Wednesday, November 30, 2011

How the "Job Creators" Have Failed

In the US the Republican party continues to argue for tax cuts for the ultra-rich and for corporations on the myth that these are "job creators" and you need to do everything possible to encourage them.

Here is the reality. From a post by Ed Yardini:

Click to Enlarge
The rebound in [business] profits’ share of National Income has been spectacular. It jumped from a recession low of 7.9% during Q4-2008 to 14.7% during the third quarter of this year. That surpasses all previous cyclical peaks.


Compensation of employees continued to lose share of National Income during Q3. It fell to 61.4%, the lowest since Q3-1965, and down from a record high of 68.5% during Q2-1980.
Let me spell this out very simply for you: the rich get richer, the poor get poorer.

If you are working, all of your increased productivity has gone as profits to the corporations and the workers have received none of it.

Politics in America

The US is one of the few countries in the world where legal fictions have the rights of citizens and human being have "rights" only insofar they they don't try to exercise them. It is an Alice In Wonderland country.

Here is Robert Reich:
A funny thing happened to the First Amendment on its way to the public forum. According to the Supreme Court, money is now speech and corporations are now people. But when real people without money assemble to express their dissatisfaction with the political consequences of this, they’re treated as public nuisances and evicted.

First things first. The Supreme Court’s rulings that money is speech and corporations are people have now opened the floodgates to unlimited (and often secret) political contributions from millionaires and billionaires. Consider the Koch brothers (worth $25 billion each), who are bankrolling the Tea Party and already running millions of dollars worth of ads against Democrats.

Such millionaires and billionaires aren’t contributing their money out of sheer love of country. They have a more self-interested motive. Their political spending is analogous to their other investments. Mostly they want low tax rates and friendly regulations.

Wall Street is punishing Democrats for enacting the Dodd-Frank financial reform legislation (weak as it is) by shifting its money to Republicans. The Koch brothers’ petrochemical empire has financed, among many other things, candidates who will vote against environmental protection.

This tsunami of big money into politics is the real public nuisance. It’s making it almost impossible for the voices of average Americans to be heard because most of us don’t have the dough to break through. By granting First Amendment rights to money and corporations, the First Amendment rights of the rest of us are being trampled on.

This is where the Occupiers come in. If there’s a core message to the Occupier movement it’s that the increasing concentration of income and wealth poses a grave danger to our democracy.

Yet when Occupiers seek to make their voices heard — in one of the few ways average people can still be heard — they’re told their First Amendment rights are limited.

The New York State Court of Appeals along with many mayors and other officials say Occupiers can picket — but they can’t encamp. Yet it’s the encampments themselves that have drawn media attention (along with the police efforts to remove them).

A bunch of people carrying pickets isn’t news. When it comes to making views known, picketing is no competition for big money .

Yet if Occupiers now shift tactics from passive resistance to violence, it would spell the end of the movement. The vast American middle class that now empathizes with the Occupiers would promptly desert them.
I may be wrong, but if you refuse to give political rights to people, then they will organize and seize those rights by bloody revolution. The words of Thomas Jefferson are prophetic: The tree of liberty must from time to time be refreshed with the blood of patriots and tyrants. It is its natural manure.

Americans Love Their "Freedom"

Here's what happens in America is you try to promote democracy by registering voters in "Freedom" Plaza...

There is something deeply wrong about a people that label everything "freedom" and "liberty" and then go about arresting people for seemingly innocuous acts. If anything, trying to enfranchise the populace should be a "protected" activity, not something subject to arrest and imprisonment. This is especially disturbing because the fellow arrested was Ray Lutz, a 2010 Congressional candidate for the Democratic Party.

More details here...

Tuesday, November 29, 2011

Taibbi on the Two-Tier Legal System in the US

Here is a bit from an excellent post by Matt Taibbi in his Rolling Stone blog:
In one of the more severe judicial ass-whippings you’ll ever see, federal Judge Jed Rakoff rejected a slap-on-the-wrist fraud settlement the SEC had cooked up for Citigroup.

I wrote about this story a few weeks back when Rakoff sent signals that he was unhappy with the SEC’s dirty deal with Citi, but yesterday he took this story several steps further.

Rakoff’s 15-page final ruling read like a political document, serving not just as a rejection of this one deal but as a broad and unequivocal indictment of the regulatory system as a whole. He particularly targeted the SEC’s longstanding practice of greenlighting relatively minor fines and financial settlements alongside de facto waivers of civil liability for the guilty – banks commit fraud and pay small fines, but in the end the SEC allows them to walk away without admitting to criminal wrongdoing.

This practice is a legal absurdity for several reasons. By accepting hundred-million-dollar fines without a full public venting of the facts, the SEC is leveling seemingly significant punishments without telling the public what the defendant is being punished for. This has essentially created a parallel or secret criminal justice system, in which both crime and punishment are adjudicated behind closed doors.


Judge Rakoff blew a big hole in that practice [the SEC’s longstanding practice of greenlighting relatively minor fines and financial settlements alongside de facto waivers of civil liability for the guilty – banks commit fraud and pay small fines, but in the end the SEC allows them to walk away without admitting to criminal wrongdoing] yesterday. His ruling says secret justice is not justice, and that the government cannot hand out punishments without telling the public what the punishments are for. He wrote:
Finally, in any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives, there is an overriding public interest in knowing the truth. In much of the world, propaganda reigns, and truth is confined to secretive, fearful whispers. Even in our nation, apologists for suppressing or obscuring the truth may always be found. But the S.E.C., of all agencies, has a duty, inherent in its statutory mission, to see that the truth emerges; and if it fails to do so, this Court must not, in the name of deference or convenience, grant judicial enforcement to the agency's contrivances.
Notice the reference to how things are “in much of the world,” a subtle hint that the idea behind this ruling is to prevent a slide into third-world-style justice.


Here’s a clip of me talking about the ruling last night on Countdown with Keith Olbermann.

Since Obama and his Attorney General aren't willing to treat crime seriously, hopefully the courts will step up and give the American people some justice.

Mario Savio Lives!

Here is a speech by Robert Reich in honour of Mario Savio and the Berkeley FSM (Free Speech Movement)...

Sadly, Mario Savio is dead, but his words live on. I love this bit:
There's a time when the operation of the machine becomes so odious—makes you so sick at heart—that you can't take part. You can't even passively take part. And you've got to put your bodies upon the gears and upon the wheels, upon the levers, upon all the apparatus, and you've got to make it stop. And you've got to indicate to the people who run it, to the people who own it, that unless you're free, the machine will be prevented from working at all.

What sparked FSM? Students wanted to include "political" tables on the plaza along with the others about fraternities/sororities and other campus groups. Here is a video of the original "Occupy" Berkeley demo:

The struggle for a better world is an eternal fight. It can't be fought and won and forgotten. Sadly it is an on-going struggle. As Thomas Jefferson said of Shay's Rebellion which occurred shortly after the War of Independence:
What signify a few lives lost in a century or two? The tree of liberty must from time to time be refreshed with the blood of patriots and tyrants. It is its natural manure.
Unlike Jefferson, I would propose that the focus of the struggle should be focused on education, voting, and the moral suasion of protest and not bloody revolution. Violence too often goes off the rails. But an organized and motivated social movement has a legacy. It is potent.

The last few minutes of the video make it very, very clear how actions have consequences and the social struggle continues through the ages. Reich recalls his friend Michael Schwerner who died in 1964 during the Freedom Summer when Mario Savio and many hundreds of other activists went into the Deep South to help register blacks to vote and to help bring change to that deeply brutal and ugly racist society. They won that struggle, but it was a bitter one. Robert Reich is evidence of how a thread of struggle knits the ages together. We are inheritors of previous struggles and our present struggle helps endow the future with a better world. It is an endless struggle, but a necessary struggle and a fruitful struggle.

Monday, November 28, 2011

Free Speech

Here is a passionate plea by Robert Reich for more free speech and less bought-and-sold politics:

As a bonus... Here's Robert Reich on the "super-committee" and 4 steps to economic recovery:

Downward Mobility

The reality in America today is that wages fail to keep up with inflation and all the benefits of productivity improvements go to the top 0.01% and not to the workers. This is an economic crime.

Here is a bit from Robert Reich on his blog that highlights this:
For most of the last century, the basic bargain at the heart of the American economy was that employers paid their workers enough to buy what American employers were selling.

That basic bargain created a virtuous cycle of higher living standards, more jobs, and better wages.

Back in 1914, Henry Ford announced he was paying workers on his Model T assembly line $5 a day – three times what the typical factory employee earned at the time. The Wall Street Journal termed his action “an economic crime.”

But Ford knew it was a cunning business move. The higher wage turned Ford’s auto workers into customers who could afford to buy Model T’s. In two years Ford’s profits more than doubled.

That was then. Now, Ford Motor Company is paying its new hires half what it paid new employees a few years ago.

The basic bargain is over – not only at Ford but all over the American economy.

New data from the Commerce Department shows employee pay is now down to the smallest share of the economy since the government began collecting wage and salary data in 1929.

Meanwhile, corporate profits now constitute the largest share of the economy since 1929.

1929, by the way, was the year of the Great Crash that ushered in the Great Depression.

In the years leading up to the Great Crash, most employers forgot Henry Ford’s example. The wages of most American workers remained stagnant. The gains of economic growth went mainly into corporate profits and into the pockets of the very rich. American families maintained their standard of living by going deeper into debt. In 1929 the debt bubble popped.

Sound familiar? It should. The same thing happened in the years leading up to the crash of 2008.
There is more. Go read the whole article.

The cause of the current Great Recession is obvious. The American worker has been marginalized. They play a smaller and smaller role in the economy. As the big shots keep taking ever bigger shares of the economic pie, there is less and less money left to circulate in the economy. People can't afford to participate, so the real economy stall or shrinks. Greed has killed the goose that laid the golden eggs. How can the electorate not see this simple fact? How can they keep voting in right wing politicians who have put the country on this treadmill?

The "Accepted" Wisdom

Sadly, what passes for wisdom in politics and economics is handled by a class of people who simply don't understand the fundamentals of economics. They've managed to screw things up badly, but they will never admit it. They make their living out of "advising" people, so they continue to advise even when the advice is contradictory and shows the bankruptcy of their ideas.

Here is the relevant bit from a post by Paul Krugman on his NY Times blog:
Today, the OECD warns that things are looking vewy, vewy bad:
Decisive policies must be urgently put in place to stop the euro area sovereign debt crisis from spreading and to put weakening global activity back on track, says the OECD’s latest Economic Outlook.

The euro area crisis remains the key risk to the world economy, the Outlook says. Concerns about sovereign debt sustainability are becoming increasingly widespread. If not addressed, recent contagion to countries thought to have relatively solid public finances could massively escalate economic disruption. Pressures on bank funding and balance sheets increase the risk of a credit crunch.

Another serious downside risk is that no action would be agreed to offset the large degree of fiscal tightening implied by current law in the United States. This could tip the economy into a recession that monetary policy could do little to counter.
That’s all perfectly sensible. But how did we get here? In large part, by listening to people like … the OECD, which demanded both fiscal austerity and interest rate hikes back in early 2010. And yes, it was the same people now running scared of the consequences of those spending cuts and rate hikes.

Maybe a little soul-searching might be in order?

To be fair, though, it wasn’t just the OECD. Future historians will look back in astonishment at the Great Pivot of 2010, in which all the Very Serious People on both sides of the Atlantic– and, sad to say, in both parties in the United States — decided that in the face of high unemployment, weak growth, and low inflation, what the world really needed was austerity.

I’m actually having trouble writing about all this; it’s just too depressing.
For the bottom 99% when you make a serious error, you pay through loss of job or serious jail time. For the elite, a serious error is simply ignored and you continue to blather with your pithy statements of false platitudes. You are secure because you "own" you position in society. You don't have to work for it.

My Blogger Pic

I really should update my blogger picture to reveal a little more about myself.

Take a peek.

Yep... Carli Davidson has captured the "real me".

The Whole Dirty, Ugly $7.77 Trillion Truth is Now Revealed

The secret actions of the US government to keep the US banking system from complete collapse are now available. You can now read the gory details of how the US government "on behalf of the taxpayers gave away $1.2 trillion on Dec. 5, 2008 and, when you add up all the "free money" the banks got, it totals $7.77 trillion.

From a Bloomberg News article:
Secret Fed Loans Helped Banks Net $13B

The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.

The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.

Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.

A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.

“When you see the dollars the banks got, it’s hard to make the case these were successful institutions,” says Sherrod Brown, a Democratic Senator from Ohio who in 2010 introduced an unsuccessful bill to limit bank size. “This is an issue that can unite the Tea Party and Occupy Wall Street. There are lawmakers in both parties who would change their votes now.”

The size of the bailout came to light after Bloomberg LP, the parent of Bloomberg News, won a court case against the Fed and a group of the biggest U.S. banks called Clearing House Association LLC to force lending details into the open.


The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.

“TARP at least had some strings attached,” says Brad Miller, a North Carolina Democrat on the House Financial Services Committee, referring to the program’s executive-pay ceiling. “With the Fed programs, there was nothing.”


The Fed says it typically makes emergency loans more expensive than those available in the marketplace to discourage banks from abusing the privilege. During the crisis, Fed loans were among the cheapest around, with funding available for as low as 0.01 percent in December 2008, according to data from the central bank and money-market rates tracked by Bloomberg.

The Fed funds also benefited firms by allowing them to avoid selling assets to pay investors and depositors who pulled their money. So the assets stayed on the banks’ books, earning interest.

Banks report the difference between what they earn on loans and investments and their borrowing expenses. The figure, known as net interest margin, provides a clue to how much profit the firms turned on their Fed loans, the costs of which were included in those expenses. To calculate how much banks stood to make, Bloomberg multiplied their tax-adjusted net interest margins by their average Fed debt during reporting periods in which they took emergency loans.


The U.S. jobless rate hasn’t dipped below 8.8 percent since March 2009, 3.6 million homes have been foreclosed since August 2007, according to data provider RealtyTrac Inc., and police have clashed with Occupy Wall Street protesters, who say government policies favor the wealthiest citizens, in New York, Boston, Seattle and Oakland, California.

The Tea Party, which supports a more limited role for government, has its roots in anger over the Wall Street bailouts, says Neil M. Barofsky, former TARP special inspector general and a Bloomberg Television contributing editor.

The lack of transparency is not just frustrating; it really blocked accountability,” Barofsky says. “When people don’t know the details, they fill in the blanks. They believe in conspiracies.”

In the end, Geithner had his way. The Brown-Kaufman proposal to limit the size of banks was defeated, 60 to 31. Bank supervisors meeting in Switzerland did mandate minimum reserves that institutions will have to hold, with higher levels for the world’s largest banks, including the six biggest in the U.S. Those rules can be changed by individual countries.

They take full effect in 2019.

Meanwhile, Kaufman says, “we’re absolutely, totally, 100 percent not prepared for another financial crisis.”
There is a lot more detail. Go read the whole article.

Freedom of the press is essential to a democracy. The fact that Bush and Obama administrations fought bitterly to prevent the electorate from knowing what sweetheart deals they gave the banks should be fully understood by American citizens. The US government is deeply corrupted by the banking system.

The fact that nobody has gone to jail for the multiple trillion dollar fraud committed by banks, mortgage brokers, assessors, ratings companies, and the big Wall Street banks that "financialized" junk debt into AAA bonds that quickly went bankrupt cries out for justice. The US government is fighting this tooth-and-nail. Heads must roll. The corruption must be rooted out.

The Occupy Wall Street and the Tea Party movements both agree on this one fact: the US political system has been corrupted by the banks.

Worst of all, the ultra-rich show complete contempt for the bottom 99%, the ordinary taxpayers and working stiffs, who don't get tax cuts and "special deals" from the government:

Sunday, November 27, 2011

Slaying the Same Dragon Again and Again and Again

Here is poor Paul Krugman dealing with a zombie myth of the political right in America: that Obama has "expanded government":
... what I’m seeing in comments and reactions, once again, is the claim that Obama has presided over a vast expansion of government — a claim backed not by describing any specific programs, but by pointing to the share of federal spending in GDP. Indeed, federal spending rose from 19.6% of GDP in 2007 to 23.8% in 2010 (it was briefly 25 in 2009, but that was a number distorted by the financial bailouts). So there has been a roughly 4 points of GDP rise in the spending share. What’s that about?

Well, part of the answer is that the ratio is up because the denominator is down. According to CBO estimates, in fiscal 2010 the economy operated about 7 percent below potential. This means that even if what the government was doing hadn’t changed, the federal spending share of GDP would have risen by 1.4 percentage points.

Then, look inside the budget data (pdf), specifically at Table E-10. You’ll see a surge in spending on “income security”; that’s basically unemployment insurance, food stamps, and similar items. In other words, spending on safety-net programs is up because the economy is depressed, and more people are falling into the safety net.

You’ll also see a sharp rise in Medicaid; again, this is because the lousy economy has pushed more people into hardship, making them eligible for the program.

I’ve done a bit of number-crunching, and here’s my allocation of the sources of the rise in federal spending as a share of GDP:
Click to Enlarge

So a depressed economy plus safety net programs that have grown as a result of a depressed economy are, overwhelmingly, the real story here.

What’s in that “other” category? Some of it is stimulus spending. Some of it is the leading wave of the baby boomers, who are starting to collect Social Security and enter Medicare. Some of it is rising health care costs.

What isn’t there, no way, nohow, is a massive expansion of government, which is a figment of the right wing’s imagination.
When a political party keeps repeating a lie, it is proves a complete disregard for honesty and truth. Only the power mad would repeat a discredited view. They know that the informed will be outraged, but they count on the fact that most people eitehr haven't heard that it is a lie, forgotten that it is a lie, or don't care if it is a lie. In short, they are appealing the ignorance and cynicism of marginal people.

This is how "family values" politicians can be continually caught in affairs with prostitutes or exercising serial polygamy by marrying and divorcing wife after wife while professing a "deep respect" for the family. Or to have the gall that one Republican, Joe Walsh, has of refusing to pay his legally obligated child support while running on "family values". Or pulling the Newt Gingrich stunt of divorcing a wife dying of cancer so that he can marry a pretty young thing while claiming to "respect" family values. So much for the "until death do us part" commitment of a family values man.

Saturday, November 26, 2011

Where the Money Is

Here is a bit from a post by Paul Krugman on his blog where he thinks about the choice between taxing the ultra-rich and cutting Medicare eligibility. Guess where you find the bigger pot of money:
So, what we learn from IRS data is that in 2007, before the Great Recession depressed everyone’s income, the top 0.1% had around $1 trillion in taxable income. Now, even confiscating that whole sum wouldn’t eliminate our current deficit, especially since the top 0.1% already paid something like a third of that total in taxes. But then, no single action would close our current budget gap — not even the complete elimination of Social Security or Medicare.

What you want to ask is how much higher taxes on the super-elite might contribute to deficit reduction, as compared with the kinds of things politicians are actually proposing.

So let’s suppose that it was possible to collect an additional 10 percent of that super-elite’s income in taxes, to the tune of $100 billion a year. How would this stack up against the kinds of things on the table right now?

Well, consider the idea of raising the Medicare eligibility age — a move that would create vast hardship. According to the Congressional Budget Office (big pdf), when fully phased in this would save … $42 billion a year.

I could multiply comparisons, but the point is that higher taxes on the very rich could make a significant contribution to deficit reduction. They couldn’t eliminate the deficit on their own, but what could? There’s real money up there, and those making it should be bearing a share of the burden.
The political right says "no new taxes" but are quite happy with cutting Medicare eligibility. The political left is happy with raising the taxes on the ultra-rich but want to keep the health care benefits for the poor.

So who will win this battle? I hope that the left wins. But my cynical side says that the rich have so corrupted politics in the US that the political right will win.

If You have a Rocketry Hobby, You are a "Terrorist"

Here is an article in The Toronto Star along with an hour long interview with the police of Byron Sonne, a person arrested in 2010 for "plotting" against the G20 meeting in Toronto. He has been held in jail for 329 days because (a) he had been spotted taking a picture of the fence constructed around the G20 site from which they got a warrant and raided his house and (b) found "explosives" which are in fact propellant for the rockets.

He belongs to the Canadian Association of Rocketry. Having a hobby of shooting rockets has become the "foundation" of the case for arresting him as a "terrorist".

If you watch the video, you should find it absolutely incredible that the cops have held this guy in jail. He is obviously innocent:

I find it really sleazy how this cop pretends to be empathic with Byron. It is pretty clear to me that this guy is manipulating Byron.

To give you an idea of the "quality" of the police work going behind holding this guy for over a year in jail is shown by this bit in the article:
Giggles arose from the body of the court when Bui asked Sonne about a mysterious powder.

“And this white substance in the fridge?”

“That is almond flour,” Sonne replies.

Sonne’s judge-alone trial is expected to begin in earnest sometime next week.
It is incredible that the legal system in Canada lets the police hold people when the policing is obviously that incompetent!

Here is a bit from Maclean's magazine, one of the premier news magazines in Canada:
Byron Sonne is a shlemiel and a shlemazl. He is clumsy and unlucky. But he is not a terrorist.

Driven by curiosity, hubris, and a genuine desire for social justice, Sonne poked and prodded the $1.2 billion “security apparatus” of the 2010 G20 summit in Toronto. He wanted to know if it was in fact just “security theater”–an expensive display of pomp and barbed wire that would never thwart an actual terrorist. Simultaneously, he wanted to know if it was too effective, if the heightened atmosphere around the summit meant that police were forgetting people’s rights. And he wanted us to know too, so he documented everything he did.

Sonne, who goes by TorontoGoat on Twitter, offered himself as a sacrificial lamb–a hapless animal who pooped on the cops via the Internet. His experiment was scattershot–he uploaded incendiary political texts of every nature to test if he was being surveilled. He flexed his freedom of speech by calling police “bacon” on Twitter. He tweeted about how the $9.4 million security fence could easily be climbed, but did not exactly say that it should be. All of this would likely have gone unnoticed if @torontogoat hadn’t clomped around the fence perimeter, shooting video. Taking pictures is not a crime, so the cops, unable to charge him with anything, threatened to take him in for jaywalking as an excuse to see his I.D. He complied with this “ruse,” as the authorities themselves have since described it, and that’s what brought the full force of law enforcement down on his head. When the cops finally googled Sonne, they went to town on him. He was surveilled, searched, arrested, questioned for 12 hours without a lawyer, and thrown in jail. Sonne spent 11 months locked up, awaiting bail. During that time his wife (also arrested, charges since dropped) left him.

So there’s your shlemiel–Byron the clumsy. As for the unlucky shlemazl, let’s consider the most serious charges Sonne faces during his trial, which continues today: four counts of “possessing explosive materials.” During their search of his Forest Hill home, police found chemicals that can be used to make explosives. That’s not so unusual–most of us have chemicals in our homes that can be used to make explosives. But actually whipping them up into something volatile may get you into serious trouble. It’s hard to imagine a good reason to do so, unless you’re trying to make some homebrew rocket fuel.

Sonne’s hobby? Model rocketry.
And from Maclean's, some questions about the police "case" against Byron Sonne:
Details of the courtroom proceedings in Sonne’s case are subject to a publication ban. As such, coverage of his case has been limited. Toronto Life published a cover story giving many details of Sonne’s life and activities leading up to his arrest. But once the ban is lifted, the real questions won’t be about what Sonne did—they’ll be about how the police and the Crown have behaved in this extraordinary case.

Here are some I’ll be asking:

-Why was Sonne, who has no prior criminal record, twice denied bail and held for over 10 months?

-Was he considered a flight risk or a danger to anyone?

-If so, what’s different now?

-Before his arrest, did the police trick Sonne into handing over his I.D. by threatening him with a jaywalking charge?

-Why was Sonne’s (now-estranged) wife also arrested and charged?

-Did the weapons charges (since dropped) refer solely to Sonne’s homemade potato gun?

-If so—really?

-Do the explosives charges refer solely to legal substances Sonne bought for gardening and toy rockets?

-If so—really?

-Why was Sonne hit with the obscure charge (since dropped) of ”intimidating justice system officials,” which is meant to prevent accused criminals from stalking or threatening judges, lawyers and jurors?

-Did it refer to Sonne’s online description of police on bicycles as “bacon on wheels”?

-If so—really?

-If it turns out that Sonne was simply a provocateur and geek who never posed a threat to anyone, at what point did the police and Crown learn this?

-If they knew this all along, why did they continue to imprison and prosecute him?

-And if so, who will answer for the loss of his freedom, the destruction of his career, and the dissolution of his marriage?

Byron Sonne may well turn out to be a guy who taunted and teased a starving, unchained guard dog to see how it would react. Maybe a guy like that is a fool, maybe he is brave—maybe he’s both. Maybe it’s not important.

The real questions are about the dog: why was it starving for meat? Why was it unchained? Thanks to Sonne, we may soon find out.

If you want a sense of how "guilty" Byron was of being a "mad bomber", consider this pointed comment in an article by Denise Balkissoon in OpenFile:
We're happy to tell you that this week, when speaking about the search-and-seizure in Sonne's home, Byrne referenced the computer security consultant's interest in science. One of the police officers on the stand, Alvin Maniquis, spoke about authorizing his team to take books on physics and chemistry.

"Essentially," said Byrne,"[Sonne]'s got a home lab, related books and documentation. He's got chemistry equipment....admittedly, they had not been put together."

So, now you know: three days before the start of the G20 summit, when arrested for possessing explosives meant to disrupt that summit, Sonne hadn't set up his beakers and bunsen burners.

That's all for now.
Yep... the police have "caught" a mad bomber with intent to blow up half of Toronto, but 3 days before the event, this "bomber" hasn't yet put any chemicals together. Funny. It would require an almost industrial scale operation to generate the hundreds (if not thousands!) of pounds of high explosives needed to seriously disrupt a G20 conference. But here is a "bomber" who hasn't mixed any chemicals and has nothing stockpiled. There is no proof that he ever tried to mix up an explosive batch. So the government's case is that he "had the books and come equipment and some chemicals". Well... under those stringent requirements the RCMP should have arrested every professor in all the universities and colleges in Canada in early 2010. They certainly had books, and equipment, and materials.

This is a completely daft case where the police have a vendetta against a guy who decided to beard the police by showing up the billion dollars of Canadian citizens money had not bought any real security but instead funded a lot of "security theatre" and a lot of booty for politicians to build stuff in this constituencies during this time period and stamp it as "security". From Wikipedia:
Members of Parliament Olivia Chow and Mark Holland labelled the initially claimed budget of $1.1-billion for hosting the summits as "obscene" and "insane" while others argued that the money could have been used for long-pending municipal projects in Canada, such as Toronto's Transit City. The security cost for the two summits was believed to be more expensive than the combined security costs of the 2010 Winter Olympics and Paralympics in Vancouver and Whistler, British Columbia, which were $878 million. However, according to final calculations from the House of Commons of Canada as of October 2010, the exact cost for holding both summits was $857,901,850.31, making it less expensive than the security costs for the 2010 Winter Olympics.
If the RCMP wanted to go after some criminals, they should have arrested Prime Minister Harper, his cabinet, and most of his caucus. They have robbed Canadians of nearly $1 billion in order to put on a big wing-ding party for big-wigs. Meanwhile, there is unemployment, poverty, and underdevelopment in Canada. That money would have been better spent feeding the hungry, providing free education for pre-schooler and college kids, and day care for working parents. Instead, it was criminally wasted. And a pook patsy like Byron Sonne has been absolutely crucified as a "criminal". His only "crime" was his ignorance about the depth of corruption and mean-heartedness in the politicians and the police, and the cold-heartedness and suspicious minds of old farts sitting as judges and acting a Crown prosecutors.

Friday, November 25, 2011

The World Still Turns

Fanatics think that when they perceive an on-coming "doomsday" that they should have the right to pass laws to make everybody march to their beat. The "global warming" crowd feels they should dictate who gets to burn fossil fuel, by how much, and where. But the real world views that as fanatics imposing their wild-eyed craziness on the rest of the world. So the push by the fanatics to legislate morality (pass IPCC restrictions and quotas) has failed.

So how are we doing in the real world? Surprise! The real world is quickly moving toward renewable energy without the use of the Spanish Inquisition or the Iron Maiden of quotas and restrictions. Here is a bit from an article in the Los Angeles Times:
Renewable energy is surpassing fossil fuels for the first time in new power-plant investments, shaking off setbacks from the financial crisis and an impasse at the United Nations global warming talks.

Electricity from the wind, sun, waves and biomass drew $187 billion last year compared with $157 billion for natural gas, oil and coal, according to calculations by Bloomberg New Energy Finance using the latest data. Accelerating installations of solar- and wind-power plants led to lower equipment prices, making clean energy more competitive with coal.

"The progress of renewables has been nothing short of remarkable," United Nations Environment Program Executive Secretary Achim Steiner said in an interview. "You have record investment in the midst of an economic and financial crisis."

The findings indicate the world is shifting toward consuming more renewable energy even without a global agreement on limiting greenhouse gases.


As well as renewables spending exceeding that on new fossil plants, last year also was the first time expenditure in developing countries, mainly China, exceeded that in the industrialized world, Sawyer said, predicting both trends will continue.

The New Energy Finance figures exclude investment that merely replaces existing plants, and its renewables tally excludes money spent on building large hydropower projects.

Wind operators are likely to install 43 gigawatts of generating capacity this year and 48 gigawatts next year, up from 36 gigawatts in 2010, GWEC estimates.
I know this disappoints the doomsters selling the snake oil of catastrophic "global warming". But in the real world, technology improves and people make choices that make their world a better place. You don't have to beat them with whips or force them into chains. The ideologues prefer to reduce people to mindless soulless automata who simply follow orders from the politically correct. But in the real world, people like the idea that they get to choose their future and that they get credit for making intelligent choices.

The European Crisis

Here is a post by Paul Krugman on his NY Times blog. It is the latest in many attempts by him to get the European authorities to be sensible and do what economics requires rather than follow their emotions or "morality play" with counter-productive policies. Sadly, the Europeans are not listening:
Death By Hawkery

What the world needed in this global deleveraging crisis was deficit spending and higher inflation targets. What it got was fiscal austerity and obsessive concern with inflation risks that weren’t real. Hence the catastrophe now unfolding.

Judging from recent comments, many readers missed my earlier analyses on these issues — I’m still getting the “You idiot, debt got us into this mess, how can debt get us out?” type of comment. So let me re-repost my discussion of this whole issue in full, followed by a couple of brief notes on the European situation.

The original post:

Sam, Janet, and Fiscal Policy

One of the common arguments against fiscal policy in the current situation – one that sounds sensible – is that debt is the problem, so how can debt be the solution? Households borrowed too much; now you want the government to borrow even more?

What’s wrong with that argument? It assumes, implicitly, that debt is debt – that it doesn’t matter who owes the money. Yet that can’t be right; if it were, we wouldn’t have a problem in the first place. After all, to a first approximation debt is money we owe to ourselves – yes, the US has debt to China etc., but that’s not at the heart of the problem. Ignoring the foreign component, or looking at the world as a whole, the overall level of debt makes no difference to aggregate net worth – one person’s liability is another person’s asset.

It follows that the level of debt matters only if the distribution of net worth matters, if highly indebted players face different constraints from players with low debt. And this means that all debt isn’t created equal – which is why borrowing by some actors now can help cure problems created by excess borrowing by other actors in the past.

To see my point, imagine first a world in which there are only two kinds of people: Spendthrift Sams and Judicious Janets. (Sam and Janet who? If you’d grown up in my place and time, you’d know the answer: Sam and Janet evening / You will see a stranger … But actually, I’m thinking of the two kinds of agent in the Kiyotaki-Moore model.)

In this world, we’ll assume that no real investment is possible, so that loans are made only to finance consumption in excess of income. Specifically, in the past the Sams have borrowed from the Janets to pay for consumption. But now something has happened – say, the collapse of a land bubble – that has forced the Sams to stop borrowing, and indeed to pay down their debt.

For the Sams to do this, of course, the Janets must be prepared to dissave, to run down their assets. What would give them an incentive to do this? The answer is a fall in interest rates. So the normal way the economy would cope with the balance sheet problems of the Sams is through a period of low rates.

But – you probably guessed where I’m going – what if even a zero rate isn’t low enough; that is, low enough to induce enough dissaving on the part of the Janets to match the savings of the Sams? Then we have a problem. I haven’t specified the underlying macroeconomic model, but it seems safe to say that we’d be looking at a depressed real economy and deflationary pressures. And this will be destructive; not only will output be below potential, but depressed incomes and deflation will make it harder for the Sams to pay down their debt.

What can be done? One answer is inflation, if you can get it, which will do two things: it will make it possible to have a negative real interest rate, and it will in itself erode the debt of the Sams. Yes, that will in a way be rewarding their past excesses – but economics is not a morality play.

Oh, and just to go back for a moment to my point about debt not being all the same: yes, inflation erodes the assets of the Janets at the same time, and by the same amount, as it erodes the debt of the Sams. But the Sams are balance-sheet constrained, while the Janets aren’t, so this is a net positive for aggregate demand.

But what if inflation can’t or won’t be delivered?

Well, suppose a third character can come in: Government Gus. Suppose that he can borrow for a while, using the borrowed money to buy useful things like rail tunnels under the Hudson. The true social cost of these things will be very low, because he’ll be putting resources that would otherwise be unemployed to work. And he’ll also make it easier for the Sams to pay down their debt; if he keeps it up long enough, he can bring them to the point where they’re no longer so severely balance-sheet constrained, and further deficit spending is no longer required to achieve full employment.

Yes, private debt will in part have been replaced by public debt – but the point is that debt will have been shifted away from severely balance-sheet-constrained players, so that the economy’s problems will have been reduced even if the overall level of debt hasn’t fallen.

The bottom line, then, is that the plausible-sounding argument that debt can’t cure debt is just wrong. On the contrary, it can – and the alternative is a prolonged period of economic weakness that actually makes the debt problem harder to resolve.

European twists

The European mess is pretty well described by the story above, with the Sams mainly in the periphery and the Janets in the core; what we’re getting is forced austerity in the periphery with no offsetting expansion in the core, and now everyone is shocked, shocked that the whole continent seems headed for recession.

In Europe’s case, however, higher inflation is even more crucial than for the United States — because Europe also needs a large adjustment of relative prices that will be very hard if not impossible to achieve with low overall inflation.

So as of this morning, the 5-year German breakeven — an implicit forecast of inflation — is only 0.9%.

This is not going to work.
Sadly the American authorities are facing a similar deflationary situation and are just now embarking on the same idiocy as the Europeans: austerity. It will fail in the US just like it is failing in Europe. It is the standard "prescription" of the political right, but it is profoundly ignorant of economic reality and what is required. People will suffer and pay a very dear price for the idiocy of politicians. It is a lost decade just like the Japanese have suffered through. Tragic.

... and here is more despair by Krugman at the idiocy of the politicians (and the "serious people" in positions of authority like the Bank of England, the Federal Reserve, and the European Central Bank):
Death By Accounting Identity

Martin Wolf has a somewhat despairing-sounding column this morning, in effect pleading with the Cameron government to admit that the laws of arithmetic must apply. Good luck with that.

Martin writes,
If the private sector is seeking to run down its debts, it is hard for the government to do so, too, because everybody cannot spend less than their income. That is the “paradox of thrift”. No, it is not a novel idea.
Ah, but for the past two years leaders in the Eurozone, Britain, and the US Republican party have subscribed to the following plan:

1. Slash government spending

2. ??????

3. Prosperity!

For a while ???? was framed in terms of the doctrine of expansionary austerity: slash spending and the confidence fairy would make private-sector spending rise. At this point, however, few still believe in this doctrine. Also, in the euro area it was hard to see how things would work even if the confidence fairy made an appearance; how was that supposed to resolve the large payments imbalances between the core and the periphery?

But even as the intellectual foundations, such as they were, for the austerity plan have been demolished, the plan itself remains unchanged.
I never thought I would live such an era of unrelieved idiocy. But knowing a little history, I was foolish to think I could avoid it. In my young adulthood I watched the US condemn an entire generation of young men to a meaningless and unwinnable war in Vietnam simply because no president had the courage to admit that the war was a mistake and end it. In my early childhood I watch as nutty right wing politicians tore the US to pieces in a mad witch hunt of "communists". I saw sleazy people like Nixon build a career on this evil enterprise. In my working years I watched as people fell in love with the rich and flocked to watch Lifestyles of the Rich and Famous. These sad fools didn't realize they were idolizing the social parasites who were busy from 1980 until today sucking the life blood out of society so they could live a life of mad indulgence while the bottom 99% saw their lives stagnate, saw the economy enter a depression caused by fraud and criminality by the greed of bankers, and saw a hopeful new president be elected and fail to act because he too was madly in love with the rich and unable and unwilling to help the bottom 99%. My life has been lived in an unremitting horror story of cruelty, greed, fear, and ignorance. That is the history of humanity for the last 10,000 years. Tragic.

Thursday, November 24, 2011

Robert Reich Addresses Occupy LA

Here is a talk by former Clinton Secretary of Labor, Robert Reich, to spell out the ugly details of the current crisis:

The tragedy is that Reagan and the Republicans laid the foundations for this crisis 30 years ago. Bush took a federal surplus and turned it into a multi-trillion dollar deficit. And now Obama has been in office for 3 years and frittered those years away without providing a big enough stimulus or working hard to get the unemployed back into jobs. America has suffered 3 decades of abuse by the 1%.

William Black Addresses Occupy LA

This is well worth listening very carefully to:

The tragedy is that Obama had the chance to take office and clean up the corruption. But he didn't. He allowed the Bush admin to walk away scott free. He has allowed fraudulent corporations to avoid justice. These crimes are behind the growing inequality in the US.

Krugman on the Occupy Movement

Here is the opening bit of the latest NY Times op-ed by Paul Krugman:
“We are the 99 percent” is a great slogan. It correctly defines the issue as being the middle class versus the elite (as opposed to the middle class versus the poor). And it also gets past the common but wrong establishment notion that rising inequality is mainly about the well educated doing better than the less educated; the big winners in this new Gilded Age have been a handful of very wealthy people, not college graduates in general.

If anything, however, the 99 percent slogan aims too low. A large fraction of the top 1 percent’s gains have actually gone to an even smaller group, the top 0.1 percent — the richest one-thousandth of the population.

And while Democrats, by and large, want that super-elite to make at least some contribution to long-term deficit reduction, Republicans want to cut the super-elite’s taxes even as they slash Social Security, Medicare and Medicaid in the name of fiscal discipline.
Go read the whole article.

He finishes with:
So should the 99.9 percent hate the 0.1 percent? No, not at all. But they should ignore all the propaganda about “job creators” and demand that the super-elite pay substantially more in taxes.
At key points in American history the government has stepped in to correct historial injustices. Roosevelt had his "New Deal" and Johnson his "Great Society". Some big program needs to be put in place to rectify the accumlated historical wrongs that have creates such an unjust inequality in the US.

Right Wing Hysteria

The political right is in thrall to the ultra-rich who are always horrified by inflation because it can eat up their piles of money as a "hidden tax". But the reality is that, despite record deficits, the bond market is signaling no fear of inflation. But despite that, the Federal Reserve (and more especially the European Central Bank) are still rigorously fighting "inflation" while their economies erode into depression and inflation soars.

Here is a bit by PBS's Paul Solman:
... checking with NYU's celebrated economic historian Richard Sylla, we find that today's rates are astonishingly close to the lowest in the entire history of the United States: 1.85 percent, the nadir reached in late 1941. That was the record, I should say -- until September 22, when the 10-year U.S. interest rate plunged briefly to 1.695 percent.

So what's going on? Well, rather obviously, investors are a lot more worried about the credit of Greece -- or Spain or Italy -- than ours. Investors are also more worried about stock investments. Investors are also more worried about almost any other asset into which they might put their money.

Investors also seem pretty sure that U.S. inflation is not going to be a problem anytime soon. If inflation scared them, they'd hardly let the United States lock in an interest rate of less than 2 percent for an entire decade.

So then why isn't it plausible to draw the following conclusion: that U.S. interest rates have been going in the "wrong" direction because investors are scared that the U.S. is going to reduce its debt and deficits, and such a reduction might horse-collar the world economy?

In other words, might the true story plausibly be a complete contradiction of what is regularly reported? That's what Nobel laureate Paul Krugman of the New York Times has regularly argued, but his "opinion" hasn't managed to leak into everyday coverage.
Obama needs a massive WPA program. In fact the whole developed world needs to do deficit spending to revive the economy. In the meantime, they should re-regulate the bank with even more severe regulations than were brought in post-Great Depression and the bankers of the 1990-2008 era should all be jailed with long, long sentences. These thieves stole trillions of dollars from the bottom 99%. They make Bernard Madoff look like a piker and the corner store robber a joke. The real crime in America is in the boardroom and the legal system needs to go after these malfactors with a vengeance.

Instead of "inflation" being the enemy of the country, the real enemy is austerity imposed by the political right and their ultra-rich patrons, the 0.01%. The financial reality is that bond prices are showing deflation and into "inflation" as the biggest threat to America:
The United States has to pay less than two percent to borrow money for 10 years? That's anti-Chicken Little. Not the sky falling, but the interest rate plummeting. Exactly the opposite of all the dire warnings.

Okay, but we need a little context. How far has the rate fallen? Let's go to Yahoo! Finance for a chart. There, on the right, is a blue chart of the 10-year rate over the past year. OMG! It's down from 3.5 percent since about April. April. What happened in April?

Oh, right. S&P downgraded U.S. debt. (See note.) But wait a second. The bond vigilantes should then have forced us to raise our interest rate. Instead, they lowered it?

Okay, maybe April was an anomaly. So click on "5y" under the chart for a view of the rate over the past five years. Can it be? It looks like the 10-year rate is at the lowest point over the entire period! Lower even than in the depths of despair, the post-Lehman crash of late 2008.

One more attempt at context. Go to Bob Shiller's online chart, then open the Excel file to which this links. You'll find a chart of stock prices, in blue, and the 10-year bond rate, in red, reaching back into the nineteenth century. You'll note that today's 1.97 percent is about as low as our interest rate has ever sunk since at least 1880.

Wednesday, November 23, 2011

Where is the Economic Crisis?

The current fear roiling financial markets is the "debt problem" in Europe. But I have a hard time finding the problem. Look at this graph:

Click to Enlarge

Supposedly Greece, Italy, Spain, and Ireland are "hopeless debtors". But their debt isn't all that different from the debt of Germany or the United States.

Click to Enlarge

I'm suspicious that all the teeth gnashing and the howls of "we are all doomed!" are simply fear stirred up by financial ghouls who want to stampede markets so they can pick off the weak.

Governments should stand up to them. They should have a united policy of supporting their bonds to stop these financial attacks. Right now the only "winners" are those who feast of the fearful. The fact that governments around the world are letting fear stampede financial markets adds fuel to the flames. It only makes things worse. I simply don't understand why governments can't realize there is strength in numbers. The old Ben Franklin saying is relevant: "Yes, we must, indeed, all hang together, or most assuredly we shall all hang separately."

Sadly, the world does not have leaders worthy of it. Instead, spineless sold-out fools have maneuvered into power on the hopes of money and glory when in fact, the world needs leaders of principle who can make tough choices, tell the people the truth, and in fact lead them out of this mess.

Monday, November 21, 2011

Questioning Democracy

I'm big on democracy. I'm one who thinks the Occupy XYZ groups should give up their tent cities and get involved in real politics with all their energy.

But here is a bit from Linda McQuaig in the Toronto Sun dressing me down for failing to see the need to operate outside the normal democratic channels:
When thousands of Egyptian protesters took over Tahrir Square in events widely celebrated as the Arab Spring, I don’t recall anyone being concerned that they were violating local bylaws.

Of course, Egypt was a dictatorship and the only way to protest the lack of democracy was by breaking laws.

Canada isn’t a dictatorship, and so protesters — like the group now ordered evicted from St. James Park — don’t have the same clear moral licence to ignore bylaws that their Egyptian counterparts had.

Critics argue that the Toronto Occupiers have made their point; if they want to take it further, they should join a political party — attend all-candidates meetings, put up lawn signs, eat hot dogs at summer barbecues, become backroom operatives.

Of course, Occupiers should join political parties and try to change them. But part of the Occupiers’ point is that democracy has become a hollow shell.

In theory, democracy is one of humankind’s noblest creations — a system in which people govern themselves. In practice, the results have been, well, disappointing.

In particular, as the Occupiers note, the concentration of wealth in the hands of the top 1 per cent undermines meaningful democracy, blocking the will of the bottom 99 per cent.

Or as the late 19th century Republican strategist Mark Hanna put it during another era of extreme inequality: “There are two things that are important in politics. The first is money and I can’t remember what the second one is.”

This is more obviously true in the U.S., but it’s also true here.

The financial elite manages to exert its dominance, not just at elections but at every stage of the political process — from the drafting of party platforms, the financing and organizing of political advocacy campaigns, the writing and amending of legislation, to the shaping of public opinion through the media (which they largely own). The wealthy are adept at influencing every stage of the broader political process.

Given the lopsided influence of the wealthy, those seeking to restore meaningful democracy and a more inclusive economic system can be forgiven for thinking it’s necessary to grab attention through extraordinary measures like occupying more than 1,000 parks across North America.


Rather than hanging out at malls or zoning out on Facebook, these young people have endured real hardship in the Canadian near-winter to fight for a more inclusive society. Any inconvenience they’ve caused through their peaceful occupation seems minor in comparison to their contribution to the public good.

As lawyers from the Law Union of Ontario point out: “Some inconveniences to local park users is a small price to pay for the larger price being paid by the 99 per cent worldwide in the face of an economic system that privileges the few over the many.”

Are occupations really necessary to draw attention to their cause? Perhaps not. But I’d trust their judgment over mine. After all, they’ve managed to change the public discourse, putting inequality front and centre — something activists and writers, myself included, have failed to accomplish despite decades of trying.

An article last week in the mainstream magazine New York notes that we’re now moving “from the terror era to the income-inequality era.”

Wow. After only two months, the Occupy movement — without backing from billionaires or governments — seems to have moved us into a new era. Not bad for a leaderless group that sleeps in tents and doesn’t even use microphones.
Go read the whole article.

I'm hoping that the Occupy movement has moved us into a new era. But it isn't yet clear to me. I wish it were true. And hopefully it will be. But I still prefer my democracy via organized politics. I can accept a short term thrust to make political parties more accountable, but I don't want to think that "change" is only possible by street protest. I watched street protest in the 1960s and it didn't change anything. Real change is hard and it comes through an organized political effort.

The energy of the Occupy movement should continue demonstrations but its real heart needs to move into either creating a new political party or seizing an existing one and reshaping it to the needs of the 99%. Institutions can run the long race. Individuals out protesting on the street are, by nature, short term. Individuals need to get on with their lives. Get jobs. Raise families. You can't spend 20 years on the street carrying a sign. But a political party can spend 20 years building a following through educating the public.

It is going to take some bitter battles to put the top 1% back in a box and rein in the big corporations that have gotten used to "lobbying" to co-opt the government. The Progressive Era spent 30 years getting consumer protection laws passed and anti-trust laws passed and improved schools and raise the educational level of the public. Today there is just as much, if not more, that needs to be done in these areas plus rein in the income inequality (not through a Great Depression which came at the end of the Progressive Era). There is a lot of social change needed and it will be a long tough slog. The Occupy movement has set off a spark. But for it to be an enduring flame of hope and real change, it will need to be institutionalized.

Hopefully the American public learned a valuable lesson with the election of Barack Obama. You can't rely on politicians. You have to move politics up a notch and ensure that political platforms have teeth and that the politicians take an oath to uphold the platform with consequences if they fail to act in a "party spirit". More discipline is needed. The last 40 years of running on "faux political platforms" has to come to an end. People need to know what they are voting for. The era of "pretty faces" and charismatic leaders has to come to an end. A new era of institutions and commitment is needed.

I think Linda McQuaig puts too much emphasis on the momentary street struggle. She needs to look back over history and see that real change only comes when the "change" becomes institutionalized. Obama was able to put forward a false platform and then ignore 90% of his promises because there is no teeth in the Democractic party. The poor voters were sold a bill of goods. The new social movement needs to either form a new party with strong institutional structure or re-structure the Democratic party to put teeth into the platform with party discipline for its representatives. Not loyalty to a "leader", but a commitment to the party platform passed in the party convention.

Hopefully we are entering a new era. But I will believe it only when there is a political party with the discipline and structure to carry out the true democratic wishes of the electorate.

What the Elite Offers When You Ask for Democracy

The ultra-rich don't like the bottom 99% "demonstrating". It is just too messy. Those 99% don't have a clear agenda. They don't have polished spokesmen who can step forth with a program.

The elite just don't like the messiness of "democracy". There are too many loose ends. It can't easily be controlled from one centre. So here is what the ultra-rich offer:

The rich like to leave running things to themselves. They have the money, so they can afford to buy the politicians, the police, the judges, the lawyers, the bureaucracy. The above video shows the elite of Egypt beating "good sense" into the heads of recalcitrant Egyptians, foolish people in the bottom 99% who don't understand that their "job" is to serve the rich. The military and police are simply on the street to remind the bottom 99% where their place is in society.

Picture of the Day

Why is democracy messy? Why does it take such a large amount of insult and injury to arouse the populace? Just look at what this woman will soon discover as she attempts to voice her viewpoint.

The state loves to tell you about your "rights" but don't you dare try to exercise them. People are smart enough to know that, so it takes a hell of a lot to arouse the populace. But when it gets outraged, it tends to take down not just the worst of the worst, but most of the worst and even a fair amount of the innocent. A social change is a messy affair. It is so much nicer to use the instruments of democracy to effect change, but when the elites refuse to listen, then you get blood in the streets.

The Police are Hard of Hearing

Either they are hiring deaf cops in NY City or the Constitutional protection of the "free press" isn't worth the paper it is written on...

I would say it is pretty obvious that option #2 is in effect in America. The press is "free" to report glowing stories about "job creators" and the heroic efforts of Republicans to control deficits. But when it comes to civil society and basic rights, the Constitution is a some relic from the past that nobody is interested in despite all the claims by the political right that they are "guided" by the Constitution.

If you are curious about just how "easy" it is to get a press pass so that you can try to exercise your so-called "rights" in America, here is an article in the New York Observer that lays out some of the details and frustrations of the "process". As she points out, the law "requires":
Applicants also must submit one or more articles, commentaries, books, photographs, videos, films or audios published or broadcast within the twenty–four (24) months immediately preceding the Press Card application, sufficient to show that the applicant covered in person six (6) or more events occurring on separate days.
But to meet that requirement:
According to the last paragraph, you have to demonstrate coverage as an uncredentialed reporter in order to get credentialed. So the only way to comply with the law is to have previously broken the law repeatedly.
Ah... the joys of a bureaucratic mind. You can get a job if you can prove that you are presently employed. Meanwhile, we'll beat you about the ears for being lazy and unwilling to work because you are unemployed. That's the reality for 25 million unemployed in the US. Obviously the same screwy "bureaucratic rules" apply to getting "press credentials". First you need to be credentialed and previously covered 6 news events. This makes the insiders safe, but it create a Kafkaesque nightmare for anybody outside the system.

Peddling Lies

Here is a Goldman Sachs partner taking on an activist/reporter in a debate on UK TV. It is interesting to watch this snake in a suit suavely manipulate the "discussion" to deliver all the same right wing talking points of the last 30 years and pretend that he has a revelation about wasteful "socialism". It was capitalism that crashed the system in 2008. And in Europe today, it is private banks who lent the trillions to governments that has created the latest global crisis. It wasn't people receiving pennies to feed themselves of the dollars to get medical care, the bits of money to find housing. It is the greed of bankers and the ultra-rich that has shut down the engine of growth and wants to impose even more "austerity" as they extract more and more from the bottom 99%.

I love the fact that this slimy Goldman Sachs suit claims that the protesters don't have "a clear agenda" and fail to have "spokesmen" to present a clearly laid out agenda. He pulls the big lie technique by claiming that the protests were "flaccid" and that their protests were over "trivial points". He obviously has never been hit by a truncheon or been gassed by police in riot suits. It takes somebody who hold more than "trivial concerns" and a "flaccid stance" to put up with police brutality and arrest. But this is the spin that the big bankers and ultra-rich want to put on it.

What this exposes is the great divide. These snakes in suits are used to quiet deals with money crossing hands to buy politicians and to buy "justice". The people in the street are used to working long hours, they are used to being lied to by politicians, and they have no clear method to get "heard" by the elites. So they go into the streets. This is messy. This is ugly. But if you can't buy the government, buy the police, buy the politicians, you are left with going into the street and getting your head cracked by a police baton. The bankers just can't understand this.

Sunday, November 20, 2011

Krugman on the New Romanticism

The Romantic movement of the early 19th century created a lot of poetry, art, and "new sensitive feelings". But by the late 1930s that romanticism had corrupted itself in to the cruel "romantic" vision of the Nazis.

Here is a bit from a NY Times op-ed piece in which Paul Krugman takes the "new romantics" to task for the cruelties they are forcing upon the poor and powerless:
There’s a word I keep hearing lately: “technocrat.” Sometimes it’s used as a term of scorn — the creators of the euro, we’re told, were technocrats who failed to take human and cultural factors into account. Sometimes it’s a term of praise: the newly installed prime ministers of Greece and Italy are described as technocrats who will rise above politics and do what needs to be done.

I call foul. I know from technocrats; sometimes I even play one myself. And these people — the people who bullied Europe into adopting a common currency, the people who are bullying both Europe and the United States into austerity — aren’t technocrats. They are, instead, deeply impractical romantics.

They are, to be sure, a peculiarly boring breed of romantic, speaking in turgid prose rather than poetry. And the things they demand on behalf of their romantic visions are often cruel, involving huge sacrifices from ordinary workers and families. But the fact remains that those visions are driven by dreams about the way things should be rather than by a cool assessment of the way things really are.

And to save the world economy we must topple these dangerous romantics from their pedestals.
For more details, go read the full article.

The powerless and poor are always the ones made to pay for the "visions" of lunatics and mad kings:
So why did those “technocrats” push so hard for the euro, disregarding many warnings from economists? Partly it was the dream of European unification, which the Continent’s elite found so alluring that its members waved away practical objections. And partly it was a leap of economic faith, the hope — driven by the will to believe, despite vast evidence to the contrary — that everything would work out as long as nations practiced the Victorian virtues of price stability and fiscal prudence.

Sad to say, things did not work out as promised. But rather than adjusting to reality, those supposed technocrats just doubled down — insisting, for example, that Greece could avoid default through savage austerity, when anyone who actually did the math knew better.


Just to be clear, this is not an anti-European rant, since we have our own pseudo-technocrats warping the policy debate. In particular, allegedly nonpartisan groups of “experts” — the Committee for a Responsible Federal Budget, the Concord Coalition, and so on — have been all too successful at hijacking the economic policy debate, shifting its focus from jobs to deficits.

Real technocrats would have asked why this makes sense at a time when the unemployment rate is 9 percent and the interest rate on U.S. debt is only 2 percent. But like the E.C.B., our fiscal scolds have their story about what’s important, and they’re sticking to it no matter what the data say.

So am I against technocrats? Not at all. I like technocrats — technocrats are friends of mine. And we need technical expertise to deal with our economic woes.

But our discourse is being badly distorted by ideologues and wishful thinkers — boring, cruel romantics — pretending to be technocrats. And it’s time to puncture their pretensions.
History is a long litany of the poor and disenfranchised having to pick up the pieces after the mad elites have utterly ruined a country through war or mad schemes. The ultra-rich don't suffer. They simply move to the "next opportunity". It is the poor and powerless who are rooted to their soil and have the burden of reconstructing a society after a disaster. Think of Germany in 1945. Think of the American Deep South in 1866. And think of the children and grandchildren of the current generation of Americans. Tragic.

Friday, November 18, 2011

Getting History Right

As Europe pushes austerity and the Republicans push an austerity agenda in the US, Paul Krugman points out a bit of history that is overlooked:
The BrĂ¼ning Thing

Joe Weisenthal tells us about an analyst willing to risk a Godwin’s Law citation; Dylan Grice of SocGen points out that it was the deflationary policies of 1930-32, not the inflation of 1923, that brought you-know-who to power.

Indeed. When we hear assertions that Germans are deeply hostile to loose money because of their historical memories, I always wonder why those memories are so selective. Why is 1923 seared into collective memory, while the BrĂ¼ning disaster has apparently gone down the memory hole?

This is important — and there’s not much time to get the record straight.
The political right thought it could "control" Hitler. He seized power and destroyed Germany. That wasn't the plan that the 1% thought it was so deftly "handling" in 1932. Today the ultra-rich and the political right are sewing the seeds for another disaster. Maybe not a new Hitler, but something disastrous. Sadly, most people don't know enough history to recognize the path the world is on. And sadly, most people -- especially the elites and the politians they have bought lock, stock, and barrel -- don't know enough economics to realize how disastrous their austerity (deficit reduction) plans truly are.

Everybody should read the Joe Weisenthal article that Krugman is pointing at.

Obama's "Hopey Changey" Leadership

Obama campaigned in 2008 to change politics in America. He promised "hope" and "change you can believe in" and "transparency". Sarah Palin nailed him when she mocked him for his "hopey changey" thing.

What you are getting today under Obama is a people being beaten by police baton sticks and pepper sprayed as they attempt to give voice to their political will in a supposedly democratic 1st Amendment right. The Occupy Movement is growing and Obama is "missing in action". He fails to lead. He is a politician who loves to make promises, but he has done precious little during 3 years to help the bottom 99% in America...

The reality is that he hasn't stopped American military torture, he hasn't closed Guantanamo, he allows American citizens to be assassinated without any judicial process, he has paid hundreds of billions to his buddies on Wall Street and half a billion to his buddy in the "green" industry of now bankrupt Solyndra. He promise of "transparency" in government has instead produced the harshest anti-whistle-blower law ever on US books. He fiddles for 3 years during the greatest recession since the Great Depression then announces that he is Mr. Jobs, Jobs, Jobs and announces a program to produce 1.2 million jobs when in fact there are 25 million unemployed/underemployed people, in short, he makes a political gesture but no effective political act. He is a farce. A joke.

The US has two parties to represent the 1% and no political parties that represent the 99%. Tragic.

The "Bug Spray" Approach to Policing

When protesters peacefully attempt to make a point, the police at UC Davis bring out the pepper spray and douse them like you would use bug spray to kill noxious insects. Then they knee them on the ground and cuff them. Yep... that's how you handle "violent" student protest...

It is pretty obvious that these goons would happily shake the canister of Zyklon-B onto the "subhuman rats" in the Nazi extermination camps. This is the same kind of mindless robotic "policing" that allowed the police in the the US in 1942 to brutally round up Japanese Americans, forcing them to abandon their property, and put them onto "reservations" in badlands in remote America. This was a blatant disregard for Constitutional rights. It is the same "policing" that turned dogs loose on young black demonstrators in the deep South in the early 1960s Civil Rights Movement, the use of high pressure fire hoses that peeled the skin right off kids, the use of trunchions to "crack skulls" to ensure that blacks in the Deep South would give up their fight for a right to vote, a right to share public facilities in Jim Crow racist America.

Obviously none of the lessons of the past have been learned. The police in America today carry out the same bullying and beatings and pepper-spraying. We are lucky that they haven't yet pulled a Ludlow Massacre where they set up the machine guns and then deliberately fire machine gun belt of bullets after machine gun belt. This is "justice" in America. This is the America where you have a "right" to free speech except when it is done in public or on the street or at an inconvenient time or in a manner that is considered "unsanitary" or "unsightly" by the powers that be.

And here's a bit from the UK... This is what you get when you protest there. This is a young girl's face after a "rubber bullet" has left its mark...

Get more details here.

Update 2011nov20: Here is a video of students at UC Davis shaming the chancellor of the university for the vicious "bug spraying" incident:

Here is a link to an outraged assistant professor of English, Nathan Brown, of the UC Davis faculty demanding the resignation of Katehi. It outlines the case against her for brutalizing the peaceful and legitimate protestors.

My personal view is that "ethical demonstrating" only works when those who have harmed you have a conscience and are moved by ethics. I'm not convinced that many of the elites have much of a conscience. I would like to think that they do, but I find precious little evidence of it. I find it profoundly sad that the bottom 99% have to take police abuse, beatings, and killings while those on top are only asked to "show regret" for their actions. Regret doesn't cut it for me. If Chancellor Katehi had any moral integrity, she would resign immediately and go about personally apologizing to the students of the university. Instead, the above video shows her walking past the powerless and not acknowledging them. Why should she? She is powerful. She is paid big bucks. She had a golden parachute. They are simply students who will suffer 10% unemployment when the graduate. They will be forced to "conform" to the dictates of an elitist society that believes that 0.1% should get 20% of the income and wealth of the society.

Gandhi and Martin Luther King Jr. led non-violent protests. They make great video and wonderful stories, but I remember the frustration of the youth of the 1960s in the pitiful "fruits" of a massive effort at attempting to change the powers that be. The Jim Crow laws disappeared slowly, but there were literally hundreds of deaths by truly wonderful and noble people. A sacrifice that wasn't shared by the vicious thugs who beat protesters or the brutal cops who turn dogs loose on them.

The only effective tool for change is democracy. The use of a ballot instead of a bullet. But sitting peacefully as a powerful person walks by doesn't strike me as an effective technique. I would have much preferred the crowd repeating "shame, shame, shame" or something more harsh that simply sitting and letting the symbol of power walk unmolested to her car. I suspect she laughed herself silly on the drive home in that car. She had just experiences the sharp end of Obama-style "change you can believe in". In short, a worthless, useless "peaceful" demonstration. That effort would be better spent organizing ordinary people to vote their interests in elections at all levels in society.

Update 2011nov22: Here is a bit from a post by Matt Taibbi on his Rolling Stone blog:
Glenn Greenwald’s post at Salon says this far better than I can, but I think there are undeniable conclusions one can draw from this incident. The main thing is that the frenzied dissolution of due process and individual rights that took place under George Bush’s watch, and continued uncorrected even when supposed liberal constitutional lawyer Barack Obama took office, has now come full circle and become an important element to the newer political controversy involving domestic corruption and economic injustice.

As Glenn points out, when we militarized our society in response to the global terrorist threat, we created a new psychological atmosphere in which the use of force and military technology became a favored method for dealing with dissent of any kind. As Glenn writes:
The U.S. Government — in the name of Terrorism — has aggressively para-militarized the nation’s domestic police forces by lavishing them with countless military-style weapons and other war-like technologies, training them in war-zone military tactics, and generally imposing a war mentality on them. Arming domestic police forces with para-military weaponry will ensure their systematic use even in the absence of a Terrorist attack on U.S. soil… It’s a very small step to go from supporting the abuse of defenseless detainees (including one’s fellow citizens) to supporting the pepper-spraying and tasering of non-violent political protesters.
Why is that such a small step? Because of the countless decisions we made in years past to undermine our own attitudes toward the rule of law and individual rights.


The UC Davis instant crystallized all of this in one horrifying image. Anyone who commits violence against a defenseless person is lost. And the powers that be in this country are lost. They’ve been going down this road for years now, and they no longer stand for anything.

All that tricked-up military gear, with that corny, faux-menacing, over-the-top Spaceballs stormtrooper look that police everywhere seem to favor more and more, it’s a symbol of the increasingly total lack of ideas behind all that force.

It was bad enough when we made police defend the use of torture and extrajudicial detention; now they’re being asked to defend mass theft, Lloyd Blankfein’s bailout-paid bonus, the principle of Angelo Mozilo not doing jail time.

How strong can anyone defending those causes be? These people are weak and pathetic, and they’re getting weaker. And boy, are they showing it. Way to gear up with combat helmets and the submachine guns, fellas, to take on a bunch of co-eds sitting Indian-style. Maybe after work you can go break up a game of Duck-Duck-Goose at the local Chuck E Cheese. I’d bring the APC for that one.

Bravo to those kids who hung in there and took it. And bravo for standing up and showing everyone what real strength is. There is no strength without principle. You have it. They lost it. It’s as simple as that.
Go read the whole post by Matt Taibbi.

And make sure you go read the Glenn Greenwald article at Salon that Matt Taibbi points at:
Despite all the rights of free speech and assembly flamboyantly guaranteed by the U.S. Constitution, the reality is that punishing the exercise of those rights with police force and state violence has been the reflexive response in America for quite some time. As Franke-Ruta put it, “America has a very long history of protests that meet with excessive or violent response, most vividly recorded in the second half of the 20th century.” Digby yesterday recounted a similar though even worse incident aimed at environmental protesters.

The intent and effect of such abuse is that it renders those guaranteed freedoms meaningless. If a population becomes bullied or intimidated out of exercising rights offered on paper, those rights effectively cease to exist. Every time the citizenry watches peaceful protesters getting pepper-sprayed — or hears that an Occupy protester suffered brain damage and almost died after being shot in the skull with a rubber bullet — many become increasingly fearful of participating in this citizen movement, and also become fearful in general of exercising their rights in a way that is bothersome or threatening to those in power. That’s a natural response, and it’s exactly what the climate of fear imposed by all abusive police state actions is intended to achieve: to coerce citizens to “decide” on their own to be passive and compliant — to refrain from exercising their rights — out of fear of what will happen if they don’t.

The genius of this approach is how insidious its effects are: because the rights continue to be offered on paper, the citizenry continues to believe it is free. They believe that they are free to do everything they choose to do, because they have been “persuaded” — through fear and intimidation — to passively accept the status quo. As Rosa Luxemburg so perfectly put it: “Those who do not move, do not notice their chains.” Someone who sits at home and never protests or effectively challenges power factions will not realize that their rights of speech and assembly have been effectively eroded because they never seek to exercise those rights; it’s only when we see steadfast, courageous resistance from the likes of these UC-Davis students is this erosion of rights manifest.


Pervasive police abuses and intimidation tactics applied to peaceful protesters — pepper-spray, assault rifles, tasers, tear gas and the rest — not only harm their victims but also the relationship of the citizenry to the government and the set of core political rights. Implanting fear of authorities in the heart of the citizenry is a far more effective means of tyranny than overtly denying rights.
Here is a bit from a talk entitled "With Liberty and Justice for Some" given by Glenn Greenwald that focuses on the abuse of Bradley Manning:

Update 2011nov23: Here is a bit from an article by Philip Kennicott in The Washington Post:
Pepper spray, which in many countries is defined as a weapon and is often illegal for civilians to possess, can cause tissue damage, respiratory attacks and, in rare cases, death. It is considered far superior during crowd control to more violent forms of self-defense. But, like Tasers, which can also cause severe injury and death, there is increasing concern than it is being used by law enforcement without discretion or proper understanding of its dangers. The UC-Davis video will only amplify those concerns.

The police officer emerges from the margins of the scene, walks in front of a line of students on the ground with arms interlaced, and brandishes the can briefly in a gesture that feels both bored and theatrical, like someone on a low-budget television commercial displaying a miracle product or a magician holding the flowers he is about make disappear. He then proceeds to spray a thick stream of orange liquid into their faces. The crowd surrounding the students erupts in cries of “shame, shame,” questioning the police about whom they are protecting.

The spraying is slow and deliberate, one face after another, down the line. It is the multiple victims that makes it so chilling, recalling the mechanization of violence during the 20th century. Pepper spray, of course, isn’t meant to be lethal, and it was deployed during an effort to enforce university policy rather than a state-sanctioned campaign of violence. But the apparent absence of empathy from the police officer, applying a toxic chemical to humans as if they were garden pests, is shocking. Even more so because it is a university police officer.

University police generally operate under a more benignly paternalistic understanding of the law than other police. They are there to ensure the safety of the students, to help with the messier details of the in loco parentis function of the university.

A half-century ago, many parents told their children to ask a cop for help in case of trouble. With police forces now defining their role as more military than civilian, viewing citizens with suspicion and often treating them with hostility, that has changed. Saying the wrong thing to a cop, asking for a warrant before a search, throwing a snowball at an unmarked cop car, legally taking a picture of an official building, questioning a Capitol police officer about why a public area has been closed can lead to threats of arrest, or worse. But on university campuses, the police are often seen as they generally once were: your friend.

The UC-Davis police force has defended the use of pepper spray. An independent police expert quoted by the Associated Press calls pepper spray a “compliance technique,” in language eerily reminiscent of the George W. Bush administration’s euphemisms for torture.

Even if it is determined that the police followed proper procedures, the video might have lasting power for outrage, tapping into growing concerns not that police are abusing standard policies, but that our policies might need to be revised. Indeed, the disjunction between how the UC-Davis police read this video (they see an officer doing his job) and how many others read this video (they see a man in a uniform causing great and unnecessary pain to unresisting students) indicates that we have reached a kind of intellectual impasse about what kind of police we want and what limits should be placed on their power.


UC-Davis has announced an investigation into the officer’s action and whether it was merited and legal. It is a familiar pattern — the video is uploaded, it spreads, outrage develops and then the institution issues a seemingly reluctant and reactive plea for caution. We don’t know the context. We don’t know what really happened.

That kind of caution grew out of an age of skepticism in response to the manipulation of photographs by unscrupulous agents, including totalitarian governments. It was an appropriate skepticism, engendering a valuable resistance to the extraordinary power of images to seem transparently truthful.

The times may be changing. Video can be as easily manipulated as photography, but multiple videos from multiple perspectives, arriving within hours or minutes after an event, require a different kind of skepticism. The repeated claims by officials that our eyes are lying begin to seem more and more incredible.

Update 2011nov24: Here is a bit from a post by Judy Stone on the Scientific American blog:
There are reports of the efficacy of capsaicin in crowd control, but little regarding trials of exposures. Perhaps this is because pepper spray is regulated by the Environmental Protection Agency, as a pesticide and not by the FDA.

The concentration of capsaicin in bear spray is 1-2%; it is 10-30% in “personal defense sprays.”

While the police might feel reassured by the study, “The effect of oleoresin capsicum “pepper” spray inhalation on respiratory function,” I was not. This study met the “gold standard” of clinical trials, in that it was a “randomized, cross-over controlled trial to assess the effect of Oleoresin capsicum (OC) spray inhalation on respiratory function by itself and combined with restraint.” However, while the OC exposure showed no ill effect, only 34 volunteers were exposed to only 1 sec of Cap-Stun 5.5% OC spray by inhalation “from 5 ft away as they might in the field setting (as recommended by both manufacturer and local police policies).”

By contrast, an ACLU report, “Pepper Spray Update: More Fatalities, More Questions” found, in just two years, 26 deaths after OC spraying, noting that death was more likely if the victim was also restrained. This translated to 1 death per 600 times police used spray. (The cause of death was not firmly linked to the OC). According to the ACLU, “an internal memorandum produced by the largest supplier of pepper spray to the California police and civilian markets” concludes that there may be serious risks with more than a 1 sec spray. A subsequent Department of Justice study examined another 63 deaths after pepper spray during arrests; the spray was felt to be a “contributing factor” in several.

A review in 1996 by the Division of Epidemiology of the NC DHHS and OSHA concluded that exposure to OC spray during police training constituted an unacceptable health risk.

Update 2011nov25: Here is an interview with Nathan Brown, professor of English at UC Davis, who has written a letter calling for chancellor Katehi to resign. He appears at 2:45 into the video: