Democracy in Flames and Sovereignty under Fire!

Democracy in Flames and Sovereignty under Fire!

By J.M. Hamilton  (11-11-11)

“Thus was parliamentary democracy finally interred in Germany.  Parliament had turned over its constitutional authority to Hitler and thereby committed suicide…”  - William  L. Shirer, The Rise and Fall of the Third Reich

It doesn’t take much to overturn a democracy or democratic institutions:  economic chaos, unchecked fear, a couple of gallons of gasoline, and a few matches.   That’s all it took in Germany in the 1930’s, when the Nazis burned down the Reichstag (Germany’s emblem of democracy and the equivalent to the U.S. Congress).  Communist were of course blamed and used as scapegoats.  In the resulting fear and turmoil, civil rights were suspended by Germany’s President Hindenburg, allowing Hitler to round up and exterminate any and all political opposition without due process.  A short time later the aptly named “Enabling Act” was passed and a dictatorship was born – all perfectly legal and sanctioned by the state.  Hitler said the suspension of both German civil liberties and democracy itself, was all for the German peoples protection.  It was through fear and uncertainty that Hitler seized that which the Nazis could not obtain democratically, hegemonic and absolute power over the German state.

Today in Europe and America we see the erosion of democratic institutions at every turn.   And what global banking oligarchs cannot accomplish by a flood of money into the political process, or by the purchase of politicians, is won through the coercive power of the state, as former bank executives cruise through the revolving door and operate key government positions – again, all perfectly legal and sanctioned by the state.  (e.g. Witness the recent coronation of Goldman Sachs alum, Mario Draghi, as head of the E.U.’ central bank, who is said to have wrote the book on hiding government debt via the use of swaps and derivative products; or check out another Goldman alum who runs the Commodities Futures Trading Commission (CFTC), Mr. Gensler… and some people wonder why the CFTC has delayed implementation of new derivative/swaps rules and regulations?)

Per the New York Times’ Thomas Friedman, there’s a reason why 61 house members sit on the congressional Financial Services Committee.

In the cradle of democracy last week, Greek Prime Minister, George Papandreou, dared defy the established order of things, that of banking uber alles, and actually sought a referendum by the people on the proposed E.U. Greek bailout package.   Now this bailout package promises a write down on Greek debt of 50%, when the market values the haircut to bond holders at no less than 80% (what a deal for the bank or institution who picks up this debt at the fireside sale price, because if the bailout holds, they will more than double their money, all at the expense and suffering of the taxpayer – both U.S. and European); moreover, the proposed bailout would in all probability consign Greece to austerity and economic decline for at least a decade or more.  Not that the alternative, default, hyper-inflation, capital flight magnified, and a return to the drachma, would have been much better.  But the resulting outcry from the European and U.S. political elites was so stunning and sharp in response to the referendum, it merely proves the point that the J.M. Hamilton blog made in an editorial a couple of weeks ago (entitled, Fear and Loathing – Globally), namely, that the elites fear democracy.   Mr. Papandreou retreated and cancelled democracy/the referendum, which would have finally given Greek citizens an opportunity to weigh in on their nation’s financial crisis.

Meanwhile, in Italy, a media mogul and a septuagenarian playboy, also known at the Italian Prime Minister, has “voluntarily” submitted his government and its budget to International Monetary Fund (IMF) oversight and scrutiny.   Now, submitting your government budget for IMF review is very much like the indignity, and an infringement upon sovereignty, that the Greeks have already endured and continue to suffer, that of sovereign budgetary oversight by interested third parties.

Moreover, it is an indignity and threat to sovereignty that the United States Congress would never tolerate, at least not yet.  You’ve got to hand it to the bankers, however, they would never tarnish and soil their bespoke suits with gasoline and matches.   That’s entirely unnecessary, especially when the banks can burn down democracy with threats of a “Lehman event,” a capital strike, dumping sovereign debt, or by making financial bets against the very nations that have repeatedly bailed them out.  (Note: In yet another assault on pesky democracy, both the democratically elected Italian and Greek prime ministers, Berlusconi and Papandreaou, are being replaced by “technocrats,” which is a fancy word for saying that Messrs. Monti and Papademos are more than likely BBF or Banker Buddies Forever.  Messrs Monti and Papademos have not been popularly elected, but will most likely run both Italy and Greece, presumably, for Wall Street’s and E.U. Bank benefit.)

Three years after the last financial crisis, politicians are desperate to avoid another “Lehman event,” which is code for the global systematic risk posed by international banking, derivatives, and credit default swaps.  Aside from the economic damage such an event would  cause the global economy, already strained state budgets, and the havoc it would reek upon global currencies, the political elite are worried that the European and U.S. electorate might begin asking very pointed questions.  Namely, what have these same politicians done over the last three years to prevent the banking crisis that is unfolding before our eyes, here and now in real time?

And that’s a question no politician, who wants to be elected or re-elected, appears to want to answer.  Why?  Because in the U.S. both political parties share blame for catering to Wall Street, and the lack of rules, regulation, and oversight since the 2008 financial crisis.

At the end of the day, international banking is the tail that has been wagging world governments, democracy, and the global economy with ever more frequent and deleterious effects.  Multi-national corporations wised up to the games these Wall Street sharks play a while ago, and have hoarded colossal amounts of cash, in essence becoming their own banks, so as to avoid dealings with same.

But the public isn’t quite as fortunate.

Ultimately, the only thing that will rein the banks in, and the threat to global security and stability they represent, is to allow them to fail and subsequently nationalize them.  If the global banking model the world is headed towards, willingly or unwillingly, is that of utility banking (i.e. elementary/pedestrian lending without the proprietary trading), than why not nationalize the cartel, install new management, and preserve as many banking jobs as possible, when these institutions inevitably fail again?  As it stands, the banks often prey upon anybody or any institution, private or public, they come into contact with; and as often as not operate to the detriment of legitimate business, the world economy, and world governments.  World governments are tapped out after bailing out international banking, repeatedly, and now the banks are demanding fiscal austerity, so that governments have the means to bailout the banks, yet again.

And to insure that the global political system continues to favor banks, these same institutions now appear to be installing their own heads of state.  Democracy be damned.

Outlawing and unwinding existing naked shorts (e.g. speculative derivatives instruments) is also a must, if we are avoid repeating the same mistakes ad nauseum.  In the last bubble, the speculative instrument of choice was mortgages, and in the coming crisis, as predicted by J.M. Hamilton, it is sovereign debt.  In both instances, the banks have suspended all business prudence in exchange for the fast buck, with the full knowledge that governments will bail them out again, since they are too big to fail.  Isn’t it time to stop this cycle?  The failed banking institutions can always be returned to the private sector, post re-org.

As this blog has alluded to before, global democracies, as a general rule, don’t allow megalomaniacs to hold and operate standing armies or to possess nuclear weapons (or they do a great deal to suppress, contain, and avoid the re-occurrence of such individuals as Herr Hitler).

Containing these rogues is a matter of global security for world markets and the consumers within those markets.

If that’s the case, then why would business leaders and global governments allow something possibly more insidious than nukes, say international banking in its present incarnation, to be left in the hands of private sector dictatorships?

PS:  For those who think that our banks, shadow banking, and exchanges are over-regulated… please explain it to the fine investors of MF Global, who relied upon CME -the self- regulating futures trading exchange – to protect their interests.   A lot of farmers and investors are missing millions of dollars, because of this unregulated market and exchange, and some could face financial ruin.

Copyright JM Hamilton Publishing 2013

A Question of Trust, A Question of Credibility

A Question of Trust, A Question of Credibility

"In a wilderness of mirrors."  - T.S. Eliot

By J.M. Hamilton (9-9-13)

How many times have the American people been lied to, so that the political elite could drag this country into war?

Gulf of Tonkin, which led to Vietnam... check.  
Weapons of mass destruction - the second Iraq war ... check again.  

War is very big business.  With a revolving door between the MIC (military industrial complex), the contractors and subcontractors who support and supply same, and the political and military elite.... is there any wonder why there appears to be a near constant drum beat for martial action?

Consider the following:

$$$  America has or is in the process of pulling out of two major wars.  Afghanistan, as a nation building exercise, would appear to be an abject failure.  The corruption and graft within this narco-terrorist state, despite our greater than decade long involvement, are unfathomable to many Americans.  This is America's legacy in Afghanistan?  In Iraq, we took down a dictator and appear to have a replaced him with a democratically elected dictator.  Now that we have or are pulling out of Afghanistan, what possible justification is there to continue to spend half the nation's discretionary Federal budget on the MIC.  Answer:  None.  Hence, the need for a new war?

$$$  This Administration (the one I favored) would appear to be in hot water.  The President, in many respects, is already a lame duck, and his Administration has largely been rendered - much to many Demo's chagrin - impotent.  The second term mandate has been made moot by a recalcitrant and gerrymandered House of Representatives.  And while I don't have the credentials to delve into the President's or Administration's psyche, with domestic policy in chaos, just how tempting must it be to demonstrate to the U.S. and international community that this Administration is still powerful, and can insinuate itself in to Syria?  Exactly like another President - who was in trouble - did during the 90's, when Mr. Clinton launched this nation into war:

Kosovo - Check Again.  Syria presents a classic "wag the dog scenario, " just like the Balkans did in the 90s.   

$$$  The Saudi regime underwrote and supported the military coup in Egypt and helped overthrow a democratically elected government, and the GOP has been baiting the President ever since, as ineffectual.  The neo-cons believe that the U.S. should rule the world, and military intervention is always their first response; however, this philosophy has helped bankrupt the nation, and left our true enemies - and the sources of many of the world's problems - in power.  What  better way to demonstrate that the U.S. still is the top dog militarily, than to bomb a third rate power, in which we have no national interest?

$$$  War can provide a convenient distraction, take away valuable time and resources from real problems that remain unaddressed here at home.  For instance, the NSA is being lanced weekly, if not daily, by Mr. Snowden's revelations.  Seems that we are all under surveillance 24/7, and that the NSA is accountable to no one.  The NSA's budget is offline or in the black, and it's results - in terms of domestic spying - are highly questionable.  Moreover, the NSA is under no supervision whatsoever, except by a secret/rubber stamp court.  But the NSA, once again, is big business, run by subcontractors and private equity firms who are very well connected to the Washington establishment.  Who am I kidding, the Carlyle Group is the Washington Establishment.   

So, surely, the NSA's invasion of privacy on a monumental scale must continue unhindered.   Right?  It's almost as if war is being waged within the U.S. upon it's own citizens.  Right?  Or is this just another Federal public works project, that has completely run off the rails, much like the MIC itself?

$$$  Last week, Secretary of State, John Kerry, arrived at the hill to "sell" the pending Syrian war to the House and the Senate.  Fortunately for the nation, the liberals and militant right in the House, don't appear to be buying the Secretary of State's product.  Mr. Kerry, a Vietnam Vet., once asked, how can you ask a man to die for a mistake?  When it comes to finding out what our national interests are in Syria, we've been told that our failure to act makes us look weak.  The nation watched the Syrian horror show unfold for two years.  Why suddenly now, would the U.S. look weak?
 

The counter-argument is the U.S. looks both weak, and is made weak, by a string of never ending budget breaking - military actions with dubious results.  The nation will likely need it's military someday.  But with a nation's collective confidence, coffers, and will - steadily eroded by our political elites apparent ability to drag America into every conflict of their choosing, how likely are we to act effectively when we need to?  Administration after administration has cried "wolf," often to the detriment of the nation and our international standing.

$$$  The President says he's worried about the children in Syria.  I believe that.  Many of us are.  But how about the one in four U.S. children born into poverty?  How about a federal budget that is in shambles?  How about tax avoiding monopolies and cartels, who own and run this country, while the middle class and upper middle class are the only ones who actually pay taxes.  How about campaign finance reform?  When will these crucial issues, et al., be addressed?

$$$  Where is the Arab League, an institution comprised of oil rich monarchies and despots?  Why aren't they standing by Syria's children?   How about our friends in Europe, who actually are dependent upon middle-east oil and energy?  Why doesn't the French military man the front lines?  The U.S. has all but achieved energy independence, and the glory in that, is the U.S. will finally be rid of a war torn and bellicose middle-east, if our elected leaders will allow it.

Seems to many Americans, the time and place for nation building is right here and now at home?

Until the cost of war is born by the people and organizations, who profit from it the most, there will be no end to war and bloodshed.  As President Eisenhower said, in his farewell address, every cent spent on the MIC, ultimately is theft from our children.  How about our children, President Obama?  (Shouldn’t the administration turn it’s gaze inward?  Frustration aside, the President should realize that just by virtue of being in office, versus the alternative, he is achieving a great deal.  Isn’t it time to focus on domestic matters, use the bully pulpit, and expose the House to the sanitizing light of day?)

The unintended consequences of war are great.  Perhaps the members of the Senate, or the board of directors and management team at the Carlyle Group - who runs the NSA, could man the aircraft that will be used to lob missiles into Damascus?  Better yet, make them all apart of the "boots on the ground," U.S. battalion that ushers the way into Syria, in yet another failed nation building exercise.  Maybe the Royal House of Saud would like to join them?


P.S.  Some have said, the U.S. is the only liberal democracy never to be ruled by Military fiat.  However, given MIC lobbying and power in Washington, the revolving door, and recent NSA revelations, one can argue that the U.S. is already under military control.

Copyright JM Hamilton Publishing 2013

¿Communista?

¿Communista?

 

"Conservatives pride themselves on resisting change, which is as it should be. But intelligent deference to tradition and stability can evolve into intellectual sloth and moral fanaticism, as when conservatives simply decline to look up from dogma because the effort to raise their heads and reconsider is too great."     -W.F.B.

By J.M. Hamilton  8-31-13

I remember it well.  I was getting my hair cut in a South Texas barbershop and we were discussing the issues of the day.  When the red head cutting my hair turned to me, batted her baby blues, and asked, "You need to meet my brother, he's a member of the John Birch society.  Would you like his phone number?"

Oh baby, talk dirty to me.

It was the early eighties and W.F.B. was in his ascendency.  Seemingly, Ronald Reagan was brought to power by National Review.  That, and Mr. Buckley's shear force of will.  The apostates and the “Birchers” had been driven from the Republican temple by the man with the golden tongue; and many were attracted to the Party by the shear athleticism of Mr. Buckley's intellect.

And there was something more, something singular – at least for me, the promise and allure of upward mobility that capitalism appeared to offer all Americans.

Sundays were great.  Sundays - after sleeping through church service in the back pew - meant Firing Line.  Almost as interesting as W.F.B.'s arguments - it was a challenge just to attempt to keep up with him - was his willingness to bring liberals, Dems, and nearly anybody else on the show, who had the testicular or ovarian fortitude to appear.  Mr. Buckley was as iconoclastic as he was iconic. 

Ultimately, what was so appealing about Mr. Buckley, however, was he often argued from the moral high ground.  His near fundamentalist belief in capitalism - the unlimited opportunity capitalism seemed to afford the U.S. and its adherents - and his faith in his own Catholic upbringing  - were undeniable.  That didn't mean he was a slave to orthodoxy, and the pillar of the conservative movement certainly had a libertarian streak a mile wide.  By way of example, he opposed President Bush's (W) war in Iraq, and he was against the war on drugs.  Clearly, this was a free-thinking conservative.  A statement that is clearly oxymoronic today.

If Mr. Buckley was doctrinaire anywhere, it was in his firm opposition to the gangsters who ran the former Soviet Union.  Perhaps it was the USSR's attack on personal freedoms, the near universal poverty of it's citizens (except for communist party cadres), the socialism and slavery that often accompanies a command economy, or it's goal of global hegemony.  Of course, Mr. Buckley shared similar concerns about the growth in the U.S. government... clearly there was angst expressed about the growing welfare state, particularly as it applied to the general public.  National Review went after the socialist inclinations within this country.

The intellectualism that Mr. Buckley brought to the party was only eclipsed some thirty year's later, at the tail end of the Bush Administration (W.), by the party's decline, characterized by: a lack of leadership, a dearth of fresh ideas, anti- intellectualism, xenophobia, moral turpitude, and a slavish devotion to party orthodoxy.

This decline is best exemplified by today's House of Representatives and the candidates the GOP put up for the last presidential election.

Presently, we see a House of Representative that is dominated by the Republican Party, propelled there by gerrymandered redistricting.  That the GOP could not win the Presidency or the Senate in 2012, during the heart of the Great Recession, speaks volumes about the decline of the Party, and it’s lack of national appeal.  Today, the House does not rule, but rather, obstructs and views this a progress; and the leadership, offers no alternative to the administration’s guidance, but for the nihilism afforded by Ayn Randians, misguided and misled Tea Partiers, and the GOP establishment (terrified by the extremist).   Supposedly the brightest ideas coming out of the House these days is the desire to shut down the Federal government, and impeach the President.  The House is allowed to play this game because the Federal Reserve has printed trillions to keep the nation afloat and bailout the Wall Street banking cartel; in short, while the GOP fiddles, D.C. and the nation burns in a ocean of liquidity.

My piece Dumbed Down Madness described in great detail how the GOP leadership advocates higher education for themselves and the elite; but believe it’s a waste of time – and completely corrupting - for the 99%.  As the GOP guts public education, and offers no alternatives to spiraling higher education costs, it proposes to allow banks to charge higher interest rates on student loans.  For many, it’s very clear that the Party prefers an under-educated and dumbed down electorate.  Unlike Mr. Buckley, today, very few right-leaning political pundits would allow Democrats, liberal guests, or competing ideas on their shows.  Today’s GOP, seemingly, doesn’t believe it’s the responsibility of the Party to educate the public on the issues of the day – as Firing Line did; but rather, the Party’s role is to dictate party orthodoxy. 

Standing completely alone among the GOP, is Senator McCain, who shows us what the GOP could be, if it was not dominated by demagogues, and paid for by right wing industrialist and oil oligarchs.  Mr. McCain’s recent performance is independent, intelligent and thoughtful; Mr. McCain’s policies and proposed legislation clearly show the path out of the wilderness, by embracing the middle class, adopting pro-middle class growth policies, and employment opportunities; but don’t look for the radicals in the Party to embrace such precepts.

The Party and the House are both divided about immigration reform, quite possibly for fear of snatching victory from the jaws of defeat, changing the homogenous complexion of their base, and due to the absolute terror of potentially affording a victory to this administration.  This single issue quite possibly demonstrates why the public opinion of the House is at an all time low.  My guess is these guys and gals will easily take their approval rating down into the single digits.  In the early 80’s National Review and other conservative journals of opinion referred to a “liberal crack-up” … today, we are witnessing nothing short of the GOP’s self-immolation.

As for moral turpitude, look no further than the House’sFinancial Service Committee.  This Committee has grown to sixty-one members, which is fourteen percent of the legislative body.  The prime purpose of sitting on this committee is to do the Wall Street bank’s bidding, in exchange for campaign contributions.  The nation’s dirty little secret is the biggest “welfare queen” around, a term that originated with Presidential Candidate Ronald Reagan, is the Wall Street banking cartel.  With trillions awarded in bailout funds, Federal Reserve bond purchasing and interest rate suppression, tax breaks, and watered down rules and regs: the Republicans use to call such government favors “socialism,” or if they were feeling particularly provocative, “communism.”  In fact, the GOP still calls public handouts “socialism, or communism,” when the government provides assistance to the 99%; however, when the House Financial Services Committee affords welfare to the affluent and uber wealthy, well that’s business as usual, or communism by any other name.  One more interesting fact, from 1980 through 2010 (largely a period of Republican rule), Federal outlays per annum have grown from just under a trillion dollars to just under six trillion dollars… a 500% increase.  Meanwhile, the yawning abyss of the GOP created national debt grows ever wider.  Perhaps that’s by design, since the GOP’s banker pals profit immensely from the national debt.

Of course, our Republican packed Supreme Court believes cash equals freedom of speech; and we wonder why the Cartel seems to always get away with an ever growing rap sheet, where another fine – without admission of guilt – is just the cost of doing business.

Republicans like to insist any proposed financial regulation (including an enfeebled Dodd-Frank), be accompanied by cost benefit analysis, showing that the new reform will not have adverse impact upon the banks.  On the surface not a bad concept, but in practice, it’s just another roadblock for badly needed reform.  However, where’s the GOP when it comes to insisting that the publicly traded monopolies, cartels, and M&A activity go through similar cost – benefit rigor?  Arguably, if the government should have to demonstrate the efficacy of proposed rules and regs, why should not monopolies and cartels – given their government granted privilege of minting monopolistic profits (taxes upon the citizenry) in exchange for campaign contributions – have to undergo an annual cost-benefits analysis/review?  Such analysis might be useful in demonstrating that the cartel or monopoly doesn’t work at cross purposes with the public good, soak the consumer, or strangle economic opportunity and nascent recoveries (such is the recent history of Big Oil).

But don’t look for the communists in the House to rein in free-market crushing cartels and monopolies anytime soon; nor will the House slow same down long enough to make them validate and justify their impact upon the United States, via the same financial analysis imposed upon Federal regulators.

As for the capitalist panacea Mr. Buckley so convincingly promised… well, it appears to have stalled.  Upward mobility is more rigid in America than in the land of royalty and aristocracy, Great Britain. 

Thanks to Mr. Buckley and President Reagan, the gangsters who ran the former Soviet Union are all gone now, replaced by a lone KGB operative; but the banksters, who run Amerika, are alive and well, and they demand tribute from Comrade Hensarling’s Committee.

As for myself…   although the Birchers were tempting, like the sophistry afforded by the Tea Party, I passed.  Alas, there is no Mr. Buckley to drive the philistines away from contaminating decency, and polluting common sense and good government; there is no Mr. Buckley to crush failed ideology, ground lockstep Republican Party orthodoxy, and offer up an enlightened moral high ground.

And it is the nation, indeed the world, who suffers for it.

Copyright JM Hamilton Publishing 2013

Dumbed Down Madness: You see, there’s that annoying thing for the GOP, and the plutocracy that pulls it strings, called democracy.

Dumbed Down Madness

“We have now sunk to a depth at which restatement of the obvious is the first duty of intelligent men. “    – George Orwell

By J.M. Hamilton (4-20-12)

Question:    When did the Republican Party begin to advocate “dumbing down” and turning off on higher education?

Answer:   The GOP embraced this concept with the realization that those fortunate enough to enjoy a higher education were fleeing their Party, and migrating to the opposition by a considerable margin.

We get the following from the April 1^st New York Times, in a story by Mr. Thomas Edsall, The Politics of Going to College:

“In 1984, those with college and advanced degrees made up 35.3 percent of the electorate. Reagan’s strongest margins were among the college educated, who backed him over Walter F. Mondale by a crushing 62.7-36.9 margin. Among all those with both college and advanced degrees, Reagan won 58.7 percent, a landslide margin.

Jump to 2008. Even though those with college degrees made up 27.9 percent of the population that year, they cast 45 percent of the presidential vote. These voters register and go to the polls in substantially higher numbers than the less well educated.

By 2008, the Republican advantage of the early 1980s among voters with a college degree or higher had disappeared. Barack Obama carried this demographic with 54.1 percent. He beat McCain 50-48 among those with bachelor’s degrees, and by a decisive 58-40 among the 17 percent of the 2008 electorate with post-graduate degrees.”

But the bad news for Republicans doesn’t stop there, women are amassing college degrees and embracing knowledge in greater numbers then men; and as we all know, per recent polls, women favor President Obama, over the presumed Republican nominee, by a double-digit margin.

The Republican Party is, of course, a two trick pony: But President Obama has shown the GOP how to conduct foreign policy and eliminate thugs and villains (with stealth and special forces; and not with Republican favored cost inefficient and amoral defense policies, such as: ready to use standing armies; invasion, occupation, nation building; and redundant budget breaking military departments and weapon systems).  As for the economy (the Republican Party’s second trick – and a really nasty one at that), it is possibly on the mend under a Democratic administration, despite enormous economic and fiscal head winds – see the “PS” below.  With a monopoly constrained economy possibly perking up, the GOP – via Rick Santorum – trotted out the only issues that still divide Americans, forty to fifty year old social issues.  And in the process this regressive may have fired up his base, but he ran off the majority of women voters and gave independents serious pause and second thoughts.  No wonder the GOP, in recent weeks, had done everything in its power to shelve Mr. Santorum’s campaign.

And what did the reactionary Mr. Santorum have up his sleeve next…  the disenfranchisement of women, or perhaps he wanted to bring back the poll tax?

Americans, the educated and uneducated, Republican and Democrat, actually agree on a great deal.  Americans, red and blue, all want a healthy economy, fiscally sound Federal and State governments, good roads and bridges, a responsible military defense, and last but certainly not least, an affordable and decent education for their children and grand children.  And of course, there is America’s love affair with entitlement spending.  To which the astute and wise Barney Frank recently commented in New York Magazine:  “Yeah, they want more from government, but they don’t want to pay for it.”

Today’s Republican leadership isn’t interested in what unites us, however.  No, the GOP, in its present incarnation, is only interested in their core constituency, the one percent; and of course, amassing and maintaining power at your expense, trashing government (via “borrow and spend” policies), taking away private and public benefits and democratic power from the ninety-nine – to be redistributed to the one percent, and maintaining a dysfunctional tax system that benefits their core constituency.  Of course, key to their success is maintaining their base within the ninety-nine percent – you see, there’s that annoying thing for the GOP, and the plutocracy that pulls it strings, called democracy.

The economic ruin created by three decades of Republican Party’s laissez faire ideology – if Japan is any example – will take decades to heal.  But as mentioned in our last editorial, the presumptive GOP nominee, “Mr. Severe,” wants to continue this failed doctrine, so that his buddies in Private Equity can continue to raid and loot businesses and short their tax payments, globally.  Again, at your expense.

To continue their failed policies the GOP will continue to push fear, specious declamation, and disinformation; but in order for this to work it must prey upon an under-educated electorate.  Ipso facto, with educated citizens fleeing the Party in droves, the Republican’s core has become, in some instances:  the cerebrally enfeebled, the frightened, and under educated Americans.  All of which might explain the dearth of fresh ideas, and the uniformity of opinions coming out of the Party.

Of course, going back to the Greeks, the whole premise supporting democracy, as a form of government, is that an educated and informed public will make up the constituency.

No wonder Mr. Santorum, and Mr. Severe, do not want you to enjoy a higher education…. Because, gosh darn it, you just might begin to engage in some critical thinking and analysis on your own, instead of buying into the GOP’s failed fables and fear.

As noted in the aforementioned Times piece:

“President Obama once said he wants everybody in America to go to college. What a snob,” Santorum told a Tea Party meeting in Troy, Mich., on Feb. 25. “I understand why he wants you to go to college. He wants to remake you in his image.”

What both GOP candidates fail to mention at the same time they are trashing higher education is that they themselves, both Messrs. Romney and Santorum, are products of higher education and in possession of rather distinguished degrees.  My guess is neither of these men would have made it quite as far in life without their education; that is to say, neither appears overly gifted with natural talent, mental or physical.  Nor has either candidate mentioned the general but often direct correlation between a higher education and income.

And only somebody with fiscally and morally bankrupt economic and foreign policies would resort to sophistry, and equate education with snobbery.  Those affected by snobbery are everywhere these days, including demagogues, the religiously and socially intolerant, and the under-educated (call it reverse snobbery if you will, but it’s all the same, it stems from pride).

But that’s what today’s Republican Party has become, a toxic, bile filled bag, spewing anger, animosity, and discord (just observe the Senate minority leadership).  For the good of the nation, let’s hope this current brand of GOP leadership stays in the minority.

And the truly sad part in all this?  This nation needs a strong, rationale, and dare I say it – highly educated – Republican Party to keep the Democratic Party’s worst impulses in check.

But for the moment, if you happen to be highly educated – or just like to keep up on current events, engage in learning for your own betterment, or even perhaps like to think for one’s self (shucks, maybe your just curious) – than per the GOP, you are defective, obviously an elitist, and quite possibly a threat to the Republican Party’s hopes to retake the White House.

We should heed well Mr. Santorum’s advice and continue to let him and the plutocracy call the shots, after all look what it has yielded: their enrichment and our enslavement.

(What’s that?  Doubt you’re enslaved?  Look at the never ending rounds of bank bailouts at taxpayer expense – both front and back door; rising gas prices at the pump – when this nation has all but achieved energy independence under the Obama administration; and the declining purchasing power of the dollar.  These are all examples of taxes upon your wallet that you have little or no say over, but must contend with and navigate daily.  But unlike the President, the Congress or the Senate, you can’t vote for the CEO – or the CEO’s pay package – at Goldman Sachs, Exxon, or Citi…not even if you’re a stockholder.)

It is so much better to deny learning, keep your blinders on, and embrace ignorance and bliss, so that you can be more easily exploited by the plutocracy that has hijacked the GOP, and thanks to the Supreme Court, the democratic process itself.

P.S.

 “During times of universal deceit, telling the truth becomes a revolutionary act.”

–      George Orwell

Interesting how yesterday’s toxic assets, CDO’s and MBS, have earned renewed cache from their creators the banks, as well as hedge funds, mutual funds, private equity, and wealthy investors.  The fix must be in… therefore, don’t count on seeing any universally restructured mortgages, debt forgiveness on same, or a spirited economic recovery anytime soon.  This same cadre – populated and managed as often as not by GOP heavy hitters – has done everything in its power to run President Obama out of power, via capital strike, commodity speculation and manipulation (read: inflation), and with a little help from Big Oil, sending gas prices at the pump ever higher. A President Romney would only encourage this group, and embrace the very policies that trashed this nation and Europe in 2008 to the present day. 

A special nod to Mr. Blow in this week’s Times, who offered up the following observations.

Copyright JM Hamilton Publishing 2013

“How many yachts can you water-ski behind? How much is enough…”

Sorry, Wrong Number!

By J.M. Hamilton (3-26-11)
 
“How many yachts can you water-ski behind?  How much is enough…”
 
-  Charlie Sheen (aka Bud Fox), from the movie, Wall Street

History repeats.  In 1974, the U.S. department of justice saw fit to break up the AT&T monopoly (aka Ma Bell), via an anti-trust law suit, into seven regional holding companies.  The break up did not last.  This week AT&T announced it would buy T-Mobile for a tidy $39 billion, which will essentially create a duopoly in U.S. wireless communications with its sister Bell Company, Verizon.  There will be the usual regulatory scrutiny, perhaps a spin off or two to protect the consumer, and the usual arguments will be made in favor of the merger, like achieving “economies of scale” and “synergy” (read: pink slips).   There will be some chest thumping and grand standing in congress, a little noise, and then in all probability the merger will go through.  

The consumer will not be protected, however, and the costs of the merger will be passed along to the cellular customers in the form of higher monthly fees, poorer service, and less innovation and possible cut backs in R&D.  Management and congressmen, exempted from insider trading laws, will grow richer, and the employees at the combination – those lucky enough to retain their jobs – well, they’ll just have to work a little harder.  

Meanwhile, our government regulatory authorities (Justice, the SEC, and the FTC, Et Al.) will be kept on a very short leash, indeed, starved for funding by their handlers, the plutocracy.  Can one envision a time when this script won’t play out?   Not anytime soon. 

Witness the pending play, rehearsed so many times before, as big oil, in all probability, gets called to take the stand for the umpteenth time before congress to explain why gas prices are soaring.  If called upon, Big Oil, of course, will blame OPEC and trouble in the middle-east, but assure congress that the industry is competitive and properly functioning.   Not to hear Mr. Stephen Schork tell it, on a recent Bloomberg Surveillance broadcast with Messrs. Prewitt and Keene.  Mr. Schork, an expert on energy matters, and an investor and speculator, informs us that 19 of 20 barrels of sweet crude sitting in Cushing are owned by speculators; moreover, thanks to the oil rich shale of Canada, the oil sitting in reserve in Cushing could be replaced six times over.  Per Mr. Schork, the NYMEX futures market is “corrupted.”  As Mr. Keene notes, speculators are moving the price of oil; and therefore, the price at the pump.  It sure wouldn’t be market forces, but what market forces truly exist in an industry dominated by monopoly and cartels?   Meanwhile the consumer will get soaked (not with inexpensive oil, however), and the newly minted nascent recovery, financed and sponsored by the Fed and QE2, will take it on the chin.

So when will the consumer prevail, and corporations fight the urge to merge?  Possibly, maybe someday soon, when the monopolies themselves realize that they are literally financially disemboweling the consumer, world markets, and cutting into one another’s profits; then maybe, monopolies will fully appreciate the instability myopic and unmitigated greed creates.

When gas prices spike, it eliminates consumer discretionary spending that could go into other businesses, or monopolies, goods and services; that is to say, when Exxon Mobil has a record quarter, the AT&T’s of the world suffer because the consumer has less money to spend on cellular services (not to mention the overall drag on the economy, which may compound into recession).  

The extent to which a business (say AT&T) is harmed by the gouging another monopoly  (say Exxon Mobil) executes upon the American consumer, depends upon where AT&T’s goods and services fall within the consumer’s, or market place’s, hierarchy of needs.   Sooner or later business and monopolies, of all shapes and stripes, are not going to appreciate the Wall Street banking cartel and the oil oligarchy taking out the U.S. economy and cutting into their profits.  Of course, many businesses and monopolies, apparently, did not get overly upset that Big Oil price increases set the U.S. economy up for failure, and the Wall Street banking disaster finished the job in 2008, because there’s always world markets to exploit and sell to. 

But a very unfunny thing happened to the “globalization paradigm” in the last thirty days: namely, a quake, a tsunami, and a presently unfolding nuclear disaster, just north of Tokyo – Japan.
This blog, from time to time, has taken a crack at Apple, who many of us love and adore, because of their cool products, and their cultivated anti-establishment – snarky- image.  Apple is perceived to be the anti-Microsoft.   

The reality, however, as this blog has documented, is that Apple utilizes Chinese “labor,” and Japanese manufacturing to mitigate product cost and maximize profit.  In short, Apple is about as establishment as it gets.  Last we read, Apple had north of fifty billion in cash sitting on their balance sheet, courtesy – to some degree –  of the fine purveyors of Chinese labor, Foxconn (see this blog for details).  I bring up Apple, because in many respects Apple symbolizes globalization.  Apple designs and engineers products here in the states, but outsources the manufacturing of product components and product assembly to the Pacific Rim.  And the mark-up on Apple products is extraordinary because of the slave labor involved.  The reality is Apple could manufacture and assemble in the U.S. and still make exceptional profit and returns, albeit less than they are making now.

But now, and this scenario is by no means limited to Apple, we hear there are going to be disruptions in the supply chain for the I-pad, because some components are manufactured in Japan, and the Japanese manufacturing facilities have either been washed away or are uninhabitable due to radiation.   Therefore, Apple cannot meet demand, which might turn off consumers, impatiently, awaiting product, and harm Apple’s bottom line and image.   If and when Apple gets production up to speed, consumers may want to run a Geiger counter over the I-pad to insure its safety, but that would go for all Japanese products, post-crisis.

The bottom line and the lesson on Japan:  Apple and other multi-nationals can no longer take for granted any given market, or country, to produce a revenue stream or a supply of products; and more importantly, it can ill afford to allow other multi-nationals or monopolies to trash a major world economy, like the U.S., as it may need that market again, either as a manufacturing, service, or revenue source.  Good corporate governance and risk management dictates peripheral vision into economic and political areas beyond a corporation’s next quarterly financial statement. 
 
Does the Japanese disaster spell the end of globalization, or put another way, the end of labor, regulatory, and tax arbitrage?  

Not hardly, but it may make monopolies and multi-nationals reconsider their recent disdain for U.S. labor, and more greatly value the relative stability of the U.S. economy (still plugging along at roughly 25% of world GDP).  If nothing else, multi-nationals and monopolies will be forced to hedge, that is Japan illustrates that they can no longer count on the stability of all developed or emerging markets and economies running in tandem all the time, neither as a source of revenue or supply.  Instead, they will have to reconsider America (indeed, all markets), and this means they can no longer  allow their brother monopolies, Banking and Big Oil, to prey upon the American consumer to the detriment of their financial statements, management bonuses and earnings, and their stockholders (not necessarily in that order).

In the near future, we may see a whole new side to the Apple’s of the world.  Instead of passively allowing Wall Street banks and Big Oil to trash the U.S. or world economy, upon which they depend, Apple, or like companies, may actually be on the forefront of advocating real and true bank regulatory reform (the antithesis of Dodd-Frank), and perhaps insist upon the break-up of the Big Oil monopolies, or be a leading advocate for alternative energy development.   All the better to insure plenty of discretionary income and employment for their consumers, and healthy markets for their own products and services. 

An enlightened and wiser Mr. Gecko may have responded to Bud Fox with, “Greed is good,” particularly when greed is channeled for the betterment of society, the American consumer/labor, and corporate bottom lines (they are mutually inclusive).  Mr. Gecko also advised Bud to read Sun Tzu: “Every battle is won, before it is fought.”

FINALLY, Hats off to President Obama for obtaining quick UN and European support for taking out Colonel Khadafy.   Too bad, the Arab League is above the fray.  American interests are being well represented by President Obama.  Even more kudos and accolades will, undoubtedly, be heaped upon Mr. Obama with a quick and early American exit, after the Colonel takes a dirt nap.  President Obama, and his Secretary of State, may very well be showing Americans the benchmark in how foreign policy and the use of force should be conducted.  Too bad his predecessor, President Bush, didn’t conduct our foreign affairs in a similar fashion in Afghanistan and Iraq.

P.S. 8-17-13:  Hats off to the administration for blocking the US Air and American Airlines merger.  The proposed merger was anti-competitive, anti-free market, and pro-monopoly.  The proposed merger would have killed jobs and management, harmed air travel consumers, hiked up air fares, and further consolidated a cartel in air travel.  This administration has shown guts in blocking some M&A, such as US Air/American and AT&T and T-Mobile; it should do so more often.  In order for capitalism to triumph over monopoly, socialism, and socialism by private proxy, competition must prevail.  Adam Smith wouldn't have it any other way.

Copyright JM Hamilton Publishing 2013