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Nederlog

 April 7, 2016

Crisis: Obama & Trump, Iceland, Sanders, Panama Papers, Rich vs Poor
Sections                                                                     crisis index
Introduction

1.
Obama’s Gift to Donald Trump: A Policy of Cracking
     Down on Journalists and Their Sources

2. Iceland's Pirate Party Gains Popularity After Prime
     Minister Walks the Plank over "Panama Papers"

3.
Actually, Bernie Sanders Does Have a Clear Plan for How
     to Break Up Too-Big-to-Fail Banks

4. What’s Missing From the Technical Analysis of the
     Panama Papers

5. Lessons of the Panama Papers: Yes, the rich are
     different from us — they stole our money

Introduction:

This is a Nederlog of Thursday, April 7, 2016.


This is a crisis blog. There are 5 items with 5 dotted links: Item 1 is about a gift from Obama to Trump (if Trump gets to be president, that is); item 2 is about Iceland and gives some clarifications; item 3 is about the fact that Bernie Sanders has a plan to break up the big American banks (and Clinton was lying or bullshitting when she said he did not); item 4 is about some things that are - so far, at least - missing from the Panama Papers; and item 5 is about the differences between the rich and the poor.

1. Obama’s Gift to Donald Trump: A Policy of Cracking Down on Journalists and Their Source

The first item is by Peter Maass on The Intercept:
This starts as follows:
ONE OF THE intellectual gargoyles that has crawled out of Donald Trump’s brain is the idea that we should “open up” libel laws to make it easier to punish the media for negative or unfair stories. Trump also wants top officials to sign nondisclosure agreements, so they never write memoirs that upset the boss.
Alternatively, Trump wants laws that protect the rich even more than they are now. Then there is Obama:
Obama has warned of the imminent perils of a Trump presidency, but on the key issue of freedom of the press, which is intimately tied to the ability of officials to talk to journalists, his own administration has established a dangerous precedent for Trump — or any future occupant of the Oval Office — to use one of the most punitive laws of the land against some of the most courageous and necessary people we have. One section of the Espionage Act even allows for the death penalty.
Yes and no: Yes, Obama did this, but then (and that's my no), he generally seems to say what he knows (from the focus group investigations his staff does) his electorate does like to hear, while he generally does (often much later, and with far less media attention) what his financial backers want him to do.

Or at least, that is how it appears to me, on the basis of nearly eight years of Obama watching - and yes, I do know a lot less about Obama's financial backers than Obama does, but this does seem to me a quite reasonable explanation for
the fact that Obama very often said one thing and did the opposite.

Then there is this (which is the main reason to review this item):
Two years ago, Eben Moglen, a law professor at Columbia University, gave a series of lectures in which he discussed the idea of “fastening the procedures of totalitarianism on the substance of democratic society.” Moglen’s lectures were mostly concerned with surveillance by the National Security Agency — the title of his talks was “Snowden and the Future” — but his idea applies to other procedures the U.S. government has recently become fond of.
I agree with both the topic (the illegal doings of the NSA) and the name (totalitarianism), and I missed this reference in 2014. I will check this out.

Finally, here is a small bit of evidence on the great opposition between the
extremely beneficial treatment friends of the government get, when their
actions and treatments are compared with the ill treatment non-friends get:
David Petraeus, the former four-star general and CIA director, leaked far more classified data to his biographer-girlfriend than Sterling or Kim or John Kiriakou, and lied to the FBI about it. Petraeus, however, was let off with a misdemeanor plea bargain, because if you are powerful you can do as you like. That deal is another gift to Trump or any menace-in-waiting. The president has set a precedent that says it’s okay to literally give a get-out-of-jail card to your friends.
Yes, indeed, and I cannot term this otherwise than "yet another fundamental break in the applications of the U.S. law": Either Petraeus should have been imprisoned as well, or Kiriakou, Sterling and others should not have been imprisoned.

2. Iceland's Pirate Party Gains Popularity After Prime Minister Walks the Plank over "Panama Papers"

The second item is
by Amy Goodman and Juan González on Democracy Now!:

This starts as follows:
Iceland’s prime minister resigned Tuesday, becoming the first major casualty of the Panama Papers revelations. Leaked documents from the Panama-based law firm Mossack Fonseca revealed that Sigmundur David Gunnlaugsson owned an offshore company with his wife, which he failed to declare when he entered Parliament. He is accused of concealing millions of dollars’ worth of family assets. Gunnlaugsson’s resignation followed the largest public demonstrations in Iceland’s history, with more than 20,000 protesters massed in Reykjavík outside Iceland’s Parliament on Monday demanding the prime minister step down. We speak to Birgitta Jónsdóttir, a member of the Icelandic Parliament and an unofficial leader of the Pirate Party, which has seen a surge of support following the publication of the Panama Papers. Polls show it is now the country’s most popular party with 43 percent support.
This is (in so far as I know, of course) a good summary. Then again, it is not quite complete, as Birgitta Jónsdóttir explains:

BIRGITTA JÓNSDÓTTIR: (..) So, actually, the strange twist of events is that the prime minister has sent an email to all the mainstream media around the world, declaring that he’s just temporarily stepping down. He is going to resume as a parliamentarian, and he might step in again—unless something has happened while I’ve been waiting to get on this stream. His interim or second in line, the offer that we got for the next prime minister, is absolutely not what the Icelandic people are calling for. Even if Sigmundur Gunnlaugsson decides to resign as a minister and not only have a temporary leave, that is just simply not enough, because he is not the only minister that is mentioned in the Panama Papers. We also have two other ministers from the other coalition party, the Independence Party. One of them is the finance minister and the minister of taxes. So, obviously, people want him to leave. And the other one is the interior minister, the minister for the—the judge system and so forth. So, people are still very upset.

I did not know that Mr. Gunnlaugsson tries absolutely everything to retain his power and his untold millions. Well... he is a real creep, and also, in so far as I did follow other news yesterday, he seems to have failed in his latest plan to tell the Icelanders that only he knows what is right and fair, and the rest of Iceland doesn't. (For Gunnlaugsson's government will go, as indeed it should: it is corrupt, and not only in Gunnlaugsson's case.)

As to the general position of Iceland, there is this:

JUAN GONZÁLEZ: And we have only about a minute left, but could you tell us how Iceland has fared since the financial collapse? What’s the state of your economy right now?

BIRGITTA JÓNSDÓTTIR: OK, so, we actually managed to do things right, and we were lucky enough to have a left-wing government that went through the austerity measures in the wake of the crisis. We were the first Western country to go through an IMF program. We have had capital controls. We sort of closed Iceland off, and we publicized or we took ownership of the collapsed banks again. So we’re doing actually quite well.

That is a whole lot better than in the USA and England (for two examples), and I think Jónsdóttir's analysis is correct: "we were lucky enough to have a left-wing government that went through the austerity measures in the wake of the crisis".

For this should have happened everywhere, with or without left-wing government: Friedmanian economics is the economy of the few rich, and is basically propaganda and not science, as I think is justified by the history of the crisis since 2008: it only helps the few rich get richer, at the costs of the many poor, who simply are being deceived. [1]

3. Actually, Bernie Sanders Does Have a Clear Plan for How to Break Up Too-Big-to-Fail Banks

The third item is by Andrea Germanos on Truthdig, and originally on Common Dreams:

This starts as follows:

Following suggestions that he somehow “bungled” when asked about how he would, if elected president, break up Wall Street’s largest and most dangerous institutions, the Bernie Sanders campaign on Tuesday offered a detailed explanation of how he would end “too-big-to-fail’ banks.”

I don't think Sanders "bungled", but yes: there were friends of the rich who said so, and that is the reason for this review, next to the following:

Hillary Clinton also seized on the interview, sending the transcript to supporters in a fundraising email that stated: “even on his signature issue of breaking up the banks, he’s unable to answer basic questions about how he’d go about doing it.” She also told MSNBC’s Morning Joe on Wednesday, “The core of his campaign has been breaking up the banks, and it didn’t seem in reading his answers that he would understand exactly how that would work under Dodd-Frank.”

But as New York Times finance and business reporter Peter Eavis argued, “taken as a whole, Mr. Sanders’s answers seem to make sense. Crucially, his answers mostly track with a reasonably straightforward breakup plan that he introduced to Congress last year.”

Hillary Clinton is the extremely well-paid factual spokesman for the banks in the Democratic Party, so it is not amazing if she is against Sanders, and is also trying to misrepresent him.

But indeed Peter Eavis seems quite right (also in the implied criticism that
that Hillary Clinton either did not know what she ought to have known or else was plainly lying).

And here is Sanders' plan to tame the banks (which is very much needed, I think) - and the
statement I quote was provided by his campaign staff:

Within the first 100 days of his administration, Sen. Sanders will require the secretary of the Treasury Department to establish a “Too-Big-to Fail” list of commercial banks, shadow banks and insurance companies whose failure would pose a catastrophic risk to the United States economy without a taxpayer bailout.

Within a year, the Sanders administration will work with the Federal Reserve and financial regulators to break these institutions up using the authority of Section 121 of the Dodd-Frank Act.

Sen. Sanders will also fight to enact a 21st Century Glass-Steagall Act to clearly separate commercial banking, investment banking and insurance services. Secretary Clinton opposes this extremely important measure.

President Franklin Roosevelt signed the Glass-Steagall Act into law precisely to prevent Wall Street speculators from causing another Great Depression. And, it worked for more than five decades until Wall Street watered it down under President Reagan and killed it under President Clinton. That is unacceptable and that is why Sen. Sanders will fight to sign the Warren-McCain bill into law.

I think this shows Sanders was correct, and Clinton was lying or bullshitting.

4. What’s Missing From the Technical Analysis of the Panama Papers

The fourth item i
by Emma Niles on Truthdig:

This starts as follows (and is reviewed here because it adds some about the Panama Papers):

It sounds like something out of a new James Bond movie: Millions of secret files are shared through encrypted technology and secretly analyzed.

What have come to be called the Panama Papers, released from the Panama-based law firm Mossack Fonseca, reveal how the uber-wealthy around the world stash millions in tax havens. But one of the most surprising things about this leak isn’t the numbers themselves, although they’re staggering; it’s the success of the highly coordinated effort it took to release the documents.
Yes, I agree (and incidentally this also seems to show that encryption still works): it is rather surprising that the whole story of the Panama Papers has
been kept (successfully, it seems) a secret for more than a year.

And there is this:
It’s astonishing that this secret effort wasn’t exposed while it was underway. After a year of careful investigation, the leak went live Sunday afternoon. Although SZ stated that it received 2.6 terabytes of data, the papers have not been released in their entirety. The International Consortium of Investigative Journalists (ICIJ), the coordinator of the leak, wants to keep it that way. “We’re not WikiLeaks. We’re trying to show that journalism can be done responsibly,” ICIJ Director Gerard Ryle told Wired.
This sounds confused to me. First, I don't think Wikileaks is doing journalism irresponsibly, and if he thinks so Ryle should have given good evidence. Second, I do not see how Ryle can show that the ICIJ is doing journalism responsibly by not showing the data (at least a good part of them) on which he works.

But OK, it still is very early days in the Panama Papers. And indeed the article ends as follows, which seems quite correct to me, and worthy to keep in mind:

The secret effort behind “the biggest leak in history” is admirable, but reporters may not have covered every angle. Perhaps, if the full documents were released to the public, additional analysis would expose Mossack Fonseca’s wealthy Western clientele.
Yes, indeed. (But it is early days.)

5. Lessons of the Panama Papers: Yes, the rich are different from us — they stole our money

The fifth and last item iby Andrew O'Hehir on Salon:
This starts as follows:
F. Scott Fitzgerald apparently never told his Parisian drinking buddy Ernest Hemingway, “Ernie, the rich are different from us,” only to be rebuffed by the legendary comeback, “Yes, they have more money.” Like so many famous anecdotes, that one was cooked up years after the fact (probably by Fitzgerald’s posthumous editor, the literary critic Edmund Wilson). One reason that apocryphal exchange possesses such enduring cultural resonance is that both observations are true, and what sounds like a contradiction is not a contradiction after all.
It so happens that I like neither writer and believe both the saying and the reply to be quite superficial and hardly interesting, but this is - nevertheless - the beginning of a good and recommended article.

For example, there is this, with questions that are considerably more interesting than Scott Fitzgerald's - quite unclear and superficial - observation:

What have we learned so far from the Panama Papers, the largest volume of leaked documents in history, which have begun to peel the lid off a vast web of global greed, deception and iniquity among the highest level of the moneyed classes? For starters, they should serve to remind us how different the very rich are from the rest of us. Yes, it starts with the fact that they have more money, but it doesn’t end there. How did they get all that money, and what are they doing with it? Why do they have so much more money than the rest of us — unimaginably more, and on an unprecedented scale? Why do they seem so perpetually unsatisfied with their wealth, and so desperate to nurture it, shield it and multiply it?
Speaking for myself, I don't think that the rich are different because they owe a whole lot more than I do. I do think they are a bit different than I am, but not because they are more intelligent or more moral or more knowledgeable (in general terms), but because they had a rather different education than I had, and because their riches allow them to get away with far more than less rich people.

As to the questions in the quoted paragraph:

Basically, the very rich got very rich either by being real bastards themselves, or by having parents, grandparents etc. who were real bastards. Once rich, what they do with their riches is getting richer and amusing themselves in rich ways. They got so very much more than the non-rich, basically because a few rich managed to deregulate the laws that did not allow them to get or keep as much. (For example, the Republican Eisenhower demanded 90% in taxes from the rich - and did not bankrupt them nor made them poor, by the way.)  And if they are unsatisfied with their vast wealth and want even more, it can only be because they are egoistic, greedy and/or believers in some ideological bullshit.

There is a lot more to be said on these questions, but these are my brief answers.

There is this about Mossack Fonseca:

Mossack evidently created some 214,000 anonymous offshore companies for its moneyed clientele — “shell firms” with sham directors and phony boards of directors, reports the SZ, designed such that their “true purpose and ownership structure is indecipherable from the outside.” In most of these cases, “concealing the identities of the true company owners was the primary aim,” and the documents suggest that Mossack routinely engages in business practices that “potentially violate sanctions, in addition to aiding and abetting tax evasion and money laundering.”
This also happened in the 1960ies (when I worked for a bank, where it was my job to find out things about banks and investors, who then also tried to hide most that was relevant to their real functioning) and has been happening long before.

What differs these days is that the laws which regulated these attempts to keep one's real earnings secret have been deregulated a lot (which means essentially: the old laws were withdrawn, often on specious ideological grounds) and this is why this fundamentally illegal activity of keeping most of your riches to yourself by denying their existence has been made partially "legal".

There is this correct relativization of the Panama Papers:
Here’s what else the Panama Papers are: They’re just the tip of a really big iceberg. That’s true in several senses. First of all, although Mossack Fonseca is a major player in the lucrative international industry of helping the rich get richer, it’s only one company among the network of bankers and lawyers and honey-tongued advisers competing to grovel before the world’s elite caste and make safe their massive wealth.
Yes, indeed: Mossack Fonseca is just one of quite a few more companies that thrive by allowing the very rich to keep almost all their riches for themselves.
Let’s put it this way: Who writes the laws, in a society dominated by finance capital, neoliberal economics and the ideology of free trade and globalization? In a system, to quote the author I alluded to earlier, “under which the market is the regulator of social production,” including the production of culture and thought? (Yes, that would be V.I. Lenin, of October Revolution fame.) Whose interests are those laws meant to protect? Does the world of Mossack Fonseca and its ilk, where morphing, shifting corporate entities shepherd amazingly large sums of money in secret from one jurisdiction to another, sound like the operation of a free and fair market society where everyone who works hard or has talent has an equal chance to become Donald Trump or Kim Kardashian? Or does it sound like a rigged system designed to delude the powerless and make them accomplices in their own impoverishment, while ensuring the indefinite oligarchic rule of the rich and powerful?
Clearly - or so I would say - the present "neoliberal capitalism" (also known as: capitalism-with-an-inhuman-face [2]) is a very much rigged system (rigged by propaganda, bullshit, and ideology, all of which are fundamentally false and fundamentally deceptive) that was "designed to delude" everybody who is not
rich and powerful, and thereby to have the "
oligarchic rule of the rich and powerful" triumph forever (also with the help of the NSA and the colossal fraud
of making all 7 billion inhabitants of the world resign all their privacies and most of their rights).

And I think that is a fair inference, though indeed I do not think (of course!) that it is a full analysis.

Here is the last bit I quote from this article:

We could rephrase that for the 21st century by saying that the rich are different because they have more money, and because they stole it from us and keep hoping we won’t notice. They stole it from you and from me, and even more from billions of other, poorer people around the world. Wealth and poverty have always been with us, and probably always will. But the disparity we see around us, far greater than anything Fitzgerald’s rich and innocent Jay Gatsby could have imagined, is an enormous historical crime, and on some level everybody knows it. The Panama Papers hint at the scale of that crime, and the scale of the coverup.
In fact, this is rather like my father told me, already in the 1950ies, albeit minus communism and socialism, that he didn't stress when he explained that society is made up of the few rich and the many non-rich, and that the rich are rich mostly because they are egoistic, greedy and very dishonest (and not because they are superior in any other way over the non-rich).

And I think my father was right about these things and this is a recommended article.
--------------------------
Notes
[1] Incidentally (and I am "an intellectual" since at least 45 years, and read very much) it is my position that neither psychology nor philosophy (in both of which I have excellent academic degrees: it is not that I am saying this while I don't know the stuff I am judging) is a real science, and the same holds for economics (in which I also read extensively, but without taking academic degrees).

You may disagree, but you should realize that extremely few economists predicted the crisis of 2008 - which I think a real science of economics would have predicted with considerable probability.

[2] I admit I have invented the name, taking inspiration from Dubcek's 1968 declaration that his socialism (in then socialist Checho-Slovakia) was "socialism with a human face", and in that way different from Russian socialism.

But I do think that the name is justified: Both Keynes and Friedman were pro capitalism, but Keynes' version of capitalism (which worked from 1945-1980 for the most part, and which did give a lot of affluence to the American and European many, between 1965 and 1980) indeed was a human version of that
system, compared with the greedy, egoistic pro very rich inhuman version of Friedman.
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