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Fascism and the Dangers of Economic Concentration

Technocrats marching in support of austerity, ready to slash government spending.

A 1980 broadcast highlights economic concentration and its historical relationship to fascism. The issue of the “1%” versus the “99%” is not new.

After discussion of the American corporate connections to the Third Reich, this program concludes with analysis of the perils of the concentration of economic power.

Several minutes in length, the conclusion of that program can be accessed here: Listen.

Of paramount significance is the possibility that concentration of economic power in the United States might eventually produce for Americans what it did for Germans in  the 1930’s.

The fact that many of the most important U.S. companies and individuals were deeply involved with Nazi industry and finance informs us that such a possibility is not as remote as it  might appear at first.

(These same interests attempted to overthrow Franklin D. Roosevelt in a coup attempt in 1934, seeking to install a government modeled on Mussolini’s “corporate state.” Mussolini and his fascisti are pictured at right.)

With the very able assistance of co-host Mark Ortiz, Dave recorded the first of the archive shows, Uncle Sam and the Swastika (M11), on Memorial Day weekend of 1980 (5/23/80).

The program echoes at the distance of thirty years the warning that James Stewart Martin sounded in his 1950 book All Honorable Men. Noting how attempts at breaking up Hitler’s German economic power base had been foiled by the Germans’ powerful American business partners, Martin detailed the same pattern of concentration of economic power in the United States that had led to the rise of Nazism in Germany.

In 2005, Uncle Sam and the Swastika was distilled into For The Record #511. Since then, the American and global economies have tanked and may well get worse. The significance of an economic collapse for the implementation of a fascist cabal figures significantly in the several minutes of this excerpt.

At more than 30 years’ distance from the original recording of Uncle Sam and the Swastika, the questions raised in this broadcast loom large. Will the “calm judgement of business necessity”–fascism–that Martin foresaw in 1950 come to pass?

We should note that Mussolini termed the fascist system–which he christened–“the corporate state.” Another way of conceptualizing it would be to think of fascism as “capitalism on full auto.”

Discussion

109 comments for “Fascism and the Dangers of Economic Concentration”

  1. Posted by Pterrafractyl | June 7, 2012, 8:02 pm
  2. ****pun alert!!*****

    It looks like Mitt might have his mitts on some money from Macau:

    TPMMuckraker
    McCain: Adelson Bringing ‘Foreign Money’ Into U.S. Campaign

    Eric Lach June 15, 2012, 10:47 AM

    Sen. John McCain (R-AZ) told PBS’ News Hour that billionaire conservative casino mogul Sheldon Adelson’s big donations are introducing “foreign money” into the presidential race.

    Adelson has been by far the largest public donor to outside spending groups this cycle. He helped prop up Newt Gingrich’s primary campaign and, just this week, The Wall Street Journal reported that Adelson had decided to give $10 million to Restore Our Future, a pro-Mitt Romney super PAC.

    [M]uch of Mr. Adelson’s casino profits that go to him come from this casino in Macau,” McCain told Judy Woodruff in an interview that aired Thursday night. “Which says that, obviously, maybe in a roundabout way, foreign money is coming into an American campaign.”

    McCain, who once worked with former Sen. Russ Feingold (D-WI) on the Bipartisan Campaign Reform Act, a.k.a. the McCain-Feingold bill, called the Citizens United decision the Supreme Court’s “most misguided, naive, uninformed, egregious decision” in the 21st century.

    Uh on, Newt’s Mitt’s sugar-daddy is making donations from his Macau-based casino proceeds? That certainly sounds like an opportunity for foreign money to flow undetected into the US presidential race.

    And since this casino is based in a asian-mobster haven, it seems like Mitt might have mobster money problem. Oh well, I’m sure he’s Triad-ing to avoiding it:

    New York Observer
    Gingrich Backer Sheldon Adelson Faces Questions About Chinese Business Affairs

    By Steve Huff 1/29 3:39pm

    Republican presidential candidate Newt Gingrich is having a tough enough time with front-runner Mitt Romney surging in the polls prior to the upcoming Florida primary. Now he may also have to contend with pesky questions about a government probe into the overseas business affairs of Las Vegas billionaire Sheldon Adelson, who may be the financial savior of Mr. Gingrich’s campaign.

    Mr. Adelson’s Las Vegas Sands Corporation has been under federal investigation since early 2011 by the Department of Justice and the Securities Exchange Commission for possible violations of the Foreign Corrupt Practices Act (FCPA). ABC News reports that corporate documents contain allegations of bribing officials on the Chinese island of Macau.

    A separate civil suit filed in Nevada in 2010 alleges Mr. Adelson ordered Steven Jacobs, the former C.E.O. of Las Vegas Sands Corp’s Chinese affiliate, to stay quiet about alleged entanglements “with Chinese organized crime groups, known as Triads.” Mr. Jacobs’s suit characterized Adelson’s demands as “repeated and outrageous.” Mr. Jacobs also claimed Mr. Adelson wanted him to essentially manipulate Macau officials to assist company business interests in the region.

    ***the pun alert has been cancelled***

    Posted by Pterrafractyl | June 15, 2012, 2:03 pm
  3. Clearly what we need is more tax cuts for the ‘job creators’:

    Richest Americans’ net worth jumps to $1.7 trillion: Forbes

    By Dan Burns

    NEW YORK | Wed Sep 19, 2012 3:08pm EDT

    (Reuters) – The net worth of the richest Americans grew by 13 percent in the past year to $1.7 trillion, Forbes magazine said on Wednesday, and a familiar cast populated the top of the annual list, including Bill Gates, Warren Buffett, Larry Ellison and the Koch brothers.

    The average net worth of the 400 wealthiest Americans rose to a record $4.2 billion, up more than 10 percent from a year ago, while the lowest net worth came in at $1.1 billion versus $1.05 billion last year, the magazine said. Seven in ten of the list’s members made their fortunes from scratch.

    It was a bad year, however, for social media moguls, whose net worth fell by a combined $11 billion. On the heels of Facebook Inc’s rocky IPO in May, the No. 1 social network’s chief executive, Mark Zuckerberg, was the year’s biggest dollar loser: his net worth fell by nearly half to $9.4 billion from $17.5 billion. He also slid to the No. 36 slot from No. 14 a year ago, Forbes said.

    Facebook shares have fallen 40 percent from their IPO price of $38 a share in May.

    Dismal performances by other social media stocks dropped some executives from the list altogether, including Groupon Inc Chairman Eric Lefkofsky, No. 293 on last year’s list, and Zynga Inc Chairman and CEO Mark Pincus, No. 212 on the 2011 list.

    “The gap between the very rich and merely rich increased and helped drive up the average net worth of The Forbes 400 members to an all-time record $4.2 billion,” said Forbes Senior Wealth Editor Luisa Kroll.

    Collectively, this group’s net worth is the equivalent of one-eighth of the entire U.S. economy, which stood at $13.56 trillion in real terms according to the latest government data. But the 13 percent growth in the wealth of the richest Americans far outpaced that of the economy overall, helping widen the chasm between rich and poor.

    Forbes attributed the growth in net worth in part to the performance of the stock market and a recovering real estate market.

    But while their wealth grew faster than the economy as a whole, which expanded at an anemic 1.7 percent annual rate in the second quarter of 2012, the super rich generally failed to keep pace with the stock market. The benchmark Standard & Poor’s 500 index rose nearly 20 percent over the 12 months ended August 24, the last date of market performance measured for this year’s list.

    Ah trickle-down economics, the economic equivalent of drinking your own urine: It might help you survive for a short period of time in an extreme emergency, but it’s really not doctor recommended.

    Posted by Pterrafractyl | October 1, 2012, 11:11 am
  4. @Pterrafractyl
    I claim exclusive rights to the term PPoP (pee pee on the poor), which I created back in the 1980s as a summation of Reagan’s economic theory. You’ve come dangerous close to infringement in this last comment.

    Posted by Dwight | October 2, 2012, 6:02 am
  5. @Dwight: It’s all good. Trickle down economics may have been the appropriate analogy for the 80’s but explosive diarrhea might actually be a better analogy for what we’ve experienced over the last decade. No one likes to get pissed on but at least it’s somewhat sterile.

    Posted by Pterrafractyl | October 2, 2012, 3:05 pm
  6. Clearly, it’s because they did 93% of the additional work:

    Top 1% Got 93% of Income Growth as Rich-Poor Gap Widened
    By Peter Robison – Oct 2, 2012 9:01 AM CT

    Since 2009, Anita Reyes’ wages have been as frozen as Lake Minnetonka in January.

    While the U.S. economy was recovering from the Great Recession, Reyes, 52, a casino dealer from Minneapolis, was dining on $1.67 cans of soup and searching for a way to keep her house, which was foreclosed on last October.

    “I went backwards,” Reyes said. “Two years ago, three years ago, I didn’t know I’d be looking at being homeless.”

    Stephen Hemsley’s salary has been frozen too. His income hasn’t.

    The chief executive officer of Minnetonka, Minnesota-based health insurer UnitedHealth Group Inc. (UNH) earned $1.3 million in salary every year since 2007. Still, as the economic recovery took hold from 2009 to 2011, Hemsley, 60, exercised stock options worth more than $170 million and made at least $51 million from share sales, making him the object of an “Occupy Lake Minnetonka” protest on the ice outside his lakeside home each winter.

    The divergent fortunes of Reyes and Hemsley show that the U.S. has gone through two recoveries. The 1.2 million households whose incomes put them in the top 1 percent of the U.S. saw their earnings increase 5.5 percent last year, according to estimates released last month by the U.S. Census Bureau. Earnings fell 1.7 percent for the 96 million households in the bottom 80 percent — those that made less than $101,583.

    The recovery that officially began in mid-2009 hasn’t arrived in most Americans’ paychecks. In 2010, the top 1 percent of U.S. families captured as much as 93 percent of the nation’s income growth, according to a March paper by Emmanuel Saez, a University of California at Berkeley economist who studied Internal Revenue Service data.

    Political Battleground

    The earnings gap between rich and poor Americans was the widest in more than four decades in 2011, Census data show, surpassing income inequality previously reported in Uganda and Kazakhstan. The notion that each generation does better than the last — one aspect of the American Dream — has been challenged by evidence that average family incomes fell last decade for the first time since World War II.

    The head of UnitedHealth made $221 million in stocks and options? If that seems like far too much for a health insurance CEO to be making you probably don’t want to read this other article about Hemsley(he apparently had $744 million in unexercised stock options as of 2009). Or this article (he had over $1 billion in options as of 2011). So what on earth could it possibly be Mr. Hemsley contributes to the overall organizing? He’s the CEO, so it’s clearly some sort of “decision making” that he’s getting paid for, but what are those extremely expensive decisions? Is the guy sitting on every single death panel at UnitedHealth? It would be really interesting to see what it is that the oligarchs actually do everyday. That question could be a fun meme.

    Posted by Pterrafractyl | October 2, 2012, 3:05 pm
  7. Arg *&%^@#)_*( …. You haven’t studied the doctrine, Pter. The oligarchs CREATE new stuff every day and new WEALTH which enriches human existence right down to the people earning 27 cents an hour to cut up ship hulls for scrap in Bangladesh. They are obsessed with CREATING WEALTH FOR THE GOOD OF US ALL. They do this directly, not relying on hired expertise, because they are superior human beans and generally nice guys. Just look at all the technological innovations and cures for disease that Ben Bernanke or Jamie Dimon have produced. I think I’ve made my case.
    I was confused for a while over why such obviously superior beings would need inherited wealth as a jump start in life, since they claim that they would rise to the top even if starting with nothing. I think the only solution is to end all inherited wealth, then watch them shine. That will shut those bleeding heart liberals up for good. God created the universe so a select few could bathe in glory. If a few billion people have to live miserably for that to happen, well, that’s FREEDOM.

    Posted by Dwight | October 2, 2012, 9:57 pm
  8. @Dwight: LOL. Now, now…I think it should be clear to all of us that those born with a silver spoon in their mouth paid for that spoon with the proceeds from the paper routes they had in the womb(one more reason child labor laws are truly stupid). Besides, I’m pretty sure heaven doesn’t have access to offshore tax-haven accounts, so it’s not like these folks are in any sort of spiritual trouble. All they want to do is make life better for their kids and the rest of us possibly up to 53% of us. Life is hard enough for our betters without the ungrateful rabble going around making controversial statements:

    Bloomberg
    JPMorgan Shouldn’t Cut Dimon’s Pay Over Loss, Harrison Says
    By Dawn Kopecki and Erik Schatzker – Oct 4, 2012 10:27 AM CT

    JPMorgan Chase & Co. (JPM) shouldn’t cut Chief Executive Officer Jamie Dimon’s pay over the bank’s $5.8 billion loss in its chief investment office, former CEO William Harrison said.

    “I wouldn’t penalize him,” Harrison, 69, said today in an interview on Bloomberg Television with Stephanie Ruhle and Erik Schatzker. “That might be a controversial statement. I think Jamie is doing a great job.”

    Dimon, 56, received $23 million in pay and bonuses in 2011, making him the highest-paid CEO of a major U.S. bank.

    It’s good to see someone finally coming to the defense of the defensless. It’s not like Jamie had anything to do with that $5.8 billion loss.

    Posted by Pterrafractyl | October 4, 2012, 9:15 pm
  9. It looks like Sheldon is planning to double down in 2016:

    Sheldon Adelson Vows To ‘Double’ Donations To GOP After Huge 2012 Election Failure

    The Huffington Post | By Nick Wing
    Posted: 12/05/2012 10:14 am EST Updated: 12/05/2012 3:56 pm EST

    Casino mogul Sheldon Adelson spent nearly $150 million on Republicans during the 2012 elections, almost entirely in support of candidates who did not win. But his cold streak hasn’t left him at all discouraged, he told the Wall Street Journal in a recent interview.

    “I happen to be in a unique business where winning and losing is the basis of the entire business,” Adelson told the Journal. “So I don’t cry when I lose. There’s always a new hand coming up.”

    In fact, Adelson, whose personal wealth is estimated at $20.5 billion, says he’s ready to literally double down on the GOP when those new cards are dealt.

    Posted by Pterrafractyl | December 10, 2012, 3:36 pm
  10. Well surprise surprise, it appears that small nations that don’t kiss the asses of international predatory bankers can do just fine on their own:

    Forbes
    Iceland’s Stabilized Economy Is A Surprising Success Story
    Tracey Greenstein, Contributor
    2/20/2013 @ 12:06PM

    You may have heard about Iceland’s toppling economy back in 2008. As one of the hardest hit countries at the time, Iceland’s heavily criticized method to escape veritable economic demise actually did the trick.

    Faced with the possibility of financial failure, Iceland had to think on its feet. Instead of bailing out banks USA-style, the country forgave mortgage debt for the population – and completely started over from square one.

    A country with a small population of roughly 320,000 citizens, Iceland‘s entire banking structure “systematically failed” in the early days of the 2008 recession. Despite the fact that Iceland is still on the road to recovery, the country ranks high as a politically and economically stable nation. Their success over the last few years has been largely under-reported, and the story behind it is quite fascinating.

    A Little Bit of Morality Goes A Long Way

    Let’s face it: Icelanders are tough. They are entirely isolated, living in frozen tundra, perpetually enduring less-than-optimal weather patterns. While they are surrounded by epic natural beauty, these people aren’t spoiled; they’re tenacious.

    Instead of allowing the criminals responsible for bank fraud to run free as the years passed by, Iceland thought it might be wise to actually indict bankers who committed serious financial crimes that contributed to the collapse. By paying off loans for consumers, forgiving homeowner debt (up to 110% of the property value), and throwing the offenders in prison, Iceland was able to bounce back. Now, their economy is “recovered” and is growing faster than both the US and European economies.

    When Iceland’s President Olafur Ragnar Grimmson was asked whether or not other countries – Europe in particular – would succeed with Iceland’s “let the banks fail” policy, he stated the following:

    Why are the banks considered to be the holy churches of the modern economy? Why are private banks not like airlines and telecommunication companies and allowed to go bankrupt if they have been run in an irresponsible way? The theory that you have to bail-out banks is a theory that you allow bankers enjoy for their own profit, their success, and then let ordinary people bear their failure through taxes and austerity. ?People in enlightened democracies are not going to accept that in the long run.”

    Grimmson’s “famous” reply to the controversial question, “What is the reason for Iceland’s recovery?” is most remarkable.

    We were wise enough not to follow the traditional prevailing orthodoxies of the Western financial world in the last 30 years. We introduced currency controls, we let the banks fail, we provided support for the poor, and we didn’t introduce austerity measures like you’re seeing in Europe.”

    However unorthodox in its method, Iceland’s “let it fail” policy resulted in jubilation. We can’t seek perfection in the years after a global financial collapse, but we can acknowledge nations who persevered with integrity.

    Let’s hope larger nations learn Iceland’s unorthodox lessons because big banks have big appetites and the size of today’s banks are, shall we say, unorthodox:

    Bloomberg
    U.S. Banks Bigger Than GDP as Accounting Rift Masks Risk
    By Yalman Onaran – Feb 19, 2013 6:01 PM CT

    Warning: Banks in the U.S. are bigger than they appear.

    That label, like a similar one on automobile side-view mirrors, might be required of the four largest U.S. lenders if Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp., has his way. Applying stricter accounting standards for derivatives and off-balance-sheet assets would make the banks twice as big as they say they are — or about the size of the U.S. economy — according to data compiled by Bloomberg.

    “Derivatives, like loans, carry risk,” Hoenig said in an interview. “To recognize those bets on the balance sheet would give a better picture of the risk exposures that are there.”

    U.S. accounting rules allow banks to record a smaller portion of their derivatives than European peers and keep most mortgage-linked bonds off their books. That can underestimate the risks firms face and affect how much capital they need.

    Using international standards for derivatives and consolidating mortgage securitizations, JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. would double in assets, while Citigroup Inc. would jump 60 percent, third- quarter data show. JPMorgan would swell to $4.5 trillion from $2.3 trillion, leapfrogging London-based HSBC Holdings Plc and Deutsche Bank AG, each with about $2.7 trillion.

    World’s Largest

    JPMorgan, Bank of America and Citigroup would become the world’s three largest banks and Wells Fargo the sixth-biggest. Their combined assets of $14.7 trillion would equal 93 percent of U.S. gross domestic product last year, the data show. Total assets of the country’s banking system would be 170 percent of economic output, still lower than 326 percent for Germany.

    U.S. accounting rules for netting derivatives allow banks to erase about $4 trillion in assets, the data show. The lenders also can remove from their books most mortgages they package into securities, trimming an additional $3 trillion.

    Off-balance-sheet assets and derivatives were at the root of the 2008 financial crisis. Mortgage securitizations kept off the books came back to haunt banks forced to repurchase home loans sold to special investment vehicles. The government had to rescue American International Group Inc. with a bailout that ballooned to $182 billion after the insurer couldn’t pay banks on derivatives tied to those bonds.

    Posted by Pterrafractyl | February 20, 2013, 10:10 am
  11. “Too big to jail” is official: According to Eric Holder, some banks have literally become so big that they can’t be prosecuted without damaging the economy:

    The Hill
    Holder: Big banks’ size complicates prosecution efforts
    By Peter Schroeder – 03/06/13 02:00 PM ET

    Attorney General Eric Holder suggested Wednesday that some financial institutions have become too large and are escaping full-fledged prosecution as a result.

    Testifying before the Senate Judiciary Committee, Holder told lawmakers that he is concerned that some institutions have become so massive and influential that bringing criminal charges against them could imperil the financial system and the broader economy. His remarks come as a growing number of lawmakers have suggested that big banks are, effectively, “too big to jail.”

    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,” he said. “And I think that is a function of the fact that some of these institutions have become too large.”

    He suggested that prior attempts to bring enforcement against banks may have been stifled by their outsize influence, saying it has an “inhibiting influence … on our ability to bring resolutions that I think would be more appropriate.”

    “The concern that you have raised is one that I, frankly, share,” he said, adding that ultimately the best deterrent would be if they could bring charges against individuals instead of companies.

    Now we get to look forward to all the “too big to break up” arguments. It’s progress!

    Posted by Pterrafractyl | March 8, 2013, 12:04 am
  12. Whoohoo! The US wealth gap between the top 1% and everyone else just hit a new record. That’s a good thing, right? Now we just have to figure out how to incentivize that lazy 99% to think and behave more like America’s CEOs. Then everyone could share in the prosperity!

    Posted by Pterrafractyl | September 11, 2013, 12:15 pm
  13. @Pterrafractyl: Absolutely no surprises here. We could take a lesson or two from Reykjavik….actually, MUCH more than that, IMO. =)

    Posted by Steven L. | September 11, 2013, 4:48 pm
  14. @Steven L.: Paul Krugman has post today that’s a reminder that even the ‘top 1 percent’ has its wealth wildly skewed towards the top 0.01 percent:

    The Conscience of a Liberal
    September 12, 2013, 10:43 am
    Good Times at the Top
    Paul Krugman

    Inequality wonks wait eagerly for the latest update of the Piketty-Saez data, which estimate concentration of income at the top using income tax returns. The latest edition does not disappoint: it shows, as one might expect but needed confirmed, that the very rich have recovered just fine from the Great Recession, even as the great majority of Americans continue to struggle. In fact, the super-elite — the top 0.01 percent — actually had higher incomes in 2012 than they did at the height of the bubble.

    The new data also give an opportunity to emphasize a key fact that all too many discussions of inequality miss: we’re not talking about the rise of a broad class of highly educated workers, we’re talking about a tiny elite. The income share of the top 10 percent has risen to a record; but you’re completely missing the picture if you think of the top 10 percent as a homogeneous group. Here’s the actual gains since the big change in inequality started to happen:
    [see graph]
    Of the gains made by the top 10 percent, almost none went to the 90-95 group; in fact, the great bulk went to the top 1 percent. The bulk of the gains of the top 1, in turn, went to the top 0.1; and the bulk of those gains went to the top 0.01.

    We really are talking about the flourishing of a tiny elite.

    These are the kinds of fun-facts that should prompt the folks at the bottom of the top 1 percent to ask themselves how long an economy with a shrinking middle class can function like a pyramid scheme. They should also ask themselves what the economy might start looking like when the base of the pyramid begins to crumble.

    Posted by Pterrafractyl | September 12, 2013, 12:36 pm
  15. The best part of Asshole Charm Offensives is that they usually just end up being offensive:

    Bloomberg
    Munger Says `Thank God’ U.S. Opted for Bailouts Over Handouts
    By Andrew Frye – Sep 20, 2010 10:11 AM CT

    Charles Munger, the billionaire vice chairman of Berkshire Hathaway Inc., defended the U.S. financial-company rescues of 2008 and told students that people in economic distress should “suck it in and cope.”

    “You should thank God” for bank bailouts, Munger said in a discussion at the University of Michigan on Sept. 14, according to a video posted on the Internet. “Now, if you talk about bailouts for everybody else, there comes a place where if you just start bailing out all the individuals instead of telling them to adapt, the culture dies.”

    Bank rescues allowed the U.S. to avoid what could have been an “awful” downturn and will help the country as it deals with the housing slump, Munger, 86, said. He used the example of post-World War I Germany to explain how the bailouts under Presidents George W. Bush and Barack Obama were “absolutely required to save your civilization.”

    “Hit the economy with enough misery and enough disruption, destroy the currency, and God knows what happens,” Munger said. “So I think when you have troubles like that you shouldn’t be bitching about a little bailout. You should have been thinking it should have been bigger.”

    Germany was unable to stabilize its financial system in the 1920s, and, Munger said, “We ended up with Adolf Hitler.”

    Taxpayer funds injected into banks helped insulate bond investors from losses and cushioned stock declines for equity holders. U.S. programs designed to ease the burden for distressed mortgage holders didn’t prevent foreclosures from rising to a record. One out of every 381 households received a foreclosure filing in August, according to RealtyTrac Inc.

    Angry Public

    “Charlie Munger is misrepresenting history, and that’s why the public is angry at Wall Street,” said Joshua Rosner, an analyst at research firm Graham Fisher & Co. “We could have wiped out the equity holders before we wiped out the taxpayer.”

    Berkshire had advanced 26 percent on the New York Stock Exchange this year as of Sept. 17 and benefited from a recovery in earnings at some of its main bank holdings. It is the largest shareholder of Wells Fargo & Co., the biggest U.S. home lender, with a stake valued at more than $8 billion. Berkshire also owns $5 billion of Goldman Sachs Group Inc. preferred stock.

    Munger won a cult following among investors for his economic insights and a direct manner of delivering his views. “He’s irascible, brilliant and doesn’t suffer fools gladly,” said Berkshire investor Jeff Matthews of Ram Partners LP.

    Munger is welcomed by crowds of tens of thousands each year when he takes the stage with Berkshire Chairman Warren Buffett, his longtime.

    ‘A Better Place’

    “I believe Costco does more for civilization than the Rockefeller Foundation,” Munger said. “I think it’s a better place. You get a bunch of very intelligent people sitting around trying to do good, I immediately get kind of suspicious and squirm in my seat.”

    Charitable donations by Munger have aided California institutions including Stanford University, the Harvard-Westlake School and the Huntington Library. He is chairman of Good Samaritan Hospital of Los Angeles and gave $3 million to the University of Michigan’s law school to improve lighting.

    These kinds of comments might provoke an angry response, but, you know, don’t get carried away.

    Posted by Pterrafractyl | September 26, 2013, 8:23 am
  16. Here’s a Krugman post that gives a timely reminder that knowing what’s good for your own business and knowing what’s “good for business” are often two very different things:

    September 29, 2013, 5:03 pm
    The Conscience of a Liberal
    Fools and Fixers
    Paul Kruguman

    Lydia DePillis has an interesting piece interviewing Paul Stebbins — a CEO who was very involved with Fix the Debt — in which Stebbins acknowledges that business is part of the problem in Washington, and proceeds to illustrate, unintentionally, just why that is. You see, if he’s any indication, big business is completely clueless about both the economics and the politics of the situation.

    In the world according to Stebbins, debt and deficits are at the heart of America’s economic problem. He doesn’t even make the case — he just claims that it’s obvious according to the facts. No notion whatsoever that we might have slow growth because we’re reducing the deficit too fast; no acknowledgment that the empirical case for debt panic has collapsed. You get the sense that he’s completely unaware of the actual debates that have taken place about economic policy, probably unaware of how much the actual deficit and forecasts of future debt have changed. So he’s angry at Washington for not facing up to a fake problem.

    And on the political side, it’s all false equivalence. The AARP, fighting against cuts to benefits, is just like Republicans threatening to plunge us into debt crisis if Obama doesn’t kill health reform. The Club for Growth, threatening any Republican who steps out of line, is just like … me, making fun of groups like Fix the Debt.

    In short, this particular CEO comes across as completely out of touch with the reality of our economic and political situation. And then he wonders why politicians won’t listen to people like him.

    The thing is, I suspect that he’s typical. Corporate America is led by men who may be very good at their jobs (or not, in some cases), but have no grasp at all of the real issues facing America as a whole — the special problems created by an economy stuck in a liquidity trap, the paralysis caused by the radicalization of the GOP. They can throw lots of money at Washington, and it’s effective at tilting policies on microeconomic issues their way. But they have no influence on the big decisions, because they don’t even understand what those big decisions are.

    Wonderful, a public epiphany from one of the folks at Fix the Debt about how Wall Street isn’t doing its part to come up with justifications for empirically dubious austerity policies. Yep, it turns out all those decades spent fretting over mutually assured nuclear destruction were off target. The real long-term threat to the US? Unrelenting irrational concern-trolling by the powerful and influential. Do not underestimate the power of the Dark Side.

    Posted by Pterrafractyl | September 30, 2013, 6:19 pm
  17. As we’ve learned in recent years, the EU’s leadership has never really viewed the negative consequences of austerity – like the undermining of the socioeconomic potential for an entire generation and the gutting of the middle-class – as reasons to end such policies or never start them in the first place. Austerity’s failures, after all, are a feature. Maybe we need to try some new arguments:

    Billionaire wealth doubles since financial crisis
    Billionaire wealth more than doubled since the financial crisis, with more than 2000 individuals now holding $6.5 trillion, up from $3.1 trillion in 2009.
    Posted By Sonali Basak | Nov. 12, 2013 at 9:57 AM

    (UPI) — The financial crisis didn’t put a strain on everyone. The number of billionaires in the world has grown to more than 2,000 since 2009, and their aggregate net worth has more than doubled, reaching a record high.

    The Wealth X and UBS Billionaire census report revealed a combined wealth of the world’s billionaires to be $6.5 trillion, up from $3.1 trillion in 2009.

    The five countries with the most billionaires are the U.S., China, Germany, the U.K. and Russia. The cities with the most billionaires are New York, Hong Kong, Moscow and London.

    Asia’s wealth has grown faster than any other region. China has added the most billionaires to the list this year, with 18 new billionaires. Meanwhile, Europe’s growth of billionaires has slowed, and was the only region to see a decline. In the next five years, Asia is expected to outgrow the United States and Europe in the number of ultra high net worth individuals.

    However, at certain times of the year the world’s billionaires are likely to migrate to the same cities, such as for the Davos for the World Economic Forum, then to the Russia Winter Olympics and then to the Clinton Global Initiative, among a number of other billionaire hot spots.

    By 2020, the report estimated the number of billionaires will grow to nearly 4,000 billionaires worldwide.

    Uh oh! Europe was the only region of the world to lose billionaires. Maybe austerity isn’t ALL fun and games. Sure, a lot of good can come from it, like rising income-inequality and greater disatifaction with life, but are those gains really worth the cost of fewer billionaires? It’s time for Europe’s billionaires to stop thinking with their heads and start thinking with their hearts.

    Posted by Pterrafractyl | November 13, 2013, 11:22 am
  18. While unintentional, Walmart moved one step closer to acknowledging that living on Walmart’s wages is an “extreme hardship”:

    TPM Livewire
    Ohio Walmart Criticized For Holding Food Drive For Own Employees
    Caitlin MacNeal – November 18, 2013, 12:56 PM EST

    A Canton, Ohio Walmart store is under fire for organizing a food drive meant to benefit its own employees, the Cleveland Plain Dealer reported on Monday.

    The store set up bins in an employee-only section of the store encouraging donations of food so that some of the store’s needier workers could enjoy a Thanksgiving meal, according to photos sent to advocacy group Organization United for Respect at Walmart.

    Community members and store workers were upset by the food drive.

    “That Walmart would have the audacity to ask low-wage workers to donate food to other low-wage workers — to me, it is a moral outrage,” Norma Mills, a Canton resident, told the Plain Dealer.

    One Walmart employee described the food drive at “demoralizing,” noting that Walmart is not fully addressing how little some people make working for the company.

    Vanessa Ferreira, an organizer for OUR Walmart, a group that organized strikes in Cincinnati and Dayton, Ohio on Monday, was angered by the food drive.

    “Why would a company do that?” she told the Cleveland Plain Dealer. “The company needs to stand up and give them their 40 hours and a living wage, so they don’t have to worry about whether they can afford Thanksgiving.”

    Kory Lundberg, a Walmart spokesman, defended the food drive and said it was an example of coworkers looking out for each other.

    “It is for associates who have had some hardships come up,” he told the Plain Dealer. “This is part of the company’s culture to rally around associates and take care of them when they face extreme hardships.”

    Walmart workers have been staging strikes across the country since Black Friday 2012, protesting the company’s low wages and focus on employing part-time workers.

    If Walmart really cared about its McResources employees it would do the right thing and just give them a raise set up a help-line.

    Posted by Pterrafractyl | November 18, 2013, 10:44 am
  19. Supply-side Jesus has a message about helping the homeless this Holiday season: Don’t. If the homeless want food and shelter they should get a job suck it in and cope.

    Posted by Pterrafractyl | November 21, 2013, 12:59 pm
  20. GOP spin-meister Frank Luntz appears to be having an existential crisis of sorts: He still believes we should eliminate social programs and free ourselves from the shackles of not being entirely shackled to the marketplace, but he’s becoming increasingly concerned that the public has become too spoiled and entitled to follow the wisdom of their billionaire betters:

    The Atlantic
    The Agony of Frank Luntz
    What does it mean when America’s top political wordsmith loses faith in our ability to be persuaded?
    Molly Ball Jan 6 2014, 6:00 AM ET

    Frank Luntz does not want the buffet. We are on the top floor of the Capitol Hill Club, the members-only Republican hangout a block from the Capitol, where a meaty smell is emanating from steam trays. Today’s main course is ham, and Luntz shakes his head.

    There’s also fish, the host offers—mahi mahi. No. “I’m 0 for 2,” Luntz says mournfully.

    “Roast chicken,” the host says, but it’s too late; he’s lost him. “Boring,” Luntz says, as we head for the elevator to the full-service dining room in the basement.

    America’s best-known public-opinion guru hasn’t suddenly gone vegan. Luntz—the tubby, rumpled guy who runs the focus groups on Fox News after presidential debates, the political consultant and TV fixture whose word has been law in Republican circles since he helped write the 1994 Contract With America—has always been a hard man to please. But something is different now, he tells me. Something is wrong. Something in his psyche has broken, and he does not know if he can recover.

    “I’ve had a headache for six days now, and it doesn’t go away,” he tells me as we take our seats at a table downstairs. “I don’t sleep for more than two or three hours at a time. I’m probably less healthy now than I have ever been in my life.” He’s not sure what to do. He’s still going through the motions—giving speeches, going on television, conducting focus groups, and advising companies and politicians on how best to convey their message.

    But beneath the surface, he says, is a roiling turmoil that threatens to consume him. He orders a chicken pot pie, then berates himself for not choosing something healthier. In recent months, he tells me, he has often contemplated quitting everything; he has spent long weeks alone, unable to sort out his thoughts. Frank Luntz, the master political manipulator, a man who has always evinced a cheery certainty about who’s right and who’s winning and how it all works, is a mess.

    And yet, over the hour and a half I spend talking with him—the first time he has spoken publicly about his current state of mind—it’s hard to grasp what the crisis is about. Luntz hasn’t renounced his conservative worldview. His belief in unfettered capitalism and individual self-reliance appears stronger than ever. He hasn’t become disillusioned with his very profitable career or his nomadic, solitary lifestyle. His complaints—that America is too divided, President Obama too partisan, and the country in the grip of an entitlement mentality that is out of control—seem pretty run-of-the-mill. But his anguish is too deeply felt not to be real. Frank Luntz is having some kind of crisis. I just can’t quite get my head around it.

    It was what Luntz heard from the American people that scared him. They were contentious and argumentative. They didn’t listen to each other as they once had. They weren’t interested in hearing other points of view. They were divided one against the other, black vs. white, men vs. women, young vs. old, rich vs. poor. “They want to impose their opinions rather than express them,” is the way he describes what he saw. “And they’re picking up their leads from here in Washington.” Haven’t political disagreements always been contentious, I ask? “Not like this,” he says. “Not like this.”

    Luntz knew that he, a maker of political messages and attacks and advertisements, had helped create this negativity, and it haunted him. But it was Obama he principally blamed. The people in his focus groups, he perceived, had absorbed the president’s message of class divisions, haves and have-nots, of redistribution. It was a message Luntz believed to be profoundly wrong, but one so powerful he had no slogans, no arguments with which to beat it back. In reelecting Obama, the people had spoken. And the people, he believed, were wrong. Having spent his career telling politicians what the people wanted to hear, Luntz now believed the people had been corrupted and were beyond saving. Obama had ruined the electorate, set them at each other’s throats, and there was no way to turn back.

    Why not? I ask. Isn’t finding the right words to persuade people what you do? “I’m not good enough,” Luntz says. “And I hate that. I have come to the extent of my capabilities. And this is not false modesty. I think I’m pretty good. But not good enough.” The old Frank Luntz was sure he could invent slogans to sell the righteous conservative path of personal responsibility and free markets to anyone. The new Frank Luntz fears that is no longer the case, and it’s driving him crazy.

    Luntz’s work has always been predicated on a sort of populism—the idea that politicians must figure out what voters want to hear, and speak to them in language that comports with it. He proudly claims that his famous catchphrases, like branding healthcare reform a “government takeover” in 2010, are not his coinages but the organic product of his focus groups. The disheveled appearance, the sardonic wit, all add up to a sort of tilting against the establishment, an insistence that it listen to the Real People.

    But what if the Real People are wrong? That is the possibility Luntz now grapples with. What if the things people want to hear from their leaders are ideas that would lead the country down a dangerous road?

    “You should not expect a handout,” he tells me. “You should not even expect a safety net. When my house burns down, I should not go to the government to rebuild it. I should have the savings, and if I don’t, my neighbors should pitch in for me, because I would do that for them.” The entitlement he now hears from the focus groups he convenes amounts, in his view, to a permanent poisoning of the electorate—one that cannot be undone. “We have now created a sense of dependency and a sense of entitlement that is so great that you had, on the day that he was elected, women thinking that Obama was going to pay their mortgage payment, and that’s why they voted for him,” he says. “And that, to me, is the end of what made this country so great.”

    Most of all, Luntz says, he wishes we would stop yelling at one another. Luntz dreams of drafting some of the rich CEOs he is friends with to come up with a plan for saving America from its elected officials. “The politicians have failed; now it’s up to the business community to stand up and be heard,” he tells me. “I want the business community to step up.” Having once thought elites needed to listen to regular people, he now wants the people to learn from their moneyed betters.

    Luntz’s populism has turned on itself and become its opposite: fear and loathing of the masses. “I am grateful that Occupy Wall Street turned out to be a bunch of crazy, disgusting, rude, horrible people, because they were onto something,” he says. “Limbaugh made fun of me when I said that Occupy Wall Street scares me. Because he didn’t hear what I hear. He doesn’t see what I see.” The people are angry. They want more, not because we have not given them enough but because we have given them too much.

    Huh. It’s not clear what Frank is so concerned about. Maybe the “Daddy beats me because he loves me” approach to government is losing its electoral appeal? Perhaps, but with the GOP ahead of the Democrats in recent congressional polls it could be something else troubling Luntz.

    Is sabotaging healthcare not working as expected? That would indeed be disturbing, but it’s too early to say how that stragegy is going work out in the upcoming midterm elections. Frank’s angst is indeed a bit of a mystery.

    Still, One of the nice things about the post-Citizens United era is that even if Luntz’s billionaire sponsors ever get so afflicted with Luntz-itis that they decide to just go Galt and leave country they’ll still sort of be able to bestow their wisdoms on the ungrateful proles. There is hope.

    Posted by Pterrafractyl | January 7, 2014, 8:26 pm
  21. There are 85 people in the world that must work some very long hours:

    85 richest people own 46% of world’s wealth
    11:28 AM, January 20, 2014

    by Kim Hjelmgaard, USA TODAY

    Research conducted by the British charity Oxfam has concluded that the combined wealth of the world’s 85 richest people is equivalent to that owned by the bottom half of the world’s population.

    Separately, the report, titled “Working for the Few,” claims that the richest 1% on the planet – more than the 85 people whose bounty is comparable to the collective wealth of the poorest half – are rich to the tune of $110 trillion. “The top 1% have 65 times the total wealth of the bottom half of the world’s population,” the study says.

    “This capture of opportunities by the rich at the expense of the poor and middle classes has helped create a situation where seven out of every 10 people in the world live in countries where inequality has increased since the 1980s and 1 percent of the world’s families now own 46% of its wealth ($110 trillion),” Oxfam said in a statement announcing the study, published ahead of this week’s annual meeting of the World Economic Forum in Davos, Switzerland.

    The WEF has identified income inequality as one of the greatest risks facing the world in 2014.

    Oxfam’s study notes that “In many countries, extreme economic inequality is worrying because of the pernicious impact that wealth concentrations can have on equal political representation. When wealth captures government policymaking, the rules bend to favor the rich, often to the detriment of everyone else. The consequences include the erosion of democratic governance, the pulling apart of social cohesion, and the vanishing of equal opportunities for all. Unless bold political solutions are instituted to curb the influence of wealth on politics, governments will work for the interests of the rich, while economic and political inequalities continue to rise.”

    The development charity did not identify the 85 richest people cited in its study.

    Note that it isn’t just extremely high incomes by a tiny sliver of the populace that’s allowed 85 people to capture as much wealth as the bottom 50% of the population. It’s also the consequence of extreme poverty around the globe.

    Fortunately, this wealth gap should be closing soon. In fact, in another couple of decades poverty will almost be a thing of the past. At least, that’s the prediction of two of the wealthiest people on the planet.

    Posted by Pterrafractyl | January 20, 2014, 2:48 pm
  22. Another problem with the concentration of wealth is that it also concentrates the socioeconomic incentives for the extremely wealthy to embrace socioeconomic madness:

    TPM Editor’s blog
    The Brittle Grip, Part 2
    Josh Marshall – January 25, 2014, 6:38 PM EST

    If you’ve been in the media slipstream today you know the outrage and mockery directed at Tom Perkins, one of the world’s wealthiest and most successful Silicon Valley venture capitalists, for an oped he wrote in the Wall Street Journal comparing the rising critique of income inequality and “the 1%” to Kristallnacht. Just so we’re all on the same page, Kristallnacht (“the night of shattered glass”) was essentially the opening act of Hitler’s Final Solution. It took place on November 9th and 10th, 1938. This claim manages simultaneously to be so logically ridiculous and morally hideous that Perkins deserves every bit of abuse he’s already receiving.

    But I think we’re missing the point if we see this as the gaffe of one aging, coddled jerk. Because it’s only a more extreme and preposterous version of beliefs that have become increasingly widespread in the wealthiest sectors of American society, especially since 2008 and the twin events of the global financial crisis and the election of Barack Obama.

    Let me state the phenomenon as clearly as possible: The extremely wealthy are objectively far wealthier, far more politically powerful and find a far more indulgent political class than at any time in almost a century – at least. And yet at the same time they palpably feel more isolated, abused and powerless than at any time over the same period and sense some genuine peril to the whole mix of privileges, power and wealth they hold.

    There is a disconnect there that is so massive and glaring that it demands some sociocultural explanation. I’ve written about this before. But I confess not terribly well because I’ve found it a difficult issue to get my arms fully around and to reorient my focus on day to day events to the longer horizon. But I do think it’s one of the core political and economic issues of our time and deserves real explanation.

    I first started noticing this when I saw several years ago that many of the wealthiest people in the country, especially people in financial services, not only didn’t support Obama (not terribly surprising) but had a real and palpable sense that he was out to get them. This was hard to reconcile with the fact that Obama, along with President Bush, had pushed through a series of very unpopular laws and programs and fixes that had not only stabilized global capitalism, saved Wall Street but saved the personal fortunes (and perhaps even the personal liberty) of the people who were turning so acidly against him. Indeed, through the critical years of 2009, 10 and 11 he was serving as what amounted to Wall Street’s personal heat shield, absorbing as political damage the public revulsion at the bailout policies that had kept Wall Street whole.

    Let’s start by stipulating that no one expects the extremely wealthy to react happily to mounting discussion of wealth and income inequality or left-wing diatribes about “the 1%.” But again, the reaction is extreme and excessive and frequently runs into less comical versions of Perkins’ screed, with weird fears of persecution and threat from the folks who quite truly rule the roost.

    Here’s an exchange I had more recently with one of the wealthiest persons in the United States on the issue of perceptions of Obama among the very wealthiest Americans.

    Let me start by saying that I am not a fan of rich people complaining they’re being mistreated… That said, all the rich people I know think that Obama is trying to whip up anti-1% sentiment. The irony is that Obama’s policies have been fine for rich people — taxes have stayed low, almost nobody got prosecuted coming out of the financial meltdown, etc. But the feeling is real.

    So what is it about?

    I see three basic roots, though I don’t think my list is exhaustive.

    Put it all together and you get the climate in which someone like Perkins writes something as ridiculous as he did. As I said up top, his Holocaust analogy is so hyperbolic and ridiculous that he’s getting dumped on by almost everyone. But we miss the point if we see this in isolation or just the rant of one out-of-touch douchebag. It is pervasive. The disconnect between perception and reality, among such a powerful segment of the population, is in itself dangerous. And it’s led to what I would call a significant radicalization of the politics of extreme wealth. My evidence for this is only anecdotal. But it’s come up in conversations I’ve had with many business reporters who cover these folks on a daily basis.

    We take it more or less rightly as a given that people in finance will have generally right-leaning politics – low taxes, tight money, lax regulatory regimes. Basically traditional money Republicanism. But over the last few years (since 2008), I think there’s been a pretty dramatic growth in what we’d call Tea Party politics in that set – extreme conservatism that goes beyond hands off fiscal and regulatory policy, the kind of feverish mindset in which you could write with a straight face that progressives might be building toward some sort of mass wealth confiscation or internment or even extermination for the likes of Tom Perkins.

    It’s a problem. And Perkins is just getting our attention because his self-censor and/or editor failed him so miserably.

    Posted by Pterrafractyl | January 26, 2014, 2:11 pm
  23. Here’s an article that’s a reminder that the psychological roots of socioeconomic Calvinism are, like many human traits, weird and irrational:

    PandoDaily
    Poverty and the “Just World hypothesis”

    By Nathan Pensky
    On February 13, 2014

    There’s an idea that gets thrown around in tech circles — notably in the high-profile rants of Peter Shih and Greg Gopman – that “poor people” or “homeless people” are “lazy” or they “deserve to be poor.”

    Sometimes this isn’t stated outright but rather strongly suggested or implied. I’ve heard it most recently in connection to the San Francisco housing debate, but it’s by no means unique to any one issue. It tends to crop up anywhere welfare or government intervention to the conditions surrounding poverty are discussed. The concept of “socio-economic status as just deserts” has become a favorite talking point of Libertarians and “free market” enthusiasts, though if we’re keeping score this is actually a corruption of Libertarian ideology.

    Like a lot of wrong-headed ideas — wrong at center, as opposed to poorly reasoned or wrong in facts — it merits articulation more than rebuttal.

    I mean to draw attention to the concept not through observation about any people in particular or by trotting out statistics but by discussing the perception of poverty and the conditions surrounding it being intrinsic to certain bad behavior, as compared to something psychologists have called the Just World hypothesis.

    The psychological study of social justice gained steam in the 1930s and 1940s, when researchers and psychologists, notably Kurt Lewin, tried to produce “a scientific means of fostering democratic and egalitarian norms and preventing tyranny and oppression from gaining the upper hand in society,” as well as to come to terms with the atrocities inflicted during World War II.

    By the 1960s, social psychologists, notably Melvin J. Lerner, had conducted studies which found the concept of justice to be a strong motivator in human behavior. According to Lerner’s findings, the question of “who is entitled to what and why?” springs from some of the most basic structures in the development of human identity.

    Lerner posited that a major developmental step in a child’s understanding of its place in a society comes from identifying the self in terms of in-groups, and and then initiating something called “impersonal causation” according to these groupings. “Impersonal causation” entails that if a certain behavior is performed, a certain viable outcome can be expected.

    As children begin to understand that if they avoid knee-jerk impulses and function according to more abstract reward systems, they can attain greater benefits. (An example of greater reward within a more abstract reward system would be, say, a child forgoing playing with his friends in the afternoon to do chores for an allowance, and then saving to buy a bicycle.)

    Initial findings in this area of social psychology determined the “justice motive” similar to the more complex, abstract goals that function alongside “impersonal causation.” Justice, as opposed to rational self-interest, was found to be a salient motivator of human behavior. Psychologists observed that people saw justice as a somewhat objective measure of reality and not just a way to further their own desires. Subjects were motivated by a sense of fairness, a “social contract” between themselves and others.

    The Just World hypothesis is one type of system justification, a cognitive bias where a person’s circumstances are incorrectly believed to always indicate his or her behavior. An example of this sort of justification is when victims of sexual assault are blamed for their own victimization. Because people can’t explain the terrible things that happens in the world, and because humans need to imagine a sort of cosmic balance of justice, they incorrectly assign blame to those most local to misfortune.

    The Just World hypothesis was first studied by Lerner, after he observed something that has since come to be referred to as “victim-blaming,” victims of abuse being blamed for their circumstance, as well as the phenomena of people with low socio-economic status getting blamed without reference to the social structures underlying poverty.

    In one telling study, Lerner made subjects watch two men perform tasks and then receive rewards. Participants reported that they felt more favorably toward the man who received a reward for the task, even though such rewards were given randomly, totally unrelated to the success of the task performed. Just World rationalizations occur especially after people witness terrible events that can’t be explained.

    Huh, well that’s sure an interesting psychological fun-fact: the more you’re paid, the more favorably other random people feel towards you. Progressive Kristallnacht here we come! And here’s a tangentially related fun-fact: winning the lottery makes you more likely to become a right-winger:

    The Conscience of a Liberal

    Feb 13, 11:58 am 30
    Vox Anti-Populi
    Paul Krugman

    Right now the online current-policy economics journal VoxEU — edited by my old student Richard Baldwin — has two fantastic pieces on inequality.

    First up, Andrew Oswald and Nattavudh Powdthavee test the effect of wealth on political attitudes by looking at people who got richer, not through their efforts or inheritance, but by winning the lottery. Sure enough, lottery winners become more right-wing. Maybe that’s not surprising, but in case you had any doubts about whether to be a cynic, this should dispel them.

    Even more interesting is the effect on political attitudes: lottery winners also became more likely to praise the current, unequal distribution of income:

    Think about that for a minute. You might imagine that a self-made man, reasoning from his own experience, might come to the conclusion that people get what they deserve. But here are people who demonstrably, by design, got rich(er) through pure chance, having nothing to do with their talents or efforts. Yet their increased wealth nonetheless convinces them that society is fair. Presumably a big enough lottery win would turn them into Tom Perkins.

    The study also found that the “the larger is their lottery win, the greater is that person’s subsequent tendency, after controlling for other influences, to switch their political views from left to right“. So all we need for a right-wing revolution is a lottery that everyone wins. But, of course, that would be welfare. Back to the drawing board.

    Posted by Pterrafractyl | February 13, 2014, 3:58 pm
  24. Tom Perkins, the ‘Progressive Kristallnacht’ billionaire, just dropped the mask a little bit more when asked for an idea that would “change the world”. His idea? Dump this ‘one man, one vote’ nonsense. If you don’t pay at least a dollar in taxes you don’t get a vote. But Perkins immediately doubled-down with an even better idea: One dollar in taxes gets you one vote. And a million dollars in taxes gets you a million votes. Etc. Just think of it as the updated neoreactionary version of the Ownership Society:

    Tom Perkins’ big idea: The rich should get more votes
    By Charles Riley @CRrileyCNN February 14, 2014: 8:22 AM ET

    HONG KONG (CNNMoney)
    Tom Perkins suggested Thursday that only taxpayers should have the right to vote — and that wealthy Americans who pay more in taxes should get more votes.

    The venture capitalist offered the unorthodox proposal when asked to name one idea that would “change the world” at a speaking engagement in San Francisco moderated by Fortune’s Adam Lashinsky.

    “The Tom Perkins system is: You don’t get to vote unless you pay a dollar of taxes,” Perkins said.

    “But what I really think is, it should be like a corporation. You pay a million dollars in taxes, you get a million votes. How’s that?”

    The audience at the Commonwealth Club reacted with laughter. But Perkins offered no immediate indication that he was joking. Asked offstage if the proposal was serious, Perkins said: “I intended to be outrageous, and it was.”

    Perkins seemed to be aware that he was courting controversy, saying that his voting proposal would “make you more angry than my letter to the Wall Street Journal.”

    That letter, published last month, compared the supposed assault on the wealthy to a wave of Nazi attacks on Jews ahead of the Holocaust.

    The letter sparked a public firestorm, and the venture capital firm he co-founded — Kleiner Perkins Caufield & Byers — distanced itself from his comments. Perkins has since allowed that the comparison went too far, but has not apologized for the overall message and his warning about anti-rich “radicalism.”

    For his part, Perkins shows no signs of backing down from his argument that the rich in America are under attack. Perkins said Thursday that the trend has grown since the election of President Obama — who he described as an “amateur.”

    Pressed for examples of how the rich were being demonized, Perkins said that he feared higher taxes.

    “The fear is wealth tax, higher taxes, higher death taxes — just more taxes until there is no more 1%. And that that will creep down to the 5% and then the 10%,” he said.

    Like syphilis, affluenza can do awful things to elderly mind.

    Posted by Pterrafractyl | February 14, 2014, 8:26 am
  25. Look who else is jumping on board the “Progressives are scapegoating the rich just like Hitler scapegoated the Jews”-meme: Obama’s distant cousin:

    TPM Livewire
    Obama’s Tea Party Cousin Thinks The President Is Hitler

    Daniel Strauss – February 14, 2014, 10:51 AM EST9290

    Kansas Senate candidate Dr. Milton Wolf has compared President Barack Obama to Hitler.

    The comparison is more surprising when you consider Wolf is a distant cousin of Obama’s. Wolf is running in the Republican primary to unseat incumbent Sen. Pat Roberts (R-KS), who he said isn’t conservative enough.

    As Mother Jones’ Tim Murphy noted on Friday, Wolf compared Obama’s treatment of “successful Americans” to the Nazi’s treatment of Jews.

    Scapegoats of history: Hitler – Jews & gypsies. Mussolini – Jews & Bolsheviks. #Obama – Successful Americans. #tcot #p2 #gop

    — Dr. Milton Wolf (@miltonwolfmd) December 13, 2012

    Wolf also argued to another Twitter user that American liberals are virtually in lockstep policy-wise with Nazis.

    “Other than killing Jews, what domestic policy of the Nazis do today’s American liberals oppose?” Wolf tweeted.

    Wolf has, however, also heaped praise on Obama in the past.

    “I speak for nobody but myself but we are all enormously proud of him and his achievement and it has been a tremendous honor to be in the family that gets put in the front row of history,” Wolf said in an interview with Fox News in 2010 also flagged by Mother Jones.

    Progressive Kristallnacht: it’ll be just like one big ‘death panel’ for the billionaires.

    Posted by Pterrafractyl | February 14, 2014, 1:55 pm
  26. Here’s some good news that’s also bad news:

    Salon

    Filthy rich but secretly terrified: Inside the 1 percent’s sore-winner backlash
    Why are the super-rich whining so much? They rigged the game for themselves, but are terrified of being discovered
    Joan Walsh
    Tuesday, Feb 18, 2014 12:03 PM CST

    What explains the toxic mélange of entitlement and shame that’s driving the raging 1 percent sore-winner backlash? From Tom Perkins comparing the ultra-rich to Jews during “Kristallnacht,” to tycoon and newspaper-destroyer Sam Zell insisting “the top 1 percent work harder,” to investment banker Wilbur Ross proclaiming that “the 1 percent is being picked on for political reasons,” there’s an epidemic of plutocrat self-pity afoot. Just last week ex-CEO of Morgan Stanley John Mack told the media to “stop beating up on” CEOs Jamie Dimon and Lloyd Blankfein after they got obscene raises from JPMorgan Chase and Goldman Sachs.

    The sore winner backlash is odd timing. There’s no longer any real movement to hike taxes on their income or their wealth, both of which are at all-time highs. President Obama has said an increase in tax rates is “off the table.” There’s no more discussion of the “Buffett Rule,” named for the Berkshire-Hathaway oracle who famously suggested his secretary should no longer pay higher rates than her boss.

    Almost nobody talks about ending the “carried interest” loophole that lets hedge fund managers pay a shamefully low rate on much of what should be considered income; instead there’s a “boom in trusts passing carried interest to heirs,” the Wall Street Journal reports. Yes, they’ve figured out a way to pass that unfair advantage onto their heirs through new estate-tax dodges. Sadly, Occupy Wall Street has fizzled, so they can even enjoy Zuccotti Park unaccosted.

    So why all the whining now? I read Kevin Roose’s buzzy “I crashed a secret Wall Street society” piece Monday morning looking for insight. You should read it if you haven’t. It’s a fun hate-read. You’ll come away thinking, if you don’t already, that a lot of these people are monsters.

    Apparently the secret fraternity Kappa Beta Phi gathers the titans of Wall Street at the St. Regis once a year for a gala that celebrates their wealth and power and mocks the rest of us. New inductees to the fraternity are charged with putting on a variety show to entertain the long-tenured. The evening features all the standard bad behavior common to male societies, from sports teams to military units to the boys of the Bohemian Grove. Cross dressing? Check.

    After cocktail hour, the new inductees – all of whom were required to dress in leotards and gold-sequined skirts, with costume wigs – began their variety-show acts.

    Misogyny and homophobia? Check.

    The jokes ranged from unfunny and sexist (Q: “What’s the biggest difference between Hillary Clinton and a catfish?” A: “One has whiskers and stinks, and the other is a fish”) to unfunny and homophobic (Q: “What’s the biggest difference between Barney Frank and a Fenway Frank?” A: “Barney Frank comes in different-size buns”).

    Mocking the loser-outsiders, who paradoxically make their great wealth possible? Check.

    One of the last skits of the night was a self-congratulatory parody of ABBA’s “Dancing Queen,” called “Bailout King.”

    When Roose was discovered, he was ejected from the ballroom, and the story wound up in his new book, “Young Money,” a portrait of eight entry-level Wall Street traders, which came out today. The Kappa Beta Phi story was excerpted in New York magazine.

    What the excerpt captured was the insularity and paranoia of plutocrats who band together to protect themselves from mostly imagined social opprobrium and self-doubt. As Paul Krugman has argued, they aren’t like the titans of yore who made things; they “push money around and get rich by skimming some off the top as it sloshes by.” They’ve gotten insanely wealthy mainly by rigging the rules of the game to privilege the world of finance, and it’s no wonder they’re worried the rest of us will someday figure that out.

    The good news from Roose’s work? Among younger Wall Streeters, there’s more doubt than you might expect. The percentage of Ivy Leaguers going into investment banking straight out of college is dropping. Before it faded, Occupy Wall Street had an impact on some of his young subjects, Roose reveals. The bad news is, the people who have doubts about the morality of their enterprise, and about their own privilege, tend to leave, so that those who remain are particularly entitled and/or deluded.

    Still, that nagging doubt helps explain the backlash. They project in order to protect themselves. Their self-defense gets ever louder.

    Yes, the upcoming generation of putative banksters might not be so keen on committing to a lifetime of wealth accumulation at any cost. That’s certainly good news, but it comes with the added caveat that these kind of conscience-driven brain-drains can end up having the effect of radicalizing the remaining members of the group even more.

    In other news…

    Posted by Pterrafractyl | February 19, 2014, 12:14 pm
  27. Here’s one more reason for society to demand reasonable work hours and limits on overtime: On top of our jobs and taking care of family and everything else, we all have a part-time job that’s easy to ignore but absolutely essential…reigning in those crazy plutocrats:

    Salon
    Sunday, Mar 30, 2014 06:00 AM CST
    Plutocracy without end: Why the 1 percent always defeats the middle class
    There are more of us than them. But income inequality keeps getting worse — and there is sadly no end in sight
    Thomas Frank

    I’ve been writing about what we politely call “inequality” since the mid-1990s, but one day about ten years ago, when I was traveling the country lecturing about the toxic curlicues of right-wing culture, it dawned on me that maybe I had been getting the entire story wrong. All the economic developments that I spent my days bemoaning—the obscene enrichment of the CEO class, the assault on the regulatory state, the ruination of average people—were very possibly not what I thought they were. When I talked about these things, I assumed they were an outrage, an affront to the affluent nation I still believed we were; once the scales fell from our eyes and Americans figured out what was happening, I argued, we would yell “stop,” bring this age of folly to a close, and get back to middle-class prosperity as usual.

    What hit me that day was the possibility that my happy, postwar middle-class world was the exception, and that the plutocracy we were gradually becoming was the norm. Maybe what was happening to us was a colossal reversion to a pre-Rooseveltian mean, and all the trappings of ordinary life that had seemed so solid and so permanent when I was young—the vast suburbs and the anchorman’s reassuring baritone and the nice appliances that filled the houses of the working class—were aberrations made possible by an unusual balance of political forces maintained only by the enormous political efforts of its beneficiaries.

    Maybe the gravity of history pulled in the exact opposite direction of what I had always believed. If so, the question was not, “When will we get back to the right order of things,” but rather, “Would we ever stop falling?”

    Today, of course, the situation has grown vastly worse. The subject of inequality is discussed everywhere; there are think tanks and academic conferences dedicated to it; it has become socially permissible for polite people to wonder about the obscene gorging of those at the top. Sooner or later the question that everyone asks, upon discovering just how much of what Americans produce goes to the imbeciles in the penthouses and executive suites, is this: How much further can this thing go?

    The One Percent have already broken every record for wealth-hogging set by their ancestors, going back to the dawn of record-keeping in 1913. But what if it all just keeps going? How much fatter can the fat cats get before they hit some kind of natural limit? Before the invisible thumb of history presses down on the other side of the scale and restores balance?

    That we are very close to such a limit—that the contradictions inherent in the system will automatically be its undoing—is an idea much in the air of late. Not many still subscribe to Marx’s dialectical vision of history, in which inevitable worker immiseration would be followed, also inevitably, by a revolutionary explosion, but there are other inevitabilities that seem equally persuasive today. We hear much, for example, about how inequality contributed to the housing bubble and the financial crisis, how it has brought us an imbalanced economy that cannot survive.

    It reminds me of the once-influential theory of inequality advanced by the economist Simon Kuznets, who thought that capitalist societies simply became more egalitarian as they matured—a theory that is carefully debunked by economist Thomas Piketty in his new book, “Capital in the Twenty-First Century.” It also reminds me of the theories of the economist Ravi Batra, who in 1987 predicted a “Great Depression of 1990” because (among other things) inequality would have by then had reached what he believed to be unsustainable levels.

    It is an attractive fantasy, this faith that some kind of built-in restraint will stop all this from going too far. Unfortunately, what it reminds me of the most are the similar mechanisms that Democrats like to dream about on those occasions when the Republican Party has won another election. As the triumphant wingers stand athwart the unconscious bodies of their opponents, beating their chests and bellowing for some new and awesomely destructive tax cut, a liberal’s heart turns longingly to such chimera as pendulum theory, or thirty-year-cycle theory, or the theory of the inevitable triumph of the center. Some great force will fix those guys, we mumble. One of these days, they’ll get their comeuppance.

    But the cosmic cavalry never shows up. No deus ex machina will arrive to rescue the middle-class society, either. The economic system is always in some sort of crisis or another; somehow it always manages to survive.

    One of the ways it manages to survive, in fact, is by working the public into paroxysms of fear at those who proclaim the inevitable destruction of the system. I refer here not only to the Republicans’ routine deploring of “class war,” by which they mean any criticism of plutocracy, but also to the once-influential right-wing radio host Glenn Beck, who in 2009 and 2010 was just about the only one in America who thought to take seriously the obscure French anarchist tract, “The Coming Insurrection.” Night after night in those dark days, Beck would use the book to terrify his vast audience of seniors and goldbugs—anarchy was right around the corner!—and to this day you can still find the tract on the reading lists of 9/12 clubs across the country.

    Let us not forget that it was thanks to the energetic activity of those 9/12 clubs and the closely aligned Tea Party that the obvious and conventional — and maybe even inevitable — response to the 2008 catastrophe was not the response the public chose. According to an important recent paper by the sociologists Clem Brooks and Jeff Manza, the orthodox poli-sci theory of economic downturn holds that voters “turn away from unregulated markets and demand more government in times of economic downturn and rising unemployment.” But in the downturn of the last few years, people reacted differently: “Rather than the recession stimulating new public demands for governent, Americans gravitated toward lower support for government responsibility for social and economic problems.” And they swept in the Republican Congress of 2010, a result that, according to Brooks and Manza, has much to do with the hyperbolic conservatism of partisan organizations like Fox News.

    A second irony, worth noting in passing, is that the right-wing offensive against public pensions, which began as soon as the Republican wave landed, has been carried on under the banner of historical determinism, with everyone agreeing that the rich are going to get their way with the unions and that no alternative exists. (“Detroit pension cuts were inevitable, city consultant testifies,” screams a typical headline on the subject.)

    *

    The ugly fact that we must face is that this thing can go much farther still. Plutocracy shocks us every day with its viciousness, but that doesn’t mean God will strike it down. The middle-class model worked much better for about ninety-nine percent of the population, but that doesn’t make it some kind of dialectic inevitability. You can build a plutocratic model that will stumble along just fine, like it did in the nineteenth century. It requires different things: instead of refrigerators for all, it needs bought legislatures and armies of strikebreakers—plus bailouts for the big banks when they collapse under the weight of their stupid loans, an innovation of our own time. All this may be hurtful, inefficient, and undemocratic, but it won’t dismantle itself all on its own.

    That is our job. No one else is going to do it for us.

    Or we can let the plutocrats continue reigning in us and just revert back to the historical norm of mass disempowerment, although it probably won’t resemble history very much. Maybe ancient history.

    Posted by Pterrafractyl | April 1, 2014, 8:10 am
  28. Sometime crocodile tears are appropriate. Sometimes:

    Vanity Fair
    10:18 AM, April 3 2014
    Pity the Rich After the Supreme Court’s Ruling on Donor Limits
    By Kia Makarechi

    People who don’t have millions of dollars set aside for influencing election outcomes took an apocalyptic view of yesterday’s Supreme Court decision to lift the ban on how much money an individual can donate to political campaigns in a single year.

    But pity the rich donors themselves, who have now found another way to paint themselves as victims. They say they’re going to be even more vulnerable to fund-raisers seeking to pick their pockets. And all these wealthy donors get in return is the power to tell candidates how to vote on issues like tax rates and the minimum wage.

    “I’m horrified, planning to de-list my phone number and destroy my email address,” one donor told Politico. “I’m poor again as a result,” said another lobbyist and donor. “The fundraising consultants are the only winner in today’s decision.”

    Longtime Texas donor Ben Barnes surmised that the day after the ruling would be “like Saturday at the grocery store” in an interview with Business Week. Another donor—who himself made $1 million in campaign contributions in 2012—told Politico that the court’s decision is detrimental to democracy and ups the “incentive for politicians to focus on a small number of super-wealthy donors, rather than the general public.”

    While limits on how much an individual can donate to a single candidate remain ($2,600 an election), the ruling in McCutcheon v. F.E.C. was widely viewed as likely to make pay for play an even bigger problem in American politics. “If the court in Citizens United opened a door, today’s decision may well open a floodgate,” Justice Breyer said in a rare oral dissent from the bench.

    If this is a floodgate, what it replaces was a barn door, at best.

    Sheldon Adelson, the casino mogul known for his Maybachs, tough bodyguards and spending $100 million on campaign contributions in 2012, held a virtual Republican primary for the 2016 presidential election last weekend. The likes of Chris Christie, Jeb Bush, and Scott Walker flew to Las Vegas to prostrate themselves in front of the Republican Jewish Conference, reaffirming their allegiances to Israel’s cause and doing their best to impress Adelson, despite the fact that he threw millions of dollars at not one, but two failed 2012 bids.

    Charles Koch, another fantastically rich Republican donor, published a curiously timed op-ed in The Wall Street Journal on Wednesday. The piece makes no mention of the court’s ruling, but it does set out an argument for how he and his brother David—G.O.P. rainmakers collectively worth $80.4 billion—are not trying to “rig the system” but actually freedom fighters working against government oppression and “cronyism.”

    “Instead of fostering a system that enables people to help themselves,” Koch wrote, “America is now saddled with a system that destroys value, raises costs, hinders innovation and relegates millions of citizens to a life of poverty, dependency and hopelessness.” Koch suggests that he reluctantly started engaging in the political process after realizing that “the fundamental concepts of dignity, respect, equality before the law and personal freedom are under attack by the nation’s own government.”

    Well there we go. Billionaires like the Koch brothers aren’t going to use the latest Supreme Court ruling to take over government. No, they’re freeing us from government. They’re freedom fighters! Money = power, and no one has the power these two have to change the course of history. Of course, once they’ve freed you from the shackles of the old power, there’s still the question of what to do about the new power:

    Courthouse News Service
    Weak Fascism
    By ROBERT KAHN
    Friday, March 28, 2014, Last Update: 2:42 AM PT

    Republicans are living down to their self-proclaimed role as the party of ideas. What they have been proposing for years is a form of weak fascism: not one in which the corporations are put in harness to strengthen the government, but one in which the government is shackled to the power of corporations.

    Fascism, Webster’s Second Edition tells us, is “a system of government characterized by rigid one-party dictatorship, forcible suppression of the opposition (unions, other, especially leftist, parties, minority groups, etc.), the retention of private ownership of the means of production under centralized government control, belligerent nationalism and racism, glorification of war, etc.: first instituted in Italy in 1922.”

    The only difference between Mussolini’s Fascism and Republican fascism is the four words under centralized government control, yet if private corporations control or can dictate to the government, that’s a distinction without a difference.

    Mussolini harnessed the corporations to the state. Republicans would harness the state to the corporations. They claim they want to free the corporations from the shackles of government. That’s nothing but right-wing anarchy.

    Anarchists, a political movement contemporaneous with Italian Fascism, believed – I quote from Webster’s Second again – that “formal government of any kind is unnecessary and wrong in principle.”

    That’s an oversimplification of anarchism. Most anarchists believed that local government – “local control” – was acceptable. Local control – states’ rights, in voting, racial policies, “science” and religious curriculum in public schools, what women should be allowed to do, and so on, is, of course, a banner cause of the so-called tea party – the Republican fascists.

    Modern American fascism, then, has just one essential difference from Italian or German fascism of the bloody 20th century: whether the controls should be exerted by government or corporations.

    Tea party Republicans are squarely on the side of the corporations, and this is a place where Republican fascism and Libertarians meet.

    Yes, what are we to do if the centralized federal government is simply replaced by weak fascism? Do we wait for a new set of Big Brothers to free us from our new corporate chains? That seems kind of pathetic. Maybe we can take a cue from our bold freedom fighting economic strong-men and free ourselves from their weak fascism:

    Salon
    Thursday, Apr 3, 2014 03:59 PM CST
    Want to cut the rich’s influence? Take away their money!
    To really bypass the Supreme Court and fix campaign finance forever, it’s time to get creative
    Alex Pareene

    Chief Justice John Roberts this week continued his gradual judicial elimination of America’s campaign finance laws, with a decision in McCutcheon v. FEC that eliminates “aggregate” contribution limits from individuals to political parties, PACs and candidates. The decision may not have a catastrophic effect, in a world where individuals were already permitted to donate unlimited sums to independent political organizations, but it is just another move toward the end of regulation of political spending altogether. If Americans want to limit the influence of money on politics, they will have to start getting more creative.

    Roberts’ specialty is “faux judicial restraint,” in which he achieves his radical desired goals over the course of many incremental decisions instead of one sweeping one. In this case, as many observers have noted, Roberts pointed to our current easily circumvented caps on political spending as justification for lifting yet another cap, without noting that the Roberts court helped create the current system to begin with. Our campaign finance laws have not quite yet been “eviscerated,” but the trend is clear. Roberts and Justice Clarence Thomas, who penned a partial dissent calling for all regulation of political spending to be eliminated, have something close to the same end goal, but Roberts is willing to be patient in getting there.

    So, if we think that money in politics is a problem; if we think it creates the appearance of corruption, alienates non-wealthy citizens from the democratic process, perverts incentives for politicians and candidates, and creates an unequal system in which the speech of the rich drowns out the speech of everyone else — and all of those things are already the long-standing status quo — we can no longer seek to address the problem by preventing money from flowing into politics. The Supreme Court is clearly not going to meet a new spending restriction that it likes any time soon. Instead of attempting to dictate how the wealthy spend their money, we are probably just going to have to take away their money.

    If the super-rich had less money, they would have less money to spend on campaigns and lobbying. And unlike speech, the government is very clearly allowed to take away people’s money. It’s in the Constitution and everything. I know it wasn’t that long ago that it also seemed obvious that the government could regulate political spending, but in this case the relevant constitutional authority is pretty clear and there is no room for a so-called originalist to justify a politically conservative reading of the text. Congress can tax income any way it pleases.

    There is one glaring problem with my plan, of course, which is that Congress is already captured by wealthy interests, and is not inclined to tax them. But all I’m saying is that would-be campaign finance reformers ought to give up on their lost cause and shift their energies toward confiscation and redistribution.

    As the article points out, one big flaw with the plan to protect ourselves from the deep pockets of weak fascists is the fact that Congress is already bought off and it’s only going to get worse. But think of how bad it’ll be once weak fascism is even more entrenched? In other words, if we really believe the Koch brother’s ‘Freedom‘ agenda is an inevitability and we really are heading into an era of nearly unrestrained power for the ultra-wealthy, we had better start protecting our freedoms now before it’s too late. Come on humanity. You can do this!

    Posted by Pterrafractyl | April 4, 2014, 9:05 am
  29. One of the fun things about the modern age is that we get answers to questions that are very difficult to ask under sane conditions. Questions like: What would the world be like if it was run by crazy people that were very adept at seeming sane to the casual observer:

    TPM Editor’s Blog
    A Must-Read from the ‘Brittle Grip’ Series

    Josh Marshall – April 7, 2014, 9:46 AM EDT1930

    I’ve been whittling away at this “brittle grip” series for a while now. And I confess it’s the first contemporary or public issue that I’ve felt any urge to write about at length in many years. But since I’m not able to do that I’ve had to content myself with observation, anecdote and hypotheses. Social psychology, economics, extensive interviews and much more would be necessary to really grasp the issue in all its dimensions. That’s why I was so charged to receive this reader email on the brittle grip theme from TPM Reader ML. It’s really, really worth your time to read.

    I am an MBA and, after working in the “private sector” for a good while am back in the public policy world. I am also a fellow Brown grad (and long time reader – since early 2000s).

    Anyway, I was, at one point, a real free market believer. I did some Jeff Sachs goes to Bolivia type of stuff. It was a heady time – the 90s. The market could bring prosperity to peasants in Bolivia (if only they let us privatize retirement and force them to become investors somehow). The market was good for you and everyone.

    The key to all of this? Basically, the “science” behind the market. The efficient market theory. Black Scholes! Portfolio theory! Betas! If you had the tools, you too could make money. Prices were set by the “market” and data not men. My finance profs at my business school seemed like scientists (not thereoticians).

    Anyway, in 2008 what happened is that the efficient market theory went to shit. Krugman, Justin Fox and others have written about this extensively and persuasively. Ironically, the mainstream and business media have ignored this pretty important finding from 2008. That the numbers show that markets were not that efficient. That you can’t balance portfolios. That Wall Street doesn’t know how to price risk.

    The crash turned efficient markets theory into ideology rather than science. Fox, Krugman and other talk alot about this. The guys at Chicago – super smart, data driven people – are now ignoring data because it leads to conclusions that they don’t like – that markets can be irrational.

    The same thing is happening with Wall Street. Being a Free Market person is now more about belief than data.

    I see the consequences in the non profit world where I now work. We have funders who – before 2008- were open to market based and policy solutions to social change. After 2008, it changed. Suddenly, the ONLY solution was the free market (ironic given that 2008 proved that the free market is far from a perfect solution for many things). If you were for policy change – suddenly you were a socialist.

    All of this has put the people who defined themselves by the free market under seige. Free market, finance guys don’t have to read Ayn Rand to feel this way. They just have to rely on the idea that the free market for their business and intellectual assurance that making money is good. This includes a lot of people in finance, venture capital, business.

    I do have some sympathy for these guys. I believed in this stuff too. It would be nice if it were true and that free markets could bring freedom and prosperity to all of us. The fact that the data – DATA! – is against them in this regard makes everyone tetchy.

    For me, what happened (for context) is that after my Sach like work (also in South America) I saw the consequences of privatizing the airlines and bank – it was to make a few guys like Carlos Slim really rich (and not help many others). It turned me from a true believer into an apostate. I always thought that what happened in Mexico and South America in the 90s and early 2000s could be an object lesson for us in the US and, lo and behold, I may have been onto something.

    Yep, in today’s world, we get to ask crazy questions like that all the time. Over and over.

    Posted by Pterrafractyl | April 7, 2014, 11:12 am
  30. On great, a new Princeton study just declared that democracy in the US is officially dead. While depressing, this shouldn’t come as too much of a surprise. Vegetative comas can’t last forever

    TPM Livewire
    Princeton Study: U.S. No Longer An Actual Democracy

    Brendan James – April 18, 2014, 10:43 AM EDT1128

    A new study from Princeton spells bad news for American democracy—namely, that it no longer exists.

    Asking “[w]ho really rules?” researchers Martin Gilens and Benjamin I. Page argue that over the past few decades America’s political system has slowly transformed from a democracy into an oligarchy, where wealthy elites wield most power.

    Using data drawn from over 1,800 different policy initiatives from 1981 to 2002, the two conclude that rich, well-connected individuals on the political scene now steer the direction of the country, regardless of or even against the will of the majority of voters.

    “The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy,” they write, “while mass-based interest groups and average citizens have little or no independent influence.”

    As one illustration, Gilens and Page compare the political preferences of Americans at the 50th income percentile to preferences of Americans at the 90th percentile as well as major lobbying or business groups. They find that the government—whether Republican or Democratic—more often follows the preferences of the latter group rather than the first.

    The researches note that this is not a new development caused by, say, recent Supreme Court decisions allowing more money in politics, such as Citizens United or this month’s ruling on McCutcheon v. FEC. As the data stretching back to the 1980s suggests, this has been a long term trend, and is therefore harder for most people to perceive, let alone reverse.

    Ordinary citizens,” they write, “might often be observed to ‘win’ (that is, to get their preferred policy outcomes) even if they had no independent effect whatsoever on policy making, if elites (with whom they often agree) actually prevail.”

    “…this has been a long term trend, and is therefore harder for most people to perceive, let alone reverse.”

    What nonsense. Of course the citizens can reverse it! They just need to vote for…oh wait.

    Well, as the article points out, at least that doesn’t mean voters won’t ever get the policies they desire. Sometimes they might happen want what the oligarchs want too. For instance, if you hate the idea of public transportation in your city and love waiting in traffic, you might love one of the Koch Brothers’ most recent pet projects:

    Vice
    Motherboard
    This Affordable Mass Transit Technology Is Now All But Illegal in Tennessee
    April 16, 2014 // 05:00 PM EST

    Think of Bus Rapid Transit as mass transportation done cyberpunk. Can’t afford shiny new high-speed rail technology? Carve out a dedicated lane, roll out a ticketing app, and watch the bus beat the traffic. It’s a high-tech idea executed with low-tech parts, at lower cost. If a bullet train is the $1,500 Google Glass, BRT is the $300 DIY version. It’s the best kind of city hack. So it’s too bad a pair of billionaires just helped shut down one of the most promising BRT startups in the nation.

    Nashville was poised to become the proud owner of a new BRT line, called Amp. The concept has proved an overwhelming success in a number of cities abroad—Curitaba, Brazil, is maybe the most famous, but there are prominent lines in China, Argentina, and South Korea, as well as right here in the states, in Kansas City and New York.

    The mayor of Nashville had secured plans to create a $175 million BRT system to increase citizen mobility and help thwart congestion as the city’s population swelled. That might sound expensive, but for a transit project in a major city, it’s a bargain—especially since BRT has repeatedly shown it stimulates economies and reduces pollution.

    But even this relatively elegant transit solution attracted the ire of powerful interests that find public transit distasteful. Spurred on by the Koch brothers’ influential political organization, Americans for Prosperity, Tennessee’s state legislature has succeeded in passing an extraordinary new law that actually bans BRT.

    That’s specifically what the language of the law says; it specifically prevents the “constructing, maintaining, or operating any bus rapid transit system” in the state of Tennessee, unless specifically approved by legislation and the transit commissioner. It also requires that if “any state agency proposes to assist in funding the project with state or federal-aid funds or otherwise requests such funds for the project, then the project must also be approved by the general assembly.” In other words, if any city wants federal funding for a local transit project, it must be approved by the state legislature. That makes it next to impossible to pass. This blows any of Uber’s regulatory setbacks out of the water; anyone frustrated at government prohibition of ride-sharing should be outraged about this. It is, essentially, a law that makes a useful transit technology illegal.

    Wired calls the legislation “mind-boggling,” which it is, and “strangely specific,” which it’s less so—because it’s exactly the language that AFP wanted placed into the bill. Alex Pareene points to the Tennessean, which explains how the anti-BRT law was first born: “StopAmp.org Inc., the leading opposition group, thanked AFP in a news release … and Andrew Ogles, AFP’s state director, said that the group didn’t back the effort financially but that the bill grew out of a conversation he had had with Sen. Jim Tracy, the sponsor.”

    This is politico-speak for ‘the advocacy group asked a legislator to draft a law that would ban BRT and so he did’. ‘Why’ is another question altogether. Why would AFP bother? The short answer is: political activism. The Kochs and their organization, like many prominent conservative groups and pundits, are ideologically opposed to public transportation. Mass transit projects require government revenue—Amp was going to be made possible with help from federal funding—and mildly inconvenience drivers who share roads with them.

    Still, why would a nationwide political organization get involved in a single municipality’s proposed bus line?

    “With supermajorities in both houses,” [Ogles] said, according to the Tennessean, “Tennessee is a great state to pass model legislation that can be leveraged in other states.”

    AFP is hoping to export this law to other states that are either aspiring to this affordable, hybrid brand of mass transit, or that already have it. That’s why there was such a uniquely vehement movement to halt the BRT, why StopAmp.org lobbied so hard, built an eyesore of a website, and even commissioned a country-western protest song. Austin, Texas and Kansas City, Kansas—two conservative states currently running BRTs—may want to brace themselves.

    It’s cases like this that help paint the Koch brothers as villainous tycoons in the popular conception. Though David and Charles Koch are almost certainly not micro-managing this particular effort out of some all-consuming hatred for mass transit, their ideology is ultimately the animating force behind the grassroots efforts they finance. And there’s no doubt that part of their preferred agenda is derailing transit. The AFP has previously campaigned to kill mass transit projects in other states. The Reason Foundation, another group supported by the Koch Brothers, lobbied Florida governor Rick Scott to kill the state’s incoming high speed rail project. He did.

    This, it bears reminding, is the new normal. Political scientists say our government now resembles not democracy, but ‘economic elite domination’. So it shouldn’t be too surprising that billionaires can influence the cancelation of a bus line in a city halfway across the country—and override the popular opinion that the BRT should go forward.

    “Though David and Charles Koch are almost certainly not micro-managing this particular effort out of some all-consuming hatred for mass transit, their ideology is ultimately the animating force behind the grassroots efforts they finance.” Indeed.

    And as one can see, it’s not a ‘pet project’ in terms of the Koch Brother’s spending their own personal time on it. They have far too many projects for that kind of focus. No, it’s the kind of ‘pet project’ that a billionaire with far too much money and a large number of human ‘pets’ might decide to undertake once they’ve turned society into their personal plaything. It’s the kind of ‘pet project’ where you are the pet. FYI, no peeing on the rug. Your owners reserve that privilege for themselves.

    So if democracy has ever felt like an Animal Farm, get ready for the post-democracy Abusive Puppy Mill. Don’t bother sucking up by trying to become a well-trained pet if you think that will get you better treatment. The “Stupid Pet Tricks” they have in mind aren’t likely to be Humane Society approved.

    Posted by Pterrafractyl | April 18, 2014, 1:43 pm
  31. What? You mean making the rich richer doesn’t automatically fix the economy? How odd and unexpected:

    Bloomberg
    Wealth Effect Failing to Move Wealthy to Spend
    By Simon Kennedy Apr 17, 2014 6:00 PM CT

    The wealth effect isn’t what it once was for the U.S. economy.

    While the wealth of American households has jumped more than $25 trillion since early 2009 amid rising equity and home prices, the pass-through to consumer spending is lagging the $1 trillion fillip that would have been anticipated historically, according to Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York.

    This means consumer spending has been exceptionally weak once wealth is accounted for, he said. With wealth gains now moderating, consumer spending could revert to what is already a weak trend, Feroli said in an April 11 report.

    His calculations show that since the recession ended in 2009, households have spent 1.7 cents of every extra $1 earned in wealth. That’s less than half the 3.8-cent average implied by data between 1952 and 2009, suggesting the trend for consumer spending gains over the past three years has been less than 1 percent once the wealth effect is stripped out.

    One reason for the adjustment may be that those enjoying gains in wealth are already rich, so have less propensity to increase spending incrementally. Withdrawing equity from homes has also been negative for five years.

    The good news is that income expectations are starting to pick up, which should encourage the spending acceleration that greater wealth failed to spark, said Feroli, a former economist at the Federal Reserve Board.

    The U.S. economy may need people more to give up work if it is going to get stronger.

    A rise in retirements would be a positive for the economy because it should help boost consumption and housing in the near term, according to Drew Matus, deputy U.S. chief economist at UBS AG in Stamford, Connecticut.

    As net wealth is increased by rising equity prices, the pickup in retirements has led to a decline in unemployment rates for workers age 25 to 34 as they fill slots left by baby boomers leaving the labor market.

    To Matus, this should mean an increase in household formation as young workers have the confidence to set up homes. It should also reduce the labor force participation rate — which measures the share of working-age people holding a job or seeking one – and therefore unemployment.

    Given that younger workers have low savings rates relative to workers nearing retirement, the shift should also reduce savings and boost consumption, Matus said.

    That’s a fun pair of findings: Giving money to the already rich doesn’t stimulate the economy because the “wealth effect” (of people spending more when the assets they own go up in value) just doesn’t have the impact it used to have because the already-wealthy are the primary beneficiaries. At the same time, rising equity prices might help the economy because it allows more people to retire, opening up jobs for younger workers and potentially stimulating the economy by giving the next generation a chance at a job where one could feasibly start a family and maybe buy a home.

    So the distribution of wealth in the US economy is so distorted these days that the benefits to trickle-down policies comes not from job creation but from job replacements that are currently being held back by the elderly not having enough savings to retire. People retiring is the US’s economic growth engine! Weird. It’s almost as if allowing the old to relax and the young to move forward with their lives makes sound economic sense in addition to just being the right thing to do. Maybe there’s a lesson or two here….

    Posted by Pterrafractyl | April 21, 2014, 2:10 pm
  32. Here’s a reminder that the financial industry doesn’t just dehumanize the rest of us. It dehumanizes itself:

    Bloomberg
    Young Bankers Fed Up With 90-Hour Weeks Move to Startups
    By Dawn Kopecki May 8, 2014 11:01 PM CT

    It was a Friday in the fall of 2004 and Umber Ahmad had been invited to read a poem at the wedding of one of her closest friends. She was planning to catch a 7 p.m. flight from New York to Toronto when a vice president at Morgan Stanley called her in. The client in a big merger deal needed work done over the weekend. A mergers and acquisitions specialist, Ahmad had no choice. She canceled the flight and started revising her analysis of the deal, Bloomberg Markets magazine will report in its June issue.

    The missed wedding was just one of dozens of dinners, family get-togethers and other events that Ahmad did not attend as she worked 70- and 80-hour weeks as a young associate at Morgan Stanley and later as a vice president at Goldman Sachs Group Inc. (GS) Ahmad, the Michigan-born daughter of a Pakistani doctor who taught at Harvard Medical School, likens the long hours and all-nighters to serving in the army.

    “The military will show you that sleep deprivation is a form of torture,” she says. “Not being able to get regular sleep is a detriment to your life, to your health.”

    Her life revolved around her job, she says. She dated another banker. Many of her friends were — and still are — bankers because they understood last-minute cancellations and upset vacation plans.

    “You always remain close to the people you’ve gone to war with,” she says. “It’s a lot of misery they can understand.”

    Ahmad says she loved her job, as exhausting as it was. “It was exciting; it was drinking from a fire hose every day,” she says.

    Stress Relief

    She left Goldman in 2007 to start her own investment firm. She didn’t forget that in her rare leisure hours at the banks, she used baking to help ease the stress. So, in 2013, Ahmad founded Mah-Ze-Dahr Bakery, a New York–based luxury pastry company launched with celebrity chef Tom Colicchio. She is also a managing director at New York investment firm Specialized Capital Management & Advisory.

    For Ahmad, banking was a springboard to her new life as an entrepreneur.

    “As hard as it was and as trying as it was and as sleepless as it was, it also afforded me the opportunity to be where I am today,” she says.

    Some of the best and brightest of Wall Street’s young investment bankers are bailing out of their high-paying, prestigious jobs at big financial institutions. Many are setting up their own businesses, especially in technology. While there are no precise statistics on the trend, data from the U.S. Census Bureau show that the number of employees aged 25 to 34 in the New York metropolitan area in finance and insurance fell to 109,187 as of the second quarter of 2013, down 19 percent from the second quarter of 2007.

    Prestige and Riches

    Forgoing a personal life has long been considered a fair exchange for the prestige and riches that can be earned in investment banking and trading. Competition remains intense for the coveted two-year bank training programs that pay graduates and new MBAs from $100,000 to $300,000 a year.

    That talented young people are questioning these trade-offs doesn’t surprise Patrick Curtis, who worked as an analyst for two years at boutique investment banking firm Rothschild Inc. a decade ago.

    “It’s definitely not worth the money,” says Curtis, 34, who now runs a career advice and networking website called WallStreetOasis.com. “You’re working 90 hours a week on average. It can go up to 120 when it’s really bad. Is it worth it? No.

    Student Dropouts

    At elite universities, fewer MBA and finance candidates are willing to even consider a life of missed weddings, busted romances and deep-into-the-night deal negotiations. The percentage of Harvard Business School graduates entering investment banking, sales or trading dropped to 5 percent last year from 12 percent in 2006, while those entering technology almost tripled to 18 percent during that period.

    At the University of Pennsylvania’s Wharton School, the percentage of MBAs entering investment banking dropped to 13.3 percent last year from 26 percent in 2006, while those entering tech more than doubled to 11.1 percent.

    “There’s less willingness on the students’ part to make the sacrifices that they might have been willing to make five years ago, 10 years ago,” says Jonathan Shepherd, associate director of the MBA career and professional development office at the Harvard Business School and a former analyst at JPMorgan Chase & Co. (JPM)

    Banks are acutely aware of the too-high attrition rate among their young associates and analysts — the titles carried by most junior bankers — and have initiated programs to combat it. Goldman Sachs and JPMorgan, among others, are rethinking the way deals are brought to fruition.

    ’War for Talent’

    “There’s a war for talent,” says Jeff Urwin, who was promoted in April to co-run corporate and investment banking at JPMorgan. “You’ve got to compete.”

    One result is guaranteed days off to keep young employees from burning out. The banks are focusing attention on their M&A groups, where seven-day, 80-hour workweeks are the norm and the hours can run around the clock in a big deal like Comcast Corp.’s $45.2 billion offer to buy Time Warner Cable Inc. The banks involved: JPMorgan and Morgan Stanley.

    Last August, Bank of America Corp. intern Moritz Erhardt, who worked in the firm’s London office, died following round-the-clock work on a merger. Though the official cause of death was an epileptic seizure, Mary Hassell, the coroner who investigated the death, said his fatigue may have triggered the convulsion that killed him. The 21-year-old banker was found dead in the shower at Claredale House, a student residential facility in East London.

    London Death

    “Moritz had a natural cause of death, though it’s not so natural that a young man should die like this,” Hassell said during a formal inquiry in November.

    Bank of America said at the time that it would “review all aspects of this tragedy.” In January, the bank issued new guidelines saying that managers would “closely monitor work volume” among junior bankers and summer associates. The policy also recommends that analysts and associates take off four weekend days a month and requires that they take all their vacation days.

    Erhardt’s death raised a more general alarm among bank executives.

    “I’m not sure how you stop work if there’s a deal on,” Morgan Stanley Chief Executive Officer James Gorman told Bloomberg Television in January. Yet the incident in London, he added, “has caused everyone to step back and say, ‘Hey, have we got this right?’”

    Managers at JPMorgan, which employs 1,000 men and women as associates and analysts worldwide, track their hours on a color-coded spreadsheet. Bankers who spend more than 75 hours in the office per week are marked in red; those who work fewer hours are branded blue or yellow.

    Urwin studies the charts every week. He isn’t looking to see who’s not working enough. He’s looking to see who’s working too much.

    “There are only two things you control in investment banking management: how you use financial capital and how you use human capital,” Urwin says.

    Junior bankers who keep lighting up red, and the people who manage them, typically get a call from Urwin to find out what they are working on and if the hours are justified. If not, the manager requesting the work may get a warning.

    Goldman Initiatives

    Both JPMorgan and Goldman Sachs have formed in-house committees designed to improve the experience of their junior bankers. At Goldman, the resulting changes included the formation of a junior banker career development committee, several of whose recommendations the firm has adopted. One change: Goldman did away with its two-year training program in 2012 in favor of hiring new graduates on a permanent basis.

    In an effort to reduce young bankers’ workloads, Goldman changed the way senior managers commission work so junior bankers don’t have to create a 50-page presentation for a client when a 15-page report would suffice. In October, Goldman began requiring entry-level bankers and slightly more-senior associates in the investment-banking division to take Saturdays off.

    Curtis of Wall Street Oasis laughs at the idea that forcing bankers to take a few weekend days off will resolve the overwork issue.

    “It’s not necessarily lowering the overall hours analysts are working,” he says. “It’s shifting it to Sunday nights and during the week. So they’re getting more all-nighters during the week.”

    Bank Self-Interest

    Kevin Roose spent three years following the careers of eight young bankers for his book “Young Money: Inside the Hidden World of Wall Street’s Post-Crash Recruits” (Grand Central Publishing, 2014). He says it’s good that the banks are taking better care of their junior bankers.

    “But this is not a charitable act,” Roose says. “They’re losing a lot of their young people and they’re having a lot of trouble recruiting, so these banks are panicking about how to keep hold of the next generation.”

    In the high-pressure environment of an investment bank, the typical professional stays on the job between seven and nine years before changing careers or leaving for other areas of finance, according to a study that will be published this summer by Alexandra Michel, who started her career as a junior banker at Goldman Sachs in 1992 and now teaches management at the University of Pennsylvania.

    Michel, who has a Ph.D. in management from the Wharton School, has spent the past 13 years studying the working conditions of investment bankers. She has found that the long hours and stress begin taking their toll after four years.

    ‘Chronic Pain’

    “On year four, physical breakdowns occur, initially minor,” she says. “Chronic pain, insomnia, endocrine disorders set in. Pain is really common.” Weight gain, hair loss, anxiety, depression and generalized low energy are also common complaints, Michel says.

    When severe stress kicks in, the young bankers are often able to perform at a high level only with the help of high-caffeine drinks, prescription stimulants and sleeping pills, she says.

    “It’s whatever it takes to keep functioning,” Michel says. “So if you have to work around the clock, you take the chemicals you need to still be sharp and awake, and if you can’t sleep because you’re so depressed and stressed, you take a different set of pills.”

    Michel is skeptical of the new programs to relieve young bankers’ pain.

    ‘Nothing Has Changed’

    “As one set of depleted bankers leaves, the next is already moving through the door,” she says. “It isn’t bad for banking in the least, and that’s why nothing has changed.”

    Executives can be less interested in their young assistants’ health than they are in getting a deal done, former junior bankers say. One recalls working on a deal through a nasty sinus infection. When the banker resisted flying out of town to meet with the client, the managing directors said it was mandatory.

    The pressure from the flight ruptured the banker’s eardrum, which started bleeding. The team pushed on with the deal talks despite the fact that the banker had lost hearing in one ear. Upon returning to New York, the banker went straight to the emergency room, where doctors ordered no flying for the next five months, preventing the banker from attending future client meetings on crucial deals.

    Former junior bankers say they quickly learned how to make do on four to five hours of sleep a night, especially during the financial meltdown in 2008 to 2009.

    24-Hour Workday

    Hamilton Colwell started as a junior banker at JPMorgan’s structured-foreign-exchange desk in 2006, when he was 27. His specialty was helping clients manage risk through interest-rate derivatives. His skills were in high demand both before and during the crisis. In 2008 and early 2009, Colwell often worked day and night, he says, returning home only to shower and change.

    In dealing with friends and family, “I learned quickly not to make promises I couldn’t keep,” Colwell says. He had a girlfriend. “Weekends away and dinners out with her were always sacrificed,” he says. “It quickly became normal.” The two eventually broke up.

    After Lehman Brothers Holdings Inc. collapsed, the crush of work made Colwell, now 36, realize he couldn’t stay in banking. Even after the markets calmed, Colwell was still working 13 hours a day during the week and often on weekends. He says for a while it was invigorating. That faded.

    Work-Life Balance

    Taylor Russell, who’s pursuing a master’s degree in finance at Princeton, was recruited by some top investment banks. He considered them, but ended up rejecting the dealmakers in favor of asset manager BlackRock Inc. (BLK) for his internship.

    “Work-life balance is important, and that was a big part of my decision-making process,” says Russell, 25, who spent three years teaching high school math and coaching swimming before entering Princeton. While the banks have their own in-house asset management divisions, Russell says he liked the more relaxed culture at BlackRock and thought he could have greater impact managing risk for individual investors.

    “Having a place where my personality fits in is more important than having a bigger bonus at the end of the year,” says Russell, who has an applied math degree from Brown University. “Either way, I’ll be making a good living.”

    No Thanks, Banks

    Russell’s Princeton classmate Karen Leiton was recruited by Goldman Sachs, JPMorgan, Citigroup Inc. and hedge fund Bridgewater Associates LP, then chose an internship at the World Bank, where she will make about a third of the compensation. The 26-year-old Colombian worked for Banco de la Republica, her home country’s central bank, from 2009 through 2013.

    Leiton, who has an undergraduate degree in international finance, says, “Working in the markets is very exciting for some people, but people that work in the government aren’t there for the money. They are there because they can have an impact in the long term.”

    Colwell, the yogurt maker, says his grueling schedule at JPMorgan helped prepare him for life as an entrepreneur.

    “My work is much, much more difficult now,” says Colwell, whose yogurt company uses only locally sourced milk from grass-fed cows in rural Pennsylvania. Yet there’s a big difference between being the first employee of a new company versus just one of JPMorgan’s army of 250,000, he says.

    As punishing as her jobs in finance were, Ahmad, the banker turned baker, has no regrets.

    “We actively chose to be bankers; we actively chose to live that lifestyle,” she says. “I couldn’t have learned what I learned at any other job. It’s an accelerated education.”

    While it’s great to see people ditch the torturous lifestyles described above, the “I have no regrets, look at all the great stuff I learned!” sentiment expressed that the end was rather disturbing. But beyond that, part of what makes the overall picture so disturbing is that it’s basically describing a system that systematically enriches and empowers people while simultaneously destroying their minds and bodies.

    The system described above (with 90-120 hour workweeks) is so insane and disgusting that even if the system improves (which may or may not happen), it’s still going to guaranteed destroyed minds and bodies unless the improvement is dramatic. And it’s a pattern that extends far beyond investment banking. If you think about it, any self-respecting democracy requires a populace that knows a lot about a lot, especially about the major issues impacting other people’s lives too. That’s how democracy is supposed to work! It really does require empathy and informed consent to function and that requires information! Just reading the news and learning about the world isn’t just a luxury, it’s a requirement unless you want your democracy to descend into a work-induced idiocracy.

    And while it’s not hard to imagine that the oligarchs, themselves, would LOVE to see a populace that’s so busy it simply doesn’t have time to learn about the world, what this article appears to be describing is a culture where even the up and coming junior oligarchs are systematically starving themselves of the time required to be well-informed oligarchs decades from now. And all that sleep-deprivation and the focus on “making it” described above is like a slow-motion lobotomy. What does that do to the brains of these future leaders after decades of that kind of lifestyle whether it’s a bank or their own start up?

    It raises the question of whether or not the intense competition to get to ‘the top’ is ensuring that whoever gets there can’t be adequately informed about the world outside their area of expertise. Sure, it’s long been assumed that certain personality types are going to be drawn towards industries that reward them with extreme wealth and power. But the scenarios described above don’t just describe the super-high achiever types that are always going for that brass ring. It describes a system that takes a group of people like that and physically and mentally tortures them while simultaneously forcing unhealthy focus on ONLY one thing in life: their work. And then they go off to be community and business leaders. Is that wise?

    On top of that, it’s very unclear that, even when they leave banking, these ex-bankers really do end the focus on “work work work”. If you drop from a 90 hour work week as an investment banker to an 70 hour workweek at your new start up company, isn’t that extra 20 going to be going towards sleeping? It should. And isn’t that lifestyle still probably going to be wildly out of balance?

    In a larger sense, why isn’t the US’s culture of insane work hours that restrict your life to a handful of focuses seen as a plan to usher the anti-Enlightenment? Can you be a Renaissance man or woman when the time to do so is simply unavailable? And how can democracy avoid becoming a joke idiocracy unless we have policies and a social contract that nurtures and values the development of Renaissance men and women? Is there any way democracy can possibly function adequately without the people across the socioeconomic spectrum being guaranteed the time to continually learn new skills and new knowledge? How is representative democracy supposed to work otherwise? Do we just let 30-second campaign ads replace the process of continuous learning?

    And if it isn’t possible to have a “work work work” lifestyle without sacrificing the “learn learn learn about things not directly related to me”-requirement for your society to function, isn’t the kind of work-ethic described above incompatible with democracy, whether it’s taking place at an investment bank or a start up? Unless Ayn was right all along, the decent society that can emerge from empathy-driven democratic governance can’t really happen unless people have time to focus on things outside their personal life. It’s just not possible.

    So if the “work/life” balance is really a “work/life/democracy” balance, it seems like it’s more than just investment bankers that need to be reexamining their employment contracts. Our social contract might need it.

    Posted by Pterrafractyl | May 9, 2014, 11:12 am
  33. Here’s a great example of why Thomas Picketty is probably going to be a very busy man for a very long time:

    Pando Daily
    The US Chamber of Commerce is full of shit for claiming that high CEO-to-worker pay ratios don’t matter

    By David Holmes
    On June 3, 2014

    It’s a damned good time to be a CEO in America.

    Despite the fact that US economy is shrinking, median CEO pay rose for the fourth straight year, topping out at $10.5 million. Analysts attribute this to a shift in recent years in how corporate compensation is calculated, with boards rewarding CEOs for boosting a company’s stock.

    And why shouldn’t they? Better to tie a CEO’s pay to a company’s success than to hand out exorbitant salaries merely to keep up with your rivals, right? That strategy of oneupsmanship was how CEO compensation had been handled for many years, Steve Silberstein of UC-Berkeley tells Pando. “Nobody wants to have a CEO that’s [paid] below average. So as one person’s pay goes up, everybody’s pay goes up. It’s kind of a club.”

    The trouble is, despite record corporate profits and the lowest effective tax rates in decades, fewer and fewer of those earnings are being passed on to non-executive employees – in fact, employer-paid compensation is at its lowest rate since 1948. This inequality is perhaps best symbolized in the minds of the public by America’s out-of-control CEO-to-median-employee pay ratios. In 2012, CEOs made a whopping 273 times more on average than their workers. Compare that to the 1960s when CEOs only made about 20 times more.

    On paper, these high-paid CEOs may “earn their keep,” but if those profits are applied disproportionally to the highest earners, it hurts the purchasing power of the average consumer, “contributing to the slowest [economic] recovery on record” according to former US Secretary of Labor Robert Reich. Furthermore, many experts question the efficacy of incentive-based CEO compensation packages, while business school professors overwhelmingly agree that performance suffers the more a CEO is paid.

    That’s why CEO-to-employee-pay ratios have become such a hot-button issue for those troubled by increasing income equality, which, considering we live at a time when a 700-page book on the country’s wealth gap can shoot to the top of Amazon’s bestseller list, appears to be a concern shared by many Americans.

    “Nobody wants to have a CEO that’s [paid] below average. So as one person’s pay goes up, everybody’s pay goes up. It’s kind of a club.” That’s right, as one person’s pay goes up (at the top), everybody’s pay goes up (at the top). The bottom? They get raises too. Special raises. The kind of raises the government pays in stamps.

    Posted by Pterrafractyl | June 3, 2014, 6:38 pm
  34. When the romantic affairs by elected officials are exposed, more often than not it just becomes a personal trainwreck that haunts the individuals involved. Under worst case scenarios it might trigger a zombie apocalypse. But every once in a while, the romatic affair morphs into an episode of political “kiss and tell”. That’s when the situation might go ‘meta’ in helpful ways:

    TPM Livewire
    GOP Rep. Acknowledges That Members Expect Donations For Votes

    Caitlin MacNeal – June 9, 2014, 6:42 PM EDT

    Rep. Vance McAllister (R-LA) openly acknowledged on Thursday that members of Congress expect to receive campaign contributions for voting a certain way on bills.

    During an event with the Northeast Chapter of Louisiana CPAs, the congressman shared an anecdote that illustrated how “money controls Washington,” according to the Ouachita Citizen. He said that many approach their work in D.C. as a “steady cycle of voting for fundraising and money instead of voting for what is right.”

    McAllister discussed a bill related to the Bureau of Land Management, which he voted against. McAllister told the crowd that an unnamed colleague told him on the House floor that if he voted “no” on the bill, he would receive a contribution from Heritage, a conservative think tank.

    “I played dumb and asked him, ‘How would you vote?’” McAllister said. “He told me, ‘Vote no and you will get a $1,200 check from the Heritage Foundation. If you vote yes, you will get a $1,000 check from some environmental impact group.’”

    Heritage Foundation, an educational nonprofit, is barred from contributing directly to candidates. Its sister political action organization, Heritage Action, however, is allowed to do so.

    McAllister did not receive a contribution, but his colleague did, the congressman said.

    McAllister said he wasn’t surprised he didn’t get a check, as Louisiana Gov. Bobby Jindal and Heritage are “upset” with him. The congressman was caught kissing one of his staffers, and has since decided not to run for re-election in 2014.

    “They are always trying to throw bullets at me,” McAllister said of Jindal and the Heritage Foundation. “Once I told my friend about Gov. Jindal being mad at me, he said, ‘Well, that’s why you didn’t get a check.’”

    If you’re surprised that a congressman would decribe the way the ol’ DC ‘free speech’-spigot works in such stark terms, keep in mind that McAllister just came into politics and office late last year, so he’s new at this:

    The Advertiser
    McAllister: Comments were taken ‘out of context’
    Greg Hilburn, Louisiana 4:23 p.m. CDT June 8, 2014

    Fifth District U.S. Rep. Vance McAllister said a published report saying the congressman told a group of CPAs he cast a vote in anticipation of a campaign contribution “was taken completely out of context.”

    The report said McAllister, R-Swartz, told the Northeast Chapter of Louisiana CPAs an unidentified colleague on the House floor told him he would receive a $1,200 contribution from the Heritage Foundation if he voted against unidentified legislation related to the Bureau of Land Management.

    McAllister was quoted as saying he voted no but never received a check.

    “I have never cast a vote with the expectation or anticipation of receiving any money for a vote,” McAllister told Gannett Louisiana. “I was just trying to illustrate how much money controls Washington, D.C., and the reporter took the comments totally out of context.”

    McAllister is a freshman congressman who earlier this year became embroiled in a scandal after a video was published of him kissing a married staffer. McAllister said he wouldn’t run for re-election, but has since left open the possibility of running again.

    No, representative McAllister wasn’t talking about explicit bribery. He was just illustrating the implicite bribery built into the system. No scandal at all! You have to wonder how long it would have taken McCallister to figure out the unwritten rules if no one had tipped him off.

    And since McAllister is a Republican novice that came out of nowhere to beat the establishment’s preferred candidate to win a special election, and he voted against a Heritage-backed bill on the Bureau of Land Management (as he describes in his anecdote above), and he supports the expansion of Medicaid for his state you also have to wonder about the possible motivations for leaking that video in the first place.

    Posted by Pterrafractyl | June 10, 2014, 5:40 pm
  35. And the US settles into the New Normal:

    Pando Daily
    Ken Griffin makes a one-day $2.5 million contribution to gubernatorial candidate Bruce Rauner

    On June 13, 2014

    Remember Citadel CEO Ken Griffin, the Illinois financial executive whose firm made a big investment in Marriott months before Chicago awarded the company a big hotel deal? Well he’s back making big Illinois investments. This time, according to records at the Illinois State Board of Elections, it is a stunning one-day $2.5 million contribution that he just made this week to the campaign of Illinois Republican gubernatorial candidate Bruce Rauner, who is also a fellow financial executive. Yes, you read that right: state records show Griffin made a $2.5 million contribution not to a national political party or a SuperPAC, but to a single candidate for a single state office. Welcome to the brave new world of Citizens United.

    We should probably expect stories like this to become a frequent occurrence. Perhaps even a highly frequent occurrence.

    Posted by Pterrafractyl | June 13, 2014, 2:02 pm
  36. There’s a fun idea out there that the incredible concentration of matter and energy that formed the big bang was, itself, formed in the middle of a black hole, leading to the intriguing possibility that the entire universe exists inside a black hole. You don’t normally think of black holes as engines of creation, but who knows, maybe they are. Having said that, some black holes are definitely not engines of creation:

    Bloomberg
    Top 1 Percent Is Even Richer Than Surveys Say, ECB Paper Finds
    By Jeanna Smialek Jul 14, 2014 11:00 PM CT

    The oft-cited line that the top 1 percent of U.S. households lay claim to 30 percent of all wealth is probably an understatement, according to a European Central Bank working paper.

    Incorporating “missed” data on rich households pushes the share of wealth held by top earners up to between 35 percent and 37 percent, wrote Philip Vermeulen, a senior economist at the ECB. That’s higher than the 34 percent suggested by the 2010 U.S. Survey of Consumer Finances data from the Federal Reserve.

    “Our knowledge of the wealth distribution is less than perfect,” Vermeulen wrote. “The results clearly indicate that survey wealth estimates are very likely to underestimate wealth at the top.”

    Richer households have a lower response rate to surveys measuring their assets, so holdings are undervalued, Vermeulen wrote. He uses data from Forbes billionaires lists in his analysis to provide new wealth distribution estimates for the U.S. and nine European nations.

    Though the U.S. change is “marginal,” the author writes, the effect in the Netherlands is much larger. Incorporating billionaires list pushes its concentration at the top to between 12 percent and 17 percent — close to nations such as Spain and Belgium — compared to the 9 percent concentration survey data would suggest.

    Posted by Pterrafractyl | July 15, 2014, 11:19 am
  37. There’s a sentiment often shared by the far right and especially folks of the Randian persuasion that if we just handed over all the political power to the people with all the money life would be better for everyone. If only…:

    The Hill
    Who rules America?

    By Allan J. Lichtman, contributor
    August 12, 2014, 06:00 am

    “The public be damned!”
    — William H. Vanderbilt, railroad magnate, 1882

    A shattering new study by two political science professors has found that ordinary Americans have virtually no impact whatsoever on the making of national policy in our country. The analysts found that rich individuals and business-controlled interest groups largely shape policy outcomes in the United States.

    This study should be a loud wake-up call to the vast majority of Americans who are bypassed by their government. To reclaim the promise of American democracy, ordinary citizens must act positively to change the relationship between the people and our government.

    The new study, with the jaw-clenching title of “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens,” is forthcoming in the fall 2014 edition of Perspectives on Politics. Its authors, Martin Gilens of Princeton University and Benjamin Page of Northwestern University, examined survey data on 1,779 national policy issues for which they could gauge the preferences of average citizens, economic elites, mass-based interest groups and business-dominated interest groups. They used statistical methods to determine the influence of each of these four groups on policy outcomes, including both policies that are adopted and rejected.

    The analysts found that when controlling for the power of economic elites and organized interest groups, the influence of ordinary Americans registers at a “non-significant, near-zero level. The analysts further discovered that rich individuals and business-dominated interest groups dominate the policymaking process. The mass-based interest groups had minimal influence compared to the business-based interest groups.

    The study also debunks the notion that the policy preferences of business and the rich reflect the views of common citizens. They found to the contrary that such preferences often sharply diverge and when they do, the economic elites and business interests almost always win and the ordinary Americans lose.

    The authors also say that given limitations to tapping into the full power elite in America and their policy preferences, “the real world impact of elites upon public policy may be still greater” than their findings indicate.

    Ultimately, Gilens and Page conclude from their work, “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.

    Rich individuals and business interests have the capacity to hire the lobbyists that shadow legislators in Washington and to fill the campaign coffers of political candidates. Ordinary citizens are themselves partly to blame, however, because they do not choose to vote.

    America’s turnout rate places us near the bottom of industrialized democracies. More than 90 million eligible Americans did not vote in the presidential election of 2012 and more than 120 million did not vote in the midterm elections of 2010.

    Electoral turnout in the United States is highly correlated with economic standing: The more affluent Americans vote in much higher proportion than the less affluent. A study by Ellen Shearer of the Medill School of Journalism at Northwestern found that 59 percent of 2012 voters earned $50,000 or more per year, compared to 39 percent of non-voters. Only 12 percent of non-voters earned more than $75,000, compared to 31 percent of voters.

    Well, it’s certainly true that non-voters are playing a role in this democratic death spiral. At least some of them. Hopefully by doing nothing meaningful to reverse the situation this will all work out.

    In other news…

    Posted by Pterrafractyl | August 13, 2014, 7:27 am
  38. With racial tensions and long standing community grievances back in nation’s focus, it’s worth asking the question, “Why hasn’t President Obama fixed the problem of race in this country by now?“:

    Hullabaloo
    Why hasn’t President Obama fixed the problem of race in this country?

    by digby
    8/18/2014 09:00:00 AM

    The Village wants to know now.

    In many ways, Obama’s difficulty in navigating matters of race as president mirrors his struggles in other areas. He has repeatedly and eloquently spoken about race — and his experiences in making his way in the world as the son of a white mother and a Kenyan father — over the past decade. But those words have done little to heal the racial wounds in the country. Perhaps it’s too much to expect any one individual, even the president, to help finally close such a deep and long-standing gash on the country’s conscience. But such is the historic nature of Obama’s presidency that many people, both white and black, expect him to do just that.

    Today at least, Obama’s vision of a post-racial America looks even further away than it did that night a decade ago in Boston.

    Yes, it’s true that President Obama has been unable to solve the race problem in America and I for one, am sorely disappointed in him on that score. It’s right up there with failing to bring world peace and finding a cure for male pattern baldness, neither of which he promised any more than he promised to end the racial divide once and for all. But still …

    Honestly, any talk that Ferguson is a sign of president Obama’s personal failure (except, perhaps the extent to which his administration continued the decades long militarization of police) is truly unfair. There are many things for which one can hold him responsible, but the failure to end white racism isn’t one of them.

    Cilizza points to the 2008 campaign for an example of how he allegedly managed to end racism for a time with one fine speech on the Jeremiah Wright controversy, implying that he could have done that over and over again. In fact, the Republicans considered bringing Wright back in to the debate in 2012,, only deciding against it when Mitt Romney personally rejected the plan. There were many millions of people willing to hear it — just not enough to win a national election.

    Ok, maybe that was a stupid question. Maybe a more useful question would be to ask why we’re still structuring society around a myth that some groups have to lose for society to win. Or maybe that’s a stupid question.

    Posted by Pterrafractyl | August 19, 2014, 10:35 am
  39. Silicon Valley’s “Techtopus” wage-fixing scandal just grew another tentacle (into the visual effects sector. There haven’t been any public “Techtopus”-driven attempts to form new tech-worker unions, but you have to wonder what would happen if there actually was a serious protest movement that emerged. Public strikes by relatively well paid tech sectors employees just don’t seem to happen very often so it’s hard to say how society would respond if a bunch of software engineers went on strike to protest the secret and systematic suppression of their wages by the major employers in their industry and demand the right to form a union. Then again, there’s no reason to keep a movement exclusively dedicated to just giving tech workers a raise when almost everyone is getting systematically screwed:

    Think Progress
    Hundreds Of Fast Food Workers Arrested While Striking For Higher Wages

    by Alan Pyke Posted on September 5, 2014 at 11:05 am

    Hundreds of striking fast food workers and their supporters were arrested Thursday while protesting to demand higher wages and the right to unionize, strike organizers say. Workers walked off the job in 159 different cities on what was at least the 10th day of strikes in the 21 months since the campaign for a $15 hourly wage and full labor rights began in New York City just after Thanksgiving 2012.

    The arrests were scattered around the country and included 50 in Chicago, 42 in Detroit, 11 in Little Rock, 10 in Las Vegas, and 52 in Kansas City, according to a partial list provided by organizers. Police in Detroit reportedly ran out of handcuffs at one point while arresting peaceful strikers who were blocking traffic during their demonstration. Rep. Gwen Moore (D-WI) was among the 25 workers and supporters arrested in Milwaukee, and several other members of the House Progressive Caucus joined worker actions in various cities. Moore said she was given a $691 ticket for disorderly conduct after she and other protesters defused to clear the road they were blocking.

    But beyond the geographic spread, Thursday’s strikes are the first example of a tactical escalation that workers and organizers promised at a convention earlier this summer. A July gathering of more than 1,300 fast food workers produced a resolution to begin using civil disobedience and nonviolent protest to advance their cause.

    “We had over 100 people arrested, but however they respected every police officer,” Rev. W. J. Rideout told Detroit’s ABC affiliate WXYZ on Thursday. “And we also chanted, ‘Police need a raise also.’ EMS need a raise, firefighters need a raise. So we’re not against anyone here, we’re against the corporations, we’re against McDonald’s.”

    McDonald’s was recently found to be responsible for its workers’ treatment by the National Labor Relations Board. That might sound obvious, but for decades the fast food industry has used franchise agreements to shrug off legal liability for labor violations by the owner-operators who run the vast majority of fast food chain stores. That legal facade crumbled this summer after workers’ attorneys presented evidence that McDonald’s is responsible for setting the rules that lead store owners to commit wage theft by falsifying time sheets, forcing people to work off the clock, and requiring workers to pay for their own uniform upkeep, among other widespread company practices.

    The unrelenting worker pressure on the ground and the gradual shift in how labor regulators treat the fast food business model could make it difficult for these companies to maintain the status quo for much longer. At present, CEOs are paid 1,200 times more than workers in the industry. Frontline fast food workers — the vast majority of whom are adults, many with families to support — earn poverty wages that require them to turn to public assistance programs to survive despite having a job. This taxpayer subsidy of low fast food wages costs the American public well over a billion dollars a year (and when accounting for similar dynamics in other low-wage industries, the cost is closer to a quarter-trillion dollars). Worse, even those meager wages often don’t get paid properly. Nine out of 10 fast food workers reports being victimized by some form of wage theft.

    Given the intense anti-union sentiments that bizarrely permeate the US society it’s not very likely that we’ll see some sort of new tech union form out of the growing “Techtopus” scandal. Starting a union isn’t easy as the arrested fast food employees amply demonstrate. But there’s nothing preventing a political “union” of sorts. If tech workers begin to champion humane livable wages for low wage employees (especially in high cost-of-living cities), it sure sounded like like those striking fast food employees could get on board with backing aggressive antitrust investigations in the tech sectors in return. Those fast food employees sure didn’t appear to be very pro-monopoly and, at this point, it’s pretty much an everyone-vs-the-top-0.0001% economy. So figuring out how to channel those economic realities into a political force that can actually address situations like mass wage-fixing and employee abuse is one of the great challenges of the day. Perhaps the growing revelations of employees getting screwed over across the socioeconomic spectrum could be turned into a national “we’re all in it together” teachable moment. Might it happen? Hopefully. It could yield much more valuable life lessons than the ones we’re currently learning.

    Posted by Pterrafractyl | September 8, 2014, 6:52 pm
  40. The billionaires would like you to know that they just can’t find anywhere to invest their billions because they’re still traumatized by the financial crisis and just can’t find any good investments. Since humanity has decided to rely on the whims of its oligarchs to fix the economy we clearly need to all work together to make things more profitable for the “job creators” if there’s going to be any hope for the future:

    CNBC.com

    Billionaires are hoarding piles of cash
    Robert Frank | @robtfrank
    Monday, 22 Sep 2014 | 2:12 PM ET

    Billionaires are holding mountains of cash, offering the latest sign that the ultra-wealthy are nervous about putting more money into today’s markets.

    According to the new Billionaire Census from Wealth-X and UBS, the world’s billionaires are holding an average of $600 million in cash each—greater than the gross domestic product of Dominica. That marks a jump of $60 million from a year ago and translates into billionaires’ holding an average of 19 percent of their net worth in cash.

    “This increased liquidity signals that many billionaires are keeping their money on the sidelines and waiting for the optimal moment to make further investments,” the study said.

    Indeed, billionaires’ cash holdings far exceed their investments in real estate. Their real-estate holdings average $160 million per billionaire, or about one-fifth of their cash holdings.

    Simon Smiles, chief investment officer for Ultra High Net Worth at UBS Wealth Management, said that the billionaire families and family offices he talks to are focused largely on the same question: What to do with all their cash.

    “The apparent safety of cash, reinforced by the painful psychological experience of the 2008-09 global financial crisis and the subsequent troubles within the European Monetary Union, likely reinforces the tendency to favor this cautious allocation strategy,” Smiles said in the report.

    But he said creeping inflation threatens to erode cash values, so he’s advising clients to take on “considered amounts of risk” with interest rate swaps, credit default swaps, or selling rates or foreign exchange derivatives.

    ..

    The wealthy are still traumatized by the financial crisis in 2009, when many wealthy families were scrambling for cash, he said. What’s more, many wealthy families missed out on the big financial-market rallies in 2012 and 2013 and feel like they missed the best chance to invest.

    “It’s the combination of many people having been under-invested in equities and under-invested in wide risk assets having seen rallies and missed those rallies,” he said. “Things are no longer cheap, and it’s emotionally hard to get invested now.”

    It looks like there’s going to be no more trickle-down prosperity until the rich get richer and the poor getting poorer. Uh oh.

    Posted by Pterrafractyl | September 23, 2014, 7:48 pm
  41. Given humanity’s incredible capacity for collective destruction, it’s sometimes easy to forget about our equally incredible capacity for collective neglect:

    The New Yorks
    Lack of money at World Food Program leaves 1.7 million Syrians without aid

    By Hugh Naylor
    December 1 at 1:04 PM

    BEIRUT — A funding crisis has forced the World Food Program to suspend assistance to 1.7 million Syrian refugees, the U.N. agency announced Monday, warning that “many families will go hungry” without the aid.

    The program, which provides electronic vouchers for Syrian refugees in Lebanon, Jordan, Turkey, Iraq and Egypt to buy food at local stores, faces a $64 million shortfall, the agency said, attributing the problem to “unfulfilled” donor commitments.

    “The suspension of WFP food assistance will be disastrous for many already suffering families,” Ertharin Cousin, the agency’s executive director, said in a statement.

    She called for an immediate resumption of funding and warned that the food-aid suspension will “endanger the health and safety of these refugees and will potentially cause further tensions, instability and insecurity in the neighboring host countries.”

    She did not specify which countries had not fulfilled pledges.

    The announcement comes amid heightened concern about the safety of the refugees in harsh conditions. The deaths of two Syrian infants last month in Lebanon were blamed on frigid weather. The flow of an estimated 3.3 million Syrians from the conflict in their country has badly strained neighboring countries such as Lebanon and Jordan.

    More than 1 million Syrians have taken refuge in Lebanon, overwhelming the nation of 4.4 million people. Citing the economic burden and security concerns, Lebanon has dramatically reduced the number of Syrians allowed entry.

    And if our incredible capacity for destruction and neglect of others doesn’t leave you in awe (and hopefully shock), there’s always humanity’s incredible capacity for self-destructive collective neglect:

    The Daily Beast
    Millions Promised for Ebola Not Adding Up
    Of the countries that promised money to fight Ebola, little has been delivered: 7 percent of China’s $122 million pledge, 17 percent of the $265 million promised by the EU, and 43 percent of the United States’ $572 million.

    Abby Haglage
    11.25.14

    “Countries have promised resources to fight Ebola. Which have delivered?”

    It’s this question that inspired nonprofit ONE.org to create an Ebola tracker to figure out just that. While the Office for the Coordination of Humanitarian Affairs (OCHA), the UN, and the World Bank have data on the dollar figures associated with each pledge, no one had taken the time to figure out how much of those resources have actually made it to the ground in West Africa.

    The answer, as of today, isn’t much.

    Culling information directly from government representatives, press releases, technical bodies, and other research, ONE has zeroed in on what exactly the international relief effort in West Africa looks like, at this point. The tracker focuses on three specific forms of support: financing, health-care personnel, and in-kind contributions. This “deeper dive” into individual country’s commitments, ONE hopes, will persuade leaders to put their money where their mouth is.

    In the financing portion, the numbers are particularly bleak. While China has pledged $122 million to the fight, it has thus far only disbursed 7 percent of that number. Of the $265 million pledged by EU Institutions, just 17 percent have reached the epidemic’s hot zone. Even private institutions, which most likely have less bureaucratic hurdles to deal with, have been slow to pull the trigger. The Silicon Valley Community Fund has thus far sent 0 percent of the 25 million pledged. At the Google/Larry Page Family Foundation, it’s the identical equation.

    Erin Hohlfelder, global health policy director at ONE and the brains behind the tracker, says the tracker shows the importance in transparency. “It’s one thing to make a great pledge and commit to doing that,” says Hohlfelder. “But in the meantime, every day that goes by without these resources is a missed opportunity.” While progress has been made in the months since those pledges, there is much work still to be done.

    The largest and longest Ebola epidemic of its kind, the crisis has resulted in an estimated 15,351 cases of Ebola and 5,459 deaths since March—numbers that the World Health Organization’s director has called a “vast underestimate” of the reality. While Liberia has shown progress in halting the epidemic’s spread, in continues to grow in neighboring Sierra Leone and Mali. According to October estimates from the World Bank, the epidemic could cost the West African countries affected upward of $32 billion in the next 24 months.

    If more help doesn’t arrive soon, the worst may not be over.

    If there’s a reason for delay in stopping the epidemic, she says, the lack of resources may be to blame. “This isn’t a nice-to-do development project, this is still an emergency,” Hohlfelder tells me. “While we wouldn’t expect 100 percent disbursal, a lot of these are pathetically low.”

    “While we wouldn’t expect 100 percent disbursal, a lot of these are pathetically low.”Pathetically low indeed. Incredibly pathetically low. Way to go humanity. We could have taken the high road, but we stuck to the highly incredibly profitable road instead. Buckle up.

    Posted by Pterrafractyl | December 1, 2014, 10:42 pm
  42. If you thought the Goblin King had it good, check this out: “Brent earned $960,000 in total compensation from conservative nonprofits related to ForAmerica in 2012 and 2013; David was paid $114,000 for his work.” It’s good to be the Troll King:

    The Atlantic
    The Right Wing’s Facebook Army
    How ForAmerica became a force to be reckoned with in politics
    Tim Alberta and Shane Goldmacher Dec 8 2014, 11:00 AM ET

    The digital army sprung to life with a click of a mouse in a nondescript office park in Alexandria. Less than 10 miles away, at the White House, the phones began to light up. One call came into the switchboard and then another. Thousands of people flooded the phone lines.

    It was early August 2014, and the callers were conservatives lambasting President Obama for promising what they described as “executive amnesty.” The deluge of angry activists was not the work of a heavily coordinated national campaign, a pricey phone-banking operation, or really an exhaustive effort of any kind.

    It resulted from a single post on Facebook.

    The volume of calls was so high that, within hours, the White House complained it was a “security issue,” according to an email from the phone vendor hired to connect callers to the switchboard. More than 9,000 calls had been made before they pulled the plug. At the headquarters of ForAmerica, the conservative group that had launched the telephone broadside, the White House’s reaction was seen more as victory than defeat.

    “We got our point across,” said David Bozell, ForAmerica’s executive director.

    In the last four years, ForAmerica has quietly amassed what it likes to call a “digital army” on Facebook—a force that that now numbers more than 7 million. The group’s spectacular growth can be explained in part by the paid acquisition of its members through targeted advertising. But thanks to a daily stream of savvy and snackable red-meat messaging, these mercenaries have become loyal conservative digital soldiers whose engagement is attracting new recruits. These days, a routine post on ForAmerica’s page reaches more than 2 million people, achieves more than 100,000 “likes,” and has tens of thousands of people repost and comment.

    But shutting down the White House switchboard this summer was just a warm-up act. Bozell and his father, Brent Bozell, the group’s chairman and a fixture in the hard-liner wing of GOP politics, have been positioning their troops for a bigger battle: policing the 2016 Republican presidential race.

    “Anybody who runs as a conservative,” Brent Bozell declared, “is going to have to satisfy our army.”

    Already, the Bozells have proved willing—if not eager—to direct their army’s rage against fellow Republicans. They jammed the lines of Mitch McConnell’s campaign office in the final days of his crucial reelection contest, accusing the senator of sounding wobbly on repealing Obamacare. Just last week ForAmerica urged its members to dial up House Majority Whip Steve Scalise and demand he toe the conservative line on immigration. These pressure campaigns are orchestrated by the Bozells, but executed by their group’s excitable, activist base.

    “Facebook tells us quite often that we’re among their most engaged operations on its entire platform, and definitely No. 1 in the political sphere,” David Bozell said. Indeed, an official with Facebook confirmed that ForAmerica’s flock is among “the largest and most active presences on Facebook” in the political realm.

    That presence was felt last month as Obama prepared his big immigration plan to shield millions from deportation. ForAmerica posted a preemptive attack two days earlier: “LIKE if you are opposed to President Obama’s plan to grant executive amnesty to illegal immigrants!” The post earned nearly 300,000 likes.

    When Obama posted a video, exclusively on Facebook, announcing his unilateral action, it drew national headlines and attention. It was cross-posted to the White House page and Obama’s page, which together boast nearly 47 million fans—almost seven times the sum of ForAmerica. The combined viewership stat line: 108,000 “likes,” 61,000 shares, about 30,000 comments, and 4.3 million views.

    The next day, ForAmerica posted a rebuttal speech in which Republican Senator Ted Cruz quoted Cicero on the Senate floor. Despite being of almost no news value, it had 1.3 million views.

    “This is not a fake, make-believe army. This is 7 million people who are active in the political conversation, who are conservatives,” said the elder Bozell. “And without them, you ain’t gonna win the primary.”

    Brent Bozell, the nephew of National Review founder William F. Buckley, has right-wing politics in his blood.

    Known for his booming laughter and rust-and-white-colored beard, Bozell, 59, has over the past quarter-century grown into something of a godfather to the conservative movement. He founded the Media Research Center in 1987 as a watchdog to the liberal media, and in decades since has parlayed that success into spinoff advocacy organizations and even news websites, including CNSNews.com and Newsbusters. Conservative politicians have long lined up to kiss his ring.

    But it wasn’t until late 2010 that he discovered the power of social media. Talk radio had long been dominated by the conservative movement, but David Bozell, 36, was convinced they could tap into a new medium and create a grassroots powerhouse driven by online activity. The elder Bozell wasn’t buying it at first—”I was a Doubting Thomas,” he recalled—but eventually succumbed to pressure from his son.

    The Bozells launched ForAmerica’s Facebook page in September 2010. The goal was to use paid acquisition to secure 300,000 Facebook “fans” by the end of 2010. “We got it in a month and a half,” David said. The explosive growth continued over the next several years. Each new membership benchmark they set was eclipsed faster—and less expensively—than they had projected.

    The Bozells wouldn’t say who underwrites ForAmerica, but tax records show that $2.4 million of the $2.52 million the organization raised in 2013 came from a single donor. Nonprofits aren’t required to disclose their financiers. The multimillion-dollar budget has allowed them to steadily add new fans on Facebook for four years.

    With 2016 looming, ForAmerica is targeting its outreach in key states—those home to early primary contests and general-election battlegrounds—to maximize the group’s influence over the upcoming presidential campaign. Their membership benchmarks are lofty—10 million members by the Iowa caucuses in January 2016, and 11.5 million by the November 2016 election. Perhaps most audaciously, David said they want at least “five percent of registered voters in every state” to be members of their movement.

    The growth, of course, is a means to an end: having the Republican presidential hopefuls cater to the concerns of the conservative base. “Do the right thing and we’re going to be behind you,” Brent said. “Do the wrong thing and we’re going to be your worst nightmare.”

    Some in the prospective 2016 field are already preparing accordingly. Cruz, for example, has a previous relationship with the Bozells and communicates with them often. According to a source close to the Texas senator, there is even preliminary talk of Cruz joining a digital “town hall” meeting with ForAmerica members next year.

    That ForAmerica, and other tea-party-influenced groups such as Heritage Action, FreedomWorks, and the Senate Conservatives Fund spend nearly as much time targeting Republicans as they do Democrats rankles many in the GOP establishment. “It’s disappointing that these grassroots resources aren’t generally targeted against Democrats who are the real problem for advancing conservative values,” said Brian Walsh, a GOP strategist and outspoken critics of these groups.

    More specifically, the complaint is that the Bozells are part of a professionalized “purity for profit” movement in D.C., in which some conservatives make a living riling up the grassroots. Brent earned $960,000 in total compensation from conservative nonprofits related to ForAmerica in 2012 and 2013; David was paid $114,000 for his work.

    Brent is unapologetic about engaging in intraparty warfare when Republicans aren’t faithful to the cause. “Look,” he said, “up until this point, it’s been primarily negative because there’s been nothing good going on in Washington in this God-forsaken city.”

    That said, ForAmerica’s founders insist they hope to lift up strong Republicans in 2016—not just tear down weak ones. “If Jeb Bush gets religion on deficit spending and champions a real deficit reduction program, we’re going to promote Jeb Bush,” the elder Bozell said.

    He quickly caught himself, and added with a smile: “Not for the presidency, but we’re going to promote what he’s doing.”

    So…

    The Bozells wouldn’t say who underwrites ForAmerica, but tax records show that $2.4 million of the $2.52 million the organization raised in 2013 came from a single donor”.

    More specifically, the complaint is that the Bozells are part of a professionalized “purity for profit” movement in D.C., in which some conservatives make a living riling up the grassroots. Brent earned $960,000 in total compensation from conservative nonprofits related to ForAmerica in 2012 and 2013; David was paid $114,000 for his work.

    Well, whoever the mystery donor is, they don’t seem to mind over $1,000,000 of that $2.4 million going to Bozells.

    It’s clearly good to be an insanely rich secret Troll King benefactor too.

    Posted by Pterrafractyl | December 8, 2014, 10:20 am
  43. Here’s a sign of the times: At the same time that a new OxFam study shows the wealthiest 80 people on the planet own as much as the poorest 3 billion, we have stories about how President Obama new call for for raising capital gains taxes on the rich is, of course, a complete non-starter with a GOP controlled congress. That’s why it’s seen as more of a trolling taunt than a serious policy proposal:

    The Washington Post
    Obama uses his tax proposal to taunt the GOP

    By Marc A. Thiessen January 19 at 10:36 AM

    Let’s imagine you were a Democratic president who just lost control of Congress to the Republicans, and you wanted to make it really, really clear that you are not serious about governing. What would you do? Simple: Use your State of the Union address to propose hundreds of billions of dollars in new taxes that will never be enacted, in order to fund a slew of new government programs that have no chance of being approved.

    Welcome to President Obama’s 2015 State of the Union address.

    On Tuesday night, Obama will ask the new Republican Congress to approve $320 billion in tax increases. To see how absurd this is, imagine for a moment what the reaction would have been if, after losing control of Congress to the Democrats in 2006, President George W. Bush had used his next State of the Union address to propose $320 billion in growth-oriented tax cuts. Would anyone have taken him seriously? The media would have dismissed Bush as delusional. Democrats would have laughed. Everyone would have asked: What’s wrong with him? Didn’t he get the message of the 2006 midterms? What planet is he on?

    Obama is not delusional. He knows his plan has no chance of becoming law. White House officials, according to Politico, “aren’t holding their breath that Obama’s new proposals will pass Congress now that Republicans control both chambers.” (Which raises the question why, if Obama were serious, didn’t he propose them when Democrats controlled both chambers?) The goal is for “Obama to position himself as a defender of the middle class” and put Republicans in the “politically awkward” position of resisting tax increases on the rich to pay for programs that benefit the middle class.

    In other words, Obama’s move is completely and transparently political. He knows Republicans have been working to shed their image as the party of the rich and powerful, with a new focus on helping the poor and the working class. He wants to taunt the GOP into attacking his plan so he can accuse Republicans of fighting for the wealthy. Indeed, within hours of the White House announcement of Obama’s plan, his former speechwriter Jon Favreau tweeted: “I see Obama’s tax plan has already baited Republicans into making the argument that most annoys people about their party.” That is the objective — to bait Republicans.

    So what should the GOP do? Not take the bait. Not argue the merits of Obama’s plan. Ignore it and pass proposals of their own to help lower- and middle-income families. The president gets his one night at the rostrum of the House of Representatives to make his case, but Republicans control the House and Senate. They should move forward with serious plans to help those who are struggling in the Obama recovery that do not involve massive new taxes or massive new spending — and then dare Obama and the Democrats to oppose them.

    Obama’s political ploy only works if the right treats it seriously. Republicans should ignore his plan and move forward with their own proposals to help Americans who are struggling. If Obama wants to act like a lame duck, the GOP should treat him like one.

    Keep in mind that Marc Thiessen is a former speech writer for George W. Bush and Don Rumsfeld, and his wife is a former chief of staff of the Republican Senate Policy Committee, so he’s probably going to be extra irked by presidential taunts targeting the GOP.

    But it’s still pretty obvious that president Obama has hit trolling paydirt with this because any time you can get the GOP to start talking about its plans for helping the poor and middle class it’s guaranteed comedy gold! 24k solid gold! Let the Trololololo-ing commence! There’s pretty much endless material for the Democrats to work with so hopefully they’ll get creative and maybe even inspire some GOP counter-trolling. That could be awesome.

    Oh, that’s right, the GOP has been already been counter-trolling. For decades. It wasn’t awesome.

    Posted by Pterrafractyl | January 19, 2015, 12:49 pm
  44. If you’re a billionaire you have to walk a number of very strange lines. After all, you’re going to have to somehow justify your incredible wealth and influence while, at the same time, avoiding any of the blame for the horrible outcomes of the policies you advocated, especially if the horrible policies were also highly profitable to the billionaires. Basically, the Great Grift never ends when you’re worth THAT much.

    But the Billionaire shuffle is also complicated by another unpleasant fact: If the general public finally has an “I’m mad as hell, and I’m not going to take it anymore”-moment and starts reaching for their torches and pitchforks, the billionaires will simultaneously have to send the message that they totally deserve their wealth AND they are just clueless doddering old fools that had no idea things had gotten so out of control. Sort of like the spin used by the entire financial sector following after the financial meltdown, but for billionaires. The clueless, doddering, helpless billionaires that are just too incompetent to harm a fly. Is isn’t easy walking the billionaire walk.

    And yet billionaire public behavior game-theory still doesn’t explain the uptick in recent years of billionaires spewing out the kind of rhetoric that is guaranteed to enrage the rabble while simultaneously giving a “I’m totally clueless” vibe. Is this all part of some new rhetorical strategy? Dementia? Some sort of hyperparasite infestation? BPA poisoning? In other words, in this recent manifestation of aggressive billionaire madness part of a plan? Or is it really just aggressive billionaire madness?

    Lawyers Guns Money blog
    Crazy old man rants in Central Park about young black men committing 95% of all murders
    February 11, 2015 | Paul Campos

    Wait, did I say in Central Park? I meant at the Aspen Institute:

    Bloomberg claimed that 95 percent of murders fall into a specific category: male, minority and between the ages of 15 and 25.

    Per the most recent FBI statistics, the actual percentage appears to be 22.8.

    Here are a few more surprising facts, soon to be featured on various websites near you:

    Becoming a plumber is on average a more lucrative career choice than graduating from Harvard College:

    If a person has the option of going to Harvard or becoming a plumber, he said he would suggest thinking about the plumbing career.

    “The Harvard graduate on average will never catch up to a plumber,” Bloomberg said. “Partially because the first four years — instead of spending $60,000, you make $60,000.”

    Unionized New York City waitresses make $150,000 per year, while ordinary waitresses make only $50,000 to $60,000:

    In New York City, where 56 million tourists visit annually, Bloomberg said the hospitality and service industries are key. Though some might say those aren’t good jobs, he claimed that a waitress in the grand ballroom of the Waldorf Astoria Hotel makes $150,000 a year because of strong union negotiations. A waitress in a decent New York restaurant will make $50,000 to $60,000 a year, he said.

    Legalizing marijuana is going to significantly lower the IQs of children:

    When an audience member asked the 72-year-old Bloomberg about Colorado marijuana, he responded that it was a terrible idea, one that is hurting the developing minds of children. Though he admitted to smoking a joint in the 1960s, he said the drug is more accessible and more damaging today.

    “What are we going to say in 10 years when we see all these kids whose IQs are 5 and 10 points lower than they would have been?” he asked. “I couldn’t feel more strongly about it, and my girlfriend says it’s no different than alcohol. It is different than alcohol. This is one of the stupider things that’s happening across our country.”

    Also:

    Bloomberg, who is now worth $36.6 billion, according to Forbes, said the poor in the U.S. need better education.

    “The Harvard graduate on average will never catch up to a plumber,” Bloomberg said. “Partially because the first four years — instead of spending $60,000, you make $60,000.”
    Ah. That’s too bad for Michael Bloomberg. It’s looking like it’s a case of dementia.

    Posted by Pterrafractyl | February 11, 2015, 2:27 pm
  45. LOL! It was just a matter of time but here we are: Millionaire proles:

    Hullabaloo
    Millionaires just get no respect these days. Billionaires take it all.

    by digby
    3/25/2015 08:00:00 AM

    The Washington Post reports on the very sad plight of a group of wealthy former bundlers who just aren’t rich enough to garner the attention from politicians that billionaires do:

    “They are only going to people who are multi-multi-millionaires and billionaires and raising big money first,” said Neese, who founded a successful employment agency. “Most of the people I talk to are kind of rolling their eyes and saying, ‘You know, we just don’t count anymore.’?”

    It’s the lament of the rich who are not quite rich enough for 2016.

    Bundlers who used to carry platinum status have been downgraded, forced to temporarily watch the money race from the sidelines. They’ve been eclipsed by the uber-wealthy, who can dash off a seven-figure check to a super PAC without blinking. Who needs a bundler when you have a billionaire?

    Many fundraisers, once treated like royalty because of their extensive donor networks,are left pining for their lost prestige. Can they still have impact in a world where Jeb Bush asks big donors to please not give more than $1?million to his super PAC right now? Will they ever be in the inner circle again?

    “A couple presidential elections ago, somebody who had raised, say, $100,000 for a candidate was viewed as a fairly valuable asset,” said Washington lobbyist Kenneth Kies. “Today, that looks like peanuts. People like me are probably looking around saying, ‘How can I do anything that even registers on the Richter scale?’?”

    Sexual favors? Offer to kill someone? There must be something.

    This is so twisted you have no choice but to laugh. These people are feeling slighted because they aren’t rich enough to gain the attention of politicians. Welcome to the world the rest of us inhabit, friends. But perhaps they need to ask themselves why they are treating these people as if they’re royalty or demi-Gods in the first place. This is supposed to be a democracy and politicians are supposed to be seeking the approval of the citizens. Instead we have citizens seeking approval from the politicians and the politicians seeking approval from the ultra-wealthy. Something isn’t quite right.

    Still, you have to feel sorry for them for this terrible loss of status. It’s gotta hurt to be a millionaire member of the upper five percent, used to being treated with deference by the servant class (the rest of us) and suddenly find yourself tossed aside as just another useless poor person. The answer to this dilemma — the answer they would certainly give to any of the sad middle class and working class people who would ask this question is — must be to “work harder” and become a billionaire themselves. Isn’t it the case that rising to the top is just a matter of having a good work ethic? And if you fail, it’s because you just don’t put the kind of effort into it that billionaires do? That’s what I always heard anyway.

    Come on, millionaires, buck up. Anyone can become a billionaire if they really try. This is America. You only have yourself to blame if you just don’t have enough money to make a politician care what you have to say.

    We are the 99.9%! Pathetically.

    Posted by Pterrafractyl | March 26, 2015, 9:24 am
  46. Paul Krugman latest column points us towards one of the more dominant causes of democratic dysfunction gripping the globe: There are no meaningful consequences to good or bad policies because voters have no memories of what happened or why:

    The New York Times
    The Opinion Pages
    Economics and Elections

    Paul Krugman
    APRIL 6, 2015

    Britain’s economic performance since the financial crisis struck has been startlingly bad. A tentative recovery began in 2009, but it stalled in 2010. Although growth resumed in 2013, real income per capita is only now reaching reaching its level on the eve of the crisis — which means that Britain has had a much worse track record since 2007 than it had during the Great Depression.

    Yet as Britain prepares to go to the polls, the leaders of the coalition government that has ruled the country since 2010 are posing as the guardians of prosperity, the people who really know how to run the economy. And they are, by and large, getting away with it.

    There are some important lessons here, not just for Britain but for all democracies struggling to manage their economies in difficult times. I’ll get to those lessons in a minute. But first, let’s ask how a British government with such a poor economic record can manage to run on its supposed economic achievements.

    Well, you could blame the weakness of the opposition, which has done an absolutely terrible job of making its case. You could blame the fecklessness of the news media, which has gotten much wrong. But the truth is that what’s happening in British politics is what almost always happens, there and everywhere else: Voters have fairly short memories, and they judge economic policy not by long-term results but by recent growth. Over five years, the coalition’s record looks terrible. But over the past couple of quarters it looks pretty good, and that’s what matters politically.

    In making these assertions, I’m not engaged in casual speculation — I’m drawing on a large body of political science research, mainly focused on presidential contests in the United States but clearly applicable elsewhere. This research debunks almost all the horse-race narratives beloved by political pundits — never mind who wins the news cycle, or who appeals to the supposed concerns of independent voters. What mainly matters is income growth immediately before the election. And I mean immediately: We’re talking about something less than a year, maybe less than half a year.

    This is, if you think about it, a distressing result, because it says that there is little or no political reward for good policy. A nation’s leaders may do an excellent job of economic stewardship for four or five years yet get booted out because of weakness in the last two quarters before the election. In fact, the evidence suggests that the politically smart thing might well be to impose a pointless depression on your country for much of your time in office, solely to leave room for a roaring recovery just before voters go to the polls.

    Actually, that’s a pretty good description of what the current British government has done, although it’s not clear that it was deliberate.

    The point, then, is that elections — which are supposed to hold politicians accountable — don’t seem to fulfill that function very well when it comes to economic policy. But can anything be done about this weakness?

    One possible answer, which appeals to many pundits, might be to remove economic policy making from the political sphere and turn it over to nonpartisan elite commissions. This presumes, however, that elites know what they are doing — and it’s hard to see what, in recent events, might make you believe that. After all, American elites spent years in the thrall of Bowles-Simpsonism, a completely misplaced obsession over budget deficits. European elites, with their commitment to punitive austerity, have been even worse.

    A better, more democratic answer would be to seek a better-informed electorate. One really striking thing about the British economic debate is the contrast between what passes for economic analysis in the news media — even in high-end newspapers and on elite-oriented TV shows — and the consensus of professional economists. News reports often portray recent growth as a vindication of austerity policies, but surveys of economists find only a small minority agreeing with that assertion. Claims that budget deficits are the most important issue facing Britain are made as if they were simple assertions of fact, when they are actually contentious, if not foolish.

    What, then, should those of us who study economic policy and care about real-world outcomes do? The answer, surely, is that we should do our jobs: Try to get it right, and explain our answers as clearly as we can. Realistically, the political impact will usually be marginal at best. Bad things will happen to good ideas, and vice versa. So be it. Elections determine who has the power, not who has the truth.

    Yeah, this is pretty distressing:

    In making these assertions, I’m not engaged in casual speculation — I’m drawing on a large body of political science research, mainly focused on presidential contests in the United States but clearly applicable elsewhere. This research debunks almost all the horse-race narratives beloved by political pundits — never mind who wins the news cycle, or who appeals to the supposed concerns of independent voters. What mainly matters is income growth immediately before the election. And I mean immediately: We’re talking about something less than a year, maybe less than half a year.

    This is, if you think about it, a distressing result, because it says that there is little or no political reward for good policy. A nation’s leaders may do an excellent job of economic stewardship for four or five years yet get booted out because of weakness in the last two quarters before the election. In fact, the evidence suggests that the politically smart thing might well be to impose a pointless depression on your country for much of your time in office, solely to leave room for a roaring recovery just before voters go to the polls.

    Actually, that’s a pretty good description of what the current British government has done, although it’s not clear that it was deliberate.

    So what’s to be done about the chronic reactionary mass cluelessness that enables one horrible policy after another? Well, as Krugman points out, one obvious part of the solution is for economists to do a better job explaining to the public what’s happening in the economy and why:

    What, then, should those of us who study economic policy and care about real-world outcomes do? The answer, surely, is that we should do our jobs: Try to get it right, and explain our answers as clearly as we can. Realistically, the political impact will usually be marginal at best. Bad things will happen to good ideas, and vice versa. So be it. Elections determine who has the power, not who has the truth.

    And more effective communication from the professional economists is certainly part of the answer. But, as Krugman also points out, no one even expects that an improvement in the quality of then national discourse amongst economic experts would actually result in more than a marginal political impact. And why would it? A better dialogue doesn’t really do much good when no one is listening.

    This conundrum is there for virtually all areas of public policy and current events, but part of what makes this particular conundrum for economics so interesting is that if you really want to find a long-term solution to chronic public amnesia and general cluelessness you need to reconfigure your economy so people actually have time to pay attention to stuff.

    Sure, if you give the public the time to actually inform themselves there might be plenty of people that choose not to do so. But as long as the economy is structured in a such a way that a shrinking number of people actual have 40 hour work week and more and more people are working nights and weekends, there’s really no way you can can reasonably expect the public to any real sense of what’s going on their world that’s grounded in reported fact. How is it is event possible without time?

    So maybe part of what we need to see from the professional economists isn’t just a higher quality of national discourse of the economic affairs of the day but also an ongoing national dialogue about the incredible opportunity costs associated with an economy that doesn’t leave the public enough time to actually be informed. Putting aside the self-inflicted damage in non-economic that a society sustains from mass cluelessness, just imagine how much economic damage results from society operating in Memento mode ALL THE TIME, DECADE AFTER DECADE. How exactly is “the market” supposed to function without the necessary information inputs and no working memory?

    Oh yeah, poorly. That’s how.

    Posted by Pterrafractyl | April 6, 2015, 1:55 pm
  47. Guess who Time found to pen some sweet nothings about the Koch Brothers. Hint: He isn’t just running for President of the Koch Brothers’ Fan Club:

    Time
    The 100 Most Influential People
    Charles Koch & David Koch

    By Rand Paul
    April 16, 2015

    Idea men

    Charles and David Koch are well known for their business success, their generous philanthropic efforts and for their focus on innovation in management. Some also know them for their activism in the political realm. All of these are important contributions to society. What is underappreciated is their passion for freedom and their commitment to ideas. Unlike many crony capitalists who troll the halls of Congress looking for favors, the Kochs have consistently lobbied against special-interest politics.

    For decades they have funded institutes that promote ideas, not politics, such as Cato and the Mercatus Center. They have always stood for freedom, equality and opportunity. Consistent with their love of liberty, they have become prominent advocates for criminal-justice reform. The Koch brothers’ investment in freedom-loving think tanks will carry on for generations, reminding all of us that ideas and convictions ultimately trump all else.

    Feel the love (and get a room you guys!)

    Still, you have to love this line:

    The Koch brothers’ investment in freedom-loving think tanks will carry on for generations, reminding all of us that ideas and convictions ultimately trump all else.

    Yes, there’s nothing like a giant pile of cash from a bunch of rich guys to remind us all that ideas and conviction ultimately trump all else.

    And that’s why Rand Paul isn’t the only candidate for President of the Koch Brothers’ Fan Club: They have such beautiful minds.

    Posted by Pterrafractyl | April 16, 2015, 10:06 am
  48. Back in December, the OECD issued one of those reports that’s remarkable, not for what it said, but for the fact that it needed to be said at all. Scam busting is often like that:

    rabble.ca
    Trickle-down economics? It’s a scam, confirms OECD
    By Linda McQuaig
    | December 11, 2014

    No doubt the rich and powerful have been cracking up with laughter for decades over their ability to peddle “trickle-down economics” to a trusting public.

    But a surprisingly strong report just released by the prestigious Organization for Economic Co-operation and Development (OECD) may cause the public to regard these wealthy snakeoil salesmen more skeptically in the future.

    Essentially, the OECD report reveals the immensity of the trickle-down scam, which the report shows has not only failed to foster economic growth as promised, but has proved to be an overall killer of economic growth.

    And the report puts actual numbers on how much growth has been reduced as a result of trickle-down. In the case of Canada, the reduced economic growth amounts to about $62 billion a year — which economist Toby Sanger notes is almost three times more than the estimated annual loss to the Canadian economy of lower oil prices.

    But while dropping oil prices are grabbing headlines, the serious negative economic consequences of Canada’s pro-rich economic policies are largely ignored. Certainly the Harper government promises to entrench these policies more deeply if re-elected.

    First, a little background. As the dominant economic theory for the past 30 years, trickle-down economics — also known as Thatcherism, Reaganomics, neoliberalism or even just the “austerity agenda” — has led to a set of economic policies that have concentrated income and wealth at the top.

    From the outset, critics charged that, despite its intellectual pretensions, neoliberalism was simply a confidence game aimed at redistributing resources to the rich.

    Not so, responded most mainstream economists (particularly those employed by right-wing think-tanks). Rather, they insisted, neoliberal policies would — by providing generous incentives for top performers and cutting back expensive social programs — foster overall economic growth, with benefits ultimately “trickling down” to all.

    This unproven claim became the justification for imposing this largely Anglo-American economic theory on the developing world as well. For years, powerful bodies like the International Monetary Fund (IMF) forced poor countries to adopt radical neoliberal reforms in order to qualify for desperately needed loans.

    Meanwhile, there was mounting evidence — advanced by Joseph Stiglitz, Paul Krugman and other high-profile liberal economists — that neoliberal policies did little more than the obvious: making the rich richer, with no benefits for anyone else.

    In the wake of the 2008 financial collapse, even the mainstream international economic organizations — including the IMF and the World Bank — began releasing studies with findings that seemed to contradict their organizations’ longstanding support for neoliberal orthodoxies.

    With its report this week, the Paris-based OECD has gone farther still, stating unequivocally that its research shows that policies favouring the rich haven’t just failed to create overall economic growth, they have actually “curbed economic growth significantly.”

    Indeed, according to the OECD, the dramatic increase in income inequality — now at its highest level in 30 years — is the “single biggest impact” preventing economic growth.

    This drag on economic growth, the OECD explains, results largely from those lower down the income scale — including the bottom 40 per cent of earners — lacking the funds to invest in their own education.

    The OECD stresses the need “not only for cash transfers, but also increasing access to public services, such as high-quality education, training and healthcare” — areas where Harper’s planned cutbacks to the provinces will hit hard.

    What’s striking about the entrenchment of policies favouring inequality is how out of sync they appear to be with popular will.

    According to international research co-authored by the Harvard Business School’s Michael Norton, there’s an almost universal desire out there for a smaller gap between the pay of corporate CEOs and ordinary workers.

    Norton surveyed the level of inequality favoured by people in 16 Western countries and found it wildly out of whack with the actual level of inequality in their countries.

    For instance, if CEO compensation were to remain at its current heights, in order to achieve the level of inequality desired by most Americans, the pay of the average U.S. worker would have to be increased … to $1.8 million a year.

    While the world’s elite may still be slapping their knees and marvelling at what they’ve managed to pull off, the fact that the most prestigious international economic bodies have lined up against trickle-down orthodoxy may mean there are now prospects for real change.

    At the least, it suggests that, in a showdown with the world’s billionaires and multi-millionaires, the world’s people may actually stand an outside chance.

    Well that was sort of uplifting:


    For instance, if CEO compensation were to remain at its current heights, in order to achieve the level of inequality desired by most Americans, the pay of the average U.S. worker would have to be increased … to $1.8 million a year.

    While the world’s elite may still be slapping their knees and marvelling at what they’ve managed to pull off, the fact that the most prestigious international economic bodies have lined up against trickle-down orthodoxy may mean there are now prospects for real change.

    At the least, it suggests that, in a showdown with the world’s billionaires and multi-millionaires, the world’s people may actually stand an outside chance.

    Woohoo! We may actually stand an outside chance. Better than nothing!

    But, of course, what makes the trickle down scam so much more sinister than your standard scam is that, as the article pointed out, it’s not like the scam simply worked by tricking the masses into thinking making the rich richer and poor poorer was a path to prosperity:


    What’s striking about the entrenchment of policies favouring inequality is how out of sync they appear to be with popular will.

    According to international research co-authored by the Harvard Business School’s Michael Norton, there’s an almost universal desire out there for a smaller gap between the pay of corporate CEOs and ordinary workers.

    Norton surveyed the level of inequality favoured by people in 16 Western countries and found it wildly out of whack with the actual level of inequality in their countries.

    And keep in mind that, according to recent studies, the public doesn’t just oppose the absurd income gap. Both Americans and Europeans have been largely clueless about just had bad it is even when they assume it’s bad.

    And since one of the mega-trends of the last 30 years has been the hijacking and perversion of the democratic process by powerful private interests, it’s not actually clear how successful the proles are going to be in reversing this trend even if they do finally learn things like:

    …according to the OECD, the dramatic increase in income inequality — now at its highest level in 30 years — is the “single biggest impact” preventing economic growth.

    The super rich obviously aren’t going to care if their pet policies are stifling economic growth even if strangling the economy with trickle down policies is making everyone else poorer because that just means they’re maximizing their relative wealth and power even if they aren’t necessarily maximizing the absolute wealth. Isn’t relative wealth the real metric here from a power standpoint?

    So hopefully enough of the proles will eventually realize that they’re actually getting screwed way more than they think they’re getting screwed. And, along those lines, hopefully repetition works. Because the OECD just issued a new report reiterating those same findings:

    Rising tide not lifting all ships, OECD warns in report on cost of growing income inequality
    By GREG KELLER Associated Press
    May 21, 2015 — 4:55am

    PARIS — The widening gap between haves and have-nots in much of the developed world not only raises concerns about the fraying social fabric — it’s also dramatically holding back economic growth, according to a new global study.

    Far from a rising tide lifting all ships, income inequality increases in good economic times as well as bad, Thursday’s report from the Organization for Economic Cooperation and Development says.

    The OECD, a global watchdog, says that not only has social and political implications but also economic ones.

    “Put simply: rising inequality is bad for long-term growth,” the OECD concluded in its report, “In It Together, Why Less Inequality Benefits All.”

    The report adds fuel to the argument popularized in French economist Thomas Piketty’s 2014 best-seller “Capital in the Twenty-First Century.”

    Policies to improve women’s treatment in the labor market and measures to reverse the growing share of low-quality, “dead-end” jobs are key to reducing income inequality and unlocking more economic growth, the OECD said.

    Well, good for the OECD in stating the obvious. And let’s hope the OECD don’t pull an ‘IMF’ and suddenly forget what it learned.

    But let’s also hope that the solution to income inequality involves a lot more than than the OECD’s recommendations:

    Policies to improve women’s treatment in the labor market and measures to reverse the growing share of low-quality, “dead-end” jobs are key to reducing income inequality and unlocking more economic growth, the OECD said.

    While those are obviously positive steps, keep in mind that, for this kind of mass income inequality gap emerge while the public remains pretty much without the public’s knowledge. So, yes, we certainly need to give people better paying jobs, especially at the low end of the pay scale. But it’s also pretty obvious that everyone (except maybe the super-rich) need to just know more, in general, about what’s going on in the world so they can at least try to change the trickle down policies. And that’s not going to necessarily happen even with rising wages unless that better pay results in more time to do things like picking up a newspaper.

    In other words, one of the best recommendations the OECD could have given for ending income inequality is to have everyone tell everyone they know about the OECD report. Trickle down economics is going to have a much harder time surviving when everyone is in on the joke.

    Posted by Pterrafractyl | May 22, 2015, 3:46 pm
  49. With a vote as soon as Friday on granting “fast-track” negotiating authority to President Obama over the Trans Pacific Partnership (TPP), as well as any trade agreements to be hashed out in the next administration, interest groups going to be in lobbying frenzy this week.

    When a major trade deal like the TPP is hanging in the balance it’s only natural to be concerned about what sort of impact it could have on your life and employment prospect. Well, fear not: If the TPP passes it’s guaranteed to to create all sorts of high paying jobs! You’ll just need to figure out how to retrain yourself to take advantage of it. Specifically, you’ll just need to retrain yourself as a corporate lawyer with a specialty in international arbitration. You should have no problem finding work all over the world:

    The New York Times
    Trans-Pacific Partnership Seen as Door for Foreign Suits Against U.S.

    By JONATHAN WEISMAN
    MARCH 25, 2015

    WASHINGTON — An ambitious 12-nation trade accord pushed by President Obama would allow foreign corporations to sue the United States government for actions that undermine their investment “expectations” and hurt their business, according to a classified document.

    The Trans-Pacific Partnership — a cornerstone of Mr. Obama’s remaining economic agenda — would grant broad powers to multinational companies operating in North America, South America and Asia. Under the accord, still under negotiation but nearing completion, companies and investors would be empowered to challenge regulations, rules, government actions and court rulings — federal, state or local — before tribunals organized under the World Bank or the United Nations.

    Backers of the emerging trade accord, which is supported by a wide variety of business groups and favored by most Republicans, say that it is in line with previous agreements that contain similar provisions. But critics, including many Democrats in Congress, argue that the planned deal widens the opening for multinationals to sue in the United States and elsewhere, giving greater priority to protecting corporate interests than promoting free trade and competition that benefits consumers.

    The chapter in the draft of the trade deal, dated Jan. 20, 2015, and obtained by The New York Times in collaboration with the group WikiLeaks, is certain to kindle opposition from both the political left and the right. The sensitivity of the issue is reflected in the fact that the cover mandates that the chapter not be declassified until four years after the Trans-Pacific Partnership comes into force or trade negotiations end, should the agreement fail.

    Conservatives are likely to be incensed that even local policy changes could send the government to a United Nations-sanctioned tribunal. On the left, Senator Elizabeth Warren, Democrat of Massachusetts, law professors and a host of liberal activists have expressed fears the provisions would infringe on United States sovereignty and impinge on government regulation involving businesses in banking, tobacco, pharmaceuticals and other sectors.

    Members of Congress have been reviewing the secret document in secure reading rooms, but this is the first disclosure to the public since an early version leaked in 2012.

    “This is really troubling,” said Senator Charles E. Schumer of New York, the Senate’s No. 3 Democrat. “It seems to indicate that savvy, deep-pocketed foreign conglomerates could challenge a broad range of laws we pass at every level of government, such as made-in-America laws or anti-tobacco laws. I think people on both sides of the aisle will have trouble with this.”

    The United States Trade Representative’s Office dismissed such concerns as overblown. Administration officials said opponents were using hypothetical cases to stoke irrational fear when an actual record exists that should soothe worries.

    Such “Investor-State Dispute Settlement” accords exist already in more than 3,000 trade agreements across the globe. The United States is party to 51, including the North American Free Trade Agreement. Administration officials say they level the playing field for American companies doing business abroad, protect property from government seizure and ensure access to international justice.

    But the limited use of trade tribunals, critics argue, is because companies in those countries do not have the size, legal budgets and market power to come after governments in the United States. The Trans-Pacific Partnership could change all that, they say. The agreement would expand that authority to investors in countries as wealthy as Japan and Australia, with sophisticated companies deeply invested in the United States.

    “U.S.T.R. will say the U.S. has never lost a case, but you’re going to see a lot more challenges in the future,” said Senator Sherrod Brown, Democrat of Ohio. “There’s a huge pot of gold at the end of the rainbow for these companies.”

    Similar chapters exist in the North American Free Trade Agreement and the Central American Free Trade Agreement, but their use has been limited against the United States. Over 25 years, according to the trade representative’s office, the United States has faced only 17 investor-state cases, 13 of which went before tribunals. The United States has lost none.

    Civil courts in the United States are already open to action by foreign investors and companies. Since 1993, while the federal government was defending itself against those 17 cases brought through extrajudicial trade tribunals, it was sued 700,000 times in domestic courts.

    In all, according to Public Citizen’s Global Trade Watch, about 9,000 foreign-owned firms operating in the United States would be empowered to bring cases against governments here. Those are as diverse as timber and mining companies in Australia and investment conglomerates from China whose subsidiaries in Trans-Pacific Partnership countries like Vietnam and New Zealand also have ventures in the United States.

    More than 18,000 companies based in the United States would gain new powers to go after the other 11 countries in the accord.

    A similar accord under negotiation with Europe has already provoked an outcry there.

    Senator Brown contended that the overall accord, not just the investment provisions, was troubling. “This continues the great American tradition of corporations writing trade agreements, sharing them with almost nobody, so often at the expense of consumers, public health and workers,” he said.

    Under the terms of the Pacific trade chapter, foreign investors could demand cash compensation if member nations “expropriate or nationalize a covered investment either directly or indirectly.” Opponents fear “indirect expropriation” will be interpreted broadly, especially by deep-pocketed multinational companies opposing regulatory or legal changes that diminish the value of their investments.

    Included in the definition of “indirect expropriation” is government action that “interferes with distinct, reasonable investment-backed expectations,” according to the leaked document.

    The cost can be high. In 2012, one such tribunal, under the auspices of the World Bank’s International Centre for Settlement of Investment Disputes, ordered Ecuador to pay Occidental Petroleum a record $2.3 billion for expropriating oil drilling rights.

    Under the Trans-Pacific Partnership, a member nation would be forbidden from favoring “goods produced in its territory.”

    Critics say the text’s definition of an investment is so broad that it could open enormous avenues of legal challenge. An investment includes “every asset that an investor owns or controls, directly or indirectly, that has the characteristic of an investment,” including “regulatory permits; intellectual property rights; financial instruments such as stocks and derivatives”; construction, management, production, concession, revenue-sharing and other similar contracts; and “licenses, authorizations, permits and similar rights conferred pursuant to domestic law.”

    “This is not about expropriation; it’s about regulatory changes,” said Lori Wallach, director of Global Trade Watch and a fierce opponent of the Pacific accord. “You now have specialized law firms being set up. You go to them, tell them what country you’re in, what regulation you want to go after, and they say ‘We’ll do it on contingency.’”

    In 2013, Eli Lilly took advantage of a similar provision under Nafta to sue Canada for $500 million, accusing Ottawa of violating its obligations to foreign investors by allowing its courts to invalidate patents for two of its drugs.

    All of those disputes would be adjudicated under rules set by either the International Centre for Settlement of Investment Disputes or the United Nations Commission on International Trade Law.

    The Obama administration pressed for — and won — clear transparency rules mandating that tribunals be open to the public and arbitration documents be available online. Outside parties would also be allowed to file briefs.

    “Here’s what I can tell you as these negotiations proceed,” President Obama told reporters in Brussels last year when questioned on the trade deals in the works. “I have fought my entire political career and as president to strengthen consumer protections. I have no intention of signing legislation that would weaken those protections.”

    There are other mitigating provisions, but many have catches. For instance, one article states that “nothing in this chapter” should prevent a member country from regulating investment activity for “environmental, health or other regulatory objectives.” But that safety valve says such regulation must be “consistent” with the other strictures of the chapter, a provision even administration officials said rendered the clause more political than legal.

    One of the chapter’s annexes states that regulatory actions meant “to protect legitimate public welfare objectives, such as public health, safety and the environment” do not constitute indirect expropriation, “except in rare circumstances.” That final exception could open such regulations to legal second-guessing, critics say.

    That’s quite a help wanted ad:


    In all, according to Public Citizen’s Global Trade Watch, about 9,000 foreign-owned firms operating in the United States would be empowered to bring cases against governments here. Those are as diverse as timber and mining companies in Australia and investment conglomerates from China whose subsidiaries in Trans-Pacific Partnership countries like Vietnam and New Zealand also have ventures in the United States.

    More than 18,000 companies based in the United States would gain new powers to go after the other 11 countries in the accord.

    Have you picked out your law school yet? No? Well keep looking.

    And don’t assume you’re going to have to work as a corporate lawyer in our new globalized corporate legal system. Because whether or not the TPP becomes law, the world still needs more lawyers. Especially the anti-corporate kind of lawyers. We’re going to need a lot more of those:

    Think Progress
    Why These Tiny Island Nations Are Planning To Sue Fossil Fuel Companies

    by Natasha Geiling Posted
    on June 10, 2015 at 8:00 am Updated: June 10, 2015 at 9:34 am

    On Monday, the seven of the world’s wealthiest nations met in southern Germany and pledged to decarbonize the world’s energy systems by 2100, while limiting global warming to 2°C.

    Later that evening, in the South Pacific, representatives from six decidedly smaller countries also took a stand against climate change. Under the People’s Declaration for Climate Justice, citizens from the nations of Vanuatu, Kiribati, Tuvalu, Fiji, the Solomon Islands, and the Philippines announced their intent to bring legal action against fossil fuel companies for their role in contributing to climate change.

    “As the people most acutely vulnerable to the impacts of climate change, we will not let the big polluters decide and assign our fate,” the declaration reads. “We refuse to accept the ‘new normal’ and demand for climate justice by holding the big polluters and their respective governments to account for their contribution to the climate crisis.”

    In conjunction with the declaration, Greenpeace Southeast Asia is planning to submit a petition to the Philippines Commission on Human Rights, requesting that the commission open an investigation into the role of major polluters in human rights violations from climate change.

    “The power of this declaration is that it represents what I think is a growing movement of people who are no longer patiently waiting for governments to address the challenges of climate change, and who are actually saying, ‘We are going to use the legal mechanism available to us in our courts, in your courts, and human rights bodies to hold you, the polluters, accountable for the human rights violations we are suffering,’” Carroll Muffett, president and CEO of the Center for International Environmental Law, told ThinkProgress.

    In late March, Cyclone Pam ripped through the tiny island nation of Vanuatu, killing 24, displacing 3,300, and destroying 90 percent of the island’s infrastructure. A week later, three more tropical storms had circled through the South Pacific, pounding the region’s island nations with wind and rain.

    The declaration doesn’t directly translate into legal action — and the island nations could face several hurdles before their complaints are even heard in a court, according to David Hunter, director of the Program on International and Comparative Environmental Law at American University’s Washington College of Law.

    “If you are citizens in Fiji and you want to sue Chevron, you’re going to have jurisdictional questions,” Hunter told ThinkProgress, noting that the nations could also run up against issues if they try to bring a case in the United States because of preemption from federal laws like the Clean Air Act. But, Hunter said, the nations have logic on their side.

    “Generally speaking, if we look at this in the simplest form, they are people that are suffering from actions that companies and others have been involved in,” he said. “If we think about the legal system as trying to remedy an injustice or an injury, then you have injury and can probably demonstrate causation from the burning of fossil fuels to ocean acidification or sea level rise.”

    Proving causation used to be a major hurdle for plaintiffs hoping to hold polluters accountable for climate change, but both Hunter and Muffett said that improved science is getting increasingly better at linking specific harm to specific actors.

    In late March, a farmer in Peru filed a complaint with the German energy company RWE, demanding that the company pay for the cost of protective measures he’s been forced to install on his home. His home lies in the floodpath of the Palcacocha lake, which is threatening to overflow as the glaciers that feed it continue to melt due to climate change.

    “This was not someone saying, ‘I’m generally concerned about the impacts of climate change on my country,’” Muffett said. “This was someone that could point to scientific data produced by his own government saying the water behind this specific dam is rising because of climate change.”

    Another defense that defendants in climate litigation cases can use is the principle that carbon pollution is a global problem. The argument largely goes that if everyone is causing the problem, then no single actor can be held responsible. But research published in 2013 in the journal Climatic Change is making that defense more difficult for fossil fuel companies.

    In that study, researcher Richard Heede, from the Climate Accountability Institute, tried to divvy up responsibility for man-made global warming emissions. What Heede found was that although there are thousands of oil and gas companies throughout the world, the majority of emissions can be traced back to a handful of participants — roughly two-thirds of industrial emissions come from just 90 entities, 50 of which were investor-owned companies.

    “Courts may not be able to deal with 6 billion defendants, or 1 billion, but courts are very comfortable with 50,” Muffett said, noting that the concept of joint and several liability was, in essence, created to deal with cases where several defendants contributed to harming the plaintiff.

    The South Pacific nations are just the latest in a slew of plaintiffs hoping to use litigation to spur action on climate change. In April, some 900 Dutch citizens filed a lawsuit against their government for failing to effectively curb climate change. There is a similar movement underway in Belgium, where a lawsuit against the government is in its early stages. And throughout the United States, Our Children’s Trust — an Oregon-based nonprofit — has launched several youth-led lawsuits against various state and federal entities for failing to stop climate change.

    To Muffett, this growing suite of lawsuits signals a turning point in the fight against polluters.

    “If you think about tobacco litigation, one case after another lost and lost and lost until the nature of the plaintiffs started changing and started growing, and suddenly the tobacco companies started losing,” Muffett said. “I think that’s the stage we’re at with climate change.”

    Have you got your environmental law courses picked out yet? If not, read this again:


    Another defense that defendants in climate litigation cases can use is the principle that carbon pollution is a global problem. The argument largely goes that if everyone is causing the problem, then no single actor can be held responsible. But research published in 2013 in the journal Climatic Change is making that defense more difficult for fossil fuel companies.

    In that study, researcher Richard Heede, from the Climate Accountability Institute, tried to divvy up responsibility for man-made global warming emissions. What Heede found was that although there are thousands of oil and gas companies throughout the world, the majority of emissions can be traced back to a handful of participants — roughly two-thirds of industrial emissions come from just 90 entities, 50 of which were investor-owned companies.

    “Courts may not be able to deal with 6 billion defendants, or 1 billion, but courts are very comfortable with 50,” Muffett said, noting that the concept of joint and several liability was, in essence, created to deal with cases where several defendants contributed to harming the plaintiff.

    As we can see, TPP or not, it’s time for school. Some ‘people‘ need to be taught a lesson.

    Posted by Pterrafractyl | June 10, 2015, 3:20 pm
  50. Remember when Home Depot founder Ken Langone joined hedge fund billionaire Tom Perkins in trolling the public by proclaiming that all the complaints about billionaires taking over the economy and the growing wealth gap were just like what the Nazis did? Well, he’s back. And he’s upped his game. Now Langone and a pair of billionaire friends say they’re super worried about the wealth gap, and have an idea for how to fix it: have the government pay companies to give raises:

    Salon
    Billionaire CEOs come to Jesus: “We are creating a caste system from which it’s almost impossible to escape”
    Peter Georgescu, Ken Langone and other industry titans are slowly realizing income inequality is bad for business

    Jim Hightower
    Sunday, Aug 30, 2015 07:00 AM CST

    Peter Georgescu has a message he wants America’s corporate and political elites to hear: “I’m scared,” he said in a recent New York Times opinion piece.

    He adds that Paul Tudor Jones is scared, too, as is Ken Langone. And they are trying to get the Powers That Be to pay attention to their urgent concerns. But wait — these three are Powers That Be. Georgescu is former head of Young & Rubicam, one of the world’s largest PR and advertising firms; Jones is a quadruple-billionaire and hedge fund operator; and Langone is a founder of Home Depot.

    What is scaring the pants off these powerful peers of the corporate plutocracy? Inequality. Yes, amazingly, these actual occupiers of Wall Street say they share Occupy Wall Street’s critical analysis of America’s widening chasm between the rich and the rest of us. “We are creating a caste system from which it’s almost impossible to escape,” Georgescu wrote, not only trapping the poor, but also “those on the higher end of the middle class.” He issued a clarion call for his corporate peers to reverse the dangerous and ever-widening gulf of income inequality in our country by increasing the paychecks of America’s workaday majority. “We business leaders know what to do. But do we have the will to do it? Are we willing to control the excessive greed so prevalent in our culture today and divert resources to better education and the creation of more opportunity?”

    Right on, Peter! However, their concern is not driven by moral outrage at the injustice of it all, but by self-interest: “We are concerned where income inequality will lead,” he said. Specifically, he warned that one of two horrors awaits the elites if they stick to the present path: social unrest (conjuring up images of the guillotine) or (horror of horrors) “oppressive taxes” on the superrich.

    Motivation aside, Georgescu does comprehend the remedy that our society must have: “Invest in the actual value creators — the employees,” he writes. “Start compensating fairly (with) a wage that enables employees to share amply in productivity increases and creative innovations.” They have talked with other corporate chieftains and found “almost unanimous agreement” on the need to compensate employees better.

    reat! So they’ll just do it, right? Uh … no. But he says he knows just the thing that’ll jar the CEOs into action: “Government can provide tax incentives to business to pay more to employees.” That’s his big idea. Yes, corporate wage-hike subsidies. He actually wants us taxpayers to give money to bloated, uber-rich corporations so they can pay a dab more to their employees!

    As Lily Tomlin said, “No matter how cynical you become, it’s never enough to keep up.”

    First of all, Georgescu proposes this tax giveaway to the corporate elite could “exist for three to five years and then be evaluated for effectiveness.” Much like the Bush tax cuts that helped drive the economic divide, once the corporate chieftains get a taste for a government handout, they will send their lawyers and lobbyists to Washington to schmooze congress critters into making the tax subsidy permanent.

    Secondly, paying to get “good behavior” would reward bad behavior, completely absolving those very CEOs and wealthy shareholders of their guilt in creating today’s gross inequality. After all, they are the ones who have pushed relentlessly for 30 years to disempower labor unions, downsize and privatize the workforce, send jobs offshore, defund education and social programs and otherwise dismantle the framework that once sustained America’s healthy middle class. These guys put the “sin” in cynical.

    Donald Trump had better watch out, he could have billionaire competition. Billionaire art competition. Probably not political competiton. But it’s still pretty interesting to see a trio of billionaires like Ken Langone come out with a proposal like this right when the US political season warming up. Especially when Donald Trump is crushing his GOP competition with not just his Trumpian bravado but also highly unorthodox GOP stances like raising taxes on hedge fund managers.

    And it raises the question: If you’re a billionaire that equates crack downs on Wall Street abuses with the Nazi oppression, would the summer of Trump necessarily be all that reassuring? Might you actually being praying for some serious anti-Trump competition at this point? After all, if Donald Trump does somehow become our Dear Leader in 2016, it’s pretty clear that this is the kind of guy that doesn’t simply rule by decree and bravado. He rules by spectacle, and what greater spectacle could Trump use to endear himself with the rabble than creating the hedge fund billionaire equivalent of a human sacrifice? That would be PR gold!

    Sure, it’s possible that nothing Trump says is predictive of what his actual policies would end up being if elected, but keep in mind that Trump doesn’t have to actually get elected to make all of the supporters of the “traditional” Grover-Norquist-style policies seem like billionaire ass-kissers in comparison:

    The New York Times
    Increase Taxes? Talk by Donald Trump Alarms G.O.P.

    By ALAN RAPPEPORT
    AUG. 31, 2015

    WASHINGTON — For years, Republicans have run for office on promises of cutting taxes and bolstering business to stimulate economic growth, pledging allegiance to a Reaganesque model of conservatism that has largely become the party’s orthodoxy.

    But this election cycle, the Republican presidential candidate who currently leads in most polls is taking a different approach, and it is jangling the nerves of some of the party’s most traditional supporters.

    The tendency of that candidate, the billionaire developer Donald J. Trump, to make provocative, headline-grabbing speeches has helped obscure an emerging set of beliefs: that he would raise taxes in certain areas, particularly on corporations that he believes do not act in the best interests of the United States.

    In recent weeks, Mr. Trump has threatened to impose tariffs on American companies that put their factories in other countries. He has suggested he would increase taxes on the compensation of hedge fund managers. And he has vowed to change laws that allow American companies to benefit from cheaper tax rates by using mergers to base their operations outside the United States.

    Alarmed that those ideas might catch on with some of Mr. Trump’s Republican rivals — as his immigration policies have — the Club for Growth, an anti-tax think tank, is pulling together a team of economists to scrutinize his proposals and calculate the economic impact if he is elected.

    “All of those are anti-growth policies,” said David McIntosh, the president of the Club for Growth, a group that Republican candidates routinely court. “Yes he’s a businessman, but if those are the policies he implements, they’ll drive the economy into the ground and we’ll see huge drops in G.D.P., and frankly I think it would lead to massive loss of jobs.”

    The issue of taxing as ordinary income the compensation of hedge fund managers — a share of investment profits known as carried interest — played prominently during the 2012 presidential election.. Financial disclosures revealed that Mitt Romney, the Republican nominee, had paid a relatively low tax rate over the years because he was earning retirement income in such a way from Bain Capital, a private equity firm.

    Investment managers generally pay only a 15 to 20 percent capital gains tax on profits earned from their customers’ holdings, a treatment that Democrats often argue amplifies income inequality. Mr. Trump wants fund managers to “pay up.”

    By inserting the issues into the presidential campaign, Mr. Trump has turned an obscure effort on Capitol Hill into a potentially major fight in the national Republican Party.

    Mr. Trump’s business acumen has been one of his biggest selling points with voters. He promises that his experience will translate into favorable deals on the global stage and boasts that he cannot be bought by bankers or corporate lobbyists.

    “I don’t want any strings attached,” Mr. Trump often says in his speeches, pointing to the big donations he has declined to take from lobbyists.

    Mr. Trump has also threatened to make companies like Ford “pay a price” for shifting their production abroad. And while he claims to be friendly with many of them, he has called hedge fund managers “paper pushers” who tend to get lucky on the road to riches. The populist tone is playing well with a subset of the Republican electorate that is frustrated with the status quo, but there are signs that Mr. Trump is beginning to alienate some in the party’s base.

    “Those aren’t the types of things a typical Republican candidate would say,” said Michael R. Strain, a scholar at the conservative American Enterprise Institute, referring to the candidate’s comments on hedge funds, support for entitlement spending and the imposing of trade tariffs. “A lot of these things are not things that businesses would be happy about.”

    Grover Norquist, the founder of Americans for Tax Reform, is holding out hope for Mr. Trump even though Mr. Trump and former Gov. Jeb Bush of Florida are the only leading Republican candidates who have not signed a pledge to not raise taxes. Mr. Trump said last week that he was still considering the pledge and that he had no plans for a net tax increase. His suggestion that he would increase the tax on carried interest, however, has raised eyebrows.

    “I would certainly be concerned about how that conversation would continue,” Mr. Norquist said. “Democrats will take that and say, ‘Now that you’ve conceded the principle, let’s go further.’ ”

    While Mr. Norquist said he had no problem with candidates making bold proposals for investing in infrastructure — such as border walls and roads — or the military, he thinks it is important that they detail where they would make requisite budget cuts.

    Mr. Trump declined to comment on his economic agenda, and a spokeswoman for his campaign said a tax plan would be rolled out in the next few weeks.

    As with many of Mr. Trump’s policy ideas, confusion seems to be keeping interested parties from knowing exactly how to respond. In an interview with Fox News last week, Mr. Trump said a flat tax would be a viable improvement to America’s tax system. Moments later, he suggested that a flat tax would be unfair because the rich would be taxed at the same rate as the poor.

    “The one problem I have with the flat tax is that rich people are paying the same as people that are making very little money,” Mr. Trump said. “And I think there should be a graduation of some kind.”

    Ultimately, he has settled on simplifying the tax code as a sensible first step, saying taxpayers spend too much time and money on their returns. H&R Block, the tax preparer, should be put out of business, Mr. Trump says.

    “I think it’s tough to really know what he’s thinking about any of this stuff,” Mr. Strain said.

    Corporate inversions are another issue on which Mr. Trump’s positions have been slippery. This practice — companies acquire smaller overseas firms and move their headquarters to countries with lower taxes — has become increasingly popular, costing the United States billions of dollars in lost revenue and drawing the ire of Democrats in Congress. In an interview with Time magazine, Mr. Trump called for a crackdown on inversions, but his solution also seemed to suggest giving companies a tax holiday in exchange for repatriating.

    On Wall Street, Mr. Trump’s attacks on the rich so far have mostly led to eye rolls and a few winces.

    Anthony Scaramucci, a managing partner of SkyBridge Capital who supports Gov. Scott Walker of Wisconsin in the Republican presidential race, visited Mr. Trump last week to complain about the way he was talking about hedge fund managers. Still frustrated, Mr. Scaramucci took to Twitter over the weekend to say that Mr. Trump was “misinformed and that he and most of his colleagues pay the highest marginal tax rate.

    Les Funtleyder, a portfolio manager at E Squared Asset Management in New York, said Mr. Trump was still widely considered to be a long-shot candidate in hedge fund and private equity circles. If his positions on raising taxes on their businesses gain traction, Mr. Funtleyder suggested, then some members of the financial industry will probably form a political action committee or donate to a candidate who would tell their side of the story.

    Until then, however, Mr. Trump’s tough talk on business remains relatively harmless to the one-percent set.

    “He’s just hitting all the populist high notes,” Mr. Funtleyder said, noting that hedge fund managers are easy targets for politicians. “It is unusual for a Republican to say it.”

    “He’s just hitting all the populist high notes…It is unusual for a Republican to say it.”
    It is indeed unusual. And in the midst of the highly unusual ‘Summer of Trump’, we see Ken Langone, a guy who chastised the Pope for being too preachy the poor, comes out with an usual plan to close the wealth gap by getting the government to pay your boss to give you a raise. That’s not just unusually trollish. It’s just weird!

    Sure, their ‘pay us to pay you more’ plan was consistent with the ‘don’t ever raise taxes on the billionaires’ philosophy of the contemporary Norquistian American oligarchy. But it’s also such an over the top weird plan that’s guaranteed to piss the public off that you have to wonder if it really was conceived of in a moment of panic and these billionaires really are as scared as they say they are and unable to think straight. Don’t forget that the torches and pitchforks Wall Street and the oligarchy fear most may not be in the hands of Occupy Wall Street. It’s the torches and pitchforks held by the people that claim to hate the oligarchs, but somehow keep getting suckered into doing their bidding, that might be the more immediate source of billionaire concern.

    Or, who knows, maybe all the Trump-induced worries are just the equivalent of oligarchy pro-wrestling. That also seems possible.

    Posted by Pterrafractyl | September 1, 2015, 6:14 pm

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