Aug 25 2016

A Nation of Cowards

It is my contention that the United States has turned into a nation of cowards. You can see the signs everywhere from Helicopter Parents to Whites who think street crime is rampant (especially from those people, you know the ones I’m talking about) when in fact it’s been in precipitous decline ever since we stopped putting Lead in Gasoline (and therefore everyone’s lungs).

I’m especially talking about the irrational fear of “Terrorism” and the near universal Islamophobic discrimination that comes from a populace pissing it’s pants any time someone with brown skin or a vaguely Arabic sounding name passes by. Look you craven idiots- you are orders of magnitude more likely to get struck by lightning than killed by a “Terrorist” even if you count the insane right wing gun nuts running around with assault rifles looking for someone they’re bigoted against to shoot (whom, by the way, are about 200 times more numerous than the Islamic type). You want be safe? Stop driving your car and taking showers and baths (the number one and two causes of violent death in the United States).

What It Looks Like When The Terrorists Win: The JFK Stampede Over Fans Cheering For Usain Bolt
by Timothy Geigner, Tech Dirt
Tue, Aug 23rd 2016 3:25am

We’ve talked a great deal here about what a theater of security our national airports have become. Far from accomplishing anything having to do with actually keeping anyone safe, those in charge of our airports have instead decided to engage in the warm fuzzies, attempting to calm an easily-spooked traveling public through bureaucracy and privacy invasion. The hope is that if everyone suffers the right level of inconvenience and humiliation, we’ll all feel safe enough traveling.

But it’s quite easy for the 4th wall in this security theater to be broken by the right sort of circumstance. In case you missed it, one such circumstance happened recently at JFK Airport. The fallout was described in a first-person account in New York Magazine by David Wallace-Wells. Following a long plane ride after a delayed departure, Wallace-Wells describes the start of the ensuing chaos as he and his wife waited to get to passport control.

He goes on to describe being in the middle of one of several literal stampedes that had broken out throughout the airport, with travelers scattering in many directions and trampling one another. Members of the public were escorted out onto the tarmac, then back inside, then back out onto the tarmac again. Airport security alternatively either bolted for the exits when the scare began, or else were ineptly ushering the public in one direction or another. NYPD officers were inside the airport terminals, clearing them, but nobody seemed to be informing or instructing the public as to what to do. It was, in simple terms, chaos. A woman in a hijab called to her family, and everyone around her panicked. Even the set-pieces of the security theater contributed to the bedlam.

I can only imagine the terror one must feel being caught within a panic inside an airport under these circumstances. As the author notes, it was clear to anyone in the airport that day just how silly the idea is that authorities could respond to a threat at an airport in a methodical and organized way. Part of the lesson of this story is just how useless the security theater we’ve allowed to be propped up before us actually is. Useless as a system for when a terror event actually occurs, but more useless at keeping travelers calm and feeling safe.

Because the cause of this chaos would be laughable if it weren’t so terrifyingly frustrating.

A spooked public whose fear is unassuaged by the pretend security the government has set up at the airport, mixed with applause for an Olympic athlete, gets you bedlam. This is everyone’s fault, from a public that can’t bother to keep the threat of terrorism in perspective, to politicians that decided on a feel-good show at airports that couldn’t even achieve that goal, to federal agencies keeping everyone so on edge that simple applause rang as gunfire in the minds of some.

It’s hard to think of a more powerful example of how terrorism works than that.

Aug 25 2016

Stiglitz- About That Euro

Yes, I know I talked about him yesterday but that was more focused on his anti-TPP positions. He also did a couple of interviews, one with Salon and one with Yahoo Finance Canada, discussing his view that the Euro as we know it is doomed.

I told you I agreed with him a lot.

Now my position is a little more militant than Stiglitz. I think without more democratization the European Union is doomed and justifiably so because right now it’s just an oppressive Neoliberal bureaurocracy, a festering boil of corruption and deceit run by incompetent idiots with aristocratic pretensions.

Stiglitz on the other hand concentrates mostly on the economic aspects and seems to think that splitting the Euro North and South will salvage it, somehow. Personally I feel this is half measures at best, without changing the attitudes of the Mega-Corporations, Billionaires, and Banksters the Southern Euro will be exactly the same as the Northern one. These groups who are calling the shots are not suffering under the present system, they’re benefiting from it and the grinding poverty and soaring unemployment (20% in Spain for instance) simply makes it easier for them to extort Public Assets from the people.

Stiglitz: The days of the euro are numbered
by Justine Underhill, Yahoo Finance Canada
Tue, 23 Aug, 2016 6:32 AM EDT

Nearly a decade after the financial crisis, the eurozone’s jobless rate still hovers around 10%, almost double that of the US.

But aggregates of the eurozone don’t tell the whole story. Austria’s unemployment sits below 6% while Spain’s has topped 20%. Between 2008-2014, Greek household disposable income fell by 24% while German households gained 15%, according to EU data.

While the reforms he (Stiglitz) proposes, including common deposit insurance, eurobonds and a move away from austerity policies, are relatively straightforward, the political climate needed to institute the change is not. The longer it takes to make reforms, the more fractured countries will become– a cycle which could eventually diminish political will to save the eurozone.

(Stiglitz:) To make a successful single currency, you had to realize that you were taking away, too, the most important instruments for adjusting when you had an economic shock, like the recession of 2008. So you took away the interest rate. You took away the currency adjustment mechanism, but they didn’t put anything in the place.

And instead, they made things even worse. Because they tied the hands of the countries of Europe by saying you have to limit the deficits and the debt. And then they said to the central bank, focus just on inflation. Don’t pay any attention to employment, jobs, financial stability. They believed, somehow, that all this would work out, that politically it would work out, that eventually, they would create the necessary institutions.

Economically, they thought markets would make sure things would work out, because if you maintain deficits and debt low and low inflation, automatically you’d be brought to full employment and rapid growth. Well, it hasn’t worked out. And theory said it wouldn’t work out.

Yahoo: As economic stagnation continues, there’s a lot more anti-EU rhetoric and populism. Do you see there being a tipping point at which the euro or the EU can’t be saved?

(Stiglitz:) Very much so. And in fact, you almost see a beginning of that with Brexit. Now, remember, the UK was not in the eurozone. But when they looked across the English Channel at what was going on inside the eurozone, one of the things they saw was rigid bureaucrats. They saw a system that was not able to adapt to the differences in circumstances. It was imposing the same rules everywhere, rules that might make sense in Germany, but didn’t make sense in other countries. They saw a dysfunctional eurozone. And their trading partners in Europe were not doing very well. And so they said, do we want to be a member of that club?

Now, what’s going to happen, I think– and what is happening already– is that the parties in the center– the center-left, the center-right– that have been supporting the concept of the euro are losing support. You see that in poll after poll. And people are moving to the extreme parties. And that’s a danger.

Because eventually, unless they make the reforms that I describe in the book– unless they make the institutions that will make the euro actually work for most of the citizens– unless they do that, the discontent will grow. And eventually, there will be vote of a country within the euro that says– a party will get elected, one of the extreme parties, a coalition, that will say we’ve had it. And they will call for a referendum like the Brexit. And there’s a good chance– and I think it’s almost inevitable, eventually, unless the reforms occur– that there will be an exit. Whether it’s Italy or Spain or Greece, it’s hard to tell. But it’s hard to see it not happening.

Unfortunately, some of the response to Brexit was suggesting that rather than doing that, they were going to move in the other direction, a hard line attitude. Juncker, who’s the head of the European Commission, said we are not going to give UK a good deal. We’re going to treat it harshly, because we want to make sure that other countries won’t leave.

When you think about that for a minute, what he was saying– this is the head of the European Commission– was saying the benefits to the citizens of Europe were so low that the only way to keep them supporting the euro was to threaten them with disaster if they leave. Now, that’s not the way to create a partnership.

Yahoo: You’ve suggested the idea of a northern and a southern euro. How exactly would that work?

(Stiglitz:) (T)here’s a closer similarity– not perfect, but closer similarity– among the countries of the south, not only in economics, but in political philosophy, and so too for the countries of north. So the prospects of two or three currency areas working are far greater than the prospect of a single currency working for the whole world.

If you ask the question could America join with a currency area of Latin America and the United States, we would say, oh no. When we talked about NAFTA, nobody said we need to have a single currency, because they knew it would not work. We could have a free trade area, but making a single currency work with countries as different as Mexico, Canada and the United States was not going to work.

In fact, even Canada and the United States have different currencies. We get along well. We have lots of economic relationship. It’s beneficial to both of us. But there’s not a single currency. So that’s the key idea.

Now, once you recognize that, there’s not a flood of money to the United States or to Canada. The money allocates itself on the basis of where the returns are highest. And the exchange rates are just to equilibrate the returns. So that’s the whole point.

If you have flexible exchange rates, you don’t get the rush of money going from one place to another, because you get the exchange rate to make the adjustment. So everybody says the returns are reasonably the same in the different parts.

Economist Joseph Stiglitz on the future of the Euro and U.S. defense spending
by Michael Garofalo, Salon
Wednesday, Aug 24, 2016 10:51 AM EST

In the clip above (which will not embed), Stiglitz discusses his ideas for solving Europe’s debt and currency crises, which he details in his new book “The Euro: How a Common Currency Threatens the Future of Europe.” In Stiglitz’s view, Europe’s economic integration outpaced its political integration, and taking a few steps away from the Euro as we now know it — without abandoning the idea altogether — might help the continent to one day move toward a sustainable common currency. “There are a lot of people who are absolutely committed to the idea of eventually having a single currency,” Stiglitz said. “The don’t want to go back on the progress we’ve made.

Stiglitz explained his “flexible Euro” plan: “It has the flexibility of saying, let’s start creating these institutions and get these countries’ currencies to move closer and closer together, and then eventually, once you got them really working cooperatively and you have creative institutions that are able to adjust in the face of a shock, then you say, OK, now we’re ready for a single currency.”

Aug 25 2016

Pondering the Pundits

“Pondering the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Pondering the Pundits”.

Follow us on Twitter @StarsHollowGzt

Heather Digby Parton: The disturbing dawn of the alt-right: Donald Trump’s the leader of a dark movement in America

After months of squabbling about whether it’s acceptable to use the “F” word (fascism) it seems at long last that we have come to some kind of consensus about what to call Donald Trump’s “philosophy”: alt-right, also known as white nationalism. With the hiring of the former chief of Breitbart media, ground zero for the alt-right movement, as Trump’ campaign chairman, the interest in it has now gone mainstream. Hillary Clinton will be making a speech about it later today.

Alt-right white nationalism is an apt term for a campaign that has electrified white supremacists so it makes sense that most people would focus on the racial angle. According to this analysis in the Guardian, the rising right-wing ethno-nationalist movement in Europe  is the progenitor of this American version, which adheres to its basic premise but brings its own special brand of deep-fried racism. Both share a belief that the white race is under siege and that “demands for diversity in the workplace which means less white males in particular forms the foundation for the movement.” So it stands to reason that Trump’s border wall, Muslim ban and bellicose appeals for “law and order” (along with his overt misogyny) is a clarion call to this faction.

Rebecca Carroll: Leslie Jones faces constant abuse – because that’s how racism works

What else do people need to see before they realize that racism is a vile, vicious daily assault that faces black Americans today – in every sphere and on every platform, but egregiously so online?

Actor and comedian Leslie Jones has been attacked again – her website hacked, filled with racist images and stolen nude photos, along with pictures of her driver’s license and Harambe, the gorilla killed in an Ohio zoo earlier this year. These actions make me think that racism is so integral, so regular a thing in this country, like water running from the kitchen faucet, that the majority of people see it as merely who and how we are. Racism: it’s what we do.

Where is the practical response to this grotesque, debilitatingly mean-spirited violence? It’s one thing to offer her digital apologies for others’ racism. It’s another to actually take a stand to help eliminate it from our society.

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Aug 25 2016

The Breakfast Club (Surprises)

Welcome to The Breakfast Club! We’re a disorganized group of rebel lefties who hang out and chat if and when we’re not too hungover we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Join us every weekday morning at 9am (ET) and weekend morning at 10:30am (ET) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.

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This Day in History

Paris liberated during World War II; A first swim across the English Channel; Actor Sean Connery, composer Leonard Bernstein, and musician Elvis Costello born; Bruce Springsteen’s ‘Born to Run’ released.

Breakfast Tunes

Something to Think about over Coffee Prozac

Since a politician never believes what he says, he is quite surprised to be taken at his word.

Charles de Gaulle

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Aug 24 2016

The Other Nobel Winner

I understand why people think I’m in the tank for Krugman, I quote him a lot and I have a signed first edition of End This Depression Now but the truth is I only do that (and also with my other usual suspects) when it suits me, which is to say when he makes a point I agree with and I want to appeal to authority. My only credential (that you know about) is I am so frequently… correct.

I don’t use Stiglitz that often not because we don’t agree on a lot, I think I find his views closer to mine than Krugman’s, but because Herr Doktor Professor is a much more conversational writer. Stiglitz has a bad habit of using ‘Academese’ and while I get it and you probably do too, I find myself compelled to translate which means I have to work harder and if nothing else I am certainly the world’s laziest human being.

In this case I have the good people at Common Dreams to do that for me so I can be as lazy as I want.

Stiglitz Blasts ‘Outrageous’ TPP as Obama Campaigns for Corporate-Friendly Deal
by Andrea Germanos, Common Dreams
Wednesday, August 24, 2016

Nobel Prize-winning economist Joseph Stiglitz has reiterated his opposition to the Trans Pacific Partnership (TPP), saying on Tuesday that President Barack Obama’s push to get the trade deal passed during the upcoming lame-duck session of Congress is “outrageous” and “absolutely wrong.”

Echoing an argument made by Center for Economic and Policy Research co-director Mark Weisbrot, Stiglitz said, “At the lame-duck session you have congressmen voting who know that they’re not accountable anymore.”

Lawmakers “who are not politically accountable because they’re leaving may, in response to promises of jobs or just subtle understandings, do things that are not in the national interest,” he said.

Expressing his overall objections to the TPP, Stiglitz said “corporate interests… were at the table” when it was being crafted. He also condemned “the provisions on intellectual property that will drive up drug prices” and “the ‘investment provisions’ which will make it more difficult to regulate and actually harm trade.”

“The advocates of trade said it was going to benefit everyone,” he added. “The evidence is it’s benefited a few and left a lot behind.”

Stiglitz has previously spoken out against the TPP before, arguing that it “may turn out to be the worst trade agreement in decades;” that it would mean “if you pass a regulation that restricts ability to pollute or does something about climate change, you could be sued and could pay billions of dollars;” and previously said that the president’s TPP push “is one of Obama’s biggest mistakes.”

Stiglitz has also been advising the Hillary Clinton presidential campaign. The Democratic candidate, for her part, supported the deal before coming out against it.

Opposition to the TPP also appeared Tuesday in Michigan and Florida, where union members and lawmakers criticized what they foresee as the deal’s impacts on working families.

Rep. Debbie Dingell (D-Mich.) said, “We have to make sure that bill never sees the light of day after this election,” while Rep. Alan Grayson (D-Fla.) said at the American Postal Workers Union convention in Walt Disney World, “If this goes through, it’s curtains for the middle class in this country.”

Over at The Hill we have a story I missed (sorry, it’s The Hill) from former Brigadier General John Adams that basically blows Barack Obama’s ‘National Security’ argument out of the water.

The national security case against TPP
By John Adams, BG USA (Ret), The Hill
August 17, 2016, 01:11 pm

While the President recently conceded that TPP critics are “coming from a sincere concern about the position of workers and wages in this country,” he’s also been hammering home a familiar and often-unchallenged fallback case for trade agreements: that TPP is essential for foreign policy and national security priorities.

As a retired Brigadier General and 30-year veteran of the U.S. Army, I’ve long considered arguments for trade deals as national security strategies, including arguments for the TPP specifically as a “way to keep the peace in the Pacific” and counter China as it “flexes its economic and military muscle.” While I respect President Obama and the pact’s military backers, I believe these arguments miss a crucial point: By facilitating the further offshoring of America’s manufacturing base, the trade pact would actually undermine America’s military readiness and global economic standing. TPP would hurt our national security interests more than it would help.

In 2013, the Pentagon’s Defense Science Board put forward a remarkable report (.PDF) describing one of the most significant but little-recognized threats to US security: deindustrialization. The report argued that the loss of domestic U.S. manufacturing facilities has not only reduced U.S. living standards but also compromised U.S. technology leadership “by enabling new players to learn a technology and then gain the capability to improve on it.” The report explained that the offshoring of U.S. manufacturing presents a particularly dangerous threat to U.S. military readiness through the “compromise of the supply chain for key weapons systems components.”

I’ve seen these offshoring risks firsthand.

Our military is now shockingly vulnerable to major disruptions in the supply chain, including from substandard manufacturing practices, natural disasters, and price gouging by foreign nations. Poor manufacturing practices in offshore factories lead to problem-plagued products, and foreign producers—acting on the basis of their own military or economic interests—can sharply raise prices or reduce or stop sales to the United States.

The link between TPP and this kind of offshoring has been well-established. The proposed deal would not only repeat but magnify the mistakes of the North American Free Trade Agreement (NAFTA), offering extraordinary privileges (.PDF) to companies that move operations overseas. Just this spring, an official U.S. government study by the International Trade Commission noted that the pact would further gut the U.S. manufacturing sector. This, following the loss of 5 million manufacturing jobs since 2000, is a perilous proposition.

Foreign policy and national security have long been the arguments of last resort for backers of controversial trade deals. A quarter century ago, we were warned that, unless NAFTA and deals with eight Latin American nations were enacted, China would come to dominate trade in the hemisphere. NAFTA passed, but America’s share of goods imported by Mexico fell, while China’s share rose by a staggering 2,600 percent. Today, following the implementation of several additional major trade deals, we’re still waiting for China to comply with its WTO commitments, and we’re still waiting for progress in dealing with our astronomical trade deficit.

While the TPP’s backers present our choice as one of trade versus protectionism, this couldn’t be further from the truth. We already have free trade agreements with the six TPP countries that account for more than 80 percent of the promised trade. Because all TPP nations are currently members of the World Trade Organization, their tariffs have already been cut to minimal levels.

Of TPP’s 30 chapters, only six deal with traditional trade issues. The rest deal primarily with special privileges for multinational corporations and investors—like establishing the rights of companies to sue governments for cash compensation over the impacts of health and safety regulations. These dominant features of the TPP would vastly expand the rights of multinational firms that do not necessarily represent America’s national interests.

Critics of the TPP come from both parties in Congress—and from the business, labor, environmental, consumer, human rights, and defense communities. These diverse players are not opposed to trade. Rather, most simply want a different trade model that facilitates the worthy goal of global engagement without shortchanging American workers, policymaking prerogatives, and national security capacities.

While the Obama Administration has been wise to shift our defense and diplomatic attention towards the Asia-Pacific region, it’s now time for a “pivot” in our approach to trade.

Not a “Trade” deal at all. Bad for National Security. Bad for 99% of us. Good only for Monopolistic Corporations.

Aug 24 2016

More Signs of The Great Tribulation

I think we can all agree that things that smell like food, but aren’t, are an inherently bad idea. I make a marginal exception for things like Strawberry Lip Gloss and Beeswax Chapstick which are at least not actively harmful, but if you have a Pumpkin scented candle in your house you’re only making me both hungry and disappointed because I really like Pumpkin.

Better you should actually bake a pie. The crust comes fresh from the dairy aisle and the recipe is right on the Libby label.

What we certainly don’t need is something like this-

KFC Made Sunscreen That Smells Like Fried Chicken
by Kali Holloway, AlterNet
August 23, 2016

How many times have you wished for a sunscreen that makes you smell like fried chicken? If the answer is “Never,” you are not alone. Nonetheless, fast-food chicken chain KFC has come up with a sunscreen that brings to mind the odor of fried chicken.

There’s a none-too-subtle joke in there somewhere about the similarity of tanning and frying. Especially since George Hamilton, an actor as well-known for having a super tan body as he is for his body of work, is the latest KFC spokescolonel. The pitch is part of an ad strategy for its new “extra crispy” chicken option.

A sort of faux infomercial about the product was also part of the giveaway, which you can check out below. If you’re moved to get a bottle of the stuff, there’s some bad news: KFC spokepeople say all 3,000 bottles had been snatched up within hours of the campaign appearing on its website.

I’ll note for the record I don’t really like fried chicken, or indeed any chicken, that much.

Aug 24 2016

Pondering the Pundits

“Pondering the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Pondering the Pundits”.

Follow us on Twitter @StarsHollowGzt

Trevor Timm: First Thiel, now the Trumps: how billionaires threaten free speech

Less than 24 hours after was killed by billionaire Peter Thiel’s legal crusade against it, another billionaire couple – Donald and Melania Trump – is already using the same law firm Thiel did to threaten more media organizations into silence. And this time, it could have a direct effect on the presidential election.

The Guardian reported late on Monday night that Melania Trump’s lawyers have sent threatening letters and are considering filing lawsuits against a variety of media organizations – including the Daily Mail, Politico and the Week – for reporting on rumors of Melania Trump’s past, including her alleged immigration status when she came to the United States.

This is the quintessential example of the disturbing precedent Peter Thiel has just set by creating a blueprint for billionaires to destroy news organizations they do not like. He has shown that all they need is a little persistence. And in a media landscape that is increasingly dominated by the rich and powerful, that should give even Gawker’s most ardent critics pause.

Celine Grounder: I’m a doctor. The real issue isn’t Hillary Clinton’s health – it’s that she might win

Former secretary of state Hillary Clinton’s health has been under scrutiny in recent weeks, not by medical professionals but by politicians and supposed pundits playing doctor on TV. Clinton’s personal physician, Dr Lisa Bardack, has repeatedly said: “Secretary Clinton is in excellent health and fit to serve as president of the United States.” Meanwhile, conspiracy theories about Clinton’s supposed ill health have gone viral. There’s no evidence these claims are true.

I’m a doctor. I don’t play at being a doctor. I don’t diagnose patients in the absence of unbiased, reliable information, such as performing a physical exam or reviewing tests. When I write or am interviewed on television or the radio, I’ll talk about what new research will mean for patients and the science behind the latest guidelines. I’ll explain why we’re seeing increasing rates of certain diseases and whether policies to combat them make sense. I don’t talk about individuals except to say what one might expect more generally with regard to a particular medical illness.

But the scientist in me understands that the real issue here isn’t Clinton’s health. Conspiracy theories signal fear; in this case, Trump’s realization that Clinton may well be the next president of the United States.

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Aug 24 2016

The Breakfast Club (Along Way There)

Welcome to The Breakfast Club! We’re a disorganized group of rebel lefties who hang out and chat if and when we’re not too hungover we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Join us every weekday morning at 9am (ET) and weekend morning at 10:30am (ET) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.

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This Day in History

Hurricane Andrew hits Florida; British troops burn Washington in War of 1812; Pluto demoted as a planet; Pete Rose banned from baseball for life.

Breakfast Tunes

Something to Think about over Coffee Prozac

In the United States today, the Declaration of Independence hangs on schoolroom walls, but foreign policy follows Machiavelli.

Howard Zinn

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Aug 23 2016

The Anti-Democratic Equation

I have no idea how many of you are Comic Book Graphic Novel Nerds like I am (the very term “Graphic Novel” leads me to suspect it was invented by a Geek, not that there’s anything wrong with that) so indulge me in a brief examination of the Kirbyverse.

Without investing in too many details the big bad is a guy named Darkseid, who uses his nigh unlimited power (Superman is no match without allies) to search for the “Anti-Life Equation”- a formula that renders sentient beings, possessed of self identity and free will, into mindless slaves.

Ok, now you have the metaphor.

Neoliberalism is exactly like that for democracy. It’s not just an economic philosophy, it’s also a political one in which a highly educated and credentialed upper class institutes policies without regard to the wishes of the masses (you know, us, the 99%) because we are simply too dumb to understand what is good for us. While the elite may indulge in a certain formalized discussion between themselves over allowed topics within very limited boundries (“Do you think inflation should be limited to 2%, or is 1.8% acceptable?”), heterodox ideas are never tolerated.

In the past, the ruling groups of all countries, although they might recognize their common interest and therefore limit the destructiveness of war, did fight against one another, and the victor always plundered the vanquished. In our own day they are not fighting against one another at all. The war is waged by each ruling group against its own subjects, and the object of the war is not to make or prevent conquests of territory, but to keep the structure of society intact.

When finally you surrender to us, it must be of your own free will. We do not destroy the heretic because he resists us: so long as he resists us we never destroy him. We convert him, we capture his inner mind, we reshape him. We burn all evil and all illusion out of him; we bring him over to our side, not in appearance, but genuinely, heart and soul. We make him one of ourselves before we kill him. It is intolerable to us that an erroneous thought should exist anywhere in the world, however secret and powerless it may be.

So how does this work?

The new aristocracy (is) made up for the most part of bureaucrats, scientists, technicians, trade-union organizers, publicity experts, sociologists, teachers, journalists, and professional politicians. These people, whose origins lay in the salaried middle class and the upper grades of the working class, had been shaped and brought together by the barren world of monopoly industry and centralized government. As compared with their opposite numbers in past ages, they were less avaricious, less tempted by luxury, hungrier for pure power, and, above all, more conscious of what they were doing and more intent on crushing opposition.

Now personally I don’t think things are quite that bad yet. The ENORMOUS incompetency and stupidity of the new aristocracy has made them weak and vulnerable. Take for instance Brexit, whether or not you think it was a good or double plus ungood there is no arguing that it was an expression of the will of the people. Big Brother would have never allowed that.

Likewise the election of Jeremy Corbyn to Leadership of the Labour Party. And they’re amazingly transparent about how badly it irks them and thwarts their plans for domination of the submissive class (you know, us, the dummies, the 99%).

Jeremy Corbyn to bypass critical MPs by polling Labour members on controversial policies
by Ben Riley-Smith, The Telegraph
22 August 2016 7:09pm

In a move that would help sideline moderate Labour MPs, Mr Corbyn hopes to strengthen party members’ influence over policy if he wins the leadership by holding email polls of members.

However his critics will see it as an attempt to sideline their views by using local parties – which have swelled with Corbyn supporters – to help push through left-wing policies.

Last year, Mr Corbyn issued an email poll of all members to strengthen his demand for Labour to formally oppose Syrian air strikes in a move that angered many of his MPs.

It showed that Labour members opposed the bombing – like Mr Corbyn but unlike many of his backbenchers. Aides used it to argue he had the party on his side.

A … Corbyn ally said he would speed up his drive to democratise policy making in Labour should he win the leadership contest on September 24, as expected.

The move would give a greater say to close to half a million Labour members – including the 130,000 new joiners who were blocked from voting – in directly shaping policy.

It is one of a series of moves planned to strengthen his authority which could begin as early as the Labour conference, which starts the day after the result.

The Labour leader’s allies are proposing to lower the number of MPs needed to support a leadership bid to around 12 to boost the chances of left-wingers running.

They also want to give local party activists a greater role in interviewing and approving prospective candidates who want to stand to be MPs.

Now if you click through at the link you’ll find this perfectly pro-democratic proposal cast in the darkest tones of ‘mob rule’ and surrounded by implications of racism, sexism, and any other kind of ism that the Parliamentary Labour Party, a collection of class traitors who think an elected position is a grant of hereditary nobility, a cross section of ‘The New Aristocracy’, think will prove Corbyn a hypocrite. Also they frame it with the most anti-Corbyn video they can muster because, you know, us proles are too dumb to understand high-falutin’ things like words and stuff. But what do you expect of England’s Wall Street Journal?

Corbyn may lose the general election but he will thump the “New Labour” Blairites like a rug and ruin their aristocratic aspirations and that, most of all, is why they hate him so much.

I say- “I’ve got a little list — I’ve got a little list, of apologetic statesmen of a compromising kind, they’d none of ’em be missed — they’d none of ’em be missed.”

Ah, where’s Robspierre when you need him?

The death of neoliberalism and the crisis in western politics
by Martin Jacques, The Guardian
Sunday 21 August 2016 00.25 EDT

The western financial crisis of 2007-8 was the worst since 1931, yet its immediate repercussions were surprisingly modest. The crisis challenged the foundation stones of the long-dominant neoliberal ideology but it seemed to emerge largely unscathed. The banks were bailed out; hardly any bankers on either side of the Atlantic were prosecuted for their crimes; and the price of their behaviour was duly paid by the taxpayer. Subsequent economic policy, especially in the Anglo-Saxon world, has relied overwhelmingly on monetary policy, especially quantitative easing. It has failed. The western economy has stagnated and is now approaching its lost decade, with no end in sight.

After almost nine years, we are finally beginning to reap the political whirlwind of the financial crisis. But how did neoliberalism manage to survive virtually unscathed for so long? Although it failed the test of the real world, bequeathing the worst economic disaster for seven decades, politically and intellectually it remained the only show in town. Parties of the right, centre and left had all bought into its philosophy, New Labour a classic in point. They knew no other way of thinking or doing: it had become the common sense. It was, as Antonio Gramsci put it, hegemonic. But that hegemony cannot and will not survive the test of the real world.

The effect of the financial crisis was to undermine faith and trust in the competence of the governing elites. It marked the beginnings of a wider political crisis.

But the causes of this political crisis, glaringly evident on both sides of the Atlantic, are much deeper than simply the financial crisis and the virtually stillborn recovery of the last decade. They go to the heart of the neoliberal project that dates from the late 70s and the political rise of Reagan and Thatcher, and embraced at its core the idea of a global free market in goods, services and capital. The depression-era system of bank regulation was dismantled, in the US in the 1990s and in Britain in 1986, thereby creating the conditions for the 2008 crisis. Equality was scorned, the idea of trickle-down economics lauded, government condemned as a fetter on the market and duly downsized, immigration encouraged, regulation cut to a minimum, taxes reduced and a blind eye turned to corporate evasion.

It should be noted that, by historical standards, the neoliberal era has not had a particularly good track record. The most dynamic period of postwar western growth was that between the end of the war and the early 70s, the era of welfare capitalism and Keynesianism, when the growth rate was double that of the neoliberal period from 1980 to the present.

But by far the most disastrous feature of the neoliberal period has been the huge growth in inequality. Until very recently, this had been virtually ignored. With extraordinary speed, however, it has emerged as one of, if not the most important political issue on both sides of the Atlantic, most dramatically in the US. It is, bar none, the issue that is driving the political discontent that is now engulfing the west. Given the statistical evidence, it is puzzling, shocking even, that it has been disregarded for so long; the explanation can only lie in the sheer extent of the hegemony of neoliberalism and its values.

But now reality has upset the doctrinal apple cart. In the period 1948-1972, every section of the American population experienced very similar and sizable increases in their standard of living; between 1972-2013, the bottom 10% experienced falling real income while the top 10% did far better than everyone else. In the US, the median real income for full-time male workers is now lower than it was four decades ago: the income of the bottom 90% of the population has stagnated for over 30 years.

The reasons are not difficult to explain. The hyper-globalisation era has been systematically stacked in favour of capital against labour: international trading agreements, drawn up in great secrecy, with business on the inside and the unions and citizens excluded, the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) being but the latest examples; the politico-legal attack on the unions; the encouragement of large-scale immigration in both the US and Europe that helped to undermine the bargaining power of the domestic workforce; and the failure to retrain displaced workers in any meaningful way.

As Thomas Piketty has shown, in the absence of countervailing pressures, capitalism naturally gravitates towards increasing inequality. In the period between 1945 and the late 70s, Cold War competition was arguably the biggest such constraint. Since the collapse of the Soviet Union, there have been none. As the popular backlash grows increasingly irresistible, however, such a winner-takes-all regime becomes politically unsustainable.

Large sections of the population in both the US and the UK are now in revolt against their lot, as graphically illustrated by the support for Trump and Sanders in the US and the Brexit vote in the UK. This popular revolt is often described, in a somewhat denigratory and dismissive fashion, as populism. Or, as Francis Fukuyama writes in a recent excellent essay in Foreign Affairs: “‘Populism’ is the label that political elites attach to policies supported by ordinary citizens that they don’t like.” Populism is a movement against the status quo. It represents the beginnings of something new, though it is generally much clearer about what it is against than what it is for. It can be progressive or reactionary, but more usually both.

The wave of populism marks the return of class as a central agency in politics, both in the UK and the US. This is particularly remarkable in the US. For many decades, the idea of the “working class” was marginal to American political discourse. Most Americans described themselves as middle class, a reflection of the aspirational pulse at the heart of American society. According to a Gallup poll, in 2000 only 33% of Americans called themselves working class; by 2015 the figure was 48%, almost half the population.

The neoliberal era is being undermined from two directions. First, if its record of economic growth has never been particularly strong, it is now dismal. Europe is barely larger than it was on the eve of the financial crisis in 2007; the United States has done better but even its growth has been anaemic. Economists such as Larry Summers believe that the prospect for the future is most likely one of secular stagnation.

Worse, because the recovery has been so weak and fragile, there is a widespread belief that another financial crisis may well beckon. In other words, the neoliberal era has delivered the west back into the kind of crisis-ridden world that we last experienced in the 1930s. With this background, it is hardly surprising that a majority in the west now believe their children will be worse off than they were. Second, those who have lost out in the neoliberal era are no longer prepared to acquiesce in their fate – they are increasingly in open revolt. We are witnessing the end of the neoliberal era. It is not dead, but it is in its early death throes, just as the social-democratic era was during the 1970s.

A sure sign of the declining influence of neoliberalism is the rising chorus of intellectual voices raised against it. From the mid-70s through the 80s, the economic debate was increasingly dominated by monetarists and free marketeers. But since the western financial crisis, the centre of gravity of the intellectual debate has shifted profoundly. This is most obvious in the United States, with economists such as Joseph Stiglitz, Paul Krugman, Dani Rodrik and Jeffrey Sachs becoming increasingly influential.

Meanwhile, some of those who were previously strong advocates of a neoliberal approach, such as Larry Summers and the Financial Times’s Martin Wolf, have become extremely critical. The wind is in the sails of the critics of neoliberalism; the neoliberals and monetarists are in retreat. In the UK, the media and political worlds are well behind the curve. Few recognise that we are at the end of an era. Old attitudes and assumptions still predominate, whether on the BBC’s Today programme, in the rightwing press or the parliamentary Labour party.

Following Ed Miliband’s resignation as Labour leader, virtually no one foresaw the triumph of Jeremy Corbyn in the subsequent leadership election. The assumption had been more of the same, a Blairite or a halfway house like Miliband, certainly not anyone like Corbyn. But the zeitgeist had changed. The membership, especially the young who had joined the party on an unprecedented scale, wanted a complete break with New Labour. One of the reasons why the left has failed to emerge as the leader of the new mood of working-class disillusionment is that most social democratic parties became, in varying degrees, disciples of neoliberalism and uber-globalisation. The most extreme forms of this phenomenon were New Labour and the Democrats, who in the late 90s and 00s became its advance guard, personified by Tony Blair and Bill Clinton, triangulation and the third way.

But as David Marquand observed in a review for the New Statesman, what is the point of a social democratic party if it doesn’t represent the less fortunate, the underprivileged and the losers? New Labour deserted those who needed them, who historically they were supposed to represent. Is it surprising that large sections have now deserted the party who deserted them? Blair, in his reincarnation as a money-obsessed consultant to a shady bunch of presidents and dictators, is a fitting testament to the demise of New Labour.

Trump may well lose the presidential election just as Sanders failed in his bid for the Democrat nomination. But this does not mean that the forces opposed to hyper-globalisation – unrestricted immigration, TPP and TTIP, the free movement of capital and much else – will have lost the argument and are set to decline. In little more than 12 months, Trump and Sanders have transformed the nature and terms of the argument. Far from being on the wane, the arguments of the critics of hyper-globalisation are steadily gaining ground. Roughly two-thirds of Americans agree that “we should not think so much in international terms but concentrate more on our own national problems”. And, above all else, what will continue to drive opposition to the hyper-globalisers is inequality.

Now me, I have no opposition to unrestricted immigration. I think anybody who comes here ought to be able to earn the same fair and regulated wage that any United States citizen does as well as all the (too meager) benefits like our Third World Health Care and Social Security, provided they’re reasonably law abiding (don’t spit on the sidewalk) and pay taxes like the rest of us.

No, the problem is Monopoly Capitalism (Neoliberalism) that seeks to reduce the value of Labor and enhance the capital of the wealthy. I’ll leave you with another quote-

From the moment when the machine first made its appearance it was clear to all thinking people that the need for human drudgery, and therefore to a great extent human inequality, had disappeared. If the machine were used deliberately for that end, hunger, overwork, dirt, illiteracy, and disease could be eliminated within a few generations. And in fact, without being used for any such purpose, but by a sort of automatic process — by producing wealth which it was sometimes impossible not to distribute — the machine did raise the living standards of the average human being very greatly over a period of about fifty years at the end of the nineteenth and the beginning of the twentieth centuries. But it was also clear that an all-round increase in wealth threatened the destruction — indeed, in some sense was the destruction — of a hierarchical society. In a world in which everyone worked short hours, had enough to eat, lived in a house with a bathroom and a refrigerator, and possessed a motor-car or even an aeroplane, the most obvious and perhaps the most important form of inequality would already have disappeared. If it once became general, wealth would confer no distinction.

The horror. The horror.

Aug 23 2016

This is how we do it baby.

What are “Capital Controls”? Well, they’re basically laws that keep people (and corporations) from sucking Billions of dollars in revenues and resources from your country and taking it someplace else.

It’s really not too strong to call it National rape.

Now back in the bad old days before “Free Trade” it was acceptable for a government to say- “Ok, your company can do business here, but you also have to take the profit you generate and buy and invest in other things here also.” Think Nigeria, Shell, and Chevron. Companies have stolen native land, gunned down protesters in the streets, and polluted the crap out it. Then, instead of improving the economy they’ve taken the money and left Nigeria like a used condom on the oil slicked bloated and decaying fish dead bird beach.

It’s Africa Jake.

Is it? Is it really? Just because they’re brown? There’s a name for that- racist.

But it’s a principle of universal applicability. Another, though marginally more subtle, example is the Eurozone. Because of the universal currency Germans can suck all the resources out of Greece, Portugal, Spain, Italy with no restrictions.

So what’s the downside of just saying “No”?

“You make your country less hospitable to foreign investors!”

So, you don’t get raped so often. This is bad why?

If you have an economy like any major power (talking U.S., EU, Japan, China, Russia…) most of your trade is internal. International investors can piss up a rope because you’ll never notice. Hell, you print your own money and all your debts are payable in that same exact money of which you can make all you want!


While most of the majors take full advantage of this there are some circumstances in which you wish to prevent Capital flight. Suppose your country was in a deep Depression and you needed to stimulate local spending to increase Demand for your Excess Capacity?

Or suppose your country was under sanctions and you couldn’t trade on a “Free Market”? Do you think it would be fair to allow everyone to just take all their stuff and leave?

Personally I think that would be fair but as we have seen sanctions are intensely political and unjust executions of punishment on regimes that are merely sufficiently unpopular among the global ruling elite. Where are the sanctions on Saudi Arabia for bombing MSF Hospitals in Yemen (oh, and they’re bombing them because the Yemeni are Shia so it’s simply religious persecution which the U.S. Government fully supports. Yay us.)?

Anyway, Banksters laugh at you and your puny attempts at regulation!

Deutsche Bank’s $10-Billion Scandal
By Ed Caesar, The New Yorker
August 29, 2016

Scandals have proliferated at Deutsche Bank. Since 2008, it has paid more than nine billion dollars in fines and settlements for such improprieties as conspiring to manipulate the price of gold and silver, defrauding mortgage companies, and violating U.S. sanctions by trading in Iran, Syria, Libya, Myanmar, and Sudan. Last year, Deutsche Bank was ordered to pay regulators in the U.S. and the U.K. two and a half billion dollars, and to dismiss seven employees, for its role in manipulating the London Interbank Offered Rate, or libor, which is the interest rate banks charge one another. The Financial Conduct Authority, in Britain, chastised Deutsche Bank not only for its manipulation of libor but also for its subsequent lack of candor. “Deutsche Bank’s failings were compounded by them repeatedly misleading us,” Georgina Philippou, of the F.C.A., declared. “The bank took far too long to produce vital documents and it moved far too slowly to fix relevant systems.”

In April, 2015, the mirror-trades scheme unravelled.

According to a former employee, before the crash of 2008 the desk’s yearly profit was nearly three hundred million dollars. In the years after the crash, profits plunged by more than half. In this environment of diminishing returns on normal stock-market activity, the Moscow equities desk was looking to find fresh revenue streams.

Many businesses in the Russian Federation avoid taxes by using offshore jurisdictions, such as Cyprus, for their headquarters. Rich Russians, meanwhile, often funnel their private fortunes offshore, in an effort to hide their assets from the capricious and predatory Russian state. Frequently, this fugitive money is invested in assets such as property: on Park Lane in London, or Park Avenue in New York.

The impact of this capital flight is felt at both ends of its journey. Research published last year by Deutsche Bank’s own analysts suggested that unrecorded capital inflows from Russia into the U.K. correlated strongly with increases in U.K. house prices and, to a lesser extent, with a strengthening of the pound sterling. Capital flight also has weakened Russia’s tax base and its currency. In 2012, Putin began a “de-offshorization” program, urging businesses and oligarchs to keep their headquarters and their fortunes at home. Two years later, after Russia’s incursion into Crimea led to sanctions from the European Union and the U.S., Putin declared that offshorization was illegal. But as the ruble and the economy foundered many Russians felt even more eager to remove their money. Mirror trading was an ideal escape tunnel.

In one, he would use Russian rubles to buy a blue-chip Russian stock, such as Lukoil, for a Russian company that he represented. Usually, the order was for about ten million dollars’ worth of the stock. In the second trade, Volkov — acting on behalf of a different company, which typically was registered in an offshore territory, such as the British Virgin Islands — would sell the same Russian stock, in the same quantity, in London, in exchange for dollars, pounds, or euros. Both the Russian company and the offshore company had the same owner. Deutsche Bank was helping the client to buy and sell to himself.

At first glance, the trades appeared banal, even pointless. Deutsche Bank earned a small commission for executing the buy and sell orders, but in financial terms the clients finished roughly where they began. To inspect the trades individually, however, was like standing too close to an Impressionist painting—you saw the brushstrokes and missed the lilies. These transactions had nothing to do with pursuing profit. They were a way to expatriate money. Because the Russian company and the offshore company both belonged to the same owner, these ordinary-seeming trades had an alchemical purpose: to turn rubles that were stuck in Russia into dollars stashed outside Russia. On the Moscow markets, this sleight of hand had a nickname: konvert, which means “envelope” and echoes the English verb “convert.” In the English-language media, the scheme has become known as “mirror trading.”

Mirror trades are not inherently illegal. The purpose of an equities desk at an investment bank is to help approved clients buy and sell stock, and there could be legitimate reasons for making a simultaneous trade. A client might want to benefit, say, from the difference between the local and the foreign price of a stock. Indeed, because the individual transactions involved in mirror trades did not directly contravene any regulations, some employees who worked at Deutsche Bank’s Russian headquarters at the time deny that such activity was improper.

Viewed with detachment, however, repeated mirror trades suggest a sustained plot to shift and hide money of possibly dubious origin. Deutsche Bank’s actions are now under investigation by the U.S. Department of Justice, the New York State Department of Financial Services, and financial regulators in the U.K. and in Germany. In an internal report, Deutsche Bank has admitted that, until April, 2015, when three members of its Russian equities desk were suspended for their role in the mirror trades, about ten billion dollars was spirited out of Russia through the scheme. The lingering question is whose money was moved, and why.

One day in 2011, the Russian side of a mirror trade, for about ten million dollars, could not be completed: the counterparty, Westminster Capital Management, had just lost its trading license. The Federal Financial Markets Service in Russia had barred two mirror-trade counterparties, Westminster and Financial Bridge, for improperly using the stock market to send money overseas. The failed trade was a problem for Deutsche Bank. It had paid several million dollars for stock without receiving a cent from Westminster. Employees at all levels of a financial institution notice when a trading desk abruptly falls short by a few million dollars. The episode should have raised serious suspicions—especially given the revoking of Westminster’s license—but apparently it did not.

Employees recall that the failed trade was resolved in November, 2012, when Westminster repaid Deutsche Bank. Volkov resumed calling in mirror trades, on behalf of other counterparties. These companies were supposedly subjected to a rigorous “client review” process, and all of them were deemed satisfactory by a Deutsche Bank compliance team. But there was a pattern suggesting malfeasance. Clients of the scheme consistently lost small amounts of money: the differences between Moscow and London prices of a stock often worked against them, and clients had to pay Deutsche Bank a commission for every transaction—between ten hundredths and fifteen hundredths of a percentage point per trade. The apparent willingness of counterparties to lose money again and again, a former manager at Deutsche Bank told me, should have “sounded an air-raid alarm” that the true purpose of the mirror trades was to facilitate capital flight.

(A) Russian banker, who helped to set up the mirror-trade scheme, told me that much of the money belonged to Chechens with connections to the Kremlin. Chechnya, the semi-autonomous region in the North Caucasus, is ruled by the exuberantly barbarous Ramzan Kadyrov, who is close with Putin. Chechnya receives huge subsidies from Russia, and much of the money has ended up in the pockets of figures close to Kadyrov.

The Deutsche Bank mirror-trades operation appears to be linked to an even bigger attempt to expatriate money: the so-called Moldovan scheme. Starting in 2010, fake loans and debt agreements involving U.K. companies helped funnel about twenty billion dollars out of Russia to a Latvian bank, by way of Moldova. When the Moldovan scheme unravelled, in late 2015, several people were arrested. One was Alexander Grigoriev, a Russian financier who controlled Promsberbank—a now defunct institution, based in a Russian backwater called Podolsk, which counted Igor Putin as a board member. Two of Promsberbank’s major shareholders—including Financial Bridge—have been accused of making mirror trades. The Russian news agency RBC has reported that “the criminal dealings of Promsberbank” and the mirror trades at Deutsche Bank are connected.

Deutsche Bank has not commented on whose money was expatriated through the mirror trades, although John Cryan, the C.E.O., has said that the bank has not knowingly assisted Russians on the sanctions list. In the deadening argot of finance, Deutsche Bank’s Russian fiasco has frequently been called a “failure of controls.” In an interview in March, 2016, Cryan said, “To our knowledge, the individual transaction steps in themselves were innocuous. However, the case raises questions about how effective our systems and controls were, especially with regard to the onboarding of new clients, an area where we experienced difficulties in collecting sufficient information.”

This passive language is hard to square with the blatant nature of the scheme. Roman Borisovich, a former investment banker at Deutsche Bank in London, who focussed on Russian businesses, told me, “‘Fucking Obvious’ is the middle name of Russian corruption.”

Reports of Deutsche Bank’s internal investigation into mirror trades do not inspire confidence. Mirror trades occurred for at least two years before anyone raised any concerns, and when red flags appeared it was months before anyone acted on them. According to Bloomberg News, the internal report notes that, in early 2014, a series of inquiries about the propriety of mirror trades had been logged by multiple parties, including Hellenic Bank, in Cyprus, the Russian Central Bank, and back-office staff members at Deutsche Bank itself. When Hellenic Bank executives contacted Deutsche Bank and asked about the unusual trades, they did not hear back from the compliance department. Instead, their inquiry was fielded by the equities desk that was performing the mirror trades. Deutsche Bank in Moscow reassured Hellenic Bank that everything was in order.

On March 9, 2015, less than a month before the mirror-trades scandal became public, Oliver Harvey and Robin Winkler, two strategists in the research department of Deutsche Bank in London, published a report, “Dark Matter,” which described the vast unrecorded transfer of money among nations. Most economic papers are politely ignored by the world at large, but “Dark Matter” attracted wide interest. Several newspapers ran articles about it, and Harvey appeared on both CNN and the BBC to discuss his research.

The report’s conclusions confirmed long-held suspicions. In any national economy, the authors explained, there are capital flows that do not appear on what is called “the balance of payments.” Errors and accidental omissions should be random, and therefore reveal no pattern. The authors found that in the United Kingdom the pattern was anything but random. Britain had “large positive net errors” that suggested significant “unrecorded capital inflows.” Analyzing data from other countries, Harvey and Winkler deduced where the vast majority of unrecorded capital flowing into the U.K. was coming from. Since 2010, they wrote, about a billion and a half dollars had arrived, unrecorded, in London every month; “a good chunk” of it was from Russia. “At its most extreme,” the authors explained, the unrecorded capital flight from Moscow included “criminal activity such as tax evasion and money laundering.”

In a connected and digitized financial system, how could such capital flight happen? Bank transfers leave a footprint. Imports and exports are accounted for. How could money disappear in one place and show up in another? The two strategists did not have to wait long, or look far, to learn the shameful answer: of the eighteen billion dollars that the researchers had estimated was flowing into the U.K. each year, about twenty per cent had arrived there as the result of trades made at their own bank.

But what does this mean to you?

Since 2011, the Federal Reserve has performed a yearly “stress test” of U.S. lenders, assessing whether banks would have enough capital to withstand the shock of an economic downturn. Deutsche Bank failed the test in 2015, and failed again this June, when “broad and substantial weaknesses” were uncovered. Soon after the Federal Reserve’s latest report was released, the International Monetary Fund issued a dire warning. Deutsche Bank, it said, was not only “one of the most important net contributors to systemic risks in the global banking system”; it was also a contagious agent, because of heavy financial “spillover” between Deutsche Bank and other lenders and insurers. Any kind of failure at Deutsche Bank, the I.M.F. suggested, would be extremely bad news for everybody.

Given Deutsche Bank’s fragility, the mirror-trading scandal could not have come at a worse time. Cryan has promised to settle the Russian case by the end of this year, and the bank recently set aside about a billion dollars for legal costs. This may not be enough. Last year, Deutsche Bank was fined the relatively small sum of two hundred and fifty-eight million dollars for its circumvention of sanctions against Iran, Sudan, and elsewhere. In 2014, however, BNP Paribas agreed to pay nearly nine billion dollars to settle with regulators over sanctions violations. And the mirror trades may exact a heavy fine from U.S. regulators, who take a dim view of activity that looks like money laundering. A payment as vast as the one levied at BNP Paribas could require Deutsche Bank to raise capital to survive. A German government bailout might become a necessity. A capital shortfall at Germany’s largest bank might provoke a banking crisis across Europe. The shock to the global economy would be profound.

No, I’m not seeing into the future. That’s the actual dateline.

Is it important? HSBC laundered Billions for Drug Lords and Terrorists. Did that matter? Deutsche Bank was deeply involved in the LIBOR scandal putting $350 Trillion (59.5 Light Years) at risk.

Senate Judiciary Committee Hearing, March 6, 2013

Sen. Chuck Grassley, R-Iowa: In the case of bank prosecution. I’m concerned we have a mentality of ‘too big to jail’ in the financial sector, spreading from fraud cases to terrorist financing to money laundering cases. I would cite HSBC.

Assistant Attorney General Breuer said that one reason that DOJ has not sought these prosecutions is because it reaches out to ‘experts’ to see what effect the prosecution will have on the financial markets. On Jan. 29, Sen. [Sherrod] Brown and I requested details on who these so-called ‘experts’ are. So far we have not received any information. Maybe you’re going to but why have we not yet been provided the names of experts the DOJ consults as we requested on Jan. 29? We continue to find out why we aren’t having these high-profile cases.

Attorney General Eric Holder: I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute — if we do bring a criminal charge — it will have a negative impact on the national economy, perhaps even the world economy. I think that is a function of the fact that some of these institutions have become too large.

Again, I’m not talking about HSBC, this is more of a general comment. I think it has an inhibiting influence, impact on our ability to bring resolutions that I think would be more appropriate.

We looked at those kinds of cases. I think we have been appropriately aggressive, these are not always easy cases to make. When you look at these cases, you see that things were done ‘wrong’ then the question is whether or not they were illegal. And I think the people in our criminal division… I think have been as aggressive as they could be, brought cases where we think we could have brought them. I know that in some instances that has not been a satisfying answer to people, but we have been as aggressive as we could have been.

Grassley: If you constitutionally can jail the CEO of a major institution, that is going to send a pretty wide signal to stop a lot of activity that people think they can get away with.

Holder: You are right, senator. The greatest deterrent effect is not to prosecute a corporation — although that’s important — the greatest deterrent effect is to prosecute the individuals in the corporations that are responsible for those decisions. We’ve done that in the UBS matter and try to do that whenever we can. But the point that you make is a good one.

Thank you so much Mr. “Liberal” “Progressive” Barack Obama.

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