The Terrorists Have Won, Part 2469

The following is an excerpt from a piece by British attorney Gareth Peirce in the London Review of Books.

One young American citizen, Syed Fahad Hashmi, was due to stand trial this month in Manhattan. He has been subjected to every coercive and unconstitutional practice at issue in the still outstanding extraditions in the three years since he was flown from the UK to the US. Before his transfer to the US, Hashmi was held in Belmarsh Prison in the same conditions as all other prisoners, accused of an offence that if tried in the UK would have merited at most a sentence of two or three years; since his extradition, he has been kept in total isolation in a tiny cell. He has not seen daylight since arriving in this New York prison.

The Anglo-American adversarial process is intended to rest on a guarantee of fairness, an equality of arms between prosecution and defence. Hashmi, under the disabilities that years of solitary confinement inevitably create, even for the strongest and fittest, faced a prosecution based on the evidence of a co-operating witness who pleaded guilty in the US to engagement in terrorist activity in Pakistan, including the use of explosives and the attempted murder of the country’s then president. The witness, having served the shortest of prison terms in the US, and having given evidence against others in a cluster of trials in a range of jurisdictions, claimed that Hashmi, a student in England, let him leave a suitcase in his London flat in which there were combat clothes and lent him his phone, on which he, the witness, rang a suspected terrorist in the UK. This was enough to secure his extradition. For this, the co-operating witness goes free and his victim stands trial on charges of providing material support for terrorism. On the eve of that trial, having maintained his innocence for three years, but faced with the prospect of a 70-year sentence, Hashmi changed his plea to guilty.

And that effective life sentence would be served under the most horrifying conditions imaginable- in total isolation, without any human contact or sunlight, and deprived of any stimulation or distraction of any kind. Imagine the door closing on a small white room, with no books or television or phone or anything else to do but stare at a white wall until you drive yourself mad. And imagine realizing that this is where you will spend the rest of life.

If that is not one of the worst forms of psychological torture imaginable, then I am at a loss as to how else to describe it.

And after three years of enduring this torture, and being told that if you do not confess you be found guilty anyway by an American kangaroo court, and that this will be your fate, how can you possibly find the strength to continue to maintain your innocence?

The entire piece must be read by anyone who still believes that the United States criminal justice system is anything more than a total farce, and who believes that we have any right to lecture Iran or China or anyone else on the subject of human rights.

Break Up Goldman and The Rest

Today's WSJ:

NEW YORK—Goldman Sachs Group Inc., facing securities fraud charges leveled against it by the government, on Monday warned that future litigation costs could cut into profits

...

Analysts have estimated that a settlement of the SEC's current complaint could range between $1 billion and $5 billion.

"We are involved in a number of judicial, regulatory and arbitration proceedings concerning matters arising in connection with the conduct of our businesses," the company said in a filing with the SEC. "Given the range of litigation and investigations presently under way, our litigation expenses can be expected to remain high."

It sounds as though Goldman is assuming that the current SEC charges will not be the only ones, and that evidence turned up during the course of this current investigation could lead to new charges.

Goldman said the challenges would not be material to the overall business, but that legal costs and potential settlements could trim operating results. The company spent about $500 million on legal costs in 2009.

What this means is that they expect to pay the fines as a business expense, and don't have any real expectation of having to do anything differently in the future.

Lloyd Blankfein, Goldman's chairman and chief executive, said Friday during the company's annual meeting that the investment bank will look into ways the company can confront the current scrutiny over its business practices. He was re-elected to the board, and shareholders voted down a proposal to split the chairman and CEO posts.

"The last few weeks have been ... difficult and disappointing," Mr. Blankfein told shareholders on Friday. "Questions have been raised that have gone to the heart of our most fundamental value: How we treat our clients."

Well, the evidence coming out in this case seems to provide an answer to that question. Apparently, they treat their customers like shit. They use them like chumps by selling them crappy products designed to fail so that they can collect insurance payments when they do.

He has been criticized for not disclosing the SEC investigation sooner. The company, which was hit by the government complaint last month, said it did not originally believe the SEC investigation would have a material effect on business.

Right. Why would having the SEC formally charge you with defrauding your own clients have any material effect on your business?

Goldman, which emerged from the financial crisis with record earnings in 2009, also disclosed in the regulatory filing that its traders did not lose money during the first quarter. The firm reported that it made more than $100 million daily for 35 days during the quarter.

Let's talk about these profits for a minute, and look at the big picture. How could anyone who believes in the efficiency of markets possibly defend a company making these kind of profits? Forget about whether you think they're obscene, and never mind the fact that most of that money will go towards buying private planes and yachts for the Goldman folks.

Think about this: in an efficient market, these kinds of profits simply wouldn't be available. In an efficient market, other firms would move in and offer the same services for far less, and still make a decent profit. In fact, in an efficient market, these profits would be approaching zero, as Goldman's competitors continued to undercut them.

This is obviously not happening, and this is obviously not an efficient market. There are many reasons why Goldman's competitors cannot compete with them, and it's not just because of some special technical skill or ability that Goldman has that they don't. Those kinds of edges never last long in that kind of business.

But Goldman has other advantages, some of which it shares with a few other huge banks that are making similar profits.

It has much cheaper funding through the Fed discount window than smaller banks do. This cheaper funding is directly paid for by taxpayers.

It has much cheaper funding from institutional investors. This is because those investors realize(even if taxpayers don't) that if Goldman fails, taxpayers will rescue it, as they've already done. Smaller banks, of course, are simply put into receivership.

Goldman acts as a member of a oligopoly, and so has very little competition. And with no competition, you get obscene profits and inefficient markets.

Goldman does not have to worry about long-term profitability. Goldman is concerned with making money today; if it makes money today, its traders and executives make millions. It can do this by making extremely risky bets. Like betting on Russian Roulette, these bets will eventually turn catastrophic. But at that point, the people at Goldman will have already been paid. And the gun is pointing at the taxpayer's head anyway.

Goldman owns the government, along with the rest of Wall Street. This means that they don't have to worry about the government passing any pesky laws that would prevent them from destroying the global economy for the sake of some bonuses, or of declining to bail them out with taxpayer money when they fail. The US Treasury department and the SEC, in fact, are full of people who used to work for them, and who are planning to go back to work for them once they've finished their little stint of infiltrating the enemy camp.

All of these are reasons to require that Goldman and the other top five banks be broken up. There is no advantage to having banks with more than $100 billion in assets, and the disadvantages become more glaringly obvious every single day.

Breaking these banks up would not be anything radical or unprecedented. It was done with Standard Oil, and it was done with AT&T. Last time I checked, this didn't result in the end of the oil or phone industries.

Excusing Obama

BP, Deepwater, Obama, Salazar

Debcoop at Open Left has a new post up trying to make sure everyone knows that Republicans are to blame for the oil spill, and not Obama.

The NY Times thinks that President Obama has not responded aggressively enough to this spill. Let's be clear:

No way is this oil spill Barack Obama's fault.

Seriously? As Paul Rosenberg points out (also in a post on Open Left!), Obama appointed an Interior Secretary (Ken Salazar) with deep ties to the oil industry. Salazar was confirmed in January of 2009. The BP permit for the Deep Horizon well was approved 3 months later in April, with zero meaningful oversight.

Since then, 26 additional well permits have been handed out in exactly the same way, by the exact same Interior Secretary. As Rosenberg says, these permits were simply rubber stamped, and the oil companies were allowed to simply assert that there would be no environmental impact. (Read Rosenberg's post if you want to get a good idea of what the Interior Department does to make sure disasters like the BP catastrophe don't happen.)

Now, you may argue that we can't expect the president to know all of the intricacies of deep sea drilling, and that it is true. But you simply cannot excuse him for appointing an Interior Secretary with the record that Ken Salazar has.  

And in case you think he just didn't know any better, just last month Obama approved a massive expansion of offshore drilling, which would have been done using the exact same regulatory process, by the exact same department-a process that could best be described as simply signing whatever drilling applications the oil corporations filled out, and then going back to sleep.

This is not some case of Obama making the passive and innocent mistake of not realizing that the Secretary of the Interior was in charge of regulating activity that could (and did) result in a massive environmental catastrophe. No, this is worse. Obama actively planned to allow a huge expansion of this activity, and he either did not bother to look into the risks of such activity, or did look into it and saw nothing or didn't care. And we know this because his administration has continued to issue rubber stamp permits, just like the one that BP got, even after the BP explosion!

None of these explanations are acceptable, nor the actions excusable. They are precisely the kind of thing that we would be (rightly) excoriating Bush/Cheney for, and yet here is DebCoop, on Open Left of all places, excusing this behavior.

This is exactly the kind of sycophantic drivel one would expect to find on the pages of the White House web site or some Democratic Party hack's blog, and yet it is making it's way onto the pages of OpenLeft.com.

The fault lies with the ideology and mores of the Republican party and its theory of government.

Which are, it is becoming painfully obvious, no different from the ideology and mores of President Obama.

Their solution to this country's energy's future is to drill anywhere and everywhere.

This might be more relevant to your case if Obama had not- just last month!- approved a plan to pretty much just drill anywhere and everywhere.

Is Government The Problem?

Have you heard about the big oil leak off of the coast of Louisiana? The one that is threatening to destroy what's left of the wetlands that are the only barrier between a major American city and the ocean? The same wetlands that oil companies have been destroying for years by building pipelines and canals through?

Well, it turns out that the oil companies were warned repeatedly about the possibility that precisely what happened would, well, happen.

WASHINGTON — Federal regulators warned offshore rig operators more than a decade ago that they needed to install backup systems to control the giant undersea valves known as blowout preventers, used to cut off the flow of oil from a well in an emergency.

The warnings were repeated in 2004 and 2009. Yet the Minerals Management Service, the Interior Department agency charged both with regulating the oil industry and collecting royalties from it, never took steps to address the issue comprehensively, relying instead on industry assurances that it was on top of the problem, a review of documents shows.

Anyone who paid any attention to the Bush administration's attitude towards regulation during the last decade would hardly be surprised. That attitude could be summed up as: "There will be no regulation."

In the intervening years, numerous blowout preventers and their control systems have failed, though none as catastrophically as those on the well the Deepwater Horizon drilling rig was preparing when it blew up on April 20, leaving tens of thousands of gallons of oil a day spewing into the Gulf of Mexico

Agency records show that from 2001 to 2007, there were 1,443 serious drilling accidents in offshore operations, leading to 41 deaths, 302 injuries and 356 oil spills. Yet the federal agency continues to allow the industry largely to police itself, saying that the best technical experts work for industry, not for the government.

This is how adversarial relationships work, you see.

When the government charges you with a crime, if you hire a lawyer who is smarter than the prosecutor, the government just lets your defense lawyer write the prosecution's case.

In tournament chess, the player with the most experience gets to make his opponent's move as well as his own.

Hell, I don't understand why bank robbers aren't allowed to write the laws on bank robbery, since they arguably know more about the subject than anyone.

(Actually, the banks do write the laws governing banking, and that's pretty much the same thing.)

The free-market fraudsters, of course, want you to believe that regulation by government is bad because they'll just fuck it up. And they'll use this case as evidence, because in this case, they did fuck it up.

But what they won't tell you is that they fucked it up because the free-market fraudsters told them to.

They ran the government almost singlehandedly for eight years. Their goal was to let corporate interests do whatever the hell they wanted to, and to hand them money for doing nothing whenever possible. And they succeeded.

Are you an investment bank that wants to gamble in an unregulated derivatives market with a notional value equal to 40 times the size of the entire US economy? Go right ahead, and we'll bail you out with taxpayer money when you implode.

Are you an international drug company that feels like marketing dangerous pharmaceuticals to people who don't need them? We'll slap you on the wrist and send you back out to kill again.

Are you a defense contractor who's tired of having someone in the government making sure you're not ripping off the Pentagon? We'll just tell those in charge of watching to close their eyes.

Are you an oil company that doesn't want to spend a few more bucks on safety equipment to prevent catastrophic environmental disasters that will affect millions of average Americans? We'll just tell the inspectors to defer to your best judgement, as though you actually have the welfare of the American people in mind when you despoil their land.

Over and over again, you will hear that government is incompetent and can't do anything right.

But here's the thing. People don't suddenly get stupid when they work for the government. The government invented the atomic bomb. It predicts the weather. It built the interstate highway system. It put a man on the fucking moon 40 years ago, using a computer that probably had less power than your $30 mp3 player. It sure as hell can figure out when BP is blowing smoke up its ass, if its told to do so!

And that's the thing. It has been told not to figure that out, over and over again. Regulators have been told not to regulate derivatives, so they did not. Regulators were told not to pay attention to the billions and billions of dollars of Iraqi reconstruction funds that were handed out to Halliburton on pallets of cash for work that was never done, so they did not. The Department of the Interior was told not to argue with BP about whether they were doing enough to prevent this kind of disaster, so it did not.

And now we have one more disaster on our hands; one more in a long line of disasters that could have been prevented by government, but were not because the free-market fraudsters and their paid-for politicians made sure that government would not be allowed to interfere in the making of money, unless they were just going to be handing more of it out.

The sad thing is that this has been a long time coming. It's not just the Bush administration; it started with Reagan's bullshit line that government was the problem, and continued through Bush I and Clinton, and then was accelerated in a frenzied looting of the American public during the eight long years of Bush II. And Obama doesn't seem to even know where to begin to fix it, and I have no idea if he even wants to.

But after a 30-year long evisceration of government's ability to govern, there really isn't much left there institutionally. The free-marketers would have you believe that government is bigger than ever, but it's not. It spends more than ever, but instead of using that money to actually do things, it just hands it over to corporations and tells them to do whatever they want with it.

It's going to be a big challenge to get the regulatory arm of government rebuilt. It will take time, and it will take money. Rich people who run oil companies will have to pay more in taxes. But it must be done, and the sooner we start on it, the better.

Will The Greeks Reject The Shock Therapy?

Over the last 30 years, as Naomi Klein has thoroughly documented in "Shock Doctrine",  numerous governments have used crises to ram through deeply unpopular "free market" reforms that have really been little more than thinly disguised efforts to make massive social spending cuts and to direct vast sums of lower and middle wealth to the corporate/government elite.

They've done this in times of crisis because, without some catastrophe to frighten and shock them, the citizenry would never go along with the plans. Whether it's been hyper-inflation in South America, Yeltsin's attack on the Russian Parliament or the millions of pounds of ordinance dropped on Bagdad in the Shock and Awe campaign, these crises have always done the trick. And the trick is to force severe austerity measures on all the citizens of already stressed nations. 

Today, it's Greece's turn. Greek sovereign debt has risen to unsustainable levels, and, without a bailout from the EU, Greece is headed towards default.

So, naturally, the EU has decided to bail them out. And, just as naturally, they are calling for austerity measures, which will mean severe cuts in the pensions, salaries, and jobs of ordinary Greek citizens, all while taxes are being raised.

If you just read the headlines, you'd think that this bailout is a great thing for all of Greece. And you would be wrong. The money from this bailout will go to paying off the banks and institutions that made bad decisions and lent Greece more money than they should have. These are banks which are based in the countries which are organizing the bailout, so in essence these countries are bailing out their own banks at the expense of the Greeks. These banks screwed up royally, but they'll get paid off in full. It's the average Greek citizen which will get screwed.

Now, you may have heard that Greek pensions, salaries and social spending levels are unsustainable, and that the people who are protesting because the pensions they were promised won't be there should realize that the deal they had was too good to be true, and shouldn't expect it to be honored. And there may be a shred of truth in that statement. 

But the institutions that lent Greece money, and banks like Goldman Sachs that actively enabled Greece to get around it's debt limits, should realize that when you lend people more money than they can afford to repay, you shouldn't expect that deal to be honored either.

In other words, there are two parties to this mess. The first is the Greek citizen, who has gotten perhaps too good of a deal when it comes to social benefits. (This, of course, is open to interpretation. If Greece bothered to collect taxes on the rich, these benefits would be a lot more affordable.)

The second party comprises the institutions that lent Greece money, all of which have made massive amounts of money in fees and interests, and whose executives have paid themselves handsomely for lending money to a country that was already too far into debt.

The first party is expected to accept new taxes and deep and painful wage cuts, social service cuts, pension cuts, and cuts in virtually every public sector in a country that relies heavily on public spending. These cuts will be catastrophic for the Greek economy, as the massive reduction in income will lead to reduced aggregate demand and a deflationary spiral which will push the country into the abyss and which will be extremely difficult to recover from, and that could easily take a decade or more to do so.

But they will be asked to do this so that the second party, the banks and institutions that enabled this crisis in the first place, can get their shitty loans paid back in full.

Does this sound like a raw deal? It does to me, and, apparently, it does to the Greeks as well, who are taking to the streets by the thousands to protest the austerity measures just announced by the government. In fact, the NYT is reporting that three people were just killed in the firebombing of a bank in Athens.

Of course, many (including leading economists) have criticized these banks, saying that they should have known better than to lend Greece money. But that misses the larger point, which is that they knew that the IMF or the European Central Bank would make sure that they were made whole, no matter how insane their lending standards. So it wasn't that they didn't know better; it was that they didn't care. They expected that the Greek people would be forced to pay for their mistakes and the mistakes of the Greek leaders. (As Yves Smith points out, the moral hazard implicit in this bailout is one of its worst features. It will encourage banks to continue to lend to countries at unsustainable levels, secure in the knowledge that the IMF will bail them out and make the citizens of the countries pay with their livelihood or lives.)

The Greeks understand that this is not about bailing them out. It's about making them pay for the mistakes of others, and about transferring vast sums of Greek wealth to the financial elite, in a process which will destroy the Greek economy and impoverish its people.

And for what? To stave off a sovereign debt default which is coming anyway? To ensure that they can remain in the very currency union which is currently preventing them from using monetary policy to escape the clutches of the IMF and the ECB?

This is not a case of figuring out some way forward that is best for everyone. As always, this is about large financial institutions and their executives getting preference over the middle class and the poor. There is absolutely no reason on earth why bondholders shouldn't take a hit, but taxpayers should. 

But this is how it's done. A country is frightened into believing that the end of the world is coming if they don't agree to massive social spending cuts. The money that is saved by making these cuts is then transferred to the people who made foolish loans to that country's government, hoping to make a killing, but assuming they would be bailed out either way. And then the massive cuts in spending lead to a widespread unemployment, reduction in demand, and an accompanying economic meltdown. 

But by this time, of course, the bankers have their money.

This is happening right now in the United States, with the debt hysteria that is being whipped up by bondholders who can't wait to slash social security and unemployment, but who wouldn't even consider cuts to the bloated military trough their rich buddies feed from. 

Greece needs to reject the bail-out package. It should default on its debt; it has no moral obligation to pay it. This will require them to withdraw from the currency union, but so what? It has been a disaster for them anyway. And with debt repudiation, Greece will at least have a chance to start anew.

Let's just hope that the protesters can be successful without further bloodshed.

Ron Paul and the Blindness of Ideological Belief

Lew Rockwell, Ron Paul, Free Markets

Ron Paul has a piece up at Lew Rockwell's site about the mischaracterizations of Obama as a socialist. He is obviously right about that, but wrong about much else, as usual.

Proceed, sir.

Lately many have characterized this administration as socialist, or having strong socialist leanings. I differ with this characterization. This is not to say Mr. Obama believes in free-markets by any means. On the contrary, he has done and said much that demonstrates his fundamental misunderstanding and hostility towards the truly free market. But a closer, honest examination of his policies and actions in office reveals that, much like the previous administration, he is very much a corporatist. This in many ways can be more insidious and worse than being an outright socialist.

I just want to stop here and go on the record for first time readers by saying socialism is certainly not insidious. It may or may not be the best system for creating the highest amount of profits, but that really has nothing to do with whether it's a good system or not. That, of course, will have to remain a topic for another discussion.

Socialism is a system where the government directly owns and manages businesses. 

This is untrue. Socialism is a system where the means of production are owned by workers and administered either by them or in their name by the state. In a social democracy, the two groups are one and the same.

Corporatism is a system where businesses are nominally in private hands, but are in fact controlled by the government. 

This is also untrue. Ron Paul hates government, so he places all the blame on government while accusing it of taking over business. But in a corporate state, business and government are one and the same. And if business is governing, then there can be no democracy. This is, of course, where we are heading in the United States. The Obama administration has been a continuation of the Bush administration in this regard.

In a corporatist state, government officials often act in collusion with their favored business interests to design polices that give those interests a monopoly position, to the detriment of both competitors and consumers.

And, even more importantly, to the detriment of workers, who soon find themselves at the mercy of large corporations and their government policies.

More to the point, in a corporatist state, there is no actual distinction between government and corporate officials. They are often interchangeable, and sometimes occupy both positions at once. Their loyalty is to each other, and their concern for the general citizenry is limited to ensuring that there are no armed rebellions.

This is exactly where we find ourselves today. Retired generals who serve as special advisors to the government at the same time they serve on the boards of defense contractors (who stand to make billions from each new war) were regularly appearing on TV advocating the invasion of Iraq. Where they government officials? Were they businessmen? There is no longer any real distinction.

Health insurance CEO's literally wrote much of the legislation in the recent health reform bill. Blackwater managers directly commanded US troops in Iraq. Hank Paulson went directly from his position as CEO at Goldman Sachs to his next job as Treasury Secretary, where he was responsible for overseeing his former company. Did he even need to change offices?

A careful examination of the policies pursued by the Obama administration and his allies in Congress shows that their agenda is corporatist. For example, the health care bill that recently passed does not establish a Canadian-style government-run single-payer health care system. 

(Which it would have done if it actually reflected the wishes of most Americans.)

Instead, it relies on mandates forcing every American to purchase private health insurance or pay a fine. It also includes subsidies for low-income Americans and government-run health care “exchanges.” Contrary to the claims of the proponents of the health care bill, large insurance and pharmaceutical companies were enthusiastic supporters of many provisions of this legislation because they knew in the end their bottom lines would be enriched by Obamacare.

Absolutely true, although calling it "Obamacare" belies this point, and, while sure to incite a rabid response from his Tea Party minions, obscures the fact that his role was one of merely marketing the product, not creating it. That job was left to the industry, which fought not with Congress or the administration, but amongst each other over which sector would get the biggest pound of flesh.

Similarly, Obama's “cap-and-trade” legislation provides subsidies and specials privileges to large businesses that engage in “carbon trading.” This is why large corporations, such as General Electric support cap-and-trade.

Also true. Instead of making them buy the carbon credits from the peasants who will bear the costs of pollution, the industry plans to just give them to themselves, at which point they can sell them back to the taxpayer in the event that the taxpayer actually wants to stop carbon emissions. And of course, if they do sell them back, they'll just give themselves some more.

To call the President a corporatist is not to soft-pedal criticism of his administration. It is merely a more accurate description of the President’s agenda.

And Ron Paul will probably be called a Marxist for this statement.

When he is a called a socialist, the President and his defenders can easily deflect that charge by pointing out that the historical meaning of socialism is government ownership of industry; under the President’s policies, industry remains in nominally private hands. Using the more accurate term – corporatism – forces the President to defend his policies that increase government control of private industries and expand de facto subsidies to big businesses. 

Although, given the fact that corporate media is also a part of the virtual government, it's unlikely that he'll be forced to defend himself any time soon.

This also promotes the understanding that though the current system may not be pure socialism, neither is it free-market since government controls the private sector through taxes, regulations, and subsidies, and has done so for decades.

It's amazing that Ron Paul can't take the next logical step. He's been so sure that businesses operating in a free market are the cure for all that ails us that he can't see that in a free market, corporatism is the inevitable result. If there are no rules, why shouldn't the corporate world consolidate into large companies and then take over government?

In fact, the last 30 years have been an experiment in destroying social democracies and anyone else who got in the way of corporate interests,  from Chile to Argentina to China to Russia to Iraq and now finally right here in the United States. It's all been done in the name of Ron Paul's beloved free markets. The free market philosophy has triumphed, and it has led us to this place: the Corporate States of America- authoritarian rule by an elite who have consolidated political power and the means of production. This fact is so glaringly self-obvious that it is astonishing that Paul cannot see it, and yet that is the nature of ideology. It is that blinding.

Using precise terms can prevent future statists from successfully blaming the inevitable failure of their programs on the remnants of the free market that are still allowed to exist. 

Remnants? There has never been a free market. You cannot have an "kind of" free market. It's like being "kind of" pregnant. The quest for a free market is an impossible one; it results not in free markets (which no one really wants anyway), but in the consolidation of power by those born into it or lucky enough to attain it. Once this consolidation reaches a critical mass, reversing it will become nearly impossible, as the corporate state will own both the means of production and the political system by which it is maintained.

The problem isn't free markets. They are a myth. The problem is that the quest for free markets inevitably results in a corporatist state-the same corporatist state that Ron Paul professes to hate.

We must not allow the disastrous results of corporatism to be ascribed incorrectly to free market capitalism or used as a justification for more government expansion. 

To what else, then, would you ascribe it? It has been the direct result, to varying degrees, of every single instance of free-market capitalism. It's not a bug; it's a feature. There is not one single example in the history of the entire human race of a successful free market system outside of Ron Paul's imagination.

And the reason for that is simple. It's a theory. It's an elaborate theory, yet one that seems simple enough to be understood by your average person. It's appealing because it tells you that all you have to do is be selfish and the world will be perfect. But it's a theory. It has never been tried because it fails to take into account one major thing: the fact that human beings never have complete information, and don't always behave in the perfectly rational ways that this theory requires them to do. In other words, it's a beautiful theory ruined by imperfect people.

And so who are you going to believe-your eyes that tell you that every time free markets are tried, they result in a corporate state, or Ron Paul, who insists that "It shouldn't happen that way! That's not how I planned it!"?

Most importantly, we must learn what freedom really is and educate others on how infringements on our economic liberties caused our economic woes in the first place. 

What is true freedom, Mr. Paul? Is it the freedom to choose between food and health care while executives eat caviar in their private jets? Is it the freedom to defraud pension funds out of billions of dollars of retirement funds so that Wall Street execs can buy another island? Is it the freedom to trick unsophisticated 20 year olds into going into credit card debt which will take them years to dig themselves out of? Is it the freedom to sell extremely complex and rigged financial products to unsuspecting clients, while taking out insurance on them with AIG so that you get paid off when they fail? Is it the freedom to threaten the poor and middle class taxpayer with the complete destruction of the economy if they don't pay those multi-billion dollar insurance claims when AIG fails? Is it, as Matt Taibbi puts it, the freedom to "sell some working father a car with wobbly brakes, then buy life insurance policies on that customer and his kids"?

Government is the problem; it cannot be the solution.

In a corporate state, this is true. In a democracy, government is us.

It's All Right There

Glenn Greenwald, Ross Douthat, South Park

Glenn Greenwald rightfully skewers Ross Douthat's outrage at the censorship of the South Park caricatures of Mohammed, noting that Douthat's claim that Muslims get special deference is ludicrous. Go read that column for more.

But I noticed two things at the end of this column that Greenwald didn't address.  Here's Douthat:

This is what decadence looks like: a frantic coarseness that “bravely” trashes its own values and traditions, and then knuckles under swiftly to totalitarianism and brute force.

He's speaking here of our supposed deference to Islam, but as a description of what conservatives like him have done to the Constitution in response to the so-called Muslim threat is much worse. Comedy Central pulled a few seconds out of a cartoon; conservatives have exploited the fear to justify invasion, mass killings, torture and an absolute shredding of the Bill of Rights.

Happily, today’s would-be totalitarians are probably too marginal to take full advantage. This isn’t Weimar Germany, and Islam’s radical fringe is still a fringe, rather than an existential enemy.

No, today's totalitarians are on the right wing, as usual, and they have taken full advantage. This isn't Weimar Germany, another famous right wing republic; it's the Neo-Con era, and for Muslims, the difference probably doesn't seem too great.

For that, we should be grateful. Because if a violent fringe is capable of inspiring so much cowardice and self-censorship, it suggests that there’s enough rot in our institutions that a stronger foe might be able to bring them crashing down.

It's already been sent crashing. And his movement is the one that did it.

Tasing Is About Sending A Message. Send One Back.

Taser, Frank Meek, Jackson WY

JH Underground's Jim Stanford takes a break from his Jazz Fest duties to alert us to another report on Tasering, this time from my hometown paper:

The Teton County attorney said Wednesday he plans to dismiss criminal charges against a man whom police subdued with a Taser last week during a traffic stop.

County Attorney Steve Weichman said the pretrial publicity in the case against Frank Meek makes him uncomfortable.

…

Meek, 60, was arrested during a traffic stop April 7 on a misdemeanor charge of interfering with a police officer and cited for improper vehicle registration. Meek has Colorado plates on his car. He said he is a Colorado resident who lives part time with his girlfriend in Driggs, Idaho, and works at the Jackson Hole Twin Cinema.

Meek accused police of using a Taser on him more than 10 times during the traffic stop. Police released a video of the traffic stop that shows Meek repeatedly calling officers profane names and displaying generally defiant behavior.

This isn't the first time area cops have had fun with a Taser. They famously Tased a harmless streaker at a demo derby a few years ago in front of a large family crowd, literally torturing him and causing him to urinate on himself before losing consciousness. This, of course, was their way of making sure that the event was kept safe for kids to view.

No doubt the cops are glad to have the Tasers. It would be terrible if they had to do what they presumably did before they got them. I suppose they would have had to just shoot that streaker, and the guy who had the audacity to argue with a cop would presumably have been filled with lead as well.

I don't believe that all cops are evil or anything. But to become a cop, you kind of have to have an authoritarian streak. You need to be interested in telling people what to do, as well as in the power that you get when you get a badge, a gun and a Taser.

And in a society that has decided to simply criminalize social behavior that it finds distasteful, like drug use or profanity, you just aren't going to get a lot of people applying for police positions who don't buy into that philosophy. So it's more symptomatic of American society's rightward lurch toward authoritarianism than some narrow indictment of law enforcement.

Look at what is already happening in Arizona, as a result of the new law that requires everyone to carry papers with them at all times to prove they are legal residents:

PHOENIX – A Valley man says he was pulled over Wednesday morning and questioned when he arrived at a weigh station for his commercial vehicle along Val Vista and the 202 freeway.

Abdon, who did not want to use his last name, says he provided several key pieces of information but what he provided apparently was not what was needed. 

He tells 3TV, “I don't think it's correct, if I have to take my birth certificate with me all the time.”

3TV caught up with Abdon after he was released from the Immigration and Customs Enforcement office in central Phoenix. He and his wife, Jackie, are still upset about what happened to him.  

Jackie tells 3TV, “It's still something awful to be targeted. I can't even imagine what he felt, people watching like he was some type of criminal.”

Abdon was told he did not have enough paperwork on him when he pulled into a weigh station to have his commercial truck checked. He provided his commercial driver’s license and a social security number but ended up handcuffed.…

Both were born in the United States and say they are now both infuriated that keeping important documents safely at home is no longer an option. 

Jackie says, “It doesn't feel like it's a good way of life, to live with fear, even though we are okay, we are legal…still have to carry documents around.”

Let's leave aside the obvious and eerie similarities to the way the Gestapo, the KGB and the East German Volkspolizei typically operated. What will happen when people become understandably upset at the fact that they are being arrested for the crime of not carrying their proper papers with them?

I don't think we should be surprised when we start seeing more completely innocent people brutalized and killed by cops who Tase them for protesting their innocence.

The goal, of course isn't to just subdue the person on hand. It's to send a message loudly and clearly: If you argue or protest your innocence or do anything other than immediately lie on the ground and submit to arrest, you will be immediately and repeatedly shot with 50,000 volts of electricity, which will result in extreme pain or death. After that, you will probably be charged with resisting arrest or assault on a police office so that the officer can justify the shooting.

In other words, the goal is to terrorize people into complying.

This is how police states begin, and the use of psychological terror is a hallmark of each and every one. But it's not too late. It's not too late to call your mayor's office or city councilman or county commissioner and demand that they remove the Tasers from law enforcement agencies.

If you live in Jackson Hole, here are some numbers:

Mayor Mark Barron: 307-733-3092
Teton County Commissioners: 307-733-8094

Call them. They won't think you care if you don't.

No, Our Great Recession Was Not A Mistake. Stop Saying That.

Alan Greenspan, the former Federal Reserve chairman who was as responsible as anybody for the economic crisis which has cost millions of average Americans their jobs, and millions more their life savings, is now trying to convince whoever is still listening that the crisis was not a repudiation of his ideology:

TAPPER:  You'll be testifying about the financial crisis on 
Wednesday before the Financial Crisis Inquiry Commission.  When you 
testified before Congress in October, you said that you finally saw a 
flaw in -- in the way that you looked at markets, that markets cannot 
necessarily be trusted to completely police themselves.

 But isn't it -- isn't it more than a flaw?  Isn't it an indictment 
of Ayn Rand and the view that laissez-faire capitalism can be expected 
to function properly, that markets can be trusted to police themselves?

GREENSPAN:..So it's not the principle of competitive markets which really has no 
alternative which works.  It is a strict application -- as I presented 
in a Brookings paper fairly recently on a somewhat technical area, the 
major mistake was assuming what the nature of risk would be.  And the 
reason it was missed is we have had no experience of the type of risks 
that arose following the default of Lehman Brothers in September 2008.

This is total horseshit. For one thing, the amounts of risk were not missed. People were pointing them out over and over again during the years leading up to the crisis. For another, this exact same thing caused the Great Depression, and has been repeated over and over in every banana republic in the world. It's not some mystery or unintended consequence.

There was nothing accidental about this crisis. Purely free markets are designed to result in large disparities in wealth. And, in fact, this wasn't a disaster for the people who were responsible. The major financial players (big banks and hedge funds, particularly) made out like bandits. Or, more to the point, the executives and traders of these firms did. They had every expectation that the government would transfer huge amounts of taxpayer money to the banks, and that once they had it they could pay themselves bonuses as they liked. And no one would hold them accountable. In other words, they're keeping your money. They'll be on an island somewhere while the rest of us spend a generation paying the bill.

This is how a free market works. Without political restraint in the form of an educated, involved electorate, the players in a free market will begin to accumulate wealth and power. When they do, they will consolidate that power and use it to control the political system in the absence of any meaningful voter interest (and voters know nothing about the complex ways in which these players rig the game until it's too late, if even then.)

There is nothing anti-free market about big banks using their immense power and influence to control government. In a purely free market, anything goes. It's survival of the fittest, after all, right? And the firms which are best suited to survive in a free market system are not those that make the best product, or provide the best service. No, the ones who know how to write the laws and make government an accomplice to the theft of trillions from poor and working-class Americans are the ones who will flourish in a free-market system.

Greenspan: That's the critical mistake.  And I made it.  Everybody that I know who works in this business made it.  And it means that basically we have to work our way back to understanding what went on.  And as I argue, what we need is far more required capital for financial institutions than we've had.

What was the critical mistake? That he was wrong about the correct level of capital reserves? Does he not recognize that in a true Randian free-market economy, there would be no capital reserves? Does he not realize that the position of great power he once held, that of Chairman of the Federal Reserve Board, would not even exist in a Randian free-market economy?

Here's the deal, Greenspan. If you want a "free market", then try proposing that we abolish the Federal Reserve, the SEC, the FDIC, the FBI, every single law every written about fraud, and basically the entire system of business and civil law that Western economies have devised over the past few centuries. See how that flies.

And when even your most sycophantic, Randian cultists recoil at the specter of creating a lawless Somalian-style free-for-all, maybe you'll admit that you do need a few laws here and there.

And then maybe, just maybe, you'll admit that the fight isn't over whether we have laws, but over who will be the ones writing them for their own benefit.

For the last 30 years, the financial sector has been writing those laws, and telling all Americans that they are for the good of all the country.

That lie is getting a lot harder to tell these days, isn't?

"Journalism" At Its Best

This is what passes for reporting these days. Here is an excerpt from a story in the NYT about Obama's planned speech to Wall Street.

The president and his allies have eagerly portrayed Republicans as handmaidens of Wall Street, while the Republicans have accused Democrats of trying to strangle the financial markets and even institutionalize the idea of bailouts in tough times.

One of these statements is true; the Republicans are taking millions from Wall Street in exchange voting as Wall Street instructs. 

But the second is demonstrably false. The NYT, of course, could not make that claim itself, because it knows it is false. So instead, it mindlessly prints that "the Republicans have accused", and then never once bothers to find out whether the Republican accusation is  false. 

I honestly believe that if the Republicans claimed that the moon was made of cheese, the New York Times would simply repeat that claim, and if the Democrats disagreed, they would note the disagreement and move on.

I understand that it is sometimes impossible, due to space limitations, to fully analyze every lie that Republicans make. But if you can't at least note that it's not true, and then link to an analysis of why it isn't, then just don't print the lie in the first place. 

It is a well known fact that when people read these lies, it is very difficult to ever get them to rally believe the truth, That's the way the human mind works. You can show them all the evidence you want further down the road; it won't matter. 

But this is the sorry state of mainstream "journalism" today. It's not about finding out the truth; it's about simply repeating whatever people in power say. Instead of being an adversary of entrenched power, mainstream journalism aids and abets it.

Republicans Are Outraged At The Attacks On Poor, Defenseless Goldman Sachs

You've probably read about the fraud charges that the SEC has leveled against Goldman Sachs. Goldman has been accused of intentionally selling investors securities which they knew were designed to fail. People are outraged; the investors include institutions like pension funds and so forth, and Goldman has been a big cause of the financial collapse and has received billions of dollars in taxpayer money, which it has used to pay it's employees obscene bonuses.

Naturally, the Republicans are outraged at what happened. But not at Goldman, you see. They are actually outraged at the SEC for filing the charges, because it makes them look bad for defending the status quo in general and Goldman in particular. From Politico:

Rep. Darrell Issa, the top Republican on the House Oversight committee, is demanding a slew of documents from the Securities and Exchange Commission, asserting that the timing of civil charges against Goldman Sachs raises “serious questions about the commission’s independence and impartiality.” 

Issa’s letter, addressed to SEC Chairwoman Mary Schapiro and signed by eight other House Republicans, asks whether the commission had any contact about the case, prior to its public release, with White House aides, Democratic Party committee officials, or members of Congress or their staff. 

“[W]e are concerned that politics have unduly influenced the decision and timing of the commission’s controversial enforcement action against Goldman,” Issa writes. 

Of course they are concerned. Republicans wouldn't dream of ever taking political advantage, especially not regarding an issue as important as financial reform. Don't think that the millions of dollars they've taken from companies like Goldman Sachs would ever influence them to do anything other than what's best for America. 

They're probably trying to return that money right now, and if they can't, they'll go spend it on something that's not political, like strip clubs or private jet service.

And I'm sure that they're also concerned that Goldman, which only earned around $3.5 billion in the first three months of the year, won't be able to afford a decent attorney to defend itself against these charges. 

I'm not too concerned for them, myself. After all, not only are they too big to fail, but, as their CEO claims,  they're also "doing God's work."

Great. Now Let's Go Home

Color me unimpressed:

BAGHDAD — Prime Minister Nuri Kamal al-Maliki announced Monday that two top insurgent leaders had been killed, including a somewhat mythic figure who has operated under the name Abu Omar al-Baghdadi. Mr. Baghdadi has been reported dead or detained several times previously, and his very existence had been called into question a few years ago by American military leaders.

How many "top Al Qaeda leaders" have been captured or killed since the the war in Iraq began? The list is as long as it's unimpressive. Is this somehow supposed to reassure us that we're making progress in Iraq? Are we to believe that these two guys, whoever they are, won't be replaced immediately by two more?

It reminds me of the constant trumpeting of the arrest of major Mexican or Colombian drug lords, who are replaced just as immediately, and the arrest of whom makes absolutely no difference in the vain attempt to halt the flow of drugs to Americans who want them.

Both men were found in a hole in the ground.

“The security forces surrounded the hole, and when they got them out they were dead,” Mr. Maliki said at the news conference. Mr. Maliki said computers and letters were found that included communication between the men and Osama bin Laden.

I'm curious to know why they were dead. Were they just shot to death in cold blood? If so, why weren't they captured alive and tried? 

To the casual observer, this might seem like progress. But if you follow the history, you'll realize that these captures are meaningless. They should be ignored, and they aren't leading to any real change in the underlying situation in Iraq, which is still a complete disaster.

Ray LaHood Wants To Outlaw Cars...Or Something

Transportation Secretary Ray LaHood recently announced a new departmental policy which would recognize methods of transportation such as walking and biking as deserving the same opportunity for funding as driving.

Predictably, the defenders of the helpless oil and auto industries immediately attacked LaHood, going as far as to suggest that he was on drugs.

LaHood, of course, was not suggesting that we give biking and walking special treatment. He was just suggesting that we recognize that walking and biking are legitimate forms of transportation.

Of course, driving is already subsidized. The gas tax does not cover the cost of road construction, so money is taken from the general budget for that. But that's just the start of the massive subsidies that driving gets.

The United States has spent trillions of dollars and endured thousands of casualties as a result of the endless wars it now fights to ensure the supply of oil. This is a direct subsidy to oil companies, the auto industry, and drivers. 

Who pays for this subsidy? Well, people who walk and bike do. All Americans do, through the payment of taxes to fund these wars. And most importantly, millions of innocent people in places like Iraq, Afghanistan, Kyrgyzstan, Yemen, Saudi Arabia, and more pay for it with their lives.

Our current rate of oil consumption is, of course, unsustainable. It is devastating to our economy and to our national security. Our transportation policy currently favors the use of vehicles over any other mode of transportation. Ray LaHood just wants to give people who want to walk or bike a chance to do so. He wants to fund things like bike paths and walkways, or plowing those things in winter so they can be used year round. He is not trying to force anyone to walk or bike. It's a minor change of policy, and one that is long overdue.

He's trying to do his part to make America safer for its citizens and the rest of the world.

And for that, the defenders of corporate America, in their callousness, greed, and complete disregard for human life, laugh at him and accuse him of being a criminal. Will they ever have enough money?

That's how our political system works these days.

Whatever Happened To The Purple Heart?

I guess they phased those out along with body armor when it became clear that useless stealth fighters were more profitable.


This should make you sick:

For three years The Nation has been reporting on military doctors' fraudulent use of personality disorder to discharge wounded soldiers [see Kors, "How Specialist Town Lost His Benefits," April 9, 2007]. PD is a severe mental illness that emerges during childhood and is listed in military regulations as a pre-existing condition, not a result of combat. Thus those who are discharged with PD are denied a lifetime of disability benefits, which the military is required to provide to soldiers wounded during service. Soldiers discharged with PD are also denied long-term medical care. And they have to give back a slice of their re-enlistment bonus. That amount is often larger than the soldier's final paycheck. As a result, on the day of their discharge, many injured vets learn that they owe the Army several thousand dollars.

According to figures from the Pentagon and a Harvard University study, the military is saving billions by discharging soldiers from Iraq and Afghanistan with personality disorder.

It's not really surprising. No one really gives a damn about the troops once they come home. They're important when they are over there, of course, because you can justify invading foreign countries with some nonsense about supporting the troops. But when they come home, they're mostly just poorly-educated, lower-income citizens, and a large percentage of them are minority. Why would anyone care about a group of people like that?

You Had Your Chance, And YOU BLEW IT!

Simon Johnson on the Republican plan for financial reform:

At one level, it is good to see the Republican Senate leadership finally express clear positions on the financial industry and what we need in order to make it safer.  At another level, what they are proposing is downright scary.

In a Senate floor speech yesterday, Senator Mitch McConnell (Senate Republican leader) said,

"The way to solve this problem is to let the people who make the mistakes pay for them. We won’t solve this problem until the biggest banks are allowed to fail.”

Do not be misled by this statement.  Senator McConnell’s preferred approach is not to break up big banks; it’s to change nothing now and simply promise to let them fail in the future. 

What makes McConnell's plan not only foolish, but dishonest as well, is the fact that he has already had the chance to let these big banks fail, back in October 2008. So what did he do then?

He voted to bail them out!

The Republicans can talk all day long about how important it is to "let the market decide", and to let these banks fail, but what every single person with even a passing familiarity with the subject knows is that, when the United States Congress is faced with the choice of:

A) Allowing the financial industry to collapse, and doing nothing while tens of millions more Americans lose their jobs in what is sure to be a worse disaster than the previous one 

or

B) Voting to avert complete collapse by handing over trillions of middle class tax dollars to the very corporations which are funding their campaigns, and whom they hope to work for when they leave Congress

they sure as hell aren't going to let these banks fail. And the market knows this. Major Wall Street firms are getting funding at rates which reflects the fact that knowledgeable operators have zero doubt that our government will not let them fail. And Mitch McConnell knows this, too.

But what does he care? When taxpayers finally wise up after the next bailout, he'll probably still have 4 years left in his term, and then he'll just go make a hundred million or so "consulting" for Citibank or Wells Fargo like Robert Rubin did after his "public service" as Treasury Secretary.

I suppose he's doing it for the children. His children, that is.

Still Making Terrorists

(Posting will be a little light, as I'm on the road for a month.)

This just happened:

KABUL, Afghanistan — American troops raked a large passenger bus with gunfire near Kandahar on Monday morning, killing and wounding civilians, and igniting angry anti-American demonstrations in a city where winning over Afghan support is pivotal to the war effort.

This really shouldn't be too surprising, I suppose. Innocent people get killed all the time during war. There's no using in wondering why these troops wouldn't bother to try something else before just opening fire. You can't arm a bunch of 20 year olds with automatic weapons, give them a license to kill, and then profess surprise when they do it. And it's not the first time it's happened, either.

General McChrystal has sought to emphasize to troops how such cases undermine Afghan support. But he has also stressed his sympathy for troops who have to make critical decisions in an instant.

“We really ask a lot of our young service people out on checkpoints because there’s danger, they’re asked to make very rapid decisions in often very unclear situations,” he told troops in a video conference last month.

“However, to my knowledge, in the nine-plus months I’ve been here, not a single case where we have engaged in an escalation of force incident and hurt someone has it turned out that the vehicle had a suicide bomb or weapons in it and, in many cases, had families in it.”

Please remind me once again what our goal in Afghanistan actually is. If we're there to wipe out Al Qaeda, well they aren't there anymore. They moved over to Yemen, and if we invade Yemen they'll just go somewhere else. 

So what are we doing? Saving the Afghan people from the Taliban? They are the Taliban, and the more we terrorize the population by doing unavoidable things like opening fire on buses, the better the Taliban looks. 

Here's what we are actually accomplishing in Afghanistan (and Iraq, and Yemen, and Somalia.) We are creating thousands of angry people, who become suicidal with grief and rage. After that, it's just a matter of Al Qaeda operatives strapping the bombs onto them and pointing them in the direction of Americans, or anyone else who looks like an easy target. Listen to the father of two men who, along with their pregnant wives, were murdered in cold blood by US Special forces, who woke them in the middle of the night and shot them on the basis of some rumor from someone who didn't like them:

The father of the two brothers who were killed in the raid adds, "My heart is burning. I will take revenge, no matter what happens to me."

and

"I have lost patience. I am obliged to revenge my martyrs," he told an ABC News cameraman on March 18. "I will destroy everything I have and will launch my own suicide attack. My heart is burning."

When the Special Forces entered that home, there was one big family and no terrorists. When they left, the family was murdered, and there was a terrorist left behind.

This may not be our mission, but we are accomplishing it nonetheless.