Wednesday, September 30, 2015

September 30 2015. Good grief! Could it be that doing the right thing can be profitable?

HERE IS THE INTERESTING FACT

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A WHOLE HOST OF THINGS—INCLUDING MANY REGULATIONS—WHICH BUSINESS INITIALLY OPPOSED (MOSTLY JUST AS A REFLEXT) HAVE TURNED OUT TO BE GOOD FOR THE BOTTOM LINE

The following is an extract from a piece by Will Hutton in the Guardian of September 27 2015. I have read something similar many times.

The oft-mindless, automatic, anti-government reflex of those who conform to the American Business Model to endeavor to deny all social obligations, ignore the environment, and denounce any and all regulations, has never made any sense—particularly when it is shown up to be bad business.

Sustainability pays.

Make your god the share price, as so many British and US companies do, and you create one basket of problems – under-investment, excess deal-making and cutting corners. Abuse the stakeholder system, as did VW, and make your god production on any terms, damning the concerns of outsiders as irrelevant, and your end can be equally grisly. Capitalism, in short, may have boundless creative and innovative energy – but it also has boundless ways to go wrong.

Intriguingly, recent work by a group of researchers at Harvard and the London Business School compared 90 American companies that took sustainability seriously with 90 who did not. Over 18 years the 90 committed to sustainability delivered annual financial returns 4.8% higher than the other 90.

In order to deliver sustainability they had to organize themselves around a core purpose, and then embed checks and balances to keep themselves honest. They shaped the way they were governed to open up to outside stakeholders with whom they checked their strategy. Their reporting measures embraced many metrics beyond share price and they rewarded directors for meeting them. Sustainability was a route to more open governance and rounded strategy – and it delivered.


Tuesday, September 29, 2015

September 29 2015. Greed is good—for the greedy. Society can go screw itself!

DO WE, U.S. CORPORATE CEOS, INVEST IN R&D, CAPITAL EQUIPMENT, TRAINING—AND OTHERWISE PREPARE THE COMPANY FOR THE FUTURE

Which is what we are hired to do (but we would so like to be rich—ridiculously rich)

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OR DO WE BUYBACK OUR OWN SHARES, ARTIFICIALLY PUMP UP THE SHARE-PRICE, MAKE OUTSELVES RICH—AND LET TOMORROW TAKE CARE OF ITSELF BECAUSE We’ll be gone by then…

The heading in the graph below?

STOCK  BUYBACKS SET RECORD FOR 1ST HALF (2015)

Well, of course they do!

What a damn silly question!

And now TIME magazine is showing concern (not before time). Bluntly, it is is absolutely clear that share buy-backs—which have grossly undermined productive investment, and vastly increased corporate debt to scant productive end, are being shown to be a disaster.

You can’t underinvest at this scale without dire consequences. Overall, American industry is losing ground to international competitors who do invest—and reap the productivity benefits.

As always, the financially stressed American worker, backed by insufficient investment—and, all too often inadequately trained (let alone, educated), loses out. This is the self-same worker who is less well off in 2014 than in 1973.

Quite why the significance of that truly frightening economic statement hasn’t caused more alarm defeats me—because costs haven’t remain stable. Healthcare, housing, third-level education, and automobile prices have increased way ahead of inflation. The defined pension has been largely done away with. The social safety net is demonstrably entirely inadequate. 

The average American has had his or her economic situation attacked in numerous ways since the ultra-rich took the initiative back in 1973. Two actions have been particularly destructive.

First, U.S. manufacturing was gutted through mammoth outsourcing—and then came years of under-investment (except in share buybacks).

The negative consequences are already showing up—so what does the future hold?

Continued economic decline in real terms.

There’s a New, Massive Threat to the U.S. Economy

Posted: 27 Sep 2015 09:01 PM PDT

For some time now, I’ve been writing about the trouble that might be brewing in the corporate debt market. Share prices have also been driven up by low interest rates that have allowed companies to borrow money on the cheap and use it for short-term gain. Corporate debt (not including debt held by banks) has risen from $5.7 trillion in 2006 to $7.4 trillion today. Much of that money has been used for stock buybacks, dividend increases and mergers and acquisitions.

The Office of Financial Research, a group set up within the Treasury Department after 2008 to conduct forensic investigations into the causes of financial crises, as well as risks that might be brewing in the markets, has already named corporate debt as one of its biggest concerns. Indeed, a OFR researcher I spoke with recently said that high yield bonds in particular were a cause for growing consternation—especially given the fact that big cash-rich tech companies were underwriting a lot of these corporate debt offerings, increasing the risk of a domino effect were the corporate bond markets to plummet as interest rates rise.

In China's market, it's the year of the bear


Monday, September 28, 2015

September 28 2015. Intellectual brain-food on this energy thing (one of my more awkward headlines which I have decided not to change).

SOCIAL WELFARE FOR BUSINESS IS WIDESPREAD

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AND, EVEN WORSE, MUCH GOES TO THE VERY TYPES OF BUSINESS WE ARE TRYING TO DISCOURAGE.

Not many people know that! Perhaps they should!

Strange as it may seem to those who know I constantly criticize the American Business Model, I’m a firm believer in a free enterprise system—by which I mean capitalism.

But capitalism is a many splendored thing—and can be practiced in many forms.

I simply would prefer a version of capitalism which delivered for most, instead of a few—and which practiced what it preached—which is a free enterprise system, largely policed by competition which benefits society as whole and treats all its stakeholders—shareholders, employees, senior management, suppliers, customers,the local community, the nation—and society as a whole—with reasonable decency and integrity.

That does not describe the current financial sector dominated American Business Model.

It appears it doesn’t describe some foreign corporations either.

One of these days we may wake up to the fact that we have let democracy slip through our fingers—and that corporate power is now substantially in control.

It’s called a ‘commercial coup.’ You simple buy the whole thing—from the Supreme Court down. It’s not that expensive in the scheme of things. The U.S. is a $18 trillion economy (more or less).

It is not the only economy which has been bought, by the way. These transnational corporations are busy fellows.

Well, on the face of it that mightn’t be the worst thing—but then reflect that there are few checks and balances any more—at least in the U.S. and that, as Lord Action so correctly remarked: “All power corrupts, and absolute power corrupts absolutely.”

But is that true?

Absolutely!

A report late last year by the International Energy Agency said that the fossil fuels industry collects $550 billion a year in global government subsidies.

That compares with about $120 billion for renewable energy, including wind, solar and biofuels, according to the Paris-based institution.


Those figures don't account for the vast difference in size between the two sectors.
But they also don't include the costs to society caused by pollution from oil and gas, Musk said.
Another measure, the one cited by Musk, was released by the International Monetary Fund last month and takes a wider view.

The IMF said global energy subsidies amount to $5.3 trillion, including an estimated cost of the damage caused by energy consumption.


Friday, September 25, 2015

September 26 2015. The richest country in the world—but not for most Americans. Something boggling this way comes. Guillotines anyone?

THE DATA SHOW SUCH AN OUTRAGEOUS SITUATION—AND SUCH EGREGIOUS GREED  THAT

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I CANNOT BUT SHAKE MY HEAD AT WHY IT IS SO IGNORED.

I’m also taken aback that the ultra-rich are quite as greedy as the data clearly show that they are—and they oppose even the most basic help for the less fortunate. 

The current American Business Model is nasty—and doomed. Even the supine American voter will eventually turn. It’s just the way it is—and, probably, the way it has to be.

Pharmaceutical profits 2013

 

Why a 62-Year-Old Drug Now Costs 5,000 Percent More

thefiscaltimes.com · by Beth Braverman

Abid Katib/Getty Images

In the latest example of out-of-control drug prices, startup Turing Pharmaceuticals has increased the price of a newly acquired drug by more than 5,000 percent.

For more than 60 years, the drug Darapin has been used to treat a life-threatening parasitic infection, The New York Times reports. After Turing acquired the U.S. rights to the drug in August, the price per pill skyrocketed from $13.50 to $750.

That would push the annual price of treatment of toxoplasmosis, a disease that can have severe consequences for pregnant women or patients with compromised immune systems, to $336,000 for those under 130 pounds and up to $634,500 for those weighing more, according to a letter to the pharmaceutical company from the Infectious Disease Society of America.

Related: As Drug Price Soar, Doctors Voice Outrage

“This cost is unjustifiable for the medically vulnerable patient population in need of this medication and unsustainable for the health care system,” the letter states.  Turing CEO Martin Shkreli told the Times that the drug is so rarely used the price hike would have little impact and that the company would use the money for research to find better treatment.

While a lot of media attention has been paid to extremely expensive new drugs used to treat specific diseases like hepatitis C, the Times story highlights the fact that high prices are sometimes hitting older, generic drugs too.

“Although some price increases have been caused by shortages, others have resulted from a business strategy of buying old, neglected drugs and turning them into high-priced ‘specialty drugs,’” the Times reports.

The newspaper cites several other examples of the practice, including Cycloserine, a tuberculosis drug whose price went from $500 to $10,800 for 30 pills after acquisition, and Doxycycline, an antibiotic whose price went from $20 a bottle to $10,800.

thefiscaltimes.com · by Beth Braverman

 


September 25 2015. Most countries are flawed in some way or other, but most developed nations have opted to treat their citizens fairly well. It tends to go with the word ‘developed.’ The U.S. seems to bend over backwards to be an exception. It’s a genuine puzzle. And it’s genuinely wrong.

NOT CONTENT WITH INCARCERATING A DISPROPORTIONATE NUMBER OF AMERICANS—PARTICULARY MINORITIES—THE  TREATMENT OF PRISONERS LEAVES A GREAT DEAL TO BE DESIRED.

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SHACKLING PREGNANT WOMEN IS JUST PLAIN BARABARIC.

The poet and fellow Anglo-Irishman (we are a vanishing class) William Butler Yeats once had occasion to address a rowdy Dublin audience—I think after a Sean O’Casey play—with the memorable words:

“Dubliners, you have disgraced yourselves again. Is this to be an ever-recurring celebration of the arrival of Irish genius?  Once more you have rocked the cradle of genius.”

Rioting over a controversial play is one thing. The disturbing prevalence of violence, gratuitous cruelty and anti-feminism in American culture is another matter entirely. Still, I feel Yeats’s words have a certain relevance—and the U.S. has certainly been “the cradle of genius” often enough. It still is.

I would truly like to see it become the cradle of decency as well. Where my American friends are concerned, it already is.

That is why such headlines as the one listed below so distress me.It is from the New York Times.

Yeats, by the way, certainly has vanished. He died many decades ago. His reputation grows ever stronger—and deservedly so.

The Duke of Wellington—he of Waterloo fame—was  another Anglo-Irishman. He memorably commented: “Being born in a stable doesn’t make one a horse.”

Oh dear.

Still, you’ve got to admit the Anglo-Irish have a way with words. And no, I’m not including myself on this occasion. But, it is an inspiring heritage.

 

Handcuffed While Pregnant

By THE EDITORIAL BOARD SEPT. 23, 2015

Being a prisoner entails daily indignities, some of which are unavoidable. But for sheer cruelty and pointless degradation, it is hard to top the shackling of women who are pregnant, in labor or caring for their newborns.

The practice has never made any sense. Apart from the fact that women giving birth or about to give birth pose little threat to anyone, handcuffs, waist chains and ankle manacles introduce very real health risks to the mother and her fetus. The American Medical Association has called the practice “barbaric.”

Yet it is perfectly legal in 28 states, and was common practice in New York until 2009, when Gov. David Paterson signed a law prohibiting shackling a woman before, during or immediately after labor and delivery.

The practice appears not to have disappeared in New York. A survey revealed that 23 of 27 incarcerated women who gave birth in the five years after the legislation passed were shackled illegally, according to the Correctional Association of New York, an inmate advocacy group. Many others were shackled during their pregnancies on medical visits or transfers between prisons, which can involve bus rides of up to 10 hours.

A new bill would clarify and strengthen the 2009 law by banning shackling throughout pregnancy and for eight weeks after giving birth. An exception would allow for handcuffing women who are a danger to themselves or others. In addition, the bill provides for training officers more frequently and informing women more clearly of their rights under the law.

The bill would also require prison officials to file annual reports on the use of shackles — a level of transparency that is conspicuously lacking today. (After the survey was released, the acting corrections commissioner, Anthony Annucci, said he was shocked, while prison officials complained that the women’s stories were not consistent with their records.)

The bill sailed through the New York Legislature in June and now awaits Gov. Andrew Cuomo’s signature. Unsurprisingly, major medical groups have supported the bill, while the New York State Sheriffs’ Association has come out against it, calling the new requirements “excessive, overstated and extraordinarily burdensome.” Among their complaints is the added cost of extra training and staff members, even though only about 40 pregnant women are held in state prisons each year. Prison guards regularly face dangerous situations; pregnant women visiting their doctors or moving between prisons is not one of them.

New York can take pride in being one of the first states to outlaw shackling six years ago. Mr. Cuomo should not hesitate to reaffirm that law, and to broaden its protections, by signing the new bill.


Thursday, September 24, 2015

September 24 2015. Let me be subtle about this. The current American Business Model is a license for a few very rich people—and their cronies—to steal while the rest of the population loses ground. And almost no one seems to notice. Ye gods—this has been going on for 42 years!

I REGULARLY CASTIGATE THE CURRENT AMERICAN BUSINESS MODEL

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I DON’T DO IT WITHOUT GOOD REASON. IT JUST ISN’T DELIVERING FOR MOST AMERICANS.

Yes, it’s elitist, corrupt, monopolistic, unfair, unjust, inefficient—and riding for a fall—but that is not why I keep on criticizing it. I’m attacking it because it is letting a genuinely Great Nation decline.

Things have come to a pretty pass when the Wall Street Journal—normally a totally biased bastion of the American Business Model—draws attention to the current pay disaster.

I’m tempted to comment on rats leaving a sinking ship—but the ABM shows no sign of being abandoned at his stage. It is still very much the way things are done—and the U.S. is very much the worse for it.

I’m amazed at more Americans aren’t outraged at all this. 1973—I would point out—was 42 years ago (nearly two generations.

I’m not sure I can add anything useful until you have read and absorbed the significance of the piece that follows.

It is horrendous—and this disastrous momentum is continuing.

The typical male U.S. worker earned less in 2014 than in 1973

The Brookings Institution · by David Wessel Director, The Hutchins Center on Fiscal and Monetary Policy Senior Fellow, Economic Studies @davidmwessel · September 18, 2015

The typical man with a full-time job–the one at the statistical middle of the middle–earned $50,383 last year, the Census Bureau reported this week.

The typical man with a full-time job in 1973 earned $53,294, measured in 2014 dollars to adjust for inflation.

You read that right: The median male worker who was employed year-round and full time earned less in 2014 than a similarly situated worker earned four decades ago. And those are the ones who had jobs.

This one fact, tucked in Table A-4 of the Census Bureau’s annual report on income, is both a symptom of an economy that isn’t delivering for many ordinary Americans and at least one reason for the dissatisfaction, anger, and distrust that voters are displaying in the 2016 presidential campaign.

What about women? Well, they haven’t closed the pay gap with men, but the inflation-adjusted earnings of the median female worker increased more than 30% between 1973 and 2014, to $39,621 from $30,182, according to census data.

But back to men. Why are wages for the typical male worker stagnating? After all, the U.S. economy has grown substantially since 1973. Output per person in the U.S. has nearly doubled since 1973, according to the Bureau of Economic Analysis. And output per hour of work (minus depreciation) has increased nearly 2.5 times, according to a recent analysis by the Economic Policy Institute, a left-leaning think tank that produces reliable statistical analyses.

As I often do when confronted with puzzles like this, I contacted Larry Katz, the Harvard University labor economist.

He identified three factors to explain the stagnation of men’s wages:

1. Although this is not the major factor, workers have been getting more of their compensation in benefits as opposed to the cash wages that the Census tallies. (The EPI chart takes that into account and tracks total compensation.)

2. Labor’s share of national income has been declining since 2000 and capital’s share has been rising. Labor’s compensation (wages and benefits) has not been keeping pace with productivity growth. In their new analysis of this phenomenon, EPI’s Josh Bivens and Larry Mishel argue, “ This decoupling coincided with the passage of many policies that explicitly aimed to erode the bargaining power of low- and moderate-wage workers in the labor market.”

3. The “most important factor,” Mr. Katz says, is the rise in wage inequality, the gap between the earnings of the best-paid workers and the ones at the middle and the bottom that has been widening steadily since about 1980. Economists differ over how much of this is the result of globalization, technological change, changing social mores, and government policies, but there is no longer much dispute about the fact that inequality is increasing.

It’s easy for Republicans to blame wage stagnation on Democrats and vice-versa. It’s not hard to understand why so many voters (who don’t need Census Bureau tables to understand what’s happening to their paychecks) are drawn to candidates who acknowledge this reality, lambast incumbents for not doing more to address it, and style themselves as outsiders with fresh approaches to one of the nation’s most alarming economic problems.

Editor’s Note: This op-ed originally appeared in the Wall Street Journal

The Brookings Institution · by David Wessel Director, The Hutchins Center on Fiscal and Monetary Policy Senior Fellow, Economic Studies @davidmwessel · September 18, 2015


Tuesday, September 22, 2015

September 23 2015. The wisdom of wizards—or do I mean jeep drivers? Real wizards drive jeeps—which makes us both. Only witches drive broomsticks.

I RECENTLY JOINED A WEBSITE CALLED WISELIKE.COM

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THE IDEA IS THAT PEOPLE ASK YOU QUESTIONS—AND WE WIZARDS ANSWER THEM.

What the hell! It’s all material

https://wiselike.com/about

 

About Wiselike

Wiselike is a knowledge-sharing platform that allows you to create your own professional Q&A page where people can ask you questions.


In essence, Wiselike is a website that enables people from all walks of life, to share their knowledge, and become a unique kind of expert by leveraging their personal experiences to advance the learning and knowledge of others. On Wiselike, people can share knowledge with one another, hone their own expertise and expand their understanding by asking and answering questions about various topics. Wiselike enables professionals, experts and individuals seeking to expand their social influence in all areas to develop their presence and social engagement with audiences online in a simple Q&A format.
Our mission is to build a world where everybody can learn from each other.

Anonymous asked Victor O'Reilly:

Do you think one should have a diverse range of interests in order to be a good writer?

Your experiences are diverse and I just want to know if you think these prepared you for a successful career in writing.

Victor O'Reilly's avatar image.Victor O'ReillyNYT BEST SELLING AUTHOR, DIGITAL CONTENT STRATEGIST, MILITARY THINKER, & ECONOMIST.

This is a more complex question than it seems--which makes it even more fun to answer. But, I think I need my morning tea first. I don't routinely have any breakfast these days--I normally eat only one meal a day and seem to be thriving on it--but without three mugs of tea spread out over the first couple of hours, I'm a lost cause.

That said, I have a habit of writing--even before my tea--because I tend to wake up wanting to write--and, once I am started, am reluctant to stop. This isn't a completely good thing because it is not good to sit too long. I try and move every 20 minutes or so--even it is only to pace about the room--but I find it hard to tear myself away if the words are flowing (which they normally are). Mostly, I know what I want to write before I get up--though, in this case, this question has become my priority. Let me add that it wouldn't if I was working on a book--but right now I am between books (inasmuch as one ever is). Also, it is an intriguing question.

In truth, since I think about writing for a very great deal of my waking day, I am never 'between books' in the complete sense of the phrase. I would feel lost if I was.

I don't think you have to have a diverse range of interests in order to be a good writer. Some people seem to live fairly narrow, focused lives--certainly by today's standards--yet write extraordinarily well. Jane Austin immediately comes to mind in that regard. However, appearances can be deceptive. Jane Austen certainly had a more complex mind than her reported lifestyle might suggest. Accordingly, what might appear like a simple lifestyle based upon relatively narrow interests may be compensated for by a writer's powers of observation, empathy, ability to understand nuance, and sheer talent at utilizing the English language. A diversity of understanding may well rival a diversity of interests. I aspire to both--though certainly don't succeed as well as I would like. But writing is about living with failure--a very special kind of failure--because one rarely writes quite as well as one would wish.

Perversely, if one does, the next action, as far as the truly dedicated writer is concerned, is to raise the bar.

Though I spend a great deal of time getting into the minds of my characters and writing about the human condition, I am often struck by the fact that, in the final analysis, we can never really know exactly what another person is thinking--let alone how they think. We only know what they communicate--both voluntarily and involuntarily--but that may be very far from the reality. In this case, I am merely conveying my thoughts on the matter--and, indirectly, my admiration for Jane Austen. She is one of my favorite authors.

Where I am concerned, I craved adventure and a diversity of experience from an early age largely so I could escape mentally from an unhappy childhood, and being sent to boarding school years ahead of when would have been appropriate.

Add in intellectual curiosity and the process fed upon itself--and continues to do so. Without doubt--in my particular case--it has served me exceptionally well from a writing point of view.

Since I have a tendency to think holistically, I don't see my diversity of interests as being as diverse as they appear. For instance, my commercial experiences as a consultant (which were diverse enough in themselves) all involved investigation, problem-solving--preferably in a creative manner. Investigation is what we writers call research.

Where my military and economic interests are concerned, I am strongly of the view that the two areas are interrelated--and that the world would be a better place if the relationship between the two was better understood.

All in all, whatever about writing, I believe with some passion that a well-rounded, civilized human being is better served by a diversity of interests. I wish, for instances, that I had paid more attention to physical skills in addition to focusing on the intellectual. And my interest in sports could be stored in a thimble.

Thank you for the question.

I am now off to steer a genuine WW II jeep for quite some distance while it is being towed for repair. I have been asked to do this without making much use of the brakes. Quite how I am going to this without running into the vehicle in front is a good question. It is a short tow-rope.

But, I have great admiration for the jeep as a vehicle--and for its owner, an old friend of mine--and find it hard to turn down yet another adventure.

Time for a second mug of tea first.

Appreciate•Reply•Share


September 22 2015. If Americans won’t treat each other decently—why should we expect much better in (INSERT GLOBE HERE).

THE FACT THAT THE RICH IN THE U.S.—BY AND LARGE—SEEM TO CARE SO LITTLE FOR THE LESS FORTUNATE (IF ONLY FOR SELFISH REASONS) IS NO MINOR PROBLEM.

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IT IS ALMOST AS IF THE POOR ARE RESENTED—OR FEARED! Perhaps there is reason to fear them. Sooner or later, the mistreated have a tendency to hit back. tThey normally fail—but it can get damnably unpleasant!).

The following piece came from DEMOS (motto: AN EQUAL SAY AND AN EQUAL CHANCE FOR ALL).

This is what Demos are about:

Demos is a public policy organization working for an America where we all have an equal say in our democracy and an equal chance in our economy.

Our name means “the people.” It is the root word of democracy, and it reminds us that in America, the true source of our greatness is the diversity of our people. Our nation’s highest challenge is to create a democracy that truly empowers people of all backgrounds, so that we all have a say in setting the policies that shape opportunity and provide for our common future. To help America meet that challenge, Demos is working to reduce both political and economic inequality, deploying original research, advocacy, litigation, and strategic communications to create the America the people deserve.

I have no objection to anybody being rich—more power to them if it is due to their own efforts and they haven’t done too much damage in the process (rarely the case as far as both qualifications are concerned)—although I have reservations about excessive inherited wealth, and do believe in the concept of equal opportunity for all.

That is so far from the reality in the U.S. that I cannot but give a wry smile. The whole basis of the U.S. these days is the privileged few, the well rewarded minions—and a target market to be kept confused, disoriented—but delivering whatever the movers and shakers want.

However, I’m not in favor of throwing out capitalism—or close. It is a flawed system well suited to the imperfections of human nature, but needs to be kept well reined in. Unfettered capitalism is a disaster. The current American Business Model is both a disaster and a distortion.

Who ever said innovation was dead in America! The ABM is now a regular cocktail of commercial bad practices—with competition carefully distilled out.

The fact that the current American Business Model is deeply flawed has more to do with the fact that it is not really a free-market economy any more. It has evolved into a form of financialized crony capitalism which is blatantly rigged to favor the rich. It is also heavily socialized through endless tax breaks, grants, subsidies, and other government assistance. The full scale of this is neither generally known nor adequately understood.

That’s what tends to happen when there is too much money in politics, bought politicians (they go together, you know)—and a truly frightening number of the less fortunate just don’t vote.

Those with money grab—because they always want more—and the poor are too busy surviving to do much about it. And, it should go without saying that they are both manipulated and demoralized,And just to make sure, their opportunities to vote are as heavily curtailed as the movers and shakers can manage. The totality, which includes mass incarceration, is pretty damn brutal. It’s a technique known as ‘subjugation.’

Works a treat! The Romans found it worked pretty well—but, to be fair to them they never pretended to run a democracy.

Clearly, the movers and shakers do not believe in democracy—and they certainly don’t practice it. The U.S. is currently a plutocracy whose main achievement is gridlock—and a vast, wasteful and hugely destructive military establishment, whose main purpose seems to generate its own wars. It is the definitive self-perpetuating, self-licking, military ice-cream cone. It is pretty good at that.

I doubt very much that European natures are any nicer than the Americans versions, but Europeans seem have learned—after their second World War (they were slow to take a hint) and sundry dictatorships (supported by the U.S. in some cases in the interests of deterring communism), that it might be good idea to treat each other with moderate decency since the alternatives had been practiced and found wanting. And memories of the guillotine tended to linger on in the folk memory. The peasants just might revolt again—and it hadn’t gone so well for the movers and shakers the last time.

And so, the European Union, and Worker Rights and all sorts of other structures and practices evolved—and were found to work. Everyone got richer. The EU (mostly) flourished. Good grief! Who knew! 

Unfortunately, the fuhrers of the American Business Model learned virtually nothing from this—even though most operated subsidiaries in Europe with great success—so decided to declare war on American labor in the early 70s—and have been at it ever since with all the firepower they could muster (which was and remains considerable since they either own or control practically everything).

It has been a multi-decade long example of vindictive idiocy—which has nearly destroyed the unions, wreaked havoc on the Middle Class, and significantly increased capital’s share of corporate profits—at an incalculable cost to the economy as a whole—and to the great benefit of some less than friendly nations. But, the ultra-rich are unquestionably the victors.

In fact, it may be the one war that Americans can claim to have won outright since WW II—though, unfortunately, it has been of the civil variety. Still, it has given a lot of very rich people great satisfaction, in a self-righteous sort of way—and one can make the case that it has scored rather well on the misery index too in terms of inflicting pain on their foes.

Just a pity one can’t use targeted killing by drones with Hellfires against trade unionists and Democrats—well, so far, anyway. But, if those SOBs get out of hand, all bets are off. We have the technology—and we will certainly use it.

The movers and shakers seem to be addicted to violence of some sort or other, and to positively excel at subjugations—but democracy is definitely not their thing.

Unfortunately, it doesn’t seem to be America’s thing either any more.

A sad fate for a great experiment.

The 2014 elections saw the lowest voter turnout rates on record. Even starker, however, are voting disparities by class, race, and age. Fifty-two percent of those earning above $150,000 voted, compared to only 1 in 4 of those earning less than $10,000, due in no small part to restrictive and exclusionary voting laws.

Our new report, Why Voting Matters, uncovers how these turnout gaps reflect not only differences in power and privilege, but also striking differences in policy views and ideology. Simply put, gaps in voter turnout result in policy that is biased towards the wealthy.

Why Voting Matters

At the core of this problem, we see that people in under-voting groups—lower-income voters and voters of color—tend to favor more progressive economic policies than affluent voters, particularly affluent white voters.

To fix this, we need to make it easier to vote. That means passing reforms like same-day registration and automatic voter registration, and renewing our commitment to existing laws like the National Voter Registration Act. It also means addressing voter suppression and deliberate attempts to keep people from casting a ballot.

These solutions can fundamentally transform our election system and give voice to millions of Americans, making our democracy more representative and more progressive in the process.


Monday, September 21, 2015

September 21 2015. Bring on your magnifying glasses! This productivity thing isn’t producing. The 0.5 percent gains in 2014 are so small, they are practically invisible. The current American Business Model strikes again.

THE 2014 PRODUCTIVITY INCREASES ARE NOT JUST EMBARRASSINGLY LOW.

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THEY ARE AN INDICTMENT OF THE CURRENT AMERICAN BUSINESS MODEL.

Could it be that employee motivation makes a difference—and that dumping on your employees is not a good thing over the longer term?

Gee! What a surprise.

I don’t agree with much of what Robert Samuelson writes but I read him because it is good to consider opposing points of view, because he is a good journalist, and because when he cites supporting data, I like to inspect the evidence.

Out with the magnifying-glass!

If it is persuasive, I let myself be persuaded. I’m far from sure it would be rational to do anything else.

Does being rational count for much in the face of ideology? I’m far from sure—but I rather enjoy being influenced by facts. Tracking them down is such fun—and they are, all too often, not quite what they seem.

Wiley little critters!

A scarcity of economic growth

By Robert J. Samuelson September 13 at 7:51 PM

Amid all the new government programs and tax cuts that have been proposed by the various presidential candidates — or will be as the campaign unfolds — there lurks a nasty statistic that suggests how difficult they will be to achieve.

The statistic is 0.5 percent.

That’s how much U.S. productivity increased in 2014, reports the Bureau of Labor Statistics. Greater productivity — reflecting advances in technology, management and worker skills, among other things — is the wellspring of higher incomes. Since the late 1940s, gains in labor productivity (measured as changes in output per hour worked) have averaged 2 percent annually. Last year’s gain was a quarter of this average; even so, it was slightly better than in the previous three years.

Worse, most or all of these small increases will probably be siphoned off in government benefits for the expanding elderly population and in higher health costs. Other income improvements will result only from either (1) a rebound in productivity or (2) redistribution of income and wealth from one group to another. As a crude generalization, Republicans emphasize improving productivity and economic growth while Democrats focus on redistributing from the rich to the middle class and poor.

The causes of the productivity collapse are unclear. Some economists say that productivity isn’t measured properly — Internet benefits are allegedly undercounted. Other economists contend that U.S. technology and innovation are lagging. Still others argue that weak business investment after the Great Recession explains lackluster growth.

To this list should be added another plausible candidate: the dead weight losses created by special interest groups, as explained by the late Mancur Olson (1932-1998).

Although an economist, Olson revolutionized thinking about the political power of interest groups. Until Olson, conventional wisdom held that large groups were more powerful than small groups in pursuing their self-interest — say, a government subsidy, tax preference or a protective tariff. Bigness conveyed power.

Just the opposite, Olson said in his 1965 book “The Logic of Collective Action.” With so many people in the large group, the benefits of collective action were often spread so thinly that no individual had much of an incentive to become politically active. The tendency was to “let George do it,” but George had no incentive either. By contrast, the members of smaller groups often could see the benefits of their collective action directly. They were motivated to organize and to pursue their self-interest aggressively.

Here’s an example: A company and its workers lobby for import protection, which saves jobs and raises prices and profits. But consumers — who pay the higher prices — don’t create a counter-lobby, because it’s too much trouble and the higher prices are diluted among many individual consumers. Gains are concentrated, losses dispersed.

This was Olson’s great insight, and it had broad implications, he said. In a 1982 book, “The Rise and Decline of Nations,” he argued that the proliferation of special-interest concessions could reduce a society’s economic growth.

“An increase in the payoffs from lobbying . . . as compared with the payoffs from production, means more resources are devoted to politics and cartel activity and fewer resources are devoted to production,” he wrote. “This in turn influences [a society’s] attitudes and culture.”

The dilemma for democracies is clear. Voters expect governments to cater to their needs and wants — and one person’s special interest is another’s way of life or moral crusade. But if governments cater too aggressively to interest groups, they may undermine (or have already done so) the gains in productivity and economic growth that voters also expect.

So this is another possible explanation for the productivity slowdown, which afflicts many advanced countries. These societies are riddled with programs and policies promoted by various interest groups that “can increase the income [of the groups’ members] while reducing society’s.” If he were alive today, Olson might well add that higher psychic income — the feeling of “doing good” — also motivates many interest groups.

Regardless, the productivity slump endures. Because there’s no agreed-upon cause, there’s no simple “fix” — though there are many familiar proposals that might make a long-term difference (better schools, more research, higher infrastructure spending). But assuming productivity doesn’t spontaneously revive — which it could — the slowdown will haunt the next president.

It connotes scarcity: too little income growth to satisfy the mass craving for higher private and public spending. Even with a jobless rate of 5.1 percent — getting close to “full employment” — the Congressional Budget Office projects a 2015 federal deficit of $426 billion. That’s one measure of over-commitment: Americans desire more government than they’re willing to pay for in taxes.

During the Obama years, the White House and Congress sidestepped many unpopular choices. It’s doubtful the next president will have the luxury of doing the same.


Sunday, September 20, 2015

September 20 2015. Lies, damn lies, and the Pentagon. The pervasive cancer of careerism in the military.

CURRENT U.S. MILITARY CULTURE DICTATES THAT VIRTUALLY ANYTHING—including outright lying— GOES, IF IT IS IN DEFENSE OF THE SERVICE

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OR INVOLVED IN ADVANCING A SERVICE’S INTERESTS  (or protecting one’s boss or oneself)

TO HELL WITH THE NATIONAL INTEREST

Intellectual honesty seems to have no place in such a culture.  What postures as loyalty to service trumps integrity every time. If the truth doesn’t fit—why change it!

This mindset and pattern of behavior  shows right through the system—and on into the battlespace. It is one of the reasons why the U.S. is not ending wars—let alone winning them.

It’s not just dishonest. It is a betrayal of trust. It is entirely incompatible with ’DUTY, HNOR, COUNTRY.’

It’s stupid! These jackasses get found out all the time—yet they go on lying because those in command want them to.

Higher want them to because it’s easier than making the hard decisions that are often what is really required. Hard decisions tend to upset people, make enemies, and be career damaging. Higher like their comfort zones to be—comfortable.

I happen to have first hand experience of this kind of behavior—which is now hard-wired into the military culture.

Despite its many obvious advantages, it is one important argument against a fully professional military. Theoretically, a professional military is better trained and generally more experienced—but it doesn’t necessarily work out that way.

When civilians are drafted in to fight a war—as in WW II—they want to get the whole wretched business over with as expeditiously as possible—and then get on with their civilian lives As a consequence, they tend to learn quickly, question freely, and focus only on what is important—which tends to be defeating the enemy.

History shows that previously inexperienced civilians do surprising well after training—if they live long enough. One reason is that many professional soldiers are far more focused on the career aspect of a military career rather than its purpose. Here, I am writing primarily about the officer corps—though long service NCO’s can behave similarly.

When a military life becomes a career—followed by a lucrative second career set up by the first (most senior officers retire into the defense contracting world—so collect a salary in addition to their pensions—so called “double-dipping”) furthering one’s career has a tendency to become the most important thing.

As far as many are concerned, it constitutes a secure, predictable, and adequately financially rewarding way of life where the chances are good—even if the Nation is near continuously at war—that you won’t experience serious combat. But, the issue here is not courage under fire—or the lack of it—but integrity. Careerism and integrity tend to be incompatible.

Careerism gives rise to a pattern of behavior which has much more to do with naked ambition and self-interest than fighting the enemy.

Where the officer corps is concerned, doing whatever is necessary to please one’s seniors tends to be the pattern—and this includes lying to cover up anything which might reflect badly on higher, or the individuals themselves.

The idea is to have a perfect track record—which includes not standing out in any way. Doing anything exceptional tends to inspire jealousy and is highly likely to be counter-productive in careerist terms. That includes distinguishing oneself in combat, writing an original book, or questioning the status quo in anyway. The whole ethos is based upon “going along to get along”—which has a disconcerting tendency to be associated with mediocrity.

The intellectually curious individual with an original cast of mind has a tendency to rock the boat regardless of his or her ambition or efforts to conform—because that is just the nature of such talent—and thus is easily spotted and weeded out. The others do what is necessary, don’t question anything, and lie as often, and as egregiously, as is required.

This is particularly the case where defending a program is involved. The larger programs involve vast sums of money—typically billions—and support large numbers of service and retirement careers. As a consequence they are fought for, and defended, with the kind of zeal and dedication one might prefer to see in combat. Lying is a favorite weapon—though it is often described as dissembling, obfuscating, being economical with the truth—or just a different perspective.

Such lying is endemic and considered the right thing to do even if it results in sub-standard equipment being issued to the troops and ending up on the battlefield. And, yes, it can—and does—result in preventable casualties (incidentally the title of a report I wrote on the Stryker armored vehicle about a decade ago).

War is not only politics by other means, but a major profit opportunity—where the needs of the fighting soldier are almost incidental. Clearly, everyone isn’t bent—because some remarkably good equipment does (sometimes) emerge—but normally at an excessive cost and after an excessive time. The degree of corruption involved would appall you. The multi-decade duration of the major programs is a disgrace. It now typically takes over 20 years to bring a major program to fruition. Given the pace of technological change, you would have to worry about the consequences of such a ridiculous length of time just in itself.

You would wonder why we have Operational Test & Evaluation when its findings are so often ignored.

It’s the kind of thing the Commander-in-chief (the President) should pay some attention to—but doesn’t. Why not? I don’t profess to know. I can but theorize.

  • Not many presidents seem to know much about the military these days—let alone the current military. Neither do their staffs.
  • Important though it is, people don’t generally pick up on culture, as such. They tend to focus on the actions that emanate from such a culture as oppose to the causes.
  • The American public, while now knowing remarkably little about the military, nevertheless give them just about the highest approval rating. This makes it politically difficult for any president to go head to head with the military.

It’s a great pity. In my opinion, sacking a few generals for lying as egregiously as they do might send a message that mistaken service loyalty is lethal to one’s career—and downright helpful to the enemy.

The following two stories are merely illustrative of a structure which has become badly corrupted.

washingtonpost.com

Pentagon weapons tester calls F-35 evaluation into question

  • by Christian Davenport
  • Sept. 15, 2015
  • 2 min read
  • original


A Marine F-35B Joint Strike Fighter lifts off from the runway during the first short take-off and vertical landing mission at Eglin Air Force Base, Fla., on Oct. 25, 2013. (Samuel King Jr./U.S. Air Force photo)

When the Marine Corps put its version of the F-35 Joint Strike Fighter through a series of tests aboard an amphibious assault ship last spring, officials said that the aircraft performed so well that the service soon declared it ready for combat.

But the Pentagon’s top weapons tester said in a report in July that the exercise was so flawed that it “was not an operational test … in either a formal or informal sense of the term.” Furthermore, the test “did not — and could not — demonstrate” that the version of the F-35 that was evaluated “is ready for real-world operational deployments, given the way the event was structured.”

For the test, which happened in late May aboard the USS Wasp, to be “bona fide,” it would have had to be under “conditions that were much more representative of real-world operations than those that were used during this deployment,” J. Michael Gilmore, director of the Pentagon’s Operational Test and Evaluation Office, wrote in a memo.

The memo, which had been previously reported on by Bloomberg, was released Monday by the Project on Government Oversight, which said it obtained the document through the Freedom of Information Act.

[Meet the most fascinating part of the F-35: The $400,000 helmet.]

Among the problems Gilmore cited were the lack of other aircraft in the test, which would share space on the flight deck and ground support equipment. He also noted that “key combat mission systems were not installed in the aircraft or were not cleared for use.”

During the tests, the aircraft were “not cleared to carry or employ any ordnance,” Gilmore wrote. And he said that uniformed personnel “received significant assistance from embarked contractor personnel who would not be part of combat operations.”

The Marine Corps did not immediately respond to a request for comment.

Aboard the Wasp in May, Lt. Gen. Jon Davis, the Marine Corps deputy commandant for aviation, said in an interview that, “by all accounts [the test] was a great success. No show stoppers at all.”

The testing, which was designed to see how the fighter would perform in operational conditions, was hailed as a moment of triumph for the embattled F-35 program, the most expensive weapons system ever developed by the Pentagon. And the successful completion of the test was heralded as a sign that the $400 billion program had turned the corner after years of setbacks, billions of dollars of cost increases and delays.

The program is “building momentum and a very good momentum, and I see very little to discourage me,” Davis said in May.

But in addition to problems with the testing, Gilmore’s office found that the F-35s used in the tests had their own problems.

“Aircraft reliability was poor enough that it was difficult for the Marines to keep more than two or three of the six embarked jets in a flyable status on any given day,” he wrote.

Another section of the report said that the “number of flight hours flown by each aircraft varied widely, with some aircraft in a down status for up to five days in a row, and other aircraft rarely requiring major maintenance.”

Gilmore suggested that the Marines conduct another test with “a more aggressive set of demonstration objectives.”

That recommendation didn’t seem to carry much weight, however. About a week after Gilmore submitted his memo, the Marine Corps declared that the F-35 was “ready for worldwide deployment.”

[After years of setback, the embattled F-35 fighter jet could soon be ready for combat]

The F-35, manufactured by Bethesda-based Lockheed Martin, comes in three variants, for the Marine Corps, Navy and Air Force. The Air Force variant is expected to be declared ready for combat sometime late next year, the Navy’s in late 2018 or early 2019.


Analysts Detail Claims That Reports on ISIS Were Distorted

By MARK MAZZETTI and MATT APUZZO SEPT. 15, 2015 WASHINGTON —

A group of intelligence analysts have provided investigators with documents they say show that senior military officers manipulated the conclusions of reports on the war against the Islamic State, according to several government officials, as lawmakers from both parties voiced growing anger that they may have received a distorted picture about the military campaign’s progress.

The Pentagon’s inspector general, who is examining the claims, is focusing on senior intelligence officials who supervise dozens of military and civilian analysts at United States Central Command, or Centcom, which oversees American military operations against the Islamic State in Iraq and Syria.

Bridget Serchak, a spokeswoman for the Pentagon’s inspector general, confirmed that the investigation is focused on Centcom’s intelligence command. “The investigation will address whether there was any falsification, distortion, delay, suppression or improper modification of intelligence information,” she said in an email on Tuesday. She added that the inquiry would examine any “personal accountability for any misconduct or failure to follow established processes.”

The New York Times reported last month that the investigation had begun, but the scope of the inquiry and the focus of the allegations were unclear. The officials now say that the analysts at the center of the investigation allege that their superiors within Centcom’s intelligence operation changed conclusions about a number of topics, including the readiness of Iraqi security forces and the success of the bombing campaign in Iraq and Syria.

The revisions presented a more positive picture to the White House, Congress and other intelligence agencies, the officials said. “The senior intelligence officers are flipping everything on its head,” said one government intelligence analyst, who like others spoke on condition of anonymity because he was not authorized to discuss the matter publicly. The analyst said that the complaints involve the highest­ranking officials in Centcom’s intelligence unit, run by Army Maj. Gen. Steven R. Grove.

The Pentagon’s inspector general would not examine disputes over routine differences among analysts, and so it is highly unusual that an investigation would be opened about the intelligence conclusions in an ongoing war. The allegations raise the prospect that military officials were presenting skewed assessments to the White House and lawmakers that were in sharp contrast with the conclusions of other intelligence agencies. The issue is expected to come up Wednesday when Gen. Lloyd J. Austin III, commander of Central Command, is expected to testify before a Senate panel about the military campaign against the Islamic State.


Saturday, September 19, 2015

September 19 2015. American exceptionalism—and this greatness thing. Being great is not a substitute for looking after ALL your people. It is also a decidedly subjective opinion. Other counties think they are great too—and, in the eyes of their citizens, they probably are.

THE U.S.’S CURRENT MILITARY REACH EXCEEDS AMERICA’S  WALLET—AND SERVES NO ONE’S INTEREST EXCEPT THE MICC.

What is the MICC?

Why, it’s the U.S. Military Industrial Congressional Complex—which  manages to soak up in excess of $1 trillion a year—and cannot be audited.

UNBELIEVABLE—BUT TRUE!

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THE SIMPLE TRUTH IS THAT THE US. NEEDS TO STOP DOMINATING THE WORLD MILITARILY (while failing to end its wars—let alone win them), CUT BACK ON MILITARY EXPENDITURE, AND INVEST IN REBUILDING ITSELF.

There are good, practical, reasons why it is in the interests of most of us in the Free World to want the U.S. to remain strong—and be the strongest nation in the world at that.

However, there is a difference between having enough military strength to deter any aggressor, and the current de-facto garrisoning of the world—together with the rather cozy arrangement known as the MICC. There is a difference between walking softly—while carrying a big stick—and being a bully.

The MICC is the Military Industrial Congressional Complex—and consists of senior military officers, both serving and retired, defense contractors, members of both houses of Congress, a slew of lobbyists, consultants, members of think tanks, and complicit media—all of whom benefit from the deep river of money (much of it borrowed) which constitutes the never-ending flow that is military expenditure.

The MICC was the focus of President Eisenhower’s last speech before leaving office. His warning was blunt and evidence of his concern. Unfortunately, his worst fears have been realized. The MICC is now entirely out of control and seriously distorts America’s policies and government. It is rich, powerful, omnipresent—and virtually unchallenged. Though it’s tentacles reach everywhere, few Americans really understand it. It is also deeply and systemically corrupt.

The primary focus of the MICC’s members is not on winning the Nation’s wars, or on National Security, but on keeping the money flowing.

The money-flow is all! To that end, they make sure that Americans live in a climate of fear with at least one existential threat always dominant. It used to be the Soviet Union. Now we have China, terrorism, and a resurgent Russia—and Iran and North Korea as reserves.

All certainly deserve to be treated with some caution, but whether they really harbor hostile military intentions (linked to the necessary capabilities) towards the U.S. is another matter entirely.

Terrorism is certainly cause for concern but we might contain it more effectively if we put vastly more effort into determining its causes. The U.S. is very far from blameless in this regard. Actions have consequences—and the 2003 invasion of Iraq was about as irresponsible an action as can be imagined. The subsequent occupation—must of it brutal and mismanaged—was even worse. ISIS, or something like it, was an inevitable and predictable result.

Certainly, the U.S. is doing little to ease global tensions by literally garrisoning the globe. To make matters worse, few of these bases are sufficiently well manned to be effective unless heavily reinforced. But they are strong enough to alarm and provoke.

Reportedly, there is now a U.S. troop presence in over 160 nations, activity of substance in 70, all of this supported by over 800 bases—to which must be added a global naval presence of several hundred ships and submarines, and, an as yet unchallenged global airpower presence. And I haven’t even touched on U.S. activity in space.

All of this adds up to a pretty good example of imperial overstretch to the point where not only is it unaffordable, but it is counter-productive, in that it incentivizes less than friendly nations to up-arm.

Look at a map with U.S. bases marked on it, and it is not hard to see why nations like Iran feel insecure. There are surrounded by the forces of a country which has a track record of aggression—without the courtesy of declaring war or even a valid reason.

Here, I am not attempting to justify Iran’s various actions over the decades since the shah was toppled—but merely to try and communicate what U.S. military activity must look like from the Iranian perspective.

The phrases ‘threatening behavior’ and ‘hostile intent’ come to mind.

As with so much, the devil is in the detail. Where the MICC is concerned, we don’t even know the necessary detail. The Pentagon cannot even be audited. It says it has too many conflicting accounting systems!

There is a serious need to get matters into balance here. As matter stand, we have a far from cost-effective defense establishment—by which I mean that that it is stunningly wasteful and ill thought-out—combined with massive neglect of the nation’s infrastructure,and the needs of Americans in general. The nation, itself,  has been underinvested in for decades.

It shows.

The MICC is doing fine. Most Americans are not. U.S. infrastructure is in a shabby, crumbling state—and literally trillions of dollars are required just to bring it up to an acceptable standard. Meanwhile, other nations are improving their infrastructure, enhancing their cities, safeguarding the environment—and generally making their particular parts of the world pleasanter places to live in.

Go look. The evidence is right out there in the open. The European investment in infrastructure has been downright astonishing—and commendable.

The U.S. is a study in contrasts—private affluence for the few, and public squalor for most of us. It is downright embarrassing.

This is fairly obvious to anyone who has travelled, and knows what is going on elsewhere.

NYT columnist Roger Cohen is an example. He has recently returned from foreign parts.

He is a thoroughly entertaining writer. The following is an extract from a piece headed AMERICA IS GREAT. It is somewhat tongue-in-cheek—and none the worse for that.

No, greatness is America’s thing now, the recurrent frisson of a still-frisky power not deflated even by two wars without victory. Ronald Reagan, who also had striking hair, declared more than three decades ago, “Let’s Make America Great Again.” Trump is more peremptory, as befits a man of bullying inclination. “Make America Great Again.”

I’m not sure, but I think it was while sitting on the Seventh Avenue express of the New York City subway looking at a map that helpfully showed stops for the Lexington Avenue line, when water started dripping on my head from the subway car ceiling and an inaudible announcement was made, that I realized I was back in the greatest nation on earth.

Or was it as I gazed at a man channeling his bristling defiance into the occupation of three subway seats rather than one, or as I listened to voices much louder and more assertive than they needed to be, or as I struggled to identify a station with no visible sign naming it, or as the temperature in the subway elevator hit 100 degrees Fahrenheit, that the thought hit me that America was indeed the greatest nation on earth?

I cannot say when America being the greatest nation on earth really sunk in. It might have been as I walked along a garbage-strewn street in Queens beneath a bridge so corroded it seemed not of the last century but of the one before that. Or as I peeled small stickers off fruit and vegetables (I’d forgotten in Europe about those pesky little charmers) while listening to Trump confuse Iran’s Quds force with the Kurds. Every foreign war — and plenty loom if there’s a Trump presidency — is an American geography lesson.

America may be great, in fact I would argue it is, but it sure doesn’t look great right now. Europe looks better but is shrunken within.

Europe’s divisions, endlessly pored over, amount in the end to what Sigmund Freud called “the narcissism of minor differences.” The Continent is united in the rejection of greatness, while the United States cannot picture itself without it.

The most dangerous point in the arc of a nation’s power is when the apogee of its greatness is passed but it is not yet resigned to decline. That’s where Trump’s America is. Which is really, really great.


Friday, September 18, 2015

September 18 2015. Crimes without consequences. Huge fines, perhaps, but accepted as just a cost of doing business (and some are tax deductible).

WHEN THE FINANCIAL SECTOR GETS SUCH A GRIP THAT IT

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IS, IN PRACTICE, ABOVE THE LAW, YOU HAVE A NATION THAT IS IN SERIOUS TROUBLE

The facts indicate that, at a certain point, financialization hinders economic growth—and does much other economic damage besides.

The U.S. is way past that point

How Wall Street’s Bankers Stayed Out of Jail

original

Matt Chase / The Atlantic

The probes into bank fraud leading up to the financial industry’s crash have been quietly closed. Is this justice?

On May 27, in her first major prosecutorial act as the new U.S. attorney general, Loretta Lynch unsealed a 47-count indictment against nine FIFAofficials and another five corporate executives. She was passionate about their wrongdoing. “The indictment alleges corruption that is rampant, systemic, and deep-rooted both abroad and here in the United States,” she said. “Today’s action makes clear that this Department of Justice intends to end any such corrupt practices, to root out misconduct, and to bring wrongdoers to justice.”

Lost in the hoopla surrounding the event was a depressing fact. Lynch and her predecessor, Eric Holder, appear to have turned the page on a more relevant vein of wrongdoing: the profligate and dishonest behavior of Wall Street bankers, traders, and executives in the years leading up to the 2008 financial crisis. How we arrived at a place where Wall Street misdeeds go virtually unpunished while soccer executives in Switzerland get arrested is murky at best. But the legal window for punishing Wall Street bankers for fraudulent actions that contributed to the 2008 crash has just about closed. It seems an apt time to ask: In the biggest picture, what justice has been achieved?

Since 2009, 49 financial institutions have paid various government entities and private plaintiffs nearly $190 billion in fines and settlements, according to an analysis by the investment bank Keefe, Bruyette & Woods. That may seem like a big number, but the money has come from shareholders, not individual bankers. (Settlements were levied on corporations, not specific employees, and paid out as corporate expenses—in some cases, tax-deductible ones.) In early 2014, just weeks after Jamie Dimon, the CEO of JPMorgan Chase, settled out of court with the Justice Department, the bank’s board of directors gave him a 74 percent raise, bringing his salary to $20 million.

After the savings-and-loan crisis of the 1980s, more than 1,000 bankers were jailed.

The more meaningful number is how many Wall Street executives have gone to jail for playing a part in the crisis. That number is one. (Kareem Serageldin, a senior trader at Credit Suisse, is serving a 30-month sentence for inflating the value of mortgage bonds in his trading portfolio, allowing them to appear more valuable than they really were.) By way of contrast, following the savings-and-loan crisis of the 1980s, more than 1,000 bankers of all stripes were jailed for their transgressions.


Thursday, September 17, 2015

September 17 2015. Is it possible to buy a profession? You know, I rather think it is. Consider Big Pharma, the medical profession, and the disaster that is American healthcare. Now, think about economists—and wonder why so many Americans are faring so poorly—while the economy, itself, appears to be growing.

BACK WHEN I WAS STUDYING ECONONOMIC AT UNIVERSITY, I BECAME VERY SCEPTICAL OF THE TREND TOWARDS MATH  MODELS OF AN ECONOMY AS BEING  CAPABLE OF PROVIDING THE ANSWERS

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IT SEEMED TO ME CRYSTAL CLEAR  THAT ECONOMICS SHOULD BE MUCH MORE CONCERNED WITH HUMAN BEHAVIOR—AND THE PRAGMATIC SEARCH FOR WHAT WORKS.

I still hold to that view—and am delighted to see that it is becoming more widely accepted (after a modest delay of 50 years).

Why is the self-evident such a mystery to so many people—including so-called experts!

Don’t get me wrong. I’m not against number-crunching as such—it is highly desirable, indeed essential, to quantify where you can—but am merely making the point that there is a great deal about the human condition, and its behavior, that we cannot quantify as yet—and possibly ever.

Anyway, I was both amused and pleased when I read the following in a piece entitled How Stanford Took On the Giants of Economics in the New York Times of September 10 2015. The following is merely a short extract, but it made me chuckle.

But the recent recruiting success of Stanford shows something broader about how the economics profession is changing. The specialties of the new recruits vary, but they are all examples of how the momentum in economics has shifted away from theoretical modeling and toward “empirical microeconomics,” the analysis of how things work in the real world, often arranging complex experiments or exploiting large sets of data. That kind of work requires lots of research assistants, work across disciplines including fields like sociology and computer science, and the use of advanced computational techniques unavailable a generation ago.

I have never practiced as an economist, so am reluctant to call myself one, but after 55 years studying it with zeal and dedication, I guess you could say I have learned a thing or two. In truth, I find it fascinating—and fun.

My focus is pragmatic. I am in search of what works—in the sense of yielding the greatest economic advantage for the population as a whole, with the least negative environmental side effects. I’m interested in quality of life rather that any particular “ism.” When people talk about “freedom” when it remains an abstract ideal without wealth, I tune out. Though I think everyone should be as personally responsible as their abilities and circumstances allow, I am not a believer in “rugged individualism.” We live in a world where cooperation isn’t just desirable—it is essential. I don’t believe anyone accomplishes anything worthwhile entirely alone. They are always helped—directly or indirectly—along the way. We don’t necessarily build on “the shoulders of giants”—though I like the concept. We build on what others have done, flaws and all.

That said, I remain decidedly uneasy about the economics profession which seems to focus far too much on developing arguments to support ideologies and not nearly enough on identifying what works. If you work in a Right Wing think-tank, for instance, your findings had better support Right Wing ideology or you will lose your job. Quite how that is compatible with intellectual honesty is a good question. I don’t think it is.

All too many economists have, in effect, been bought. It’s a great pity, because increasingly we have enough data to identify what works—and with Big Data, the necessary tools to monitor, store, and analyze it.

Whether we will or not is another matter entirely. Data have a disturbing tendency to be corrupted by ideologies—and all the computing power in the world is of scant benefit if some zealots are fiddling with the figures.

We have Taliban in the West too—under other names—and they are just as fanatical and dangerous.

I’ll expand on that thought some other time.

 


QUOTE OF THE DAY

"The salary of the chief executive of a large corporation is not a market award for achievement. It is frequently in the nature of a warm personal gesture by the individual to himself." -John Kenneth Galbraith