Tag Archives: Wall Street

Good question

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Michael Hudson asks:

This pro-austerity mythology [which animates orthodox economics and economic policy in the United States and elsewhere] aims to distract the public from asking why peacetime governments can’t simply print the money they need. Given the option of printing money instead of levying taxes, why do politicians only create new spending power for the purpose of waging war and destroying property, not to build or repair bridges, roads and other public infrastructure? Why should the government tax employees for future retirement payouts, but not Wall Street for similar user fees and financial insurance to build up a fund to pay for future bank over-lending crises? For that matter, why doesn’t the U.S. Government print the money to pay for Social Security and medical care, just as it created new debt for the $13 trillion post-2008 bank bailout?

The answer to these questions: Banks and other financial institutions want to keep as much of their income as they can. Transaction fees, regulations, oversight, taxes, etc. — these consume profits. America’s banks want to transfer these costs to others, namely, to those individuals who lack the political power to defend their standard of living. This cost transfer project amounts to a hidden and sometimes obvious tax the government levies on the 99%. When coupled to a system of risky and fraudulent financial transactions, elite looting and private debt creation, this cost transfer project amounts to little more than a predatory political economy.

The ridiculous fiscal cliff debate which now dominates America’s public life is but a crude expression of this predatory political economy.

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The FBI considered the Occupy Movement a terrorist threat

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From a PCJF news release:

FBI documents just obtained by the Partnership for Civil Justice Fund (PCJF) pursuant to the PCJF’s Freedom of Information Act demands reveal that from its inception, the FBI treated the Occupy movement as a potential criminal and terrorist threat even though the agency acknowledges in documents that organizers explicitly called for peaceful protest and did “not condone the use of violence” at occupy protests.

The PCJF has obtained heavily redacted documents showing that FBI offices and agents around the country were in high gear conducting surveillance against the movement even as early as August 2011, a month prior to the establishment of the OWS encampment in Zuccotti Park and other Occupy actions around the country.

In other words, according to Mara Verheyden-Hilliard, the Executive Director of the PCJF:

“These documents show that the FBI and the Department of Homeland Security are treating protests against the corporate and banking structure of America as potential criminal and terrorist activity. These documents also show these federal agencies functioning as a de facto intelligence arm of Wall Street and Corporate America.”

It is always good to have allies in high places….

Along with the thugs they authorize….

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Randall Wray: The World’s Worst Central Banker

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L. Randall Wray, a heterodox economist and proponent of Modern Monetary Theory who teaches economics at the University of Missouri at Kansas City, wrote an amusing account of a central banker get together in Argentina.  I have reprinted in full to motivate those who read it to travel to Wray’s blog, where the original can be found and which contains much else of political and social interest. The full text can be found below the break.

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Quote of the day

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Charles M. Young made me laugh with this celebration of OWS’ first birthday:

Is there anything less threatening than a morbidly obese cop on motor scooter?

Okay, 25 morbidly obese cops on motor scooters — that’s even more unthreatening. When I’m out in the streets chanting, “Show me what a police state looks like! THIS is what a police state looks like!” I think I have a right to be oppressed by proper storm troopers who have spent enough time at the gym to bristle instead of sag. They don’t have to be television actors or anything, but as a taxpayer, am I getting my money’s worth when I’m being beaten and arrested by a parade of fried dumplings?

I’m going to be fair here and admit that I did see a morbidly obese cop on a motor scooter run over somebody’s foot last fall. That was moderately threatening until the ambulance arrived.

Note to Mayor Bloomberg: Is this why you banned the 32 oz. Big Gulps? All the guards at your cement bunker on East 79th Street were getting diabetes?

Note to Commissioner Kelly: Make your cops get off the motor scooters and chase those anarchists on foot. It’s good exercise. You might lose some anarchists, but think how much less embarrassing it will be to display fewer bulges in blue uniforms the next time Obama ties up midtown for a fundraiser.

At least 60% of the NYPD looks like the governor of New Jersey. Where is your pride?

It must be uncomfortable to have a hundred pounds of potbelly squeezing like toothpaste out the edges of those bullet-proof vests. They aren’t fooling anyone, using those vests like girdles.

It’s probably even more uncomfortable to work for a mayor who is cutting your pension while claiming you as a soldier in his “personal army.” That would be the same mayor who was worth $5 billion in 2002 when he was first elected mayor and promised to work full time in office. Now he’s worth $23 billion. How many cops on scooters made $18 billion while working full-time for the city?

The London Disease

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The phrase just rolls off the tongue, doesn’t it! One even expects it to make sense. What, then, is the London Disease? Well,

Which brings us to an issue that is fast troubling global financial regulators: the so-called ‘London disease’. It has not gone unnoticed that many of the financial scandals in recent years have a Square Mile connection. Never mind Libor, it was the London offices of AIG, Lehman Brothers and Bernie Madoff that helped destroy them. The JP Morgan and UBS rogue traders who lost billions were both London based.

The UK is also arguably the centre of the offshore world. It is one of the biggest private bank centres and Britain’s non-domicile tax rules allow the global super-rich to legally avoid taxes on their overseas income while residing here. In addition, many of the UK’s overseas territories and crown dependencies such as Jersey, Isle of Man, the Cayman Islands and the British Virgin Islands are major offshore centres. This perhaps explains why the British government, for all its rhetoric, has failed to clamp down on the shadow financial system.

What is the “offshore world”? It is a place that mostly lacks legal and political accountability, where the oligarchy parks its money, where loyalty can be bought. The London Disease exists because casino capitalism exists, because The City is a place where the world’s oligarchs like to do business and because the British political system is intrinsically corrupt. The London Disease thus refers to a place where the morbidity of contemporary capitalism manifests itself with clarity. Wall Street is also such a place. Both have more in common with the “offshore world” than they do with Great Britain and the United States. Their autonomy is a political catastrophe without an identifiable conclusion.

The ungrateful bastards

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The New York Times reports that:

President Obama’s re-election campaign is straining to raise the huge sums it is counting on to run against Mitt Romney, with sharp dropoffs in donations from nearly every major industry forcing it to rely more than ever on small contributions and a relative handful of major donors.

From Wall Street to Hollywood, from doctors and lawyers, the traditional big sources of campaign cash are not delivering for the Obama campaign as they did four years ago. The falloff has left his fund-raising totals running behind where they were at the same point in 2008 — though well ahead of Mr. Romney’s — and has induced growing concern among aides and supporters as they confront the prospect that Republicans and their “super PAC” allies will hold a substantial advantage this fall.

To whom does the Obama campaign turn when the stuffed-pocket crowd has turned its collective back on him?

With big checks no longer flowing as quickly into his campaign, Mr. Obama is leaning harder on his grass-roots supporters, whose small contributions make up well over half of the money he raised through the end of March, according to reports filed Friday with the Federal Election Commission.

As one should have expected after the Supreme Court’s very controversial Citizens United
decision (.pdf), the Republican Super PACs are fat with cash. This has forced the Obama campaign to appeal for funding from the lesser people whose interests he failed to serve during his first term.

Caveat emptor!

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Occupy Wall Street protesters evicted from Zuccotti Park

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The New York City Police Department, currently embroiled in scandals which are so common (ticket fixing, gun running and contraband smuggling, rape, killing of the unarmed, surveillance of the innocent, identity-biased stop-and-frisk searches, etc.) that they now define its very existence, added to its current scandal list when its members “rioted” (see this and this) while removing Occupy Wall Street protesters from Zuccotti Park in Manhattan. The protesters reoccupied the Park while celebrating the sixth-month anniversary of its emergence.

Sadly, not much has changed for the better since 1996 when Amnesty International released its infamous report on the NYPD’s human rights violations. To be sure, the Department’s political and corporate paymasters would not have it any other way.

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Heroic Americans — citizens of the land of the free, home of the brave

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Journalist Eyal Press, during his report on dissent, whistleblowing and elite opposition to both in Obama’s America, makes this remarkable but unsurprising claim:

Despite the lore of the whistleblower that pervades popular culture, Americans turn out to be less sympathetic to such dissenters than Europeans. Drawing on data from the World Value Surveys and other sources over multiple years, the sociologist Claude Fischer has found that U.S. citizens are “much more likely than Europeans to say that employees should follow a boss’s orders even if the boss is wrong.” They are also more likely “to defer to church leaders and to insist on abiding by the law,” and more prone “to believe that individuals should go along and get along.”whistleblower

Whistleblowers may often be praised in the abstract and from a distance, but Americans have a tendency to ignore or even vilify them when they dare to stir up trouble in their own workplaces or communities.

Stirring up trouble. Right here in River City. We can’t have that. Nosiree. We can’t have any of that.

Whistleblowers have walked hard road during Obama’s tenure (see, for instance, this, this and this), the ever-hopeful, sunshine President. They often lack a sympathetic ear in government, a lack which enables grifters on Wall Street and security apparatchiks in Washington to work their black magic on the weak. Crimes undetected are not really crimes! They’re smart business deals or realistic acts of sober G-men. And the powerful are always innocent until proven guilty.

Since Americans do not like to listen to discouraging words about important things, things on which they depend, it so happens that the fate of these whistleblowers obliquely mirrors the fate of the Occupy Movement: Like the Occupiers, whistleblowers are ignored when they are not harassed and denigrated. They, like their Occupy cousins, sometimes face prison terms for their efforts. They lose their jobs and their homes for exposing the powerful to critical scrutiny. It is fortunate that America’s whistleblowers in an out of government are not beaten or assaulted with caustic chemicals, although I would be negligent if I were to fail to point out that whistleblower Bradley Manning has had to endure mental and physical torture inflicted on him by the Pentagon. He stands before the world as an object lesson for anyone tempted to blow the whistle on America’s empire. The Occupiers have felt the baton and the pepper spray. The whistleblowers have been spared those methods. Yet, the powerful seek the same goal when confronting a whistleblower or an Occupation. They want to quash dissent.

It is sad that Americans typically advocate following the path of the witless and craven servant. For one thing, it is sad because the powerful are to remain unmolested even when they deserve close judicial scrutiny. It seems as though Americans prefer their authority figures to remain inscrutable and free. This condition creates a moral hazard problem for the country. For another, the beliefs which inform this advocacy comprise the social cement which binds together the elements that compose America’s security-surveillance government and its financial plutocracy. These institutional complexes could not operate as they have and want to without the passive and active consent of most Americans. Common Americans collude in the domination exercised by the elite. We might have a functioning democracy if it were not for these beliefs and the collusion they sponsor. We have instead what Sheldon Wolin called an inverted totalitarian system (see this and this). America’s politics are as vacuous as its plutocrats are rich and its war-makers are violent.

The antidote for minimal democracy remains strong democracy.

Bradley Manning: Before, After

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Gasoline prices increase because of speculative investing

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Some of the explanations for America’s current relatively high gas prices contain a kernel of truth. Countries have hoarded petroleum in order to have enough of it on hand if Israel and the United States attack Iran and thereby disrupt the flow of crude oil from the region. There have been incidental disruptions to the global production of gasoline that do account for local price increases. But the speculative trading of crude oil is the primary mechanism for the price increases seen by consumers at the pumps over the past year. Rentier capital now dominates the commodity market for crude oil, according to a McClatchy report:

Historically, financial speculators accounted for about 30 percent of oil trading in commodity markets, while producers and end users made up about 70 percent. Today it’s almost the reverse.

A McClatchy review of the latest Commitment of Traders report from the Commodity Futures Trading Commission, which regulates oil trading, shows that producers and merchants made up just 36 percent of all contracts traded in the week ending Feb. 14.

That same week, open interest, or the total outstanding oil contracts for next-month delivery of 1,000 barrels of oil (about 42,000 gallons), stood near an all-time high above 1.486 million. Speculators who’ll never take delivery of oil made up 64 percent of the market.

Speculators are motivated only by profit-taking. Thus:

Not surprisingly, big Wall Street traders on Tuesday projected oil will rise above $112 a barrel; some such as Swiss giant Vitol even suggested $150-a-barrel oil is coming soon. When they dominate the market, as they do, speculators’ bids can make their prophecies self-fulfilling.

Austerity is for the “have-nots,” Alan Simpson’s “little people.” Times are fat for the “haves,” who have the means and the will to profit well from the misery of others.

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Re: The State of the Union

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There are so many nits to pick, foolish claims to debunk, neoliberal hooey to ridicule…. I shall limit myself to three points the President failed to address last night:

  • Weakening the dollar
  • Dismantling America’s empire
  • Planned reindustrialization

A strong dollar cheapens the price of America’s imports. It also feeds Wall Street with foreign capital. It is, in other words, the chief reason the United States has a service economy dominated by the FIRE sector.

America’s empire absorbs capital and labor power, it wastes both on non-consumable goods, it drives the growth of the security-surveillance apparatus, it directly and indirectly undermines the Constitution and it creates political and military debacles which produce blowback. It must go as quickly as it can be safely dismantled.

Education and training will do Americans little good if they fail to find jobs which make use of their cultural capital. In fact, an educated and trained work force that fails to make good on its talents is one that wastes resources. To avoid wasting these resources, the United States ought to institute an industrial planning agency with the capital resources and legal means to develop an ecologically sound industrial sector. It makes no sense to demand a low rate of employment for a well-educated workforce when those workers will work at service sector jobs that pay little.

These reforms are radical with respect to the social system now in place. If achieved,they would decisively change the identity of that system. But they are not comprehensive and do not touch on so many related problems that would also need to be addressed. These include reforming the tax code, making it strongly progressive; developing public transportation; reforming the campaign-finance laws; etc. But the three points listed above would be one place to start.

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