Double-whammy (a jab from the shoulder followed by an uppercut)

Thursday October 15, 2009

. . . . .I often use the top part of this column for my culture watch, that is, culture that I enjoy, so yes, it's entirely selfish and quite skewed in viewpoint, but too bad, it's my taste and this is the stuff I like.

. . . . If you've never read Freakonomics, the excellent book by economist Steven Levitt, a brilliant Chicago economist, and Stephen Dubner, a journalist you should. Levitt is one of the brightest and most unconventional economists around, and instead of macro policy, takes a look at human nature and the eternal economic questions; what do people value? what are they willing to trade to get those things? and what is their perception and baggage that drives those decisions? Levitt will freely admit that his fascination with crime, corruption and unconventionality is what drives his interest. It was Levitt who postulated the 4 maxims of economics that hold true, I actually try to live by and measure things by them, and was doing so long before I ran across Levitt's work.
Maxim #1 - Incentives are the cornerstone of modern life
Maxim #2 - Dramatic effects have distant, often subtle, causes
Maxim #3 - "Experts" often use their informational advantage to serve their own agenda
Maxim #4 - Knowing what to measure, and how to measure it, makes a complicated world much less so.

. . . .These lead to two truths that, again for me, are ones to live by:
- The conventional wisdom of is neither
- If everybody knows it, it's probably wrong

. . . .Well, anyhow, they've got a second book out, and it's well worth your time to read and grasp. Titled Superfreakonomics:Global Cooling, Patriotic Prostitutes and why Suicide Bombers Should Buy Life Insurance. It will be released on October 20th, and I expect that Levitt and Dubner have gone further into the real science of economics, which, truly is all about human behavior. What we value, why we value it, and what transactions, at any level, are we willing to make to get what we value and avoid what we fear.

. . . .Order in the playlist has changed again, have fun. If you're reading this on the Facebook notes page, you can go to the external site, The Desolation Angel - An Idiot's Ravings, and catch all the music.

. . . .I spent the first part of this week going into the total insanity that is behind Max Baucus and the Finance Committee's health care reform bill, the contents of which only reveal what we already knew, the doctor's lobby, the pharmaceutical lobby, the health insurance industry lobby outright owns Washington. We know now where to look as the House Financial Services committee begins it's hearings on a financial reform bill, straight to the lobbying contributions, as if we didn't know that already.

. . . From Arthur Delaney and the Lobbyblog:

Rep. John Larson (D-Conn.) has a sad story to tell about how he lost a friend in Washington.

"I came here in 1998. I served with a guy named Jim Maloney. He came here in 1996. I would say, 'Jim, why don't we get together tonight and go out?' He'd say, 'I'm in a swing district and I gotta go make phone calls.'

"I didn't get to see Jim a single night," Larson told the Huffington Post. "Here's a guy who never got to take a breath, and who ultimately lost a very close election when the district was redrawn."

Maloney was spending his nights "dialing for dollars" -- sitting in a room with a phone, going down a list of potential campaign donors and asking them for money one after another. It's to put an end to constant fundraising that Larson, chairman of the House Democratic Caucus, is pushing the Fair Elections Now Act, a bill to provide for public financing of congressional campaigns. It's got 106 cosponsors in the House.

"If we can get a system that's based on small donors that takes the big money out of the process, there's a value to that. It frees up your time," Larson said. "It borders on insanity when you think of the time and energy that's devoted to the money chase instead of serving your constituents, instead of spending time on issues."

Members of Congress, if they want to keep their jobs, have to drum up ever-larger amounts of money to pay for increasingly expensive campaigns. In 2000, when Larson ran his first campaign as an incumbent, the average winning campaign for a House seat spent $849,158, according to the Center for Responsive Politics. In 2008, the price of admission rose to $1,372,546. But Larson said the amount of time a congressman has to spend to raise all that money, either by dialing for dollars or attending fundraisers, has increased tenfold since he first took office.

Exactly how much time that means, Larson wouldn't say. A 2000 study found that 43 percent of House candidates spent at least a quarter of their time raising money. (The Huffington Post makes an effort to cover some of this fundraising as it happens.)

Aside from the amount of time spent shaking the money tree instead of learning about policy or working for constituents, there's the small matter of where that money comes from.

"You can see how no matter what the circumstance," Larson said, "no matter how much you follow the letter of the law, you can see how easy it is to draw a bright line from a donor to a member to something that passed in Congress and say, 'Aha!'"

Indeed -- and there's plenty to say "Aha!" about, like the House and Senate appropriations committees and defense pork or Blue Dog Democrats and their health care stance.

Even a guy who supports campaign finance reform has to finance his own campaigns, and Larson acknowledges a "tinge of hypocrisy" among supporters of the bill who still want to keep their jobs. (Check out some of Larson's fundraisers this year. He said he missed most of the food at his a cooking class event, but had a great time at Rep. Rush Holt's "Jeopardy in DC" party. "You try to come up with ways that are not just your down-and-dirty show up and collect a check," he said, though he doesn't "know anyone who really likes it.")

Larson said he couldn't think of a particular instance when campaign contributions affected policy.

"It's not that anything we do is corrupt," he said. "The system is completely legal and lawful, but it's corrosive."

. . . .Let's finish off that way, by drawing back, and getting some more data and bringing it into focus as we look at the fundamental weakness in this entire picture, that of our economy. Celebrating because the Dow broke 10,000 is simply asinine as far as I'm concerned. It was the corporation that owns the White House, and has for the last 30 years, Goldman-Sachs leading the way through that breakthrough number, with our money, not their own. And folks, whether or not you want to hear it, it's meaningless. What's going to happen next is exactly what we've been told was going to happen, the commercial mortagage bubble is about to burst, and it's going to far worse than the residential bubble pop.

. . . .It's no secret that I love Matt Taibbi and his style of writing, his attitude, his approach and his take on what's going on. Matt, from his blog, on the same subject as above:

Good News on Wall Street Means… What Exactly?

Lloyd Blankfein, the company’s chairman and CEO, said Goldman is starting to see a rebound across many of its businesses even as the broader economy and consumers continue to struggle with rising unemployment and mounting loan losses.

“Although the world continues to face serious economic challenges, we are seeing improving conditions and evidence of stabilization, even growth, across a number of sectors,” Blankfein said in a statement.

via Goldman Sachs profit tops $3B on strong trading – Yahoo! News.

It’s literally amazing to me that our press corps hasn’t yet managed to draw a distinction between good news on Wall Street for companies like Goldman, and good news in reality.

I watched carefully the reporting of the Dow breaking 10,000 the other day and not anywhere did I see a major news organization include a paragraph of the “On the other hand, so fucking what?” sort, one that might point out that unemployment is still at a staggering high, foreclosures are racing along at a terrifying clip, and real people are struggling more than ever. In fact the dichotomy between the economic health of ordinary people and the traditional “market indicators” is not merely a non-story, it is a sort of taboo — unmentionable in major news coverage.

Here’s an example of the Dow-10000 coverage, from USA Today:

If investors view the Dow’s recovery as a signal that the economy and financial markets are healing, it could serve as a mood-altering boost. It might also lure skeptical investors hiding in safe fixed-income investments such as money market funds and certificates of deposit, which are yielding close to 0%, to move cash back into stocks, says Bruce Bittles, chief strategist at Robert W. Baird.

“Dow 10,000 will act like a magnet,” Bittles says. “It will increase optimism and bring in more money off the sidelines.” But, he says, the index must stay above 10,000 for a few weeks or more before investors think it is safe to get back in.

No one mentions here that this is a carrot-and-stick story — the stick being that ordinary people have been robbed of the interest they should be getting in CDs and ordinary bank savings accounts by the various bailout programs and lending guarantees, which have brought the cost of capital down to nothing for the big banks, and punished those people who have been doing the right thing all along by saving. The Fed lends its money to Goldman Sachs and BOFA for free, why does anyone have to pay Grandma a high rate for her CD or her bank savings?

And now that those good, savings-oriented people are getting gouged, they’re being encouraged to get back into the stock market, where the returns are better at the moment. They’re being called people on the “sidelines” who have to be encouraged to “get back in.”

What’s so tiresome about all of this is that no one reports this stuff as a political story. This is politics at its most basic. The Dow is going up, sure, but what does that mean, if the rest of the economy still sucks?

. . . .If you had told me back in June that Dylan Ratigan, host of Morning Meeting, would wind up becoming one my heroes back in June, I would have laughed in your face. This man has emerged as a commonsense voice for the middle class the common people. He is what a populist should be, a reformed conservative, I should know, I am one.

. . .Ratigan:

n a world where real competition, modern technology and lack of special government standing means most American businesses have no choice but to adapt and innovate -- Wall Streets wimps only apparent skill is rigging the game.

In fact, on Wall Street there have always been only two basic ways to make money. The first and most difficult: Be a great investor -- to the best investors go the profits, rewarding those who are best at picking winning businesses for America and punishing those who fail through the loss of their money. The second, and seemingly preferred method, exploit those who know less than you -- and take their money, even if you have to change the laws to do so.

Now, this second business was much easier to pull off prior to the internet and 24-hour exchanges etc. as technology is the enemy of any business that makes its living overcharging customers who don't know better or are given no other choice.

So bankers, facing an onslaught of web-driven transparency and reduced profitability during the last decade along with an increasingly educated customer-base became anxious to change the laws in 2000 and are even more anxious to protect those changes now.

While things like stock and bond trading became a very low margin business because of modern information -- the legalization in 2000 of a secretive market for crooked insurance with no transparency or accountability has been an absolute boon.

They called it credit derivatives -- where banks and insurers offer to effectively "insure" financial assets. For instance, they were used to insure much of the real estate and pension liabilities in America the past 10 years.

To make money, the banks exploit two loopholes. The first -- overcharge customers by depriving them of the type of competitive pricing only possible on an exchange like the New York Stock Exchange or Chicago Mercantile Exchange.

And the second, exploit the lack of transparency to hide the fact that you are keeping little or no money to pay claims while selling insurance and collecting fees on every house and pension payment in America.

The key to success here is that when there is a default or claim against that so-called credit insurance -- the banks keep all the past payment -- and the taxpayer under threat of collapse pays off the claims while getting nothing in return.

This quite simply, is a brilliant way to steal our money.

Now this method of "business" is only possible if the government continues to allow these crooked insurance contracts to be written in secret, allows them to hold little or no money in reserve for payment and allows them to sell enough coverage on enough vital national assets that if there is a default -- the taxpayer has no choice but to pay.

Needless to say, J.P. Morgan & Co. has never had more revenue and the Goldman Sachs bonus pool has never been bigger.

Considering the $23.7 trillion of taxpayer money being used to support these Corporate Communists one would hope they could at least make a few billion in profits with it. In context, making a few billion risking a few trillion is a rather pathetic return after all.

As we talked about last week - allowing these outdated banks to take control of our government and change the rules so they are protected from the natural competition and reward systems that have created so many innovations in our country, you not only steal from the citizens on behalf of the least worthy but you also doom them by trapping the capital that would have been used to generate new innovation and, most tangibly in our current situation, jobs.

We don't want a government commandeered by those in our banking system who have failed and been passed over by technological advancements, innovation and flat out smarts.

The government's job is to restore the rules of investment, not indulge those who want to unfairly sustain their wealth and power at our nation's expense.

What we want, is a Wall Street that would attract men and women who would seek to be the next Warren Buffett, or great venture capitalist. Men and women competing to analyze the countless ideas of our best and brightest - investing in those who will best be able to bring their innovations to America and the world.

To tell your congressman, go to dylan.msnbc.com and heed the call.

. . . .From Nomi Prins over at the Daily Beast, this warning bell about Goldman-Sachs:

Why? Once Goldman got approval to become a bank holding company on September 21, 2008, it had two years to come into line with other bank holding companies in terms of capital requirements. But, a lot can change in two years if your influence is as strong as Goldman’s--and you don’t like constraints. Despite the new name, Goldman received a Federal Reserve waiver from the market risk rules that other banks use.

Thus, it gets federal support like a bank, but computes risk and capital reserves like an investment bank, meaning it can set aside more capital to trade with, even while its value at risk (VAR) remains high. Last quarter, Goldman’s daily VAR jumped to a record of $245 million, up 35% compared to the $181 million held against risk during the third quarter of 2008. This quarter, it was $208 million, a 17 percent decrease over last quarter.

Goldman Pays to Play

Recall from last week, the man at the number one slot on Treasury Secretary Tim Geithner’s speed-dial list is none other than Goldman Sachs, Chairman and CEO Lloyd Blankfein, which screams access.

The firm’s access last year gave Goldman $54 billion in other federal treats, outside of TARP. Those included $12.9 billion from the AIG bounty that it was supposedly hedged against, $29.7 billion of debt backed by the FDIC’s Temporary Liquidity Guarantee Program, approximately $11 billion available under the Fed’s Commercial Paper Facility, plus some unknown quantity of assistance through the Federal Reserve’s emergency programs.

Going Forward

Yes, things are great for Goldman. The firm is nearing record numbers for bonuses, trading profits and the sheer size of its influence in the banking arena. For now. But, there’s something ominous about the giddy trading figures, even besides the risk they represent. In terms of complex transactions, the more clients are convinced to add bells and whistles to their transactions, the more revenue is maximized for the bank. People get paid big bonuses for this ‘value-added’ service to clients, and the clients who didn’t get trashed last year, or even the ones that did, seem to have dipped back into exotic transaction land, bolstered by stock price euphoria and the bubble mentality of not wanting to miss anything—again. We’ve been here before. It’s amazing no lessons have been learned.

But, since they haven’t, and complexity is making its way back into the game, Goldman will continue to thrive. As Blankfein said last month at a banking conference in Frankfurt, Germany, “First, the industry let the growth and complexity in new instruments outstrip their economic and social utility as well as the operational capacity to manage them. As a result, operational risk increased dramatically and this had a direct effect on the overall stability of the financial system.” That’s on the way down, though. On the way up, complexity was Goldman's friend as much as cheap capital, federal favoritism, and loose regulations are. It is again.

Goldman will do well as long as trading on leverage does well, and as long as there remains no meaningful regulatory fallout from last year’s crisis. Goldman is sheltered from the general riff-raff of mortal consumer losses. One additional reason that it doesn’t need to put as much capital away in reserves for consumer-driven losses: it can use that capital to trade.

When you stack all the cards in your favor, you tend to beat the other players at the table. Goldman’s earnings are proof of that. As a result, after the market digests this quarter's numbers, their stock price is likely to continue to rise—that is, until the government gets wise to the dangers of risk driven profitability. Since that wisdom wasn’t achieved from the experience of this crisis and bailout, until and unless the next leg of the crisis smacks Washington even harder in the head, Goldman will keep winning.

Nomi Prins is author of It Takes a Pillage: Behind the Bonuses, Bailouts, and Backroom Deals from Washington to Wall Street (Wiley, September, 2009). Before becoming a journalist, she worked on Wall Street as a managing director at Goldman Sachs, and running the international analytics group at Bear Stearns in London.

. . . .Read the entire piece here.

. . . .The points here are incredibly simple. Goldman-Sachs does run the Street, the Fed, the Treasury Department and the White House, that evidence is now so clear that they don't care who knows it, and they sure as hell don't care because there's nothing anyone can do about it. They are, along with JP Morgan Chase, and the complicit and overt ownership of the Goverrnment, the prime drivers behind what is rapidly appearing as a two-tier, two-class society, and guess which tier we're in?


. . . . .And finally today, this little one from Mark Karlin over at Buzzflash via the folks over at The Political Carnival, and it summarizes exactly why I hate, loathe and revile the current version of the Republican party and the partisan idiots who are at it's head:

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Rape-Nuts
www.thedailyshow.com
Daily Show Full Episodes Political Humor Ron Paul Interview

Last week, Senator Al Franken proposed an amendment that would prohibit the Pentagon from contracting with firms that force women employees to agree not to sue companies if they are raped as a result of their employment.

"Kind of a slam dunk," Jon Stewart noted in another of his devastating commentaries on October 14.

The amendment resulted from a Halliburton/KBR employee who was gang raped and temporarily imprisoned by fellow employees in Iraq and then went public. Halliburton/KBR had a no-sue-if-raped clause in her contract.

So, as Stewart caustically noted, 30 Republican Senators -- 30 -- voted in favor of denying recourse to rape victims in order to protect corporate America.

It, simply put, is beyond belief in a civilized society that 30 Senators -- all Republicans -- voted in favor of rape, gang rape, in the precipitating case that caused Franken to try and end governmental sanctioning of this outrage.

As Stewart, once again, did the work that corporate media should be doing, he showed the hypocrisy of the Republican Senators, many of them who just the week before went on a successful partisan rampage to revoke government funding of ACORN, an organization that had been entrapped by a right wing wannabe pimp, but did not have any employees raped on the job.

As far as the Franken amendment is concerned for the 30 Republican Senators, the interests of corporate America superceded the rights of a woman not to be raped.

That is unspeakably horrifying, and yet the mainstream media was more absorbed with right wing attacks on Obama -- and with its own celebrity status -- than to highlight that 30 United States Senators sanctioned U.S. tax dollars going to companies that are not accountable for rape and force employees to agree not to hold them accountable.

There was gobs of coverage about ACORN, about which its only fault seems to be a couple of employees got taken in by a RWNJ attack dog -- and that it angers Republicans because it empowers poor people.

But when it comes to protecting women from rape, the corporate mainstream media didn't even blink when 30 Republican Senators voted in favor of sexual violation instead of holding companies to the most basic standard of civilized decency and prevention of a heinous crime.

That's 30 Republican Senators who voted for gang rape.

The Franken amendment passed because every Democrat voted for it and a few Republicans who haven't yet descended into Dante's Inferno.

But don't ever forget that 30 GOP Senators voted for rape and even gave floor speeches "defending" their vote.

It's beyond disgraceful. It's 30 U.S. Senators who are accessories to a brutal crime.

. . . .. . . .And that's the way it is:

. . . . .. . . .We can salvage this shipwreck of a Nation. It will take all of us working together. It will take all of us understanding the concepts of the Great American Experiment, the political process of the Republic. It's amazing, I don't see eye-to-eye on every issue with my friends, but we respect one another's opinion, share information, share facts, and we don't talk over one another or at one another, we talk with one another. It's amazing what happens when a group of people who share the common goal of leaving a better country for their children and grandchildren can do when they sit down with one another as human beings, and realize that we each have power, and together, we are unstoppable.

. . . .I'm going to ask this of you for the next 30 days. Turn your TV off, turn your radio off. Start to use that beautiful mind that your Creator gave you, that your underpaid, underappreciated High School teachers tried to develop. If you hear something, if you read something, if someone sends you an e-mail that says "this bill will do this", or "this politician says this", I'm asking you to check it out. Check it out this way, use some of the following fact-based sites, who exist solely for the purpose of data and fact-checking.
- If whatever you've heard or read concerns a bill in Congress, use the following -
- Open Congress, it's non-partisan and devoted to a complete tracking of every bill in Congress, both houses. How a bill is developed, who is sponsoring it, what the riders are, what the discussion around it is.
- GovTrack, again non-partisan, non-commercial and open source; devoted to the same things, tracking Congress.
- Open Secrets, one of the most important ones, it tracks the lobbying money and campaign contributions flowing to your congressperson, and most of the time is a pretty good predictor of how they'll vote.
- Political Party Time, non-partisan, devoted to solely tracking political fundraisers, and letting you know exactly what parties your Representative and Senators are throwing for fundraisers and who is attending and how much money they're throwing at them to gain influence.

. . . .If someone sends something to you saying "this is so" or "that is so" or "the President/Senator/Representative said this" use the following:
- Fact Check, non-partisan, designed to separate fact from bullshit and fiction
- Snopes, devoted to the same thing.
- Politifact, devoted to getting to the truth, and separating out the lies that are spread.


. . . .I keep doing this not because I don't have faith, but because I do have faith. I have faith in the ultimate triumph of the spirit, intellect and heart of the American people. I have faith that the people I know want to leave something better for future generations, and know that something is terribly wrong, and want to do something about it. I do it because Paine and Jefferson were brilliant, unique singularities and were right.

. . . .I keep doing this because I don't believe in big imaginary friends for adults, I don't believe in alien conspiracies running the Government, I don't believe the Roswell bodies are at Wright-Patterson, I don't believe that a big portal will open up on Dec. 21, 2012, I don't believe that the spaceships will show up.

. . . I do believe that the people who have fucked everything up are greedy, avaricious human beings who have been able to steal from the American people, to harm them, who have run unchecked because no one calls it out for what it is. I believe that if we shine the light of day on it, if the people of this country have had enough, we can change it, and change it for the better.

. . . . I keep doing this because I do believe that people, human beings, unchecked will continue to do what they've done throughout history, and throughout the history of this country. Together, they will find the solutions and provide better for their children and grandchildren.

. . . .I believe in us, I believe in people. I believe in the beauty, power and grace of the individual.

. . . .I do this for everyone who's ever walked that lonely road of knowing what they do, what they believe, what they know is right. I do it for everyone who's ever walked that lonely road of faith, hope, love, hate, justice, war and peace.

. . . .I do it because I believe in justice, in all it's forms.

. . . .I do this everyday for the people and kids who are tattoed, pierced and inked and keep getting told to get "into the mainstream". I do this everyday for those guys who wear black that you don't understand, you just know there's something about them, and that when the chips are down, when you have to walk down a dark alley somewhere, and you know what's waiting for you at the end of it, and you can only take one person with you, that's who you want walking with you, because you know you'll come back out alive, and that guy doesn't care what it costs him.

. . . .I do this everyday for the outcasts, the misfits, the ones who don't fit and who will turn their back on you and walk away when you try to make them fit into a mold. I do it everyday for everyone who does it their way, knows that they're paying a high price for it, but the freedom is worth the cost.

. . . . I do this everyday for outlaws, cowboys, renegades, pirates and fallen angels. I do it everyday for the people who understand that rock and roll can save their soul, that redemption can be found in a 3-chord lick from a vintage Les Paul. I do it for the men and women who aren't afraid to turn it all the way up, who keep looking for an 11 setting on a volume knob that only goes to 10, who know that rock and roll's got nothing to do with age.


. . . .If right now, you're doing something you don't want to do, stop it. If you've surrounded yourself with people who want you to do or be something other than who you are, walk away. If you've got people around you who actually let it slip out that they think you "should be doing (fill in the blank here)" and it involves your life, your future, your existence as an individual, walk away, right now, and don't look back. You don't owe anyone anything. Live fearlessly. If the people around you can't accept it, can't accept you as you are, really are, they aren't and weren't friends anyhow.

. . . .Don't march to anyone else's drumbeat, don't drink the Kool-Aid, anyone's. Right, Left, conservative, liberal, Democrat, Republican, Christian, Buddhist, Pagan. Use your own mind, that's why you were given one. Examine, question, do what's right for you first, everything else will fall in place from there, quit looking for the path, you're already on it.

. . . .Come out of the gate each morning with both barrels blazing, pedal-to-metal, full-tilt boogie, all-in and balls-out, what's stopping you? Do you want to live forever? That'd be boring.

. . . .Got your back. somewhere out there in the night

. . . .Kiss your kids, tell the ones you love out loud that you do. Seize the precious moments before they're ripped away from you. This rodeo is a one-way ticket and no one, absolutely no one gets out alive. There aren't a lot of second chances, and we don't get to dictate terms and circumstances of how the ticket gets punched. This ain't no dress rehearsal, and the curtain's gone up, it's real and right now. It's not about yesterday or tomorrow. It's about right fucking here, right fucking now. This, what you're reading, what you're hearing, is the proof, the words, the sounds and the sights of someone changing his own life and his own world and not being afraid to put it out there. What have you done for yourself lately and why are you waiting? Do it now.

The Desolation Angel
from somewhere halfway to Heaven, and just a mile out of Hell

You know someone like me, there's still a few of us left. If we have to, we'll stand at the gates of Hell and hold the last train home for you.. . . . . .