The Pentagong Show

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

Tuesday, August 17, 2010

Capitalism = Constant War.

The Great Recession is that different from a mild depression?

Double-dip recession.... how is that possible when we've not come out of the first dip?

Oil prices: the more the price of oil increases, the faster anthropogenic climate change accelerates. Burning oil, even hi-sulfur oil from Citgo, is, in the Northeast, being replaced by burning wood in fireplaces as the price of oil has doubled, with barely a comment, in the past year. The ensuing particulate pollution from an ancient fuel source being used by a modern-sized population is having catastrophic consequences as the soot covers snow in the Arctic drastically reducing its albedo factor. Meanwhile, coal, the next dirtiest fuel, is burned in prodigious quantities in both China and the US to generate electricity.

Peak Oil Production: if peak oil production is not a factor in the above problems, why is it that the largest burners of fossil fuels don't burn oil in preference to coal? And not by happenstance, but by policy preference, even as they argue about Cap and Trade?

Unemployment = 9.5%, no it = 22.5%, no it = 9.5% ... which do you believe? Which do you feel is real?

Banks made their outrageous profits only by deceiving their clients and customers and issuing "products" they then sold to suckers. This is called hucksterism, in a folksy milieu, fraud in a legal framework. This is all our banks have left to make profits from. This is all the government has left to collect taxes from. Do you feel recovered yet?

Recovered is also a term used in upholstery. In the present context it is that meaning that is more descriptive of our current economic recovery. Throw a TARP over it and hope that that recovery will fool people into thinking that something has essentially changed when nothing has, even though the economy is in dire need, by its own definitions that were promulgated and forced upon lesser, developing economies for decades, of restructuring, ie a SAP (Structural Adjustment Program) for the saps who believed in ever escalating property values, even as wages atrophied and the industries under-girding the economy that was supposedly supporting those valuations, was dismantled and systematically moved overseas in a matter of decades.

An economy recovered via a TARP being thrown over it has no hope of recovering in the medical sense of systemic health being restored.

I remember that when I was a wee child our family had a sand bank in the back yard. This is the concept most people have, left over from the days of the gold standard, of a bank: a Place of stored value, full and protected. The more people realize that it is neither full nor protected, and the more they realize that there is, in fact, risk involved in putting their dollars in said depositories, risk for which they are completely uncompensated, the less they will be inclined to keep said dollars in the hands of banksters determined to take the value of their money and transfer it to that of their shareholders. Something they are, as are all Corporations operating under the auspices of the United States of America, required to do.

Remember, in ruling for the Ratings agencies of Moody's and Standard Poor's and Filth's, oh, I mean Filch, no, Fitch's, whatever - the third one - the Supreme Court called their rating service protected by the 1'st Amendment's free-speech clause (even though you had to pay to hear it), which means the banks can sell you any product, the insurance companies write any policy (see MBIA's claim that the insurance against Vallejo's default wasn't really insurance, or AIG's Insurance for CDO's with no capital allocated to cover losses, again entire business models completely based on Fraud, backed by the full faith and credit of the US Treasury ... YOU), so if they rated a security AAA, and you bought it, and it turned out to be junk, toxic waste, valueless, the ratings agency can not be held libel for you believing that they provided the service you paid them to.

If that's true of a mere ratings agency, a Bank, whose losses are covered by the FDIC, their gambling debts back-stopped by the Central Bank, which has access to the full vaults of the Treasury and the pockets of the Taxpayer, whereas their bondholders and investors are made whole by duplicity and chicanery, is held even less accountable. Literally, as the Accounting firms that audit them merely change the rules under which Bank holdings of collateral are valued. All under the auspices of those very same banks.

This will be money kept quite literally "on the sidelines", as it is pulled out of the banking sector completely and stored in a safer place under the mattress, a rock in the backyard, in knickknacks bought specifically because they have a nook in which cash can be sequestered where it is deemed safer.

It may not in fact BE safer in any of those places. However, the one thing the banking industry has succeeded in doing is convincing the public of banking's untrustworthy nature. The one thing the free market now understands is that the banksters, by dint of the very free-market dictum they promulgate, are, the public is finally coming around to understand, under no rubric to return money to its depositors. That is unless there happens to be some remaining when they're through with it. Once deposited in their virtual vault, it ceases to be yours, but is, from thereafter, theirs.

The cynical trickle of trickle-down economics, is beginning, but not in the way it was envisioned. It is already showing signs of turning into a torrent as billions are being pulled out of, not only mutual funds, but simultaneously from money market funds and savings accounts. It is not just paying down debt and deleveraging that we are witnessing. There is a loss of trust in our financial institutions more profound than anything I've ever witnessed, not by the underclass, who never really trusted them to begin with, but by the complacent, somnambulant middle classes who have been roughly shaken from their American dream of security to the stark reality that they are to be skewered on the altar of Free Market Economics. They are slowly waking up to the fact that they are the Isaacs to the Free Market's Abraham. Trusting children held in Bernanke's hand that has stayed their execution for the moment, but which is still poised, glistening blade in hand, ready to deliver the deathblow, as the same forces that brought Free Markets reforms to Russia, decimating that population and trimming it by the millions, delivers the same fate to the middle class of the good ole USA.

That is why Mr. Bernanke, the head of a Corporation, a private Corporation, can by mere fiat, declare the value of your money worthless, the risk of your losing it negligible and pay you zero, da nada, zilch, while paying his wholly-owned subsidiaries, the Federal Reserve Banks (again, private institutions beholden to no one but their shareholders), a premium by giving them dollars for nothing which they can then use to buy Treasuries, effectively taking money from the public to shovel it by the boatload into the vaults of banks to pay for the bad loans they reaped enormous bonuses to make, but for which they'll never be paid back.

Those loans, even after the dog-and-pony-show of the Obama stress tests, are worth far less than what the institutions claim they are worth. To such an extent that the whole process is called extend and pretend. Again, we come up to that word that encompasses so much of the banksters' "recovery" plan - Fraud. That is all extend and pretend is: a catchy phrase for: Bank Fraud. On a global, international scale. And not just fraud in the parlor sense of the word, FRAUD in all caps, not only running throughout the system but, more accurately, running the system. The fumes of fraud, by the pronouncement of bankrupt Central Bankers and insolvent Governments worldwide, including the IMF and The World Bank, is all that 's keeping the globalized financial system from undergoing a shuddering cataclysmic collapse.

"Consumer protection", whether presided over by Ms Warren, or Ralph Nader, is something forced down the throats of Corporations, not because they're big bad she-devils, but because protecting profits by exploiting people is what their charter demands of them. If a product, such as tobacco, kills your customers, kills those in the vicinity of your customers, including their children, degrades the soil in which it's grown, costs the State billions upon billions in healthcare costs, and costs other industries, oftentimes right across the street, an additional billions of dollars in lost productivity and health-related costs, that, legally, is not your problem. Your shareholders are richer. And that's a plus, because in the taxes collected, the government is richer (or used to be), so the only entity capable of stopping your killing spree is profiting from it along with you.

Shumpeter trumpeted that the soul of Capitalism is Creative destruction. "Creative" is an adjective, a modifier. The essential sense is therefore that Capitalism = destruction. First of nature, then of societies, as in its latter phases it cannibalizes what has been previously wrought.

But, as any scientist knows, each conversion loses energy to heat in the process. Capitalism depends on a store of wealth that it can cannibalize. Upon the "discovery" of the Americas, it had an entire two continents to feed upon and suck the value out of. The product, in terms of energy, most amenable to extraction and utilization to energize the business environment was, of course, gold, and then silver. Once that was sucked dry, the next target was, naturally, soil, which went hand-in-hand with slavery, and then it was coal and finally was - is - oil.

The rate of extraction of oil was so great, however, that, as predicted by M. King Hubbert, it reached its peak barely 100 years after it's discovery, necessitating a revamping of the entire economy to accommodate such a seismic shift. That was the entire nature of the so-called Reagan Revolution. To rejigger the economy to enable it to extract the value built into it over a generation, that had been meant to serve a larger portion of the economic pie to a larger swath of the population, and instead slowly suck that investment away from the public whose toil paid for it into the hands of a few oligarchs, the upper class, who, the argument went, since they were the Owners, could be better entrusted with it.

Part and parcel of this plan was ultimate destruction not only of American unions, but of the Soviet Union. The access to its enormous oil reserves, with the arrival of Peak Oil in the US, could no longer be foregone. Detente was for the sissified Left. In a race against time during which the huge sucking sound was not just the jobs being moved to third world economies that Ross Perot warned about, but the sucking of the insatiable thirst for oil in the US that must be satisfied. And the place to get those reserves was in the oil-rich Baku of the Caspian Sea and Central Asia. And the behemoth that stood astride that particular piece of geography was the USSR.

That Russia is now the Number One oil producer in the world, replacing the US, which was the Number One oil producer in the world when Nixon started detente with the USSR, is not an accident.

Obama, like his predecessor, insists that we must wage constant War to maintain the peace. What he's really saying, is that since unrestrained Capitalism = Destruction, and the most efficient engine of destruction = War. Capitalism = Constant War.

To further prove this thesis, merely go back to the definition of entropy, the basic law under which the entire universe must bend. It states that all matter and energy tend from a state of higher concentration to one of chaos. So an economic system that dictates that all people should tend to their own selfish needs and ignore others, pushes that tendency to chaos towards its ultimate solution: the chaos of War.

That is what the reality of America translates into. The American Dream, in its real atavistic dreams and puerile fantasies embraces and ultimately worships the nihilistic testosterone-drenched trappings of an overly-militarized Capitalist War Machine. It's baked into the yellow cake.

That is the final unmentionable. Like the economic collapse before it, it will supposedly arrive unbidden to our shores. Who could have foreseen that turning every country inward toward jingoistic exultation of their own Superiority and contempt for International Law could result in Nation against Nation? But when citizen is turned against citizen the only thing that unites them is a common hatred of "the other". And united we will stand. Because the haves and the have-mores know all they have to do is present a common enemy and the have and know nothings will rally to their side and gladly give up everything: their life, their liberty, even their progeny, just so long as they can know they're depriving some alien of it.

Tuesday, August 10, 2010

The Spoils.

SEC Secretary denying regulatory capture.

A USA TODAY analysis finds that, while private sector workers' pay and benefits have stagnated, federal employees' average compensation has grown to more than double what those private sector workers earn. What the data show:

Benefits. Federal workers received average benefits worth $41,791 in 2009. Most of this was the government's contribution to pensions. Employees contributed an additional $10,569.

Pay. The average federal salary has grown 33% faster than inflation since 2000. USA TODAY reported in March that the federal government pays an average of 20% more than private firms for comparable occupations. The analysis did not consider differences in experience and education.

•Total compensation. Federal compensation has grown 36.9% since 2000 after adjusting for inflation, compared with 8.8% for private workers.

Colleen Kelley argues that, "The data are not useful for a direct public-private pay comparison." She's the self-serving  president of the National Treasury Employees Union (NTEU), and believes that, "the compensation gap reflects the increasingly high level of skill and education required for most federal jobs".

Such statements would have been impossible in the days when private-sector Unions really united workers, at a time when government unions were not even allowed. But having colluded in the destruction of unionization in the private sector, the NTEU is now completely complicit in the rapidity of transformation, the frenzy for enjoyment, and the blindness to growing government expense that is crushing the productive part of the economy, to rock any boats in Washington. Just like Municipalities that, despite finding themselves face to face with crushing deficits, will not hear of prudence, of economy, of a calm and respectable existence, the Federal Government prefers to keep up their own useless luxury and continue to hide the real penury of new-fangled financial innovations whence can be derived colossal fortunes, coming into being each morning only to be swallowed up at night.

Passing from adventure to adventure, the Capitol now possesses only the gilded facade of dried up capital: promissory notes now just a broken promise and insincere "sorry". In this period of meagerness and madness, not even Enron, Donald Trump, Bear Stearns, or Lehman's risked their future with greater rashness, nor marched straighter towards every folly and every trick of finance than does the Capitol now, yet Colleen Kelley can say with a straight face that "the compensation gap reflects the increasingly high level of skill and education required for most federal jobs".

The fortunes being made that are the offspring of those federal jobs, in this "free-for-all mark-it-up" economy, seem to be at their zenith. They blaze in the midst of ever-swelling homeless populations like a colossal bonfire. These appetites, let loose by the Bush tax-cuts for the rich, can be satisfied only with the shamelessness of triumph amid the sounds of crumbling cities, as Detroit disintegrates and Facebook's fortunes spring up in six months: real estate crumbles while the ominous thunderCloud of cyberspace rumbles. Overnight Washington has become a sheer orgy of gold and trophy women. Vice, coming from on high, flows through the gutters, spreads out over ornamental waters, shoots up in the fountains of the public gardens to fall down again upon the roofs in a fine, penetrating mist.

And at night, when you commute to your suburb, it seems as though the Potomac drew along with it, through the sleeping city, the refuse of the town: crumbs fallen from the tables, food enough to feed a city sloughed off into dumpsters, bows of lace decorate crotches, false hair forgotten in cabs along with dollars that have slipped out of brassieres and jockstraps. All that brutality of desire and the immediate satisfaction of an instinct flung into the street bruised and sullied. Then, amid the feverish sleep of the apparently unskilled, uneducated workers of the private sector, and even better than during its breathless quest in broad daylight, you can feel the unsettling of the brain, the golden and voluptuous nightmare of a city madly enamored of cash and flesh.

There, the Treasury, embedded in its center, yawns like a Neo-Classical alcove, large enough to accommodate the amorous exploits with trillions of dollars. Here, in this hothouse atmosphere rife with corruption and dank decay is fortune bloomed and insolently displayed. It spends money madly on pure folly; handfuls of bills flung out the window, the Federal Reserve emptied each evening to its last nickel, filling again every night, no one knows how, and never supplying such large sums as when Hank Paulson pretended to have lost the keys.

Only with such a backdrop can the conditions exist for a burgeoning government that for almost two generations has been steered by avatars of small laissez-faire government, claiming that it needs to get out of the way to let the private sector do its work, yet now claim that that supposedly feckless, know-nothing institution that is increasingly sloughing off its most sacred trusts and important responsibilities onto the private sector, is somehow deserving of its dazzling salaries because that same private sector, the one now responsible for carrying out the governments'  responsibilities, is not only poorly educated, but is sorely lacking in skills.

If consistency were indeed the hobgoblins of little minds, Colleen Kelley must need a crane to carry her hypertrophied encephalic grey matter.