Steve Denning: Itemization of How We Blew Up the World

Steve Denning

Lest We Forget: Why We Had A Financial Crisis

Steve Denning

Forbes, 22 November 2011

When a true genius appears in the world you may know him by this infallible sign, that the dunces are all in confederacy against him.

Jonathan Swift

It is clear to anyone who has studied the financial crisis of 2008 that the private sector’s drive for short-term profit was behind it. More than 84 percent of the sub-prime mortgages in 2006 were issued by private lending. These private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year. Out of the top 25 subprime lenders in 2006, only one was subject to the usual mortgage laws and regulations. The nonbank underwriters made more than 12 million subprime mortgages with a value of nearly $2 trillion. The lenders who made these were exempt from federal regulations.

How then could the Mayor of New York, Michael Bloomberg say the following at a business breakfast in mid-town Manhattan on November 1, 2011?

It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp. Now, I’m not saying I’m sure that was terrible policy, because a lot of those people who got homes still have them and they wouldn’t have gotten them without that. But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it’s one target, it’s easy to blame them and Congress certainly isn’t going to blame themselves.”

Barry Ritholtz in the Washington Post calls the notion that the US Congress was behind the financial crisis of 2008 “the Big Lie”. As we have seen in other contexts, if a lie is big enough, people begin to believe it.

Full Story Below the Line with BLOCKBUSTER Itemization

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Dec 5

Chuck Spinney: UK Dunkirk, USA Long Walk Away from Afghanistan – the Military-Industrial Scam is to “Reset, Rebuy, Retrench”

Chuck Spinney

… How the Military – Industrial – Congressional Complex (MICC) Will Win By Losing

The old adage that it is easy to get into Afghanistan but painful to leave is true for many reasons — here is a big one described in 27 November issue of the Daily Mirror [also attached below] — the British army  plans to use Russian railways, built by the Tsars 140 years ago, to return hundreds of millions of pounds worth of equipment in Afghanistan via a landroute to the English Channel.

If you think the horror described in the Daily Mirror report is bad, think about the US options: Given our deteriorating relations with Pakistan, the long, highly vulnerable land route out of Afghanistan, thru the Bolan and Khyber passes, and then down the road system of the Indus Valley in Pakistan to its port of Karachi, is becoming increasingly problematic.

An optional US exit strategy would be an agonizing variation of the Dunkirk option described in the Daily Mirror report plus a sea lift, perhaps via transshipment points in Black Sea ports, like Batumi in Georgia, or Novorossiysk or Sochi in southern Russia, or even Odessa in the Ukraine (which at least would avoid the problem of different railroad gauges).

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Nov 27

Marcus Aurelius: SecDef to McCain on Sequester + RECAP on DoD Fraud, Waste, & Abuse

Marcus Aurelius

Invite your attention to pages 5 thru 7 of attached which outlines in very clear terms the likely FY 2013 and longer term impacts on the Department of Defense and the Joint Force of the impending sequester brought about by this week’s dereliction of duty on the part of the Senators and Representatives making up the Joint Select Committee on Deficit Reduction.

SecDef Panetta to Senator McCain on Sequester (PDF 2 pages)

Phi Beta Iota:  Panetta-McCain may be the toxic replacment to Cheney-Warner.  The letter is without merit.   The acquisition system is so broken now the Navy and Army cannot build anything coherently–the Navy still lacks Naval Gun Fire and the Army still lacks an infantry weapon able to out-gun  the Taliban, while the Air Force continues to stink at close air support and lack both an intra-theater adequacy of lift and a long-haul heavy lift capability (or the ability to be effective above 6,000 ft).  DoD, in short, is a mis-managed mess and Panetta has no idea how to go about fixing that, nor does he want to.  Lockheed Martin and others are quite happy with the way things are, where 50% of every dollar is waste but that waste is profit for them because it includes their overhead.  It is true that the current laws mandated by Congress make it difficult for any Cabinet Secretary to cut waste–this is the same Congress that mandated we pay 100% asking price for Medicare drugs instead of the more common global standard of 2% for generic wholesale.  As long as Congress remains corrupt, and the SecDef remains corrupt, there is no fixing this problem.  The FACT is that we have to cut one trillion a year (what we are borrowing), not one trillion over ten years.  The FACT is that DoD would be much stronger if it could combine both intelligence and integrity and actually create the four forces after next, at a much reduced cost, that those with intelligence and integrity have been discussing for decades, and with greater intensity, since the mid-1990’s.

See Also:

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Nov 25

Real PR (public reality): Harsh Realities in “Call of Duty”

Call of Duty: Modern Warfare 3 Breaks Records, Makes $400 Million in One Day (video game)


Source: TruthDig

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Nov 13

John Robb: Occupy Resilience – Condemn the Regional Power Companies and Then Municipalize Them

John Robb

Resilient Energy: Municipalization of Power

How can you help your community build a resilient energy system?  One of the first steps is to buy back the energy system from the regional power company by condemning it and then municipalizing it (it can be run as a power co-op or as a standard company …  The structure really depends on the community.).  This moves provides you with the control of the local grid so that your community can:

  • Ensure higher levels of maintenance (tree trimming, etc.) and faster response to failure.  During the two big power outages on the east coast this summer/fall, power was out for much of the region for nearly a week.  In many cases, the municipal power companies get power back on to all of their customers in 1/2 the time of the big regional companies.
  • Cut rates and change energy mix.  As a municipal company, you can select the different types of energy you will use locally.
  • Add advanced micro-grid features.  Everything from community energy markets to local energy backup to power smoothing.   Extra benefit of this approach:  it will prevent the regional power company from using smart grid tech to snoop on everyone in the community by micro-analyzing energy use (which they will then resell to marketing companies or provide to the government w/o warrant for “signature” sniffing).

All of the benefits listed above will double or treble in importance as the global economy nose dives into depression over the next couple of years.  So, it’s better to get started early than later.

Here’s a few links from the Boulder Colorado effort to condemn and municipalize it’s power.  A combo of bad service and a low level of renewables use prompted the effort (use whatever hooks you need to get it done, but get it done):

  • The site of the citizens coalition.  The astroturf site of the national power company.
  • Citizen groups do the hard work.  A technical group does the modelling and analysis for a municipal grid.  They compare rates, costs, and energy mix  Here’s an amazingly video of a member of that team, Sam Weaver.
  • Homer software. The software you need to model a municipal grid from rate analysis to energy mix.  The numbers.

NOTE:  Great article in the NYTimes today on how the big regional companies are so focused on acquisitions, regulatory gaming, and extractative finance; they are delivering terrible service.

NOTE:  Great pushback in the comments on how tough it is to do this.  Basically, crony capitalism (revolving door, bribes, etc.)  + regulatory capture (same mindset) + gov’t granted monopoly = lots of opposition.

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Nov 8

Winslow Wheeler: Military Spending versus Competence

Winslow Wheeler

Washington Post Joins Hysterical Defense Budget Rhetoric

Center for Defense Information, 7 November 2011

Monday, November 7, the Washington Post editorial board published its take on the extreme rhetoric the country has been hearing on the defense budget since Secretary of Defense Leon Panetta starting talking about the “doomsday mechanism” that would reduce defense spending.  Quoting the newer extreme rhetoric of several members of the Joint Chiefs of Staff defending their budget ambitions to the eager-to-listen House Armed services Committee, the Washington Post positioned itself foursquare in favor of hysterics.  It was with an editorial titled “Defense on the Rocks: Mandated spending cuts could decimate U.S. military might.”  Find it here  (although at the web link they toned down the title with the more sympathetic “US Defense on the defensive.”)
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Nov 8

Videos on Election Fraud/Theft

+ Stealing America: Vote by Vote

+ American Blackout: documentary of Greg Palast’s investigation into voter fraud

+ UNCOUNTED: The New Math of American Elections

+ Hacking Democracy: The HBO Special

+ Election theft video archive from

Note: Diebold – “Diebold Election Systems” acquired by “Premiere Election Solutions” then acquired by “ES&S” which was acquired by “Dominion” in 2010 (wikipedia).

Also see:
+ Election Defense Alliance
+ Citizens for Legitimate Gov

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Nov 7

Event: Nov 9 – Nation-wide House Parties to Plan for the Two-Year Anniversary of Citizens United

More than 150 house parties are being planned
, and Sen. Bernie Sanders (I-Vt.) will join the parties by phone and webcast. For those in Manhattan, believe it or not, but there is only ONE event listed (60 Wall St, “the Atrium” which is also accessible from Pine St).

 Also see:
Resources for House Party Hosts and Activists Organizing for the Two-Year Anniversary of Citizens United v. FEC

Boulder’s corporate personhood measure

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Nov 3

Chuck Spinney: Manufacturing Dissent – The Rise of the Tea Party as an Elite Front – Opposite of OWS

Chuck Spinney

Below is an excellent interview with Anthony DiMaggio in Counterpunch.  DiMaggio author of The Rise of the Tea Party, due out in November 2011. He uses the “propaganda model” developed by Noam Chomsky and Edward Herman in their book Manufacturing Consent to document and explain the Tea Party’s organizational dynamics for manufacturing dissent, and he compares these dynamics to those of the Occupy Wall Street movement.

Before reading the interview, consider please the following: The forces powering the rage of the Tea Party — the stagnation of incomes and the increasingly unequal distribution of income — were around long before the Tea Party erupted on the national scene.

Click on Image to Enlarge

That the distribution of income had shifted in a very fundamental way toward the wealthy and especially the super-wealthy at the expense of the bottom 80% of the working population was clearly demonstrated in a classic study by Emanuel Saez and Thomas Piketty (Quarterly Journal of Economics, February 2003, updated in 2009), and subsequently confirmed by many other others, including just last week, on 25 October 2011, by the Congressional Budget Office.

It has also clear for years that inflation-adjusted wage growth that underpinned the improved living standards of great American dream machine sputtered out during the 1970s (see chart below).

So, it is simply beyond dispute that a fundamental change in the income distribution has taken place since the late late 1970s.  That change is also correlated with the wave of deregulation, tax cutting, defense spending increases (with a slight interregnum following the Soviet Union’s collapse), and deindustrialization/globalization that took off after 1980 during the Reagan Administration and accelerated during the Clinton and Bush II Administrations.  

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Oct 29

Chuck Spinney: Screwing the Greeks – Deeply

Chuck Spinney

Below are two eye opening reports/analyses by two of the best counterpunchers in Alexander Cockburn’s and Jeffrey St Clair’s stable of bomb throwers.  The subject is Greece: its political/economic crisis and the myths surrounding average Greeks being the cause of its crisis.

In the first, Destroying the Livelihoods of Thirteen Million People: The Myth of Greek Profligacy, my friend Marshall Auerback, argues that the masses of the Greek people (the bottom 80% of a highly unequal income distribution) are being set up as scapegoats to pay for a neo-liberal austerity plan that aimed producing income deflation (instead of a currency devaluation) to improve export competitiveness.  Auerback explains why this is  really a plan of collective punishment that is guaranteed to fail while shredding what is left of Greece’s social contract.

In the second, Naxos Hangs On By Its Fingernails: How Greeks Were Driven Back to the Land, Patrick Cockburn presents the reader with a micro-case study of what is happening to average Greeks (i.e. part of the lower 80%) on the island of Naxos, the largest and my favorite island in the windy Cyclades.

Chuck Spinney

Destroying the Livelihoods of Thirteen Million People
The Myth of Greek Profligacy
Counterpunch, OCTOBER 24, 2011

Naxos Hangs On By Its Fingernails
How Greeks Were Driven Back to the Land
Counterpunch, OCTOBER 18, 2011

Phi Beta Iota:  One reason why the Electoral Reform and BigBatUSA endeavors are so important NOW, is because if they succeed in the USA, where Internet connectivity, cognitive surplus, and Occupy awaking have converged, the model can be scaled globally very quickly.  At root this is about secular corruption.  Pope Benedict XVI had a chance to use Assisi creatively but chose the low road.

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Oct 25