November 20, 2012

Self-Interest and the Pathology of Power: the Corruption of America Part 2

http://www.oftwominds.com/blogfeb12/pathology-of-power02-12.html

The self-interest of the alcoholic is to keep drinking. Is this truly in his best interests? The answer illuminates the pathology of power in America.

If we ignore the lip-service showered on "reform," we find that there is really only one strategy in America: extend and pretend. Individuals, households, communities, cities, states, enterprises and the vast sprawling Empire of the Federal government and its many proxies--all are engaged in extend and pretend.

The closest analog is a seriously ill alcoholic who tells himself he just has a hang-over when it's abundantly clear he is suffering from potentially terminal cancer. With a hang-over, extend and pretend is the only strategy that works: you can try various "magic potions" to relieve the symptoms, but the only real cure is to give the body enough time to cleanse itself of the toxins you've created and pretend to be functioning in the meantime. In the case of aggressive cancer, then extend and pretend is the worst possible strategy: ignoring the rapid progression of the disease only makes eventual treatment more difficult and uncertain. The only way to treat cancer is to face it straight-on, learn as much as you can about the disease and the spectrum of treatments, consider the side-effects and consequences of various treatment strategies, and then get to work radically transforming your entire life, mind, body and spirit to effect the cure. Why do we perpetrate the delusion of a hang-over when it's painfully clear we have cancer? We're afraid, of course; we fear the unknown and find comfort in the belief that nothing has to really change. We call this denial, but it arises from fear and risk aversion.

In the moment, amidst all the swirling chaos of fear and uncertainty, we choose extend and pretend because it seems to be in our self-interest. This is the ontology of extend and pretend: a delusional view of our self-interest. The drunk is terrified of not being able to drink himself into a stupor; in that dysfunctional state of being, then he perceives his self-interest as denying he has cancer because he knows that treatment will require him to stop drinking. In effect, what he perceives as acting in his self-interest is actually an act of self-destruction. Political and social revolutions occur when the productive classes realize the Status Quo no longer serves their self-interests. In other words, the revolution is first and foremost an internal process of recognition and enlightenment: all the propaganda issued by the Status Quo, i.e. that it serves the best interests of the productive classes, is finally recognized as false. As this awakening begins, a divergence between the definitions of self-interest by the Power Elites (financial and political) and the productive classes begins to open. This is extremely dangerous to the Power Elites, who are fundamentally parasitical and predatory: their wealth and power all flow from the labor, taxes, debt service and passivity/complicity of the productive classes.

.......................................................................................

The Power Elites' time-honored strategy to protect their own wealth and grip on power has three components: one is to pursue a strategy of pervasive, ceaseless propaganda to persuade the productive classes that the system is sound, fair and working for them; the second is to fund diversionary "bread and circuses" for the potentially troublesome lower classes, and the third is to harden the fiefdoms of power and wealth into an aristocracy that is impervious to the protests of debt-serfs and laborers below. In addition to "the system is working for you" social control myth, the wealth/power aristocracy also invokes various fear-based social control myths: external enemies are threatening us all, so ignore your debt-serfdom and powerlessness, etc. In the ideal Power Elite scenario, a theocracy combines faith and State: not only is it illegal to resist the Aristocracy, you will suffer eternal damnation for even thinking about it.

Ask yourself this: how much influence do you as a citizen, voter and taxpayer have over the Federal Reserve? If we're honest, we must confess that the Federal Reserve is as remote to us as any branch of the North Korean government: we have zero influence over it, and the same can be said of our elected representatives. This is the definition of an aristocracy, oligarchy (a power structure in which power is held by a small number of people), kleptocracy, etc. The Power Elite has a key advantage over the citizenry: its own self-interest is clear. The citizenry must entertain this question: is the Status Quo really working for me or not? The Power Elite aristocracy has no such confusion: the Status Quo is working beautifully for them, and the only threat to their wealth and power is the possibility that the productive classes might opt out and stop paying the taxes and debt service which funds the parasitical Power Elite. Thus the Power Elite has a single goal: to persuade and coerce the citizenry into accepting their powerlessness and debt-serfdom as a pathological form of self-interest.

There is another dynamic to the Power Elite aristocracy's grip on concentrated wealth and power: the self-selecting, self-perpetuating pathology of the aristocracy and the Upper Caste that so slavishly serves them. Author Chris Sullins identified this dynamic as one of self-propagating fractals (The MacRib is Back! September 23, 2008):



Once a populace accepts a self-definition that strips out their participation as anything but passive consumers, then the maintenance of power boils down to test-marketing new social control myths and fear-mongering. This sophisticated level of marketing and predation requires a highly trained class of servants: an Upper Caste of technocrats, middle managers, marketers, lobbyists, "creatives," engineers, etc. who do the heavy lifting that keeps the Power Elite's wealth and status not just intact but expanding. The reward for this service is a hefty salary that enables the purchase of the signifiers of upper-middle class existence and an intoxicating proximity to power and status visibility, i.e. some measure of recognition as "being somebody important." Until very recently I reckoned this Upper Caste of loyal servants comprised about 20% of the American populace, but upon closer examination of various levels of wealth and analysis of advert targeting (adverts only target those with enough money/credit to buy the goods being offered), I now identify the Upper Caste as only the top 10% (the aristocracy is at most the top 1/10th of 1%). Wealth and income both fall rather precipitously below the top 10% line, and as globalization and other systemic forces relentlessly press productivity into fewer hands, then the rewards aggregate into a smaller circle of laborers. As noted yesterday in Social Fractals and the Corruption of America (February 8, 2012), you cannot aggregate healthy, thrifty, honest, caring and responsible people into a group that is dysfunctional, spendthrift, venal and dishonest unless those individuals have themselves become dysfunctional, spendthrift, venal and dishonest. This is the ontology of the pathology of power: If you want to join the elite levels of the Upper Caste, where "doing God's work" is a daily practice of fraud, embezzlement, misrepresentation, collusion, purposeful obfuscation, all in service of a pathologically self-destructive notion of self-interest, then you must become dysfunctional, venal and dishonest (with becoming spendthrift in service of acquiring signifiers of status a close fourth).

Since non-pathological people will quit or be fired, then these fractals of corruption are self-selecting and self-perpetuating. This is true not just of financial America but of elected officialdom. Anyone who is still naive or delusional enough to think that getting elected to Congress or the state legislature will empower "doing good" will soon learn the ropes: the next election is less than two years away, and if you want to retain your grip on power you're going to need a couple million dollars. And if you want to "get something done," you will need to take orders from your party leadership and service your donors.

MORE

ANOTHER GEM FROM THE PAST--FEBRUARY, TO BE EXACT

November 19, 2012

About the Poor and Taxes MUST READ AND BOOKMARK AND COMMIT TO MEMORY

http://jessescrossroadscafe.blogspot.com/2012/07/about-poor-and-taxes.html

I see a push coming from the fortunate again, the ones who have been rewarded by the system as it has been, to 'scrap the tax system' and go to a lower flat tax, or even better, a much lower but general consumption tax. Whatever benefits them the most. And economics is a handmaiden flexible and malleable enough to provide them whatever rationale is required to support their arguments.

But the truth is that a consumption tax falls particularly hard on those with the least disposable income, who must still buy the necessities of life. A flat tax is not much better, for much the same reason. The burden falls disproportionately on those who can bear it the least.

I should add that a shift from an income to a consumption tax is a great idea if you would like to stimulate and subsidize a new bubble in speculative financial paper that would bring down the financial system once and for all when it collapses...

The problem with the tax system we have today is that there are so many loopholes and ways to avoid taxes for those with the most power and money. It really is more of a scandal than you might know. It encourages and rewards expoitative behaviour and foments financial corruption. Until you have some serious walking around money, and it draws in the lawyers and accountants, one does not see what a racket the current system is, and how well it serves those 'in the know,' to the disadvantage of everyone else...

November 16, 2012

Weekend Economists Under the Influence of Saturn, November 16-18, 2012

Saturday, I say goodbye to my dear friend:



This isn't the actual car, but the 1994 Saturn SL1 that kept me going for several years and 95,000 miles (I bought it with 117,000 from the original owner) is very like it...a little more battered, and unless gifted with a new engine, permanently immobile.

The Saturn was a new concept in American automobiles: it was designed to compete with the sporty, sleek, small Japanese brands that were taking over the American market. And it did! Even today, there are Saturns all over Michigan's highways. Except for my old friend...

The Saturn was designed by engineers, and you could tell. It ran like a champ...my baby never died until AFTER I finished my daily paper route, and the mechanics could fix it quickly and cheap. It had a lot fewer parts than most cars...there were parts in the Volvo (before Ford) that I'd never heard of before or since.

So Demeter is in mourning....the baby got its death sentence in June, and I've grieved enough to let go (more like, got enough more pressing problems out of the way so that I can deal with this one...)

November 13, 2012

British Have Invaded Nine Out of Ten Countries By Jasper Copping

http://www.telegraph.co.uk/history/9653497/British-have-invaded-nine-out-of-ten-countries-so-look-out-Luxembourg.html



...A new study has found that at various times the British have invaded almost 90 per cent of the countries around the globe. The analysis of the histories of the almost 200 countries in the world found only 22 which have never experienced an invasion by the British...The analysis is contained in a new book, All the Countries We've Ever Invaded: And the Few We Never Got Round To. Stuart Laycock, the author, has worked his way around the globe, through each country alphabetically, researching its history to establish whether, at any point, they have experienced an incursion by Britain.

Only a comparatively small proportion of the total in Mr Laycock's list of invaded states actually formed an official part of the empire. The remainder have been included because the British were found to have achieved some sort of military presence in the territory – however transitory – either through force, the threat of force, negotiation or payment. Incursions by British pirates, privateers or armed explorers have also been included, provided they were operating with the approval of their government. So, many countries which once formed part of the Spanish empire and seem to have little historical connection with the UK, such as Costa Rica, Ecuador and El Salvador, make the list because of the repeated raids they suffered from state-sanctioned British sailors.

Among some of the perhaps surprising entries on the list are:

* Cuba, where in 1741, a force under Admiral Edward Vernon stormed ashore at Guantánamo Bay. He renamed it Cumberland Bay, before being forced to withdraw in the face of hostile locals and an outbreak of disease among his men. Twenty one years later, Havana and a large part of the island fell to the British after a bloody siege, only to be handed back to the Spanish in 1763, along with another unlikely British possession, the Philippines, in exchange for Florida and Minorca.

*Iceland, invaded in 1940 by the British after the neutral nation refused to enter the war on the Allies side. The invasion force, of 745 marines, met with strong protest from the Iceland government, but no resistance.

* Vietnam, which has experienced repeated incursions by the British since the seventeenth century. The most recent – from 1945 to 1946 – saw the British fight a campaign for control of the country against communists, in a war that has been overshadowed by later conflicts involving first the French and then Americans.

It is thought to be the first time such a list has been compiled. Mr Laycock, who has previously published books on Roman history, began the unusual quest after being asked by his 11-year-old son, Frederick, how many countries the British had invaded. After almost two years of research he said he was shocked by the answer. "I was absolutely staggered when I reached the total. I like to think I have a relatively good general knowledge. But there are places where it hadn't occurred to me that these things had ever happened. It shocked me.

"Other countries could write similar books – but they would be much shorter. I don't think anyone could match this, although the Americans had a later start and have been working hard on it in the twentieth century."

The only other nation which has achieved anything approaching the British total, Mr Laycock said, is France – which also holds the unfortunate record for having endured the most British invasions. "I realise people may argue with some of my reasons, but it is intended to prompt debate," he added. He believes the actual figure may well be higher and is inviting the public to get in touch to provide evidence of other invasions. In the case of Mongolia, for instance – one of the 22 nations "not invaded", according to the book – he believes it possible that there could have been a British invasion, but could find no direct proof. The country was caught up in the turmoil following the Russian Revolution, in which the British and other powers intervened. Mr Laycock found evidence of a British military mission in Russia approximately 50 miles from the Mongolian border, but could not establish whether it got any closer. The research lists countries based on their current national boundaries and names. Many of the invasions took place when these did not apply...




The countries never invaded by the British:

Andorra

Belarus

Bolivia

Burundi

Central African Republic

Chad

Congo, Republic of

Guatemala

Ivory Coast

Kyrgyzstan

Liechtenstein

Luxembourg

Mali

Marshall Islands

Monaco

Mongolia

Paraguay

Sao Tome and Principe

Sweden

Tajikistan

Uzbekistan

Vatican City

November 9, 2012

Weekend Economists Get Away from it All November 9-12, 2012

Are you shuddering at the thought of 6 months of ice and snow? Or Xmas sales and muzak? Do you ever want to escape?



How far do you want to go?



As a sci-fi fan, I've been to worlds and galaxies near and far, and alternate time streams, but somehow, always end up back here.



Generally after the Xmas sales....

November 9, 2012

It’s the Interest, Stupid! Why Bankers Rule the World

http://www.alternet.org/economy/its-interest-stupid-why-bankers-rule-world?akid=9666.227380.9bsrU0&rd=1&src=newsletter741850&t=8

Banking and credit should become public utilities, feeding the economy rather than feeding off it. In the 2012 edition of Occupy Money released last week, Professor Margrit Kennedy writes that a stunning 35% to 40% of everything we buy goes to interest. This interest goes to bankers, financiers, and bondholders, who take a 35% to 40% cut of our GDP. That helps explain how wealth is systematically transferred from Main Street to Wall Street. The rich get progressively richer at the expense of the poor, not just because of “Wall Street greed” but because of the inexorable mathematics of our private banking system.

This hidden tribute to the banks will come as a surprise to most people, who think that if they pay their credit card bills on time and don’t take out loans, they aren’t paying interest. This, says Dr. Kennedy, is not true. Tradesmen, suppliers, wholesalers and retailers all along the chain of production rely on credit to pay their bills. They must pay for labor and materials before they have a product to sell and before the end buyer pays for the product 90 days later. Each supplier in the chain adds interest to its production costs, which are passed on to the ultimate consumer. Dr. Kennedy cites interest charges ranging from 12% for garbage collection, to 38% for drinking water to, 77% for rent in public housing in her native Germany.

Her figures are drawn from the research of economist Helmut Creutz, writing in German and interpreting Bundesbank publications. They apply to the expenditures of German households for everyday goods and services in 2006; but similar figures are seen in financial sector profits in the United States, where they composed a whopping 40% of U.S. business profits in 2006. That was five times the 7% made by the banking sector in 1980. Bank assets, financial profits, interest, and debt have all been growing exponentially.



Exponential growth in financial sector profits has occurred at the expense of the non-financial sectors, where incomes have at best grown linearly.



By 2010, 1% of the population owned 42% of financial wealth , while 80% of the population owned only 5% percent of financial wealth. Dr. Kennedy observes that the bottom 80% pay the hidden interest charges that the top 10% collect, making interest a strongly regressive tax that the poor pay to the rich...

MORE AT LINK AND MUST READ!

November 8, 2012

No Conspiracy Theory -- A Small Group of Companies Have Enormous Power Over the World

http://www.alternet.org/world/no-conspiracy-theory-small-group-companies-have-enormous-power-over-world?akid=9662.227380.MVMuRP&rd=1&src=newsletter741068&t=10&paging=off


In October of 2011, New Scientist reported that a scientific study on the global financial system was undertaken by three complex systems theorists at the Swiss Federal Institute of Technology in Zurich, Switzerland. The conclusion of the study revealed what many theorists and observers have noted for years, decades, and indeed, even centuries: “An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.” As one of the researchers stated, “Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market… Our analysis is reality-based.” Using a database which listed 37 million companies and investors worldwide, the researchers studied all 43,060 trans-national corporations (TNCs), including the share ownerships linking them.[1~footnotes at the end of the article]
The mapping of ‘power’ was through the construction of a model showing which companies controlled which other companies through shareholdings. The web of ownership revealed a core of 1,318 companies with ties to two or more other companies. This ‘core’ was found to own roughly 80% of global revenues for the entire set of 43,000 TNCs. And then came what the researchers referred to as the “super-entity” of 147 tightly-knit companies, which all own each other, and collectively own 40% of the total wealth in the entire network. One of the researchers noted, “In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network.” This network poses a huge risk to the global economy, as, “If one [company] suffers distress… this propagates.” The study was undertaken with a data set established prior to the economic crisis, thus, as the financial crisis forced some banks to die (Lehman Bros.) and others to merge, the “super-entity” would now be even more connected, concentrated, and problematic for the economy.[2]

The top 50 companies on the list of the “super-entity” included (as of 2007):

Barclays Plc (#1), Capital Group Companies Inc (#2), FMR Corporation (#3), AXA (#4), State Street Corporation (#5), JP Morgan Chase & Co. (#6), UBS AG (#9), Merrill Lynch & Co Inc (#10), Deutsche Bank (#12), Credit Suisse Group (#14), Bank of New York Mellon Corp (#16), Goldman Sachs Group (#18), Morgan Stanley (#21), Société Générale (#24), Bank of America Corporation (#25), Lloyds TSB Group (#26), Lehman Brothers Holdings (#34), Sun Life Financial (#35), ING Groep (#41), BNP Paribas (#46), and several others.[3]

In the United States, five banks control half the economy: JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs Group collectively held $8.5 trillion in assets at the end of 2011, which equals roughly 56% of the U.S. economy. This data was according to central bankers at the Federal Reserve. In 2007, the assets of the largest banks amounted to 43% of the U.S. economy. Thus, the crisis has made the banks bigger and more powerful than ever. Because the government invoked “too big to fail,” meaning that the big banks will be saved because they are very important, the big banks have incentive to make continued and bigger risks, because they will be bailed out in the end. Essentially, it’s an insurance policy for criminal risk-taking behaviour. The former president of the Federal Reserve Bank of Minneapolis stated, “Market participants believe that nothing has changed, that too-big-to-fail is fully intact.” Remember, “market” means the banking cartel (or “super-entity” if you prefer). Thus, they build new bubbles and buy government bonds (sovereign debt), making the global financial system increasingly insecure and at risk of a larger collapse than took place in 2008.[4] When politicians, economists, and other refer to “financial markets,” they are in actuality referring to the “super-entity” of corporate-financial institutions which dominate, collectively, the global economy. For example, the role of financial markets in the debt crisis ravaging Europe over the past two years is often referred to as “market discipline,” with financial markets speculating against the ability of nations to repay their debt or interest, of credit ratings agencies downgrading the credit-worthiness of nations, of higher yields on sovereign bonds (higher interest on government debt), and plunging the country deeper into crisis, thus forcing its political class to impose austerity and structural adjustment measures in order to restore “market confidence.” This process is called “market discipline,” but is more accurately, “financial terrorism” or “market warfare,” with the term “market” referring specifically to the “super-entity.” Whatever you call it, market discipline is ultimately a euphemism for class war.[5]

MUST READ! MUCH MORE AT LINK

November 5, 2012

The Corporate Masters of the Universe By Thom Hartmann and Sam Sacks

http://truth-out.org/opinion/item/12512-the-corporate-masters-of-the-universe

First the corporate masters of the universe came for Greece, and we here in the United States did nothing.

We watched with silence as corporate technocrats toppled the democratic government of Prime Minister George Papandreou and forced austerity on the Greek people against their will. We said nothing as unemployment rates spiraled out of control and suicide rates shot up 40%. We didn't flinch when a Greek pensioner walked up to Parliament and shot himself in the head, leaving behind a letter blaming austerity that read, "I cannot find any other form of struggle except a dignified end before I have to start scrounging for food from rubbish bins."

This week, the Conservative Greek government unveiled a new round of austerity cuts for the Greek people, who've already lost their universal healthcare system to the bankster masters. Pensioners and public workers will again be hit the hardest, just so these corporate masters can collect their returns on their failed investments.

And none of us here in the United States are asking any questions as Greece descends into chaos. The main question being, "What's the point of austerity?" As influential Canadian lawyer Demitri Lascaris exposed recently on TRNN.com, austerity has nothing to do with paying down Greek's debt...

MUST READ! MORE AT LINK

November 3, 2012

Social Security History Upton Sinclair

...Sinclair's interests ranged over a wide variety of topics, in his many books and articles. He would receive a Pulitzer Prize for a later novel about Hitler's rise to power. His contemporary, the writer Edmund Wilson, would say of him: "Practically alone among the American writers of his generation, Sinclair put to the American public the fundamental questions raised by capitalism in such a way that they could not escape them."

The nomination of an avowed socialist to head the Democratic party ticket was more than the California establishment could tolerate. Sinclair's radical candidacy was opposed by just about every establishment force in California. The media virtually demonized Sinclair through a concerted propaganda campaign based largely on smears and falsehoods. Sinclair's candidacy also set off a bitter political battle both within the Democratic party and with many groups who were opposed to various aspects of the EPIC plan. Sinclair was denounced as a "Red" and "crackpot" and the Democratic establishment sought to derail his candidacy.

Despite all of this, Upton Sinclair was very nearly elected Governor of California in 1934. He probably would have won, except for two last-minute political errors in judgment. When President Roosevelt announced in June 1934 that he would propose a national social insurance system in the next session of Congress, Sinclair quite reasonably declared that he would be willing to defer his plan in favor of the President's national solution. This was perhaps reasonable, but it was impolitic, as it undermined his strongest issue. Then too, Sinclair felt duty-bound to announce his opposition to the rival Townsend Plan because the Townsend Plan was based on a regressive sales tax. Since the Townsend Plan and the EPIC supporters were often one and the same people, this was in effect an attack on his own core constituency. When the votes were counted, Upton Sinclair got 37% of the vote, the Republican candidate got 48% and a third-party progressive candidate took another 13%. Had it been a two-man race, or had Sinclair been less intellectually honest and more of a politician, he would likely have become Governor of California and the EPIC pension plan might well have become the California model. (In a classic exercise in political hubris, Sinclair detailed his EPIC plan in a book published in 1933, with the confident title "I, Governor of California And How I Ended Poverty: A True Story of the Future." Following the election he would publish another book with the humbled title "I, Candidate for Governor and How I Got Licked.&quot

Undeterred by his loss in the 1934 California election--and not really humbled either--in the 1936 election cycle Sinclair authored another version of his "I, Governor" booklet. This one had an even more expansive aim, and an inflated title to go along with it, "We, People of America and How We Ended Poverty: A True Story of the Future."

SEE SINCLAIR'S PLAN FOR SOCIAL SECURITY HERE:

http://www.ssa.gov/history/epic.html

FOR CHAPTER AND VERSE ON THE HISTORY OF SOCIAL SECURITY:

http://www.ssa.gov/history/index.html

November 2, 2012

Weekend Economists: It's a Jungle Out There! November 2-4,2012

&feature=related

Yes, the theme song is from the TV series "Monk" about a man with OCD, to put it mildly. But I want to emphasize the "Jungle" aspect, and the great journalist who broke into the Jungle of American Labor in 1906 and lived to tell the tale...

Upton Beall Sinclair Jr. (September 20, 1878 – December 25, 1968), was an American author and one-time candidate for governor of California who wrote close to one hundred books in many genres. He achieved popularity in the first half of the twentieth century, acquiring particular fame for his classic muckraking novel, The Jungle (1906). It exposed conditions in the U.S. meat packing industry, causing a public uproar that contributed in part to the passage a few months later of the 1906 Pure Food and Drug Act and the Meat Inspection Act. Time magazine called him "a man with every gift except humor and silence."==wikipedia

I would say that hardly anything remains of Upton's reform movement: the government FORBIDS testing for mad cow disease, and scandals about bacterial contamination proliferate while the lobbyists keep raking in the shekels and watering down the regulations. California has gone out on a limb to see if they can at least identify what they are eating: is it real or is it GMO? We shall see if the public interest prevails. And then, there's Monsanto, the home of Agent Orange, developing sneakier and more effective ways to deal with overpopulation...

Since we have entered the 21st century, some people have been going around acting like we can forget everything we learned in the 20th (never mind anything earlier!). And so the lessons of Marx, Gandhi, FDR, Rachel Carson and Upton Sinclair, among others, must be relearned again. Only this time, there is less time, fewer resources, and many more people to suffer if the wrong choices are made.

So let us review what Upton Sinclair had to say...post away!

I will be trying to commit karoshi this weekend, so any help with this thread would be greatly appreciated!