Thursday, April 24, 2014

the truth is out: money is an iou and banks are rolling in it...,

guardian | Back in the 1930s, Henry Ford is supposed to have remarked that it was a good thing that most Americans didn't know how banking really works, because if they did, "there'd be a revolution before tomorrow morning".

Last week, something remarkable happened. The Bank of England let the cat out of the bag. In a paper called "Money Creation in the Modern Economy", co-authored by three economists from the Bank's Monetary Analysis Directorate, they stated outright that most common assumptions of how banking works are simply wrong, and that the kind of populist, heterodox positions more ordinarily associated with groups such as Occupy Wall Street are correct. In doing so, they have effectively thrown the entire theoretical basis for austerity out of the window.

To get a sense of how radical the Bank's new position is, consider the conventional view, which continues to be the basis of all respectable debate on public policy. People put their money in banks. Banks then lend that money out at interest – either to consumers, or to entrepreneurs willing to invest it in some profitable enterprise. True, the fractional reserve system does allow banks to lend out considerably more than they hold in reserve, and true, if savings don't suffice, private banks can seek to borrow more from the central bank.

The central bank can print as much money as it wishes. But it is also careful not to print too much. In fact, we are often told this is why independent central banks exist in the first place. If governments could print money themselves, they would surely put out too much of it, and the resulting inflation would throw the economy into chaos. Institutions such as the Bank of England or US Federal Reserve were created to carefully regulate the money supply to prevent inflation. This is why they are forbidden to directly fund the government, say, by buying treasury bonds, but instead fund private economic activity that the government merely taxes.

It's this understanding that allows us to continue to talk about money as if it were a limited resource like bauxite or petroleum, to say "there's just not enough money" to fund social programmes, to speak of the immorality of government debt or of public spending "crowding out" the private sector. What the Bank of England admitted this week is that none of this is really true. To quote from its own initial summary: "Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits" … "In normal times, the central bank does not fix the amount of money in circulation, nor is central bank money 'multiplied up' into more loans and deposits."

In other words, everything we know is not just wrong – it's backwards. When banks make loans, they create money. This is because money is really just an IOU. The role of the central bank is to preside over a legal order that effectively grants banks the exclusive right to create IOUs of a certain kind, ones that the government will recognise as legal tender by its willingness to accept them in payment of taxes. There's really no limit on how much banks could create, provided they can find someone willing to borrow it. They will never get caught short, for the simple reason that borrowers do not, generally speaking, take the cash and put it under their mattresses; ultimately, any money a bank loans out will just end up back in some bank again. So for the banking system as a whole, every loan just becomes another deposit. What's more, insofar as banks do need to acquire funds from the central bank, they can borrow as much as they like; all the latter really does is set the rate of interest, the cost of money, not its quantity. Since the beginning of the recession, the US and British central banks have reduced that cost to almost nothing. In fact, with "quantitative easing" they've been effectively pumping as much money as they can into the banks, without producing any inflationary effects.

What this means is that the real limit on the amount of money in circulation is not how much the central bank is willing to lend, but how much government, firms, and ordinary citizens, are willing to borrow. Government spending is the main driver in all this (and the paper does admit, if you read it carefully, that the central bank does fund the government after all). So there's no question of public spending "crowding out" private investment. It's exactly the opposite.

Why did the Bank of England suddenly admit all this? Well, one reason is because it's obviously true. The Bank's job is to actually run the system, and of late, the system has not been running especially well. It's possible that it decided that maintaining the fantasy-land version of economics that has proved so convenient to the rich is simply a luxury it can no longer afford.

But politically, this is taking an enormous risk. Just consider what might happen if mortgage holders realised the money the bank lent them is not, really, the life savings of some thrifty pensioner, but something the bank just whisked into existence through its possession of a magic wand which we, the public, handed over to it.

Historically, the Bank of England has tended to be a bellwether, staking out seeming radical positions that ultimately become new orthodoxies. If that's what's happening here, we might soon be in a position to learn if Henry Ford was right.

dementia sufferers have a duty to die...,

telegraph |  The veteran Government adviser said pensioners in mental decline are "wasting people's lives" because of the care they require and should be allowed to opt for euthanasia even if they are not in pain.

She insisted there was "nothing wrong" with people being helped to die for the sake of their loved ones or society.
The 84-year-old added that she hoped people will soon be "licensed to put others down" if they are unable to look after themselves.
Her comments in a magazine interview have been condemned as "immoral" and "barbaric", but also sparked fears that they may find wider support because of her influence on ethical matters.
Lady Warnock, a former headmistress who went on to become Britain's leading moral philosopher, chaired a landmark Government committee in the 1980s that established the law on fertility treatment and embryo research.
A prominent supporter of euthanasia, she has previously suggested that pensioners who do not want to become a burden on their carers should be helped to die.

Last year the Mental Capacity Act came into effect that gives legal force to "living wills", so patients can appoint an "attorney" to tell doctors when their hospital food and water should be removed.

But in her latest interview, given to the Church of Scotland's magazine Life and Work, Lady Warnock goes further by claiming that dementia sufferers should consider ending their lives through euthanasia because of the strain they put on their families and public services.

Recent figures show there are 700,000 people with degenerative diseases such as Alzheimer's in Britain. By 2026 experts predict there will be one million dementia sufferers in the country, costing the NHS an estimated £35billion a year.

Lady Warnock said: "If you're demented, you're wasting people's lives – your family's lives – and you're wasting the resources of the National Health Service.

i'd rather be a cow manager than a people manager...,

NYTimes | The cows seem to like it, too.

Robots allow the cows to set their own hours, lining up for automated milking five or six times a day — turning the predawn and late-afternoon sessions around which dairy farmers long built their lives into a thing of the past.

With transponders around their necks, the cows get individualized service. Lasers scan and map their underbellies, and a computer charts each animal’s “milking speed,” a critical factor in a 24-hour-a-day operation.

The robots also monitor the amount and quality of milk produced, the frequency of visits to the machine, how much each cow has eaten, and even the number of steps each cow has taken per day, which can indicate when she is in heat.

“The animals just walk through,” said Jay Skellie, a dairyman from Salem, N.Y., after watching a demonstration. “I think we’ve got to look real hard at robots.”

Many of those running small farms said the choice of a computerized milker came down to a bigger question: whether to upgrade or just give up.

“Either we were going to get out, we were going to get bigger, or we were going to try something different,” said the elder Mr. Borden, 59, whose family has been working a patch of ground about 30 miles northeast of Albany since 1837. “And this was something a little different.”

The Bordens and other farmers say a major force is cutting labor costs — health insurance, room and board, overtime, and workers’ compensation insurance — particularly when immigration reform is stalled in Washington and dependable help is hard to procure.

The machines also never complain about getting up early, working late or being kicked.
“It’s tough to find people to do it well and show up on time,” said Tim Kurtz, who installed four robotic milkers last year at his farm in Berks County, Pa. “And you don’t have to worry about that with a robot.”

The Bordens say the machines allow them to do more of what they love: caring for animals.
“I’d rather be a cow manager,” Tom Borden said, “than a people manager.”

Wednesday, April 23, 2014

the rise of the fatty

zerohedge | For all the talk about QE this, HFT that, crony capitalism, cold war 2.0, hyperinflation, hyperdeflation, social inequality, Keynesian dead end, global financial meltdown, perhaps the one more tangible threats to mankind as a whole (and to the future underfunded healthcare costs) is something fatr simpler: the rise of the fatty.

Below we present a candied look via Nature of, pardon the pun, society at large, and just why is it that those cuddly, jovial fat people, which seems to be growing exponentially in recent years, present a great danger not only to themselves, but to just as exponentially growing welfare costs in a world which already is, for all intents and purposes, insolvent (unless of course someone in charge gets a Swiftian idea to let the world's obese deal with their own problems just the way Charles Darwin suggested they should). 

They are everywhere.

government = protection racket for the 1%?

commondreams |  The evidence of income inequality just keeps mounting. According to “Working for the Few,” a recent briefing paper from Oxfam, “In the US, the wealthiest one percent captured 95 percent of post-financial crisis growth since 2009, while the bottom 90 percent became poorer.”

 Our now infamous one percent own more than 35 percent of the nation’s wealth. Meanwhile, the bottom 40 percent of the country is in debt. Just this past Tuesday, the 15th of April — Tax Day — the AFL-CIO reported that last year the chief executive officers of 350 top American corporations were paid 331 times more money than the average US worker. Those executives made an average of $11.7 million dollars compared to the average worker who earned $35,239 dollars.

As that analysis circulated on Tax Day, the economic analyst Robert Reich reminded us that in addition to getting the largest percent of total national income in nearly a century, many in the one percent are paying a lower federal tax rate than a lot of people in the middle class. You may remember that an obliging Congress, of both parties, allows high rollers of finance the privilege of “carried interest,” a tax rate below that of their secretaries and clerks.

And at state and local levels, while the poorest fifth of Americans pay an average tax rate of over 11 percent, the richest one percent of the country pay — are you ready for this? — half that rate. Now, neither Nature nor Nature’s God drew up our tax codes; that’s the work of legislators — politicians — and it’s one way they have, as Chief Justice John Roberts might put it, of expressing gratitude to their donors: “Oh, Mr. Adelson, we so appreciate your generosity that we cut your estate taxes so you can give $8 billion as a tax-free payment to your heirs, even though down the road the public will have to put up $2.8 billion to compensate for the loss in tax revenue.”

All of which makes truly repugnant the argument, heard so often from courtiers of the rich, that inequality doesn’t matter. Of course it matters. Inequality is what has turned Washington into a protection racket for the one percent. It buys all those goodies from government: Tax breaks. Tax havens (which allow corporations and the rich to park their money in a no-tax zone). Loopholes. 

Favors like carried interest. And so on. As Paul Krugman writes in his New York Review of Books essay on Thomas Piketty’s Capital in the Twenty-First Century, “We now know both that the United States has a much more unequal distribution of income than other advanced countries and that much of this difference in outcomes can be attributed directly to government action.”

american middle-class no longer the world's richest

NYTimes |  The American middle class, long the most affluent in the world, has lost that distinction.
While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades.

After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.

The numbers, based on surveys conducted over the past 35 years, offer some of the most detailed publicly available comparisons for different income groups in different countries over time. They suggest that most American families are paying a steep price for high and rising income inequality.

Although economic growth in the United States continues to be as strong as in many other countries, or stronger, a small percentage of American households is fully benefiting from it. Median income in Canada pulled into a tie with median United States income in 2010 and has most likely surpassed it since then. Median incomes in Western European countries still trail those in the United States, but the gap in several — including Britain, the Netherlands and Sweden — is much smaller than it was a decade ago.

In European countries hit hardest by recent financial crises, such as Greece and Portugal, incomes have of course fallen sharply in recent years.

The income data were compiled by LIS, a group that maintains the Luxembourg Income Study Database. The numbers were analyzed by researchers at LIS and by The Upshot, a New York Times website covering policy and politics, and reviewed by outside academic economists.

The struggles of the poor in the United States are even starker than those of the middle class. A family at the 20th percentile of the income distribution in this country makes significantly less money than a similar family in Canada, Sweden, Norway, Finland or the Netherlands. Thirty-five years ago, the reverse was true.

LIS counts after-tax cash income from salaries, interest and stock dividends, among other sources, as well as direct government benefits such as tax credits.

The findings are striking because the most commonly cited economic statistics — such as per capita gross domestic product — continue to show that the United States has maintained its lead as the world’s richest large country. But those numbers are averages, which do not capture the distribution of income. With a big share of recent income gains in this country flowing to a relatively small slice of high-earning households, most Americans are not keeping pace with their counterparts around the world.

“The idea that the median American has so much more income than the middle class in all other parts of the world is not true these days,” said Lawrence Katz, a Harvard economist who is not associated with LIS. “In 1960, we were massively richer than anyone else. In 1980, we were richer. In the 1990s, we were still richer.”

That is no longer the case, Professor Katz added.

Median per capita income was $18,700 in the United States in 2010 (which translates to about $75,000 for a family of four after taxes), up 20 percent since 1980 but virtually unchanged since 2000, after adjusting for inflation. The same measure, by comparison, rose about 20 percent in Britain between 2000 and 2010 and 14 percent in the Netherlands. Median income also rose 20 percent in Canada between 2000 and 2010, to the equivalent of $18,700.

The most recent year in the LIS analysis is 2010. But other income surveys, conducted by government agencies, suggest that since 2010 pay in Canada has risen faster than pay in the United States and is now most likely higher. Pay in several European countries has also risen faster since 2010 than it has in the United States.

Three broad factors appear to be driving much of the weak income performance in the United States. First, educational attainment in the United States has risen far more slowly than in much of the industrialized world over the last three decades, making it harder for the American economy to maintain its share of highly skilled, well-paying jobs.

Tuesday, April 22, 2014

there are no rights or freedoms: there is only power...,

howtosavetheworld | I have, of late, had a falling out with many of my fellow ‘progressives’, similar I suppose to that of Paul Kingsnorth, who is being savaged by Naomi Klein and others for giving up on the environmental movement and non-local activism, and by humanists for losing faith in our species’ capacity for innovation and change.

I should say at the outset that I agree that our political and economic and legal and educational and social systems are dreadful, unfair, teetering, and totally inadequate to our needs. I agree that this is a world of horrific inequality, inequitable and unjust privilege, massive suffering, and outrageous patriarchy. I agree that corporatism and corruption and propagandist media are rampant and destructive and destabilizing. I agree that militarized police and torture prisons and drone killing and massive global surveillance are repugnant and a fundamental threat to our personal safety and security and the very principles upon which our nations are founded.

And I fully acknowledge that the fact I’m white, male, boomer generation and relatively wealthy provides me with enormous privilege compared to others, including relative freedom of movement, freedom from fear of harrassment and assault, and greater social, political and economic opportunity.
But when I hear arguments that “we need” to stand up for our ‘inherent’ rights and freedoms, and wrest ‘control’ of the levers of power from the obscenely wealthy elite, and denounce and protest injustice and inequality, and acknowledge and renounce our role as privileged oppressors, as the first steps to a true social revolution in and political and economic reform, leading, somehow, to a radical redistribution of wealth and power, and a more just society, I am reduced to despair.

I used to believe people, and perhaps some other creatures, had ‘rights’ and ‘freedoms’. I believed that someone was in control. I believed there were answers to the predicaments we face.

But now I realize that there are no rights or freedoms. The concept of rights and freedoms is a sop that the rich and powerful of this world use to appease the fury and frustration of the poor and disenfranchised. The ‘granting’ of rights and freedoms means nothing, because they can be and are taken away whenever those in power choose to do so, and are simply ignored when they interfere with the exercise of power or accumulation of wealth by those who allowed them to be granted.

what do you call armed private militias massing to oppose federal authority?

WaPo | The Senate majority leader who called President Bush a “loser” and a “liar,” declared former Federal Reserve chairman Alan Greenspan a “political hack” and asserted that all Obamacare horror stories are “untrue” has now called Nevada rancher Cliven Bundy and his supporters “domestic terrorists.”

The comparison is as noxious as it is absurd. Oklahoma City bomber Timothy McVeigh was a domestic terrorist. The Unabomber was a domestic terrorist. Centennial Olympic Park bomber Eric Rudolph was a domestic terrorist. To equate Bundy and his supporters with these murderers is, quite simply, appalling. 

It was the federal Bureau of Land Management that provoked the confrontation — descending with 200 armed men, including some with sniper rifles, to seize the Bundys’ cattle on land their family has grazed since 1877. Whatever one thinks of the Bundys’ legal case over unpaid grazing fees — and the federal government’s desire to protect the desert tortoise — defending your property against a paramilitary force of armed federal agents is not the equivalent of blowing up a federal building or sending letter bombs.

It would be easy to dismiss Reid as a buffoon with a chronic case of logorrhea. But this was not a slip of the tongue on Reid’s part. Video shows that when Reid first used the phrase “domestic terrorists” at a Las Vegas Review Journal event, he looked down at his notes just before he spoke the words. It was a carefully planned line of attack. Then, when he was asked during a Nevada TV interview a day later “What did you mean by that?” he replied, “Just what I said” — before engaging in an extended attack on the Bundy family and its supporters. 

Why would Reid, the senior senator from Nevada, make such an outrageous accusation?
First, Reid is defending the Obama administration from the charge that it used excessive force to try to seize the land. Most Americans recoil at the sight of armed federal agents training sniper rifles on a group of Boy Scouts, veterans, parents and grandparents engaged in civil disobedience. But if Bundy’s supporters are not protesters but “domestic terrorists,” then sending a federal force to confront them is not excessive. 

Second, Reid is defending his former staffer, Neil Kornze, who presided over this debacle as the newly installed head of the Bureau of Land Management. Kornze, who is just 35 years old, was Reid’s handpicked choice to run the BLM. “Neil is just perfect for this position,” Reid declared when Kornze was nominated, adding that he “really understands the role of public lands in rural America, and natural resources across the West.”

In his first days on the job, Kornze demonstrated that understanding by launching a paramilitary raid against a Nevada rancher. Kornze tried to silence Bundy’s supporters by setting up “First Amendment Zones” where protesters would be corralled and fenced in like a bunch of cattle. And he provoked an armed standoff that might well have resulted in the death of innocent men, women and children. The only way his actions could be even remotely defensible is if he was confronting “domestic terrorists.”

cliven bundy and homeland security

rsn |   t’s a stark image: A supporter of Nevada rancher Cliven Bundy lies prone behind a concrete retaining wall on a freeway overpass, training a rifle on federal agents.

He walked away a free man. When does that happen?

This episode, this time, involved a private rancher's self-proclaimed right to graze his commercial herd of cattle on public lands. The most coherent argument he makes is that his family has owned the adjacent ranch since the 1870s. The other arguments are more conceptual, focusing on issues like "natural law,” the “sovereign citizen movement,” and various other quasi-legal invocations based loosely and vaguely on the US Constitution and white-militia psycho-babble.

At stake clearly is the rule of law. “Terrorism” after 9/11, certainly in light the Patriot Act, is defined so broadly that any material act of opposition to the US Government can be prosecuted as an act terrorism and a matter of homeland security.

The images of fully militarized police beating unarmed Occupy protesters for nothing more than assembling in public places stands in vivid contrast to agents of Bureau of Land Management releasing back to Bundy and his heavily armed supporters 400 confiscated head of cattle.

Ultimately federal and state law enforcement officials would say they intended to handle it in court. But since the BLM operation was carried out pursuant to a federal court order, a subsequent court order is likely to carry the weight of a paper airplane. Make no mistake about it, this was a heavily armed standoff and the US Federal Government backed down.

Mostly white, middle aged, male, fiercely opposed to what they see as an oppressive government and just as fiercely loyal to the NRA, they took militarily-inspired positions in opposition to federal rangers with sights trained and fingers on triggers.

Civil War on the Table
“We’re about ready to take the country over with force!” Bundy bellowed to his supporters. There is no doubt that many of them wish they could. 

While this case of federal agents acquiescing to the demands of an angry mob with guns may be unsettling, the reality is that it might have been the right decision. Had the situation escalated, what followed might have ignited an American insurgency. Bundy’s supporters, it should be noted, had a vast tactical advantage. The BLM personnel and lightly armed park rangers were totally outgunned and would have stood little chance against the militias assembled. 

Yes, additional federal firepower could have been called in, in theory as much as needed, but had such an action resulted in significant loss of life the result could easily have been nationwide conflict.

Monday, April 21, 2014

the american deep state today

japanfocus |  The issue of Saudi Embassy funding of at least two (and possibly more) of the alleged 9/11 hijackers (or designated culprits) is so sensitive that, in the 800-page Joint Congressional Inquiry Report on 9/11, the entire 28-page section dealing with Saudi financing was very heavily redacted.56 A similar censorship occurred with the 9/11 Commission Report: According to Philip Shenon, several staff members felt strongly that they had demonstrated a close Saudi government connection to the hijackers, but a senior staff member purged almost all of the most serious allegations against the Saudi government, and moved the explosive supporting evidence to the report’s footnotes.57
It is probable that this cover-up was not designed for the protection of the Saudi government itself, so much as of the supranational deep state connection described in this essay, a milieu where American, Saudi, and Israeli elements all interact covertly. One sign of this is that Prince Bandar himself, sensitive to the anti-Saudi sentiment that 9/11 caused, has been among those calling for the U.S. government to make the redacted 28 pages public.58

This limited exposure of the nefarious use of funds generated from Saudi arms contracts has not created a desire in Washington to limit these contracts. On the contrary, in 2010, the second year of the Obama administration,
The Defense Department … notified Congress that it wants to sell $60 billion worth of advanced aircraft and weapons to Saudi Arabia. The proposed sale, which includes helicopters, fighter jets, radar equipment and satellite-guided bombs, would be the largest arms deal to another country in U.S. history if the sale goes through and all purchases are made.59
The sale did go through; only a few congressmen objected.60 The deep state, it would appear, is alive and well, and impervious to exposures of it.

It is clear that for some decades the bottom-upwards processes of democracy have been increasingly supplanted by the top-downwards processes of the deep state.

But the deeper strain in history, I would like to believe, is in the opposite direction: the ultimate diminution of violent top-down forces by the bottom-up forces of an increasingly integrated civil society.61

In the last months we have had Wikileaks, then Edward Snowden, and now the fight between the CIA and its long-time champion in Congress, Dianne Feinstein. It may be time to see a systemic correction, much as we did after Daniel Ellsberg’s release of the Pentagon Papers, which was followed by Watergate and the Church Committee reforms. I believe that to achieve this correction there must be a better understanding of deep events and of the deep state.

Ultimately, however, whether we see a correction or not will depend, at least in part, on how much people care.

deep politics

wikipedia |  Deep politics is a phrase coined by researcher and academic Peter Dale Scott, which he describes thus;
“My notion of deep politics… posits that in every culture and society there are facts which tend to be suppressed collectively, because of the social and psychological costs of not doing so. Like all other observers, I too have involuntarily suppressed facts and even memories about the drug traffic that were too provocative to be retained with equanimity.”[1]
Scott has extensively researched political processes that fly under the radar of conscious political activity, are omitted from discourse on the right and the left, and are many times intertwined with global drug traffic. Here is Scott’s definition of “parapolitics”;
par a pol i tics (pa˘r ə po˘l ə tı˘ks), n. 1. a system or practice of politics in which accountability is consciously diminished. 2. generally, covert politics, the conduct of public affairs not by rational debate and responsible decision-making but by indirection, collusion, and deceit… 3. the political exploitation of irresponsible agencies or parastructures, such as intelligence agencies… Ex. 1. ‘The Nixon doctrine, viewed in retrospect, represented the application of parapolitics on a hitherto unprecedented scale.’ 2. ‘Democracy and parapolitics, even in foreign affairs, are ultimately incompatible.’[2]
Although valuable, Scott ultimately found the label of parapolitics too limiting;
“…the investigation of parapolitics, which I defined (with the CIA in mind) as a ‘system or practice of politics in which accountability is consciously diminished.’ . . . I still see value in this definition and mode of analysis. But parapolitics as thus defined is itself too narrowly conscious and intentional . . . it describes at best only an intervening layer of the irrationality under our political culture’s rational surface. Thus I now refer to parapolitics as only one manifestation of deep politics, all those political practices and arrangements, deliberate or not, which are usually repressed rather than acknowledged.”[3]
David MacGregor is another academic who applies the ideas of parapolitics and deep politics to his own research. Here are some of his observations;
“Deep politics is a revision of Scott’s original concept of parapolitics first developed in The War Conspiracy. It responds to criticism that political conspiracies, like the murder of Kennedy, are too difficult to arrange and keep hidden…[4]
“Scott came to see parapolitics as “too narrowly conscious and intentional to describe the deeper irrational movements which culminated collectively in the murder of the President.” In contrast deep political analysis presupposes “an open system with divergent power centers and goals” The collapse of the First Italian Republic in the mid-1990s, involving large-scale criminal influence in government, offers a telling example. It originated as an American parapolitical operation to suborn the threat of communism which parachuted prominent U.S. Mafia hoods into power in post-war Italy “[B]y the 1980s this . . . strategem had helped spawn a deep political system of corruption exceeding Tammany’s, and (as we know from the Andreotti trial of 1995) beyond the ability of anyone to call it off”. Another example… is the CIA-financed jihad against Russian occupiers in Afghanistan that flooded Europe with opium and helped create Osama bin Laden, a modern version of the Old Man of the Mountains, who’s [sic] 11th Century followers – the Assassins – “sacrificed for him in order to perpetuate his crimes”[4]

at last - an honest and forthright corporate policy

Sunday, April 20, 2014

the global drug metagroup

lobster |  In the last three decades, three important facts have emerged about the international drug traffic. The first is that it is both huge and growing.
Narcotics are estimated to be worth between $500 billion and $1 trillion a year, an amount, according to UN Secretary General Kofi Annan in remarks to a United Nations General Assembly session in June 2003, that is greater than the global oil and gas industry, and twice as large as the overall automobile industry.[2]
The second is that it is both worldwide and above all "highly integrated."[3] At global drug summits such as the one in Armenia in 1993, representatives of the Sicilian Mafia, the Brighton Beach Organizatsiya, and Colombian drug lords, have worked out a common modus operandi, with the laundering of dirty money entrusted chiefly to the lawless Russian banks.[4]
The third important fact, undeniable since the 1980 U.S. intervention in Afghanistan, is that governments with global pretensions will avail themselves, in pursuit of their own political ends, of the resources, both financial and political, of the drug traffic. It was striking in the 1980s that the CIA, in its choice of Afghan mujahedin leaders to back against the Soviet Union, passed over those with indigenous support in favor of those, notably Gulbuddin Hekmatyar, who dominated the heroin trade. The result was to enhance Hekmatyar's power until he became a leading heroin trafficker, not just in Afghanistan but in the world.[5]

Three more important features of the global drug traffic have been less noticed; thus although I regard them as facts I shall refer to them not as facts but as propositions to be tested against evidence. The first proposition is that the highly integrated drug traffic industry, in addition to serving the political ends of world powers, has its own political as well as economic objectives. It requires that in major growing areas there must be limited state control, a condition most easily reached by fostering regional rebellion and warfare, often fought by its own private armies. This is the on-going situation of designed violence in every major growing area, from Lebanon to Myanmar, Colombia to Afghanistan.

Once the local power of drug armies was enough in itself to neutralize the imposition of state authority. But today there are increasing signs that those at the highest level of the drug traffic will plot with the leaders of major states to ensure, or even to stage, violence that serves the power of the state and the industry alike.

Thanks to extensive research in Russia, we now have initial evidence of a second and even more significant proposition: There exists on the global level a drug meta-group, able to manipulate the resources of the drug traffic for its own political and business ends, without being at risk for actual trafficking. These ends include the creation of designed violence to serve the purposes of cabals in political power – most conspicuously in the case of the Yeltsin "family" in the Kremlin, but allegedly, according to Russian sources, also for those currently in power in the United States.

One piece of evidence for this consists in a meeting which took place in July 1999 in southern France near Nice, at the villa in Beaulieu of Adnan Khashoggi, once called "the richest man in the world." Those at the meeting included a member of the Yeltsin cabal in the Kremlin and four representatives from the meta-group, with passports from Venezuela, Turkey, United Arab Emirates and Germany. Between them they allegedly enjoyed excellent relations with:

1) Ayman al-Zawahiri, the acknowledged mastermind of 9/11 and senior mentor to Osama bin Laden.
2) Soviet military intelligence.
3) the FARC, the Colombian revolutionary group that has become increasingly involved in the drug traffic.
4) the Kosovo Liberation Army, a similarly involved group.
5) (according to a well-informed Russian source) the CIA.

The third important proposition is that a meta-group of this scale does not just help government agencies make history. I hope to show that it, and its predecessors, are powerful enough to help make history themselves. However they do not do so overtly, but as a hidden Force X whose presence is not normally acknowledged in the polite discourse of academic political scientists. On the contrary, as we shall see, references to it are usually suppressed.

the astounding conspiracy theories of mark gorton

gawker | Mark Gorton is a prominent financier and a respected entrepreneur. He founded the music sharing site Limewire, and he runs Tower Research, a famed high-frequency trading firm. Gorton also believes that the "ruthless" secret cabal that assassinated JFK and planned 9/11 could be coming to kill his family.

Mark Gorton does not have a reputation as a crackpot. Quite the opposite. He's been favorably profiled in the New York Times for his business acumen and charitable deeds. His experience as the head of Limewire—which disrupted the music industry and then lost a $100 million lawsuit as a result—was closely followed by the press. And when Michael Lewis's blockbuster new book about high frequency trading was published recently, prominent media outlets turned to Gorton to learn what HFT firms are really like. The Huffington Post even dubbed him "the new face of Wall Street." He is a very respected and very wealthy man. 

This week, we were forwarded documents that Gorton was sending out to employees at Tower Research. These documents—embedded at the bottom of this post—are essays by Mark Gorton, laying out his theories on the secret high-level murderous criminal "Cabal" that is responsible for, among other things, the JFK and RFK assassinations, the presidential careers of the Bushes, Clinton, and Obama, the Oklahoma City bombing, the 9/11 plot, and the murder of countless witnesses, politicians, and journalists who sought to expose them, including Sen. Paul Wellstone and even Hunter S. Thompson. Everything, according to Gorton, has been an inside job.

It is really something.

Saturday, April 19, 2014

cultural supremacy mechanics...,

pnas |  An outstanding open problem is whether collective social phenomena occurring over short timescales can systematically reduce cultural heterogeneity in the long run, and whether offline and online human interactions contribute differently to the process. Theoretical models suggest that short-term collective behavior and long-term cultural diversity are mutually excluding, since they require very different levels of social influence. The latter jointly depends on two factors: the topology of the underlying social network and the overlap between individuals in multidimensional cultural space. However, while the empirical properties of social networks are intensively studied, little is known about the large-scale organization of real societies in cultural space, so that random input specifications are necessarily used in models. Here we use a large dataset to perform a high-dimensional analysis of the scientific beliefs of thousands of Europeans. We find that interopinion correlations determine a nontrivial ultrametric hierarchy of individuals in cultural space. When empirical data are used as inputs in models, ultrametricity has strong and counterintuitive effects. On short timescales, it facilitates a symmetry-breaking phase transition triggering coordinated social behavior. On long timescales, it suppresses cultural convergence by restricting it within disjoint groups. Moreover, ultrametricity implies that these results are surprisingly robust to modifications of the dynamical rules considered. Thus the empirical distribution of individuals in cultural space appears to systematically optimize the coexistence of short-term collective behavior and long-term cultural diversity, which can be realized simultaneously for the same moderate level of mutual influence in a diverse range of online and offline settings.

understanding how the octupus operates...,

"I brought this information out eighteen years ago and I got shot at and driven out of the LAPD."  

Just like Gary Webb the San Jose Mercury journalist who broke the original "CIA dealing drugs in LA" story. 

Just like Mark Lombardi the american conceptual artist whose work carefully documented the Bush-Bin Laden family money laundering operation - before 9/11. 

Just like J.H. Hatfield Fortunate Son author who documented George Bush Jr's drug abuse and arrest for cocaine possession. 

Just like Danny Casolaro American writer who documented the Octupus a criminal network that also involved the Bush family.

Jes sayyin....,

Friday, April 18, 2014

why capitalists do not want recovery and what that means for america...,

bnarchives |  Can it be true that capitalists prefer crisis over growth? On the face of it, the idea sounds silly. According to Economics 101, everyone loves growth, especially capitalists. Profit and growth go hand in hand. When capitalists profit, real investment rises and the economy thrives, and when the economy booms the profits of capitalists soar. Growth is the very lifeline of capitalists.

Or is it?

What motivates capitalists?

The answer depends on what motivates capitalists. Conventional economic theories tell us that capitalists are hedonic creatures. Like all other economic “agents” – from busy managers and hectic workers to active criminals and idle welfare recipients – their ultimate goal is maximum utility. In order for them to achieve this goal, they need to maximize their profit and interest; and this income – like any other income – depends on economic growth. Conclusion: utility-seeking capitalists have every reason to love booms and hate crises.

But, then, are capitalists really motivated by utility? Is it realistic to believe that large American corporations are guided by the hedonic pleasure of their owners – or do we need a different starting point altogether?

So try this: in our day and age, the key goal of leading capitalists and corporations is not absolute utility but relative power. Their real purpose is not to maximize hedonic pleasure, but to “beat the average.” Their ultimate aim is not to consume more goods and services (although that happens too), but to increase their power over others. And the key measure of this power is their distributive share of income and assets.

Note that capitalists have no choice in this matter. “Beating the average” is not a subjective preference but a rigid rule, dictated and enforced by the conflictual nature of the system. Capitalism pits capitalists against other groups in society – as well as against each other. And in this multifaceted struggle for greater power, the yardstick is always relative. Capitalists – and the corporations they operate through – are compelled and conditioned to accumulate differentially; to augment not their personal utility but their relative earnings. Whether they are private owners like Warren Buffet or institutional investors like Bill Gross, they all seek not to perform but to out-perform – and outperformance means re-distribution. Capitalists who beat the average redistribute income and assets in their favor; this redistribution raises their share of the total; and a larger share of the total means greater power stacked against others. In the final analysis, capitalists accumulate not hedonic pleasure but differential power.

how diversity was killed in economics...,

adbusters | Innovation feeds on diversity, but diversity is scarce in economics. 

A little-remembered episode in the history of the discipline, told by Tiago Mata in his dissertation at LSE, reveals how diversity was killed in economics. Back in 1968, a group of young radical economists, the product of the campus unrest of the 60s and the anti-war movement, came to rock the discipline. Organized by the Union for Radical Political Economics, they called for a politicization of economics, accusing fellow economists of ignoring the important questions and being “instrumental to the elite’s attainment of its unjust ends.” They rejected the “marginalist approach,” today’s mantra in economics, for accepting the basic institutions of capitalism, and catering to improve only its administration … marginally.

The front-guard of the group was at Harvard, where non-tenured faculty Arthur MacEwan, Samuel Bowles, Herbert Gintis and Thomas Weisskopf taught a course tellingly named “The capitalist system: conflict and power.” Older Harvard faculty found the course a disgrace. But these were still the 60s and economics was not yet economics. Harvard-based John Kenneth Galbraith, a non-conventional political economist, and a notable ally of the young radicals, was President of the American Economic Association. Galbraith was wary of economics becoming a system of belief and used his presidential address in 1972 to support this “new and notably articulate generation of economists” that was coming to ask politically-important questions. Not everyone agreed.

A campaign ensued the next few years to eradicate the young radicals from top positions. Contract after contract and tenure after tenure were denied, including to the Harvard four. 

Among them, the most notable case was that of Sam Bowles, one of the brightest economists of his generation, as confirmed by his later work. His tenure candidacy was rejected by a nineteen to five vote in 1973. He had received the support of the most prominent members of the department, J.K. Galbraith, and Nobel-prize winners Wassily Leontief and (yet to be) Kenneth Arrow. Albert Hirschman was one of the other two who voted in his favor, as recounted by his biographer in a talk in memoriam I recently attended in Boston and which brought the whole Harvard affair to my attention. 

Hirschman, a moderate economist, left Harvard bitter in 1974 for Princeton and so did Leontief for NYU in 1975, after serving Harvard for 30 years, and mentoring such conservative heavyweights like Paul Samuelson and Robert Solow. Galbraith retired in 1975 after half a century at Harvard and Arrow departed for the West Coast. Bowles’ denial of tenure and the departure of Leontief, Galbraith, Hirschmann and Arrow brought an end to the notorious Harvard faculty battles between moderates and conservatives, not only over tenures but also University governance and student occupations, battles that had brought the department to a stalemate in the early 70s.

The young radicals did not have the luck of their more established elder supporters. They were relegated to universities of lesser prestige, radical refuges such as the New School in New York and UMass at Amherst. UMass offered Bowles the opportunity to set up an institute and host other ousted young radicals from Harvard, Yale and beyond, such as Marxists Stephen Resnick and Richard Wolff.

The American Economic Association judged that there was no political motivation behind the purge of the radicals, other than in cases where the FBI was found to be involved. The rationale, however, often used in many faculty decisions to deny the quality of the radicals’ research was that it was “political” and not scientific enough. Science and objectivity in economics came to be defined through these tenure battles not only as mathematical formalism (in this people like Bowles and Gintis excelled), but as one of a particular kind, based on the so-called “neo-classical” assumptions of a world consisting of selfish individuals maximizing their personal gain. This pre-analytic vision of a world of neo-liberal subjects was considered neutral, but deviations from it ideologically-motivated.