October 6, 2015
Crisis: War Crime, Torture, Economy*2, "Free Markets", Banksters, TPP*4
 "They who can give up essential 
   liberty to obtain a little temporary
   safety, deserve neither liberty
   nor safety."
   -- Benjamin Franklin
   "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


The Radically Changing Story of the U.S. Airstrike on
     Afghan Hospital: From Mistake to Justification

2. Britain’s role in torture demands an inquiry – now
3. Michael Hudson on Parasitic Financial Capitalism
4. Why Free Markets Make Fools of Us
Robert Reich’s Dire Warning: America’s Free-Market
     Obsession Is “Poisoning” Our World

6. Bernanke: Jail the Banksters
7. On the TTP

This is a Nederlog of Tuesday, October 6, 2015.

This is a crisis blog. There are 7 items with 10 dotted links: Item 1 is on an article by Glenn Greenwald about the lies of the USA about their targeting a hospital and killing more than 20 persons there (which is a war crime); item 2 is about how the British tortured people (outside Great Britain, it seems) and how Jack Straw doesn't know a thing about that; item 3 is an excellent interview with Michael Hudson on parasitical financial capitalism; item 4 is about a book by two Noble Prize winners of economy about the economy, which I didn't think said anything that wasn't known to Adam Smith or Aristotle; item 5 is about Robert Reich's new book, with some criticism by me and the reviewer about his "Saving Capitalism"; item 6 is about a horribly written article about Bernanke and Holder, that is ill written but basically correct; and item 7 consists of four items on the TPP, which now has been signed, but which I do not have the time to review (here and now).

1. The Radically Changing Story of the U.S. Airstrike on Afghan Hospital: From Mistake to Justification

The first item today is an article by Glenn Greenwald on The Intercept:

This starts as follows (and continues items from yesterday and the day before that):

When news first broke of the U.S. airstrike on the Doctors Without Borders hospital in Kunduz, Afghanistan, the response from the U.S. military was predictable and familiar. It was all just a big, terrible mistake, its official statement suggested: an airstrike it carried out in Kunduz “may have resulted in collateral damage to a nearby medical facility.” Oops: our bad. Fog of war, errant bombs, and all that.

This obfuscation tactic is the standard one the U.S. and Israel both use whenever they blow up civilian structures and slaughter large numbers of innocent people with airstrikes. Citizens of both countries are well-trained – like some tough, war-weary, cigar-chomping general – to reflexively spout the phrase “collateral damage,” which lets them forget about the whole thing and sleep soundly, telling themselves that these sorts of innocent little mistakes are inevitable even among the noblest and most well-intentioned war-fighters, such as their own governments. The phrase itself is beautifully technocratic: it requires no awareness of how many lives get extinguished, let alone acceptance of culpability. Just invoke that phrase and throw enough doubt on what happened in the first 48 hours and the media will quickly lose interest.

Yes, indeed - and "collateral damage" is a typical euphemism (for which see Carlin on October 4 which is instructive on euphemisms).

But now the story shifted:

Even cynical critics of the U.S. have a hard time believing that the U.S. military would deliberately target a hospital with an airstrike (despite how many times the U.S. has destroyed hospitals with airstrikes). But in this case, there is long-standing tension between the Afghan military and this specific MSF hospital, grounded in the fact that the MSF – true to its name – treats all wounded human beings without first determining on which side they fight. That they provide medical treatment to wounded civilians and Taliban fighters alike has made them a target before.
As a result of all of this, there is now a radical shift in the story being told about this strike. No longer is it being depicted as some terrible accident of a wayward bomb. Instead, the predominant narrative from U.S. sources and their Afghan allies is that this attack was justified because the Taliban were using it as a “base.”
Incidentally, that is a quite insane "justification" for two reasons: (1) even if it were true, it still means the USA deliberately targeted a hospital, while (2) it is not true according to the doctors who were being bombed (some of whom were killed), whom I am inclined to believe very much more than any speaker for the US army or government.

Now the situation is as follows:

So now we’re into full-on justification mode: yes, we did it; yes, we did it on purpose; and we’re not sorry because we were right to do so since we think some Taliban fighters were at the hospital, perhaps even shooting at us. In response to the emergence of this justification claim, MSF expressed the exact level of revulsion appropriate (emphasis added):

“MSF is disgusted by the recent statements coming from some Afghanistan government authorities justifying the attack on its hospital in Kunduz. These statements imply that Afghan and US forces working together decided to raze to the ground a fully functioning hospital with more than 180 staff and patients inside because they claim that members of the Taliban were present. 

This amounts to an admission of a war crime. This utterly contradicts the initial attempts of the US government to minimize the attack as ‘collateral damage.’

Yes, indeed - for attacking a hospital is a war crime. Here is one of the last statements of the MSF:

Responding to the above-referenced admission, MSF has issued this statement:

“Today the US government has admitted that it was their airstrike that hit our hospital in Kunduz and killed 22 patients and MSF staff. Their description of the attack keeps changing—from collateral damage, to a tragic incident, to now attempting to pass responsibility to the Afghanistan government. The reality is the US dropped those bombs. The US hit a huge hospital full of wounded patients and MSF staff. The US military remains responsible for the targets it hits, even though it is part of a coalition. There can be no justification for this horrible attack. With such constant discrepancies in the US and Afghan accounts of what happened, the need for a full transparent independent investigation is ever more critical.”

This is a fine article with considerably more. Recommended reading.

Britain’s role in torture demands an inquiry – now

The next article today is by Richard Norton-Taylor on The Guardian:

This starts as follows:
Shaker Aamer, the sole remaining British resident incarcerated and tortured in Guantánamo Bay, has repeatedly said he was brutally tortured in Afghanistan even before he was flown to the US military prison in Cuba. Moreover, he has said officers from British intelligence knew about his torture at the notorious US prison in Bagram, north of Kabul.

His lawyers say he has now been cleared for release by the US Department of Defense after 13 years detained without trial or charge. He says he is still being subjected to physical abuse and may not come out of Guantánamo Bay alive. He was seized in Afghanistan in 2001 after the 9/11 attacks, and was said to be close to Osama bin Laden. He denies this, saying he went to Afghanistan to work for a charity, but was kidnapped by villagers and sold to the Americans.

In any case, Shaker Aamer's case - brutally tortured, and then locked up for thirteen years without any conviction - shows the brutality and inhumanity of the "justice" meeted out to prisoners by the American government.

There is also this:

Aamer’s claims about British complicity in torture, and his impending release, come as the Crown Prosecution Service is considering a hefty Metropolitan police file on evidence of MI6 involvement in the rendition and torture of two prominent Libyan anti-Gaddafi dissidents and their families in 2004. MI6’s role in the rendition of Abdel Hakim Belhaj, and Sami al-Saadi, and their families, and how they were abducted and rendered to Tripoli in a joint operation with the CIA, emerged in documents found in 2011 in the wake of Nato air strikes on the Libyan capital.

Jack Straw, then foreign secretary responsible for MI6, has said: “No foreign secretary can know all the details of what its intelligence agencies are doing at any one time.”
The Blairite Blatcherist Straw might as well have said "As soon as I hear my boys are torturing someone I look the other way, with my fingers in my ears. So I can honestly say that I don't know "the details of what its intelligence agencies are doing at any one time"".

3. Michael Hudson on Parasitic Financial Capitalism
The next article today is by - I think - Eric Draitser and Michael Hudson (<- Wikipedia). I found it on Naked Capitalism, and it is an excellent interview:
This is also too long to properly excerpt. The reason for the interview is that Michael Hudson (<- Wikipedia) wrote "Killing the Host: How Financial Parasites and Debt Bondage Destroyed the Global Economy".

The following are a number of selections from an interview that should be read in full.

First, there is this on the financial sector, the economy and the rest of society:

MH: The brain in modern economies is the government, the educational system, and the way that governments and societies make their economic policy models of how to behave. In nature, the parasite makes the host think that the free rider, the parasite, is its baby, part of its body, to convince the host actually to protect the parasite over itself.

That’s how the financial sector has taken over the economy. Its lobbyists and academic advocates have persuaded governments and voters that they need to protect banks, and even need to bail them out when they become overly predatory and face collapse. Governments and politicians are persuaded to save banks instead of saving the economy, as if the economy can’t function without banks being left in private hands to do whatever they want, free of serious regulation and even from prosecution when they commit fraud. This means saving creditors – the One Percent – not the indebted 99 Percent.

Precisely - and in case you missed it: The reason the banks are protected, and most of the rest of the economy, and nearly all of society is not, is that no bankmanager has had to go to jail for the enormous crimes they committed: All that has happened to them, ever since 2008, was that they had to repay a small percentage of their profits "in punishments" in exchange of which the American Department of Justice declared them free of any blame.

This is about how Milton Friedman and his Chicago School operated in Chili, in the early 1970ies:

MH: The first thing the neoliberal Chicago School did when they took over Chile was to close down every economics department in the country except the one they controlled at the Catholic University. They started an assassination program of left wing professors, labor leaders and politicians, and imposed neoliberalism by gunpoint. Their idea is you cannot have anti-labor, deregulated “free markets” stripping away social protections and benefits unless you have totalitarian control.

And in fact Friedman c.s. are also right that totalitarian control makes it a lot easier to get all the profit you want.

Then there is this on the "neoliberals" (which I prefer to call "neoconservatives", for that is what they are, but this is an aside):

MH: Neoliberals say they’re against government, but what they’re really against is democratic government. The kind of governments they support are pre-referendum Greece or post-coup Ukraine. As Germany’s Wolfgang Schäuble said, “democracy doesn’t count.” Neoliberals want the kind of government that will create gains for the banks, not necessarily for the economy at large. Such governments basically are oligarchic. Once high finance takes over governments as a means of exploiting the 99 Percent, it’s all for active government policy – for itself.

Yes, indeed - and I think "high finance" has taken over most Western governments in the last 35 years, and especially since 2001, and probably also many of the elected politicians. [1]

Here is how high finance works:

MH: If you treat debt as a weapon, the basic idea is that finance is the new mode of warfare. That’s one of my chapters in the book. In the past, in order to take over a country’s land and its public domain, its basic infrastructure and its mineral resources, you had to have a military invasion. But that’s very expensive. And politically, almost no modern democracy can afford a military invasion anymore.

So the objectives of the financial sector – of Wall Street, the City of London or Frankfurt in Germany – is to obtain the land. You can look at what’s happening in Greece. What its creditors, the IMF and European Central Bank (ECB) want are the Greek islands, and they want the gas rights in the Aegean Sea. They want whatever buildings and property there is, including the museums.

And this are the objectives of "Wall Street" i.e. essentially the bankmanagers and their current mates in government:

MH: The problem is, what is the objective of central planning by Wall Street? It’s not to raise living standards, and it’s not to increase employment. It is to smash and grab. That is the society we’re in now.

A number of chapters of my book (I think five), describe how the Obama administration has implemented this smash and grab, doing the exact opposite of what he promised voters. Obama has implemented the Rubin-omics [Robert Rubin] doctrine of Wall Street to force America into what looks like a chronic debt depression.

As I have said many times in Nederlog: Obama generally says X but does not X, for nearly any arbitrary X, and he does so because he thinks he can get away with it, and indeed he generally does.

Here is some more about Obama:

MH: (..) He was the Wall Street candidate, promoted by Robert Rubin, who was Clinton’s Treasury Secretary. Basically, American economic policies can run by a combination of Goldman Sachs and Citigroup, often interchangeably.

ED: This was demonstrated very clearly in the first days of Obama taking office. Who does he meet with to talk about the[1] financial crisis? He invites the CEOs of Goldman Sachs and JP Morgan, Bank of America, Citi and all of the rest of them. They’re the ones who come to the White House. It’s been written about in books, in the New Yorker and elsewhere. Obama basically says, “Don’t worry guys, I got this.”

MH: Ron Suskind wrote this. He said that Obama said, “I’m the only guy standing between you and the pitchforks. Listen to me: I can basically fool them.” (I give the actual quote in my book.) The interesting thing is that the signs of this meeting were all erased from the White House website, but Suskind has it in his book. Obama emerges as one of the great demagogues of the century. He may be even worse than Andrew Jackson.

There is a lot more in the interview, which is recommended reading.

4. Why Free Markets Make Fools of Us

The next article today is by Cass R. Sunstein on The New York Review of Books:
This is a review of "Phishing for Phools: The Economics of Manipulation and Deception", by the two Nobel Prize winning economists George Akerlof and Robert Shiller.

First, there is this about Akerlof and Shiller:

George Akerlof and Robert Shiller want to go far beyond behavioral economics, at least in its current form. They offer a much more general, and quite damning, account of why free markets and competition cause serious problems.Both Akerlof and Shiller have won the Nobel Prize; they rank among the most important economists of the last half-century.
Regular readers of Nederlog may know that I don't take that very seriously: A "science" in which nearly every economist totally misses the collapse of 2008 cannot be much of a real science.

This is not to say that I criticize Akerlof and Shiller. I didn't know they existed, and don't know anything about them. What I reject is merely the idea that there is much real scientific content to the notion of "
the most important economists of the last half-century".

Next, here is there thesis - which may be compared to the previous item:
Akerlof and Shiller use the word “phish” to mean a form of angling, by which phishermen (such as banks, drug companies, real estate agents, and cigarette companies) get phools (such as investors, sick people, homeowners, and smokers) to do something that is in the phisherman’s interest, but not in the phools’. There are two kinds of phools: informational and psychological. Informational phools are victimized by factual claims that are intentionally designed to deceive them (“it’s an old house, sure, but it just needs a few easy repairs”). More interesting are psychological phools, led astray either by their emotions (“this investment could make me rich within three months!”) or by cognitive biases (“real estate prices have gone up for the last twenty years, so they’re bound to go up for the next twenty as well”).
I say. There are fishermen busy in the economy, who like to make fools part with their money, except that Akerlof and Shiller speak of "phishermen" and "phools".
The idea is older than Adam Smith, I must say, and quite possibly older than Aristotle.

Then there is this:
Akerlof and Shiller are aware that skeptics will find their depiction of human beings as “phools” to be inaccurate and impossibly condescending. Their response is that people are making a lot of bad decisions, producing outcomes that no one could possibly want. In their view, phishing for phools “is the leading cause of the financial crises that lead to the deepest recessions.”
How somebody can say that the idea that there are fools is "inaccurate and impossibly condescending" escapes me completely.

Also, while I don't deny that there is some sense to the thesis that "
phishing for phools“ "is the leading cause of the financial crises that lead to the deepest recessions" it also is a very non-specific and metaphorical thesis, that itself does not say anything of economical value that I see: There are fools, and they are abused. Wow! Amazing!

Not only that:
Akerlof and Shiller think that the idea of phishing also helps to explain modern advertising, especially when we focus on the crucial role of narrative in human thinking. Clever marketers offer simple, attractive stories about their products, and get those stories to stick in the human mind.
Again I don't say "No", but again I complain this is both obvious to me since I was 10 (and discussed advertising with a school friend), and doesn't add anything to what I knew 45 years ago.

Finally, the same holds for the last example I excerpted from this article:
Akerlof and Shiller contend that presidents are sold in essentially the same way, as “modern statistical techniques now tell marketers and advertisers—both private and political—when and how to phish, just as modern techniques in geology tell the oil and gas companies where and how to drill.” They single out the 2012 Obama campaign for its use of statistical testing “as a new art form.”
Actually, I know that since 2009, but yes: Akerlof and Shiller are correct, but again neither original nor particularly interesting. But OK... their Nobel Prizes were in economy, not physics.

5. Robert Reich’s Dire Warning: America’s Free-Market Obsession Is “Poisoning” Our World

The next article today is by Conor Lynch on AlterNet:
This is a review of Robert Reich's latest book, "Saving Capitalism: For the Many, not the Few". This gets summarized as follows:

“Few ideas have more profoundly poisoned the minds of more people than the notion of a ‘free market’ existing somewhere in the universe, into which government ‘intrudes,’” Reich writes, “But the prevailing view, as well as the debate it has spawned, is utterly false. There can be no ‘free market’ without government… Competition in the wild is a contest for survival in which the largest and strongest typically win. Civilization, by contrast, is defined by rules; rules create markets, and governments generate the rules.”

Laws and regulations, whether relating to patents and property or bankruptcy and contracts, help form a stable capitalist market, while a truly “free” market would be akin to the wild (i.e. Social Darwinism). Reich argues that the major problem with the market of today is not that the government has intruded too much, as Republicans generally contend, but that the laws and regulations necessary for a market are tilted in the favor of wealthy individuals and corporations who can buy influence in the political world, rather than average people, i.e “the many,” who cannot. In other words, the free market vs. government debate is largely a pointless distraction from what should be the real debate: Does the market and the rules that establish it work for everyone, or just the few at top who are wealthy enough to shape those rules?

I agree on "free markets" and indeed wrote myself in 2004:

Besides, there also is a fallacy involved in quite a few kinds of economic liberalism that plead for 'free markets': There are no free markets without state protection and legal rules, not within states, and not between states. Each and every free market either was maintained by the state or by a city, or else existed only because and in the times of a relative balance of power between states or cities. And most of the rhetoric of 'laissez-faire' and 'laissez-aller' is no more than dishonest cant.

Also, I am pretty certain I thought so already in 1967. So while I agree with Reich, it is not precisely a new idea - and I certainly was not the first to think so in 1967: It is what anyone of reasonable intelligence who thinks about the concept of 'free market' will quickly conclude.

There is also this by Conor Lynch:
Reich contends that their is “nothing about capitalism that leads inexorably to mounting economic insecurity and widening inequality.” I’m not so convinced. Capitalism, by definition, is the private ownership of the means of production and distribution. When so few own capital, massive inequality is largely inevitable.
Yes, I agree. More specfically, in my life of 65 years (I was born in 1950, in a poor family) there were some 15 years of limited sharing of some riches, namely from 1965 - 1980. Before that, my parents and their children were poor, and after that I did not get any richer, and indeed got poorer from the time the euro was introduced in 2002. (But my poverty is due to my illness, that lasts now 37 years, and is still not admitted by the bureaucracy or the politicians, even though my extremely high marks would have made it easy to find a job in some university - preferably: not a Dutch one - if I had been healthy. But try to explain that to a typical Dutch bureaucrat with an IQ at least 50 points lower...)

Anyway - as far as "Saving Capitalism" is concerned: I don't like socialism if that is based on the state owning everything: That means in practice that the very few in government own everything, as in socialist Russia. For more, see what I wrote about Socialism: There are alternatives, and indeed one is a kind of capitalism with a capped income for everyone.

6. Bernanke: Jail the Banksters

The next article today is by - I take it - The Daily Take Team, on Truth-Out:

First, I'm sorry for the style of the quotations: I much dislike paragraphs of one statement each, though I am willing to suppose that the audience of The Daily Take Team much like it.

Anyway, this starts as follows:

President Obama should have thrown the banksters in jail.

That's more or less what former Federal Reserve chairman Ben Bernanke said in an interview this weekend with USA Today.

In fact, I tried the last reference and found this:
For one thing, he says that more corporate executives should have gone to jail for their misdeeds. The Justice Department and other law-enforcement agencies focused on indicting or threatening to indict financial firms, he notes, "but it would have been my preference to have more investigation of individual action, since obviously everything what went wrong or was illegal was done by some individual, not by an abstract firm."
I conclude that the first two statements are true. Next (skipping some) there is this:

We SHOULD have criminally punished more banksters after the financial crisis, and the fact that we didn't - and still haven't - will go down in history as one of this administration's biggest screw-ups.

That's because the only thing that actually keeps big financial institutions in check is prosecutions.

Just ask Ronald Reagan and George H.W. Bush.

In the wake of the savings and loans debacle of the 1980s, the Reagan and Bush administrations prosecuted more than 1,000 different individuals for their role in the crisis, and of those prosecutions, 839 resulted in convictions.

Again, I am sorry for the simplicity of the style, but the content is correct.

Next, there is this:

President Obama should have done what Reagan did.

He should have criminally prosecuted the Wall Street banksters.

But he didn't, and if there's one person most responsible for that, it's former Attorney General Eric Holder, the granddaddy of "too big to jail."

Back when he was a deputy attorney general in the Clinton administration, Holder wrote an infamous memo in which he laid out a plan for how to deal with large financial crimes.

I mostly agree, but Obama was the first responsible man, and Eric Holder got his position - I think - thanks to Robert Rubin (who earned at least $170 million).

And finally there is this:

Holder's Justice Department did slap a few big banks like JP Morgan with multi-million dollar settlement fines, but those fines are chump change compared to the billions those banks take in every year in profits, including the profits from illegal activity.

These fines have just become a routine cost of doing business for the banksters.

They're also tax-deductible, which makes the idea that they could ever serve as a deterrent to future bad behavior just flat-out ridiculous.

Thanks to the Holder Doctrine, the big banks are bigger than ever and comfortable in the knowledge that they're still too big to jail, six years after they got caught robbing the US blind.

I agree (though I much dislike the paragraphing).

7. On the TTP

The last articles today are all on the TPP. I merely list them here, because this Nederlog is already around 50 Kb. The theme is given by the first item, which is by Don Quijones on Raging Bull-Shit:

If you are a resident (the word “citizen” no longer seems fitting) of the U.S.A, Japan, Mexico, Canada, Brunei, Peru, Chile, Malaysia, Singapore, Vietnam, Australia or New Zealand, your elected government just sold you, your family, friends and everybody else you know down the river. Without a paddle. In other words, they just signed the Trans-Pacific Partnership, the world’s biggest trade agreement of the last two decades. Don’t worry if you weren’t consulted; nobody was — well, apart from 600 representatives of the world’s largest corporations.

I agree. The other three articles are by Robert Reich, Ralph Nader and about Bernie Sanders, who are all three much against it, as I am:

These are all well worth reading, but I lack the time to review them.

[1] This is my guess. But it is based on fairly good knowledge of Dutch politicians from several parties - CDA, VVD, PvdA - who all talk as if they have read GOP-materials, and also use the same tricks as the GOP used. And while I do not give a penny for their moral integrity, I know the vast majority does not have the brains to think this out for themselves. (But OK: I do not know what these politicians received, textually or financially. Then again, few know.)

       home - index - summaries - mail