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(NEOLIBERAL FORM OF) Capitalism Is the Enemy of Democracy


The most significant accomplishment for Occupy Wall Street (OWS) to date is that the Occupiers have managed to poke a hole in the legitimacy of neoliberal capitalism and its central claim that unregulated markets provide opportunity and freedom.

The Occupiers have accomplished this feat in a surprising way, peacefully, with home-made signs, signs that say things like, "If I had a lobbyist, I wouldn't need this sign."

OWS has punctured the neoliberal façade simply by having the audacity to gather in public, in bold defiance of the police and to bear witness, by their solidarity and cooperation, to the idea that the Washington Consensus has long denied - that a different world is possible.

Phil Rockstroh puts it this way: "the walls of the neoliberal prison are cracking ... We are no longer isolated, enclosed in our alienation, imprisoned by a concretized sense of powerlessness; daylight is beginning to pierce the darkness of our desolate cells."

Protesters Occupy Goldman Sachs


It is not warm on West Street at 8:30 AM on December 12, and the wind coming simultaneously off the Hudson River to the west and New York harbor to the south doesn't make it very much balmier. But if 50,000 people can take to the streets of Moscow because they object to their democracy being gamed by the elites, Occupy Wall Street won't let a little chill get in its way.

The reason several hundred protesters have congregated on West Street is that Goldman Sachs can be found there. And, today, Occupy Wall Street has gone squidding just outside. The idea comes from Matt Taibbi's "nailed-it" description of the banking giant as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." Many umbrellas sporting makeshift tentacles and ad hoc hats with angry squid eyes cap the march, which leaves simultaneously from two locations: City Hall and Zuccotti Park.

The march is timed to coincide with an effort in West Coast cities to shut down ports, with New York occupiers showing solidarity with their brothers and sisters in Los Angeles, Oakland, Seattle, and elsewhere - all of whose occupations were evicted just like the de facto flagship one in New York. According to Boots Riley of the Oakland hip-hop outfit The Coup, "Occupy Oakland called for this massive coordinated blockade as a way to strike back at the 1% after their attacks on the Occupy movement and their continued assault on working and poor people." New York couldn't have picked a more apt 1 percent target than Goldman, as Taibbi's depiction hints.

"Everybody pays their tax," chant the marchers. "Everyone but Goldman Sachs." The reference is to Goldman's shady accounting, which allows the corporation to grossly underpay its federal taxes. According to the US Public Interest Research Group, "Goldman Sachs, which reported more than $2 billion in profit in 2008, was able to use its 29 tax haven subsidiaries to reduce its federal tax bill to just $14 million. That means that Goldman Sachs' CEO Lloyd Blankfein, who made $42.9 million that year, earned more than three times the amount that the company paid in federal taxes." This, while social services are cut because of an alleged budget crisis.

Phoenicians Return to Europe With Temple of Baal


This article was a comment on the article posted at Fabius Maximus which was POSTED ABOVE...

I’ll try to add something from my vantage point inside Europe...Follow up:

(1) The original sin in the building of euro is the following: history says that there is no money without a prince who mints and guarantees it (with his sword).

(2) Who is Europe’s prince? If being prince means having the longest sword, the answer can easily be found (try under “U”, like in “United States of America”, or under “B”, as in “Bases, American with nuclear weapons on Europe’s soil”)

(3) Meet the pink mammoth in the cosy UE drawing board at Bruxelles. Until recently, it was peacefully eating its grass in the vast bureucratic pastures of Commissions and Subcommissions laboring under the strain of imposing uniformed weights and measures on bananas and salami all over Europe; but now it seems to be getting a little nervous.

(4) Before running away and being substituted by a safer appointee by the Financial Powers That Be, the former Greek premier Papandreou, on the verge of imposing to Greek people an impressing and longlasting recession, has fired at once the equivalent of the Joint Chiefs of Staff (Heads of Army, Navy, Air Force), substituting them with OTAN verified officers.

(5) In my home country, President of the Republic Giorgio Napolitano (a former communist who after having served well USSR has turned to be the best USA’a political asset in Italy, so much that recently, the NYT lavishly praised him on its front page) has kindly persuaded Prime Minister Berlusconi to resign so to be substituted by Professor Mario Monti, UE technocrat and Goldman Sachs Advisor for Europe – just like Mario Draghi, now head of BCE, was Goldman Sachs Vice-President for Europe. Secretary of State in Mont’s Government: Giulio Terzi di Santagata, former ambassador in Washington (and Tel Aviv). Secretary of Defence: Adm. Di Paola, who accepted his new appointment by sms from his current location at OTAN Headquarters in Afghanistan.

(In a parliamentary republic like Italy, a Premier resigns only if he loses his majority in Parliament, and Berlusconi never lost it; just like, according to the Constitution, the President of the Italian Republic should have no political role in chosing governments, being an institutional figure....Maybe an impressively hard speculative attack on Berlusconi’s firms (he is a billionaire) in the previous days has something to do with his unheard of decision. I suspect that maybe he received, too, a jovial phone call by Mrs. Clinton, something like “Hi, Silvio! How’s your business? How are your sons? You have five, don’t you?” but of course I have no evidence of it.)

(6) Once upon a time, when UE was a small child, General de Gaulle said that integration of Europe could be viable only if a) by treaties among sovereign nations b) by a federal government legitimated by the vote of European peoples c) Europe independence was guaranteed by European swords. After which, he d) took France out of OTAN e) built an independent nuclear armament, the “force the frappe” f) asked the US government to pay French exports in solid gold by monthly rates (Nixon and Volcker had not yet thrown away that part of the Bretton Woods’ treaties).

(7) No doubt that M. de Gaulle was not an easygoing fellow, but he was not a dictator or a fascist (on the contrary, he bet his life and his fortunes against fascism when fascism had crushingly won his country). And when he told the things I have briefly resumed, economy in Europe was going very well.

(8) Now, a friend of mine working in Greece tells me that in Athens’ hospitals (Athens, Greece, Europe) the inpatient’s relatives are beginning to bring in breakfast, lunch and dinner for their dear ones, because the hospitals have no more money to ensure a proper nutrition. Medicines are getting scarce.

To sum up. As our kind host rightly says, Financial Powers ARE (or at least own) Western Civilization. But if the Financial Powers do not deliver the single good they produce (in effect, they create out of nothing), keeping it just for themselves, maybe Western human beings, even of the European brand, will begin to wonder why they should accept the yoke of such an ineffective and exacting prince, who reduces them in debt peonage while giving them just gay marriage and Iphone.

If and when they realize this simple fact, I hope that we will find a leader such as M. de Gaulle, but I’m afraid that the historical record is not so comforting, and statistics suggest that slaves revolts have no good manners.
Chi vivrà vedrà, who will live will see.

And begging your pardon for so long a comment, I’ll add a little philologic note: we call ourselves Western Civilization, but if words have to keep their meaning, in our civilization and its ways nothing Western exists any more. Our fathers the Greeks (the ancient ones) built their and our civilization on the basis of a single concept, “metron”, which means “measure”, “limit”. Greek tragedy, architecture, political science, ethics, are all based on it; and in the plains of Marathon and Thermopylae, in the waters of Salamis, they fought Eastern “apeiron”, which means lack of limit, and chaos: a lack of limit which expresses itself by Emperors issuing orders at their whim, in peoples enslaved, their reason darkened by the drunkenness of fear and desire. I’ll add that the Greeks were horrified by the Phoenicians, too, because in their cities money was the absolute master, and because their God Baal exacted human sacrifices, especially liking the sacrifice of the firstborn.

Simple Explanation of Why Night Falls over Europe


  • Europe’s leaders gambled, attempting monetary unification before fiscal unification as a step towards full political union. The fatal flaw was its lack of a mechanism to modify the treaties, correcting design errors and adapting to changed conditions.

  • Germany exploited its control of monetary policy for its own benefit, allowing rapid growth in their exports to southern Europe — financed by its loans to southern Europe. All prospered.

  • All good things eventually come to an end. The system started to collapse from a combination of the too much accumulated debt AND malinvestment in southern Europe, plus the shock of the great financial crisis.

  • Banks are the vulnerable part of a capitalist system. French and German banks hold much of the southern european debt; defaults (soft or hard) would bankrupt them.

  • Europe’s banks own Europe’s governments, as American banks own America’s government. Hence in 2009 recapitalizing the banks became the primary imperative.

  • The crisis might allow Germany to push Europe another step towards unification, giving Germany the power to influence individual national budgets in the EU or EMU, allowing them ever great ability to exploit their neighbors (this is the traditional way nations use power).

    Since the Greek crisis began in early 2010 Europe’s leaders have sought ways to rebuild the banks. Guarantees and loans from their government have proved insufficient. The only remaining alternative to nationalization (as done in Sweden, Russia, and to US S&L’s) is ECB printing hundreds of billion euros for the debtors, so they can pay the banks. Any resulting inflation would also help in this great work.

    Not realizing that bankers are western civilization (or own it), Germany’s people refused to see the wisdom of massive ECB printing. Europe’s leaders despise public opinion, but shirk from taking so large a step in the face of such strong opposition. They see lamp posts and fear what the public might do.

    Instead they resort to increasingly baroque proposals, hoping to create a facade behind which the ECB can print sufficient euros to save the banks. This effort ignores the actual problems afflicting Europe, burning scarce political capital and still scarcer time. But they encounter two obstacles:

  • The creditor nations are not stupid, so they will not all monetization without some form of fiscal unification (otherwise the core nations finance fiscal deficits in the periphery without the ability to control them)

  • The debtor nations are not stupid, and so will not allow fiscal unification on Germany’s terms (as they did with monetary unification).

    The end game will come eventually, as they pass some invisible tipping point. Continued capital flight will create disorderly markets. The coming recession will scuttle the austerity plans. And the austerity programs will intensify the coming recession — drastically increasing social stress throughout Europe (imagine Spain starting a recession with 23% unemployment).

    This will get interesting for Europe. Survival is always interesting; all their political regimes might not survive.



    On a deeper level, a driver of this crisis is a misreading of history by the German people. They believe that the NAZI rise to power resulted from the hyperinflation six years earlier (1921-24). They don’t see the proximate cause: Weimar imposed austerity during 1929-32 (after the crash). For details see A lesson from the Weimar Republic about balancing the budget.


    Update: About the results of the latest euro-rescue summit

    (1) The real results concern aid for the banks (see the Financial Times). Necessary actions to improve bank liquidity, but ineffective without broader policy action.

    (2) Approval for more and deeper austerity policies. In fact, locking EU fiscal policy into a straitjacket as a recession looms ahead. Europe’s leaders have learned nothing from 1929-32, and nothing from the great progress in economic theory since then. This could have horrific results! Future generations will not understand.

    (3) They hope (again) to get more aid from the BRICs (Brazil, Russia, India, China) via the IMF. This is delusional. The BRICs did nothing earlier this year, when hopes were higher for effective EU action AND the BRICs were stronger. Now all four BRICs have serious problems at home; substantial help for the rich folks of Europe from the poorer BRICs seems unlikely.

    (4) Most important, they have done nothing to address the imbalances within the EMU that caused the crisis — and drive the current downturn.

    (5) “Never let a crisis go to waste”, so they wisely use this opportunity to push for Treaty changes. But the emphasis on this is bizarre. It is, as others have said, like the Captain of the Titanic convening a seminar on metallurgy after they hit the iceberg (later analsyis showed that its steel became brittle when cold).

    (6) For details see Europe’s disastrous summit“, Felix Salmon, Reuters, 9 December 2011.
  • Looking for Stock Market Watch / Weekend Economists Threads?

    Both will be residing in the Economy Group of the Economy and Education Unit.

    Sam Pizzigati: Presenting the Ten Greediest Americans of 2011


    You don't have to make a million to rate as an all-star greedster. You do have to be ruthless, self-absorbed and grossly insensitive. The greediest among us in 2011 probably haven’t been any greedier, as a gang, than any greedy of the recent past. They just seem that way.

    Why so? We have a whole new frame of reference. This fall’s sudden — and exhilarating — rise of the Occupy movement has helped us remember what we, as a society, had sadly forgotten: that decent, smart societies never let the few grab away rewards that ought to be shared among the many.


    Don't 'Occupy the Democratic Party' -- Four Lessons From the Populist Movement


    ...The public understands correctly that Wall Street’s financial elites dominate politics. How else can we account for the fact that the financial sector was rewarded for gambling our economy into debt and killing 8 million jobs in a matter of months? At the same time, wages are stagnant, benefits are being cut right and left, public sector workers are under attack, and unemployment remains above 8 percent. No wonder Americans believe that both parties are beholden to the 1 percent.

    To be sure, the 99 percent framework, so magnificently popularized by Occupy Wall Street, will be deployed by just about everyone to energize the base. Yet, we’re hearing arguments that Occupy Wall Street should occupy the Democratic Party...If Occupy Wall Street has anything at all to do with the 2012 elections, I hope it will organize large demonstrations at both conventions to dramatize the well-documented fact that both parties care more about financial elites than they do about the 99 percent. Of course there are worthy Democrats who have shown the gumption to take on Wall Street. But their power is muted as the Democratic Party overall defers to Wall Street’s lobbyists and campaign funds...For over a generation, we’ve watched the Democratic Party move steadily to the right and increasingly accommodate the top 1 percent. (In case you have any lingering doubts, read Winner Take All Politics, by Jacob Hacker and Paul Pierson.) The Wall Street orgy of the last 30 years was built upon the deregulatory push initiated by Jimmy Carter and then accelerated by Bill Clinton. Wall Street–friendly policies continue today, actualized by Obama’s appointment of Tim Geithner as Treasury Secretary. Even after the enormous crash, born and bred on Wall Street, the needs of the financial elites still come first. The banks who caused the crash, we recently discovered, had access to $7.77 trillion in secret bailouts, while the real economy languished....Nevertheless, labor and progressive organizations see no other option save the Democrats. They believe it’s a fool’s errand even to consider a political alternative because, they argue, third parties always fail, sometimes miserably. (They feel particularly burned by Ralph Nader’s run, which they believe put G.W. Bush into office.)

    So what’s to be done? For starters, we should investigate carefully the last massive movement that explicitly challenged the one percent and that demanded a democratization of high finance — the Populists of the late 1880s...This made-in-America movement grew out of the horrendous conditions faced by small farmers, especially in the South. In order to survive through the winter, farmers had to pledge their future crops to one dominant local merchant in exchange for food and supplies. The merchant (then called “The Man”) would charge outrageous interest rates, insuring that eventually farmers would have to sign over title to their land in order to settle their debts. As a result, thousands of independent farmers turned into impoverished sharecroppers. All the necessities of farming, from the grain elevators to farm implements to the railroads were run by monopolies that squeezed the farmers dry. To compound these problems, the U.S. money supply was limited to a fixed quantity of gold, as demanded by Wall Street. This insured that as the population grew, the money supply would remain fixed, leading to enormous downward pressures on farm prices. It was a continuous rural depression as black and white farmers drifted into peonage. (Will rising student loans do something similar to the next generation? Will all of us be indebted to a handful of Wall Street banks?)

    ...Out of these conditions grew the People’s Party, one of the most powerful third party alternatives in U.S. history. But it didn’t end well. In 1896 the People’s Party was hijacked by a group of ambitious politicians who rammed through a fusion ticket behind the Democratic presidential nominee, William Jennings Bryan. That retreat, combined with Bryan’s defeat, alienated the farmer base within the National Farmers Alliance. With the failure to achieve political power, the cooperative movement was starved to death due to lack of credit and faded away. More and more small farmers lost their land and slipped into abject poverty as the elites tightened their grip on political power and held it, with few exceptions, until the New Deal. (See Lawrence Goodwin’s The Populist Moment for a definitive account.)


    Secretive Millionaires Funding Online Primary For 'Independent' White House Run


    They won't tell us who they are, but they are spending tens of millions as part of 'Americans Elect' to nominate and to field an 'Independent' presidential candidate in 2012...There’s an increasing amount of buzz around Americans Elect, a peculiar Internet-based effort to shake up presidential politics. But dig a bit beneath the surface and there’s reason to be deeply skeptical of the endeavor. The basic pitch of Americans Elect goes like this: We’ll go through the expensive and time-consuming process of getting ballot access in all 50 states. Then we’ll hold an online convention in June in which any registered voter can participate. Participants will nominate a presidential ticket including one Democrat and one Republican who will then enter the general election fray...Here’s what the group is not so upfront about: It’s fueled by millions of dollars of secret money, there is a group of wealthy, well-connected board members who have control over Americans Elect’s nominating process, and the group has myriad links to Wall Street...So here are some facts about the group to keep in mind.


    The group is hoping to raise $30 million for its effort. It has already raised an impressive $22 million as of last month. So where is all that money coming from? Americans Elect won’t say. In fact, the group changed how it is organized under the tax code last year in order to shield the identity of donors. It is now a 501(c)(4) “social welfare” group whose contributors are not reported publicly. What we do know about the donors, largely through news reports citing anonymous sources, suggests they are a handful of super-rich Americans who made fortunes in the finance industry. (More on this below.) But it’s impossible to fully assess the donors’ motives and examine their backgrounds and entanglements – important parts of the democratic process – while their identities and the size of their donations remain secret. In response to critics, Americans Elect official Darry Sragow argues that the donors fear there will be a backlash if their names are public. “Cross those who hold power and you are banished to political Siberia, or targeted not by the Molotov cocktails conjured up by the professor, but by unresponsive or hostile government actions,” he wrote in a recent column. HUH?


    Americans Elect officials often tout their “revolutionary” online nominating convention, which will be open to any registered voter. But there’s a big catch. Any ticket picked by participants will have to be approved by a Candidate Certification Committee, according to the group’s bylaws...Among other things this committee will need to certify a “balanced ticket obligation” – that the ticket consists of persons who are “responsive to the vast majority of citizens while remaining independent of special interests and the partisan interests of either major political party,” according to the current draft of Americans Elect rules. Making these sorts of assessments is, of course, purely subjective. And who appoints the members of the Candidate Certification Committee? The board members of Americans Elect....In response, Americans Elect’s Sragow has written that some of these rules are still subject to change. And he has defended the board, comparing them to the Founding Fathers. “While we don’t mean to put the board in the company of the Founding Fathers, we’d point out that nobody picked the Founding Fathers, either,” Sragow argues. “They took it upon themselves to turn a popular dream into a shared reality. And they, too, had debates over how much control should be centralized. They knew that too much power in the hands of too few isn’t real democracy, but that power too diffuse is anarchy.”


    So who is on the Americans Elect board, and where is the money coming from? Thomas Friedman reported over the summer that the group is “financed with some serious hedge-fund money,” which has paid for, among other things, prime office space in New York and Washington. A spokeswoman for the group did not respond to a request for comment about Friedman’s report. At one point over the summer, the group was claiming that none of its funding comes from “special interests” – a difficult-to-define term that, if it has any meaning at all, would have to include the hedge fund industry...We do know that Peter Ackerman, chairman of the board of Americans Elect, has given over a million dollars to the group. A wealthy investment banker, he has been a donor to both President Obama and Republicans over the years. He was also on the board of the CATO Institute’s Social Security Choice project, which advocated for a Bush-style scheme to dismantle and privatize social security...According to the Guardian, other funders include Melvin Andrews of Lakeside Capital Partners and Kirk Rostron of an investment firm called the Mt. Vernon Group. Rostron formerly worked as a director at Merrill Lynch’s hedge fund group. Another reported funder is Jim Holbrook, chairman of the Promotion Marketing Association, the trade association for the marketing industry. And the list of political operatives who have signed on to the effort – including former McCain aide Mark McKinnon, Will Marshall of the Progressive Policy Institute, former New Jersey governor Christine Todd Whitman, and Bloomberg pollster Douglas Schoen – suggest the group will promote a kind of pro-establishment, “why can’t we just all get along by agreeing to dismantle Social Security”-style centrism.

    The blog Irregular Times has been providing very close coverage of Americans Elect, so keep an eye over there as the group continues its rise to prominence.

    Perpetual National Elections Make the Top 1% Richer


    The presidential campaign season keeps getting longer, and more expensive, allowing the uber-rich to effectively control our democracy...Think about that. You vote for the president to spend some part of 20% of his days raising money for his own future from the incredibly wealthy. Or put another way, the Washington Post now estimates that if you add in the non-fundraising, election-oriented events that involve him -- 63 so far in 2011 -- perhaps 12% of his time is taken up with campaign efforts of one sort or another; and this is what he’s been doing 12 to 24 months before the election is scheduled to happen.

    ...In this age, our rulers, the 1% whose money has flooded the electoral cycle, are turning the election itself into our extended circus....The only problem: however strange all this may be, it’s not, at least in the old-fashioned sense, an election nor does it seem to have much to do with democracy. The fact is that we have no word for what’s going on. Semi-democracy? Unrepresentative democracy? 1% democracy? Demospectacracy?

    ...It's an ever-expanding system, engorging itself on money and sucking in ever larger audiences. It’s the Blob of this era. In fact, the next campaign now kicks off in the media the day after (if not the day before) the previous election ends with speculation (polls soon to follow) handicapping the odds of future candidates, none yet announced...

    On money, the sky’s the limit. In 2000, the total federal election season cost $3 billion; in 2008, more than $5 billion, of which an estimated $2.4 billion went into the presidential campaign. With the Supreme Court having made it easier for outside money to pour in, thanks to its Citizens United decision, funding for campaign 2012 is expected to pass $6 billion and could even top $7 billion. The Obama campaign, which raised $760 million in 2008, is expected to pass the billion-dollar mark this time around (with money already pouring in from the financial and banking sector on which candidate Mitt Romney is also heavily reliant). TV advertising alone, which topped $2.1 billion in 2008, is expected to reach or exceed $3 billion this time around...For comparison’s sake, back in 1976, in the era when pundits were first beginning to write about presidential elections as perpetual campaigns, the total spending of presidential candidates Gerald Ford and Jimmy Carter was $66.9 million.

    Solar Power Much Cheaper to Produce Than Most Analysts Realize, Study Finds By Joe Romm NO DUH!


    The public is being kept in the dark about the viability of solar photovoltaic energy, according to a study conducted at Queen’s University. “Many analysts project a higher cost for solar photovoltaic energy because they don’t consider recent technological advancements and price reductions,” says [co-author] Joshua Pearce, Adjunct Professor, Department of Mechanical and Materials Engineering. “Older models for determining solar photovoltaic energy costs are too conservative.”

    Dr. Pearce believes solar photovoltaic systems are near the “tipping point” where they can produce energy for about the same price other traditional sources of energy. That’s the news release for a new journal article, “A review of solar photovoltaic levelized cost of electricity” (subs. req’d). The analysis concludes:

    Given the state of the art in the technology and favourable financing terms it is clear that PV has already obtained grid parity in specific locations and as installed costs continue to decline, grid electricity prices continue to escalate, and industry experience increases, PV will become an increasingly economically advantageous source of electricity over expanding geographical regions.

    That argument is one Climate Progress and others have been making for a while (see ‘Ferocious Cost Reductions’ Make Solar PV Competitive and Utility CEO on Solar: In “3 to 5 Years You’ll Be Able to Get Power Cheaper from the Roof of Your House Than From the Grid”.)...

    Analysts look at many variables to determine the cost of solar photovoltaic systems for consumers, including installation and maintenance costs, finance charges, the system’s life expectancy, and the amount of electricity it generates.

    Dr. Pearce says some studies don’t consider the 70 per cent reduction in the cost of solar panels since 2009 . Furthermore, he says research now shows the productivity of top-of-the-line solar panels only drops between 0.1 and 0.2 percent annually, which is much less than the one per cent used in many cost analyses.

    Equipment costs are determined based on dollars per watt of electricity produced. One 2010 study estimated this cost at $7.61, while a 2003 study set the amount at $4.16. According to Dr. Pearce, the real cost in 2011 is under $1 per watt for solar panels purchased in bulk on the global market, though he says system and installation costs vary widely.

    (Chart from Emanuel Sachs of MIT. Note: Even this data is already two years old.)
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