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They’re few, rich and vulnerable?

Pearls of Wisdom:  “If you offer to do demonstrations at a science fair hoping to pick up some networking business cards, your profession has just slid off the deep end”

Picked up at Susie Madrak’s site, this study purports to show who are the richest of the rich and how they are interconnected in a network of influence and interdependency.  I read it briefly last night but it was math intensive and it was starting to give me math anxiety (the bane of my existence.  Not the math, the anxiety.), which is never a good thing when you’re trying to get to sleep.

This is an excerpt of the Discussion section of the paper The Network of Global Corporate Control:

The fact that control is highly concentrated in the hands of few top holders does not determine if and how they are interconnected. It is only by combining topology with control ranking that we obtain a full characterization of the structure of control. A first question we are now able to answer is where the top actors are located in the bow-tie. As the reader may by now suspect, powerful actors tend to belong to the core. In fact, the location of a TNC in the network does matter. For instance, a randomly chosen TNC in the core has about 50% chance of also being among the top holders, compared to, e.g., 6% for the in-section (Tbl. S4). A second question concerns what share of total control each component of the bow-tie holds. We find that, despite its small size, the core holds collectively a large fraction of the total network control. In detail, nearly 4=10 of the control over the economic value of TNCs in the world is held, via a complicated web of ownership relations, by a group of 147 TNCs in the core, which has almost full control over itself. The top holders within the core can thus be thought of as an economic “super-entity” in the global network of corporations. A relevant additional fact at this point is that 3=4 of the core are financial intermediaries. Fig. 2 D shows a small subset of well-known financial players and their links, providing an idea of the level of entanglement of the entire core.

One thing is for sure, this group of 147 individuals might look like a tight little network but as I have learned from looking at proteins closely that initially look invulnerable, there are always weak spots that can be exploited.  A little push here, a bond broken there and the whole shebang is rendered unworkable.  It’s probably no different for spheres of influence like wealth networks.  What we need is someone who can analyze the network with some kind of sensitivity analysis program.  (For all we know, someone is already busily analysing this. Not me.  That s%^& just makes me nervous.)  I’m *sure* that it can be done.  The parameters of power and money most likely are the same for all of the major players. And once we know where the weak spots are, ooo, baby, I wish I had the big bucks to bet on how it unravels.  I could buy my own pharma and employ all my friends.  By the way, this looks like old data from before October 2008 because Bear Stearns and Lehman Brothers are included in the 147 firms.  Recent historical data shows just how vulnerable and interdependent this network is since the collapse of Bear Stearns and Lehman Brothers threatened to derail the entire global economy.  It also shows how 147 firms can hold the world hostage.  It looks like the authors are publishing their oldest stuff first, which suggests they have something newer coming up.  I can hardly wait.

Hmmm, I just noticed that my 401K manager is on the network.  Better move my money first…

31 Responses

  1. The first motto of members of a network like this is probably: “if I’m going down, you’re going down with me.” In this case, the “you’re going down with me” would refer to the whole of human society outside the network. So if persons outside the network are studying how to cause the whole network to fission by firing some neutrons into its most destabilizable nuclei, those persons should also study up on how people outside and below The Network can create for themselves and eachother little survival networks which can withstand the violent Chain Reaction Breakdown of The Network destabilizing.

    And even if the people studying how to send The Network into self-destruct aren’t thinking about pre-emptive survival networks among ordinary people, that shouldn’t stop any ordinary persons reading this comment from thinking about that starting right now.

    • I think many ordinary people have been thinking of how to build survival networks. Some people think going more local is the answer. But this is not something that can be put in place overnight.

      The biggest worry is food, which for most of us, comes from distant parts by truck and rail. In an urban setting this is not a problem that is amenable to a quick fix. It’s all well and good to say grow vegetables and replant you front yard with squash instead of sunflowers, but for most of us, particularly in northern climes, it’s not a workable solution

  2. Joannie in Brooklyn,

    We shouldn’t feel obligated to try finding pure solutions in an impure world. Going local would take years for those who could, even if they begin right now today. Those who can, maybe should.
    Between the local and the distant is . . . the regional. Could people in Brooklyn and elsewhere in NYC find and buy more food from the nearby northeastern US than they now are? And if they made a point of finding and buying more regional food than before, would that create and grow a regional marketplace attractive to other or future farmers in the region to produce for sale into that growing regional market? Does Brooklyn have any regional or local or micro-local banks or credit unions where people could put their money (if any)?
    Thereby taking it out of the Black Hat Megabanks? If such credit unions exist, do they sponsor their own credit cards (for when using a credit card cannot be avoided)? If they do, and members of those credit unions switched away from Black Hat MegaBankCards over to
    their regionalocal credit union cards, then the merchant fees and the interest charged against those cards would be going to the sponsoring credit union pushcart peddlers of credit rather than to the Black Hat MegaBank Lords of Credit. Leading the money around by the nose, as it were.

    Every dollar is a bullet on the field of economic combat.
    (By the way, somebody on another thread told me that the ugly icons are the fault of microsoft explorer. If I switched to a better browser I would not have that problem. But since I type on company computers during breaks, and the company chose Microsoft Explorer, there is nothing I can do).

    • I hear what you’re saying ,and regional is probably be the short term solution. The real problem is that in NYC, there are mostly large chains where most people shop for food. Other than chains, there are bodegas whose markup is very high because they’re so small. There’s literally nothing in between. Mom and Pop supermarkets disappeared a long time ago.

      Since most communities are ethnically homogeneous, there are stores that sell ethnic products that reflect their community. For instance, Flatbush (where I live) is primarily a Caribbean community so there are stores that sell Caribbean products. In the Asian communities, you will find stores that feature Asian food products. But other than those specialty stores and bodegas, you’re stuck with the chains. I don’t know that these large chains are making any provision for doing business differently; and quite frankly, I don’t think the typical New Yorker thinks much about where their food is coming from; other than the grocery store, that is.

  3. I won’t pretend to be an economist, I never even played one on t.v., but from what I’ve been reading, no one need stay up nights figuring out how to crash the system. It will crash; that’s a certainty. From what I’ve read, it will take the GDP of the world, the entire PLANET, to save these banksters from their unholy bets in the form of derivatives and CDS. So it’s not a matter of if but when.

    This interlude we’re living through now is the big players deciding amongst themselves who the winners and losers will be. To be sure some of these 147 companies will be among the losers. In the meantime, the EU, ECB and IMF are heading for the exits while France tries to protect its bondholders and triple A rating and Germany tries to protect theirs. Greece is done. The interconnectedness guarantees that some American banks will go down as well. Still begs the question: what does the ordinary person do when this all goes down?

  4. Wall St. Protest Isn’t Like Ours, Tea Party Says

    And for this, I am quite grateful.

    • That’s very true, their movement is yesterday’s news; can you say s’oolong.

  5. Joanie and others, NYC offers unique challenges to survival during and after big-system decay. Since I don’t live there, I can only offer a few hopeful resource links. Here’s someone doing some densepack food production in her own part of Brooklyn where it is possible.
    http://www.gardengirltv.com/ Here’s a book whose title speaks for itself: http://www.chelseagreen.com/bookstore/item/fresh_food_from_small_spaces/
    About redirecting money towards outlets-for-regionalocal food . . . are there any co-ops in NYC? We still have a legacy-hippie co-op in my to town. People like Quakers (Friends) and Unitarians would know where the co-ops are in NYC if any are in NYC. Are there any Mormons in NYC? Where do they get their food?

    I am so grateful I don’t live in NYC or Los Angeles or any other potential system-crash mega-deathtraps.

  6. h/t corrente… I love this …

    Protesters Occupy GE CEO Jeff Immelt’s Connecticut Front Lawn

    Occupy Wall Street protesters took a field trip from Zuccotti Park on Saturday morning, all the way to the wealthy suburban enclave of New Canaan, Conn., where they took their anger at income and tax disparity to GE CEO Jeff Immelt’s front lawn.

  7. People like me who are long term still-employed can sometimes lose sight of the immediate and pressing needs of the recently dis-employed. (If someone’s whole job got fired, I would say they are “disemployed” and not merely “unemployed”). The huge and rising numbers of the people recently disemployed through mass jobicide can only get jobs again through forcefully applied public policies of mass job restoration. If enough disemployed OWSers come to share the same feeling, then they may well start discussing among themselves just what those job-restoration policies might be, and how they might be forced into existence and application.

    It is people who still have jobs who are in a position to perhaps think and act about raising the survival chances of themselves and people like them if/when mass-jobicide reaches their job.
    The psychological sense of security coming from knowing one is more job-loss survival-redy than one was before commencing preparations might give one the feeling of time and energy needed to work on forcing policies and politics of mass job restoration for the people who have already been jobicided.

  8. Joanie and others, a couple more narrow-focus links to possibly some information…http://www.growingpower.org/

    A wide-focus blog with a dim prognosis of the mainstream system we all live within today is John Robb’s Global Guerillas. It used to be about insurgents and terrorists and stuff. But lately he has been writing about “resilient neighborhoods” and so forth. He offers some insights into the future we can either prepare for or refuse to prepare for.

  9. Another view of the Network:


    • I don’t know about all industries but this is bullshit when it comes to pharmaceuticals. The 50 companies in the network have been calling the shots with pharmaceuticals for more than a decade now. The pressure has been applied to all of them. We’ve all heard it at townhall meetings about 1 quarter prior to the next layoff announcement. Merck held out the longest. For some time now, it has been underfire to cut back on research even though the CEO keeps telling them that research is what it does. You can’t have blockbuster drugs without it. But they must have finally got to Merck too because it’s making euphemistically sounding cutback noises to be announced next week.
      The best thing the 50 companies on the node can do for pharma at this point in time is completely divest. No, seriously. Once the money is gone, the industry can shed all of the parasites in the corporate offices and get back to doing what it does best- discovering drugs. There won’t be any reason for the MBA class to stay in an industry where they can’t make big bonuses for re-engineering the core processes to the detriment of the people who, you know, actually do the work.
      Divest! Divest!

  10. How we fare depends on who’s side Congress takes. If they come down on the side of Corporate America again we are boned.

    What I want to know is what Democrats got paid off so the government didn’t treat the big banks like they did GM and Chrysler?

    Demand that they explain themselves or vote them out.

    What we need now is for Obama to channel FDR but that ain’t happening anytime soon. Wall Street is a cancer on America and needs to be excised, the sooner the better.

  11. For what it’s worth, as it’s speculative so read with caution, but I’ve read that BofA may be the next bank allowed to fail because it’s the new kid on the block and has few, if any, strong Fed or Wall Street ties or connections, unlike JPMorgan.

  12. On the other hand, it also reveals that in the same countries, control is found to be highly concentrated at the global level, namely, lying in the hands of very few important shareholders. Interestingly, the exact opposite is observed for European countries.
    stop foreclosure

  13. Aside from trying to break this economic command network, might we the millions of still-employed think of ways that we could add up our millions of individual efforts to begin with-holding money/bussiness/support from the one-way money-suction-pumps pulling money up to the level of these network operators? Begin constricting and attriting their revenue streams by causing them a creeping revenue drought far upstream from where the money gathers into rivers which they can hijack?

    • As soon as I have another place to put my 401K funds, I’m moving them. I can’t make everyone else do that but imagine the impact if everyone did.

  14. New article at Naked Capitalism about how pro-OverClass deregulationists infested government and engineered open-ended government-sponsored encouragement of “control-fraud” throughout all major money-handling bussiness sectors. (I wonder whether the so-called Dodd-Frank is real reregulation or foam-rubber fauxregulation designed to prevent real reregulation from happening).http://www.nakedcapitalism.com/2011/10/bill-black-the-anti-regulators-are-the-job-killers.html
    Forcible reregulation policies should certainly be pursued. But people with any job/wealth/future left to protect should certainly figure out how to proetect what they have and what they do from the Control Fraud-Industrial GoverPlex.

  15. Here is an article about a prominent Tea Party group-leader urging small bussiness owners to Not Hire Anyone to “hurt Obama”. As if Obama would be hurt by that. Here is the link.
    If any small bussiness owners take an overt pledge by name to refrain from employing people they would otherwise have employed in the real non-financialist economy so as to shrink the real economy further . . . that would make them our functional enemies, would it not?
    And that would make spendig any of our money at any of their bussinesses suicidal, would it not? It would be better to spend our money with bussinesses which are at least not pledged to boycott the hiring process, would it not? Let us hope someone keeps track of every small bussiness identifying itself as following this “no hiring” plan . . . and keep our money away from them.

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