taibbi has it right:
it sometimes feels like we’re re-living the same stories over and over again
but this time it is about securities legislation enforcement at the SEC.
when are we going to get serious about designing institutions with cultures that are effective at recognising performance and diligent in pursuing whose behaviour they are mandated to investigate?
Guess who opposes the privatization of the power agency established under Franklin Roosevelt? Hint: It’s not the Democrats.
nothing on capitol hill is sacred it seems when a dollar or two (or a hundred million or two as the case may be) being paid to a consituent comes into the equation.
my favourite quote:
Ah, socialism, a brand so sweet that it even sweeps Republicans off their feet.
a heady brew indeed…
because with this set up they’re going to need it…
with big financial support from a major conservative activist … the GOP [won] control of both chambers of the state General Assembly in 2010.
Those victories were capped last year when Republican Pat McCrory was elected governor, giving the party control of all levers of state government for the first time since 1870.
The victories were aided by the strong financial support of Art Pope, a multimillionaire who spent heavily in support of the state’s GOP candidates. The Institute for Southern Studies, a North Carolina-based research organization, said Pope’s advocacy network spent $2.2 million on 22 legislative races, winning 18. Overall, conservative organizations largely supported by Pope accounted for three-fourths of the outside money spent in North Carolina legislative races in 2010, according to the institute.
One of McCrory’s first acts after being elected governor was to install Pope, a former legislator, as the state budget chief.
again we see well targeted funding for elections getting results. and those results now translate into a job as state budget chief for the man behind the moolah and to a debt that those elected with his funds will repay with votes for his budgets. one should hope then that in setting the budget that one art pope exhibits more of the wonderful papal infallibility that gave us the borgias…
========
In North Carolina, unimpeded GOP drives state hard to the right
State Republicans are pushing a sweeping conservative agenda, and opponents can do little to stop them.Oh dear. One party rule by any party is usually a bad thing… Well, we’ll see how this goes.
while it is early days yet as to whether this is libor-gate 2.0, Matt Taibbi has an excellent article on whether we have yet another case of TBTF banks fleecing us. two snippets, one which describes the farcicial situation via analogy:
If you can imagine paying 20 bucks for a crappy PB&J because some evil cabal of agribusiness companies colluded to fix the prices of both peanuts and peanut butter, you come close to grasping the lunacy of financial markets where both interest rates and interest-rate swaps are being manipulated at the same time, often by the same banks.
and one which gives some very recent history of the power of these banks:
the biggest shock came out of a federal courtroom at the end of March – though if you follow these matters closely, it may not have been so shocking at all – when a landmark class-action civil lawsuit against the banks for Libor-related offenses was dismissed. In that case, a federal judge accepted the banker-defendants’ incredible argument: If cities and towns and other investors lost money because of Libor manipulation, that was their own fault for ever thinking the banks were competing in the first place.
let’s put a real fix in. how? make it so that banks - if they want deposits made with them to be covered by FDIC - cannot trade derivatives. simple? feasible? ask your representative what they think
do we have any doubt about the costs we bear by putting up with this system? do we have knowledge of those costs? when BP gets fined $4.525 billion for the part it played leading up to and following the Deepwater Horizon spill in the Gulf of Mexico do we think justice has been done?
what if i were to tell you that BP minimised the visible impact of the spill through the use of millions of gallons of a dispersant one of which:
Corexit 9527, was considerably […] toxic. According to the NALCO manual, Corexit 9527 is an “eye and skin irritant. Repeated or excessive exposure … may cause injury to red blood cells (hemolysis), kidney or the liver.” The manual adds: “Excessive exposure may cause central nervous system effects, nausea, vomiting, anesthetic or narcotic effects.” It advises, “Do not get in eyes, on skin, on clothing,” and “Wear suitable protective clothing.”
what if i were to tell you that in spraying dispersants such as this from planes they hit fisherman co-opted into helping with the cleanup in the face? and when those fishermen spoke to BP reps about it they had conversations such as this:
“The next day […] when the BP rep came around on his speed boat, I asked, ‘Hey, what’s the deal with that stuff that was coming out of those planes yesterday?’ He told me, ‘Don’t worry about it.’ I said, ‘Man, that s—t was burning my face—it ain’t right.’ He said, ‘Don’t worry about it.’ I said, ‘Well, could we get some respirators or something, because that s—t is bad.’ He said, ‘No, that wouldn’t look good to the media. You got two choices: you can either be relieved of your duties or you can deal with it.’”
well if you still have doubt about how morally bankrupt our corporates are read the fantastic article by mark hertsgaard and then do something about it. talk to your your family and friends, your neighbours and colleagues, organise action. do something.
and if you don’t have any doubt, tell us what you are doing to change the system
which camp do you fall into?
To the tens of thousands of City bankers and traders or back office staff or anyone else losing a job amidst the slowdown in the financial sector, my message is clear: consider other recourse but steer well clear of the Employment Tribunal. Until it enforces its own rules, the Tribunal will remain a mockery of itself, a fact that will be well known to several of the largest banks in the world.
what mechanisms should a democracy have to report, censure and change a corrupt office? if the UK, the home of parliamentary democracy, doesn’t have them, what hope for the rest of the world?
Is this really going to be a surprise to anyone? Does anyone really think Hillary, Obama, Biden, or any other Democrat would have acted differently?
Politicians are rational self actors. It’s simple Economics, not rocket science.
this act was rational? how much do you think he made (or didn’t lose) from this versus what he could make (have made perhaps now) from his time after being VP and potentially POTUS after that? it was short sighted and greedy and certainly not an economic decision - but a fearful one.
and whether other politicans would have done the same, that has been proven, but of course they are not subject to the same laws as us. perhaps that needs to change?
(Source: wontoo3fore, via andrewfriedle-deactivated201301)
Ryan attended a closed meeting with congressional leaders, Bush’s Treasury Secretary Henry Paulson, and Federal Reserve Chairman Ben Bernanke on September 18, 2008. The purpose of the meeting was to disclose the coming economic meltdown and beg Congress to pass legislation to help collapsing banks. Instead of doing anything to help, Ryan left the meeting and on that very same day Paul Ryan sold shares of stock he owned in several troubled banks and reinvested the proceeds in Goldman Sachs, a bank that the meeting had disclosed was not in trouble.
this just gets better and better. how bad must the corruption be before we take a stand?
(Source: wontoo3fore)
— Frederic Bastiat, The Law (1850)
(Source: quotableskeptics)
montrealmighteatitsyoung thanks for an interesting post. here are some responses to why the stockmarket is legal:
because it is legal to ask investors to put their savings into a new business
because it is legal for people saving for retirement to invest in existing businesses
you say
…[as the business owner,] you’re […] subject to your shareholders, right, and all the negative pressures of the stock market
if the company raising the money for its business doesn’t want to be subject to the demands of investors, it is also legal for them not to raise money on the stockmarket. they can go back to the venture capitalists they were so afraid of. or they can save their own money and invest in their own business themselves and share it with no-one.
…the stock market [is] legalised gambling, but all the risk is taken by the public.
no. the stockmarket is not legalised gambling. when you gamble you rely on luck. when you invest it is because you take a view on the worth of a business and its assets, its people, its ideas, its attention to quality. and the risk is taken by two kinds of public. for small companies the risk - both the risk of success and thus a rising share price and the risk of failure and a lower or zero share price - is borne by theinvestingpublic. for large companies like too big too fail banks, upside risk (their success) is taken (gladly) by the investing public and any downside risk (subprime etc) is borne by thepublic as represented by the government who steps in to save them
so you need to rethink this
you continue:
[the stockmarket] exerts pressure on public companies to grow beyond simply profitable with risky debt purchases.
it does not. the investorsmight exert pressure at board meetings or annual general meetings. but the stockmarket as a whole does not. it is not a living breathing human being. it is a [metaphorical] building. and if in that building there is quoted a price on a share where the investors told the CEO to go and buy toxic debt and should that price fall to zero when that debt blows up, then that investor deserves to lose their investment and not come complaining to the nearest (sleeping most likely) official.
[the stockmarket] promotes a culture of risk and corruption that managed to fuck up the entire world’s economy. And it’s still rigged as hell.
again, the stockmarket is not a person and cannot promote anything. perhaps it is representative of risk and corruption in our society. or perhaps that is where risk and corruption are most easily identified in our society. but risk does not fuck anything up. risk is up as well as down. risk is being blind sided too. it comes from all directions.
corruption does create problems. it allows people to get away with theft. it allows people to get away with fraud. it allows people to engage in dishonest activity and when they are caught continue merrily along as if nothing had ever happened. so that needs to change: can you propose how please?
and is it rigged? only for as long as we allow the corruption to exist. only for as long as we allow the fraudulent to escape punishment. only for as long as we listen to the crying of the children about to lose a wealth they felt someone else was responsible for. for me we don’t allow children to play with money. so if they don’t like all the risks: the upside, the downside, the blindside, they can sell their shares and take their money home with them.
so why is the stock market legal? it doesn’t create any material good or beneficial service. it’s rich people transferring capital back and forth between each other. it pays out massive salaries, creating a brain drain from actual professions that need talent.
it does create the service of bringing those with savings together with those who want to use those savings to invest in an idea, in a business, in people. that is a good thing. it builds connections and deepens our relationship as a community, as a society.
so why is the stock market legal?
because it is good to allow people to start businesses, to take risks. better ask a question that gets to the foundations of the building - but if the answer there shows the building to have corrupted foundations, be prepared to repair them or to tear down the building but make sure the replacement is up and running before you tear this one down otherwise no-one will let you near it
i don’t think i misunderstood what john broome says. let’s take what he says:
What is the role of experts in democracy?…Their views, supported by arguments and evidence, help individuals and their representatives to form judgments.
agreed. then he says:
This is not how economists typically see their democratic role. They do not see themselves as participants in public deliberation, helping people to make their judgments.
i disagree. so i said:
economists do try to base their views on evidence. they do try to help individuals to form judgements. they are, and are seen as, participants in [p]ublic deliberation.
an example of this? zoeschlanger has a piece on an economist basing their view on evidence. the latest study on fracking on ohio was to ‘help’ individuals - namely policy makers - to form judgements - whether or not to allow fracking in their state. and as such the study is seen as an input into public deliberation.
[note the blog by zoe is about how economists hide the source of funding for the study and release findings which are erroneous in such a way as the ommission favours the group funding the study. like monsanto releasing studies which downplay the genetic damage associated with cancer recognition in round-up which allows round-up ready GM plants to continue to be planted]
here we have an economist, an expert, standing behind their expertise in the form of a study. the study is meant to influence the debate. the debate occurs in the deliberation the state legislature will undertake when considering whether or not to allow fracking. here the economist is seen as a participant in the debate as they use that very expertise to influence the outcome of the deliberation. this comprehensively contradicts john broome’s statement
what else does john broome say?
Instead, they think their role is to help ensure that the preferences of the people prevail. They do this by basing their valuations on market prices, which reflect people’s preferences.”
the economists who hide the source of their funding, who exclude certain evidence such as negative externalities in the case of fraqcking to further an agenda, are not making sure the ‘preferences of the people prevail’ - where ‘people’ means the entire populace. but where ‘people’ means those paying hundreds of thousands for the study, i agree with this statement.
and when they exclude some evidence to present a biased picture, not only are they not reflecting the populace’s preferences, they are not reflecting market forces - which are more than prices. after all, prices are simply the result of an intersection of a demand and supply curve. the preferences reflect the steepness - or very existence - of those curves. and thus preferences are never reflected by market prices themselves, but how they change in response to information.
basically, when an economist conducts a study and shows how fracking is beneficial in employment terms and discounts the environmental costs, then it is distorting market preferences. it is allowing personal value judgements to override their duty as experts.
and you attempt to show what i should have understood:
Economists do base their views on evidence, but mosteconomists use this evidence to further market preferences and not their own value judgments. Most of this value is manifested in market prices, and is commonly used due to its summative and objective nature.
most economists doing studies like these attempt to reveal what the market doesn’t even know it prefers. in the case highlighted by zoe, making the market - the politicans - aware they could be creating jobs. but a truthful economist would reveal all the costs or benefits of certain actions. when they conduct studies in the way highlighted they are making value judgements. they are allowing their bias to cloud the picture they present to further a particular agenda.
you then go on to say:
I think Broome makes an interesting point because far too often I have seen experts abuse their influence to further personal agenda, and thus economists that refrain from value judgments and political leanings in their recommendations, while allowing preferences to prevail, lead to a more democratic market economy.
well, we’ve seen it again. i will say that those economists who do present the entire picture do allow for more intelligent decision making. such economists who do not should be stripped of all their qualifications and have their tenure revoked.
but do those who are truthful lead to a ‘more democratic market economy’? is there such a thing? perhaps they lead to a more rational market economy. where all of the decisions taken in that economy are taken with all information in hand. but more democratic? i don’t think so. unless by democratic you mean that now the fully informed people only make rational choices? well behavioural economics will show you this doesn’t exist. people are irrational. and long may it be so.
(via jumbodumbothoughts)
It’s over for the banking cabal.
we are slowly waking up to the fact that it has been writ large that we need a reset of the system. we need a hercules to clean our augean stables. and like him we need to do it by - thinking again of money as water - diverting rivers. do we have his imagination? his creativity? and his strength of purpose?
Seeing as how the fall out from the Libor scandal is ongoing, it is quite important to understand what Libor is, how it effects the economy, and what is currently occurring in the scandal.
Explaining the Libor interest rate mess
The Libor Scandal In Full Perspective
BANK FRAUD: The Big Losers in the Libor Rate Manipulation
Banks have been Manipulating LIBOR for Decades
The Big Banks are Amateurs When It Comes to Manipulating Interest Rates
Libor Is Not the Only Manipulated Economic Number: Core Economic Figures Twisted and Manipulated
11-minute Matt Taibbi video: LIBOR crime defrauded trillions from 99%
(Source: mr-introverted)
Matt Taibbi on Sam Seder’s Majority Report: You Should Be Freaking Out Over LIBOR Scandal!
agreed
- this scam was covered by the Wall Street Journal as early as 2008
- the government of the UK has been implicated in the manipulation
- this impacts everyone who is touched by the financial industry; i.e. everyone, through the impact on borrowing or lending rates
- “all sixteen banks [those members of the British Banking Association that sets LIBOR] were complicit”
the financial system needs a reset
- the banks need to be broken up into smaller entities so there is no more “too big to fail”
- banks and other financial institutions caught in fraudulent or criminal activity need to be closed down and their assets transferred to other entities much like when the FDIC takes over a bank
- banks can only lend - whether commercial or retail lending - from deposits and equity
- banks cannot hold (or be short) any derivative contracts, exchange traded or OTC
draconian? dictatorial? maybe. but a system so corrupt needs a cleanout.
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