Naomi Klein warned progressives in 2008

But did they listen?  Nooooo.

What she is saying sounds an awful lot like what Conflucians were trying to warn.  If you don’t hold him accountable *before* the election, you won’t get anything from him afterwards.

Why buy the cow when you can get the milk for free?

Anyway, it looks like progressives are about to make the same mistake again.  Can they be taught?  It’s not looking good.

Some of the things Klein said that should have triggered alarm bells is that Obama had no plan for getting out of Iraq and Afghanistan.  He was not an anti-war president.  As Jane Caro said politicians should underpromise and overdeliver.  And if progressives had been paying attention, they would have realized that Obama was promising nothing. The other thing she says is that as soon as Hillary bowed out, Obama put Jason Furman on his economics team.  Furman was not a friend to organized labor.  But note the timing.  Obama waits until progressives have put out for him and when there’s no way to get back the person they just blew off.  Then he brings in the guy that Wall Street liked.  He did something of the same thing on the telecomm immunity bill.  Hillary voted against it for principled reasons.  Obama voted for it- because Hillary had bowed out.

Klein was also wrong about some things.  She was wrong to hold one woman accountable for the Iraq War and let that one vote color her opinion about the character and vision of that candidate.  Progressives were completely deaf to everything that Hillary said that was not in reference to the war.  And no, she wasn’t held accountable by the voters for her IWR vote.  She was dumped because the money coming from Obama’s camp was too good to pass up.  Progressives’ deafness to everything *but* the war allowed something even more dangerous to creep in.  The Wall Street boys knew the financial collapse was coming and they set up the election so they would be in charge when the shock hit.  Klein came to Zuccotti park to talk at the Occupy movement’s birthplace.  And she was inspiring and absolutely correct about everything including the urgency.  But she undermined her own Shock Doctrine theory when she focused all of her attention on the war to the exclusion of the economy.  When the economy crashed and income inequality became even more obvious and suffering and unemployment started to take a toll on the American psyche, it took all focus away from the war.  Therefore, verily I say unto you anti-war activists, if you want to get out of illegal, abominable wars, you must exercise vigilance about your economy.

It wasn’t just the PUMAs who were trying to get progressives’ attention.  Klein happens to be incredibly good at predicting the fallout of the political decisions we make.  But “when your heart’s on fire, you must realize, smoke gets in your eyes”.  Progressives were infatuated with Obama and ignored all of the warning signs.

Four years later, the guy ignores them, abuses them, pushes them around and tells them they’re nothing without him.  And what to progressives do?  They go back to him because they think they have no other choice.  They will not stand up for themselves.

We’ve seen this plot before.  It will not end well.

Wall Street + Stock Buy Backs => Cookies of the Apocalypse

Greed has consequences.  The definition of success also has consequences.  When people judge their success in life by how much money they are making instead of what they contribute to the well being of the society they live in, they can have unintended consequences for other people who they don’t even know in fields they couldn’t care less about.

Let’s follow this trail, shall we?

Matt Taibbi writes another scathing critique on the lack of character on Wall Street.  This is where the worldview is developed and the flawed value system starts.  In this little snippet about John Paulsen and his incredible haul of obscene gobs of cash, we are to feel sympathy for the pain he has suffered for all the gobs of cash he lost on bets that didn’t pan out last year:

Look, the financial services industry should be boring. It should be quaint. Let’s take the municipal debt business. For ages, it was a simple, dull, low-margin sort of industry, in which banks arranged municipal bond issues and made small but dependable profits as cities and towns financed improvements and construction projects.

That system worked seamlessly for decades, until people like Sherman’s interview subjects suddenly decided to make the business exciting. You know what happens when you make municipal debt exciting? Jefferson County, Alabama happens. Or, on a macro level, Greece happens.

When making a few points on mere bond issues stops being enough, and you have to cook up crazy swap schemes and indices to bet against those schemes, ingenious scams allowing politicians to borrow billions of dollars that they will never in a million years be able to pay back, you might end up getting a few parks, schools, and subways in New York.

But what you get everywhere else is a giant clusterfuck that costs the rest of us years and even more billions of tax dollars to remedy.

This is what the protests are all about – it’s anger that Wall Street has been profiting from an imaginary economy that leaves bankers overpaid, but creates damage everywhere else. Sherman doesn’t get this. He seems to subscribe to the well-worn straw-man position that protesters are simply upset that bankers and financiers make a lot of money. Take for example his view on John Paulson, the hedge fund titan who was involved in Goldman’s infamous Abacus deal:

In October, a thousand protesters stood outside John Paulson’s Upper East Side townhouse and offered the hedge-fund billionaire a mock $5 billion check, the amount he earned from his 2010 investments. Later that day, Paulson released a statement attacking the protesters and their movement …. The truth was, Paulson was furious that the protesters had singled him out. Last year, he lost billions of dollars on bad bets on gold and the banking sector. One of his funds posted a 52 percent loss. “The ironic thing is John lost a lot of money this year,” a person close to Paulson told me. “The fact that John got roped into this debate highlights their misunderstanding.”

Hey, asshole: nobody misunderstands anything about John Paulson. They’re not mad that he made billions the year before, and they’re not happy that he lost money this year. They’re mad that the way he made his money in previous years – which involved putting together a born-to-lose portfolio of toxic mortgage bonds and then using Goldman Sachs to dump them on a pair of European banks, who in turn had no idea that Paulson was betting against them.

Matt Taibbi is using harsh curse words.  How declasse.  The fundies react with shock and horror.  Is there no civility on the internet?  Paulsen is rich.  Surely this man deserves respect.

Moving on.

Derek Lowe at In the Pipeline wrote a rather longish post for him about the pharmaceutical companies buying back stock in what looks like a desperate attempt to push up the stock price and keep more for the executives.  Lovely.  And this is made easier by assuring investors that they have cracked down on research costs, by golly.  We’ll have none of that wasteful spending here:

He has some figures from our own industry: From 1997 to 2009 “Amgen did
repurchases equal to 99 percent of R&D expenditures, Pfizer 67 percent, Merck 62
percent, and Johnson & Johnson 57 percent.” It could be worse – companies in the IT sector have often managed to spend even more than their R&D budgets on repurchases, partly because they increased the number of shares outstanding so hugely during the dot-com boom years.

One complication with the market-manipulation view is that stock buybacks don’t correlate very well with total stock returns. If anything, the correlation is negative: companies (and sectors) that spend the most on repurchases have lower returns. Of course, there’s a correlation/causation problem here – perhaps those returns would have been even lower without the buybacks. But there’s clearly no slam-dunk financial case to be made for repurchases.

Except one: that they’re often the easiest and least controversial use of the money. Companies get criticized if they sit on cash reserves, and they get criticized for missing earnings-per-share numbers. Why not try to address both at the same time? And without having to actually think very hard about what to invest in? I think that Pfizer’s Ian Read is being truthful when he says things like this:

Pfizer declined to make an executive available to discuss its policy. But in a statement, the company said it “remains committed to returning capital to shareholders through share buybacks and dividend payments.”

As for the cut in research spending in February, Pfizer said it has “accelerated our research strategy and made important changes to concentrate our efforts to deliver the greatest medical and commercial impact.”

In a conference call with analysts this month, Pfizer’s chief executive, Ian C. Read, said his company would “continually look” for acquisitions that would increase revenue growth. But in deciding how to use the proceeds from recent asset sales, he said “the case to beat is share repurchase.”

And that, truly, is a shame.

Oh, well, it’s not like the executives are going to stick around to see what a shame it is.  As the following animation suggests, they will be sitting on a beach in the Cayman Islands ideating and leaving the company to hobble toward some finish line on its own:

{{catching breath, wiping eyes, clearing throat}}  Ahem, geek humor and all that.  Too funny, or it would be if so many of us “ancient ones” weren’t out of work.

A good reason to watch the Oscars this year.

Have you seen Moneyball?  The movie about the Oakland A’s and its record breaking winning streak was developed from a book by former Wall Street insider Michael Lewis.     Billy Beane, manager of the A’s, hired a math and statistics guy on a whim, and together, they use numbers to find hidden gems in other teams’ baseball lineups.  It sounds kind of dry, doesn’t it?

Well, it’s not and part of the credit for turning math into magic is due to film editor, Christopher Tellefsen.  A couple of weeks ago, he was nominated for his first Academy Award.  The New York Times had an interview with Chris about what it takes to be an Oscar nominated editor, and wrote it up for today’s paper.  A clip from the movie, Moneyball, demonstrates what Christopher sees, the shots he uses and why he selects them to describe an abstract concept (it looks like principal component analysis) in a film for the sports lover in the general audience.

And the reason why all of this is important is because Christopher is married to Bev who is a sister to

….

Katiebird!

We’re nearly peeing ourselves with excitement for Christopher and looking forward to catching a glimpse of him and Bev on the red carpet.  And it goes without saying that we hope he wins.  Moneyball is a terrific movie with one of the tensest baseball game scenes I’ve ever seen.  It had me on the edge of my seat and as afraid to watch for fear of jinxing it as Billy Beane himself.

(note to Bev: Katie and I think lavender is your color and you should wear the Spanx in the dressing room when you try the dresses on)