The protectors of Wall Street criminality

Matt Taibbi has a new article in the latest issue of Rolling Stone whose title Is the SEC Covering Up Wall Street Crimes? pretty much says it all.

It recounts the story of Darcy Flynn, a staff attorney at the SEC (the Securities and Exchange Commission that is supposed to regulate Wall Street) who blew the whistle about how the SEC has been systematically destroying documents about matters that it had investigated, thus destroying the chances of seeing patterns of criminal behavior.

Imagine a world in which a man who is repeatedly investigated for a string of serious crimes, but never prosecuted, has his slate wiped clean every time the cops fail to make a case. No more Lifetime channel specials where the murderer is unveiled after police stumble upon past intrigues in some old file – “Hey, chief, didja know this guy had two wives die falling down the stairs?” No more burglary sprees cracked when some sharp cop sees the same name pop up in one too many witness statements. This is a different world, one far friendlier to lawbreakers, where even the suspicion of wrongdoing gets wiped from the record.

That, it now appears, is exactly how the Securities and Exchange Commission has been treating the Wall Street criminals who cratered the global economy a few years back.

The article also relates how the SEC is particularly prone to the revolving door, where SEC regulators get lucrative jobs at the very firms that they are supposed to be regulating, and then come back and lobby their colleagues to drop investigations.

Cenk Uygur talks with Matt Taibbi about the revolving door following an earlier article by Taibbi.

Welcome to World War III

How bad is the economic warfare being waged by the oligarchy on the rest of us? Bad enough that David DeGraw calls it World War III. He has published a book The Road Through 2012: Revolution or World War III (to be released on September 28, 2011).

Here is the abstract of a long paper based on the book that lays out the gruesome details.

Despite increasing personal financial hardship, most Americans remain unaware of the economic world war currently unfolding. An all-pervasive corporate and government propaganda campaign has effectively obscured this blatant reality. After extensive analysis, it is evident that World War III is a war between the richest one-tenth of one percentof the global population and 99.9 percent of humanity. Or, as I have called it, The Economic Elite Vs. The People. This war has been a one-sided attack thus far. However, as we have seen throughout the world in recent months, the people are beginning to fight back.

You can read a condensed version here.

How John McCain destroyed the Republican party (and Tim Pawlenty)

When the history of the Republican party is written, John McCain will have to share the brunt of the blame for its demise, and the central piece of evidence will be his choice of Sarah Palin as his running mate in 2008. To support this contention, I am going to indulge myself with a highly self-referential post.

I wrote on September 3, 2008, soon after he announced her selection:

Someone once said that the most common last words expressed by reckless men before they do something stupid is: “Hey guys, watch this!” The McCain decision strikes me as exactly one of those ideas, something that looks bold and daring and exciting in the heat of a brainstorming session where a few people are trying to “think outside the box” and make a stunning impression, but where all the negatives only show up in the cold light of day. It is then that you realize that there is a very thin line separating ‘thinking outside the box’ from ‘being out of your mind’.

I think that this decision is going to haunt McCain. His and her ardent supporters are trying to put on a good face and saying that this move is a ‘game changer’. I think they are right but not in a good way for him. It risks changing a narrow race into a blowout victory for Obama.

And so it turned out.

I believe that the seeds of Tim Pawlenty’s failure as a presidential candidate were also planted by that same event. As I wrote a few days after the 2008 election:

On election night, Minnesota governor Tim Pawlenty, one of the reported four finalists to be McCain’s running mate, was interviewed just after Obama had become elected. I knew the others in the running (Joe Lieberman and Tom Ridge) and I could see why the campaign might not be excited about them, since they both seemed kind of dull and stodgy, not adding much to McCain’s appeal. But I had never seen Pawlenty before and he seemed to me to have many of Palin’s positives (youth and energy and ideology) without all of her obvious negatives.

Pawlenty spoke fluently and well about the issues that drove the campaign, and graciously about Obama. Furthermore he is an evangelical Christian and is solidly in step with their anti-abortion, anti-gay agenda, although in the early 1990s he was not quite as hard-line. As he spoke, I became increasingly mystified as to why McCain had overlooked him for Palin.

But while being the vice-presidential candidate in 2008 would undoubtedly have helped Pawlenty in 2012, it was not being overlooked that hurt him so badly. The real problem was that the Palin selection opened a Pandora’s box within the Republican party, releasing furies that have divided the party and in the process destroyed his presidential hopes. As I predicted in November 2008:

This is where the battle lines are going to be drawn within the Republican party. What is happening now is that the culture wars that were used in the fights against Democrats is becoming a weapon to be used within the Republican Party, to determine who the ‘real Republicans’ are. The Southern strategy tactics of dividing the country on cultural issues that worked so well for the Republicans on the national level for nearly four decades, has now suddenly turned in on itself and is being used to divide up the party internally in order to see who will lead it and in what direction it will go.

This is why the jockeying for leadership within the Republican party will be interesting to watch, as various candidates try to keep their names in the public eye while at the same time trying to gauge which way the wind is blowing.
…
Minnesota governor Tim Pawlenty, who was short-listed as a possible vice-presidential candidate, might serve the bill. He seems to have the required positions on social issues such as abortion, gay rights and stem-cell research, though he does not seem to flaunt his religion, perhaps because of that famous Minnesota reserve.

But earlier in his career he had softer stands on abortion and stem-cell research and supported anti-discrimination laws against gays. He is also one of the few evangelicals to support actions to combat global warming, and these will hurt him with the true believers.

While Pawlenty should be acceptable to the social values base of the party, it is not clear if he gives out that special frequency signal that only true believers can hear that enables them to identify those who are truly one of them and thus support them enthusiastically.

We now know the answer to that last question: No. For Michele Bachmann, the answer is yes.

The final nail that McCain drove into the Republican party coffin is that by putting one of their own into the running mate slot, he gave the social base their first real taste of power. Until then, they had been successfully manipulated by the Republican leadership into delivering their votes and energy to the establishment candidates the party chose, while being kept out of leadership positions. That changed in 2008. As I wrote in July 2009:

The old-style conservatives seem to have been routed and are even more marginalized than before. At this stage, they look like people unhappy with what the Republican Party has become and not sure if they can bring it back to what they see as sanity or whether it is hopelessly under the control of nutcases and they need to look for a new home.
…
The second group [the rank-and-file social values base for whom guns, gays, abortion, stem-cell research, flag, religion, homosexuality, and immigration are the main concerns] has not grown larger but has grown more militant. It is digging in its heels and demanding to be in the party leadership and will not go back to their former role as mere foot soldiers. This group has always been made use of by their party leaders but never given a real shot at leadership. McCain’s choice of Palin changed that. For the first time, they felt that one of their own was close to the driver’s seat and they are not returning to the back of the bus.

And so it has turned out. We saw the rise of the Tea Party as the manifestation of this phenomenon. We now see candidates for the nomination swearing fealty to the most extreme positions of this group. It seems obvious that the Republican party establishment is worried that they have lost control of their party’s agenda to a bunch of loonies. Republican David Frum has been quite harsh about the direction his party has taken, and the desperate search for a ‘savior candidate’ (Paul Ryan or even people like Chris Christie and Mitch Daniels who have been emphatic about not seeking the nomination) are further symptoms of this unease.

The oligarchy cannot be happy about this development. They need both party leaderships to be smooth manipulators of the system who can deliver the fiscal and economic policies that enrich them under cover of the noise generated by extreme social policies, so that whichever party wins, the oligarchy’s interests are advanced. They are not social issues ideologues that believe in the crazy policies and slogans that are used to inflame voters, particularly at election time. As the process moves forward, it will be interesting to see how the oligarchs try to shoot down the candidates they dislike and advance the candidacies of ‘sensible’ people like Romney or Huntsman.

This is the headache that John McCain created for the Republican party with his impulsive and ill-thought out decision in 2008.

Last place aversion

One of the enduring mysteries is why so many struggling poor people in the US are opposed to government programs that would assist people just like them. The Economist reports on recent studies that shed new light on this odd phenomenon. (via Boing Boing)

Economists have usually explained poor peoples counter-intuitive disdain for something that might make them better off by invoking income mobility. Joe the Plumber might not be making enough to be affected by proposed hikes in tax rates on those making more than $250,000 a year, they argue, but he hopes some day to be one of them. This theory explains some cross-country differences, but it would also predict increased support for redistribution as income inequality widens. Yet the opposite has happened in America, Britain and other rich countries where inequality has risen over the past 30 years.

Instead of opposing redistribution because people expect to make it to the top of the economic ladder, the authors of the new paper argue that people don’t like to be at the bottom. One paradoxical consequence of this “last-place aversion” is that some poor people may be vociferously opposed to the kinds of policies that would actually raise their own income a bit but that might also push those who are poorer than them into comparable or higher positions. The authors ran a series of experiments where students were randomly allotted sums of money, separated by $1, and informed about the “income distribution” that resulted. They were then given another $2, which they could give either to the person directly above or below them in the distribution.

In keeping with the notion of “last-place aversion”, the people who were a spot away from the bottom were the most likely to give the money to the person above them: rewarding the “rich” but ensuring that someone remained poorer than themselves. Those not at risk of becoming the poorest did not seem to mind falling a notch in the distribution of income nearly as much. This idea is backed up by survey data from America collected by Pew, a polling company: those who earned just a bit more than the minimum wage were the most resistant to increasing it.

Poverty may be miserable. But being able to feel a bit better-off than someone else makes it a bit more bearable.

Ron Paul, Gary Johnson, and the media narrative

The Daily Show had an excellent piece on the extreme lengths that the media have gone to in ignoring Ron Paul’s candidacy for the Republican nomination, that reached comical levels following his near tie with Michele Bachmann in the Ames straw poll.

Glenn Greenwald points out that both Paul and former two-term New Mexico governor Gary Johnson have been effectively declared non-persons and makes the persuasive case that this is because neither of them fit into the pre-ordained media narrative because of their stances on war and civil liberties.

[W]hat makes the media most eager to disappear Paul is that he destroys the easy, conventional narrative — for slothful media figures and for Democratic loyalists alike. Aside from the truly disappeared former New Mexico Governor Gary Johnson (more on him in a moment), Ron Paul is far and away the most anti-war, anti-Surveillance-State, anti-crony-capitalism, and anti-drug-war presidential candidate in either party. How can the conventional narrative of extremist/nationalistic/corporatist/racist/warmongering GOP v. the progressive/peaceful/anti-corporate/poor-and-minority-defending Democratic Party be reconciled with the fact that a candidate with those positions just virtually tied for first place among GOP base voters in Iowa? Not easily, and Paul is thus disappeared from existence. That the similarly anti-war, pro-civil-liberties, anti-drug-war Gary Johnson is not even allowed in media debates — despite being a twice-elected popular governor — highlights the same dynamic.
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GOP primary voters are supporting a committed anti-war, anti-surveillance candidate who wants to stop imprisoning people (disproportionately minorities) for drug usage; Democrats, by contrast, are cheering for a war-escalating, drone-attacking, surveillance-and-secrecy-obsessed drug warrior.

Greenwald also makes the important point is that the media pouring so much resources into covering the trivialities of politics during the interminably long election cycle (now lasting 18 months) means that government can act without much scrutiny during that time.

NPR’s Talk of the Nation on the Monday following the straw poll, devoted a large segment of their program to discussing the candidacies of Michele Bachmann and Rick Perry, showing that they follow the media herd as well. They had to fend off questions from annoyed listeners as to why they were ignoring Paul. The host’s weak response was that they were focusing on the ‘new’ people who were getting the ‘buzz’ and that Paul did not fit the category.

Justin Raimondo also looks at what the media silence on Paul’s candidacy says about their agenda, and how the very brazen way in which they are deliberately ignoring Paul is now becoming a story in itself.

The media’s refusal to report Paul’s growing support, beyond grudging acknowledgement that he’s come in from “the fringe,” reflects its institutional bias in favor of the right-left red-blue narrative that has, up until now, dominated American politics, and in which so much of the news industry is heavily invested. This narrative doesn’t allow for any significant deviations, and certainly not on the presidential level: all must submit to its tyranny, in spite of its archaic and increasingly obstructionist character. What it obstructs is any meaningful challenge to the functioning of the Welfare-Warfare State. If one party is in power, welfare is given more weight than warfare, if the other takes the throne, then welfare is given the axe. In any case, these two aspects of the modern American state are inextricably intertwined, as “defense” spending in the age of empire becomes just another dollop of pork to be ladled out to corporate and political interests – and welfare becomes a way to keep the disgruntled quiescent in wartime.

Think of the media as the Greek chorus to the two “majors,” with different media actors cheerleading one party and razzing the other – but never straying outside the bounds of the red-blue narrative, with its rigid definitions and litmus tests. This mindset is encoded in the two-party system, and institutionalized in our ballot access laws, which privilege the two “major” parties – the very same two parties that have led us down the path to endless war and imminent bankruptcy, and are now running away from their dual responsibility for the present crisis.

Roger Simon also thinks that Paul is getting shafted and finds some telling clues about how political narratives are structured.

There was a deliciously intriguing line in The Washington Post‘s fine recap of Ames on Sunday. It said had Paul edged out Bachmann, “it would have hurt the credibility and future of the straw poll, a number of Republicans said.”

So don’t blame the media. Here are Republicans, presumably Republican operatives, who said if one candidate wins, the contest is significant, but if another wins the contest is not credible.

I myself have mixed feelings about Ron Paul. I like the fact that he opposes all these wars that the US is waging and the militarization of foreign policy and his civil libertarian and anti-Wall Street stances. I dislike his positions on some social issues, find his desire to eliminate almost all of government too extreme, and do not understand economics well enough to confidently judge his desire to return the US to the gold standard. But there is no doubt that he is far and away the candidate who discusses the issues most substantively and not in clichés and sound bites aimed at pandering to the base. He undoubtedly elevates the level of political debate. But that is another reason for the media to ignore him. It would require them to actually talk about monetary and foreign policy and other boring stuff. It is much easier and way more fun to talk about Michele Bachmann’s husband or Sarah Palin’s latest publicity-seeking stunt or Rick Perry’s swagger.

I hope that Paul does well if for no other reason than to have the smug condescending looks of the media establishment wiped off their faces.

The secret life of L. Ron Hubbard

British television had a series in 1997 called Secret Lives and one program was about L. Ron Hubbard, founder of the Church of Scientology. It is quite fascinating.

Some supporters of religion argue that the very fact that their religion has lasted so long and spread so widely must mean that there must be something to it. But if people now, with all the information at their disposal, can be suckered by an obvious conman like Hubbard into following his religion, it should not be surprising that people a couple of thousand years ago fell for it too. Joseph Smith and the Mormons is another good example of how modernity does not inoculate the gullible against hucksters.

(Thanks to Norm)