I was reading through Ellen Brown’s “Web of Debt” site, which I first discovered when I saw that she – like me – had been the target of a rant by the same individual.

I like a lot of what Ellen is doing. I’m in favor of networks of individuals forming credit pools for investment or to create businesses. That already exists at higher economic levels – Angel Investing, for instance. And at the lower level there are organizations like the Grameen Bank. Or versions thereof, like Grama Vidiyal, Opportunity International, Islamic banking, and others mentioned in this piece.

[Note: Grameen Bank has come in for criticism on a number of grounds.]

Browsing through the comments on the site,  you realize that many people sense there’s something fundamentally wrong with the system.

Which there is.

And that they sense that language has been taken out of our mouths and used for propaganda.

Which it has.

But after that initial perception, the logic sometimes falls apart….

Here’s one comment, broken down line by line, with my response in brackets.

Comment:

“Just because everyone believes rich people create jobs, doesn’t make it true.”

LR:

1.  False.

Rich is a relative term. American working class people are much richer than people sleeping on roads and railway stations in Asia. When an American (even a working class American) goes to a poor country and sets up a business, he does create jobs. He is rich relatively speaking and his capital (such as it is) enables him to start a business. In that sense, riches (rather than rich people) can indeed create jobs.
Of course, they need not. Riches can also stagnate uneconomically if they’re not deployed correctly.

2. False

Everyone doesn’t believe rich people create jobs. A much larger group of people world-over believes that the government creates jobs. That’s why governments everywhere are tasked with that function  – which is unfortunate, because they don’t do it very successfully, usually.

What’s the only truth in the comment then? The statement that because every one believes something, that doesn’t make it true.

But the problem is that this truism should be applied not to the “rich people don’t create jobs” assertion, but to the much more common assumption behind the assertion – the assumption that the government creates jobs.

Comment: “Rich people don’t create jobs. Rich people can’t create jobs.”

LR:

1. The first part of this is a half-truth.

Rich people may (or may not) create jobs. It depends on their entrepreneurial ability.

The second part is just false. Rich people can and do create jobs.

Comment:

“Only DEMAND creates jobs. No demand = no production, period. Only demand can create and does create jobs.”

LR:

1. This would be hilarious if it weren’t so sad. Demand creates jobs? Obviously, the writer’s never been anywhere where there’s demand all year round for things that  can’t be found on the shelves of the stores. There’s plenty of demand, but where is the production?

2. The existence of demand is necessary to genuine economic activity, but not sufficient to create it. You can in fact have production without demand (for instance, state-mandated production in China). This is entirely wasteful and a dislocation, but it exists. And it exists because China has money..riches…not because it has people (Africa has people too). (June 28: I realized I had this backward and switched it around. I thought I’d corrected it before but apparently the ‘save’ function didn’t go through. Apologies).

Comment:

“Which means, as any rational person can see with a moment’s thought, that it is the people who create their own jobs. We create our own jobs.”

LR:

1. Another half-truth. People…some people… create jobs.

People with access to money, entrepreneurial ability, and supported by structures that defend economic activity and ownership. Without all that, production declines.

2.  Half-truth again. “We” is used to invoke emotion – populist emotion. But the populism obviously excludes “rich people.”

Whom does “we” represent then? Isn’t it the people who are “have-nots” – i.e. lack money, or credit, or skills? If so,  aren’t these just the people who do not create jobs, emotional appeals notwithstanding?

Comment:

“Fight the fog.”

Lila: Indeed. Starting at home.

Comment:

“Fact: capital formation is highest in the most egalitarian countries.”

Lila:

Not true. Capital formation is high in China (as high as 50% according to this report in 2007)* and India (savings rate of about 25-30%, with 29.2% in 2004-5 ).  Both are highly unequal societies (India more so than China) where households save a far greater percentage of their income than in America (about 2%).

Correction: the numbers above were rough averages computed from over the last several years. To be more specific, the US savings rate rose to 6.9% in May 2009 to from zero in April 2008 and less than 1% in 2005 (negative 0.5%), 2006, and 2007.

Other studies also measure the Chinese savings rate differently and return a figure of around 22% for the 2000-2004 period. and 30% in 2006.

America is also unequal – though less so –  but it has a much lower rate of capital formation.

This isn’t an endorsement of inequality. It’s merely a recitation of the facts.

Comment:

“We do not have to give away our money to wealthpower [sic] giants, to make it work for commerce.”

Lila:

I presume what the person is trying to say is that you don’t have to keep your money in banks owned by the banking conglomerates in order for business to flourish.

That’s perfectly true. Solution: don’t keep your money in the banks.

Keep it in the form of businesses, or farms, or bullion in vaults, or in guns, or in commodities or whatever else will retain some value during a time of universal monetary debasement.

But when you do that you are, by definition, a rich person (i.e. an asset-owning person). And it’s your riches – husbanded – that will create jobs.

It’s almost worth the Great Depression to learn how little our big men know.”
– Will Rogers

On November 5, 2009, 14 more money managers and lawyers  were named in the Galleon Insider Trading case:

1.STEVEN FORTUNA, formerly a Managing Director of S2 Capital LLC (“S2 Capital”), a hedge fund based in Boston, Massachusetts

2. ALI FAR, founder of Spherix Capital LLC (“Spherix”), a hedge fund based in California

3. RICHARD CHOO-BENG LEE, former President of Spherix

4. ROOMY KHAN, a California trader who served at certain times as a paid consultant to a hedge fund based in New York, New York and

5. GAUTHAM SHANKAR, a proprietary trader at Schottenfeld in New York, New York.

6. ZVI GOFFER (pictured here), who formerly worked at The Schottenfeld Group LLC (“Schottenfeld”), a broker dealer in New York, New York, and currently operates a trading firm called Incremental Capital (“Incremental”), in New York, New York

7. ARTHUR CUTILLO, an attorney at the law firm of Ropes & Gray LLP in New York, New York

8. JASON GOLDFARB, an attorney in New York, New York

9. CRAIG DRIMAL, who worked in the offices of the Galleon Group in New York, New York, but is not employed by Galleon

10. EMANUEL GOFFER, who formerly worked at Spectrum Trading LLC, a trading firm in New York, New York, and currently is associated with Incremental in New York, New York

11. MICHAEL KIMELMAN, currently associated with Incremental in New York, New York

12. DAVID PLATE, formerly employed by Schottenfeld, and currently associated with Incremental in New York, New York and

13. ALI HARIRI, a Vice President of Atheros Communications, Inc. (“Atheros”) in California

14. DEEP SHAH, who was formerly employed by Moody’s Investors Service, Inc. (“Moody’s”), in New York, New York, remains at large.

My Comment:

Glee at anyone’s misfortune, however deserved, is unseemly. But can I indulge in a little satisfaction that at least once the high and the mighty didn’t get away with it.

A second note.  Khans, Shankars, Shahs. Never let it be said that Asians cannot steal with the best of them. And if this is what’s being dredged up from the capital markets in New York, I’d just love to know what’s going on in Mumbai, Shanghai, and the rest of the globe…

From Hell Survivor’s Reality Check:

“Collectivizing investments into Wall Street maximizes fees, involves vast geographical distances, minimizes transparency, operates in an asymmetric knowledge market that always favors the insiders, the sophisticated investors, and maximizes opportunities for corruption.

German emphasis on local and regional investments minimizes these negative elements. Re-injecting the money back into the economy aggravates the already intensely collectivized private sector of the U.S. economy in the form of chain fast food outlets, chain restaurants, chain hotels, chain stores in sharp contrast to the German economy which still maintains highly attractive family owned restaurants and family owned hotels. It is not surprising that Wal-Mart has become, in the last 20 years, the largest corporation. It tried to export its disease to Germany but was rebuffed.

It must be understood that in sharp contrast to popular myths, the private sector of the U.S. economy is, in fact, intensely collectivistic/socialistic. A parasitic cost shifting pulsates intensely throughout the U.S. economy far more than in Germany. It is exemplified in the broadcasting industry and even in free restrooms. Rush Limbaugh’s 50 million annual income causes the products of his corporate sponsors to rise and the cost to be passed on to those not in the market, those who receive no benefit, who had no choice and who have no transparency.”

“Tilt” is frustrated, reactive behavior that sends a rush of blood to activate our instinctual behavior – fueling “flight or fight” response (fear/anger). Symptoms of “on tilt” behavior include over-trading, continually increasing position sizes, inability to understand why you made certain trades when you look back. Since we want the logical, rational parts of our mind to be in charge instead, here’s a quick summary of trading psychologist Brent Steenbarger’s remedies for “on tilt” behavior:

1. Focus on breathing slowly and on body movements that center and connect the mind and body (such as moving hands up and down in front of you).
2. Focus on process, not on outcome or expectation. Focus on making each trade a good one and on being a good trader, not on the money.
3. Build up “self-efficacy” (confidence in yourself as a person who can reach your goals) by not reacting to the market, but being proactive

In the news, myth making at the Fort Hood shootings:

“Though the official version of events won’t be available until the military releases the results of its investigation, Todd told the New York Times in an interview Thursday that it was indeed he who fired the shots that brought down Hasan. He said that he and Munley both pulled up to the scene at the same time and, after receiving fire from Hasan when they ordered him to drop his weapon, each broke in different directions. After aborting an attempt to circle the building, Todd said he headed back to the front of the building where he saw Munley wounded on the ground. He said that he then ordered Hasan to drop his weapon a second time, which again prompted the gunman to fire upon him. It was at this point that Todd told the Times that he “neutralized him and secured him.”

In the aftermath of the week-long confusion over who brought down Hasan, some are not holding back in criticizing the media and the military for their roles in the chaos — the media for not not digging deeper and thus performing their jobs properly, and the military for being too secretive. Some have even questioned whether or not there might have been a racial component involved with crediting a white woman over a black man as the day’s hero.”

My Comment:

“Might have been”?

Ah.

No one usually would intentionally write out the role of a heroic black man to give it to a white woman. Probably not. But unintentionally they often do. That’s a form of unconscious racism that becomes institutional, to use the in-vogue word.

People “just assume” that it wasn’t the black man who did it…..if they even saw him as a subject… and not just background.

This isn’t exaggeration. It’s the way the contributions of most people in the world is appropriated.

We just assume that non-white people do menial things in between tribal wars, and that the heroic, the creative, the original, the value-producing things are done by non-tribal whites.

We assume this not because we’re racists but because empire blinds us.
Having your thumb on the scales to fix the game so that you always come out the winner tends to make you swallow your own mythology and believe that you really are always the winner. Which on its face is absurd, since intelligence and creativity are found much more widely distributed.

Again, it’s not intentional racism. It’s the underlying arrogance of empire. It’s the distortion in morality produced by the distortion in markets. Which is ultimately caused by the state.

Knowing others is wisdom;
Knowing the self is enlightenment.
Mastering others requires force;
Mastering the self needs strength.

See simplicity in the complicated,
Achieve greatness in little things.

Lao-Tzu

Bloomberg reports:

“Since the arrests (of Rajaratnam and associates) were announced, the SEC has seen an “uptick” in individuals coming forward with information on misconduct, Khuzami said, adding that people trading on confidential information “should be worried.”

Khuzami, 53, said prosecutors will continue using undercover techniques including informants and front businesses to attract wrongdoing and wiretaps to “ferret out” misconduct. The SEC has endorsed legislation that would let the agency pay whistleblowers for information leading to a case.

Khuzami, a former federal prosecutor who joined the agency in March, is reorganizing the division to add front-line investigators, speed inquiries and create specialized units after the agency was faulted for missing Bernard L. Madoff’s Ponzi scheme. He’s also seeking to bolster his attorneys’ powers by gaining greater access to grand-jury evidence and expanding deal-making and cooperation with informants. “

The SEC is also looking “closely” at laws in the 2002 Sarbanes-Oxley Act, which let the SEC punish executives for misconduct at firms even when they aren’t involved in the wrongdoing, he said last month.”

My Comment:

I’m all for busting the bad guys on Wall Street. And RICO laws are the best way to do that because the scams are so extensive. But given that the corruption goes up to the very top, there’s the real risk that the SEC could simply proceed selectively, targeting political enemies or making examples of relatively small players. Selective justice isn’t justice.

I also don’t care for the way informants are being used. When informants are being rewarded and are able to cut deals, what you get is  what you always get when you offer an incentive, more of the activity. We’ll get more informants and more information. How good that information will be is another story. 

When incentives were introduced into intelligence gathering (the outsourcing of information gathering and interrogation to private contractors like Titan and Caci), what did we get? Better information? No. We got torture and abuse.  I’m afraid that’s what we’re going to get with this, as well. The SEC may end up just settling political scores…

At Lew Rockwell, Michael Gaddy asks the pertinent questions about the Fort Hood shooter Major Hasan:

“We know Hasan graduated from Virginia Tech with a degree in biochemistry from the school’s Center for Applied Behavior Systems, most likely on the taxpayer’s dime. While at Virginia Tech did Hasan have any associations with the Defense Advanced Research Projects Agency (DARPA); was he in any way associated with them since his graduation, if so, in what capacity? DARPA states on its website, “DARPA programs focus on high-risk research that will have payoffs that could provide dramatic advances in military capabilities.” DARPA has been rumored to be associated with the MKULTRA program of mind control and Virginia Tech. Cathy O’Brien stated in her book, Trance-Formation of America that “Virginia Tech is good for two things, engineering and mind control.” and that “most of the east coast M.K. Ultra Mind Control experiments happened in this DARPA facility.” 

Another question that deserves an answer is, “Exactly what position did Major Hasan hold in the U.S. Army’s PSYOP community and how did that relate to his dealings with his patients? Also, what was Major Hasan’s position with the US Center for the Study of Traumatic Stress and how did this relate to his duties with the Army’s Warrior Combat Reset Program? Did Major Hasan’s assignment to Ft. Hood have anything to do with a program the Army initiated to “electronically prepare” soldiers for redeployment to Iraq and Afghanistan?”

My Comment

Check out my posts on Virginia Tech from 2007-08 from the category “V-Tech” and also google for subsequent posts.  I haven’t revisited the subject and don’t intend to. There’s enough material on the web for the public to enlighten itself and tripping yourself up on irrelevant details doesn’t help that task.

Mass shootings have been rife in American society recently.  The same elements recur each time: the disarmament of the victims, the association of the perpetrator with the military/intelligence, association with Virginia Tech (in some cases); paramilitary trappings; prescription drugs of some kind; trauma.

Note: I know nothing about the book, “Trance-formation of America”  or its authenticity. But the questions about MKUltra, Darpa and behavioral research are pertinent and need to be looked into.