Access News Service

ANS -- The Sad Death Of The Knob, Switch And Button

2012-01-28T20:55:00.001-08:00

Here is an interesting comment on design. Possibly fatal design. It won't be the first time someone dies for a fashion statement, but here you don't really get a choice.
Find it here: http://jalopnik.com/5874496/the-death-of-the-knob-switch-and-button
--Kim

detroit auto show
By Jason Torchinsky
Jan 11, 2012 12:00 PM
46,729 466

The Sad Death Of The Knob, Switch And Button

I want to start by coming out and saying I'm not one of those car luddites who think everything should hover in some magical past; while I'm very fond of old-school cars, there's an amazing amount of amazing new tech in cars, and LCD dashboards in so many new cars here at the Detroit Auto Show are a genuinely great advance. Except for one big issue: Knobs, switches and buttons? They're now officially doomed.

Knobs are still around, albeit in reduced numbers, but it's very clear they're considered vestigial holdouts and it's just a matter of time before they're done away with completely. Looking at forward-thinking cars like the Tesla Model S demonstrates this, as its dash is basically just two big iPads, one in landscape orientation and the other in portrait.

A booth from Denso, a major supplier of auto parts and electronics, shows a prototype cockpit of the future and it's all touch screens. Touch screens are great on our phones and tablets; so why wouldn't they be great in a car, right?

The problem has to do more with the "screen" part than the "touch" part, though both are factors. On your phone, you're looking at the screen, interacting with it very directly; the visual feedback is essential for operating the interface.

When you're driving, ideally you're looking mostly out of the big window in front of you, and you operate most of the ancillary controls with no more than a quick glance. Touch screens don't work like that; little buttons on smooth glass surfaces have to be targeted with a pair of eyes.

All you need to do to prove the point is to look up.

Have you ever peeked in the cockpit of an airplane and seen the levers in between the seats? Those levers have funny-shaped knobs: Spool-shaped, crown-shaped, star-shaped it's the marshmallows from a Lucky Charms box. There is, of course, a great reason why they're like that: so pilots can know what lever is what just by touch.

That's exactly what is being given up when controls move to the touch screen. Tactile feedback and the ability to feel what a control is has long been part of driving.

Traditionally, we can feel and know what's a radio knob, what a climate control lever feels like, how the notches feel as we move them from one setting to another, and it's worked great. Even without any interior lights or dash lights I bet most of us could find and use the essential controls on our cars.

Touch screens are awesome for many, many things. They look great, they can show an incredible amount of information, but they should never be the only components on a dash.

Oh, but that's not the only problem. Some cars, like the Chevy Volt, the Cadillac ATS and everything from Lincoln are replacing standard buttons with sleek capacitive touch plates with big clusters of identically-shaped buttons. Capacitive technology refers to using electrodes to sense the conductive properties of objects, such as a finger. So, basically, rather than physically depressing a button you've fumbled for while your eyes remained on the road, you'll turn on and off four different things before finally looking down to find what function you want to change. Then you crash and die.

So those suck in about the same way touch screens do, and they look like they came off a VCR. So knock that off, too.

Automakers, I'm pleading with you, spare the life of just a few knobs, just some essential ones, even if they have redundant touch-screen controls. Leave me some knobs in the cars of the future. Nice, chunky, clicky knobs, and maybe a lever, switch and button or two.

I'll even let you make them look cool and LED-lit or whatever you want.
Contact Jason Torchinsky:

ANS -- Old mortgages rise from the dead, haunt homeowners

2012-01-28T01:38:00.000-08:00

Yet another egregious after-effect of deregulating the greedsters and the banksters. Many of the people who have lost homes never missed a payment -- the banks just cheated them.
find it here: http://www.reuters.com/article/2012/01/26/us-usa-housing-mortgage-reincarnation-idUSTRE80P0SJ20120126
--Kim

Old mortgages rise from the dead, haunt homeowners

By Michelle Conlin

Thu Jan 26, 2012 2:56pm EST

(Reuters) - In July 2009, Roy and Sheila Bowers refinanced the mortgage on their suburban ranch home in Topeka, Kansas. The couple wanted to take advantage of the low interest rates that were all the rage at the time.

Roy, a truck driver, and Sheila, a former hotel housekeeping supervisor, knew their new loan from Wells Fargo would enable them to save $198.86 a month - a nice chunk to help with gas and groceries.

But what the Bowers never imagined was that their old loan, the one Wells Fargo told them was paid off, would resurrect itself, trashing their credit report, scotching their son's student loans and throwing the whole family into foreclosure. All, they say, even though they didn't miss a single mortgage payment.

The Bowers are not alone.

More and more, homeowners say that mortgages they thought were dead and buried are springing back to life, sometimes haunting them all the way into foreclosure.

"It's the most egregious manifestation of an industry that's seriously broken," said Ira Rheingold, a lawyer who is the executive director of the National Association of Consumer Advocate.

Diane Thompson, an attorney with the National Consumer Law Center, says she has defended hundreds of foreclosure cases, and in nearly all of them, the homeowner was not in default. "The record-keeping on the part of the mortgage servicers is not to be trusted."

The problems grew from a lot of sloppy recordkeeping that began during the housing boom, when Wall Street built a quick-and-dirty back-office operation to process mortgages quickly so lenders could sell as many loans as possible. As the loans were later sold to investors, and then resold around the world, the back office system sidestepped crucial legal procedures.

Now it's becoming clear just how dysfunctional and, according to several state attorneys general, how fraudulent the whole system was.

Depositions from "affidavit slaves" depict a surreal, assembly-line world in which the banks and their partner firms hired hair stylists, fast-food kids and Wal-Mart floor workers, paying them $10 an hour, to pose as bank vice presidents, assistant secretaries and corporate attorneys.

These "robosigners" became a national sensation in the fall of 2010 when it was revealed that they faked titles, forged documents and backdated affidavits so they could make up for the bypassed procedures and foreclose on properties.

They passed around notary stamps as if they were salt. They did all of this, they testified, without verifying a single word in any of the documents - as is required by law.

And it was all done, they say, to foreclose on as many homeowners as fast as possible.

No one collects statistics on wrongful foreclosures, or how many people are facing the phantom mortgage debts. But as the industry enters its fifth year of unwinding its mortgage morass, consumer groups, homeowner attorneys and foreclosure-fraud investigators say they are seeing more cases where people who don't owe the banks a dime are getting ensnared in the same hell as those who have missed payments.

They add that such problems are likely to intensify. Former industry employees have testified that they knowingly pushed through foreclosures on the wrong people.

It all casts a pall over a housing market in worse condition than it was during the Great Depression. By some estimates, 12.5 percent of U.S. homes with mortgages are either in foreclosure or the loans are at least 30 days past due, representing about $1 trillion in value.

"This is an epic problem that the economy hasn't even begun to digest," said Florida foreclosure analyst Lisa Epstein.

In some cases, mortgages that were supposed to die off in a refinancing are popping back up, while in others, the loans were paid in full. Homeowners who pay off their houses through bankruptcy programs are also falling prey.

So are homeowners who never even had a mortgage to begin with.

Homeowners say the banks' repo men sometimes even show up at work. Banks also hector them with threatening letters and phone calls. "It scared the hell out of him," said a Houston lawyer whose client was the target of such efforts. "He was absolutely spooked," lawyer Barry Brown said.

So was Shantell Curtis of Utah. She showed up at her accountant's office last year only to learn that she had been sued for foreclosure on a house she had sold years before. Bank of America reported the delinquency to credit bureaus, tarring Curtis's credit. It turned out the entire saga stemmed from a bank coding error. The amount the bank falsely alleged Curtis still owed on her mortgage? One dollar.

Vietnam vet Dwight Gaines fell behind on his payments on his Birmingham, Alabama, home. Gaines paid off his entire mortgage, plus all the fees and expenses he owed the bank in March 2010, as a part of a Chapter 13 bankruptcy plan. But Bank of America kept sending Gaines notices that he still owed $6,842.37. Nearly two years later, Gaines is still fighting the bank in court.

"In my experience, if I had not sued Bank of America, they would have eventually placed Mr. Gaines in foreclosure although he had completely paid his mortgage," said Gaines' lawyer, Wesley Phillips.

Bank of America spokewoman Jumana Bauwens said the bank is working to resolve the Gaines situation. She also said that "these situations pre-date a review of our foreclosure procedures which took place in the fall of 2010. At the time, we identified areas of our process that needed to be improved, and we have been making those improvements."

The reincarnating mortgage is only the latest development in the megabanks' mortgage debacle, a scandal that has made them the target of a mounting pile of investigations and lawsuits. Though a settlement with most of the U.S. attorneys general may be imminent, a rogue group of AGs has peeled off to launch their own investigations.

One of those AGs, New York's Eric Schneiderman, is a part of the U.S. Justice Department task force announced by President Obama in his State of the Union address on Tuesday night.

Up until Obama's announcement, the federal government's response to the alleged financial misconduct was in the form of an independent review of the banks overseen by the federal Office of the Comptroller of Currency. But critics have labeled the OCC review as a farce rife with conflicts of interest.

The OCC spokesman, Bryan Hubbard, disputed that claim, saying the OCC has gone to great lengths to ensure that the independent consultants hired by the banks to review their procedures would report to regulators, not the banks. "During the selection process of the independent consultants and law firms, regulators rejected some proposed consultants and law firms to prevent conflicts of interest," said Hubbard.

Such reviews are supposed to gather information from homeowners like Jennifer Wilson, a former nursery school teacher from Philadelphia. Wilson settled a wrongful foreclosure case with Wells Fargo in June 2010. That month, court records show, Wells Fargo filed a satisfaction of mortgage document noting that the $8,000 loan on Wilson's home had been paid in full.

But more than a year later, on December 8, 2011, Wilson, who is disabled and lives below the federal poverty line, answered her door to see a process servicer brandishing foreclosure warning papers from Wells Fargo. The bank's letter warned Wilson that she owed 57 months of late payments, plus expenses, totaling $18,407.55. If she did not pay within 30 days, the bank said, it would sue for foreclosure.

"I thought I'd been punked," said Wilson. Even more bizarrely, one day later, a different process server from a different company showed up on Wilson's door and handed over the exact same papers Wilson had received the day before.

"We see a lot of cases like this, where they are trying to collect even though there is no mortgage," said Wilson's lawyer, Jennifer Schultz. "Once the system has marked you as delinquent, there's just this massive machinery that takes over. There are people whose lives are destroyed by the system, and there's no way to fix it."

"We are working with her to resolve this matter as quickly as we can," Wells Fargo spokesman Jim Hines said.

Some critics say the stories indicate a pattern of systemic wrongdoing. That is one allegation lobbed in a December lawsuit against the banks brought by Massachusetts Attorney General Martha Coakley, who is among the handful of attorneys general that split off from the broader AG settlement group.

For the Bowers of Topeka, it all started in July 2009, when they refinanced their home with Wells Fargo. As is standard in a refinance, the couple used the proceeds from their new loan to pay off their old loan, with Security National Mortgage Company.

On July 6, 2009, Wells Fargo sent the Bowers a letter with a header in all caps at the top that stated: "CONFIRMATION OF LOAN PAYOFF." The letter opened by saying: "Congratulations! We are pleased to inform you that we have processed the funds necessary to pay your loan in full."

At the same time, Wells Fargo also sent a certificate of satisfaction to the Bowers local recorder of deeds in Shawnee County, Kansas. That notice certified that the Bowers' old loan of $184,222.00 had been paid off.

As the Bowers had hoped, their interest rate dropped from 7 percent on the old loan to 4.875 percent on the new one. The couple say they paid their new mortgage early each month.

But what the Bowers didn't know is that, five months later, the banks' private mortgage recording service filed an "Erroneous Release of Mortgage" document on the Bowers' loan with the Shawnee County Recorder's Office. The filing stated that the Bowers' first mortgage "has not been fully paid, nor satisfied, nor discharged, but, instead, continues to exist."

The document was signed by a robosigner, the Bowers' attorney alleges.

One month later, the Bowers noticed that the loan number and interest rate on their mortgage statement had mysteriously changed. Wells Fargo was now charging them the old 7 percent rate - and it hit them with more than $3,000 in late fees.

Thus began the family's descent into their mortgage ordeal. Sheila Bowers says she called Wells Fargo over and over and finally learned that the bank was now alleging that the couple's refinance never went through, and so the bank was reverting to the terms of the original mortgage.

To Wells Fargo, it was as if the refinance had never occurred. Yet Wells Fargo then reported two mortgages to the credit bureaus. That lowered the couple's credit score to the point where they couldn't obtain their son's new student loans.

"We only ever got one bill," said Sheila Bowers. "But they kept telling us we had two mortgages."

The Bowers couldn't find a lawyer who would take their case, especially since they could pay so little. But through friends, they knew an owner of a Topeka mortgage brokerage company who was also an attorney: Donna Huffman. It turned out Huffman was defending just such cases. "I'm a lender suing lenders," said Huffman. "I fought to put people in homes, and now I'm fighting to keep them."

Huffman sued, alleging that the bank was making the Bowers pay for its mistake. Wells Fargo response, in court papers, was that the Bowers failed to sign all the paperwork necessary for the refinance to go through. But the Bowers say they signed every document that the bank gave them. The bank also says in court papers that the Bowers never attended a closing. But the Bowers say the bank never told them they needed to do so.

What made the story even more strange to the Bowers is that when Sheila Bowers called the Federal Housing Administration to get help, the FHA, in a letter filed in court papers and dated October 19, 2010, told her that the loan Wells Fargo was trying to collect on did not exist. Instead, the FHA said it had documentation showing that the Bowers' original loan "was terminated on July 1, 2009, by prepayment," suggesting that Wells Fargo did pay it off. As far as the FHA was concerned, the loan that Wells Fargo was enforcing didn't exist.

Despite the misunderstanding, the Bowers continued to send in their mortgage payment to Wells Fargo, with the amount for the new, refinanced loan, every month. They hoped the entire ordeal would one day get cleared up. But in November 2010, Wells Fargo rejected the Bowers payment and sent it back. The next month, five days before Christmas, the bank foreclosed. The family then stopped sending in payments. They continue to live in limbo in their house as they fight for resolution.

Wells Fargo spokesman Jim Hines said: "The allegations, we feel, are baseless. We feel we are entitled to protect our lien interest because the promissory note has never been paid and the note and the (original) mortgage are in default."

To this day, the Bowers say they have no idea where all the mortgage payments they sent in after they got their new loan went.

"Nobody seems to know," said Sheila Bowers. "It's a mystery."

(Corrects paragraph 10 to $10 an hour instead of $10 per day; corrects last paragraph to Bowers instead of Bowe)

(Reporting by Michelle Conlin; Editing by Gary Hill)

ANS "info only" Fwd: Breaking: California's AG refuses to give in to the Big Banks

2012-01-26T23:00:00.001-08:00

For your information only (I am not soliciting money for them or even signatures) -- I got this and I thought you all should know that we are not agreeing to the idea of letting the banks get off scott free for what they have done to too-trusting mortgage holders.
--Kim

Dear Kim,

Yesterday, Attorney General Kamala Harris announced that she would NOT agree to the current settlement deal with the Big Banks since it is "inadequate for California." She refused to sign on -- despite monumental pressure from the Big Banks, as well as the Obama Administration.

Kamala Harris is a hero -- the spirit of courage -- fighting for right even if the establishment and conventional wisdom are against her.

Will you thank AG Harris for standing up for homeowners against the most powerful people in the world?

Only 48 hours ago, no one was sure if the potential settlement would deliver justice for the millions defrauded by the Big Banks, or if it would amount to bank bailout #2. AG Harris reviewed the details of the final proposal and believes it's closer to the latter. She told us it lacks sufficient transparency, financial relief for homeowners, and meaningful enforcement measures to ensure accountability -- three of the five principles you, Courage members, asked to her stand up for months ago. In doing so, she showed the sort of remarkable courage for which we named the Courage Campaign and which we strive to embody every day.

Click here to sign our thank you card to Kamala. If you're interested in helping us deliver it, let us know on the sign up page.

We are encouraged that President Obama announced his special mortgage task force headed by New York Attorney General Eric Schneiderman, and we hope it's a sincere effort to hold the Big Banks accountable for the fraud they perpetrated in the housing market. Investigation and prosecution for crimes is absolutely necessary, but it alone is not sufficient to sign onto a deal unless it meets our criteria for a truly good settlement.

Please join us in thanking Attorney General Kamala Harris for standing up for you and me, when a less courageous elected official would have wilted.

Yours in the fight for economic justice,

Rick Jacobs
Chair and Founder, Courage Campaign

Chip in today to support our work fighting the Big Banks.

Courage Campaign is an online organizing network that empowers more than 750,000 grassroots and netroots activists to push for progressive change and full equality in California and across the country.

This email was sent to Kimc@astound.net

To unsubscribe: http://couragecampaign.org/unsubscribe

ANS -- IBM: Lithium air battery prototype in 2013, production in 2020

2012-01-23T18:36:00.001-08:00

Here is an exciting announcement of a new advancement in batteries for cars. If it works out, it will be very helpful.
Find it here: http://reviews.cnet.com/8301-13746_7-57358899-48/ibm-lithium-air-battery-prototype-in-2013-production-in-2020/?tag=mncol;cnetRiver
--Kim

IBM: Lithium air battery prototype in 2013, production in 2020

by Liane Yvkoff January 13, 2012 2:56 PM PST

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(Credit: IBM)

Researchers are working on a lithium air battery that will make electric vehicles as practical as internal combustion cars are today.

For all the leaps and advances electric vehicles have made in the last couple of years, they still have a way to go before they become practical enough or cheap enough to be the typical family car. But IBM is working on a battery that will put an end to range anxiety, able to power a vehicle for 500 miles.

IBM researchers at four of the technology giant's laboratories are testing a lithium air battery. Dubbed the Battery500 Project, the lithium air batteries swap heavy-metal oxides for carbon, which reacts with oxygen to create an electrical charge. It's considered the holy grail of electric vehicle technology because it offers a theoretical energy density more than 1,000 times greater than the typical lithium ion battery you'll find in a Nissan Leaf. But it's also highly unstable.

To make lithium air batteries more stable, researchers tapped the Blue Gene supercomputer in Zurich to analyze electro-chemical reactions to find alternative electrolytes that won't degrade the battery while recharging, and have identified material that is promising, according to an article in New Scientist.

With several concepts under their belt, IBM expects to reveal a working prototype of the lithium air battery in 2013. If all goes according to plan, IBM expects full commercial production of their technology in 2020.

(Source: New Scientist)

Read more: http://reviews.cnet.com/8301-13746_7-57358899-48/ibm-lithium-air-battery-prototype-in-2013-production-in-2020/#ixzz1kL5oN27p

ANS -- Property vs. Freedom

2012-01-23T16:14:00.001-08:00

This article explains copyrights, property rights, and the public domain in a way that's easy to understand. this is going to be important to understand if we want to keep the internet free.
Find it here: http://weeklysift.com/2012/01/23/property-vs-freedom/
--Kim

January 23, 2012 1:51 pm

Property vs. Freedom

If you strip it down to its essence, the battle over SOPA/PIPA is Property vs. Freedom: the media companies want to defend their intellectual property, while Internet-users want to defend their freedom.

You won't often hear it characterized that way in the corporate media, though, because Property and Freedom are supposed to be inseparable, like Love and Marriage. Sing it, Frank:

This I tell you, brother:
You can't have one without the other.

Or, as Ron Paul more prosaically put it in 2004:

The rights of all private property owners must be respected if we are to maintain a free society.

Simply saying the phrase "Property vs. Freedom" marks you as some kind of extreme Leftist. All right-thinking people know that Property can't possibly oppose Freedom.

Last summer I wrote Six True Things Politicians Can't Say. Well, here's another one: The relationship between Property and Freedom is highly contentious. (On second thought, the Love-and-Marriage parallel isn't that bad.)

Get off my lawn. Why is that relationship so contentious? It's simple: The essence of Property is the right to tell people to get off your lawn, and to sic the police on them if they don't. If you can't do that, it's not really your lawn.

So naturally Property increases Freedom for the owner. Once you have the right to sic the police on trespassers, your lawn becomes available for cookouts, gardening, minimally supervised children, and all sorts of other expressions of freedom.

But look at it from the other side. What if you're constantly being forced off other people's lawns and own no property you can retreat to? How free is that?

Free to be Jim Crow. Now read the Ron Paul quote in its full context. On the 40th anniversary of the Civil Rights Act of 1964 ( Wikipedia entry, text of bill), which banned racial discrimination in "any place of public accommodation" (like the Woolworth's lunch counter in Greensboro) and in hiring, Paul portrayed the law in this light:

The Civil Rights Act of 1964 gave the federal government unprecedented power over the hiring, employee relations, and customer service practices of every business in the country. The result was a massive violation of the rights of private property and contract, which are the bedrocks of free society.

In other words, business owners lost some of their right to tell black people to get off their lawns. Definitely it was a diminishment of Property. But was Paul right that it was a net loss of Freedom, or did the freedom gained by blacks more than make up for the freedom lost by businesses?

Why is it your lawn anyway? Post-slavery America may look like an exceptional case, but actually it was just a particularly egregious example of a general rule: Never in the history of humankind has private property been fairly distributed. By the time American blacks stopped being property themselves, all the good stuff was already owned by whites.

Welcome to Freedom, suckers! Now get off my lawn.

One standard pro-property response to this point is that in a free economy property tends to move to the people who earn it through hard work and ingenuity, so mal-distributions even out over time. Maybe the newly-freed slaves did get a raw deal, but that was a long time ago. According to this point of view, by now their great-great-grandchildren must be pretty much where they deserve to be.

But far from an exception, the race problem is a convenient color-coding that makes the general historical pattern easier to see. Michael Hudson described that pattern like this:

The tendency for debts to grow faster than the population's ability to pay has been a basic constant throughout all recorded history. Debts mount up exponentially, absorbing the surplus and reducing much of the population to the equivalent of debt peonage.

In other words, the typical trend is not for things to even out after a few generations, but for unfair distributions of property to get moreso. Sing it, Billie:

Them that's got shall have.
Them that's not shall lose.

The only exception I can think of is post-World-War-II America and Europe, where property tended for decades to become more evenly distributed. But far from the natural workings of a free economy, that outcome required inheritance taxes, progressive income taxes, public education, laws to break up monopolies and protect unions, a significant social safety net, and many other government interventions.

Freedom and public property. America's two greatest symbols of freedom are the Cowboy and the Indian, both of whom own little, but live in a vast public common where they can hunt in the forests, drink in the streams, and swim in the lakes without worrying about ownership.

Contrast that freedom with economic blogger Noah Smith's account of downtown Tokyo.

there are relatively few free city parks. Many green spaces are private and gated off (admission is usually around $5). outside your house or office, there is basically nowhere to sit down that will not cost you a little bit of money. Public buildings generally have no drinking fountains; you must buy or bring your own water. Free wireless? Good luck finding that!

Does all this private property make me feel free? Absolutely not! Quite the opposite the lack of a "commons" makes me feel constrained.

To me the lesson is clear: For all but the fabulously wealthy, freedom is maximized by balancing public and private property. It's nice to have your own lawn, but public property you can't be chased off of roads, parks, sidewalks is even more important. It's also nice to have public access to water and sanitation, and not to be at the proprietor's mercy whenever you enter a store, restaurant, or theater.

Intellectual property. Applying that logic to intellectual property gets you to the kind of public/private balance we used to have: Copyrights and patents grant creators and inventors valuable temporary rights, while producing a rich public common allowing fair use of recent creations. And since everything eventually becomes public, a balanced copyright law increases the value of the public domain by encouraging the creation of works that otherwise might be impractical.

Protests of SOPA and PIPA make no sense until you understand that we have lost that balance.

Consider how the music-downloading problem arose: By controlling distribution, media corporations inserted themselves as toll-collectors between creators and users. You'd pay $20 for a CD you could easily copy for $1, knowing that precious little of the difference made it back to the artist. Napster-users had few moral scruples against "stealing" music because the system was already amoral. (Call it the Leverage Principle: "The rich and powerful take what they want. We steal it back for you.")

Also, endless copyrights have dammed the flow of material into the public domain. When Walt Disney created Mickey Mouse in 1928, he was granted a 28-year copyright with the prospect of renewing for another 28 years. Evidently, the prospect of Mickey entering the public domain in 1984 didn't deter Walt from creating him.

But every time that expiration date approaches, the Disney Corporation leans on Congress to extend the length of existing copyrights. Tom Bell illustrates how copyrights lengthen as Mickey ages.

Unless corporate money loses its primacy in our political system, nothing created after 1928 will ever enter the public domain. Unlike Mickey, the vast majority of that cultural treasure-trove will be orphan works that no one has the right to use. (For a book-length treatment of these issues, see The Public Domain, which the author has graciously put in the public domain.)

As Laurence Lessig has pointed out, extending an existing copyright does nothing to promote creativity or otherwise advance the public interest:

No matter what the US Congress does with current law, George Gershwin is not going to produce anything more.

In short, the Infosphere is slouching towards Tokyo. Gradually the public common is shrinking towards the day when almost everything of value will be corporately owned.

SOPA/PIPA. The Stop Online Piracy Act in the House and the equivalent Protect Intellectual Property Act in the Senate are two more corporate attempts to buy laws that serve the private interest but not the public interest. (Interestingly, Politico covers the SOPA protests as a battle between Hollywood and Silicon Valley, as if the public were not involved.)

These laws would make search engines, internet-service providers, and other middlemen responsible for blocking access to web sites that copyright-holders claim are pirating their works. Since they bear no comparable responsibility for defending fair use, their safest course will be to block any site Disney or Time-Warner complains about.

Consider the quotes and images in this article. Traditionally, they would be considered fair use. But what if somebody complains? Is WordPress really going to pay a lawyer to read this article and write an opinion? Or are they just going to shut the Weekly Sift down?

The protests worked, for now. Websites like Wikipedia went dark on Wednesday to protest SOPA/PIPA, and a massive public response forced many lawmakers to change their positions.

But it's naive to think that's the end of the story. Corporate money is relentless. When public outrage dies down, we'll soon see the basic ideas of SOPA/PIPA back in some other form.

In addition to protests, we need a fundamental rethinking of intellectual property. As long as we're just talking about theft and how to prevent it, we're missing the point. The right question is how we restore the public/private balance to intellectual property.

We need intellectual property lines that are widely seen as legitimate. When we have that, the problems of trespassing and theft will become much, much smaller and easier to police.
January 23, 2012 1:47 pm Categories: Articles | Comments (1)

Tagged copyright, corporations, framing, media, propaganda

ANS -- Selling electric vehicles' power back to grid or vehicle-to-grid (V2G)

2012-01-23T15:44:00.001-08:00

This is an article about electric cars becoming a storage medium for electricity. It's interesting, we need to do this, and the article doesn't mention that Europe is far ahead of us on this kind of stuff. If you want to know what's going on in the rest of the world with respect to changing over to renewable energy, read Jeremy Rifkin's new book, The Third Industrial Revolution.
Find it here: http://www.evwind.es/noticias.php?id_not=16183
The website has links to further explanations about electric cars.
--Kim

Selling electric vehicles power back to grid or vehicle-to-grid (V2G)

january 24, 2012

By now, everyone is familiar with the idea of an electric car plugging into an outlet to recharge. But vehicle-to-grid (V2G) electrification flips that around.

NextEnergy has begun ordering expensive test equipment for the technology equivalent of a man-bites-dog story: a project that officials hope will help validate a promising component of the smart grid known as vehicle-to-grid electrification.

But vehicle-to-grid (V2G) electrification flips that around: If components and communication systems between car and grid evolve as planned, owners of electric vehicles will be able to generate income to offset the premium they pay for their cars by selling power back to utility companies at times of peak usage.

In April, the nonprofit Institute of Electrical and Electronics Engineers and the Society of Automotive Engineers signed a memorandum of understanding calling for the two organizations to agree on future national standards for vehicle-to-grid electrification.

NextEnergy has agreed to help develop those national standards. This spring, NextEnergy will begin testing components and electric cars in a building adjacent to its Detroit headquarters that houses what is called a microgrid that is already hooked up to DTE Energy.
Gauthier

"This could be a way to have a market subsidy," said Gary Gauthier, NextEnergy's director of business development. "This isn't near term. We need to get the OEMs involved. Realistically, it'll be three to five years before we even have small-scale operations up and running.

According to a report in November by Pike Research, 100,000 electric vehicles could be feeding power back into the national grid by 2017.

Prognostications by industry observers and technology publications vary from "this will prove to be much ado about nothing," to it will be a revolution in power generation in coming decades that will help free us from dependence on oil.

A 2010 report by the IEEE called vehicle-to-grid technology "the most promising opportunity in electrical vehicle adoption" but that "due to certain technical and economical issues, it is still less likely to become a reality in the short term."

The report also referred to a study that estimated a potential return to electric vehicle owners on the California power grid of between $3,038 and $5,038 per year.

Meanwhile, Willett Kempton, director of the Center for Carbon-free Power Integration at the University of Delaware, serves as a proof of concept. He set up his electric Scion to feed power back to the grid in 2009 and claims earnings of about $300 a month since then.

Marc Spitzer, a member of the Federal Energy Regulatory Commission, which regulates interstate transmission of electricity, told a conference in Boston that "vehicle-to-grid is, I believe, the salvation of the automotive industry in the United States."
Gardhouse

Both Gauthier and Ron Gardhouse, NextEnergy's CEO and president, say Spitzer wildly overstates the case in terms of the auto industry, but nonetheless there is a huge economic potential.

"If this is going to happen, Detroit should own it," said Gardhouse, who said the long-range plan for NextEnergy is to help Michigan companies become suppliers of components and equipment needed to make vehicle- to-grid electrification commonplace.

"We need to work with the utilities and the auto companies to prove that there's a business case to be made," said Gauthier. "Does this work. Can there be a business there? Can you get enough money flowing for it to make sense?"

Gauthier said one of the Detroit 3 he doesn't have permission to name has agreed to provide vehicles, and others may, as well. He said he has had talks with DTE and expects a formal partnership with it, also.

He said the project will be funded in part by the Michigan Economic Development Corp. and in part by grants the nonprofit will be seeking from the U.S. Department of Energy and the Department of Defense.

Gardhouse said that with enough funding the project could expand to fill all six bays in the microgrid building.

The cost of the two-bay phase one will approach $2 million, he said.

He said NextEnergy will also work on inductive charging, a system where cars don't need to plug in but are charged wirelessly just by parking over a floor fitted with the proper equipment.

"Plugging in is eventually going to be old fashioned," said Gauthier.

If vehicle-to-grid electrification becomes a reality, a likely model is for a company known as an aggregator to work on behalf of utility companies to line up owners of electric vehicles. It will also require substantially more penetration by EVs into the new-car market, said Gauthier.

Meanwhile, NextEnergy has ordered a $500,000 piece of equipment known as a dual bi-directional charging model to serve as the guts of the two-bay station the nonprofit hopes to have on line by the end of May. He said the bays will test different types of charging systems, new batteries as they evolve and systems operating at different voltages and frequencies.

The car-to-grid model becomes more realistic as the cost of solar panels continues to fall. A dramatic price drop in the past year has led to a shakeout in the industry, but higher sales volumes for those companies left standing.

As more electric cars get recharged from renewable sources such as solar energy, the return to their owners when they sell electricity back to the grid will be higher than if they are just selling back electricity to the power company that they bought earlier at slightly lower rates.

Tom Henderson, www.crainsdetroit.com

ANS -- Confessions of a Publisher: Were in Amazons Sights and Theyre Going to Kill Us

2012-01-20T23:44:00.000-08:00

Here is a shocking note from the future -- Amazon is driving publishers -- all of them -- out of business. In the future all books will be ebooks. Personally it sounds yukky to me. I find it objectionable that Amazon alone will be the arbiter of what is publishable. It means things will have to appeal to a mass audience to be published.... Horrible!
Find it here: http://pandodaily.com/2012/01/17/confessions-of-a-publisher-were-in-amazons-sights-and-theyre-going-to-kill-us/
--Kim

Confessions of a Publisher: "We're in Amazon's Sights and They're Going to Kill Us"

by Sarah Lacy
on January 17, 2012

When you see Snooki's book on the New York Times Best Seller List, you know publishing is in trouble.

You can blame readers and say publishing is just giving the public what they want. But that's only half the problem.

The rest is a lazy publishing industry that does far too little of the work that got them here: Discovering new authors and giving them a shot. Instead, they go for the lazy lay-up: Overpaying on celebrity memoirs and pop culture phenomenons with a built in audience.

But that was a short term mistake that has put the publishing industry behind the eight ball. And, according to this industry insider who asked not to be named, a familiar bully is about to take them out. From an email:

So Amazon, pretty much since they started selling books, has been selling them for razor thin or zero margin. We sell them books at 50% of the retail price. You'll notice that popular books are usually selling for more than 50% off. So they're actually losing money on them. For years Borders and Barnes and Noble maintained that this was unsustainable, but the tactic succeeded in putting Borders out of business, putting BN on the ropes, and destroying hundreds of indie stores. It also lowered customers' perception of what a book *should* cost.

When ebooks started, we were pricing ebooks at the same price as the print book, and Amazon was selling them all for $9.99. So they were losing like $3-$4 per book. And they weren't doing it simply to move Kindles, since they don't actually make any money on the Kindle unit sales. Now with the "agency model" we get to set the ebook price and Amazon simply takes 30% of that.

We all kinda assumed that Amazon was either using books as a loss leader for other things (like getting people to sign up for Prime or simply gathering customer data), or was maybe planning on raising the prices they sell books for once BN and Borders were eliminated as competition. But I think they actually intend to keep print books at their current prices, and they want ebooks to be even cheaper. What they're actually targeting is the publishers' margin.

Long-term there's no future in printed books. They'll be like vinyl: pricey and for collectors only. 95% of people will read digitally. Everybody in publishing knows this but most are in denial about it because moving to becoming a digital company means laying off like 40% of our staffs. And the barriers to entry fall, too. We simply don't want to think about it.

Amazon is thinking about it, though, and they're targeting the publishers directly.

Publishers like to pretend that we make our money from discovering unknown talents for small advances and selling millions of their books. That's a very small part of our business. The bestselling books are all written by celebs, by people with huge platforms, by fiction writers with a long history of bestselling books, or by people who do a proposal that's on its surface brilliant. In short, there's a bidding war among the publishers over the big books. We all know what the good books areit all comes down to how much of an advance we're willing to pay for them. The hotly fought-for books are the ones that sell. And while we might not make huge profit % on these, we make big profit $ on these. They keep the lights on by covering overhead. Better to cover our fixed costs by going all in on a few big books than trying to buy dozens of mid-list books.

But in recent years, as book sales have declined, the advances for the biggest books have gone down proportionally, too. What used to be a $1 million book is now a $400,000 book. Publishers are thinking, "OK, we'll move less copies but we'll pay less for them, so we'll survive." Enter Amazon's print publishing arm. They hired this guy Larry Kirshbaum to run ithe's a savvy vet with 30+ years of publishing experienceand they have some editors, too. And they've been paying a ton of money for books.

I saw this [redacted] proposal a few weeks back. It was okay[same redacted author] is an asshole but [redacted] has a certain following and it would probably be a bestseller. Bestseller now means selling 20,000 copies, so I was thinking of offering like [hundreds of thousand] for it. But Amazon had already bid $1 million for it. A similar thing happened with a [redacted] memoir a few months back. Traditional publishers are snickering, "Look at stupid Amazonoverpaying for books!"

But Amazon isn't stupid. They're overpaying intentionally to keep advances high (and high advances will bankrupt publishers). And they're also taking away all the authors who actually move units. They gave Seth Godin really favorable terms on a deal. Only a matter of time before they snag a James Patterson or some other big genre fiction name.

We can't pay $1 million for books anymore. Amazon could probably afford to lose $20 million/year in their publishing arm just to put the other publishers out of business. I think that's what they're trying to dothrow money around in an industry that doesn't have any, until Amazon becomes not only the only place where you buy books, but the only place that publishes books, too.

So rather than getting a 30% of an ebook (with the other 70% being split between the publisher and author), they'll be getting a 70% cut (with the other 30% going right to the author). Funny thing is that it's actually better for authors.

To be honest, publishing is a quaint little industry based on romance and low profit margins. But now we're in Amazon's sights, and they're going to kill us.

I have no insight into whether Amazon has planned this out, or it's just a happy accident given the success of the Kindle, the iPad and other eReaders and the general dysfunction of publishing. But I don't have much more sympathy for publishing than Farhad Manjoo has for independent book stores. Amazon didn't create publishing's woes, any more than blogging created the challenges of newspapers. The company is just cleverly exploiting them.

And good for them. My hope is disgruntled publishing executives like the one above will quit their comfortable jobs at dysfunctional prehistoric companies and start innovating on the model. I don't believe the public only wants books written by over-tanned drunks who go clubbing anymore than blog readers only want slideshows and posts on Apple.

Someone will build the next great publishing imprint out of these ashes. And as a reader and an author, I can't wait.

ANS -- Nissan Examines Second Life For Used Leaf Battery Packs

2012-01-20T10:15:00.001-08:00

Here is the latest on saving energy, using used electric car batteries. We may be way behind Europe, but we may get the idea yet.
Find it here: http://www.greencarreports.com/news/1071941_nissan-examines-second-life-for-used-leaf-battery-packs
--Kim

Nissan Examines Second Life For Used Leaf Battery Packs

By Nikki Gordon-Bloomfield
1 428 views January 19, 2012

2011 Nissan Leaf
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In the aftermath of the last year's devastating Japanese earthquake and tsunami, more impetus has been given to the idea of turning electric cars -- and their battery packs -- into emergency backup power systems.

But now a new project has been set up to take the idea of using electric car batteries to provide backup power one step further -- by building backup battery banks built entirely of Nissan Leaf battery packs.

Announced yesterday, the collaboration between Nissan North America, power technology group ABB, 4R Energy and the Sumitomo Corporation of America aims to develop a prototype system that uses old Leaf battery packs to provide emergency power for 15 average homes for up to two hours.

After ten years of use in a Nissan Leaf, the lithium-ion battery pack responsible for providing motive power to the car will have lost around 30 percent of its original 24 kilowatt-hour capacity.

For the driver, that equates to lost range, and less performance than when the car was new.

2011 Nissan Leaf SL

But while the remaining 16.8 kilowatt-hours or so may not be enough to provide useful power to an electric car, battery pack is still capable of storing charge.

Cheaper than recycling, placing used Leaf battery packs together in a larger backup battery array ensures that the lithium-ion battery packs remain useful for as long as possible.

As well as provide power in a natural disaster, the backup battery arrays have the potential to reduce demand on the electrical utilities during peak demands, reducing brownouts.

It will also ensure that battery packs stay out of landfills.

The idea of using large banks of batteries to supplement the power to the electricity grid isn't new. In fact, many DIY electric car enthusiasts regularly recycle old lead acid battery packs from their home-built electric cars by using them to store electricity harvested from solar panels during the day so they can charge their cars up at night for free.

2011 Nissan Leaf

However, the new project involving Nissan Leaf battery packs is the first one we've heard of which exclusively uses battery packs from a particular electric car.

We'd love to see the project succeed, but can't help but wonder if utility companies will be comfortable using unknown, repurposed battery packs to provide reliable backup power.

It is more likely, unfortunately, that utility companies will favor brand-new lithium-ion cells in large arrays to ensure the systems remain completely predictable.

Even if that happens, it's still a win-win for electric cars: if demand for lithium-ion cells increases, economies of scale should help drive down the cost of electric car battery packs.

+++++++++++

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ANS -- How Would SOPA/PIPA be Enforced?

2012-01-18T21:21:00.001-08:00

Here is Brad Hicks' take on the SOPA and PIPA laws currently being considered. Apparently, if passed, they will a) shut down the internet, all emails, and twitter completely, and b) make us all "guilty" of a crime so "they" can come for us whenever "they" want.
As I said before, not passing these laws is really important.
If it does pass, I will have to stop publishing this bulletin, too.
find it here: http://bradhicks.livejournal.com/456542.html#comments
--Kim

You are viewing bradhicks's journal

The Infamous Brad

Previous Entry

How Would SOPA/PIPA be Enforced?

Jan. 18th, 2012 at 10:12 AM

It's taken me a long time to feel like I even needed to say anything about the Stop Online Piracy Act and Protect Intellectual Property Act bills that are floating through Congress, even knowing (thanks to Wikileaks' Cablegate) that the US State Department is threatening every other country on the globe with crippling trade sanctions if they don't pass their own version of this bill this year. It's a horrific bill, but one I couldn't take seriously at first because it is, in every version floating around, as flatly impossible to obey as King Canute's legendary law forbidding the tide from coming in. No matter how much lobbying money is thrown at an impossible idea, no matter how many campaign contributions were made, no matter how much of the US's remaining export economy depends on the industry backing an impossible idea, I had a hard time taking seriously the idea that Congress would really, when push come to shove, try to ban all user-created content on the Internet: no more email, no more Twitter, no more Facebook, no more YouTube, no more LOLcats, no more discussion forums, no more comment pages on articles, no more blogs.

The only way to actually enforce SOPA or PIPA as written would be to do just that. SOPA and PIPA give the US Attorney General the unilateral authority to order not just any tweet or email or web page or blog post, but the whole site that hosts it, permanently off of the Internet if even one link is found on it, anywhere, that "facilitates" copyright infringement. That's a term that's been interpreted so broadly, in some court cases, as to include "linked to a web site where, by clicking on this button, then this button, then this button, you could find a link to a specific page on a different website, where, if you clicked down three layers from that page, you could find infringing content." When the lawyer arguing this was asked if there was any limit to that, he said no. He was laughed out of court, because it was pointed out that this argument, if accepted, outlawed the whole Internet, as the whole point of the World Wide Web was that, given enough clicks, you can navigate from any non-dead-end site to any page on the web. But SOPA and PIPA won't end up in court, because they don't create any actual judicial review process, or allow any judicial appeal: if anybody asks the Attorney General to knock an entire site off of the Internet for just this reason, and he or she agrees, it goes down, period, end of story. So the only way that any website on the Internet could comply with SOPA and PIPA is to never, ever allow anything to be posted to their site that could in any way be, or be decrypted to suggest how to find, a link to a site that might have on it, anywhere, an equally vague and hard to find link to infringing content. The process for guaranteeing the safety of each 140 character tweet, each 100px by 100px user avatar icon, each link-shortened URL to a baby picture on a picture hosting site, each text caption embedded in a video of a cute kitten, didn't link to or describe how to find any site? Can't be done. Especially can't be done if you do allow supposedly non-infringing links, because let's say you review the URL today, and tomorrow something else is up at that URL? And how do you review the URL anyway; does somebody have to go read every comment on every review on every product at Amazon.com if I link to Amazon? Can't be done.

But the law's going to pass anyway. Or so they say. And the Internet is Made of Cats. Sociologists and political scientists studying the Arab Spring have accepted this as literal truth, in a way: governments being threatened by the Arab Spring could shut down any website that was only useful to the opposition, but if the opposition used Facebook or Twitter or YouTube, no matter how badly architected those websites were for safe use by an illegal opposition, the governments couldn't block them -- blocking grandparents from seeing their grandbabies on Twitter or Flicker, blocking everybody in the country from seeing Maru or Keyboard Cat on YouTube, caused more political blowback than letting the activists use them. So no, not even in the post-9/11 national security state, not even the United States is going to enforce SOPA or PIPA as written. No, really, I meant it when I said it: it can't be done. Which made it hard for me to take the proposed laws seriously ...

Until I realized the only way they could be enforced.

The MPAA and the RIAA, Sony and Bertelsmann and Disney, et al, wave aside all claims that SOPA or PIPA will be used to ban all user-originated content. They say that the law is written to be as draconian, and instantaneous, and without appeal as it is because no other plausible law, nothing short of that that's been tried, lets them take down obviously infringing sites like Pirate Bay and Torrent Freak without them being able to set up new, mirrored sites faster than DMCA takedowns can take them off the air. They want a broad law that gives one person, the Attorney General of the United States, the authority and the power and the responsibility to know a pirate site when he or she sees one, and trusts that person to never abuse that power, to only use it to protect America's last remaining profitable export industry from never being able to sell more than one copy of every movie or song ever again. They want the rest of us to have the same trust that they obviously have: that this power will never be abused.

No Democratic appointee will ever find a whistle-blower report on the Drudge Report or Fox News websites that they don't like, find (or fabricate, or just baldly dishonestly allege) that there is an infringing link in a comment thread on one of the news articles, and order that site knocked off the Internet. No Republican appointee will ever find an anti-war or an anti-oil-industry news story they don't like on Democracy Now or MSNBC and order those websites taken off the Internet, permanently, the same way. Why can we trust this? Is there something in the law that would protect those websites from that kind of abuse? No. Is there anything that would penalize the Attorney General for doing that? No. Is there anything to stop them from doing it as often as necessary to shut down all political opposition that would publicize the fact that they'd done this, going into the next election? No. So why are we supposed to trust that it will never happen? Just "because." Because we need it not to. Because we need this law, or the pirates will sink our economy, so we'll just half to hope that it never happens.

It took me until today to realize that the rule of law, not men, has fallen into such disrepute that this may actually pass.

Mood: worried

Comments

( 8 comments Leave a comment )

eggshellhammer wrote:
Jan. 18th, 2012 04:17 pm (UTC)
My understanding is that SOPA's not going to pass, it's pretty much dead in the water. Where are you getting your information?
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bradhicks wrote:
Jan. 18th, 2012 04:28 pm (UTC)
SOPA's vote has been canceled, and the President is threatening a veto, but the sponsors say that it will be re-debated in February. PIPA, which is the same bill in the other house of Congress, is still scheduled to be voted on on the 24th.
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hugh_mannity wrote:
Jan. 18th, 2012 04:51 pm (UTC)
Yep. It's too ~~good~~ bad an idea for it not to come into force in one guise or another.

Not just because it ensures Hollywood's revenue stream, but also because it allows the government to shut down protest. And there's nothing the government (and democrat or republican, it doesn't matter -- they're 2 sides of the same coin) would like to do more than remove all protest -- other than the pro-forma official party vs. party stuff that is.

Bring on the police state -- let's get it over with sooner rather than later!
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bradhicks wrote:
Jan. 18th, 2012 05:10 pm (UTC)
It does boggle my mind that people who've spent the last three years convinced that Obama was going to come for their guns aren't afraid that he's going to come for their websites.
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sethg_prime wrote:
Jan. 18th, 2012 05:11 pm (UTC)
The bill won't shut down piracy in the "go download torrents of such-and-such a movie" sense. What it will do is shut down companies with business models involving fair use of copyrighted material, because from day one, such companies will have to rigorously censor themselves, invest heavily in legal protection, or cut deals with Hollywood.
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rowyn wrote:
Jan. 18th, 2012 07:48 pm (UTC)
Yep. It doesn't matter that the law is ridulous and makes the whole web in violation for existing, because they have no intention of shutting down the web. They just want a handy excuse to make us all lawbreakers, so that whenever they don't like something someone's done for whatever reason, they can mete out punishment without need for bothering with all that messy proof stuff.
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laplor wrote:
Jan. 18th, 2012 08:25 pm (UTC)
Exactly! When everyone is guilty, everyone is in danger of prosecution - it's ultra-Orwellian.
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silveradept wrote:
Jan. 18th, 2012 08:05 pm (UTC)
Related to this, when would you place the first obvious evidence that media cabals have been able to get whatever they want through the purchase of legislators?

It seems like this is the continuation of the regular amounts of legislation that extends copyright whenever one of their properties is about to go to the public domain. Just to the point where they've realized they can't contain the new methods any more.
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ANS -- Everything You Need to Know About Wall Street, in One Brief Tale

2012-01-14T14:09:00.000-08:00

Here's more stuff about what has been happening on Wall Street that is responsible for crashing our economy, and who is partly responsible. You need to know about this stuff. The article is by Matt Taibbi, who has really been following this stuff, and probably knows more about it than anyone.
Bad language warning.
Find it here: http://www.rollingstone.com/politics/blogs/taibblog/everything-you-need-to-know-about-wall-street-in-one-brief-tale-20120113
--Kim

Everything You Need to Know About Wall Street, in One Brief Tale

POSTED: January 13, 9:15 AM ET
Comment 67

The Hotel Jerome in Aspen.
Walter Bibikow/Getty Images/AWL Images RM

If there was ever a news story that crystalized the moral dementia of modern Wall Street in one little vignette, this is it.

Newspapers in Colorado today are reporting that the elegant Hotel Jerome in Aspen, Colorado, will be closed to the public from today through Monday at noon.

Why? Because a local squire has apparently decided to rent out all 94 rooms of the hotel for three-plus days for his daughter's Bat Mitzvah.

The hotel's general manager, Tony DiLucia, would say only that the party was being thrown by a "nice family," but newspapers are now reporting that the Daddy of the lucky little gal is one Jeffrey Verschleiser, currently an executive with Goldman, Sachs.

At first, I couldn't remember how I knew that name. But then I looked it up and saw an explosive Atlantic magazine story, published last year, called, "E-mails Suggest Bear Stearns Cheated Clients Out Of Millions." And then I remembered that piece, and it hit me: Jeffrey Verschleiser is one of the biggest assholes in the entire world!

The story begins at Bear Stearns, where Verschleiser used to work, up until the company exploded, in large part because of him personally.

Back in the day, you see, Verschleiser headed Bear's mortgage-backed securities operations. Toward the end of his tenure, his particular specialty began with what at the time was the usual industry-wide practice, putting together gigantic packages of crappy subprime mortgages and dumping them on unsuspecting clients.

But Verschleiser reportedly went beyond that. According to a lawsuit later filed by a bond insurer called Ambac, Verschleiser also masterminded a kind of double-dipping scheme. What he would do is sell a bunch of toxic mortgages into a trust, which like all mortgage trusts had provisions written into their pooling and servicing agreements (PSAs) that required the original lenders to buy the loans back if they went into default.

So Verschleiser would sell bad mortgages back to the banks at a discount, but instead of passing the money back to the trust, he and other Bear execs allegedly pocketed the funds.

From the Atlantic story by reporter Teri Buhl:

The traders were essentially double-dipping -- getting paid twice on the deal. How was this possible? Once the security was sold, they didn't have a legal claim to get cash back from the bad loans -- that claim belonged to bond investors -- but they did so anyway and kept the money. Thus, Bear was cheating the investors they promised to have sold a safe product out of their cash. According to former Bear Stearns and EMC traders and analysts who spoke with The Atlantic, Nierenberg and Verschleiser were the decision-makers for the double dipping scheme.

Imagine giving someone a hundred bucks to buy a bushel of apples, but making a deal with him that he has to buy back any apples that turn out to have worms in them. That's what happened here: Bear sold the wormy apples back to the farmer, but instead of taking the money from those sales and passing it on to you, they simply kept the money, according to the suit.

How wormy were those apples? In one infamous email cited in the suit, a Bear exec colorfully described the content of the bonds they were selling:

Bear deal manager Nicolas Smith wrote an e-mail on August 11th, 2006 to Keith Lind, a Managing Director on the trading desk, referring to a particular bond, SACO 2006-8, as "SACK OF SHIT [2006-]8" and said, "I hope your [sic] making a lot of money off this trade."

So did Verschleiser himself know the mortgages were bad? Not only did he know it, he went so far as to tell his colleagues in writing that it was a waste of money to even bother performing due diligence on the bad bonds:

Jeffrey Verschleiser even said in an e-mail that he knew this was an issue. He wrote to his peer Mike Nierenberg in March 2006, "[we] are wasting way too much money on Bad Due Diligence." Yet a year later nothing had changed. In March 2007, Verschleiser wrote to Nierenberg again about the same due diligence firm, "[w]e are just burning money hiring them."

One of the ways that banks like Bear managed to convince investors to buy these bonds was by wrapping them in bond insurance through companies like Ambac, commonly known as "monoline" insurers. Investors who knew the bonds were insured were less worried about default.

Verschleiser, seeing that Bear had gotten firms like Ambac to insure its "sack of shit" bonds, saw here a new opportunity to make money. He first induced the monolines to insure the worthless bonds, then bet against the insurers! (Is it any wonder this guy ended up hired by Goldman, Sachs?) From the Atlantic story again:

Then in November 2007, Verschleiser wrote to his risk committee that he knew insurers for mortgage securities were going to have big financial problems. He suggested they multiply by ten times the short bet he'd just made against stocks like Ambac. These e-mails show Verschleiser's trading desk bragging to firm leadership that he made $55 million off shorting insurers' stock in just three weeks.

So in essence, Verschleiser was triple-dipping. First he was selling worthless "sacks of shit" to investors, representing them as good investments. Then, he kept the money from the return sales of the wormy apples. And then, on top of that, he made money by betting against the insurers he was sticking with these toxic assets.

We all know what happened from there. Bear, Stearns went under, thanks in large part to insane schemes like Verschleiser's, and all of us were forced to pick up at least part of the tab as the Fed spent billions subsidizing Bear's emergency takeover by JP Morgan Chase. In subsequent litigation, Chase has steadfastly refused to buy back the bad mortgages dumped on investors by the likes of Verschleiser, and has even fought tooth and nail to prevent the information in the Ambac suit from being made public.

Ambac went into Chapter 11 bankruptcy in 2010 for a variety of reasons, some of which had nothing to do with its losses in deals like these. But certainly Ambac and other monoline insurers like MBIA suffered for having insured worthless mortgage bonds sold onto the market by the Verschleisers of the world. Ambac in its suit asserted that it paid out over $641 million in claims related to the bonds from the Bear deals.

With all of this, though, Verschleiser landed happily on his feet. He reportedly heads Goldman's mortgage division now. And after cutting a mile-wide swath of losses through the American economy, helping destroy two venerable firms in Bear and Ambac, bilking the taxpayer for untold millions more (he is also named in a lawsuit filed by the Federal Housing Finance Agency for allegedly speeding bad loans onto securitization before they defaulted), Verschleiser is now living the contented life of a proud family man, renting out a 94-room hotel for three days for his daughter's Bat Mitzvah.

It's certainly heartening that Verschleiser is spending this money on his daughter instead of, say, hiring a busload of Jamaican hookers to spend the weekend lounging with him in a hot tub full of Beluga caviar. People ought to give their children the best, I guess. But there's this, too: at a time when one in four Americans has zero or negative net worth, renting a 94-room hotel for three days for a tweenager party might already be pushing the edge of the good taste/tact envelope. Even for the most honest millionaire in Aspen, it would seem a little gauche.

But for this burglarizing dickhead to do it? It's breathtaking. I hope he at least invited his bankrupted investors to the pool party.

p.s. Since this blog was posted, I've received a number of letters all asking the same question -- how could it be possible that what Verschleiser did is not illegal? How is he not in jail?

The answer is that if the allegations in the Ambac suit are true, it certainly would seem to be illegal. Most notably, the pocketing of putback money almost has to be a form of theft or embezzlement.

The rest of Bear/Verschleiser's scheme, however, is also illegal, but in a more complicated way. If you read the complaint in the Ambac suit, what you see is a sort of extreme blueprint for how mortgage securitization worked in general during that period.

There is a veritable sea of fraudulent and corrupt practices one may gaze upon here, if the SEC were looking for something to target -- everything from withholding material facts from customers and ratings agencies, to threatening ratings agencies with lost business if they didn't overrate bonds, to lying in offering documents, to the manipulation of accounting procedures (this went on after the loans had moved onto Chase's books), etc. -- but the most flagrant violation in the suit involves the issue of due diligence, and here we do know a lot about Verschleiser's role.

It seems that when Bear did do due diligence in these deals, it very frequently overrode the firms they'd hired to do that due diligence, and put the loans in the deals anyway. In the third quarter of 2006, Bear overrode its due diligence firm an incredible 65% of the time, putting loans into their securitizations despite an outside firm finding red flags in the notes.

Even worse, Bear went out of its way to hide the evidence that it was knowingly ignoring due diligence. This is from the complaint:

Bear Stearns ignored the proposals made by the heads of its due diligence department in May 2005 to track the override decisions, and instead took the opposite tack, adopting an internal policy that directed its due diligence managers to delete the communications with its due diligence firms leading to its final loan purchase decisions, thereby eliminating the audit trail.

This is fraud because in its agreements with investors, Bear promised to conduct "due diligence," it promised to conduct "quality control" testing of the loan pools, it promised to "repurchase" defective loans, and it also promised to implement "seller monitoring," i.e. to prevent the securitization of loans from bad suppliers.

But it not only didn't do these things, it engaged the opposite behavior and knowingly covered up its fraud by deleting its communications.

Verschleiser was personally named in the evidence offered in the Ambac suit. In a letter to Ambac, Bear's RMBS Investor Relations managing director Cheryl Glory wrote that "Jeff will... provide you with the due diligence results of all three deals once complete."

But this is the same Jeff who we now have in writing saying this about those promised due diligence results: "We are wasting way too much money on Bad Due Diligence," and "We're just burning money hiring them."

It doesn't take a genius to deduce that Bear was not upholding its contractual obligations by delivering what it itself considered "bad due diligence" to Ambac. At the very least, this is actionable.

Verschleiser undermined due diligence in other ways. One good one was to demand that his due diligence people operate at speeds that made genuine due diligence impossible.

At one point during these deals, Verschleiser reamed out his immediate subordinate, co-head of mortgage finance Baron Silverstein, over the "problem" of the due diligence department taking too much time to do its work. Silverstein responded by issuing the following tirade to John Mongelluzzo, Bear's VP for Due Diligence, demanding that he not get in the way of Bear's insane goal of funding 500 mortgages a day:

I refuse to receive more emails from [Verchleiser] (or anyone else) questioning why we're not funding loans every day. I'm holding each of you responsible for making sure we fund at least 500 each and every day I was not happy when I saw the funding numbers and I knew NY would NOT BE HAPPY... I expect to see 500+ every day. I will do whatever is necessary to make sure you're successful in meeting this objective.

Whenever any right-wing loon, or Bloombergite, tries to tell you the mortgage crisis was caused by the government forcing the poor banks to lend to broke black people, please direct them to this passage. The banks not only wanted to give out these loans, they wanted to give them out at the speed of light. They wanted to crank them out so fast that their own auditors literally couldn't read the writing on the loan applications. This was greed, not policy. Anybody who says anything else is high on something.

Anyway, given that much of Verschleiser's questionable behavior is in writing, his case sure seems court-ready. But for whatever reason, he has not been indicted.

One can almost understand a regulator not wanting to take on the whole circular securitization scheme -- Bear lends money to corrupt mortgage firm, mortgage firm makes bad loans, Bear packages bad loans and sells to investors, then takes the proceeds and creates more bad loans -- because it is so complex and difficult to prove.

But in this case there are simple issues of fraud and theft thatcould be taken on without having to prosecute broader crimes related to securitization. But prosecutors, apparently, just blew those off. In the current environment, regulators even miss the layups.

Read more: http://www.rollingstone.com/politics/blogs/taibblog/everything-you-need-to-know-about-wall-street-in-one-brief-tale-20120113#ixzz1jTNWt3Xi

ANS -- Full-Blown Civil War Erupts On Wall Street Financial Elite Start Turning On Each Other

2012-01-09T21:51:00.001-08:00

Did you know that the FHFA (Federal Housing Finance Agency) is suing 17 Big Banks for fraud? We had heard about the fraud, but didn't know anyone was doing anything about it. We weren't familiar with this website, so Joyce searched to see if this is true, and found it had been previously reported in the Wall Street Journal, in the real estate section. This happened last September. Did you hear about it?
Find it here: http://wakeup-world.com/2011/09/06/full-blown-civil-war-erupts-on-wall-street-financial-elite-start-turning-on-each-other/
There's a video at the end that I don't think comes through here in email-land.
--Kim

Noise Pollution Makes Some Birds Less Attractive »

Full-Blown Civil War Erupts On Wall Street Financial Elite Start Turning On Each Other

Reality Finally Hits The Financial Elite As They Start Turning On Each Other

By David DeGraw - ampedstatus.org

Finally, after trillions in fraudulent activity, trillions in bailouts, trillions in printed money, billions in political bribing and billions in bonuses, the criminal cartel members on Wall Street are beginning to get what they deserve. As the Eurozone is coming apart at the seams and as the US economy grinds to a halt, the financial elite are starting to turn on each other. The lawsuits are piling up fast. Here's an extensive roundup:

Time to put your Big Bank shorts on! Get ready for a run The chickens are coming home to roost The Global Banking Cartel's crimes are being exposed left & right Prepare for Shock & Awe

Well, well here's your Shock & Awe:

First up, this shockingly huge $196 billion lawsuit just filed against 17 major banks on behalf of Fannie Mae and Freddie Mac. Bank of America is severely exposed in this lawsuit. As the parent company of Countrywide and Merrill Lynch they are on the hook for $57.4 billion. JP Morgan is next in the line of fire with $33 billion. And many death spiraling European banks are facing billions in losses as well.

FHA Files a $196 Billion Lawsuit Against 17 Banks

The Federal Housing Finance Agency (FHFA), as conservator for Fannie Mae and Freddie Mac (the Enterprises), today filed lawsuits against 17 financial institutions, certain of their officers and various unaffiliated lead underwriters. The suits allege violations of federal securities laws and common law in the sale of residential private-label mortgage-backed securities (PLS) to the Enterprises.

Complaints have been filed against the following lead defendants, in alphabetical order:

1. Ally Financial Inc. f/k/a GMAC, LLC $6 billion
2. Bank of America Corporation $6 billion
3. Barclays Bank PLC $4.9 billion
4. Citigroup, Inc. $3.5 billion
5. Countrywide Financial Corporation -$26.6 billion
6. Credit Suisse Holdings (USA), Inc. $14.1 billion
7. Deutsche Bank AG $14.2 billion
8. First Horizon National Corporation $883 million
9. General Electric Company $549 million
10. Goldman Sachs & Co. $11.1 billion
11. HSBC North America Holdings, Inc. $6.2 billion
12. JPMorgan Chase & Co. $33 billion
13. Merrill Lynch & Co. / First Franklin Financial Corp. $24.8 billion
14. Morgan Stanley $10.6 billion
15. Nomura Holding America Inc. $2 billion
16. The Royal Bank of Scotland Group PLC $30.4 billion
17. Société Générale $1.3 billion

These complaints were filed in federal or state court in New York or the federal court in Connecticut. The complaints seek damages and civil penalties under the Securities Act of 1933, similar in content to the complaint FHFA filed against UBS Americas, Inc. on July 27, 2011. In addition, each complaint seeks compensatory damages for negligent misrepresentation. Certain complaints also allege state securities law violations or common law fraud. [read full FHFA release]

You can read the suits filed against each individual bank here. For some more information read Bloomberg: BofA, JPMorgan Among 17 Banks Sued by U.S. for $196 Billion. Noticeably absent from the list of companies being sued is Wells Fargo.

And the suits just keep coming

BofA sued over $1.75 billion Countrywide mortgage pool

Bank of America Corp (BAC.N) was sued by the trustee of a $1.75 billion mortgage pool, which seeks to force the bank to buy back the underlying loans because of alleged misrepresentations in how they were made. The lawsuit by the banking unit of US Bancorp (USB.N) is the latest of a number of suits seeking to recover investor losses tied to risky mortgage loans issued by Countrywide Financial Corp, which Bank of America bought in 2008. In a complaint filed in a New York state court in Manhattan, U.S. Bank said Countrywide, which issued the 4,484 loans in the HarborView Mortgage Loan Trust 2005-10, materially breached its obligations by systemically misrepresenting the quality of its underwriting and loan documentation. [read more]

Bank of America kept AIG legal threat under wraps

Top Bank of America Corp lawyers knew as early as January that American International Group Inc was prepared to sue the bank for more than $10 billion, seven months before the lawsuit was filed, according to sources familiar with the matter. Bank of America shares fell more than 20 percent on August 8, the day the lawsuit was filed, adding to worries about the stability of the largest U.S. bank. The bank made no mention of the lawsuit threat in a quarterly regulatory filing with the U.S. Securities and Exchange Commission just four days earlier. Nor did management discuss it on conference calls about quarterly results and other pending legal claims. [read more]

Nevada Lawsuit Shows Bank of America's Criminal Incompetence

As we've stated before, litigation by attorney general is significant not merely due to the damages and remedies sought, but because it paves the way for private lawsuits. And make no mistake about it, this filing is a doozy. It shows the Federal/state attorney general mortgage settlement effort to be a complete travesty. The claim describes, in considerable detail, how various Bank of America units engaged in misconduct in virtually every aspect of its residential mortgage business. [read more]

Nevada Wallops Bank of America With Sweeping Suit; Nationwide Foreclosure Settlement in Peril

The sweeping new suit could have repercussions far beyond Nevada's borders. It further jeopardizes a possible nationwide settlement with the five largest U.S. banks over their foreclosure practices, especially given concerns voiced by other attorneys general, New York's foremost among them. In a statement, Bank of America spokeswoman Jumana Bauwens said reaching a settlement would bring a better outcome for homeowners than litigation. "We believe that the best way to get the housing market going again in every state is a global settlement that addresses these issues fairly, comprehensively and with finality. [read more]

FDIC Objects to Bank of America's $8.5 Billion Mortgage-Bond Accord

The Federal Deposit Insurance Corp. is objecting to Bank of America Corp. (BAC)'s proposed $8.5 billion mortgage-bond settlement with investors, joining investors and states that are challenging the agreement. The FDIC owns securities covered by the settlement and said it doesn't have enough information to evaluate the accord, according to a filing today in federal court in Manhattan. Bank of America has agreed to pay $8.5 billion to resolve claims from investors in Countrywide Financial mortgage bonds. The settlement was negotiated with a group of institutional investors and would apply to investors outside that group. [read more]

Fed asks Bank of America to list contingency plan: report

The Federal Reserve has asked Bank of America Corp to show what measures it could take if business conditions worsen, the Wall Street Journal said, citing people familiar with the situation. BofA executives recently responded to the unusual request from the Federal Reserve with a list of options that includes the issuance of a separate class of shares tied to the performance of its Merrill Lynch securities unit, the people told the paper. Bank of America and the Fed declined to comment to the Journal. Both could not immediately be reached for comment by Reuters outside regular U.S. business hours. [
read more]

Bombshell Admission of Failed Securitization Process in American Home Mortgage Servicing/LPS Lawsuit

Wow, Jones Day just created a huge mess for its client and banks generally if anyone is alert enough to act on it. The lawsuit in question is American Home Mortgage Servicing Inc. v Lender Processing Services. It hasn't gotten all that much attention (unless you are on the LPS deathwatch beat) because to most, it looks like yet another beauty contest between Cinderella's two ugly sisters. AHMSI is a servicer (the successor to Option One, and it may also still have some Ameriquest servicing).

AHMSI is mad at LPS because LPS was supposed to prepare certain types of documentation AHMSI used in foreclosures. AHMSI authorized the use of certain designated staffers signing with the authority of AHSI (what we call robosinging, since the people signing these documents didn't have personal knowledge, which is required if any of the documents were affidavits). But it did not authorize the use of surrogate signers, which were (I kid you not) people hired to forge the signatures of robosigners. The lawsuit rather matter of factly makes a stunning admission [read more]

Fraudclosure: MERS Case Filed With Supreme Court

Before readers get worried by virtue of the headline that the Supreme Court will use its magic legal wand to make the dubious MERS mortgage registry system viable, consider the following:

1. The Supreme Court hears only a very small portion of the cases filed with it, and is less likely to take one with these demographics (filed by a private party, and an appeal out of a state court system, as opposed to Federal court). This case, Gomes v. Countywide, was decided against the plaintiff in lower and appellate court and the California state supreme court declined to hear it

2. If MERS or the various servicers who have had foreclosures overturned based on challenges to MERS thought they'd get a sympathetic hearing at the Supreme Court, they probably would have filed some time ago. MERS have apparently been settling cases rather than pursue ones where it though the judge would issue an unfavorable precedent

3. The case in question, from what the experts I consulted with and I can tell, is not the sort the Supreme Court would intervene in based on the issue raised, which is due process (14th Amendment). But none of us have seen the underlying lower and appellate court cases, and the summaries we've seen are unusually unclear as to what the legal argument is. [read more]

Iowa Says State AG Accord Won't Release Banks From Liability

The 50-state attorney general group investigating mortgage foreclosure practices won't release banks from all civil, or any criminal, liability in a settlement, Iowa Attorney General Tom Miller said. [read more]

Fed Launches New Formal Enforcement Action Against Goldman Sachs To Review Foreclosure Practices

The Federal Reserve Board has just launched a formal enforcement action against Goldman Sachs related to Litton Loan Services. Litton Loan is the nightmare-ridden mortgage servicing unit, a subsidiary of Goldman, that Goldman has been trying to sell for months. They penned a deal to recently, but the Fed stepped in and required Goldman to end robo-signing taking place at the unit before the sale could be completed. Sounds like this enforcement action is an extension of that requirement. [read more]

Goldman Sachs, Firms Agree With Regulator To End 'Robo-Signing' Foreclosure Practices

Goldman Sachs and two other firms have agreed with the New York banking regulator to end the practice known as robo-signing, in which bank employees signed foreclosure documents without reviewing case files as required by law, the Wall Street Journal said. In an agreement with New York's financial-services superintendent, Goldman, its Litton Loan Servicing unit and Ocwen Financial Corp also agreed to scrutinize loan files for evidence they mishandled borrowers' paperwork and to cut mortgage payments for some New York homeowners, the Journal said. [read more]

Banks still robo-signing, filing doubtful foreclosure documents

Reuters has found that some of the biggest U.S. banks and other "loan servicers" continue to file questionable foreclosure documents with courts and county clerks. They are using tactics that late last year triggered an outcry, multiple investigations and temporary moratoriums on foreclosures. In recent months, servicers have filed thousands of documents that appear to have been fabricated or improperly altered, or have sworn to false facts. Reuters also identified at least six "robo-signers," individuals who in recent months have each signed thousands of mortgage assignments legal documents which pinpoint ownership of a property. These same individuals have been identified in depositions, court testimony or court rulings as previously having signed vast numbers of foreclosure documents that they never read or checked. [read more]

JPMorgan fined for contravening Iran, Cuba sanctions

JPMorgan Chase Bank has been fined $88.3 million for contravening US sanctions against regimes in Iran, Cuba and Sudan, and the former Liberian government, the US Treasury Department announced Thursday. The Treasury said that the bank had engaged in a number of "egregious" financial transfers, loans and other facilities involving those countries but, in announcing a settlement with the bank, said they were "apparent" violations of various sanctions regulations. [read more]

This Is Considered Punishment? The Federal Reserve Wells Fargo Farce

What made the news surprising, of course, was that the Federal Reserve has rarely, if ever, taken action against a bank for making predatory loans. Alan Greenspan, the former Fed chairman, didn't believe in regulation and turned a blind eye to subprime abuses. His successor, Ben Bernanke, is not the ideologue that Greenspan is, but, as an institution, the Fed prefers to coddle banks rather than punish them.

That the Fed would crack down on Wells Fargo would seem to suggest a long-overdue awakening. Yet, for anyone still hoping for justice in the wake of the financial crisis, the news was hardly encouraging. First, the Fed did not force Wells Fargo to admit guilt and even let the company issue a press release blaming its wrongdoing on a "relatively small group."

The $85 million fine was a joke; in just the last quarter, Wells Fargo's revenues exceeded $20 billion. And compensating borrowers isn't going to hurt much either. By my calculation, it won't top $20 million. [read more]

Exclusive: Regulators seek high-frequency trading secrets

U.S. securities regulators have taken the unprecedented step of asking high-frequency trading firms to hand over the details of their trading strategies, and in some cases, their secret computer codes. The requests for proprietary code and algorithm parameters by the Financial Industry Regulatory Authority (FINRA), a Wall Street brokerage regulator, are part of investigations into suspicious market activity, said Tom Gira, executive vice president of FINRA's market regulation unit. [read more]

And here's part of the Collapse Roundup I wrote on August 25th, referenced in the beginning of this report as you will see, I would probably make a lot more money as an investment adviser:

Collapse Roundup #5: Goliath On The Ropes, Big Banks Getting Hit Hard, It's A "Bloodbath" As Wall Street's Crimes Blow Up In Their Face

Time to put your Big Bank shorts on! Get ready for a run

The chickens are coming home to roost. Reality is catching up with the market riggers (Fed, ECB, PPT, CIA) and the "too big to fail" banks are getting whacked. Trillions of dollars in bailouts and legalized (FASB) accounting fraud cannot save these insolvent zombie banks any longer. The Grim Reaper is on the horizon and his sickle will do what paid off politicians won't, cut 'em down to size. So get your silver stake ready, time to plunge it into their vampire squid hearts.

What about Warren Buffet? He saved Goldman Sachs with a bailout in 2008. Can he save Bank of America?

Warren's bailout will help BofA over the short run, but $5 billion is just a drop in the bucket when it comes to their problems. The only thing his $5 billion will accomplish is a temporary run up in stock value so everyone who has been killed on the plummeting stock price can then jump out without complete loss.

Trouble a-comin'

Goldman Sachs TANKS After CEO Lloyd Blankfein Hires Famous Defense Lawyer

Is the Goldman Sachs CEO facing a new lawsuit?

The market seems to think so. Goldman Sachs just tanked in minutes before the close after news that Lloyd Blankfein hired a lawyer famous for defending vilified execs. It's back up a bit since dropping over 5%, but the news is still concerning.

It's unclear whether the lawyer is for him, Goldman Sachs, or both, but Goldman Sachs's CEO Lloyd Blankfein hired Reid Weingarten, a high profile defense attorney who says "I'm used to these monstrously difficult cases where everybody hates my clients," according to Reuters.

Reuters says the hire might have something to do with accusations of Blankfein's committing perjury. Or something else:

One former federal prosecutor, who was not authorized to speak publicly, said Blankfein may have hired outside counsel after receiving a request from investigators for documents or other information. [read full report]

Speaking of hiring lawyers

The Global Banking Cartel's Crimes Are Being Exposed Left & Right Blowing Up In Their Face Prepare for Shock & Awe BOOM!

Moody's exposed:

MOODY'S ANALYST BREAKS SILENCE: Says Ratings Agency Rotten To Core With Conflicts

A former senior analyst at Moody's has gone public with his story of how one of the country's most important rating agencies is corrupted to the core.

The analyst, William J. Harrington, worked for Moody's for 11 years, from 1999 until his resignation last year.

From 2006 to 2010, Harrington was a Senior Vice President in the derivative products group, which was responsible for producing many of the disastrous ratings Moody's issued during the housing bubble.

Harrington has made his story public in the form of a 78-page "comment" to the SEC's proposed rules about rating agency reform.

Here are some key points:

* Moody's ratings often do not reflect its analysts' private conclusions. Instead, rating committees privately conclude that certain securities deserve certain ratingsbut then vote with management to give the securities the higher ratings that issuer clients want.

* Moody's management and "compliance" officers do everything possible to make issuer clients happyand they view analysts who do not do the same as "troublesome." Management employs a variety of tactics to transform these troublesome analysts into "pliant corporate citizens" who have Moody's best interests at heart.

* Moody's product managers participate inand vote onratings decisions. These product managers are the same people who are directly responsible for keeping clients happy and growing Moody's business.

* At least one senior executive lied under oath at the hearings into rating agency conduct. Another executive, who Harrington says exemplified management's emphasis on giving issuers what they wanted, skipped the hearings altogether. [read full report]

BOOM! The SEC Caught Covering Up Wall Street Crimes:

Matt Taibbi Exposes How SEC Shredded Thousands of Investigations

An explosive new report in Rolling Stone magazine exposes how the U.S. Securities and Exchange Commission destroyed records of thousands of investigations, whitewashing the files of some of the nation's largest banks and hedge funds, including AIG, Wells Fargo, Lehman Brothers, Goldman Sachs, Bank of America and top Wall Street broker Bernard Madoff. Last week, Republican Sen. Chuck Grassley of Iowa said an agency whistleblower had sent him a letter detailing the unlawful destruction of records detailing more than 9,000 information investigations. We speak with Matt Taibbi, the political reporter for Rolling Stone magazine who broke this story in his latest article.

KA-BOOM! The Fed And All Their Crony-Capitalist Cartel Members Exposed, Yet Again:

Wall Street Pentagon Papers Part III Are The Federal Reserve's Crimes Still Too Big To Comprehend?

Another day, another trillion plus in secret Federal Reserve "bailouts" revealed. Bloomberg News exposes this latest Fed "deal" after winning a long Freedom of Information Act (FOIA) legal battle to get the details on what was done with the American people's money. Their report runs with an AmpedStatus style headline: "Wall Street Aristocracy Got $1.2 Trillion From Fed."

The aristocracy is alive and well thanks to the Fed, of course.

Keep in mind, this $1.2 trillion is in addition to the $16 trillion the Government Accountability Office (GAO) audit revealed and the over $2 trillion in Quantitative Easing the Fed dished out, not to mention the now continued promise of the Zero Interest Rate Policy (ZIRP). This is also separate from the $700 billion TARP program that Congress approved. This is yet another unknown secret program, throwing another mere $1.2 trillion in public money at the Wall Street elite (global banking cartel), just being revealed now.

Those of us paying attention over the past three years have had Fed crony-capitalism on steroids fatigue for awhile now. Nonetheless, this is deja vu all over again as another mindbogglingly huge story that must be covered comes to light.

Here are the details of this latest revelation:

[read full report]

Speaking of the $16 trillion GAO audit

BOOM! GAO audit exposed, missing some vital details:

More on how the GAO's Fed audit failed to disclose some dirty secrets about BlackRock and JP Morgan

In its review of the Fed's outsourcing practices, it failed to mention the most damaging and suspicious sole-source (no bid) contract awarded to BlackRock, which was for handling the New York Fed's toxic Bear Stearns portfolio, otherwise known as Maiden Lane. This contract would generate $108,000,000 in fees and was one of the largest awarded during the bailout period, but it might also have saved JP Morgan $1.1 billion in losses from its Bear Stearns acquisition.

Also, BlackRock was also one of the managers of the NY Fed's separate $1.25 trillion MBS purchase program as part of QE1. Contrary to the lie on the NY Fed's webpage (that the MBS auctions were conducted via competitive bidding), the NY Fed's own purchasing manager, Brian Sack, admitted in a paper that, "the MBS purchases were arranged with primary dealer counterparties directly, [and] there was no auction mechanism to provide a measure of market supply."

Putting it all together, it looks like Jamie Dimon signed off on hiring BlackRock for no justifiable reason to trade the very Maiden Lane portfolio that could have caused his bank, JP Morgan, to lose up to $1.1 billion. And, it was entirely possible that BlackRock saved the portfolio by trading the MBS portion of ML with the New York Fed directly as QE1 was underway. [read full report]

BOOM! Bear Stearns exposed:

Report Says Bear Stearns Executives Sold Illegal RMBS and Covered It Up

Former back office employees from Bear Stearns are coming out of the woodwork to explain how Tom Marano's mortgage group cheated their own clients out of billions. This week I reported at The Distressed Debt Report, EMC insiders say they were told to make up the classification for whole loans, packaged into mortgage securities, to get them switched out of the trust. By classifying the loans as 'prepaid' or having 'subsequent recoveries' Bear employees were able to fool the trustee into giving them back loans they were not able to legally service. A move New York Attorney General Eric Schneiderman is actively investigating now.

In my latest DealFlow story we hear from EMC staffers who describe how subprime loans, that would have been sold by Bear Stearns trader Jeff Verschleiser's team, never had a proper servicing license in West Virginia when they were packaged into the residential mortgage backed security. In 2003 Bear/EMC put $100 million of subprime loans from West Virginia into a few RMBS transactions. EMC, the banks wholly owned mortgage servicing shop, would service all of Bear's RMBS after they were sold.

A year latter, when senior executies realized the mishap instead of Bear going out and informing their regulator and applying for a license, they orchestrated a cover up and even threaten EMC employees not to talk about it. [read full report]

The big banks are getting lit up!

You shall reap what you sow.

Karma is a bit@h. [read full report]

Let's end with this video. We need to keep in mind that the Federal Reserve has known about all of this criminal activity from the start. Yet, they have done everything they could, and are still trying, to keep this criminal operation up and running. As all these criminal banks begin to blow up, let's not forget who their central bank is and what they have done to the American people.

Cenk, take it away and drive the point home:

- David DeGraw is the founder and editor of AmpedStatus.com. His long-awaited book, The Road Through 2012: Revolution or World War III, will finally be released on September 28th. He can be emailed at David[@]AmpedStatus.com. You can follow David's reporting daily on his new personal website: DavidDeGraw.org

Please rate this wake up world post using the stars below. Your ratings will provide us a better understanding of topics that are important to our readers.

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Bailouts, Fraud, Lawsuits, Wall-Street

ANS -- Explaining Socialism To A Republican

2012-01-09T21:28:00.000-08:00

If you have friends and relatives who are confused about what modern socialism is, this article will help to explain it.
Find it here: http://www.addictinginfo.org/2011/11/07/explaining-socialism-to-a-republican/comment-page-1/#comment-40283
--Kim

Explaining Socialism To A Republican

November 7, 2011
By Nurse Pam

I was talking recently with a new friend who I�m just getting to know. She tends to be somewhat conservative, while I lean more toward the progressive side.

When our conversation drifted to politics, somehow the dreaded word �socialism� came up. My friend seemed totally shocked when I said �All socialism isn�t bad�. She became very serious and replied �So you want to take money away from the rich and give to the poor?� I smiled and said �No, not at all. Why do you think socialism mean taking money from the rich and giving to the poor?

�Well it is, isn�t it?� was her reply.

I explained to her that I rather liked something called Democratic Socialism, just as Senator Bernie Sanders, talk show host Thom Hartman, and many other people do. Democratic Socialism consists of a democratic form of government with a mix of socialism and capitalism. I proceeded to explain to her the actual meaning terms �democracy� and �socialism�.

Democracy is a form of government in which all citizens take part. It is government of the people, by the people, and for the people.

Socialism is where we all put our resources together and work for the common good of us all and not just for our own benefit. In this sense, we are sharing the wealth within society.

Of course when people hear that term, �Share the wealth� they start screaming, �OMG you want to rob from the rich and give it all to the poor!� But that is NOT what Democratic Socialism means.

To a Democratic Socialist, sharing the wealth means pooling tax money together to design social programs that benefit ALL citizens of that country, city, state, etc.

The fire and police departments are both excellent examples of Democratic Socialism in America. Rather than leaving each individual responsible for protecting their own home from fire, everyone pools their money together, through taxes, to maintain a fire and police department. It�s operated under a non-profit status, and yes, your tax dollars pay for putting out other people�s fires. It would almost seem absurd to think of some corporation profiting from putting out fires. But it�s more efficient and far less expensive to have government run fire departments funded by tax dollars.

Similarly, public education is another social program in the USA. It benefits all of us to have a taxpayer supported, publicly run education system. Unfortunately, in America, the public education system ends with high school. Most of Europe now provides low cost or free college education for their citizens. This is because their citizens understand that an educated society is a safer, more productive and more prosperous society. Living in such a society, everyone benefits from public education.

When an American graduates from college, they usually hold burdensome debt in the form of student loans that may take 10 to even 30 years to pay off. Instead of being able to start a business or invest in their career, the college graduate has to send off monthly payments for years on end.

On the other hand, a new college graduate from a European country begins without the burdensome debt that an American is forced to take on. The young man or woman is freer to start up businesses, take an economic risk on a new venture, or invest more money in the economy, instead of spending their money paying off student loans to for-profit financial institutions. Of course this does not benefit wealthy corporations, but it does greatly benefit everyone in that society.

EXAMPLE American style capitalistic program for college: If you pay (average) $20,000 annually for four years of college, that will total $80,000 + interest for student loans. The interest you would owe could easily total or exceed the $80,000 you originally borrowed, which means your degree could cost in excess of $100,000.

EXAMPLE European style social program for college: Your college classes are paid for through government taxes. When you graduate from that college and begin your career, you also start paying an extra tax for fellow citizens to attend college.

Question - You might be thinking how is that fair? If you�re no longer attending college, why would you want to help everyone else pay for their college degree?

Answer - Every working citizen pays a tax that is equivalent to say, $20 monthly. If you work for 40 years and then retire, you will have paid $9,600 into the Social college program. So you could say that your degree ends up costing only $9,600. When everyone pools their money together and the program is non-profit, the price goes down tremendously. This allows you to keep more of your hard earned cash!

Health care is another example: If your employer does not provide health insurance, you must purchase a policy independently. The cost will be thousands of dollars annually, in addition to deductible and co-pays.

In Holland, an individual will pay around $35 monthly, period. Everyone pays into the system and this helps reduce the price for everyone, so they get to keep more of their hard earned cash.

In the United States we are told and frequently reminded that anything run by the government is bad and that everything should be operated by for-profit companies. Of course, with for-profit entities the cost to the consumer is much higher because they have corporate executives who expect compensation packages of tens of millions of dollars and shareholders who expect to be paid dividends, and so on.

This (and more) pushes up the price of everything, with much more money going to the already rich and powerful, which in turn, leaves the middle class with less spending money and creates greater class separation.

This economic framework makes it much more difficult for average Joes to �lift themselves up by their bootstraps� and raise themselves to a higher economic standing.

So next time you hear the word �socialism� and �spreading the wealth� in the same breath, understand that this is a serious misconception.

Social programs require tax money and your taxes may be higher. But as you can see everyone benefits because other costs go down and, in the long run, you get to keep more of your hard earned cash!

Democratic Socialism does NOT mean taking from the rich and giving to the poor. It works to benefit everyone so the rich can no longer take advantage of the poor and middle class.

ANS -- The Four Flavors of Republican

2012-01-09T17:06:00.001-08:00

Here's an interesting article, by Doug Muder, explaining what is going on with the Republican Party, and why they keep switching top candidates, still looking for one they can all agree on. It clears up some of the mystery.
find it here: http://weeklysift.com/2012/01/09/the-four-flavors-of-republican/
--Kim

Tagged constitution, law |

The Four Flavors of Republican

As I've explained elsewhere, the news media does a good job at telling us what is new today, but a bad job of explaining the context-providing frames that the insiders have known all along.

That is showing up big-time in the coverage of the Republican presidential campaign. Let a new poll come out or one candidate launch a new sound bite at another, and CNN is all over it, whether it actually makes any difference or not. That's how we wind up with so much coverage of manufactured events like August's Iowa Straw Poll, which in retrospect did not even say much about last Tuesday's Iowa Caucus, which in itself was a bit of a manufactured event.

On the other hand, the background truths that insiders take for granted are never "new", so they don't make headlines.

I thought I'd fill in one of those gaps by asking: What is this thing called "the Republican Party"? What are its components? How do they fit together? And how do the various candidates relate to them?

The four components. Republicans come in one of four basic flavors: NeoCons, Corporatists, Libertarians, and Theocrats. I don't call them factions because the boundaries between them aren't clear-cut. You can pitch many of the same pitch ideas to all four, but each requires its own spin.

Take global warming. All four flavors are potential climate-change deniers, but each requires its own argument: Tell Corporatists that regulating or taxing carbon will cut profits. Tell Libertarians that global warming is a conspiracy to impose world government. Theocrats will also buy the conspiracy angle, if you emphasize that the plot was concocted by the same evil scientists behind the evolution conspiracy. Tell NeoCons that any carbon restrictions we accept will work to the advantage of the Chinese.

But they aren't just tribes speaking different languages. Their substantive differences show up most clearly on drugs. Libertarians want to legalize drugs, because what business is it of the government's anyway? This position is anathema to the Theocrats, who see the government as the guardian of public morality. NeoCons fundamentally don't care, while Corporatists would happily make money selling either heroin in elementary schools or helicopters to the DEA or both.

Get the idea? Now let's go through them one by one.

NeoCons are the people who gave us the Iraq War. Their highest priority is that the United States remain the top military power in the world, and that we use our power to prevent the rise of any rival powers. Their #1 issue in this election is Iran. When a candidate says we have to do "whatever it takes" to prevent Iran getting a nuclear weapon, he (now that Bachmann has dropped out I'll refer to candidates as he) is appealing for NeoCon support. Of all the remaining candidates, Newt Gingrich is the clearest NeoCon choice.
Corporatists champion the interests of corporations and want to weaken government, unions, or any other power that might resist corporate dominance. Often they borrow the individualistic rhetoric of the Libertarians, but their motivation is different: They want decisions made by individuals because individuals are no match for corporations. Mitt Romney was the corporatist candidate even before he said, " Corporations are people, my friend."
Libertarians want government restricted to defending people and property against crime, defending the borders against invasion, and enforcing contracts. If you don't want the government to restrict your neighbor's right to build a nuclear power plant in his back yard, you're a Libertarian and your candidate is Ron Paul.
Theocrats (a.k.a. Social Conservatives or the Religious Right) believe that morality is eternal and established by God, and that society will collapse if it diverges from this God-given script. Therefore the government should promote true morality and punish deviance. They are especially obsessed with anything that changes gender roles: abortion, gay rights, and even contraception.

It's possible to organize them on two axes, as in the diagram: Corporatists and Libertarians want weak government, while Theocrats and NeoCons want government strong enough to control your bedroom and tap your phone. Libertarians and Theocrats have a populist/outsider mentality that is suspicious of experts and prone to conspiracy theories. Corporatists and NeoCons have an elitest/insider mentality, believing that people are stupid and need to be manipulated into doing what's best. Insiders see outsiders as useful idiots; outsiders sense this attitude and resent it.

Trust and volatility. This coalition goes back to Reagan, who virtually invented the useful-idiot theory, using social issues as bright, shiny objects to get Theocrats' attention, but not actually doing anything about them once in office. As Thomas Frank put it in What's the Matter With Kansas?:

Values may "matter most" to voters, but they always take a backseat to the needs of money once the elections are won. Vote to stop abortion, receive a rollback in capital gains taxes. Vote to make our country strong again; receive deindustrialization. Vote to screw those politically correct college professors, receive electricity deregulation. Vote to get government off our backs; receive conglomeration and monopoly everywhere from media to meatpacking. Vote to stand tall against terrorists, receive Social Security privatization. Vote to strike a blow against elitism; receive a social order in which wealth is more concentrated than ever before in our lifetimes, in which workers have been stripped of power and CEOs are rewarded in a manner beyond imagining.

The outsider groups have been catching on lately, which is how they turned the tables in the 2010 elections: The Tea Party was supposedly all about economic issues, but once in office the first priority was restricting abortion.

That's why the Republican electorate has been so jittery in the 2012 cycle, jumping from candidate to candidate and asking who the "real" conservative is. Everybody is afraid of getting played except for the Corporatists, who have complete confidence in Romney.

Agree/Disagree. Four groups means six relationships.

Corporatist/NeoCon. Agree: Control the world's oil. Install pro-capitalist, pro-globalization governments. Disagree: Iran (Corporatists want to make money trading with them) and immigration (NeoCons worry about the border, Corporatists want cheap labor).
Corporatist/Libertarian. Agree: Cut taxes and regulations, including regulations on campaign contributions. Disagree: convergence of Wall Street and Washington (Libertarians want to abolish the Fed, Corporatists want cheap loans from it).
Corporatist/Theocrat. A diagonal relationship; mostly they can co-operate because their issues have so little to do with each other. Agree: oppose anti-poverty programs, see wealth as a sign of God's blessing. Disagree: globalization.
NeoCon/Libertarian. Another diagonal relationship, but more fraught. Agree: on substance, not much. Disagree: foreign wars, civil liberties.
NeoCon/Theocrat. Onward Christian soldiers. Agree: American exceptionalism, Pro-Israel, anti-Muslim, no gays in the military. Disagree: NeoCon indifference to social issues.
Libertarian/Theocrat. Agree: against liberal judges. Disagree: government as a moral watchdog.

Unifying rhetoric. Talking out of four sides of your mouth is a good trick, even for a professional politician. So spinmeisters have developed variety of rhetorical tropes so that the same words are heard differently by different people.

To give just one example, Theocrats and Libertarians share attitudes, but not policies. Both are nostalgic: Libertarians for the Robber Baron era of the late 1800s, Theocrats for the Great Awakening of the 1700s.

Worshipful rhetoric about the Founders is designed to appeal to both. Theocrats believe the Founders established a Christian Republic, while Libertarians identify the Founders with limited government too limited to get into your bedroom or your medicine cabinet. So a candidate need only say "the Founders" and each group will fill in the picture it likes.

Fault lines. Ronald Reagan and George W. Bush unified the four flavors, but this year no candidate does. NeoCons can't support Ron Paul, Libertarians can't support Rick Santorum, and Theocrats can't support Mitt Romney. That's why Republican insiders keep having fantasies about some new candidate it's basically the same fantasy they had about Rick Perry before he turned out to be an idiot: a tough-talking, pro-business, Christian Reconstructionist who wants to abolish the EPA.

Each non-fantasy candidate exposes a different fault line, so expect Obama to run differently depending on who the Republican nominee is. His increasing economic populism of late is evidence that he expects to run against Romney.

ANS -- Under-reported Stories of 2011

2012-01-07T12:22:00.001-08:00

Here's Doug Muder of The Weekly Sift and his list of under-reported stories of 2011. Have a look.
Find it here: http://weeklysift.com/2012/01/02/under-reported-stories-of-2011/#comments
--Kim

Under-reported Stories of 2011

You didn't need some blogger to tell you that Charlie Sheen flipped out in 2011, or that Kim Kardashian got married and divorced. It was everywhere. You couldn't miss it. But one valuable service that the blogosphere and the alternative press provide at the end of every year is to raise the question: What important stuff didn't you hear about?

It's got a few flaws, but my favorite such list for 2011 is AlterNet's. These stories weren't censored, exactly, they just went by so fast that you had to really be paying attention to catch them.

2011's carbon emission increase was the largest ever.
50,000 Iraq War refugees have been forced into prostitution in Jordan or Syria. (Thanks for liberating us, America.) [Caveat: The links AlterNet gives are horrifying, but I can't find the 50K statistic in either of them. This study looks authoritative and says 5,000, which is bad enough. Maybe somebody at AlterNet typed too many zeroes.]
More activity-duty troops are killing themselves than are dying in combat.
Drone strikes kill innocent civilians.
Record numbers of US kids face hunger and homelessness. The homeless total is higher than after Hurricanes Katrina and Rita in 2006. The 2010 raw numbers for hunger were a record, but the percentages were about the same as 2009.
Prison hunger strikes protest long-term solitary confinement. If you aren't crazy when you start your ten-year time-out, you will be when you finish.
5,000 kids are native-born American citizens, but they're in long-term foster care because we deported their parents.
The FBI is training its agents to suspect all Muslims. The religious bigotry here is bad enough by itself, but it also promotes the very terrorism the FBI is supposed to fight: "depicting Islam as inseparable from political violence is exactly the narrative al-Qaida spins as is the related idea that America and Islam are necessarily in conflict."

Several other most-under-reported lists were less interesting ( New Republic's, for example). But BlackAmericaWeb.com has a suggestion that could be on the list every year: any missing black woman. Derrica Wilson of the Black and Missing Foundation says, "It just seems like our lives are less valued."

A couple of stories suggested by Current TV's Josh Sternberg are worth a look:

Big corporations are getting into solar power in a big way. Google, KKR, General Electric, Berkshire Hathaway and several others.
The Pentagon is investigating how to use social-media sock puppets for propaganda. The contract to study this is less than $3 million, though, so by Pentagon standards it isn't exactly a big push.

Every year has dogs that didn't bark important things that should have happened, but didn't. Usually those non-events pass without notice, so hats off to the NYT for highlighting this one: After investigating the 2010 Upper Big Branch mine disaster, Congress should have closed the loopholes that let Massey Energy risk its employees' lives until 29 of them died. But it didn't.

Religion never gets covered properly in the corporate media. When the media pays attention at all, it's usually for some stupid reason like the trumped-up War on Christmas, or to cover some tiny sect of weirdos like the Westboro Baptists. But religion is pretty important in America and important developments must happen there from time to time. So who covers that stuff?

Check out Religion Dispatches. In particular, look at their Top 2011 Religion Stories That Weren't: the Vatican's clout in historically Catholic countries like Spain and Ireland is shrinking; a pioneering gay-friendly church is losing its identity now that mainstream denominations are open to gays; fewer Americans believe the US plays a special role in God's plan; plus several other developments you won't see on CNN.

But I especially want to call your attention to this neglected religion story: "Upside-Down Ideas About Religious Liberty" (which Kevin Drum also noticed).

In the past, the social service arms of religious bodies understood that if they wanted public money they would need to honor public law regarding the disposition of the money: i.e., provide the full range of mandated services on a universal basis. We used to say to objectors, "If you don't like the mandate, don't take the money."

Apparently such a commonsensical response is now insufficiently deferential to religion. More and more people seem willing to say that if a Catholic health care provider doesn't "believe" in providing reproductive health care to women, that private belief can trump public law.

A lot of attention has come to this issue lately because Catholic Charities is pulling out of Illinois rather than help gay couples adopt children. The bishops are getting away with painting this as a religious liberty issue when it really is nothing of the kind.

The principle here is pretty simple: If you take public money, you have to serve the public the whole public, not just the portion of the public you happen to like. Nobody in Illinois state government is stopping Catholic Charities from arranging adoptions. They can even keep discriminating against gay couples, as long as they raise their own money. The only change is that Illinois tax dollars will no longer support a bigoted program. That's right and just, and infringes no one's religious liberty.

ANS -- Review: Amy Schalet, Not Under My Roof

2012-01-06T21:26:00.001-08:00

Here's another one of those strange articles by Brad Hicks. It's about the cultural differences between Americans and the Dutch, especially with respect to teenage sex. I've included the discussion because he elaborates some there. There's also an interesting Anonymous comment that illustrates the article -- an American insisting that his attitude is reasonable, and it's exactly the weird attitude described in the article. It illustrates how blind people are about seeing another world view. It's very difficult to see from another's point of view.
Find it here: http://bradhicks.livejournal.com/455194.html?view=8787738#t8787738
--Kim

Review: Amy Schalet, Not Under My Roof

Jan. 3rd, 2012 at 9:35 AM

Imagine two rowboats, both adrift at sea. The first rowboat has no oars. They can see an island in the distance. Somebody calculates the distance to it, and the rate at which they're drifting, and concludes that they have only half the food and water they'll need for everybody to reach the island. The conclusion is obvious*: at least half of them have to be thrown overboard. And the sooner it happens, the fewer of them will have to die.

Now imagine the other rowboat. It has plenty of food and water, and it has oars, but it has a different problem: it's leaking, and fast. Somebody does the math, and they conclude that they can all make it to the island in the distance. But they can only make it if everybody who can row, rows, and if everybody else bails water as fast as they can, and if they cooperate in sharing the rowing, bailing, and resting cycles; if anybody is selfish, if anybody doesn't cooperate, nobody will make it.

Call the first rowboat "America." Call the second rowboat "the Netherlands."

That's the metaphor that came to my mind after spending a couple of days deciding how to explain Not Under My Roof: Parents, Teens, and the Culture of Sex, by Amy Schalet (University of Chicago Press, 2011). Even though the book has nothing to do with rowboats, and only indirectly to do with the overall differences between Americans and the Dutch. What the book is really about is the regulation of teenage sex by their parents. You see, as someone who grew up in both the Netherlands and the US, baffled by the differences between the two, and who went on to do her Ph.D. research in the sociology of adolescent/parent relationships, Schalet has dedicated an entire book to trying to explain a major difference between two different cultures that were substantially identical as late as the late 1950s: democratic capitalist republics who won their independence from colonial imperial masters around the same era, dominated by conservative Protestants, who went through the same Great Depression and two World Wars, and the same sexual revolution when contraception and antibiotics were made widely available, and the same economic shock after the OPEC crisis. But in the years after that, huge social differences appear, and Schalet concentrates, as her academic speciality, on one of them.

It's a glaring difference, and it has to do with what American and Dutch parents and teens "know for a fact" about teenage sexual development and maturity during puberty. American parents and their teenagers both "know for a fact" that adolescent male sexuality is dominated by hormones that completely obliviate any capacity developed, up to that point, for sexual and emotional self-regulation. The parents also "know for a fact" that teenage boys are incapable of actually loving their partners; the sons all know that they have genuine romantic emotional feelings, but all feel freakishly abnormal and different from their peers because of this, because they "know" it's true of all the other teenage boys around them. All of them, parents and teen boys and teen girls alike, also "know for a fact" that there are two kinds of teenage girls: the "good girl" majority who desperately want someone to love them but who think that sex is icky and unpleasant, and the "slut" minority who want sex just as much as the teenage boys do, and who have no more self-control. As a result, parents and teens participate in a process of dramatization, intended to exaggerate the expected consequences of any teenage sex or romance, and that also relies on control and punishment by the parents in an attempt to prevent their teenagers from succumbing to those out-of-control hormones, punishment starting at loss of privileges and potentially (or at least threatened) to go as far as parental abandonment, as far as expulsion from the home and imposition of homelessness. Teenage girls are taught to fear rape, infection with STDs, and unwanted pregnancy by out-of-control boys; boys are taught to fear infection with STDs and the imposition of crushing child-support burdens that will drop them out of the middle class for all eternity, stranding them irretrievably among the poor. Despite this, at around age 15, teenage boys and girls assert their independence, and exercise the emotional and physical drives that will push them towards eventual independence from their parents, by "sneaking around," occasionally re-establishing emotional contact with their parents by "getting caught," until they are either married or "can put their own roof over their heads," because officially, those are the mnimum preconditions before any American can legally and morally be allowed to have officially sanctioned sex.

Dutch parents and teenagers, on the other hand, "know for a fact" that only an infinitesimally small number of teenagers, insultingly called "pubers," have out-of-control hormones that they have to grow out of; every parent and most kids have at least heard, second or third hand, of somebody who once knew somebody who knew somebody who might have been a puber once, but nobody interviewed could name one. They "know for a fact" that around age 13 or 14, boys and girls both start thinking about wanting romantic and family relationships of their own like the ones that their parents have. They "know for a fact" that by age 15 to 17, all but a few really abnormally immature children just normally and naturally find a partner they genuinely love, and with who they just naturally want to be cozily together with. They "know for a fact" that through consultation and proper education, parents and society have taught them that this is perfectly okay, as long as it's someone who's also willing to be cozily together with, comfortable with and acceptable to, the parents. They also "know for a fact" that any normal child, having been raised since early childhood to eroticize condoms, and any normal girl, having probably gone on hormonal birth control (for free) as soon as she started menstruating, isn't going to hurt anybody or disrupt the all-important family bond if they bring their romantic partner over to sleep with them a couple of nights a week. They "know for a fact" that children that young will make the occasional mistake, and get gently humiliated by their parents and peers for immaturity, for having shown that they weren't really ready or that they did a bad job of accommodating everybody in the family's needs, and that they'll learn from that how to self-regulate their behavior in harmony with the cozy, comfortable family that they "know for a fact" everybody, including teenagers, wants. (Parents do, however, worry about their children forming relationships with people who "don't fit in with the family," by which they mean "poor people or immigrants." But they express confidence, for the most part, in their ability to steer their children towards someone more comfortable for the family. There's also a grating confidence that none of their children are "asocial" enough to be homosexual or polyamorous.) And, after all, since everybody in the Netherlands has free universal comprehensive health care, including birth control, STD treatment, and abortion, and nobody over the age of 16 needs so much as a parent's permission to use it, and since everybody gets a guaranteed stipend to pay for their own living expenses any time they want to move out, as long as they're still in school, everybody, parent and child alike, "knows for a fact" that the worst thing that can happen if somebody makes a mistake is temporary discomfort and embarrassment. The most important thing, then, is to make sure that nobody feels any need to be "sneaky" or "secretive" about any part of their life, because that might disrupt cozy togetherness.

I am, for the second time in two years**, convinced that I live in a country full of superstitious, primitive, blood-thirsty savages.

So, what's this got to do with rowboats?

In interviews about this book, Schalet got asked a lot about what her opinion was, what did her research show, about why we're so different? Why did we go in opposite directions after our sexual revolutions? That's not her speciality, although she does speculate about it, some. She points out that hierarchical domination and winner-take all are also normal paradigms for American businesses and in American politics, whereas Dutch politics and Dutch businesses are a lot more collaborative; on some level, the difference in parenting styles do a pretty good job of preparing American teenage boys to appear to submit to those above them while sneakily seeking to form their own dominance hierarchies in which they can earn the privilege of dominating others, a pretty good job of preparing Dutch boys to go along to get along, to make and expect concessions, as part of collaborative structures in the rest of their adult life. But it's a unsatisfying explanation; both cultures changed more that way in their politics and business around the same time as they changed in their attitudes towards adolescent sexuality and child-raising, so there's more likely a common cause.

She speculates, at one point in the book, that the defining difference is this: around the time of our respective sexual revolutions, the two countries experienced radically different disasters. The Americans experienced Vietnam, which set the young against the old and corporations and their defenders against poor conscripts, in a struggle for life and death, and normalized the language of intergenerational conflict. The Dutch, who mostly stayed out of Indochina, instead experienced a series of catastrophic nationwide floods, which taught every single person in the Netherlands that unless they all cooperate, unless they all give as much as they can, unless they all move out of their comfort zone a little, they'll all drown. Or, in my metaphor: two different lifeboats.

* The lifeboat that's out of food is an imperfect metaphor, but I knew it would be vivid for any of you who haven't studied extreme survival. It turns out that a lifeboat at sea, after about three days, accumulates a thriving ecosystem on the bottom of the boat, making it relatively easy to fish for turtles and other sea life for food, and their spinal fluid for water. Survive the first three days, and there's no reason to sacrifice anybody. How many Americans do you think would actually think of that? Or, not knowing that, be willing to risk it, in hopes that "something will come along" to make it possible for everybody to survive? I think maybe a few of us, but the rest of us have been conditioned to be quick to try human sacrifice, throwing some people overboard, as the first thing to try in any disaster.

** See Thomas Geoghan, Were You Born on the Wrong Continent?

Posted via LiveJournal app for Android.

Comments

( 21 comments Leave a comment )

lysystratae wrote:
Jan. 3rd, 2012 05:11 pm (UTC)
Further proof that I'm weird - my first thought on the rowboats was 'that's stupid, if you don't have oars just take turns swimming and pushing the boat'.
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bradhicks wrote:
Jan. 3rd, 2012 06:11 pm (UTC)
I'm watching Star Trek: The Original Series on Netflix lately, and one of the earliest episodes is "The Conscience of the King:" an actor in a traveling Shakespeare troupe is suspected of being the notorious criminal Kodos the Executioner. What was Kodos's crime, for which he's still being hunted 18 years later? The colony he was on had a sudden disaster that left them with only half the food they would need until their next food shipment, so he assumed control of the colony by force and executed the least-worthy half of the population, over 4,000 people. He is quite peeved that nobody think this was a good idea, since he had no way of knowing that, only a couple of days later, an unscheduled food shipment would arrive in time to save everybody.

Of course, this episode was aired back in 1966. Back in 1966, leaving the least worthy of us to die in order to save the rest of us would have been looked down upon.
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bradhicks wrote:
Jan. 3rd, 2012 06:19 pm (UTC)
And you're not the only one.

There's a Heinlein novel, written during the Vietnam War, in which the main character compares Vietnam-era conscription to an old Russian fable about a group of people on a sleigh, being chased through the woods by wolves. Every time the horse gets tired enough that the wolves are catching up, they throw another person to the wolves to lighten the load.

The first time I read that, I thought, "Well, that's stupid. All that does is guarantee that when the wolves do catch you, you've got nobody left to help you fight them off except one completely exhausted horse. And the wolves will be well fed."
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skull_bearer wrote:
Jan. 3rd, 2012 08:33 pm (UTC)
I remember one sci-fi story, I think it was call the Cold Equations or something, about a stowaway on a ship which has only enough fuel to transport a single person, so of course, she gets throw out of the airlock. Which would have been fine, if the story hadn't mentioned all the furniture on the spaceship they could have thrown out instead...
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simulated_knave wrote:
Jan. 7th, 2012 02:46 am (UTC)
I believe the furniture didn't weigh as much as she did.
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sci wrote:
Jan. 3rd, 2012 06:20 pm (UTC)
I liked this read. Though each description is a generalisation, the one regarding the USA does seem in line with a lot of first-hand accounts I read. I don't know the same about the Dutch, having only a few contacts there, though the idea of "social" being an alternate word for "normal" is a particularly worrying thought.

I would say for all our close physical location to Europe, the culture of the UK is very largely (as far as public perceptions go) on the American side of things. The only major exception really being the kicking out of home issue, probably as a result of our affordable housing shortage which is perpetually in the public eye. To kick a child with child out on the streets here is doing exactly that; making them homeless, not pushing them to stand on their own.
Maybe it's just the people I hang around with though, but I still have hope and suspect the actual actions and accepted behaviour differs radically from what people admit. People here may talk like they're following that American model, but out of the public eye they're a lot more accepting. Mob dynamics at work.
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anitra wrote:
Jan. 3rd, 2012 07:20 pm (UTC)
In (most of) the US, we're actually having the same sort of problem with housing and entry-level job shortages... but it's still new enough (less than a decade) so that "moving back in with your parents" is still generally looked down upon - even though nearly every person I know under 24 lives with their parents. Nearly every parent-of-twenty-somethings I know is trying to figure out how to get their kids to move out, without pushing them out onto the streets.
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ff00ff wrote:
Jan. 3rd, 2012 08:55 pm (UTC)
I think you misunderstand the American mindset. For a pair of parents kicking their child out of the home for some offense or another, the more they know the child will suffer for that decision the more likely it makes them to kick a child out of the home. It makes them feel better about themselves, more righteous, more committed to justice and right. The more suffering you can cause for an ideal, the more worthy an ideal is to many Americans. We're ever a breath away from just outright human sacrifice to a deified George Washington. The entire Iraq and Afghanistan wars are discussed in our media as logical blood sacrifice to our chief deity "freedom".
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bradhicks wrote:
Jan. 4th, 2012 12:38 am (UTC)
Regarding "the idea of 'social' being an alternate word for 'normal'": Schalet uses the hell out of two Dutch words that, she says, do not translate precisely into single English words: "gewoon," meaning simultaneously customary and healthy, and and "gezellig," meaning simultaneously comfortable (or cozy, as I came to think of it) and social. She says that the reason she uses the heck out of those words is that you cannot discuss social policy, economics, culture, history, or family life with anybody who grew up in the Netherlands without them using each of those words in one out of every three sentences.

The net effect comes across as almost oppressive; I can't imagine the pressures that must come to bear on anybody who wants to do something that isn't customary, or who wants to be a loner, in a culture where everybody just takes it for granted that everybody wants to do what is gewoon, especially including always being gezellig. She makes that feeling quite explicit in one regard: by all but emotionally blackmailing kids to have all of their sex at home, and to do most of their drinking at home, and then getting to mock the kids if they do these things in ways that the parents think are immature, the parents have far, far more powerful tools for controlling their teens ... all under the soft illusion of always "consulting" with the teens and "coming to agreements" in which "everybody makes concessions."

Schalet accuses the Dutch model of deliberately hiding power differentials under a fog of fake consensus building, in which the less powerful always make more concessions than the most powerful, but everybody maintains the fiction that it isn't so. On the other hand, I'm also reading Pivens at the moment, and I suspect that she would dismissively reply that all political systems coerce concessions from the less powerful; at least the Dutch model gives the less powerful, whether the poor in a rich state, or kids in the home, or ethnic immigrants, at least one way to extract concessions without having to riot in the streets, by shaming the elites over their failure to be gewoon, specifically by failing to be gezellig with the less privileged. From what I see in Schalet, she at least thinks, as someone who grew up as a first-generation immigrant in the Netherlands, that such shaming of elites actually works there.
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sci wrote:
Jan. 4th, 2012 01:56 am (UTC)
I'm sorry this is such a trite reply but it's well into the AM here now and all I can think is the terrible pun that an English-language book on the subject could be titled "Gewoon, Gewoon, Gone." But that probably also only works in certain pronunciations.
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silveradept wrote:
Jan. 3rd, 2012 06:24 pm (UTC)
The summary you've given makes it sound like a lot of our modern society is messed up because our sexual politics is very much messed up thanks to things "everyone knows". And, possibly, the toxic mess that results by combining the myth s above about sexuality and the myth of rugged individualism and bootstraps.
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(Anonymous) wrote:
Jan. 3rd, 2012 08:07 pm (UTC)
Proper Families vs Incremental Hedonism
It's easy for me to see that the concept of a 'proper family' is what's guiding parents. Speaking as an American with three teens living at home, my answer has been to stress abstinence before adulthood. I do not see any benefit whatsoever in allowing people who are not consenting adults to act as if they were. In other words, I use the term 'statutory rape'. In the same way, I don't particularly expect that the experience of a babysitting job adequately prepares anyone for being in the workforce. In short, my attitude about teen sex is that more people are talking about it than are actually doing it, and those who are doing it are doing it all wrong. The idea that taking all of the risk out of the consequences that might lead to a shotgun wedding or herpes via a safety net sounds Orwellian to me. I like the idea that sex is complicated and dirty - that getting naked is not easy and casual.

I expect at long last that the results of the sexual revolution in the West will turn out to show a skew in our societies as much as the One Child policy in China. It is inconceivable to me that the historical norm has been so out of touch with reality and that the benefits of feminism are simple but have been overweighted. In short, I don't believe in social liberation through sexual freedom, but rather through the evolution of property rights. Women and children are not property and freeing them from those traditional constraints were necessary and sufficient to greater liberty - however to assert the additional demands of radical feminism (ie to properly have men 'deal with their female side', or question the roles of men & women in family life) was a gross error with significant detrimental consequences for the concept of family. And I think it is becoming more clear that having women think of sex outside of marriage as a liberating thing has worked primarily to the advantage of polygamous men.

So the very idea that this is a lifeboat kind of situation begs the question of the centrality of sexuality in our humanity and exactly what sort of benefits we have gained by focusing on upending our attitudes and trying new practices. It is my opinion that focus on sexuality tends to be dysfunctionally individualistic, and so it is not surprising that it brings into question those sacrifices necessary for family stability. Why is teen sex so important? I think it has to do with the improper way many Westerners conceive of freedom.

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bradhicks wrote:
Jan. 4th, 2012 12:11 am (UTC)
Re: Proper Families vs Incremental Hedonism
The "proper families" model you describe assumes that teens will start dating at 16 but will abstain from sex until at least a couple of years after they graduate from college, a gap of nearly ten years. How's that working out for you?

Don't bother to answer that, the answer is in the book: American and Dutch teens have sex at equally early ages. The Dutch kids average fewer sexual partners, far fewer pregnancies, almost no sexually transmitted diseases; they also drink approximately equal amounts of alcohol, and the Dutch kids use marijuana and other drugs at a fraction of the rate Americans' kids do, smoke far, far less tobacco, and stay in school longer.

Americans have spent the 40 years since the sexual revolution trying to stop kids from having sex, from smoking, from drinking, and from doing drugs until they have a house or apartment of their own. All they really achieve is guaranteeing that the kids do it by sneaking around, and without even minimal health care or other preparation.
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naath wrote:
Jan. 4th, 2012 03:30 pm (UTC)
Re: Proper Families vs Incremental Hedonism
I think it's true though - that people are guided by what they think of as a "proper family" when it comes to raising kids. Of course ideas about what a "proper family" might be vary hugely (and the effectiveness of the enforcement on the kids varies hugely too).

Although the US model (as described in this post) is obviously (to me) nasty; the Dutch one is, on closer examination, also nasty. Both involve parents attempting to compel their children to act in ways they find "proper" - the Dutch are apparently more successful at the compulsion, which is good where it leads to fewer unwanted teen pregnancies but I'm not sure that it is overall good. Of course had I children I don't think I could avoid attempting to convince them that "my way" is the right way; although I like to think I would never actually make it my way or the highway (not that I have or want children, so moot point).
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brynndragon wrote:
Jan. 3rd, 2012 10:13 pm (UTC)
The paragraph on how our (America's) approach to teen sex affects men made me wonder how it affects women. Did Schalet only speculate on how it affects men? If so, what the hell?

(Also, the "everyone knows" bits for America are extremely gender-essentialist, which the Dutch ones are not; way to make me hate you, America.)
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bradhicks wrote:
Jan. 4th, 2012 12:06 am (UTC)
There's stuff all through the book about it. (The basic structure of each chapter: a chunk of sociology jargon, an explanation of the sociology jargon, two anecdotes about American parents, two anecdotes about Norwegian parents, one anecdote each about an American and a Norwegian teen boy and a girl, summary that shows the commonalities by using the sociology jargon.)

One thing that really, really stuck with me was that there is a long, and very good, section in there about the differences in "slut shaming" between the Netherlands and the USA. Dutch girls never brought the subject up on their own, and when asked about it said that the only way to be labeled a slut was to be having a romantic relationship with more than one new person every two weeks or more than one at once; American girls brought up the subject immediately, and said that any girl who was known or suspected to have had sex before she moved out of her parents' house was widely labeled a slut and her life was basically permanently ruined.

In the bit about how the different models maybe prepare people for the two different economic and political cultures, she does say outright that while the Dutch model is in theory compatible with teaching Dutch children of both genders how to get along in society, in practice, it isn't either: there are tremendous pressures on women to stay out of the workforce or only work part time, they're supposed to use their compromise and negotiation skills, and their learned cultural preference for cozy togetherness, to control their kids, not in public. And the American model is just flat bizarre unless you assume that only sluts work outside the home, which just isn't even vaguely true.

Nevertheless, you're not wrong; all the way through the book, it does paint the American version as far more gender essentialist, in that Americans' concept of how sexuality works treats it as primarily a problem of containing and controlling nearly-unstoppable male sexual appetite for novelty, and protecting basically sexless girls from being tricked or bullied into getting labeled as sluts for falling victim to it.
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tzaddi_93 wrote:
Jan. 5th, 2012 06:13 am (UTC)
Where did the Norwegians come into this?
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all_unnecessary wrote:
Jan. 4th, 2012 02:59 am (UTC)
A country full of superstitious, primitive, blood-thirsty savages
Yes.

Schalet was on the Thinking Allowed podcast recently. Interesting to get the British perspective, which is closer to the Dutch than to ours.
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bander wrote:
Jan. 4th, 2012 05:39 pm (UTC)

I am Dutch.

If you want to understand the Netherlands a bit better, a very important fact is that is very densely populated, about equally dense to the state of New Jersey. This, I think, pretty much forces people to be social. This is also why New York City reminds me of home in a good way.

As Brad mentions, 'gewoon' and 'gezellig' are very core concepts to the Dutch, and they can't be directly translated into English.

To explain 'gewoon' a bit better, a well-known Dutch saying is ' doe maar gewoon, dan doe je al gek genoeg': there's a strong social pressure to act normal because there's simply not enough room in the country for you to be an asocial loner, to the point that 'social' and 'normal' are two possible meanings of that one word.

The best translation I can come up with for 'gezellig' is 'having a good time', but with the caveat that it's always with other people. It can be having tea with grandma, but also hanging out with friends at that new hip restaurant.

Brad and anybody else, if you'd like to know more about Dutch culture (and lack thereof), I can heartily recommends The Undutchables. It picks apart the peculiarities of the Dutch culture in a very humorous way.
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tzaddi_93 wrote:
Jan. 5th, 2012 06:16 am (UTC)
That makes a lot of sense, especially when you contrast it with the varying population density of the US. If you are uncomfortable with a highly dense population in this country, there are all sorts of places you can go where there are fewer people.
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kimchalister wrote:
Jan. 7th, 2012 04:57 am (UTC)
Have you read...?
Brad -- Have you read The Culture Code by Clotaire Rapaille? It's about what makes different cultures different -- what the individual attitudes are that make a culture (and how to manipulate it for advertising or campaigning). I think you would get a lot out of it.
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ANS -- New York City Council Votes Against Corporate Personhood, Citizens United

2012-01-04T21:45:00.000-08:00

by now you have probably heard that Montana has refused to go along with the Citizens United decision. (The one that says corporations are persons and money is speech.). There's more.
Find it here: http://www.truth-out.org/new-york-city-council-vote-against-corporate-personhood-citizens-united/1325701337
--Kim

New York City Council Votes Against Corporate Personhood, Citizens United

Wednesday 4 January 2012
by: Yana Kunichoff, Truthout | Report

Missoula, Montana; Boulder, Colorado; and South Miami, Florida, have all done it, but you know it's really catching on when the Big Apple jumps on board. The New York City Council voted Wednesday to get rid of corporate personhood in a growing nationwide backlash against the much-maligned Citizens United ruling.

Passed on January 21, 2010, Citizens United gave corporations the same political rights as people, opening the door for nearly unlimited political spending on elections. Though there are boundaries keeping a candidate from receiving or soliciting money directly from a corporation, the shifting of the rules and the weaknesses of the Federal Election Commission make this increasingly difficult to enforce.

Critics, including those associated with the Occupy movement, see Citizens United as a danger to democratic values.

We "are expecting elected officials to heed the call for constitutional reform that makes clear that democracy is for people, not for corporations," said Jonah Minkoff-Zern, senior organizer of Public Citizen's Democracy is for People Campaign.

New York City would be the second big city after Los Angeles, and New York would be at least the seventh state to take up a similar resolution, but it is likely to take movement in Congress to overturn the Supreme Court's decision on the case.

In 2011, four constitutional amendments to overturn the case were introduced. To pass, two-thirds of lawmakers in both houses must vote for the changes.

"People across the country are standing up to reclaim our democracy," said Minkoff-Zern. "New York City should support this movement by passing this resolution."

This work by Truthout is licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License.

ANS -- Montana High Court Says 'Citizens United' Does Not Apply In Big Sky State

2012-01-02T16:33:00.001-08:00

This is interesting news. In Montana, they know what powerful outside interests can do -- they have been fighting them a long time. Even the judge with the dissenting opinion in this case said he disagreed with the U.S. Supreme Court decision.
Find it here: http://movetoamend.org/publications-talks/montana-high-court-says-citizens-united-does-not-apply-big-sky-state
--Kim

Montana High Court Says 'Citizens United' Does Not Apply In Big Sky State

January 2, 2012
Steven Rosenfeld
AlterNet

State Supreme Court Issues Remarkable Ruling Against Corporate Speech

Montana's Supreme Court has issued a stunning rebuke to the U.S. Supreme Court's Citizens United decision in 2010 that infamously decreed corporations had constitutional rights to directly spend money on 'independent expenditures' in campaigns.

The Montana Court vigorously upheld the state's right to regulate how corporations can raise and spend money after a secretive Colorado corporation, Western Tradition Partnership, and a Montana sportsman's group and local businessman sued to overturn a 1912 state law banning direct corporate spending on electoral campaigns.

"Organizations like WTP that act as a conduit for anonymously spending by others represent a threat to the political marketplace," wrote Mike McGrath, Chief Justice of the Montana Supreme Court, for the majority. "Clearly the impact of unlimited corporate donations creates a dominating impact on the political process and inevitably minimizes the impact of individual citizens."

The 80-page ruling is remarkable in many respects. Throughout, including in a lengthy dissent by a state Supreme Court justice who felt Montana was dutibound to abide by the U.S. Supreme Court ruling, the Montana Court attacked the thinking behind the Citizens United decision and the impact of big money in political culture, including the notion that corporations are deserving of the same political speech rights as citizens.

"While, as a member of this Court, I am bound to follow Citizens United, I do not have to agree with the [U.S.] Supreme Court's decision," wrote Justice James C. Nelson, in his dissent. "And, to be absolutely clear, I do not agree with it. For starters, the notion that corporations are disadvantaged in the political realm is unbelievable. Indeed, it has astounded most Americans. The truth is that corporations wield enormous power in Congress and in state legislatures. It is hard to tell where government ends and corporate America begins: the transition is seamless and overlapping."

"It should be noted that the Montana Corrupt Practices Act was adopted in 1912 at a time when the country's focus was on preventing political corruption, not on protecting corporate influence," wrote Nelson, later in his dissent.

Western Tradition Partnership

The lead group that sued to overturn the Montana ban on direct corporate spending in campaigns followed a very deliberate course of clashing with virtually every aspect of Montana campaign finance law. The lawyers behind the litigation believe that they should face no limits or accountability for any political fund-raising or spending.

The Montana Supreme Court's majority opinion described why Western Tradition Partnership was as slippery an organization as one finds in modern politics. They noted how the groups lawyers claimed that they should be allowed to spend freely because the group would have to disclose that activity under Montana law, when as the state's Chief Justice noted in his opinion, the same group, using another name, actually had sued the state to overturn those very disclosure laws.

Moreover, the ruling quoted a fund-raising brochure that said, "If you decide to support this program, no politician, no bureaucrat, and no radical environmentalist will ever know you made this program possible." The group also is involved in a third suit challenging the state's campaign spending disclosure law.

"We take note that Western Tradition appears to be engaged in a multi-front attack on both contribution restrictions and the transparency that accompanies campaign disclosure requirements," the Court said, adding in a footnote that the Montana Commissioner of Political Practices called the group a "sham" because it failed to register with the state, and refused to disclose the sources of its funds or its spendingas required by law.

Rebutting Citizens United

Lawyers attacking the Montana ban on direct corporate spending said the U.S. Supreme Court in its 2010Citizens United ruling removed any barrier to corporate spending. But the Montana Supreme Court disagreed and took a more nuanced view.

The U.S. Supreme Court in Citizens United found there was no compelling reason why a non-profit corporation that produced an anti-Hillary Clinton video should be prevented from showing that video in the weeks before Election Dayas a new federal campaign law had banned. But the Citizens United ruling did not remove all bans on corporate speech, the Montana Court said. "The Supreme Court held that laws that burden political speech are subject to strict scrutiny, which requires the government to prove that the law furthers a compelling state interest and is narrowly tailored to that interest."

The Montana Court then launched into detailed explanations of sufficiently compelling state interests to merit sustaining the century-old law. The majority opinion read like a history lesson that recounting how the state, especially in the decades following its founding in 1889, struggled to restrict the power and influence of mining corporations. In 1906, the citizenry amended the state Constitution to allow for ballot initiatives. Six years later it passed the ban on corporate spending, specifically to curb mining companies based in Butte. The Court noted that the statethen and nowwas beset with corporate players whose money, power and influence easily overshadow individuals.

"What was true a century ago is as true today: distant corporate interests mean that corporate dominated campaigns will only work 'in the essential interest of outsiders with local interests a very secondary consideration,'" the opinion said, quoting a historian's testimony from a lower state court that reviewed the case. "While specific corporate interests come and go in Montana, they are always present."

The Court said Montana had a political tradition that has emerged in intervening decades and they wanted Montana to remain a state where candidates run low-budget, personal campaigns and do not rely on anonymous, well-financed messaging from outsiders.

The Court pointed out that judicial elections were particularly vulnerable to anonymous spending by large corporations. Montana's 2008 Chief Justice race had advertising from all candidates costing about $60,000, it noted. "It is clear that an entity like Massey Coal, willing to spend even hundreds of thousands of dollars, much less millions, on a Montana judicial election could effectively drown out all other voices."

These various factorsa history of citizenry fighting corporate corruption, political traditions of low-budget campaigning, and the vulnerability of judicial elections to corporate spendingwere sufficiently compelling, the Court said, to preserve the century-old ban on corporate spending in the face of the Citizens United ruling.

"The question then, is when in the last 99 years did Montana lose the power or interest sufficient to support the statute, if it ever did," the majority said. "We think not. Issues of corporate influence, sparse population, dependence upon agriculture and extractive resource development, location as a transportation corridor, and low campaign costs make Montana especially vulnerable to continued efforts of corporate control to the detriment of democracy and the republican form of government."

Concluding, the Court said that the sportsman's group and businessman who sued to overturn the law were not prohibited from participating in politics by the ban on direct corporate spending. And it said Western Tradition Partnership could follow the same rules as anyone else. "WTP can still speak through its own political committee/PAC as hundreds of organizations in Montana do on an ongoing basis," the Court said. "The difference then is that under Montana law the PAC has to comply with Montana's disclosure and reporting laws."

There is little doubt that the anonymous money behind Western Tradition Partnership will appeal the Montana Supreme Court ruling in federal courtand even seek to take the case to the U.S. Supreme Court. However, even it it does that, the ruling issued Friday by Montana's Supreme Court will endure as a monumental defense of a state's right to curb political corruption and the excesses of big-money politics.

Corruption and Corporate Personhood

Justice Nelson, who dissented because he believed that the state had to follow the U.S. Supreme Court's ruling, concluded by fervently disagreeing with the assumptions behind the Citizens United ruling, starting with the Roberts Court's assumption that spending large sums in campaigns was not inherently corrupting.

Nelson said independent expenditures by corporations in political campaignswhere political players are not supposed to coordinate their actions with candidate campaignsabsolutely were noticed and influenced the lawmaking process. "In the real world of politics," he wrote, "the "quid pro quo" of both direct contributions to candidates and independent expenditures on their behalf is loyalty. And, in practical effect, experience teaches us that money corrupts, and enough of it corrupts absolutely."

Nelson closed by slamming the legal theory of corporate personhoodthat corporations, because they are run and owned by people, should have the same constitutional freedoms as individuals under the Bill of Rights. Corporatist judges, such as the Roberts Court, believe that corporations and people are indistinguishable under the law. In contrast, constitutional conservatives know very well that the framers of the U.S. Constitution distrusted large economic enterprises and drafted a document to protect individual businessmen, farmers and tradespeople from economic exploitation.

"While I recognize that this doctrine is firmly entrenched in law," Nelson began, "I find the concept entirely offensive. Corporations are artificial creatures of law. As such, they should enjoy only those powersnot constitutional rights, but legislatively-conferred powersthat are concomitant with their legitimate function, that being limited liability investment vehicles for business. Corporations are not persons. Human beings are persons, and it is an affront to the inviolable dignity of our species that courts have created a legal fiction which forces peoplehuman beingsto share fundamental natural rights with soulless creations of government. Worse still, while corporations and human beings share many of the same rights under the law, they clearly are not bound equally to the same codes of good conduct, decency, and morality, and they are not held equally accountable for their sins. Indeed, it is truly ironic that the death penalty and hell are reserved only to natural persons."

As Nelson said, ending his dissent, "the [U.S.] Supreme Court has spoken. It has interpreted the protections of the First Amendment vis-a-vis corporate political speech. Agree with its decision or not, Montana's judiciary and elected officers are bound to accept and enforce the [U.S.] Supreme Court's ruling"

But the Montana Supreme Court has also spokenand with a clarity that is rare to behold.

Steven Rosenfeld covers democracy issues for AlterNet and is the author of "Count My Vote: A Citizen's Guide to Voting" (AlterNet Books, 2008).
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Montana

ANS -- What Americans Keep Ignoring About Finland's School Success

2012-01-01T23:50:00.001-08:00

This is an article about the excellent education afforded to students in Finland, and how they do it. It's an amazing vision. Brad Hicks, who recommended it, said this, "What it would REALLY look like if we Left No Child Behind: "
Read it.
Find it here: http://www.theatlantic.com/national/archive/2011/12/what-americans-keep-ignoring-about-finlands-school-success/250564/#.Tv45FGKKPEs.twitter
--Kim

« Previous National | Next National » Email Print

What Americans Keep Ignoring About Finland's School Success

By Anu Partanen

Dec 29 2011, 3:00 PM ET 788

The Scandinavian country is an education superpower because it values equality more than excellence.

Sergey Ivanov/Flickr
Everyone agrees the United States needs to improve its education system dramatically, but how? One of the hottest trends in education reform lately is looking at the stunning success of the West's reigning education superpower, Finland. Trouble is, when it comes to the lessons that Finnish schools have to offer, most of the discussion seems to be missing the point.

The small Nordic country of Finland used to be known -- if it was known for anything at all -- as the home of Nokia, the mobile phone giant. But lately Finland has been attracting attention on global surveys of quality of life -- Newsweek ranked it number one last year -- and Finland's national education system has been receiving particular praise, because in recent years Finnish students have been turning in some of the highest test scores in the world.

Finland's schools owe their newfound fame primarily to one study: the PISA survey, conducted every three years by the Organization for Economic Co-operation and Development (OECD). The survey compares 15-year-olds in different countries in reading, math, and science. Finland has ranked at or near the top in all three competencies on every survey since 2000, neck and neck with superachievers such as South Korea and Singapore. In the most recent survey in 2009 Finland slipped slightly, with students in Shanghai, China, taking the best scores, but the Finns are still near the very top. Throughout the same period, the PISA performance of the United States has been middling, at best.

Compared with the stereotype of the East Asian model -- long hours of exhaustive cramming and rote memorization -- Finland's success is especially intriguing because Finnish schools assign less homework and engage children in more creative play. All this has led to a continuous stream of foreign delegations making the pilgrimage to Finland to visit schools and talk with the nation's education experts, and constant coverage in the worldwide media marveling at the Finnish miracle.

So there was considerable interest in a recent visit to the U.S. by one of the leading Finnish authorities on education reform, Pasi Sahlberg, director of the Finnish Ministry of Education's Center for International Mobility and author of the new book Finnish Lessons: What Can the World Learn from Educational Change in Finland? Earlier this month, Sahlberg stopped by the Dwight School in New York City to speak with educators and students, and his visit received national media attention and generated much discussion.

And yet it wasn't clear that Sahlberg's message was actually getting through. As Sahlberg put it to me later, there are certain things nobody in America really wants to talk about.

* * *

During the afternoon that Sahlberg spent at the Dwight School, a photographer from the New York Times jockeyed for position with Dan Rather's TV crew as Sahlberg participated in a roundtable chat with students. The subsequent article in the Times about the event would focus on Finland as an "intriguing school-reform model."

Yet one of the most significant things Sahlberg said passed practically unnoticed. "Oh," he mentioned at one point, "and there are no private schools in Finland."

This notion may seem difficult for an American to digest, but it's true. Only a small number of independent schools exist in Finland, and even they are all publicly financed. None is allowed to charge tuition fees. There are no private universities, either. This means that practically every person in Finland attends public school, whether for pre-K or a Ph.D.

The irony of Sahlberg's making this comment during a talk at the Dwight School seemed obvious. Like many of America's best schools, Dwight is a private institution that costs high-school students upward of $35,000 a year to attend -- not to mention that Dwight, in particular, is run for profit, an increasing trend in the U.S. Yet no one in the room commented on Sahlberg's statement. I found this surprising. Sahlberg himself did not.

Sahlberg knows what Americans like to talk about when it comes to education, because he's become their go-to guy in Finland. The son of two teachers, he grew up in a Finnish school. He taught mathematics and physics in a junior high school in Helsinki, worked his way through a variety of positions in the Finnish Ministry of Education, and spent years as an education expert at the OECD, the World Bank, and other international organizations.

Now, in addition to his other duties, Sahlberg hosts about a hundred visits a year by foreign educators, including many Americans, who want to know the secret of Finland's success. Sahlberg's new book is partly an attempt to help answer the questions he always gets asked.

From his point of view, Americans are consistently obsessed with certain questions: How can you keep track of students' performance if you don't test them constantly? How can you improve teaching if you have no accountability for bad teachers or merit pay for good teachers? How do you foster competition and engage the private sector? How do you provide school choice?

The answers Finland provides seem to run counter to just about everything America's school reformers are trying to do.

For starters, Finland has no standardized tests. The only exception is what's called the National Matriculation Exam, which everyone takes at the end of a voluntary upper-secondary school, roughly the equivalent of American high school.

Instead, the public school system's teachers are trained to assess children in classrooms using independent tests they create themselves. All children receive a report card at the end of each semester, but these reports are based on individualized grading by each teacher. Periodically, the Ministry of Education tracks national progress by testing a few sample groups across a range of different schools.

As for accountability of teachers and administrators, Sahlberg shrugs. "There's no word for accountability in Finnish," he later told an audience at the Teachers College of Columbia University. "Accountability is something that is left when responsibility has been subtracted."

For Sahlberg what matters is that in Finland all teachers and administrators are given prestige, decent pay, and a lot of responsibility. A master's degree is required to enter the profession, and teacher training programs are among the most selective professional schools in the country. If a teacher is bad, it is the principal's responsibility to notice and deal with it.

And while Americans love to talk about competition, Sahlberg points out that nothing makes Finns more uncomfortable. In his book Sahlberg quotes a line from Finnish writer named Samuli Puronen: "Real winners do not compete." It's hard to think of a more un-American idea, but when it comes to education, Finland's success shows that the Finnish attitude might have merits. There are no lists of best schools or teachers in Finland. The main driver of education policy is not competition between teachers and between schools, but cooperation.

Finally, in Finland, school choice is noticeably not a priority, nor is engaging the private sector at all. Which brings us back to the silence after Sahlberg's comment at the Dwight School that schools like Dwight don't exist in Finland.

"Here in America," Sahlberg said at the Teachers College, "parents can choose to take their kids to private schools. It's the same idea of a marketplace that applies to, say, shops. Schools are a shop and parents can buy what ever they want. In Finland parents can also choose. But the options are all the same."

Herein lay the real shocker. As Sahlberg continued, his core message emerged, whether or not anyone in his American audience heard it.

Decades ago, when the Finnish school system was badly in need of reform, the goal of the program that Finland instituted, resulting in so much success today, was never excellence. It was equity.

* * *

Since the 1980s, the main driver of Finnish education policy has been the idea that every child should have exactly the same opportunity to learn, regardless of family background, income, or geographic location. Education has been seen first and foremost not as a way to produce star performers, but as an instrument to even out social inequality.

In the Finnish view, as Sahlberg describes it, this means that schools should be healthy, safe environments for children. This starts with the basics. Finland offers all pupils free school meals, easy access to health care, psychological counseling, and individualized student guidance.

In fact, since academic excellence wasn't a particular priority on the Finnish to-do list, when Finland's students scored so high on the first PISA survey in 2001, many Finns thought the results must be a mistake. But subsequent PISA tests confirmed that Finland -- unlike, say, very similar countries such as Norway -- was producing academic excellence through its particular policy focus on equity.

That this point is almost always ignored or brushed aside in the U.S. seems especially poignant at the moment, after the financial crisis and Occupy Wall Street movement have brought the problems of inequality in America into such sharp focus. The chasm between those who can afford $35,000 in tuition per child per year -- or even just the price of a house in a good public school district -- and the other "99 percent" is painfully plain to see.

* * *

Pasi Sahlberg goes out of his way to emphasize that his book Finnish Lessons is not meant as a how-to guide for fixing the education systems of other countries. All countries are different, and as many Americans point out, Finland is a small nation with a much more homogeneous population than the United States.

Yet Sahlberg doesn't think that questions of size or homogeneity should give Americans reason to dismiss the Finnish example. Finland is a relatively homogeneous country -- as of 2010, just 4.6 percent of Finnish residents had been born in another country, compared with 12.7 percent in the United States. But the number of foreign-born residents in Finland doubled during the decade leading up to 2010, and the country didn't lose its edge in education. Immigrants tended to concentrate in certain areas, causing some schools to become much more mixed than others, yet there has not been much change in the remarkable lack of variation between Finnish schools in the PISA surveys across the same period.

Samuel Abrams, a visiting scholar at Columbia University's Teachers College, has addressed the effects of size and homogeneity on a nation's education performance by comparing Finland with another Nordic country: Norway. Like Finland, Norway is small and not especially diverse overall, but unlike Finland it has taken an approach to education that is more American than Finnish. The result? Mediocre performance in the PISA survey. Educational policy, Abrams suggests, is probably more important to the success of a country's school system than the nation's size or ethnic makeup.

Indeed, Finland's population of 5.4 million can be compared to many an American state -- after all, most American education is managed at the state level. According to the Migration Policy Institute, a research organization in Washington, there were 18 states in the U.S. in 2010 with an identical or significantly smaller percentage of foreign-born residents than Finland.

What's more, despite their many differences, Finland and the U.S. have an educational goal in common. When Finnish policymakers decided to reform the country's education system in the 1970s, they did so because they realized that to be competitive, Finland couldn't rely on manufacturing or its scant natural resources and instead had to invest in a knowledge-based economy.

With America's manufacturing industries now in decline, the goal of educational policy in the U.S. -- as articulated by most everyone from President Obama on down -- is to preserve American competitiveness by doing the same thing. Finland's experience suggests that to win at that game, a country has to prepare not just some of its population well, but all of its population well, for the new economy. To possess some of the best schools in the world might still not be good enough if there are children being left behind.

Is that an impossible goal? Sahlberg says that while his book isn't meant to be a how-to manual, it is meant to be a "pamphlet of hope."

"When President Kennedy was making his appeal for advancing American science and technology by putting a man on the moon by the end of the 1960's, many said it couldn't be done," Sahlberg said during his visit to New York. "But he had a dream. Just like Martin Luther King a few years later had a dream. Those dreams came true. Finland's dream was that we want to have a good public education for every child regardless of where they go to school or what kind of families they come from, and many even in Finland said it couldn't be done."

Clearly, many were wrong. It is possible to create equality. And perhaps even more important -- as a challenge to the American way of thinking about education reform -- Finland's experience shows that it is possible to achieve excellence by focusing not on competition, but on cooperation, and not on choice, but on equity.

The problem facing education in America isn't the ethnic diversity of the population but the economic inequality of society, and this is precisely the problem that Finnish education reform addressed. More equity at home might just be what America needs to be more competitive abroad.

ANS -- The Dumbest Idea In The World: Maximizing Shareholder Value

2012-01-01T23:24:00.001-08:00

This is the first page of a four-page article. If you want to read the rest of it, go where the link takes you. (It's Forbes). It explains, using sports analogies, why the stock market is destroying capitalism and America. And this is Forbes!
I was turned onto the article by Brad Hicks, who said, "Plainly true. Unusually useful, detailed. And, remarkably? It's actually in Forbes, so the right people MIGHT read it:
I'll highlight a paragraph for you to look at.
Find it here: http://www.forbes.com/sites/stevedenning/2011/11/28/maximizing-shareholder-value-the-dumbest-idea-in-the-world/
--Kim

Leadership

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11/28/2011 @ 1:19PM |250,968 views

The Dumbest Idea In The World: Maximizing Shareholder Value

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There is only one valid definition of a business purpose: to create a customer.

Peter Drucker, The Practice of Management

"Imagine an NFL coach," writes Roger Martin, Dean of the Rotman School of Management at the University of Toronto, in his important new book, Fixing the Game, "holding a press conference on Wednesday to announce that he predicts a win by 9 points on Sunday, and that bettors should recognize that the current spread of 6 points is too low. Or picture the team's quarterback standing up in the postgame press conference and apologizing for having only won by 3 points when the final betting spread was 9 points in his team's favor. While it's laughable to imagine coaches or quarterbacks doing so, CEOs are expected to do both of these things."

Imagine also, to extrapolate Martin's analogy, that the coach and his top assistants were hugely compensated, not on whether they won games, but rather by whether they covered the point spread. If they beat the point spread, they would receive massive bonuses. But if they missed covering the point spread a couple of times, the salary cap of the team could be cut and key players would have to be released, regardless of whether the team won or lost its games.
'Capitalism At A Tipping Point' Robert Lenzner Forbes Staff
H-P and Yahoo!: Just the Tip of the Activist Iceberg Richard Levick Contributor

Suppose also that in order to manage the expectations implicit in the point spread, the coach had to spend most of his time talking with analysts and sports writers about the prospects of the coming games and "managing" the point spread, instead of actually coaching the team. It would hardly be a surprise that the most esteemed coach in this world would be a coach who met or beat the point spread in forty-six of forty-eight gamesa 96 percent hit rate. Looking at these forty-eight games, one would be tempted to conclude: "Surely those scores are being 'managed'?"

Suppose moreover that the whole league was rife with scandals of coaches "managing the score", for instance, by deliberately losing games ("tanking"), players deliberately sacrificing points in order not to exceed the point spread ("point shaving"), "buying" key players on the opposing team or gaining access to their game plan. If this were the situation in the NFL, then everyone would realize that the "real game" of football had become utterly corrupted by the "expectations game" of gambling. Everyone would be calling on the NFL Commissioner to intervene and ban the coaches and players from ever being involved directly or indirectly in any form of gambling on the outcome of games, and get back to playing the game.

Which is precisely what the NFL Commissioner did in 1962 when some players were found to be involved betting small sums of money on the outcome of games. In that season, Paul Hornung, the Green Bay Packers halfback and the league's most valuable player (MVP), and Alex Karras, a star defensive tackle for the Detroit Lions, were accused of betting on NFL games, including games in which they played. Pete Rozelle, just a few years into his thirty-year tenure as league commissioner, responded swiftly. Hornung and Karras were suspended for a season. As a result, the "real game" of football in the NFL has remained quite separate from the "expectations game" of gambling. The coaches and players spend all of their time trying to win games, not gaming the games.

The real market vs the expectations market

In today's paradoxical world of maximizing shareholder value, which Jack Welch himself has called "the dumbest idea in the world", the situation is the reverse. CEOs and their top managers have massive incentives to focus most of their attentions on the expectations market, rather than the real job of running the company producing real products and services.

The "real market," Martin explains, is the world in which factories are built, products are designed and produced, real products and services are bought and sold, revenues are earned, expenses are paid, and real dollars of profit show up on the bottom line. That is the world that executives controlat least to some extent.

The expectations market is the world in which shares in companies are traded between investorsin other words, the stock market. In this market, investors assess the real market activities of a company today and, on the basis of that assessment, form expectations as to how the company is likely to perform in the future. The consensus view of all investors and potential investors as to expectations of future performance shapes the stock price of the company.

"What would lead [a CEO]," asks Martin, "to do the hard, long-term work of substantially improving real-market performance when she can choose to work on simply raising expectations instead? Even if she has a performance bonus tied to real-market metrics, the size of that bonus now typically pales in comparison with the size of her stock-based incentives. Expectations are where the money is. And of course, improving real-market performance is the hardest and slowest way to increase expectations from the existing level."

In fact, a CEO has little choice but to pay careful attention to the expectations market, because if the stock price falls markedly, the application of accounting rules (regulation FASB 142) classify it as a "goodwill impairment". Auditors may then force the write-down of real assets based on the company's share price in the expectations market. As a result, executives must concern themselves with managing expectations if they want to avoid write-downs of their capital.

In this world, the best managers are those who meet expectations. "During the heart of the Jack Welch era," writes Martin, "GE met or beat analysts' forecasts in forty-six of forty-eight quarters between December 31, 1989, and September 30, 2001a 96 percent hit rate. Even more impressively, in forty-one of those forty-six quarters, GE hit the analyst forecast to the exact penny89 percent perfection. And in the remaining seven imperfect quarters, the tolerance was startlingly narrow: four times GE beat the projection by 2 cents, once it beat it by 1 cent, once it missed by 1 cent, and once by 2 cents. Looking at these twelve years of unnatural precision, Jensen asks rhetorically: 'What is the chance that could happen if earnings were not being "managed'?"' Martin replies: infinitesimal.

In such a world, it is therefore hardly surprising, says Martin, that the corporate world is plagued by continuing scandals, such as the accounting scandals in 2001-2002 with Enron, WorldCom, Tyco International, Global Crossing, and Adelphia, the options backdating scandals of 2005-2006, and the subprime meltdown of 2007-2008. The recent demise of MF Global Holdings and the related ongoing criminal investigation are further reminders that we have not put these matters behind us.

"It isn't just about the money for shareholders," writes Martin, "or even the dubious CEO behavior that our theories encourage. It's much bigger than that. Our theories of shareholder value maximization and stock-based compensation have the ability to destroy our economy and rot out the core of American capitalism. These theories underpin regulatory fixes instituted after each market bubble and crash. Because the fixes begin from the wrong premise, they will be ineffectual; until we change the theories, future crashes are inevitable."

"A pervasive emphasis on the expectations market," writes Martin, "has reduced shareholder value, created misplaced and ill-advised incentives, generated inauthenticity in our executives, and introduced parasitic market players. The moral authority of business diminishes with each passing year, as customers, employees, and average citizens grow increasingly appalled by the behavior of business and the seeming greed of its leaders. At the same time, the period between market meltdowns is shrinking, Capital marketsand the whole of the American capitalist systemhang in the balance."

How did capitalism get into this mess?

Martin says that the trouble began in 1976 when finance professor Michael Jensen and Dean William Meckling of the Simon School of Business at the University of Rochester published a seemingly innocuous paper in the Journal of Financial Economics entitled "Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure."

The article performed the old academic trick of creating a problem and then proposing a solution to the supposed problem that the article itself had created. The article identified the principal-agent problem as being that the shareholders are the principals of the firmi.e., they own it and benefit from its prosperity, while the executives are agents who are hired by the principals to work on their behalf.

The principal-agent problem occurs, the article argued, because agents have an inherent incentive to optimize activities and resources for themselves rather than for their principals. Ignoring Peter Drucker's foundational insight of 1973 that the only valid purpose of a firm is to create a customer, Jensen and Meckling argued that the singular goal of a company should be to maximize the return to shareholders.

To achieve that goal, the academics argued, the company should give executives a compelling reason to place shareholder value maximization ahead of their own nest-feathering. Unfortunately, as often happens with bad ideas that make some people a lot of money, the idea caught on and has even become the conventional wisdom.

ANS -- While the teachers said they wanted creative kids in their classroom, they actually didnt

2012-01-01T13:42:00.000-08:00

a snippet..... A very short article with scientific evidence of what the title says. but I think it's an age-old problem for anyone who deals with kids. My mother used to say she wanted us to think independently, but she demonstrated the opposite.
Find it here: http://johntropea.tumblr.com/post/15121949777/while-the-teachers-said-they-wanted-creative-kids-in
--Kim

While the teachers said they wanted creative kids in their classroom, they actually didn't

While the teachers said they wanted creative kids in their classroom, they actually didn't. In fact, when they were asked to rate their students on a variety of personality measures - the list included everything from "individualistic" to "risk-seeking" to "accepting of authority" - the traits mostly closely aligned with creative thinking were also closely associated with their "least favorite" students. As the researchers note, "Judgments for the favorite student were negatively correlated with creativity; judgments for the least favorite student were positively correlated with creativity."

This shouldn't be too surprising: Would you really want a little Picasso in your class? How about a baby Gertrude Stein? Or a teenage Eminem? The point is that the classroom isn't designed for impulsive expression - that's called talking out of turn. Instead, it's all about obeying group dynamics and exerting focused attention. Those are important life skills, of course, but decades of psychological research suggest that such skills have little to do with creativity.

- Jonah Lehrer

(Source: scienceblogs.com)

ANS -- What Peak Oil Looks Like

2011-12-31T13:10:00.001-08:00

this is another one of those articles that makes economics easy (or easier) to understand. but this one is about opening our eyes to that fact that we are already in the downward spiral that leads to the end of this epoch. Very well done, except he doesn't see that solar will work, once we get the bugs out. I should post something about it on his site: that we are inventing something that will make solar far more practical.
Find it here: http://thearchdruidreport.blogspot.com/2011/12/what-peak-oil-looks-like.html
--Kim

Wednesday, December 07, 2011

What Peak Oil Looks Like

There are times when the unraveling of a civilization stands out in sharp relief, but more often that process makes itself seen only in the sort of scattered facts and figures that take a sharp eye to notice and assemble into a meaningful picture. How often, I wonder, did the prefects of imperial Rome look up from the daily business of mustering legions and collecting tribute to notice the crumbling of the foundations on which their whole society rested?

Nowadays, certainly, that broader vision is hard to find. It's symptomatic that in the last few weeks I've fielded a fair number of emails insisting that the peak oil theoryof course it's not a theory at all; it's a hard fact that the extraction of a finite oil supply in the ground will sooner or later reach a peak and begin to declinehas been rendered obsolete by the latest flurry of enthusiastic claims about shale oil and the like. Enthusiastic claims about the latest hot new oil prospect are hardly new, and indeed they've been central to cornucopian rhetoric since M. King Hubbert's time. A decade ago, it was the Caspian Sea oilfields that were being invoked as supposedly conclusive evidence that a peak in global conventional petroleum production wouldn't arrive in our lifetimes. Compare the grand claims made for the Caspian fields back then, and the trickle of production that actually resulted from those fields, and you get a useful reality check on the equally sweeping claims now being made for the Bakken shale, but that's not a comparison many people want to make just now.

On the other side of the energy spectrum, those who insist that we can power some equivalent of our present industrial system on sun, wind, and other diffuse renewable sources have been equally vocal, and those of us who raise reasonable doubts about that insistence can count on being castigated as "doomers." It's probably not accidental that this particular chorus seems to go up in volume with every ethanol refinery or solar panel manufacturer that goes broke and every study showing that the numbers put forth to back some renewable energy scheme simply don't add up. It's no more likely to be accidental that the rhetoric surrounding the latest fashionable fossil fuel play heats up steadily as production at the world's supergiant fields slides remorselessly down the curve of depletion. The point of such rhetoric, as I suggested in a post a while back, isn't to deal with the realities of our situation; it's to pretend that those realities don't exist, so that the party can go on and the hard choices can be postponed just a little longer.

Thus our civilization has entered what John Kenneth Galbraith called "the twilight of illusion," the point at which the end of a historical process would be clearly visible if everybody wasn't so busy finding reasons to look somewhere else. A decade ago, those few of us who were paying attention to peak oil were pointing out that if the peak of global conventional petroleum production arrived before any meaningful steps were taken, the price of oil would rise to previously unimagined heights, crippling the global economy and pushing political systems across the industrial world into a rising spiral of dysfunction and internal conflict. With most grades of oil above $100 a barrel, economies around the world mired in a paper "recovery" worse than most recessions, and the United States and European Union both frozen in political stalemates between regional and cultural blocs with radically irreconcilable agendas, that prophecy has turned out to be pretty much square on the money, but you won't hear many people mention that these days.

The point that has to be grasped just now, it seems to me, is that this is what peak oil looks like. Get past the fantasies of sudden collapse on the one hand, and the fantasies of limitless progress on the other, and what you get is what we're gettinga long ragged slope of rising energy prices, economic contraction, and political failure, punctuated with a crisis here, a local or regional catastrophe there, a war somewhere elseall against a backdrop of disintegrating infrastructure, declining living standards, decreasing access to health care and similar services, and the like, which of course has been happening here in the United States for some years already. A detached observer with an Olympian view of the country would be able to watch things unravel, as such an observer could have done up to now, but none of us have been or will be detached observers; at each point on the downward trajectory, those of us who still have jobs will be struggling to hang onto them, those who have lost their jobs will be struggling to stay fed and clothed and housed, and those crises and catastrophes and wars, not to mention the human cost of the broader background of decline, will throw enough smoke in the air to make a clear view of the situation uncommonly difficult to obtain.

Meanwhile those who do have the opportunity to get something approaching a clear view of the situation will by and large have every reason not to say a word about what they see. Politicians and the talking heads of the media will have nothing to gain from admitting the reality and pace of our national decline, and there will be a certain wry amusement to be had in watching them scramble for reasons to insist that things are actually getting better and a little patience or a change of government will bring good times back again. There will doubtless be plenty of of the sort of overt statistical dishonesty that insists, for example, that people who no longer get unemployment benefits are no longer unemployedthat's been standard practice in the United States for decades now, you know. It's standard for governments that can no longer shape the course of events to fixate on appearances, and try to prop up the imagery of the power and prosperity they once had, long after the substance has slipped away.

It's no longer necessary to speculate, then, about what kind of future the end of the age of cheap abundant energy will bring to the industrial world. That package has already been delivered, and the economic rigor mortis and political gridlock that have tightened its grip on this and so many other countries in the industrial world are, depending on your choice of metaphor, either part of the package or part of the packing material, scattered across the landscape like so much bubble wrap. Now that the future is here, abstract considerations and daydreaming about might-have-beens need to take a back seat to the quest to understand what's happening, and work out coping strategies to deal with the Long Descent now that it's upon us.

Here again, those scattered facts and figures I mentioned back at the beginning of this week's post are a better guide than any number of comforting assurances, and the facts I have in mind just at the moment were brought into focus by an intriguing essay by ecological economist Herman Daly.

In the murky firmament of today's economics, Daly is one of the few genuinely bright stars. A former World Bank official as well as a tenured academic, Daly has earned a reputation as one of the very few economic thinkers to challenge the dogma of perpetual growth, arguing forcefully for a steady state economic system as the only kind capable of functioning sustainably on a finite planet. The essay of his that I cited above, which I understand is scheduled to be published in an expanded form in the journal Ecological Economics, covers quite a bit of ground, but the detail I want to use here as the starting point for an unwelcome glimpse at the constraints bearing down on our future appears in the first few paragraphs.

In his training as an economist, Daly was taught, as most budding economists are still taught today, that inadequate capital is the most common barrier to the development of the so-called "developing" (that is, nonindustrial, and never-going-to-develop) nations. His experience in the World Bank, though, taught him that this was almost universally incorrect. The World Bank had plenty of capital to lend; the problem was a shortage of "bankable projects"that is, projects that, when funded by a World Bank loan, would produce the returns of ten per cent a year or so that would be needed to pay off the loan and and also contribute to the accumulation of capital within the country.

It takes a familiarity with the last half dozen decades of economic literature to grasp just how sharply Daly's experience flies in the face of the conventional thinking of our time. Theories of economic development by and large assume that every nonindustrial nation will naturally follow the same trajectory of development as today's industrial nations did in the past, building the factories, hiring the workers, providing the services, and in the process generating the same ample profits that made the industrialization of Britain, America, and other nations a self-sustaining process. Now of course Britain, America, and other nations that succeeded in industrializing each did so behind a wall of protective tariffs and predatory trade policies that sheltered industries at home against competition, a detail that gets discussed next to nowhere in the literature on development and was ignored in the World Bank's purblind enthusiasm for free trade. Still, there's more going on here.

In The Power of the Machine, Alf Hornborg has pointed out trenchantly that the industrial economy is at least as much a means of wealth concentration as it is one of wealth production. In the early days of the Industrial Revolution, when the hundreds of thousands of independent spinners and weavers who had been the backbone of Britain's textile industry were driven out of business by the mills of the English Midlands, the income that used to be spread among the latter went to a few mill owners and investors instead, with a tiny fraction reserved for the mill workers who tended the new machines at starvation wages. That same pattern expanded past a continental scale as spinners and weavers across much of the world were forced out of work by Britain's immense cloth export industry, and money that might have stayed in circulation in countries around the globe went instead into the pockets of English magnates.

Throughout the history of the industrial age, that was the pattern that drove industrialism: from 18th century Britain to post-World War II Japan, a body of wealthy men in a country with a technological edge and ample supplies of cheap labor could build factories, export products, tilt the world's economy in their favor, and make immense profits. In the language of Daly's essay, industrial development in such a context was a bankable project, capable of producing much more than ten per cent returns. What has tended to be misplaced in current thinking about industrial development, though, is that at least two conditions had to be met for that to happen. The first of them, as already mentioned, is exactly the sort of protective trade policies that the World Bank and the current economic consensus generally are unwilling to contemplate, or even to mention.

The second, however, cuts far closer to the heart of our current predicament. The industrial economy as it evolved from the 18th century onward depended utterly on the ability to replace relatively expensive human labor with cheap fossil fuel energy. The mills of the English Midlands mentioned above were able to destroy the livelihoods of hundreds of thousands of independent spinners and weavers because, all things considered, it was far cheaper to build a spinning jenny or a power loom and fuel it with coal than it was to pay for the skilled craftsmen and craftswomen who did the same work in an earlier day. In economic terms, in other words, industrialism is a system of arbitrage.

Those of my readers who aren't fluent in economic jargon deserve a quick definition of that last term. Arbitrage is the fine art of profiting off the difference in price between the same good in two or more markets. The carry trade, one of the foundations of the global economic system that came apart at the seams in 2008, was a classic example of arbitrage. In the carry trade, financiers borrowed money in Japan, where they could get it at an interest rate of one or two per cent per year, and then lent it at some higher interest rate elsewhere in the world. The difference between interest paid and interest received was pure profit.

What sets industrialism apart from other arbitrage schemes was that it arbitraged the price difference between different forms of energy. Concentrated heat energy, in the form of burning fossil fuel, was cheap; mechanical energy, in the form of complex movements performed by the hands of spinners and weavers, was expensive. The steam engine and the machines it powered, such as the spinning jenny and power loom, turned concentrated heat into mechanical energy, and opened the door to what must have been the most profitable arbitrage operation of all time. The gargantuan profits yielded by this scheme provided the startup capital for further rounds of industrialization and thus made possible the immense economic transformations of the industrial age.

That arbitrage, however, dependedas all arbitrage schemes doon the price difference between the markets in question. In the case of industrialism, the difference was always fated to be temporary, because the low price of concentrated heat was purely a function of the existence of vast, unexploited reserves of fossil fuels that could easily be accessed by human beings. For obvious reasons, the most readily accessible reserves were mined or drilled first, and so as time passed, production costs for fossil fuelsnot to mention the many other natural materials needed for industrial projects, and thus necessary for the arbitrage operation to continuewent up, slowly at first, and more dramatically in the last decade or so.

I suspect that the shortage of bankable projects in the nonindustrial world that Herman Daly noted was an early symptom of that last process. Since nonindustrial nations in the 1990s were held (where necessary, at gunpoint) to the free trade dogma fashionable just then, the first condition for successful industrializationa protected domestic market in which new industries could be sheltered from competitionwas nowhere to be seen. At the same time, the systemic imbalances between rich and poor countriesthemselves partly a function of industrial systems in the rich countries, which pumped wealth out of the poor countries and into corner offices in Wall Street and elsewheremeant that human labor simply wasn't that much more expensive than fossil fuel energy.

That was what drove the "globalization" fad of the 1990s, after all: another round of arbitrage, in which huge profits were reaped off the difference between labor costs in industrial and nonindustrial countries. Very few people seem to have noticed that globalization involved a radical reversal of the movement toward greater automationthat is, the use of fossil fuel energy to replace human labor. When the cost of hiring a sweatshop laborer became less than the cost of paying for an equivalent amount of productive capacity in mechanical form, the arbitrage shifted into reverse; only the steep differentials in wage costs between the Third World and the industrial nations, and a vast amount of very cheap transport fuel, made it possible for the arbitrage to continue.

Still, at this point the same lack of bankable projects has come home to roost. A series of lavish Fed money printing operations (the euphemism du jour is "quantitative easing") flooded the banking system in the United States with immense amounts of cheap cash, in an attempt to make up for the equally immense losses the banking system suffered in the aftermath of the 2005-2008 real estate bubble. Pundits insisted, at least at first, that the result would be a flood of new loans to buoy the economy out of its doldrums, but nothing of the kind happened. There are plenty of reasons why it didn't happen, but a core reason was simply that there aren't that many business propositions in the industrial world just now that are in a position to earn enough money to pay back loans.

Among the few businesses that do promise a decent return on investment are the ones involved in fossil fuel extraction, and so companies drilling for oil and natural gas in shale depositsthe latest fad in the fossil fuel fieldhave more capital than they know what to do with. The oil boomtowns in North Dakota and the fracking projects stirring up controversy in various corners of the Northeast are among the results. Elsewhere in the American economy, however, good investments are increasingly scarce. For decades now, profits from the financial industry and speculation have eclipsed profits from the manufacture of goodsbefore the 2008 crash, it bears remembering, General Motors made far more profit from its financing arm than it did from building carsand that reshaping of the economy seems to be approaching its logical endpoint, the point at which it's no longer profitable for the industrial economy to manufacture anything at all.

I have begun to suspect that this will turn out to be one of the most crucial downsides of the arrival of peak oil. If the industrial economy, as I've suggested, was basically an arbitrage scheme profiting off the difference in cost between energy from fossil fuels and energy from human laborers, the rising cost of fossil fuels and other inputs needed to run an industrial economy will sooner or later collide with the declining cost of labor in an impoverished and overcrowded society. As we get closer to that point, it seems to me that we may begin to see the entire industrial project unravel, as the profits needed to make industrialism make sense dry up. If that's the unspoken subtext behind the widening spiral of economic dysfunction that seems to be gripping so much of the industrial world today, then what we've seen so far of what peak oil looks like may be a prologue to a series of wrenching economic transformations that will leave few lives untouched.

ANS -- How to Talk to Kids about the Principles (without all the big words)

2011-12-31T09:58:00.001-08:00

This is a really short, really interesting article about explaining "the principles" to your kids. Now, I don't know what principles they are talking about, but you don't really need to know to understand the article. And isn't THAT interesting? anyway, it's good advice and a neat little window into how we think and how to explain it to kids.
Find it here: http://www.pranskyandassociates.com/blog/relationships/how-to-talk-to-kids-about-the-principles-without-all-the-big-words/
--Kim

How to Talk to Kids about the Principles (without all the big words)

Posted on December 29, 2011 by Erika Bugbee

Kids learn everything faster than we do and learning about the way our thinking works seems to be no exception. Sometimes the biggest obstacle for parents in sharing the principles is that they think they have to use words like principles and consciousness. Just like us, however, kids live in their own thinking all day long, and have plenty of moments when they have registered on the fact that it can be illusory and misleading, so they have their own first-hand experience and it doesn't involve big academic terms. As a parent, I have found myself talking to my kids about the invisible forces that are happening inside of us, because I know it will help my kids make sense of life when they are having a hard time. Let me give an example that happened a few days ago with my daughter.

Here is the scenario: my seven-year-old got out of bed twice one night after I tucked her in, once to get a Band-Aid for a hangnail, and once because she remembered she'd left her coat on the playground. She never gets out of bed. My son, on the other hand, gets out of bed chronically, using one of a thousand random, almost entirely fictional reasons. Because I'm so used to hearing fictional excuses, I just automatically got impatient with her.

My daughter is sensitive and fell apart, and I wanted to make things right. I knew if she could see that people are living under the influence of their own thinking, it would help her see that my impatience was not personal. Here is how the conversation went: I said I was sorry for getting upset for no good reason and my grouchiness had nothing to do with her at all. It had to do with me. We talked about how sometimes her cousin comes over and only wants to play with her older brother. The last time her cousin came over, before he even walked in, she got upset thinking he was going to leave her out. She went off by herself and felt left out without every actually seeing him. Eventually she came around and things were fine. Her cousin was into playing with her, and she had just made the whole thing up in her head. Once she had made it up in her head that he was not going to play with her, she felt sad. Her mind tricked her and told her something that wasn't true, and she believed it.

And that is exactly what I did. My mind tricked me and told me she had some made-up reason to get out of bed like her brother usually has and I got mad before I even heard the reason. That is what our minds do all day long. They make up stories and trick us and we don't even know the stories are not real. Eventually, seemingly out of nowhere, things turn around in your head and you feel different my daughter realized she was not actually being left out and I realized I had gotten mad without a valid reason.

I was trying to show her two things in our conversation:

1. The way you feel at any moment comes from the thinking you are having and not from whatever situation you're in.

2. Your thinking changes all by itself and gives you a different set of feelings about the exact same situation.

These are the principles in plain language. My daughter was amused and comforted by the fact that I get tricked too, and did not feel bad anymore that I got mad at her. As our kids realize that their parents get tricked all the time, it becomes easier for us to talk to them about anything, big or small, and they will start to see how we all get lost. It is a sharing moment, not an educational moment. It is a "Here is what happened to you, and that very same thing just happened to me" conversation.

Regardless of what you are trying to discuss with your kids, if you are like most parents (myself included), you have about 30 seconds before you lose your audience. Their eyes will glaze over if we lecture or teach at them. Since we are caught in the very same tricks they are, however, conversations about the principles have a much better chance of going somewhere because we are talking to them from one novice to another. As a result, you are much more likely to intrigue them. That is the point of the principles: to shine a light on the fact that life as you know it is coming from these forces inside you and we are all asleep to that fact a good percent of the time. The fact that these forces are invisible is the biggest challenge, and my job as a parent is to share what little I've learned about this unseen factor using any moment that I have been thrown by my own thinking. Fortunately for my kids, that happens daily.

ANS -- Small Investors Flee Stocks, Changing Market Dynamics

2011-12-30T23:03:00.001-08:00

For more than a year I have been posting variations of

1)Take your money out of Wall St.

2)Support local businesses, especially democratically-run, worker-owned cooperatives.

3) Elect progressive candidates

in various places all over the internet.
Now we heard this on the radio:

Find it here: http://online.wsj.com/article_email/SB10001424052748704545004575353102793970916-lMyQjAxMTAxMDMwMTEzNDEyWj.html?mod=wsj_share_email If you want to look at it do it soon, as they only leave them up for a few days.
--Kim

Small Investors Flee Stocks, Changing Market Dynamics

By E.S. BROWNING

Many individual investors were tiptoeing back into stocks in the spring. Now, they're running for cover again.

Karen and Roger Potyk, a comfortably retired couple in San Antonio, Tex., had clung to some stock mutual funds despite their anxiety following the financial crisis of 2008. But the renewed market volatility following the "flash crash" of May 6 proved too much to bear.

Enlarge Image

Karen and Roger Potyk.

Karen and Roger Potyk sold the last of their stock mutual funds after May's market volatility.

"We just didn't want to put up with it any more," says Karen Potyk. She and her husband sold the last of their stock holdings on May 20, moving the money to bonds, certificates of deposit and bond-like annuities.

Small investors' faith in stocks, which surged in the 1990s, has collapsed since the technology-stock debacle and the Enron and WorldCom scandals of 2000-2002. The 2007-2009 financial crisis only made things worse. Now, the pullback among ordinary investors means they are a declining force in a market that is increasingly dominated by professionals.

Some were tantalized by equities during the 70% rally that began in March 2009 and ran through April. But mutual-fund data and other clues suggest that that brief infatuation has ended.

In 2002, investors withdrew more money from mutual funds that invest in U.S. stocks than they put in. Then from 2007 through 2009 they withdrew money for three consecutive years. That marked the first three-year period of withdrawals since 1979-1981, according to the Investment Company Institute, a mutual-fund trade group. This year, U.S.-stock funds saw inflows in January, March and April, but net withdrawals resumed in May.

Investors talk of a growing disillusionment with big institutions, including corporations, government, banks and political partiesas well as fears about the nation's heavy debt. Some people's confidence in stocks was seriously shaken by the volatility that returned in May. They worry that the May 6 flash crash, when the Dow Jones Industrial Average fell 700 points in eight minutes before rebounding, is a sign that ordinary people are increasingly at the mercy of anonymous companies that trade with powerful computers.

Individual investors were important market pillars in the 1990s, but their flight from stocks is changing the market dynamic. By adding money to mutual funds, individuals helped push stocks higher in the 1990s and to a lesser extent from 2003 through 2006. Now they are moving money out again on balance, making them a drag on the market.

Ordinary investors are returning to the cautious mentality they developed during the 1970s. That was the last extended period of stock weakness, after which it took many people a decade or more to get comfortable with stocks again.

"I feel like the tail of the dog that is being wagged by institutional investors who are taking a lot of risk, playing a lot of games and just have these computerized orders that affect me a lot," says Simeon Thibeaux, a semi-retired businessman from Alexandria, La.

History suggests that individuals eventually will return to stocks, as they did in the 1980s and, even more strongly, in the 1990s. But rebuilding their confidence could take time, says Brian Reid, chief economist of the Investment Company Institute. Historically, it has taken an extended period of stock success to lure individuals back after long periods of disaffection.

Rebounding after a two-month slump, the Dow Jones Industrial Average jumped 511 points, or 5%, to 10198.03 last week, its biggest weekly gain in almost a year, although it remains down 9% since topping out on April 26.

"We have gone through two of the worst bear markets since the Great Depression, and it has given investors a better sense of the risks and dangers of investing" in stocks, Mr. Reid says, referring to the bear markets of 2000-2002 and 2007-2009.

The gradual dissipation of investor confidence can be seen in mutual-fund investing patterns.

After getting hurt in the 2000 tech-stock crunch, individuals came back to U.S.-stock funds in 2003, as stocks were entering a new bull market, ICI data show. But the buying proved tepid and turned to net selling in the latter part of 2006, even before the bull market ended in 2007. Despite occasional periods of inflows to U.S.-stock funds, the selling trend has continued since then. Individuals removed a net $7 billion from stock funds in the seven days ending May 12 and $13 billion two weeks later, eclipsing the deposits from earlier in the year.

Recent volatility has certainly shaken the Potyks' confidence. Mr. Potyk, a 68-year-old pharmacist, spent 25 years as an army officer and 11 years with Pfizer before retiring. His wife, 63, is a retired real-estate broker.

The Potyks stuck with their stocks through the tech wreck, the Sept. 11 attacks and Enron. They were willing to take risks to get stock-market returns. By 2006, he and his financial adviser say, the Potyks' portfolio was 50% stocks and 50% bonds and other fixed-income investments.

The big blow to their confidence was the 2008 collapse of brokerage-firm Lehman Brothers, in which they lost $75,000 on a Lehman bond. Although it was a bond that hurt them, the Potyks' faith in all potentially risky investments was shattered.

"In the military, you learn that you want people you can respect, trustwho have integrity," Mr. Potyk says. "Over the last five years or so, I find that our financial institutions have no shred of the character I describe."

The last straw was the May market volatility, accompanied by widespread fears about European government debt. On May 20, the Potyks asked their financial adviser to sell the last of their stock mutual funds.

Now that their portfolio consists entirely of fixed-income investments, "I won't make 8% on my money. I will make 4% or 5%, but the money will be there," says Mr. Potyk.

Stocks had developed an almost cult-like following in the 1980s and 1990s, when they were among the best investments available. But in the past decade, big U.S. stocks have had the worst performance of nine major investment classes tracked by investment research firm Morningstar.

The Standard & Poor's 500 stock index has fallen at an annualized rate of 3% a year over the past 10 years, including dividends and controlling for inflation. Long-term Treasury bonds show a gain of 5% a year during that same period, after inflation. Gold is up 10% a year and real-estate investment trusts 8% a year. The S&P 500 index itself, without adjusting for inflation and dividends, is stuck today at a level it first reached 12 years ago, meaning it has gone nowhere in more than a decade, scaring a legion of people in the process.

Reflecting their flight from risk, individual investors appear to be losing faith in an investment strategy called buying on the dips. In times of stock strength, people learn to buy stocks after a decline, when they are cheaper, because the stocks have a tendency to recover. Lately, investors have been reversing that behavior, selling on dips for fear the declines will continue.

The Yale School of Management maintains an index, designed by Professor Robert Shiller, that tracks individuals' willingness to buy on dips, based on a monthly survey of wealthy investors. The index topped out in 2002. While it has moved up and down since then, it has been falling since the start of 2009.

Some investors, haunted by the continuing credit crunch and unemployment fears, are being driven to pull money out of stock funds to make up budget shortfalls.

Also eating away at risk tolerance is demographics: Baby boomers are aging, making them think more about preserving their holdings' value. This is only part of the story, however: The Investment Company Institute data show lower risk tolerance among younger people, too.

In surveys of mutual-fund owners, the ICI found that just 30% said in 2009 that they were willing to take above-average or substantial risk in the stock market, down from 37% in 2008. The number willing to take only below-average risk or no risk at all rose to 20% from 14%.

Mr. Thibeaux of Alexandria, La., sold one-third of his stock mutual funds late in April at the suggestion of an investment adviser, who warned him that stocks were due for a pullback.

The problem was where to put the cash. A money-market fund at his mutual-fund company or a short-term certificate of deposit at his bank would yield almost nothing, he says. He finally decided simply to pay off the mortgage on a second home, on which he was paying 5% interest.

"I think there is no investment strategy now except to buckle up and hope that you don't get hit too hard," Mr. Thibeaux says.

Long-term investors have been showing a distinct change in behavior since 2008. Jay Pestrichelli, who monitors client behavior at online brokerage firm TD Ameritrade, has noted a change in the traditional buy and hold strategy. "People who once made few changes to their accounts have begun trading more frequently," he says. He saw the trend especially clearly on May 6, when there was an uptick of selling.

"A higher percentage of our trading was coming from our longer-term investor base," he says. People who might log into their accounts regularly, but not necessarily trade, were selling heavily that day, he says.

"The next day, those clients were all buying back in," he says, often losing money on a trade where they had sold low and bought higher. "To see that kind of a move in such a short period of time, it certainly can shake their trust."

James Rotenstreich, a businessman in Birmingham, Ala., says the May flash crash damaged his confidence in stocks as a store of wealth.

The Herd Instinct Takes Over

"I was just dumbfounded. The whole thing could have melted down, and I wouldn't have had much to do with it one way or the other," he says.

Mr. Rotenstreich has received offers for some real estate he owns in the Birmingham area, but so far has been reluctant to sell, he says, in part because he doesn't know what he would do with the money. He notes that corporate bonds and other alternatives also suffered severely in the market decline.

Reflecting on his options, he says that if he sold the real estate, "I really think I would put it in the bond market. So maybe I have lost some faith in the future of the stock market."

Some investment advisers are telling clients that, for long-term investors, this summer will turn out to have been a great time to buy stocks on the cheap. So far, not many clients are listening.

Write to E.S. Browning at jim.browning@wsj.com

ANS -- Can a molecule make us moral?

2011-12-29T10:59:00.001-08:00

This great article was sent to me by one of our readers. Read it. Watch the videos too; there's more info there that's not in the text. It's about a molecule that makes us behave morally. It increases empathy. Psychopaths don't have it....
find it here: http://www.cnn.com/2011/12/27/opinion/zak-moral-molecule/index.html?hpt=hp_bn9
--Kim

Can a molecule make us moral?

By Paul Zak, Special to CNN
updated 7:36 AM EST, Tue December 27, 2011

Paul Zak: Trust, morality and oxytocin
STORY HIGHLIGHTS

Paul Zak: Experiments show the presence of a chemical promotes moral behavior
He says oxytocin makes people more willing to help a stranger
Those who release the most oxytocin are the most satisfied with their lives, he says
Zak: Aristotle was right in saying that the reason to be virtuous is that it makes us happy

Editor's note: Paul Zak is professor of Economics and Department Chair and director of the Center for Neuroeconomics Studies at Claremont Graduate University. He's the author of "The Moral Molecule: The Source of Love and Prosperity." Zak spoke at the TED Global conference in July in Edinburgh. TED is a nonprofit dedicated to "Ideas worth spreading" which it makes available through talks posted on its website.

(CNN) -- The longest debate since humans have been having debates is whether we are good or evil. It underlies the stories of Adam and Eve, Cain and Abel, Jesus and Judas.

What is our human nature? Of course, the answer is we can be both good and evil. But what determines which part of our character emerges?

About a decade ago, my lab made an unexpected breakthrough in the understanding of good and evil. We discovered that the neurochemical oxytocin makes people trustworthy. We then found oxytocin was responsible for many other moral behaviors, from being generous to sacrificing to help a stranger.
An interview with Paul Zak

Wait -- morality is chemical? In my TED talk, I describe how I made the unlikely discovery of the moral molecule, how I was roundly discouraged from even looking for such a chemical, and what drove me to persist in my search.

In these experiments, we tempt people with virtue and vice using money (share with others: virtue; selfishly keep everything for yourself: vice). Using money to understand how and why humans make decisions is a field now called neuroeconomics.

Money gives us a convenient way to measure how much someone cares about another person. For example, in one experiment we randomly matched strangers in the lab by computer and put $10 in an account for each of them. In each pair there was a decision-maker 1 (DM1) and a decision-maker 2 (DM2).

All participants got these instructions: DM1 can give up some or all of his or her $10 and transfer it to DM2 by computer but cannot talk to, or meet, the other person. Whatever is transferred is removed from DM1's account but is tripled in DM2's account.

Then, DM2 gets a computer message identifying how much has been received from DM1 and a reminder of the total in his or her account. Next, the software asks DM2 if she or he wants to send some of this larger pot of money back to DM1.

The amount sent back comes out of DM2's account one for one and is not tripled -- it's a pure loss to DM2. For example, if DM1 transfers $8, he or she would keep $2 and DM2 would receive $24 (=3 x $8). The total in DM2's account would be $34 ($24 + $10).

If you were DM2, what would you do -- keep it all or share some back with DM1? We found that 90% of DM1s send money and of the DM2s who receive money, 95% return at least some of it. Usually both DMs in a pair leave the lab with more than $10, sometimes much more.

The DM1 to DM2 transfer is understood to be a measure of trust, while the DM2 to DM1 transfer measures trustworthiness. By taking blood from participants, we found that the more money denoting trust DM2 received, the more oxytocin his or her brain made. And, the more oxytocin on board, the more money was returned to DM1. All this happened without any face-to-face interactions, revealing how easily the oxytocin system activates.

TED.com: How we read each other's minds

Morality has traditionally been the domain of theologians and philosophers, often providing prescriptions of what we must do. But in the past decade, neuroscientists have started analyzing brain activity while people think about, and engage in, moral or immoral acts. These findings have changed the inquiry into morals from prescriptive to descriptive. As I discuss in my talk, I have even done studies that have manipulated brain chemistry in human beings to show that oxytocin directly causes people to be moral.

I also talk about what having a chemical that affects morality means for individuals, organizations and entire societies. For example, does "my chemicals made me do it" absolve people from legal or moral responsibility? If we have a moral molecule, where does evil come from?

By the way, oxytocin doesn't only cause morality in a laboratory setting -- I've done studies in churches, on sports fields and among indigenous people to show that the biology of morality is a human universal.

TED.com: The battle between your present and your future self

While neuroscience has provided new insights into our human nature, the philosophy of morality has not gone away. My talk identifies the philosophers whose insights and arguments are consistent with the way oxytocin works in the human brain. Two hit the mark: Aristotle and Adam Smith. Aristotle claimed that the reason to be a virtuous person is because it makes us happy. I found the same thing: Those who release the most oxytocin in the lab are more satisfied with their lives (watch the talk to find out why).

And then there is Adam Smith. Yes, the same Adam Smith who is considered the "father" of economics was a moral philosopher. In 1759, Smith published a book called "The Theory of Moral Sentiments" that nearly perfectly anticipated my findings. Smith's book caused a sensation when it came out because of his radical claim that morality comes from humans' social nature, not from God.

Sociality, said Smith, means we inevitably share the emotions of others. This is just what I found: When the brain is flooded with oxytocin, people feel empathy for others. It is this emotional connection that causes most of us, most of the time, to behave well toward each other.

I've also found that societies that are more moral (for example, more trustworthy and more tolerant) also have higher standards of living. Smith understood why: Morality undergirds economic exchange, opening up more opportunities for the creation of wealth that individuals in a transaction can share. And, prosperity (perhaps surprisingly) can make societies more moral. All this occurs as part of our human nature, our brains adapting to evolving social environments.

So, this ancient and tiny molecule, oxytocin, has taken us from being social creatures to, increasingly, being tolerant, empathic and prosperous ones. Quite a nice trick for a tiny molecule that traces its lineage back at least 400 million years.

Follow @CNNOpinion on Twitter

The opinions expressed in this commentary are solely those of Paul Zak.

ANS -- Occupy Wall Street, Swarm Behavior & Self-Organized Criticality

2011-12-28T23:29:00.001-08:00

This is another pretty intellectual article about how systems change. I have an especial affection for this because we studied Self-Organizing Criticality in a theoretical physics class i accidentally took in grad school. I even wrote a paper on it.
Find it here: http://www.cognitivepolicyworks.com/blog/2011/10/15/occupy-wall-street-swarm-behavior-self-organized-criticality/
--Kim

Occupy Wall Street, Swarm Behavior & Self-Organized Criticality

by Joe Brewer on October 15, 2011 in News , Social Movements

If you've been watching the Occupy Wall Street protests these last few weeks, you may be surprised by how quickly it spread from a small group of disgruntled youth in New York to a planetary mobilization that is now active in more than 100 cities all in a few short weeks. This is an unprecedented ripple of change in local conversations, media coverage, global consciousness, and international solidarity.

My friend and fellow observer of global patterns, Timothy Rayner, describes the Occupy protests as a "swarm movement", suggesting that we may be in the midsts of an unprecedented pattern of self-organization that wasn't possible before the internet. I am inclined to agree with his core thesis and want to suggest that we are observing what complexity researchers call self-organized criticality, defined in the following way:

A point at which a system changes radically its behavior or structure, for instance, from solid to liquid. In standard critical phenomena, there is a control parameter which an experimenter can vary to obtain this radical change in behavior. In the case of melting, the control parameter is temperature.

Self-organized critical phenomena, by contrast, is exhibited by driven systems which reach a critical state by their intrinsic dynamics, independently of the value of any control parameter. The archetype of a self-organized critical system is a sand pile. Sand is slowly dropped onto a surface, forming a pile. As the pile grows, avalanches occur which carry sand from the top to the bottom of the pile. At least in model systems, the slope of the pile becomes independent of the rate at which the system is driven by dropping sand. This is the (self-organized) critical slope. Read more

I wrote about this a few weeks ago when describing the importance of phase transitions for the study of social change. We have passed a tipping point (also called a critical threshold, inflection point, regime change, or paradigm shift) and the patterns are changing quickly. Pressure has been growing for years now with the following trends indicating that the status quo is increasingly unstable and therefore unlikely to persist much longer:

Growing income inequality in the United States and around the world;
A shift from investments in productive capital (e.g. manufacturing) toward financial capital (e.g. making money off of money derivatives, hedge funds, etc.);
Ongoing unemployment and widespread economic insecurity since the 2008 financial meltdown;
The collapse of a particular life narrative that builds from childhood to college to career and homebuilding and culminating in retirement. This life arc no longer feels viable to the mainstream youth generation;
Increasing awareness about and severity of environmental damage, especially that having to do with global climate disruption;
Decades of decline in public confidence regarding government, corporations, and the banking system;
Rapid depletion of many raw materials that now drive innovation in life cycle design for new products;
Emergence of popularity for social entrepreneurship, novel corporate forms for promoting social good, and mainstream business strategy incorporating sustainability at top management levels.

These trends (and many more) suggest that the old models for building civilization have become obsolete. It is now a mainstream view that our government is fundamentally corrupted by corporate influence. And we are beginning to see the capacity for the younger generations (both Gen X and Millennials) to develop and deploy technologies for mass mobilization.

So what does self-organized criticality have to do with the Occupy Wall Street movement? In a word Everything.

This is a movement that has no elevated leader. It is not making demands to authorities with decision-making power in the old institutions. It is being organized locally by each group and built as a fractal pattern of small groups setting plans through general assemblies, orchestration of networks of groups through hub websites (like the one at Occupy Together linked to above), and coordinated branding through meme propagation of the "We're the 99%" slogan.

The key thing to keep in mind about self-organizing systems is that their unfolding dynamic is the source of group intelligence. There are no puppeteers pulling the strings. It isn't possible to orchestrate nested networks in a centralized manner. Instead what we're seeing is the emergence of structure and social order through the conversations themselves, starting at the small scale and spiraling upward. Occupy Wall Street is a swarm that like a flock of birds or school of fish has burst into action as individuals finding resonance with one another only to discover that a coherent group flow has emerged.

I cannot say how far this movement will go, although the trends just mentioned suggest that monumental change is imminent. If this doesn't lead to fundamental change, it will at least be part of the gathering momentum for future attempts to be more bold and effective. If you are cheering Occupy Wall Street onward (or concerned that it may unseat you from a comfortable position in the old political order), you'll want to familiarize yourself with the laws of self-organization and swarm behavior in order to grasp what is going on.

For my part, I'll continue to shed light on the dynamics at play to assist in our global transition toward social justice and sustainability fluttering along as part of the swarm!

Cognitive Policy Works specializes in providing organizations and individuals with frame analysis, policy briefs, strategic advising, and training.

ANS -- A Change Makers Guide to Economic Paradigms

2011-12-28T23:12:00.001-08:00

Here's an article describing the boom and bust cycles that are characteristic of Capitalism. It's from the successor to the Rockridge Institute, the thinktank formed by George Lakoff, the famous linguist.
I'm afraid the graphs didn't come through completely -- if not, go to the site.
find it here: http://www.chaoticripple.com/2011/change-maker-guide-economic-paradigms/
--Kim

Chaotic Ripple

A Change Maker's Guide to Economic Paradigms

In Economic Patterns, Social Change on April 1, 2011 at 9:48 pm

We are in the midst of a collapsing economic paradigm. This is evident in the widespread wealth inequality, absence of strong civic institutions, corrosive infusion of money into our broken democracy, and a deteriorated environment ravaged by a profound blindness to our impacts on the larger world.

As Change Makers, it is our job to understand the patterns of economic systems so we can participate in the creation of the next economy one that must embody ecological principles if we are to survive on the Earth.

I want to help you understand:

How economic paradigms come into being;
The role of financial capital in driving boom-bust cycles; and
The ascension of a new paradigm that pulls society out of collapse.

We Change Makers need to understand this entire process if we want to transition to a sustainable form of civilization in the coming decades.

The Governing Dynamics of Capitalism

Every complex system has a governing dynamic the signature pattern that gives it a unique character. For capitalism, the defining pattern is Boom-Bust Cycles set on top of a growth curve. These cycles of growth and collapse that recur in market economies are what economist Joseph Schumpeter described as the tendency for "creative destruction" to cascade through economic systems. This pattern builds on an exponential growth curve which I'll come back to below.

This schematic view (overly simplified), depicts the basic structure of a Boom-Bust Cycle:

There are periods when the economy hits a plateau and becomes stable. Sometimes called "Golden Ages" these periods are defined by widespread prosperity, a growing middle class, and general peace and stability. Golden Ages are preceded (and typically followed) by "Recessions" created by destabilizing economic conditions indicators include dramatic wealth inequality, lost confidence in societal institutions, and speculative bubbles where large sums of money vanish in a short period of time.

What this graphic conceals is the fundamental shift that happens with each new pulse. The continuous line suggests that the same economy can be found on either side of a recession. Yet, each pulse entails deep structural changes to the economy. Every cycle is the destruction of the old economy followed by the birth of a new one.

In other words, it is a normal part of capitalist systems to go through paradigm shifts. This is very good news for all of us Change Makers working to build a sustainable global economy. We can leverage the natural evolution of market economies to disrupt and create anew.

Digging Deeper

To really understand Boom-Bust Cycles, we'll need to take the work of Carlota Perez (especially, her book Technological Revolutions and Financial Capital) and see how economic paradigms rise and fall.

Carlota Perez set out to explain an interesting phenomenon that every 50 years or so there have been new economic structures that forced the collapse of what came before. She identified five economic paradigms (or "Great Surges") throughout this period:

Industrial Revolution in Britain (~1770-1830)
Age of Steam and Railways (~1830-187o)
Age of Steel, Electricity, and Heavy Engineering (~1870-1920)
Age of Oil, Automobiles, and Mass Production (~1920-1975)
Age of Information and Telecommunications (~1975-20??)

Each of these periods represents a major technological breakthrough that resulted in a fundamental restructuring of the economy. Each period has its own paradigms for wealth-generation, institutional structures, regulatory environments, and desired trajectories for society. The technologies themselves are but one piece in an array of vital inputs that ultimately defined each era. It is the overarching perspective or worldview that captures the core of each paradigm.

Perez's major contribution to economics is the model for how paradigm shifts occur, as depicted in this graphic:

There are four phases of each economic paradigm Irruption, Frenzy, Synergy, and Maturity.

Each economic paradigm begins with a technological breakthrough capable of generating entirely new modes of production. In the Age of Steam and Railways, this was the dual invention of steam engines and a manufacturing process for producing cheap, high-quality steel. These breakthroughs made it possible to build vast transportation networks (railways) that were durable when exposed to the elements and could carry vehicles powered by steam engines (trains) over long distances.

During the Irruption Phase, breakthrough technologies became recognized as "game changers" for economic development. They may have been discovered earlier without their latent potential being recognized. Very little money was invested during this period, until a catalyzing event captured the imaginations of investors and entrepreneurs.

After such a catalyzing event, the Frenzy Phase unfolds. During this period, a large pool of investors jump on the bandwagon to support a wave of entrepreneurs in the creation of new business models that exploit the benefits of the new technologies. This leads to the emergence of entirely new economic sectors that build on legacy institutions from the previous paradigm.

The convergence of business applications into new sectors occurs during the Synergy Phase. Mainstream investors start to recognize the profitability of businesses that have proven themselves as "winners" in the highly competitive space of entrepreneurial activity during the Frenzy Phase. These business models are expanded and consolidated to create "economies of scale" that maximize profits in the emerging new economic sectors.

Through the rush of consolidations and mergers of the Synergy Phase, new markets become saturated and it becomes more difficult to keep profit returns high. This constitutes the Maturity Phase as a period when investments decouple from productive forces in the mature economy and financial tools arise to "make money from money." This phase often leads to widespread income inequality, corrosion of regulatory environments by the corrupting influence of money, and a stagnation in profitability.

The stage is now set for the next economic paradigm to arise. The old economy becomes unstable and lurches into decline or collapse, depending on which environment it unfolds into.

Where "Speculative Bubbles" Come From

This unfolding process reveals why capitalist economies go through Boom-Bust Cycles. The role of money changes in each phase of the evolving market system, creating instabilities along the way.

This is how it works:

Investment pools are scarce during the Irruption Phase. The new wave of business leaders is tinkering away in their garages without financial support (or in corporate research labs without obvious pathways to commercialization). The absence of finance defines this period. Revolutionary ideas are unable to scale upward because they don't fit with the institutional or investment cycles that still dominate under the maturing economy of the previous era.

Then a shift happens allowing the new technologies to rise quickly. A central driver of the Frenzy Phase is the flood of money invested in the new that accompanies rapid growth of agile companies whose success could not be predicted by the common sense of established players (Facebook and Google are two recent examples of the new arising seemingly out of nowhere to define a new paradigm for business).

The massive profitability of these shining stars gets the attention of mainstream investors. And the new business practices require changes in the regulatory environment to pull investments away from the old way of doing business. Corrupting influences often arise as established power players resist such fundamental changes in their effort to maintain control over the economy. This is where anti-innovation tendencies creep into the system. All of these activities unfold in the Synergy Phase of the new paradigm, making it very difficult to predict how the economy will grow and change.

And finally, the investors who made a killing on the meteoric rise of the Frenzy wave become hungry for larger returns. This introduces corrupting influences into the mix, largely arising through the creation of financial tools for generating money from money itself decoupling the wealth-creation process from activities that produce real value for society.

As money decouples from real value, a speculative bubble emerges. As financial capital feeds on itself the bubble grows, until it consumes the entire system and drives it into decline (or collapse, as we saw in 2008).

Putting All the Pieces Together

By now it should be clear that the fundamentals of capitalism can be studied and understood by Change Makers. I have sketched the core dynamic elements of a very complex web of processes to give you a sense that this can truly be learned and made use of as part of our tool set for creating change.

I want to tie together the loose end left hanging at the beginning the Growth Curve that keeps the system going through each wave of creative destruction. Each Boom-Bust Cycle sits on top of a trend of economic expansion, as the total value of the market system increases with time.

Real data is more messy than the pure theory, but the patterns I've described are easy to see in the Dow Jones over the last 100 years:

(This graph was found here.)

Notice how the size of the economy grows with 50 year pulses that match the paradigms discussed by Perez. This growth pattern reveals our salvation along with a profound threat. The good news is that civilization remains robust in the face of Boom-Bust Cycles. The achievements of the previous era are built upon to increase the general wealth of humanity (as measured in economic terms).

What's missing from this picture is the depletion of many different invisible forms of wealth that are destroyed as profits rise. Every economy is grounded in the physical reality of our biological existence as human beings. We require food, water, land, shelter, and other vital physical inputs for our survival. As market economies have grown in their ability to "produce" goods and services, they have simultaneously depleted the capacity of the world's ecosystems to provide these fundamental needs.

And so the Growth Curve is untenable for the long haul. We cannot grow the size of our economy indefinitely because physical limits exist that are more fundamental than economic laws. This creates the context for the next wave of Change Makers. Not only must we cultivate a new economic paradigm, we must also replace the fundamentals of human economic systems to align them with our ecological nature as living beings.

This is why I've taken the time to share this knowledge with you, so we can work together to create a New Epoch of Ecological Economics for the survival of the human species. I encourage you to take the insights presented here and expand them to discover new modes of social organization that profoundly redefine what we mean by a healthy economy.

And, of course, feel free to ask me questions if you'd like more clarification on this very complex evolutionary process.

ANS -- And By Raging I Mean Flailing, And By Light I Mean Relevance

2011-12-28T10:46:00.001-08:00

This is a little article about how far away from a moral universe business people have traveled. Their "Overton Window" has moved so far to the "business can do no wrong" side that they have no idea how immoral they sound.
Americans have gone crazy.
Find it here: http://exple.tive.org/blarg/?p=2905&cpage=1#comment-13295
--Kim

« Astrophysics //

And By Raging I Mean Flailing, And By Light I Mean Relevance

Posted on December 27th, 2011 by mhoye

A friend of mine points me to this incredible New York Times article in which publishers lay out the fact that they are fundamentally opposed to public libraries, detailing their struggles as they take up arms against these nefarious institutions promoting such injustices as culture, literacy and the greater public good.

Ms. Thomas of Hachette says: "We've talked with librarians about the various levers we could pull," such as limiting the number of loans permitted or excluding recently published titles. She adds that "there's no agreement, however, among librarians about what they would accept."

It's really a great article, full of these little turns of phrase that seem to come out of publisher's mouths without them even realize how evil they sound. "There's no agreement among librarians to bend themselves, the public and the greater good over this barrel we've offered to sell them at a very reasonable rate", they don't quite say.

HarperCollins was brave to tamper with the sacrosanct idea that a library can do whatever it wishes with a book it obtains.

This sacrosanct idea is better known as the First-Sale Doctrine; those crafty librarians, always falling back things like "established law" and "century-old Supreme Court decisions" to make their case. Crazytimes, right?

But that's not the best bit:

David Young, Hachette's chief executive, says: "Publishers can't meet to discuss standards because of antitrust concerns. This has had a chilling effect on reaching consensus."

Mr. Young lays it flat out: that laws prohibiting anticompetitive collusion and price-fixing are having a "chilling effect" on major publishers' attempts to collude, fix prices and thwart competition.

I can't imagine a functioning adult saying this with a straight face, but there it is. "Laws against doing evil things are having a chilling effect on the efforts of aspirant evildoers." I'm sure it's a problem for somebody, but as far as I'm concerned, mission accomplished, gold stars all 'round, well done laws and keep up the good work.

As has been noted many times, by many people, we've juiced up the entirely artificial copyright laws of the world to the point that if libraries weren't already a centuries-old cultural institution, there's no chance they'd ever be able to come into existence today. And here in this miraculous age of free-flowing information, that's sad as hell.

Tags: books, business, digital, doom, fail, future, interfaces, losers, vendetta // 2 Comments »

2 Responses to "And By Raging I Mean Flailing, And By Light I Mean Relevance"

Jamie // Dec 28, 2011 at 5:24 am I like the various points they make about the "inconvenience" of physical books vs. ebooks. Of course, one of those inconveniences is requiring an author to use a publisher in order to get a physical book produced and shipped out to sellers, a problem that is avoided if an author were to put out an ebook on their own.
gah // Dec 28, 2011 at 11:03 am Grey on dark grey? Dark grey on black? Are you *trying* to make us go blind?
A little common sense in color schemes will go a long way.

Discussion Area - Leave a Comment

ANS -- Tim Harford: Trial, error and the God complex

2011-12-26T22:12:00.001-08:00

Here's a link to a really good video about trial and error and
complex systems and God Complexes.
Link: http://www.ted.com/talks/tim_harford.html
--Kim

ANS -- The Sifted Books of 2011: Rethinking Economics

2011-12-26T12:13:00.001-08:00

Here is Doug Muder's summary of the book reviews he did this year. If you are looking for some good reading, you might want to see what he says here.
Find it here: http://weeklysift.com/2011/12/26/the-sifted-books-of-2011-rethinking-economics/
--Kim

The Sifted Books of 2011: Rethinking Economics

I don't have a book-review strategy on the Sift. In deciding what to read and what to write about, I usually just follow my nose and figure out later what it all means. So I don't know why I reviewed exactly half as many books in 2011 as in 2010: 8 instead of 16.

In retrospect, it's interesting to note that more than half of the 2011 books were about economics: Debt: The First 5,000 Years by David Graeber, The Seven Deadly Innocent Frauds of Economic Policy by Warren Mosler (reviewed in two parts: first, second), Why Marx Was Right by Terry Eagleton, The Lights in the Tunnel by Martin Ford, and Consumed by Benjamin Barber.

There's a strong contrast here with last year's economics books. Then I was often telling you about books by economists from the liberal mainstream, like Robert Reich and Paul Krugman. But these five are more radical start-over-from-scratch books.

In retrospect, here's what I think that means: For a long time now, I have doubted the conservative conventional wisdom that the market can solve any and all problems. But lately I've also begun to doubt the liberal conventional wisdom that we can achieve a fair and vibrant economy by tinkering with interest rates, regulations, and government spending. This year's books reflect my search for a new way of thinking about the economy.

Both Graeber and Mosler are telling us that money isn't what we think it is. Mosler's book examines the nuts-and-bolts of how the banking system creates money, while Graeber takes a long anthropological look at where this whole idea of money comes from and how it changed society.

Eagleton challenges the capitalism-has-won narrative of the post Cold War world, and shows how our "victorious" capitalism is displaying the flaws that Marx predicted a century and a half ago. And Ford goes back to the Luddite claim that machines destroy jobs, arguing that even if it wasn't true then, it is now.

Barber's book is on the boundary between economics and politics, arguing that if capitalism is allowed to run wild it will destroy democracy. Consumer and citizen are two very different roles, and the more we identify with our consumer role, the less we will be able to perform our duties as citizens.

Barber presents a different side of the scene portrayed by Ford. I summarized Barber's point like this:

The root of the problem Barber presents is capitalism's success in satisfying all the genuine needs of people who have money, creating a situation in which "the needy are without income and the well-heeled are without needs."

Here's the Ford/Barber connection: In our mechanized world, the one thing the well-heeled don't need is more labor, which is all the needy have to sell.

Given this theme, there are two books that I should have written about but didn't. Race Against the Machine by Erik Brynjolfsson and Andrew McAfee, and the 1944 classic The Great Transformation by Karl Polanyi. Both are woefully short of effective prescriptions, but they add important ideas to the diagnosis.

Brynjolfsson and McAfee bring in this arresting image from a book I haven't read, A Farewell to Alms by Gregory Clark: In 1901, the British economy found jobs for more than 3 million horses. All those jobs are done by machines now, and horses are purely recreational.

There was always a wage at which all these horses could have remained employed. But that wage was so low that it did not pay for their feed.

How many human workers will go the way of the horse?

Polanyi's book is a hard read, but fascinating. He tells the story of how the market economy was created in the 1800s. That statement is already radical, because so many people believe that the market economy is natural and goes back into deep antiquity.

In fact, Polanyi says (and Graeber agrees), markets used to be only a small part of the economy. In order to have what we now think of as a market economy, markets had to be created for what Polanyi calls the three "fictitious commodities": labor, land, and money.

Labor is only another name for a human activity that goes with life itself, which in its turn is not produced for sale but for entirely different reasons, nor can that activity be detached from the rest of life, be stored or mobilized; land is only another name for nature, which is not produced by man; actual money, finally, is merely a token of purchasing power which, as a rule, is not produced at all, but comes into being through the mechanisms of banking or state finance. None of them is produced for sale. The commodity description of labor, land, and money is entirely fictitious.

My hunch is that the re-thinking of economics has to start there.

A related question is why our political system can't adjust to our new economic realities. That led me to look at So Damn Much Money by Robert Kaiser, which is a history of lobbying.

The possibility of another way of functioning entirely led me to Reality is Broken by Jane McGonigal. McGonigal starts with the observation that the multi-player computer games like World of Warcraft and Halo soak up vast amounts of human time, effort, and ingenuity. What makes these invented worlds so much more engaging than reality?

Part of the answer is that successful games appeal to aspects of the human character that have been left out of the homo economicus model of human nature. In other words, we aren't all trying to get as much stuff as we can for as little effort as possible at least not all the time. Sometimes we want to achieve self-respect and honor even if it costs us effort and money.

McGonigal describes the widespread perception among gamers that their game persona is a better human being than their work persona. Something can be done with that. (One fictional view of how that could work is the Daemon/Freedom series by Daniel Suarez.)

Another book I should have reviewed made a similar point looking backward rather than forward: The Honor Code by Kwame Anthony Appiah. Major social changes, he claims, come not from self-interest but from a sense of honor. Society changes because our ideas about what is honorable change.

Appiah looks at societies that ended dueling, slavery, foot-binding, and honor killings of sexually activity female relatives. In each case, he finds that the cause is not economic and not fundamentally rational; in fact, the rational arguments against the practice were well known long before they became convincing. Instead, change happens via an invisible shift in the community's honor code: Practices that once defended honor suddenly become dishonorable.

Two books I should have reviewed that deserve more than a paragraph here are 23 Things They Don't Tell You About Capitalism by Ha-Joon Chang and The Myth of Individualism by Peter Callero. Maybe next year.

The one book I reviewed that doesn't fit this pattern is The Hour of Sunlight by Sami al Jundi, which is one Palestinian's attempt to envision peace between his people and the Israelis. Interestingly, that review was an afterthought: The article I wanted to write fell through at the last minute, and I needed something to fill the space.

ANS -- How to Frame Yourself: A Framing Memo for Occupy Wall Street

2011-12-26T10:07:00.001-08:00

This is George Lakoff's answer to the Occupy Movement, who did ask for his opinion.
I have also linked this on my Facebook page. If any of you want to Friend me on Facebook, let me know by email that you have requested to be friended, so I will accept the invitation, as I generally ignore most of them.
find this here: http://georgelakoff.com/2011/12/11/how-to-frame-yourself-a-framing-memo-for-occupy-wall-street/
--Kim

How to Frame Yourself: A Framing Memo for Occupy Wall Street

Posted on December 11, 2011

By George Lakoff

I was asked weeks ago by some in the Occupy Wall Street movement to make suggestions for how to frame the movement. I have hesitated so far, because I think the movement should be framing itself. It's a general principle: Unless you frame yourself, others will frame you the media, your enemies, your competitors, your well-meaning friends. I have so far hesitated to offer suggestions. But the movement appears to maturing and entering a critical time when small framing errors could have large negative consequences. So I thought it might be helpful to accept the invitation and start a discussion of how the movement might think about framing itself.

About framing: It's normal. Everybody engages in it all the time. Frames are just structures of thought that we use every day. All words in all languages are defined in terms of frame-circuits in the brain. But, ultimately, framing is about ideas, about how we see the world, which determines how we act.

In politics, frames are part of competing moral systems that are used in political discourse and in charting political action. In short, framing is a moral enterprise: it says what the character of a movement is. All politics is moral. Political figures and movements always make policy recommendations claiming they are the right things to do. No political figure ever says, do what I say because it's wrong! Or because it doesn't matter! Some moral principles or other lie behind every political policy agenda.

Two Moral Framing Systems in Politics

Conservatives have figured out their moral basis and you see it on Wall Street: It includes: The primacy of self-interest. Individual responsibility, but not social responsibility. Hierarchical authority based on wealth or other forms of power. A moral hierarchy of who is "deserving," defined by success. And the highest principle is the primacy of this moral system itself, which goes beyond Wall Street and the economy to other arenas: family life, social life, religion, foreign policy, and especially government. Conservative "democracy" is seen as a system of governance and elections that fits this model.

Though OWS concerns go well beyond financial issues, your target is right: the application of these principles in Wall Street is central, since that is where the money comes from for elections, for media, and for right-wing policy-making institutions of all sorts on all issues.

The alternative view of democracy is progressive: Democracy starts with citizens caring about one another and acting responsibly on that sense of care, taking responsibility both for oneself and for one's family, community, country, people in general, and the planet. The role of government is to protect and empower all citizens equally via The Public: public infrastructure, laws and enforcement, health, education, scientific research, protection, public lands, transportation, resources, art and culture, trade policies, safety nets, and on and on. Nobody makes it one their own. If you got wealthy, you depended on The Public, and you have a responsibility to contribute significantly to The Public so that others can benefit in the future. Moreover, the wealthy depend on those who work, and who deserve a fair return for their contribution to our national life. Corporations exist to make life better for most people. Their reason for existing is as public as it is private.

A disproportionate distribution of wealth robs most citizens of access to the resources controlled by the wealthy. Immense wealth is a thief. It takes resources from the rest of the population the best places to live, the best food, the best educations, the best health facilities, access to the best in nature and culture, the best professionals, and on and on. Resources are limited, and great wealth greatly limits access to resources for most people.

It appears to me that OWS has a progressive moral vision and view of democracy, and that what it is protesting is the disastrous effects that have come from operating with a conservative moral, economic, and political worldview. I see OWS as primarily a moral movement, seeking economic and political changes to carry out that moral movement whatever those particular changes might be.

A Moral Focus for Occupy Wall Street

I think it is a good thing that the occupation movement is not making specific policy demands. If it did, the movement would become about those demands. If the demands were not met, the movement would be seen as having failed.

It seems to me that the OWS movement is moral in nature, that occupiers want the country to change its moral focus. It is easy to find useful policies; hundreds have been suggested. It is harder to find a moral focus and stick to it. If the movement is to frame itself, it should be on the basis of its moral focus, not a particular agenda or list of policy demands. If the moral focus of America changes, new people will be elected and the policies will follow. Without a change of moral focus, the conservative worldview that has brought us to the present disastrous and dangerous moment will continue to prevail.

We Love America. We're Here to Fix It

I see OWS as a patriotic movement, based on a deep and abiding love of country a patriotism that it is not just about the self-interests of individuals, but about what the country is and is to be. Do Americans care about other citizens, or mainly just about themselves? That's what love of America is about. I therefore think it is important to be positive, to be clear about loving America, seeing it in need of fixing, and not just being willing to fix it, but being willing to take to the streets to fix it. A populist movement starts with the people seeing that they are all in the same boat and being ready to come together to fix the leaks.

Publicize the Public

Tell the truth about The Public, that nobody makes it purely on their own without The Public, that is, without public infrastructure, the justice system, health, education, scientific research, protections of all sorts, public lands, transportation, resources, art and culture, trade policies, safety nets, That is a truth to be told day after day. It is an idea that must take hold in public discourse. It must go beyond what I and others have written about it and beyond what Elizabeth Warren has said in her famous video. The Public is not opposed to The Private. The Public is what makes The Private possible. And it is what makes freedom possible. Wall Street exists only through public support. It has a moral obligation to direct itself to public needs.

All OWS approaches to policy follow from such a moral focus. Here are a handful examples.

Democracy should be about the 99%

Money directs our politics. In a democracy, that must end. We need publicly supported elections, however that is to be arranged.

Strong Wages Make a Strong America

Middle-class wages have not gone up significantly in 30 years, and there is conservative pressure to lower them. But when most people get more money, they spend it and spur the economy, making the economy and the country stronger, as well as making their individual lives better. This truth needs to be central to public economic discourse.

Global Citizenship

America has been a moral beacon to the world. It can function as such only if it sets an example of what a nation should be.

Do we have to spend more on the military that all other nations combined? Do we really need hundreds of military bases abroad?

Nature

We are part of nature. Nature makes us, and all that we love, possible. Yet we are destroying Nature through global warming and other forms of ecological destruction, like fracking and deep-water drilling.

At a global scale, nature is systemic: its effects are neither local nor linear. Global warming is causing the ferocity of the monster storms, tornados, floods, blizzards, heat waves, and fires that have devastated huge areas of our country. The hotter the atmosphere, the more evaporated water and the more energy going into storms, tornados, and blizzards. Global warming cannot be shown to cause any particular storm, but when a storm system forms, global warming will ramp up the power of the storm and the amount of water it carries. In winter, evaporated water from the overly heated Pacific will go into the atmosphere, blow northeast over the arctic, and fall as record snows.

We depend on nature on clean air, water, food, and a livable climate. And we find beauty and grandeur in nature, and a sense of awe that makes life worth living. A love of country requires a love of nature. And a fair and thriving economy requires the preservation of nature as we have known it.

Summary

OWS is a moral and patriotic movement. It sees Democracy as flowing from citizens caring about one another as well as themselves, and acting with both personal and social responsibility. Democratic governance is about The Public, and the liberty that The Public provides for a thriving Private Sphere. From such a democracy flows fairness, which is incompatible with a hugely disproportionate distribution of wealth. And from the sense of care implicit in such a democracy flows a commitment to the preservation of nature.

From what I have seen of most members of OWS, your individual concerns all flow from one moral focus.

Elections

The Tea Party solidified the power of the conservative worldview via elections. OWS will have no long-term effect unless it too brings its moral focus to the 2012 elections. Insist on supporting candidates that have your overall moral views, no matter what the local issues are.

A Warning

This movement could be destroyed by negativity, by calls for revenge, by chaos, or by having nothing positive to say. Be positive about all things and state the moral basis of all suggestions. Positive and moral in calling for debt relief. Positive and moral in upholding laws, as they apply to finances. Positive and moral in calling for fairness in acquiring needed revenue. Positive and moral in calling for clean elections. To be effective, your movement must be seen by all of the 99% as positive and moral. To get positive press, you must stress the positive and the moral.

Remember: The Tea Party sees itself as stressing only individual responsibility. The Occupation Movement is stressing both individual and social responsibility.

I believe, and I think you believe, that most Americans care about their fellow citizens as well as themselves. Let's find out! Shout your moral and patriotic views out loud, regularly. Put them on your signs. Repeat them to the media. Tweet them. And tell everyone you know to do the same. You have to use your own language with your own framing and you have to repeat it over and over for the ideas to sink in.

Occupy elections: voter registration drives, town hall meetings, talk radio airtime, party organizations, nomination campaigns, election campaigns, and voting booths.

Above all: Frame yourselves before others frame you.

ANS -- If You Want To Attack The Volt, Try To Get Your Math Right

2011-12-24T10:35:00.001-08:00

Now, why would the far right be attacking the Volt electric car? And inaccurately at that.... /sarcasm
Find it here: http://www.greencarreports.com/news/1071027_if-you-want-to-attack-the-volt-try-to-get-your-math-right
--Kim

If You Want To Attack The Volt, Try To Get Your Math Right

By John Voelcker
23 2,704 views December 23, 2011

2011 Chevrolet Volt drive test, March 2011
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Few things seem to set off a certain part of the political spectrum like the Chevrolet Volt, the extended-range electric car from General Motors.

It's been on sale exactly one year, so we think it's rather too early to deem the Volt a success or a failure, though that hasn't stopped its critics.

When criticizing anything, however--the Volt included--it's usually incumbent on the critic to get the math right.

Off by a factor of 10,000

Yesterday, The Street posted a lovely takedown of the math offered by a critic who claims Volts carry quarter-million subsidies. The Street's contributor Anton Wahlman gently points out that the calculations were slightly off.

In fact, he suggests they were wrong by a factor of 10,000--or four orders of magnitude. That's what you would call an embarrassing error.

It's worth pointing out that Wahlman emphasizes that he is against government subsidies to industry, calling himself "somewhere way to the right of Rush Limbaugh" on that topic. Which makes his analysis all the more trenchant.

He also notes that, "the idea that the Volt was somehow a government invention is about as accurate as the idea that Al Gore invented the Internet. It has no relation to the truth whatsoever." He liked the Volt he tested, by the way.

2011 Chevrolet Volt

Here's the story. Four days ago, we dissected in some detail Matt Drudge's uninformed war against the Volt. He promptly posted two more anti-Volt headlines the next day.
One of them linked to an article on Michigan Capital Confidential citing a study by James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy.

A quarter of a meeeeellion dollars !!

The report claims that every Chevrolet Volt is the beneficiary of a quarter of a million dollars of state and Federal subsidies. Yes, the car with a 2012 retail price of $39,995 carries $250,000 of Your Tax Dollars in its load bay.

Hohman added up all the known state and Federal incentives to obtain a "total value offered to the Volt," not only for General Motors but also its suppliers.

A total of "18 government deals that included loans, rebates, grants and tax credits" are included. The total loan amounts are apparently listed in full, even though the loans are intended to be be paid back with interest.

Hohman then divided the sum by the number of Volts sold as of November 30. The result prompted him to call the Volt "the most government-supported car since the Trabant," the East German plastic-bodied two-cylinder minicar.

The denominator problem

As Wahlman notes, the egregious flaw in this calculation is "the denominator problem"--to what base of cars do you apply the analysis?

2011 Chevrolet Volt Production Line

Dividing the number of Volts sold to date ( 6,468 as of November 30) into the total incentives that apply to all Volts past, present, and future is either dopey or intellectually dishonest.

You could as easily say that on December 15 last year, the day the first Volt was delivered to a retail buyer, it carried a stunning, incredible, unconscionable $1.5 BILLION in subsidies. You'd be doing the same thing: dividing by the number of Volts sold, or 1.

More reasonably, fast-forward to the end of next year, by which time the two-year total of Volt sales is likely to be about 60,000. The number plummets to $25,000. And so on.

Actual number: $25

Wahlman instead divides the supposed $1.5 billion in incentives by a projected total of 60 million cars over the next 25 years that will use elements of the Voltec range-extended electric drive technology in today's Volt. That calculation puts the amount at, ummm, $25. Or a dollar a year.

Slightly different, eh?

We personally tend to think that a dollar a year is a reasonable amount to subsidize a domestic battery-electric car industry. Reasonable minds may differ, however.

We can address the question of whether the $1.5 billion total in state and Federal incentives is valid another time. Critic Hohman notes that depending on various factors, it could vary from $300 million to $3 billion.

We recommend reading Wahlman's entire article on The Street (note that there are four pages, but the links are tiny).

+++++++++++

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ANS -- The Post-Truth Campaign

2011-12-23T22:25:00.001-08:00

This article says that the Republicans most likely will get no negative feedback for lies and fabricating falsehoods about Democrats. I got this link from Norman Goldman, the radio personality, who said about it, "

Another very good Paul Krugman piece - one disagreement: If the President DID say those things about Romney, he'd be CORRECT!! Take a look and see for yourself! "

Find it here: http://www.nytimes.com/2011/12/23/opinion/krugman-the-post-truth-campaign.html?_r=1&src=me&ref=general
--Kim

The Post-Truth Campaign

By PAUL KRUGMAN

Published: December 22, 2011

Suppose that President Obama were to say the following: "Mitt Romney believes that corporations are people, and he believes that only corporations and the wealthy should have any rights. He wants to reduce middle-class Americans to serfs, forced to accept whatever wages corporations choose to pay, no matter how low."

Fred R. Conrad/The New York Times

Paul Krugman

How would this statement be received? I believe, and hope, that it would be almost universally condemned, by liberals as well as conservatives. Mr. Romney did once say that corporations are people, but he didn't mean it literally; he supports policies that would be good for corporations and the wealthy and bad for the middle class, but that's a long way from saying that he wants to introduce feudalism.

But now consider what Mr. Romney actually said on Tuesday: "President Obama believes that government should create equal outcomes. In an entitlement society, everyone receives the same or similar rewards, regardless of education, effort, and willingness to take risk. That which is earned by some is redistributed to the others."

And in an interview the same day, Mr. Romney declared that the president "is going to put free enterprise on trial."

This is every bit as bad as my imaginary Obama statement. Mr. Obama has never said anything suggesting that he holds such views, and, in fact, he goes out of his way to praise free enterprise and say that there's nothing wrong with getting rich. His actual policy proposals do involve a rise in taxes on high-income Americans, but only back to their levels of the 1990s. And no matter how much the former Massachusetts governor may deny it, the Affordable Care Act established a national health system essentially identical to the one he himself established at a state level in 2006.

Over all, Mr. Obama's positions on economic policy resemble those that moderate Republicans used to espouse. Yet Mr. Romney portrays the president as the second coming of Fidel Castro and seems confident that he will pay no price for making stuff up.

Welcome to post-truth politics.

Why does Mr. Romney think he can get away with this kind of thing? Well, he has already gotten away with a series of equally fraudulent attacks. In fact, he has based pretty much his whole campaign around a strategy of attacking Mr. Obama for doing things that the president hasn't done and believing things he doesn't believe.

For example, in October Mr. Romney pledged that as president, "I will reverse President Obama's massive defense cuts." That line presumably plays well with Republican audiences, but what is he talking about? The defense budget has continued to grow steadily since Mr. Obama took office.

Then there's Mr. Romney's frequent suggestion that the president has gone around the world "apologizing for America." This is a popular theme on the right but the so-called Obama apology tour is a complete fabrication, assembled by taking quotes out of context.

As Greg Sargent of The Washington Post has pointed out, there's a common theme to these whoppers and a number of other things Mr. Romney has said: the strategy is clearly to portray the president as a suspect character, someone who doesn't share American values. And since Mr. Obama has done and said nothing to justify this portrait, Mr. Romney just invents stuff to make his case.

But won't there be some blowback? Won't Mr. Romney pay a price for running a campaign based entirely on falsehoods? He obviously thinks not, and I'm afraid he may be right.

Oh, Mr. Romney will probably be called on some falsehoods. But, if past experience is any guide, most of the news media will feel as though their reporting must be "balanced," which means that every time they point out that a Republican lied they have to match it with a comparable accusation against a Democrat even if what the Democrat said was actually true or, at worst, a minor misstatement.

This isn't an abstract speculation. Politifact, the project that is supposed to enforce truth in politics, has declared Democratic claims that Republicans voted to end Medicare its "Lie of the Year." It did so even though Republicans did indeed vote to dismantle Medicare as we know it and replace it with a voucher scheme that would still be called "Medicare," but would look nothing like the current program and would no longer guarantee affordable care.

So here's my forecast for next year: If Mr. Romney is in fact the Republican presidential nominee, he will make wildly false claims about Mr. Obama and, occasionally, get some flack for doing so. But news organizations will compensate by treating it as a comparable offense when, say, the president misstates the income share of the top 1 percent by a percentage point or two.

The end result will be no real penalty for running an utterly fraudulent campaign. As I said, welcome to post-truth politics.

A version of this op-ed appeared in print on December 23, 2011, on page A31 of the New York edition with the headline: The Post-Truth Campaign.

ANS -- Chart: The sweat of your brow

2011-12-22T21:37:00.001-08:00

this really says it. Our economy has been bad since the '70s. I've been saying that for years: it should only take one salary to support a family. If it takes more, something is wrong with the economy.
Find it here: http://maddowblog.msnbc.msn.com/_news/2011/12/21/9612512-chart-the-sweat-of-your-brow#.TvI_dQLG0Y0.twitter
--Kim

Chart: The sweat of your brow

By Laura Conaway
-
Wed Dec 21, 2011 3:02 PM EST

Robert Frank chart by way of Ezra Klein

Ezra Klein today runs a year-in-charts post that's purely the excellent. It includes the Toil Index, by the excellent economist Robert Frank. Basically, it shows why it's so hard for working people to live decently these days. Working families are running faster and faster just to afford the same things their parents enjoyed, namely decent homes and decent schools for the kids.

This is the same territory Elizabeth Warren began mapping in the early 2000s, with The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke. The thesis from Ms. Warren was that families need to have two parents cranking away all the time in order to stay in the middle class. If something happens to one parent, she wrote, like a layoff or an injury, then it all falls apart.

Here's betting you can relate.

ANS -- Empathy Disorders

2011-12-22T15:09:00.001-08:00

This is a short piece about empathy and empathy disorders and homeless people. If you find the subject and the article interesting, I strongly suggest you go to the site and read the comments too. They go into more depth.
Find it here: http://bradhicks.livejournal.com/454817.html?view=8778401#t8778401
--Kim

Empathy Disorders

Dec. 20th, 2011 at 2:24 PM

Doctors call one of the things I have an "empathy disorder." That has always left me confused and very angry, because it seems to me that I have MORE empathy than neurotypicals. I finally got it through my head that there are two conflicting definitions of empathy. Sometimes, "empathy" means being able to sense other people's emotions without being told about them. That, I definitely can't do. Other times it means caring about other people's feelings and emotions, as in "having empathy for them." And as far as I can tell, when it comes to anybody other than their closest friends and family members, this, most neurotypicals cannot do.

I finally developed my own terms for the two conflicting definitions. I gave in, and let the doctors and the neurotypicals keep their word "empathy" to mean emotional mind-reading. Okay. I have an empathy disorder. What they have? Is a sympathy disorder. I can't tell what strangers are feeling. You can tell what strangers are feeling; you just don't care. Merry fucking Christmas.

I've been meaning to bring this up for a while; I get around to mentioning it now because of how sick to my stomach I feel, how much hatred for humanity is suddenly choking off my Christmas spirit, reading about the abuse the audience heaped on three former homeless teens who told their stories at a public panel, including now successful blogger, columnist, and author Violet Blue: " Booksmith Community Forum on Homelessness, Aug 24, 2009," un-bylined article on "Hope in Haight" blog.

Edited to add:

I find that I have more to say about this; something that's obvious to me but no, it probably isn't obvious to some of you.

There's a guy I used to hang with in college, a fellow CS grad, fairly right wing back then, now some god's own personal fool for every hoax, prank, and propaganda lie that trickles from various hate groups into the Republican commentariat via WorldNewsDaily. (Reporter Dave Neiwert, America's #1 expert on right wing death squads and death-squad wannabes in America, has written extensively about this: they brag to him, openly, that they learned ages ago that they can make up any lie they want, drop it into WND, watch it bubble up to the front page on page views and comments, watch it get picked up by Glen Beck or Bill O'Reilly from there, watch Rush Limbaugh and Sean Hannity get forced to comment on it when their listeners who overlap ask them about it, and watch it, from them, go straight onto Fox News and into comments by Republicans in power. They say it works every time.) Ever since we reconnected on Facebook, he bounces this crap off of me, and I serve as the fact check, for him, that 30 seconds on Google would be. It's inefficient, but personal. Anyway, I didn't bring this up to dish on the Aryan Nations or WND or Glen Beck or my friend Doc, I brought this up to introduce my friend Doc and explain something related to homelessness that I just had to explain to him.

You see, in the years since we were in college together, my old friend Doc has ended up on the board of directors of a religious charity that serves the homeless. And it occurred to him, the other day, to ask me why it is that no matter how good they make the services they offer the homeless people in his hometown, no matter how string-free they make them, at least half of the homeless people in his town just flatly refuse to have anything to do with them. He wanted to know if, as someone who's been borderline homeless himself and who sees the world through different eyes from him, I could give him any advice on what his church could be doing differently. As I expected, I bumped my head very quickly into the first hurdle: despite years of working with, and on behalf of, the homeless, he had no better idea than most Americans do of how in the hell anybody, whether it's a teenager or a single mother or a combat veteran, ends up homeless. It was the first thing I had to explain to him:

We threw these people away, because nobody wanted them for anything.

And that is the first thing we have to fix. You can't fix anything for a homeless person, whether it's an unparented or mal-parented homeless teenager trying to stay out of sex work or a homeless woman whose children's father left her for a younger model, or couldn't deal with her health issues, or who ran away because he was out of work too long and lost his own self-respect, or who is in jail, or who is dead, and she's spending 140 hours a week trying to keep her children alive without any help, or whether it's a Vietnam War, Gulf War, Yugoslav Civil War, Afghan War, or Iraq War veteran whose physical and mental health problems render him completely unemployable, you can't fix anything for that person if you can't find them someone who wants them to live, who needs them to live, who has a useful purpose for them.

And ever since Ronald Reagan got elected in November of 1980, we have solved every single problem we've had in America, every problem we've had since Lyndon Johnson's hare-brained idea of fighting a deficit-financed entirely optional land war in Asia, every problem we've had since we used up all but the last trickle of our own oil and oil producers discovered that a shattered, used up US Marine Corps could no longer come and take the oil away from them by force, every problem we've had since then, we have solved by human sacrifice: identifying more people to throw away, and throwing those people away; sending them away to sleep in alleys or under overpasses, to live off of stolen food and handouts and scavenged trash, to slowly rot away of completely untreated health problems. Never mind how much needs to get done and isn't getting done; we can't afford the energy cost or raw materials cost to do those things, so we can't afford to hire people to do them, so the people who would have done them are disposable, destined to end up in human landfills

So, if you're one of them, would you please stop depressing the rest of us by reminding us of this? Would you please go find some place to go where none of us can see you as you slowly freeze, starve, and rot away to death? The rest of us, the fortunate ones, have to get on with our lives somehow. That requires some modicum of morale. We do know, on some level, that the first time we slow down, or the first time we get sick, or the first time something goes seriously wrong, or the first time we end up losing someone we were depending on to survive, that we'll be joining you. But if we think about that too much, it'll happen all that much sooner. And you're bringing us down. That's what we, in America, say to them every day with our actions, with the way we complain about and hate on our homeless.

I didn't have a lot of advice for my friend Doc. Knowing he was a conservative, I appealed to Ronald Reagan. One thing Reagan wasn't wrong about is this: "the only effective anti-poverty program is a job." I reminded Doc that I've seen homeless, mentally ill drug addicts instantly and suddenly sober up, and rise to never seen before (albeit temporary) levels of functionality, when they found a kitten that needed to be rescued. I told him about a news story I saw a while back about a halfway house for about to be released, at best partially rehabbed, female drug addicts that more or less accidentally turned those women's lives around when one of the women staying there came up with the idea of volunteering, during the hours they were confined to their group home, to raise puppies that are destined to be trained as service dogs. What do those stories have in common? Somebody needed them. And we all need that. Maslow was wrong, you know: that need to be needed? It's more profound than the need for food and water and sleep; we can live better with occasional deprivation of food, water, and sleep than we can without having anybody need us, or without being able to meet that need. My suggestion to him was to find jobs that his church needed done, that they couldn't afford to do, and to go to those men and ask them, "can you please help us?" Not to bribe them with food and shelter to do it, not as some paternalistic way to rehab them into a "culture of work;" just tell them, honestly and humbly, "we need you for this; if someone doesn't help us, we're in trouble." Watch them rise up.

We won't do that. Oh, Doc might; he's easily fooled, but he's good people, his heart is in the right place. Or he might not; he's only one man, and the social and economic pressures to do nothing effective are overwhelming. We as a country won't. We took the homeless teens and homeless bums of 1932 and turned them into the Greatest Generation of 1944 by needing them that badly; we won't admit that we need the homeless teens and homeless bums of 2011, because we're not scared enough. So they know damned well that we (at least think that) we don't need them. Providing services to them? Is like taking aspirin to deal with the fact that you have a broken leg you can't afford to get set, or an infected tooth you can't afford to get pulled; it may make life momentarily better, but it doesn't stop the problem from getting worse. I hate painkillers for just that reason; they remind me that I can't get whatever it is that's broken, that's sick, that hurts, I can't get it fixed. I hate homeless services, whether government or private charity, the same way.

And they say I have an empathy disorder.

Mood: depressed

ANS -- 8 Stories Buried By the Corporate Media That You Need to Know About

2011-12-22T12:55:00.001-08:00

These are some articles you may or may not have seen. Our mainstream media is really biased these days. Why is that legal?
Find it here: http://www.alternet.org/news/153455/8_stories_buried_by_the_corporate_media_that_you_need_to_know_about/?page=entire
--Kim

8 Stories Buried By the Corporate Media That You Need to Know About

Not all news stories are treated equally.
December 15, 2011 |

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As 2011 comes to a close, we will see lists of the year's most memorable events and most important people, as is the pattern every year. But not all stories are created equal. When the corporate media bury significant developments in the back pages of the paper or the second to last paragraph of an article, it's easy for stories to go unnoticed.

As usual, this year was packed with critical, newsworthy and insufficiently covered stories that should have, but didn't, make the front page. Below are eight explosive must-read stories of 2011 that you may have missed.

1) Our Planet Saw the Largest Increase in Carbon Emissions Since the Industrial Revolution

Global emissions of carbon dioxide increased 5.9 percent in 2010, the largest increase on record, according to Global Carbon Project, an international group of scientists tracking the numbers. This increase, reports the New York Times, is "almost certainly the largest absolute jump in any year since the Industrial Revolution, and the largest percentage increase since 2003."

Another study, published in the journal Nature Geoscience, traces an estimated three-quarters of the planet's warming since 1950 to human activities. On top of that, the World Meteorological Organization warned that 10 of the hottest years ever recorded have occurred in the last 15 years, with temperatures this year registering as the 10th highest on record.

It's obvious that the world is getting warmer at an accelerating rate and it's our fault. What are world leaders going to do about it? Wait another eight years to cut emissions.

These statistics were released before last week's United Nations Climate Change Conference in Durban, South Africa, which ended with an agreement to kick the can down the road they will negotiate a new climate treaty by 2015, which would postpone emission cuts until 2020.

To avoid the most devastating effects of climate change, we must limit the earth's warming to 2°C. For that to happen, emission volumes cannot exceed 450 parts per million (ppm) of carbon dioxide. Since emissions have already reached 390 ppm, higher than any other time in recorded history, the International Energy Agency warns that action cannot be delayed past 2017. Based on the Durbin agreement, emissions won't be cut until 2020.

Unless something drastic pushes our leaders to change the destructive path we're on, 2011 may go down in the history books as the year that humans irreversibly screwed themselves and the planet.

2) Widespread Trafficking Of Iraqi Women And Girls Thanks To The Iraq War

Since the 2003 US invasion of Iraq, over 100,000 Iraqis have been killed and another 4.4 million displaced, leaving many women and girls widowed or orphaned.

As a result of the conflict more than 50,000 Iraqi women find themselves trapped in sexual servitude in Syria and Jordan, giving rise to a lucrative and growing sex industry that feeds off the chaos from the Iraq war.

Women and girls inside Iraq fare no better, often working in brothels run by female pimps. In an interview with the Inter Press Service, Rania, a former trafficker who now works as an undercover researcher for a women's support group in Iraq, detailed a visit to "a house in Baghdad's Al-Jihad district, where girls as young as 16 were held to cater exclusively to the U.S. military. The brothel's owner told Rania that an Iraqi interpreter employed by the Americans served as the go-between, transporting girls to and from the U.S. airport base."

Although human trafficking is illegal in Iraq, the country lacks a robust criminal justice system to enforce the law. Sadly, the victims of trafficking and prostitution are often the ones who are punished.

3) More Iraq Veterans Committed Suicide Last Year Than Active-Duty Troops Died In Combat

In 2010, 468 active duty and reserve troops committed suicide while 462 died in combat, marking the second year in a row that more US soldiers killed themselves than died at war, according to Congressional Quarterly's John Donnelly.

Over the past decade, over 2,000 soldiers have taken their own lives, yet they receive little attention in our corporate media. In August the New York Times ran a story with the celebratory headline, " Iraq War Marks First Month With No U.S. Military Deaths." That same month, the Department of Defense reported19 possible suicides among active-duty soldiers. In July, that number reached a record high of 32. America's decade-long wars in Iraq and Afghanistan leave troops with deep emotional scars that can be just as dangerous as a combat wound. Perhaps it's time we gave them the attention they deserve.

4) Drone Strikes Kill Innocent Civilians, Not Just 'Militants'

After Jon Brennan, President Obama's top counterterrorism adviser, claimed in June that no civilians had been killed in US drone attacks in nearly a year, the Bureau of Investigative Journalism reported that at least 45 civilians were killed in 10 US attacks during that period.

Overall, drone strikes in Pakistan have killed 780 civilians, including 175 children. The bureau documents 309 CIA drone strikes carried out since 2004 that have killed as many as 2,997 people. Over 85 percent were launched by the Obama administration, an average of one strike every four days. Yet the casualties of the US drone war rarely receive mention in the corporate media, except when described as "Islamic militants" or "suspected terrorists." This is challenged not only by the bureau's data, but also by gruesome photographs of drone victims taken by local journalists.

The Guardian described the images captured by Noor Behram, a journalist from the North Waziristan region of Pakistan, whose work appeared in an exhibition at London's Beaconsfield gallery in August:

The photographs make for difficult viewing and leave no doubt about the destructive power of the Hellfire missiles unleashed: a boy with the top of his head missing, a severed hand, flattened houses, the parents of children killed in a strike. The chassis is all that remains of a car in one photo, another shows the funeral of a seven-year-old child. There are pictures, too, of the cheap rubber flip-flops worn by children and adults, which often survive: signs that life once existed there. A 10-year-old boy's body, prepared for burial, shows lipstick on him and flowers in his hair a mother's last loving touch.

Spencer Ackerman recently featured a number of Behram's disturbing photographs at Wired, which can be seen here.

5) Record Number Of US Kids Face Hunger and Homelessness

A report released by National Center on Family Homelessness finds that one in 45 US children (1.6 million) are homeless, the majority under the age of seven. The Christian Science Monitor reports, "The number of homeless children in 2010 exceeded even the total in 2006, when thousands of families displaced by hurricanes Katrina and Rita produced a historic spike in homelessness."

It doesn't stop there. According to recent figures released by the USDA, 17.2 million American households (14.5 percent) are "food insecure," one of the highest recorded rates since surveys were first conducted in 1995. As a result, 16.2 million American children one in five-- face the threat of hunger. According to emergency room doctors in cities around the country, this is leading to a dramatic spike in malnourishment in babies.

Over the summer, the Boston Globe reported on shocking levels of infant malnourishment in Massachusetts. Doctors at the Boston Medical Center (BMC) reported seeing "more hungry and dangerously thin young children in the emergency room than at any time in more than a decade of surveying families." Pediatricians in other large cities, including Baltimore, Little Rock, Minneapolis, and Philadelphia, have also seen a rise in infant and child malnourishment since 2008.

BMC doctors also warn that "rising chronic hunger threatens to leave scores of infants and toddlers with lasting learning and developmental problems."

The Globe likened child malnourishment and hunger among Boston's poor to levels seen in the "developing world."

6) Prisoners Are People Too

This summer, more than 6,000 California prison inmates went on a month-long hunger strike in solidarity with those held in solitary confinement at the Secure Housing Unit in California's Pelican Bay State Prison. Pelican Bay is notorious for holding nearly half of its 1,111 prisoners in solitary confinement for longer than 10 years. The strike was suspended in July when inmates entered negotiations with the California Department of Corrections and Rehabilitation (CDCR). They expected change, but prisoners who organized and participated in the strike were instead retaliated against by prison guards.

By September 26, the strike was back on, with 12,000 inmates throughout California and out-of-state facilities participating. But those numbers quickly dwindled as the CDCR disciplined those involved by limiting access to visiting family members and isolating participants from other prisoners. A string of prisoner suicides committed by inmates who participated in the hunger strikes followed. Colorlines' Julianne Hing reported:

In recent months Alex Machado and Johnny Owens Vick, who were both housed in Pelican Bay's notorious solitary confinement Security Housing Unit, and Hozel Alanzo Blanchard, who was incarcerated at Calipatria State Prison's Administrative Segregation Unit, all committed suicide. Prisoner advocates say all three participated in a statewide hunger strike this summer to protest, among other things, prison discipline policies intended to identify prison gang members which punish innocent, unaffiliated inmates with decades of confinement to segregated units.

7) US Deports 46,000 Parents, Kids Left Behind In Foster Care

Under the Obama administration, deportations of immigrants have skyrocketed, with a record 397,000 people removed in 2011 alone and families torn apart as a result. According to an investigation carried out by Colorlines, the United States deported over 46,000 parents whose children were U.S. citizens between January and June of this year. With their parents detained or deported, at least 5,100 children have been placed in foster care, and many may never see their parents again. Our draconian immigration system is creating orphans. Investigative reporter Seth Freed Wessler writes:

These children, many of whom should never have been separated from their parents in the first place, face often insurmountable obstacles to reunifying with their mothers and fathers. Though child welfare departments are required by federal law to reunify children with any parents who are able to provide for the basic safety of their children, detention makes this all but impossible. Then, once parents are deported, families are often separated for long periods. Ultimately, child welfare departments and juvenile courts too often move to terminate the parental rights of deportees and put children up for adoption, rather than attempt to unify the family as they would in other circumstances.

8) FBI Teaches Agents That Muslims Are Violent Radicals

In September, Spencer Ackerman reported some disturbing findings about the FBI's counterterrorism training materials. He revealed, among other things, that the FBI's Training Division depicts all Muslims as potential terrorists. Ackerman writes:

The FBI is teaching its counterterrorism agents that "mainstream" American Muslims are likely to be terrorist sympathizers; that the Prophet Mohammed was a "cult leader"; and that the Islamic practice of giving charity is no more than a 'funding mechanism for combat.

At the Bureau's training ground in Quantico, Virginia, agents are shown a chart contending that the more "devout" a Muslim, the more likely he is to be "violent." Those destructive tendencies cannot be reversed, an FBI instructional presentation adds: "Any war against non-believers is justified" under Muslim law; a "moderating process cannot happen if the Koran continues to be regarded as the unalterable word of Allah."

Ackerman also came upon an alarming description of Sunni Muslims, which is included in the FBI's Joint Terrorism Task Forces mandatory online orientation material:

Sunni Muslims have been prolific in spawning numerous and varied fundamentalist extremist terrorist organizations. Sunni core doctrine and end state have remained the same and they continue to strive for Sunni Islamic domination of the world to prove a key Quranic assertion that no system of government or religion on earth can match the Quran's purity and effectiveness for paving the road to God.

The FBI immediately apologized for the derogatory training materials, promising to comprehensively review all training materials. But it turns out that the FBI's counterterrorism culture is soaked in Islamophobia, as demonstrated by the inclusion of books by Islamophobic authors Robert Spencer and Daniel Pipes in the FBI Quantico library.

This comes on top of a troubling pattern in counterterrorism law enforcement training -- the use of Islamophobic "terrorism consultants" to school agents on the Islamic faith. According to the Washington Monthly, this "growing profession" of consultants rakes in taxpayer cash to educate our cops about evils of Islam. One example is Walid Shoebat, who reportedly told an audience at a counterterrorism conference last year that the way to solve the threat of Islamic extremism is to "kill themincluding the children." Shoebat's extreme denunciations of Islam helped fuel the paranoia of right-wing terrorist Anders Breivik, who massacred some 90 people in Norway earlier this year. According to the American Prospect, Shoebat is cited in Breivik's manifesto 15 times.
Rania Khalek is an associate writer for AlterNet. Follow her on Twitter @RaniaKhalek.

ANS -- Worker-Owners of America, Unite!

2011-12-21T21:09:00.001-08:00

this is good news. I hope it continues and expands. It would get America back to work and restore the middle class.
Find it here: http://www.nytimes.com/2011/12/15/opinion/worker-owners-of-america-unite.html?_r=3&hpw
--Kim

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Op-Ed Contributor

Worker-Owners of America, Unite!

Ross MacDonald

By GAR ALPEROVITZ

Published: December 14, 2011

College Park, Md.

THE Occupy Wall Street protests have come and mostly gone, and whether they continue to have an impact or not, they have brought an astounding fact to the public�s attention: a mere 1 percent of Americans own just under half of the country�s financial assets and other investments. America, it would seem, is less equitable than ever, thanks to our no-holds-barred capitalist system.

But at another level, something different has been quietly brewing in recent decades: more and more Americans are involved in co-ops, worker-owned companies and other alternatives to the traditional capitalist model. We may, in fact, be moving toward a hybrid system, something different from both traditional capitalism and socialism, without anyone even noticing.

Some 130 million Americans, for example, now participate in the ownership of co-op businesses and credit unions. More than 13 million Americans have become worker-owners of more than 11,000 employee-owned companies, six million more than belong to private-sector unions.

And worker-owned companies make a difference. In Cleveland, for instance, an integrated group of worker-owned companies, supported in part by the purchasing power of large hospitals and universities, has taken the lead in local solar-panel installation, �green� institutional laundry services and a commercial hydroponic greenhouse capable of producing more than three million heads of lettuce a year.

Local and state governments are likewise changing the nature of American capitalism. Almost half the states manage venture capital efforts, taking partial ownership in new businesses. Calpers, California�s public pension authority, helps finance local development projects; in Alaska, state oil revenues provide each resident with dividends from public investment strategies as a matter of right; in Alabama, public pension investing has long focused on state economic development.

Moreover, this year some 14 states began to consider legislation to create public banks similar to the longstanding Bank of North Dakota; 15 more began to consider some form of single-payer or public-option health care plan.

Some of these developments, like rural co-ops and credit unions, have their origins in the New Deal era; some go back even further, to the Grange movement of the 1880s. The most widespread form of worker ownership stems from 1970s legislation that provided tax benefits to owners of small businesses who sold to their employees when they retired. Reagan-era domestic-spending cuts spurred nonprofits to form social enterprises that used profits to help finance their missions.

Recently, growing economic pain has provided a further catalyst. The Cleveland cooperatives are an answer to urban decay that traditional job training, small-business and other development strategies simply do not touch. They also build on a 30-year history of Ohio employee-ownership experiments traceable to the collapse of the steel industry in the 1970s and �80s.

Further policy changes are likely. In Indiana, the Republican state treasurer, Richard Mourdock, is using state deposits to lower interest costs to employee-owned companies, a precedent others states could easily follow. Senator Sherrod Brown, Democrat of Ohio, is developing legislation to support worker-owned strategies like that of Cleveland in other cities. And several policy analysts have proposed expanding existing government �set aside� procurement programs for small businesses to include co-ops and other democratized enterprises.

If such cooperative efforts continue to increase in number, scale and sophistication, they may suggest the outlines, however tentative, of something very different from both traditional, corporate-dominated capitalism and traditional socialism.

It�s easy to overestimate the possibilities of a new system. These efforts are minor compared with the power of Wall Street banks and the other giants of the American economy. On the other hand, it is precisely these institutions that have created enormous economic problems and fueled public anger.

During the populist and progressive eras, a decades-long buildup of public anger led to major policy shifts, many of which simply took existing ideas from local and state efforts to the national stage. Furthermore, we have already seen how, in moments of crisis, the nationalization of auto giants like General Motors and Chrysler can suddenly become a reality. When the next financial breakdown occurs, huge injections of public money may well lead to de facto takeovers of major banks.

And while the American public has long supported the capitalist model, that, too, may be changing. In 2009 a Rasmussen poll reported that Americans under 30 years old were �essentially evenly divided� as to whether they preferred �capitalism� or �socialism.�

A long era of economic stagnation could well lead to a profound national debate about an America that is dominated neither by giant corporations nor by socialist bureaucrats. It would be a fitting next direction for a troubled nation that has long styled itself as of, by and for the people.

Gar Alperovitz, a professor of political economy at the University of Maryland and a founder of the Democracy Collaborative, is the author of �America Beyond Capitalism.�

A version of this op-ed appeared in print on December 15, 2011, on page A39 of the New York edition with the headline: Worker-Owners of America, Unite!.

ANS -- The Secret That 'Job Creators' Like Walmart Won't Tell You

2011-12-20T20:29:00.001-08:00

this is just a little snapshot of what's going on in the USA today.
Find it here: http://front.moveon.org/the-secret-that-job-creators-like-walmart-wont-tell-you/?rc=fb.fan
--Kim

Access News Service

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