Mass Movement

Mass movements mostly come out of nowhere or at least left field. What preceded the sixties were the fifties which as we all are reminded was the era of the gray flannel suit and political apathy except for the McCarthy witch hunts. But student activism started not much after 1960 on college campuses and then coalesced with the civil rights movement that stayed joined at the hip throughout Vietnam protests. And there was a bonafide mass movement that many people left and center, black and white, could easily join. This movement broke the back of the anti-communist witch hunts of the previous decade.  The movement had organic roots and the participants all had vested interests of one kind or another. Sadly the unions opposed and argued against this movement as they didn't see there were any advantages to being part of the movement and as time went on and Vietnam ended and civil rights moved forward though at a snail's pace. Fragmentation occurred and we are where we are today. ( far too complex for me to go into here). But the seeds have been planted and another movement will eventually emerge. It's not apathy as big mouth Nugent says. It's history and history comes at us in waves and some are smaller and some tsunamis.  And this generation will give rise to another and so on and eventually that tsunami will happen and most of us won't see it coming.    

Article on psychiatry today and what's wrong with it

http://www.nybooks.com/articles/archives/2011/jul/14/illusions-of-psychiatry/?pagination=false

The Glass-Steagall act of 1933

The Banking Miracle

By JOE NOCERA

The president of the American Bankers Association was railing against excessive regulation in a speech at the Waldorf Astoria. The banking reform bill, he complained, “would destroy a substantial part of our bond-distributing machinery.” He added, “Can anyone expect that a step of this kind will improve the quality of our long-term investments?”
Modern echoes, for sure. But I read about the speech in a Jan. 27, 1933, article culled from the wonderful archives of The American Banker, the bankers’ bible now celebrating its 175th birthday. The speaker, one Francis H. Sisson, was complaining about an early version of the Glass-Steagall Act, the most famous of all Depression-era bank laws, and the one that, in retrospect, probably did the most good. Less than six months after Sisson’s speech, President Franklin Roosevelt signed it into law.
From my vantage point here in 2011, Glass-Steagall seems miraculous. It was amazingly radical, not just for its time, but for any time; it didn’t so much reform banking as upend it. Most notably, it ordered banks to get out of the securities business. As Sisson complained: “The effect of the proposed banking reform is to renounce investment banking rather than regulate it.” Because investment banking was then the chief activity of the big banks, this was a very big deal.
Glass-Steagall also created the Federal Deposit Insurance Corporation, which insured customer deposits for the first time, and outlawed branch banking by national banks, among other things. It is impossible to imagine anything like it passing today; although the modern reform bill, Dodd-Frank, surely does some good, it’s not even comparable.
I’d long wondered how Senator Carter Glass, the powerful Virginia Democrat, and his House counterpart, the Alabama congressman Henry Steagall, managed to get it passed. What were the politics like? What did they fight over? Why didn’t people like Sisson have better luck pushing back against it, the way bank lobbyists do today? So I asked the editors at American Banker if they would send me some articles from the era that would shed some light on the question. Happily, they obliged.
The first thing I realized is that all the horse-trading over the bill’s provision was done by Democrats. The Republicans, having been badly defeated in the 1932 election, had no ability to block it or even amend it. For instance, Republicans tended to view the creation of deposit insurance as “socialism.” (Sound familiar?) But it didn’t matter: Steagall cared deeply about deposit insurance. Many community bankers — as strong a force back then as today — also supported the idea because they believed it would renew customers’ faith in the banks, and bring back deposits. (This turned out to be true.) Glass, though skeptical, went along so he could get things he cared about, mainly a stronger Federal Reserve with more power over the banks.
The second thing I realized was that, the Sisson speech notwithstanding, there was surprisingly little controversy over what we now think of as the law’s primary achievement: splitting commercial and investment banking. The fights were all over issues that seem inconsequential by today’s lights. It’s as if the notion of breaking the banking business into two was always a foregone conclusion.
And, for the most part, it was. Partly, this was because, unlike today, bank failures in the 1930s were often ruinous to customers. So reform was more pressing. But it was also because, for the entire time the legislation was under consideration, the Pecora hearings were going on — in which Ferdinand Pecora, the flamboyant chief counsel of the Senate Banking Committee, dragged one well-known banker after another before the committee and grilled them mercilessly, exposing how they had abused their investment banking roles, sometimes to the point of criminality. The Pecora hearings serve as a steady drumbeat in the American Banker articles.
Those hearings infuriated the country, and made it unthinkable that banks would continue to be allowed to sell securities. In fact, some banks, seeing which way the wind was blowing, applauded: “The spirit of speculation should be eradicated from the management of commercial banks,” declared Winthrop Aldrich, the chairman of Chase National Bank, according to Michael Perino, Pecora’s biographer. Ironically, Glass loathed the Pecora hearings, deriding them as “a circus, and the only thing lacking now are peanuts and colored lemonade.” But the hearings made his bill — which had been filibustered by Huey Long just 18 months earlier — not just possible but inevitable.
How inevitable? Charles Geisst, a finance professor at Manhattan College and an expert on the law, says that the House and Senate didn’t even bother with a roll-call vote for final passage. This seminal piece of legislation, which helped keep the banks out of trouble for the next 70-plus years, flew through on a voice vote. On Friday, June 16, 1933, when Roosevelt signed it into law, The American Banker gave the news all of three paragraphs. There was nothing left to say.

Obama violates War Powers Act?

2 Top Lawyers Lost to Obama in Libya War Policy Debate

By CHARLIE SAVAGE

WASHINGTON — President Obama rejected the views of top lawyers at the Pentagon and the Justice Department when he decided that he had the legal authority to continue American military participation in the air war in Libya without Congressional authorization, according to officials familiar with internal administration deliberations.
Jeh C. Johnson, the Pentagon general counsel, and Caroline D. Krass, the acting head of the Justice Department’s Office of Legal Counsel, had told the White House that they believed that the United States military’s activities in the NATO-led air war amounted to “hostilities.” Under the War Powers Resolution, that would have required Mr. Obama to terminate or scale back the mission after May 20.
But Mr. Obama decided instead to adopt the legal analysis of several other senior members of his legal team — including the White House counsel, Robert Bauer, and the State Department legal adviser, Harold H. Koh — who argued that the United States military’s activities fell short of “hostilities.” Under that view, Mr. Obama needed no permission from Congress to continue the mission unchanged.
Presidents have the legal authority to override the legal conclusions of the Office of Legal Counsel and to act in a manner that is contrary to its advice, but it is extraordinarily rare for that to happen. Under normal circumstances, the office’s interpretation of the law is legally binding on the executive branch.
A White House spokesman, Eric Schultz, said there had been “a full airing of views within the administration and a robust process” that led Mr. Obama to his view that the Libya campaign was not covered by a provision of the War Powers Resolution that requires presidents to halt unauthorized hostilities after 60 days.
“It should come as no surprise that there would be some disagreements, even within an administration, regarding the application of a statute that is nearly 40 years old to a unique and evolving conflict,” Mr. Schultz said. “Those disagreements are ordinary and healthy.”
Still, the disclosure that key figures on the administration’s legal team disagreed with Mr. Obama’s legal view could fuel restiveness in Congress, where lawmakers from both parties this week strongly criticized the White House’s contention that the president could continue the Libya campaign without their authorization because the campaign was not “hostilities.”
The White House unveiled its interpretation of the War Powers Resolution in a package about Libya it sent to Congress late Wednesday. On Thursday, the House speaker, John A. Boehner, Republican of Ohio, demanded to know whether the Office of Legal Counsel had agreed.
“The administration gave its opinion on the War Powers Resolution, but it didn’t answer the questions in my letter as to whether the Office of Legal Counsel agrees with them,” he said. “The White House says there are no hostilities taking place. Yet we’ve got drone attacks under way. We’re spending $10 million a day. We’re part of an effort to drop bombs on Qaddafi’s compounds. It just doesn’t pass the straight-face test, in my view, that we’re not in the midst of hostilities.”
A sticking point for some skeptics was whether any mission that included firing missiles from drone aircraft could be portrayed as not amounting to hostilities.
As the May 20 deadline approached, Mr. Johnson advocated stopping the drone strikes as a way to bolster the view that the remaining activities in support of NATO allies were not subject to the deadline, officials said. But Mr. Obama ultimately decided that there was no legal requirement to change anything about the military mission.
The administration followed an unusual process in developing its position. Traditionally, the Office of Legal Counsel solicits views from different agencies and then decides what the best interpretation of the law is. The attorney general or the president can overrule its views, but rarely do.
In this case, however, Ms. Krass was asked to submit the Office of Legal Counsel’s thoughts in a less formal way to the White House, along with the views of lawyers at other agencies. After several meetings and phone calls, the rival legal analyses were submitted to Mr. Obama, who is a constitutional lawyer, and he made the decision.
A senior administration official, who spoke on the condition of anonymity to talk about the internal deliberations, said the process was “legitimate” because “everyone knew at the end of the day this was a decision the president had to make” and the competing views were given a full airing before Mr. Obama.
The theory Mr. Obama embraced holds that American forces have not been in “hostilities” as envisioned by the War Powers Resolution at least since early April, when NATO took over the responsibility for the no-fly zone and the United States shifted to a supporting role providing refueling assistance and surveillance — although remotely piloted American drones are still periodically firing missiles.
The administration has also emphasized that there are no troops on the ground, that Libyan forces are unable to fire at them meaningfully and that the military mission is constrained from escalating by a United Nations Security Council resolution.
That position has attracted criticism. Jack L. Goldsmith, who led the Office of Legal Counsel during the Bush administration, has written that the administration’s interpretation is “aggressive” and unpersuasive, although he also acknowledged that there was no clear answer and little chance of a definitive court ruling, so the reaction of Congress would resolve it.
Walter Dellinger, who led the Office of Legal Counsel during the Clinton administration, said that while “this is not an easy question,” Mr. Obama’s position was “both defensible and consistent with the position of previous administrations.” Still, he criticized the administration’s decision-making process.
“Decisions about the lawfulness of major presidential actions should be made by the Department of Justice, and within the department by the Office of Legal Counsel, after consultation with affected agencies,” he said. “The president always has the power of final decision.”
Other high-level Justice lawyers were also involved in the deliberations, and Attorney General Eric H. Holder Jr. supported Ms. Krass’s view, officials said.
Matthew Miller, a Justice Department spokesman, said, “Our views were heard, as were other views, and the president then made the decision as was appropriate for him to do.”

"Para Bellum" | The Agonist

"Para Bellum" | The Agonist

"Para Bellum"

~by Phil Sloan

Para bellum is a noun coined by a German arms maker referring to bullets. However, it is also derived from a Latin adage “Si Vis Pacem, Para Bellum” if you wish for peace, prepare for war. It is this latter context that I write this post. Although I have felt for a while that the winds of war were rising, recent events have sharpened my focus. I don’t wish to say that war is imminent but the likely probabilities have increased significantly. Many of you may say that we are already fighting two wars. That is true, but a broader war encompassing many more nations is now possible.

There are many people that have long followed the theories espoused in the “The Fourth Turning” by Howe and Strauss, or the Long Wave Cycles espoused by Nikolai Kondratieff. I would strongly recommend that you get The Fourth Turning and also read up on Kondratieff. If you have read these concepts, you know that we have entered the Fourth Turning and the winter seasonal cycle under Kondratieff. These are called periods of crisis. During these periods the moods of nations change. Pessimism rises broadly, and the chances for social unrest, revolutions, and wars become reality. At a recent financial conference in New York, the noted market strategist Marc Faber said”You have to prepare for War” He recommends loading the boat with commodities.

Let’s hop around the globe. We all know what’s happening in the Middle East. However, there are undertones that you may have missed. In Bahrain for example, the monarchy is Sunni Moslem and the general population is Shia. Besides the long term hatred of each other this ultimate battle may determine control of oil supplies to the world. Our 5th Fleet is headquartered in Bahrain, therefore making it strategically important to the US. Bahrain is also next door to Saudi Arabia (Sunni) and sixty miles from the largest oil fields in the world. Iran (the world’s largest Shia country and arch rival of the Saudi’s) recently has sent a flotilla to Bahrain, which hasn’t arrived yet. Libya was in advance negotiations with Russia for a new naval base in their country, but that’s now dead. A Russian base in the Middle East would be a problem for us. Russia was also in discussions in Yemen for a naval base. Egypt is still in upheaval. What happens now?

In Europe where we are learning that PIIGS can’t fly, the Greek situation is getting worse by the day. Will the Greek people be willing to accept the austerity necessary? Will the Greek government raise enough money through privatizations? To both I think not. Greece will default, in my opinion. I just can’t predict when. Ireland and Portugal are in the same boat. Not if but when. Spain recently voted to throw their regional bums out. However until the next general election the current prime minister vows to continue his austerity plans. With 21% unemployment will the Spaniards go gently? I think not. What happens to French and German banks that hold boatloads of the debts of these countries? Europe has erupted into war for less in the past.

In South Asia the borders between India and Pakistan are in a constant state of friction. With Bin Laden gone will we go after more terrorists inside Pakistan to the chagrin of their leaders? Recently China gave 50 Military Jets to Pakistan, probably to get port access on the Arabian Sea. How will India react? How will this affect our withdrawals from Afghanistan? By the way, our supply routes to Afghanistan are through Pakistan. The Economist magazine in a recent issue stated that the India/ Pakistan border is the most dangerous in the world. Will Pakistan hold together as a single country or will it break apart into subsets?

In the US the political divide is growing and the rhetoric is getting dangerous in my view. When there have been protests they have been peaceful so far! With the world’s economies slowing down again according to several economists, and the threats outlined above, the outlook for equities is murky at best. In my view this means you should take at least some chips off the table. Remember “Para Bellum”, if you wish for peace, prepare for war.

Don’t forget it’s your Money!

Out of Afghanistan

Iraq, Afghanistan now Libya and Yemen. These are wars that are different than Vietnam when you look at the details. But on the face of it they all are alike: the need for empire to exert its will and make safe the continued business of the empire. Since Vietnam how they go about that though has changed in a changing world. So let's think of a question: Is the U.S. a constitutional Republic where the citizens make the decisions or is it an empire with a historical document known as the constitution but run by international corporations?  On the face of it we're all for liberty and justice for all. So the powers that be tell us.   The details of course are always something else.  The times has come for no more blood and treasure in this effort.   

The Backfire Effect

June 10, 2011

tags: Angela Fagerlin, Backfire Effect, Biased Assimilation, Birthers, Brendan Nyhan, Conservative, Conspiracy Theories, Corrections, Dan Gilbert, David Lopez, Demand Media, Geoffrey Munro, Jason Reifler, Kent State, Liberal, Michael Hulsizer, Peter Ditto, Ronald Reagan, Spanking, Stuart Taylor, Welfare Queens

by David McRaney

The Misconception: When your beliefs are challenged with facts, you alter your opinions and incorporate the new information into your thinking.
The Truth: When your deepest convictions are challenged by contradictory evidence, your beliefs get stronger.

http://youarenotsosmart.com/2011/06/10/the-backfire-effect/

On Weiner a week later

I don't think he should resign. It's too late for that now. Had Weiner early on admitted to his stupidity and had fallen on his sword at the time it might have meant something. Instead this continuing moral baiting now reveals a major problem in the Democratic party and why the Republicans always make mince meat out of them. The leadership should be fighting for him and rallying around him just like they eventually did for Clinton. ANd just like the Republicans do for any and every one of their corrupt and venal members. Shame on Democrats. Weiner's career Is kaput but the behavior of Democrats will cause further erosion of support, not to mention the specter of hypocrisy that will haunt them.

The New American Dream: Full Employment redefined

There is no such thing as full employment. Even in the best of times with Capitalism there is a need for a small percentage to be out of work so that they can fill jobs if the need arises. Governments would rather pay for the unemployed than to have a crisis on their hands if there are no bodies available for work. That crisis could provoke inflation if goods are not made and services go unattended. Wages will be forced to go up as unionized labor will demand more because with a shortage of labor they will be able to. And when no higher wages are  forthcoming, strikes ensue, causing worsening headaches for the Capitalist class.

Inflation is the big bugaboo for Capitalism. Rising prices and rising interest rates are considered much worse than a slow down or a recession.  Of course inflation hurts Capitalists more, but it also does damage on the populace and as the populace can no longer afford to pay certain prices, the reverse starts to happen, recession starts to rear it's head and the Capitalists have to hunker down and cut employment. 

Recession on the other hand really only damages the working and the middle classes. The Capitalists will still take their profits, will cut back some but they'll always have money to get them through. But even the working classes who are used to this ebb and flow of work and money can usually bear the brunt. When you don't have much, you don't really have much to lose.  Government will step in to find ways to alleviate the pain for the Capitalists: tax cuts & bail-outs where necessary. Governments can also start a war which in the modern era is a driving engine for economic recovery. The middle class though ends up paying for the whole shebang. They have something to lose and they will do whatever it takes to hang on to what they've got.

So in this last crisis where the banks, wall street, insurance companies and other investing type of capitalists created, with the aid of government, a situation where they can provide expensive homes to anyone who wanted them with little or no capital or collateral. They knew that by bundling those mortgages, the majority of which were toxic, along with some good investments  (sort of like the man with a wad of $1.00 bills and a $20. bill on either side to hide the $1.00 bills) they could sell those toxic assets and then bet on them failing later. In that sense then they made money on both ends. (if that isn't inside information, than what is?)  But even more devious, some of the banks only made money on the administrative fees taken in producing the mortgages, selling the mortgages, shorting the mortgages and then cleaning up later when the short sales came.

Now the question is why would government aid in this situation? And they did from encouraging home sales through political agitation to lax regulations and a belief that ordinary people weren't smart enough to understand anything and that the Wall Street brains would do what was best for the country. That is make money and by doing so create an economy that would be so strong that no other nation couldn't stand up to it.   

But the fact is the accepted wisdom and the political agitation indicated that government had to be made small and without teeth so that Capitalism could operate unfettered as in the days of The Gilded Age.  But government didn't grow small. It grew bigger so that it could pay the Capitalists their tax breaks, so that it could pay for the deemed necessary defense projects, so that it could give to Wall Street everything it needed to assure hegemony in the wider economic world.  But even government was duped.  Because the Capitalists didn't show their gratitude by creating jobs in the U.S. It showed their gratitude by destroying good paying jobs here in the U.S. and shifting those jobs overseas where they got even more tax breaks but increased the amount of debt that was piling up on the federal government's books. And who would be forced to pay that debt? The very people who paid for the original tax breaks and defense projects and allowed the moving of jobs. All that money had to come from somewhere and so it came from the coffers filled buy the middle classes and the working classes. Thereby making them pay twice.  

Discovering their problem the federal government shifted the cost away from federal coffers and then passed them on to state and local governments by eliminating any and all federal subsidies. Those small governments couldn't possible go to war against the Feds so they were forced to raise taxes in the form of fees and fines, thereby causing the middle and working classes to pay a third time. 

But this does not fully answer the question why would government participate in this. Half the time they may just be unwitting participants. For one the electorate is not fully engaged. They are distracted by any number of distractions from serious issues like 9/11 to the endless sex scandals and 24/7 entertainment. another possibility is that government hired second and third tier people while Wall Street hired the cream of the crop. and any time a government official left government he'd end up on Wall Street and among the Capitalists providing the necessary secrets for circumventing government. 

But the bigger questions for me which I don't know if it can be reasonably answered is how has the crisis which has been in development since the seventies helped make the U.S. a better place?  How have these events created an economic engine that would insure all citizens prosperity?  Does it help Capitalism to have as many unemployed as we do now? Or is it that Capitalism is trying to find out how much unemployment the U.S. can live with and still get by and not have a revolt?  Full employment traditionally is anywhere from 2 - 4% unemployed. Currently our official rate is above 9% and unofficially it could be as high as 15 - 16%.  Will new rules be written that says Officially 9% unemployment is full employment?