who can give up essential
liberty to obtain a little temporary
safety, deserve neither liberty
-- Benjamin Franklin
"All governments lie and nothing
say should be believed."
"Power tends to corrupt, and
absolute power corrupts
absolutely. Great men
almost always bad men."
1. Banks fiddled while Rome
burned: how to predict the
next global financial crisis
2. The Myth of Human Progress and the Collapse
NSA Exploited Heartbleed for Own Use
4. The NSA's Heartbleed
Problem is the Problem with the
US Is an Oligarchy Not a Democracy, says Scientific Study
Corporate Cash Hoarding Is Killing the Middle Class
This is the Nederlog of April
14. It is another crisis
This one starts
with the issue of how to
predict crisis, continues with an article by Hedges, also with video,
followed by two on
the NSA, continued with one that insists the USA is no longer a
democracy but an oligarchy, and ends with one by Alan Grayson on how
good the corporate entities without souls and bodies have it, compared
with how bad many with bodies and souls are now.
fiddled while Rome burned: how to predict the next global financial
The first article today is by Larry Elliott on The Guardian:
This starts as follows:
Well... I guess the
operative term is "Looking
back": In hindsight we all
have 20/20 vision. This does not mean one cannot predict economical
crises, but it does mean it is considerably more difficult to do when
Looking back, it was easy
to see that the crash was coming. There had been too much cheap money.
Debt had exploded. Speculation was rife. The gap between rich and poor
had widened. Welfare spending had risen. The financial system was so
stretched that even a modest tightening of policy was enough to make it
impossible for over-borrowed debtors to service their debts.
The US in 2007? No, this was
imperial Rome during the reign of Tiberius in AD33.
Also, this is mainly a review of a book called "Money Mania" by
Bob Swarup, and I shall see what pointers can be derived from it. Here
is a first one:
History suggests that
certain conditions have to be in place for a crisis to develop. The
first is that a decent period of time has to elapse after the previous
crash. (...) A 15-year gap is the norm.
This suffers from not
defining "crisis". I suppose this is not easy, but a crisis every 15
years seems to be a bit much. (I may be wrong: I am just looking back
on the 64 years of my life, in which I count two major ones. But again,
I have also no - serious - definition of "crisis", apart from the list
I provided in Crisis: It is the deregulation,
stupid!, and the serious suggestion that a real crisis involves
more than only the economy and also lasts at least five years. And yes,
the present crisis qualifies in those respects very well.)
condition is a sustained period of solid growth, by the end of which
individuals convince themselves that the good times will go on and on.
I don't know about this
one, and have two distinct reasons.
First, in one sense of the word "crisis", this is necessary to have a
serious down at all: there must have been an up, rather like a mountain
requires a valley. But that makes it necessary and logical rather than
Second, empirically I doubt it is correct: Hitler arose out of the
economic mess of the twenties in Germany, that had lost the first World
War, and was forced to huge payments to the Allies. Then again, this
suffers again from "crisis" not being defined, and indeed under Hitler
the economy improved, the first six years or so.
A third crucial
factor is belief in those running the show.
Again, I don't quite
know about this one: Clearly, some belief is necessary for
there to be a boom, that is followed by a crisis, but how much of this
constitutes "a belief" is unclear to me.
Then it is said:
Whip these three
ingredients together and you have the recipe for a crisis.
No, I don't think so.
That is, I do not think you can infer "there soon will be a
crisis" from "there hasn't been one for 15 years" + "we had 15 years of
solid growth" + "people believe in the folks leading the economy": if
it were as simple as that, crises could be prevented.
Indeed, that is what the author also concludes in the next paragraph:
But more is needed
to create the perfect bubble dish. Crises do not occur unless there is
an abundance of credit to allow debt to build up and to permit
speculators to take ever bigger bets.
Not only that:
understood what the web of banks, hedge funds and shadow banks were up
to as they traded credit default swaps and collateralised debt
So the recipe also
requires "an abundance of credit" + "poorly managed and regulated financial systems".
I do not think the title is justified ("how to
predict the next global financial crisis") and I also do not think the present
crisis, that started in 2008, has finished. But otherwise, this is fair article.
2. The Myth of Human Progress and the Collapse
of Complex Societies (VIDEO)
The next item is an
article by Chris Hedges on Truth Dig, that accompanies a video of a
speech by him of 53 minutes:
I have not seen all of
the video (I much rather read, since that goes much faster in my case)
so all I can say is that the sound does get better after the beginning.
The article starts as follows:
I am doubtful about
this. That is, I am willing to assume especially novelists have more
freedom to explain the societies they describe than scientists, and
also quite frequently have better insights, and I also like "Moby
Dick", but I don't think a novel published more than 160 years ago can
be used as a compass to chart the present ills.
The most prescient
portrait of the American character and our ultimate fate as a species
is found in Herman Melville’s “Moby Dick.” Melville makes our murderous
obsessions, our hubris, violent impulses, moral weakness and inevitable
self-destruction visible in his chronicle of a whaling voyage. He is
our foremost oracle. He is to us what William Shakespeare was to
Elizabethan England or Fyodor Dostoyevsky to czarist Russia.
But OK - perhaps this is meant by way of illustration rather than as
enlightenment, and further on Hedges does get to grips with the present
system—like our participatory democracy—is a mirage. The Federal
Reserve purchases $85 billion in U.S. Treasury bonds—much of it
worthless subprime mortgages—each month. It has been artificially
propping up the government and Wall Street like this for five years. It
has loaned trillions of dollars at virtually no interest to banks and
firms that make money—because wages are kept low—by lending it to us at
staggering interest rates that can climb to as high as 30 percent. ...
Or our corporate oligarchs hoard the money or gamble with it in an
overinflated stock market. Estimates put the looting by banks and
investment firms of the U.S. Treasury at between $15 trillion and $20
trillion. But none of us know. The figures are not public. And the
reason this systematic looting will continue until collapse is that our
economy [would] go into a tailspin without this giddy infusion of free
I think he is mostly
right about this, as he is also about the following:
The ecosystem is at the same
assault on culture, journalism, education, the arts and critical
thinking has left those who speak this truth marginalized and ignored,
frantic Cassandras who are viewed as slightly unhinged and depressingly
apocalyptic. We are consumed by a mania for hope, which our corporate
masters lavishly provide, at the expense of truth.
There is more there,
that I do not all agree with, but it is an interesting lecture.
Exploited Heartbleed for Own Use
next item is an
article by Lauren McCauley on Common Dreams, indeed the first of two:
This starts as
Not only did the NSA know
about the Heartbleed internet bug—found to have exposed the sensitive
information of countless web users—but they exploited it for their own
intelligence gathering purposes for years, sources charge.
Bloomberg News reported
late Friday that the agency found Heartbleed shortly after its
introduction in early 2012, according to a person "familiar with the
matter," and rather than reporting or repairing the flaw, the NSA
adopted it as "a basic part of they agency's toolkit for stealing
account passwords and other common tasks."
Heartbleed, believed to
be one of the biggest flaws in the Internet's history, is a
vulnerability in OpenSSL protocol, which is used to encrypt
communications between users and websites. The bug makes those
supposedly secure sites an "open book," Bloomberg explains.
The existence of Heartbleed was first made public on April 7.
I am quite willing to
believe this, but the operative term is "sources charge", which also
does not name the sources. Also, it will be quite difficult to believe
the public spokepersons of the NSA about this, simply because one of
the reasons for their existence is to report such flaws, rather than
keep them hidden and use them - and the present bug can be used against
very many computers.
And as McCauley
The incident highlights
what many are saying are the "fundamentally
incompatible" dual missions of the agency: securing
cyber-infrastructure and gathering foreign intelligence.
There is more in the
article, including a reference to the next one:
NSA's Heartbleed Problem is the Problem with the NSA
Next, an article by
Julian Sanchez on Common Dreams, that originated on The Guardian:
This starts as
The American intelligence
community is forcefully
denying reports that the National Security Agency has long
known about the Heartbleed bug, a catastrophic
vulnerability inside one of the most widely-used encryption
protocols upon which we rely every day to secure our web
communications. But the denial itself serves as a reminder that NSA's
two fundamental missions – one defensive, one offensive – are
fundamentally incompatible, and that they can't both be handled
credibly by the same government agency.
The last part is
certainly correct. There is considerably more in explanation, and the
article ends thus:
Because Internet security
depends on trust and cooperation between researchers, the mission of a
security-breaking agency is fundamentally incompatible with that of a
security-protecting agency. It's time to spin off NSA's "defense"
division from the "offense" team. It's time to create an organization
that's fully devoted to safeguarding the security of Internet users –
even if that might make life harder for government hackers.
Yes - although it is
difficult to see how one government can play two such fundamentally
opposed roles: guarding the secrets of the internet and breaking the
secrets of the internet.
5. US Is an
Oligarchy Not a Democracy, says Scientific Study
Next, an article by Eric
Zuesse on Common Dreams:
This starts as follows:
to appear in the Fall 2014 issue of the academic journal Perspectives
on Politics, finds that the U.S. is no democracy, but instead an
oligarchy, meaning profoundly corrupt, so that the answer to the
study’s opening question, "Who governs? Who really rules?" in this
"Despite the seemingly
strong empirical support in previous studies for theories of
majoritarian democracy, our analyses suggest that majorities of the
American public actually have little influence over the policies
our government adopts. Americans do enjoy many features central to
democratic governance, such as regular elections, freedom of
speech and association, and a widespread (if still contested)
franchise. But, ..." and then they go on to say, it's not true, and
that, "America's claims to being a democratic society are seriously
threatened" by the findings in this, the first-ever comprehensive
scientific study of the subject, which shows that there is instead "the
nearly total failure of 'median voter' and other Majoritarian Electoral
Democracy theories [of America]. When the preferences of economic
elites and the stands of organized interest groups are controlled
for, the preferences of the average American appear to have only a
minuscule, near-zero, statistically non-significant impact upon
I suppose that is true, and indeed that accords with what the
authors of the study, which I have downloaded, say:
To put it short: The
United States is no democracy, but actually an oligarchy.
point that emerges from our research is that economic elites and
organized groups representing business interests have substantial
independent impacts on U.S. government policy, while mass-based
interest groups and average citizens have little or no independent
influence. Our results provide substantial support for theories of
Economic Elite Domination and for theories of Biased Pluralism, but not
for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism.
6. Corporate Cash Hoarding Is Killing the
by Alan Grayson that I found on AlterNet:
considers the Good News for the corporate entities that do have neither
bodies nor souls with the Bad News for most of the entities that do
have a body and a soul (see Hazlitt's "Corporate bodies
have no souls", by which he did not mean a supernatural entity, but
simply: thinking, feeling and desiring for oneself, with one's own
The Good News is that US corporations are sitting on some $1,265,836,000,000 and that corporations have
largely been excused from paying taxes.
The Bad News comprises this:
million of us are unemployed and more than seven million of us have
part- time jobs, but can’t find full-time work. And in the past 10
years, the U.S. labor force participation rate has shrunk by three
percent. Among those who are fortunate enough to find work, the average pay is a
whopping $24 an hour. According to a University of Michigan report,
in 5 households in America has a negative net worth — they owe more
than they own. In addition 48
million Americans have no health coverage, and 48
million rely on food stamps to stave off hunger.
There is rather a lot
more in the article, but it seems to me rather convincing support for
my own statement that the crisis is not over, and indeed will
not be over until the deregulations are undone, and much heavier taxes
have been (re-)instituted on the rich.
For non-corporeal entities,
times are good. For flesh and bone, bad.
Legal fictions, good.
Mothers, fathers, sons, daughters — all bad.
 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
if good, is part of its executive power. Here I quote Aristotle from my
More on stupidity, the rule of law, and Glenn
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
from is quite pertinent.)
(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: