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    • Ferguson and the brokenness of America’s “Justice” System
      There isn’t much to say that others haven’t, but let’s go through it anyway: There was never any chance that Darren Wilson would be charged; the prosecutor acted as defense attorney, not as prosecutor; A grand jury, for all intents and purposes does what the prosecutor tells it to; Doing the announcement at 8pm at [...]
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What Yves said

Yves Smith at Naked Capitalism has a long post about former Goldman Sachs Vice President Greg Smith’s new book on the company.  Smith’s book, Why I Left Goldman Sachs, describes the atmosphere at Goldman and how vulnerable clients are in an environment when making a deal and the gigantic fees that come with it is more important than selling a complicated and flawed financial instrument to unsophisticated clients.  Yves gives her own insider view of Goldman and why the company has gone ballistic over Smith’s book while at the same time insisting that Smith was too junior to know what was going on.  The money quote comes at the end of her piece:

Goldman has such a strongly developed internal culture that even a change at the top would take a while to percolate through, and Smith appears to have seen the impact.

I can relate.  Those of us in the lower rungs of the pharmaceutical industry witnessed a similar phenomenon.  At one point, we were governed by scientists and MDs who rose through the ranks to head the companies.  But that started to change radically in the 90’s during the era of many mergers and acquisitions and it really accelerated in the 2000s.  The financiers began to have more influence at about that time and we read accounts of CEOs under fire from analysts to cut research and outsource heavily. In retrospect, it looks like they were setting up pharma companies for their next M&A deals but eventually, all of the restructuring and Wall Street culture of constant change tricked downwards. The performance and compensation system changed, adopting Jack Welch’s program that was designed for GE salespeople, until it resembled Enron with even the lowly lab rats ranking each other, hoarding resources and actively engaging in cutthroat activities in order to avoid the ax.  And that, my friends, is about the worst thing you can do to a research organization.  Collaboration is essential to research.  By the time Wall Street values had trickled down to our level, we could see that they were more suited to the sales executives but in the labs were alien, out of place and destructive.  When it got to the point that lab equipment repairs had to be justified and we were forced to charge other departments for services we used to provide as part of our project collaboration, it was over.

So, I have no doubt that whatever Smith witnessed at Goldman was significant, profound and deeply disturbing.  It may be a similar situation where the business has begun to run amok and eat itself from the inside out, where policies no longer make sense and where the bulk of his time was spent pushing the competition in the next office off of his pedestal.  At that point, it’s no longer a functional business.  It’s a game of winner take all musical chairs.

Yves speculates on the reasons why Smith doesn’t spill all of the beans on Goldman or is even as detailed in his account as someone like Michael Lewis.  Some of those reasons include his relatively low level and institutional omertà.  But another possible reason is that there are few former insiders, even low level insiders like Michael Lewis who can write well on what are pretty complex financial instruments and make them intelligible to the average consumer.   I loved Lewis’s book The Big Short but it wasn’t until I was halfway through the book before I understood enough of it that I saw the humor in some of Lewis’s passages.  Now I know what Wall Street was up to but I doubt that even many Wall Street analysts truly understand the math and models behind their dynamic proprietary programs.  If Greg Smith understands them, there’s probably a lot he can’t divulge without  getting the Goldman legal department to bear down on him.

In any case, Smith’s book sounds interesting but I probably won’t be adding this one to my audible queue.  It’s not because I don’t think it is a worthy read or can’t learn more.  It’s just that through Karen Ho’s book Liquidated, and Lewis’s The Big Short and Boomerang, I think I get the picture well enough to know what went wrong.  But if you don’t have the time or patience for more than just a high level summary. it sounds like Greg Smith’s book might be just the horror story to keep you up on a cold and stormy October evening.

Sunday: Spreading the mess to YouTube

This morning, I checked my youtube subscriptions for new videos and this ad popped up on one of them:

I can only hope that the less politically savvy viewers figure out that:

1.) If there are only 2 trillion barrels of oil available in the US and we’ve used a trillion just in the last century alone, the trillion that’s left isn’t going to last very long.

2.) Just because wages have been lost, that’s not necessarily the result of a moratorium on exploring for new sources.  The authors of this ad should show a connection.  Just saying there is one isn’t a very good answer.  You wouldn’t accept this level of proof from your teenagers.  If, on the other hand, those wages have been lost from oil rig workers in the Gulf and the politicians answerable to the workers in their states blocked stimulus money or money dedicated to energy research or grants to retrain those workers (to install solar panels, for example), then those politicians should face their voters and explain themselves.

3.) Obama is responsible for a lot of things but in this case, any politician who doesn’t find a quick solution for the diminishing amount of oil in the entire world is not doing his or her job regardless of party affiliation.

I also bothered to look up who was behind this Stop the Energy Freeze campaign.  It’s the Institute for Energy Research and it seems to be particularly concerned with oil that is currently off limits in the Gulf of Mexico, for some strange reason.  Maybe that’s because they’re based in Houston?  Or maybe it’s because it’s because it’s been touted by Rush Limbaugh who hasn’t met a resource (natural or human) that he hasn’t considered exploitable?

Ahhh, this little tidbit is interesting.  The co-founder and CEO of The Institute for Energy Research is some dude named Robert L. Bradley.  And HE used to work for Enron and Kenneth Lay.  You know, the Smartest Guys in the Room?  The ones whose traders used to yuck it up about how they were going to f$^& over some Granny in California by manipulating the energy market?  The company that made all of its employees invest in Enron stock in their 401Ks and then locked them out of their accounts when the price plummeted so that they lost EVERYTHING?  Yeah, that Enron.  Bradley was the PR guy.  He’s also an adjunct “scholar” of the Cato Institute.  How charming.  Is that where he learned to deceive unsuspecting youtube viewers?  Is the liberty to make the end really justify the means ensconced in the Constitution somewhere?  Are we free to pull the wool over citizen’s eyes with bullshit?  I guess it’s the responsibility of every rugged individualist to be on his guard.

Enron, has it really been 10 years?

I hate to see Google participating in evil by allowing entities like this one from blatantly lying and misleading viewers and planting even more craziness in the heads of the unsuspecting.  So, if you’re out there, Jeff Jarvis, why don’t you ask Google if they have a policy about false and misleading advertising?  I’m not aware of any mechanism that will allow me to shut off ads like this.  There should be a toggle switch for political/policy ads.  Being bombarded with Old Spice ads is one thing.  This is quite a different and dangerous thing.  At the very least, Google should be requiring a lot more disclaimer and maybe even a warning saying “this ad is produced by a policy advocacy firm the purpose of which is to persuade the viewer.  Not all information presented here may be factual or accurate. Viewer discretion is advised.” and then followed by links to rebuttal ads.

Otherwise, it’s like being a party to evil, or renting out your beach house to a bunch of frat boys where evil is done.

Disclaimer: I favor alternatives to oil and coal energy including wind, wave, solar and *nuclear* energy, provided the regulatory agencies that monitor these things are technologically modern and rigorous.

Sunday: That Giant Sucking Sound

I just finished listening to The Pillars of the Earth by Ken Follet.  It’s an historical fiction novel saga of massive proportions revolving around the building of a cathedral and the original robber barons who didn’t give a flying fig for truth or beauty.  Follet is a perfectionist when it comes to historical accuracy so I can only imagine what life must have been like to live under the rule of the despicable Sir William Hamleigh, the local lord.  Sir William rapes, raids and plunders his own burghers with impunity.  He owes his allegience to the King and the King doesn’t have time or interest in mitigating disputes or hearing the pleas of Hamleigh’s besieged populace.  Essentially, the 12th century, pre-Magna Carta, was a lawless place.  The church had ecclesiastical courts but the barons did what they pleased and everyone else was forced to eek out a living between tithing the church, paying their outrageous taxes and keeping their heads down whenever Hamleigh decided to torch their homes out of spite.

Virtue wins in the end, but it takes 45 years before the wicked get their comeuppance.  Justice comes when the good guys take time to help themselves and their neighbors, don’t allow fields to go fallow,  keep the poor on their land even when poor weather conditions make it impossible for them to grow food and pay their rents and taxes.  They pitch in for community infrastructure projects, like building a wall and barbicon to keep their lord and his men-at-arms from entering and robbing the village at will.  They volunteer their time on building the cathedral and in the process, create a bustling commercial zone where people from surrounding farms and villagers can ply their wares.  If Sir William had just left well enough alone, he would have seen an increase in tax revenue and a healthier, more productive population.  But nooooo, the wealth that was starting to build had to be siphoned off immediately by Sir William time and again.

History keeps repeating itself.  In the past eight years, the robber barons have made a comeback.  When Bill Clinton, the man of good government stepped down, he left a population that was prospering.  There was a mild recession but in general, people had money in their pockets, were gainfully employed and there was a surplus.  And the robber barons sat back in their saddles and decided it was plunderable.  So, they manipulated the energy markets in California first and siphoned off the assets of vulnerable Enron workers when the whole scheme went south.  But that was just the beginning.  Then came collateralized debt obligations, credit default swaps and tranches.  The Paulsen Bailout Bill was the biggest transfer of wealth from average taxpayers to the wealthy and powerful with virtually no accountability or oversight.  And Barack Obama was all for it, even as Hillary Clinton tied desperately to get the country’s attention in order to fix the bill before it passed.  But that wasn’t enough.  Then the nobility at Halliburton got no-bid contracts to rape and pillage another country and hoard the oil.  But that wasn’t enough.  Now we know for sure what we suspected all along: speculators drove the price of oil up so that we, the hapless burghers, would spend $4.00/gallon in gas, driving food and heating costs up and bringing vulnerable families in shady mortgages to their knees.

But that wasn’t enough.

The plot of Follet’s book revolves around the White Ship disaster.  King Henry I was a powerful Norman monarch who had a zillion illegitimate children but few true heirs.  His only male heir is drowned in a shipwreck early in the book.   Follet writes the shipwreck as sabotage, planned by the barons, in order to keep the monarchy weak.  Henry’s only remaining heir is a woman, Matilda.  Matilda has a cousin, Stephen, who promises the churches and barons everything they want.  So, they give their allegience to Stephen, setting off a 20 year civil war that tears the country apart and leaves many rank and file English on the brink of starvation.  Stephen *is* a weak king and alliances to him shift like the wind with the end result that the barons pretty much do whatever the F^&* they want, sucking up wealth with impunity and terrorizing the villagers.  And Stephen can’t do a damn thing about it.

Plus ça Change™!

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Sunday: The Freeper Infestation

A couple of years ago, Bob Altemeyer of the Univerity of Manitoba wrote an online book based on his 40 years of psychological research into the mind of authoritarians.  He didn’t think the book had any commercial value so he offered it for free  on his website under the title, The Authoritarians.  John Dean cited Altemeyer’s work in his book Conservatives Without Conscience.  I highly recommend both books but if you have to start somewhere, try Altemeyer’s book.  It’s based on a lot of research but it is written in a highly accessible conversational style and is chock full of fascinating details about what makes these people tick.

I only bring this up because Obama’s position on the FISA debate has brought out something deeply disturbing in his followers.  Obama says he will support the House compromise but not necessarily Telecomm immunity.  (I have my own thoughts about this but I’ll get to that in a minute.)  Glenn Greenwald has a scathing post about Obama’s capitulation but what Glenn says about Obama’s followers is even more severe.  From Greenwald’s Obama’s Support for the FISA Compromise, Glenn has this to say:

The excuse that Obama’s support for this bill is politically shrewd is — even if accurate — neither a defense of what he did nor a reason to refrain from loudly criticizing him for it. Actually, it’s the opposite. It’s precisely because Obama is calculating that he can — without real consequence — trample upon the political values of those who believe in the Constitution and the rule of law that it’s necessary to do what one can to change that calculus. Telling Obama that you’ll cheer for him no matter what he does, that you’ll vest in him Blind Faith that anything he does is done with the purest of motives, ensures that he will continue to ignore you and your political interests.

Beyond that, this attitude that we should uncritically support Obama in everything he does and refrain from criticizing him is unhealthy in the extreme. No political leader merits uncritical devotion — neither when they are running for office nor when they occupy it — and there are few things more dangerous than announcing that you so deeply believe in the Core Goodness of a political leader, or that we face such extreme political crises that you trust and support whatever your Leader does, even when you don’t understand it or think that it’s wrong. That’s precisely the warped authoritarian mindset that defined the Bush Movement and led to the insanity of the post-9/11 Era, and that uncritical reverence is no more attractive or healthy when it’s shifted to a new Leader.

The excuse that we must sit by quietly and allow him to do these things with no opposition so that he can win is itself a corrupted and self-destructive mentality. That mindset has no end. Once he’s elected, it will transform into: “It’s vital that Obama keeps his majority in Congress so you have to keep quiet until after the 2010 midterms,” after which it will be: “It’s vital that Obama is re-elected so you have to keep quiet until after 2012,” at which point the process will repeat itself from the first step. Quite plainly, those are excuses to justify mindless devotion, not genuine political strategies.

I recommend the whole piece.  Greenwald is brilliant when it comes to constitutional issues.  But what I think he touches on here is what some of us witnessed in the very early manifestation of Obama mania for brutal suppression of dissent and unquestioning loyalty towards the Obama personality that is reminiscent of the early Bush years.  And I think the reason we are seeing this is because some of the Freepers and Little Green Football fanatics moved to the Democratic party.  Whether this was due to some Rovian design or whether it was the inevitable migration of an evolving demographic is unclear to me.  I picture these new Democrats as the same type of people who ran Enron like they did in the documentary, The Smartest Guys in the Room.  They seem to share many of the same characteristics.  They are like salesmen with testosterone poisoning, ultracompetitive and not particularly wedded to one political philosophy or another.  The party power structures exist to them as a means to acquiring what they want, whether it is deregulated markets or wealth or unfettered liberty.

Some Obama followers, not all, are the double high kind of authoritarians that Altemeyer talks about.  They are both vulnerable to authoritarian indoctrination while at the same time, perfectly capable of manipulating the system and individuals for their own personal gain.  This is who has taken over the Democratic party.  For those of you who still believe that is OK to straddle the fence and be both supportive of the party but object to the way that Obama has managed to comandeer the party mechanisms for his own advantage, I would strongly caution you that this is not the case.  If you do not now take a stand and push back with all your might, you will not have a party that will represent you in the future.  Obama and his handlers are not benevolent despots.  And this is not an insurmountable situation.  You have the power, now, and in the worst case scenario, at election time, to make a difference.  As Edmund Burke once said: “The only thing necessary for the triumph of evil is for good men to do nothing.”

PUMAs can not do nothing.

Now, I don’t know about you but I have my own criteria as to what would have been the correct response to the FISA debacle.  If I were King of the Forest, I would make sure that our constitutionally guaranteed civil liberties were protected.  The proposed bill would have to be structured in such a way that new surveillance techniques would not infringe upon them.  As for telecom immunity, I’m a more practical individual.  There is a lot of room here for negotiation.  The power is in the hands of Congress to compel the telecomms to compromise on more market competition.  If we punish the telecomms with class action lawsuits, the only people who will benefit will be the lawyers.  The average customer will not likely see a big payoff.  What are you going to get?  A check for a $100 or a credit for your next month’s phone bill?  You, I and the fencepost know this is the all too typical result.  BUT, what if you could force the telecomms to allow ala carte programming on your cable system or infrastructure improvements or mandatory guidelines for better customer service?  What if you could forbid big telecomms from bidding on newly available radio spectra or force them to open their networks to your favorite cellphone?  Wouldn’t this be better than decimating them and sending potentially thousands of their workers to the unemployment lines?  And so what if some of them *did* take a hit?  Wouldn’t their workers benefit from the increased competition as well by having more new start up companies to work for?

Just sayin’

(If you want to know what Hillary has to say about FISA, here are her last statements I could find on the subject from back in February, 2008.  In summary, she co-sponsored Dodd’s bill and says she will support a filibuster if the bill that comes before her infringes on a citizen’s right to privacy and civil liberties.  This, more than preventing retroactive telecomm immunity, is the correct stance.)

Tuesday: Bird Brains

From Jacilyn:

It looks like people higher up in the food chain are considering a protest vote as well. Taylor Marsh writes that even Geraldine Ferraro is disgusted. And, predictably, the accusations of political immaturity are not far behind.

Let me set the record straight for those of you who don’t understand where this is coming from. This DNC and the Obama campaign have conducted the campaign season as if they took lessons from the Enron boys from the movie, The Smartest Guys in the Room. There’s something distinctly unDemocratic about the whole thing. It doesn’t pass the smell test. Cokie Roberts (of all people) mentioned it a couple of days ago. The process for picking a candidate is deeply flawed and *could* be easily manipulated to thwart rather than confirm the will of the people. It’s like the California deregulation plans that were just sitting there waiting for some clever traders to game the system for fun and profit at “granny’s” expense.

The system is flush with cash and one can almost imagine the operatives sitting at their monitors hearts pumping with adrenaline while they pull out all of the stops, reaching deep down into the modern American psyche in order to power play off all the weaknesses there that will result in a maximum payoff. Assertive women, men with hardhats, hillbilles, grannies ripe for rapping, gays and lesbians all provide targets for the aggressive young, male and pretentious to exercise their new social hierarchy. The level of viciousness is reaching a fever pitch.

Who is giving them permission to set aside their ethics and shuffle off the standards of acceptable behavior? Who is running the party that allows for the brutal suppression of one half by the unleashed id of the other half? I put the blame at the top of the party and Obama himself.

There is a price to be paid for such aggressive and insensitive behavior. People do have free will. The party belongs to the people who believe in its principles. Those principles of social justice, equality and shared responsibility can not be discarded for Change! without the party suffering some severe blows to its foundation. Going forward, the party becomes a fragile shell, easily blown to bits by outside forces because its foundations of support have been carelessly undermined.

This is where we are. The foundations of support, the people and principles that made the Democratic party viable and strong, are being callously destroyed by those who have been given permission to rig the system for one candidate over the other. Those of us who stayed with the party and our country through decades of movement conservatism, who volunteered our time and our voices, who suffered withering criticism and family divisions for not adopting Republican values, who protested the war, the attacks on science, the regression of women’s and GBLT progress in the public sphere, the subjugation of the working class have all been told that we’re not wanted anymore. Our party has evolved and we, like neanderthals, didn’t make the cut.

What is left is the Republican party and a Republican Lite party. There is no place for the “tired, the poor, the huddled masses yearning to breathe free, the wretched refuse of the teeming shores”. Where is our liberty? Who will defend us? What has happened to our power in a union?

To those who are celebrating their triumph, light and joyous, unburdened by the working class and their entitlements, be careful. There is one power that we still have. And if we have to exercise it to bring you back into line and ground you in your responsibilities and obligations to us, we will.

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