NOT Liberal, Libertarian, or Populist Enough…. For 2016.

NOT Liberal, Libertarian, or Populist Enough…. For 2016.

“You could say I'd lost my belief in our politicians -They all seemed like game show hosts to me…”  - Sting, If I Ever Lose my Faith in You

By  J.M. Hamilton 6-28-14

Yes, Mrs. Clinton is running for President, and her campaign strategy is already abundantly clear.  Quite simply the establishment's Trojan-candidate will become the nation's first woman President by becoming the "Anti-Bill," and by boring us into apathy and submission.  Have you heard this lady speak, or read her new book?

Looking for a cure for insomnia?

We surrender already.  We know Mrs. C has been bucking for the top slot in the corporation for some time... Her resume screams it.  From when she "temped" as the junior Senator from New York to her recent stint as Secretary of State.   A job in which Mrs. Clinton was so understatedly unsuccessful that she had no response when asked to list her achievements, as Madame Secretary, and neither could Foggy Bottom produce a list either.  After all, it wouldn't do to tell her adoring base that her greatest achievement at State was to act as a shill for Boeing, at the taxpayer's expense.  I know pretty snarky, but what part of the above isn’t true?

The Clintons sold out a long time ago... whether it was asking arch-right-winger Senator Jesse Helm's campaign advisor, Dick Morris, to run the Clinton's 1996 re-election campaign.  Or uniting with Treasury Secretary Rubin (of Goldman $achs fame) and Senator Phil Gramm (R. - TX) in the repeal of Glass-Steagall and deregulating swaps and derivatives.  We often forget, deep within the inter sanctum that is Hillary 4.0 beats the heart of a Goldwater Republican.

It's all here, the Clinton years: The Prelude to the 2008 Financial Crisis, and the resulting Great Recession.

In fact, Clintonian politics is symptomatic of today's binary/winner take all political economy.  On the heals of Mr. Reagan (after a very brief Bush interlude), the Clinton’s led the way with extraordinary '90s deregulation and welfare state rollbacks.  The GOP is now so extreme, and the nation and the Democratic Party have been pulled so far right, that today's core Democratic Party looks a great deal like the all but extinct "moderate republican," or what I like to call GOP-Lite.  The result of this extremism and the rendering of the social contract, in line with Newton's Third Law: A Populist backlash at home, and in Europe, and I would argue globally.

With the economic disparity (i.e. inequality) between the one percent and the balance of the nation never greater, and finally receiving the long overdue attention it deserves, even “Hills,” whose Clintonian policies helped to usher in a neo-gilded age, is now attempting to burnish her populist cred?

Good luck with that.  More likely, the uber-hawk can't wait to be ensconced into the oval office and lead this nation quite possibly, into yet another war, presumably as payback to all those defense contractors, who will write lavish checks for her coronation.  Iron Lady II?  That's probably not far off the mark.  Remember it was Senator Clinton who voted for W's, and Cheney’s, and Blair’s folly in Iraq.  

"Mission Accomplished,"indeed.

So go back to sleep progressives, liberals, and libertarians because this one (2016) already appears in the bag.... Mrs. Clinton's withering drone demands submission and somnolence, and is more deadly than a fleet of drones of an entirely different sort, aptly named Predator and Reaper.

Mrs. Clinton is said to have never met a dollar that she didn't like, and that makes her both highly malleable and much sought after by this country's billionaire aristocracy.

Of course, it doesn't have to be this way... The establishment doesn't always have to win, nor do Americans have to go on perpetually bailing out the Wall Street cartel, and the plutocracy, on the backs of the poor and our children.

All it takes is to focus and a brewing populist revolt at the polls.

That and a couple of brave souls to step forward, like.... Senators Elizabeth Warren and Rand Paul.  The "establishments" worst nightmare and respectively, the best hope for humanity and this nation's future.

Politics makes strange bedfellows, and some say, “the enemy of my enemy is my friend”...Senators Warren and Paul may utilize different reasoning, logic, and ideologies to draw the same conclusions; but the really important point is that these two leaders, often via circuitous routes, repeatedly draw the same conclusions on many of the same issues and are often 100 percent correct.  Both are populist and neither is a friend of the plutocracy, or the establishment that has bankrupted this nation.  Therefore, they already have the majority of Americans support.  Whether most Americans know these two individuals, yet, is an entirely different story.

So let's quickly run down why these two senators are at the right place, at precisely at the right time, for protecting the nation from yet another round of Clintonian politics.  Think of Warren and Paul as a safety valve for what remains of our democracy, the best democracy money can buy - thanks to SCOTUS/Roberts/Scalia.

Issue One:  Foreign Policy

Warren comes at this from a more cerebral aspect, in that she basically adopts General Stanley McChrystal's maximum that when you kill one terrorist you are likely creating ten more.  Mr. McChrystal led the war in Afghanistan before being sacked by President Obama, because his staff popped off in Rolling Stone (I have often wondered if President Obama knew of Mr. McChrystal’s thoughts, emails, phone conversations, and peccadillos well in advance of the Rolling Stone article- just like another General's downfall - via email, Patreaus - and could the President have been informed, courtesy of the NSA and a rival General Alexander?  But I digress.).  

General McChrystal and Warren are both right of course, and they have two failed wars, a bankrupt nation, and war weary public to point to as support.  Meanwhile, militant Islam has not been subdued by U.S. power, only made more virulent.  Not to mention a suicide rate among active duty soldiers that is a national disgrace.  Establishment Republicans, and the "Neo Con-men," believe every thing can be resolved from the barrel of a gun (Senator John McCain being a case in point).  That's what makes Mr. Paul such an anomaly as he argues from our founder’s perspective to beware of foreign entanglements, and from the law’s perspective that the U.S. has no constitutional prerogative to play the world's policeman.  Moreover, efforts for America to play the world's top cop have both failed, repeatedly, and ran up the U.S. national debt by the trillions.

Both Paul and Warren are correct, and would likely keep this nation out of yet another war.  If Afghanistan and Iraq have revealed anything to the American people, it is that the U.S. doesn't go to war to spread peace and democracy; no, America goes to war for oil, and to protect multinational corporate and sovereign/foreign interests (here, think of the Royal House of Saud, and the Europeans).

As for the Clintons, remember Kosovo?  A war conveniently, ramped up, at the same time Mr. Clinton was under fire for the Monica Lewinsky scandal.  "Wag the dog" during the Clinton's third crowning?  It's an all too real possibility.  As for our European, and our so-called Saudi allies, isn't it time for them to fight their own battles?  America is energy independent.  Why are we sending the nation’s poor to die for Monarchs who spread Wahhabism, and Europeans, who take off the month of August to vacation on the French Rivera?

Issue Two:  The NSA & Privacy

I have to give this one to Mr. Paul.  Hell, he's actually suing the NSA, which makes the German Stasi look like the boy scouts.  Only Orwell could have envisioned an organization that has been so damaging to this nation's reputation, U.S. global security, and U.S. global commercial (IT) interests (not to mention is evil-incarnate).  As a Libertarian, you can tell that Mr. Paul feels strongly that the NSA has made a perfidious hash out of the constitution and our civil liberties.  Mrs. Warren has written a letter with several other Senators protesting the NSA, and helped sponsor legislation to rein in the Surveillance State, but beyond that she's been rather reticent.

Mrs. Clinton, on the other hand, has never seen a taxpayer funded defense, or intelligence, dollar spent that she didn't like.  Some of those dollars, undoubtedly, and indirectly, find there way back to the Clinton Foundation.

Here, I'll take the two Senators any day, as the truly sincere alternative to Mrs. Clinton, whom less than 50% of the voters believe is truthful.

Issue Three:  The Wall Street Cartel

As Mr. Paul is known for being outspoken on MIC and NSA matters, Mrs. Warren is the Queen of Wall Street containment.  It's not that Mrs. Warren is anti-Wall Street per se, it's that she's passionately against the fraud and double-dealing that passes for standard business practice on the Street, and recognizes the tremendous drag on the economy that Wall Street represents.  Whether its collusion in the FOREX market, in the commodities market, collusion in bidding on LBO business, or gambling with the nation's finances/future in a seven hundred plus trillion swaps and derivatives market, or a HFT rigged stock market and dark pools.... Senator Warren has been fighting pathological malfeasance and perpetual fraud, since well before the 2008 financial crisis began.  The expense and costs of Wall Street's grand larceny have been passed onto the average U.S. citizen and investors in the form of bailouts, massive Federal debt, higher commodity prices, a depressed economy, a lousy jobs market, and headline inflation – for years and likely, the decade to come.  

Moreover, Warren would be the candidate most likely to do something about it.  She's smart, ethical, and would not look the other way, and that puts “the fear” into the Street (Or as President Obama told Senator Warren, "You make them very nervous.")  

Is there any greater endorsement?  

The irony is the public would likely return to Wall Street investments, and the stock market, in droves under a Warren Administration, if they knew the stock market wasn't rigged.

A President Warren would actually be the best thing that ever happened to Wall Street.

Ironically, the Tea Party, before it was co-opted by the Koch brothers and assorted  billionaires, was formed in direct response to the revulsion the GOP elicited, when Republicans and Government $achs repeatedly bailed out Wall Street.  Mr. Paul, presumably, and many libertarians state that they are pro-free market; and therefore, that does not make Mr. Paul, or libertarians, a natural ally of big business and the Wall Street cartel, who are perennially in bed with Federal and State governments, in our crony economy.  

That being said, the concern I have with libertarians is that their revulsion for big government all too often does not translate into revulsion for monopolies and cartels (which after all, are creatures of the state).  Government does indeed have an important role to play in a capitalist society.  As acknowledged by both Messrs. Smith and Hayek (free market deities) that role is to set and establish moral rules of the capitalist road, and the rule of law, which within businesses are to operate.  The morality play for capitalism is that it is the best provider of goods and services for the American public, and used to do pretty well at job creation.  Which is the antithesis of what capitalism has become in America, as crony capitalism is now dominated by cartels, monopolies, and a bunch of Robber Barrons - who want to get rich at the expense of everyone else (citizen, taxpayer, employee, would-be employees, students, consumers, stockholders, and small business owners…  did I miss anybody?).

Government is not there to be co-opted, paid to look the other way, aid in a rigged system, or to create barriers to entry, or starved of regulatory funding, which is exactly what the GOP and Dems have allowed our crony economy/government to become.

In the plutocracy’s/bankocracy’s rush to place laissez faire economics before all, I'm not, entirely, sure we can count on Mr. Paul, or libertarians, to save us from the next Wall Street generated calamity.  If the Wall Street cartel continues unfettered, they’ll take this country and the global economy down, and everyone in it.  And but for extraordinary measures, and government intervention, the banks damn near pulled it off in 2008.


The Federal Reserve already has us floating along in yet another bubble, generated by quantitative easing and interest rate suppression.

On this issue, I lean Warren, but would very much like to hear more from Mr. Paul.
 
Ironically, the Clintons, alleged "liberals," played a huge role in spawning the 2008 financial crisis with the aforementioned swaps and derivatives dereg, and Glass-Steagall abolition.  Way to go!  And guess what?  Dodd-Frank is laughable in its ability to prevent the next crisis, and Glass-Steagall has not been reinstated.

Issue Four:  Jobs and the Economy

One might conclude from the facts that Mrs. Clinton is for any billionaire, or any corporation, wealthy enough to pay her, which means the average person doesn't factor into her political calculus.  Mr. Clinton, as incredibly bright and as politically sophisticated as he is, recently stated that the issue in America is not “inequality,” but rather, helping the middle-class.  Which just goes to show, not only has Mr. Clinton missed the boat, but he’s gone over to the other side and is a full fledged plutocratic member.  Contrary to what Mr. Clinton would lead us to believe, these two issues, inequality and helping the middle-class, are inextricably linked.

Elizabeth Warren understands that rapacious Wall Street banking, Shadow Banking, and Private Equity industries, kills jobs and opportunity as do cartels and monopolies.  These entities are a huge tax/economic drag upon our society (via monopolistic profits, leveraging up and bankrupting previously financially healthy companies for executive enrichment, and through tax avoidance... just to name a couple of examples), and they absolutely crush opportunity and innovation, via globalization, layoffs, and reductions in R&D spending.   

Senator Warren might even enforce the Sherman Anti-Trust Act, the law of the land, which would create jobs and opportunity immediately, by smashing venal and greedy cartels and monopolies.  Comcast and AT&T, for some reason, immediately come to mind.

Mr. Paul gets that the GOP has to change, and that in his words the GOP can no longer be ruled by rich, old, white men.  Truly, with his vision of inclusiveness, Mr. Paul is the future of the Republican Party, if the Party is to have a future.  That said, many of us would like to know more about these three politicians plans to bring this nation back, economically.  Mr. Paul knows that the Fed's trickle down monetary policy, and hopefully, he knows our trickle down tax-code, are not the answer.  The plutocracy, and the GOP establishment owned by billionaires, have had their way for thirty-plus years, and have failed this nation, while enriching themselves.

Note, for sake of time, I didn’t touch on these politicians' views on other key issues, such as: immigration; campaign finance reform (and a possible constitutional amendment to rein in the billionaires and SCOTUS); the record rates of incarceration in this country for victimless crimes (designed to disenfranchise a whole class of citizens); or the environment.  Give me time.

There’s a great deal of talk these days about obvious distractions, such as Iraq, Benghazi, and the failure of Imperial America to “man-up” and take care of our Empire (code for, let’s start another war).  All of which are convenient distractions from the real issues at hand, and that most politicians don’t have the cojones or ovaries to address: Namely, how to rein in billionaires, and monopolistic corporations, from looting the land, eviscerating the remnants of the middle-class, overthrowing our democracy with unlimited campaign contributions, and dodge paying billions in taxes!

How indeed.

Don’t count on a President Clinton, Trois, to act on these issues.  The Clinton’s, once occupiers of a humble Arkansas governor’s mansion, have moved up in the world and have come a long way.  God bless ‘em for that.   Why should we begrudge them their success, achieved through a rigged economy they helped create?

Clearly, the Clintons are not the answer to what ails the U.S., today.

Mrs. Warren is shrewd.  She should not announce her candidacy, if she wants to run, until after the 2014 midterms.  Until then, let Hillary talk, frequently and often.

As for Mr. Paul, the GOP's greatest hope, remember what happened in the Republican primaries in 2012.  It was an absolute brawl, fiasco, and a GOP establishment bloodletting on a monumental scale.  Your conclusions, Mr. Paul, are often 100% correct, but might your cause be better served if you were to - at times - wrap your libertarian beliefs, values and solutions in more mainstream arguments, ready-made for mass-consumption (it requires a little thought, but it can be done, and the American public is ready for you).  Don’t reject your father’s core values, as much you will be pressured by the GOP establishment to do so.  Unfortunately, at some point, you will likely have to pander to an ultra-socially conservative Christian base to some degree, in order to get the GOP nod.  In 20 years, these folks will be gone, but today, you’ll have to deal with them. 

Deal with them, however, you must…. Just be sure that the arguments you use to get the Republican nomination are not turned against you in the general election.  That thankfully, was Mr. Romney’s downfall.  Some of my readers will attack my support of Mr. Paul as hypocritical because I often argue from the center-left and have knocked the Tea Party in more than a few columns, but Mr. Paul is both inspiring and certainly a cut above most Tea Party candidates.  To date, I detect NO racism or xenophobia in this man.  Quite the opposite.

A President Warren or President Paul would be a wonderful thing.  For Liberals, with a President Warren, you get the whole agenda, and with a President Paul, Libertarian, you get three-quarters of the same Warren outcomes, but via an entirely different logic.  In fact with a gerrymandered congress not going away anytime soon, Mr. Paul might actually get more legislation passed.  A President Warren would likely have to use executive orders to carry out her agenda, which is not a bad thing.

For Libertarians, Mr. Paul is the future of the GOP, but a President Elizabeth Warren would be the next best thing.  Don’t forget that.  If your state allows crossover voting, strongly consider switching over in the primaries to put these two into play.  It may even be a strategic political play to cross political parties in 2016, and re-register, in order to get these two nominated. 

Call it “The Anti- Hillary/Anti - Establishment” vote.

Almost anything is better than another status quo, establishment candidate, like Madame Hillary Clinton…. An establishment that ran this country into the ground, repeatedly, for the enrichment of a few and at the expense of many.  

Mrs. Clinton has the next two and half years to convince us otherwise.

Copyright JM Hamilton Publishing 2014

The Simple Economics and Math in Mr. Cantor’s Defeat….

The Simple Economics and Math in Mr. Cantor’s Defeat….

By J.M. Hamilton (6-14-14)

House Majority Leader Eric Cantor suffered a stunning upset this week from Republican outsider David Brat.  Mr. Brat ran on opposition to crony/insider capitalism, and against immigration reform.  Is there a lesson here for establishment democrats, who are also acolytes and devotees of the same flow of funds coming from commercial interests and commercial interest lobbyist?  

Here then are some simple economics and math equations to ponder.

Equation A:  Bank Bailouts

Congress supported repeated Bank Bailout(s), plus a

Reinvigorated mortgage securitization market, funded by GSEs and the FED, equals

Failure to refinance homes and failure to provide debt forgiveness, and millions of homes owners still upside down on mortgages, equals

Less discretionary income, less aggregate demand, and the lack of a universal rebound in the housing recovery, equals

Fewer jobs and opportunity, and the inability of labor to relocate.

Equation B:  FED Policy

Congress supported bank-centric FED policy, plus

Interest Rate Suppression and Quantitative Easing, equals

Political Cover for Politicians and a Stagnant Economy (benefiting the financial elite to the exclusion of Main Street), equals

Fewer jobs and opportunity (In short, the lost Japanese Decade(s), visited upon America)

Equation C:  Support for Private Equity, M&A, and Monopolies

Congress’ blind support for PE, M&A, and Cartel and monopolistic mergers, equals

Globalization, highly leveraged firms (teetering on bankruptcy), pink slips, temp labor, stagnant wages and a stagnant economy, and lower top line growth, equals

Fewer jobs and opportunity.

Equation D:  Tax Policy, or the Lack thereof

Congress continues to support tax loopholes/dodges that favor the rich equals,

Higher taxes for the 99%, equals

Less discretionary spending, on top of already stagnant wages, equals

Lower aggregate demand and lower top line growth, equals

You guessed it, Fewer jobs and opportunity.

Equation E:  Rising Xenophobia

Congress’ unyielding support for equations A + B + C + D (the Crony Economy) equals

Fewer jobs and opportunity, equals

Fear, equals

Rising Xenophobia, Racism and Political Extremism, equals

Mr. Cantor – unceremoniously – hitting the streets, and not a moment too soon.

Good bye Mr. Cantor, you aren’t the first, and hopefully, you won’t be the last. 

Populism is here to stay, as Mrs. Clinton is about to learn, if Mrs. Warren decides to run.

In a salute to Mr. James Carville: It’s all about the jobs, stupid! 

That is to say, bring back opportunity, by reversing some of the equations above, and we are likely to see: More jobs, less fear, more racial tolerance, and more polite political discourse.

Don’t forget failure to pass immigration reform will ultimately end the GOP (double-click this link for a picture worth a thousand words).

P.S. 
Missing from the equation above is the deleterious effect “financial engineering” has on jobs and the economy, so that earnings per share and executive compensation can be boosted.  Separately, two failed nation-building exercises did much to enrich the MIC, but left the nation’s finances in poor condition.  These wars were costly, resolved nothing, and as result, the government finances are not where they should be to help offset the reduction in private sector spending, during these troubled economic times.  

Both financial engineering and wars are strongly supported by Congress, and destroy jobs and opportunity.


Copyright JM Hamilton Publishing 2014
 

Rakoff

Some two and a half years later (because that's how lawyers and judges often operate), Judge Rakoff has been overruled on the Citigroup/SEC deal, but remains 100% Correct… which goes to show and as many have learned since 2008: What is often times “legal” is in many instances amoral and “criminal" (malum in se).

Fear not Judge Rakoff, you may have lost this battle, but your arguments are winning the war.  The U.S. government now charges banks with crimes, and the penalties are now running well into the billions.

A Tsunami of Cover-ups and Lies

“As Ferdinand Pecora, the Depression-era prosecutor, is supposed to have said of the events leading to the Wall Street crash of 1929: Pitch darkness was among the bankers’ stoutest allies.”  - Gretchen Morgenson – NY TIMES

By J.M. Hamilton (12-4-11)

In a land where back room dealing, and double dealing, in government, banking, and many other facets of our lives, has become the norm, Judge Rakoff’s position on the Citigroup/SEC deal was a breath of fresh air.

The Judge’s position, unfortunately, would appear to be – by current standards – anachronistic.  Mr. Rakoff’s appears to be standing against the tide of history, more akin to a tsunami of cover ups and lies, and yelling 

“Stop – a little honesty and integrity, please!”

Please recall Judge Rakoff, a Federal Judge, was supposed to rubber-stamp a deal between the Securities and Exchange Commission and Citigroup, a bank that has been bailed out by the U.S. taxpayer, ad nausem.   In fact last I checked the U.S. government still holds a substantive stake in Citigroup, as a result of the bank’s failure in 2008.  The “deal” was Citigroup would cough up just north of a quarter billion dollars, and its role in selling, possibly, fraudulent security products, like derivatives and CDOs during the height of the financial crisis, would vanish w/out any admission of responsibility or wrong doing.

How convenient.   

And yet this is the norm in our two tiered justice system, where the public deals with one set of courts, and banks get fast track justice with no trial, relatively light fines, and where the fines, themselves, are considered a cost of doing business.   Americans, of course, have become numb to Wall Street’s recidivist activities.  And so for Judge Rakoff to say “no more,” was truly exceptional.

We can see why the Judge’s behavior was novel, almost rebellious: the Wall Street cartel has co-opted our government, regulators, our judicial system, rating agencies, and our laws and law making.  Our opaque accounting system is laughable, when we consider how derivatives and swap are not accounted for in financial statements (often only receiving a footnote); and Repos – an accounting maneuver/derivative product that helped bring down MF Global (not to mention Lehman), and with it possibly a billion plus in client money disappearing – are an all too common practice.

Granted Judge Rakoff’s decision could possibly mean more trials and the SEC spending more time proving its case against the major banks – at a time when, as recently noted by Arthur Levitt on Bloomberg Radio (Hosted by Tom Keene and Ken Prewitt), Republicans are starving the organization of money and funds.   Mr. Levitt is the SEC’s former chairman.  The Republicans, lap dog of Wall Street, and advocate and stander bearer for the one percent, quite possibly may believe they are doing “god’s work,” by supporting a monopolistic cartel and restraining government agencies, like the SEC.  However, the SEC is the first, and often only, line of defense against the predatory Wall Street oligopoly, in the protection of ordinary Americans, investors, business – both big and small, and of course, the government, itself.

But can you hardly blame the Republicans?  With all that money coming their way from Wall Street, and presidential candidate Romney meeting with Jamie Dimon,  (Mr. Romney, himself making his bones on Wall Street with private equity’s Bain Capital), why not perpetuate crony capitalism and crony democracy?   After all, and gee-whiz, Wall Street paid back its TARP loans with interest….isn’t it time to get off the cartel’s back?

And therein lies the problem, because as much as Republicans would like to wish away the financial crisis of 2008, and assure us that the banks’ have paid back the U.S. taxpayer in full, quite the opposite has in fact happened.   The Banks, who have received 7.0 plus trillion in handouts and government benefits, as reported by Bloomberg last week (that’s half of U.S. GDP), have not paid for the damage they have caused to the real estate market (the cornerstone of life savings and equity for many Americans), the economy, nor for their share of the fiscal mess our government and economy is in.

Not by a fraction.

Republicans are often portrayed as being unfeeling, uncaring, and against the welfare state… that paradigm does not hold up, however, when the welfare is gifted to the Republican Party’s core constituency, the one percent.

So for Judge Rakoff to shine a bright light of truth on an unacceptable practice, tantamount to a banking whitewash and cover-up, was both brave and the kind of iconoclastic practice Americans need to see more of, in both business and government.

Some might call Judge Rakoff a bully.  I call the Judge a hero.

In the land where who you know and one’s connections, as often as not trumps the truth, Judge Rakoff’s act was a singularly courageous event.   

Kudos and accolades to Judge Rakoff!

Copyright JM Hamilton Publishing 2014