Author: Brian

Naomi Klein at The Guardian:

You – politicians and CEOs huddled at some trade summit – are like the reckless scamming execs at Enron (of course, we didn’t know the half of it). We – the rabble outside – are like the people of Argentina, who, in the midst of an economic crisis eerily similar to our own, took to the street banging pots and pans. They shouted, “¡Que se vayan todos!” (“All of them must go!”) – and forced out a procession of four presidents in less than three weeks.

What made Argentina’s 2001-02 uprising unique was that it wasn’t directed at a particular political party or even at corruption in the abstract.

The target was the dominant economic model: this was the first national revolt against contemporary deregulated capitalism.

If I were aggressive, would I restart promoting monorail? It wasn’t ‘hi-tech’ enough during the last few decades, but it’s practicality might be more achievable in a recession.

Too many look for ideal transportation and current proposals are costly.

I believe that a ‘true’ monorail is an overlooked option. Most proposals require elevated and engineered roadbed but a simple steel-on-steel track over existing routes is the most effective option available.

The right of way is already amortized.

An iron wheel on an iron rail is proven and efficient. Track and beams are both inexpensive and common.

Suspending weight costs less. Too many transit ideas, such as BART or Maglev, lift a costly roadbed into the air, but suspending weight over existing roadway requires far less investment.

A monorail is simple corridor and easy engineering – cargo and passengers, containers or cars, moved over ordinary routes.

Monorail capitalizes unused rights of way, whether over existing roadbed or new point-to-point conveyance. There’s the savings, and the prosperity.

The air value over our roads is a trillion dollar frontier.
Monorail & monobeam links here at the University of Washington.
Texas Transportation Institute offers a 136 page .pdf study here.

Insight is hard, and worse, it tires, and dangerously, we’re not always willing to pile bad news atop bad news. It’s best if we know a crisis ends, but sometimes we must endure.

We truly need to know. History is turning now.

Let’s begin our journey by pointing out a regulatory ‘anomaly’ which has allowed European banks to take on much more leverage than their American colleagues and which now makes them far more vulnerable.

In Europe, unlike in the US, it is only risk-weighted assets which matter to the regulators, not the total leverage ratio. European banks can therefore apply a lot more leverage than their US counterparties, provided they load their balance sheets with higher rated assets, and that is precisely what they have been doing.

That is fine as long as you buy what it says on the tin.

But AAA is not always AAA as we have learned over the past 18 months.

Studies pile up. We call it research.

The Science blog at Australia Broadcasting says:

Young children who watch television for more than two hours a day double their risk of developing asthma.

Enough to take your breath away.

Big news for parents of young kids: 186 four-year olds given carrots called ‘X-ray Vision Carrots’ ate nearly twice as much as they did when simply labeled as ‘carrots’.

Why strong policy is important:

Tropical trees in undisturbed forest are absorbing nearly a fifth of the CO2 released by burning fossil fuels.

The 40 year study shows that tropical forests remove a massive 4.8 billion tons of CO2 from the atmosphere each year.

“It’s well known that about half of the ‘missing’ carbon is being dissolved into the oceans, and that the other half is going somewhere on land in vegetation and soils, but we were not sure precisely where.”

About half the total carbon ‘land sink’ is in tropical trees. ScienceBlog

From the blog of the Global Governance unit of the World Bank Institute:

The global financial crisis, triggered by the mortgage and financial derivatives debacle in the US was not just a failure of dogmatic ideology, or of know-how, or of a technical regulation.

As illustrated at the outset, powerful vested interests, at the intersection between politics and business, and corruption, did play a role in shaping the extent and type of oversight, the absence of transparency, the regulations, and their implementation.

Enter now the problematic field of study of corruption, which has many challenges nowadays. One of them is having underplayed for too long the study of misgovernance in the financial sector.

The basics first: the way corruption is defined is flawed…

The interpretation of the traditional definition of “abuse of public office for private gain” is often ‘legally’ biased towards unearthing evidence that an egregious illegal act has been committed, and, further, biased towards pointing a finger at a public official as the main culprit.

I thought this definition was inadequate years ago…

…the focus on corruption needs to move away from exclusive focus on the ‘abuse of public office’ and squarely acknowledge that corruption often involves collusion between the public and private (and at times outright capture by the private potentates).

Further, corruption ought to also encompass some acts that may be legal in a strict narrow sense, but where the rules of the game and the state laws, policies, regulations and institutions have often been shaped in part by undue influence of certain vested interests for their own private benefit (and not for the benefit of the public at large).

I want to focus on one factor that has often been kept under wraps: the regulatory and policy capture by vested interests. This has been years in the making.

A frank and open debate about this issue, grounded on sound analytics and data, is overdue.

Therefore, it makes sense to have a neutral and broader definition of corruption, akin to “the privatization of public policy”.

More here: Why Does Corruption Thrive?

The Bulging Pocket and the Rule of Law…
Corruption acts as an extra tax on citizens.
Corruption leads to lower levels of economic growth and to ineffective government.

Corruption amounts to an attack on the everyday quality of life of everyday people. [summary] [author’s free book]

DanaGarrett at Clipmarks says:

The FBI is conducting more than 530 investigations of corporate fraud amid the financial meltdown; 38 involve fraud directly related to the economic crisis.

“A thinner line than we acknowledge divides “self interest” and fraud. When no one is watching, “self interest” will blur the difference. But when someone is minding the store, self interest can be a engine of innovation and prosperity. That only occurs when the government realizes that its proper role is to get on, not off, the backs of big business.”

Darn near Shakespeare:
“Enter now the problematic field of study of corruption… “A thinner line than we acknowledge divides self interest and fraud…

Michael Hudson, Distinguished Research Professor, University of Missouri, points out the “rhetorical smokescreen organized by financial lobbyists seeking to muddy the ideological waters sufficiently to mute popular opposition to today’s power grab by finance capital and monopoly capital”.

Enjoy. It’s an eloquent exposé and a rant as easy to read as the cadence above.

How is it that Alan Greenspan, free-market lobbyist for Wall Street, recently announced that he favored nationalization of America’s banks…?

The answer is that the rhetoric of “free markets,” “nationalization” and even “socialism” (as in “socializing the losses”) has been turned into the language of deception to help the financial sector mobilize government power to support its own special privileges. Having undermined the economy at large, Wall Street’s public relations think tanks are now dismantling the language itself.

…
Doublethink and doubletalk with regard to “nationalizing” or “socializing” the banks and other sectors is a travesty of political and economic discussion from the 17th through mid-20th centuries. Society’s basic grammar of thought, the vocabulary to discuss political and economic topics, is being turned inside-out in an effort to ward off discussion of the policy solutions posed by the classical economists and political philosophers that made Western civilization “Western.”

Today’s clash of civilization is not really with the Orient; it is with our own past, with the Enlightenment itself and its evolution into classical political economy and Progressive Era social reforms aimed at freeing society from the surviving trammels of European feudalism. What we are seeing is propaganda designed to deceive, to distract attention from economic reality so as to promote the property and financial interests from whose predatory grasp classical economists set out to free the world. What is being attempted is nothing less than an attempt to destroy the intellectual and moral edifice of what took Western civilization eight centuries to develop, from the 12th century Schoolmen discussing Just Price through 19th and 20th century classical economic value theory.

Any idea of “socialism from above,” in the sense of “socializing the risk,” is old-fashioned oligarchy – kleptocratic statism from above.

The result is a regime of insider dealings and oligarchy – rule by the wealthy few.

Roughly 7,000 square miles off Louisiana is dead – not enough oxygen to sustain fish or fauna.

Except oxygen-devouring algae.

There are more than 450 dead zones around the world.

An increase in macroalgae or phytoplankton is usually the first ‘visible’ sign that a system is dying.

Shutting down fisheries soon follows, but of all things, reviving our streams can prevent dead oceans.

America is blessed with many, many streams, but we need to pay attention. In too many cases, our streams have become ditches and canals that we use merely to drain urban runoff or channel irrigation.

We’ve forgotten that a stream is also what lives nearby – trees, brush, grasses and abundant life in the soil. These capture fertilizers and phosphorous from soaps and urban chemicals and process pollutants before it travels to lakes, rivers and coastlines.

“Protecting drinking water and preventing harmful coastal “dead zones”, as well as eutrophication in many lakes, will require reducing both nitrogen and phosphorus as well as toxic pollution.

“Because streams and rivers are conduits to the sea, management strategies should be implemented along the land-to-ocean continuum. In most cases, strategies that focus only on one pollutant will fail.

“By focusing only on minimizing phosphorus in our fresh waters, and ignoring nitrogen inputs, existing management strategies are exacerbating the decline of coastal ecosystems.”

Instead of millions of raw channels and pipes forcing dirty water into lakes and oceans, our streams must become living corridors in order to capture and reduce pollutants before they reach the sea.

Fix-A-Ditch might be another jobs engine we need. Our localities and farmlands have ignored streams for too many decades and it’s time for a national repair. There’s much research and support for healthy stream corridor.

We may not eat well unless we stop passing the problem downstream…

Would you agree that justice is calling the RIAA and others?

…[through] concerted efforts and cartels, control or attempt to control the channels of creation, distribution, and sale of musical works throughout the United States and the world. They are not artists, songwriters, or musicians. They did not write or record the songs. For a number of years, a group of large, multinational, multi-billion dollar record companies, including these [record labels], have been abusing the federal court judicial system for the purpose of waging a public relations and public threat campaign targeting digital file sharing activities.

…
As part of this campaign of their sham litigation program, the [record labels] enhance the intimidation factor by actually filing suit in a number of instances with no prior warning. These suits are designed to attract media attention, and often do, as stories emerge of [record labels’] suits against the elderly, disabled, technologically clueless, and other vulnerable victims.

…
[The record labels’] litigation campaign, its preceding demands, and illegal investigations, are part of a concerted pattern of sham litigation.

Praise the lawyers for phrases alone as they challenge ‘concerted efforts and cartels’ wishing to ‘control or attempt to control the channels of creation’. People. These are the days for putting the end to that.

Pick up the event at TorrentFreak.

“Some of the people who are most outraged turn out to be consumers of the very things they claimed to be outraged by,” says Benjamin Edelman at Harvard Business School.

Repression.

Eight of the top 10 pornography consuming states gave their votes to John McCain.

Obama’s budget is more than spending:

“I realize that passing this budget won’t be easy. Because it represents real and dramatic change, it also represents a threat to the status quo in Washington. I know that the insurance industry won’t like the idea that they’ll have to bid competitively to continue offering Medicare coverage, but that’s how we’ll help preserve and protect Medicare and lower health care costs for American families. I know that banks and big student lenders won’t like the idea that we’re ending their huge taxpayer subsidies, but that’s how we’ll save taxpayers nearly $50 billion and make college more affordable. I know that oil and gas companies won’t like us ending nearly $30 billion in tax breaks, but that’s how we’ll help fund a renewable energy economy that will create new jobs and new industries. I know these steps won’t sit well with the special interests and lobbyists who are invested in the old way of doing business, and I know they’re gearing up for a fight as we speak. My message to them is this:

“So am I.”

[video]

Think hard:

“You have to have a place to park at home, a place to park at work, and a place to park at retail establishments. In an absurd ‘market distortion’ cars have a right to housing and people don’t.”

Don’t think for one minute that Geo. Bush or John McCain promoted giving Social Security to Wall Street because it’s a good idea for America. People are being paid to build rhetoric and ply bias. The prize is huge.

But the pain is greater. We forget that families and children will be terribly hurt.

Asked what punishment he would like to see for Mr. Madoff, Mr. Elie Wiesel said: “I would like him to be in a solitary cell with only a screen, and on that screen for at least five years of his life, every day and every night, there should be pictures of his victims, one after the other after the other, all the time a voice saying, ‘Look what you have done to this old lady, look what you have done to that child, look what you have done,’ nothing else.

“This was a personal tragedy where we discovered all of a sudden what we had done in 40 years — my books, my lectures, everything — was gone.”

Even judged by its own yardstick, the trickle-down approach has failed to deliver: Rather than getting richer, we have been slowly impoverishing ourselves.

While incomes at the very top have soared to levels beyond imagining even a generation ago, the average inflation-adjusted income of the bottom 90 percent of earners was lower in 2006 than it was back in 1973. And since 2000, the median income of all Americans has actually slipped, proof that tax cuts for the rich do not create general prosperity.

Today, more and more of us do not have enough money to live on without going into debt. For each dollar of equity people gained in their homes from 1980 to 2006, they borrowed two—and while a portion of that is accounted for by poor decision making, much has to do with the sheer impossibility of making ends meet.

This should come as no great surprise.

For anyone born after, say, 1970, the world has been shaped by Ronald Reagan’s remaking of government’s relationship with private interests—a vision of lower taxes, less regulation, and maximum economic leeway for those at the top. In this view, the pursuit of wealth is the warp and weft of America; everything else will follow.

By contrast, the preamble to the Constitution tells us the nation’s reason for being in 52 words that can be reduced to six principles: society, justice, peace, security, commonwealth, and freedom. Individual riches don’t make the list. They are a product of American society, not its guiding purpose.

David Cay Johnston, Fiscal Therapy: Getting the economy back on its feet, giving taxpayers a break, saving your retirement fund and your kid’s college tuition? Done.

And it won’t cost you a penny.

1. Quit Cooking the Books
2. Make the Superrich Pay Their Share
3. End Legal Tax Cheating
4. Invade the Caymans
5. Wean Wal-Mart (and the Yankees)
6. Cut Off the Utility Scam
7. Ground the Private Jet Exemption
8. Demolish the Mansion Deduction

From a Harvard advisory boutique:

Why does President-elect Obama have to invest a likely trillion dollars to renew, well, pretty much the entire industrial base of the economy – to seed new auto, energy healthcare, education, finance, and agricultural industries (to name just a few)? Because today’s crop of apathetic, risk-averse venture investors didn’t.

The venture economy is failing investors, entrepreneurs, the economy, and society.

And has for many years.

The U.S. ranks sixth among 40 countries for innovation. Our development sector are merely cherry picking and have put a burden on both game theory and human nature.

William K. Black is a white-collar criminologist and former financial regulator with much research on what causes financial markets to become profoundly dysfunctional.

The FBI has been warning of an “epidemic” of mortgage fraud since September 2004.

It also reports that lenders initiated 80% of these frauds.

When the person that controls a seemingly legitimate business or government agency uses it as a “weapon” to defraud we categorize it as a “control fraud” and the “weapon of choice” is accounting.

Control fraud causes greater financial loss than all other forms of property crime.

Control fraud epidemics can arise when financial deregulation and desupervision and perverse compensation systems create a “criminogenic environment”.

“The FBI correctly identified the epidemic of mortgage control fraud at such an early point that the financial crisis could have been averted had the Bush administration acted with even minimal competence.”

The Two Documents Everyone Should Read to Better Understand the Crisis

As posted on the White House blog, Obama had some strong words for people who have been misrepresenting an overhaul of regulations:

Let me be clear: The choice we face is not between some oppressive government-run economy or a chaotic and unforgiving capitalism. Rather, strong financial markets require clear rules of the road, not to hinder financial institutions, but to protect consumers and investors, and ultimately to keep those financial institutions strong. Not to stifle, but to advance competition, growth and prosperity. And not just to manage crises, but to prevent crises from happening in the first place, by restoring accountability, transparency and trust in our financial markets. These must be the goals of a 21st century regulatory framework that we seek to create.

1. Enforce strict oversight of financial institutions that pose systemic risks

2. Strengthen markets so they can withstand both system-wide stress and the failure of one or more large institutions

3. Encourage our financial system to be open and transparent, and to speak in plain language investors can understand

4. Supervise financial products based on “actual data on how actual people make financial decisions”

5. Hold market players accountable, starting at the top

6. Overhaul our regulations so they are comprehensive and free of gaps

7. Recognize that the challenges we face are global

I roamed into a Lombard Street party in San Francisco forty years ago and began slapping my knees to the blues of Taj Mahal. During a pause, he walked into the kitchen to retrieve two tablespoons and showed me how to use ’em. A wonderful evening.

Taj Mahal, a two-time Grammy winner, will soon be inducted into the Blues Hall of Fame.

“The blues is played everywhere. There’s no place I’ve been where they don’t have blues or aren’t interested in blues.”

Black Swan author Nassim Taleb:

Indeed, the incentive system put in place by financial companies has produced the worst possible economic system mankind can imagine: capitalism for the profits and socialism for the losses.

…
Roman soldiers signed a sacramentum accepting punishment in the event of failure. [wiki]

Darkness is hard to find.

The 24-hour day has arrived.

The night sky has been disintegrated.

Nothing twinkles in the heavens anymore…

A photon soup floods village and cities, drowning out the view of the stars. Insects, birds and other animals are getting confused, ecosystems are suffering and even humans are being harmed, both physically and culturally.

“We know about the adverse health effects of noise, but with light we are just beginning to understand the connection.

“Despite climate change, the economic crisis and high electricity prices, thousands upon thousands of new light sources are constantly being added to the mix… practically increasing from one night to the next.”

Light smog: “Unless we create dark sky zones, a truly dark sky will not be found.”

British Psych. Society reports:

People can recognize in just ten seconds whether one person has the hots for another.

Researchers also noticed:

A key finding was less accuracy when judging the romantic interest of females compared with males, just as the researchers had predicted.

So that explains it.

But 10 seconds is nothin’ in the race for a sexual cue.

People accurately judge men’s sexual orientation in 50ms!

Do not train a child to learn by force or harshness; but direct them to it by what amuses their minds, so that you may be better able to discover with accuracy the peculiar bent of the genius of each. – Plato

Christian Science Monitor:

Warren Buffett paid 17.7 percent of his income in total taxes. His secretary, who made $60,000, paid 30 percent of hers. While making more than $60,000 per hour, the tax rate for America’s top 400 is just 17.2 percent, and they don’t pay that.

How did we end up with this sorry state of affairs?

Lawmakers in Congress have spent the past several decades systematically slicing the tax rates on America’s top income brackets. Their rationale? Lower taxes on the top, free up capital for investment, and boost productivity. In actual economic practice, those lower taxes have served instead to fuel speculation and increase budget deficits.

More than ever, America needs its ultrarich to chip in more.