In the Land of White Ribbons
Posted: December 12, 2011 Filed under: #Occupy and We are the 99 percent!, corruption, Democratic Politics, Elections, Populism, Russia, The Russian Winter | Tags: 2011: days of revolt, middle class, worldwide protests 6 CommentsFirst we had the Arab Spring then the European Summer. The American Autumn manifested itself in the Occupy Wall St. Movement.
Welcome the Russian Winter.
Saturday nearly 35,000 young, mostly university-educated protesters, the new Russian middle class, gathered in Moscow in peaceful demonstration. Reportedly, a police presence on the order of 50,000 greeted them. But still they came and marched to voice opposition to Russia’s recent election results. Vladimir Putin’s party won the parliamentary election after multiple reports of election fraud and ballot box stuffing. For instance, in Chechnya [hardly a place of Putin-love] the party pulled 94% of the vote. Putin has announced his plans to run in Russia’s March presidential elections to the dismay of many citizens, who charge that fraud and corruption run rampant throughout the country’s political system.
Demonstrators, donning white ribbons, marched in various cities around the country to say: Enough is enough.
Dismissed by the official Russian press, the white ribbon demonstrators were ignored by state television, which focused on small, flag-waving pro-Putin groups. How did the word get out? Social media—Facebook and twitter.
In an attempt to disrupt the protests, Russian authorities circulated rumors that young men present at the rallies could be stopped by police and conscripted into the army. Health officials reportedly warned citizens to stay home for fear of contracting a virulent flu or Sars. Twitter feeds were jammed and robo-calls flooded phone lines with messages of state propaganda.
Sound vaguely familiar?
How much press is OWS getting today with its West coast port demonstrations? How many words have been spent denigrating protesters as un-American losers, slackers, even dangerous criminals? Let’s not forget the MSM’s reluctance to cover OWS, the strange lack of network film footage during police actions, particularly as the encampments were dismantled. Twitter feeds jammed, cameras turned off.
Still, the world is watching. The world is pushing back. Everywhere.
What he said …
Posted: December 11, 2011 Filed under: #Occupy and We are the 99 percent!, Bailout Blues, Banksters, Economy, financial institutions, Global Financial Crisis 6 CommentsI keep talking about the utter audacity of the political class these days and how they completely ignore everything we know about economics and finance in pursuit of
self-dealing and getting political donations from the FIRE industries. I particularly hate that we’ve got this complete twisted notion of “free” trade and “free” markets thanks to a bunch of really ignorant right wingers and mouthpieces like Rush Limbaugh, Fox News, Larry Kudlow, etc. etc. etc.. These folks are out to line their own pockets and they are pitching nonsense to low information zombies.
I also really hate to just wholesale copy and paste another blog–in this case Washington Blog at The Big Picture–but some times you just have to let the voice of the source speak for itself and hope it stands up to the ideals of fair use. Thanks go to Fiscal Liberal for pointing me to this list and its readable wonky links of proof. It’s called ‘The Financial Crisis was Entirely Foreseeable’ but it might as well be labelled ‘Idiots in the Beltway are spewing memes and setting us up for a big ol’ repeat of the global financial meltdown’. Idiots in Europe are doing likewise. Why are they all bailing ut gambling bankers over their households and real businesses? Where’s a politician that really knows his stuff when it comes to authentic finance and economics?
We’ve Known for Thousands of Years
We’ve known for literally thousands of years that debts need to be periodically written down, or the entire economy will collapse. And see this.
We’ve known for 1,900 years that that rampant inequality destroys societies.
We’ve known for thousands of years that debasing currencies leads to economic collapse.
We’ve known for hundreds of years that the failure to punish financial fraud destroys economies.
We’ve known for hundreds of years that monopolies and the political influence which accompanies too much power in too few hands is dangerous for free markets.
We’ve known for hundreds of years that trust is vital for a healthy economy.
We’ve known since the 1930s Great Depression that separating depository banking from speculative investment banking is key to economic stability. See this, this, this and this.
We’ve known since 1988 that quantitative easing doesn’t work to rescue an ailing economy.
We’ve known since 1993 that derivatives such as credit default swaps – if not reined in – could take down the economy. And see this.
We’ve known since 1998 that crony capitalism destroys even the strongest economies, and that economies that are capitalist in name only need major reforms to create accountability and competitive markets.
We’ve known since 2007 or earlier that lax oversight of hedge funds could blow up the economy.
And we knew before the 2008 financial crash and subsequent bailouts that:
- The easy credit policy of the Fed and other central banks, the failure to regulate the shadow banking system, and “the use of gimmicks and palliatives” by central banks hurt the economy
- Anything other than (1) letting asset prices fall to their true market value, (2) increasing savings rates, and (3) forcing companies to write off bad debts “will only make things worse”
- Bailouts of big banks harm the economy
- The Fed and other central banks were simply transferring risk from private banks to governments, which could lead to a sovereign debt crisis
Given the insane levels of debt, rampant inequality, currency debasement, failure to punish financial fraud, growth of the too big to fails, repeal of Glass-Steagall, refusal to rein in derivatives, crony capitalism and other shenanigans … the financial crisis was entirely foreseeable.
Okay, so let’s just end that last part by taking out “the financial crisis was entirely foreseeable” and by replacing it with “the next big financial crisis is entirely foreseeable and getting more likely every day”. If you need any proof of further inevitability just listen to ANY Republican these days and most of the Democratic Caucus. They are resplendent with VooDoo Economics and Finance believers and enablers. It’s just like with climate science and evolution. An entire group of people who embrace ideology over reality just can’t seem to get out of the flat earth theories. Watching the Republican debates alone has been like watching the march of ignorance personified. I’m waiting for them to start announcing the earth is only a few thousand years old, gravity doesn’t exist or need to because god’s hand holds us in place, and 1 + 1 is really 3. If only the media would act like the set of fact checkers they could be instead of mouthpieces for corporate interests we might actually be able to get through to a few zombies and bring them back to life. Until then, get ready for the next big one.
Congressional Insider Trading: A case study in Moral Hazard
Posted: December 9, 2011 Filed under: #Occupy and We are the 99 percent!, corruption | Tags: congressional insider trading, congressional self dealing, josephy stiglitz 9 Comments
The more I’ve become aware of how pervasive the problem is of congressional insider trading, the more horrified I’ve become. This is a worst case scenario because this is just like congressional raises and campaign finance reform in that the foxes are in charge of their taxpayer funded chicken coop. They are unlikely to pass any kind of law that controls self-dealing behavior and there is no other way to get it done. There are always a few of them that are willing to do the right thing but the leadership of each house is most likely to be the stellar examples of those that manipulate the system to their own advantage. So, if a law comes up, the leadership will stop any forward momentum. Insider trading appears to be a bi-partisan problem with egregious examples from both sides of the aisle.
Insider trading in the financial markets is one of the most prosecuted and investigated crimes. The realization that inside information–information you have that is not available to the public–gives you an unfair advantage in predicting prices of assets is long standing. It’s been declared unethical and illegal for some time. Insider, self dealing behavior has been a problem for our country both in and outside of government. One good early congressional example is that of William Duer who was a member of the Continental Congress. However, Duer was an outlier for his time. Recent investigation by journalists indicate that the current congresspeople regularly self deal by buying stocks and other assets while influencing legislation that directly impacts those holdings.
Eric Cantor just blocked a bill that would outlaw insider trading by members of congress. This appears to be another example of a congressional leader who has made money off a practice ensuring they can continue to ride their gravy train. The behavior is clearly an example of self-dealing and is considered unethical in Wall Street and financial market circles. Given those guys frequently try to push the envelop on acceptable investing behaviors, that really puts Cantor in the poster child of moral hazard category.
The Republican sponsor of the bill in the House, Financial Services Chairman Spencer Bachus of Alabama, had scheduled a markup of the Stop Trading on Congressional Knowledge (STOCK) Act for next week. But on Wednesday, Majority Leader Eric Cantor of Virginia cancelled the markup session.
Cantor reportedly said he blocked the bill to give Congress more time to examine the issue. Critics of the move, however, fear that any delay could kill the bill entirely.
Some version of the the STOCK Act has been bouncing around Capitol Hill for six years. But recent attention to the issue of Congressional insider trading, following reports from CNBC’s Eamon Javers and a “60 Minutes” report, brought the bill out of stasis and made its passage into law seem likely. If the latest delay pushes the bill into next year, it may become lost in election-year politics.
Trading by lawmakers based on non-public information about legislation falls into what many see as a loophole in insider trading regulations.
Although corporate insiders are banned from trading on non-public information about their companies, congressional representatives and senators may not be banned from trading on non-public information about legislation or regulation. The legal issue is disputed by scholars and regulators.
The head of the enforcement division of the Securities and Exchange Commission recently argued that congressional insider trading is already banned. But he admitted that no legal action has ever been taken against a member of Congress.
Studies have shown the investment portfolios of House members and Senators consistently outperform the market by significant degrees, suggesting they are either miraculously bright and lucky investors or using their access to non-public information when trading. Financial experts regard the idea that it is just luck or investing smarts as laughable.
Minnesota Democrat-Farm-Labor Representative Tim Walz has been one of the bill’s sponsor. He’s currently doing interviews in an attempt to shame Cantor into releasing his hold.
The 1st District DFL Rep. Tim Walz-sponsored STOCK Act — Stop Trading in Congressional Knowledge — has been around for six years, but just recently started getting attention. It had been going nowhere until a “60 Minutes” report in November.
“We know that during the health care debate, people were trading health care stocks. We know that during the financial crisis of 2008, they were getting out of the market before the rest of America really knew what was going on,” Peter Schweizer, a fellow at the conservative Hoover Institution said on “60 Minutes.”
Overnight, the bill went from a handful of co-sponsors to having dozens. A month later, the bill has more than 220 co-sponsors from both parties, but mostly from the House.
This is a bill that should be on the top of the list for things that those sympathetic of the Occupy movement. It should appeal to Tea Republicans too. This is clearly something that is highly unethical and similar behavior by senior management in the private sector would be subject to criminal investigation and would result in charges. You can watch the 60 Minutes segment here. It’s worth watching. This bill should pass and be implemented. Something is seriously wrong with Eric Cantor’s moral barometer if he really thinks it needs more study.
Cantor’s move comes after we find that the wealth of US households suffered their biggest loss last quarter since the worst part of the financial crisis in 2008. Congress actually gained net worth during the same period. Last quarter’s losses by ordinary Americans are undoubtedly due to the eurozone crisis–which is essentially yet another bank problem–and the brinkmanship behavior of Congress balking at passing the debt ceiling increase to pay for spending they approved. The inability of congress to do anything substantial for the economy and instead engaging in naked partisan one-up-man-ship has been beyond the comprehension of most economists who know exactly what needs to be done to put the nation back on solid ground.
Even more unsettling than the latest quarterly figures on wealth destruction is the amount of wealth that has been vaporized in the past four years. The net worth of American households peaked in 2007 at $66.8 trillion. As of September 30, 2011, the net worth of American households had plunged to $57.4 trillion for a loss of $9.4 trillion. To put these number in perspective, this is a loss of net worth per person in the United States of $30,618. A family of four is statistically poorer by $122,472 than they were in 2007.
This is nothing less than malpractice on the part of elected officials that are more focused on gaining and keeping seats in their caucuses than doing right by the American people. Joseph Stiglitz’s ‘The Book of Jobs’ in January’s Vanity Fair is a compelling list of America’s economic troubles and the sins our elected officials in getting everything backasswards. This has not been our grandparent’s Great Depression where the government and the administration thought and acted big to take care of American people and their communities. Instead, our congress jumped to benefit personally from their knowledge of the problems by investing correctly and conducting policy improperly. They seem to know what their actions are doing when it comes to smartly using their own funds for their own enrichment.
It has now been almost five years since the bursting of the housing bubble, and four years since the onset of the recession. There are 6.6 million fewer jobs in the United States than there were four years ago. Some 23 million Americans who would like to work full-time cannot get a job. Almost half of those who are unemployed have been unemployed long-term. Wages are falling—the real income of a typical American household is now below the level it was in 1997.
We knew the crisis was serious back in 2008. And we thought we knew who the “bad guys” were—the nation’s big banks, which through cynical lending and reckless gambling had brought the U.S. to the brink of ruin. The Bush and Obama administrations justified a bailout on the grounds that only if the banks were handed money without limit—and without conditions—could the economy recover. We did this not because we loved the banks but because (we were told) we couldn’t do without the lending that they made possible. Many, especially in the financial sector, argued that strong, resolute, and generous action to save not just the banks but the bankers, their shareholders, and their creditors would return the economy to where it had been before the crisis. In the meantime, a short-term stimulus, moderate in size, would suffice to tide the economy over until the banks could be restored to health.
The banks got their bailout. Some of the money went to bonuses. Little of it went to lending. And the economy didn’t really recover—output is barely greater than it was before the crisis, and the job situation is bleak. The diagnosis of our condition and the prescription that followed from it were incorrect.
The problem is that congress–due to its ability to self deal–has no experience of any of this. In fact, the more we suffer it appears the more they make up fairy tales that suggest the only people doing well in this economy should be left to repeat the sins of their past. A congressional seat should not be an easy path to a secure position among the 1 percent. It appalls me that so many folks don’t seem to actually get this. Witness the rise of ultimate self-dealer Newt Gingrich to the front runner status of the republican presidential campaign. If we can’t stand up to the likes of Eric Cantor and we can’t reject the leadership model of Newt Gingrich, we will certainly loose any semblance of truly representative government. This bill would close the door on one faucet of the moral hazard problems that are rampant in government.
The Art of Doublespeak
Posted: December 1, 2011 Filed under: #Occupy and We are the 99 percent!, 2012 presidential campaign, double-speak, Economy, income inequality, unemployment | Tags: 2011: days of revolt, 2012 presidential election, Financial Crisis 9 CommentsLanguage is important. Words can inspire, inflame, enrage. Words can hide a speaker’s intentions. Sing me a lullaby. Spin me a fairytale. Sell me a load of bull-hockey.
One of today’s best-known language twisters is Frank Luntz. Pollster and political consultant, Luntz is the Master of Political Doublespeak. He would have made Orwell proud: War is Peace, Freedom is Slavery, Ignorance is Strength. He crawls out during every election cycle with the creepy focus groups, wired up and ready to go. We learn ‘what words work.’ Otherwise known as ‘what words obfuscate, spin and get the best reaction from would-be voters.’
Well, here’s a Newsflash: Luntz is worried about Occupy Wall Street, all those sorry slackers the GOP and various critics have sidelined as hippies, losers and Obama-lovers. Seems from Luntz’s point of view, OWS is having an impact on political discourse.
No kidding Sherlock!
And so, Luntz decided a tutorial was needed to school Republicans how to “speak” when asked questions about the very issues that the Occupy wave has been raising.
Fascinating! A defense against the so-called irrelevant. But even more fascinating is the list of rules on how to ‘discuss and defend against’ the grievances that Occupy members have introduced into the public sphere.
The very first instruction made me laugh:
Don’t say capitalism.
Because people might start questioning the broken economic construct that’s taken root in the US. Btw, I haven’t heard OWS slamming capitalism, per se. It’s Vulture Capitalism, the darling of the neoliberal/libertarian set, that’s being questioned and panned, where only the well-heeled financial class takes the booty while the rest of the country is left to collect unemployment checks and shop with food stamps. Sorry, don’t think ‘free market’ or ‘economic freedom’ will wash in a country where poverty is rising at an alarming rate and over 20% of American kids are classified as food insecure.
Politicians whether Right or Left need to do far better than that. Like maybe tell the truth: that the financial class in this country has been running a huge Ponzi scheme, that transnational corporations are willing to run roughshod over everything in a blind pursuit of profit, that endless war makes money for the few, while the many bleed.
That would be refreshing.
Don’t say the government taxes the rich. Tell them the government takes from the rich.
Oh yes, that’s much better. Then pull out Warren Buffet’s statement that his tax rate
[as a multi-billionaire] is lower than what his secretary is required to pay. And please, take a spin over the corporate history of negative taxes after all the loopholes and government largesse heaped on the ‘job creators’ is taken in to account. Then too, let’s not forget the ‘off-shore’ pooling of tax-free profits and tidy nest eggs. The beat goes on for those with the courage to look.
The government takes from the rich? Hahaha. More like the government sucks up to the rich and their ever-present lobbyists.
Republicans should forget winning the battle for the middle-class. Call them hardworking tax-payers.
Yes, Republicans should forget winning the middle-class since they’ve gone out of their way to eliminate them, crush them out like last year’s cigarettes.
Frank Luntz is ‘really’ scared of the Occupy Movement ? With rules like this he may be out of a job. If the Republican’s go-to wordsmith can’t get his head or words around the basic complaints of not simply Occupy but most Americans and/or the very real economic and political discontent, then they are deaf, dumb and blind.
Or maybe smart like the wily fox. Because the evidence is everywhere. What to do? Keep the disinformation and propaganda machine in high gear. I won’t belabor the hypocrisy and cynicism of Luntz’s list. He and the entire stable of political pollsters, consultants and analysts on all sides are merely symptoms of a system flailing in the wind, a system that’s forgotten how to reach out or even talk to real people in anything approaching honest discourse. A system that has no respect for its citizenry.
Will the Luntz approach work as it has in the past?
We shall see. But I invite you to read the Ten Commandments of Political Doublespeak for 2012 at the link above. Some examples will make you laugh. Several will make you mad as hell.
Oh, and here’s a tip: Don’t say the word ‘Bonus.’






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