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“When the capital development of a country becomes a by-product
of the activities of a casino, the job is likely to be ill-done.”
John Maynard Keynes
"Life is a school of probabilities."
Neoliberal economics (aka casino capitalism) function from one crash to another. Risk is pervasively underpriced under neoliberal system, resulting in bubbles small and large which hit the economy periodically. The problem are not strictly economical or political. They are ideological. Like a country which adopted a certain religion follows a certain path, The USA behaviour after adoption of neoliberalism somewhat correlate with the behaviour of alcoholic who decided to booze himself to death. The difference is that debt is used instead of booze.
Hypertrophied role of financial sector under neoliberalism introduces strong positive feedback look into the economic system making the whole system unstable. Any attempts to put some sand into the wheels in the form of increasing transaction costs or jailing some overzealous bankers or hedge fund managers are blocked by political power of financial oligarchy, which is the actual ruling class under neoliberalism for ordinary investor (who are dragged into stock market by his/her 401K) this in for a very bumpy ride. I managed to observe just two two financial crashed under liberalism (in 2000 and 2008) out of probably four (Savings and loan crisis was probably the first neoliberal crisis). The next crash is given, taking into account that hypertrophied role of financial sector did not changes neither after dot-com crisis of 200-2002 not after 2008 crisis (it is unclear when and if it ended; in any case it was long getting the name of "Great Recession").
Timing of the next crisis is anybody's guess but it might well be closer then we assume. As Mark Twain aptly observed: "A thing long expected takes the form of the unexpected when at last it comes" ;-):
This morning that meant a stream of thoughts triggered by Paul Krugman’s most recent op-ed, particularly this:
Most of all, the vast riches being earned — or maybe that should be “earned” — in our bloated financial industry undermined our sense of reality and degraded our judgment.
Think of the way almost everyone important missed the warning signs of an impending crisis. How was that possible? How, for example, could Alan Greenspan have declared, just a few years ago, that “the financial system as a whole has become more resilient” — thanks to derivatives, no less? The answer, I believe, is that there’s an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they’re doing.
As most 401K investors are brainwashing into being "over bullish", this page is strongly bearish in "perma-bear" fashion in order to serve as an antidote to "Barrons" style cheerleading. Funny, but this page is accessed mostly during periods of economic uncertainty. At least this was the case during the last two financial crisis(2000 and 2008). No so much during good times: the number of visits drops to below 1K a month.
Still I hope it plays a small but important role: to warn about excessive risk taking by 401K investors in neoliberal economic system. It designed to serve as a warning sign and inject a skeptical note into MSM coverage. There are not many such sites, so a warning about danger of taking excessive risk in 401K accounts under neoliberalism has definite value. The following cartoon from 2008 illustrated this point nicely
As far as I know lot of 401K investors are 100% or almost 100% invested at stocks. Including many of my friends. I came across a very relevant to this situation joke which nicely illustrated the ideas of this page:
Seven habits that help produce the anything-but-efficient markets that rule the world by Paul Krugman in Fortune.
1. Think short term.
2. Be greedy.
3. Believe in the greater fool
4. Run with the herd.
6. Be trendy
7. Play with other people's money
I would like to stress again that it is very difficult to "guess" when the next wave of crisis stikes us: "A thing long expected takes the form of the unexpected when at last it comes".
But mispricing of risk in 401K accounts is systemic for "overbullish" 401 investors, who expect that they will be able to jusp of the train in time, before the crash. Usually such expectations are false. And to sell in the market that can lose 10% in one day is not easy psychologically. I remember my feelings in 2001-2002 and again 2008-2009. That's why many people who planned to "jump" stay put and can temporarily lose 30 to 50% of value of their 401k account in a very short period of time (and if you think that S&P500 can't return to 1000, think again; its all depends on FED). At this point some freak out and sell their holdings making paper losses permanent.
Even for those who weathered the storm and held to their stock holdings, it is important to understand that paper losses were eliminated mostly by Fed money printing. As such risks remains as at one point FED might find itself out of ammunition. The fact that S&P500 recovered very nicely it does not diminish the risk of such behavior. There is no guarantee that the third crisis will behave like previous two.
Next crash will have a new key determinant: the attitude toward the US government (and here I mean the current government of Barack Obama) and Wall Street after 2008 is the lack of trust. That means that you need to hope for the best but prepare for the worst. Injection on so much money into financial system was a novel experiment which is not ended yet. So how it will end is anybody's guess. We are now in uncharted waters. I think when Putin called Bernanke a hooligan, he meant exactly this. Since Bernanke was printing money out of thin air to buy financial paper, his action were tantamount to shoplifting. In some way this probably is more similar to running meth labs inside Fed building. The system was injected with narcotics. Everybody felt better, but the mechanism behind it was not healthy.
The complexity of modern financial system is tremendous and how all those new financial instruments will behave under a new stress is unknown. At the same time in the Internet age we, the great unwashed masses, can't be keep in complete obscurity like in good old time. Many now know ( or at least suspect ) that the neoliberal "show must goes on" after 2008 is actually going strongly at their expense. And while open rebellion is impossible, that results in lack of trust which represents a problem for financial oligarchy which rules the country. The poor working slobs are told be grateful for Walmart's low (poverty-subsidized) prices. Middle class is told that their declining standard of living is a natural result of their lack of competitiveness in the market place. Classic "bread and circuses" policy still works but for how long it will continue to work it is unclear.
But nothing is really new under the sun. To more and more people it is now clear that today the US is trying to stave off the inevitable decline by resorting to all kinds of financial manipulations like previous empires; yesterday, it was the British Empire and if you go further back, you get the USSR, Hapsburg empire, Imperial Russia, Spanish empire, Venetian empire, Byzantium and Roman empire. The current "Secretary of Imperial Wars" (aka Secretary of Defense) Ashton Baldwin Carter is pretty open about this:
“We already see countries in the region trying to carve up these markets…forging many separate trade agreements in recent years, some based on pressure and special arrangements…. Agreements that…..leave us on the sidelines. That risks America’s access to these growing markets. We must all decide if we are going to let that happen. If we’re going to help boost our exports and our economy…and cement our influence and leadership in the fastest-growing region in the world; or if, instead, we’re going to take ourselves out of the game.”
For the US elite it might be a time to rethink its neocon stance due to which the US is exposing ourselves to the enmity of the rising economic powers, and blowing serious cash to maintain it hegemony via maintaining huge military budget, financing wars and color revolutions in distant countries. In a way the US foreign policy became a financial racket, and racket can't last forever because it incite strong opposition from other countries.
Neoliberalism (aka casino capitalism) as a social system entered the state of decline after 2008. Like communism before it stopped to be attractive to people. But unlike communism it proved to have greater staying power, surviving in zombie state as finanfial institutions preserved political power and in some cases even enhanced it. It is unclear how long it will say in this state. Much depends on the availability of "cheap oil" on which neoliberal globalization is based.
But the plausible hypothesis is that this social system like socialism in xUSSR space before entered down slope and might well be on its way to the cliff. Attempts to neo-colonize other states by the West became less successful and more costly (Compare Ukraine, Libya and Iraq with previous instances of color revolutions). Some became close to XIX century colonial conquests with a lot of bloodshed (from half million to over a million of Iraqis, by different estimates, died ). As always this is mainly the blood of locals, which is cheap.
Libya and Ukraine are two recent examples. Both countries are now destroyed (which might be the plan). In Ukraine population is thrown in object poverty with income of less that $5 a day for the majority of population. And there is no other way to expand markets but to try to "neo-colonize" new countries by putting them into ominous level of debt while exporting goods to the population on credit. That is not a long term strategy as Greece, Bulgaria, and now Spain and Portugal had shown. With shrinking markets stability of capitalism in general and neoliberalism in particular might decrease.
Several researchers points to increased importance Central banks now play in maintaining of the stability of the banking system. That's already a reversal of neoliberal dogma about free (read "unregulated") markets. Actually the tale about "free markets", as far as the USA is concerned, actually was from the very beginning mainly the product designed for export (read about Washington consensus).
For the list of top articles see Recommended Links section
Nov 24, 2018 | www.bradford-delong.com
Dan Davies on financial fraud is certainly the most entertaining book on Economics I have read this year. Highly recommend
Chris Dillow : Review of Dan Davies: Lying for Money :
"Squalid crude affairs committed mostly by inadequates. This is a message of Dan Davies' history of fraud, Lying For Money ....
Most frauds fall into a few simple types.... Setting up a fake company... pyramid schemes... control frauds, whereby someone abuses a position of trust...
My favourite was Alves dos Reis, who persuaded the printers of legitimate Portuguese banknotes to print even more of them....
All this is done with the wit and clarity of exposition for which we have long admired Dan. His footnotes are an especial delight, reminding me of William Donaldson.
Dan has also a theory of fraud. 'The optimal level of fraud is unlikely to be zero' he says. If we were to take so many precautions to stop it, we would also strangle legitimate economic activity...
Nov 24, 2018 | www.thenation.com
Zbigniew Brzezinski: America's Grand Strategist By Justin Vaïsse; Catherine Porter, trans.
Buy this book
Underlying that purpose are at least two implicit assumptions. The first is that, when it comes to statecraft, grand strategy actually exists, not simply as an aspiration but as a discrete and identifiable element. The second is that, in his writings and contributions to US policy, Kissinger himself qualifies as a strategic virtuoso. For all sorts of reasons, we should treat both of these assumptions with considerable skepticism.
That Brzezinski, who died last year at age 89, lived a life that deserves to be recounted and appraised is certainly the case. Born in Warsaw in 1928 to parents with ties to Polish nobility, Brzezinski had a peripatetic childhood. His father was a diplomat whose family accompanied him on postings to France, Germany, and eventually to Canada. The Nazi invasion of 1939, which extinguished Polish independence, also effectively ended his father's diplomatic career. With war engulfing nearly all of Europe, Brzezinski would not set foot on Polish soil again for nearly two decades.
Although the young Brzezinski quickly adapted to life in Canada, the well-being of Poles and Poland remained an abiding preoccupation. After the war, he studied economics and political science at McGill University, focusing in particular on the Soviet Union, which by then had replaced Germany as the power that dominated the country of his birth. Brzezinski was a brilliant student with a particular interest in international affairs, a field increasingly centered on questions related to America's role in presiding over the postwar global order.
After graduating from McGill, Brzezinski set his sights on Harvard, which at the time was the very archetype of a "Cold War university." Senior faculty and young scholars on the make were volunteering to advise the national-security apparatus just then forming in Washington. For many of them, the Soviet threat appeared to eclipse all other questions and fields of inquiry. In this setting, Brzezinski flourished. Even before becoming an American citizen, he was thoroughly Americanized, imbued with the mind-set that prevailed in circles where members of the power elite mixed and mingled. Partially funded by the CIA, the Russian Research Center, Brzezinski's home at Harvard, was one of those places.
From his time in Cambridge, he emerged committed, in his own words, to "nothing less than formulating a coherent strategy for the United States, so that we could eventually dismantle the Soviet bloc" and, not so incidentally, thereby liberate Poland. To this cause, the young Brzezinski devoted himself with single-minded energy.
A s a scholar and author of works intended for a general audience, Zbig, as he was widely known, was nothing if not prolific. Churning out a steady stream of well-regarded books and essays, he demonstrated a particular knack for "summarizing things in a concise and striking way."
Clarity took precedence over nuance.
And with his gift for stylish packaging -- crafting neologisms ("technetronic") and high-sounding phrases ("Histrionics as History in Transition") -- his analyses had the appearance of novelty, even if they often lacked real substance.
Whether writing for his fellow scholars or addressing a wider audience, Brzezinski had one big idea when it came to Cold War strategy: He promoted the concept of "peaceful engagement" as a basis for US policy.
Convinced that the Soviet Union and the Soviet bloc were internally fragile, he believed that economic and cultural interaction with the West would ultimately lead to their collapse. The idea was to project strength without provoking confrontation, while patiently exerting indirect influence.
Yet little of the Brzezinski oeuvre has stood the test of time. The American canon of essential readings in international relations and strategy, beginning with George Washington's farewell address and continuing on through works by John Quincy Adams, Alfred Thayer Mahan, Hans Morgenthau, and a handful of others (the list is not especially long), does not include anything penned by Brzezinski. Although Vaïsse, a senior official with the French foreign ministry, appears to have read and pondered just about every word his subject wrote or uttered, he identifies nothing of Brzezinski's that qualifies as must-reading for today's aspiring strategist.
This limited academic influence probably did not bother Zbig; he never saw himself as a mere scholar. He was a classic in-and-outer, rotating effortlessly from university campuses to political campaigns, and from government service to plummy think-tank billets. According to Vaïsse, Brzezinski never courted the media. Even so, he demonstrated a pronounced talent for getting himself in front of TV cameras, becoming a frequent guest on programs like Meet the Press . He knew how to self-promote.
Toward the end of his life, Brzezinski even had a Twitter account. His last tweet, from May 2017, both summarizes the essence of his worldview and expresses his dismay regarding the presidency of Donald Trump: "Sophisticated US leadership is the sine qua non of a stable world order. However, we lack the former while the latter is getting worse."
F rom the time Brzezinski left Harvard in 1960 to accept a tenured position at Columbia, he made it his mission to nurture and facilitate that sophistication. For Zbig, New York offered a specific advantage over Cambridge: It provided a portal into elite political circles. As it had for Kissinger, the then-still-influential Council on Foreign Relations provided a venue that enabled Brzezinski to curry favor with the rich and powerful, and to establish his bona fides as a statesman to watch. Henry's patron was Nelson Rockefeller; Zbig's was Nelson's brother David.
Although not an ideologue, Brzezinski was a liberal Democrat of a consistently hawkish persuasion. Committed to social justice at home, he was also committed to toughness abroad. In the 1960s, he supported US intervention in Vietnam, treated the domino theory as self-evidently true, and argued that, with American credibility on the line, the United States had no alternative but to continue prosecuting the war. Even after the war ended, Vaïsse writes, Brzezinski "did not view Vietnam as a mistake."
Yet Vietnam did nudge Brzezinski to reconsider some of his own assumptions. In the early 1970s, with an eye toward forging a new foreign policy that might take into account some of the trauma caused by Vietnam, he organized the Trilateral Commission. Apart from expending copious amounts of Rockefeller money, the organization produced little of substance. For Brzezinski, however, it proved a smashing success. It was there that he became acquainted with Jimmy Carter, a Georgia governor then contemplating a run for the presidency in 1976.
Zbig and Jimmy hit it off. Soon enough, Brzezinski signed on as the candidate's principal foreign-policy adviser. When Carter won, he rewarded Brzezinski by appointing him national-security adviser, the job that had vaulted Kissinger to the upper ranks of global celebrity.
Zbig held this post throughout Carter's one-term presidency, from 1977 to 1981. It would be his first and last time in government. After 1981, Brzezinski went back to writing, continued to opine, and was occasionally consulted by Carter's successors, both Democratic and Republican. Yet despite having ascended to the rank of elder statesman, never again did Brzezinski occupy a position where he could directly affect US policy.
Because of Brzezinski's limited influence on foreign policy after Carter, Vaïsse's case for installing him in the pantheon of master strategists therefore rests on the claim that on matters related to foreign policy, the Carter presidency was something less than a bust. Vaïsse devotes the core of his book to arguing just that. Although valiant, the effort falls well short of success.
From the outset of his administration, Carter accorded his national-security adviser remarkable deference. Brzezinski was not co-equal with the president; yet neither was he a mere subordinate. He was, Vaïsse writes, "the architect of Carter's foreign policy," while also exercising "an exceptional degree of control" over its articulation and implementation.
In a characteristic display of self-assurance and bureaucratic shrewdness, as the new president took office, Brzezinski gave him a 43-page briefing book prescribing basic administration policy. Under the overarching theme of "constructive global engagement," Brzezinski identified 10 specific goals. The first proposed to "create more active and solid cooperation with Europe and Japan," the 10th to "maintain a defense posture designed to dissuade the Soviet Union from committing hostile acts." In between were less-than-modest aspirations to promote human rights, reduce the size of nuclear arsenals, curb international arms sales, end apartheid in South Africa, normalize Sino-American relations, terminate US control of the Panama Canal, and achieve an "overall solution to the Israeli-Palestinian problem."
While Brzezinski's agenda was as bold as it was comprehensive, it nonetheless hewed to the Soviet-centric assumptions that had formed the basis of US policy since the end of World War II. Zbig recognized that the world had changed considerably in the ensuing years, but he also believed that any future changes would still occur in the context of a continuing Soviet-American rivalry. His strategic perspective, therefore, did not include the possibility that the international order might center on something other than the binaries imposed by the Cold War. The disintegration of the Soviet bloc and eventually of the Soviet Union itself was, in his view, a nominal goal of American foreign policy, but not an immediate prospect.
Using Brzezinski's 10 policy objectives as a basis for evaluating his performance, Vaïsse gives the national-security adviser high marks. "Few administrations have known so many tangible successes in only four years," he writes, citing the Panama Canal Treaty, the Israeli-Egyptian peace agreement, and improved relations with China. Yet while Panama remains an underappreciated achievement, the other two qualify as ambiguous at best. The Camp David accords did nothing to resolve the Palestinian issue that underlay much of Israeli-Arab enmity; it produced a dead-end peace that left Palestinians without a state and Israel with no end of problems. And the Brzezinski-engineered embrace of China, enhancing Chinese access to American technology and markets, accelerated that country's emergence as a peer competitor.
More troubling still was Brzezinski's failure to anticipate or to grasp the implications of the two developments that all but doomed the Carter presidency: the 1978 Iranian Revolution and the 1979 Soviet intervention in Afghanistan. Vaïsse does his best to cast a positive light on Brzezinski's role in these twin embarrassments. But there's no way around it: Brzezinski misread both -- with consequences that still haunt us today.
The Iranian Revolution, which Brzezinski sought to forestall by instigating a military coup in Tehran, offered a warning against imagining that Washington could shape events in the Islamic world. Brzezinski missed that warning entirely, although he would by no means be the last US official to do so. As for the Kremlin's plunge into Afghanistan, widely interpreted as evidence of the Soviet Union's naked aggression, it actually testified to the weakness and fragility of the Soviet empire, already in an advanced state of decay. Again, Brzezinski -- along with many other observers -- misread the issue. When clarity of vision was most needed, he failed to provide it.
Together, these two developments ought to have induced a wily strategist to reassess the premises of US policy. Instead, they resulted in decisions to deepen -- and to overtly militarize -- US involvement in and around the Persian Gulf. While this commitment is commonly referred to as the Carter Doctrine, Vaïsse insists that it "was really a Brzezinski doctrine."
Regardless of who gets the credit, the militarization of US policy across what Brzezinski termed an "arc of crisis" encompassing much of the Islamic world laid the basis for a series of wars and upheavals that continue to this day. If, as national-security adviser, Brzezinski wielded as much influence as Vaïsse contends, then this too forms part of his legacy. When it mattered most, the master strategist failed to understand the implications of the crisis that occurred on his watch.
The most glaring problem anyone faces in trying to assert Brzezinski's mastery of world affairs, however, rests not in Iran or Afghanistan, but in how the Cold War came to an end. Indeed, Brzezinski viewed it as essentially endless. As late as 1987, just two years before the fall of the Berlin Wall, he was still insisting that "the American-Soviet conflict is an historical rivalry that will endure for as long as we live."
B rzezinski was certainly smart, flexible, and pragmatic, but he was also a prisoner of the Cold War paradigm. So too were virtually all other members of the foreign-policy establishment of his day. Indeed, subscribing to that paradigm was a prerequisite of membership. Yet this adherence amounted to donning a pair of strategic blinders: It meant seeing only those things that it was convenient to see.
Which brings us back to Zbig's last tweet, with its paean to American leadership as the sine qua non of global stability. The tweet neatly captures the mind-set that the foreign-policy establishment has embraced with something like unanimity since the Cold War surprised that establishment by coming to an end. This mind-set gets expressed in myriad ways in a thousand speeches and op-eds: The United States must lead. There is no alternative; history itself summons the country to do so. Should it fail in that responsibility, darkness will cover the earth.
This is why Trump so infuriates the foreign-policy elite: He appears oblivious to the providential call that others in Washington take to be self-evident. Yet adhering to this post–Cold War paradigm is also the equivalent of donning blinders. Whatever the issue -- especially when the issue is ourselves -- it means seeing only those things that we find it convenient to see.
The post–Cold War paradigm of American moral and political hegemony prevents us from appreciating the way that the world is actually changing -- rapidly, radically, and right before our very eyes. Today, with the planet continuing to heat up, the nexus of global geopolitics shifting eastward, and Americans pondering security threats for which our pricey and far-flung military establishment is all but useless, the art of strategy as practiced by members of Brzezinski's generation has become irrelevant. So too has Zbig himself.
Nov 27, 2018 | discussion.theguardian.com
Themiddlegound -> Themiddlegound , 11 Jun 2013 05:42The American Chamber of Commerce subsequently expanded its base from around 60,000 firms in 1972 to over a quarter of a million ten years later. Jointly with the National Association of Manufacturers (which moved to Washington in 1972) it amassed an immense campaign chest to lobby Congress and engage in research. The Business Roundtable, an organization of CEOs 'committed to the aggressive pursuit of political power for the corporation', was founded in 1972 and thereafter became the centrepiece of collective pro-business action.
The corporations involved accounted for 'about one half of the GNP of the United States' during the 1970s, and they spent close to $900 million annually (a huge amount at that time) on political matters. Think-tanks, such as the Heritage Foundation, the Hoover Institute, the Center for the Study of American Business, and the American Enterprise Institute, were formed with corporate backing both to polemicize and, when necessary, as in the case of the National Bureau of Economic Research, to construct serious technical and empirical studies and political-philosophical arguments broadly in support of neoliberal policies.
Nearly half the financing for the highly respected NBER came from the leading companies in the Fortune 500 list. Closely integrated with the academic community, the NBER was to have a very significant impact on thinking in the economics departments and business schools of the major research universities. With abundant finance furnished by wealthy individuals (such as the brewer Joseph Coors, who later became a member of Reagan's 'kitchen cabinet') and their foundations (for example Olin, Scaife, Smith Richardson, Pew Charitable Trust), a ﬂood of tracts and books, with Nozick's Anarchy State and Utopia perhaps the most widely read and appreciated, emerged espousing neoliberal values. A TV version of Milton Friedman's Free to Choose was funded with a grant from Scaife in 1977. 'Business was', Blyth concludes, 'learning to spend as a class.
In singling out the universities for particular attention, Powell pointed up an opportunity as well as an issue, for these were indeed centers of anti-corporate and anti-state sentiment (the students at Santa Barbara had burned down the Bank of America building there and ceremonially buried a car in the sands). But many students were (and still are) affluent and privileged, or at least middle class, and in the US the values of individual freedom have long been celebrated (in music and popular culture) as primary. Neoliberal themes could here find fertile ground for propagation. Powell did not argue for extending state power. But business should 'assiduously cultivate' the state and when necessary use it 'aggressively and with determination'
In order to realize this goal, businesses needed a political class instrument and a popular base. They therefore actively sought to capture the Republican Party as their own instrument. The formation of powerful political action committees to procure, as the old adage had it, 'the best government that money could buy' was an important step. The supposedly 'progressive' campaign finance laws of 1971 in effect legalized the financial corruption of politics.
A crucial set of Supreme Court decisions began in 1976 when it was first established that the right of a corporation to make unlimited money contributions to political parties and political action committees was protected under the First Amendment guaranteeing the rights of individuals (in this instance corporations) to freedom of speech.15 Political action committees could thereafter ensure the financial domination of both political parties by corporate, moneyed, and professional association interests. Corporate PACs, which numbered eighty-nine in 1974, had burgeoned to 1,467 by 1982.
The Republican Party needed, however, a solid electoral base if it was to colonize power effectively. It was around this time that Republicans sought an alliance with the Christian right. The latter had not been politically active in the past, but the foundation of Jerry Falwell's 'moral majority' as a political movement in 1978 changed all of that. The Republican Party now had its Christian base.
It also appealed to the cultural nationalism of the white working classes and their besieged sense of moral righteousness. This political base could be mobilized through the positives of religion and cultural nationalism and negatively through coded, if not blatant, racism, homophobia, and anti feminism.
The alliance between big business and conservative Christians backed by the neoconservatives consolidated, not for the first time has a social group been persuaded to vote against its material, economic, and class interests the evangelical Christians eagerly embraced the alliance with big business and the Republican Party as a means to further promote their evangelical and moral agenda.
Themiddlegound -> Themiddlegound , 11 Jun 2013 05:23Any political movement that holds individual freedoms to be sacrosanct is vulnerable to incorporation into the neoliberal fold.
The worldwide political upheavals of 1968, for example, were strongly inﬂected with the desire for greater personal freedoms. This was certainly true for students, such as those animated by the Berkeley 'free speech' movement of the 1960s or who took to the streets in Paris, Berlin, and Bangkok and were so mercilessly shot down in Mexico City shortly before the 1968 Olympic Games. They demanded freedom from parental, educational, corporate, bureaucratic, and state constraints. But the '68 movement also had social justice as a primary political objective.
Neoliberal rhetoric, with its foundational emphasis upon individual freedoms, has the power to split off libertarianism, identity politics, multiculturalism, and eventually narcissistic consumerism from the social forces ranged in pursuit of social justice through the conquest of state power. It has long proved extremely difficult within the US left, for example, to forge the collective discipline required for political action to achieve social justice without offending the the Construction of Consent desire of political actors for individual freedom and for full recognition and expression of particular identities. Neoliberalism did not create these distinctions, but it could easily exploit, if not foment, them.
In the early 1970s those seeking individual freedoms and social justice could make common cause in the face of what many saw as a common enemy. Powerful corporations in alliance with an interventionist state were seen to be running the world in individually oppressive and socially unjust ways. The Vietnam War was the most obvious catalyst for discontent, but the destructive activities of corporations and the state in relation to the environment, the push towards mindless consumerism, the failure to address social issues and respond adequately to diversity, as well as intense restrictions on individual possibilities and personal behaviors by state-mandated and 'traditional' controls were also widely resented. Civil rights were an issue, and questions of sexuality and of reproductive rights were very much in play.
For almost everyone involved in the movement of '68, the intrusive state was the enemy and it had to be reformed. And on that, the neoliberals could easily agree. But capitalist corporations, business, and the market system were also seen as primary enemies requiring redress if not revolutionary transformation: hence the threat to capitalist class power.
By capturing ideals of individual freedom and turning them against the interventionist and regulatory practices of the state, capitalist class interests could hope to protect and even restore their position. Neoliberalism was well suited to this ideological task. But it had to be backed up by a practical strategy that emphasized the liberty of consumer choice, not only with respect to particular products but also with respect to lifestyles, modes of expression, and a wide range of cultural practices. Neoliberalization required both politically and economically the construction of a neoliberal market-based populist culture of differentiated consumerism and individual libertarianism. As such it proved more than a little compatible with that cultural impulse called 'postmodernism' which had long been lurking in the wings but could now emerge full-blown as both a cultural and an intellectual dominant. This was the challenge that corporations and class elites set out to finesse in the 1980s.
In the US case a confidential memo sent by Lewis Powell to the US Chamber of Commerce in August 1971. Powell, about to be elevated to the Supreme Court by Richard Nixon, argued that criticism of and opposition to the US free enterprise system had gone too far and that 'the time had come––indeed it is long overdue––for the wisdom, ingenuity and resources of American business to be marshaled against those who would destroy it'.
Powell argued that individual action was insufficient. 'Strength', he wrote, 'lies in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations'. The National Chamber of Commerce, he argued, should lead an assault upon the major institutions––universities, schools, the media, publishing, the courts––in order to change how individuals think 'about the corporation, the law, culture, and the individual'. US businesses did not lack resources for such an effort, particularly when they pooled their resources together.
Dec 14, 2018 | peakoilbarrel.com
Eulenspiegel, 12/12/2018 at 12:44 pmIn other sources US growth is more 1.9 mb/year, source is Rystad:GuyM, 12/12/2018 at 2:04 pm
Looks like the USA is supplying half of the world soon at these growth rates.
As far I know Bakken is still pipeline limited the next time, so no growth from there?
So it falls most to GOM, Eagle ford and Permian, which can grow without pipelines?EF does not have pipeline problems, but it is not going to grow at $55 or less oil price. If prices rise to $80, yes. But, the price will need to be consistent for a good long while.
GOM has hit its high back in August according to SLa and George.
We won't have much, or any growth in the first half of 2019, no matter what the hype is, unless prices spike.
Dec 14, 2018 | peakoilbarrel.com
ProPoly, 12/13/2018 at 12:35 pmYeah, seems highly unlikely at best that Eagle Ford will ever regain its high. Even the EIA forecast – notorious blue sky that it is – only gets it back to 1.5 million bpd. And that on a theory of producers shifting from Permian due to logistical constraints in the latter.
It's a mature area, only so many decent spots to drill.
Dec 14, 2018 | peakoilbarrel.com
shallow sand, 12/13/2018 at 9:49 amDennis.Hickory, 12/13/2018 at 10:54 am
I think the frustration of a small business oil producer should be obvious.
My family and I have pretty much decided producing oil in the US is not a real business anymore. How can one have a real business when there are so many fixed costs, that do not change much, with the price of the product sold moving up and down like a yo-yo? Add to that at least 50% of the voting public thinking what you are doing is evil. It is now much more preferred that one grow harvest and sell cannabis so people can get high, rather than produce oil for gasoline, diesel, plastics and the numerous other daily used consumer products.
You have done a lot of construction work, so I am sure you know the feeling when there is a recession and work drops way off. At least you might get some sympathy in that situation. Farmers get a government payment. Oil people get laughed at.
We basically lost $20 a barrel in the blink of an eye. In our case, that is over $100K per month of income loss. This after 2015-17, where the price was less than half what it had been 2011-14.
Take the family out here that is living on 20 BOPD, doing all the work themselves. Selling 600 BO per month. That family just saw a $12,000 hit to the top line. The expenses didn't change except for fuel, which has fallen some. Probably less than $1,000 per month savings there.
Imagine what would happen if the boss walked into the tech campus of a firm in Silicon Valley and said everyone was taking a $12,000 per month pay cut immediately. Would be a lot of knashing of teeth.
Now imagine the pay cut was pretty much in conjunction with an erratic President, supported almost 100% by the industry, ironically, who erroneously thinks .30 a gallon lower gasoline prices will be a boon to the US economy. With the alternative being a party openly hostile to the industry, who cannot differentiate between small business owners with small footprints and corporate titans who make no money on the product, but make billions off the corporate largess. We are all terrible polluters who need to get hit with a carbon tax and made to jump through environmental testing hoops despite we are emitting less than the tiny amounts of methane we were emitting 30 years ago.
It is incredibly frustrating.Shallow. Thanks for explaining how it looks from where you stand.
As much as I hate to think this way, it raises the idea that the government should have a price stability mechanism in place that shields producers from the volatility of the dysfunctional market. Maybe gets updated every 6 months depending on market conditions or something like that. I'm sure everyone would hate it.
Maybe the government should even have a longrange an energy policy. Like a ten yr plan. I know crazy thinking.
shallow sand, 12/13/2018 at 12:43 pmRegarding my small oil business rant above. Small business is a tough place, not just in the oil industry, but all over.Longtimber, 12/13/2018 at 3:22 pm
I think of the grocery store owners. Those guys had a pretty good thing going in small towns 30 years ago. Now they are gone if there is a Walmart nearby.
Same with department stores. The mall in a mid sized town nearby is halfway a ghost town now.
Capitalism can be brutal. But it doesn't seem that another way has proven to be a better idea either. We tend to take freedom for granted in the USA. We are very lucky we have the freedom we do have.
I don't know that price controls are a good idea. I don't know what the answer is to market volatility. We benefitted from getting into oil when no one wanted to touch it, and really did well from 2005–14. Since then, not so good, but maybe our time will come once more.
Overall, shouldn't complain. Just trying to give a unique perspective. Also trying to let everyone know that there are a lot of hardworking small business owners in upstream oil and they aren't the terrible people some make them out to be.
Everything in the media these days is very urban centered and also very East Coast dominant. So different perspectives from different regions is always good, I think.!! Runners-up for Quote of the Year !!Synapsid, 12/13/2018 at 7:14 pm
"Shale oil is a by-product of easy monetary policies which are being withdrawn."
in a way kinda
"Now, I know FOR A FACT that American energy dominance is within our grasp"
and it keeps getting more better
"Reilly stressed, "Knowing where these resources are located and how much exists is crucial to ensuring both our energy independence and energy dominance.""
Pretty Powerful results for just a by-product!
Was it JH Kunstler that pointed out that "energy dominance" is kinda kinky?shallow sand,farmlad, 12/13/2018 at 10:04 pm
I always look forward to your posts. I think there's nothing more important here, and that's a high bar.Shallow SandDennis Coyne, 12/14/2018 at 12:35 am
Neo Capitalism or Creditism might be better terms to describe our current monetary and economic system. When central banks can issue Credit and lend it to their pets by the billions and when those corporations go under they just issue more Credit to the corporations that take their place. This is not Capitalism where companies and individuals produce something valuable and return a profit that they can then reinvest as Capital.
This current economic system is destroying the sources of wealth and valuables. It encourages burning down the house to stay warm. I used to dream of being a big farmer but more and more I feel lucky when I see the stress and fear that so many of the bigger farmers are dealing with.
I appreciate your great contribution to this site. I've learned so much from your comments. They've increased my confidence that this shale business would not be here if it were not for the biggest ponzi scheme to date. And that the peak of Oil production per Capita that was reached in 1979 will never again be topped in my lifetime even with all this fraud on its side.
Some great musings from Charles Hugh Smith
https://www.oftwominds.com/blogoct18/zombies10-18.htmlshallow sand,Boomer II, 12/13/2018 at 1:52 pm
Your perspective is much appreciated. I continue to hope for higher oil prices as that is what will allow us to get through the energy transition.Oil consumption might head down.Frugal, 12/13/2018 at 8:48 pm
This one on recession.
This one on automation.
https://www.nytimes.com/2018/12/13/opinion/robots-trump-country-jobs.htmlCurrently, legacy decline is just above 500,000 barrels per month. This means that if production is to be increased by 100,000 barrels per month then new wells must produce 600,000 barrels per month of new oil.Watcher, 12/14/2018 at 12:00 am
If US new oil production is indeed increasing by 600,000 barrels/day per month, this is a mind-blowing number -- 7.2 million barrels/day per year. Has new oil production ever increased by this much anywhere else in the World?Do we have a computation of what % of total US oil production is from wells < 1 year old? Or even < 3 mos old.Dennis Coyne, 12/14/2018 at 12:29 amWatcher,
Go to shaleprofile.com to get an idea. In August 2018 roughly 25% of US C+C is from wells which started producing in the first 8 months of 2018.
Dec 13, 2018 | economistsview.typepad.com
anne , December 07, 2018 at 04:13 PMhttps://glineq.blogspot.com/2018/12/why-inequality-matters.htmlDarrell in Phoenix said in reply to anne... , December 07, 2018 at 05:59 PM
December 5, 2018
Why inequality matters?
This is the question that I am often asked and will be asked in two days. So I decided to write my answers down.
The argument why inequality should not matter is almost always couched in the following way: if everybody is getting better-off, why should we care if somebody is becoming extremely rich? Perhaps he deserves to be rich -- or whatever the case, even if he does not deserve, we need not worry about his wealth. If we do that implies envy and other moral flaws. I have dealt with the misplaced issue of envy here * (in response to points made by Martin Feldstein) and here ** (in response to Harry Frankfurt), and do not want to repeat it. So, let's leave envy out and focus on the reasons why we should be concerned about high inequality.
The reasons can be formally broken down into three groups: instrumental reasons having to do with economic growth, reasons of fairness, and reasons of politics.
The relationship between inequality and economic growth is one of the oldest relationships studied by economists. A very strong presumption was that without high profits there will be no growth, and high profits imply substantial inequality. We find this argument already in Ricardo where profit is the engine of economic growth. We find it also in Keynes and Schumpeter, and then in standard models of economic growth. We find it even in the Soviet industrialization debates. To invest you have to have profits (that is, surplus above subsistence); in a privately-owned economy it means that some people have to be wealthy enough to save and invest, and in a state-directed economy, it means that the state should take all the surplus.
But notice that throughout the argument is not one in favor of inequality as such. If it were, we would not be concerned about the use of the surplus. The argument is about a seemingly paradoxical behavior of the wealthy: they should be sufficiently rich but should not use that money to live well and consume but to invest. This point is quite nicely, and famously, made by Keynes in the opening paragraphs of his "The Economic Consequence of the Peace". For us, it is sufficient to note that this is an argument in favor of inequality provided wealth is not used for private pleasure.
The empirical work conducted in the past twenty years has failed to uncover a positive relationship between inequality and growth. The data were not sufficiently good, especially regarding inequality where the typical measure used was the Gini coefficient which is too aggregate and inert to capture changes in the distribution; also the relationship itself may vary in function of other variables, or the level of development. This has led economists to a cul-de-sac and discouragement so much so that since the late 1990s and early 2000s such empirical literature has almost ceased to be produced. It is reviewed in more detail in this paper. ***
More recently, with much better data on income distribution, the argument that inequality and growth are negatively correlated has gained ground. In a joint paper **** Roy van der Weide and I show this using forty years of US micro data. With better data and somewhat more sophisticated thinking about inequality, the argument becomes much more nuanced: inequality may be good for future incomes of the rich (that is, they become even richer) but it may be bad for future incomes of the poor (that is, they fall further behind). In this dynamic framework, growth rate itself is no longer something homogeneous as indeed it is not in the real life. When we say that the American economy is growing at 3% per year, it simply means that the overall income increased at that rate, it tells us nothing about how much better off, or worse off, individuals at different points of income distribution are getting.
Why would inequality have bad effect on the growth of the lower deciles of the distribution as Roy and I find? Because it leads to low educational (and even health) achievements among the poor who become excluded from meaningful jobs and from meaningful contributions they could make to their own and society's improvement. Excluding a certain group of people from good education, be it because of their insufficient income or gender or race, can never be good for the economy, or at least it can never be preferable to their inclusion.
High inequality which effectively debars some people from full participation translates into an issue of fairness or justice. It does so because it affects inter-generational mobility. People who are relatively poor (which is what high inequality means) are not able, even if they are not poor in an absolute sense, to provide for their children a fraction of benefits, from education and inheritance to social capital, that the rich provide to their offspring. This implies that inequality tends to persist across generations which in turns means that opportunities are vastly different for those at the top of the pyramid and those on the bottom. We have the two factors joining forces here: on the one hand, the negative effect of exclusion on growth that carries over generations (which is our instrumental reason for not liking high inequality), and on the other, lack of equality of opportunity (which is an issue of justice).
High inequality has also political effects. The rich have more political power and they use that political power to promote own interests and to entrench their relative position in the society. This means that all the negative effects due to exclusion and lack of equality of opportunity are reinforced and made permanent (at least, until a big social earthquake destroys them). In order to fight off the advent of such an earthquake, the rich must make themselves safe and unassailable from "conquest". This leads to adversarial politics and destroys social cohesion. Ironically, social instability which then results discourages investments of the rich, that is it undermines the very action that was at the beginning adduced as the key reason why high wealth and inequality may be socially desirable.
We therefore reach the end point where the unfolding of actions that were at the first supposed to produce beneficent outcome destroys by its own logic the original rationale. We have to go back to the beginning and instead of seeing high inequality as promoting investments and growth, we begin to see it, over time, as producing exactly the opposite effects: reducing investments and growth.
-- Branko MilanovicPaine -> Darrell in Phoenix... , December 08, 2018 at 05:33 AM"he argument is about a seemingly paradoxical behavior of the wealthy: they should be sufficiently rich but should not use that money to live well and consume but to invest."
I disagree on this. I do not care if they use the high income to invest or to live well, as long as it is one or the other.
The one thing I do not want the rich to do is to become a drain of money out of active circulation. The paradox of thrift. Excess saving by one dooms others into excess debt to keep the economy liquid.
If you invent a new widget that everyone on earth simply must have, and is willing to give you $1 per to get it, such that you have $7 billion a year income... good for you!
Now what do you deserve in return?
1) To consumer $7 billion worth of other peoples' production?
2) To trap the rest of humanity in $7 billion a year worth of debt servitude, which will have your income ever increase as interest is added to your income, a debt servitude from which it will be mathematically impossible for them to escape since you hold the money that they must get in order to repay their debts?
I vote 1.Yes it's corporate capitalist actions that matterDarrell in Phoenix said in reply to Paine... , December 08, 2018 at 07:07 AM
The choice of capitalists to buy paper not products
Wealthy households are obscene But not macro drags. When they buy luxury products and personal services
When they buy existing stocks of land paintings and the like of course this is as bad as buying paper. But at least that portfolio shifting
Can CO exist with product purchases. So long as each type of spending remains close to a stable ratioIn my "ideal" tax regimen, steeply progressive income taxes would be avoided by real property spending or capital investment to get deductions.Paine -> Darrell in Phoenix... , December 08, 2018 at 09:33 AM
This, of course, would lead to over-investment in land, buildings, houses, etc. WHICH is why my regimen also includes a real property tax (in addition to state and local real estate taxes). The income tax would not be "avoided" by real property purchases as much as "delayed".
To avoid 90% income tax, buy diamonds, paintings, expensive autos... then only pay 5% per year on the real property, spreading the the tax over 20 years. Buy land, buildings, houses, etc., get hit with the 5%, plus the local real estate taxes.A 100 % ground rent tax Ie a location value confiscatory taxPaine -> Paine... , December 08, 2018 at 09:36 AM
Can be off set by credits earned with the costs of "real " land improvementsExisting stocks of jewels and paintings should be taxedkurt -> Darrell in Phoenix... , December 10, 2018 at 03:00 PM
to extract the socially created
value of the item
This is an analogue to location taxes
Yes this can be avoided by.domation to a non.profit museum archiveIt really depends on what is consumed. Consumption can lead to malinvestment. For instance, buying 1960s ferraris does very little for the current economy. This is an exceptionally low multiplier activity.Soul Super Bad said in reply to anne... , December 07, 2018 at 06:37 PMinequality have bad effect on the growth of the lower deciles of the distribution as Roy and Ireason -> anne... , December 08, 2018 at 01:59 AM
keep in mind that there are many directions of growth. there is growth that benefits the workers, the rank-and-file. there is growth that benefits the excessively wealthy. but now, finally there's a third type of growth, the kind of growth that destroys the planet, and perhaps a 4th a new channel of growth that would help us to preserve the planet. we need to think about some of these things.
thanks, gals and
!One VERY important item is missing from that list - environmental sustainability - giving people control over much more resources than they need is a waste of something precious.Paine -> reason... , December 08, 2018 at 05:35 AMCapitalistsmulp -> reason... , December 10, 2018 at 01:16 AM
Owning the planets surface
and its natural resources and products
Is pathologicalTed Turner owning millions of acres of land he's restoring to prairie sustained by bison, prairie dogs, wolves, etc is bad?anne , December 07, 2018 at 04:14 PM
I wish he had ten times as much land. Or more so a million bison were roaming the west and supplying lots of bison steaks, hides, etc, as they did for thousands of years before about 1850.https://glineq.blogspot.com/2018/12/first-reflections-on-french-evenements.htmlDarrell in Phoenix said in reply to mulp ... , December 10, 2018 at 08:28 AM
December 5, 2018
First reflections on the French "événements de décembre"
Because I am suffering from insomnia (due to the jetlag) I decided to write down, in the middle of the night, my two quick impressions regarding the recent events in France -- events that watched from outside France seemed less dramatic than within.
I think they raise two important issues: one new, another "old".
It is indeed an accident that the straw that broke the camel's back was a tax on fuel that affected especially hard rural and periurban areas, and people with relatively modest incomes. It did so (I understand) not as much by the amount of the increase but by reinforcing the feeling among many that after already paying the costs of globalization, neoliberal policies, offshoring, competition with cheaper foreign labor, and deterioration of social services, now, in addition, they are to pay also what is, in their view and perhaps not entirely wrongly, seen as an elitist tax on climate change.
This raises a more general issue which I discussed in my polemic with Jason Hickel and Kate Raworth. Proponents of degrowth and those who argue that we need to do something dramatic regarding climate change are singularly coy and shy when it comes to pointing out who is going to bear the costs of these changes. As I mentioned in this discussion with Jason and Kate, if they were serious they should go out and tell Western audiences that their real incomes should be cut in half and also explain them how that should be accomplished. Degrowers obviously know that such a plan is a political suicide, so they prefer to keep things vague and to cover up the issues under a "false communitarian" discourse that we are all affected and that somehow the economy will thrive if we all just took full conscience of the problem--without ever telling us what specific taxes they would like to raise or how they plan to reduce people's incomes.
Now the French revolt brings this issue into the open. Many western middle classes, buffeted already by the winds of globalization, seem unwilling to pay a climate change tax. The degrowers should, I hope, now come up with concrete plans.
The second issue is "old". It is the issue of the cleavage between the political elites and a significant part of the population. Macron rose on an essentially anti-mainstream platform, his heterogenous party having been created barely before the elections. But his policies have from the beginning been pro-rich, a sort of the latter-say Thatcherism. In addition, they were very elitist, often disdainful of the public opinion. It is somewhat bizarre that such "Jupiterian" presidency, by his own admission, would be lionized by the liberal English-language press when his domestic policies were strongly pro-rich and thus not dissimilar from Trump's. But because Macron's international rhetoric (mostly rhetoric) was anti-Trumpist, he got a pass on his domestic policies.
Somewhat foolishly he deepened the cleavage between himself and ordinary people by both his patrician predilections and the love of lecturing others which at times veered into the absurd (as when he took several minutes to teach a 12-year old kid about the proper way to address the President). At the time when more than ever Western "couches populaires" wanted to have politicians that at least showed a modicum of empathy, Macron chose the very opposite tack of berating people for their lack of success or failure to find jobs (for which they apparently just needed to cross the road). He thus committed the same error that Hillary Clinton commuted with her "deplorables" comment. It is no surprise that his approval ratings have taken a dive, and, from what I understand, even they do not fully capture the extent of the disdain into which he is held by many.
It is under such conditions that "les evenements" took place. The danger however is that their further radicalization, and especially violence, undermines their original objectives. One remembers that May 1968, after driving de Gaulle to run for cover to Baden-Baden, just a few months later handed him one of the largest electoral victories -- because of demonstrators' violence and mishandling of that great political opportunity.
-- Branko Milanovic"So, harvesting energy from the sun is unsustainable?"
No. I'm saying it is not scale-able.
How are you going to do it? Run diesel fuel powered tractors to dig pit mines to get metals, to be smelted in fossil fuel powered refineries. Burn fossil fuels to heat sand into glass. Use toxic solvents purify the glass and to electroplate toxic metals. Then incinerate the solvents in fossil fuel powered furnaces.
That may get us to a 40% reduction in carbon, but it isn't getting us to 90% reduction.
Even then, how are you going to get nitrogen fertilizers for farms? Currently we strip H2 from CH4 (natural gas), then mix with nitrogen in the air, apply electricity, poof, nitrogen fertilizers, and LOTS of CO2. I have yet to see a proposal for large-scale farming that offers a method of obtaining nitrogen fertilizers without CO2 emissions.
AND, there is still a massive problem of storing the electricity from when the wind is blowing and sun is shining until times when it isn't.
"So, you are calling for global thermonuclears war to purge 6 billion people from the planet?"
"You clearly believe the solution is not paying workers to work, but to not pay them so they must die."
I'm all about paying workers to work. I vehemently disagree with liberals when they breach the idea of "universal basic income"... a great way to end up like the old Soviet Union, where everyone has money, but waits in long lines to get into stores with nothing on the shelves for sale.
"The population is too high to support hunter-gathers and subsistence farming for 7 billion people plus."
"You have bought into Reagan's free lunch framing and argue less trash, less processing of 6trash to cut costs, so everyone must earn less so they consume less, ideally becoming dead."
Not even close.
This is where Liberals pissed me off right after Trump won and was still talking "border adjustment tax". The cry from the likes of Robert Reich was "oh noooo... prices will go up and hurt the poor." Since when were progressives the "we need low prices" party? I thought we were the ones that wanted higher prices, if those higher prices were caused by higher wages to workers!
"I call for evveryone paying high living costs to pay more workers to eliminate the waste of landfilling what was just mined from the land."
Not sure how that makes it magically possible to cut carbon emissions 90% though.
Dec 13, 2018 | www.zerohedge.com
Besides that, Saudi Arabia requires the organization to maintain a high level of oil production due to pressure coming from Washington to achieve a very low cost per barrel of oil. The US energy strategy targets Iranian and Russian revenue from oil exports, but it also aims to give the US a speedy economic boost. Trump often talks about the price of oil falling as his personal victory. The US imports about 10 million barrels of oil a day, which is why Trump wrongly believes that a decrease in the cost per barrel could favor a boost to the US economy. The economic reality shows a strong correlation between the price of oil and the financial growth of a country, with low prices of crude oil often synonymous of a slowing down in the economy.
It must be remembered that to keep oil prices high, OPEC countries are required to maintain a high rate of production, doubling the damage to themselves. Firstly, they take less income than expected and, secondly, they deplete their oil reserves to favor the strategy imposed by Saudi Arabia on OPEC to please the White House. It is clearly a strategy that for a country like Qatar (and perhaps Venezuela and Iran in the near future) makes little sense, given the diplomatic and commercial rupture with Riyadh stemming from tensions between the Gulf countries.
In contrast, the OPEC+ organization, which also includes other countries like the Russian Federation, Mexico and Kazakhstan, seems to now to determine oil and its cost per barrel. At the moment, OPEC and Russia have agreed to cut production by 1.2 million barrels per day, contradicting Trump's desire for high oil output.
With this last choice Qatar sends a clear signal to the region and to traditional allies, moving to the side of OPEC+ and bringing its interests closer in line with those of the Russian Federation and its all-encompassing oil and gas strategy, two sectors in which Qatar and Russia dominate market share.
In addition, Russia and Qatar's global strategy also brings together and includes partners like Turkey (a future energy hub connecting east and west as well as north and south) and Venezuela. In this sense, the meeting between Maduro and Erdogan seems to be a prelude to further reorganization of OPEC and its members.
LetThemEatRand , 9 hours ago linkThe Dreadnought , 8 hours ago link
It's crazy to think of all of the natural gas burned off by the world's oil producers. I think of those oil platforms that have a huge burning flame on top. This is the kind of **** that reminds us that the people who control the world care not for the people who live here. Can't make a buck from it? ******* burn it.Koba the Dread , 7 hours ago link
Right fuckin' AMs No , 9 hours ago link
Consider though that those oil producers are only in it for the money; it's not an avocation with them. I imagine if there was a way to salvage the natural gas, it would be done. Mo Muny would dictate it.serotonindumptruck , 8 hours ago link
This could be the beggining of a level 5 popcorn event. It started a year or two ago and when I saw it everybody laughed. Well look at it now. Saudi wants to defect. They have had nothing but problems with the House of Sodomy for quite some time now.
I wonder what Mossad and the CIA are planning.Brazen Heist II , 8 hours ago link
A False Flag operation to block the Strait of Hormuz?Ms No , 9 hours ago link
They are planning on removing Salman junior if he doesn't stop embarrassing their sorry assesjmarioneaux , 9 hours ago link
If this leads to war in the Persian Gulf Edgar Cayce called it. The empire will burn that place down before losing it. They may fail but something is going to go down.
Are the Sauds still full heartedly pushing the Zionist mission in Yemen?
"...submissive allies as Saudi Arabia"
Is that what they call it now?PeaceForWorld , 6 hours ago link
I feel something big is coming with Iran.TeraByte , 9 hours ago link
As an Iranian-American I have been waiting for something big to happen with Iran. I am really tired of waiting. I hope that Iran will grow some balls and fight the coalition. I know that there are 80 million lives in danger, including my mom going back to Iran for a short term. But this has been like a long torture and unending nightmare.
There is no multipolarity yet, but a bipolar hype of the world dominance run by US and its vassals. An awakening will be harsh, when these realize their emperor goes naked.
Dec 13, 2018 | www.zerohedge.com
Update 5: Cohen has been sentenced to 36 months in prison for his crimes, far below the guideline of 51 - 63 months laid out by New York prosecutors. The Judge noted that the guidelines aren't binding and had the ability to issue a lesser sentence.
Cohen has also been hit with forfeiture of $500,000, restitution of $1.4 million and a fine of $50,000. He will be allowed to voluntarily surrender on March 6 .
Update 4: Judge Pauley has responded following Cohen's statement, saying "Mr. Cohen's crimes implicate a far more insidious crime to our democratic institutions especially in view of his subsequent plea to making false statements to Congress," adding that Cohen's crimes warrant "specific deterrence."
Update 3: Cohen has spoken, telling the Judge: "Recently the president tweeted a statement calling me weak and it was correct but for a much different reason than he was implying. It was because time and time again i felt it was my duty to cover up his dirty deeds." Judge William Pauley, meanwhile, noted that Cohen pleaded guilty to a " veritable smorgasbord of fraudulent conduct ," which was motivated by "personal greed and ambition."
Update 2: Petrillo, Cohen's attorney, continues to reference Cohen's desire to cooperate further with prosecutors to answer future questions - however Manhattan prosecutors don't appear to care, according to Bloomberg banking reporter Shahien Nasiripour. In a memo last week to the court, they said that Cohen's promise to cooperate further is worthless - especially since there would be nothing requiring him to do so once he's already been sentenced.
Meanwhile, Jeannie Rhee - an attorney with Robert Mueller's office, told the court that while Cohen lied to the special counsel's team during his first interview in July, he has been truthful since.
Manhattan Assistant US Attorney Nicolas Roos, however, says that any reduction in sentence "should be modest."
Roos added that Cohen "has eroded faith in the electoral process and compromised the rule of law," and that he engaged in " a pattern of deception of brazenness and greed ."
Update: Cohen's attorney, Guy Petrillo, says Cohen thought that President Trump would shut down the Mueller probe, and has argued that his client's cooperation warrants a lenient sentence.
"Mr. Cohen's cooperation promotes respect for law and the courage of the individual to stand up to power and influence," said Petrillo.
"His decision was an importantly different decision from the usual decision to cooperate," added Petrillo. "He came forward to offer evidence against the most powerful person in our country. He did so not knowing what the result would be, not knowing how the politics would play out and not even knowing that the special counsel's office would survive."
"The special counsel's investigation is of the utmost national significance... Not seen since 40 plus years ago in the days of Watergate." -Guy Petrillo
Petrillo has asked the judge to "consider Cohen's "life of good works" in his decision, adding that Cohen's cooperation stands in "profound contrast" to others who havern't cooperated and who "have continued to double-deal while pretending to cooperate."
Michael Cohen, former longtime personal lawyer for President Trump, has shown up to a New York courthouse where he will be sentenced on Wednesday for a laundry list of crimes - some of which implicate Trump in possible wrongdoing, but most of which have nothing to do with the president. Judge William Pauley, meanwhile, noted that Cohen pleaded guilty to a " veritable smorgasbord of fraudulent conduct ," which was motivated by "personal greed and ambition."
Update 2: Petrillo, Cohen's attorney, continues to reference Cohen's desire to cooperate further with prosecutors to answer future questions - however Manhattan prosecutors don't appear to care, according to Bloomberg banking reporter Shahien Nasiripour. In a memo last week to the court, they said that Cohen's promise to cooperate further is worthless - especially since there would be nothing requiring him to do so once he's already been sentenced.
Meanwhile, Jeannie Rhee - an attorney with Robert Mueller's office, told the court that while Cohen lied to the special counsel's team during his first interview in July, he has been truthful since.
Manhattan Assistant US Attorney Nicolas Roos, however, says that any reduction in sentence "should be modest."
Roos added that Cohen "has eroded faith in the electoral process and compromised the rule of law," and that he engaged in " a pattern of deception of brazenness and greed ."
Update: Cohen's attorney, Guy Petrillo, says Cohen thought that President Trump would shut down the Mueller probe, and has argued that his client's cooperation warrants a lenient sentence.
"Mr. Cohen's cooperation promotes respect for law and the courage of the individual to stand up to power and influence," said Petrillo.
"His decision was an importantly different decision from the usual decision to cooperate," added Petrillo. "He came forward to offer evidence against the most powerful person in our country. He did so not knowing what the result would be, not knowing how the politics would play out and not even knowing that the special counsel's office would survive."
"The special counsel's investigation is of the utmost national significance... Not seen since 40 plus years ago in the days of Watergate." -Guy Petrillo
Petrillo has asked the judge to "consider Cohen's "life of good works" in his decision, adding that Cohen's cooperation stands in "profound contrast" to others who havern't cooperated and who "have continued to double-deal while pretending to cooperate."
***Michael Cohen, former longtime personal lawyer for President Trump, has shown up to a New York courthouse where he will be sentenced on Wednesday for a laundry list of crimes - some of which implicate Trump in possible wrongdoing, but most of which have nothing to do with the president.
Cohen, who went from claiming he would "take a bullet" for President Trump to stabbing his former boss in the back, faces sentencing on nine federal charges , including campaign finance violations based on a hush-money scheme to pay off two women who claimed to have had affairs with Trump, as well as making false statements to special counsel Robert Mueller.
Prosecutors alleged that Cohen paid off two women at the "direction" of "Individual-1," who is widely assumed to be Trump.
Prosecutors said the payments amounted to illegal campaign contribution s because they were made with the intent to prevent damaging information from surfacing during the 2016 presidential election, which Cohen pleaded guilty to in August.
Legal experts view the filing as an ominous sign for Trump , suggesting prosecutors have evidence beyond Cohen's public admissions implicating the president in the payoff scheme. While the Justice Department has said previously that a sitting president cannot be indicted, that would not stop prosecutors from bringing charges against Trump once he leaves office. - The Hill
New York prosecutors have recommended that Judge William Pauley impose "a substantial term of imprisonment" on Cohen - which may be around five years. Cohen's attorneys, meanwhile, have asked Pauley for a sentence which avoids prison time - citing his cooperation with the Mueller probe and other investigations which began prior to his guilty plea last summer. Mueller said that Cohen had "gone to significant lengths to assist the Special Counsel's investigation," having met with Mueller's team seven times where he reportedly provided information useful to the Russia investigation. The special counsel's office has recommended that any sentence Cohen receives for lying to Congress should run concurrently with the charges brought by the Manhattan federal prosecutors.
me title=Cohen, 52, pleaded guilty in August to tax evasion, lying to banks and violating campaign finance laws - charges filed by the US Attorney's Office for the Southern District of New York.
The campaign finance charges relate to his facilitation of two hush-money payments to porn star Stormy Daniels and Playboy model Karen McDougal shortly before the 2016 presidential election. Both women say they had sex with Trump in the prior decade. The White House has denied Trump had sex with either woman.
Prosecutors say the payments were made "in coordination with and at the direction of" Trump, who is called "Individual-1" in a sentencing recommendation filed last week.
Cohen's crimes were intended "to influence the election from the shadows," prosecutors wrote. - CNBC
In November Cohen also pleaded guilty to lying to Congress about the Trump Organization's ill-fated plans to develop a Trump Tower in Moscow - a project floated by Cohen and longtime FBI asset who had been in Trump's orbit for years, Felix Sater. Cohen claims he understated Trump's knowledge of the project. He also lied to Congress when he said that the Moscow project talks ended in early 2016, when in fact he and the Trump Organization had continued to pursue it as late as June 2016.
On Wednesday, Stormy Daniels' lawyer, Michael Avenatti - who is in attendance at Cohen's sentencing, said in a Wednesday tweet that Cohen "thought we would just go away and he/Trump would get away with it. He thought he was smart and tough. He was neither. Today will prove that in spades."
We wonder how much Avenatti will pick up of the $293,000 in legal fees Stormy Daniels was ordered to pay Trump?Tags Law Crime Politics
pedoland , 8 minutes ago linkjafo2me , 2 hours ago link
Did the State of New York REVOKE his license to practice law yet?
Is a felony conviction automatic revocation in NY?
It would be funny if he was still able to practice law in NY, legally as a convicted felon.
I assume criminal fraud is a felony in NY.
Trump's paying around $280,000 in " hush money " .. out of his own pocket is dwarfed into virtual insignificance by Obama's Presidential Campaign in 2008..,.
BEING FOUND "GUILTY" OF ILLEGAL USE OF 2 MILLION IN CAMPAIGN MONEY
barely reported by the media that saw THE OBAMA DOJ decide not to prosecute Obama and instead quietly dispose of this
"REAL CRIME" with a fine of 375 thousand dollars by the US FEDERAL ELECTION COMMISION.
Welcome to the two tier Justice System we all live under..
One for the Deeeep State Globalist Elite and .. the other...
Life In Prison or execution for the rest of us.
Dec 12, 2018 | www.amazon.com
Despite tthe fact that necoliberalism brings poor economic growth, inadequate availability of jobs and career opportunities, and the concentration of economic and social rewards in the hands of a privileged upper class resistance to it, espcially at universities, remain weak to non-existant.
The first sign of high levels of dissatisfaction with neoliberalism was the election of Trump (who, of course, betrayed all his elections promises, much like Obma before him). As a result, the legitimation of neoliberalism based on references to the efficient
and effective functioning of the market (ideological legitimation) is
exhausted while wealth redistribution practices (material legitimation) are
not practiced and, in fact, considered unacceptable.
Despite these problems, resistance to neoliberalism remains weak.
Strategics and actions of opposition have been shifted from the sphere of
labor to that of the market creating a situation in which the idea of the
superiority and desirability of the market is shared by dominant and
oppositional groups alike. Even emancipatory movements such as women,
race, ethnicity, and sexual orientation have espoused individualistic,
competition-centered, and meritocratic views typical of ncolibcral dis-
courses. Moreover, corporate forces have colonized spaces and discourses
that have traditionally been employed by oppositional groups and move-
ments. However, as systemic instability' continues and capital accumulation
needs to be achieved, change is necessary. Given the weakness of opposi-
tion, this change is led by corporate forces that will continue to further
their interests but will also attempt to mitigate socio-economic contra-
dictions. The unavailability of ideological mechanisms to legitimize
ncolibcral arrangements will motivate dominant social actors to make
marginal concessions (material legitimation) to subordinate groups. These
changes, however, will not alter the corporate co-optation and distortion of
discourses that historically defined left-leaning opposition. As contradic-
tions continue, however, their unsustainability will represent a real, albeit
difficult, possibility for anti-neoliberal aggregation and substantive change.
Connolly (2016) reported that a poll shows that some graduated student loan borrowers would willingly go to extremes to pay off outstanding student debt. Those extremes include experiencing physical pain and suffering and even a reduced lifespan. For instance, 35% of those polled would take one year off life expectancy and 6.5% would willingly cut off their pinky finger if it meant ridding themselves of the student loan debt they currently held.
Neoliberalism's presence in higher education is making matters worse for students and the student debt crisis, not better. In their book Structure and Agency in the Neoliberal University, Cannan and Shumar (2008) focus their attention on resisting, transforming, and dismantling the neoliberal paradigm in higher education. They ask how can market-based reform serve as the solution to the problem neoliberal practices and policies have engineered?
It is like an individual who loses his keys at night and who decides to look only beneath the street light. This may be convenient because there is light, but it might not be where the keys are located. This metaphorical example could relate to the student debt crisis. What got us to where we are (escalating tuition costs, declining state monies, and increasing neoliberal influence in higher education) cannot get us out of the SI.4 trillion problem. And yet this metaphor may, in fact, be more apropos than most of us on the right, left, or center are as yet seeing because we mistakenly assume the market we have is the only or best one possible.
As Lucille (this volume) strives to expose, the systemic cause of our problem is "hidden in plain sight," right there in the street light for all who look carefully enough to see. We only have to realize that the emperor has no clothes and reveal this reality. If and when a critical mass of us do, systemic change in our monetary exchange relations can and, we hope, will become our funnel toward a sustainable and socially, economically, and ecologically just future where public education and democracy can finally become realities rather than merely ideals.
Indeed, the approach our money-dependent and money-driven legislators and policymakers have employed has been neoliberal in form and function, and it will continue to be so unless we help them to see the light or get out of the way. This book focuses on the $1.4+ trillion student debt crisis in the United States. It doesn't share hard and fast solutions per se. Rather, it addresses real questions (and their real consequences). Are collegians overestimating the economic value of going to college?
What are we, they, and our so-called elected leaders failing or refusing to sec and why? This critically minded, soul-searching volume shares territory with, yet pushes beyond, that of Akers and Chingos (2016), Baum (2016), Goldrick-Rab (2016), Graebcr (2011), and Johannscn (2016) in ways that we trust those critically minded authors -- and others concerned with our mess of debts, public and private, and unfulfilled human potential -- will find enlightening and even ground-breaking.
... ... ...
In the meantime, college costs have significantly increased over the past fifty years. The average cost of tuition and fees (excluding room and board) for public four-year institutions for a full year has increased from 52,387 (in 2015 dollars) for the 1975-1976 academic year, to 59,410 for 2015-2016. The tuition for public two-year colleges averaged $1,079 in 1975-1976 (in 2015 dollars) and increased to $3,435 for 2015-2016. At private non-profit four-year institutions, the average 1975-1976 cost of tuition and fees (excluding room and board) was $10,088 (in 2015 dollars), which increased to $32,405 for 2015-2016 (College Board, 2015b).
The purchasing power of Pell Grants has decreased. In fact, the maximum Pell Grants coverage of public four-year tuition and fees decreased from 83% in 1995-1996 to 61% in 2015-2016. The maximum Pell Grants coverage of private non-profit four-year tuition and fees decreased from 19% in 1995-1996 to 18% in 2015-2016 (College Board, 2015a).
... ... ....
... In 2013-2014, 61% of bachelor's degree recipients from public and private non-profit four-year institutions graduated with an average debt of $16,300 per graduate. In 2011-2012, 50% of bachelor's degree recipients from for-profit institutions borrowed more than $40,000 and about 28% of associate degree recipients from for-profit institutions borrowed more than $30,000 (College Board, 2015a).
Rising student debt has become a key issue of higher education finance among many policymakers and researchers. Recently, the government has implemented a series of measures to address student debt. In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (2005) was passed, which barred the discharge of all student loans through bankruptcy for most borrowers (Collinge, 2009). This was the final nail in the bankruptcy coffin, which had begun in 1976 with a five-year ban on student loan debt (SLD) bankruptcy and was extended to seven years in 1990. Then in 1998, it became a permanent ban for all who could not clear a relatively high bar of undue hardship (Best 6c Best, 2014).
By 2006, Sallie Mae had become the nation's largest private student loan lender, reporting loan holdings of $123 billion. Its fee income collected from defaulted loans grew from $280 million in 2000 to $920 million in 2005 (Collinge, 2009). In 2007, in response to growing student default rates, the College Cost Reduction Act was passed to provide loan forgiveness for student loan borrowers who work full-time in a public service job. The Federal Direct Loan will be forgiven after 120 payments were made. This Act also provided other benefits for students to pay for their postsecondary education, such as lowering interest rates of GSL, increasing the maximum amount of Pell Grant (though, as noted above, not sufficiently to meet rising tuition rates), as well as reducing guarantor collection fees (Collinge, 2009).
In 2008, the Higher Education Opportunity Act (2008) was passed to increase transparency and accountability. This Act required institutions that are participating in federal financial aid programs to post a college price calculator on their websites in order to provide better college cost information for students and families (U.S. Department of Education |U.S. DoE|, 2015a). Due to the recession of 2008, the American Opportunity Tax Credit of 2009 (AOTC) was passed to expand the Hope Tax Credit program, in which the amount of tax credit increased to 100% for the first $2,000 of qualified educational expenses and was reduced to 25% of the second $2,000 in college expenses. The total credit cap increased from $1,500 to $2,500 per student. As a result, the federal spending on education tax benefits had a large increase since then (Crandall-Hollick, 2014), benefits that, again, are reaped only by those who file income taxes.
Dec 11, 2018 | www.ianwelsh.net
- Lee Grove permalink April 25, 2016
Add one -- a BIG ONE–to your list: The utter destruction of the K-12 classroom learning environment: students spend the vast majority of their time trying to surreptitiously–or blatantly–use their cellphones in class; and if not actually using them, they are preoccupied with the thought of using them. It has been going on for almost a decade now, and we will start to see the results in that we will have a population where nobody can do anything that requires focus; it will be as if the entire upcoming population of college students has ADHD.
Welcome to the high-tech third world.
- V. Arnold permalink April 25, 2016
April 25, 2016
Well Lee, you have a clue; but fail the really big picture regarding the abject failure of western education (which is a misnomer).
John Taylor Gatto's book, The Underground History of American Education, lays out the sad fact of "western education"; which has nothing to do with education; but rather, an indoctrination for inclusion in society as a passive participant.
Docility is paramount in members of U.S. society so as to maintain the status quo; working according to plan, near as I can tellLinux Administrator at Adept Solutions clinton, NJ
Good work experience in Puppet with L2/L3 Linux administration skills Ability to manage UNIX/Linux configuration management using Puppet Ability to understand the existing Puppet environment, modules, manifests, classes and troubleshoot them Ability to classify and manage different UNIX/Linux variants in Puppet Work experience with GIT Good work experience in Redhat Satellite environment Work experience in blade / enclosure hardware systems Volume manager Administration (VERITAS Volume Manager/Linux LVM) File system Administration (VERTIAS File system/ VERITAS Cluster FS/ext3/ext4) Troubleshooting the OS performance related issues Providing the production support, maintenance, administration & Implementation Upgrading the System/HBA ´s firmware Nice To Have Oracle Virtualization Manager (LDOM)/L2 Linux Administration Skills
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Knowledge / work experience in IBM PowerHA / HMC / LPAR and VIOs
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Dec 07, 2018 | www.nytimes.com
We are, once again, experiencing one of the greatest housing booms in United States history.
How long this will last and where it is heading next are impossible to know now.
But it is time to take notice: My data shows that this is the United States' third biggest housing boom in the modern era.
Since February 2012, when the price declines associated with the last financial crisis ended, prices for existing homes in the United States have been rising steadily and enormously. According to the S&P/CoreLogic/Case-Shiller National Home Price Index (which I helped to create) as of September, the prices were 53 percent higher than they were at the bottom of the market in 2012.
That means, on average, a house that sold for, say, $200,000 in 2012 would bring over $300,000 in September.
Even after factoring in Consumer Price Index inflation, real existing home prices were up almost 40 percent during that period. That is a substantial increase in less than seven years.
In fact, based on my data , it amounts to the third strongest national boom in real terms since the Consumer Price Index began in 1913, behind only the explosive run-up in prices that led to the great financial crisis of a decade ago, and one connected with World War II and the great postwar Baby Boom.
The No. 1 boom occurred from February 1997 to October 2006, when real prices of existing United States homes rose 74 percent. This was a period of intense speculative enthusiasm -- for houses and for financial instruments based on mortgages as investments -- and it was also a time of great regulatory complacency. The term "flipping houses" became popular then. People exploited the boom by buying homes and selling them only months later at a huge profit.
That boom ended disastrously. Soaring valuations collapsed with a 35 percent drop in real prices for existing homes, ushering in the financial crisis that enveloped the world in 2008 and 2009.
The second greatest boom , from 1942 to 1947, had more benign consequences. Over this five-year interval, real prices of existing homes rose 60 percent.
Today, signs of weakness in the housing market are being taken by some as a signal that the prices of single-family homes may fall soon, as they did sharply after 2006. The leading indicators, which include building permits and sales of both existing and new homes, have all been declining in recent months.
But with few examples of extreme booms, we cannot be sure what such indicators mean for the current market.
Low interest rates - imposed by the Federal Reserve and other central banks in reaction to the financial crisis - are the most popular culprit in the current boom. There is some apparent merit to this view, since these three biggest nationwide housing booms all included very low interest rates.
But the market reaction to interest rates is hardly immediate or predictable. The housing market does not react as directly as you might expect to interest rate movements. Over the nearly seven years of the current boom, from February 2012 to the present, all major domestic interest rates have increased, not decreased. So, while interest rates have been low, they have moved the wrong way, yet the boom has continued.
Another explanation is simple economic growth. But, as a matter of history, prices of existing homes - as opposed to the supply of newly built homes - have generally not responded to economic growth. There was only a 20 percent increase in real prices of existing homes in the 50 years from 1950 to 2000 despite a sixfold increase in real G.D.P.
The simplest narrative being given for the current boom is just that the 2008-2009 financial crisis and the so-called Great Recession are over and home prices are returning to normal.
But that explanation does not cut it either. In September they were 11 percent higher than at the 2006 peak in nominal terms, and almost as high in real terms. This is not a return to normal, but a market that appears to be rising to a record.
It is difficult to assess the contribution of President Trump to the current boom.
It is certainly less obvious than the role of President George W. Bush in the 1997-2006 boom. Mr. Bush extolled the benefits of "the ownership society" and in 2003 he signed the American Dream Downpayment Act, which subsidized home purchases. In his 2004 re-election bid he boldly asserted: "We want more people owning their own home." This seems to have contributed to an atmosphere of high expectations for home price increases.
The Trump administration's attitude toward housing is less clear. President Trump's slogan "Make America Great Again" has overtones of the "American dream." But provisions of his Tax Reform and Jobs Act of 2017 were unfriendly to homeowners.
Even without major further interest rate increases, there would seem to be a limit on how much the prices of existing homes can increase. After all, people must struggle to cover a range of living expenses, and builders are supplying fresh new offerings to compete with the existing houses on the market.
Perhaps the home price increases are now a self-fulfilling prophesy. As John Maynard Keynes argued in his 1936 "General Theory of Employment, Interest and Money," people seem to have a "simple faith in the conventional basis of valuation."
If the conventional basis is now that home prices are going up 5 percent a year, then sellers, who would otherwise have no idea what to ask for their houses, will just put a price based on this convention. And likewise buyers will not feel they are paying too much if they accept the convention. In the United States, we may believe that the process is all part of the "American dream."
Nov 14, 2017 | www.theguardian.comAs even its harshest critics concede, neoliberalism is hard to pin down. In broad terms, it denotes a preference for markets over government, economic incentives over cultural norms, and private entrepreneurship over collective action. It has been used to describe a wide range of phenomena – from Augusto Pinochet to Margaret Thatcher and Ronald Reagan, from the Clinton Democrats and the UK's New Labour to the economic opening in China and the reform of the welfare state in Sweden.
The term is used as a catchall for anything that smacks of deregulation, liberalisation, privatisation or fiscal austerity. Today it is routinely reviled as a shorthand for the ideas and practices that have produced growing economic insecurity and inequality, led to the loss of our political values and ideals, and even precipitated our current populist backlash .
We live in the age of neoliberalism, apparently. But who are neoliberalism's adherents and disseminators – the neoliberals themselves? Oddly, you have to go back a long time to find anyone explicitly embracing neoliberalism. In 1982, Charles Peters, the longtime editor of the political magazine Washington Monthly, published an essay titled A Neo-Liberal's Manifesto . It makes for interesting reading 35 years later, since the neoliberalism it describes bears little resemblance to today's target of derision. The politicians Peters names as exemplifying the movement are not the likes of Thatcher and Reagan, but rather liberals – in the US sense of the word – who have become disillusioned with unions and big government and dropped their prejudices against markets and the military.
The use of the term "neoliberal" exploded in the 1990s, when it became closely associated with two developments, neither of which Peters's article had mentioned. One of these was financial deregulation, which would culminate in the 2008 financial crash and in the still-lingering euro debacle . The second was economic globalisation, which accelerated thanks to free flows of finance and to a new, more ambitious type of trade agreement. Financialisation and globalisation have become the most overt manifestations of neoliberalism in today's world.
That neoliberalism is a slippery, shifting concept, with no explicit lobby of defenders, does not mean that it is irrelevant or unreal. Who can deny that the world has experienced a decisive shift toward markets from the 1980s on? Or that centre-left politicians – Democrats in the US, socialists and social democrats in Europe – enthusiastically adopted some of the central creeds of Thatcherism and Reaganism, such as deregulation, privatisation, financial liberalisation and individual enterprise? Much of our contemporary policy discussion remains infused with principles supposedly grounded in the concept of homo economicus , the perfectly rational human being, found in many economic theories, who always pursues his own self-interest.
But the looseness of the term neoliberalism also means that criticism of it often misses the mark. There is nothing wrong with markets, private entrepreneurship or incentives – when deployed appropriately. Their creative use lies behind the most significant economic achievements of our time. As we heap scorn on neoliberalism, we risk throwing out some of neoliberalism's useful ideas.
The real trouble is that mainstream economics shades too easily into ideology, constraining the choices that we appear to have and providing cookie-cutter solutions. A proper understanding of the economics that lie behind neoliberalism would allow us to identify – and to reject – ideology when it masquerades as economic science. Most importantly, it would help us to develop the institutional imagination we badly need to redesign capitalism for the 21st century.
N eoliberalism is typically understood as being based on key tenets of mainstream economic science. To see those tenets without the ideology, consider this thought experiment. A well-known and highly regarded economist lands in a country he has never visited and knows nothing about. He is brought to a meeting with the country's leading policymakers. "Our country is in trouble," they tell him. "The economy is stagnant, investment is low, and there is no growth in sight." They turn to him expectantly: "Please tell us what we should do to make our economy grow."
The economist pleads ignorance and explains that he knows too little about the country to make any recommendations. He would need to study the history of the economy, to analyse the statistics, and to travel around the country before he could say anything.Facebook Twitter Pinterest Tony Blair and Bill Clinton: centre-left politicians who enthusiastically adopted some of the central creeds of Thatcherism and Reaganism. Photograph: Reuters
But his hosts are insistent. "We understand your reticence, and we wish you had the time for all that," they tell him. "But isn't economics a science, and aren't you one of its most distinguished practitioners? Even though you do not know much about our economy, surely there are some general theories and prescriptions you can share with us to guide our economic policies and reforms."
The economist is now in a bind. He does not want to emulate those economic gurus he has long criticised for peddling their favourite policy advice. But he feels challenged by the question. Are there universal truths in economics? Can he say anything valid or useful?
So he begins. The efficiency with which an economy's resources are allocated is a critical determinant of the economy's performance, he says. Efficiency, in turn, requires aligning the incentives of households and businesses with social costs and benefits. The incentives faced by entrepreneurs, investors and producers are particularly important when it comes to economic growth. Growth needs a system of property rights and contract enforcement that will ensure those who invest can retain the returns on their investments. And the economy must be open to ideas and innovations from the rest of the world.
But economies can be derailed by macroeconomic instability, he goes on. Governments must therefore pursue a sound monetary policy , which means restricting the growth of liquidity to the increase in nominal money demand at reasonable inflation. They must ensure fiscal sustainability, so that the increase in public debt does not outpace national income. And they must carry out prudential regulation of banks and other financial institutions to prevent the financial system from taking excessive risk.
Now he is warming to his task. Economics is not just about efficiency and growth, he adds. Economic principles also carry over to equity and social policy. Economics has little to say about how much redistribution a society should seek. But it does tell us that the tax base should be as broad as possible, and that social programmes should be designed in a way that does not encourage workers to drop out of the labour market.
By the time the economist stops, it appears as if he has laid out a fully fledged neoliberal agenda. A critic in the audience will have heard all the code words: efficiency, incentives, property rights, sound money, fiscal prudence. And yet the universal principles that the economist describes are in fact quite open-ended. They presume a capitalist economy – one in which investment decisions are made by private individuals and firms – but not much beyond that. They allow for – indeed, they require – a surprising variety of institutional arrangements.
So has the economist just delivered a neoliberal screed? We would be mistaken to think so, and our mistake would consist of associating each abstract term – incentives, property rights, sound money – with a particular institutional counterpart. And therein lies the central conceit, and the fatal flaw, of neoliberalism: the belief that first-order economic principles map on to a unique set of policies, approximated by a Thatcher/Reagan-style agenda.
Consider property rights. They matter insofar as they allocate returns on investments. An optimal system would distribute property rights to those who would make the best use of an asset, and afford protection against those most likely to expropriate the returns. Property rights are good when they protect innovators from free riders, but they are bad when they protect them from competition. Depending on the context, a legal regime that provides the appropriate incentives can look quite different from the standard US-style regime of private property rights.
This may seem like a semantic point with little practical import; but China's phenomenal economic success is largely due to its orthodoxy-defying institutional tinkering. China turned to markets, but did not copy western practices in property rights. Its reforms produced market-based incentives through a series of unusual institutional arrangements that were better adapted to the local context. Rather than move directly from state to private ownership, for example, which would have been stymied by the weakness of the prevailing legal structures, the country relied on mixed forms of ownership that provided more effective property rights for entrepreneurs in practice. Township and Village Enterprises (TVEs), which spearheaded Chinese economic growth during the 1980s, were collectives owned and controlled by local governments. Even though TVEs were publicly owned, entrepreneurs received the protection they needed against expropriation. Local governments had a direct stake in the profits of the firms, and hence did not want to kill the goose that lays the golden eggs.
China relied on a range of such innovations, each delivering the economist's higher-order economic principles in unfamiliar institutional arrangements. For instance, it shielded its large state sector from global competition, establishing special economic zones where foreign firms could operate with different rules than in the rest of the economy. In view of such departures from orthodox blueprints, describing China's economic reforms as neoliberal – as critics are inclined to do – distorts more than it reveals. If we are to call this neoliberalism, we must surely look more kindly on the ideas behind the most dramatic poverty reduction in history.
One might protest that China's institutional innovations were purely transitional. Perhaps it will have to converge on western-style institutions to sustain its economic progress. But this common line of thinking overlooks the diversity of capitalist arrangements that still prevails among advanced economies, despite the considerable homogenisation of our policy discourse.
What, after all, are western institutions? The size of the public sector in OECD countries varies, from a third of the economy in Korea to nearly 60% in Finland. In Iceland, 86% of workers are members of a trade union; the comparable number in Switzerland is just 16%. In the US, firms can fire workers almost at will; French labour laws have historically required employers to jump through many hoops first. Stock markets have grown to a total value of nearly one-and-a-half times GDP in the US; in Germany, they are only a third as large, equivalent to just 50% of GDP.Facebook Twitter Pinterest 'China turned to markets, but did not copy western practices ... ' Photograph: AFP/Getty
The idea that any one of these models of taxation, labour relations or financial organisation is inherently superior to the others is belied by the varying economic fortunes that each of these economies have experienced over recent decades. The US has gone through successive periods of angst in which its economic institutions were judged inferior to those in Germany, Japan, China, and now possibly Germany again. Certainly, comparable levels of wealth and productivity can be produced under very different models of capitalism. We might even go a step further: today's prevailing models probably come nowhere near exhausting the range of what might be possible, and desirable, in the future.
The visiting economist in our thought experiment knows all this, and recognises that the principles he has enunciated need to be filled in with institutional detail before they become operational. Property rights? Yes, but how? Sound money? Of course, but how? It would perhaps be easier to criticise his list of principles for being vacuous than to denounce it as a neoliberal screed.
Still, these principles are not entirely content-free. China, and indeed all countries that managed to develop rapidly, demonstrate the utility of those principles once they are properly adapted to local context. Conversely, too many economies have been driven to ruin courtesy of political leaders who chose to violate them. We need look no further than Latin American populists or eastern European communist regimes to appreciate the practical significance of sound money, fiscal sustainability and private incentives.
O f course, economics goes beyond a list of abstract, largely common-sense principles. Much of the work of economists consists of developing stylised models of how economies work and then confronting those models with evidence. Economists tend to think of what they do as progressively refining their understanding of the world: their models are supposed to get better and better as they are tested and revised over time. But progress in economics happens differently.
Economists study a social reality that is unlike the physical universe. It is completely manmade, highly malleable and operates according to different rules across time and space. Economics advances not by settling on the right model or theory to answer such questions, but by improving our understanding of the diversity of causal relationships. Neoliberalism and its customary remedies – always more markets, always less government – are in fact a perversion of mainstream economics. Good economists know that the correct answer to any question in economics is: it depends.
Does an increase in the minimum wage depress employment? Yes, if the labour market is really competitive and employers have no control over the wage they must pay to attract workers; but not necessarily otherwise. Does trade liberalisation increase economic growth? Yes, if it increases the profitability of industries where the bulk of investment and innovation takes place; but not otherwise. Does more government spending increase employment? Yes, if there is slack in the economy and wages do not rise; but not otherwise. Does monopoly harm innovation? Yes and no, depending on a whole host of market circumstances.Facebook Twitter Pinterest 'Today [neoliberalism] is routinely reviled as a shorthand for the ideas that have produced growing economic inequality and precipitated our current populist backlash' Trump signing an order to take the US out of the TPP trade pact. Photograph: AFP/Getty
In economics, new models rarely supplant older models. The basic competitive-markets model dating back to Adam Smith has been modified over time by the inclusion, in rough historical order, of monopoly, externalities, scale economies, incomplete and asymmetric information, irrational behaviour and many other real-world features. But the older models remain as useful as ever. Understanding how real markets operate necessitates using different lenses at different times.
Perhaps maps offer the best analogy. Just like economic models, maps are highly stylised representations of reality . They are useful precisely because they abstract from many real-world details that would get in the way. But abstraction also implies that we need a different map depending on the nature of our journey. If we are travelling by bike, we need a map of bike trails. If we are to go on foot, we need a map of footpaths. If a new subway is constructed, we will need a subway map – but we wouldn't throw out the older maps.
Economists tend to be very good at making maps, but not good enough at choosing the one most suited to the task at hand. When confronted with policy questions of the type our visiting economist faces, too many of them resort to "benchmark" models that favour the laissez-faire approach. Kneejerk solutions and hubris replace the richness and humility of the discussion in the seminar room. John Maynard Keynes once defined economics as the "science of thinking in terms of models, joined to the art of choosing models which are relevant". Economists typically have trouble with the "art" part.
This, too, can be illustrated with a parable. A journalist calls an economics professor for his view on whether free trade is a good idea. The professor responds enthusiastically in the affirmative. The journalist then goes undercover as a student in the professor's advanced graduate seminar on international trade. He poses the same question: is free trade good? This time the professor is stymied. "What do you mean by 'good'?" he responds. "And good for whom?" The professor then launches into an extensive exegesis that will ultimately culminate in a heavily hedged statement: "So if the long list of conditions I have just described are satisfied, and assuming we can tax the beneficiaries to compensate the losers, freer trade has the potential to increase everyone's wellbeing." If he is in an expansive mood, the professor might add that the effect of free trade on an economy's longterm growth rate is not clear either, and would depend on an altogether different set of requirements.
This professor is rather different from the one the journalist encountered previously. On the record, he exudes self-confidence, not reticence, about the appropriate policy. There is one and only one model, at least as far as the public conversation is concerned, and there is a single correct answer, regardless of context. Strangely, the professor deems the knowledge that he imparts to his advanced students to be inappropriate (or dangerous) for the general public. Why?
The roots of such behaviour lie deep in the culture of the economics profession. But one important motive is the zeal to display the profession's crown jewels – market efficiency, the invisible hand, comparative advantage – in untarnished form, and to shield them from attack by self-interested barbarians, namely the protectionists . Unfortunately, these economists typically ignore the barbarians on the other side of the issue – financiers and multinational corporations whose motives are no purer and who are all too ready to hijack these ideas for their own benefit.
As a result, economists' contributions to public debate are often biased in one direction, in favour of more trade, more finance and less government. That is why economists have developed a reputation as cheerleaders for neoliberalism, even if mainstream economics is very far from a paean to laissez-faire. The economists who let their enthusiasm for free markets run wild are in fact not being true to their own discipline.
H ow then should we think about globalisation in order to liberate it from the grip of neoliberal practices? We must begin by understanding the positive potential of global markets. Access to world markets in goods, technologies and capital has played an important role in virtually all of the economic miracles of our time. China is the most recent and powerful reminder of this historical truth, but it is not the only case. Before China, similar miracles were performed by South Korea, Taiwan, Japan and a few non-Asian countries such as Mauritius . All of these countries embraced globalisation rather than turn their backs on it, and they benefited handsomely.
Defenders of the existing economic order will quickly point to these examples when globalisation comes into question. What they will fail to say is that almost all of these countries joined the world economy by violating neoliberal strictures. South Korea and Taiwan, for instance, heavily subsidised their exporters, the former through the financial system and the latter through tax incentives. All of them eventually removed most of their import restrictions, long after economic growth had taken off.
But none, with the sole exception of Chile in the 1980s under Pinochet, followed the neoliberal recommendation of a rapid opening-up to imports. Chile's neoliberal experiment eventually produced the worst economic crisis in all of Latin America. While the details differ across countries, in all cases governments played an active role in restructuring the economy and buffering it against a volatile external environment. Industrial policies, restrictions on capital flows and currency controls – all prohibited in the neoliberal playbook – were rampant.Facebook Twitter Pinterest Protest against Nafta in Mexico City in 2008: since the reforms of the mid-90s, the country's economy has underperformed. Photograph: EPA
By contrast, countries that stuck closest to the neoliberal model of globalisation were sorely disappointed. Mexico provides a particularly sad example. Following a series of macroeconomic crises in the mid-1990s, Mexico embraced macroeconomic orthodoxy, extensively liberalised its economy, freed up the financial system, sharply reduced import restrictions and signed the North American Free Trade Agreement (Nafta). These policies did produce macroeconomic stability and a significant rise in foreign trade and internal investment. But where it counts – in overall productivity and economic growth – the experiment failed . Since undertaking the reforms, overall productivity in Mexico has stagnated, and the economy has underperformed even by the undemanding standards of Latin America.
These outcomes are not a surprise from the perspective of sound economics. They are yet another manifestation of the need for economic policies to be attuned to the failures to which markets are prone, and to be tailored to the specific circumstances of each country. No single blueprint fits all.
A s Peters's 1982 manifesto attests, the meaning of neoliberalism has changed considerably over time as the label has acquired harder-line connotations with respect to deregulation, financialisation and globalisation. But there is one thread that connects all versions of neoliberalism, and that is the emphasis on economic growth . Peters wrote in 1982 that the emphasis was warranted because growth is essential to all our social and political ends – community, democracy, prosperity. Entrepreneurship, private investment and removing obstacles that stand in the way (such as excessive regulation) were all instruments for achieving economic growth. If a similar neoliberal manifesto were penned today, it would no doubt make the same point.
ss="rich-link"> Globalisation: the rise and fall of an idea that swept the world Read more
Critics often point out that this emphasis on economics debases and sacrifices other important values such as equality, social inclusion, democratic deliberation and justice. Those political and social objectives obviously matter enormously, and in some contexts they matter the most. They cannot always, or even often, be achieved by means of technocratic economic policies; politics must play a central role.
Still, neoliberals are not wrong when they argue that our most cherished ideals are more likely to be attained when our economy is vibrant, strong and growing. Where they are wrong is in believing that there is a unique and universal recipe for improving economic performance, to which they have access. The fatal flaw of neoliberalism is that it does not even get the economics right. It must be rejected on its own terms for the simple reason that it is bad economics.
A version of this article first appeared in Boston Review
Main illustration by Eleanor Shakespeare
Feb 27, 2013 | www.alternet.orgThe record of deceit and deception that has surfaced in just the past two months points to yes. Print 147 COMMENTS Photo Credit: Songquan Deng / Shutterstock.com
Are too-big-to-fail banks organized criminal conspiracies? And if so, shouldn't we seize their assets, just like we do to drug cartels?
Let's examine their sorry record of deceit and deception that has surfaced in just the past two months:
You want to get really, really pissed off? Then read " Major Banks Aid in Payday Loans Banned by States " by Jessica Silver-Greenberg in the New York Times (2/23/13). In sickening detail, she describes how the largest banks in the United States are facilitating modern loansharking by working with Internet payday loan companies to escape anti-loansharking state laws. These payday firms extract enormous interest rates that often run over 500 percent a year. (Fifteen states prohibit payday loans entirely, and all states have usury limits ranging from 8 to 24 percent. See the list .)
The big banks, however, don't make the loans. They hide behind the scenes to facilitate the transactions through automatic withdrawals from the victim's bank account to the loansharking payday companies. Without those services from the big banks, these Internet loansharks could not operate.
Enabling the payday loansharks to evade the law is bad enough. But even more deplorable is why the big banks are involved in the first place.
For the banks, it can be a lucrative partnership. At first blush, processing automatic withdrawals hardly seems like a source of profit. But many customers are already on shaky financial footing. The withdrawals often set off a cascade of fees from problems like overdrafts. Roughly 27 percent of payday loan borrowers say that the loans caused them to overdraw their accounts, according to a report released this month by the Pew Charitable Trusts. That fee income is coveted, given that financial regulations limiting fees on debit and credit cards have cost banks billions of dollars.
Take a deep breath and consider what this means. Banks like JPMorgan Chase provide the banking services that allow Internet payday loansharks to exist in the first place, with the sole purpose of breaking the state laws against usury.
Then Chase vultures the victims, who are often low-wage earners struggling to make ends meet, by extracting late fees from the victims' accounts. So impoverished single moms, for example, who needed to borrow money to make the rent, get worked over twice: First they get a loan at an interest rate that would make Tony Soprano blush. Then they get nailed with overdraft fees by their loansharking bank.
For Subrina Baptiste, 33, an educational assistant in Brooklyn, the overdraft fees levied by Chase cannibalized her child support income. She said she applied for a $400 loan from Loanshoponline.com and a $700 loan from Advancemetoday.com in 2011. The loans, with annual interest rates of 730 percent and 584 percent respectively, skirt New York law.
Ms. Baptiste said she asked Chase to revoke the automatic withdrawals in October 2011, but was told that she had to ask the lenders instead. In one month, her bank records show, the lenders tried to take money from her account at least six times. Chase charged her $812 in fees and deducted over $600 from her child-support payments to cover them.
Let's be clear: JPMorgan Chase, the big bank that supposedly is run oh-so-well by Obama's favorite banker, Jamie Dimon, is aiding, abetting and profiting from screwing loanshark victims.
What possible justification could anyone at Chase have for being involved in this slimy business? The answer is simple: profit. Dimon and company can't help themselves. They see a dollar in someone else's pocket, even a poor struggling single mom, and they figure out how to put it in their own. Of course, everyone at the top will play dumb, order an investigation and then if necessary, dump some lower-level schlep. More than likely, various government agencies will ask the bank to pay a fine, which will come from the corporate kitty, not the pockets of bank executives. And the banks will promise -- cross their hearts -- never again to commit that precise scam again.
(Update: After the publication of Jessica Silver-Greenberg's devastating article, Jamie Dimon "vowed on Tuesday to change how the bank deals with Internet-based payday lenders that automatically withdraw payments from borrowers' checking accounts," according to the New York Times . Dimon called the practices "terrible." In a statement, the bank said, it was "taking a thorough look at all of our policies related to these issues and plan to make meaningful changes.")
Money Laundering for the Mexican Drug Cartels and Rogue Nations
HSBC, the giant British-based bank with a large American subsidiary, agreed on Dec. 11, 2012 to pay $1.9 billion in fines for laundering $881 million for Mexico's Sinaloa cartel and Colombia's Norte del Valle cartel. The operation was so blatant that "Mexican traffickers used boxes specifically designed to the dimensions of an HSBC Mexico teller's window to deposit cash on a daily basis," reports Reuters . They also facilitated "hundreds of millions more in transactions with sanctioned countries," according to the Justice Department .
Our banks got nailed as well. "In the United States, JPMorgan Chase & Co, Wachovia Corp and Citigroup Inc have been cited for anti-money laundering lapses or sanctions violations," continues the Reuters report. My, my, JPMorgan Chase, the biggest bank in the U.S. sure does get around.
And the penalty? A fine (paid by the HSBC shareholders, of course, that amounts to 5.5 weeks of the bank's earnings) and we promise – honest -- never to do it again.
Too Big to Indict?
Wait, it gets worse. Why weren't criminal charges filed against the bank itself? After all, the bank overtly violated money laundering laws. This was no clerical error. The answer is simple: " Too big to Indict," screams the NYT editorial headline. You see federal authorities are worried that if they indict, the bank would fail, which in turn would lead to tens of thousands of lost jobs, just like what happened to Arthur Anderson after its Enron caper, or like the financial hurricane that followed the failure of Lehman Brothers. So if you're a small fish running $10,000 in drug money, you serve time. But if you're a big fish moving nearing a billion dollars, you can laugh all the way to your too-big-to-jail bank.
Fleecing Distressed Homeowners
The big banks, in collusion with hedge funds and the rating agencies, puffed up the housing bubble and then burst it. Nine million workers, due to no fault of their own, lost their jobs in a matter of months. Entire neighborhoods saw their home values crash. Tens of millions faced foreclosure.
The big banks, which were bailed out and survived the crash, sought to foreclose on as many homes as possible, as fast as possible. Hey, that's where the money was. In doing so they resorted to many unsavory practices including illegal robo-signing of foreclosure documents. When nailed by the government, the big banks agreed to provide billions in aid for distressed homeowners. Were they finally forced to do the right thing? Not a chance. (See " Homeowners still face foreclosure despite billion in aid" NYT 2/22 .)
The big banks, despite what they say in their press statements, found a convenient loophole in the government settlement. The banks began forgiving second mortgages, and then foreclosing on the first mortgage. That's a cute maneuver because in a foreclosure, the bank rarely can collect on the second mortgage anyway. So they're giving away something of no value to distressed sellers and getting government credit for it. Just another day at the office for our favorite banksters.
The Indictments Go On...
I could write a book about all the ways in which banks and their hedge fund cousins have turned cheating into a way of life. (In fact, I just did: "How to Earn a Million Dollars an Hour: Why Hedge Funds Get Away With Siphoning off America's Wealth . Here's the AlterNet interview . )
JPMorgan Chase, Citigroup and Goldman Sachs have been fined over a billion dollars for creating and selling mortgage-related securities that were designed to fail so their hedge fund buddies could make billions. And then we've got the recent LIBOR scandal where the biggest banks colluded to manipulate interest rates for fun and profit.
It's not about good people or bad people running these banks and hedge funds. It's the very nature of these institutions. That's what they do. They make big money by doing what the rest of us would call cheating. As the record clearly shows, they cheat the second they get the chance.
What kind of institution would loanshark, money launder, fix rates, game mortgage relief programs, and produce products designed to fail? Answer: An institution that should not exist.
Nationalize Now and Create State Banks
There are about 20 too-big-to fail banks which have been designated "systematically significant." These should be immediately nationalized. Shareholder value should be wiped out because these banks are repeatedly violating the law, including aiding and abetting criminal enterprises. All employees should be placed on the federal civil service scale, where the top salary is approximately $130,000.
Can the government run banks? Yes, if we break up the big banks and turn them over to state governments so that each state would have at least one public bank. (North Dakota has a strong working model.) The larger states would have several public state banks. But never again would we allow banks to grow so large as to threaten our financial system and violate the public trust. Let FDIC regulate the state banks. They're actually good at it.
(We'd also have to do something about the shadow banking industry -- the large hedge funds and private equity firms. Eliminating their carried-interest tax loophole and slapping on a strong financial transaction tax would go a long way toward reining them in.)
Won't the most talented bankers leave the industry?
Hurray! It can't happen soon enough. It's time for the best and the brightest to rejoin the human race and help produce value for their fellow citizens. Let them become doctors, research scientists, teachers or even wealthy entrepreneurs who produce tangible goods and services that we want and need. What we don't need are more banksters.
Isn't This Socialism?
We already have socialism for rich financiers. They get to keep all of the upside of their shady machinations and we get to bail them out when they fail. This billionaire bailout society is now so entrenched that our nascent economic recovery of the last two years has been entirely captured by the top 1 percent. Meanwhile the rest of have received nothing. Nada. (See "Why Is the Entire Recovery Going to the Top One Percent? ")
I know, I know, people say, "Next time, just don't bail them out!" Meanwhile, they get to rip us off, day in and day out, until the next crash? No thanks. Put them out of business now. If you have a better idea, let's hear it.
Guest • 6 years ago ,mrjohnspeaks • 6 years ago ,
So what are we going to do about this? I fully agree with the assessment of this article and even the solution. State banks would make very positive contributions to replacing these criminal enterprises. But, you have to understand that the Bank of North Dakota was instituted in a time where the populist farmers were in a battle with the same criminal Banksters of the 1800/early 1900s. Thankfully, they succeeded in establishing their bank and it has shown us how well it works, even in a Red state like ND. So, why is it that the dumbfuck Dems don't overwhelmingly endorse them? Two years ago, I publicly endorsed (as a citizen) state banks as a solution to the financial problems for my state (Idaho), citing the BND as a model to follow. Who do you think gave me the most shit about it? It wasn't the Idaho GOP, it was a Dem state senator who downplayed the state bank idea and pinned the success that ND had on its shale oil production and proclaimed that Idaho needs to exploit its own natural resources more. Well, they are. We are now going to start fracking for nat gas in Payette County. Dems and GOP alike here are endorsing the fracking of our land. The sad fact is that there is not very much nat gas here to get excited about. We have nowhere near what ND has in plays.
And, the Dems here completely miss the point of what a state bank can do for youlifeamongtheruins • 6 years ago ,
Based on the behavior they have displayed since the '80's I would say that there is no doubt about it.Dale Hiway Settle • 6 years ago ,
Try the last three centuries. They have absolute power as they control every nation's money supply and could if they wished crash the economy next Tuesday. They can drag out a recession for years and have the ability to determine if you have job or not. As the axiom about absolute power goes so goes the banking/financial business. Robbers and pond scum who just happen to know how the system works but have no idea of what life is about.
"Globalism" is their mantra. Globalism is code for the Darwinian truth the elites pray to; which is their superiority giving them the right to acquire ever increasing wealth always at any cost to other life or life support system. This IS their sum total understanding of the meaning of existence. They laugh at our collective utter blind stupidity. If you haven't viewed "Money as Debt" on youtube better have a boo. Then have a look at "The Money Masters" to see how the elites managed their take over of America and are now going for the world.
"It is well enough that the people of the nation do not understand our banking and monetary system, for if they did I believe we would have a revolution before tomorrow morning."
Henry FordDIMOJABE Dale Hiway Settle • 6 years ago ,
It is mandated fleecing by the likes of Bank of America in the state of Maryland- beginning January of this year, all child support is handled by BoA via an "Epic" atm card... just one of the many ways they will skim from the people collecting support for their kids is the 1 time per week atm rule for withdrawing cash- after that- $5 per transaction.
This is coordinated robbery with state legislature and the big banks... and it is abhorrant.timebr • 6 years ago ,
You want more examples - read Zero Day Threat by Ocheedo & Swartz (2009). That book peels back the curtain on the entire bank card vs credit data corporation vs congressional enablers. And it's easy to read as it tracks a bunch of Canadian meth heads in their successful efforts to steal our identities and then take our money and put it into fake bank accounts.teddyfromcd • 6 years ago ,
A reminder that the WASP society has it's roots in Darwin's theory of the survival of the fittest which has been taken to new heights lately to mean one is considered savvy if they are able to rob the meek and humble honest guy, the honest Abe's are just too week minded, so the pain is internalized turned into self-blame "i guess i was too dumb to fall for it". I suggest the old saying to put your hand into the tiger's mouth and take back what's yours. People are too damn dismissive and artificially programmed to confuse nationalism with wall street thievery which they associate to the government and dare not criticize their USA government, that would be unpatriotic and rebel rousing. I say hang the bastards all the way from Houston Texas to Los Angeles California on every power pole from which they have stollen billion's of people's money by faking those "rolling blackouts". Authoritarianism begets authoritarianism.Dev • 6 years ago ,
YES .Guest • 6 years ago ,
Not only are the banks a criminally organized mafia, there are more. For instance does anybody here know that there are two mafia organizations in Italy? Let me explain to the novices here especially the knowledge challenged tea bagers cons repubics. One mafia is in souther Italy in sicily which everyone knows including the dumbest tea bagers cons. The other one is in northern Italy near Roma and is called the vatican where everything which goes on in southern Italy mafia also goes on here from money laundering, power abuse from the top, human rights violation like converting all and sundry in foreign lands especially the vulnerables and so on and on.Jimbo • 6 years ago ,
Yes they are criminals.....they just have laws that saya its ok to use people and steal from them unlike your average street criminals.
The two enemies of the people are criminals and government, so let us tie the second down with the chains of the Constitution so the second will not become the legalized version of the first.
I believe that banking institutions are more dangerous to our liberties than standing armies.
When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes Money has no motherland; financiers are without patriotism and without decency; their sole object is gain." – Napoleon Bonaparte, Emperor of France, 1815zonmoy Jimbo • 6 years ago ,
Are these banks operating as criminals? Not really when you understand that they own lock, stock and barrel those who make the laws. So if some pesky law was out there that prevented these capitalists from sucking every ounce of our blood they will pay a meager fine, for appearances, and then bring the politicians and lawyers into their offices and tell them to change the law. The government will obey as they know who the owners are.
Now let's talk about justice. When we get to that we see the whole system is so corrupt that there is no reform possible- if you could fix it you wouldn't want to anyway.
Look, nowadays there is very little conspiratorial in any of this. They are doing it so blatantly out in the open and in our faces it's as if they are challenging the people to stand up and fight back. So far not much resistance on the streets of the Homeland.
I think it's also futile to attempt regulations or ask for any legal oversight. This is like the proverbial fox guarding the hen house. The police will not police themselves. It's up to us.zonmoy Jimbo • 6 years ago ,
Cybershaman • 6 years ago ,
owning the lawmakers doesn't make them not criminals, just makes them criminals that are above the law.Leland Somers • 6 years ago ,
Welcome to the world where businesses can 'regulate themselves'. I've said for decades that the business community is only as socially responsible as they are legally required to be. The white collar criminal class has, like scum, risen to the top. The first clue was the savings and loans collapse during King George the firsts rule. The creation of these entites came about from the Reaganistas anti-regulation frenzy within the banking industry. They milked the system until it collapsed but very few paid any price. Most actually made out like the bandits they were from THAT taxpayer bailout. So the pattern was set. Even the Democratic party fell into lockstep because so much money could be legally stolen by these machinations. Of course, in order to hide the fallout they had to change how inflation and unemployment was calculated.
This was all as predictable as the sunrise.Moszep • 6 years ago ,
This is not a revelation - that big banks are little more than organized crime whose bosses dress in better suits, live at better addresses and have more money than most people in organized crime ever dreamed of because these criminals are protected by law and by the fact that even when the break what few laws there are that seriously affect them, they are simply not prosecuted. After all who is going to launder the trillion or so dollars in drug money every year for handsome profits - as much as 20% sometimes. Who is going to facilitate the transfer of laundered and other money in the international sale of hundreds of billions of dollars in weapons to dictators, warlords and various other sleazebags around the world? The banks have an absolutely necessary role to play in the Western World where Corruption is the norm in all businesses and banking operations that are bigger than one person. Private banks need to be abolished and private bankers need to be in prison for life.kyushuphil Moszep • 6 years ago ,
The current banking and economic system that is in place operates outside normal perception. Look at how Barclays was manipulating interest rates to favour their investments and to charge others more. Geee I wonder if the other banks and investment houses did the same? Toxic derivatives being sold as great investments knowing that they are going to fail. Goldman Sachs complicit in hiding Greek debt for decades. Hyper trading where algorithms and nano second trading drive market values. These elite hyper traders never seem to lose money.
The system is broken and those few benefiting from it do not want it to change.
We need to re-envision our world. I want a system where legislation benefits citizens, not corporations. I want legislation that ensures the best possible results for the most people. I am not opposed to capitalist style economic system that serves a citizenry needs. I am opposed to an economic system that has us serving it.
It seems it is only going to get worse. We have people trying to privatize education. Their goal is not better education but a profit. The same people want a larger privatized penal system. Not to protect society and rehabilitate, but to generate profit. We have this system in place in the health care industry. It does not get us better health care, it gets u more expensive health care.
We seriously need to rethink how our economy functions, our society, etc....
P.S. I am not holding my breathGuest • 6 years ago ,
Yes, Mo -- privatizing ed's about profit. But also about the new corporate religion.
Privatized schools play much more into the hands of admin. Teaching itself gets more niched into the specialized departments whereby the specialists model the habits and reduced language of never looking into anything in anyone else's cubicles.
So few and so much rarer are the tenured posts in all these turfs that careerists will readily shear themselves of all ethics in order to conform to the safe and orthodox. So will the many tens of thousands of Ph.D. contingent labor, who increasingly wither in academe's vast corporate gulag.
Yes, you're so correct -- it's money that drives these massively amoral and immoral of high finance. But idolatry's more than money. It's also the steroided vulgarized corporate religion. And it's rotting all ed, so the weakest rise to the top, and now all K-12, too, becomes enablers of the standardized numbers rackets.Larry A Singleton • 6 years ago ,
I would gladly award the DEATH penalty to the crooks who run Bank of America and Wells Fargo, two criminal organizations with whom I have had dealings.Guest • 6 years ago ,
Here's a reminder:
Bank of America: Too Crooked to Fail Rolling Stone Magazine / by Matt Taibbi
The bank has defrauded everyone from investors and insurers to homeowners and the unemployed. So why does the government keep bailing it out?
"It's Time to Break Up AT&T, Verizon, Comcast, Time Warner and the Rest of the Telecoms." AlterNet / By David Rosen and Bruce Kushnick
Today's telecoms provide overpriced and inferior service, and are systematically overcharging the hapless American consumer.
"How the Phone Companies Are Screwing America: The $320 Billion Broadband Rip-Off" AlterNet / By David Rosen and Bruce Kushnick
Americans are stuck with an inferior and overpriced communications system, compared with the rest of the world, and we're being ripped off in the process.kfreed Guest • 6 years ago ,
Great article. Spot on. Democrats used to be wary of the bankers, knowing that they needed to be watched and controlled. Regulated banking is something necessary for an economy to run, with the emphasis on regulated. But, the banks have bought the regulators, the "people's party," the democrats are sleeping with the bankers, and we are all paying the price.
Time to separate investment banking from commercial banking.
Time to enforce usury laws, including "fees" as part of the interest rate calculation
and, way past time to nationalize or simply yank the charters from the offending banks.
Clear, simple; and exactly what folks in Washington cannot understand.tomherzog sisterlauren • 6 years ago ,
The democrats? Who was it presided over this between 2000 and 2008, allowing it and creating laws to ensure the banks succeeded in their ripoff? And who is currently standing in the way of any forward momentum? Republicans. Tea Party, Koch -funded Republicans and their "Libertarian" network of slimeballs. Who was it pushing for the repeal of Glass-Steagall that made all of this possible? Koch and their "Libertarian" slimeball network of free marketeers.And who was it that made the situation worse by getting more of these aholes elected in 2010 and pretty much ensurig that nothing will get ccomplished? "Progressives" and "Libertarian" shysters who were out in force yelling "both sidess are the same" - "don't vote."
And I see we're still at it in spite of everything we've witnessed the Tea Party do both at the federal and state levels.Neo Conned • 6 years ago ,
But it's in alignment with the new, 21st century Neo-Fascist America.
Debtor prisons were eliminated more than a century ago because legislators had the sense (yes, they had some back then) to understand that society is worse off, and no one benefits by putting those who can't pay their debts in prison. The burden was thus shifted to creditors to assure their debtors could repay them before making the loan. The burden of indebtedness was thus shifted from the debtor to the creditor as it should be.
In recent years the US has gone back to the old model of encouraging indebtedness and then punishing the debtors, initially with non-bankruptable debt (thank you Joe Biden) and now with imprisonment.
There is absolutely nothing progressive or good for society in general or for individuals in particular in all of this. This is all part of the reactionary movement in this country to destroy the Middle-class and return to a (neo) feudal society controlled by a small class of "economic royalist" lording over a vast majority of disenfranchised and economically hopeless "serfs".
TeeJayFlow Neo Conned • 6 years ago ,
Six years after these criminals crashed the economy and almost took down the entire global structure we're still trying to decide if these were crimes? The real crime is that We, the People meekly allow these crimes -and many others- to go unpunished. After all, it really doesn't interest anybody outside of a small circle of friends.tomherzog Neo Conned • 6 years ago ,
Well put. If the mainstream media doesn't say something, the general population acts like it doesn't exist. The rich and powerful have been very creative in hijacking public opinion and decimating our ability to think for ourselves. We are supposed to have checks and balances between branches of government, but every single branch has been bought out and is in cahoots with each other. I don't think anything short of a revolution will fix this corporatocracy. The White House has abandoned us, Congress has abandoned us, and the Supreme Court has struck the final chord of war claiming that corporations are to be treated as people.
How much is your life worth? Not much if you aren't a politician or banker.
Neo Conned, look around you; look at the morons glued to their "smart" phones. Look at the idiots with their pants hanging off their butts; listen to the people who can't put together a sentence in Standard English or who can't say two consecutive words without at least one of them being a vulgar Anglo-Saxon term for a bodily function.
In general, Americans are probably the stupidest people in the world and we have lost our (at least at one time nominal) democratic republic because of that: the obliviousness of the American people. (For reference please see Chris Hedges' excellent book, The End of Reason and the Triumph of Illusion.)
Dec 09, 2018 | www.zerohedge.com
Authored by Andrew Korybko via Oriental Review,
The head of the British Secret Intelligence Service (MI6) Alex Younger briefed the public about the challenges of so-called " fourth generation espionage ".
The UK's top spy spent some of his time blaming Russia for trying to, as he put it, "subvert the UK way of life" by supposedly poisoning the Skripals and through other mischievous but ultimately never verified actions, though moving beyond the infowar aspect of his speech and into its actual professional substance, he nevertheless touched on some interesting themes.
According to him, "fourth generation espionage" involves "deepening our partnerships to counter hybrid threats, mastering covert action in the data age, attaching a cost to malign activity by adversaries and innovating to ensure that technology works to our advantage."
In other words, it's all about applying what he calls the "Fusion Doctrine" for building the right domestic and international teams across skillsets in order to best leverage new technologies for accomplishing his agency's eternal mission, which is "to understand the motivations, intentions and aspirations of people in other countries."
While he remarked that the so-called "hybrid threats" associated with "fourth generation espionage" necessitate "being able to take steps to change [targets'] behavior", this has actually been part and parcel of the intelligence profession since time immemorial, albeit nowadays facilitated by social media and other technological platforms that allow shadowy actors such as the UK's own "77th Brigade" to carry out psychological, influence, and informational operations.
Younger warned that "bulk data combined with modern analytics" could be "a serious challenge" if used against his country , obviously alluding to Cambridge Analytica's purported weaponization of these cutting-edge technological processes to supposedly "hack" elections, though neglecting to draw any attention to the fact that his intelligence agency and its allies could conceivably do the same in advance of their own interests, something that everyone who uses Western-based social media platforms is theoretically at risk of having happen to them.
What Younger is most concerned about, however, are what he describes as the "eroded boundaries" that characterize so-called "hybrid threats" lying between war and peace, which he fears could undermine NATO's Article 5 obligation for all of the military alliance's members to support one another during times of conflict. Considering Russia to be a country that "regards [itself] as being in a state of perpetual confrontation with [the West]", Younger believes that unacceptably high costs must be imposed upon it every time it's accused of some wrongdoing, forgetting that the exact same principle could more applicably be applied against the West by Russia for the same reasons.
He claims that it's the UK that will never respond in kind by destabilizing Russia like Moscow's accused of doing to the UK, but in reality, it's President Putin's so-called "judo moves" which prove that it's Russia who has mastered asymmetrical responses instead. If read from a cynical standpoint by anyone who's aware of the true nature of contemporary geopolitics, Younger's speech is actually quite informative because it inadvertently reveals what the West itself is doing to Russia by means of projecting its own actions onto its opponent .
That in and of itself is actually the very essence of Hybrid War , which is commonly understood to largely include blatantly deceptive techniques such as the one that the UK's top spy is unabashedly attempting to pull off.
Accusing one's adversaries of the exact same thing that you yourself are doing is a classic method of deflecting attention from one's own actions by pretending that you're being victimized by the selfsame, which therefore "justifies" escalating tensions by portraying all hostile acts as "proactive defensive responses to aggression".
Basically, the British spymaster just sloppily revealed his hand to Russia while attempting to implicate it for allegedly conducting "fourth generation espionage" against the UK.
Nov 30, 2018 | www.moonofalabama.org
jim slim | Nov 29, 2018 4:04:44 AM | 24Pompeo is a Deep State Israel-firster with a nasty neocon agenda. It is to Trump's disgrace that he chose Pompeo and the abominable Bolton. At least Trump admits the ME invasions are really about Israel.
Peter AU 1 , Nov 28, 2018 9:44:50 PM | link
Pompeo is a Deep State Israel-firster with a nasty neocon agenda. It is to Trump's disgrace that he chose Pompeo and the abominable Bolton. At least Trump admits the ME invasions are really about Israel.
Trump, Israel and the Sawdi's. US no longer needs middle east oil for strategic supply. Trump is doing away with the petro-dollar as that scam has run its course and maintenance is higher than returns. Saudi and other middle east oil is required for global energy dominance.
Energy dominance, lebensraum for Israel and destroying the current Iran are all objectives that fit into one neat package. Those plans look to be coming apart at the moment so it remains to be seen how fanatical Trump is on Israel and MAGA. MAGA as US was at the collapse of the Soviet Union.
Pft , Nov 29, 2018 1:15:05 AM | linkAs for pulling out of the Middle East Bibi must have had a good laugh. Remember when he said he wanted out of Syria. My money is on the US to be in Yemen before too long to protect them from the Saudis (humanitarian) and Iranian backed Houthis, while in reality it will be to secure the enormous oil fields in the North.
Perhaps this was what the Khashoggi trap was all about. The importance of oil is not to supply US markets its to deny it to enemies and control oil prices in order to feed international finance/IMF.
Dec 08, 2018 | www.alternet.org
kyushuphil -> Neo Conned • 6 years ago ,
People don't "meekly allow these crimes," Neo. Americans hugely endorse them.
The students not only continue to flock to the amorality skills courses, but also put themselves into mega-debt by student loans to turn themselves not just imaginatively and ethically over to the corporate idolatries, but also to do another double whammy on themselves. They accept the servitude of massive student loan debt, and ensure by prolonged interest payments on that debt to keep bloating all the most cynically immoral of high finance.
And then all the other departments of corporate academe have seen how smoothly work the most rank of corporate habits to ensure most mediocrity for most rank careerisms -- and all have only increased departmentalism protocols over recent years. Tenure now means nothing more than max award for most-narrowed specialist minds and for all most-max conformists in all those niched fields.
Nuthin' "meek" about all this, Neo. The corporate disease, the cubicle culture, the deference to plutocracy, the reduced literacy, the tracking to numbers -- all has been only steroided since Citizens United quite flagrantly legally underlined what most genteel in corporate ed have been doing for years.
willymack > kyushuphil • 6 years ago
Well said, and sadly, TRUE.
zonmoy > kyushuphil • 6 years ago
and how have students been pushed into those programs and the problems pushed on them by the corporate crooks that own everything including our government.
Feb 06, 2017 | economistsview.typepad.compgl : February 04, 2017 at 03:41 PM, 2017 at 03:41 PMNot that Wikipedia gets everything right but here is a snippet of what it says about the Goldman Sachs CEO:libezkova -> pgl... , February 04, 2017 at 07:12 PM
'Blankfein testified before Congress in April 2010 at a hearing of the Senate Permanent Subcommittee on Investigations. He said that Goldman Sachs had no moral or legal obligation to inform its clients it was betting against the products which they were buying from Goldman Sachs because it was not acting in a fiduciary role. The company was sued on April 16, 2010, by the SEC for the fraudulent selling of a synthetic CDO tied to subprime mortgages. With Blankfein at the helm, Goldman has also been criticized "by lawmakers and pundits for issues from its pay practices to its role in helping Greece mask the size of its debts". In April 2011, a Permanent Subcommittee on Investigations report accused Goldman Sachs of misleading clients about complex mortgage-related investments in 2007, and Senator Carl Levin alleged that Blankfein misled Congress, though no perjury charges have been brought against Blankfein. In August of the same year, Goldman confirmed that Blankfein had hired high-profile defense lawyer Reid Weingarten'
Weingarten helped in the defense of the Worldcom thieves. Why would anyone do business with a company led by such an ethically challenged CEO?
The problem here is probably deeper then personality of Blankfein.
There is such thing as system instability of economy caused by outsized financial sector and here GS fits the bill. Promotion of psychopathic personalities with no brakes and outsize taste for risk is just an icing on the cake.
> Why would anyone do business with a company led by such an ethically challenged CEO?
Why you are assuming the other TBTF are somehow better then GS?
Dec 08, 2018 | www.alternet.org
Originally from: Truthdig December 8, 2018, 4:38 AM GMT
Wall Street's corruption runs deeper than you can fathom | AlternetWall Street's corruption runs deeper than you can fathom As an employee at the Federal Reserve in 2011, three years after the dissolution of Lehman Brothers, Carmen Segarra witnessed the results of this deregulation firsthand
Print 61 COMMENTS
Of the myriad policy decisions that have brought us to our current precipice, from the signing of the North Atlantic Free Trade Agreement (NAFTA) to the invasion of Iraq and the gerrymandering of House districts across the country, few have proven as consequential as the demise of Glass-Steagall . Signed into law as the U.S.A. Banking Act of 1933, the legislation had been crucial to safeguarding the financial industry in the wake of the Great Depression. But with its repeal in 1999, the barriers separating commercial and investment banking collapsed, creating the preconditions for an economic crisis from whose shadow we have yet to emerge.
Carmen Segarra might have predicted as much. As an employee at the Federal Reserve in 2011, three years after the dissolution of Lehman Brothers, she witnessed the results of this deregulation firsthand. In her new book, " Noncompliant: A Lone Whistleblower Exposes the Giants of Wall Street, " she chronicles the recklessness of institutions like Goldman Sachs and the stunning lengths the United States government went to to accommodate them, even as they authored one of the worst crashes in our nation's history.
"They didn't want to hear what I had to say," she tells Robert Scheer in the latest installment of "Scheer Intelligence." "And so I think what we have in terms of this story is really not just a failure of the banks and the regulators, but also a failure of our prosecutors. I mean, a lot of the statutes that could be used -- criminal statutes, even, that could be used to hold these executives accountable are not being used, and they have not expired; we could have prosecutors holding these people accountable."
Segarra also explains why she decided to blow the whistle on the Fed, and what she ultimately hopes to accomplish by telling her story. "I don't like to let the bad guys win," she says. "I'd rather go down swinging. So for me, I saw it as an opportunity to do my civic duty and rebuild my life. I was very lucky to be blessed by so many people who I shared the story to, especially lawyers who were so concerned about what I was reporting, who thought that the Federal Reserve was above this, who thought that the government would not fail us after the financial crisis, and who were livid."
"Noncompliant" explores one of the darkest chapters in modern American history, but with a crook and unabashed narcissist occupying the Oval Office, its lessons are proving remarkably timely. "We live in a culture where we reward bad behavior, we worship bad behavior, and it's something that needs to stop," she cautions. "Changing the regulatory culture on [a] U.S. governmental level is something that's going to take a decade, maybe two. And we need to start now, before things get worse."
Listen to Segarra's interview with Scheer or read a transcript of their conversation below:
Robert Scheer: Hi, I'm Robert Scheer, and this is another edition of "Scheer Intelligence," where the intelligence comes from my guests. Today, Carmen Segarra. She's written a book, just came out, called "Noncompliant: A Lone Whistleblower Exposes the Giants of Wall Street." And boy, did she ever. Perhaps you remember this case; it was in 2011, two, three years into the Great Recession. There was a lot of pressure from Congress that these banks be regulated in a more serious way. As a result, Carmen Segarra, someone of considerable education, was brought in. And she was assigned to do a survey of Goldman Sachs, to go over to Goldman Sachs. And I just want to preface this, people have to understand that not only is the Federal Reserve an incredibly -- the most important economic institution in the United States, but the New York Federal Reserve plays a special role being in New York. And they are basically entrusted with regulating the banks, and they are the institution that most definitely failed in that task, and helped bring about the Great Recession. Would you agree with that assessment?
Carmen Segarra: Yes, I would agree with that assessment. When I joined the Federal Reserve, as you pointed out, I was hired from outside the regulatory world, but within the legal and compliance banking world, to help fix its problems. And I was well aware of the problems that existed. And scoping the problems itself was relatively easy; I mean, within days of arriving, I had participated in meetings where you had Goldman Sachs executives, you know, lying, doublespeaking, and misrepresenting to regulatory agencies without fear of repercussions. And where I saw Federal Reserve regulators actively working to suppress and expunge from the record evidence of wrongdoing that could be used by regulatory agencies, prosecutors, and even the Federal Reserve itself to hold Goldman Sachs accountable. The question was, when I arrived, you know, are these problems fixable? And, spoiler alert: I don't think so.
RS: Well, your book really is a compelling read on, really, what one could consider the dark culture of finance capital. Most of us know very little about it; we think it's boring, it's detailed and so forth. And I was thinking of another woman observer of great education and experience, who first tipped me off as a journalist when I was trying to cover the stuff about banking deregulation and so forth, and when Clinton was president and they did the basic financial deregulation. A woman named Brooksley Born, who was head of the Commodity Futures Trading Commission, and she had your kind of background, you know; a leading lawyer with the banks, and so forth. Understood this a lot better than most of the men who were powerful, including Treasury Secretary Robert Rubin; Lawrence Summers, who took over from him and went on to be the head of Harvard; Alan Greenspan–none of them really understood these collateralized debt obligations, credit default swaps; she did. She blew the whistle on it, and they basically destroyed her. She was forced out of the Clinton administration, and what have you. Did you know about Brooksley Born's work when you got into this? Do you have any sense? I mean, this was really sort of the first major whistleblower, and she was, as you have been, basically pushed aside.
CS: Yes. I definitely knew about her. And you know, I have to say that I was, you know, just taking that historical perspective, which I think is an important point of view through which we should approach this topic. I mean, I remember when I was in law school, I was one of the very first graduating classes to graduate into a post-Glass-Steagall world. From a 50,000-foot level, I think people have a better understanding of what that means, in the sense, you know, you have all of a sudden the securities and the banking products can get together.
But from a practical standpoint, from a ground-zero level, where I was at, that essentially meant two things. From a professional standpoint, we studied and were aware of the fact that there were a bunch of people on one side of the aisle, the investment products side–you know, the collateralized debt obligations that you mentioned.
And then there were people who were on the banking side; we're talking, you know, for purposes of argument, credit cards and debit cards. And that these people, they may have known about their products, but they were highly specialized; they only knew about the one or two things that they touched, and they certainly didn't know about them and how they interacted together. And one of the things that I remember studying were not just the cases of whistleblowers, but also discussing amongst our classmates, you know, what the impact would be of all of a sudden having a class or a series of classes, graduating from law school, with people who are focusing on banking and compliance, like I was, and who are having to understand both of these products and sort of how they interact together. And what, sort of visualizing what our work life would be like, in terms of reporting to people that had an incomplete understanding of how the banking world worked. So, yes, I was definitely aware; I understood perfectly where she was coming from. And she was very much a cautionary tale for the rest of us who are lawyers. In terms of, if you find yourself in these difficult situations, you sort of game out what potentially can happen. And I certainly took it into consideration when I was gaming out whether or not to whistleblow.
RS: Well, before you get to the whistleblowing stage, I think you're being too kind to what I personally think are people who should be considered as, or at least charged and examined often with what is criminal behavior. Because ignorance is really not a good defense; when they were called before congressional committees, these knowledgeable people admitted they really didn't understand collateralized debt obligations and credit default swaps. And for people who are not that familiar, you mentioned Glass-Steagall. And what Glass-Steagall was, was one of the, really maybe the most important response of Franklin Delano Roosevelt's democratic administration to the Great Depression. And how did this terrible depression happen, how were the banks so irresponsible. And they decided the key thing was to separate investment banks from commercial bank; investment banks could be high-rollers, private money, you know what you're doing, you have knowledge; and commercial banks where you're basically protecting the assets of ordinary people, they're not knowledgeable, they're trusting your expertise. And eliminating Glass-Steagall eliminated this wall between the two kinds of banking. And the company that you went to observe, Goldman Sachs, was an investment bank. And by the working of that law, they should have been allowed to go belly-up when it turned out they had a lot of these dubious credit default swaps and collateralized debt obligations. To people who don't know, a credit default swap was a phony insurance policy pretending to cover these things, but really there's nothing backing it up. And somehow, in order to save them, they were allowed to announce they could do commercial banking. One could argue, in some ways, the barrier was lifted to help–Citigroup was of course the other one–Citibank. And these are two banks that the government stepped in to help and create this monster. Is it not the case?
CS: Yeah, that's absolutely the case. But there's a couple of things that we need to keep in mind. I mean, I think that we're all sort of educated enough to know that, you know, where there's a will, there's a way. And so if a system can be corrupted, people that are allowed to grab hold of power will corrupt it–insofar and only for so long as we allow those people to have the ability and the power to corrupt it. So ultimately, talking about more or less rules, or different rules, is productive only to a point. Because ultimately what we're talking about here is the haphazard, slap on the wrist, failure to truly enforce the rules and regulations equitably across the system. And that creates the imbalances that you see, for example, in Goldman Sachs, and that you see in the system in general. One of the things that happened as a result of Glass-Steagall coming down was that a lot of the investment bankers were allowed to take over the commercial banks. And those investment bankers knew nothing about banking, and Goldman is a great example of that. I mean, when I arrived three years in after the financial crisis, what was one of the things that was very shocking to me was going into meeting after meeting with Goldman senior management and hearing them lie, doublespeak, and most shockingly of all, insist that they didn't have to comply with the law. And that is a problem. Because a bank that doesn't believe, or management at a bank that doesn't believe they have to comply with the law–you bet they are not supervising their employees correctly, and they're not incentivizing employees correctly in terms of how to do their job. So their behavior is injecting enormous risk into the system
... ... ...
CS: The case was assigned to a judge who was friends with the attorney, I had worked with the attorney that represented the Fed. And then two days before dismissing the case, she revealed that she was married to someone who represented Goldman Sachs for a living. So, yeah, there you go. [Laughs] I mean, it's almost impossible in terms of successfully blowing the whistle. But going back to your question with respect to the recordings and having a say, I think the question that we need to be asking ourselves is this: the Federal Reserve Bank of New York, and the Federal Reserve in general, is tasked with supervising the banks. They have recorders. They have the law on their side. New York is a one person consent state. Banks, private banks, habitually record everything that goes on inside the bank, and they do it for good reason. Because they do it to stop and prevent fraud, among employees and by anybody that walks in the door. Why is the Federal Reserve not recording these executives? Why are they not preserving evidence? I think that is the question that we need to be asking ourselves. You know, what I did was not special. What I did is what the Fed should have been doing.
Wall Street's corruption runs deeper than you can fathom | AlternetRS: Well, it was special in that [Laughs]–come on! There have been a lot of witnesses to these crimes, really, and you're the lone voice from within that system that dared to speak up. And as I said, had you not been able to document it with these tapes, you would have been just dismissed as some kind of kook. The book is called Noncompliant: A Lone Whistleblower Exposes the Giants of Wall Street. You know, what is so important is nuance and language and attitude. And the people on Wall Street can affect the protection of manners and complexity. I remember Lawrence Summers testifying in Congress on why you had to get rid of Glass-Steagall, and he said "this is very complicated." And he said the same thing Alan Greenspan said: "These people know what they're doing," and so forth. It wasn't complicated. If the Mafia did it, you'd see right through it in five minutes. Right? You were bundling a bunch of lousy deals together with some good deals, and you didn't even know what was in there, and you sold them, and you got a phony insurance contract to back it up. And yet none of these people have been, gone to jail; very few, one or two have been prosecuted as kind of a scapegoat. But the book is a great story of an American heroine–but this is what everybody should do! [Laughs] I mean, the real issue about whistleblowers like yourself is why did it take you? Where were the other folks? How many people–yeah, go ahead.
CS: Yeah, agreed. I think that's exactly right. You know, there's a number of reasons why I wrote the book. First of all, because I think it's an important contribution to the historical record. As to what is the systemic culture of corruption that exists in these regulatory agencies that are taking our taxpayer dollars and paying themselves handsome salaries to work against the American taxpayers. And then the second reason I wrote it is to incentivize people to come forward with their stories. I wasn't the only person who wanted to blow the whistle in terms of what was going on there. My circumstances were unique, and I sort of go through it in the book, in the sense that I was very lucky, for example, that the Fed refused to even negotiate the mandated settlement that they were supposed to negotiate with me. But they refused, and that allowed me to sue. There's a number of people who have gone through the process and have been silenced by, you know, getting a monetary offer and signing a settlement agreement. And we don't hear about them because they are forced not to talk. What I sort of thought about was, you know, this is just a unique–you know, I didn't ask to be in this situation, but I felt it was my civic duty. Because I do think that we need more people to really think about how in their daily lives, they can stop rewarding bad behavior. We live in a culture where we reward bad behavior, we worship bad behavior, and it's something that needs to stop, you know. Changing the culture, the regulatory culture on the U.S. governmental level is something that's going to take a decade, maybe two. And we need to start now, before things get worse. We are not in the best-off of situations as a country; you know, we have what seems like an economic boom, but it's really just a debt-fueled economic boom that is going to be temporary. And it's very tough to fix these types of cultural issues, system issues, when the hurricane of the next financial crisis hits. We need to fix it now, while we still have a semblance of peace, while we still have the sun shining. And we don't know how much longer that's going to be. I hope it's long enough to fix it. I hope that people are inspired to come forward and to think about how to make a difference in their daily lives. You know, because we need to start thinking of raising children and raising adults that are incentivized in their daily lives to reward good behavior. I think that until we create a critical mass of Americans that in their daily lives refuse to reward bad behavior, we're not going to see real systemic change.
RS: Well, we'll see change. It might not be good change. I mean, you have Donald Trump–and I want to put some oomph behind this, that it's bipartisan. Because one of the–you know, everybody, a lot of people I know are very upset about Donald Trump. He's speaking to what Hillary Clinton calls the "deplorables"; but there's a lot of people hurting out there. And if you read a study done by the Federal Reserve of St. Louis about the consequence of this economic meltdown that was engineered from places like Goldman Sachs, the human cost was incredible. I mean, people lost everything. They weren't bailed out. There was no mortgage relief. They were not helped. The banks were bailed out. And yet no one has been held accountable, and the politicians, democrats and republicans, who supported it, have gotten off scot-free.
Wall Street's corruption runs deeper than you can fathom | AlternetCS: Yeah, I think you're absolutely right. This is not a democratic problem, this is not a republican problem. This is an American problem with worldwide impact. The U.S. dollar is a reserve currency. The world depends in large part on the American banking system to work. And for it to work, there are these rules, and these rules are there to create trust in the system and to create smooth processes in the system, so that money can be moved and the economy can continue to grow. If the world can no longer trust the American banking system because Americans cannot be trusted to regulate it, they are going to move away from the American banking system. They are going to move away from the U.S. dollar as a reserve currency. And then we are going to find ourselves in the situation that a lot of countries that are not governed by reserve currencies find themselves occasionally, from time to time, whenever they have a crisis. You know, we're talking about countries in Latin America; we're talking about countries in Africa; we're talking about countries in Asia. I hope the book will inspire people to really take a look around and realize, you know, the American consumer, the American worker, is incredibly powerful. You know, these banks cannot survive without our money. We don't have to wait for the government to keep failing us; we don't have to wait for the judiciary to keep failing us; we don't have to wait for lawyers to keep failing us. We choose who we work for. We choose where we keep our money. We can choose to protest. We can choose to call our pension funds and tell them, I want you to stop doing business with Goldman Sachs. It's what we do on a daily basis. When we stand up and we say, I am not going to be banking with these people–they will listen. It's like, they control all of these other checks and balances that were put in place in terms of the government to stop them. So now it's up to us as a people to actually do something about this.
RS: Let me take a break. And I've been talking to Carmen Segarra, who is actually the lone honest person from within the banking system that I know of who really took the story of what these people were doing, and swindling the American people, and fortunately documented it with tape recording–as they document everything; if you call the bank for information, "your conversation will be recorded to make it more efficient"–well, she turned the table on that, had the record. The book is called Noncompliant: A Lone Whistleblower Exposes the Giants of Wall Street. [omission for station break] I'm not going to be able, in the time that I have here, to do justice to this book, because the devil is in the details. I want to talk about some people who did speak up. I mentioned Brooksley Born, who was this brilliant member of the Clinton administration who got pushed out for speaking up. But when the pressure came down after the Great Recession, and the banks had to be questioned, they at Goldman Sachs turned to a Columbia University finance professor, David Beim. And he did a report. He had access to everything, he did this incredible report. We only know about it because it showed up in some footnote somewhere. And by the way, I haven't given enough credit here to the people who have helped break this story. ProPublica, who did a really terrific job on it, and the NPR show This American Life, which really did a great job. So there has been really good reporting. As you pointed out, it was absolutely shameful that Congress did not really take testimony from you; you were there as an observer–I think in a red dress, to be noticed. [Laughs]
CS: Yes. Well, you know, red is the color of martyrs.
RS: And so I want to ask you about that. Before you even went there, this guy David Beim had done a study. And William Dudley, the president of the bank, didn't even respond. He said thank you, they looked at the–and they never responded to the criticisms in that study, which were devastating. Of how the bank was operating.
CS: Yeah, but that's how the Federal Reserve Bank of New York operates. And that's, curiously enough, also how Goldman Sachs operates. They say one thing and do another. If you want to know what they're doing, just flip it, right? I mean, if they're asking for a report, that means that they plan to do nothing about it. And you know, the book sort of walks you through the story of how they played at this game of pretending to clean up the regulatory issues. I mean, the joke really was on us, the new regulators that were brought in from the industry to actually clean up the problems that were there. None of us are there at the Fed anymore. Every single one of those people that I talk about that validated my story, they're gone. And they are gone under different circumstances, some in good standing, some in less good standing, but the point is they're all gone. Because the purpose of bringing us in was not really to change things, it was to ensure that they had a smoke screen and a story to feed the press, that they would print, saying that they had indeed fixed this. And there was nothing else there to see.
Wall Street's corruption runs deeper than you can fathom | AlternetRS: We're going to run out of time here, but I want to nail down one–this chain of responsibility. And I had just mentioned New York Fed president William Dudley, who I believe ran into some difficulty; he had ownership in something that they were trading with. But leaving that aside, he replaced Timothy Geithner. And when Goldman Sachs, when this whole banking thing happened, there was no more important individual in this country, in a position to observe it, than Timothy Geithner. He had been in the Clinton administration; he had worked for Robert Rubin and Lawrence Summers in the Clinton administration when they deregulated Wall Street. And he was rewarded for that deregulation, right, by being named to the most important regulatory position, to be head of the New York Fed. And Barack Obama in 2008, as the banking meltdown was happening, gave a speech at Cooper Union, April of 2008, blasting Wall Street. And then, when Hillary Clinton lost the primary, Barack Obama turned to Lawrence Summers and Timothy Geithner, and these people for advice, and he named Timothy Geithner to be his treasury secretary. The guy who at the New York Fed, where you went there to work and to try to supervise Goldman Sachs–he knew everything about this, and told us nothing, and he was rewarded by being made treasury secretary.
CS: When I'm saying, you know, we have to stop rewarding bad behavior, that's an example of what I'm talking about. It's like, we have a culture where we reward people for their bad behavior. And in the Fed it is a systemic problem. And it is a problem that comes from the top down. And when I was at the Fed, Ben Bernanke was head of the Fed; Bill Dudley, as you pointed out, was the head of the New York Fed; and Sarah Dahlgren was his head of supervision. This is a very small world. We're not talking about a lot of people; the culture is top-down, and everybody there just does what these people say, because if they don't they're afraid they're going to lose their jobs. So from their perspective, they have nothing to lose, because they have a bunch of workers that are going to do as they say. And they will do what is in their best corporate interests. I mean, you have Bill Dudley, who was allowed to hold on to a lot of his investments that predated his arrival at the Fed and were held at Goldman Sachs. And you know, when you have somebody who's not forced to really work for the government–as in divesting themselves of their own conflicts and truly taking taxpayer money and doing their job–then you can't expect a good result to come from that. Again, we rewarded bad behavior. And that's why I think, you know, the key here is really about taking a really good look at our daily lives and seeing, who are we rewarding on a regular basis? And we need to stop rewarding that bad behavior.
Wall Street's corruption runs deeper than you can fathom | AlternetRS: But I want to challenge what I think is your optimism. And in fact, you are living proof that doing the right thing can be a career-ender. I haven't asked you, I mean, I assume you still have a good career; you're highly talented and competent, and you were, you know, extremely well educated. But you're not being considered to be treasury secretary or something, right? The consequences for you were quite dire, weren't they?
CS: They were. And you know, my career in banking is over on a permanent basis. But I think you sort of point out to, a little bit to my personality, and I hope it comes through in the book; I sort of talk about that fact that I'm just a very resilient person. And I just, I don't like to let the bad guys win. I'd rather go down swinging. So for me, I saw it as an opportunity to do my civic duty and rebuild my life. You know, and I was very lucky to be blessed by so many people who I shared the story to, especially lawyers who were so concerned about what I was reporting, who thought that the Federal Reserve was above this, who thought that the government would not fail us after the financial crisis, and who were livid. And I've been blessed with their support through the process of whistleblowing, and I continue to be blessed by their support even after. I have a husband who was, you know, a real hero of the story in my book, and I have been able to remake my life as a lawyer in private practice. And my clients, you know, God bless them, they trust me to help them. And I wouldn't change what I did for anything. Because I think for me–and I talk about it in the book–I think living a meaningful life is more important than making money. I think for me, making money is important insofar as it pays the bills. But once my bills are paid, it's about having a meaningful life. And I just feel very, very lucky that I have had the life that I've had, that I got to go to a Catholic school that taught me the morals that I believe in. I think that I am who I am, and I think that I would be just as moral if I had grown up Jewish, or if I had grown up a Mormon, or if I had grown up a Protestant. So I feel very blessed that I was exposed to what good values and good behavior are. I decided since I was very little that that's just the way I wanted to live my life, and that to live meaningfully was more important than anything else. And that has driven all of my decisions, and I found the experience to be rewarding. And when people talk to me about how bad things are and how things sort of look like they're never going to turn around, I tell them, no. They will turn around. We just need to believe in ourselves and be our own saviors, and be our own heroes in our own daily lives.
RS: But let me, let me challenge that. And yes, you're an exemplary person. No question. And people should read this book, Noncompliant: A Lone Whistleblower Exposes the Giants of Wall Street. But I want to focus on that word, "lone." Lone whistleblower. These people had the same great education you had at the best schools, OK? They didn't blow the whistle. No, they abetted the crime! They made it possible. They destroyed people like Brooksley Born, who dared challenge it. And the fact of the matter is, you can't expect ordinary people–even myself. You know, I did graduate work in economics, I'm a professor, blah blah blah. But I can tell you, when I went into my bank loans, I didn't know all the details and what they were talking about and everything. I counted on regulation, I counted on government, I counted on accountability, frankly, on the part of these institutions. So my view is, you can't expect ordinary people–that's why we had a distinction between investment banks and commercial banks. Commercial banks are supposed to deal with ordinary people, OK? They're supposed to hold their money, give them a fair interest rate, make loans on their houses, and help them out. And they have to be regulated, because you know, the ordinary person can't be an expert. The failure here is of the educated class. Of the superachievers. And you count on those people, yes, to do the right thing. But money talks. And the fact of the matter is, the people you went to school with, at the Ivy League schools, at the wherever–they sold us all out.
CS: I think you make a good point. But I also think that the problems are systemic and run deeper. I mean, I would point out, for example, just from a personal perspective, when I graduated both college and law school I happened to be one of those that graduated into a recession, twice. There weren't too many jobs. I didn't have too many options. I ended up working in where I ended up working because it was either that or not feed myself. And I think one of the problems that we have that is systemic is that we have allowed capitalism to create such huge imbalances in how we reward people for their daily work. So people are forced to do something that they may not even like, or may not even be good at, because they have no choice. It's a shame, because we're a big enough country, we have a lot of talent, there should be more invisible hand, central planning. This whole system where we are now turning our attention to creating computer programmers is more based on making sure that computer programming becomes a cheap, minimum-wage job where the owners of the computer companies like Apple don't have to overpay like they are doing now for those workers. So I think that there are more systemic issues than we realize. And I agree with you, I think that, you know, we were sold out by the intellectual class. But we still need to figure out–and the intellectuals are the ones who are going to help us–we need to figure out how to fix the system on a larger scale if we are going to rebalance things. And I don't have the monopoly on the answer, on all the answers, you know? I'm just a girl born in Indiana to two Puerto Rican parents, you know? [Laughs] It's not like I have any terms, in any way access to the higher echelons and how that works. But I think that we really do need to think about, in our own ways and in our own lives, how we can sort of convince other people to make the right choices on a daily basis. Because I think that if everybody takes making the right choices seriously, and realizes that we're all in the same boat–you know, we're all Americans, this is going to impact us all–I think that we can, slowly but surely, right the boat and start heading in the right direction.
RS: People should read Noncompliant –it's an important word; they weren't compliant– A Lone Whistleblower Exposes the Giants of Wall Street. And recognize that the problem with modern governance is that the decisions are made by people who don't have our common interest, who are bought off. That money talks. And one reason we have such despair now, and we go for demagogues, and we have such divisive, ugly language and ugly politics, is the so-called civilized, well-educated leaders of our country went for the money and betrayed ordinary people. I'll let you take the last word, and then we'll wrap it up.
CS: Ah, well, thank you. And again, you know, I know that you are sort of [Laughs] thinking about it from the perspective of a hopeless sort of case. But I do think that there is–and I hope people will look at it as the beginning of change. You know, yes, the book is a very sad story; the bad guys do win, for now. But just because they win the battle doesn't mean they're going to win the war. And I refuse to give up hope in the American people, and I refuse to give up hope in the American consumer. I think that we can make a difference if we try. Because I think that when we get the American people–no matter whether they're democrats, republicans, independent–when we get them educated on the topic of finance, when we get them accessible stories, they will have their say. And they matter–we matter. And it's important that they come to the table, otherwise this problem isn't going to get solved.
Dec 08, 2018 | www.nakedcapitalism.comBy Bill Black, the author of The Best Way to Rob a Bank is to Own One, an associate professor of economics and law at the University of Missouri-Kansas City, and co-founder of Bank Whistleblowers United. Jointly published with New Economic Perspectives
I cannot write many blogs during the fall semesters because I teach four classes (I co-teach one of them). The fall term of instruction at UMKC is now over so I am writing one piece before turning to grading. I have recently done additional research on a topic I know is of great interest -- the prosecution of elite white-collar criminals. I have organized it in the form of a game in which the reader guesses who authored the quoted passage.Which President described the elite banksters of his era as "charlatans, chiselers and cheats?" Which Vice President criticized prosecutions, enforcement actions, and even safety rules for the elite white-collar criminals of his era in these terms?
But the number of complex regulations is only half the problem. As President [deleted] has repeatedly emphasized, it is also the adversarial and seemingly mindless enforcement methods that really get under people's skins. Business owners are sick of being treated like criminals. They see a government that just doesn't make sense, that charges them with safety violations when no one is in harm's way.
[Note that enforcement action is supposed to be 'adversarial' and that 'business owners' need to be 'treated [as] [not 'like'] criminals' when they are criminals. A safety violation that does not cause injury because no worker is in the unsafe trench when it collapsed should be charged as a safety violation because it is. A well-run company with a strong safety record takes that approach to safety. The government must too.]Which U.S. Attorney General offered the excuse for refusing to create a national task force to prioritize the prosecution of the elite banksters of his era that the fraudsters were merely "white collar street criminals"? Which U.S. Attorney General explained in these terms why he was working with the regulators because prosecutions of elite banksters require enormous sophistication and prioritization?
[T]hese investigations most often involve complicated paper trails leading to highly sophisticated schemes which disguise illegality under the veneer of legitimate business and financial transactions.
[Note that this AG understood the essential danger that makes 'control frauds' uniquely damaging -- the fact that the CEO finds it far easier to 'disguise illegality' 'under the veneer' of seeming 'legitima[cy].']Which U.S. President met with the Nation's U.S. Attorneys to emphasize in these terms the criticality of prosecuting elite banksters?Which U.S. President proclaimed "I did not run for office to be helping out a bunch of fat cat bankers on Wall Street"? Which FBI Director characterized the level of elite fraud in failed insured institutions as 'pervasive' and explained that the fraud problem came from the top in these terms?
It takes a snake, a cold-blooded snake, to betray the trust and innocence of hard-working people," [deleted] said in a speech to his administration's U.S. attorneys in announcing his effort. "And so, if we have to look under rocks to find these white-collar criminals, then we will leave no stone unturned.
The American public relied upon banking institutions and financial institutions being soundly managed by people who were honest. Therefore, it is absolutely essential that this program go forward to the end no matter how long that takes.
He discounted past arguments that Texas' economy was the root cause for the state's financial crisis. "Although it was the general economic downturn in Texas that surfaced the problem, it appears to the FBI as if a pervasive pattern of fraudulent lending activity began much earlier."Which U.S. President told the Nation's leading bankers "My administration is the only thing between you and the pitchforks"?
[Note that the President was characterizing the American people as a mob out to murder the banksters that caused the financial crisis -- and stressing that his administration would safeguard them from accountability for their crimes.]Which U.S. Attorney General explained in these terms how he began working with the new regulator the day after he was appointed to ensure the prioritization of the most elite banksters in the ongoing financial crisis they were both confronting?Which regulatory agency made the 'mass of [criminal] referrals' the AG was referring to? How many criminal referrals did the agency make in response to its financial crisis? How many felony convictions of individuals did the Department of Justice (DOJ) obtain in 'major' cases in response to these referrals? Which senior law enforcement agency warned in September 2004 that an 'epidemic' of mortgage fraud was developing that would, he predicted, cause a financial 'crisis' if it were not stopped? Which administration "debated for months the advantages and perils of a criminal indictment against HSBC" given an FBI investigation confirming the congressional finding that the bank, between 2001 and 2010, "exposed the U.S. financial system to money laundering [by a leading drug cartel] and terrorist financing risks" [by Saudis]"? The U.S. Attorney General, at the urging of the Fed and the Comptroller of the Currency, refused to indict the bank or its senior officers who committed and profited from tens of thousands of felonies. What U.S. Attorney General testified to Congress in the following terms that the largest banks were too big to prosecute?
I met with [deleted] Director of [deleted], the day after he assumed office to map out a joint effort between the regulatory agencies and the Department of Justice to winnow through the mass of referrals that had already been made to ensure that we were focusing upon the most significant cases as our first priority.Under which administration did Scott G. Alvarez, general counsel at the Federal Reserve successfully intervene with the SEC to weaken fraud penalties against some of the world's largest banks? Under which administration did Timothy Geithner, then President of the NY Fed, successfully intervene with then NY Attorney General Cuomo to caution against vigorous prosecution of elite banksters? Did this harm Geithner and Cuomo's careers? Which President unconstitutionally appointed the first Director of the Office of Thrift Supervision -- after being warned that appointing him without the Senate's 'advice and consent' would be unconstitutional? Why did the President do so -- and why did the Senate not protest the action? Which administration ended the career prospects of a top regulator they appointed when he had the audacity to bring an enforcement action against the President's son? Which U.S. Attorney General wrote: "We are presently facing the largest financial disaster in American history grounded in the betrayal of public trust by flagrant self-dealing in 'other people's money'"? Which U.S. Attorney General described the causes of the financial crisis he was investigating "the biggest white-collar swindle in history"?
I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.
For bonus points, these questions relate to a non-government party.Who wrote the following -- and made it public?
"Our savings and loan industry has created the largest mess in the history of U.S. financial institutions," [deleted] said in a letter to the [industry trade association -- the 'league']. "The league responds to the savings and loan mess as Exxon would have responded to the oil spill from the Valdez if it had insisted thereafter on liberal use of whisky by tanker captains." [Deleted] blamed the league for 'constant and successful' lobbying over many years that prevented government regulators from cracking down on S&Ls run by 'crooks and fools' and persuaded regulators to use 'Mickey Mouse' accounting .
"It is not unfair to liken the situation now facing Congress to cancer and to liken the league to a significant carcinogenic agent ."
"Because the League has clearly misled its government for a long time, to the taxpayers' great detriment, a public apology is in order, not redoubled efforts to mislead further."
Answers : (plus the President that appointed the official):George HW Bush Gore Mukasey (Bush II) Thornburgh (Bush I) George HW Bush Obama William Sessions (Bush II) Obama Thornburgh (Tim Ryan was the OTS Director he worked with) OTS, during the S&L debacle, made > 30,000 criminal referrals (all federal banking agencies combined made fewer than a dozen criminal referrals in response to the Great Financial Crisis) and DOJ obtained > 1,000 felony convictions in cases DOJ defined as 'major.' The FBI (through Chris Swecker) Obama 13. Holder (Obama) Bush II Bush II (No, Cuomo was elected Governor of NY and Obama appointed Geithner as Treasury Secretary) George HW Bush (the unconstitutional appointment was Danny Wall as OTS Director) George HW Bush (Tim Ryan was the OTS Director who brought the enforcement action v. Neil Bush) Thornburg (Bush I) Thornburgh (Bush I) Warren Buffett and Charles Munger (May 30, 1989).
JEHR , December 8, 2018 at 12:57 pm
The mess is caused by deregulation, money in politics, lobbying by the rich, wealth inequality, fraud in the banking system, corruption of corporations, the wealthy hiding taxes off-shore, greed, failure of democratic institutions, etc. In another way, you could say It's the Love of Money. (It is a very long list epitomized by Black's quotations from the highest offices in the land.)
Chauncey Gardiner , December 8, 2018 at 9:35 am
Concise and enlightening summary. Thank you, Bill Black. Should be taught in every high school US History and Civics class in America together with financial and monetary literacy. Interesting how pervasive this behavior has been across so called "leaders" of both legacy political parties and whose names repeatedly appear on the summary list. The damage to the social and political fabric of the nation is incalculable.
Dec 08, 2018 | www.thetradingreport.com
Organized crime. This phrase is now a precise synonym for big-banking in the United States. These Big Banks commit big crimes; they commit small crimes. They cheat their own clients; they swindle outsiders. They break virtually every financial law on the books. What do all these crimes have in common? The Big Banks commit all these crimes again and again and again – with utter impunity.
These fraud factories commit their serial mega-crimes, year after year, because the Big Banks know that they will never, ever be punished. On rare occasions, their crimes have been so egregious that U.S. 'justice' officials could no longer pretend to be oblivious to them. In such cases, there was a token prosecution, there was a settlement where the law-breaking banks didn't even have to acknowledge their own criminality, and there was a microscopic fine – which didn't even force the felonious financial institutions to disgorge all of their profits from these crimes.
Criminal sanctions, by definition, are supposed to deter criminal conduct. The token prosecutions against U.S. Big Banks didn't deter Big Bank crime, they encouraged it. But even these wrist-slaps were becoming embarrassing for this crime syndicate, so they dealt with this problem. The Big Bank crime syndicate told its lackeys in the U.S. 'justice' department that they were not allowed to prosecute one of its tentacles, ever again.
The lackeys, as always, obeyed their Masters, and issued a new proclamation . The U.S. 'Justice' Department would never prosecute a U.S. Big Bank ever again – no matter what crimes it committed, no matter how large the crimes, no matter how many times the same Big Banks committed the same crimes. Complete, legal immunity; totally above the law. A literal culture of crime.
What happens when you create a culture of crime in (big) banking? Not only the banks break laws – with impunity – their bank employees do so as well. Case in point: Warren Buffett's favorite Big Bank – Wells Fargo. Wells Fargo employees came up with a good idea for boosting their salaries: stealing money directly out of the accounts of the bank's clients .
Consider how large this crime became, in just one of these tentacles of organized crime.
L.A City Attorney Mike Feuer announced a $185 million settlement reached with Wells Fargo, after thousands of bank employees siphoned funds from their customers to open phony checking and savings accounts raking in millions in fraudulent fees. [emphasis mine]
Thousands of bank employees stealing millions of dollars from bank customers, in tiny, little increments, again and again and again. But the story gets much worse. Why was a lowly city attorney involved with the prosecution of this organized crime?
So where is the FBI? Where is the Department of Justice? How about California Attorney General Kamala Harris? Too busy campaigning for the Senate to notice? How about L.A. District Attorney Jackie Larry?
Only City Attorney Mike Feuer took action, and he only has the authority to prosecute misdemeanors
There are only two ways in which the non-action of the U.S. pseudo-justice system can be explained:
Take your pick. The U.S. pseudo-justice system is used to seeing so many multi-billion dollar mega-crimes being committed by these fraud factories that the systemic crime at Wells Fargo (which was 'only' in the $millions) didn't even attract their attention. Or, the entire U.S. pseudo-justice system is completely bought-off and corrupt – and they refuse to prosecute Big Bank organized crime .
A culture of crime.
It gets still worse. Thousands of Wells Fargo employees stole millions of dollars, from countless clients. They were caught. But not even one banker was sent to jail. In a real justice system, systemic crime of this nature would/could only be prosecuted in one of three ways. Either every Wells Fargo criminal would be prosecuted to the full extent of the law (given the egregious nature of the crime), or Wells Fargo management would be prosecuted – because they would have/should have known about this crime-wave. Or else both.
Bankers stealing money, directly and brazenly, right out of customer accounts, but no one goes to jail? A culture of crime.
Understand that endemic, cultural changes of this nature don't originate at the bottom of the corporate ladder. They originate at the top. In the case of the Wall Street crime syndicate; we already know that their management personnel are criminals, because they have admitted to being criminals.
Many Wall Street executives says [sic] wrongdoing is necessary: survey
If the ancient Greek philosopher Diogenes were to go out with his lantern in search of an honest man today, a survey of Wall Street executives on workplace conduct suggests he might have to look elsewhere.
A quarter of Wall Street executives see wrongdoing as a key to success, according to a survey by whistleblower law firm Labaton Sucharow released on Tuesday.
In a survey of 500 senior executives in the United States and the UK [New York and London] , 26 percent of respondents said they had observed or had firsthand knowledge of wrongdoing in the workplace, while 24 percent said they believed financial services professionals may need to engage in unethical or illegal conduct to be successful [emphasis mine]
One-quarter of Big Bank management admitted that they "need" to commit crimes. A culture of crime. More needs to be said about the rampant, disgusting criminality among upper management in the Big Banks of the U.S. (and UK).
A known whistleblower was conducting a public survey, asking known criminals how many of them were engaging in criminal behavior. What percentage of respondents would lie when answering such a survey? Three-quarters sounds about right. One-quarter of Wall Street executives admitted that committing crimes was a way of life. The other three-quarters lied about their criminal acts.
Monkey see; monkey do. The lower level foot soldiers see their Bosses breaking laws, with impunity, on a daily basis. Their reaction, at Wells Fargo? "Me too."
Most if not all of the Wall Street fraud factories conduct detailed "personality testing" on their bank personnel. Are they looking to weed-out those with criminal (if not psychopathic) inclinations? Of course not. They conduct this personality testing to find which employees have no reservations about engaging in criminal conduct – so they can be fast-tracked for promotion .
There is no other way in which the systemic criminality of senior banking personnel can be reconciled with the detailed personality-testing in which they participated, in order to reach that level of management. The Wall Street fraud factories look for the most amoral criminals which they can find. And with the exorbitant, ludicrous "compensation" they award to these criminals for their systemic crimes, they end up with (literally) the best criminals that money can buy.
A culture of crime.
As a final note; the U.S. system of pretend-justice already has a powerful weapon in its arsenal to fight organized crime: the "RICO" act. This anti-racketeering statute was created for one, precise purpose: to not merely prosecute/punish organized crime, but to literally dismantle the crime infrastructure which supports the organized crime.
Not only does the statute confer strong (almost limitless) powers in gathering evidence of organized crime, it also permits mass seizures of assets – anything/everything connected to the organized crime of the entity(ies) in question. In the case of the Big Bank crime syndicate, where all of its operations are directly/indirectly tied into criminal operations of one form or another, if RICO was turned loose on these fraud factories, by the time the dust had settled there would be nothing left.
Oh yes. If the U.S. 'Justice' Department ever went "RICO" on U.S. Big Banks, lots and lots and lots of bankers would go to prison, for a very, long time.
Dec 08, 2018 | www.unz.com
Anonymous  Disclaimer , says: December 7, 2018 at 12:23 pm GMT@Miro23
Now that the banks are calling in their insurance, the EU has to deliver either by 1) screwing down Italy the same as they did Greece, or 2) getting the French and German public (or better the whole EU) to bail out the banks.
There is a third option: the banks simply accept their losses, and the bankers make do without their customary bonuses for a few quarters.
Dec 08, 2018 | peakoilbarrel.com
Survivalist, 12/06/2018 at 6:43 pmMy apology if this was posted on the last thread; an Interesting article from Jean LaherrereGoneFishing, 12/06/2018 at 7:07 pm
Thoughts on the Future of World Oil Production
I hope the oily side of the blog finds it interesting.Great article, thanks. Author says US LTO will be done by 2040, which makes sense. The speed and acceleration of sinking oil production is critical since we have not been strongly pursuing alternatives. If the production is down 50 percent by 2030 to 2035 it's going to be a tough go. If it falls faster then we are in severe trouble.Dennis Coyne, 12/07/2018 at 10:38 amGone Fishing,Michael B, 12/06/2018 at 9:33 pm
Jean Laherrere knows a lot, but on LTO I think he may be wrong.
From the piece linked above:
The best approach for forecasting future production is the extrapolation of past production (called Hubbert linearization). For Eagle Ford the trend can be extrapolated toward an ultimate quantity of 3 Gb.
The USGS estimates about a 12.5 Gb mean for the TRR of the Eagle Ford, when economics is considered the URR might be reduced to 10Gb under a reasonable oil price scenario (AEO 2018 reference oil price scenario).
Recent USGS estimates for the Permian Delaware Basin have lead to a revision of my US tight oil estimate to a mean of 74 Gb with peak probably in 2025 to 2030. Decline will be relatively steep from 2030 to 2040, if the USGS estimates for the US tight oil resource prove correct.This is a terrific article. It takes all the confusions around oil and articulates them beautifully. His review really makes me want to buy the book.yvest, 12/07/2018 at 7:03 am
This is a delight to me because while I've always liked Laherrere's charts, I find his English writing atrocious (not all his fault as a native speaker of French). This could alienate lay readers, which is too bad because his message really needs to get out there.
The uncertainties he notes are shocking. That we have spent the last ten years pissing away our remaining "pennies" on a driving spree, instead of using it to build a renewable future, really makes me think that the backside of the peak is going to be awful.
Laherrere's knowledge is magisterial. Good on the editor who worked with him on this.Indeed the amount of work that Jean is producing is truly quite amazing. By the way what about Kjell Aleklett ? According to his blog he didn't publish anything since 2017, the case ?Jeff, 12/07/2018 at 7:07 am
The "issue" with Jean is that he also is a climato skeptic (regarding CO2 effects) and this has been detrimental to his ressource studies.
But one exercice in comparing the urgencies (taking the IPCC models just as they are), and feeding them with the resource aspects of Laherrere, clearly shows that peak oil or even peak fossile is the most urgent matter (knowing that anyway the mitigation measures, dimishing fossile fuels burning, are usually the same, except stuff like CSS, that will most probably never happen anyway).
Some elements (and Laherrere charts) in below post about this, sorry in French, but should go ok in gg translate :
Also below ppt in English from B Durand and Laherrere :
http://aspofrance.viabloga.com/files/BD_Fossils_Fuels_Ultimate_2015.pdfAleklett has retired.yvest, 12/07/2018 at 7:11 amOk but the case also for Laherrere, and since 20 years or something !yvest, 12/07/2018 at 7:09 amAnd on this subject the most impressive chart is probably below one :Dennis Coyne, 12/07/2018 at 10:42 am
[img] https://iiscn.files.wordpress.com/2018/12/lahererre-et-scenarios-giec.png [/img]
Overall the terrible deficit of the "resource message" compared to the climate/CO2 one, could be seen as a key reason for no measures being taken for the two aspectsGuym,GuyM, 12/07/2018 at 11:20 am
Laherrere also suggests a 3 Gb URR for Eagle Ford where the USGS TRR mean estimate is about 12.5 Gb and when economic assumptions are applied the ERR is probably about 10 Gb.
You are much more familiar with the Eagle Ford, at $80/b (2017$) does a 3 Gb URR estimate seem correct?Seems low.Dennis Coyne, 12/07/2018 at 11:50 amGuym,GuyM, 12/07/2018 at 12:52 pm
Thanks. Does 10 Gb seem reasonable or is that too high? Average of USGS mean and Laherrere's estimate would be about 6.5 Gb, again you know the area so your estimates would probably be better than most.It's pretty difficult to measure with strictly an $80 price. Some depends on gas price. There are three windows in the EF. Oil, gas/condensate, and mostly gas. Gas has barely been touched, and is the biggest window. Geologically older. It still will produce some oil and condensate. If any, it will be mostly condensate. But it is still production as yet mostly untouched. Gas/condensate has been drilled, and is responsible for the higher api coming out of the EF, but in the past few years, less has been drilled due to the api. Oil window is being drilled, but there is still plenty of tier two and three areas to go. Not so much tier one. How do you measure that, and at what oil and gas price. I would say 12 is possible, but it includes a lot of condensate and gas.Dennis Coyne, 12/07/2018 at 1:01 pm
You could look at the USGS assessment of the Delaware in the same light. It may be there, but is it cost productive? You may only get gas and/or condensate, depending on geological age of the formation. Or, you may have to keep chasing after anything, as it moves quickly as wells are drilled.Thanks for the correction. Yes Gas prices would also be needed. The 10 Gb was C+C and yes there is probably lots of condensate. I guess I would make it $4/ MCF for NG, you would probably need condensate and NGL prices to do a full analysis, way too many moving parts for me.GuyM, 12/07/2018 at 1:21 pmGot that right. Here's my cracker jacks geology assessment in the Permian. midland and Delaware basins are slightly different, but the both have a wolfcamp as the lower level. It's primarily a shale from my view of core samples. From the Bone Springs to the bottom wolfcamp, there is no clear formation that acts as a container, Bone Springs looks like it is closer to a sandstone, but closely formed from my view of the core samples. Not conducive to water flooding due to lack of "walls". But, because of the lack of walls, the oil/condensate/gas travels when wells are drilled. Indications are that EF has the same problems, but not as fast? Very simplistic, and possibly wrong viewpoint.Doug Leighton, 12/06/2018 at 6:51 pm
And there is a fairly wide variety of prices depending on what comes out. I'm still trying to figure out my pay Stubbs.LARGEST CONTINUOUS OIL AND GAS RESOURCE POTENTIAL EVERMichael B, 12/06/2018 at 9:35 pm
Today, the U.S. Department of the Interior announced the Wolfcamp Shale and overlying Bone Spring Formation in the Delaware Basin portion of Texas and New Mexico's Permian Basin province contain an estimated mean of 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids, according to an assessment by the U.S. Geological Survey (USGS). This estimate is for continuous (unconventional) oil, and consists of undiscovered, technically recoverable resources.
https://www.sciencedaily.com/releases/2018/12/181206135643.htmI'll be curious to hear others' assessments of this. Zinke is really jumping up and down with the pom-poms on this one.GuyM, 12/06/2018 at 10:49 pmThe Easter Bunny, Santa Clause, Tooth Fairy, but no Trolls? Conventional? They are out of their Fxxng minds. Dept of the Interior is sharing the same hospital suite with the EIA. Both digging for that phantom oil.Dennis Coyne, 12/07/2018 at 10:44 am
Somebody ought to tell the oil companies to quit using all this fracking stuff. All they need to do is drill straight down. Sheesh!Guym,GuyM, 12/07/2018 at 11:56 am
Your estimate of Permian Basin URR is ? Generally the USGS does a pretty good job in my opinion.I'm not a geologist, but your original projections peaking in 2025 appear reasonable to me. Slow peak, not a huge peak like some. To add to that, JG Tulsa (below post), who is a working geologist in the area, agrees with a mid 2020's peak. I'm not stupid enough to argue with expertsDennis Coyne, 12/07/2018 at 1:05 pmGuym,GuyM, 12/07/2018 at 1:50 pm
You are clearly smarter than me. I do tend to listen when geologists and geophysicists try to educate me.
Here is a preliminary estimate for US LTO assuming USGS mean estimates are correct, the Permian is up to date, but the older Bakken, EF, Niobrara, and US other LTO scenarios need to be revised to reflect the AEO reference oil price scenario. Peak about 9 Mb/d in 2025, also shown is an older estimate from June 2018 (before the recent Delaware Basin Wolfcamp and Bonespring assessment from the USGS.)
I think your original is closer to reality.Coffeeguyzz, 12/06/2018 at 11:11 pmThis 46 billion barrels oil – along with 20 billion barrels NGLs and 281 Tcf gas – is for the Delaware Basin Wolfcamp and Bone Spring only.Dennis Coyne, 12/07/2018 at 8:54 am
Combined with the earlier Midland Basin assessments of the Wolfcamp and Spraberry of 24 billion barrels combined, the total so far Technically Recoverable Resource is over 70 billion barrels oil.
Just as the Haynesville jumped from 39 Tcf to over 300 Tcf as the Haynesville/Bossier, the Mancos from 1.6 to 66 Tcf, the Barnett from 26 to 52 Tcf, the Bakken/TF will jump next assessment and both the Utica and Marcellus will skyrocket.Coffeeguyzz,Watcher, 12/07/2018 at 2:55 am
I know less about Marcellus, but Bakken/Three Forks was recently assessed in 2013, the new assessment may be an increase, but I won't speculate in advance what it will be.
The 46 Gb mean undiscovered TRR for the Wolfcamp (Delaware Basin) and Bonespring is a surprise to me, based on this the Permian tight oil TRR would be about 74 Gb, before this assessment I had guessed 8 Gb for Delaware Wolfcamp based on output compared to Midland Wolfcamp (it was about 30% of Midland so I took the 20 Gb Midland Wolfcamp times 0.3 and rounded to 8 Gb). My previous mean estimate for Permian tight oil TRR was 38 Gb, so I was too low by more than a factor of 2. My F5 (5% probability TRR might be higher) estimate was 54 Gb before and the F95 estimate was 20 Gb, these are revised to F95=43 Gb and F5=113 Gb.
For the entire US I had a previous TRR estimate of 70 Gb for all of the US, this is revised to 107 Gb for the mean US tight oil TRR.
An interesting development that might push the US peak in tight oil a little later and/or a little higher. My F5 model had the Permian peak at about 7.5 Mb/d in 2027, a new model might result in 2029 at 9.5 Mb/d, for the US as a whole, other tight oil plays might be declining by 2029, so the overall US peak might be 2027 or 2028, based on current information.https://pubs.usgs.gov/fs/2018/3073/fs20183073.pdfWatcher, 12/07/2018 at 3:19 am
The formal report. The references are . . . a bit odd. There is a sense the whole thing is dependent on technology results assessment from IHS.
Meaning, I don't see anything here that suggests USGS sent teams out to look at rock for this whole area. They seem to have taken info from other IHS papers -- and the recent ones from USGS were for what looks like much more limited geographic areas. Looks like IHS encouraged extrapolation.Btw someone at Bloomberg has declared this is a X2 on previous estimates. That would suggest 46 billion barrels of oil we're not just added to the US resource database. It would be more like 23.ProPoly, 12/07/2018 at 9:49 am
The Bloomberg guy didn't seem all that sharp, and so let's not take that as gospel.
Probably worth noting that it would not take much variance to move this resource into an API 45+ or even 50+ configuration, and given the NAT gas and NGL estimates, that would seem a pretty credible scenario. In which case it's not oil."Extrapolation" fits with it being undiscovered TRR.Dennis Coyne, 12/07/2018 at 10:17 am
This reminds me a lot of ANWAR (wasn't oil) and Monterey (not actual technically recoverable, our bad).The Monterrey estimate was a study done for the EIA which was poorly done (it was not a USGS estimate), the USGS estimates tend to be pretty good and have tended to be on the conservative side, though we won't know for sure until all the oil is produced and the last well is shut in. Every resource estimate involves extrapolation and/or modelling of future well output by definition.Dennis Coyne, 12/07/2018 at 9:58 am
Some estimates are better than others, for example the USGS estimates are better than the EIA estimates in most cases.Thanks Doug,Dennis Coyne, 12/07/2018 at 10:10 am
Previously I has guessed (incorrectly) that Permian mean TRR would be 38 Gb, this new assessment would lead to a revision to about 74 Gb for mean TRR of the Permian Basin tight oil resource.
In the scenario below I have a 253,000 well scenario (about 6 times more than my ND Bakken/Three Forks mean scenario with 42,000 wells completed.) I assume new well EUR starts to decrease in Jan 2023(about 3 years after my estimate of the future ND Bakken EUR decrease start as Permian ramp up started about 3 years after Bakken). This assumption is easily modified.
Peak is about 2028 with peak output at about 7000 kb/d (currently Permian tight oil output is about 2750 kb/d based on EIA tight oil production estimates by play).
The scenario above does not consider economics. When we consider the discounted net revenue over the life of the well and assume this must equal the real well cost in order for the well to be completed using the assumptions below, then we find an economically recoverable resource (ERR) scenario.GuyM, 12/07/2018 at 10:25 am
Economic assumptions (all costs in constant 2017$) are:
real oil prices in 2017$ follow the EIA AEO 2018 Reference Brent Oil Price scenario
royalties and taxes are 32% of wellhead revenue
transport cost is $4/b
OPEX is $2.3/b plus $15000 per month per well
real annual discount rate is 7% (nominal rate is 10% at 3% annual inflation rate)
real well cost=9.5 million 2017US$
Peak output is unchanged but wells completed are reduced to 173,000 and ERR=60 Gb.
The indications from drilling companies, so far, operating in the Delaware do not seem to jive with the assessment of grandiosity. So, I am more than skeptical. The government can create all the reserves they want, but if the oil companies can't get it out of the ground?? My understanding is that there is a core area in West Texas and NM. EOG is there. Extends a few Counties in West Texas and NM starting around Loving County. Even there, it is high api. Outside of that, it is highly sporadic. If you extrapolate what they are doing in tiny Loving County to the rest of the Delaware, you can come up with these numbers. But, you can't. As I read, there are over 800 Ducs outside of this area. You leave them as Ducs, because you pretty much know what the completion will look like after drilling. Basically, the report is hogwash. It's pretty easy to tell on the Texas side, as you can pull up completions by county.Dennis Coyne, 12/07/2018 at 10:53 amGuym,JG Tulsa, 12/07/2018 at 11:10 am
It may require higher oil prices and the associated gas is a problem, not enough infrastructure to move it.
Also the USGS simply does a resource assessment, these are not reserves, no economic assessment was done, the USGS leaves that to others.
I have often been skeptical of USGS Assessments (such as Bakken Assessment in 2013), looking at proved reserves and cumulative production to data in the ND Bakken/Three Forks, the 11 Gb mean TRR estimate from 2013 looks pretty good.
This may look different in 2023.As a working petroleum geologist in the Delaware Basin and others, I will say USGS and EIA assessments are considered a joke. They do little to take into account the actual geology, or changes in the thermal maturity of the rock across a basin, it is more multiply an average well performance for a certain amount of acres drilled, times the total area of the basin, minus the number of drilled wells.GuyM, 12/07/2018 at 11:22 am
Everything is more complex than that. Right now operators are drilling the best, most economic parts of the Delaware basin, at the going rate it will not be too many years before they have to shift over to other benches of the Wolfcamp or Bone Spring, which will be less productive. for deeper Wolfcamp benches you get more condensate, less oil, much more gas, you might go from a 10,000′ lateral making 1-2 MMBO in the Wolfcamp A, down to one making 300-500 MBO.
Still a decent well when you add in the gas, but if you take that across a large area that will lead to a substantial decline in new well performance. I would not doubt oil production peaks in the mid-2020s as people drill up the best rock, and have to keep shifting to less productive horizons.Thank you. That was my take on all, but I'm no geologist. Nice to have a professional opinion.Dennis Coyne, 12/07/2018 at 1:21 pmThanks JG Tulsa,GuyM, 12/07/2018 at 4:59 pm
Can you give us your estimate of the TRR or ERR of the Delaware Wolfcamp and Bonespring. There is a wide range in the USGS TRR estimate from 27 to 71 Gb with a mean of 46 Gb and a median of 45 Gb. Would you say that 27 Gb is too high? It seems clear you think that 46 Gb is far too optimistic. Note that the mean ERR would probably be around 38 Gb if the mean TRR estimate was correct and prices follow the AEO 2018 reference price scenario. For the F95 USGS TRR estimate the ERR would be around 21 Gb.
Maybe you could also comment on other USGS assessments for Eagle Ford, Wolfcamp Midland basin and Spraberry. Perhaps you could give us the "correct assessment".
I agree the EIA assessments are not good, economists do not know much about geophysics. The people at the USGS are scientists, though they have limited information and thus use statistical analysis to fill the data gaps.Come on, Dennis. He may be a geologist, but my bet he is mortal, like you and I. I really believe your first graph with 8 million as the high is the best I have seen. The tail of that is probably not ever to be properly guessed, until it happens.Watcher, 12/07/2018 at 2:53 pmDood, one of the most frequent points we deal with on this blog is the claim that technology in horizontal fracking has multiplied output tremendously -- excluding from consideration stage count/length.GuyM, 12/07/2018 at 3:57 pm
The extra production "per well" seems to be from the well being longer in length and thus consuming more water and proppant. Is this true, or is there some magical improvement in proppant type or fracking pressure or whatever?It's mostly the length of the lateral, although some is due to increased fracking stages within the lateral (more holes in the pipe). Better drilling is another, although extra lateral makes up most of it. The laterals, in general, are about twice as long.Michael B, 12/07/2018 at 8:41 amUS becomes a net oil exporter.Watcher, 12/07/2018 at 11:33 am
Hanh? And this paragraph strikes this lay reader as utterly incoherent:
The U.S. sold overseas last week a net 211,000 barrels a day of crude and refined products such as gasoline and diesel, compared to net imports of about 3 million barrels a day on average so far in 2018, and an annual peak of more than 12 million barrels a day in 2005, according to the U.S. Energy Information Administration.
From EIA: "In 2017, the United States consumed about 19.96 million barrels per day." Let's call it 20.
Also from EIA: US weekly field production ending 11/30: 11.7 million barrels.
True? Fudging? Lying? What am I missing?
Then, you read further into the article:
While the net balance shows the U.S. is selling more petroleum than buying, American refiners continue to buy millions of barrels each day of overseas crude and fuel. The U.S. imports more than 7 million barrels a day of crude from all over the globe to help feed its refineries, which consume more than 17 million barrels each day.
WTF.It's all measured in barrels.Michael B, 12/07/2018 at 1:38 pm
The US refines a lot of imported oil -- for export. There is refinery gain in this. This means a barrel comes in. It is refined to various constituent parts like gasoline, diesel, kerosene, etc. The VOLUME of these parts are liquids of less density and this means their volume is greater. So a barrel of crude will yield a sum total of more than 1 barrel of liquids of lower density. Since these products are exported, the barrel count is in favor of exports vs the barrel count imported.
This is not a huge effect, but it's significant.
There's an EIA page for US sales volume consumed. If you add up all the products you get well over 15 million bpd. US production is rather less than that. Imports must exceed exports.Thanks for trying to explain it to me. Maybe it's just too complicated for me to understand.kolbeinh, 12/07/2018 at 1:41 pm
I still can't reconcile the headline, "US becomes a net oil exporter" with the EIA's numbers: The US consumes 20 million barrels a day. The US produces 12 million barrels a day. But, yes, they're net exporters. Whatever.
After 14 years, the niceties of peak oil still escape me.I am not sure I follow you entirely, but for heavier crude oils there is waste to get to diesel (a bit higher than 30 API). And for extra light oil there is a huge waste to get to diesel, as much has to be segregated to petroleum gas and gasoline components due to length of carbon chain.Watcher, 12/07/2018 at 2:50 pm
The case for diesel shortage in 2020 due to shipping legislation is still very much legit.I was talking about imported crude (that would not be LTO and probably diesel rich) being refined into a larger number of barrels of product vs the barrels of input crude. They export. It's a bias towards export.Eulenspiegel, 12/07/2018 at 8:55 am
I think mostly the report derives from very noisy weekly data. The US is not a net exporter.So the oil cut is out: 1.2 mb. Together with russia and others. So LTO is saved, the frenzy can go on soon.
Dec 08, 2018 | peakoilbarrel.com
kolbeinh , says: 12/07/2018 at 9:45 amYes, it is all a big show!GuyM , says: 12/07/2018 at 5:18 pm
The peak oil theme is very much forgotten in all the turmoil, but is very real still.
How much more reserves to classify as probable (2p) is a movable target, it depends on the oil price.
And how rapid the extraction rates of reserves can extend to difficult to say; technology and not at least the 3D maps of reservoirs coupled with improved seismic data, more precise drilling and lower costs due to excess oil service capacity (at least for offshore) have countered the inevitable declining quality of oil reservoirs and size of new ones coming online for some time now.
I agree that 2019 will show big declines in OECD inventory primarily because core OPEC wants it. (increasing KSA premiums to the US +3,5 dollars in Jan and lowering it to Asia).
The next question is how high oil prices will go before there is some reaction from the nations that have spare storage/capacity. I am thinking there is some relief in increased pipeline capacity in Texas in 2H 2019 and also Johan Sverdrup in Norway (since I follow things close to home) in the same time period to save the oil market in winter 2020.
Or still more likely, a spike in oil prices in 2H 2019 and a recession soon thereafter.
Who knows..the only thing certain is that oil is being pressured towards the final "spare capacity" (whatever that is) and that a recession will come anyway as a result of the low oil price environment the last 4 years.
Offshore is hit hard, so are supply in places "too risky" for cheap financing the hidden secret of the oil market (why so few news stories covering this?)Saved from $40 oil, but I really doubt there will be much of a frenzy at $52 oil price. Hopefully, that will give them enough cash flow for stationary. They need to write Christmas letters to their shareholders telling them everything will be better next year.
Dec 08, 2018 | oilprice.com
We will also have to see how long it takes for the shale frackers modify their behavior in the face of $50 oil. We haven't seen any signs so far, with a few rigs continued to be added each week. At some point the frackers will wake up and determine that oil at $50 doesn't go as far as oil at $75 and tap the brakes just a hair. We are also due for a seasonal pause in some of the U.S. Northern areas, as winter takes a bite out of drilling activity.
In practical terms we will probably be well into the first quarter before we see any impact from OPEC production cuts. However, once we do, it will be like June of 2017 all over again, and the price of oil could strongly respond to the upside.
By David Messler for Oilprice.com
Dec 08, 2018 | mainlymacro.blogspot.com
The Bank's analysis is of course not beyond criticism.  But the attacks of the Brexiter elite are quite deliberately not economic in character but political: Rees Mogg claimed Carney is a second rate politician (a second rate foreign politician!) and his forecast is designed to produce a political outcome ('Project Hysteria'). The idea is to suggest that these projections should not be taken as a warning by experts but instead as a political act. Once again, I'm not suggesting we should never think about what an experts own interests might be, but if you carry this line of thought to the Rees Mogg extreme you undermine all expertise that is not ideologically based, which is exactly what Rees Mogg wants to do.
This I think is the second reason why the view of the overwhelming majority academic economists that Brexit will be harmful is going to be ignored by many. Since Mrs Thatcher and the 364 economists, the neoliberal right has had an interest in discrediting economic expertise, and replacing academic economists with City economists in positions of influence. (Despite what most journalists will tell you, the 364 were correct that tightening fiscal policy delayed the recovery.) Right wing think tanks like the IEA are particularly useful in this respect, partly because the media often makes no distinction between independent academics and think tank employees. Just look at how the media began to treat climate change as controversial.
But isn't there a paradox here? Why would members of the public, who have little trust in politicians compared to academics, believe politicians and their backers when they attack academics? In the case of Brexit, and I think other issues like austerity, these elites have two advantages. The first is access. Through a dominance of the printed media, a right wing elite can get a message across despite it being misleading or simply untrue. Remember how Labour's fiscal profligacy caused record deficits? Half the country believe this to be a fact despite it being an obvious lie. What will most journalists tell you about Brexit and forecasts? My guess is that forecasters got the immediate impact of Brexit very wrong, rather than the reality that what they expected to happen immediately happened more gradually. Why will journalists get these things wrong? Because they read repeated messages about failed forecasts in the right wing press, but very little about how GDP is currently around 2.5% lower as a result of Brexit, and real wages are lower still.
The second is that the elite often plays on a simple understanding of how things work, and dismisses anything more complex, when it suits them. Immigrants 'obviously' increase competition for scarce public resources, because people typically fail to allow for immigrants adding to public services either directly or through their taxes. The government should 'obviously' tighten its belt when consumers are having to do the same, and so on. In the case of the economic effects of Brexit, it is obvious that we will save money by not paying in to the EU, whereas everything else is uncertain and who believes forecasts etc.
As the earlier reference to Mrs Thatcher suggests, there is a common pattern to these attacks by elites on experts: they come from the neoliberal right. If you want to call the Blair/Brown years neoliberal as well, you have to make a distinction between [neoliberal] right and left. The Blair/Brown period was a high point for the influence of academics in general and academic economists in particular on government. As I note here , Iraq was the exception not the rule, for clear reasons. Attacks by elites on experts tend to come from the political right and not the left, and the neoliberal right in particular because they have an ideology to sell.
Dec 07, 2018 | www.zerohedge.com
Appearing in court wearing a green jumpsuit and without handcuffs, Meng reportedly looked to be in good spirits in a Vancouver courtroom where the prosecutions' case was detailed publicly for the first time. Specifically, the US alleges that Meng helped conceal the company's true relationship with a firm called Skycom, a subsidiary closely tied to its parent company as it did business with Iran.
Meng used this deception to lure banks into facilitating transactions that violated US sanctions, exposing them to possible fines. The prosecutor didn't name the banks, but US media on Thursday reported that a federal monitor at HSBC flagged a suspicious transaction involving Huawei to US authorities, according to Bloomberg. Prosecutors also argued that Meng has avoided the US since learning about its probe into possible sanctions violations committed by Huawei, and that she should be held in custody because she's a flight risk whose bail could not be set high enough. Before Friday's hearing, a publication ban prevented details about the charges facing Meng from being released. However, that ban was lifted at the beginning of her hearing. Meng was arrested in Vancouver on Saturday while on her way to Mexico, according to reports in the Canadian Press.
Canadian Foreign Affairs Minister Chrystia Freeland said Canada's ambassador in Beijing had briefed the Chinese foreign ministry on Meng's arrest. The Chinese Embassy in Ottawa had branded Meng's detention as a "serious violation of human rights" as senior Chinese officials debate the prospects for retaliation. Freeland said McCallum told the Chinese that Canada is simply following its laws - echoing Prime Minister Justin Trudeau's claim that Meng's arrest was the result of a legal process happening independent of politics.
Friday's hearing in Vancouver is just the start of a legal process that could end with Meng being extradited to stand trial in the US. Even if prosecutors believe there is little doubt as to Meng's guilt, the extradition process could take months or even years.
youshallnotkill , 39 seconds ago link
Anything involving Iran is inherently political. The US is abusing Interpol in no less brazen fashion than Russia and China when seeking the extradition of dissidents. Canada shouldn't accomodate this BS.
Dec 06, 2018 | finance.yahoo.com
Social Security recipients will get a 2.8 percent increase in 2019, following a cost-of-living adjustment announced by the agency in October.
That marks the biggest hike since 2012, when the cost-of-living adjustment was 3.6 percent .
Dec 06, 2018 | finance.yahoo.com(Bloomberg Opinion) -- As a longtime market observer, what I find most interesting about the latest correction in equities has the feeling of inevitability that it will turn into something worse. It wasn't this way in late January, when everyone wanted to buy that dip. It certainly wasn't this way in 2007, when the magnitude of the recession was grossly underestimated.
Even the Federal Reserve is getting into the pessimism. Chairman Jerome Powell signaled last week that a pause in interest-rate hikes might be forthcoming. What's interesting about that is Powell surely knew that such a reference might be interpreted as bowing to pressure from President Donald Trump and yet he did it anyway. In essence, he risked the perception of the Fed's independence probably because he knows the economic data is worsening.
Just about everyone I talk to in the capital markets, including erstwhile bulls, acknowledges that things are slowing down. Yes, the Institute for Supply Management's monthly manufacturing index released earlier this week was strong, but jobless claims are ticking up and I am hearing anecdotal reports of a wide range of businesses slowing down. Even my own business is slowing. Anecdotes aside, oil has crashed, home builder stocks have been crushed, and the largest tech stocks in the world have taken a haircut. If we get a recession from this, it will be a very well-telegraphed recession. Everyone knows it is coming.
A recession is nothing to fear. We have lost sight of the fact that a recession has cleansing properties, helping to right the wrong of the billions of dollars allocated to bad businesses while getting people refocused on investing in profitable enterprises. Stock market bears are so disliked because it seems as though they actually desire a recession and for people to get hurt financially. In a way, they are rooting for a recession because they know that the down part of the cycle is necessary.
There are signs that capital has been incorrectly allocated. In just in the span of a year, there have been three separate bubbles: one in bitcoin, one in cannabis and one in the FAANG group of stocks: Facebook, Apple, Amazon.com, Netflix and Google-parent Alphabet. This is uncommon. I begged the Fed to take the punch bowl away, and it eventually did, and now yields of around 2.5 percent on risk-free money are enough to get people rethinking their allocation to risk.
Yet, I wonder if it is possible to have a recession when so many people expect one. The worst recessions are the ones that people don't see coming. In 2011, during the European debt crisis, most people were predicting financial markets Armageddon. It ended up being a smallish bear market, with the S&P 500 Index down about 21 percent on an intraday basis between July and October of that year. It actually sparked a huge bull market in the very asset class that people were worried about: European sovereign debt. We may one day have a reprise of that crisis, but if you succumbed to the panic at the time, it was a missed opportunity.
But just the other day, the front end of the U.S. Treasury yield curve inverted, with two- and three-year note yields rising above five-year note yields. Everyone knows that inverted yield curves are the most reliable recession indicators. Of course, the broader yield curve as measured by the difference between two- and 10-year yields or even the gap between the federal funds rate and 10-year yields has yet to invert, but as I said before, there is an air of inevitability about it. Flattening yield curves always precede economic weakness. They aren't much good at exactly timing the top of the stock market, but you can get in the ballpark.
I suppose all recessions are a surprise to some extent. If you are a retail investor getting your news from popular websites or TV channels, you might not be getting the whole picture. In the professional community, it is becoming harder to ignore the very obvious warning signs that a downturn is coming. In bull markets, everything works. In bear markets, the only thing that really works is short-term government and municipal bonds and cash. Ample opportunity is being given to cut exposure to risk, and it's clear that few people are taking advantage of it. They never do.
S 25 minutes ago If our country is going bankrupt, there is no better President, with greater experience at going bankrupt, than this President.
M 24 minutes ago Another Republican recession whoda thunk that would happen trump's "greatest economy ever".
D 9 minutes ago So let's see the market is up over 20% since January 3 2017 which means it's above it's historical average gain per year. Meanwhile everyone is screaming recession and bear market. I want to know why anyone who has been invested in the market longer than the last two years is so upset about. Do you think your entitled to a gain of more than 10% a year.
Dec 06, 2018 | understandingsociety.blogspot.com
Sexual harassment in academic contexts
Sexual harassment of women in academic settings is regrettably common and pervasive, and its consequences are grave. At the same time, it is a remarkably difficult problem to solve. The "me-too" movement has shed welcome light on specific individual offenders and has generated more awareness of some aspects of the problem of sexual harassment and misconduct. But we have not yet come to a public awareness of the changes needed to create a genuinely inclusive and non-harassing environment for women across the spectrum of mistreatment that has been documented. The most common institutional response following an incident is to create a program of training and reporting, with a public commitment to investigating complaints and enforcing university or institutional policies rigorously and transparently. These efforts are often well intentioned, but by themselves they are insufficient. They do not address the underlying institutional and cultural features that make sexual harassment so prevalent.
The problem of sexual harassment in institutional contexts is a difficult one because it derives from multiple features of the organization. The ambient culture of the organization is often an important facilitator of harassing behavior -- often enough a patriarchal culture that is deferential to the status of higher-powered individuals at the expense of lower-powered targets. There is the fact that executive leadership in many institutions continues to be predominantly male, who bring with them a set of gendered assumptions that they often fail to recognize. The hierarchical nature of the power relations of an academic institution is conducive to mistreatment of many kinds, including sexual harassment. Bosses to administrative assistants, research directors to post-docs, thesis advisors to PhD candidates -- these unequal relations of power create a conducive environment for sexual harassment in many varieties. In each case the superior actor has enormous power and influence over the career prospects and work lives of the women over whom they exercise power. And then there are the habits of behavior that individuals bring to the workplace and the learning environment -- sometimes habits of masculine entitlement, sometimes disdainful attitudes towards female scholars or scientists, sometimes an underlying willingness to bully others that finds expression in an academic environment. (A recent issue of the Journal of Social Issues ( link ) devotes substantial research to the topic of toxic leadership in the tech sector and the "masculinity contest culture" that this group of researchers finds to be a root cause of the toxicity this sector displays for women professionals. Research by Jennifer Berdahl, Peter Glick, Natalya Alonso, and more than a dozen other scholars provides in-depth analysis of this common feature of work environments.)
The scope and urgency of the problem of sexual harassment in academic contexts is documented in excellent and expert detail in a recent study report by the National Academies of Sciences, Engineering, and Medicine ( link ). This report deserves prominent discussion at every university.
The study documents the frequency of sexual harassment in academic and scientific research contexts, and the data are sobering. Here are the results of two indicative studies at Penn State University System and the University of Texas System:
The Penn State survey indicates that 43.4% of undergraduates, 58.9% of graduate students, and 72.8% of medical students have experienced gender harassment, while 5.1% of undergraduates, 6.0% of graduate students, and 5.7% of medical students report having experienced unwanted sexual attention and sexual coercion. These are staggering results, both in terms of the absolute number of students who were affected and the negative effects that these experiences had on their ability to fulfill their educational potential. The University of Texas study shows a similar pattern, but also permits us to see meaningful differences across fields of study. Engineering and medicine provide significantly more harmful environments for female students than non-STEM and science disciplines. The authors make a particularly worrisome observation about medicine in this context:The interviews conducted by RTI International revealed that unique settings such as medical residencies were described as breeding grounds for abusive behavior by superiors. Respondents expressed that this was largely because at this stage of the medical career, expectation of this behavior was widely accepted. The expectations of abusive, grueling conditions in training settings caused several respondents to view sexual harassment as a part of the continuum of what they were expected to endure. (63-64)The report also does an excellent job of defining the scope of sexual harassment. Media discussion of sexual harassment and misconduct focuses primarily on egregious acts of sexual coercion. However, the authors of the NAS study note that experts currently encompass sexual coercion, unwanted sexual attention, and gender harassment under this category of harmful interpersonal behavior. The largest sub-category is gender harassment:
"a broad range of verbal and nonverbal behaviors not aimed at sexual cooperation but that convey insulting, hostile, and degrading attitudes about" members of one gender ( Fitzgerald, Gelfand, and Drasgow 1995 , 430). (25)The "iceberg" diagram (p. 32) captures the range of behaviors encompassed by the concept of sexual harassment. (See Leskinen, Cortina, and Kabat 2011 for extensive discussion of the varieties of sexual harassment and the harms associated with gender harassment.)
The report emphasizes organizational features as a root cause of a harassment-friendly environment.By far, the greatest predictors of the occurrence of sexual harassment are organizational. Individual-level factors (e.g., sexist attitudes, beliefs that rationalize or justify harassment, etc.) that might make someone decide to harass a work colleague, student, or peer are surely important. However, a person that has proclivities for sexual harassment will have those behaviors greatly inhibited when exposed to role models who behave in a professional way as compared with role models who behave in a harassing way, or when in an environment that does not support harassing behaviors and/or has strong consequences for these behaviors. Thus, this section considers some of the organizational and environmental variables that increase the risk of sexual harassment perpetration. (46)Some of the organizational factors that they refer to include the extreme gender imbalance that exists in many professional work environments, the perceived absence of organizational sanctions for harassing behavior, work environments where sexist views and sexually harassing behavior are modeled, and power differentials (47-49). The authors make the point that gender harassment is chiefly aimed at indicating disrespect towards the target rather than sexual exploitation. This has an important implication for institutional change. An institution that creates a strong core set of values emphasizing civility and respect is less conducive to gender harassment. They summarize this analysis in the statement of findings as well:
Organizational climate is, by far, the greatest predictor of the occurrence of sexual harassment, and ameliorating it can prevent people from sexually harassing others. A person more likely to engage in harassing behaviors is significantly less likely to do so in an environment that does not support harassing behaviors and/or has strong, clear, transparent consequences for these behaviors. (50)So what can a university or research institution do to reduce and eliminate the likelihood of sexual harassment for women within the institution? Several remedies seem fairly obvious, though difficult.
As the authors put the point in the final chapter of the report:
- Establish a pervasive expectation of civility and respect in the workplace and the learning environment
- Diffuse the concentrations of power that give potential harassers the opportunity to harass women within their domains
- Ensure that the institution honors its values by refusing the "star culture" common in universities that makes high-prestige university members untouchable
- Be vigilant and transparent about the processes of investigation and adjudication through which complaints are considered
- Create effective processes that ensure that complainants do not suffer retaliation
- Consider candidates' receptivity to the values of a respectful, civil, and non-harassing environment during the hiring and appointment process (including research directors, department and program chairs, and other positions of authority)
- Address the gender imbalance that may exist in leadership circles
Preventing and effectively addressing sexual harassment of women in colleges and universities is a significant challenge, but we are optimistic that academic institutions can meet that challenge--if they demonstrate the will to do so. This is because the research shows what will work to prevent sexual harassment and why it will work. A systemwide change to the culture and climate in our nation's colleges and universities can stop the pattern of harassing behavior from impacting the next generation of women entering science, engineering, and medicine. (169)
Dec 06, 2018 | oilprice.comRussia Economic Report said that OPEC was the single most important factor for oil price outlooks in the short term.
"As non-OPEC oil supply growth is expected to be greater than that of global demand, the outlook for oil prices depends heavily on supply from OPEC members," the report's authors noted. The level of spare capacity among OPEC members is estimated to be low at present, suggesting there are limited buffers in the event of a sudden shortfall in supply of oil, raising the likelihood of oil price spikes in 2019."
The World Bank is not alone in seeing OPEC's spare capacity as an important factor for oil prices going forward. Spare capacity provides a cushion against price shocks as evidenced most recently by the June decision of the cartel and Russia to start pumping more again after 18 months of cutting to arrest a too fast increase in oil prices. They had the capacity to do it and prices stopped rising, helped by downward revisions of economic forecasts.
Now, the oil market is plagued with concerns about oversupply, but this could change quite quickly if there is any sign that OPEC is nearing the end of its spare production capacity. As to the likelihood of such a sign emerging anytime soon, this remains to be seen.
The U.S. Energy Information Administration estimates OPEC's spare capacity at a little over 1 million bpd as of the fourth quarter of this year. That's down from 2.1 million bpd at the end of 2017, but with Venezuela's production in free fall and with Iran pumping less because of the U.S. sanctions, the total spare capacity of the group has declined substantially.
Dec 06, 2018 | www.zerohedge.com
Originally from: Paul Craig Roberts Laments The Disintegration Of Western SocietyIn the United States today, and throughout "Western Brainwashed Civilization," only a handful of people exist who are capable of differentiating the real from the created reality in which all explanations are controlled and kept as far away from the truth as possible.
Everything that every Western government and "news" organization says is a lie to control the explanations that we are fed in order to keep us locked in The Matrix.
The ability to control people's understandings is so extraordinary that, despite massive evidence to the contrary, Americans believe that Oswald, acting alone, was the best shot in human history and using magic bullets killed President John F. Kenndy; that a handful of Saudi Arabians who demonstratively could not fly airplanes outwitted the American national security state and brought down 3 World Trade Center skyscrapers and part of the Pentagon; that Saddam Hussein had and was going to use on the US "weapons of mass destruction;" that Assad "used chemical weapons" against "his own people;" that Libya's Gaddifi gave his soldiers Viagra so they could better rape Libyan women; that Russia "invaded Ukraine;" that Trump and Putin stole the presidential election from Hillary.
The construction of a make-believe reality guarantees the US military/security complex's annual budget of $1,000 billion dollars of taxpayers' money even as Congress debates cutting Social Security in order to divert more largess to the pockets of the corrupt military/security complex.
Readers ask me what they can do about it. Nothing, except revolt and cleanse the system, precisely as Founding Father Thomas Jefferson said.
Is Thomas Jefferson Alive and Well In Paris?
Dec 04, 2018 | community.oilprice.com
Tom KirkmanNormally I don't quote entire articles, but this is a Panic Service Announcement (and a gentle ribbing).Marina Schwarz
My comment at the bottom, after the article.
The Psychological Origins of American Russophobia
The main reason so many Americans buy into the anti-Russian craze is not only due to what people are told by the government and media, but by how they think and process information. For if Americans were taught how to analyze and think properly they would not fall for the blatant propaganda.
For example, we are told that the Nazis discovered the secret of repetition as a means of programming people into believing something to be true, but we are not taught why this practice is so effective.
The psychological reason behind this trick has to do with "pattern recognition". Human beings – through evolution – have learned to identify a phenomenon as real and true because it repeats again and again and again. After a while, the mind interprets this consistent pattern as proof of truth value. In psychological terms, "schemata" are created by a layering of memories similar in nature over time so that all events associated with the phenomenon are perceived through a prism of previous repetitions. In other words, even if a certain type of behavior is different from the norm it will still be identified as belonging to the typical pattern regardless. It is literally a trick of the mind.
The American knee-jerk reaction to the recent Kerch bridge incident is a case in point. Ignoring facts, people automatically placed Russian behavior in the "aggressive" category because they have been programed by constant repetition for many years to think this way. Not having been taught this trick of the mind even educated people buy into the narrative unaware that their schemata dictate that the belief must be reinforced. All experiences regarding Russia are simply put into one box labeled "aggressive behavior".
Another psychological cause of why Americans buy into the "Russia is aggressive" narrative is due to "confirmation bias". For a variety of reasons many Americans demonize Russians. Part of this is due to the fact that people actually enjoy having a "bad guy" to hate. This is why outlaw cowboys and mafia gangsters are so popular in American culture. We love our "anti-heroes" as much if not more than our heroes. Putin, of course, is the prototypical "baddie". He's a real-life Boris from the Bullwinkle cartoon who satisfies our need to boo and hiss the proverbial bad guy.
To a certain extent, pattern recognition comes into play as well because in America TV shows and films over the past two decades evil Russian spies and mafia types have figured prominently. The repeating portrayals create schemata which then create stereotypes that frame how we think.
Russophobia, however, will not last forever because it is essentially based upon lies. Truth always wins out over time and fantasy gives way to reality. Despite the censorship on social media and the attempts to silence RT America the truth will eventually triumph.
For gagging the tongue of truth is always followed by a long-suppressed shout that echoes ever louder throughout the ages.
The most basic form of mind control is repetition.
The most basic form of mind control is repetition.
The most basic form of mind control is repetition.
... ... ...
The most basic form of mind control is repetition.Well, Dr. Paul Whatshisname is obviously an agent of Putin. Did I even need to say this?A/Plague
On a serious note, repetition works perhaps shockingly well. I was taught in my childhood that Germans are bad because Hitler and Russia was good because twice saviors. Simple and effective. However, with no social media at the time, critical thinking was also available so I could outgrow the propaganda.Tom Kirkman
... ... ...
Are you on a salary in "Russia Today" or a volunteer?Marina SchwarzOn 12/5/2018 at 10:29 AM, A/Plague said: Are you on a salary in "Russia Today" or a volunteer?
I try to gently (and if possible, humorously) nudge people to question the "official narrative". CNN / WaPo is far worse propaganda than RT. RT is clearly biased, but they are open about their pro-Russia bias. CNN pretends to be objective "journalism".
And sometimes I feel like commenting in the same vein of this little guy, bouncing all over excitedly:
https://twitter.com/i/status/945219733464469504By the way, did you know RT was nominated for an Emmy this year? It actually has a few nominations. Shocking, right? I suspect a lot of the people who say "Ew, RT, propaganda," have never read anything from RT. I have. they regularly republish Reuters and the FT as well as major U.s. outlets. I don't know what to think about that, it's so confusing.Tom KirkmanDan Warnick16 hours ago, Marina Schwarz said: By the way, did you know RT was nominated for an Emmy this year? It actually has a few nominations. Shocking, right? I suspect a lot of the people who say "Ew, RT, propaganda," have never read anything from RT. I have. they regularly republish Reuters and the FT as well as major U.s. outlets. I don't know what to think about that, it's so confusing.
https://www.rt.com/about-us/Rodent16 hours ago, Marina Schwarz said: By the way, did you know RT was nominated for an Emmy this year? It actually has a few nominations. Shocking, right? I suspect a lot of the people who say "Ew, RT, propaganda," have never read anything from RT. I have. they regularly republish Reuters and the FT as well as major U.s. outlets. I don't know what to think about that, it's so confusing.
When I read their articles I am mindful that they are Russian. Having said that, they seem to publish a lot of good content, and much of it is from Reuters and other (mostly) reputable sources. Editorials are free for anyone to research for themselves. Pretty much the same as other pubs.Laying conspiracy theories aside for one moment (and I do so love a good conspiracy theory), let's chat about this Russia panic.Dan Warnick
I am not one to panic in general. Sure, I have a food, guns, and water stash in my basement. I'm generally well prepared. There are Russia-is-the-boogeyman theories, and then there are Russia-boogey-man-theories-are-silly theories. Of course they both can't be right.
But where do these theories come from?
I am sure I'm not going to do a very good job explaining my self in the rant that follows. But I'm going to give it a good college try.
I want to talk about the Russia Boogeyman theory. First, there's no way to explain this other than to divulge my age. So I'm just going to spit it out right here and get that out of the way. I'm 40. I've been 40 for approximately 5 years, stubbornly refusing to go further than that. There. I said it. Now that that's out of the way, it's important to note that children are sponges. As such, they are impressionable and in young childhood, traumatic events can have a profound and lasting effect, and even change how someone thinks.
When I was about 10ish, in about 1983, a movie came out. If you lived in America, and likely even if you didn't, and you're over the age of 40 (or if you've been 40 for a while), you've seen it. It's a movie called "The Day After". It was a huge production and it aired on television. The most watched TV movie ever. And ranked as one of the top 10 movies ever by several sources. You millennial whippersnappers will have no clue what I'm talking about. Read on anyway, if you'd like. I'm all inclusive.
The movie was about nuclear warfare, and most importantly, the aftermath. The setting was a small town in Kansas, I think. A small town that very closely resembled my home town, making it particularly impactful (I know that's not a word. Sue me.) to me at the time. In the movie, which although was a complete work of fiction was very realistic, Russia unleashed nuclear weapons. It was freaky. So eerily unsettling was it that I obsessed about it after I saw it. I thought about it every night. I remember being so afraid that in the event of a nuclear blast, I might be separated from my family. I remember pondering if I would rather be obliterated in the blast immediately, or whether I would prefer to be spared instant death only to survive without my family under horrid conditions. I also remember drills at school around that same time that were designed to get people prepared in the event of such a disaster. While it may have done so, it also solidified in my mind that there was a real possibility these events would unfold.
Nearly two years post-freaky-movie, Sting released it's "Russia" song, about Russians loving their children too. Although it was not talked about much at the time, since life proceeded as normal, in my mind I remember thinking that I didn't much care if the Russians loved their children, because they were looking to wipe us off the map. And I lived near the Soo Locks, and I distinctly remember knowing (but I don't have any idea where I came by this information) that the Locks would be a nuclear target in the event of a strike, since it is a main thoroughfare for ships.
You can't undo that kind of fear, no more than you can undo my fear of spiders. I know in my head that spiders, at least where I live, are not poisonous and they cannot harm me. I know it. But my head cannot eradicate the intense creepiness that even thinking about spiders conjures up. Likewise, no rational thought about Russia can completely undo a fear that was borne as a child.
There you have it. My Russia hysteria may be founded or unfounded--I know not. But I do not have the power within me to change this mindset.
Okay Russia-boogeyman-theories-are-silly promoters: fire away.
@Tom Kirkman @Marina SchwarzGreat description of what life was like back then, er, so I was told, by older people. Not those of us born in the 60's, er, I mean the 70's, er, the 80's. Yeah, that's it, the 80's!Marina SchwarzWe had attack training at school in the 80s -- complete with gas masks and stuff -- on the other side of the Iron Curtain for when the imperialists invaded, what can I say. I was too distracted by everything to pay attention, though. @Rodent , your story tells me your propaganda was better than our propaganda, perish the thought. The Cold War was a blast, right?Rodent
P.S. Stephen King has done a really good overview of this stage in the U.S. entertainment industry, by the way. The stages of horror in movies. behind the curtain we only had heroic movies about the Second World War. I shall now hypothesize that the Soviet bloc lost the Cold War because its entertainment industry was absent. End of hypothesizing. Thank you for your attention.Rodent8 hours ago, Marina Schwarz said: We had attack training at school in the 80s -- complete with gas masks and stuff -- on the other side of the Iron Curtain for when the imperialists invaded, what can I say. I was too distracted by everything to pay attention, though. @Rodent , your story tells me your propaganda was better than our propaganda, perish the thought. The Cold War was a blast, right?
P.S. Stephen King has done a really good overview of this stage in the U.S. entertainment industry, by the way. The stages of horror in movies. behind the curtain we only had heroic movies about the Second World War. I shall now hypothesize that the Soviet bloc lost the Cold War because its entertainment industry was absent. End of hypothesizing. Thank you for your attention.
Makes sense. Not surprisingly the movie makers (supposedly) did not want to have Russia be the first striker in the movie, but they needed to borrow some footage from the DoD, and the govt. refused to play ball unless Russia struck first. The guy who made the movie, while he was making it, reportedly would go home at night literally sick to his stomach at the horrific nature of the movie. It went rounds and rounds with the censors who thought it might not be suitable for families.
Also interesting, speaking of Russia-led propaganda, and coming from someone who has dabbled a tiny bit in white-hatishness, if you google "The Day After Russia" as I did to inquire about the movie, there is actually a Russian movie titled "the day after" about zombies. Yup, let's just bury those search results! It's a conspiracy!!!
There is another interesting thread here about the different search results showing up for different people. What shows up when YOU google "The Day After"?You know, speaking of conspiracies, there is a fairly logical opinion that that movie was designed to scare the bajeezus out of people so they wouldn't vote for Reagan a second term.
Dec 05, 2018 | www.zerohedge.com
Update: As the giant cache of newly released internal emails has also revealed, Karissa Bell of Mashable notes that Facebook used a VPN app to spy on its competitors .
The internal documents , made public as part of a cache of documents released by UK lawmakers, show just how close an eye the social network was keeping on competitors like WhatsApp and Snapchat , both of which became acquisition targets.
Facebook tried to acquire Snapchat that year for $3 billion -- an offer Snap CEO Evan Spiegel rejected . (Facebook then spent years attempting, unsuccessfully, to copy Snapchat before finally kneecapping the app by cloning Stories.)
Facebook's presentation relied on data from Onavo, the virtual private network (VPN) service which Facebook also acquired several months later . Facebook's use of Onavo, which has been likened to "corporate spyware," has itself been controversial.
The company was forced to remove Onavo from Apple's App Store earlier this year after Apple changed its developer guidelines to prohibit apps from collecting data about which other services are installed on its users' phones. Though Apple never said the new rules were aimed at Facebook, the policy change came after repeated criticism of the social network by Apple CEO Tim Cook. - Mashable
A top UK lawmaker said on Wednesday that Facebook maintained secretive "whitelisting agreements" with select companies that would give them preferential access to vast amounts of user data, after the parliamentary committee released documents which had been sealed by a California court, reports Bloomberg .
The documents - obtained in a sealed California lawsuit and leaked to the UK lawmaker during a London business trip, include internal emails involving CEO Mark Zuckerberg - and led committee chair Damian Collins to conclude that Facebook gave select companies preferential access to valuable user data for their apps, while shutting off access to data used by competing apps. Facebook also allegedly conducted global surveys of mobile app usage by customers - likely without their knowledge , and that "a change to Facebook's Android app policy resulted in call and message data being recorded was deliberately made difficult for users to know about," according to Bloomberg.
In one email, dated Feb. 4, 2015, a Facebook engineer said a feature of the Android Facebook app that would "continually upload" a user's call and SMS history would be a "high-risk thing to do from a PR perspective." A subsequent email suggests users wouldn't need to be prompted to give permission for this feature to be activated. - Bloomberg
The emails also reveal that Zuckerberg personally approved limiting hobbling Twitter's Vine video-sharing tool by preventing users from finding their friends on Facebook.
In one email, dated Jan. 23 2013, a Facebook engineer contacted Zuckerberg to say that rival Twitter Inc. had launched its Vine video-sharing tool, which users could connect to Facebook to find their friends there. The engineer suggested shutting down Vine's access to the friends feature, to which Zuckerberg replied, " Yup, go for it ."
"We don't feel we have had straight answers from Facebook on these important issues, which is why we are releasing the documents," said Collins in a Twitter post accompanying the published emails. - Bloomberg
We don't feel we have had straight answers from Facebook on these important issues, which is why we are releasing the documents.-- Damian Collins (@DamianCollins) December 5, 2018
Thousands of digital documents were passed to Collins on a London business trip by Ted Kramer, founder of app developer Six4Three, who obtained them during legal discovery in a lawsuit against Facebook. Kramer developed Pikinis, an app which allowed people to find photos of Facebook users wearing Bikinis. The app used Facebook's data which was accessed through a feed known as an application programming interface (API) - allowing Six4Three to freely search for bikini photos of Facebook friends of Pikini's users.
Facebook denied the charges, telling Bloomberg in an emailed statement: "Like any business, we had many of internal conversations about the various ways we could build a sustainable business model for our platform," adding "We've never sold people's data."
A small number of documents already became public last week, including descriptions of emails suggesting that Facebook executives had discussed giving access to their valuable user data to some companies that bought advertising when it was struggling to launch its mobile-ad business. The alleged practice started around seven years ago but has become more relevant this year because the practices in question -- allowing outside developers to gather data on not only app users but their friends -- are at the heart of Facebook's Cambridge Analytica scandal.
Facebook said last week that the picture offered by those documents was misleadingly crafted by Six4Three's attorneys. - WaPo
"The documents Six4Three gathered for this baseless case are only part of the story and are presented in a way that is very misleading without additional context," said Facebook's director of developer platforms and programs, Konstantinos Papamiltiadis, who added: "We stand by the platform changes we made in 2015 to stop a person from sharing their friends' data with developers. Any short-term extensions granted during this platform transition were to prevent the changes from breaking user experience."
Kramer was ordered by a California state court judge on Friday to surrender his laptop to a forensic expert after he admitted giving the UK committee the documents. The order stopped just short of holding the company in contempt as Facebook had requested, however after a hearing, California Superior Court Judge V. Raymond Swope told Kramer that he may issue sanctions and a contempt order at a later date.
"What has happened here is unconscionable," said Swope. "Your conduct is not well-taken by this court. It's one thing to serve other needs that are outside the scope of this lawsuit. But you don't serve those needs, or satisfy those curiosities, when there's a court order preventing you to do so ."
Trouble in paradise?
As Facebook is now faced with yet another data harvesting related scandal, Buzzfeed reports that internal tensions within the company are boiling over - claiming that "after more than a year of bad press, internal tensions are reaching a boiling point and are now spilling out into public view."
Throughout the crises, Facebook's CEO Mark Zuckerberg, who maintains majority shareholder control, has proven remarkably immune to outside pressure and criticism -- from politicians, investors, and the press -- leaving his employees as perhaps his most important stakeholders. Now, as its stock price declines and the company's mission of connecting the world is challenged, the voices inside are growing louder and public comments, as well as private conversations shared with BuzzFeed News, suggest newfound uncertainty about Facebook's future direction.
Internally, the conflict seems to have divided Facebook into three camps: those loyal to Zuckerberg and chief operating officer Sheryl Sandberg; those who see the current scandals as proof of a larger corporate meltdown ; and a group who see the entire narrative -- including the portrayal of the company's hiring of communications consulting firm Definers Public Affairs -- as examples of biased media attacks. - Buzzfeed
"It's otherwise rational, sane people who're in Mark's orbit spouting full-blown anti-media rhetoric, saying that the press is ganging up on Facebook," said a former senior employee. "It's the bunker mentality. These people have been under siege for 600 days now. They're getting tired, getting cranky -- the only survival strategy is to quit or fully buy in."
A Facebook spokesperson admitted to BuzzFeed that this is "a challenging time."
Madcow , 7 minutes ago linksmacker , 2 hours ago link
When exactly did [neo]Liberal Dems become enthusiastic cheerleaders for rapacious profit-maximizing corporations acting illegally against the public interest?
Why would "progressives" want to shield Facebook from anti-trust legislation? Compared to the 1950s / 60s / 70s ... it seems like "liberals" and "conservatives" have switched roles.pedoland , 2 hours ago link
Why is it that Zucker.slime.berg and so many other people of his ilk are basically crooks. They go into business to wheel & deal and to rip people off. There are no depths that they won't sink to just to enrich themselves with wealth and power. They quickly learn how to sidestep and evade every law on the statute books. They have no integrity, no ethical standards and no moral compass. They are conscienceless and shameless.
The world would be better off without them. Who would miss Phacephuq?Tirion , 2 hours ago link
Dumb **** gets caught saying dumb ****.
Stop using the dumb ****'s website.Fluff The Cat , 2 hours ago link
Surely by now people realize that FB is a data-gathering organ for a Deep State geointelligence database? Why all the indignation? Every key stroke you have ever made has been recorded. Just stop using all the Deep State social media (ie, all of them).
Get your faces out of your phones and look around you and see what's happening. Humanity is becoming digital. This is a control mechanism. To regain its sovereignty, humanity needs to unite spiritually and head in a new direction. Reject all the "divide-and-conquer" BS. We are many, they are few. United we stand. Divided, we fall.DEDA CVETKO , 2 hours ago link
Never used FaceBook nor any other social media platform. All they exist to do is aggregate personal data which is then either sold or handed to governments to build profiles and keep tabs on what people are doing. The hell with that.Idiocracy's Not Sure , 3 hours ago link
Secrecy? In American elitist establishment, the most transparent Skull-and-Boner tomb in history? NOOOOOOOOooooooo....!!!!
In the USA we have always had will always have corruption to the fullest extent possible. I know rich and powerful people who are very well connected and if the average person knew what they truly think they would be freakin pissed!!
Dec 05, 2018 | www.zerohedge.com
SMOOCHY SMOOCHY CARLO , 3 hours ago linkSummerSausage , 3 hours ago link
Sure thing! And in other news Mike Flynn is now chanting "LOCK HIM UP! LOCK HIM UP!" referring of course to Trumplestiltskin. I like Mike!SMOOCHY SMOOCHY CARLO , 16 minutes ago link
You realize 2 years of Flynn under Mueller's microscope yielded nothing? And the fact he's facing sentencing means he's not going to be called as a witness to anything.
Everything Flynn had to say implicated Obama, Clapper & Brennan but the corrupt cabal isn't subject to the laws of unwashed inbreds like you and I and the other 320 million Americans (including those who THINK they're part of the club because they virtue signal so well).
Says Summer Sausage who was of course not in the room. You think you know stuff? You know stuff from the koolaide you've swallowed for the past 20 years...
Dec 05, 2018 | www.bloomberg.com
By one measure, the yield curve inverted on Monday : The interest rate on five-year Treasury bonds slipped below the rate on three-year bonds. That's a worrying sign because rates on longer-term bonds are typically higher than those on shorter-term bonds, and such inversions are associated with recessions.
So far, however, I would consider the yield curve only "partially" inverted. A full inversion would be when interest rates on two-year Treasury bonds rise higher than rates on 10-year bonds. In the last 40 years, each time this has happened, the U.S. economy has entered a recession soon afterwards.
This makes an inverted yield curve the most reliable indicator macroeconomists have for predicting a recession. The last two times the yield curve inverted, in 1998 and 2008, the debate among economists was whether this time would be different. In both cases, it wasn't.
As I write, the interest rate on two-year Treasury bonds is just above 2.8 percent while 10-year Treasury bonds are just below 3 percent. This is the closest they have been since the Great Recession ended. Does that mean that the U.S. is on the verge of recession? My answer: yes, probably. But, as with so much else, a lot depends on how the Federal Reserve reacts.
When it meets next week, the Fed is widely expected to raise its target interest rate again, to 2.5 percent. This rate, known as the federal funds rate, is the shortest term interest rate in the economy. It's the rate banks charge each other for loans that last from the close of one business day to the opening of the next. These loans help ensure that banks have enough funds available to process any payments authorized the previous day.
Raising this rate puts pressure on other short-term interest rates. December's increase is largely already priced into the interest rate on two-year Treasury bonds, so it alone won't be enough to push the economy into recession. What really matters is how the Fed responds to the yield curve and other key macroeconomic data over the next few months.
While almost all economists agree that a yield curve inversion signals a coming recession, they are divided on why. The mainstream view is that the yield curve inverts because the markets expect the Fed to cut interest rates once the economy starts to slow down. Traders want to lock in relatively high rates now so that they will be protected from future declines. This makes sense: Investors wouldn't purchase 10-year bonds that paid a lower interest than two-year bonds if those same investors thought interest rates were likely to rise.
Still, this explanation raises a deeper question. If the yield curve is inverting because bond traders believe that the Fed will lower rates in the future to fight an imminent recession, then why doesn't the Fed simply lower interest rates now and avoid the recession altogether?The answer, I think, is that the inverted yield curve indicates that the Fed's current policy has already begun to cause a recession. An inverted yield curve is telling us that short-term rates have risen above the long-run natural rate of interest and that, one way or another, short-term interest rates are going to have to fall. And they will fall either because the Fed recognizes its mistake and lowers them in time to avoid a recession, or they will fall because the Fed fails to see its mistake and leads the economy into recession.
Central to this view is the realization that it is difficult for long-term interest rates to drift very far from the long-term natural rate of interest. Suppose, for example, that over the next month or so the yield curve fully inverts, yet the Fed continues with its plan to hike interest rates. Not only would economic activity begin to slow, but inflation pressures would fall. And when inflation falls, as Irving Fisher explained, inflation-adjusted interest rates rise.
The combination of less activity and higher rates makes debt service more difficult, raising the risk of default. In response, investors would sell stocks and buy Treasury bonds. Thus interest rates on those bonds would fall even as conditions in the rest of the economy got worse.
The economy faced just this scenario in 2000, when interest rates on 10-year Treasury bonds continued to fall even as the Fed was raising rates:
By the time the Fed began cutting rates in December 2000, it was too late. The economy entered a recession in March 2001.
In 2000, the Fed overestimated the strength of the economy, and starting in 2001 it was forced to make deep rate cuts to make up for lost time. I fear it is making a similar mistake today. The underlying economy is fairly strong, but not as strong as the Fed thinks.
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Dec 05, 2018 | www.kiplinger.com
Social Security Social Security Tips to Maximize Your Benefits
Answers to real-life questions about Social Security claiming strategies.
By the Editors of Kiplinger's Retirement ReportQ If I take Social Security at age 62 and then pay back the benefits within 12 months to erase the penalty for claiming early, is it true I get to keep the interest I earned while I had the money? SEE ALSO: 10 Things You Must Know About Social Security
March 9, 2017
A Yes, but don't get too excited. Prior to 2010, when Social Security imposed the 12-month limit for withdrawing an application and repaying benefits, it was often advised that people who didn't need the money use this "do over" procedure to get what amounted to an interest-free loan from the government. If you claimed benefits at 62 and repaid them at 66, you might be playing with $100,000 or more of "house money." The 12-month window restricts that opportunity. Also, note that if you receive benefits in one calendar year and pay them back in the next, you'll likely have to pay tax on the benefits in year one. You can recoup the tax, but it's complicated.
Q I understand how delayed-retirement credits boost Social Security benefits by 8% for each year that one delays claiming between age 66 and age 70. But do cost-of-living adjustments during the years you wait amplify the advantage to more than 8% a year?
A Yes. COLAs are built into benefits starting at age 62, the earliest age at which you can claim benefits, even if you don't claim at that time.
Here's an example worked up for us by Baylor University professor William Reichenstein, head of research for consulting firm Social Security Solutions. Let's say your benefit at age 66 is estimated at $2,000 a month, but you decide to wait until age 70 to claim. You'll get eight years of compounded COLAs based on the full retirement age benefit of $2,000 -- bringing the monthly benefit up to $2,533, assuming an average annual COLA of 3%. You'd also get four years of 8% delayed-retirement credits calculated on the $2,533 benefit. That extra 32% brings the total monthly benefit at age 70 to $3,343. (Yes, a 3% COLA may seem high considering 2016's 0% and 2017's 0.3%. But the annual average COLA since automatic adjustments started in 1975 is 3.8%.)
1. Re: the professor's hypothetical example... don't kid yourself. He shows a hypothetical 20% increase ($2000 going up to $2500.) Just observing the past 3 years, COLA's have been 0% twice,( so says social security) and & .3% this past year.. And a few years before that, there were a few more 0% years, along with minimal COLA increases. Myself, having been forced to retire in 2009, I've discovered what social security says the COLA is, (on which they base your yearly increase in benefits) and what the CPI is in REAL LIFE are ridiculously far apart.)
2. The payback question states, "it's complicated." Here's the quick and short answer: TO START, you must be able to ITEMIZE your tax return ( and not take the standard deduction) in the year you enact your do over, to even have a CHANCE to recoup some of the taxes you paid on your social security benefits. The dollar amount you pay back in the "do over" to SS that exceed the benefits you received from SS during the current year, is the amount on which you can include as an itemized deduction on your tax return for the current year. And remember, itemized deductions will only reduce your taxes by 15 cents or 25 cents on the dollar (depending on your marginal tax bracket.) There is no such thing as a tax credit, nor an amended tax return, when it comes to trying to recoup income tax you paid on social security benefits. My credentials? I'm a CPA & retired college accounting professor.
Dec 05, 2018 | www.bradford-delong.com
Contra Tim Duy, The Lack of Federal Reserve Maneuvering Room Is Very Worrisome...
This , by the every sharp Tim Duy, strikes me as simply wrong: Contrary to what he says, the Fed has room to combat the next crisis only if the next crisis is not really a crisis, but only a small liquidity hiccup in the financial markets. Anything bigger, and the Federal Reserve will be helpless, and hapless.
Look at the track of the interest rate the Federal Reserve controls -- the short safe nominal interest rate:
In the past third of a century, by my count the Federal Reserve has decided six times that it needs to reduce interest rates in order to raise asset prices and try to lift contractionary pressure off of the economy -- that is, once every five and a half years. Call these: 1985, 1987, 1991, 1998, 2000, and 2007.
Continue reading "Contra Tim Duy, The Lack of Federal Reserve Maneuvering Room Is Very Worrisome..." "
Dec 03, 2018 | www.zerohedge.com
Posa , 4 hours ago link
But the internet has largely disabled the gigantic CIA fog-machine. Thousands of skilled researchers quickly blow apart the propaganda line from the Deep State which is why there's an hysterical reach these days to shut down the 'net (but still keep it open enough to sell lots of stuff and nake money for the Predator Class).
Take the JFK assassination. One skilled researcher directs readers to the Warren Commission, where buried deep inside one volume is a finding that Oswald's rife was inoperable, certainly unable to function as a precise assassination weapon. Plus Oswald was a lousy shot to begin with. Yet Military sharpshooters had to add parts just to site the weapon and fire. This info in the WC pretty much excludes Oswald as the lone assassin. Without the 'net, how many people could find this info themselves.
9/11? Several researchers and web sites disclosed findings of a support network for the alQ hijackers run by Saudi intelligence and the Royal family (the 28 pages inside the Congressional 9/11 Inquiry); FBI informants providing financing, housing and other logistical support to the hijackers; CIA knowledge that alQ had entered the US 18 months before 9/11 and hid this knowledge etc.
Ditto for the OKC bombing (where local TV found bombs inside the Federal Building, which blew away the FBI narrative about McVeigh)... ditto for the FBI role in handing out explosives to the perps at the first WTC bombing etc. etc.
All this info, including news reports are up on the web even today... So with this kind of info available for large numbers of people to find, the only tactic left for the deep state psy-war operations to function is complete martial law in an Orwellian Police State. At that point the game is over and the US collapses as a nation.
Dec 03, 2018 | www.zerohedge.com
DEDA CVETKO , 5 hours ago linkWormwoodcums , 5 hours ago link
I am hearing from reliable anonymous CNN sources that Deep State cockroaches do not like too much sunlight.
Pass the UV lamp, please!iSage , 5 hours ago link
Hard to piece together? Supposed to be. Story is so unreal it's unbelievable. Aliens Bitchez.
http://xekleidoma.info/scam_MERS , 4 hours ago link
Spy vs Spy...used to love reading Mad Magazine. Now the world is Mad Magazine, amazing stuff.
I credit Mad with my warped sense of humor, as well as my skepticism of anything/everything.
And don't forget: Potrzebie!
Dec 03, 2018 | www.zerohedge.com
From Killing Kennedy To Kremlin Collusion - Deep State Forced Out Of The Shadows
by Tyler Durden Sat, 12/01/2018 - 20:15 150 SHARES Authored by Robert Gore via Straight Line Logic blog, The Deadliest Operation
Choose your battles wisely...
One month to the day after President Kennedy's assassination, the Washington Post published an article by former president Harry Truman.
I think it has become necessary to take another look at the purpose and operations of our Central Intelligence Agency -- CIA. At least, I would like to submit here the original reason why I thought it necessary to organize this Agency during my Administration, what I expected it to do and how it was to operate as an arm of the President.
Truman had envisioned the CIA as an impartial information and intelligence collector from "every available source."
But their collective information reached the President all too frequently in conflicting conclusions. At times, the intelligence reports tended to be slanted to conform to established positions of a given department. This becomes confusing and what's worse, such intelligence is of little use to a President in reaching the right decisions.
Therefore, I decided to set up a special organization charged with the collection of all intelligence reports from every available source, and to have those reports reach me as President without department "treatment" or interpretations.
I wanted and needed the information in its "natural raw" state and in as comprehensive a volume as it was practical for me to make full use of it. But the most important thing about this move was to guard against the chance of intelligence being used to influence or to lead the President into unwise decisions -- and I thought it was necessary that the President do his own thinking and evaluating.
Truman found, to his dismay, that the CIA had ranged far afield.
For some time I have been disturbed by the way CIA has been diverted from its original assignment. It has become an operational and at times a policy-making arm of the Government. This has led to trouble and may have compounded our difficulties in several explosive areas.
I never had any thought that when I set up the CIA that it would be injected into peacetime cloak and dagger operations. Some of the complications and embarrassment I think we have experienced are in part attributable to the fact that this quiet intelligence arm of the President has been so removed from its intended role that it is being interpreted as a symbol of sinister and mysterious foreign intrigue -- and a subject for cold war enemy propaganda.
The article appeared in the Washington Post's morning edition, but not the evening edition.
Truman reveals two naive assumptions. He thought a government agency could be apolitical and objective. Further, he believed the CIA's role could be limited to information gathering and analysis, eschewing "cloak and dagger operations." The timing and tone of the letter may have been hints that Truman thought the CIA was involved in Kennedy's assassination. If he did, he also realized an ex-president couldn't state his suspicions without troublesome consequences.
Even the man who signed the CIA into law had to stay in the shadows, the CIA's preferred operating venue. The CIA had become the exact opposite of what Truman envisioned and what its enabling legislation specified. Within a few years after its inauguration in 1947, it was neck-deep in global cloak and dagger and pushing agenda-driven, slanted information and outright dis