Owl: Who Is in Charge of the Economy? Does It Matter?

03 Economy, 07 Other Atrocities, 09 Justice, 11 Society, Money, Banks & Concentrated Wealth
Who? Who?

What Would a “Good” Banking System Look Like? Banks Weren’t Meant to Be Like This

MICHAEL HUDSON

CounterPunch, Weekend Edition January 27-29, 2012

In medieval times, wealthy bankers lent to kings and princes as their major customers. But now it is the banks that are needy, relying on governments for funding – capped by the post-2008 bailouts to save them from going bankrupt from their bad private-sector loans and gambles.

Yet the banks now browbeat governments – not by having ready cash but by threatening to go bust and drag the economy down with them if they are not given control of public tax policy, spending and planning. The process has gone furthest in the United States. Joseph Stiglitz characterizes the Obama administration’s vast transfer of money and pubic debt to the banks as a “privatizing of gains and the socializing of losses. It is a ‘partnership’ in which one partner robs the other.” Prof. Bill Black describes banks as becoming criminogenic and innovating “control fraud.”  High finance has corrupted regulatory agencies, falsified account-keeping by “mark to model” trickery, and financed the campaigns of its supporters to disable public oversight. The effect is to leave banks in control of how the economy’s allocates its credit and resources.

If there is any silver lining to today’s debt crisis, it is that the present situation and trends cannot continue. So this is not only an opportunity to restructure banking; we have little choice. The urgent issue is who will control the economy: governments, or the financial sector and monopolies with which it has made an alliance.

Fortunately, it is not necessary to re-invent the wheel. Already a century ago the outlines of a productive industrial banking system were well understood. But recent bank lobbying has been remarkably successful in distracting attention away from classical analyses of how to shape the financial and tax system to best promote economic growth – by public checks on bank privileges.

How banks broke the social compact, promoting their own special interests

People used to know what banks did. Bankers took deposits and lent them out, paying short-term depositors less than they charged for risky or less liquid loans. The risk was borne by bankers, not depositors or the government. But today, bank loans are made increasingly to speculators in recklessly large amounts for quick in-and-out trading. Financial crashes have become deeper and affect a wider swath of the population as debt pyramiding has soared and credit quality plunged into the toxic category of “liars’ loans.”

The first step toward today’s mutual interdependence between high finance and government was for central banks to act as lenders of last resort to mitigate the liquidity crises that periodically resulted from the banks’ privilege of credit creation. In due course governments also provided public deposit insurance, recognizing the need to mobilize and recycle savings into capital investment as the industrial revolution gained momentum. In exchange for this support, they regulated banks as public utilities.

Over time, banks have sought to disable this regulatory oversight, even to the point of decriminalizing fraud.

Read full article.

Chuck Spinney: Without Intelligence or Integrity, Incestuous Amplication of Self-Referencing (Corrupt Idiocy) Assures Eventual Implosion

03 Economy, 09 Justice, 10 Security, 11 Society, Blog Wisdom, Commerce, Commercial Intelligence, Corruption, Cultural Intelligence, Director of National Intelligence et al (IC), DoD, Government, IO Impotency, Military, Officers Call
Chuck Spinney

Sun Tzu or Bismarck: Who will Prevail in the 21st Century?

[Note: this first appeared in Time's Battleland Blog (here)], 

The first three chapters in Sun Tzu’s timeless classic “The Art of War” describe how to make net assessments by comparing your strengths and weaknesses and those of your adversary and how to formulate strategy. Near the end of Chapter 3, he sums up his advice, saying, “Know your enemy and know yourself; in a hundred battles, you will never be defeated. When you are ignorant of the enemy but know yourself, your chances of winning or losing are equal. If ignorant both of your enemy and of yourself, you are sure to be defeated in every battle.”

The fundamental problem in the American military and foreign policy elite lies in an incestuously amplifying, self referencing orientation that makes it ignorant of both of Master Sun’s categories of knowledge.  (I explain how incestuous amplification hijacks a decision cycle in this essay.) Briefly, the American policy elite’s self-referencing Orientation causes it to Observe what it wants to see.

This kind of one-way shaping isolates the decision-making mind from what is really going on in its external environment.  As the American strategist Colonel John Boyd showed, Decisions flowing out of an Orientation that overwhelms Observations become disconnected from reality, and therefore, the Actions consequent to those decisions inevitably become irrelevant at best, and more often counterproductive, in that they amplify themselves to drive the collective decision cycle or Observation – Orientation – Decision – Action (OODA) loops ever further away from reality.

Left uncorrected, the result is an inexorable descent into disorder, and eventually a magnification into chaos leading to overload and collapse. (Interested readers will find a short summary of Boyd’s theory in the last part of this essay.  A more extended description of the man and his work can be found in Robert Coram’s excellent biography, Boyd: The Fighter Pilot Who Changed the Art of War, now in its 7th printing.   Boyd’s entire Discourse on Winning and Losing — his art of conflict — can be downloaded here.)

Self-referencing behavior is clearly evident with regard to ourselves, for example, in the entirely predicable — and predicted — chaos of the Pentagon’s uncontrollable long-range budget plan (which is grounded on a combination of inwardly focused power games as well as a deliberately corrupted accounting system — explained herehere, and here). Put bluntly — we know that we do not know ourselves — indeed the evidence I compiled during my 25+ years of research in the the Pentagon’s pathological decision making practices, while employed in the Office of the Secretary of Defense, suggests we do not want to know ourselves and will go to great lengths to avoid doing so (unclassified reports can be found here).

Not only does our elite not want to understand itself, it also does not know its adversaries. That was clearly the case in Vietnam and Iraq and currently in Afghanistan.  Consider this farcical, were it not so serious, report in Sunday’s New York Times; it describes how the Taliban and impostors are scamming us in Afghanistan.  Bear in mind, this report is just the tip of a huge iceberg of evidence describing the self-inflicted — dare I say incestuously delusional — ignorance: see, for example, like that described by Lieut. Colonel Daniel Davis in his 87 page report, “Dereliction of Duty II” (a summary by ace investigative journalist Gareth Porter can be found here).

But Sun Tzu is a voice from 500 B.C., and his musing may be irrelevant in the 21st Century. Perhaps that’s because, as Otto von Bismarck is alleged to have predicted, just before he died in 1898, there is a “special providence for drunkards, fools, and the United States of America.”  As Francis Urquhart would say: “You might very well think that. I couldn’t possibly comment.”

Lord James of Blackheath: 2009 to 2010 Massive Money Laundering Between USA, England, and Scotland — Three Possibilities

03 Economy, 04 Indonesia, 07 Other Atrocities, 08 Wild Cards, 11 Society, Budgets & Funding, Commerce, Corruption, General Accountability Office, Government, Intelligence (government), Methods & Process, Money, Banks & Concentrated Wealth, Office of Management and Budget, Power Behind-the-Scenes/Special Interests, Secrecy & Politics of Secrecy

Lord James of Blackheath, House of Lords [VIDEO 11:10] from 2010, now circulating

Breaking news Lord James of Blackheath has spoken in the House of Lords holding evidence of three transactions of 5 Trillion each and a transaction of 750,000 metric tonnes of gold and has called for an investigation.

I think there are three possible conclusions that may come from it. I think there may have been a massive piece of money laundering committed by a major government which ought to know better and that it has effectively undermined the integrity of the British bank the Royal Bank of Scotland, in doing so. The second alternative is that a major American department has an agency that has gone rogue on it because it has been wound up and has created a structure out of which they are seeking to get at least 50 billion Euros as a payoff. And the third possibility is that this is an extraordinarily elaborate fraud which has not been carried out but which has been prepared in order to provide a threat to one government or more if they don't pay them off. So there are three possibilities and this all needs a very urgent review.

My Lords, it starts in April and May of 2009, with the alleged transfer to the United Kingdom, to HSBC of a sum of 5 trillion dollars and seven days later, in comes another 5 trillion dollars to HSBC, and then 3 weeks later another 5 trillion. 5 trillion in each case. Sorry. A total of 15 trillion dollars is alleged to have been passed into the hands of HSBC for onward transit to the Royal Bank of Scotland and we need to look at where this came from and what the history of this money is. And I have been trying to sort out the sequence by which this money has been created and from where it has come from for a long time.

http://www.rumormillnews.com/cgi-bin/forum.cgi?read=230593

http://www.publications.parliament.uk/pa/ld201212/ldhansrd/text/120216-0002.h…

Marcus Aurelius: SOF, Syria, and Pandora’s Box

02 Diplomacy, 07 Other Atrocities, 10 Security, 11 Society, Corruption, Director of National Intelligence et al (IC), DoD, Government, IO Deeds of Peace, Military, Officers Call, Peace Intelligence
Marcus Aurelius

SmallWarsJournal.com, February 17, 2012

This Week at War: The Toughest Op

By Robert Haddick

In my Foreign Policy column, I discuss whether Admiral William McRaven's request for greater operational freedom for Special Operations Command will extend to an unconventional warfare campaign in Syria.

This week, the New York Times reported on a draft proposal circulating inside the Pentagon that would permanently boost the global presence and operational autonomy of U.S. special operations forces. According to the article, Adm. William McRaven, the Navy SEAL who oversaw the raid that killed Osama bin Laden and who is now the commander of U.S. Special Operations Command (SOCOM), is requesting additional authority and independence outside of the normal, interagency decision-making process.

After the successful direct action strike against bin Laden and SOCOM's important role in training allied security forces in Afghanistan, the Philippines, and elsewhere, it is easy to understand how McRaven's command has become, as the New York Times put it, the Obama administration's “military tool of choice.” A larger forward presence around the world and more autonomy would provide McRaven's special operations soldiers with some of the same agility enjoyed by the irregular adversaries SOCOM is charged with hunting down.

Continue reading “Marcus Aurelius: SOF, Syria, and Pandora's Box”

Koko: 22% US Children in Poverty… + Poverty RECAP

01 Poverty, 06 Family, 09 Justice, 11 Society
Koko

Koko sign: Sad.

As seniors climb from poverty, young fall in

By Marisol Bello

USA TODAY, 15 February 2012

EXTRACT:

Nationally, official Census numbers show 9% of seniors in poverty. Among children, 22% — 15.6 million — live in poverty.

. . . . . . .

A 2011 analysis by the Urban Institute, a public policy and research center, found public spending per child was $11,300 over the course of a year. The spending included federal and state programs for education, health such as Medicaid and nutrition, social services and housing. The report said some of those programs are being cut as states wrestle with dwindling budgets. By comparison, public spending on seniors was about $24,800 per person, mostly in federal funding for Social Security and Medicare.

Read full story.

Phi Beta Iota:  The US Budget is not based on a coherent strategic model, on a national strategy, or even on any fundamentals such as save the children, preserve the water.  How a nation treats its children can be a reasonable predictor of the future of that nation.

See Also:

Continue reading “Koko: 22% US Children in Poverty… + Poverty RECAP”

Owl: Gulag Wealth Fund – Tracking Predatory Capitalism

03 Economy, 11 Society, 12 Water
Who? Who?

Gulag Wealth Fund

In a recent and very interesting interview with author Cory Doctorow, he mentions Max Keiser’s “Gulag Wealth Fund”. Doctorow says:

“And there's this symbiotic relationship between criminalization or prohibition, and the people who benefit from enforcement, right? There's a rogue economist named Max Keiser who has a notional fund, just a fund on paper that you can buy into if you wanted to follow a stock. It's called the Gulag Wealth Fund, [and is comprised of] private prison companies, mercenaries, arms dealers, and so on. Basically, his theory is that if the Gulag Wealth index goes up, the world is going to hell in a handbasket. And the Gulag Wealth index has been soaring.” (my emphasis)

Interview   ..  Gulag Wealth Fund

I wonder how long it will take before someone sets up an actual fund of this type and makes a lot of money?

Continue reading “Owl: Gulag Wealth Fund – Tracking Predatory Capitalism”

David Swanson: Could Impeachment Threat Stop Attack on Iran? Photos of Depleted Uranium Babies

04 Inter-State Conflict, 05 Iran, 07 Other Atrocities, 09 Justice, 10 Security, 11 Society, IO Deeds of War
David Swanson

Where is Conyers with Impeachment Threats Against President for Iran Attack Now?

By Ralph Lopez

It may have been the one and only thing which prevented an attack on Iran during the Bush years. Chairman of the Judiciary Committee John Conyers spent years fending off nationwide calls to impeach George W. Bush over the invasion of Iraq, the shredding of the Constitution after 9/11, and other high crimes and misdemeanors culminating in a summer of 2008 “non-impeachment impeachment hearings,” in which witnesses such as Rep. Brad Miller, Rep. Maurice Hinchey, Rep. Walter Jones, Rep. Dennis Kucinich, constitutional scholar Bruce Fein, former Rep. Elizabeth Holtzman, Vincent Bugliosi and many others came together to implore the committee to bring articles of impeachment.

At one point Conyers closed to the committee room to any further audience members, prompting calls of “shame! shame! shame!” from the packed halls of the Rayburn Building to which people had traveled from across the country, but established numerous closed-circuit television viewing rooms for the public in other parts of the Hill.

Conyers refused to impeach, but did in fact draw one hard line in the sand, saying that if Bush attacked Iran, it would guarantee impeachment proceedings. George Bush must have believed him. Now as the crazies beat the drums for war with Iran, driving Obama almost irresistibly to war, Conyers has fallen silent. As recently as January 25, Obama said no options were “off the table.”

If we attack Iran, it will be an excuse to pour millions of rounds of utterly demonic – there is no other word – depleted uranium ammunition into a country which has done us no harm, which acknowledges the right of navigation in international waters but merely insists that it will not be bullied. The U.S. is determined to impose sanctions no matter what Iran says about its weapons programs, in a perfect replay of the run-up to the invasion of Iraq. Then as in Iraq, this will kill and maim entire generations of the most innocent life imaginable, that which sits and will sit in their mothers' wombs.

Read full article and see extremely disturbing photos of depleted uranium babies.