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Post in a hurry

Weather here in Pittsburgh is right up there with Edinburgh, Scotland this spring.  The forsythia still have yellow flowers on them.  The magnolia tree was in full bloom when we got a hard, hard frost a couple of weeks ago.  That turned all of the blossoms brown.  That same frost killed the flowers in my planter.  Don’t you love to spend money on plants to watch them die?

Lovely.

Cate Blanchett as Hedda Gabler

I noticed that someone was reading my Mad Men post from a couple of years ago.  I still stand by the Ibsen connection but I have a couple of revisions, as well as some theories about a secondary theme on the submission of the creative forces in business to the forces of convention and money.  Heads up: it doesn’t end well for the creative types.  But if you’re wondering how it is Americans celebrate the MBAs and their values to the detriment of everyone else, Matt Weiner may have an idea about how that happened.  I’ll try to map that out later.

Betty Draper as Hedda Gabler

In the meantime, what is the real world consequence of the defeat of the creative?  We may be about to find out when it comes to infectious diseases.  The NYTimes reported yesterday on the first case of MERS in the US.  MERS is a respiratory disease that is related to SARS.  It has a lethality rate of around 30%.  That’s scary high.  It doesn’t mean that MERS is going to take off like the pneumonic plague but I’m betting that fellow passengers on the flight with patient zero are sweating buckets right now.

MERS is a viral infection but resistant bacterial infections are the ones to really worry about.  Viral infections require vaccines and they’re trickier to treat once you get an infection.  For example, what do you take if you get the flu or ebola?  Cat’s out of the bag at that point.  You don’t have a lot of options but to wait it out and hope your immune system kicks in before you die. But we know how to make antibiotics.  We just aren’t making a lot of new ones these days.  Those kinds of drugs aren’t profitable because patients don’t take them for long periods of time so the shareholders aren’t getting a high enough return on investment.  The antibiotic projects get dumped from the portfolio in favor of cancer drugs and orphan disease drugs.  Maybe that’s reassuring to the cancer patients out there but how does it feel to be the shareholders’ cash cows?  And what about the patients with resistant infections, psychiatric illnesses and other illnesses that are difficult and expensive to discover drugs to treat?

In the meantime, the creative types are busily writing their resumes in the wake of another M&A announcement.  That’s the way the world works these days.  The research divisions are viewed as unpredictable and expensive weights on the bottom line.  The hardworking creative geniuses are at the mercy of the bean counters and MBAs.

And so are the rest of us.

Non-fiction day: The Divide and The Lucifer Effect

I’m not quite finished with Matt Taibbi’s new book, The Divide: American Injustice in the Age of the Wealth Gap, but I thought I’d review it now because, a.) I’m pretty sure of my impressions of the book and b.) it should be read in conjunction with another book, The Lucifer Effect: Understanding How Good People Turn Evil by Phillip Zimbardo.  I dunno, maybe I should read the Taibbi book to the end to see if he makes the connection but I’m beginning to get outrage fatigue, which is why it’s probably a good idea to read the more clinical prose in Zimbardo’s book to gain perspective.

So. Much. Morality.

The premise of Taibbi’s book is that the justice system is divided into two parts in this country.  If you are a member of the bonus class or oligarchy, your possession of the One Ring makes it nearly impossible for the justice system to prosecute you.  You’re invisible to the powers of accountability for one reason or another.  On the other hand, if you are a member of the working class, that is, anyone not living off their investments, the justice system can make your life a living hell.  Just breathing wrong can get you into trouble and that trouble is excessively punitive, relentless, expensive, arbitrary and seemingly endless.  It doesn’t take much to fall down the rabbit hole but it takes even less if your are a member of a minority population.

Sidenote: We have experienced this in our own family when a cousin’s persistent drug problem lead to direct interaction with the justice system.  He needed rehab- quickly.  What he got instead resembled Les Miz.  In the end, the legal system and it’s self-replicating fees, coupled with unmerciful punishment of every imaginable variation, put him in a hole he could not climb out of, made him homeless, broke and despondent.  He committed suicide.  So, you know, we definitely know what Matt is talking about. You don’t have to be black or hispanic. All that is required is that you have no money and live in a country where the public has been trained to be completely unsympathetic to what is happening to you.

Taibbi alternates the book with stories from each side of the divide.  We swing from bankers on Wall Street who got away with murder to “stop and frisk” detentions of young black men who are just standing outside their apartments at the wrong time.  Where the justice system seems willing to take a “boys will be boys” attitude towards the bankers, it comes down on the loiterers with a vengeance, depriving them of their dignity in the courtroom and subjecting them to endless hours of waiting around, mounting fees and coercion to plea to crimes they didn’t commit that ultimately deprive them of their right to public housing and student loans.

Taibbi doesn’t write with the same snap and clarity as Michael Lewis or Neil Barofsky  when describing the machinations of the Wall Street criminals.  His prose tends to meander, feels insidery (is that a word?) and it was difficult to follow who did what to whom.  This only pertains to the case studies in the upper justice system but I think his editor should have pulled him aside and asked him to tighten these sections up. He could never have gotten those case studies published in the kind of peer reviewed journals the science community is subjected to. Both Lewis and Barofsky have demonstrated that complexity doesn’t have to be confusing, even in an audio book.  But if you’re going to plow through Taibbi’s book, you’re probably better off getting the ebook version so you can make notes, leave book marks and create a flowchart.

On the other hand, Taibbi’s case studies of what happens on the bottom half of the justice system are easy to understand and  heartbreaking, probably because the infractions are so minor but the reaction is so severe.  It’s like the American justice system is chock full of turbo charged law and order types who carry out punishment with ruthless and brutal inefficiency.  And there was something about depersonalizing experiences of the victims and the anonymity of flawed computer systems of the justice system that reminded me of the Stanford Prison Experiment that Phillip Zimbardo carried out in the 70′s.

In case you aren’t familiar with the experiment, Zimbardo, a psychology professor at Stanford, wanted to replicate the experience of prison in order to figure out how the accused reacted to incarceration and depersonalization.  So, he recruited a couple dozen students to take the roles of prisoners and guards.  He randomly assigned the students to one of the groups and had the prisoners arrested and processed by real police.  In the makeshift prison, the prisoners were stripped of their clothes and given numbers instead of names.  The guards hid behind mirrored sunglasses and were given very few instructions. The warden was hands off.  Well, it didn’t take long before the guards started exercising authority and the prisoners started to crack.  We’re talking days.  It turns out that when one group of people is given all of the power and another group of people is subjected to that power, depersonalization and lack of oversight, it can lead even the blandest guy on campus to become indistinguishable from one of the guards at Abu Ghraib. The guards imposed capricious, humiliating and sadistic punishment while the prisoners became more and more despondent and stressed.  Zimbardo went on to testify as an expert witness in the Abu Graib trials.  He concludes that even the most decent, moral people are capable of evil behavior when the situation is right.  Group dynamics, conditioning to authority and dehumanization contribute to the kind of evil we saw at Abu Ghraib and, it seems, the excessively punitive experiences of the victims in the lower half of the American justice system.

The more I read Taibbi’s book, the more I was reminded of Zimbardo’s book.  So, I recommend you read Zimbardo’s book first and follow it up with Taibbi’s.  In fact, that’s the only reason I would recommend Taibbi’s book.  Without a proper context, it lacks the force it needs to land a powerful blow.  And that’s why I’m going to finish it even though the stories of “getting away with evil” followed by “getting away with nothing” are somewhat monotonous.  Taibbi might make the connection in the final chapters and have that eureka moment that will make it all worth while.  But I’m almost done with the book and see no evidence of it yet.  I’m afraid that the lefty community will miss the larger point that could propel it out of its fecklessness.  Instead, it might fall back on the “Bill Clinton is to blame for all of this!” crap they’ve been mindlessly vomiting for the past decade (as if Newt Gingrich and his Contract On America never existed {{rolling eyes}}).  What a horribly wasted, missed opportunity to see the world as it truly is.

3 Sponges for The Divide

4 Sponges for The Lucifer Effect (it can bog down with too many details in the first part)

PS. The left should study part 2 of Zimbardo’s book to understand how to resist situational influences.  It’s going to come up again in 2016.  Let’s not get fooled again, m’kay?

Oh, and here’s a concept that we should all learn about: malignant narcissism.  Don’t throw it around indiscriminately though.  It’s the kind of thing that Fox News and Rush Limbaugh types will seize on and dilute.  (it’s what they do)  But the next time an oligarch whines about how the rest of us are mean to them and envy their wealth, think about malignant narcissism.  They’re on the spectrum.

 

 

 

Karen Ho: It’s not about full employment

Anthropologist Karen Ho, author of Liquidated, was on Virtually Speaking a couple of weeks ago.  Check out the whole interview here.

I wrote a series of posts about Liquidated, applying Ho’s observations of Wall Street culture to the pharmaceutical industry because I’m going to make you care about unemployed scientists no matter how much you think you hate them, dammit.  It’s that important.  Here are my posts:

The Strategy of no Strategy Part 1

The Strategy of no Strategy Part 2- Flexibility

The Strategy of no Strategy Part 3- Shareholder Value

The Strategy of no Strategy Part 4- Putting it Together

I have to add that the outrageous price of drugs has just as much to do with the left’s behavior as the right’s but that is for another post. The pharmaceutical industry is probably the only place where that statement is accurate.  I’m not just playing a “professional journalist” who has a fiduciary obligation to my employer to say that “both sides do it”.

Oh, and I also told you that the cost of generics is going to continue to rise.  You heard it here first.

Anyway, back to Karen Ho.  In her interview, she said something very interesting that I had been wondering about.  She said that the “culture of smartness” thinks that no one works harder than they do.  And that’s probably true.  The analysts on Wall Street work crazy hours, like about 100 hours a week.  That doesn’t mean they do anything of value or that is productive.  I’m not sure lining up bullet points within a pixel of their lives is a particularly good use of one’s time, even if the presentations are beautiful.  Content is more important, but that’s just me.  So, essentially, Wall Street takes 22 yr old ivy league graduates, throws them in a financial crash course for a couple of months and turns them loose on the world to work like maniacs.  It love bombs them and tells them they’re wonderful because they pull the levers of the world’s economy without sleep and then those same analysts grow up to leave nasty comments in pharmaceutical industry blogs.

What I’m referring to are the comments that Derek Lowe sometimes gets on his posts when he announces another round of mass layoffs at Merck or Glaxo or whatever.  Some asshole will say something to the effect that it’s ok because it clears out the “deadwood”.

The weird thing is, these layoffs frequently *don’t* clear out the deadwood.  Oh sure, there is some brush clearing but the thing is, if you are in a group run by a blessed manager, you could be the deadest of the wood and still survive.  And a lot of the deadwood is in the managerial class and they tend to have the salesperson’s gift for explaining why they should be retained while everyone under them is cut.  So, by the end of the day, after pharmageddon leaves smoking ruins in its wake, the people who are left are those that haven’t been inside the lab for years.

Anyway, I have to thank Ho for alerting me to who was leaving those comments.  Funny how they would even bother to check up on our horror and dismay at another medicinal chemistry group biting the dust.  But they really have no idea what they’re doing, hence The Strategy of No Strategy.

Chrystia Freeland also has an opinion piece in the NY Times about the role of plutocrats vs populists and social distancing.  Something about Freeland’s piece didn’t seem quite right though.  Freeland is taking it as a given that technology is hollowing out the middle class.  This may be true but I see things from a different perspective and mourn the blight that plutocracy has had on technological progress.

The truth is that we are now experiencing the golden age of biology.  We are learning so much about biological processes on a daily basis that it is hard to keep up.  There is so much we now know and so much yet to be discovered.  There is enough work to keep every chemist and biologist busy for the rest of their lives.

The problem is that no one wants to pay for discovering those mysteries.  There will be diseases that won’t be cured, processes that won’t be applied to other fields and whole new industries that won’t be founded because plutocracy is choking the life out of the discovery field in the name of shareholder value.  And now we have the Republicans and their sequester choking out the only hope we have that government will step in and pick up the slack where shareholder value has failed.

In a way, the demonization of science has helped this process along.  We’re just a bunch of Simon Barsinisters in white lab coats planning to take over the world and heedless of our impact on it.  That suits the lawyers and the politicians that feed on the “knit your own sandals” demographic just fine, doesn’t it Jay Ackroyd?  But it leaves science without any advocates.

The point that Freeland is missing and that Ho might understand better is that there doesn’t need to be a hollowing out of the middle class.  This country could become an unmatchable technology powerhouse once again if some of that money was put back into research at both an industrial and academic level.  But someone has to be willing to commit the money to the process and in the age of shareholder value, that’s not going to happen.  Research takes long term investment and continuity and stability, all three of which are severely lacking these days.  The countries that make the commitment to provide these three elements are going to come out ahead.

One other point I’d like to make has to do with what do we do to get it back on track.  One of the things I hated when I was on the school board was when a bunch of parents complained about the same thing over and over again but never offered any solutions.  Ezra Klein twittered yesterday: what is the country’s most challenging economic problem and what is the solution?  Here’s my answer: the problem is an out of control finance industry.  The solution is to phase out the 401K.  Regulation would also help but the 401K makes more and more of us reliant on risky Wall Street instruments and encourages a kind of recklessness.  A steady stream of 401K payroll deductions is like heroin to addicts.

It’s got to stop.

 

 

What’s wrong with these people, er, this picture?

Screen Shot 2013-07-19 at 7.18.27 AM

Oo! Oo!  I know how to fix this!  Maybe we can take the fines from the banks like Chase, who now consider fines just protection money they have to pay so they can keep doing what they want, and use it to make Detroit solvent.  Or would we hear whining from Wall Street that it is unfaaaaair to redistribute our country’s tax dollars to the unworthy?

Assholes

****************************************

In another story of bad deed doing, Glaxo Smith Kline (GSK) is creating an international incident in China where it has been accused of bribing government officials and doctors with about $500 million in order to raise the price of their prescription drugs.  Note that it was probably the testosterone and amphetamine soaked sales department that came up with this brilliant idea.  Now, China is forbidding GSK’s finance director from leaving the country.  What a splendid idea!  Maybe we should send all of our misbehaving finance directors to China.  Derek Lowe has more on the story.

If I recall correctly, the GSK research site in Shanghai was also accused of some falsification of data that lead to publications being pulled from Nature.  Hey, the management in China wanted to show it could get publications in Nature so it did- by lying.  For a brief time there, the Shanghai site was probably held up as a model of research brilliance by the executive class to all of the other global, loser “centers of excellence” at GSK.  That ought to give the King of Prussia, PA site a nice warm and fuzzy feeling.  We shouldn’t be surprised by the China syndrome.  One of my Chinese colleagues told me that China wasn’t like the US in terms of business infrastructure and relatively low levels of corruption but that only time would prove to the executive class that China wasn’t ready for a world class research industry.

It’s also GSK that proposed to pay their scientists million dollar bonuses if a drug candidate goes blockbuster.  Read Derek Lowe’s post on the topic for a run down of why this is a phenomenally bad idea.

GSK, this week’s poster child.

Revealing, Sickening or Scarily Incompetent?

Someone hacked the AP Twitter account today and tweeted that the White House was bombed and Obama was badly injured.

The stock market took a dive.  In a matter of minutes, the market plunged almost 100 points.

That’s not a precedent I would have liked to have set.  Maybe next time, they’ll hack Reuters, MSNBC, CNN, Al Jazeera and the State Department.

(and what exactly were they dumping that seemed to so heavily rely on Obama? Curiouser and curiouser…)

The people who run the economy should be sacked.

The foreign STEM worker’s revenge

Note: Corrente is having an end-of-year fundraiser!  Check it out.  They are some really decent people over at Corrente including Lambert, DCBlogger, Letsgetitdone and CoyoteCreek.  There are some people who make me think, “bloggers, you can’t live without them and you can’t give them a wedgie.”.  But that’s all good, right?  How much fun would blogging be if it was all just one big echo chamber and no one disagreed or raised their voices?  It would be like spending eternity with a bunch of Jehovah’s Witnesses.  So, keep your blogosphere JW free and contribute to Corrente today!

*********************************************

Avedon Carol posted this today:

Congress Betrays The U.S. STEM Worker Once Again: “The House of Representatives is out to destroy the American Science, Technology, Engineering and Mathematics Professional. Republicans passed H.R. 6429 with the oxymoron title, STEM Jobs Act of 2012. STEM stands for Science, Technology, Engineering and Mathematics and this bill gives 55,000 foreigners a year who graduate from an American university with a Masters or PhD in these fields an employment sponsored green card. ” They’d rather have guest workers rather than Americans in jobs.

Avedon, thank you so much for being one of the first bloggers on the left who even acknowledges that there are about 100,000 unemployed, highly trained STEM professionals who are out of work right now.  I have been trying to get through to some of thick skulls on our side of the aisle for almost 4 years now and they have either been in denial or lifted their snooty liberal noses in the air because they don’t like what we do for a living, i.e. save their asses with our research.

But it’s not the Green Card holders I’m worried about.  It’s the people who come here on HIB visas who can only work here as long as their companies sponsor them.  I have known people who worked in research for years who couldn’t get a green card.  Once their companies laid them off, they had to go back to their country of origin even if they had settled down and bought houses and had excellent work records.  Even *with* a green card, a researcher is at risk of being sent home if the green card is narrowly restricted.  For example, a green card holder might be able to get one to work only in the particular position for which they were hired.  If their company lays them off, they have to find a similar position or they can’t work in this country. They can’t just become a greeter at Walmart. If they can’t find an almost identical job within a certain period of time, they have to start the application process all over again, which means going back home, going on parole, all kinds of unpleasant and economically disastrous things.

By the way, here is a word of warning to the visa holders out there who applied for a green card years ago but whose company bureaucracy seems to be sitting on the application.  If you can’t get them to move on your application it’s probably because the company isn’t planning to keep your site open.  But they can’t come right out and say that because that might induce panic at the site.  So, instead, your application sits in no-man’s land.  They’re planning to milk you for all you’re worth and then lay you off.  What happens to you after that is YOUR problem.  Get your affairs in order and don’t buy that house.

I don’t know whether Congress is going to fix this.  You’re absolutely right that we don’t need to further cripple the ability of American STEM workers to find jobs. Right now, there isn’t a shortage.  Nope, not even a little bit.  We are fairly bursting at the seams with over educated, technically proficient STEM professionals who are all dressed up with no place to go.  The companies whine about a skills gap that is non-existent.  What I and my fellow unemployed STEM professionals have found is that these companies want a person straight out of school with 25 years of experience.  In other words, they desperately need experienced people but they have no intention of paying for it.  So, they are assuming that cheap foreign grad students will be able to pick up the slack and if it doesn’t work out, well, it’s only a green card. Let them try to find work at another company.  That will keep them from getting notions of dignity above their station.  Right?  You know I am.

But here’s the thing, Avedon.  I know many, many foreign researchers who come here, get a Green Card and as quickly as possible, convert that to citizenship, which is how it should work.  We should welcome the people who intend to stay.  Then, they become ferocious tiger parents and their kids graduate at the top of their classes.  But those kids are just as likely to go compete for jobs – on Wall Street.

Yep.  In fact, those Chinese, Indian and Russian graduate students in molecular biology and physics could be the brand new recruits for Goldman Sachs.  It’s not unheard of.  I know several people who decided that research was unrewarding and economically unstable.  No one appreciates what we do. They decided to leave science to get into hedge funds.  And their kids are going to go where the money is. I already know many Asian parents who are steering their children in that direction. The “Jahb creators” might think of them stereotypically as hard working, no drama Chinese (they greatly underestimate them) but they are not naive pushovers.

And why shouldn’t Lloyd Blankfein replace his little group of overpaid WASPs to work the front office when he’ll have more than enough brilliant, aggressive recruits who not only speak perfectly unaccented English but a fair bit of Mandarin too?  Talk about asymmetric information, you have no idea how much you’re missing until you’re surrounded by the Chinese underground every day.

So, while I’m not happy about this bill, because the premise upon which it is built, that we need more STEM workers, is absolutely not true.  But if they’re coming, I’d rather give them a green card with zero restrictions than a visa.  And then, I’m just going to sit back and watch them take over the world.

Bwahahahahahahhhhhh!

As for the Congresspeople and Senators who voted for this stupid bill that will keep many Americans, including naturalized Asian American researchers, out of work permanently, I think we STEM workers should compile a list of names.  Maybe some of us should run against you or at least point our fingers in your direction and proclaim loudly to everyone we know and our children that you put us out of work and killed American science by giving in to the greedy lobbyists who have no appreciation for what it means to do actual research.

Now, can we talk about who clueless twit Marcia Angell is working for?

Neil Barofsky’s book is depressing.

Summary: Obama appointed the Mafia to run the Treasury.

You know it’s bad when your Democratic Special Inspector General for TARP who was appointed under Bush says the Obama Treasury appointees are worse.  Not only that but the HAMP program was constructed in such a way as to encourage mortgage foreclosure fraud by the servicers. Tim Geithner is not a nice guy.  Oh, no, he isn’t.  He’s a sociopath.  It’s just bad any way you look at it.  We’ve been had.  The banks own everything.

I don’t know if I can handle Sheila Bair’s book, Bull by the Horns, as well.  It might be too much.

Don’t let anyone fool you.  The good guys have left the administration with a couple of exceptions.  The rest have to go.  Clean them all out.

The Ring of Gyges or Why Study the Classics at UVA or Why anti-Regulators are full of $#*!

About 2500 years ago, the philosopher Plato told a story that even the most dedicated Fox News viewer can understand.  Here it is in text form:

According to the tradition, Gyges was a shepherd in the service of the king of Lydia; there was a great storm, and an earthquake made an opening in the earth at the place where he was feeding his flock. Amazed at the sight, he descended into the opening, where, among other marvels, he beheld a hollow brazen horse, having doors, at which he stooping and looking in saw a dead body of stature, as appeared to him, more than human, and having nothing on but a gold ring; this he took from the finger of the dead and reascended.

Now the shepherds met together, according to custom, that they might send their monthly report about the flocks to the king; into their assembly he came having the ring on his finger, and as he was sitting among them he chanced to turn the collet of the ring inside his hand, when instantly he became invisible to the rest of the company and they began to speak of him as if he were no longer present. He was astonished at this, and again touching the ring he turned the collet outwards and reappeared; he made several trials of the ring, and always with the same result–when he turned the collet inwards he became invisible, when outwards he reappeared.Whereupon he contrived to be chosen one of the messengers who were sent to the court; where as soon as he arrived he seduced the queen, and with her help conspired against the king and slew him, and took the kingdom.

Suppose now that there were two such magic rings, and the just put on one of them and the unjust the other; no man can be imagined to be of such an iron nature that he would stand fast in justice. No man would keep his hands off what was not his own when he could safely take what he liked out of the market, or go into houses and lie with any one at his pleasure, or kill or release from prison whom he would, and in all respects be like a God among men. Then the actions of the just would be as the actions of the unjust; they would both come at last to the same point.

And this we may truly affirm to be a great proof that a man is just, not willingly or because he thinks that justice is any good to him individually, but of necessity, for wherever any one thinks that he can safely be unjust, there he is unjust. For all men believe in their hearts that injustice is far more profitable to the individual than justice, and he who argues as I have been supposing, will say that they are right. If you could imagine any one obtaining this power of becoming invisible, and never doing any wrong or touching what was another’s, he would be thought by the lookers-on to be a most wretched idiot, although they would praise him to one another’s faces, and keep up appearances with one another from a fear that they too might suffer injustice.

The Greeks go on to say that King Croesus, you know, the guy who had more money than God, was a descendent of Gyges.

Now, the more zealous whip kissers out there will ask why even bring up this stupid story.  I mean, it’s not even in the Bible, right?  I have no way of knowing for sure but I suspect that Jesus would have gotten around to it eventually but his career was cut short by the anti-Occupy forces of the Roman Empire.  You know how it goes, some rowdy bunch of activists for social justice and equality who sleep outdoors and make noisy spectacles of themselves in public places and carry out unpermitted marches into Jerusalem are reported to the authorities for disrupting the peace, keeping everyone up at night, and making everyone uncomfortable and, before you know it, someone gets crucified and the whole group scatters.  So many parables, so little time.  Still, Jesus was totally into shepherds so I think he was leading up to it.

The Ring of Gyges story is pretty easy to understand and there is a reason why we call stuff like this “the classics”.  The classics never go out of style and say something that is universally true.  So, let me give you my spin on this and why the Ring of Gyges should be invoked whenever some politician starts using the evils of “regulation” to persuade others to vote for him.

The power that the ring gives the user is the ability to do what he wants without accountability.  Gyges gets away with murder and seduction and theft because no one can see him.  In other words, shit just happens. Mistakes are made.  We don’t know who.  Maybe Gyges did it, maybe someone else did it.  We can’t hold anyone responsible because no one is able to see or use indirect methods of seeing who did what.  That is, there is no way to measure who went in and out of the palace that doesn’t rely on our own eyes.  There’s no safeguarding person watching over the treasury who has the power to see through the ring’s power and detect Gyges robbing the bank.

The moral of the story is if there’s nobody watching, no justice system in place that is able to hold you accountable, and even the most honest and ethical person can become corrupted.  It is human nature to desire things and if there is no way to hold you accountable for taking what you desire, then you might as well take it.  In fact, you’re going to look like a fool if you have access to unlimited power and the things you desire and don’t take full advantage of it and the power you have over others.  If you don’t have access to the ring, well, you’re just a fricking loser.  Keep that in mind when you listen to this act from a This American Life episode called “Crybabies” about Happy Hour on Wall Street. Try to ignore the fact that Adam Davidson is reporting. The piece is actually quite good and illustrates the power of the ring of Gyges perfectly:

Wall Street: Money Never Weeps

Plato couldn’t have written that act any better.  Isn’t your blood boiling?  Don’t you want to hurt those bankers?  I know I do.  I think, who the f^*$ do those assholes think they are?  Oh, yeah, they’re the guys (and they’re almost always guys.  Women rarely get away with behaving badly.) who think they don’t have to answer to anyone.  They can do pretty much whatever the hell they want because no one can do a thing about it.  And they attribute their success to their smartness.  They’re just smarter than you losers who work at a regular job.  But that’s not why they’re so amazingly successful.  No.  They’re so successful because we have removed just about all the regulation from the financial industry.  There’s no oversight.

Oversight-1.a : watchful and responsible care b : regulatory supervision <congressional oversight>

In other words, those bankers are invisible to the justice system.  They can do what they want because no one can see what they’re doing.  No one can see what they’re doing because they keep telling everyone that regulation is bad.  They convince voters that regulation is bad by focusing the voters’ attention on the plight of small business owners.  And it probably is bad for small business owners.  But the effect of deregulation virtually never benefits small business owners.  It almost always benefits the guys at the top with the ring.  And the more money they get with their rings, like Croesus, the more money they can spend on advertising and Fox News and bribing politicians to make sure that no oversight is ever imposed on them.  Remember Elizabeth Warren?  She was supposed to head up a new oversight commission for the consumer financial products.  But the bankers wouldn’t have any oversight so Obama never appointed her.  Therefore, they can do whatever they want to consumers without oversight.

This is the real story of Elizabeth Warren and what she stands for.  She should be using that against Scott Brown.

And here is the most recent manifestation of the power of the ring of Gyges as explained by Matt Taibbi and Eliot Spitzer with regard to the fraud that Goldman-Sachs perpetrated on unsuspecting pension fund managers.  Goldman-Sachs is negotiating its way out of prosecution with the consent of our US attorney generals.  Matt says:

I was trying not to be too obvious in making the point that Spitzer is an example of the kind of guy you would want looking at that Goldman case. Not only did I not want to look like a suck-up, but I wasn’t sure how, “As you know, Eliot, a prosecutor is supposed to be kind of a dick!” would go over. Because I would have meant it in the most complimentary way possible. And it has nothing to do with politics. If you read James Stewart’s Den of Thieves you can see that Rudy Giuliani had some of the same key qualities. A good prosecutor should look down the barrel of a bunch of millionaire lawyers at Davis Polk or White and Case and feel turned on by the challenge of combat. Making a deal with any devil should burn him at the core, keep him awake at night.

But that’s exactly who Eric Holder and Lanny Breuer haven’t been, exactly who Bob Khuzami at the SEC hasn’t been. Instead of being fighters, they’ve been dealmakers and plea-bargainers. They’ve dealt out every major financial scandal, from Abacus to the Muni-bid-rigging cases (they prosecuted a few low-level guys at GE but let the big players at the big banks skate) to the Citigroup fraud settlement that was so bad a judge threw it back at the govenment’s face. In that latter case, amazingly, the govenment is now fighting not for its constituents, but for its right to give out crappy deals to repeat-offender banks without judicial review.

I’m not surprised that the Obama administration’s justice department has been reluctant to use regulation to its benefit and prosecute the criminals with the full force of the law.  It was evident early on (April 2009, to be exact) that this was the approach that Obama would use when it came to Wall Street.  All of the “oversight” would come in the way of ad hoc deals, each company getting a custom made solution that allowed them to skirt the law and get away with a slap on the wrist.  That’s because Obama doesn’t have any principles that he isn’t willing to bargain away on the negotiating table and he always starts his bidding on terms that are heavily favorable to the other side.  It’s not a bug, it’s a feature.

It goes without saying that you don’t have to be of any particular political persuasion to be incensed that the banking industry is getting away with murder and theft without any oversight.  It goes without saying but for some reason, I feel compelled to say it anyway.

Just because people on the left are the most vocal and angry and disappointed and irate about the fact that the financial industry is going unpunished doesn’t mean they are wrong.  Just because a bunch of Occupiers are calling attention to the financial industry and how the fact that it is not accountable screws all of us doesn’t mean that they’re bad people.

What I wonder is why it is that so many people on the right are focusing all of their attention on abortion and gay rights and how unemployed and poor people are unconscionable deadbeats but giving the real parasites in the finance industry a pass.  And I can only come to two possible conclusions: 1. The people on the right are easily lead and gullible and respond well to authoritarian messaging because it is all over the place or 2. It’s because they hope to *be* part of that privileged group of power ring owners in the future so that they can have all of their desires met without accountability.

Now, I will be the first one to mock the left for their crazy ass beliefs about GMO crops and homeopathy and nuclear energy and that the pharma industry is trying to poison them (because they’re not and anyway, it’s just another way for the trial lawyers to sink their fangs into the money stream. The left has its own unaccountability problem.)  But if you’re on the right or leaning right, or used to be a Democrat but are so pissed off about what Obama and the DNC did in 2008 that you’re letting your anger blind you to what these criminals on Wall Street are doing now, then you need to do some soul searching and get to the bottom of your orneriness because it’s really not helping.

It’s the right that relies on religion to keep everyone in line with threats of hellfire if you’re sexually active and not married.  You can always count on the religious to condemn everyone who doesn’t believe strictly in the Judeo-Christian version of the ten commandments.  They have a holy fit if you’re an atheist.  But they seem to be perfectly Ok with giving Wall Street a pass.  It’s like, “there’s nothing we can do.  They’re evil and we’re scared of them because they have all the power to make our lives miserable.”  Bullshit, of course there’s something you can do.  Stop voting for the politicians who keep asking for fewer regulations.  It doesn’t get any simpler than that.  Unfortunately, they’re also the politicians who hide behind religion or pander to religious people.  Show me a religious politician and I’ll show you someone who doesn’t believe in regulation.  That’s all there is to it.  They want to let the criminals operate without boundaries.

If these wealthy, unaccountable assholes continue to do what they’re doing without oversight, they’re going to bring the entire world’s financial system down.  That’s what happens when you can’t stop yourself from taking whatever you want and no one else has to power to interfere.

It doesn’t matter if you are on the right or the left, everything you own, everything you planned, your health, your retirement, your entire future, is at risk.

Banks on Jello

Does anyone else get the sense that the financial system is so royally screwed up that it’s one butterfly’s wing flap away from collapsing?

Wall Street shut down this morning because of a number of unusual high volume trades, the LIBOR scandal keeps building, the former CEO of Citigroup says merging with Travellers was probably not such a good idea, while Steve Rattner says don’t break up the banks, write a better Dodd-Frank.  Here’s the money quote from Rattner’s piece today:

Because of pressure from Sheila C. Bair, then the chairwoman of the Federal Deposit Insurance Corporation, the primary responsibility for winding down failing institutions was given to the F.D.I.C., an agency woefully ill equipped to deal with complex global entities. The Federal Reserve Board would have been a far superior choice.

In April 2011, the F.D.I.C. published a hypothetical plan suggesting that it could wind down a global octopus like Lehman in a manner similar to the way in which it routinely takes over small community banks. The report was widely derided.

We need a Dodd-Frank do-over to create the right oversight apparatus for huge banks. Regulators will always be outnumbered by bankers, and they will never find every problem. But, like prison guards, regulators are essential, even if they are outnumbered. In a world of behemoth banks, it is wrong to think we can shrink ours to a size that eliminates the “too big to fail” problem without emasculating one of our most successful industries.

You know who else didn’t like the idea of Sheila Bair taking over the banks?  Tim Geithner.  But he pressured Bair to back them anyway, guaranteeing shareholders a lot of money Bair didn’t think they deserved.  She would have made shareholders take substantial haircuts.  I’m betting that Rattner and his friends wouldn’t have liked that very much which is why it was off the table almost from the beginning.

I’m not sure I like Rattner’s tone.  Is he saying that the FDIC, which has something like 80 years of experience taking over failing banks is incapable of dismantling these behemoths or is he just dissing Sheila Bair?  Maybe it was just bad timing to have a woman as head of the FDIC when a man would have been able to do his job without meddling and disrespect.  Or maybe the world of the political elite should be held accountable for the fact that its ingrained sexism appears to be behind some phenomenally bad decisions in the past 13 years.  There’s more than one account of Bair being called “hard to work with” and “not a team player”.  Those are code words, baby, for we don’t want to listen to her and we’re going to pull out the old sexist staples to knock her status down.  Well, it worked so well against Bair and Brooksley Born, Elizabeth Warren, Christina Roemer and Hillary Clinton.  The pattern is obvious.  They don’t even pretend to hide it anymore.

I don’t know but I’m getting really pissed that so many sensible women are ignored and trampled so that the big boys can keep playing their games uninterrupted.  That shit’s gotta stop or why bother appointing women at all??  Again, this is Obama’s responsibility.  He hired these guys. And it’s not like his female White House staff didn’t warn him about the disrespect shown them.  What has Obama done about it?

Then there’s Rattner’s statement that even if we regulate the banks, they’ll just find a way around the regulations.  I’m not sure what point he is trying to make here.  If he’s trying to put us at ease, it’s not working.  It’s probably time to stop treating banks as a blessed industry while everyone else is getting damned.

And then there are the uber wealthy who are starting to worry that the Sans Culottes are going to turn the country into some dystopian state.  Maybe we shouldn’t have taken so much, they muse while they take in the scenery from their mansions.

Yeah, maybe.  Only time will tell.

And then there is Tim Geithner.  It looks like we were right about him.  He knew all about the LIBOR interest rate fix.  According to Taibbi, it was a well known secret on Wall Street.  Everybody knew it but the American people, who put their faith in Obama and his treasury secretary.

All I can think about is the stress tests and the way that Geithner assured everyone that the banks were solvent.  Who knows what the truth is but all of the Obama administration’s policies were built around the fiction of the condition of the banking industry.  Maybe the regular American citizen didn’t know about the LIBOR interest rate fixes but it’s hard for me to believe that Obama didn’t know.  You have to ask yourself what Obama was thinking when the stimulus turned out to be too small, bankers’ asses were saved and not homeowners, and he treated every bank crisis with an ad hoc solution instead of regulation.  Without regulation, it could happen again.

It’s all very, very shaky.

David Brooks’ world: Let all the worms that lurk in the mud hatch out

Ashley Moser, age 25

The shooting in Aurora, Colorado and its aftereffects, appear to be a culmination of all of the ways we Americans have let each other down in the past 30 years.  Let’s take a look, shall we?

Ashley Moser: If there was a poster child for everything that has gone wrong in America since Richard Nixon resigned, Ashley would have to be it.

Ashley is 25 years old.  Her father died recently from leukemia.  His illness wiped out the family’s financial resources.  He died penniless.  Ashley is a single mother, it’s unclear if she is divorced or ever married.  But the “little Depression” has been hard on families who struggle to make ends meet and are broken up by distance when one parent has to make a living in another location and can’t take the whole family.  It’s a common situation these days and marriage is no safeguard against it.  She was living with her parents but times got tough and when her father died, she had to move in with her aunt.

She’s a student.  She is also unemployed.  She had applied to and was accepted into a nursing program.  She was living on student loans.  LOANS, not grants.  She had a six year old daughter who she took to the movie with her.  Been there, done that, waiting with the kid for the latest book in the Harry Potter series at the local bookstore at 12am, surrounded by a store full of Hermione Grangers and Draco Malfoys.  Veronica Moser-Sullivan, aged 6, was the youngest victim.  She died at the scene.

Ashley was shot in the neck and the abdomen and is in critical condition.  Her doctors say she will suffer some paralysis but may have the use of her hands.  There’s a bullet in her head that hasn’t been removed yet. She is pregnant.

Because she is unemployed and uninsured, she is on medicaid. If she weren’t horribly injured at the moment and didn’t have the nation’s sympathy, it’s likely that she’d be shamed by these very same people who would be calling her a deadbeat leech on the American taxpayer.  She’d be treated with more dignity and respect in Norway but she had the misfortune to not be Norwegian during these last critical years of her life. That’s where single motherhood is no big deal, children are valued and she wouldn’t be struggling to live on student loans while she got her life together and was able to contribute to society, which should be the *only* definition of success, other than good parenthood, that gets admiration and respect.

It is unclear what her prospects, medical expenses or living arrangements will be once she is released from the hospital, if she is released. But whatever they are, it is likely that her future wages will be garnished to pay back her student loans.  Otherwise, it would be irresponsible to let this kind of moral hazard stand and wouldn’t be teaching Ashley a valuable lesson.

Her relatives had to tell her about her daughter on Saturday night.  She didn’t take it well and screamed that she wanted to die.

In all likelihood, if she *does* look like she is about to die, some Christian group will petition the state for guardianship of her unborn baby, intending to keep her on life support until the delivery.  Or, she may he on the brink of death without an abortion and they may interfere at that point.  Or, because she is on Medicaid, she will have to pay for a lifesaving and possibly much more expensive high risk abortion herself.  If it’s a “partial birth abortion”, there might not be any way to do it in the state of Colorado.  The scenarios that play out here sound like an updated version of Stephen King’s Misery crossed with Never Let Me Go.  Her family should have kept this information out of the media but it’s too late now.  The cat’s out of the bag and the evangelicals are no doubt already winding up for the prayer circle of all prayer circles, sending her messages about how her lifelong paralysis happened for a reason and god wanted Veronica for his newest angel but it’s a miracle that god has blessed her with a precious replacement!  As if children are swappable objects.  If it were up to me, I would leave life and death decisions up to Ashley and her doctors.  Maybe we should ask Michael Schiavo how that kind of thing works out.

The mass murderer, James Holmes, is apparently a very disturbed individual.  He’s not unlike many other disturbed mass murderers.  Friends and family notice that there is a personality change or he starts to behave strangely but there’s not a whole lot of things parents can do.  After all, the kid is an adult now.  The owner of a gun club says that Holmes left messages on his company’s voice mail and that his voice made him very uneasy.  He thanks god he didn’t have to deal with him, probably because guns are big business in America and it would have been hard to turn him away.

Not much is known about whether or not Holmes was treated for any psychological problems. It’s hard to know when science geeks have crossed the line mentally.  Many a time I have heard, “You know, so and so is acting really weird. He gives me the willies.  If anyone here were to go postal, it would be him.”  “Yeah, but he’s great in the lab! Fricking brilliant. His boss would be lost without him.” (True story about a gun “enthusiast” I used to work with many years ago.) His University probably has a counseling office but in America these days, it’s almost unheard of to commit people.  We usually just let them fall to their natural level, as David Brooks might say, and let them live on the streets. Holmes will probably get better mental health care now that he’s in prison or at the facility for the criminally insane.  For sure, he should never be free again, but will he be turned over to an institution run by a for profit company?

Graduate students are used to working conditions that are unusual.  I’ve heard it said that they have a lot of flexibility in their work.  They can work any 80 hours of the week they want.  It’s unclear if his work schedule contributed to his mental state but we should consider that Wall Street traders and analysts Holmes’ age work about 80 hours a week without a break for a couple of years and they nearly blew up the world, so, you know, there’s that.  His stipend, no matter how much the media makes of it, was probably less than minimum wage for the hours he would have been expected to work and was not enough to live on in the Denver area.  I’ve had a kid who worked in Denver as a chef for a couple of years.  They didn’t pay her enough.  She had to move.  She loves Denver.  Denver wages?  Ehhhhh, not so much.

Holmes ended up in Denver at graduate school because after earning a master’s in Neuroscience in 2010, he couldn’t find a job.  That’s not really all that unusual for scientists these days, including yours truly and everyone I’ve ever worked with.  A master’s is plenty sufficient for anything industrial research could throw at him but without experience, even young, cheap labor can’t find work.  Neither can older, experienced labor.  I find that a lot of employers want experienced labor, they just don’t want to pay for it.  So, Holmes had to go back to graduate school.  He probably would have been better off learning plumbing or joining the navy.  At least the military will help you pay your student loans.

This is not to say that I feel any kind of compassion for James Holmes the mass murderer.  But I do feel sorry for colleagues of James Holmes who are in a similar economic situation through the actions of a bunch of financiers on Wall Street who thought mergers and acquisitions of research companies in the last two decades was a sweet way to make loads of money and big bonuses.  Too bad it ruined research.

Holmes was able to order many rounds of ammunition online.  He also ordered an urban assault vest.  Unlike buying birth control, there is no conscience rule that would allow someone who is using common sense to stop a graduate student like James Holmes from buying combat equipment.  No one was allowed to say, “Where are you headed, buddy? Afghanistan?  Iraq?  Because I don’t think you need any of that stuff in Aurora.  Whatever you’re planning, I’m agin’ it.  No sale for you.”

Let’s think about that for a second.  It is harder for Ashley Moser to buy Plan B in the very same places where James Holmes could buy his own arsenal.  Enough weaponry to mow down a theater?  As long as you have a credit card, not a problem. No questions asked.   A couple of pills of early intervention to prevent a mistake?  Everyone you don’t know has an opinion and a hoop you must jump through.  Sure, the conscience rule executive order has been modified but whose going enforce it?  In a couple of years, Sasha and Malia will be able to buy their own Glocks but long after they’ve given up bubble gum, they will still have problems locating a pharmacist who will sell Plan B to them from behind the counter.

And because this is an election year and we must not piss off the young, white males in western states who might vote, Barack Obama sees no reason why he should develop any policies to address the issue of unfettered access to guns.  He also sees no need to promote an assault weapons ban that Bill Clinton put in place during his terms but went out of fashion during the Bush years.

I wonder if Ashley Moser knows this.  I hear Obama has been visiting the victims.  There’s an outpouring of support for Ashley right now, including a fundraiser.  But in a couple of months, America will forget about Ashley and she’ll have to navigate the social welfare system on her own.  For what it’s worth, I think a fundraiser should never be necessary for Ashley or others like her.  She, and all of the other Ashleys and Alexes, deserves a nation’s support, not charity or pity or insensitive moralizing.  She needed her country to be behind her in the last couple of years.  We’d better not fail her in the years to come.

So, there you go.

Worms everywhere.

Update: Katiebird says there is a second family that will be ruined by this shooting through no fault of their own.  Caleb Medley was shot in the eye and is in a medically induced coma.  His medical bills are expected to top $2 million, which is $2 million *less* than what David Brooks paid for his new house.  Caleb’s wife is on a separate floor of the hospital ready to give birth.

Of course, according to David Brooks, if the Medley’s end up broke, disabled and must remain deliberately impoverished in order to qualify for the bare modicum of subsistence medical care that Medicaid provides, at least we can console ourselves that the nation didn’t “commit sociology” to rescue any Americans who were collateral damage of a disturbed guy who just happened to use an easily available gun on their bodies.

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