The Pentagong Show

The Pentagong Show
United State of Terror: Is Drone War Fair?

Thursday, July 31, 2008

Vampire Capitalism

I've noticed that they've used the term "moral hazard" a lot more on TV in the last 6 months than in the last 6 yrs.

Moral hazard is defined as: "The risk that a party to a transaction has not entered into the contract in good faith, has provided misleading information about its assets, liabilities, or credit capacity, or has an incentive to take unusual risks in a desperate attempt to earn a profit before the contract settles."

Sound like gobbledygook, but FDIC insurance gives the most compelling example. Since the Fed has cut its rate to 2%, elderly savers have seen their paltry incomes from their "safe" investments in CD's slashed by more than half, just as their costs have begun escalating relentlessly. What this forces them to do is seek out higher yields, but with an eye to capital preservation, as they have no way to recover from capital losses. This makes them gravitate towards those banks that offer higher paying CD's....ie, those banks that are desperate to re-capitalize because of the enormous losses they've suffered by offering ARMs to the poor, in this case, let's say Countrywide Savings, whose CD rates are in the 4.5% range.

So those banks with the worst record of skating on thin ice and proffering risky loans, with practically criminal intent on raking their customers over the coals, are the very banks that, thanks to FDIC insurance, receive the most funds flowing to them. Without insurance, no one in their right minds would put their capital into an institution on the brink of failure, with no business plan in place that differs from the one that got them in the treacherous straits they deliberately sailed into in the first place ... and for precisely the same reason: considering themselves TBTF: too big to fail. This is the tacit understanding among large financial institutions, put in place since the failure, and subsequent FED rescue, of Chicago's Continental Illinois National City bank in the 80's, that should their risky behavior bite them in the ass, the FED'll always come to their rescue.

That same model of encouraging risky behavior applies to the health industry as well. Although I'd argue it's a misnomer. Like the "Defense" Dept. As we saw at Pearl Harbor, and 9/11, the US military is uninterested in providing anything as unglamorous as defense...the real money and excitement is to be made in waging War, but then we'd have to admit what we really are, and since that's not pretty, the mightiest military machine ever to straddle the face of the earth prefers to liken itself to a helpless little lamb, always having to defend its poor picked-on little self from unwarranted attacks.

So just as the War dept likes to call itself Defense, the Illness industry likes to refer to itself as the "healthcare" industry, whereas, in a Capitalist society, health is the last thing the Illness industry is interested in, as there's absolutely no money to be made from a society in robust health. And where there's no money, there's no industry, no shareholders, no raison d'etre. The perfect example of this is of course, the so-called "HMO's", whose last interest is in maintaining its patients' health....they are only interested in collecting insurance payments from the employees' Companies, discouraging them from using their services so as to keep the expenses down, and then jettisoning any responsibility to continue coverage to people who've paid for it for 20 years w/out ever using it, (as they were in good health) when they're laid off, and finally, just when they do need those services, in retirement, casting them off to the responsibility of the government.

This is the same model as the financial industry: all the profits to the private sector, all the risk and liability thrown onto the public sector. With the very industry that profited so handsomely fighting tooth and nail to keep from paying any taxes.

And were they to act any differently, the shareholders would take their money away from them and invest it elsewhere. Because the investments were made in the first place, not to maintain health, but to profit from disease.

Why is this, in America...or more accurately, the United States (which, true to form, has usurped the name America from the continent, because, lacking any Real name, like its former counterpart, the USSR, has to call itself America, as if Mexico and Canada don't exist....if we are America, then Mexicans aren't illegal aliens, are they?, they are as American as you and me...in fact more so, as their ancestral blood is of this continent whereas yours is not), the bastion of Vampire Capitalism, Champion to the Rich and Privileged, news to anyone?

That's what's Capitalism's all about: Hobbesian, nasty, brutish, Jackboot-in-the-face, Lord of the Flies, might makes right, winner takes all and the rest be damned, survival of the fittest, kick the losers when they're down while laughing, Triumphalism. Don't you watch Fox News? Have you not listened to a word that Blonde mop-on-a-pole, Anne Colt-face says?

Which gets us back to moral hazard. That term, is, of course, basically the definition of Capitalism, where from cigarette companies to Automobile manufacturers, the aim of the Corporation is to sell its own customers products that are poisonous, dangerous, expensive and marketed deceptively to obscure the fact that all the above is true. The whole intent is to kill off its customers once they've procreated, destroying any chance of survival into old age when they're perceived as nothing but a drain on profits.

This is the model, adopted from the Military and Oil industries. The Macho Militancy on which the post-USSR world has been built: the so-called "Washington Consensus". It's Yahweh or the Highway. Without the Soviet Union to point to and say how horrible it is in comparison with our own wonderful selves, the whole pretense of cradle-to-grave socialism has been rent asunder, and capitalism's true colors made unabashedly apparent. The winners, who of course are the American Aristocracy, are allowed to, as in French pre- revolutionary days, no encouraged to, prey on their fellow citizens, who now have no rights, inalienable or otherwise, stripped to the status of denizens in their own country, their own government concerned more with factories in China, (there being no more here) and eviscerating any labor laws still extant here, and cynically giving them the finger while intoning "Let them eat ....", well, it ain't cake this time, unless it's yellow.

Because, if anything , the Privileged Class have attained a whole new level of snide viciousness, as embodied by that hellacios, supercilious, pussy-flashing skank, Paris Hilton.

Wednesday, July 30, 2008

What's wrong wtih this picture?

Sunday's NYT included an article on Home-4closures that was accompanied by a photo of a woman who was desperately trying to forestall her own.
She was pictured sitting at her credit-card purchased outdoor table with umbrella, puffing away on a cigarette, with a bottle of unfinished $4 Starbucks, a can of coke, and two other hi-sugared drinks. Even with the wolves are at the door, this woman would not even consider foregoing the pleasure of consuming these completely useless items that, despite the fact that they are poisonous and will only increase her already advanced obesity, she can ill afford. Instead she continues to guzzle sugar, which'll result in diabetes, the treatment of which, she'll expect the rest of us to pay for, as well as any form of cancer or other self-inflicted illess caused/exacerbated by her own blind desire for constant stimulation.

Rather than break the back of the on-going attitude Americans have of depending on the kindness of dangers, we continue to feed the Vampire Capitalism that sucks the lifeblood out of our communities and transfuses it into the already-bloated undead parasitic banking sector, and then stand aghast at the totally predictable results of our decisions.
So despite the fact that I find Gramm's statement that Americans are a bunch of whiners, outrageously callous, at the same time, why is he the only one making it? We've shredded all the social safety nets from our children's generation, even as we've molly-coddled them into thinking they're living in a European-style cradle-to-crave Welfare State. The inevitable head-on collission between these two starkly different realities is bound to leave many more whiners than diners.

Monday, July 28, 2008

Just one little Question

Hearing the Bush/Paulson duet sing over and over how "The US economy's fundamentally strong, diverse and resilient", how come no one's asking them, then why does the US government have to shore up the failing institutions at the very heart of that economy? If it were sound, diverse or resilient, the extraordinary, extralegal activities of the Fed chairman Benron Bernanke would not be allowed, nor would they be necessary.

Instead, because this administration, in collusion with the "independent" Fed reserve Chairman Alan Greedspin, took what oncewas a resilient economy and twisted it into a bubble-induced debt straitjacket to pay for an insane War while lowering taxes to keep the protests of those paying for it muted.

Why is Mike Shedlock the only person I read who has the cajones to say it: "Liars!" From day one that's all it's been with the Bushies, lies lies and lies, and any one that won't go along with the constant lies is summarily dismissed (Isn't that right Lawrence Lindsey?).

Friday, July 25, 2008

Acknowledgements

Although my backround in IT and the computer industry may be irrelevant, it would be remiss of me not to mention the principle writers who helped me form my views, or whose views I completely co-opted.

Adam Smith , Alexis De Tocqueville and Thomas Wolfe notwithstanding, most of these are ongoing influences: authors that I found on the web, since the world of TV “journalism”, and newspapers in general have completely abandoned the serious topics necessary to remain informed about the world. Some of these, my personal Rock Stars, I will list here, starting with the man who had the most influence in opening my eyes to the true nature and scale of the calamity the American public was being led into in order to enrich the upper class to such an extent that the ensuing Gotterdammerung was totally predictable.

That particular gentleman was Doug Noland, a scribe for David Tice’s Prudentbear.com. With charts of not only the growth of MBS, federal deficits, cad’s, and other debt instruments, he projected their unsustainable growth paths way back in 2003 or so when I started reading him to the present time…charts that could only send chills down the spine of anyone interested in where the policies of the feckless Bushies and their chicaneries were taking us.
And to get to his post, it took about a year of following my nose, disregarding the harlots who echoed the same garbage spouted during the dot.com boom, such as Jim Cramer, that people, inexplicably, still hearkened to…how could this be? How could an entire country, in fact the entire globe, still heed the blandishments of the very coterie of little foxes that brought us the dotcom debacle and the Enron “scandal”? (Of course, the fact that a “news” organization could actually call itself Fox (in the henhouse) News and actually be taken seriously, should have been a clue right there).

So to get to Doug Noland, I first had to go through that stalwart band of dedicated gold aficionados such as James Turk, referred to as “goldbugs”, who rue the day we went off the gold standard and believe the barbaric relic to still have relevance as a basis for monetary value. Their theories took me to Anatole Fekete and his Gold University, Adrian Ash from Goldbullion.com, and Richard Daughty of Mogambo Guru fame from Safehaven .com and ATOL, the best online newspaper (Asia Times online) for opinions outside the American purview, including not only Henry C.K. Liu and the above-mentioned Doug Noland, but Gareth Porter, Julian Delasantellis, Jack Crooks (since left), Chan Akya, Tom’s dispatch , Micheal Klare, even Spengler, a nasty piece of work, and Martin Hutchinson, for a sprinkling of the dark side.

Mike Ruppert’s “fromthewilderness (is Stan Goff still out there?) also had excellent coverage of events the mainstream press didn’t cover, and Stephen Roach of Morgan Stanley looked at the world from a doubting Thomas perspective until going over to the rose-colored glasses crowd just as his more nuanced view of the state of the world was about to be vindicated.

Which brings me to my current faves which includes Naked Capitalism, Nouriel Roubini, IRA, and Mish's (Mike Shedlock) Global Economic Analysis. I first read Mish in a Newsletter called Whiskey and Gunpowder, and his prognostications were so dire, yet undeniably based in fact, as opposed to the fantasy-delusion on the mainstream press, that, together with Peter Schiff's more famous, as they are on video tape, predictions, were like Emma Thompson's in Harry Potter, bone-chillingly accurate.

I know this is all choppy, but I don’t want to forget anyone, and yet know I must, as I‘ve gone through numerous computers on whose drives are still articles and stories I deemed cogent enough for saving, yet that now sit in magnetic limbo, saved but inaccessible , but I plow on and that’s one of the reasons for this, at least now as the computers bite the dust, perhaps the data and the chronicling of the Demise of American Capitalism, indeed of the very USSA, in my humble opinion, can be perused.

To paraphrase Pogo, We've not seen the enemy, because it is US. The longer we retain our self-inflicted, triumphalism-inspired, PNAC-documented, blindness, the more apparent it will become that the USSA will suffer the same consequences of its fatal hubris that the USSR did, and dissolution becomes the only solution.