Archive for February 13th, 2012
According to this article in Yahoo News, President Obama unveiled a $3.8 trillion budget request Monday that hikes taxes on the rich, spends new money on infrastructure and education, but does little to reform the entitlement programs that pose the biggest long-term threat to the federal budget. According to the article, this proposed budget “forecasts a deficit for fiscal year 2012 that will top $1.3 trillion, before falling in 2013 to $901 billion, or 5.5% of gross domestic product.”
If I’m understanding this correctly, this means that 34% of what the United States spends is borrowed or created out of thin air. I’m not an economist, but this sounds incredibly reckless and unsustainable. My “solution” to this perceived problem is to not think about this issue much, and hope that not too many are hurt too badly. I wish I could understand how a huge country like the United States could, year after year, for decades, run massive deficits. I’m assuming that running these deficits causes damage to our economy and our national interests, but what do I know?
Virtually without exception, the American judiciary has refused to allow any victims of America’s War on Terror abuses — whether foreign national or American citizen — to even have their claims heard in court. Federal courts have repeatedly shielded government officials from any accountability for these abuses, not by ruling in their favor on the merits, but by ruling that they need not answer for their actions at all. Courts have accomplished this whitewashing by accepting the Bush and Obama DOJ’s arguments that government actions undertaken as part of the War on Terror are completely shielded from judicial review — i.e., from the rule of law — by both secrecy doctrines (it’s too secret to risk having a court examine) and immunity prerogatives (government officials cannot be sued even for egregious wrongdoing committed while in office).
Greenwald then lists five examples of U.S. Courts preventing meaningful inquiry based on “secrecy” and “immunity.” In comparison, he describes a recent ruling by the Pakistan’s highest court holding its ultra-secret ISI agency accountable for prisoner abuse. It appears that the “backwards” country of Pakistan offers more civil rights protection to victims of “the war on terror” than the United States.
According to this article in New York, Wall Street is bleeding badly these days. Profits are down and much of the credit goes to Dodd-Frank. Midway through the article, one can read the following succinct description of how Wall Street made its money in times past, and then what went wrong:
To understand how radically Wall Street is changing, you have to first understand how modern Wall Street made its money. In the quaint old days, Wall Street tended to earn its profits rather boringly by loaning money, advising mergers, and supervising bond issues and IPOs. The leveraging of the American economy—and the supercharging of the financial industry—began in earnest in the early eighties. And banks have profited from a successive series of financial bubbles, each bigger and more violent than the one preceding it. “Wall Street did a really good job convincing people it was really complicated and they were the only ones who could do it and it justified paying them millions of dollars,” a former Lehman trader explained. Credit was the engine that powered the explosion in bank profits. From junk bonds in the eighties to the emerging-markets crisis in the nineties to the subprime mania of the aughts, Wall Street developed new ways to produce, package, and sell debt to willing investors. The alphabet soup of complex vehicles that defined the 2008 crash—CLO, CDO, CDS—had all been developed to sell more credit. “If you look at the past 25 years, the world economy was going through a process of leveraging,” a senior Citigroup executive said. “Debt has grown faster than economic growth. The banking industry was at the epicenter of facilitating the growth of credit creation. It drove every business.” . . . From 1986 to the middle of the last decade, Wall Street’s earnings grew from 19 percent of all U.S. corporate profits to 41 percent. And the talent followed. . . . Bank earnings and ever-rising asset values allowed them to borrow ever-larger amounts of money, which in turn juiced ever-greater profits. Banks, which had previously made their money advising corporations and underwriting securities, essentially became giant hedge funds (in 2007, Morgan Stanley held $1.05 trillion in assets supported by just $30 billion in equity).
The article concludes that Wall Street will never again see the good old days:
The implosion of the credit bubble destroyed Wall Street’s business model. Now regulations are kicking in that will sap its ability to create the next bubble. Over the past year and a half, the banks have dramatically deconstructed their proprietary-trading desks to comply with the new rules of the game. Among Volcker’s provisions is a rule that mandates that banks can invest just 3 percent of their core capital in hedge funds and private equity, meaning that, in addition to being banned from trading for their own accounts, they can’t take risks in outside funds either. “There’s less money to go around because the revenue business model is changing, and it has to change,” a former Lehman trader says. “You can’t print the cheap money anymore.”
The loss-numbers cited by the article are dramatic, but I’m not buying that Wall Street has so quickly been tamed and reformed. Time will tell whether the trends described in this article are long-term, given that Wall Street has long had a choke-hold on Congress, and can be expected to work vigorously to find new ways of making obscene money while returning little to nothing of value.
Why do so many people equate atheists with sociopaths? Perhaps it’s because the Bible tells them so:
[R]ight there in the Bible they lump together atheists and patricidal sociopaths. And when it comes to non-believers God does not mess around:
So shall ye perish, because ye would not be obedient unto the voice of the Lord your God. —Deuteronomy 8:20
But not all atheists are all bad, right?
The fool hath said in his heart, “There is no God.” They are corrupt, they have done abominable works. There is none that doeth good. —Psalms 14:1
The above passage is from Funmentionables, where Michael Morris takes issue with this conflation of atheists with sociopaths, injecting his usual dose of logic and humor.
It seems to me that, by a wide margin, most statements uttered by most people are inaccurate or downright untrue. Most of these problems result from sloppy fact-finding and sloppy reasoning; they are not the result of people intentionally misleading each other. This problem with inaccurate and false statements is even more common in the political arena, and they are also more dangerous because political lies and coverups damage our democracy. They cause us to waste time and resources on many small things and some huge things like needless wars. Falsehoods pour out of politicians mouths like water gushing out of fire hydrants. It has gotten so bad that many of us fear that our democracy is at risk. What else could one reasonably conclude when less than 10% of Americans approve of the work of Congress. But these untruths, the falsehoods, the lies and the coverups continue unabated. I’d like to discuss two of reasons for this sad situation (I’m sure there are other reasons too):
1. The confirmation bias. When political or financial motivation exists (and it almost always exists), human animals notice, say and believe the things they are motivated to notice, say and believe. The confirmation is invisible to us; we are aghast when others call us “biased” (See Jonathan Haidt’s discussion of the invisibility of the confirmation bias here). We only see bias and selective perception in other people. We constantly deny that our own perception of the “facts” is warped by our motivations, including our financial motivations. We are convinced that the lies we want to believe are truths and that our coverups are not coverups. Actually, we don’t see the coverups that benefit us as coverups. Rather, we see accusations that we are covering-up the facts as annoyances. We deny these requests for purposes of expediency and we declare inconvenient things to be “irrelevant.”
2. It is much easier to lie (or to palter) than to take the time to determine the truth. I don’t know how to quantify the extent of this problem, but I’ll take a wild guess: On average, it takes 500 times more work to expose a lie or coverup than to tell a lie and cause a coverup. It’s a lot like the physical world. It takes a lot longer to build a house than to destroy a house. Whatever the exact number, we ought to give this lopsided Ratio a name, because it is a phenomenally important factor to consider in our need to fight for policies to encourage open government. Perhaps it could be called the Lie-Truth-Cost-Ratio. This lopsided Ratio gives untruthful people (liars, obfuscators and those who are reckless with the truth) huge advantages, given that time and money are such precious resources. In the time it takes to write one accurate and detailed report regarding a serious policy issue, untruthful people can issue hundreds or thousands of untruthful statements on the same topic.
In the political realm, is the solution investigative journalism? Probably not, because investigative journalism is dying; to do it right costs lots of money. Further modern media outlets often resist free-wheeling investigative journalism because the corporate media is in the position to foot the bill for investigative journalism, yet the results of such journalism too often embarrass advertisers and business relationships connected to media enterprises (only six corporations own and control most of the media in America).
Citizens can also function as journalists too. Can we depend on private citizens to fill the void? Unlikely. Who is willing to give up significant time with their family or time to take a walk or time to watch a movie in order to do the painstaking research to expose liars, even when those lies cause massive waste of desperately needed public funds? Because we are human animals, we live in a distracting world where fatigue is a reality–we crave eating, exercising, sleeping and entertainment, and none of these enjoyable activities is long-term compatible with hunching over a computer keyboard or analyzing big piles of abstruse documents in order to expose corporate or political lies. Who do you know who is willing to do any of these things in his or her spare time? Do you even know anyone who has an adequate skill-set for doing this type of work? Who do you know who would be willing to spend even $100 of his or her money to obtain records, even where there is a good chance that those records would expose government or corporate wrong-doing? We are sometimes fortunate that public interest groups gather a critical mass of people, money and energy to investigate complex political issues, but their funding is often no match for the funds spent (and the number of untruths told) by corporate and government players, who are highly motivated to make issues complex in order to make them impenetrable. It is important to keep in mind that making a political or corporate system needlessly complex (2,000 page bills, anyone?) are a highly effective way of hiding the truth.
Further, there are so many lies out there that they cannot all be investigated. I’ll make another highly speculative guess: Only 5% of important political claims are investigated by any journalist or public interest group to any meaningful degree. That is largely due to the power of the Lie-Truth-Cost-Ratio.
Here’s a real-life example: the current controversy regarding proposed Keystone XL pipeline. I’ll set aside, for now, the environmental concerns that are often dismissed or underplayed by the corporate players and the alleged news media. Instead, I’ll look simply at the alleged quid pro quo regarding those who have been pushing for the project. The Koch brothers have indicated that they have no financial stake in the XL pipeline.
In the real world, these sorts of claims appear in newspaper headlines, and they are declared be the “news.” In a perfect world, these claims would be meaningfully investigated before being reported. But investigating each of these sorts of claims would require highly motivated people (including journalists at the U.K. Guardian) countless hours, because the truth regarding complex matters like this can only be determined by reviewing hundreds of convoluted documents. Robert Greenwald has produced the following 2-minute video announcing his own suspicions:
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