Two cheers for industrial policy!

Jon Gertner’s NYT mag piece on Manufacturing and (oh so scary!) industrial policy gets it. And, incidentally, it summarizes the guru of Obamanomics, ‘neo-liberal’ Larry Summers, rather beautifully:

“As the former White House economic adviser Lawrence Summers put it, America’s role is to feed a global economy that’s increasingly based on knowledge and services rather than on making stuff.”

Jargon over objects, this is the echt neo-liberal style. Gertner doesn’t reference the source, but I imagine it was the Lizza piece on Summers in the New Yorker that contained all the information you needed to know that Obama’s administration was set on fail, two years ago. The funniest remark of the Obama four year term so far came in this article from Summers:

“Summers was equally doubtful of the idea that fairness required the government to bail out every struggling industry. He said, “The point that some of you made is one that, frankly, a number of the President’s more political advisers make with great frequency: how could you lend money to the big banks in New York and not lend money to regular folk who are employing a hundred people and are losing a hundred jobs?” But, he said, “just like occasionally in war there are unintended benefits, occasionally in bailouts there are unintended beneficiaries.” The bank bailouts, which, he noted several times, began under President Bush, “were directed at preventing a collapse that would have led millions of people to be out of work, not as support for those institutions.”



But to get to crowning Gertner’s article with a few laurel wreaths.

I liked how this article seems to get it. The manufacturing economy isn't "modular", but full of network affects. It is a root system, not a haphazard pile of building blocks. When you ship the manufacturing of an industry to another country, contra Larry Summers, you are shipping knowledge, you are shipping the increasing return on investment that comes with every next step in the industry. Not understanding this one bit, the economists as advisors and the political elite have truly helped bring the U.S. to this point of exhaustion. And they will continue, blindly, to work against the interests of the majority, because it is in the interest of the one sector that does hire economists - the financial sector. Notice that 60 percent of scientists and engineers are employed in the manufacturing sector, and notice that these aren't fake engineers - financial 'engineers". So far, the financial industry has been so successful that the trillions 'loaned' to it hasn't even emerged as an issue in the public space - because newspapers won't report on it (the GAO report on the Fed didn't even break into the back pages of the NYT) and the economists who reporters call up for the 'expert' quote are quite proud of themselves for managing to keep us from a 'depression'.


I liked the fact that the NYT mag piece didn't spend much time quoting any economists. In Lizza’s piece on Obama’s economic team in 2009, you could almost hear the disdain in Summers’ voice for the phrase “industrial policy.” How Un-Hayekian! How cruel to put impediments in the way of creative destruction!
Economists have the same view of the people who make ‘stuff’ as bug spray manufacturers have of bugs. They know enough about the way the bug’s nervous system works to get rid of em. But if you want to know how bugs really evolve, live, and reproduce, go to an entomologist. Obama hired Raid, when he shoulda been hiring Edward O. Wilson.

A Better novel than Anna Karenina

From LI, 2004




We would never have read La Regenta or heard of it if we didn’t have a habit of trolling the aisles of libraries, our shoulders hunched up like that of an old crow, dreamily pulling tomes off the shelf and looking at first paragraphs, blurbs, pictures of authors, etc. etc. Years ago, when we came upon La Regenta, we were in the mood for a long 19th century novel. At that time, believe it or not, we were living in utter poverty (gasp!), renting a room for a pittance from our friend H. That La Regenta was a long novel was all the reason we needed to check it out and take it home. We have a lovely memory of reading the book in great big gulps: a reel of reading, a continuum, a glide down a slide. We immediately grouped the heroine, Ana Ozores, with Nana in terms of overpowering sexiness. But Clarin, unlike Zola, was not in the habit of drooling over his heroine. In fact, Anna is quite intelligent; Nana merely has the intelligence God would have given to any more than usually shrewd member of the 19th century demi-monde. Purge the odor of sex around Nana, and you have an operator, a nineteenth century capitalist of her own extraordinary pussy, whose vital instincts have merged with the utilitarian calculus preferred by the laissez faire economists of the time in much the way any captain of industry’s did. Her industry was orgasm, Carnegie’s was steel. Same diff.



We recently decided to treat ourselves to the novel once again.



The edition we are reading was put out by University of Georgia Press. Warning: it carries a completely bogus introduction by the translator, John Rutherford. The innocent reader, stumbling into the intro, might flee from the book entirely to escape the babbitry in which Rutherford so abounds. After congratulating Leopoldo Alas, aka Clarin, for having anticipated Freud (it was the fashion, back in the sixties and seventies, to take anything anyone said about sex before Freud to be valuable insofar as it anticipated Freud, or quaint insofar as it disagreed with him – Freud being to sex what Edison was to illumination), Rutherford reaches the very zenith of platitudes with the following sentence: ‘But thanks to its universal themes, psychological insight and technical boldness, it [the novel] has proved itself to be worthy of the attention of modern men and women.’



Oh, what bliss, to be worthy of the attention of modern men and women! The heart sings like a robin… A poisoned robin.



Too much of that kind of thing makes one wonder if the translation is going to be any good. Ignorant of Spanish, we can’t vouch for its accuracy – but it achieves a consistent tone well above the introduction’s heady sampling of Rutherfordism. And there aren’t big mistakes in the English – a state of affairs that is rare, nowadays. It is amazing, the carelessness of publishers who publish translations. This is a subject we have had plenty of reviewing experience of. Ça suffit…



We are happy to note that we still hold to our original judgment, when we finished the novel way back in the dreamtime: La Regenta kicks Anna Karenina’s ass.



The only way to justify this would be to go through the novel at much greater length than we have time for. Instead, let’s excerpt a paragraph.



Here’s the context. Ana Ozores is the daughter of an Italian dressmaker and a petty liberal aristocrat. The seamstress dies, the petty liberal aristocrat gives himself over to the struggle to remake Spain, and then retires in disgust in a small bungalow, having shot his inherited wad. On his death, Ana, who is a scrawny teen in the throes of her first menses, is taken in by her two spinster aunts in Vetusta, a backwards cathedral town. Her aunts intentionally “plump” Anna up – and she cooperates, realizing that her aunts want to make her “eligible.” Since she doesn’t have money, her ‘eligibility’ will have to consist of her blue blood – mention of the dressmaker is under strict rature – and her beauty, which in due time blossoms. Anna is one of those 19th century beauties – poitrine a la Nana, haunches like J-Lo. That Ana has a knack for writing is discovered by the aunts, and firmly suppressed as a vice. And so the aunts put her on the market, so to speak. They catch a millionaire, an ‘American’ who has returned to Vetusta and wants to buy the biggest house and the town beauty. Ana refuses. She is being courted, at this time, by an older man, Don Victor Quintanas. This is the description of her aunt Anuncia’s receiving Ana’s refusal of the millionaire. The scene is set in the dining room. There’s a fire in the fire place – otherwise, the room, one presumes, is not illuminated. The aunts have their little ways to save money:



“But Dona Anuncia needed no more to let loose the basilisk of fury which she carried in her bowels. Her shadow, amidst all the other shadows on the wall, at times resembled that of a gigantic witch; at other times, multiplied by the flickering flames and the old woman’s jerks and contortions, it represented all hell let loose. There were moments when Dona Anuncia’s shadow had three heads on the wall and three or four others on the ceiling, and it seemed that screams and shrieks were coming from all of them, so strident were her vociferations.”



Obviously, Alas is fusing, here, a memory of Goya’s Caprichios and a motif out of European folklore to create this scene – but how brilliantly it succeeds! LI has found that arguments are extremely hard to depict in fiction. As any rookie knows, modifications of “said’ are always rather iffy – yelled, vociferated, sarcastically observed, shrieked, cried – the lexicon is there, but the effects fall short of the intensity one wishes to convey, as though one were playing the keys of a piano in which the wires had been cut. The shadow play, here, supplies a context that does everything: merges the economics of marriage to a primal scene of cannibalism; caps the whole extended metaphor of plumping Ana up – a metaphor that creates, on one end, sympathy for a woman who is, after all, simply eating, and on the other end, transforms the cooks into monsters; and finally, it gives us a sense of just how close Anna is to that soap bubble film separating perception from hallucination. This quality is at the heart of her poetic talent. It is also at the heart of her downfall.



We could go on…



Just one other thing. We’ve mentioned this before – in fact, one of our first posts, back in 01, was about this. The relation between time and suspense in novels has never really been spelled out to our satisfaction. A novel in which a man is depicted borrowing money has installed a timer in its code – the timer is the debt. Time will be measured by the debt coming due. Time spatializes itself in the actions of the indebted man – the axe he finds to get rid of the pawnbroker from whom he has borrowed sums, the marriage he intends with the rich merchant’s daughter, etc., etc. There are all sorts of timers in the novel’s code. Here we see metaphor acting as a timer – the plumping out process has to end, for one thing – Anna can’t become too fat. She has to achieve a healthy avoidupois. For another, since this is a plumping up, the timer is running on the aunts. Eventually, they have to make good on their side of the metaphor – they have to become the monsters that plump up humans, that feed on human flesh. It is an agricultural metaphor, indicating an agricultural original sin – the slaughtering of the fed beast. Since feeding is, after all, a gift, one of the great founding gifts of society, to feed and then to slaughter is a contradiction that sets in motion a whole exculpatory ethic.



We could go on…

harvey golub, welfare queen

On 10 November, 2008, American Express suddenly filed the papers to become a bank holding company. Why? Well, American Express was feeling – as corporations sometimes feel - a bit down. A bit like it was going to collapse. A bit like enjoying extraordinary loans from the American government.

The Fed obliged. The Fed’s rules about loans were a bit different from American Express’s. American Express’s Daily Periodic Rate can be up to 15.9 percent. The Fed’s for its Commercial Paper Funding Facility and its Term Asset Backed Funding Facility was 1 percent or below. The FDIC did its part and extended something called the Temporary Liquidity Guarantee Program. American Express generously decided to save itself; whereas its customers, in the situation that American Express found itself in, would have their cards yanked or its interest rates adjusted upwards, these are evidently the rules in the microsphere for micropeople. The rules in the stratosphere for stratopeople are different. It is thus that AXP became a big welfare entity overnment that it had helped stock, over the years, with bribed and venal officeholders – like the rest of corporate America. AXP weathered the storm triumphantly, with the help of little over 10 to 15 billion dollars from Uncle Sam.

Are we happy about this or what?

Which is the background against which to read the plutocrat’s lament by former American Express CEO Harvey Golub, whose protest against the idea of raising tax rates on the successful – and who can argue with success when it diverts such large sums of money from the Government for the purposes of peculation and hypertrophied CEO compensation packages? – has received much play among the peculators and exploiters

Golub is rather an expert in the field of hypertrophied compensation packages – appointed CEO of AIG after it had become another welfare queen, he left in a huff because the Government in a cosmetic move to assure the micropeople that it was democratic and populist to save a fancypants bucket shop from extinction put a limit on said compensations. This contrasts with how he left American Express in 2000. Having presided over the company during the fat nineties, when every CEO was king (while, surprisingly, every king CEO was raking in bucks from companies that were simply averaging what other companies in their sector earned – almost as if their own personal god-king decisions were not the deciding factor in the prosperity of the enterprises they were picking the fat bits from), Golub left in 2000 with this:

“The American Express Company gave Harvey Golub, its chairman and chief executive, options on 750,000 shares of stock last March, according to a proxy statement filed last week that valued the ''special award'' at $30.9 million. The options raised Mr. Golub's total pay to about $52 million. He got an additional $38 million from exercising other options the company had granted.
A company spokesman said the options rewarded Mr. Golub for a job well done and gave him ''an incentive to stay during the transition.'' Mr. Golub, 60, will give up his job as chief executive to Kenneth I. Chenault, the president, in April 2001, and his chairman's post a year later. Mr. Chenault, 48, received options worth $16.5 million plus stock worth $4.9 million, raising his 1999 pay to about $32 million.

Then, inevitably, this happened in 2001:

“American Express surprised investors yesterday by saying that it would eliminate as many as 5,000 jobs and take more than $1 billion in charges against its earnings by the end of this quarter.

The job cuts would be the biggest that American Express has taken in about a decade and would come on top of the 1,600 jobs American Express has already eliminated this year. They are part of a reorganization of the company's various financial services businesses and will help offset the heavy losses the company sustained from its aggressive investing in junk bonds.

In announcing the changes several days before the company is scheduled to report its second-quarter earnings, the chief executive, Kenneth I. Chenault, admitted that the company had misjudged the risks in its $3.5 billion portfolio of junk bonds. He repeatedly told analysts and investors yesterday that the company would take a more conservative approach to investing the money it takes in from selling insurance and investment products.

Mr. Chenault, who succeeded Harvey Golub as chief executive in January, said the costs of the changes it is making would reduce pretax earnings for the quarter that ended in June by $826 million. In addition, the cost of cutting about 5 percent of its jobs will reduce this quarter's pretax profit $310 million to $370 million, he said.

The losses are far larger than analysts had expected. They follow two earlier write-downs of the company's investment portfolio in the last year and some investors sounded angry about the latest disappointment. All told, the company has marked down the value of its junk bonds and some other bonds that it cannot resell by more than $1.1 billion, or about one-fourth of their original value.” NYT 7/19/2001

Evidently, Mr. Golub has that sixth sense that tells him when to head for the door with the family silver. On Wall Street, this makes you a sage. So of course, his screed on the taxes he pays was full of the kind of thing that passes for Conventional Wisdom among the plutocrats and the political elite. Read the tidbits!

“Governments have an obligation to spend our tax money on programs that work. They fail at this fundamental task. Do we really need dozens of retraining programs with no measure of performance or results? Do we really need to spend money on solar panels, windmills and battery-operated cars when we have ample energy supplies in this country? Do we really need all the regulations that put an estimated $2 trillion burden on our economy by raising the price of things we buy? Do we really need subsidies for domestic sugar farmers and ethanol producers?
Why do we require that public projects pay above-market labor costs? Why do we spend billions on trains that no one will ride? Why do we keep post offices open in places no one lives? Why do we subsidize small airports in communities close to larger ones? Why do we pay government workers above-market rates and outlandish benefits? Do we really need an energy department or an education department at all?”

Good questions! I especially like the one about the overcompensated laborers on public projects. From the junk bond king, this was the kind of gall that is almost sweet - it shows not so much hubris as a deepfried stupidity, a selfishness that builds a monument in the soul like a giant pearl, except made out of the material you find in your lower gut.

But I notice that he did not ask: do we really need a Temporary Liquidity Guarantee Program, a Commercial Paper Funding Facility, or a Term Asset Backed Funding Facility at all? Because after all, a man doesn’t question the things that saved his ass. They simply recede into the background of the gated community, to be used next time the predators lose massive amounts of money.

Mockingbird politics

A. and I went camping this weekend, and I had an (admittedly drunken) talk with one of my bros., who is getting more conservative as he grows older. Sadly, he was the one who was most enthusiastic about Obama when he came in – and he is exactly the type Obama lost with his ‘compromises’ and inability to recognize the cratering of middle class American lifestyles we’ve been witnessing. He’s looking for that fabled beast, the reasonable republican.

Anyway, to my insistence on the fact that political talk shouldn’t be hemmed in by the “we can’t afford it” mantra when in fact the ‘we’ is the bottom 80 percent who owns 25 percent of the wealth, while the “we’ in the top 20 percent, who owns 75 percent of the wealth, is rich as fuck and can definitely afford it, he made a very wise and so far unbeatable reply: “I’ve heard this over and over, but the cost for the social programs don’t come out of the rich. The rich always win. So in the end, they come out of me.”

This is true. And I think it explains much of the vile politics of the Bush-Obama era. You cannot run a New Deal social insurance system while at the same time encouraging a pre-New Deal division of wealth. It just doesn’t work. The reason the mantra of the rich against tax increases works is because, in reality, everybody out there knows that the tax increase, while it might hit the wage class, will spare the wealthy. Meanwhile, the government does all it can to ‘de-regulate” and “privatize”, adding further costs to the wage class and causing streams of money to rise like manna towards the bloodsuckers. Obama’s disastrous administration is simply the logical result of a welfare state that has evolved into a welfare for the rich state. It is getting worse in this “crisis”, not better. It is the first economic crisis, perhaps, since 1848 in which there is no “left” flank – not a single powerful organization or party. Just right flanks, socialist parties adopting Austrian economics, and the like.

According to the polls, the group that Obama has pissed off the least, in the last year, is liberal Democrats. Which does make me wonder why these people consider themselves liberal. I imagine that tattered word now covers a sort of fan base – it isn’t really a political viewpoint at all, but more of a warm feeling towards certain celebrity figures.

At least for people like me, with no stake in the system and no hope for change, this is the moronic inferno of our mockingbird dreams. We mock, because we can’t act.

Looting in the plutocene!

Comparison: an old and reliable enlightenment tool. The philosophes loved the whole idea of comparison, for it seemed to magically produce progress in ideas. Unfortunately, comparison, as the elementary student of dialectics knows, simply fossilizes the embryo idea – leaving it forever in a pre-natal state unless it is vigorously moved forward via the forceps of antithesis and inversion.

However, under the shadow of that dialectic move, comparison still holds a great deal of anarchic power – satirical power. The enlightenment prehended the limits and fate of comparison in the preference given to satire.

To which I want to revert. Let us compare stories of looting.

Here’s one. It comes from the Royal Bank of Scotland. The Bank received 541 billion dollars worth of 1 percent and below loans from the Fed over the past 3 years. Why? Well, the Bank was preserved for all of us, we are told. Or rather, not told – our governors don’t have to tell us these things, they act for our own good. But the fluffers in the news, the bloggers and pundits, and sometimes the economists tell us that this was all for our good.

Oh, that good! So general we can barely feel it. But so specific that we can name whose good was served by the Fed’s kindly action. 9 people in the upper management of RSB, according to this story from 8 March 2011:

“… the nine key staff – including chief executive Stephen Hester – had been handed bonuses for 2010 of £10m in shares with a further £18m in long-term incentive plans that run until 2014 when their exact value will be known.

... The RBS disclosures came just 24 hours after Barclays lifted the lid on the pay deals it makes to its highest earners – handing five of them £110m.

Hester – whose £2m bonus for 2010 was announced last month and will be paid in shares – is receiving an extra £4.5m in stock through the long-term incentive plan on top of his annual bonus and £1.2m salary. This puts him on track for a pay deal of around £7.7m. For 2009 he did not take a bonus but received just over £4m through the long-term share plan.

Finance director Bruce van Saun is receiving £1.3m in shares for his 2010 bonus and a further £2.8m through the long-term incentive plan.

The largest bonus awarded in shares is the £2.5m handed to John Hourican, head of the investment bank. Next week it is likely to emerge that Hourican has received more than that because he is also being paid in the bank's debt – although he is not expected to top the £7.7m that Hester could be handed if he meets all his performance criteria.

American-based Ellen Alemany also emerges as a top earner with a £1.1m bonus in shares and £2.5m of stock awarded through the long-term plan. Nathan Bostock, who runs the parts of the bank being shut down or sold off, gets £637,000 in shares for his 2010 bonus and £2m through the long-term plan. Brian Hartzer, who runs the retail bank, had £600,000 awarded in shares for 2010 and £1.9m in the long-term plan.

The 2010 awards are coming from the £950m payout pool agreed with UK Financial Investments, which controls the taxpayer's 83% stake in the bank, at the time of the Project Merlin deal.

The Merlin deal requires the pay of the five highest earners reporting to the chief executive to be announced and RBS is expected to make those disclosures next week. The nine included in Tuesday's announcement are expected to be among them.”

And then there is the story of the looting that occurred on the streets of London and Liverpool and other cities in the UK. Disgraceful! It must have been considerable, as there are 1,000 people going to jail for it. So what are the figures we are talking about?

“In Bristol police released dramatic footage of a jewellery shop being looted in the city centre, and still images of 17 alleged rioters taken on Monday night, and urged the public to name them. The videos from CCTV systems in the Cabot Circus shopping centre capture a group of at least 10 men, women and youths, some on bikes, breaking through the window of the Thomas Sabo jewellery shop where thousands of pounds of goods was stolen.”

“It has been estimated that the UK riots thus far have cost high street retailers around £80m in lost sales. High value shops like HMV, GAME and Comet were all the targets of looting.”

"...Carter, of James Street, Salford, was caught in King Street, Manchester, with a bag of clothes and shoes worth £500. He was sentenced to 16 months in jail for theft by finding.

The maximum sentence of six months in jail that lower courts can hand out was deemed not to be enough by magistrates.

A fourth person to be sentenced on Tuesday was Linda Boyd, 31, who received a 10-month suspended jail sentence. She was also handed an 18-month supervision order.

The court heard Boyd, of Acomb Street, Moss Side, was found by a police officer with a bag full of cigarettes and alcohol, so heavy she could not carry it.

In all, the looting carried out over three nights in the UK amounts to not even a single day of borrowing from TALF by Royal Scotland – amounts, in fact, to about an hour of borrowing. I find the numbers interesting. I find the proportion
interesting. I find it interesting to compare the danger to society of Ms Boyd, of Acomb street, with her bag of looted cigs, and the danger to society posed by Ms. Ellen Alemany, with her bag of £1.1m bonus in shares and £2.5m of stock. However, the stock and shares were never so vulgar as to be materialized as something you put in a bag – Ms. Boyd’s big mistake.

Now, Ms. Ellen Alemany sounds like a nice enough person, unlike the vile cig smoking Ms. Boyd. Daughter of a liquor store owner. Making her way to the top by hard work, no doubt. After carrying off her swag from RSB, she was given an honorary degree from a Rhode Island college in May of this year: PROVIDENCE, R.I. - Ellen Alemany, Head of RBS Americas and Chairman and Chief Executive Officer of Citizens Financial Group, Inc. has been named an Honorary Doctor of Business Administration at Bryant University. This honorary degree was presented at the school’s undergraduate commencement on May 21, 2011.

“I am honored by this degree from Bryant University, one of Rhode Island’s great institutions” In its citation, the University commended Ms. Alemany as someone “who in both her personal and professional life exemplifies what being excellent in the world of commerce means. At a time when many financial institutions and their leaders have failed to merit public scrutiny and approval, you make it a point to be worthy of the trust of your customers, employees, and your leadership team.
“Those who are familiar with you say that even before the financial crisis you were thought of as an authentic banker—a person with an unending commitment to excellence and accountability. To this end, you re-launched the corporate campaign, GOOD BANKING IS GOOD CITIZENSHIP, reminding us all why banks exist and the critical role they play in fostering growth and prosperity, that in a most essential way they are meant to serve the communities where they exist. Indeed, good citizenship for you is embedded not just in the name of your company, you see to it that it is rooted in your daily corporate culture.”

“I am honored by this degree from Bryant University, one of Rhode Island’s great institutions,” Ellen Alemany said. “This is a special time for the Class of 2011 and I was proud to be a part of Commencement as this year’s graduates prepared to leave Smithfield for the careers and the life journey for which Bryant has prepared them so well.”

Strangely enough, the honorary award said not word one about the fact that Ms. Alemany was part of the group who presided over one of the UK’s great Bank collapses, albeit as head of an American subsidiary. But bygones are bygones – save when you are caught after a riot with a bagful of cigs. Then it is six months for you, and eviction from public housing.

Perhaps our Bryant University friends are merciful Christians of the type that can overlook women without bags of cigs and alcohol, but stuff up the bungus with stock and shares. Let's roll the tape back to distant 2008, when this happened:


“No comment at the weekend from ROYAL Bank of Scotland officials on reports that its American subsidiary Citizens Financial Group was under investigation by the US regulator for deleting e-mail records vital to an investigation into the mis-selling of financial products to the elderly.

Two New England newspapers reported last week that the Securities and Exchange Commission (SEC) was involved in an investigation by the Massachusetts state regulator for the alleged "unethical and dishonest conduct" in selling variable annuities.

These are tax-deferred investments that provide periodic payments to investors. They are considered inappropriate for elderly investors as their value rises or falls with the underlying investments, usually stock or bond mutual funds. Gaining access to the fund carries a hefty surcharge.

Citizens chairman Larry Fish, who earned £2.3 million last year and whose multi-million dollar "secret" bonus scheme was attacked at the RBS annual meeting in Edinburgh in April, has defended Citizens Financial as "an ethical entity", but has refused to comment on the details of the state investigation, or whether the SEC was involved.

Massachusetts secretary of state William Galvin accused the bank of not co-operating with the inquiry.

The Massachusetts Securities Division, which regulates banks in neighbouring Rhode Island, where Citizens Financial is based, lodged a complaint against its brokerage arm, accusing it of failing to preserve e-mail crucial to the variable annuities inquiry.

The complaint said Citizens "failed to preserve e-mail communications related to its business as a broker-dealer, despite having an affirmative obligation to do so". The lost e-mail has "substantially and severely impeded" the investigation into the sales of variable annuity investments to elderly customers, Galvin's office said.

It had filed an earlier complaint in February, accusing Citizens of violating securities laws in connection with variable annuity sales.”

I think it all comes down to weight, doanit? For our governors, the weight of deleted emails (zero!) must be balanced against a bag of looted stimulants (which our lootress can barely carry!). Thus, off to the clink with the one, and off to the honorary degree ceremony with the other. And thus the wheels of justice grind, and the grinders simply hope never to be caught under them. Build those gated communities high! Anyone who, in fact, advocates that the grinders feel a bit of justice gets kicked straight off Facebook and five years in a cell for em!

The plutocratic riot has been televised. Nobody cared. It will, of course, destroy your lifestyle and your children's, but don’t get mad at our gentle kleptocrats! For Look! A vicious looter in a hoodie!

Table 8- our Hoover Dam!

The news is full of pundits worrying and stories tutting about our swollen entitlements culture. Our middle class leaches. Our wage class deadbeats. The news is full of stories about how the government is going bust providing a safety net to the poorest, who incidentally, don’t appreciate it at all and smoke dope.

The news is not full of the greatest safety net ever devised. It is as if we are hiding our light under a basket! What the Hoover Dam was to the culture of the thirties, Table 8 of the GAO report on the Fed is to the culture of the 00s. We should be proud of our men in blue (suits), whose hands no doubt were stricken with carpal tunnel aches and pains as they shoveled money into the pockets of the wealthiest.

Here’s table 8.

Table 8: Institutions with Largest Total Transaction Amounts (Not Term-Adjusted) across Broad-Based Emergency Programs
(Borrowing Aggregated by Parent Company and Includes Sponsored ABCP Conduits), December 1, 2007 through July 21,
2010
Dollar in billions
Borrowing Parent Company TAF PDCF TSLF CPFF Subtotal AMLF TALF Total loans
Citigroup Inc. $110 $2,020 $348 $33 $2,511 $1 - $ 2,513
Morgan Stanley - 1,913 115 4 2,032 - 9 2,041
Merrill Lynch & Co. 0 1,775 166 8 1,949 - - 1,949
Bank of America Corp 280 947 101 15 1,342 2 - 1,344
Barclays PLC (Uk) 232 410 187 39 868 - - 868
Bear Stearns Co. - 851 2 - 853 - - 853
Goldman Sachs - 589 225 0 814 - - 814
Royal BankScotland 212 - 291 39 541 - - 541
Deutsche Bank AG (Germany) 77 1 277 - 354 - - 354
UBS AG (Switzerland) 56 35 122 75 287 - - 287
JP Morgan Chase & Co. 99 112 68 - 279 111 - 391
Credit Suisse Group AG (Switzerland) 0 2 261 - 262 0 - 262
Lehman Brothers Holdings Inc. - 83 99 - 183 - - 183
Bank of Scotland PLC (United Kingdom) 181 - - - 181 - - 181
BNP Paribas SA (France) 64 66 41 3 175 - - 175
Wells Fargo & Co. 159 - - - 159 - - 159
Dexia SA (Belgium) 105 - - 53 159 - - 159
Wachovia Corporation 142 - - - 142 - - 142
Dresdner Bank AG (Germany) 123 0 1 10 135 - - 135
Societe Generale SA (France) 124 - - - 124 - - 124
All other borrowers 1,854 146 14 460 2,475 103 62 2,639
Total $3,818 $8,951 $2,319 $738 $15,826 $217 $71 $16,115

irresponsible socialism: now more than ever!

I left the following rather mild comment on an economics site about “WHAT SHOULD BE DONE”, thee Chernyshevsky caps included : “Hike the capital gains tax to 39 percent, Start separate tax categories for the individuals making more than 400 thou and more than a million thou per year and bring their marginal rates back to pre-Reagan levels. Remember, spending is great. It is what the gov. should do. And it should do it without the keynesian mumbo jumbo, which is a political stupidity. Instead of a stimulus, a patchwork of government spending justified, each piece, by the product or service it will bring. This is where economists, who live in a world of aggregates, have no psychological feel for the way the voter thinks at all. To call it a stimulus was from the beginning an idiocy. But spending on infrastructure, spending on research, taking over some banks and backing massive, trillion dollar loans to the middle class - that is an idea whose time is still here.”



In reply, I was told, as I often am told, that I am a socialist. I have no business experience. I am one of those people who have the attitude of all take and no give. I am one of those people who say about our massive deficit that it should be paid by “anyone but me.”



This rather charmed me. Anyone but me is an excellent guide to our current crisis. Firstly, of course, one should refute the nonsense that businesses live on the Responsible Me principle. In fact, capitalist enterprise in our epoch is founded wholly on anyone but me. This is standard practice - one always tries to offload costs. Ask the oil companies who cleans up after they cut canals through bayou country and the swamps start to salinize. Anyone but me. Ask the power companies who should pay for the enormous costs of nuclear accidents. Anyone but me. Ask the banks who should pay for trillion dollar mistakes in trick investing involving useless financial instruments. Anyone but me. Anyone but me is the principle of the top 1 percent income bracket.


Luckily, that bracket makes enough that whacking them with taxes will not diminish their life styles in any noticeable way. Their healthcare will be excellent, their vacations will be primo, their children will go to the best schools, etc. Money, at a certain point, is all about power. And power is there to ensure that the anyone but me ideology works every time there is an oopsy moment. It is, in other words, insurance against the supposed 'Darwinism' of capitalism.

After the GAO report on the 16 trillion - trillion - dollars in 'emergency loans', at emergency interest rates of less than one percent, hat floated the entire investor class over the last three years, I would think that there'd be a certain shame about pretending that us 'socialists' know nothing about business. We do - we just don't know how to do socialism. The wealthy, however, have perfected that art. It is time to learn from them.