ALL DINOs MUST GO... THE WAY OF THE DINOSAUR!

ALL DINOs MUST GO...  THE WAY OF THE DINOSAUR!

When the former Enron CEO Jeffrey Skilling was released from prison a few weeks ago, the news conjured memories of a corporate scandal that now seems almost quaint – and it was also a reminder that Enron executives were among the last politically connected criminals to face any serious consequences for institutionalized fraud.

Since Skilling’s conviction 12 years ago, our society has been fundamentally altered by a powerful political movement whose goal is not merely another court seat, tax cut or election victory. This movement’s objective is far more revolutionary: the creation of an accountability-free zone for an ennobled aristocracy, even as the rest of the population is treated to law-and-order rhetoric and painfully punitive policy.

America's new aristocracy lives in an accountability-freezone – The Guaridan

By JM Hamilton (10-7-2018)

As I write this, Judge Kavanaugh’ coronation  has just been approved by the US Senate for his appointed SCOTUS seat; Mr. Kavanaugh will now be able - along w/ other right-wing jurists - to legislate the GOP's & plutocracy's patriarchal & reactionary agenda for decades to come.  So if the House falls to Dems in 2018, and the Executive branch goes to any number of competent female Dem senators in 2020, the Court will be there to slow down a progressive agenda, and hold back the left's populist tide.

JMH has documented for several years, now, the ongoing collapse of our democracy, and the hostile takeover of the government by the monied elite.  JMH has always acknowledged the benefits of a capitalist economy - ameliorated by a strong social safety net - to protect the economically & politically disenfranchised.  However, the US no longer operates a capitalist economy, but rather, the economy is driven by predatory cartels and monopolies. With the plutocracy's capture of government now complete, the robber barons are free to engage in crony-capitalism (i.e. monopolistic taxation & rent seeking behavior as the sine qua non of all economic endeavor)  - coupled w/ austerity for everyone else - w/out worry or concern.  

The ultimate sugar daddies - an unelected & unaccountable FED & SCOTUS - will protect the American aristocracy from the barbarian hordes (from the perspective of the patriarchy: disgruntled gays, minorities, & women).

Characteristics of the crony government are trillion dollar deficits, for as long as the world is willing to tolerate the dollar as the global fiat currency.  As well as, credit card wars w/out end; a foreign policy dictated by Big Oil and the MIC; and the continued plundering of the economy & government - exemplified by financial engineering & tax cuts for the wealthy: all funded by the Fed's printing presses.

Trickle down is not only America’s default fiscal & monetary policy, but it is paramount judicial policy as well... via a slick veneer of originalist judicial dogma to add some legitimacy.  

And Americans of all stripes - but particularly minorities, the poor, and women & children - will suffer the most from Kavanaugh’ rise. 

In such an environment political blowback against the kleptocracy is inevitable, and certainly, last week, there were some things for liberals to celebrate.

Senator Sanders took a victory lap after Amazon agreed to raise its entry level minimum wage, for its long abused warehouse workers, to fifteen dollars a hour.  The Senator went on the offensive against Amazon, by simply stating the obvious: Amazon's profits were subsidized by the Federal government/US taxpayer, as many employees relied upon government assistance just to survive.  The Senator has taken on Disney, and more multinationals will undoubtedly follow.  So many US multinationals dodge taxation, while exploiting the United States dwindling credit line & social services to enhance their bottom line: a double kick to Uncle Sam’s nether regions, and Americans.  What was surprising, however, was not the inevitable pushback Mr. Sanders received from the extremist within the Republican party, and the US Chamber, but even members of the Democratic establishment attacked Senator Sanders (engaging in sophistry and specious declamation - typical neoliberal tactics - when reason and logic fail).  Go get 'em Senator!  

Despite Mr. Kavanaugh's crowning, and ascension to the thrown, ushered in by Senate Majority Leader McConnell (complete w/ the facade of a faux - FBI - investigation), the hearings showed that the #MeToo movement is alive and well, and women aren't going tolerate abuse. Women and minorities have been treated like second class citizens (indeed, at times as indentured servants and slaves), since the nation's founding. And they certainly placed a very large dent in Mr. Kavanaugh's record & pending reign.  He, and another current SCOTUS member, will forever have asterisks by their names: admitted to the bench after highly credible allegations of serial sexual harassment.  Thankfully, this movement isn't going away anytime soon, and unfortunately, neither is men's behavior towards women likely to change anytime soon.  Until parents are more open w/ their children about sex, sex education - and sexual behavior & issues surrounding orientation - our prudish, and often provincial (see red states), society will continue to breed and foster men like Mr. Kavanaugh.  As w/ nearly all things, education & transparency would do much to eliminate a pandemic of harassment, misogyny, rape, and sexual abuse.  

The upside, women are motivated, and woke, to run for political office, and vote, as never before.

I'll take a battalion of angry - motivated - women over an army of elitist, entitled frat boys any day of the week, in their ability to bring about constructive change. The other positive, SCOTUS, and yes, all US courts, continue to be exposed as the political institutions that they are; that it to say, run by politicians wearing black robes for the elite's benefit.  The answer to this problem is simple: term limits and popularly elected SCOTUS/Federal court members (i.e. greater democracy). That and the judicious use of SCOTUS impeachment when appropriate.  If the GOP, and their paymasters, are so confident in their economics & politics then surely they would not object to greater democracy and a popular vote on their judicial nominees?  Ditto the Dems.

And yes, let's give the devil his due.  Mr. Trump negotiated a better NAFTA deal last week, or USMCA trade agreement. The agreement has a number of pro-labor features, not the least of which are: greater North American parts content in North America assembled vehicles; exponentially higher pay for a percentage of Mexican workers, so that mercenary multinationals may be less inclined to move factories south of the border to exploit Hispanic labor; and my personal favorite, Chapter 11 has been nearly eliminated (but for the notable exceptions of - surprise - Big Oil & Telecommunications).  Chapter 11 allowed multinationals to sue governments - in rigged corporate panels - for loss of profits, due to changes in laws & regulations.  Sovereignty, and the people's will, appear to have been restored. (Kudos PM Trudeau!)  Of course, as w/ all trade agreements, Satan is in: the details; the enforcement mechanisms; and passage through a Congress, that is wholly owned by a nefarious US Chamber of Commerce.

That said, Trump appears to have paved the way, and set the bar on trade. Has anybody taken a look at China's stock market lately, or China's diminished growth prospects, & foreign investment into mainland China & Asia?  Not good. Trump appears to be winning on trade, as the Sino-US trade war heats up (aka the title fight).  Now future Dem administrations can't hide behind closed doors w/ multinational overlords & donors, or behind the Chamber's skirt.... the die is cast, and American labor expects Dems to only improve upon Trump’s work & future trade agreements.  Neoliberalism (aka exploitation of global labor, tax laws, & lax regulation, at the expense of American labor, the tax base, & economy) is dead.  

Add in Bloomberg's story about China hacking the motherboards throughout US industry, tech sector, and the US government, and America has far greater incentives to bring both jobs & supply lines home.  Dem leadership take note: sometimes it pays to be aggressive - even at the risk of upsetting allies, or so-called niceties & norms - in the pursuit of your base's & the country's interests.  

This also means upsetting the donor class.

No DINO, American labor is feeling the Bern.

In spite of the good news, there are still some immediate concerns on the horizon... the Democratic party is loaded w/ DINOs (Democrats in name only), or dinosaurs as I like to call them; that is septu & octogenarians, who have been sucking on the corporate/multinational tit for decades, in the form of campaign contributions and donations. 

You know, the usual suspects: Clintonistas, GOP-Lite, establishment types... somewhat liberal on social policy, but on economic and foreign policy (FP), basically indistinguishable from their republican colleagues. 

It's time for a purge.  If the Democratic party is to demonstrate that it has learned anything from 2016, the DINOs must go, or be converted.  DINO policies - from Clinton & Obama administrations - led directly to the rise of Trumpism and the rejection, by the everyman, of the Democratic party. The Party of the People - allegedly Dems - ignored the people, got in bed w/ the super-predators of Wall Street & Silicon Valley, and have been thrown out of federal & state executive, legislative, & judicial branches.

Blame the dinosaurs & their neoliberal policies... I mean DINOs. Bottom line: America doesn't need two Republican parties.

The future is AI, continued automation, and perhaps, to a far lesser degree, globalization.... but this means the US needs even greater social policies to aid ordinary Americans, minorities, women, children, and yes, even white males.  This means progressives are going to need to attack & leash: neoliberalism; a criminal & failed neocon FP; our crony- kleptocracy; and yes, DINOs, themselves, in bed w/ the US Chamber and its laissez faire agenda. The national debt must also be methodically & slowly written down, so that both establishment parties can no longer weaponize the national debt against the 99%.  The national debt was run up to pay for tax cuts for the rich, credit card wars, and bailout Wall Street and its aftermath.... so why are ordinary Americans stuck paying for the serial pathologies, and recidivism, of the elite?

The people don't need DINOs and the party doesn't need them either.

Anything less, and the Democratic party will find itself out of power, just as quickly as it might find its way back, post - November elections. Take lessons from FDR & the New Deal... the only POTUS to win four terms.  

The road map to success for Democrats was laid out in the 1930s & 40s. 

PS

Finally, I was re-reading the Declaration of Independence last night – you know that manifesto that shook off the chains of a corrupt elite - presently American law.  I couldn’t help notice that if we substitute "US aristocracy" for "King George," and any reference to same.... we can quickly see that not only does the document hold up today, but the tyranny of a monied elite has replaced the cruel oppression of a monarch.

Many of the outrages the founding fathers accused King George of, in 1776, apply here and now to American aristocracy.

The more things change, the more they stay the same.... that is, until a political revolution arrives.

Copyright JM Hamilton Publishing 2018 

Debt is a Drug

Debt is a Drug

Geithner hadn’t set the dials wrong. He had made a choice about who deserved the government’s full attention and how aid would be distributed. And he had done it without any meaningful input from Congress, or even a public debate.

“It led to a breakdown and a lack of trust in institutions,” says Admati. “What we witnessed here … is kind of ominous. It raised a lot of questions about who controls society ― corporations or the elected government.”

-      Ten Years After The Financial Crisis, The Contagion Has Spread To Democracy Itself – Huffpost

By J.M. Hamilton (9-23-2018)

Much has been made about the opioid epidemic, and the number of lives lost due to pain pills and heroin addiction.  The drug du jour comes and goes - sometimes its coke, meth, or synthetics - but one drug apparently always stays in fashion: debt.

Debt, like drugs, erases inhibitions, provides temporary euphoria and a high, is a short to intermediate term palliative, and turns corporations and people into millionaires, perhaps even billionaires. Politicians - love debt - because it often provides a reprieve from making hard decisions, which the elected are loath to do.  Don't want to choose between Medicare/Social Security and the US empire, or the Surveillance state, that's easy... go to your friendly central banker and they'll ease the pain.  Politicians also love debt because fortunes - often spawned by debt - are used by the donor class to buy influence and finance the political process (i.e. purchase politicians).

Seemingly everyone's doing it.  Corporations use debt to engage in financial engineering; nation states attempting to keep bankers and economies afloat; tyrants and dictators use debt to build up their militaries and police states; and many Western democracies are engorged by debt.

As noted in Bloomberg, global debt has skyrocketed, since the 2008 Crash (another debt fueled orgy), from $173 trillion to $250 trillion.  So much for the deleveraging that many central bankers said would transpire, as part of their extraordinary money printing operations, engaged in after the Crash.

Banks and Wall Street drool over debt.  Debt - for bankers - generates fees, revenue, a plethora of speculative products (such as CLOs and derivatives/swaps), and a never ending stream of leverage.  Heh, and when profits are privatized, and losses are socialized ... what's not to like?

Many have noted the precipitous drop in the number of publicly traded companies, and the increase in privately held companies, and the rise of private equity.  Private equity, conveniently, receives scant, or no, attention from the congress and the regulatory bodies, and with tax law favoring debt over equity.... private, it has been said, has become the new public.  Financial reporting is easier, management & ownership can enrich themselves more quickly and away from prying eyes.  Heck, in a PE takeover, profits can be front loaded, and the risk takers are, ironically & ultimately, the bondholders.

In a publicly held company some degree of propriety is the order of the day, and profits are subject to taxation; while w/in a privately held company nearly anything goes - short of committing murder, and good luck trying to find someone to prosecute said murder - and interest payments are tax deductible.  In a privately held company, layoffs and pinks slip are de rigueur.

Not everyone is doing the drug, however.  Banks are said to have cut back, due to higher - post-crisis - capital requirements; but given the accounting shenanigans surrounding derivatives & swaps, repos, offshore & foreign operations rooted in nations w/ lax accounting, tax, & regulatory standards, who is really to say?  Per the aforementioned Bloomberg piece, global household debt has remained the same, since 2008 (w/ many families throughout the West cutting back, while China's private and public debt has ballooned).  

Like all hard drugs, debt is a stone cold killer.  Debt finances armies, martial actions, and since the turn of the century, endless - credit card - wars.  Hundreds of thousands have lost their lives, and some have estimated that civilians make up somewhere between 50 to 90% of all war casualties.  That's right, the blood of innocents covers central bank money manufacturing; bankers find blood to be an excellent lubricant for their smoking printing presses.  Sometimes the fatalities caused by the debt drug are less overt... Greece is the classic example of a nation that got hooked, thanks to enabling dealers/bankers and centrist - establishment - politicians. That debt (and the Goldman derivatives that obscured same) financed all manner of high living: lovely public employee salaries; patronage gone wild; early retirement; unsustainable public pensions; tax avoidance for the plutocracy; and the reelection of Greek - establishment - politicians, who like to take credit for the good times, and aren't around when the money comes due.

When the money comes due, the dealer, the enabler - the bank underwriters - are not held to account, but the user - the government and its people - are never let off the hook. Generally the fallout, or withdrawal, arrives in a cold turkey process, called austerity.  Social spending is cut, pensions are greatly diminished, and pubic sector jobs and salaries are slashed. Public assets are privatized.  And of course, plutocrats dodge the overdose, and still avoid taxation.  Instead, the people feel the pain and sometimes even death, as the economy goes into a tailspin.  

But the bankers, the dealers... they always win, despite committing all manner of crimes (from stealing from clients & depositors to money laundering & market manipulation, et al.).

Arguably, the title of the Fed Chairman should be changed to Dr. Feelgood.  The efforts of the Medellín cartel, and Pablo Escobar, have nothing on the likes of Greenspan, Bernanke, Yellen, and Powell.  The spillover effects from central bank actions, over the last decade, could fill volumes, and include, but are not limited to: intergenerational wealth larceny; a M&A market on steroids; the aforementioned financial engineering; cartel & monopoly formation throughout the economy; and wage & wealth inequality.

Banks perhaps - in addition to Big Pharma - are the only drug dealers, generally, esteemed by the elites and politicians within a society, and almost never are held responsible for their actions, unlike dealers in the illicit drug world.  

There's that key dichotomy again:  malum in se, versus malum prohibitum.  That is to say, just because something is legal doesn't mean - taken to the extremes - it isn't evil incarnate.  (Moreover, just because something is illegal today - say cannabis or in some countries, homosexuality - doesn't preclude the objective reality that said drug, or sexual orientation, is comparatively benign or natural.)

El Patrón

Like any proscribed drug, debt, in moderate doses can be beneficial.  It can spur a business, an economy, or help a household through a rough patch; but once addiction occurs, debt can lead to catastrophic and economy debilitating consequences.  As Harvard's Professor Rogoff has stated, it becomes a drag upon the economy itself (obviously, at present levels, both at the macro and micro level).  Debt distorts the public's reality of what is, and what is not important; in short, it distorts our perception of the value of everything. 

So how to cure and detox from this unsustainable global binge, before a web of derivatives & swaps take the world economy down into a deep black hole?  Or avoid a situation like that which occurred in Denmark last week, when Danske bank - with a balance sheet far greater than Denmark's GDP - found itself in deep trouble on money laundering charges.

The answer - as w/ any addiction - would seem to be a gradual and methodical taking away of the highly addictive substance in a controlled environment.  

Go to the source; go to the dealer.  Bankers - central, institutional, & shadow - have created this problem.  And central banks are the only institution that can suffer a write down, or hair cut, or countenance genuine debt forgiveness - necessary - to remove this ticking time bomb, nation state debt, from our lives.  

Regulatory checks on private equity (PE), and controlled, contained, and measured leverage ratios - for business and investments - would seem to be another obvious answer.  That is to say, caps on the amount of leverage PE can apply to a takeover target, and additional limits to the amount of bonds, securities, & stocks investors - & speculators - can purchase on the margin.

When the economy hits the skids again, all these highly leveraged private firms - if past is prologue - are going to have a hard time servicing their debt. Many will end up bankrupt, and millions of citizens will lose their jobs.

There are solutions to this debt pandemic: the aforementioned, the rewriting of tax laws, and taking away many of the myriad incentives for the ultimate narcotic's use.

Unfortunately, it will likely take another global depression, and a serious jones - the likes of which have never been witnessed - before anything is done about it.

Copyright JM Hamilton Publishing 2018