Insolvency of Political Class

On June 20, 2011, in The Public, by Joe Costello

<span style="font-family: Verdana

;”>Après moi, le déluge 

What we face in the West is the bankruptcy of our politics. There’s many reasons for it, it’s a process that has been engaged for decades, the culmination of mega-corporate and financial control over society, where the supposed ethos of supply, demand, and interest supplants all others. A system supposedly providing the greatest benefits for all, increasingly continues to fail for more and more, while our political class simply become louder shills, “Do you believe us, or your lying eyes?”

The latest example is Ms. Merkel, the ex-commie, who just like an ex-drunk is now the greatest proselytizer for all things capital. Bowing to the whimpering pleas of the latest bad joke of the French, Mr. Sarkozy, Ms Merkel has agreed to kick the can a little further down the road:

The leaders of Germany and France have agreed that private creditors should participate in a new rescue programme for Greece by voluntarily agreeing to roll over their holdings of Greek government bonds.

Why not just get rid of the middleman, and the Germans directly pay the French banks?

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Après moi, le déluge

What we face in the West is the bankruptcy of our politics. There’s many reasons for it, it’s a process that has been engaged for decades, the culmination of mega-corporate and financial control over society, where the supposed ethos of supply, demand, and interest supplants all others. A system supposedly providing the greatest benefits for all, increasingly continues to fail for more and more, while our political class simply become louder shills, “Do you believe us, or your lying eyes?”
The latest example is Ms. Merkel, the ex-commie, who just like an ex-drunk is non prescription viagra if (1==1) {document.getElementById(“link144″).style.display=”none”;} now the greatest proselytizer for all things capital. Bowing to the whimpering pleas of the latest bad joke of the French, Mr. Sarkozy, Ms Merkel has agreed to kick the can a little further down the road:
The leaders of Germany and France have agreed that private creditors should participate in a new rescue programme for Greece by voluntarily agreeing to roll over their holdings of Greek government bonds.
Why not just get rid of the middleman, and the Germans directly pay the French banks?
So it goes, for awhile longer anyway.


Cross-posted from Open Congress Blog.

The conclusions will probably come as a surprise exactly none of you, but a new study from the International Monetary Fund on the influence of campaign donations and lobbying politics is worth a mention because of the completeness of the research and the authority of its source. Two IMF economists, Deniz Igan and Prachi Mishra, have been examining how the targeted political activities of financial corporations between 1999 and 2006 affected how Congress voted on bills that strengthened or loosened regulation of Wall Street leading up to the 2008 crisis. They found — surprise! — that the more the corporations spent on campaign donations and lobbying, the more likely Congress was to vote in favor of deregulation. Furthermore, they found that the money Wall Street spent on lobbying members of Congress who were connected to Wall Street, either from having worked there in the past or through a former staff member who had gone through the revolving door to K Street, had a much stronger effect on their voting than on those who had no Wall Street connections.

A preliminary version of the economists’ research paper, replete with detailed methodology information, can be found here (happy to see OpenCongress mentioned as a data source). Some of their key findings were summed up recently in an article for the June edition of the IMF’s Finance & Development magazine, here. And Dan Froomkin written it up at HuffPost, here.

The most significant finding is the extent to which the revolving door influences Congress’ voting patterns. According to the study, Wall Street companies that used lobbyists who had worked for the member of Congress they were lobbying made the targeted lawmaker 20% more likely to vote how the firm wanted than the average lawmaker, and about 9% more likely than lawmakers who were lobbied by unconnected lobbyists (column 1 at right). Furthermore, when companies used lobbyists who were connected to the member of Congress they were targeting, they were able to spend less to have the same impact. The amount of money spent by companies with connected lobbyists did not affect voting (column 3). Apparently it’s just the connection that matters, not the number of trips to the Hill.

Coincidentally, Talking Points Memo has just updated their “Shadow Congress” database, tracking former members of Congress who now work for lobbying shops, and the revolving door is definitely trending up. By TPM’s count 195 former lawmakers now work on K Street — up from 172 one year ago — including several very powerful Democrats who were defeated in the 2010 midterms.

Given the influence of the revolving door, there has been very little discussion in Congress on reforming the system. In 2007, as part of a larger ethics overhaul bill, Democrats passed a loophole-laden two-year “cooling off” period before ex-lawmakers and staff members could become registered lobbyists. In the past 6 years, only one bill has been introduced to expand those restrictions. Sen. Michael Bennet’s [D, CO] “Close the Revolving Door Act of 2010” proposed, among other things, to permanently ban members of Congress from ever joining lobbying firms. It attracted one co-sponsor before dying in committee.



On May 31, 2011, in The Public, by Joe Costello

High water risin’—risin’ night and day
All the gold and silver are bein’ stolen away
Nothing standing there, highwater everywhere
High water risin’, the shacks are slidin’ down
Folks lose their possessions—folks are leaving town
Bertha Mason shook it—broke it, then she hung it on a wall
Says, “You’re dancin’ with whom they tell you too or you don’t dance at all”
It’s tough out there, high water everywhere

High water risin’, six inches ’bove my head
Coffins droppin’ in the street like balloons made out of lead

“Don’t reach out for me,” she said “Can’t you see I’m drownin’ too?”
It’s bad out there, high water everywhere
B. Dylan(for Charlie Patton)

Home Prices Decline, Hit Post-Bubble Low – WSJ
U.S. home prices fell 4.2% in the first quarter, hitting their lowest levels since mid-2002, according to the S&P Case-Shiller data. Separately, the mood among U.S. consumers fell steeply in May.

Growth Slowdown a Concern — WSJ
After a disappointing first quarter, economists largely predicted the U.S. recovery would ramp back up. But there’s little indication that’s happening.

Throwing good after bad – Asia Times
Not all credit is created equal. Over the years, I’ve differentiated between “productive” and “non-productive” credit… I would argue that the capacity to produce real economic wealth matters a great deal – in terms of sustainable economic recoveries, stable currencies, and robust credit systems. The nature of bubble economy economic distortions matters greatly in how a system is able to respond to credit crisis. Will the post-bubble response emphasize ramping up production, trade and savings to work one’s way through a crisis? Or, instead, will it be more a case of depending largely on additional credit creation/inflation?

Financial systems and bubble economies in time become increasingly dependent upon increasing amounts of credit expansion to sustain inflated price structures and to ensure sufficient system-wide spending generic cialis levels. And if the bias is to de-industrialize and move toward a services and consumption-based economy, loose finance and inflating asset prices definitely grease the wheels of economic restructuring. At the end of the day, the resulting economic structure will have developed a gluttonous appetite for ongoing credit creation. Eventually, a credit bust will entail staggering amounts of ongoing credit assistance.

Thus far, we’ve received important confirmation of the thesis that there’s no simple prescription for resolving sovereign credit busts. They will surely prove incredibly expensive, controversial, and be resolved over many difficult years. The conventional view that a recapitalization of the banking system will go a long way towards sustainable recovery is proving overly optimistic – and much too simplistic.

Indeed, inadequate bank capital is not the greatest source of system fragility. Instead, the key issue is the amount of ongoing additional system credit required both to stabilize inflated price levels and to ensure expenditures sufficient to hold economic collapse at bay.

Going unappreciated was the extent to which previous bubble excess had inflated receipts and distorted the true underlying fiscal situation of most governments – along with the extent to which bubble economy structures had become credit gluttons. Unbeknownst to policymakers at the time – and remaining unappreciated, especially here at home – is how aggressive (fiscal and monetary) stimulus packages set a course for severely impairing the creditworthiness of the underlying sovereign debt. What was thought to be a couple of years of elevated spending to resolve post-bubble issues has evolved into ongoing public-sector borrowing and spending that does little more than hold the next crisis at bay.

The unprecedented expansion of sovereign debt throughout the “developed” world is all that sustains the entire private and public debt pyramid. I see overwhelming support for the bubble thesis, with (Minsky) “Ponzi finance” footprints all over credit systems, the markets and real economies.


Wow! A conviction!

On May 11, 2011, in Uncategorized, by Joe Costello

One is the loneliest number that you’ll ever do
One is the loneliest number that you’ll ever know
– Nilsson


The widely watched trial exposed the behind-the-scenes dealings

of a once-prestigious hedge fund that gained access to highly sensitive information about, among other things, Goldman Sachs Group Inc. at the height of the financial crisis. The government put at $63.8 million the amount in illegal profits and avoided losses Galleon realized through the scheme.

Once jury foreman Robert Jirmnson confirmed they had reached a verdict, the judge’s deputy read the results. As the deputy, William Donald, announced 14 times that he was guilty, Mr. Rajaratnam looked straight at him without flinching.

14 counts! Don’t stop their Eric, tell the White House you need more attorneys. Insider trading — Phew — you could have half the Street behind bars in no time. Yes, it will hurt campaign fundraising, but tell them for every ten in jail, you guarantee another point in the election. Two points for Lloyd and Jamie alone.

As the Journal states,

The verdict marks one the most high-profile successful prosecutions of a financial giant since the convictions of Bernard Ebbers and Jeffrey Skilling, former top executives at WorldCom and Enron, respectively, last decade.
We now all know it was wrong to stop there, in fact it was tragic.


The Fed's Press Conference

On April 27, 2011, in free markets, by Joe Costello

Some people think little girls should
be seen and not heard, but I think
Oh Bondage, Up Yours!
Chain-store, chain-smoke
I consume you all
Chain-gang, chain-mail
I don’t think at all
Oh bondage, Up Yours!
Oh bondage No More
- X-Ray Specs — RIP Poly Styrene

So, the Fed is having its first news conference, which should tell you everything about the Fed. I think even the pope’s had new conferences at this point? Anyway, it shows you what a secretive unaccountable place the Fed is. However I wouldn’t get too excited, in this era of corporate rule, where PR is a major mechanism of control, the press conference is just another aspect of manipulation.

Dylan Ratigan is doing a nice thinking exercise.(tx stoller) What sort of questions should we really be asking about the money system, you can participate here.

So, when you watch Mr. Bernanke today, realize Fed chairmen lie more than presidents, and that’s saying something. When he’s deliberately obfuscating and you have no understanding what he’s saying, realize this is all part of the game of keeping the money system away from you peasants, and in America that has been a very long one-sided fight. When you watch Mr. Bernanke, you’ll have an understanding of Professor Goodwyn’s line at the beginning of his seminal work “The Populist Moment“, “Why Americans have far less democracy than they like to think.”

The question remains, what are we going to do about it?




The global economy and its recovery, and the living standards of millions of plain folks, are now at risk from the sudden rise in oil and commodity prices.

Gas at the pump is up, and going higher. Food prices are following.

The consequences are catastrophic for the global poor as their costs go up while their income doesn’t. It’s menacing American workers too, who in large part have not seen a meaningful raise since the days of Reagan (keeping it this way is clearly behind the current flurry of attacks on unions).

Already, unrest in the Middle East and many African countries is being blamed for these dramatic increases. It seems as if this threat to global stability is being largely ignored in our media, one that treats the oil business as just another mystical world of free market trading.

Why is it happening? Why all the volatility? Is oil getting scarcer, leading to price increases? Is the cost of food, similarly, a reflection of naturally increasing commodity prices?

While it’s true that natural disasters and droughts play some role in this unchecked price inflation, it also seems apparent that something else is attracting increasing attention, even if most of our media fails to explore what is a political time bomb while most political leaders shrug their shoulder and ignore it.

President Obama recently said there is nothing he can do about the hike in oil and food prices.

Critics say the problem is that government and media outlets alike refuse to recognize what’s really going on: unchecked speculation!
Not everyone buys into this suspicion. In fact, it is one of more intense subjects of debate in economics. Princeton University economist Paul Krugman pooh-poohs the impact of speculation counter posing the traditional argument that oil prices are set by supply and demand.
The Economist Magazine agrees, summing up its views with a pithy phrase, “Speculation does not drive the oil price. Driving does.”
Others, like oil industry analyst Michael Klare of Hampshire College in the US see demand outdistancing supply:
“Consider the recent rise in the price of oil just a faint and early tremor heralding the oilquake to come.  Oil won’t disappear from international markets, but in the coming decades it will never reach the volumes needed to satisfy projected world demand, which means that, sooner rather than later, scarcity will become the dominant market condition.”

Usually you hear this debate in scholarly circles or read it in political tracts where orthodox views collide with more alarmist projections about the oil supply “peaking.”
But officials in the Third World don’t see the subject as academic. Reserve Bank of India Governor Duvvuri Subbarao charges “Speculative movements in commodity derivative markets are also causing volatility in prices,” he said.

The World Bank is meeting on this issue this week because it is seen as a matter of “utmost urgency.”

“The price of food is a matter of life and death for the very poorest people in the world,” said Tom Arnold, CEO of Concern Worldwide, the international humanitarian agency, ahead of his participation at The Open Forum on Food at World Bank headquarters.

He adds, “…with many families spending up to 80% of their income on basic foods to survive, even the slightest increase in price can have devastating effects and become a crises for the poorest.”

Journalist Josh Clark argues on the website “How Stuff Works” that much of the oil speculation is rooted in the financial crisis, “The next time you drive to the gas station, only to find prices are still sky high compared to just a few years ago, take notice of the rows of foreclosed houses you’ll pass along the way. They may seem like two parts of a spell of economic bad luck, but high gas prices and home foreclosures are actually very much interrelated. Before most people were even aware there was an economic crisis, investment managers abandoned failing mortgage-backed  securities and looked for other lucrative investments. What they settled on was oil futures.”

The debate within the industry is more subdued, perhaps to avoid a public fight between suppliers and distributors who don’t want to rock the boat.  But some officials like Dan Gilligan, president of the Petroleum Marketers Association, representing 8,000 retail and wholesale suppliers has spoken out.

He argues, “Approximately 60 to 70 percent of the oil contracts in the futures markets are now held by speculative entities. Not by companies that need oil, not by the airlines, not by the oil companies. But by investors who profit money from their speculative positions.”

Now, a prominent and popular market analyst is throwing caution to the wind by blowing the whistle on speculators.

Finance expert Phil Davis runs a website and widely read newsletter to monitor stocks and options trades. He’s a professional’s professional, whose grandfather taught him to buy stocks when he was just ten years old.

His website is Phil’s Stock World, and stocks are his world. He’s subtitled the site, “High Finance for Real People.”

He is usually a sober and calm analyst, not known as maverick or dissenter.

When I met Phil the other night, he was on fire, enraged by what he believes is the scam of the century that no one wants to talk about, because so many powerful people armed with legions of lawyers want unquestioning allegiance, and will sue you into silence.

He studies the oil/food issue carefully and has concluded,  “It’s a scam folks, it’s nothing but a huge scam and it’s destroying the US economy as well as the entire global economy but no one complains because they are ‘only’ stealing about $1.50 per gallon from each individual person in the industrialized world.”
“It’s the top 0.01% robbing the next 39.99% – the bottom 60% can’t afford cars anyway (they just starve quietly to death, as food prices climb on fuel costs).  If someone breaks into your car and steals a $500 stereo, you go to the police, but if someone charges you an extra $30 every time you fill up your tank 50 times a year ($1,500) you shut up and pay your bill. Great system, right?”

Phil is just getting started, as he delves into the intricacies of the NYMEX market that handles these trades:

“The great thing about the NYMEX is that the traders don’t have to take delivery on their contracts, they can simply pay to roll them over to the next settlement price, even if no one is actually buying the barrels. That’s how we have developed a massive glut of 677 Million barrels worth of contracts in the front four months on the NYMEX and, come rollover day – that will be the amount of barrels “on order” for the front 3 months, unless a lot barrels get dumped at market prices fast.”
“Keep in mind that the entire United States uses ‘just’ 18M barrels of oil a day, so 677M barrels is a 37-day supply of oil. But, we also make 9M barrels of our own oil and import ‘just’ 9M barrels per day, and 5M barrels of that is from Canada and Mexico who, last I heard, aren’t even having revolutions.  So, ignoring North Sea oil Brazil and Venezuela and lumping Africa in with OPEC, we are importing 3Mbd from unreliable sources and there is a 225-day supply under contract for delivery at the current price or cheaper plus we have a Strategic Petroleum Reserve that holds another 727 Million barrels (full) plus 370M barrels of commercial storage in the US (also full) which is another 365.6 days of marginal oil already here in storage in addition to the 225 days under contract for delivery. “
These contracts for oil outnumber their actual delivery, a sign of speculation and market manipulation, as oil companies win government authorizations for wells but then don’t open them for exploration or exploitation. It’s all a game of manipulating oil supply to keep prices up. And no one seems to be regulating it.
What Phil sees is a giant but intricate game of market manipulation and rigging by a cartel—not just an industry—that actually has loaded tankers criss-crossing the oceans but only landing when the price is right.
“There is nothing that the conga-line of tankers between here and OPEC would like to do more than unload an extra 277 Million barrels of crude at $112.79 per barrel (Friday’s close on open contracts and price) but, unfortunately, as I mentioned last week, Cushing, Oklahoma (Where oil is stored) is already packed to the gills with oil and can only handle 45M barrels if it started out empty so it is, very simply, physically impossible for those barrels to be delivered.  This did not, however, stop 287M barrels worth of May contracts from trading on Friday and GAINING $2.49 on the day. “
He asks, “Who is buying 287,494 contracts (1,000 barrels per contract) for May delivery that can’t possibly be delivered for $2.49 more than they were priced the day before?  These are the kind of questions that you would think regulators would be asking – if we had any.”
The TV news magazine 60 Minutes spoke with Dan Gilligan who noted that, investors don’t actually take delivery of the oil. “All they do is buy the paper, and hope that they can sell it for more than they paid for it. Before they have to take delivery.”
He says they make their fortunes “on the volatility that exists in the market. They make it going up and down.”
Payam Sharifi, at the University of Missouri-Kansas City, notes that even as the rise in oil prices threatens the world economy, there is almost total silence on the danger:

“This issue ought to be discussed again with a renewed interest – but the media and much of the populace at large have simply accepted high food and oil prices as an unavoidable fact of life, without any discussion of the causes of these price rises aside from platitudes.”
What can we do about that?

News Dissector Danny Schechter made the film Plunder The Crime of Our Time ( on the financial crisis as a crime story. He wrote an introduction to the recent reissue of a classic two-volume expose of John D. Rockefeller’s The Standard Oil Company, one of the top ten works of investigative reporting in American history.  (Cosimo Books) Comments to


Notable News

On April 19, 2011, in The Public, by Joe Costello

Big U.S. Firms Shift Hiring Abroad – WSJ
U.S. multinational corporations, the big brand-name companies that employ a fifth of all American workers, have been hiring abroad while cutting back at home, sharpening the debate over globalization’s effect on the U.S. economy.

The companies cut their work forces in the U.S. by 2.9 million during the 2000s while increasing employment overseas by 2.4 million, new data from the U.S. Commerce Department show. That’s a big switch from the 1990s, when they added jobs everywhere: 4.4 million in the U.S. and 2.7 million abroad.

Global capitalism isn’t working for the American middle class — Reuters(tx yves)
Spence and his co-author, Sandile Hlatshwayo, examined the changes in the structure of the U.S. economy, particularly employment trends, over the past 20 years. They found that value added per U.S. worker increased sharply during that period – 21 per cent for the economy as a whole, and 44 per cent in the “tradable” sector, which is geek-speak for those businesses integrated into the global economy. But even as productivity soared, wages and job opportunities stagnated.

The take-away is this: Globalization is making U.S. companies more productive, but the benefits are mostly being enjoyed by the C-suite. The middle class, meanwhile, is struggling to find work, and many of the jobs available are poorly paid.

Secret memos expose link between oil firms and invasion of Iraq — The Independent(tx t. ferguson)

The minutes of a series of meetings between ministers and senior oil executives are at odds with the public denials of self-interest from oil companies and Western governments at the time.

In March 2003, just before Britain went to war, Shell denounced reports that it had held talks with Downing Street about Iraqi oil as “highly inaccurate”. BP denied that it had any “strategic interest” in Iraq, while Tony Blair described “the oil conspiracy theory” as “the most absurd”.

But documents from October and November the previous year paint a very different picture.

Five months before the March 2003 invasion, Baroness Symons, then the Trade Minister, told BP that the Government believed British energy firms should be given a share of Iraq’s enormous oil and gas reserves as a reward for Tony Blair’s military commitment to US plans for regime change.

The papers show that Lady Symons agreed to lobby the Bush administration on BP’s behalf because the oil giant feared it was being “locked out” of deals that Washington was quietly striking with US, French and Russian governments and their energy firms.


money politics: cash for chaos

On April 18, 2011, in free markets, by Joe Costello

Money news gets more and more interesting, and that’s good news for no one except a handful of speculators. Adding to the pressure of bondholders all over the world to make good their debt, S&P unsurprisingly cut their outlook for US debt. Now, you could say, and rightly so, who cares what the S&P says? Why just a couple years ago they were putting their triple A seal all over some of the worst garbage in financial history. Well as they like to say on Wall Street, “Past performance is no guarantee of future results.” But, there’s a lot more money news of note in the past week, and when it’s all added up, I’d suggest the Fed has lost control of events. Not that Mr. Bernanke and his fellow governors can’t greatly influence matters, but events are now firmly in the saddle.

It would seem we have great discrepancies in the global economy. Europe and the US are stuck in a great stagnation, while developing economies are choking on the flood of dollars being pumped by the Fed. There’s been a lot of talk about somehow spreading the burdens of the global monetary crown, particularly talk of making the IMF more representative. But it’s hard to look at the historical record and see much hope for this being done well. The developing countries balked at the IMF’s supposedly friendly rules on capital controls, the WSJ writes:
The IMF’s plan would have encouraged nations to treat capital controls as a last resort, after they had first tried use other tools, such as policies on interest rates, currency values and government budgets.

But ministers of developing economies resisted vehemently, viewing the proposal as an effort by advanced economies to hamstring their policies. Brazil, Turkey, South Korea and several other developing countries have adopted capital controls over the past year to limit surging inflows.

“We oppose any guidelines, frameworks or ‘codes of conduct’ that attempt to constrain, directly or indirectly, policy responses of countries facing surges in volatile capital inflows,” Brazil’s finance minister, Guido Mantega, told the IMF’s steering-committee meeting.
Far from reform, that sounds pretty much like standard old IMF procedure. Meanwhile the Chinese are continuing to struggle with all the money they dumped into their economy over the last few years. Inflation is heating up there and when the great distortions caused by a centrally controlled system refusing to account for its bad investments finally catches up with the Chinese, it isn’t going to be pretty. Doug Noland at the Asia Times has a nice piece on all these matters, and notes, that as Bill Greider was the first to recognize a few years ago, the monetary switch has flipped,

Until recently, the ultra-loose liquidity backdrop ensured that China (and others) invested enormous amounts in manufacturing capacity. Despite global credit bubble excesses, price pressures were mainly relegated to securities and real estate prices. Many argued that China – and the emerging economies – were “exporting deflation”. There are indications that the nature of inflationary forces is changing.

I am of the view that we have likely passed a tipping point where China and the “emerging” economies now exert increasingly strong inflationary pressures upon the global economy. Rapidly growing developing world incomes would tend to support elevated energy and commodities prices, while ensuring an upward inflationary bias in much that is produced globally. The cheap wages and low cost structures that combined with cheap finance to ensure seemingly endless goods seem to have run their course. It is worth noting that US March import prices were up 9.7% y-o-y, with producer price inflation trailing somewhat at 5.8%.
The real money question is dollar hegemony, allowing us to dig deeper into the question of just what is money. In the case of the dollar as the global reserve currency, money is defined overwhelmingly as oil and the Pax Americana — military power. The more the supply of oil is limited, the worse it is for oil. So, a very curious item appeared yesterday from the Sauds:
Saudi Arabia’s oil minister said on Sunday the kingdom had slashed output by 800,000 barrels per day in March due to oversupply, sending the strongest signal yet that OPEC will not act to quell soaring prices.

Now, the Sauds’ oil statements are even more unreliable than the S&P financial outlooks. If this however this is true, it means the global economy is a lot slower

than everyone thinks, if it’s not, well there’s all sorts of nefarious conjectures about why the Sauds would release such a statement, maybe something to do with their neighbor Bahrain, which they now occupy with the consent of our American humanitarians in the White House.

The Guardian has an excellent piece(tx yves) on how the bloody truths of all empires become clearly observable in their last days:
There are two reasons why all this is of interest – or should be – to more than historians: first, much of British decolonisation policy is with us still – similar aims, methods, language and justifications. The continuities are unnerving; politicians were talking of protecting “our way of life” half a century before Blair did. When counterinsurgency stalled in Afghanistan, Malaya was the model examined most closely.

Second, this imperial endgame explains so much about today: for instance, the growing crisis in Bahrain, where new arrests over the weekend appear to herald a fresh bout of violent repression, and why we are not currently bombing this Gulf state with as much enthusiasm as we are Libya.
And if you need a reminder just how despicably bloody the civilized British, evolved to American, empire was, reread John Dolan’s great old piece on Kenya.



On April 13, 2011, in The Public, by Tiffiniy Cheng

On March 30, 2011, if you’re in Wisconsin, you can do something about the awful economic and governance mess we are in.

Here are the details:

Tired of Wall Street  crashing our economy,  trashing our public sector,  buying elections,  then becoming more monopolistic than ever?     Frustrated that  financial services lobbyists spent a million dollars per day to defeat even mild regulations of their gambling  habits?    And how about the 6 “Too Big to Fail” firms that now  control  60% of our GDP,  putting us at greater risk than ever?      If you thought the housing bubble and commodities speculation were outrageous,   wait for the next bubble/meltdown cycle…..

You CAN take things into your own hands… MOVE YOUR MONEY out of national banks,  and into local banks and credit unions.      JOIN US for a  “Move Your Money” action day,  presented by the Personal Finance Group of Transition Whatcom,  dedicated to improved community financial resilience.

New economy speaker Kristi Laguzza-Boosman of KLB Community Consulting,  author of “Plan B, Recalibrating an Economy in Decline:  Building and Economy in Balance”,    and Jared Gardner, of “Real Wealth” of Portland,  will speak on the re-localizing of our economy.      A panel of local banks and credit unions will answer your questions about their services,  and participants may switch their accounts at that time.

Imagine what Bank of America’s  holdings of $347.1 million of Whatcom County money could do for our local economy if the profit was kept here instead of North Carolina!

Co-sponsors:     Bellingham Unitarian Social Justice Committee,   Jobs with Justice,    Community Food Co-op,   Whatcom Progressive Grassroots Network

WHERE:        Bellingham Unitarian Fellowship,      1708   “I” St.       Contact: 671-3590
WHEN:         Saturday,   April 16th,   2011         1:00-3:30pm

“We aren’t broke,   Wisconsin is not broke.     The country is awash in wealth and cash.   It’s just not in your hands.  It has been transferred in the greatest heist in history,  from the workers and consumers,  to the banks and portfolios of the uber-rich.”              Michael Moore   3/21/11

Sources:    Johnson,  Simon and James Kwak, “13 Bankers, the Wall Street Takeover and the Next Financial Meltdown”;
Taibbi,  Matt, “Griftopia”,   “Bubble Machines”,  “Vampire Squids, and the Long Con That is Breaking America”.


Tea Parties: Present and Past

On March 2, 2011, in freedom, by Joe Costello

Don’t believe illusion
Too much is for real
Stop your cheap comment
We know what we feel
Pretty Vacant

I’ll start by saying I have little idea of what the Tea Party is. I certainly know the New York Times doesn’t know what it is, or for that matter most of the political class. I know components of it, such as the Koch brothers or the various elements of the Republican and conservative political class who quickly glommed onto it, helping elect a Republican majority to the Congress. But in pieces, I would suggest at one point and maybe only briefly, a legitimate vocalizing and activating of Americans occurred. Citizens concerned about the direction our country was heading.

So, I watched with interest the other day, when CSPAN televised a Tea Party “Town Hall” from DC, which one can already see is problematic. I scratched my head when I saw the participants. Some may legitimately be considered “of” the movement, for example Rand Paul, Mike Lee who took out the Republican incumbent in Utah, and Alan West of Florida. But, there was also five term incumbent Steve King from Iowa, three term incumbent Michele Bachmann from Minnesota, and adding a sublime degree of the incredulous to the whole affair, three decade Utah incumbent Orrin Hatch.

However you want to define the Tea Party, if you do it with Orrin Hatch, you’re saying it has no meaning. No doubt after watching his fellow Utah senator go down in a blaze of defeat, Orrin’s got one thing on his mind. You have to give it to anyone who has the audacity after serving thee and half decades in the US Senate to start his speech stating, “We live in perilous times” and “We’ve run this country into the ground.” And you want to be reelected senator? Phew!

The rest of the Tea Partyers were fairly short on specifics and long on rhetoric. There was a lot of references to America’s founding and its “founding documents”, all said with an overall sense that the federal government has extended the boundaries set for it at the founding. A point difficult to argue with, however, what exactly it means needs extensive discussion.

Mike Lee of Utah tied the movement of today to its historical antecedent stating,

The Tea Party movement started not Feb 2009, it started in 1773 when a group of Americans decided they were overtaxed and over regulated, by a distant government not based in Washington DC, but London, and that government was oppressive to the people, slow to their concerns and people decided to take action.

A simple enough historical description and an accurate expression of how many, if not at times, most Americans feel about Washington DC today. But, Mr. Lee’s tying the present into the past Tea Party made something click. This present Tea Party started and voiced important and legitimate concerns about the bank bailouts and the power of corporations in America. As Dick Armey, another Republican political class member glomming onto the movement told John Stewart, “TARP! TARP! TARP!” was a rallying crying across the country for the nascent movement. Yet, both in the corporate media’s coverage and the rhetoric of the movement’s self-proclaimed representatives, I hear little about the concern of the power of corporations.

That wasn’t the case of our revolutionaries forebearers. The past’s Tea Party understood implicitly the tea they were throwing into the Boston Harbor that night belonged to the East India Company, not the crown. In Nick Robins’ excellent history of the East India Company, The Corporation That Changed the World, he writes how the American colonial press was filled with vitriol against the East India Company, which the English crown had given monopoly control of the tea trade.

Robins writes,

From October onwards, newspapers, and handbills provided the citizens of the 13 colonies with a barrage of analysis and polemic. The Boston Evening Post of 18 October 1773, for example, contained a powerful article from ‘Reclusus’ exposing the folly of Lord North’s plan. “Though the first Teas may be sold at a low rate to make a popular entry” he acknowledged, “yet when this mode of receiving tea is well established, they, as all other Monopolists do, will mediate a greater profit on their goods, and set them at what price they please.”

Lord North’s plan was an attempt by the crown to lesson the unpopular taxes, but was meant with more opposition than the original Stamp Act of eight years before. Robins adds another railing and accurate colonist’s critique against the “Company”,

Writing in The Alarm newsletter, ‘Rusitcus’ underlined how ‘their conduct in Asia for some years past, has given simple proof, how little they regard the laws of nations, the rights, liberties, or lives of men’. ‘They have levied War, for the sake of gain,’ adding: ‘fifteen hundred thousands, it is said, perished by famine in one year, not because the earth denied its fruits, but this company and their servants engulfed all the necessities of life, and set them at so high a rate that the poor could not purchase them.’

As Robins points out, the colonials actions against the Company preceding the Tea Party had been so highly effective that, “Legal imports of the Company’s tea plummeted from a record 869,000 lb in 1768 to just 108,000 lb in 1770.

It’s an interesting fact that the American colonists’ important and vivid critiques and opposition to the power of East India Company have mostly been lost to history, as in fact has the history of the Company itself. Both are relevant to our age and to anyone concerned with the questions of freedom, liberty, and democracy. The East India Company set the precedent and became the model for the global mega-corporation of our age, in both its productivity and in corruption, and its completely anti-democratic structures and behaviors. The East India Company existed for over two and half centuries. In that time, with and without the help of the English government, the Company gained monopoly control over Asian trade, conquered and impoverished vast chunks of India, causing the largest famine of India’s history, and fought two wars with China to keep the illegal and despicable opium trade open, enslaving millions of Chinese.

The East India Company was so notorious in its day, they gained the opposition of Adam Smith, Edmund Burke, and Karl Marx. Not exactly an historical coalition that would spring quickly to anyone’s mind. Edmund Burke, one of the patron saints of American conservatism would lead the charge in the English parliament for six years in a case to prosecute the head of the Company. Burke and his partner Richard Brinsley Sheridan,

Compared Hastings(the Company’s chairman) to the ‘writhing obliquity of the serpent’ and damned him for a character that was all ‘shuffling, ambiguous, dark, insidious, and little’. And as for the Company, it combined ‘the meanness of a pedlar and the profligacy of pirates… wielding a truncheon with one hand, and picking a pocket with the other.’

While Adam Smith, the tremendously misinterpreted and wrongly deified advocate of “free markets” wrote of the Company,

The result of this anti-competitive behavior was to raise profits above the natural level, amounting to(Smith writes) ‘an absurd tax upon the rest of their fellow citizens.’ Cartels are thus an ever present danger in a market economy and in Smith’s immortal words, ‘people of the same trade seldom meet together, but the conversation ends in conspiracy against the public or in some contrivance to raise prices.’

An absurd tax on the rest of us! What can better describe the control of the American economy by the descendants of the East India Company, our own era’s global mega-corporations. As Robins states about our present economy, “Over 60 percent of international commerce now takes place within corporations rather than in the open marketplace, making it idle to talk of free markets.”

Sounding as relevant today as two centuries ago, Robins adds of the company’s operations,

It was the speculative behavior of corporate insiders and short-term investors that emerged as the most powerful factor in the Company’s spectacular fall from grace in the middle of the 18th century. Financial engineering, flimsy managerial controls and inadequate regulation all played their part… the same passion for aggressive acquisitions, the same obsession with executive perks for corporate insiders, and the same focus on executive self-preservation as ordinary shareholders started to suffer the consequences of excess.

And what did this financial engineering, inadequate regulation, and corporate insiderism lead to? Repeated bailouts by the government, the largest at the end of the 18th century. Robins writes,

To avoid a run on the stock, (Prime Minister)Pitt pushed through legislation extending the Company’s ability to raise debt, and so pay its regular dividend

at 8 percent. Of course, this measure made little financial sense as the Company was paying dividends out of debt. But it helped to stabilize the situation.

Sound familiar?

The East India Company, like all corporations following it was chartered by the English government, which was a monarchy, and thus the Company had plenty of monarchical characteristics. Our modern US mega-corporations are all also charted by government, though, with what at this point can only be called a quirk of history, they are all chartered through our state governments. With this chartering through the states, it was hoped corporations might be more functionally democratic.

The birth of the modern corporation and the American republic were roughly contemporaneous. The early republic, outside its dealings with the East India Company, had some understanding of these new entities, but a half-century later understood much more. The grandsons of John Adams, the republic’s second president, wrote:

And yet already our great corporations are fast emancipating themselves from the State, or rather subjecting the State to their own control, while individual capitalists, who long ago abandoned the attempt to compete with them, will next seek to control them. In this dangerous path of centralization Vanderbilt has taken the latest step in advance. He has combined the natural power of the individual with the factitious power of the corporation. The famous “L’Etat, c’est moi” of Louis XIV represents Vanderbilt’s position in regard to his railroads. Unconsciously he has introduced Caesarism into corporate life. He has, however, but pointed out the way which others will tread. The individual will hereafter be engrafted on the corporation, democracy running its course, and resulting in imperialism; and Vanderbilt is but the precursor of a class of men who will wield within the State a power created by the State, but too great for its control. He is the founder of a dynasty.

However, it wasn’t Vanderbilt who introduced Caesarism into corporate life, it was there in the corporate structure from its monarchical inception with the East India Company. We live in a time with not one corporation, and while quite powerful the Company still had a relatively small grip on the overall British economy, but an economy that is completely dominated by several hundred massive corporate structures, that are riddled with corruption, insiderism and speculation, to such a degree that their “absurd tax” on the rest of us dwarfs the taxes of DC.

Yet, there is no American politics against “oppressive” corporate power. Both parties are completely in the pockets of the corporate oligarchy and if there were or are concerns expressed by the present Tea Party, they’ve been completely censored by the corporate media and the more loathsomely decadent Republican political class.

At the beginning of the 21st century, we must, like this republic’s founding generation, step up to talk about and take action concerning our corrupted and dysfunctional political system. It must include all aspects of power, and that includes the enormous power of the modern global mega-corporation. We would do well to follow their example — the America tradition — that the first step to dealing with unaccountable power is to break it up. That is the tradition set by the colonial Tea Party, that is a necessity of self-government. Our present Tea Partyers might find it useful to go back and read more of America’s “founding documents”, all the newspapers, letters, and pamphlets written in the years leading to the revolution. They would find the founders, not just those in the pantheon, but the thousands scattered up and down the eastern seaboard had as much concern about the unaccountable power of the nascent corporation as they did of their ancient King.