13, 2014
Crisis: Capitalism, Silicon Valley, Obama, Government, Torture
   "They who can give up essential 
   liberty to obtain a little temporary
   safety, deserve neither liberty
   nor safety."
   -- Benjamin Franklin [1]
   "All governments lie and nothing
   they say should be believed.
   -- I.F. Stone.
   "Power tends to corrupt, and   
   absolute power corrupts
   absolutely. Great men are        
   almost always bad men."
   -- Lord Acton

Prev- crisis -Next

1. Capitalism simply isn't working and here are the reasons

2. Silicon Valley could force NSA reform, tomorrow. What's
     taking so long?

3. Retiring Obama Administration Prosecutor Says the SEC
     Is Corrupt (...)

4. The Government Listens To Lobbyists And The Wealthy,
     Not You And Me

5. If Waterboarding Isn't Torture, Cheney Should Try It

About ME/CFS


This is the Nederlog of April 13. It is another crisis issue.

There are again 5 articles, on a Sunday. This
starts with an article about "Capital in the Twenty-First Century", also billed as "Capital". There is more on the failures of Silicon Valley, of Obama and of the American government, and it ends today with a request made to Dick Cheney.

1. Capitalism simply isn't working and here are the reasons why

The first article today is by Will Hutton on The Observer (the world's oldest Sunday newspaper since 1791, and a sister paper to The Guardian):
This starts as follows:

Suddenly, there is a new economist making waves – and he is not on the right. At the conference of the Institute of New Economic Thinking in Toronto last week, Thomas Piketty's book Capital in the Twenty-First Century got at least one mention at every session I attended. You have to go back to the 1970s and Milton Friedman for a single economist to have had such an impact.

Like Friedman, Piketty is a man for the times. For 1970s anxieties about inflation substitute today's concerns about the emergence of the plutocratic rich and their impact on economy and society. Piketty is in no doubt, as he indicates in an interview in today's Observer New Review, that the current level of rising wealth inequality, set to grow still further, now imperils the very future of capitalism. He has proved it.

I am going to spend a litte more attention to this than I might have otherwise, (1) because my parents, who were communists, agreed with the thesis that "capitalism simply isn't working" and (2) because Piketty's book may be important.

Also, there is in this section another dotted article, from The Guardian. As a matter of fact, it is my guess is that both journalists did not quite get Piketty's argument, but that is a mere guess, although it parallels relatively many other economists whose academic works also rarely got properly understood by journalists.

In any case, here is the outline of the argument given by Will Hutton, whose article I will first deal with:
Capital, he argues, is blind. Once its returns – investing in anything from buy-to-let property to a new car factory – exceed the real growth of wages and output, as historically they always have done (excepting a few periods such as 1910 to 1950), then inevitably the stock of capital will rise disproportionately faster within the overall pattern of output. Wealth inequality rises exponentially.

The process is made worse by inheritance and, in the US and UK, by the rise of extravagantly paid "super managers". High executive pay has nothing to do with real merit, writes Piketty – it is much lower, for example, in mainland Europe and Japan. Rather, it has become an Anglo-Saxon social norm permitted by the ideology of "meritocratic extremism", in essence, self-serving greed to keep up with the other rich. This is an important element in Piketty's thinking: rising inequality of wealth is not immutable. Societies can indulge it or they can challenge it.

Yes, indeed. And as I have argued before, many of the evil outgrowths of capitalism can be tamed by adequate laws - except that these laws, which were in place, at least to a considerable extent, from the fifties till the seventies, I suppose mostly thanks to John Maynard Keynes, were all undone by deregulation: See my Crisis + DSM-5: It's the deregulation, stupid!

Here is the lesson of the past:

The lesson of the past is that societies try to protect themselves: they close their borders or have revolutions – or end up going to war. Piketty fears a repeat. His critics argue that with higher living standards resentment of the ultra-rich may no longer be as great – and his data is under intense scrutiny for mistakes. So far it has all held up.
Well, the higher living standards are falling apart for the majority. And I agree that, given these, there are better and better chances for a revolution or a war, especially as more and more people grow poorer in the West, where they have grown richer from the fifties onwards into the eighties.

And here are the solutions:

The solutions – a top income tax rate of up to 80%, effective inheritance tax, proper property taxes and, because the issue is global, a global wealth tax – are currently inconceivable.

But as Piketty says, the task of economists is to make them more conceivable. Capital certainly does that.

I do not think these solutions are "currently inconceivable": they are quite conceivable, simply because (1) they were quite normal, and (2) they do not imply any large losses for the rich either.

But they are currently impracticable, it seems mostly because the rich have succeeded in buying most politicians, who indeed were very glad to be bought, and tend these days to be, when powerful, "revolving door types": from professor to parliamentarian to mayor or minister and back to professor again is quite typical, for the several hundreds or thousands of these in each country, both from "the left" and the right, and there also might be a management stint inbetween.

Here is the other article, by Andrew Hussey on The Observer:

First, as to what Piketty has done, at least according to fellow economists:

The groundbreaking status of the book was recognised by a recent long essay in the New Yorker in which Branko Milanovic, a former senior economist at the World Bank, was quoted as describing Piketty's volume as "one of the watershed books in economic thinking". In the same vein, a writer in the Economist reported that Piketty's work fundamentally rewrote 200 years of economic thinking on inequality.
I think myself that this is in part exaggeration, although it may be true that this is a watershed book - time will tell.

Here is part from the interview Hussey had with Piketty:
"I began with a straightforward research problematic," he says in elegant French-accented English. "I began to wonder a few years ago where was the hard data behind all the theories about inequality, from Marx to David Ricardo (the 19th-century English economist and advocate of free trade) and more contemporary thinkers. I started with Britain and America and I discovered that there wasn't much at all. And then I discovered that the data that did exist contradicted nearly all of the theories including Marx and Ricardo. And then I started to look at other countries and I saw a pattern beginning to emerge, which is that capital, and the money that it produces, accumulates faster than growth in capital societies. And this pattern, which we last saw in the 19th century, has become even more predominant since the 1980s when controls on capital were lifted in many rich countries."
I agree, but I do so basically because this gets also underpinned by the Dutch saying that "the devil always shits on the largest heap": growth needs to be redistributed, and is so mostly by taxation, which is "the way to buy civilization" as Supreme Court judge Oliver Wendell Holmes Jr. put it, while if it is not redistributed, it will only make the few rich even richer than they were when properly taxed.

Next, there is this:
What have we learned? Capitalism is bad. Hooray! What's the answer? Socialism? Hope so. "It is not quite so simple," he says, disappointing this former teenage Marxist. "What I argue for is a progressive tax, a global tax, based on the taxation of private property. This is the only civilised solution. The other solutions are, I think, much more barbaric – by that I mean the oligarch system of Russia, which I don't believe in, and inflation, which is really just a tax on the poor."
I was a teenage marxist as well, but gave it all up when 20, and one of my main reasons for giving up on socialism is that I never saw it work well, except on a very small scale, while I also saw that all nominally "socialist states" were in fact totalitarian dictatorships.

Also, while in principle these
totalitarian dictatorships might have been tamed by laws, this is very improbable once so much economic, social, religious, legal and educational power has been concentrated in so few hands, which is what state socialism is and does: concentrate all hitherto independent or semi-dependent powers in the state, that is, in the hands of the few who run the state.

So I quite agree with Piketty here: By far the least barbaric solution to the crisis of capitalism is taxation of private property.

Finally, there is this from Hussey (and much more under the last dotted link):

Unlike many economists he insists that economic thinking cannot be separated from history or politics; this is what gives his book the range the American Nobel laureate Paul Krugman described as "epic" and a "sweeping vision".
2.  Silicon Valley could force NSA reform, tomorrow. What's taking so long?

The next item is an article by Trevor Timm on The Guardian:

This starts as follows:

With Glenn Greenwald and Laura Poitras triumphantly returning to the US to accept the Polk Award with Barton Gellman and Ewan MacAskill yesterday, maybe it's time we revisit one of their first and most important stories: how much are internet companies like Facebook and Google helping the National Security Agency, and why aren't they doing more to stop it?

The CEOs of the major tech companies came out of the gate swinging 10 months ago, complaining loudly about how NSA surveillance has been destroying privacy and ruining their business. They still are. Facebook founder Mark Zuckerberg recently called the US a "threat" to the Internet, and Eric Schmidt, chairman of Google, called some of the NSA tactics "outrageous" and potentially "illegal". They and their fellow Silicon Valley powerhouses – from Yahoo to Dropbox and Microsoft to Apple and more – formed a coalition calling for surveillance reform and had conversations with the White House.

But for all their talk, the public has come away empty handed.
Yes, indeed. So here is my answer to the question in the title: The CEOs do not want a strong NSA reform, mostly because the NSA does the same things as they do: Find the private and personal details of their users (and sell these to advertisers).

The difference is that the NSA is not known to sell what they find to advertisers (though lots may be interested), but that is because they are paid from the taxes anyway.

In fact, here is what the CEOs of the major tech companies could do:

The leading internet companies could easily force Congress' hand by pulling an OKCupid: at the top of your News Feed all next week, in place of Monday's Google doodle, a mobile push alert, an email newsletter: CALL YOUR MEMBER OF CONGRESS. Tell them to SUPPORT THE USA FREEDOM ACT and tell the NSA to stop breaking common encryption.

We know it's worked before.
Namely with the Sopa (Stop Online Piracy Act). But so far it did not happen, and I gave my main reason why it didn't: it is against their own interests, which is getting paid for the personal private data they got from their users, usually not honestly, and certainly not openly.

There is considerably more in the last dotted article.

3.  Retiring Obama Administration Prosecutor Says the SEC Is Corrupt; Prior Reports Indicate Administration's Corruption 

The next item is an article by Eric Zuesse on OpEdNews:

This starts as follows:

Bloomberg News reported, on April 8th, that a Securities and Exchange Commission prosecuting attorney, James Kidney, said at his recent retirement party on March 27th, that his prosecutions of Goldman Sachs and other mega-banks had been squelched by top people at the agency, because they "were more focused on getting high-paying jobs after their government service than on bringing difficult cases." He suggested that SEC officials knew that Wall Street would likely hire them after the SEC at much bigger pay than their government remuneration was, so long as the SEC wouldn't prosecute those megabank executives on any criminal charges for helping to cause the mortgage-backed securities scams and resulting 2008 economic crash.

His "remarks drew applause from the crowd of about 70 people," according to the Bloomberg report. This would indicate that other SEC prosecutors feel similarly squelched by their bosses.

Kidney's speech said that his superiors did not "believe in afflicting the comfortable and powerful."

Referring to the agency's public-relations tactic of defending its prosecution-record by use of what he considered to be misleading statistics, Kidney said, "It's a cancer" at the SEC.

There is a lot more, spread over two pages. Here is a selection on Obama (about whom there is a lot more in the article):

He had been lying to the public, all along. Not only would he not prosecute the banksters, but he would treat them as if all they had was "an acute public relations problem that's turning into a political problem." And he thought that the people who wanted them prosecuted were like the KKK who had chased Blacks with pitchforks before lynching.  According to the DOJ, their Financial Fraud Enforcement Task Force (FFETF) was "established by President Barack Obama in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes." But, according to the Department's IG, it was all a fraud: a fraud that according to the DOJ itself had been going on since at least November 2009.

That indeed seems to be the case. Here is part of Zuesse's sum up:
Historians will have a hard time deciding whether Obama was the most corrupt President -- even more corrupt than Grant, Harding, and G.W. Bush -- but certainly he is one of the four most corrupt. The evidence that he is presiding over an Administration in which aristocrats can do anything they want and commit any crime with total impunity, extends not just to Obama's protection of George W. Bush from prosecution, but to his protection of Wall Street CEOs from prosecution. Only blue-collar crooks are pursued by him; white-collar ones get off easy, and mega-corporate CEOs (as well as torturers and their masters in the former Administration, and the traitors who lied this nation into invading Iraq) are totally immune from prosecution by him.
Obama is fundamentally a conservative, who parades in Democratic rhetoric. The reports and studies that have been presented here are convincing proof of that.

And you can check this by consulting the last dotted article.

4.  The Government Listens To Lobbyists And The Wealthy, Not You And Me 

Next, an article by Bryce Covert on Think Progress:

This starts as follows:

When organized interest groups or economic elites want a particular policy passed, there’s a strongly likelihood their wishes will come true. But when average citizens support something, they have next to no influence.

That’s according to a forthcoming article in Perspectives on Politics by Martin Gilens of Princeton University and Benjamin I. Page of Northwestern University. The two looked at a data set of 1,779 policy issues between 1981 and 2002 and matched them up against surveys of public opinion broken down by income as well as support from interest groups.

They estimate that the impact of what an average citizen prefers put up against what the elites and interest groups want is next to nothing, or “a non-significant, near-zero level.” They note that their findings show “ordinary citizens…have little or no independent influence on policy at all.” The affluent, on the other hand, have “a quite substantial, highly significant, independent impact on policy,” they find, “more so than any other set of actors” that they studied. Organized interest groups similarly fare well, with “a large, positive, highly significant impact on public policy.”

There is more in the article. What I like about this is that it does get reasonably reported and is based on "a data set of 1,779 policy issues between 1981 and 2002": That is a lot of data.

5.  If Waterboarding Isn't Torture, Cheney Should Try It  

Finally, not an article but a video of 6 m 32 s by The Young Turks:
This concerns the following, that I quote from Youtube:
"Sen. Angus King (I-Maine) said Sunday that former Vice President Dick Cheney should give waterboarding a try himself if he doesn't believe the interrogation tactic qualifies as torture.

During a visit to American University in Washington, D.C. late last month, Cheney said he had no regrets over the controversial interrogation practices used by the Central Intelligence Agency during the Bush administration.

"Some people called it torture. It wasn't torture," Cheney told ATV, the university's student-run television station, referring to the administration's use of waterboarding to gather information."
I think this is entirely fair, and indeed one of the few things I like about the late Christopher Hitchens (I don't like former "marxists" who also kept this up for several decades) is that he also said waterboarding was not torture - until he agreed to a small bout of it, which immediately converted him to the position that it is torture.
P.S. Apr 14, 2014: I added two links and corrected a typo.
[1] Here it is necessary to insist, with Aristotle, that the governors do not rule, or at least, should not rule: The laws rule, and the government, if good, is part of its executive power. Here I quote Aristotle from my More on stupidity, the rule of law, and Glenn Greenwald:
It is more proper that law should govern than any one of the citizens: upon the same principle, if it is advantageous to place the supreme power in some particular persons, they should be appointed to be only guardians, and the servants of the laws.
(And I note the whole file I quote from is quite pertinent.) 

About ME/CFS (that I prefer to call M.E.: The "/CFS" is added to facilitate search machines) which is a disease I have since 1.1.1979:
1. Anthony Komaroff

Ten discoveries about the biology of CFS(pdf)

3. Hillary Johnson

The Why  (currently not available)

4. Consensus (many M.D.s) Canadian Consensus Government Report on ME (pdf - version 2003)
5. Consensus (many M.D.s) Canadian Consensus Government Report on ME (pdf - version 2011)
6. Eleanor Stein

Clinical Guidelines for Psychiatrists (pdf)

7. William Clifford The Ethics of Belief
8. Malcolm Hooper Magical Medicine (pdf)
Maarten Maartensz
Resources about ME/CFS
(more resources, by many)

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