Tag: ek Politics

Why the White Paper Is So Terrifying

By Stephen Marche, Esquire

at 10:24AM, Feb 6, 2013

The administration’s white paper on targeted killings, which was released yesterday, has provoked some intense and entirely justified expressions of fear and loathing. There was Tom Junod’s piece on this site, which outright accused Obama of coveting kingship, and there was Ta-Nehisi Coates over at The Atlantic, who found an apt comparison with Orwell’s work on language and totalitarianism. Both are great pieces, and terrifying enough.

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Where are we going to find a better description of what the Obama administration is doing with their legal defense of targeted killing? They have made the president into a sovereign. Their language hides this basic fact: The president now gets to decide when the law doesn’t apply. The vague terminology in the white paper – “imminent threat” and “national self-defense” – is intended to be meaningless. Threat and self-defense can be defined in any way the president likes. He gets to choose.

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There are no exceptions under the law. There are no sovereigns. There is equality under the law and that’s it. Nobody gets to decide who doesn’t have rights under the Constitution. What’s so terrifying about this white paper is that it’s unconstitutional, not in the sense that it violates any particular tenet of the American Constitution, but in that it doesn’t respect the premise of there being a Constitution in the first place. The whole idea of having a Constitution is that no individual gets to decide what’s an exception to it.

What is so extraordinary about this moment in American life is that tens of millions of people are ferociously defending the Second Amendment, and throw the name of the Constitution around like it’s sacred, and yet they utter not one peep when its basic principles are shaken to their foundation. And let’s be honest about why the right doesn’t attack Obama for this outrageous violation of the founding principles of the country: They don’t want to look weak, and they think that it only affects people they don’t mind seeing die anyway. As for the idea that Al-Qaeda is so much of a threat that it requires extraordinary extensions of the president’s powers, I can only say that the United States didn’t need a sovereign while facing the Nazis or Communist Russia, both of which were infinitely more resourceful and threatening than a bunch of camel-humpers living in remote caves in the most desolate places on earth. Rome didn’t need a sovereign for five hundred years, while facing half a dozen truly existential threats. We all know how that turned out. At least they knew when they had an emperor. They had a ceremony and everything. Obama just has a white paper.

Except, you know, to call it stupid is a catgory error.

Yglesias Pours the Geithner, Holder, Breuer (GHB) Banksters Immunity Doctrine in our Drinks

Bill Black, Naked Capitalism

Friday, February 1, 2013

It’s early, but Salon has published on January 30, 2013 either the funniest or saddest column of the year to date: “Are Banks Too Big To Prosecute?”

The column is attributed to Matthew Yglesias, a blogger who studied philosophy as an undergraduate. It could be a brilliantly ironic satire of the Geithner, Holder and Breuer doctrine of immunity for banksters (which I am dubbing “GHB” for short). GHB is the “roofie” that the Obama administration gave us so the banksters could screw us repeatedly with impunity. Alternatively, and far more likely, Yglesias has written the saddest and most immoral apologia for elite white-collar crime that has yet made it into electronic bits. It takes a rerouted beginning student of philosophy, posing as a commentator on finance, to replace what should be a discussion that includes virtue ethics with a virtue-free, criminology-free, and economics-free apologia for the felons who became wealthy by costing the Nation $20 trillion and 10 million jobs.

Matthew Yglesias wrote a similar column on April 14, 2011 embracing the Geithner immunity doctrine. He titled it: “The Fraud Free Financial Crisis” – and it proves our family’s rule that it is impossible to compete with unintentional self-parody. In 2011, Yglesias thought we might be experiencing the first “Virgin Financial Crisis” – conceived without sin.

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I find it strange that neither of Yglesias’ columns on a subject that has a vital ethical component discusses the ethics of his support for giving elite bank frauds immunity from the criminal laws. Yglesias’ relevant expertise on this subject was in ethics.

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Riggs’ actions were beyond “serious.” They were criminal and they helped murderous national leaders commit murder, loot their Nations, and hide their crimes and the money they looted from U.S. and international prosecutors. Were there “serious investigations”? Not so much according to the article Yglesias relies on. The Office of the Comptroller of the Currency (OCC) failed to investigate competently for many years. Its examiner-in-chief of examining Riggs left the government and took a job with Riggs.

There were no “serious penalties” – in large part due to the weakness of the investigations. The senior officers who directed and were enriched by Riggs’ crimes were not prosecuted. Riggs became richer and more powerful through its crimes and its senior managers’ reputations were made by those illegal profits. Joseph Allbritton was inducted into the Washington Business Hall of Fame in 2002. A lower level Riggs officer was criminally investigated – but he was alleged to have embezzled from the bank.

The so-called “serious penalties” were a $25 million OCC penalty and a $16 million penalty for money laundering. At those low levels of penalties crime paid. It paid very well. The amount of funds Riggs was able to manage because it aided the looting of Equatorial Guinea was massive: $360 million. Riggs had $6.4 billion in total assets.

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I don’t expect Yglesias to understand regulation or regulators, but even without relevant expertise about regulation he should have been able to see the total lack of integrity his preferred system of immunity for elite bankster frauds would create. I cannot think of any philosophical basis for believing that the senior officers of a large bank should be allowed to become wealthy by causing their bank, unlawfully, to aid murderous Dictators loot “their” Nations. The senior officers’ actions are profoundly unethical and they set the “tone at the top” that determine a bank’s ethical culture.

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Fraud is a dynamic process and elite frauds are not random. Control frauds beget other control frauds. They are strongly criminogenic. Control frauds exist in all three major sectors – private enterprise, NGOs, and government. Government control frauds (“kleptocrats”) loot “their” Nations. Kleptocrats create and seek out other control frauds, such as Riggs Bank, that will aid their looting. Riggs Bank’s aid to the Dictators of Chile and Equatorial Guinea helped them murder and torture thousands of people. Control frauds are weapons of mass economic destruction, but many control frauds also maim and kill large numbers of people. Yglesias thinks a $46 million penalty assessed to a bank with $6.4 billion in assets – not the controlling officers – represents a “serious penalty” for hundreds of crimes that continued for over a decade and produced considerably greater income for the bank than the penalties and helped make the controlling officers wealthy.

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Yglesias does not understand that as long as you leave the fraudulent senior officers in control they have an overwhelming interest in continuing to lie about the SDIs’ financial condition. It is absolutely essential to find the true facts about the SDIs losses – an action that the Bush and Obama administration prevented at every key stage. The stress tests, for example, are carefully designed not to find existing losses on bad assets. Two factors are essential to determine the real losses. First, one must ensure that the controlling officers have strong incentives to identify the losses instead of covering them up. “Pass through” receiverships do this superbly well. Second, one must investigate problem assets. Vigorous criminal investigations greatly aid in the detection of losses that were being covered up by the fraudulent managers. Our mantra in criminology with respect to sophisticated financial frauds is that if you don’t look; you don’t find.

Yglesias writes as if “insolvency” were some purely scientific measurement that was conducted by the regulators and that we know that the SDIs were insolvent in 2008 but are solvent now. We know no such thing. Yglesias has no concept of how to conduct a rigorous financial investigation. Think about Geithner’s incentives under Yglesias’ take on “solvency.” If Geithner ordered a rigorous investigation of the SDIs’ solvency and found that several SDIs were insolvent or even badly undercapitalized, then he (1) would be transformed into a failure and (2) he would “cause” a global crisis by triggering a “catastrophe.” Under Yglesias’ own framing of Geithner’s incentives we can only conclude that Geithner’s (and the regulators’) claims that all is well at the SDIs have no credibility because of a powerful bias by the SDIs and the regulators to hide losses.

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Yglesias ends his attempt at logic by repeating his false framing of the policy options and employing euphemisms: “if saving the banks was the right thing to do, then curtailing prosecutions was the only way to execute the strategy.” I begin with the euphemism – GHB’s doctrine did not “curtail prosecutions” of SDIs and their managers for the frauds that drove the financial crisis. They prevented virtually all prosecutions of elite bank fraudsters and fraudulent banks. Indeed, they prevented virtually all prosecutions of senior officers of even non-elite banks. Worse, as we have been saying for years and as “The Untouchables” confirmed – GHB’s immunity doctrine prevented even vigorous criminal investigations of the SDIs. That denied us the facts about fraud, including how much the senior officers gained in wealth through fraud, how large were the losses their frauds caused, and how deeply did the losses drive the SDIs into insolvency. The failure to investigate and prosecute also minimized any reputational injury to the frauds – maximizing their ability to defraud us in the future. I’ve already pointed the deliberate abuse of logic exemplified by Yglesias’ false claim that preventing “prosecutions” was “the only way” of “saving the banks.” We can prosecute the SDI officers who directed the control frauds and grew wealthy through those frauds without having to prosecute the banks.

But perhaps I am being too fair to Yglesias. Perhaps he is saying that if we successfully prosecuted the SDIs’ controlling officers for using the SDIs as “weapons” to defraud the SDIs’ customers, creditors, and shareholders then we would inherently establish that the SDIs were liable through civil suits for the massive damages their frauds caused. (A corporation is normally liable for the wrongs of its officers committed in their capacity as officers.) Indeed, successful prosecutions and guilty pleas could establish “collateral estoppel” and allow the victims to easily win their civil cases against the SDIs. The damages in these civil suits should be extraordinary because fraud allows the recovery of punitive damages and the SDIs committed so many crimes that treble damages are available against the SDIs through civil RICO suits. Perhaps Yglesias, like GHB, believes that it is essential that we not be allowed to hold the officers accountable criminally and that we must act to prevent the victims of the SDIs’ frauds from receiving more than token recompense from the SDIs lest we fail to “save the banks” (by which he really means “save the SDIs”). Does Yglesias want the U.S. to add to the injury to the victims and to provide further aid and comfort to the elite fraudsters by declaring immunity from prosecution for the officers who grew rich through fraud?

TURKEY TROTS TO WATER GG FROM CINCPAC ACTION COM THIRD FLEET INFO COMINCH CTF SEVENTY-SEVEN X WHERE IS RPT WHERE IS TASK FORCE THIRTY FOUR RR THE WORLD WONDERS

Now you probably know him better as letsgetitdone from corrente and Firedog Lake and he’s started a series which, if you have any interest in economics and the economy at all, I think you should pay attention to.

It’s called Framing Platinum Coin Seigniorage and is available in source form from New Economic Perspectives (you might want to  bookmark that).

The precis-

Framing Platinum Coin Seigniorage: Part One, Basics

Joe Firestone

Posted on January 31, 2013

How come nobody asks why, since Congress has the unlimited authority to create coins and currency, it doesn’t just create money when it deficit spends? The short answer is that Congress in 1913, constrained the Executive Branch from creating currency or bank reserves, delegated its power to do that to the Federal Reserve System, and never looked back when we went off the gold standard in 1971, even though this removed the danger of money-creation outrunning gold reserves, and also created a new monetary system based on fiat currency.

But coins, it turns out are different from currency and bank reserves. They’re the province of the Executive. And Congress provided the authority, in legislation passed in 1996, for the US Mint to create one oz. platinum bullion or proof platinum coins with arbitrary fiat face value, having no relationship to the market value of the platinum used in the coins. These coins are legal tender. When the Mint deposits them in its Public Enterprise Fund (PEF) account, the Fed must credit it with the face value of these coins. The difference between the Mint’s costs in producing the coins, and the reserves provided by the Fed is the US Mint’s “coin seigniorage” or profit from the transaction.

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Platinum coins with huge face values such as $60 T, can produce seigniorage closing the revenue gap and technically end deficit spending, while still retaining the gap between tax revenues and spending that can add to aggregate demand and produce full employment. Platinum Coin Seigniorage (PCS) is also a way for the Executive to end debt ceiling crises, since the profits could be used to repay debt instruments when they fall due, without the need to issue any more debt.

The seigniorage from a $60 T platinum coin would serve as a potent symbol of the truth that the Federal Government can never involuntarily run out of money. This is one of the central ideas of MMT that the public needs to accept routinely, to understand that the Government’s budget isn’t like their household budget. The presence of the $60 T in the public purse would be a positive enabler of progressive legislation creating benefits that people want now, but austerians say we can’t pass because “we can’t afford it.”

If all debt instruments are re-paid by using PCS, then, eventually the US would have no debt subject to the limit, or presence in the bond market, and would pay no interest to bond holders. No one would worry about the public debt, or use its size to justify blocking legislation that fulfills public purpose and promotes the general welfare.

So, PCS-based elimination of debt can end the whole austerity mind set that provides our current budgetary process with its constraining conservative cast, focused on narrow monetary cost considerations, rather than on a broader progressive framework that weighs the real costs and benefits of proposed fiscal activities of the Federal Government.

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It must be done now! If it doesn’t, then people who are against the use of PCS will have time to organize against it and get it repealed by the Congress. Now that the PCS capability is widely known, the FIRE (Finance, Insurance, Real Estate) Sector will be gunning for it with all the financial, political and propaganda power it can bring to bear. It will do that because using PCS, especially the $30 T or greater coin, High Value Platinum Coin Seigniorage (HVPCS) I propose, strikes at the domination of the financial and political systems by Wall Street and the big banks

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HVPCS threatens the banks’ domination of the Fed, and also their role in money creation, and with it some of their income. The more time that passes without using HVPCS, the more likely it is that the Executive Branch will lose this capability to Wall Street’s persistent political efforts at repeal, and become the actual, rather than only the pretended (kabuki) prisoner of debt instruments and austerity once again.

available in orange

Please admit that we were right.

You see, that’s what all the hippie kicking comes down to.  The monumental ego of the predestined, God-ordained elite who can not possibly ever be wrong because they are successful and privileged and a just deity could not allow wickedness to go unpunished.

It logically follows the unsuccessful and under privileged are wicked and must be punished you see.

Part 3, Chapter 4

He had capitulated, that was agreed. In reality, as he saw now, he had been ready to capitulate long before he had taken the decision. From the moment when he was inside the Ministry of Love — and yes, even during those minutes when he and Julia had stood helpless while the iron voice from the telescreen told them what to do — he had grasped the frivolity, the shallowness of his attempt to set himself up against the power of the Party. He knew now that for seven years the Thought police had watched him like a beetle under a magnifying glass. There was no physical act, no word spoken aloud, that they had not noticed, no train of thought that they had not been able to infer. Even the speck of whitish dust on the cover of his diary they had carefully replaced. They had played sound-tracks to him, shown him photographs. Some of them were photographs of Julia and himself. Yes, even … He could not fight against the Party any longer. Besides, the Party was in the right. It must be so; how could the immortal, collective brain be mistaken? By what external standard could you check its judgements? Sanity was statistical. It was merely a question of learning to think as they thought. Only!

The pencil felt thick and awkward in his fingers. He began to write down the thoughts that came into his head. He wrote first in large clumsy capitals:

FREEDOM IS SLAVERY

Then almost without a pause he wrote beneath it:

TWO AND TWO MAKE FIVE

But then there came a sort of check. His mind, as though shying away from something, seemed unable to concentrate. He knew that he knew what came next, but for the moment he could not recall it. When he did recall it, it was only by consciously reasoning out what it must be: it did not come of its own accord. He wrote:

GOD IS POWER

He accepted everything. The past was alterable. The past never had been altered. Oceania was at war with Eastasia. Oceania had always been at war with Eastasia. Jones, Aaronson, and Rutherford were guilty of the crimes they were charged with. He had never seen the photograph that disproved their guilt. It had never existed, he had invented it. He remembered remembering contrary things, but those were false memories, products of self deception. How easy it all was! Only surrender, and everything else followed. It was like swimming against a current that swept you backwards however hard you struggled, and then suddenly deciding to turn round and go with the current instead of opposing it. Nothing had changed except your own attitude: the predestined thing happened in any case. He hardly knew why he had ever rebelled. Everything was easy, accept!

Anything could be true. The so-called laws of Nature were nonsense. The law of gravity was nonsense. ‘If I wished,’ O’Brien had said, ‘I could float off this floor like a soap bubble.’ Winston worked it out. ‘If he thinks he floats off the floor, and if I simultaneously think I see him do it, then the thing happens.’ Suddenly, like a lump of submerged wreckage breaking the surface of water, the thought burst into his mind: ‘It doesn’t really happen. We imagine it. It is hallucination.’ He pushed the thought under instantly. The fallacy was obvious. It presupposed that somewhere or other, outside oneself, there was a ‘real’ world where ‘real’ things happened. But how could there be such a world? What knowledge have we of anything, save through our own minds? All happenings are in the mind. Whatever happens in all minds, truly happens.

And yet two and two make four and nothing more regardless how much you newspeak five (or orange for that matter).

The emperor is butt naked and is and always has been monumentally and monstrously wrong about-

• Iraq
• Torture
• Star Chamber Trials
• Spying on Citizens without warrants
• Execution without trials
• A horrendous litany of War Crimes including Wars of Aggression and deliberate targeting of civilians and first responders
• Economics in general and theft and corruption in particular

to name but a few.

You may censor me, break me, or kill me and yet as Eddington observed- “if your theory is found to be against the second law of thermodynamics I can give you no hope; there is nothing for it but to collapse in deepest humiliation.”

FAA 787 Inspections Reveal Checks Were Left to Boeing

By Alan Levin, Bloomberg News

Jan 30, 2013 8:00 PM ET

The Federal Aviation Administration has operated that way for many years, even as government audits have found those efforts were sometimes poorly overseen and led to errors. The agency in 2005 began allowing Boeing and other manufacturers to pick the engineers, who previously were chosen by the FAA.

“I think everyone recognizes there is an inherent conflict there,” Jim Hall, former chairman of the U.S. National Transportation Safety Board, said in an interview.

…

“It’s hard for the public to accept the concept for someone else to make a finding for the government,” he (John McGraw, a former FAA deputy safety director) said. “But this has been done since the start of the FAA. This is really just an extension of that, with better oversight than they had back then.”

…

The Transportation Safety Board of Canada pointed to engineering certification as a possible factor in the crash of Swissair Flight 111 off Nova Scotia on Sept. 2, 1998, that killed all 229 aboard.

Engineers at an aircraft maintenance company who were acting on the FAA’s behalf signed off on an entertainment system that may have started a fire that brought down the plane, the Canadian safety board found. The engineers lacked sufficient knowledge of the Boeing MD-11’s power grid to provide that certification, the board found.

I want to die peacefully in my sleep like my grandfather, not screaming in terror like his passengers.

Monitor Outside Gitmo Tribunal Has Power to Censor Proceedings Without Judge’s Knowledge

By: Kevin Gosztola, Firedog Lake

Tuesday January 29, 2013 12:32 pm

The Guantanamo war court was deciding whether to go into a closed session yesterday. David Nevin, who is representing 9/11 suspect, Khalid Sheikh Mohammed, was speaking in court about the decision to argue some of a motion involving evidence of CIA black prison sites. The audio feed went off for three minutes and court was off-record for about three minutes.

Judge Col. James Pohl noted, “The 40-second delay was initiated, not by me. I’m curious as to why.” Nevin had simply been reading the caption to an unclassified motion. “If you don’t feel we can discuss this now, let me know, but I’m just trying to figure out.” The government wanted to explain what happened to the judge in a secret session.

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Nevin addressed the court, “I would like to know who has the permission to turn that light on and off, who is listening to this, who is controlling these proceedings, or controlling that aspect of these proceedings.” He added, “I was under the impression that the [court security officer] was, commanded that light in this process.”

Cheryl Bormann, the defense counsel for Walid bin Attash (9/11 suspect), wished to state for the record that Nevin has been repeating the name of a defense motion but she decline to say it for fear of setting off the censor again. Navy Commander Walter Ruiz, who is representing Mustafa al-Hawsawi (9/11 suspect), told the judge, “The main concern is that moving forward from this point forward we know there is another body or party who is in control of this proceeding in turning that light on and off.”

“Before we proceed any further,” he added, “We can only assume that maybe they are monitoring additional communications, perhaps when we are at counsel table. We know we have green lights that have the ability to record. We think this is an answer and question we have to have precedent to proceeding with this commission.”

Military Claims to Have Released Portion of Gitmo Tribunal Proceedings That Was Censored

By: Kevin Gosztola, Firedog Lake

Wednesday January 30, 2013 10:36 am

What was said in the exchange should appear in the transcript, but it appears something was said in that minute before the feed was restored that the government does not want to add into the transcript.

The military now claims that the transcript was “restored,” but if it was recording discussion of the censorship, that should be in the public record and not merely summarized. The decision to censor was startling for not just the press but also the judge, as it showed that some outside body has a person who is able to interfere in proceedings whenever they choose without notifying the judge prior to censoring the proceedings.

This person-an original classification authority (OCA), as the government revealed-likely works in cooperation with the CIA and is tasked with ensuring that even the tiniest amount of information on the CIA’s Rendition, Detainee & Interrogation (RDI) program is not heard by the press. The episode shows the OCA may censor unclassified language. There are details on the RDI program in the public record.

If Mohammed or another 9/11 suspect describes their treatment in CIA custody and that happened to be in the CIA Inspector General report, will the OCA be interfering again? The whole entire episode raises serious questions about the military commission’s claimed commitment to transparency and fairness.

All That’s Wrong With the Guantanamo Trials

By Andrew Cohen, Esquire

at 4:11PM January 30th, 2013

(W)hat makes it such an important moment in the sorry history of the Guantanamo tribunals– was that even the presiding judge, Army Col. James Pohl, didn’t know who had blocked the feed on Monday– or why. He had lost control over his own courtroom. Later that day, in open court, he said: “If some external body is turning the commission off based on their own views of what things ought to be, with no reasonable explanation, then we are going to have a little meeting about who turns that light on or off.” That was on Monday. On Tuesday, after conducting an investigation into the episode, Judge Pohl declared that the feed should not have been turned off-the defense attorney had merely mentioned “the caption in a particular appellate exhibit that is unclassified”– but the judge did not disclose to the public who turned off the feed or why. Later, we learned that the feed was disrupted by the “original classification authority,” most likely the CIA.

The idea that a trial judge has control over his courtroom is about as sacrosanct a notion in American law as you can find. And even though military judges traditionally have had to serve conflicting masters (the law, their superior officers, etc.) the idea that a litigant would have the power to control the courtroom without the judge’s knowledge or consent goes to the heart of the problem with our current tribunals. A trial judge who does not have the authority to control his own courtroom, who is subject to the whims of the very officials whose charges against the detainees must be fairly weighed, cannot be the sort of independent judge which the Constitution requires and which justice demands. It’s not Judge Pohl’s fault. By Congress, by the Pentagon, by the Obama Administration, by the CIA, he’s been dealt a hand no truly independent judge could play. That’s just another big reason why these tribunals are doomed to fail, in the court of world opinion if not before the United States Supreme Court, no matter how many convictions they ultimately gin up.

The shame prize award was made in Davos during the World Economic Forum as a counter-WEF event.  Shell also “won” a shame prize, but I spoke on Goldman Sachs, the role of epidemics of accounting control fraud, and the WEF’s anti-regulatory and pro-executive compensation policies.  I explained that the anti-regulatory policies were intended to fuel the destructive regulatory “race to the bottom” and why the executive and professional compensation policies maximized the incentives to defraud.  I also explained that WEF was a fraud denier.  Collectively, these three WEF policies contributed to creating the intensely criminogenic environments that produce the epidemics of accounting control fraud driving our worst financial crises.

Goldman Sachs Proof that God hates its Customers

By William K. Black, New Economic Perspectives

Posted on January 26, 2013

Goldman Sachs is a fitting recipient of the “Public Eye” shame prize, but it is vital to remember that Goldman is not a singular rotten apple in a healthy bushel.  It is characteristic of the abuses that become endemic when powerful plutocrats achieve de facto immunity from the criminal laws.

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Indeed, this discussion understates Goldman’s culpability because Goldman’s executives were principal architects of the crisis.  Its former CEO, Robert Rubin, led the disastrous deregulation in the Clinton administration and was a leader in pushing Citicorp to become a major contributor to the hyper-inflation of the bubble.  Henry Paulson, when he was Goldman’s CEO, made Goldman a leading “vector” spreading fraudulent mortgages through the global financial system (and creating Goldman’s holdings of toxic mortgages that produced huge, fictional, accounting income in the short-term – making Paulson’s already large compensation massive).

Goldman Sachs: Doing "God’s Work" by inflicting the Wages of Sin Globally

By William K. Black, New Economic Perspectives

Posted on January 26, 2013

The central point that I want to stress as a white-collar criminologist and effective financial regulator is that Goldman Sachs is not a singular “rotten apple” in a healthy bushel of banks.  Goldman Sachs is the norm for systemically dangerous institutions (SDIs) (the so-called “too big to fail” banks).  Impunity from the laws, crony capitalism that degrades democracy, and massive national subsidies produce exceptionally criminogenic environments.  Those environments are so perverse that they produce epidemics of “control fraud.”  Control fraud occurs when the persons who control a seemingly legitimate entity use it as a “weapon” to defraud.  In finance, accounting is the “weapon of choice.”  It is important to remember, however, that other forms of control fraud maim and kill thousands.

Large, individual accounting control frauds cause greater financial losses than all other forms of property crime – combined.  Accounting control frauds are weapons of mass financial destruction.  One of the crippling flaws of the World Economic Forum (WEF) is ignoring private sector control frauds.  Control fraud makes a mockery of “stakeholder” theory.  Accounting control fraud, for example, aims its stake at the heart of its stakeholders.  The principal intended victims are the shareholders and the creditors (which includes the workers).  Other forms of control fraud primarily target the customers.  If the WEF wishes to effectively protect stakeholders it is imperative that they undertake a sea change and make the detection, prevention, and sanctioning of control fraud one of their central priorities.  WEF does the opposite, it wishes away fraud with propaganda because the alternative is to admit that many of its dominant participants are the central problem – they are degrading the state of the world.

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WEF has been acting for decades to make banking criminogenic.  They have pushed the three “de’s” – deregulation, desupervision, and de facto decriminalization.  They have favored executive compensation systems.  They have pushed for ease of entry.  And they have spread the myth that fraud by corporate elites is “rare.”  WEF has optimized the intensely criminogenic environments that produce recurrent, intensifying fraud epidemics, bubbles, and financial crises.

WEF’s complacency about accounting control fraud has led to its embarrassing failures in finance.  It’s “competitiveness” scales and “financial market development” scales have praised the most criminogenic financial systems – Iceland, Ireland, the UK, the U.S., and Spain – even as the largest banks in those Nations were (in reality) destroyed along with the much of the national economy.  Similarly, the WEF’s “global risks” series has proven unable to identify the major financial risks until the hurricane has roared through the system.  The central problems are the same – the WEF “stakeholder” premise and the WEF’s domination by powerful corporations is an elaborate propaganda apparatus that assumes away the reality of how CEOs running control frauds use compensation (and the power to hire, promote, and fire) and political power to deliberately create the perverse incentives that produce widespread fraud.  The irony is that the WEF’s dogmas have encouraged elite frauds to drive stakes through the stakeholders.

a modus operandi.

Krugman On Morning Joe: How Many Times Do I Have To Be Right?

By Susie Madrak, Crooks and Liars

January 28, 2013 10:00 AM

“Have you been living in the same country I’m in these past five years?” Krugman retorted, saying the deficit is far down on his list of things to worry about.

In response, Mika gasped and said, “I feel like we’re talking about climate change! My God!” (What a dope.) Krugman said that was a destructive comparison, and explained why. But I doubt she listened.*

I especially liked it when he responded to Joe Scarborough: “How many times do people like these have to be wrong and people like me have to be right?”

Remember, Paul: Ignorance can be fixed. Stupidity is forever.

This is what lambert strether calls a “category error.”  They are not stupid.

My brother sent me a postcard the other day with this big sattelite photo of the entire earth on it. On the back it said: ‘Wish you were here.’ — Steven Wright

At Davos, Is the Party Over?

By ANDREW ROSS SORKIN, The New York Times

January 22, 2013, 9:52 pm

In previous years, the Friday night of the World Economic Forum was always filled with big dinners and blowout parties.

Certain bashes were among the most coveted. Google held a standing-room only party at Steigenberger Belvedere Hotel, complete with bands flown in from New York and beyond. Across the street, Accel Partners, the venture capital firm behind Facebook, held a wine tasting at the Kirchner Museum, often flying in cases of vintage wine from California. And Nike held a huge dinner with the slogan, “No Speeches. No Powerpoint. And no ties.”

This Friday, however, the operative slogan could be “No dinner. No parties.”

…

Have those companies given up on Davos for good? Is there something bigger here at play than just parties? Those are some of the questions being asked, however, answers have been forthcoming – at least not yet.

Oxfam says world’s rich could end poverty

Al Jazeera

20 Jan 2013 07:49

The world’s 100 richest people earned enough money last year to end world extreme poverty four times over, according to a new report released by international rights group and charity Oxfam.

The $240 billion net income of the world’s 100 richest billionaires would have ended poverty four times over, according to the London-based group’s report released on Saturday.

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(Jeremy) Hobbs (executive director at Oxfam) said that “a global new deal” is required, encompassing a wide array of issues, from tax havens to employment laws, in order to address income inequality.

Closing tax havens, the group said, could yield an additional $189bn in additional tax revenues. According to Oxfam’s figures, as much as $32 trillion is currently stored in tax havens.

In a statement, Oxfam warned that “extreme wealth and income is not only unethical it is also economically inefficient, politically corrosive, socially divisive and environmentally destructive.”

Can we fight poverty by ending extreme wealth?

by Olga Khazan, Washington Post

January 20, 2013 at 8:00 am

In a sign that the “Occupy” and “99 percent” movements that swept the United States in recent years have taken on increased global relevance, Oxfam International this week called (.pdf) for “a new global goal to end extreme wealth by 2025,” as a way to stem income inequality and continue the fight against poverty.

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Oxfam does have a point. The movement against income inequality has been gaining momentum as the world’s rich have continued to amass larger shares of their countries’ fortunes. In the United States, according to the group, the share of national income going to the top 1 percent of the population has increased to 20 percent, from 10 percent in 1980.

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The World Economic Forum (Davos) also recently rated “severe income disparity” as one of its top global risks for 2013.

Oxfam’s idea is basically the opposite of the trickle-down theory: Rather than creating jobs and lifting others out of poverty, the group says, super-rich minorities cause social unrest and depress demand for goods and services, limiting growth and innovation as a result. It’s an argument that’s also been echoed recently by several vocal billionaires.

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The group also suggested some measures that have been at the center of some of the fiercest policy battles in the United States and elsewhere:

“Limits to bonuses, or to how much people can earn as a multiple of the earnings of the lowest paid, limits to interest rates, limits to capital accumulation are all only recently-abandoned policy instruments that can be revived. Progressive taxation that redistributes wealth from the rich to the poor is essential,” Oxfam continued.

Those tactics sound good, but they’d require something else that unfortunately the most unequal countries also lack: governments willing to risk angering their wealthiest citizens in order to improve life for the poorest.

I wouldn’t hold my breath.