracts to secretly - let me say it again, secretly - spend untold amounts to elect and re-elect the very legislators who are awarding them those contracts. That's wrong. It's a terrible conflict of interest that undermines the integrity of government.

Some of you will remember that I said the "Citizens United" decision would harm democracy. I wish it were not so, but I was right; this secrecy in influence peddling by federal contractors is a bad thing. It wastes your money. It distorts the relationship between your government and business. It works against start-up entrepreneurs who can't afford to hire lobbyists or make political contributions while entrenched old-line companies hire former government officials - members of Congress and their staffs in particular - to steer business their way. Let's put an end to these practices, once and for all.

Third, an open democracy is an honest democracy. Disclosure is the foundation of public trust in government and business, while secrecy invites corruption. Even the Supreme Court justice who wrote the majority opinion for "Citizens United" acknowledged this to be true. Justice Anthony Kennedy belongs to another party than I. He adheres to a different ideology. But listen to what he wrote:  "With the advent of the Internet, prompt disclosure of [political] expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters. Shareholders can determine whether their corporation's political speech advances the corporation's interest in making profits, and citizens can see whether elected officials are 'in the pocket' of so-called moneyed interests." I agree with Justice Kennedy.

You see, undisclosed money - "dark money" - is not "free speech" as its proponents claim. To the contrary. It's a threat to free speech, especially to citizens like you. Even if you believe money is speech, don't you and every other American have a right to know who's speaking? Secrecy weakens democracy's backbone, causing it to become brittle - so brittle that fractures are now commonplace. That's one reason Washington is broken and dysfunctional.

As Justice Kennedy himself - the author of the "Citizens United" decision, remember - recently admitted, our system "is not working the way it should." The executive order I have signed today is a step toward helping us see why it is not working and giving us a way to start fixing it. We are casting sunshine on a system badly in need of light.

Sadly, I must report to you that Republicans in Congress are opposed to sunshine. They prefer government do business in the dark, out of your sight and away from the prying eyes of reporters. But the Sunlight Foundation has discovered that over one recent five-year period 200 of the most politically active corporations spent a combined $5.8 billion on federal lobbying and campaign contributions and, in return, got $4.4 trillion in federal business and support. Yes, $4.4 trillion - with a "t." That's an enormous return on their investment in lobbyists and politicians.

Earlier this month I delivered my last State of the Union address to you. I told you that, "We have to reduce the influence of money in our politics, so that a handful of families or hidden interests can't bankroll our elections. And if our existing approach to campaign finance reform can't pass muster in the courts, we need to work together to find a real solution."

My record on this issue may not inspire confidence, but I offer this executive order as an act of genuine penitence. And I pledge to you that in my remaining months as president I intend to take more steps to put right what I have helped to keep wrong. When I leave this office next January there will be no private citizen in the country more active in the fight to save our public life from the pernicious grip of private greed.

I am not a saint; I am a sinner. But I have been born again - again. And this time I will keep the faith. If you believe in democracy, join me.

(A note to Moyers' readers:  Some observers in Washington think President Obama may be about to sign such an order. We are not so sure. He reportedly came close in 2011 when the draft of such an order was leaked. The US Chamber of Commerce and other lobbyists roared and the president backed down. The only spunk he has shown on the issue since has been rhetorical. So he could once again capitulate. You can help to stiffen his spine by signing the petition sponsored by the non-partisan group Public Citizen.

As the president himself concluded in his most recent State of the Union address:  "Changes in our political process… will only happen when the American people demand it. It depends on you. That's what's meant by a government of, by, and for the people." OK, agreed. But in the meantime, let's tell the president to stand tall like a leader and do the right thing. Mr. President, sign the executive order compelling federal contractors to disclose all their political spending, including dark money.)

Friday, January 29, 2016

Did Wall Street Banks (Who Have Lost $219.7B So Far) Create the Oil Crash To Receive Bailouts (Oil Could Fall to $20)?  (Just Askin')  The Populist Revolution:  Bernie and Beyond  (Kantner Starship Sails)


Up against the wall.

This is the most incredibly bad news.

And so unbelievable.

I loved this man, this gifted, matchless artist.

I'll never forget how his beautifully moving music informed my youth.

What bliss it was to spend an afternoon in my dorm room listening to the Airplane, and then the Starship, and then all of the other transmutations of musical envelopmentness that he and they provided.

That's how it felt:  completely enveloped in blissful love.

I had all his/their albums.

What a happy life.

I was kissed by Jorma and Jack one afternoon before a performance.

What phenomenal luck.

But never Paul.

I was never close enough.

But he was an idyll provider for me.

Paul Kantner can not pass away.

Sail on, sailor.

You sailed into our hearts.

To stay.

5 Wall Street Banks Have Lost $219.7 Billion in Market Cap in 7 Months

We get the inside word on how the Obama exit from the national stage will be managed from the "New York Times:"

BALTIMORE — When President Obama addressed the annual retreat for House Democratic lawmakers in 2009, the event had the buoyant exuberance of a pep rally as he urged his party’s robust majority — then 257 members strong — to help muscle through his economic stimulus plan.

But as Mr. Obama speaks at this year’s retreat here on Thursday evening, he will stand before a far smaller and less popular audience:  188 Democratic lawmakers in a minority caucus with virtually no chance of moving back into power in the November elections.

. . . Some Democrats hold Mr. Obama responsible for that, saying their party’s lawmakers took the blame for the president’s aggressive and often unpopular agenda to revive the economy and adopt sweeping health care legislation during his first two years in office. And some say Mr. Obama showed indifference to the political circumstances of rank-and-file lawmakers and missed an opportunity to seize on the undercurrents of populism and anti-establishment sentiment that began coursing through the electorate after the partisan battle over health care.

“The main Democrat nationally, and the only one who could be heard, was silent on the huge structural issues that more and more Americans were facing,” said Stanley Greenberg, a veteran Democratic pollster who blames Mr. Obama for Democratic House losses in 2010 and 2014. “His silence on those things left the voters without much motivation to vote.”

Mr. Greenberg said Mr. Obama and Ms. Pelosi would be remembered for making transformative changes during 2009 and 2010, when the president confronted an economic crisis, Ms. Pelosi wielded the speaker’s gavel to corral support, and Senate Democrats controlled the 60 votes needed to overcome Republican filibusters.

“We will look at those two years as enduring,” he said. But he said Mr. Obama’s legacy would also include the political death of Ms. Pelosi’s once-powerful majority. “Part of his legacy is the off-year elections,” he said.

Administration officials reject that critique, noting the historic pattern of losses that a president’s party often sustains in off-year elections and the eight House seats Democrats regained when Mr. Obama was on the ballot in 2012. They say Mr. Obama was a prolific fund-raiser and a frequent campaigner for Democratic candidates whenever he was asked; the president hosted 17 fund-raising events across the country in 2013 and 2014, they said.

Some Congressional Democrats said it was not enough — not necessarily because Mr. Obama could have done more but because there could never be enough fund-raising given the nature of modern political campaigns. “If the president had allocated 50 more of his days to raising money,” Representative Brad Sherman, Democrat of California, said at a reception to mark the start of the retreat in Baltimore, “we would have more Democratic members here.”

In a lunchtime speech here, Vice President Joseph R. Biden Jr. told the Democratic lawmakers he believed that they could win back the House if they drew a sharper contrast with Republicans.

“I think we can win; I think the House we can win,” Mr. Biden said. “I think we have to focus — and we didn’t do it enough the last time in my view. The best way to win is to run on what we have done and what we stand for, and run on what more we are trying to do, making clear what we think we have to do to finish the agenda and then contrast that to what they are for and what they oppose.”

As for Republicans, he said, “They opposed every single, solitary initiative that you supported over the last seven years if you were here that long to support this recovery.”

And, yet, not a word about the massive state gerrymandering that has eliminated representative districts by drawing districts that put the vast majority of Democratic voters in a few closely-packed districts versus the more numerous sparcely-populated Republican-dominated districts.

Let alone all the (frigging new) wars and drone victims that have occurred in the last seven years.

I'm sure these had nothing to do with the Democratic voters who didn't vote (or voted for another party).

The "New York Times!"

Stand up and take a bow.

Those hearings triggered an in-depth investigation and more outrageous disclosures in 2014 of an out-of-control Wall Street by the Senate’s Permanent Subcommittee on Investigations, then chaired by Senator Carl Levin, another Senator that refused to be silenced by Wall Street. Levin’s Subcommittee found that Wall Street banks had set up secret shell companies to gain control of a stunning amount of the nation’s industrial commodities – such as oil, aluminum, copper, natural gas, and even uranium – on a scale that “appears to be unprecedented in U.S. history,” according to a 400-page report released by the Subcommittee.
Since Republicans took control of both the Senate and House in January 2015 and appointed their own Committee and Subcommittee chairs, we’ve heard almost nothing further about this critical matter – proving once again how Wall Street gets its way on Capitol Hill.

Not that I agree that Obama is worried about how his legacy will be viewed, but the rest of the essay below is pretty much spot on.

Go Bernie!

Bernie Sanders Meets With Obama Today:  What They Might Talk About

By Pam Martens and Russ Martens
January 27, 2016
Expensive media real estate is reporting that presidential candidate, Senator Bernie Sanders of Vermont, will meet with President Obama in the Oval Office today. Much is being made of the fact that the meeting comes less than a week before the politically important Iowa caucuses and just two days after "Politico" published an exclusive interview with the President in which he appeared to favor a Clinton presidency. (Memo to the President:  this election is about finding an authentic non-establishment candidate, so your opinion as the quintessential establishment figure is not likely to sway folks – at least not in a good way.)

The first thing that came to mind when we heard about the meeting was that one or more kingpins on Wall Street might have asked the President to whisper in Senator Sanders’ ear to stop repeating at every campaign stop that the business model of Wall Street is fraud. Sanders is also regularly stating on the stump that one of his top priorities as President will be to break up those Wall Street banks that would require another taxpayer bailout if they should fail.

Would Wall Street actually be brazen enough to try to censor the message of a sitting U.S. Senator? Back in March of last year, Reuters reported that representatives of Citigroup, JPMorgan, Goldman Sachs and Bank of America “have met to discuss ways to urge Democrats, including [Elizabeth] Warren and Ohio Senator Sherrod Brown, to soften their party’s tone toward Wall Street.” The article noted that withholding campaign donations to Senate Democrats was one option that was on the table at the Wall Street banks.

Wall Street’s guns were out for Senators Elizabeth Warren and Sherrod Brown because both were mincing few words about the serial corruption on Wall Street. Senator Warren is also a lead sponsor of legislation to separate insured deposit banks from investment banks and brokerage firms that speculate in stocks, bonds and derivatives, thus restoring the Glass-Steagall Act that successfully protected the country’s financial system for 66 years until the Bill Clinton administration repealed it in 1999. Just nine years after its repeal, Wall Street imploded in a fashion similar to the 1929 crash – the reason that the Glass-Steagall Act was enacted in the first place in 1933.

Senator Sherrod Brown had raised eyebrows on Wall Street with his hearings that rooted out the unfathomable levels of physical holdings of oil, metals and other commodities that a negligent Federal Reserve had allowed Wall Street banks to take ownership of and control, unilaterally repealing decades of banking law with no Congressional input or even awareness.

Those hearings triggered an in-depth investigation and more outrageous disclosures in 2014 of an out-of-control Wall Street by the Senate’s Permanent Subcommittee on Investigations, then chaired by Senator Carl Levin, another Senator that refused to be silenced by Wall Street. Levin’s Subcommittee found that Wall Street banks had set up secret shell companies to gain control of a stunning amount of the nation’s industrial commodities – such as oil, aluminum, copper, natural gas, and even uranium – on a scale that “appears to be unprecedented in U.S. history,” according to a 400-page report released by the Subcommittee.

Since Republicans took control of both the Senate and House in January 2015 and appointed their own Committee and Subcommittee chairs, we’ve heard almost nothing further about this critical matter – proving once again how Wall Street gets its way on Capitol Hill.

Say something nice, if you say anything at all, about Wall Street became the mantra back in 2013. CNBC’s Maria Bartiromo (now on Fox) appeared on NBC’s "Meet the Press" on September 15, 2013 – the fifth anniversary of the Wall Street crash. Bartiromo had this to say:

Bartiromo: “We need to get beyond the conversation of is Wall Street evil, are the bankers evil and causing pain; and toward the conversation of, how do you create sustainable economic growth? That will answer the issue of inequality. Because with growth comes jobs.”
Fortunately for Americans, there are still Democrats in the U.S. Senate and a handful of Republicans who understand that Wall Street’s serial corruption and wealth transfer system is at the very heart of wealth and income inequality in America. America is also fortunate to have one Presidential candidate, Senator Bernie Sanders, who is serious about changing this reality.

Just last week we were reminded of just how little progress has been made on reforming Wall Street since President Obama took office in January 2009. JPMorgan Chase said in filings that it had awarded its Chairman and CEO, Jamie Dimon, total compensation of $27 million for 2015, an increase of 35 percent from the prior year. The obscene compensation came despite the fact that Dimon’s company became an admitted felon in 2015 for rigging foreign currency (Forex) markets. No major U.S. bank had ever before carried the taint of felon in U.S. financial history. After an unprecedented run of serial crimes against the investing public, detailed here by two attorneys who think this is on a par with a crime syndicate family, why is Jamie Dimon even still heading a major Wall Street bank, let alone getting a 35 percent pay increase?

The two attorneys, Helen Davis Chaitman and Lance Gotthoffer, who published a book about JPMorgan’s facilitation of the Bernie Madoff Ponzi scheme (which garnered it a deferred prosecution agreement from Eric Holder’s U.S. Justice Department), wrote the following about Dimon and JPMorgan Chase in May of last year:

If Carlo Gambino were alive, he’d be kissing the toes of Jamie Dimon out of abject admiration. Gambino and his cronies were like small-time pickpockets by comparison; and they went to prison for their crimes. They could never have foreseen that America would be run by the Obama/Holder team. As we demonstrated in Chapter 4 of JP Madoff, it is no exaggeration to say that JPMorgan operates like a crime syndicate. That’s why we suggested in Chapter 5 that it be criminally prosecuted under RICO — and punished like the members of other crime syndicates have been punished. And, believe it or not, even the participants in the Forex scheme knew they were acting like organized crime does.

“In its plea agreement with JP Morgan, the DOJ recites it had evidence sufficient to prove that: ‘In furtherance of the conspiracy, the defendant [JPMorgan] and its co-conspirators engaged in communications, including near daily conversations, some of which were in code, in an exclusive electronic chat room which chat room participants, as well as others in the [relevant] Market referred to as ‘The Cartel’ or ‘The Mafia.’ ”
On the same day last week that the news broke of Dimon’s obscene pay, the "Dow Jones" news site, "MarketWatch,"  published an article revealing that Wall Street is underwriting a significant amount of Initial Public Offerings (IPOs, meaning companies being sold to investors as publicly traded companies for the first time) whose auditors have issued a “going concern” warning. This warning, as the article explains, means that auditors are signaling that “there is reasonable doubt the company can stick it out over the next year — also frequently leads to a bankruptcy filing.”

The job of Wall Street is to fairly and responsibly allocate capital to companies which can help America grow and create good-paying jobs.

Underwriting IPOs for companies whose time frame for surviving may be less than a year sounds like a replay of the Bust of 2000 which destroyed trust in Wall Street and wiped out $4 trillion of investors’ wealth.

A third article came out last Thursday from Mark Karlin, Editor of "Buzzflash" at "Truthout," calling attention to Senator Warren’s upbraiding of Obama’s Justice Department’s and other regulators’ settlement with Goldman Sachs over its subprime mortgage abuses. Senator Warren had this to say on her Facebook page:

“In the 2008 financial crisis, we lost trillions in wealth and millions of people lost their homes and their jobs because of Wall Street recklessness. Today, Goldman Sachs announced it will pay $5.1 billion for its role in precipitating the economic collapse by misleading investors about the quality of the junk mortgage securities they peddled. Seven years later. No admission of guilt. No individuals are going to jail. A payment that’s barely a fraction of the billions investors lost – and the trillions our economy lost – because of this fraud. And over half of it could be tax deductible! That’s not justice — it’s a white flag of surrender.”
President Obama is clearly worried about his legacy and his career prospects that will ensue from that legacy. The time to have worried about that was when he contemplated who should run his Justice Department and his Treasury Department and his SEC. Thanks to those decisions, the country has a great deal more to worry about now than the President’s legacy.

All it would take to set America back on the right financial course are these 31 words in Wall Street reform legislation:

“No bank holding insured deposits can own or be affiliated with an investment bank, broker-dealer, futures commission merchant, insurance company or engage in the underwriting of stocks, bonds or derivatives.”
That’s the essence of restoring the Glass-Steagall Act and curtailing the unbridled looting of the public by the Wall Street machine.

And when it goes down again . . .

It goes downnnnnnn.

Hello 4th world!

Did Wall Street Banks Create the Oil Crash?

Price of West Texas Intermediate Crude Oil Before and After the 2008 Crash

Price of West Texas Intermediate Crude Oil Before and After the 2008 Crash
By Pam Martens and Russ Martens: January 26, 2016 
From June 2008 to the depth of the Wall Street financial crash in early 2009, U.S. domestic crude oil lost 70 percent of its value, falling from over $140 to the low $40s. But then a strange thing happened. Despite weak global economic growth, oil went back to over $100 by 2011 and traded between the $80s and a little over $100 until June 2014. Since then, it has plunged by 72 percent – a bigger crash than when Wall Street was collapsing.
The chart of crude oil has the distinct feel of a pump and dump scheme, a technique that Wall Street has turned into an art form in the past. Think limited partnerships priced at par on client statements as they disintegrated in price in the real world; rigged research leading to the Bust and a $4 trillion stock wipeout; and the securitization of AAA-rated toxic waste creating the subprime mortgage meltdown that cratered the U.S. housing market along with century-old firms on Wall Street.
Pretty much everything that’s done on Wall Street is some variation of pump and dump. Here’s why we’re particularly suspicious of the oil price action.
Americans know far too little about what was actually happening on Wall Street leading up to the crash of 2008. The Financial Crisis Inquiry Commission released its detailed final report in January 2011. But by July 2013, Senator Sherrod Brown, Chair of the Senate Banking Subcommittee on Financial Institutions and Consumer Protection had learned that Wall Street banks had amassed unprecedented amounts of physical crude oil, metals and other commodity assets in the period leading up to the crash. This came as a complete shock to Congress despite endless hearings that had been held on the crash.
On July 23, 2013, Senator Brown opened a hearing on this opaque perversion of banking law, comparing today’s Wall Street banks to the Wall Street trusts that had a stranglehold on the country in the early 1900s. Senator Brown remarked:
“There has been little public awareness of or debate about the massive expansion of our largest financial institutions into new areas of the economy. That is in part because regulators, our regulators, have been less than transparent about basic facts, about their regulatory philosophy, about their future plans in regards to these entities.
“Most of the information that we have has been acquired by combing through company statements in SEC filings, news reports, and direct conversations with industry. It is also because these institutions are so complex, so dense, so opaque that they are impossible to fully understand. The six largest U.S. bank holding companies have 14,420 subsidiaries, only 19 of which are traditional banks.

“Their physical commodities activities are not comprehensively or understandably reported. They are very deep within various subsidiaries, like their fixed-income currency and commodities units, Asset Management Divisions, and other business lines. Their specific activities are not transparent. They are not subject to transparency in any way. They are often buried in arcane regulatory filings.
“Taxpayers have a right to know what is happening and to have a say in our financial system because taxpayers, as we know, are the ones who will be asked to rescue these mega banks yet again, possibly as a result of activities that are unrelated to banking.”
The findings of this hearing were so troubling that the U.S. Senate’s Permanent Subcommittee on Investigations commenced an in-depth investigation. The Subcommittee, then chaired by Senator Carl Levin, held a two-day hearing on the matter in November  2014, which included a 400-page report of hair-raising findings.
Of particular interest was the jaw-dropping physical oil assets owned by Morgan Stanley, an institution that most people viewed as an investment bank advising on mergers and acquisitions and a retail brokerage firm with over 15,000 brokers advising moms and pops and institutions on their investment portfolios. Levin’s Subcommittee unearthed the following about Morgan Stanley:

Morgan Stanley had purchased massive physical oil holdings, including the purchase of TransMontaigne, which managed almost 50 oil sites within the United States and Canada. It also had a majority ownership stake in Heidmar, which “managed a fleet of 100 vessels delivering oil internationally.” Morgan Stanley also owned Olco Petroleum, “which blended oils, sponsored storage facilities, and ran about 200 retail gasoline stations in Canada.”
The report raised further concerns as to just what Morgan Stanley had morphed into with this finding:
“One of Morgan Stanley’s primary physical oil activities was to store vast quantities of oil in facilities located within the United States and abroad.  According to Morgan Stanley, in the New York-New Jersey-Connecticut area alone, by 2011, it had leases on oil storage facilities with a total capacity of 8.2 million barrels, increasing to 9.1 million barrels in 2012, and then decreasing to 7.7 million barrels in 2013. Morgan Stanley also had storage facilities in Europe and Asia.  According to the Federal Reserve, by 2012, Morgan Stanley held ‘operating leases on over 100 oil storage tank fields with 58 million barrels of storage capacity globally.’ ”
Let that sink in for a moment. With financial derivatives and 58 million barrels of physical storage capacity, it might not be so hard to manipulate the oil market.
The Subcommittee got its hands on an internal Federal Reserve memo from 2011, which acknowledged that the Fed knew what a sprawling industrial octopus Morgan Stanley had become, even though the Fed had granted it bank holding company status during the 2008 crash and injected a cumulative total of $2 trillion in below market-rate loans into Morgan Stanley to help it survive the crash. The Fed memo said that Morgan Stanley “controls a ‘vertically-integrated model’ spanning crude oil production, distillation, storage, land and water transport, and both wholesale and retail distribution.”
According to the Subcommittee’s finding, Morgan Stanley “used its storage facilities to build inventories with millions of barrels of different types of oil.”
Morgan Stanley was not the only mega Wall Street bank singled out in the study. Among its numerous findings of fact were the following:
“Incurring New Systemic Risks.  Due to their physical commodity activities, Goldman, JPMorgan, and Morgan Stanley incurred increased financial, operational, and catastrophic event risks, faced accusations of unfair trading advantages, conflicts of interest, and market manipulation, and intensified problems with being too big to manage or regulate, introducing new systemic risks into the U.S. financial system.
“Using Ineffective Size Limits.  Prudential safeguards limiting the size of physical commodity activities are riddled with exclusions and applied in an uncoordinated, incoherent, and ineffective fashion, allowing JPMorgan, for example, to hold physical commodities with a market value of $17.4 billion – nearly 12% of its Tier 1 capital – while at the same time calculating the market value of its physical commodity holdings for purposes of complying with the Federal Reserve limit at just $6.6 billion.”
At another hearing on January 15, 2014, Norman Bay, the Director of the Office of Enforcement at the Federal Energy Regulatory Commission (FERC), explained how the rigging of the commodities markets might be conducted:
“A fundamental point necessary to understanding many of our manipulation cases is that financial and physical energy markets are interrelated…a manipulator can use physical trades (or other energy transactions that affect physical prices) to move prices in a way that benefits his overall financial position.  One useful way of looking at manipulation is that the physical transaction is a ‘tool’ that is used to ‘target’ a physical price…The purpose of using the tool to target a physical price is to raise or lower that price in a way that will increase the value of a ‘benefitting position’ (like a Financial Transmission Right or FTR product in energy markets, a swap, a futures contract, or other derivative).
“Increasing the value of the benefitting position is the goal or motive of the manipulative scheme.  The manipulator may lose money in its physical trades, but the scheme is profitable because the financial positions are benefitted above and beyond the physical losses.”
Wall Street mega banks are able to leverage their oil trades in the futures market by a factor of 95 to 1 or greater. Typically, margin of 5 percent or less is required of large oil speculators on the major commodity futures exchanges. If you know the direction of prices, you can make a killing using very little of your own firm’s capital. And if you also own the physical commodities, you can call yourself a bona fide hedger and avoid rules meant to rein in risky or manipulative trading.
Morgan Stanley has reduced its holdings of oil assets and storage capacity in recent years. Exactly how much remains is not known. In a November 2, 2015 press release, Morgan Stanley announced that it had completed the sale of its Global Oil Merchanting unit of its Commodities division to Castleton Commodities International LLC. The financial terms were not disclosed, however, the Financial Times reported that its Heidmar assets were not part of the deal.
The Federal Reserve, the sole regulator in the United States of bank holding companies, has known since at least 2009 that the mega Wall Street banks were building massive positions in physical commodities. It was that year that 60 Minutes revealed that Morgan Stanley had the capacity to store and hold 20 million barrels of oil and Goldman Sachs had taken stakes in companies that owned oil storage terminals – while both firms’ oil analysts made public statements that oil would reach $150 and $200 per barrel, respectively.
Now that Morgan Stanley has shed significant exposure to oil, its analysts are singing a different tune. Earlier this month on January 11, Bloomberg News reported that Morgan Stanley was predicting that “Oil is particularly leveraged to the dollar” and could potentially fall to $20.


The Populist Revolution:  Bernie and Beyond

The world is undergoing a populist revival. From the revolt against austerity led by the Syriza Party in Greece and the Podemos Party in Spain, to Jeremy Corbyn’s surprise victory as Labour leader in the UK, to Donald Trump’s ascendancy in the Republican polls, to Bernie Sanders’ surprisingly strong challenge to Hillary Clinton – contenders with their fingers on the popular pulse are surging ahead of their establishment rivals.
Today’s populist revolt mimics an earlier one that reached its peak in the US in the 1890s. Then it was all about challenging Wall Street, reclaiming the government’s power to create money, curing rampant deflation with US Notes (Greenbacks) or silver coins (then considered the money of the people), nationalizing the banks, and establishing a central bank that actually responded to the will of the people.
Over a century later, Occupy Wall Street revived the populist challenge, armed this time with the Internet and mass media to spread the word. The Occupy movement shined a spotlight on the corrupt culture of greed unleashed by deregulating Wall Street, widening the yawning gap between the 1% and the 99% and destroying jobs, households and the economy.

Donald Trump’s populist campaign has not focused much on Wall Street; but Bernie Sanders’ has, in spades. Sanders has picked up the baton where Occupy left off, and the disenfranchised Millennials who composed that movement have flocked behind him.

The Failure of Regulation

Sanders’ focus on Wall Street has forced his opponent Hillary Clinton to respond to the challenge. Clinton maintains that Sanders’ proposals sound good but “will never make it in real life.” Her solution is largely to preserve the status quo while imposing more bank regulation.

That approach, however, was already tried with the Dodd-Frank Act, which has not solved the problem although it is currently the longest and most complicated bill ever passed by the US legislature. Dodd-Frank purported to eliminate bailouts, but it did this by replacing them with “bail-ins” – confiscating the funds of bank creditors, including depositors, to keep too-big-to-fail banks afloat. The costs were merely shifted from the people-as-taxpayers to the people-as-creditors.

Worse, the massive tangle of new regulations has hamstrung the smaller community banks that make the majority of loans to small and medium sized businesses, which in turn create most of the jobs. More regulation would simply force more community banks to sell out to their larger competitors, making the too-bigs even bigger.

In any case, regulatory tweaking has proved to be an inadequate response. Banks backed by an army of lobbyists simply get the laws changed, so that what was formerly criminal behavior becomes legal. (See, e.g., CitiGroup’s redrafting of the “push out” rule in December 2015 that completely vitiated the legislative intent.)

What Sanders is proposing, by contrast, is a real financial revolution, a fundamental change in the system itself. His proposals include eliminating "Too Big to Fail" by breaking up the biggest banks; protecting consumer deposits by reinstating the Glass-Steagall Act (separating investment from depository banking); reviving postal banks as safe depository alternatives; and reforming the Federal Reserve, enlisting it in the service of the people.

Time to Revive the Original Populist Agenda?

Sanders’ proposals are a good start. But critics counter that breaking up the biggest banks would be costly, disruptive and destabilizing; and it would not eliminate Wall Street corruption and mismanagement.

Banks today have usurped the power to create the national money supply. As the Bank of England recently acknowledged, banks create money whenever they make loans. Banks determine who gets the money and on what terms. Reducing the biggest banks to less than $50 billion in assets (the Dodd-Frank limit for “too big to fail”) would not make them more trustworthy stewards of that power and privilege.

How can banking be made to serve the needs of the people and the economy, while preserving the more functional aspects of today’s highly sophisticated global banking system? Perhaps it is time to reconsider the proposals of the early populists. The direct approach to “occupying” the banks is to simply step into their shoes and make them public utilities. Insolvent megabanks can be nationalized – as they were before 2008. (More on that shortly.)

Making banks public utilities can happen on a local level as well. States and cities can establish publicly-owned depository banks on the highly profitable and efficient model of the Bank of North Dakota. Public banks can partner with community banks to direct credit where it is needed locally; and they can reduce the costs of government by recycling bank profits for public use, eliminating outsized Wall Street fees and obviating the need for derivatives to mitigate risk.

At the federal level, not only can postal banks serve as safe depositories and affordable credit alternatives, but the central bank can provide is it just a source of interest-free credit for the nation – as was done, for example, with Canada’s central bank from 1939 to 1974. The U.S. Treasury could also reclaim the power to issue, not just pocket change, but a major portion of the money supply – as was done by the American colonists in the 18th century and by President Abraham Lincoln in the 19thcentury.

Nationalization: Not As Radical As It Sounds

Radical as it sounds today, nationalizing failed megabanks was actually standard operating procedure before 2008. Nationalization was one of three options open to the FDIC when a bank failed. The other two were (1) closure and liquidation, and (2) merger with a healthy bank. Most failures were resolved using the merger option, but for very large banks, nationalization was sometimes considered the best choice for taxpayers.  The leading U.S. example was Continental Illinois, the seventh-largest bank in the country when it failed in 1984. The FDIC wiped out existing shareholders, infused capital, took over bad assets, replaced senior management, and owned the bank for about a decade, running it as a commercial enterprise.

What was a truly radical departure from accepted practice was the unprecedented wave of government bailouts after the 2008 banking crisis. The taxpayers bore the losses, while culpable bank management not only escaped civil and criminal penalties but made off with record bonuses.

In a July 2012 article in "The New York Times" titled “Wall Street Is Too Big to Regulate,” Gar Alperovitz noted that the five biggest banks — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Goldman Sachs — then had combined assets amounting to more than half the nation’s economy. He wrote:

With high-paid lobbyists contesting every proposed regulation, it is increasingly clear that big banks can never be effectively controlled as private businesses.  If an enterprise (or five of them) is so large and so concentrated that competition and regulation are impossible, the most market-friendly step is to nationalize its functions. . . .

Nationalization isn’t as difficult as it sounds.  We tend to forget that we did, in fact, nationalize General Motors in 2009; the government still owns a controlling share of its stock.  We also essentially nationalized the American International Group, one of the largest insurance companies in the world, and the government still owns roughly 60 percent of its stock.
A more market-friendly term than nationalization is “receivership” – taking over insolvent banks and cleaning them up. But as Dr. Michael Hudson observed in a 2009 article, real nationalization does not mean simply imposing losses on the government and then selling the asset back to the private sector. He wrote:

Real nationalization occurs when governments act in the public interest to take over private property. . . . Nationalizing the banks along these lines would mean that the government would supply the nation’s credit needs. The Treasury would become the source of new money, replacing commercial bank credit. Presumably this credit would be lent out for economically and socially productive purposes, not merely to inflate asset prices while loading down households and business with debt as has occurred under today’s commercial bank lending policies.
A Network of Locally-Controlled Public Banks

“Nationalizing” the banks implies top-down federal control, but this need not be the result. We could have a system of publicly-owned banks that were locally controlled, operating independently to serve the needs of their own communities.

As noted earlier, banks create the money they lend simply by writing it into accounts. Money comes into existence as a debit in the borrower’s account, and it is extinguished when the debt is repaid. This happens at a grassroots level through local banks, creating and destroying money organically according to the demands of the community. Making these banks public institutions would differ from the current system only in that the banks would have a mandate to serve the public interest, and the profits would be returned to the local government for public use.

Although most of the money supply would continue to be created and destroyed locally as loans, there would still be a need for the government-issued currency envisioned by the early populists, to fill gaps in demand as needed to keep supply and demand in balance. This could be achieved with a national dividend issued by the federal Treasury to all citizens, or by “quantitative easing for the people” as envisioned by Jeremy Corbyn, or by quantitative easing targeted at infrastructure.

For decades, private sector banking has been left to its own devices. The private-only banking model has been thoroughly tested, and it has proven to be a disastrous failure. We need a banking system that truly serves the needs of the people, and that objective can best be achieved with banks that are owned and operated by and for the people.