Republican Neoliberalism is Touching Us All.

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Antifascist's picture
United States Government is

United States Government is now a day trader. While JP Morgan is losing billions on a bad tail end index spread trade, the media is temporarily focused on regulating bank speculation. You would think a Democratic Administration that ran a populist campaign on “Change” would take advantage of the timing to push for reform of Wall Street. Instead Obama praises Jamie Dimon as one of Wall Street’s smartest bankers.  But what has the Obama administration actually done? Warn JP Morgan that they are not going to get bailed out of bad bets? ...Just the opposite:

Wall Street Journal says Comex has been classified as 'too big to fail'

From the Wall Street JournalThursday, May 24, 2012

...Little noticed is that on Tuesday Team Obama took its first formal steps toward putting taxpayers behind Wall Street derivatives trading -- not behind banks that might make mistakes in derivatives markets, but behind the trading itself. Yes, the same crew that rails against the dangers of derivatives is quietly positioning these financial instruments directly above the taxpayer safety net...

Specifically, the law authorizes the Federal Reserve to provide "discount and borrowing privileges" to clearinghouses in emergencies. Traditionally the ability to borrow from the Fed's discount window was reserved for banks, but the new law made clear that a clearinghouse receiving assistance was not required to "be or become a bank or bank holding company." To get help, they only needed to be deemed "systemically important" by the new Financial Stability Oversight Council chaired by the Treasury Secretary....

We're told that the clearinghouses of Chicago's CME Group and Atlanta-based Intercontinental Exchange were voted systemic this week, and rumor has it that the council may even designate London-based LCH.Clearnet as critical to the U.S. financial system.

U.S. taxpayers thinking that they couldn't possibly be forced to stand behind overseas derivatives trading will not be comforted by remarks from Commodity Futures Trading Commission Chairman Gary Gensler. On Monday he emphasized his determination to extend Dodd-Frank derivatives regulation to overseas markets when subsidiaries of U.S. firms are involved...

So instead of stopping Wall Street from engaging in risky derivative market bets, the Obama administration is telling Wall Street the US taxpayer is here to back up your bets right up to the trading desk!!! The administration says one thing but does another. JP Morgan isn’t going to stop gambling if they are assured by the Obama administration that their bets are covered.

Even worse, the betting insurance extends to the mafia ran Chicago Comex ! This is a rigged commodities market subject to nake short selling and High Frequency trading that speculates on energy, metals, and food. Some commodities they jack up like oil and food, and some they smash down like precious metals that compete with the paper stock market. Well, the Obama administration just told them “We got you covered.” Have you heard this new policy in the mainstream media? 

Put to music, and with a

Put to music, and with a dance number or three, you might make that prose sing for others.  Avoid judging those who fall for it.  Enjoy the fact that we are not subject to good managing or herding, no matter how stupid we are about freedom (for all).  A good laugh, of course.  It is where epistemology and prophecy have to go.  "Know thyself," is not a comforting idea.  The idea that we have to manage our way out of this mess and survive the collapse of great big things is always with us because we do have to deal with it.  Not "manage," but deal with it. 

We are not rational enough to escape the powers of inverted totalitarianism, and yet I don't think we are irrational enough to put up with it.  The idea that we can govern ourselves as free people runs against "herd mentality" and independent "cussedness."  But, the idea that we can be herded and fooled into our own subjugation successfully depends upon how you judge success.  If your goal is to enforce authoritarianism at all cost, you may sustain a longer reign.  Or, if you know how to give the appearance of freedom and choice, do you lull them into a narcotic sense of having a good time and everything being ok?  When do they start caring about their addiction instead of using it.

This stuff gets old.  Enough people get tired of the freak show or soap operas to want a life instead.  The things left out of the story become known.  The neglected and abused break.  Even cynicism becomes a tough slog.  (What would we do without the wordsmith Rumsfeld)?  These are the best manipulators of word because of the added power of image and the photo-shopped "truth."  Seeing is believing, and the sleight of hand has never been more exquisite.  We spent the last decade marveling at their technique and daring.  Now it just gets stupid, ugly and ridiculous, with new lows all the time.

We cannot rely upon memories of the past in vibrant narratives of the present.  We cannot pretend that "truth will prevail" or any of the Rationalist maxims apply.  Nonetheless, we can be confident that faux human ideologies that do not satisfy the soul will not wear well as human images.  We will get that sickness of soul that makes us itch and scratch instead of embrace our enslavement.  Ideology will begin to leave a bad taste in our mouth instead of being refreshing.

They cannot make this crap work.  Try as the may and insist as they do, it still won't work in the sense that the human beings will stay enslaved and enraptured instead of having other dreams and stories.  Take heart in this.  We do not have to engineer this revolution.  We only need to be ready to get on it when it arrives.

.ren's picture
This thread was started two

This thread was started two years and one day ago, more or less in honor of the Gulf Oil Spill, one of the most cataclysmic signs yet of the onset of an age of decline and disruption that will follow peak oil.  More is to come.  Tar sands, fracking, the list of harder to get precious energy sources is up already and those sources are making their quietly ignored, even applauded presence felt, bit by bit.

This is from the lead post:

Antifascist wrote:

We are witnessing the consequences of forty years of Republican deregulation policies. BP and American energy companies has done everything humanly possible to not obey and comply with any safety regulation: they bribe, legislated loopholes, lobbied, got exemptions, propagandized, and simply ignored the safety regulations that the US Government complied to prevent an oil spill catastrophe. But in spite of all the subterfuge, the companies still had to install the blow out preventer--but nothing says the BOP actually has to work. Private Enterprise made another bet--a national security risk-- and we all lost.

With the current  ongoing Oil Spill catastrophe in mind, I will quote myself from last January, 08.January.2005 8:51 PM.


Anti's quote

At this very moment entire ecosystems are dying. A dynamic cloud of toxic oil and dispersants is drifting under the ocean into the richest and consecrated biological Life Engines on planet earth. Death is washing upon the shores. Maybe the Gulf of Mexico Loop current will transport the toxic cloud all the way to Cape Kennedy, Florida where the US Government in 1970 dumped 3,000 TONS of nerve gas 280 miles off the Florida coast.

That forty years began with a strong reaction to a warning brought to the world from the Club of Rome entitled Limits to Growth.  A warning that evolved into the anti regulation reaction of the Reagan/Thatcher eighties, and vomited itself upon the world with the help of Clinton and his signing of NAFTA, which promulgated the WTO in 1995 to internationally codify the spreading of this parasitic economic form.  The world wide reverberations of financial collapse are now part of that block-headed denial of our limits to growth, and any need to use our human minds to abrogate its effects.

Entire ecosystems have been dying for some time now.  Yes, the neoliberal version of economic expansion can be given credit for what may be a global acceleration towards those limits.  But we should also note that Keynesian economics is also a growth oriented brand of that dismal religion that likes to think of itself as science.

No question it's touching us all.  And we are standing by doing nothing as a society.  Meanwhile:

Apocalypse Soon: Has Civilization Passed the Environmental Point of No Return?


Although there is an urban legend that the world will end this year based on a misinterpretation of the Mayan calendar, some researchers think a 40-year-old computer program that predicts a collapse of socioeconomic order and massive drop in human population in this century may be on target.

Remember how Wile E. Coyote, in his obsessive pursuit of the Road Runner, would fall off a cliff? The hapless predator ran straight out off the edge, stopped in midair as only an animated character could, looked beneath him in an eye-popping moment of truth, and plummeted straight down into a puff of dust. Splat! Four decades ago, a Massachusetts Institute of Technology computer model called World3 warned of such a possible course for human civilization in the 21st century.

Antifascist's picture
Ren wrote, Quote:No question

Ren wrote,

No question it's touching us all.  And we are standing by doing nothing as a society.  Meanwhile:

Apocalypse Soon: Has Civilization Passed the Environmental Point of No Return?

I see the critique of capitalism as being on at least two levels: the contradictory systemic nature of capitalism when it runs toward maximum production of GDP, and how the workings of capitalism differs from the idealized models the free marketers claim. But whichever critique one is talking about the collapse is happening in real time. It appears that the world is now going to have to accept as the cost of doing business a certain amount of cesium-134 and cesium-137 in food--a cost of living like the overhead cost of doing business, or as a tax on life thanks to the nuclear power industry's deception of how to dispose of nuclear radioactive waste. They cannot justify it, so they ignore it. Who would of thought during the 1970s when the debates about emergency responses to a nuclear accident where proposed that the actual response by government and industry would be to simply ignore it.

Japan is finding Fukushima radioactive isotopes in tea, rice, mushrooms, seaweed, algea, fish, soil, air, water, in sewage waste, animals, plant pollen and children's urine. The Japanese government are finding thyroid cysts in children but parents are not allowed to see test results because it would be too alarming.

Meantime the financial markets of free enterprise collapse. See world market charts here:

.ren's picture
NIMBY comes home to roost,

NIMBY comes home to roost, just as we predicted it would when a few of us tried to do something to stop Clinton from signing NAFTA and renegotiating GATT.  I did a paper that focused on NIMBYism that fed into that attempt.  Global neoliberalism can actually foster an attitude that makes it difficult to deal with macro societal threats in a broad and democratic way.  Of course we can't stop Japan, or pretty much any sovereign nation for that matter, from developing global back yard-threatening technologies, but we can do something about educating attitudes if we don't adopt a NIMBY attitude about problems.  The U.S. has been anything but a leader on these measures.  The corporatocracy has its hooks set deep into the American psyche.

The collapsing financial markets are also to be expected as a logical extension of this closed techno-industrial capitalist system.  It's part of a much larger syndrome that includes overstepping the limits to growth set by the planet itself -- as this system has guaranteed itself of doing by legitimizing the seeking of commodified resources all over the planet to feed the machinery of those centers of techno-industrial growth that have prospered most in the past two hundred years.

Richard Heinberg wrote:

We have relied on economic growth for the “development” of the world’s poorest economies; without growth, we must seriously entertain the possibility that hundreds of millions — perhaps billions — of people will never achieve the consumer lifestyle enjoyed by people in the world’s industrialized nations. From now on, efforts to improve quality of life in these nations will have to focus much more on factors such as cultural expression, political freedoms, and civil rights, and much less on an increase in GDP.

Moreover, we have created monetary and financial systems that require growth. As long as the economy is growing, that means more money and credit are available, expectations are high, people buy more goods, businesses take out more loans, and interest on existing loans can be repaid.5 But if the economy is not growing, new money isn’t entering the system, and the interest on existing loans cannot be paid; as a result, defaults snowball, jobs are lost, incomes fall, and consumer spending contracts — which leads businesses to take out fewer loans, causing still less new money to enter the economy. This is a self-reinforcing destructive feedback loop that is very difficult to stop once it gets going.

In other words, the existing market economy has no “stable” or “neutral” setting: there is only growth or contraction. And “contraction” can be just a nicer name for recession or depression — a long period of cascading job losses, foreclosures, defaults, and bankruptcies.

We have become so accustomed to growth that it’s hard to remember that it is actually is a fairly recent phenomenon.

Over the past few millennia, as empires rose and fell, local economies advanced and retreated — while world economic activity overall expanded only slowly, and with periodic reversals. However, with the fossil fuel revolution of the past century and a half, we have seen economic growth at a speed and scale unprecedented in all of human history.6 We harnessed the energies of coal, oil, and natural gas to build and operate cars, trucks, highways, airports, airplanes, and electric grids — all the essential features of modern industrial society. Through the one-time-only process of extracting and burning hundreds of millions of years’ worth of chemically stored sunlight, we built what appeared (for a brief, shining moment) to be a perpetual-growth machine. We learned to take what was in fact an extraordinary situation for granted. It became normal.

But as the era of cheap, abundant fossil fuels comes to an end, our assumptions about continued expansion are being shaken to their core. The end of growth is a very big deal indeed. It means the end of an era, and of our current ways of organizing economies, politics, and daily life.

It is essential that we recognize and understand the significance of this historic moment: if we have in fact reached the end of the era of fossil-fueled economic expansion, then efforts by policy makers to continue pursuing elusive growth really amount to a flight from reality. World leaders, if they are deluded about our actual situation, are likely to delay putting in place the support services that can make life in a non-growing economy tolerable, and they will almost certainly fail to make needed, fundamental changes to monetary, financial, food, and transport systems.

Heinberg, Richard (2011-06-01). The End of Growth: Adapting to Our New Economic Reality (Kindle Locations 275-297). Perseus Books Group. Kindle Edition.

Antifascist's picture
Arsonist Lew Rockwell

Arsonist Lew Rockwell (Chairman of the Ludwig von Mises Institute) wants to help put out the fire with a bucket of gas. 

This is a shock doctrine strategy setup again. Whenever the markets begin to falter, the Free Market ideologues get on their soapboxes and start selling the same economic policies that created the problems we have today. They are like an arsonist volunteering to help put out the fire which they started. In this RT interview with Lauren Lyster, Chairman Lew Rockwell proscribes the same old remedies of reduce government size, austerity, deregulation, debt reduction, and tax reduction for the rich.

Rockwell, like all the Neo-Liberals, proclaims the theological doctrine that “big government is bad.” Notice the ambiguity in that statement of faith: they are never clear if the statement “big government is bad” is a definition, or a statement of fact. These militant ideologues proclaim their faith in the conversation as a matter of fact, but they really mean it as a definition—they mean big government is bad by definition. When challenged on a factual level, the need for market regulation for example, they then argue in a circle: “We don’t need government to regulate and harm efficiency of the markets because government is...bad.” 

They are experts of ambiguity that disguise other problems within the market economy. Rockwell, like all conservatives, complains about government debt. This is the Jude Thaddeus Wanniski “Two Santa Claus Theory” of the right wing; that is, the Republicans spend when they are in the political majority, but complain bitterly about debt when they are out of the majority to steer fiscal policy. Wanniski’s propaganda gives the impression to the slow-minded electorate that prosperity follows Republicans and austerity follows Progressives. The Wall Street gang and their ideological priests never complained of the billions of borrowed dollars spent in Iraq and Afghanistan for war when Bush was in office for eight years--but now that Bush is out of office debt is the problem.

And notice that these right wing ideologues slip over the fact that all this “government debt” is really LAUNDRIED PRIVATE SPECULATIVE BANK DEBT transferred to the US public fiscal balance sheet through the generously of George Bush in a $29 Trillion dollar bailout of Wall Street’s gambling losses. In fact, Neo-Liberal and Neo-Classical economic theory (Milton Friedman is one such theorist) doesn’t even address debt and banks in its macroeconomic model. It is private debt generated by Wall Street’s ponzi lending fraud and speculating on rising asset prices that caused the housing bubble debt in America. The debts in Ireland and Spain resulted from bank asset speculation on housing also. Debts in Italy, Greece, and Portugal were from speculation on government inspired IOUs, and not from fiscal budget deficits in those countries. The financial priests of Wall Street cleverly shift the discussion of government debt from bank speculation and war to social safety net programs giving the impression that insurance programs, like social security, are the blame for the current fiscal deficits. Consequently, the mainstream media always speak of government debt problems in terms of “entitlement” and fiscal programs so as to make them the target of austerity measures. 

This isn’t the kind of speculative deficit spending the Keynesians had in mind. There is a delicate balance of spending, monetary printing, and setting interest rates in navigating between deflationary depression and hyperinflation to avoid the hardships of both kinds of economic un-equilibrium.

In recent times conservatives have reacted adversely to inflation, though not with great enthusiasm to the measures for preventing it. Liberals have thought unemployment the greater affliction. In fact no economy can be successful which has either. Inflation causes discomfort and frustration for many. Inflation causes acute suffering for many. Unemployment causes discomfort and frustration for a lesser number. There is no certain way of knowing which causes the most in the aggregate of pain. It was a prime lesson of the ‘30s that deflation and depression destroyed international order, caused each nation to try for its own salvation, indifferent to the damage that its effort caused to neighbors. It has equally been the lesson of the late ‘60s and early ‘70s that inflation too destroys international order. Those who express or imply a preference between inflation and depression are making a fool’s choice. Policy must always be against whichever one has.

But also it is now evident that only in the extremes of inflation or depression is there a choice. Otherwise, if only the accepted and orthodox remedies are applied, we get both. For this combination no one, liberal or conservative, speaks. And at this combination after 2500 years, we have at last arrived. Few histories could have a less happy ending. (Money: Whence It Came, Where It Went, by John Kenneth Galbraith, 1975, Bantam Press, p. 364.)

The most repeated argument against government stimulus spending is that government, like a household, should not spend more that it takes in as income. You can hear this popular argument from the most sophisticated financial commentator on the mainstream media. It is a fallacy in reasoning.

An engagingly plausible mode of thought, the fallacy of composition extends the economics of the family to that of the government. A family cannot indefinitely spend beyond its income. So neither can a government. A parent who borrows to live leaves debts, not a competence, to those who come after. A government that borrows does the same. Both are morally deficient.

The comparison between family and state, on second thought, is implausible. That anything so massive, diverse, complex, incomprehensible as the United States government (or any national government) should be subject to the same rules and constraints as a wage-earner’s household is a matter that, to say the least, requires proof. Nor is it proof, as often said, that it should be so. Additionally it should be observed that the wealth and solvency of a nation depend on what is national economy produces. If borrowing and spending enhance production, as the Keynesian ideas held, then such borrowing and spending enhance solvency. Only rarely do borrowing and spending enhance wealth for a family. It was an enduring complaint of Keynesians that their opposition did not understand what they were trying to do. It was equally the case that the Keynesians did not understand the depth of the tradition to which their opposition was subject or the power by which it was governed. (Money: Whence It Came, Where It Went, by John Kenneth Galbraith, 1975, Bantam Press, p. 282.)

Economist Steve Keen explains (8 minutes) that debt is not bad by definition. Prof. Steve Keen points out that it is private bank debt and private mortgage debt, not government deficient spending that caused the Wall Street collapse. In fact, it is bankers managing monetary policy for leveraging speculative debt that has caused the numerous boom and bust cycles in the last thirty years. When right-wing Priests like Lew Rockwell argued for less regulation of banks, he is really advocating predatory financial cancer, which is what got us all here in the first place.

Historically the Keynesian remedy for a deflationary depression is deficient spending by government to insure an increase in the velocity spending at the temporary cost of inflation. However, if the government has already been laden down by private banker losses and massive speculative bank debt, this Keynesian monetary tool is less effective especially when manufacturing is being exported oversea to China and other foreign countries. Simulative deficient spending is less effective if it is spent overseas, or entrusted to corporations to spend for the goal of reducing unemployment. A case in point, Yahoo Corporation received $9,921,887 in stimulative money to build a clean-energy data center and only created a total of 25 jobs. Other large infrastructure projects have been contracted out of the country: the new Bay Bridge in the San Francisco area now being built by Caltrans is partly fabricated by a government supported Chinese steel firm denying American workers badly needed jobs. In another case BART (Bay Area Rapid Transit) is purchasing a new fleet of passenger cars fabricated in Canada for $1.5 billion and assembled in Plattsburgh, New York. How does that help American taxpayers and wage earners? Trusting private corporations to spend simulative funds in this country was an administrative error of execution that dilutes the economic effect of increasing demand and employment for an otherwise sound Keynesian strategy. Once again the actions by private companies and oblivious government officials have diminished the effect of the American Recovery and Reinvestment Act of 2009. ARRA seems to have been modeled more on Reagan’s providential “trickle down” theory than on FDR’s direct hiring by the Works Progress Administration (WPA): a mistake not surprising for a president that seems more like a moderate Republican than a progressive Democrat.

Lew Rockwell and other economists of his ilk called for austerity measures in response to the fear of inflation. This is because inflation erodes unearned income on interest bearing instruments like stocks and bonds; in other words, inflation hurts the investments of the rich and their 401k hostages. Austerity reduces demand and employment. Reduction in public spending and wages traumatizes those it is directed against and has unpredictable social consequences. John K. Galbraith recounts how inflation fighting austerity measures affected Germany in the 1930s after the nation experienced massive hyperinflation following WWI.

What is not in doubt is that the German inflation left Germans with a searing fear of its recurrence. And whatever the effect of inflation in paving the way for Fascism, measures taken later out of fear of inflation were certainly not without effect. We have noticed, and will see again, that the strongest action is taken against inflation when it is least needed. On December 8, 1931, with one-sixth of the total German labor force out of work, the government of Heinrich Brunning decreed a reduction of from 10 to 15 percent in most wages, this being a rollback to the level of four years earlier. It decreed also a reduction in industrial prices of 10 percent, a similar reduction in rents, railway fare, rail freight charges, and charges for municipal services. Earlier, wages of public employees had been reduced by a fifth, and taxes on wages, salaries and on incomes had been sharply increased. Unemployment benefits were also reduced. In the following year unemployment rose to one-fifth of the German labor force, and in the next year came Hitler. 16 17

17 Later in the ‘30s, Bruning joined the Harvard faculty as Professor of Government. At a welcoming seminar one evening I asked him if his Draconian measures at a time of general deflation had not advanced the cause of Adolf Hitler. He said they had not. When unwisely, I pressed the point, he asked me if I disputed the word of the former Chancellor of the German Reich. (Money: Whence It Came, Where It Went, by John Kenneth Galbraith, 1975, Bantam Press, p. 198-199.)

It should be noted that Heinrich Brunning coined the Orwellian term, "authoritative democracy." In both economic environments of hyper-inflation and deflation there is a massive transfer of wealth from those that have savings and mortgages to those that hold debt instruments and tangible assets. And notice the German unemployment number of one-fifth rivals our own current real unemployment of 20%.

George Santayana's famous quote “Those who cannot learn from history are doomed to repeat it,” applies to the debate the Neo-Liberals and Libertarians lead in calling for a return to the gold standard. Free Marketers have always liked the gold standard in their theological belief that such a monetary system is more self-regulating and stable. One has to ask the logical question if markets were self-regulating why would they need the establishment, and therefore administrative plan, of a gold standard? And if logic is out of style how about reviewing the historical record of the gold standard operating as the world’s regulating mechanism? But then history, being a social science, also seems to be out of style since so many history graduates are unemployed these days. Joseph E. Stiglitz summarizes Karl Polanyi’s historical study of the gold standard and it isn’t one of economic stability and self-regulation.


The gold standard was intended to create an integrated global marketplace that reduced the role of national units and national governments, but its consequences were exactly the opposite.23 Polanyi shows that when it was widely adopted in the 1870s, it had the ironic effect of intensifying the importance of the nation as a unified entity. Although market liberals dreamed of a pacified world in which the only international struggles would be those of individuals and firms to outperform their competitors, their efforts to realize these dreams through the gold standard produced two horrific world wars. The reality was that the simple rules of the gold standard imposed on people economic costs that were literally unbearable. When a nation’s internal price structure diverged from international price levels, the only legitimate means for that country to adjust to the drain of gold reserves was by deflation. This meant allowing its economy to contract until declining wages reduced consumption enough to restore external balance. This implied dramatic declines in wages and farm income, increases in unemployment, and a sharp rise in business and bank failures. It was not just workers and farmers who found the costs of this type of adjustment to be high. The business community itself could not tolerate the resulting uncertainty and instability. Hence, almost as soon as the gold standard mechanism was in place, entire societies began to collude in trying to offset its impact. A first recourse was for countries to increase their use of protective tariffs for both agricultural and manufactured goods.24 By making trade flows less sensitive to price changes, countries could gain some degree of greater predictability in their international transactions and be less vulnerable to sudden and unanticipated gold outflows. A further expedient was the rush by the major European powers, the United States, and Japan to establish formal colonies in the last quarter of the nineteenth century. The logic of free trade had been strongly anticolonial, because the costs of empire would not be offset by corresponding benefits if all traders had access to the same markets and investment opportunities. But with the rise of protectionism in international trade, this calculation was reversed. Newly acquired colonies would be protected by the imperial powers’ tariffs, and the colonizers’ traders would have privileged access to the colonies’ markets and raw materials. The “rush to empire” of this period intensified the political, military, and economic rivalry between England and Germany that culminated in the First World War.25 For Polanyi the imperialist impulse cannot be found somewhere in the genetic code of nations; rather, it materializes as nations struggle to find some way to protect themselves from the relentless pressures of the gold standard system. The flow of resources from a lucrative colony might save the nation from a wrenching crisis caused by a sudden outflow of gold, and the exploitation of the overseas populations might help keep domestic class relations from becoming even more explosive. Polanyi argues that the utopianism of the market liberals led them to invent the gold standard as a mechanism that would bring a borderless world of growing prosperity. Instead, the relentless shocks of the gold standard forced nations to consolidate themselves around heightened national and then imperial boundaries. The gold standard continued to exert disciplinary pressure on nations, but its functioning was effectively undermined by the rise of various forms of protectionism, from tariff barriers to empires. And yet even when this entire contradictory system came crashing down with the First World War, the gold standard was so taken for granted that statesmen mobilized to restore it. The whole drama was tragically played out again in the 1920s and 1930s, as nations were forced to choose between protecting the exchange rate and protecting their citizens. It was out of this stalemate that fascism emerged. In Polanyi’s view the fascist impulse—to protect society from the market by sacrificing human freedom—was universal, but local contingencies determined where fascist regimes were successful in taking power. (Polanyi, Karl (2001-03-28). The Great Transformation: The Political and Economic Origins of Our Time . Beacon Press, Loc: 545, Kindle Edition.)

So it appears that economic volatility and even war where the consequences of the world gold standard. One could even argue that the international economic volatility of the gold standard contributed to the rise of fascism. There is no reason to believe that a return to the gold standard would be any different today in stopping asset speculation: in fact, the current American gold and silver commodity markets are the most corrupt, manipulated, and volatile in the world.

Polanyi stresses the interrelatedness of the doctrines of free labor markets, free trade, and the self-regulating monetary mechanism of the gold standard. His work was thus a precursor to today’s dominant systemic approach (and in turn was foreshadowed by the work of general equilibrium economists at the turn of the century). There are still a few economists who adhere to the doctrines of the gold standard, and who see the modern economy’s problems as having arisen from a departure from that system, but this presents advocates of the self-regulating market mechanism with an even greater challenge. Flexible exchange rates are the order of the day, and one might argue that this would strengthen the position of those who believe in self-regulation. After all, why should foreign exchange markets be governed by principles that differ from those that determine any other market? But it is also here that the weak underbelly of the doctrines of the self-regulating markets are exposed (at least to those who pay no attention to the social consequences of the doctrines)! For there is ample evidence that such markets (like many other asset markets) exhibit excess volatility, that is, greater volatility than can be explained by changes in the underlying fundamentals. There is also ample evidence that seemingly excessive changes in these prices, and investor expectations more broadly, can wreak havoc on an economy. The most recent global financial crisis reminded the current generation of the lessons that their grandparents had learned in the Great Depression: the self-regulating economy does not always work as well as its proponents would like us to believe. Not even the U.S. Treasury (under Republican or Democratic administrations) or the IMF, those institutional bastions of belief in the free market system, believe that governments should not intervene in the exchange rate, though they have never presented a coherent and compelling explanation of why this market should be treated differently from other markets. (Polanyi, Karl (2001-03-28). The Great Transformation: The Political and Economic Origins of Our Time . Beacon Press, Loc: 115, Kindle Edition.)
Currently, I only see gold and silver as an inflation hedge and nothing more. Returning to the gold standard would be a disaster resulting in deflation and then hyperinflation depending on the direction of gold’s travel in the international markets. 

.ren's picture
Antifascist wrote: Currently,

Antifascist wrote:

Currently, I only see gold and silver as an inflation hedge and nothing more. Returning to the gold standard would be a disaster resulting in deflation and then hyperinflation depending on the direction of gold’s travel in the international markets.

Anti, I appreciate your decimating analysis of the free market-oriented neoliberal/Chicago School/libertarian/Austrian school version of how to do economies.  It's quite convincing, given what I see taking place and my own version of that critique.  And certainly Polanyi adds an insightful historical perspective to our past forty years' emphasis on that philosophical strategy that's taken over our politics.

Stepping back and looking at the past forty years of economic interactions that have involved this emphasis on globalized neoliberalism I think it's also important to recognize how it evolved into a form of financially-oriented casino capitalism instead of the production-oriented real world wealth based capitalism that the original free market thinkers had in mind when writing about issues like the wealth of nations, where wealth was not investment derivatives, like MBSes and CDSes and other casino style banking instruments where their investment made them too big to fail (because the Fed can't cover their bets), at which government efforts like QE1 and QE2 were aimed in hopes of kick starting a new phase of economic debt based growth.  But the machinery is still too broke to fix.  And I think that comes back to my above post about limits to growth.

I note that the evolution of modern capitalism goes hand in hand with the colonialization process of the past six hundred or so years, which is essentially an effort to get outside the restrictions of a local ecology and its limits to growth.  Once the discovery of cheap energy began its rapid implementation involving the very socially radicalizing industrial revolution, that process of resource extraction became a planetary-round process.  We now appear to be approaching a planetary limit to this form of economics with is an infinite growth oriented economics.

With that as the broad background, we can see that in macro economics terms, the expansion of production in the U.S., which was leading the world in this process following WWII, began to slow in the seventies.  That began to put pressure on the need for profits to run the entire capitalist expansion machine.   Money is the fuel that drives economies of this sort, and with our system of fractional banking, debt is the source of much of that money when growth is the expected norm.  It's a kind of a Ponzi-like scheme, but it works as long as the economy continues to grow. 

Why did it slow?  I would say the profits-diminishing "costs" are the areas to investigate.  And I can ignore all the moralizing about greed on this issue and just try to stay with the simple structure of the capitalistic profit and loss, combined with the pressure for growth in order to keep producing and selling with all the parts needed for that process. This is coming from my own background as a strategic planning consultant for corporations, where I was quite good at helping them solve these kinds of problems even though I inherently despised what are and what they do as hierarchical institutions that work like machines.  And yes, I'd already read Jacques Ellul by that time. 

First of all, on a macro level, the economic machine itself depends on real energy, as well as a host of easy to "harvest" resources.  The ease of harvesting the low hanging fruit (and blissfully disposing of the waste without concern) is an essential part of minimizing the economic cost of running this machine, and as the costs rise, the expansion, or growth, which also involves jobs, the buying of commodities by those who have jobs and so forth, slows.  And then the economic machine itself begins to show signs of problems with its internal parts breaking down, and needing to be fixed, in order to keep running smoothly.  The way it looks to a lot of us now, that fix began to follow the age-old practice of playing around with finance.  Essentially tinkering with all essential debt part.

I saw the pressure towards doing that as a consultant in the eighties trying to help corporations get financed through venture (now "vulture" if you look at the Bain style that's evolved) capital and other types of credit instruments.  One of the first pressures I witnessed was this pressure to break down the rules that prevented banks from playing around creatively with their investors' savings.  I actually did some work on some of the financial supermarket proposals going around at the time, like the Sears Financial Services startup that eventually failed, I still have an original Discover Card I was issued as part of my efforts. The very first major systemic failure from that financial deregulation pressure was the change in Savings and Loans rules that led to the rest of us bailing out the mistakes Savings and Loans entities blundered into, screwing up by doing things they didn't know how to do. In a macro sense, that's the story of our financial system today.

Never mind that little savings and loan glitch, the pressure for profits was still on.  So then we had the first Gulf War -- and recognize that in reality it was related geopolitically to the geostrategic area of critical oil resources but as usual was politically covered over with the threat of a supposedly "insane" dictator's actions, which may or may not have been manipulated, because there's all the intrigue with Bush and his son's involvement in Silverado behind that particular military event. That's how the geostrategies of geopolitics need to be read in order to avoid getting sucked into all this Bilderberg conspiracy stuff.  And then eventually by 1999 neoliberals like Clinton (I count him as such thanks to his enthusiasm for NAFTA, GATT, and WTO re, essentially de-regulating of the global business environment and the fact that he signed the Gramm-Leach-Bliley Act (GBLA) along with a signing statement showing his establishment position for its repeal of those significant casino banking controls in sections of the Glass-Steagal Act), Phil Gramm (R-TX), and James A. Leach (R-IA) managed to repeal most of the protections instituted against casino finance by 1933 Glass Steagall Act.

Your analysis really points to how the casino finance arm of the necessary part of providing the debt for the necessary investment needed to fuel more production took on a life of its own as the anti-government deregulators of those above schools influenced our government.

What needs to be added is that finance capital, gambling casino evolution was the direction taken because we have been gradually, relentlessly moving towards what are painfully clear limits to growth of this form of capitalism.

Your above concluding statement to your last post represents one of two options I see at the moment for this system, as long as it refuses to recognize reality and invent an entirely new form of economics.  Yours implies dealing with the inflation that could essentially devalue the dollar and wipe out savings and other forms of hedging for the future.

The other is deflation.

I think in either case, the result is going to be catastrophic for most.  The Great Depression was one of those catastrophic examples.  It was uncontrolled casino capitalism that took us to that point where the machinery of economics simply broke down.

The difference between then and now is the world still had a lot of low hanging fruits of resources, and once government primed the pump through war spending, we had a few decades of Keynesian directed prosperity, which began to dwindle in the seventies.  The neoliberals like to blame the Keynesians with their government controls and backing of the failures of this infinite growth capitalist financial system.  I think it's more likely we have, as predicted in 1972, approached our limits to growth in a very real sense, not just with the debt-defying aspects of providing a Ponzi scheme version of growth, and the economic machinery that relies on debt is breaking down.  Especially the high tech electronics aspects of that machine that are now so complicated even some of the PhD's in the religion of economics can't figure them out.

OK, you guys get it and state

OK, you guys get it and state it so clearly and well that one has to wonder why so many in power and teaching positions appear not to.  I don't think there are that many paid "liars" to be hired for these jobs, so they have to believe in the crap they are selling or using to a considerable degree. How does this happen and why does it persist?

I have found "economics" to be a particularly emotive topic for something that pretends to be about facts and figures with a modicum of theory thrown in.  We have "bottom lines" here, at least we think we do.  This is as close as we come to "praxis thinking" and woe are we!  "Economic Man" is about what ought to be and who has earned the right to be respected.  It is not about how economic systems find balance or how societies are maintained well.  It is not even about anything close to equality of opportunity for citizens, much less humane treatment of all who reside or "sojourn" in our land.  It is the soul on fiduciary responsibility steroids.

Not being in debt to others was sound advice for children of the Depression.  There is a moral integrity to buying what you want with cash and saving.  It does not give the economy a boost or make real cost/benefit investing sense, but it is a way of being "above it all."  Unfortunately, it also requires framing oneself in the image one is above.  Unlike the Franciscans, this way of opting out of the credit card economy cannot accept gifts as part of the mandate of "poverty."  It makes being above it all the moral point of virtue.  It makes needing help from others a moral offense.  Fear of poverty in America does not come with faith that family and community will pull together to protect people.  We think of it in terms of having our own money or assets rather than being in it together.

I think it is past time to be talking economics without a louder conversation about caring for people in need and building what we will need together.  Doing democracy will be how we will "talk about it" rather than in the abstract.  Move from theory to addressing real here and now needs while also investing in what will work better for us.  "Green" and "sustainable" do not need to be "austere" even if they are unburdened by much of our industrial excess.  What we need to "give up" are not the good things of life.

How do we get this narrative focus instead of watching the masters of media manipulation pull off another dazzling performance?  With the greatest respect and compliments for several excellent posts summing up the topic very well, if it is this clear to us, what are the factors that make it resistable to incomprehensible in the minds of those in power?  Is our job to educate them or does this just allow us to understand their pathology better?  Is it the hierarchy or the people attracted to it?  Can power be established bottom up?

That brings me to ren's tech complexity and social media, networking and whether it frees us or makes us creatures of the technology.  Who can predict, and while we do see how it goes wrong in authoritarianism, do we need to protect democracy from all that power of the state or does democracy require a state the serves the people?  Empires are not democracies, so what is abhorent in the hands of emperors may not be so in the hands of public servants.  Anyway, very well said, and brief to boot!

.ren's picture
DRC wrote: Anyway, very well

DRC wrote:

Anyway, very well said, and brief to boot!

Now that's funny.  No one's ever said that to me before.  Except maybe a hint of it in public where I generally don't talk much and people who talk appreciate my reticence.

DRC wrote:

That brings me to ren's tech complexity and social media, networking and whether it frees us or makes us creatures of the technology.  Who can predict, and while we do see how it goes wrong in authoritarianism, do we need to protect democracy from all that power of the state or does democracy require a state the serves the people?

I think it begins to go wrong in complex societies where we develop hierarchical systems, private and public, and people relegate themselves to doing their jobs at work, which often involves giving up their autonomy to think independently, and then, outside that, try to figure out how to go from that job mindset to something of an entirely different nature of thought.  I have a strong feeling a lot of people don't get through that transition, perhaps because so much is dependent on survival related to the job mindset it can be scary to let that go.

I guess that's why so many of us need a good place to go and listen to a readjusted vision on Sunday mornings.  Between routines of work and mass media exposure, we can really get locked into a certain kind of mindset.

Antifascist's picture
drc2 wrote, Quote: OK, you

drc2 wrote,

OK, you guys get it and state it so clearly and well that one has to wonder why so many in power and teaching positions appear not to.  I don't think there are that many paid "liars" to be hired for these jobs, so they have to believe in the crap they are selling or using to a considerable degree.

“Clarity” is the best compliment you could of given us. I think careerism explains the motivation behind many of those professionals in business, government, media, and academia that expound the sociological propaganda of the free market status quo. Civil vocational privatism is the “passive interest in administrative performance and a primary orientation toward consumption and leisure.” Possessive individualism and the advantage-oriented life style promote deference to authority and ideological compliance without explicit coercion by authority. Speaking of which, there is a new video lecture by Chris Hedges given in Canada that touches on this issue of the conformist intelligentsia to the systemic goals of advanced Neo-Liberal capitalism. Hedges quotes one of his Harvard mentors James Luther Adams who once said,” If the Nazis took over America tomorrow, sixty percent of the Harvard faculty would happily begin their lectures with the Nazi salute.” (1:06:50 minutes) I whole-heartedly believe this to be true based on my own experiences. Thankfully, there are exceptions to conformism.

Ren wrote,

Anti, I appreciate your decimating analysis of the free market-oriented neoliberal/Chicago School/libertarian/Austrian school version of how to do economies.  It's quite convincing, given what I see taking place and my own version of that critique.  And certainly Polanyi adds an insightful historical perspective to our past forty years' emphasis on that philosophical strategy that's taken over our politics....I think it's also important to recognize how it evolved into a form of financially-oriented casino capitalism instead of the production-oriented real world wealth based capitalism that the original free market thinkers had in mind when writing about issues like the wealth of nations, where wealth was not investment derivatives, like MBSes and CDSes and other casino style banking instruments where their investment made them too big to fail (because the Fed can't cover their bets), at which government efforts like QE1 and QE2were aimed in hopes of kick starting a new phase of economic debt based growth.  But the machinery is still too broke to fix.  And I think that comes back to my above post about limits to growth.

I want to tie together these themes of conformism, casino banking, critical historical perspective, and Keynesian macroeconomics around this question of the monetary gold standard that the right-wing/conservative/speculators are floating on the Internet recently. One famous non-conformist personality I have in mind is economist John Maynard Keynes and there is a specific historical event in which his nonconformist attitude got him into trouble with Winston Churchill. After WWI Churchill sought to re-establish the gold standard in Britain with disastrous worldwide effects. 

Because we have discussed Wittgenstein extensively in this tread, I just want to point out that Keynes was a very close friend of Ludwig Wittgenstein at Cambridge University, England. Keynes was primarily responsible for getting Wittgenstein to return permanently to Cambridge in 1913, even paying for his expenses. In fact, Keynes met him at the train station and later wrote in a letter to his wife Lydia Lopokova referring to his philosopher friend Wittgenstein, “Well, God has arrived. I met him on the 5:15 train.” This is a very interesting time in history to study British philosophy and economics. 

I apologize for the numerous quotes from John Kenneth Galbraith, but he is a great writer and I could not possibly match his expert knowledge and subdued sarcasm in recounting the huge blunder by Churchill in returning to the British gold standard. 

Churchill and Gold 

In 1925, Churchill presided over the most dramatically disastrous error by a government in modern economic history. It was Keynes who made it famous. 

The mistake was the attempted return to the gold standard at the prewar gold and dollar value of the pound-123.27 fine grains of gold and 4.86 dollars to the pound. Churchill was Chancellor of the Exchequer.... 

In retrospect, the error was not an especially subtle one. British prices and wages had risen during the war as they had in other countries. But in the United States they had risen less and fallen more in the postwar slump. And France, as elsewhere in Europe, though prices had risen more that in Britain, the exchange value of the local currencies had fallen even more than prices had gone up. When you bought the cheap foreign currencies and then the goods, they were, in comparison with those of Britain, a bargain. 

Had Britain gone back to the pound at, say, 4.40 dollars, all would have been well....With pounds bought at 4.86 dollars, British prices were about 10 percent higher than those of her competitors. Ten percent is 10 percent. It was enough to send buyers to France, German, the Low Countries, the United States. 

Why the mistake? To go back to the old rate of exchange of pounds of gold and dollars was to show that British financial management was again as solid, as reliable, as in the nineteenth century. It proved that the war had changed nothing. It was a thought to which Winston Churchill, historian and professional custodian of the British past, was susceptible. Also, only a few people participate in such decisions, and the instinct is strongly conformist....Those who have a reputation for dissent, like Keynes, are not invited. They are not responsible, serious, effective. It follows that financial decisions, like those on foreign policy, are carefully orchestrated to protect error. 

The country responded well to Churchill’s House of Commons announcement of the return to gold....Keynes wrote instead to ask why Churchill did “such a silly thing.” It was because he had “no instinctive judgment to prevent him from making mistakes.” And “lacking this instinctive judgment, he was deafened by the clamorous voices of conventional finance.” Also, he was misled by his experts....

If British exports were to continue, British prices had to come down. Prices could come down only if wages came down. And wages could come down in only one of two ways. There could be a horizontal slash, whatever the unions might say. Or there could be unemployment, enough unemployment to weaken union demands, threaten employed worker and idleness and thus bring down wages. This Keynes foresaw. (John Kenneth Galbraith, The Age of Uncertainty , Boston, Houghton Mifflin Company, 1977, p. 203-204.)

Churchill’s motivation for returning the gold monetary standard was only symbolic to demonstrate that Britain was back as a world colonial power. “The elixir of nationalism” is the name Chris Hedges has for it. And Galbraith notes Keynes’ role as the contrary voice. Keynes had already made it on the unwelcome list by his criticism of the economically dangerous Versailles Treaty which demanded war reparations from Germany that were impossible to repay. It wasn’t until after WWII that Keynes was welcome again to high public debate and elite circles.

There was, in the end, both unemployment and a horizontal wage cut....To meet this competition with the more expensive pound, the British coal-owners proposed a three-point program: longer hours in the pits, abolition of the minimum wage, and lower wages for all.... (Ibid. , p. 207.)

And who paid the price for the symbolism of the gold standard? Labor of course: the same people who fight the wars. One wonders if the real motivation behind the contemporary call to establish an American gold standard is to trigger massive deflation and open the door for more Neo-liberal economic shock therapy to finally crush organized labor with the added bonus of a fire sale of deflated assets for banks. Currently, the American money supply is exploding, but there is no hyperinflation yet because consumers are not spending; non-spending is keeping the velocity of money low, and consequently, prices are relatively low. The problem is changing to a gold standard could have unpredictable consequences of either more deflation or hyperinflation-either way human suffering would be great.

By 1927, the loss of gold to the United States was alarming. Accordingly, in that year, Montagu Norman, the head of the Bank of England, in company with Hjalmar Horace Greeley Schacht, head of the Reischsbank...sailed for New York to try and get it back. There, in company with Charles Rist of the Banque of France, they asked the Federal Reserve to lower its interest rate, expand its loans and thus ease monetary policy. The lower interest rates would discourage the flow of money to the United States. The easier money would mean more loans, more money, higher American prices, less competition in Britain and elsewhere from American goods and easier sales by Europeans in the United States. The Americans obliged. This was the action...that is held to have helped trigger the great stock market speculation of 1927-29. The easier money went to finance purchase of common stocks instead....(Ibid., p. 207)

There are some interesting arguments of why the Federal Reserve, known affectionately as the “System,” further engaged in an easy money policy. One theory is that the Federal Reserve knew restricting easy money would not only restrict Wall Street stock market speculation, but would cause the entire pyramid of holding companies owning the stock of other holding companies downstream to collapse. It all seems so familiar. If the Federal Reserve tried to stop market speculation, the entire ponzi scheme would collapse and the Federal Reserve would of been blamed for it all. We all know the airtight refrain of the blameless speculators, “If the government had not of interfered, it all would of worked.” So as not to be the patsy, the Federal Reserve allowed the stock market to take its course...and it did. Churchill happened to be in the New York Stock Exchange on the day it happened, Thursday, October 24, 1929.

Around noon the Exchange authorities closed the visitors’ gallery. It was all too obscene. One who had been watching was Winston Churchill. In the established if unduly simple view, his return to gold in 1925, the subsequent rescue of Britain by low interest rates and easy money in New York had been the cause of it all. It would be good to believe that it was design or guilt that had Churchill on hand but it isn’t so. He only happened to be there.  (Ibid. , p. 209.)

How "real" is money?  If I

How "real" is money?  If I get your Wittgenstein connection correctly, we are dealing with the mistaking of the symbols for the substance and "thinking" about money as a hard and fast, concrete thing like "gold" is more religious or psychological than "real."  It is always about the meaning of money instead of the science of money's function in economic systems.  The problems of economic system design aside, our thinking about money almost never addresses anything other than its "morality."  The appeal of "austerity" is its morality, not its effective result.  At least, not to the non-predators.  The predators appreciate desperation as an opportunity to fatten up their own bankrolls.

Graeber and others have opened some productive paths for thought and action.  The way debt functions and its need to be forgiven when its utility has passed cannot make sense in a metaphysics of moral economics.  We are to pay our debts, of course.  Who would question the morality or integrity of that?  Precisely the point.  Some debts do not deserve to get paid off; and others require generosity rather than "bottom line" justice.  It is about the economy, what has been made and done, and it is about the meaning of that making and doing.  That meaning comes from the human and ecological integrity it produces, and to treat the damage done as the bonds that prevent that bottom line is to serve the demonic.

Batra tells us that the Age of Greed exhausts itself and that service to others is the new value of our culture in response.  Economists rarely think this broadly, but he has his focus fixed where dogma has nailed its blinders.  Finding a better way to achieve meaning and purpose than the economic man rat race ought not to be at all depressing.  While we do need to follow the money to do the diagnosis, we need to get a lot more realistic than any focus on money can produce.  It is in the nature of money.

.ren's picture
I wrote a fairly complicated

I wrote a fairly complicated response to Anti's post this morning around six am.  Just as I was about to click on "save" my little laptop decided to start a scan and that froze the computer.  Something that never happens.  Probably the best for everyone.  Gone is gone.

DRC, I know from just having read your post on Vulture Capitalism that you understand this credit/debt as money velocity that's involved with fractional banking, and that it's what was allowed by deregulation to become these Ponzi scheme derivative investments that the big banks got caught holding when the balloon popped in '07-'08 instead of representative pieces of supposed genuine wealth for collateral. As such that made the big institutions too big to fail.  Obviously some within the industry itself don't understand that or how it's come to be, or maybe facing the truth is too threatening to their world view.  More the sorrier that they are the front line spear carriers for empire and the 1% vultures who continue to eat the carrion of a dying capitalist system.  It makes communication about these very ethical and moral matters we've arrived at here so much harder to accomplish.

As Graeber points out, debt is not necessarily something to pay off in traditional cultures, but acts more like a glue that holds society together.  We don't have that debt going for us now.

Austerity is the disappearance of credit and money, hence the end of business and consumerism. And that's the result of a deflation strategy similar to Anti's mention of a return to the gold standard.  That's essentially what that idea amounts to.

What we need now is to figure out a new way to do society that involves bringing back our humanity and reviving the value of service to others and community engagement.  Moreso because we are truly at the end of growth now.  There can be stability or chaos.  But not growth.  Every time I go around the block I come back to that.  We need people who have that vision, and I suspect it will be more of us who are no longer young, like you, who get the call.

Thank you Anti for linking last week's Chris Hedges talk in Canada.  After my computer crashed this morning I got it back up and watched that.  Afterwards I realized he'd said everything and more I tried to say and so much more eloquently.

I will say this much from what I wrote that disappeared, the character in our play who most resembles Churchill would have to be Alan Greenspan.  He of course was not trying to return to the Gold Standard but he was trying to return to the Robber Baron version by removing anyone from the bridge who could steer away from the icebergs.  As Keynes might have said of him (as he said of Churchill): he had “no instinctive judgment to prevent him from making mistakes.”


The bipartisan Financial Crisis Inquiry Commission (established by Congress as part of the Fraud Enforcement and Recovery Act of 2009) released its report in January 2011. The many causal factors it highlighted include:

• Federal Reserve Chairman (1987–2006) Alan Greenspan’s refusal to perform his regulatory duties because he did not believe in them. Green–span allowed the credit bubble to expand, driving housing prices to dangerously unsustainable levels while advocating financial deregulation. The Commission called this a “pivotal failure to stem the flow of toxic mortgages” and “the prime example” of government negligence.

Heinberg, Richard (2011-06-01). The End of Growth: Adapting to Our New Economic Reality (Kindle Locations 1305-1310). Perseus Books Group. Kindle Edition.

You'll also notice the other bullet points of blame shoot the other casino capitalist measures that evolved once Raygun through Clinton presidents got through decimating Glass Steagall's protections:


• Federal Reserve Chairman (2006-present) Ben Bernanke’s failure to foresee the crisis.

• The Bush administration’s “inconsistent response” in saving one financial giant — Bear Stearns — while allowing another — Lehman Brothers — to fail; this “added to the uncertainty and panic in the financial markets.”

• Bush Treasury Secretary Henry Paulson Jr.’s failure to understand the magnitude of the problem with subprime mortgages.

• The Clinton White House’s (and Treasury Secretary Lawrence Summers’s) crucial error in shielding over-the-counter derivatives from regulation in the Commodity Futures Modernization Act; this constituted “a key turning point in the march toward the financial crisis.”

• Then NY Fed President, now Treasury Secretary Timothy F. Geithner’s failure to “clamp down on excesses by Citigroup in the lead-up to the crisis.”

• The Fed’s maintenance of low interest rates long after the 2001 recession, which “created increased risks.”

• The financial sector’s spending of $2.7 billion on lobbying from 1999 to 2008, with members of Congress affiliated with the industry raking in more than $1 billion in campaign contributions.

• The credit-rating agencies’ stamping of “their seal of approval” on securities that proved to be far more risky than advertised (because they were backed by mortgages provided to borrowers who were unable to make payments on their loans).

• The Securities and Exchange Commission’s permitting of the five biggest banks to ramp up their leverage, hold insufficient capital, and engage in risky practices.

• The nation’s five largest investment banks’ buildup of wildly excessive leverage: They kept only $1 in capital to cover losses for about every $40 in assets.

• The Office of the Comptroller of the Currency’s (along with the Office of Thrift Supervision’s) blocking of state regulators from reining in lending abuses.

• “Questionable practices by mortgage lenders and careless betting by banks.”

• The “bumbling incompetence among corporate chieftains” as to the risk and operations of their own firms. Among corporate heads at the large financial firms (including Citigroup, AIG, and Merrill Lynch), the panel says its examination found “stunning instances of governance breakdowns and irresponsibility.”

Commission members disagreed on the significance of the roles of Freddie Mac and Fannie Mae in the crisis.

The Commission has indicated that it will make criminal referrals.8

Heinberg, Richard (2011-06-01). The End of Growth: Adapting to Our New Economic Reality (Kindle Locations 1305-1310). Perseus Books Group. Kindle Edition.

I'm not going to hold my breath waiting for those criminal referrals.

Another statistic reveals the parallels between 1929 and now:

Richard Heinberg wrote:

in the US, the ratio of total debt to GDP has risen to more than 300 percent, exceeding the previous record of 290 percent achieved immediately prior to the stock market crash of 1929.22 If there is a theoretical or practical limit to debt, the US seems destined to reach it, and soon.

Remember: in a system in which money is created through bank loans, there is never enough money in existence to pay back all debts with interest. The system only continues to function as long as it is growing.23

Heinberg, Richard (2011-06-01). The End of Growth: Adapting to Our New Economic Reality (Kindle Locations 1558-1560). Perseus Books Group. Kindle Edition.

Antifascist's picture
Ren wrote..."Just as I was

Ren wrote..."Just as I was about to click on "save" my little laptop decided to start a scan and that froze the computer." I just hate it when that happens. 

Collapse At Hand - Paul Craig Roberts

.ren's picture
Antifascist wrote: Collapse

A pretty fair analysis, it covers most of what I understand and then some with some details.


Paul Craig wrote:

Everyone wants a solution, so I will provide one. The US government should simply cancel the $230 trillion in derivative bets, declaring them null and void. As no real assets are involved, merely gambling on notional values, the only major effect of closing out or netting all the swaps (mostly over-the-counter contracts between counter-parties) would be to take $230 trillion of leveraged risk out of the financial system. The financial gangsters who want to continue enjoying betting gains while the public underwrites their losses would scream and yell about the sanctity of contracts. However, a government that can murder its own citizens or throw them into dungeons without due process can abolish all the contracts it wants in the name of national security. And most certainly, unlike the war on terror, purging the financial system of the gambling derivatives would vastly improve national security.

At the same time that ought to cancel the trillions in bailouts from future taxes we may never have, because they were meant essentially to cover the bankers' collective asses.

What's never mentioned is the basis for fractional reserve-based money pressure in the first place, and that's to keep funds growing to fuel infinite growth, another Ponzi scheme invention of modern capitalism, and one the libertarians and their fetish with laissez faire free markets are especially prone to ignore.  But they are not alone of course.

The real problem for this began as the Limits to Growth reared its inconvenient point of truth and the financial gangsters went on full frontal attack against anyone who whimpered even the slightest suggestion that corporate person's Truth, Justice and the Red White and Blue free enterprise system might be the problem.  They did this with the collusion of their corporate siblings who owned the presstitute (love that one Paul, is that yours?).

If the economy can't grow as it has, then debt can't grow.  We would also therefore reach all these other limits, including a limit to debt. But at least with Robert's solution the big bad deep dark wolf of depression might be held off a bit.  We may not have to be pushing wheel barrows of money into a grocery store to buy a loaf of bread, or face the yawning bottomless pit of deflation.  Perhaps government could provide a financial steadying macro force as we collectively invent a way to live that doesn't involve infinite capitalist or any other growth.


Antifascist's picture
First time I came across the

First time I came across the term "presstitute." I don't known who coined the term. And speaking of coins and money, my favorite economist. 

The Age of Uncertainty: The Rise and Fall of Money by John Kenneth Galbraith

The Age of Uncertainty: The Mandarin Revolution by John Kenneth Galbraith

.ren's picture
Wonderful  history lesson. 

Wonderful  history lesson.  But lessons from history are always ongoing, so it's not likely to be up to date.

At about 32 minutes into The Age of Uncertainty: The Mandarin Revolution, Galbraith summarizes his angst at facing the need for a personal paradigm shift in 1936 after reading Keynes' The General Theory of Employment, Interest, and Money, which he'd introduced at 29:46 into the episode.  Keynes' book of course marks the shift in attitudes that so upsets conservatives and libertarians today, and which brought about such still reverently worshipped tomes as Hayek's Road to Serfdom ten years later.  Coincidently that was about the same time the much more sophisticated and anthropologically broad minded view of economic and social history was published by another Austro-Hungarian, Karl Polanyi, The Great Transformation: Political and Economic Origins of our Time. This of course everyone participating on this thread knows because we've pulled from it from time to time.  But I thought it worth mentioning as context here.

I see this whole series -- how many hour long episodes? I see fifteen -- was done in 1977.  That was five years after Limits to Growth came out, which coincided roughly with the U.S. Peak Oil event, and a couple of years before the Reagan Revolution along with asinine books from neoconservative/libertarian-oriented economists like the late Julian Simon:

Richard Heinberg wrote:

The near-religious belief that economic growth depends not on energy and resources, but solely on increasing innovation, efficiency, trade, and division of labor, can sometimes lead economists to say silly things.

Some of the silliest and most extreme statements along these lines are to be found in the writings of the late Julian Simon, a longtime business professor at the University of Illinois at Urbana-Champaign and Senior Fellow at the Cato Institute. In his 1981 book The Ultimate Resource, Simon declared that natural resources are effectively infinite and that the process of resource substitution can go on forever. There can never be overpopulation, he declared, because having more people just means having more problem-solvers.

How can resources be infinite on a small planet such as ours? Easy, said Simon. Just as there are infinitely many points on a one-inch line segment, so too there are infinitely many lines of division separating copper from non-copper, or oil from non-oil, or coal from non-coal in the Earth. Therefore, we cannot reliably quantify how much copper, oil, coal, or neodymium or gold there really is in the world. If we can’t measure how much we have of these materials, that means the amounts are not finite — thus they are infinite.53

It’s a logical fallacy so blindingly obvious that you’d think not a single vaguely intelligent reader would have let him get away with it. Clearly, an infinite number of dividing lines between copper and non-copper is not the same as an infinite quantity of copper. While a few critics pointed this out (notably Herman Daly), Simon’s book was widely praised nevertheless.54 Why? Because Simon was saying something that many people wanted to believe.

Heinberg, Richard (2011-08-09). The End of Growth: Adapting to Our New Economic Reality (Kindle Locations 3243-3257). Perseus Books Group. Kindle Edition.

So I'm wondering, since I don't have a 15 (or possibly more?) hour block to spare right now if Galbraith gets into anything concerning growth restrictions in the Keynesian debt to growth Ponzi scheme?  I mean, after all, it was 1977 and Limits to Growth had made a big and controversial splash with plenty of ripples rippling across the world economic pond by then.

Antifascist's picture
Ren wrote, Quote:So I'm

Ren wrote,

So I'm wondering, since I don't have a 15 (or possibly more?) hour block to spare right now if Galbraith gets into anything concerning growth restrictions in the Keynesian debt to growth Ponzi scheme?  I mean, after all, it was 1977 and Limits to Growth had made a big and controversial splash with plenty of ripples rippling across the world economic pond by then.

Galbraith doesn’t address the question of growth restrictions in the TV documentary “The Age of Uncertainty,” however he does challenge the assumption of high level of production in his 1958 book, “The Affluent Society.” In those days production was measured in Gross National Product (GNP).

Chapter X, The Imperatives of Consumer Demand.

Both the ancient preoccupation with production and the pervasive modern search for security have culminated in our time in a concern for production....A high level of production has become the keystone of effective economic security. There remains, however, the task of justifying the resulting flow of goods. Production cannot be an incidental to the mitigation of inequality or the provision of jobs. It must have a raison d’etre of its own. At this point, economists and economic theory have entered the game...The result has been an elaborate and ingenious defense of the importance of production as such. It in is a defense which makes the urgency of production largely independent of the volume of production. In this way, economic theory has managed to transfer the sense of urgency in meeting consumer need that once was felt in a world where more production meant more....

Although the economic theory which defends these desires and hence the production that supplies them has an impeccable (and to an astonishing degree even unchallenged) position in the conventional wisdom, it is illogical, and meretricious and, in degree, even dangerous. (John Kenneth Galbraith, The Affluent Society, Mentor, 1958, p.112).

Galbraith challenges the conventional wisdom of economic orthodoxy in the widely accepted doctrine of consumer demand—Ricardo’s theory of consumer demand as production for security.

Theory of consumer demand

  1. When man has satisfied his physical needs, then psychologically grounded desires take over...The concept of satiation has very little standing in economics. It is held to be neither useful nor scientific to speculate on the comparative cravings of the stomach and the mind.
  2. “...wants originate in the personality of the consumer or in any case, that they are given data for the economist. The latter’s task is merely to seek their satisfaction. He has no need to inquire how these wants are formed. His function is sufficiently fulfilled by maximizing the goods that supply the wants. (Ibid., p.114.)

In the same book Galbraith’s counter arguments highlight the market force of corporate advertisement in the directing the “need” of high-level production of consumer goods.

Chapter XI, The Dependence Effect

“If the individual’s wants are to be urgent, they must be original with himself. They cannot be urgent if they must be contrived for him. And above all, they must not be contrived by the process of production by which they are satisfied. For this means that the whole case for urgency of production, base on the urgency of wants, falls to the ground. One cannot defend production as satisfying wants if that production creates the wants. (Ibid., p. 121.)

He defines this relationship between wants and production as,“...the dependence effect means that it grows out of the process of production itself.” (Ibid., p.126)

Galbraith brings to the uncritical and tautological concept that a high GNP is good by asking the question of the quality of life as measured against the quantity consumer goods production, “In technical terms, it can no longer be assumed that welfare is greater at an all-round higher level of want production than at a lower one. It may be the same.” (Ibid., p.127) 

Galbraith directly address the question of production and the Environment in his other book, Economics & The Public Purpose, “Chapter 28, The Environment,” Mentor, 1973, p. 275. He comments and makes suggestions of the three solutions for the damage production inflicts on the environment: 1. Spend public money to clean up pollution. 2. Identify uninhibited growth as the problem and propose limits to growth. 3. Continue economic growth, but specify by legislation the parameters within which it can occur. 

To the question of the production of goods and the quality of life, there is one powerful scene that says it all in his documentary, “The Age of Uncertainty: The Fatal Competition,” at 40 minutes, 54 seconds. This is surplus production—to requested specifications.

.ren's picture
I appreciate your effort to

I appreciate your effort to provide that.  He apparently was as up on the problem as most at the time.  Clearly his ideas weren't taken any more seriously than Limits to Growth's were.  And now Republican neoliberalism is touching us all. Here's yet another dire prediction that's come out in the past few days:

Study predicts imminent irreversible planetary collapse

The article links to a study in a professional science journal, Nature, which I can't afford at the moment so I'll go by the article's summary (written by one of its authors) for now:

Arne Mooers (one of the authors of the study) wrote:

In Approaching a state-shift in Earth’s biosphere, a paper just published in Nature, the authors, whose expertise spans a multitude of disciplines, suggest our planet’s ecosystems are careering towards an imminent, irreversible collapse.

Earth’s accelerating loss of biodiversity, its climate's increasingly extreme fluctuations, its ecosystems’ growing connectedness and its radically changing total energy budget are precursors to reaching a planetary state threshold or tipping point.

Once that happens, which the authors predict could be reached this century, the planet’s ecosystems, as we know them, could irreversibly collapse in the proverbial blink of an eye.

As to the causes, the article sums them up as follows:


They reviewed scores of theoretical and conceptual bodies of work in various biological disciplines in search of new ways to cope with the historically unprecedented changes now occurring on Earth.

In the process they discovered that:

Human-generated pressures, known as global-scale forcing mechanisms, are modifying Earth’s atmosphere, oceans and climate so rapidly that they are likely forcing ecosystems and biodiversity to reach a critical threshold of existence in our lifetime.

“Global-scale forcing mechanisms today “include unprecedented rates and magnitudes of human population growth with attendant resource consumption, habitat transformation and fragmentation, energy production and consumption, and climate change,” says the study.

Human activity drives today’s global-scale forcing mechanisms more than ever before. As a result, the rate of climate change we are seeing now exceeds the rate that occurred during the extreme planetary state change that tipped Earth from being in a glacial to an interglacial state 12,000 years ago. You have to go back to the end of the cataclysmic falling star, which ended the age of dinosaurs, to find a previous precedent.

I'm guessing the authors of the study are likely to have as much influence now as Galbraith had then:


The authors recommend governments undertake five actions immediately if we are to have any hope of delaying or minimizing a planetary-state-shift. Arne Mooers, an SFU biodiversity professor and a co-author of this study, summarizes them as follows.

“Society globally has to collectively decide that we need to drastically lower our population very quickly. More of us need to move to optimal areas at higher density and let parts of the planet recover. Folks like us have to be forced to be materially poorer, at least in the short term. We also need to invest a lot more in creating technologies to produce and distribute food without eating up more land and wild species. It’s a very tall order.”


Antifascist's picture
On the program, Conversations

On the program, Conversations with Great Minds, Thom Hartmann interviews Lamar Waldron about his new book Watergate: The Hidden History to dispel the myths, or more correctly disinformation, about the Watergate burglary committed 40 years ago by Nixon’s henchmen. Waldron presents documentation showing the so-called “third rate burglary” was in fact one of four burglaries carried out by a mafia involved CIA which included the Chief of Western European operations, E. Howard Hunt, agent James McCordFrank Sturgis (AKA Frank Angelo Fiorini), Virgilio González, agent Bernard Barker, and Eugenio Martínez. Eventually 70 persons were indicted or found guilty for the Watergate break-in. And what where the Nixon directed agents looking for? A 90 page dossier recorded Vice-President Nixon’s attempts to assassinate Fidel Castro starting in September 1960 until 1972 and evidence of his association with mobsters like John RoselliSanto TrafficanteMickey Cohen and Bebe Robozo. Robozo was known as the “bag man” for Nixon who funneled millions of dollars from the mafia for elections, and as bribes to release the former Teamster President Jimmy Hoffa from prison. Nixon was an evil genius of corruption best exemplified by his ability to run dirty trick election campaigns, media disinformation, and illegal campaign funds. Nixon once won both the Democratic and Republican primaries at the same time using these tactics. In an effort to immunize himself from criticism for the attempted assassinations of Castro, Nixon directed CIA agent Hunt to fake a cable implicating former President Kennedy of trying to kill a Vietnam leader. It is a decades long story of corruption and betrayal of the American people’s trust and values.

I remember those years being so puzzled by the political event of that time. It seems unbelievable that the American government could be so corrupt. One hoped that these charges were just more election disinformation, that it was hateful gossip, or some other distortion of political events. One’s natural tendency was to give people and government the benefit of the doubt because, being so young, I had not become deeply cynical of publicly respected government officials, especially of a former Vice President of the United States. But then one could witness the actions of government that shocked the conscience: the Kent State shootings, the brutality of war, the thugs beating up students on Wall Street, and then finally the Watergate story that at first appeared to fade away. It took years to understand what was happening, or should I say past tense, what happened. The delay between events and understanding their historical meaning has only increased since that corrupt administration. The first error many people made after Watergate was to believe this level of criminality was gone, that the guilty were punished, and now the country would move forward never to see that disgraced political organization ever again. Actually, the corruption did not stop, but instead it went deeper underground and became even cleverer in its deceptions. Unbelievably, that same Nixonian political organization would re-emerge later as the Reagan administration as if nothing happened, and even reincarnate again in the later Bush administrations. 

This political culture of extreme corruption is multigenerational and even multinational. Reagan appeared in 1980 as something new from the past yet after gaining power by the same Nixonian manipulating electoral methodology, old familiar names started to re-emerge: Donald Rumsfeld, David Gergen, Alexander Haig, Frank Carlucci, Pat Buchanan, Larry Speaks, George Shultz, Roger Ailes, and many more.  The quality of governance promised from a reduction in the quantity of government did not improve following years of an expanding military industrial complex, rolling recessions, bolder CIA operations, and covert foreign wars abroad. The zombie administration lives on even if some of its victims, or citizens, did not. 

Just this little slice of political American history is long and complicated. Listing all these events would be a massive undertaking: even if they could all be documented, the depraved moral content, civil lessons, existential meaning and human tragedy would be lost on too specific deviate personalities in their historical particularity. “The truth is the whole,” especially when it comes to understanding history. Historical facts can obscure the Gestalt of an era. Myth is able to capture universal understanding: historical factual data, even when it is correct, needs interpretation to be meaningful.  The mythological story form abstracts from the particulars of history to reach deeper into the realm of human moral experience. 

In 1936 Orwell went to Spain to fight Franco, the German fascists, and their Italian allies during the Spanish Civil War. Orwell later wrote to expose the propaganda that the Communists, Leftists, and Conservatives engaged to stop any real revolutionary changes in Spain. He had seen revolutionary political forces work themselves out in a chaotic way in Spain with tragic results. Orwell only found one person in Britain who would publish his Spanish Civil War essay. Orwell was also critical of the corrupt Russian Stalinist movement. Instead of writing an exact factual history of his experiences in Spain and his knowledge of Russia’s Stalinism, he presented his insights of violent revolutions waged by corrupt leadership into a book entitled, “Animal Farm: A Fairy Story.” The first four publishers refused to publish this “fairy story” after consulting the British Ministry of Information. Britain was trying to hold together an alliance with America, and Russia against Germany and feared Orwell’s Aesopian fable would offend the Russians. Evidently, Orwell’s talking animals were saying too much. “Animal Farm,” was eventually published in 1945 as the political allegory of its era.  

What “fairy story” would capture the truth of the recent history of our political situation today? After listening to Lamar Waldron’s interview, the story that comes to mind is a novel written by Ira Levin in 1967 entitled, “Rosemary’s Baby.” It is a political allegory and modern horror story. The story is about a multigenerational satanic coven that conspires to rape and impregnate Rosemary with Satan’s offspring. Although it does not seem so at first, Polanski’s 1968 film draws eerie parallels to our times by subtly bringing to mind through its symbolic images philosophical questions of conformity, exploitation, self-identity, atheism, and transformed consciousness. I was not sure if anyone had interpreted this film as a political allegory before and after some research found at least one essay by Elaine MacIntyre. I want to examine some of her thematic insights and add a few of my own.

Antifascist's picture
The setting is a Manhattan

The setting is a Manhattan Gothic style apartment building called “The Bramford” located in Central Park West and a newlywed 1960s couple. The post-honeymoon tenants, Rosemary and Guy Woodhouse, take up residence on the seventh floor. Guy is an ambitious, but unemployed actor. His unemployment bothers him greatly even to the point that he attempts to present himself as a doctor to Mr. Nicklas who is showing the vacant apartment. Guy is fundamentally competitive, dishonest, and egoistic. Rosemary is originally from Omaha, Nebraska and out her fundamental honest openness reveals Guy’s real occupation and then innocently volunteers personal information of their plans to have a baby. So there is a basic conflict of generational style: a modern couple in a Gothic setting representing a different ethos from the couple’s modernity. Later, Rosemary’s friend Edward "Hutch" Hutchins reveals that the Gothic building has a sorted history of association with a death of an infant, cannibalism of children, and witchcraft that stretches back 50 years. During the 1890s Adrian Marcato lived in Bramford and was known to practice witchcraft. Through out the story Hutchins periodically provides historical context and insight to Rosemary of her dangerous situation. The standard of truth in this story is knowledge of the past: truth is remembrance.

Bramford is a small urban community representing modern society. Rosemary and Guy live next door to a much older couple Roman Castevet and his wife Minnie. The Castevets are friendly neighbors. Minnie is funny but nosey, and Roman a bit more dignified and even has a professorial presence. He boosted, "You name a place and I've been there...I'm seventy-nine, and I've been going one place or another since I was ten. You name a place, and I've been there." Their presence is so relaxed and disarming of any suspicions that the Woodhouse couples give out very personal information. Rosemary meets another woman resident in the building’s basement laundry room named Terry Gionoffrio who in conversation confessed to being a former homeless drug addict and that the Castevets generously allowed to room with them. Gionoffrio tells Rosemary how grateful she is to the Castevets for taking her in and shows a good-luck charm filled with a smelly herb they gave her.

It is difficult to pinpoint the very moment that Rosemary sensed that something was not right in the world she lived. The warning signs were not even signs, but isolated particular events that do not point beyond themselves to any greater meaning—they just occurred and it was impossible to understand the events in isolation of a larger context to anything else. Appearance is not reality: appearances are most often disarming in its mundane everyday character. Historical memory is what provides meaningful context. Yet, without any context Rosemary still had access to her inexpressible intuitive feelings. The first clue of trouble could have been the unfinished dissenting note Rosemary found written by Ms. Gardenia, the former apartment resident and herbalist who died in a coma, which said, "I can no longer associate myself...." At another time Rosemary felt uncomfortable in the basement laundry room because a dead infant wrapped in newspaper was found there 50 years earlier, which prompted Gionoffrio to show her protective charm. Another subtle, but strange experience occurred when Rosemary heard chanting coming through the decorative wallpapered wall of her bedroom from another apartment. Again, these strange occurrences happen in the comfortable surrounding of Rosemary’s personal life rendering them disconnected and non-threatening. Meaning and understanding only come after historical reflection on experience.

The rapid sequence of coincidental events that follow is the only other clue of some conspiracy of purpose against her. After the chanting incident, during another evening, Guy and Rosemary returned to their apartment and found Terry, the girl that roomed with the Castevets, lying dead in a pool of blood outside the apartment building. By coincidence Roman and Minnie appear from their evening walk. Roman convinces the Woodhouse couple with a coherent explanation of Terry being depressed and must have committed suicide by jumping off the building. There are other deaths in the story that all seem natural, but unusual in they are all involved in some kind of dissenting action—or knowledge. Terry’s dead has no further explanation in the story, and lacks any evidence of conspiracy. We can only speculate that Terry realized her fate at the hands of the coven to propagate its cult and was killed, or she killed herself. This ambiguity in the question of homicide, or suicide as cause of death accompanies all the story’s deceased characters.

A few days later Minnie show up at Rosemary’s door to invite them over to her apartment for dinner that evening. Rosemary’s perception of the Castevets is distorted and symbolized in the film showing Minnie’s face viewed by Rosemary through the doors fish-eye peep-hole. Again, the theme that everyday appearances are distortions of a false world remains throughout the film. Guy’s audition for a Broadway play is rejected that same day, but he attends the Castevets dinner party in spite of his failure.

At the dinner three issues are discussed; Rosemary’s reveals her plan to become pregnant, the Catholic Church, and Guy’s career as an actor.  It is Rosemary’s naive honestly and willingness to give up her privacy that makes her a target of the coven. All the characters the coven destroys or injures had a personal item taken from them like a glove or tie giving the coven power over its subject.

The Pope’s visit to Manhattan is brought into the dinner conversation:


Roman: No Pope ever visits a city where the newspapers are on strike.
Minnie: I heard he's gonna postpone and wait till it's over.
Guy: Well, that's show-biz.
Roman: (chuckling with his wife) That's exactly what it is. All the costumes or rituals, all religions.

Rosemary is nominally a Catholic. Although Guy might be an atheist, Roman’s beliefs are not so simple. Roman really isn’t an atheist. Roman is anti-Christian, but not anti-religious. His criticism is essentially that religion is hypocritical—not that it is false. “Hypocrite” is from the Greek word “hypokritēs” which literally means, “actor.” Roman’s nominal atheism is strategic as an antithetical ideological position against Catholicism, but he is as religious as any Catholic Christian. Roman is anti-Christ, not atheistic. This is why he is interested in the Catholic Rosemary. At one point in the film Rosemary is in the doctor’s office and see a Time Magazine (an actual published edition) with the title “Is God Dead?” The real conflicts of religion in society isn’t the superficial debate of atheism against theism: by tautologous definition “God” could not die, but rather the real questions are about competing cults of religion. However, the media carries on a superficial debate about God instead.

After dinner Rosemary and Minnie wash dishes while Guy and Roman talk privately. Guy and Roman’s actual conversation is not shown because the film’s perspective is from Rosemary’s limited perception of events. This leaves the viewer having to speculate on what the two men said, at least until the story’s end. In Alfred Hitchcock’s tradition of cinematography the most violent action is left to the audience’s imagination and this is by far the most morally reprehensible act imaginable in the film. Guy agrees to join the coven and help manipulate Rosemary into their evil plot in exchange for success as an actor. In an unbelievable act of betrayal as Rosemary’s husband--an act she could never have rationally anticipated. Guy made a deal with the Devil to sacrifice Rosemary for their ultimate goal of continuing the coven’s existence. Those we trust the most, whether in familial relationship or public life, have a greater capacity to disarm our defenses and turn us over to powers that otherwise could never have reach us. Guy represents the ideal person susceptible to commit such an act of betrayal. He is the competitive unfettered privatistic egoist living the advantage-oriented life style of the obedient careerist whose ultimate concern is only consumption and leisure.

At one point in the film while Rosemary hangs curtains she sits down at the television to watch Guy acting the role of a customer in a Yamaha commercial. Rosemary wears the latest Vidal Sassoon hairstyle and is consumer-minded like her husband. These images symbolize their vulnerability, as with all of society, to market manipulation and conformism. Rosemary respects and trusts authority figures like her doctors, her husband, and the older father figure Roman Castevets. The values and norms she holds dear are turn around to work against her as tools of manipulation and exploitation—even her desire for the creative and productive energy of motherhood. In one scene, she discovers a door leading from her apartment to the apartment next door, but instead of locking it she leaves it unsecured.

The way in which she unblocks the secret doorway leading from her apartment into the Castevets' can be seen as symbolic of this deliberate, artless openness: rather than blocking off this gateway to hell, she papers it prettily with gingham. (Rosemary’s Baby, Elaine MacIntyre)

Conformism negates the possibility of a critical attitude. She is propagandized, drugged and sadistically raped. She submits to Dr. Abraham Sapirstein’s advise to ignore her pregnancy pain and dutifully takes the milkshake concoction given to her. She lacks conviction of any larger issues of life, and is instructed by Dr. Sapirstein not to read books on caring for her pregnancy. Guy tries to keep her isolated from her community of liberal minded friends. He called them “bitches.” When Hutch attempts to warn Rosemary of danger with a book on witchcraft left to her after his mysterious death, Guy throws it away. Historical knowledge impedes the uncritical conformist mind. She clings to a protective charm given to her that formerly belonged to Terry. The charm represents the coven’s desire for total domination over a fearful victim whose faith in the charm for security only adds to the coven’s invisible hand of power.

She struggles of self independence wanting at first to take natural herbs for her pregnancy, but later wants conventional pills. Such conflicts were desublimated expressions of her inner struggle against the repressive forces around her.  In spite of all the forces working against her, the pregnancy brings about a gradual transformation of self-consciousness. Her pre-rational intuitions assist her with seeing into and beyond the juxtaposition of daily objects of mundane ordinariness. There appears a constellation of meanings from involuntary memories that form a Gestalt insight of her situation.

The disintegration of Rosemary's sense of self is clearly marked by the recurring motif of the mirror in the film, a symbol consistently used in art both for self-knowledge and for alienation from the self.(2) The first time we see Rosemary looking in the mirror she is filled with confidence: 'Tannis, anyone?' she jokes to herself, holding up Minnie's talisman before sensibly hiding it away in a drawer. Once she is pregnant, however, she becomes anxious to confirm her own identity, conscious that something within her has fundamentally changed: 'You're pregnant,' she whispers to her reflection in a shocked undertone. Later on, her tired, haggard image intrudes shockingly on her contemplation of a nativity scene in a shop window, an almost unrecognizable stranger preventing her from aspiring towards the icon of the ideal mother. Finally, when she catches sight of herself gnawing on a piece of raw liver, her reflection has become so alien that it makes her physically sick.(3) (Ibid., p. 1)

There is a term for this process.

Anagnorisis (/ˌænəɡˈnɒrɨsɨs/; Ancient Greek: ἀναγνώρισις) is a moment in a play or other work when a character makes a critical discovery. Anagnorisis originally meant recognition in its Greek context, not only of a person but also of what that person stood for. It was the hero's sudden awareness of a real situation, the realization of things as they stood, and finally, the hero's insight into a relationship with an often antagonistic character in Aristotelian tragedy. 

A false consciousness is a fragmented consciousness. Events that were earlier interpreted as coincidental, irrational, and conspiratorial no longer organized themselves along to the declared boundaries of meaning and reality. There is a reordering of her world. The Greek word "Cosmos" (κόσμος) literally means "order," or "organize."  Her personal subjective feelings challenged the satanic Dr. Sapirstein’s expertise. She refused to completely consume the spiked herbal drink before being raped during which she gained semi-consciousness and shouting out her realization, “This is really happening!” The occult book on witchcraft given to her by Hutch triggered a paradigm shift that gave coherent meaning to all the prior events in her false world. 

At the end of the story Rosemary gives birth to her monstrous nonhuman progeny, Adrian. The coven has won. She could no longer be deceived and did not believe the child had died at birth as she was told. She confronts the coven with a knife in hand which symbolically represents her ability to see through all previous deceptive rationalizations. But her ability to discern reality from fantasy comes too late. Roman offers her the role as the caring mother for Adrian. She has to make a decision to take up the role of the competent mother to regain some sense of self-identity and purpose. Rosemary says to the coven member, Laura-Louise, rocking the crying baby’s crib, “You're rocking him too fast. That's why he's crying.” Rosemary begins to rock the cradle instead. She embraces the role of motherhood. In the end, her Calvinistic ascetic ethic wins over all other norms. Once again the highest personal value that provides her with some sense of self-competency works against her with the sheer momentum of habitual obedience. This story has no happy ending.

Antifascist's picture
Robert Mundell, evil genius

Robert Mundell, evil genius of the euro

For the architect of the euro, taking macroeconomics away from elected politicians and forcing deregulation were part of the plan

Antifascist's picture
Thom was speaking about how

Thom was speaking about how Plutocrat Mitt Romney is going to re-invent himself after taking contradictory stands on a number of issues: bailing out GM, Bin Laden, Pakistan, Iraq –the list is unending. Romney is not an unknown personality type. There is a big disconnect between capital in business and industry. Romney only knows capital business; capital industry is a something he does not know anything about.

Romney is American aristocracy; another world that we have no concept just as Romney has no concept of life for ordinary Americans. He has no technical abilities; lacks broad knowledge of life and society; would be unable to even shop and pay with cash for groceries; lacks knowledge of even the most fundamental principles of economics. What Mitt Romney has that separates him from most Americans is unlimited assess to bank credit. This is how he made his fortune. His Pirate Equity business is a conduit of liquidity from banks that enabled Bain Capital to strip assets from healthy capital goods companies.

The complete delinking of capital from ‘capital goods’ is well illustrated by comical extremes. In the summer of 1928, the world’s largest oil companies signed the secret Red Line Agreement, parceling the Middle East between them for years to come. To celebrate the occasion, the architect of the deal, Calouste Gulbenkian, or ‘Mr Five Percent’ as he was otherwise known, chartered a boat to cruise the Mediterranean with his daughter Rita:

Off the coast of Morocco, he caught sight of a type of ship he had never seen before. It looked very strange to him, with its funnel jutting up at the extreme stern of the long hull. He asked what it was. An oil tanker, Rita told him. He was fifty-nine years old, he had just made one of the greatest oil deals of the century, he was the Talleyrand of oil, and he had never before seen an oil tanker. (Yergin 1991: 206)

This illustration is not an outlier. Currently, roughly half of all capitalist assets are owned indirectly through institutional investors such as pension and mutual funds, hedge and sovereign funds, insurance companies, banks and corporations. The ultimate owners of these assets, whether big or small, exercise little voice in the management of the underlying production processes. For the most part, they merely buy and sell shares of these assets and collect the flow of dividends. Often, their diversification is so extensive that they don’t know exactly what they own. And that characterization is by no means limited to portfolio owners. Many of the largest direct investors – including the capitalist dons whose names populate the Forbes listing of the superrich – are equally removed from any industrial dealings. Most of their energies are spent on the high politics of sabotage and the fine art of cutting and pasting assets through endless deals of divestment and merger – activities that they commonly carry out, just like Gulbenkian, without ever seeing a single ‘capital good’. (Capital as Power. A Study of Order and Creorder, Nitzan, Jonathan and Bichler, Shimshon, 2009, page 230.)

douglaslee's picture
A Vulture's Picnic is a good

A Vulture's Picnic is a good documentary on what is basically the Bain model applied to sovereign states.

Noami Klein, Greg Palast, Dean Baker, are among others contributing. Enron is referenced with their internal fraud audio recorded. 'Ha ha ha, you have to give back some money you took from grandma? Ha ha ha'

btw the real title is Catastroika, but Palast mentioned a Vulture's Picnic and it sounds about right.

Antifascist's picture
Douglaslee, That is an


That is an excellent video Catastroïka — Privatisation Goes Public recounting international Neo-Liberal privatization over the last thirty years using secrecy, bribery, debt, and organized violence. This international plague originated from neo-fascists Friedrick von Hayek and Milton Friedman at the University of Chicago. No wonder there are no arrests of Wall Street bankers for corporate control fraud which heaped debts on individuals, industry, and municipalities to induce bankruptcy, takeover, merger, and then privatization.

Elections are just a diversion from this process of privatization that has occurred in Chile’s Pinochet who imported Neo-Liberal economists from the University of Chicago, Britain under Thatcher, Russia under Yeltzen, France by Jaques Chirac, Greece under Papandreou, Turkey, Egypt under Mubarak, USA under Reagan, and many other countries.

In Germany The Eurosaal (The Euro Room), housed in the same building constructed by Herman Goering --the very room Luftwaffer raids were planned against Britain--is today headquarters for privatizing Europe and planned Pirate Equity asset stripping raids. Not once has privatization been addressed in debate by Democratic or Republican candidates during this American election cycle because they know privatization can be stopped and then reversed.

Japanese politician Toru Hashimoto is currently campaigning on Neo-liberal themes of “do-it-yourself” individualism, scapegoating public employees, and  “privatization” in the on going emergency of Fukushima—a national catastrophe to stage Japan’s version of the Shock Doctrine. Hishimoto gives lip service to Japan’s antinuclear populist wave, but he is just using Japanese discontent as a platform for introducing Neo-liberal policies of privatization, which if adopted by Japan will be a worst catastrophe than Fukushima itself. Neo-Liberalism and Democracy are antithetical ideologies. In all countries that Neo-Liberal policies are instituted neo-fascist groups have emerged with greater power.

A comprehensive view of this ongoing parasitic privatization of public transportation systems, water resources, education, and utility systems is completely absent from the mainstream media: the process of infection is gradual and invisible even to a host population---until it is too late. National media stations owned by the same private corporations bidding for public assets only cover events like a daily journal leaving out broader continuity from which to construct a narrative of this national privatization takeover. Each case of privatization is covered in isolation as separate debt default incidents requiring selling off public assets to raise emergency funds—like burning one’s furniture to keep the house warm.

douglaslee's picture
Thanks Anti, as I was

Thanks Anti, as I was watching the results of the privatizing of the trains and water services I couldn't help but make a comparison to our privatized healthcare, all of them are dysfunctional. We started dysfunctional and they sought to achieve the same thing from a successful beginning. Romney wants to do it to every sector. Issa is trying for the postal system now. Social Security will be their first target. Our public roads and infrastructure look like the neglected water service. Why maintain anything when you can wait until it's broken, even break it yourself like enron did to CA energy sector.   

This film might make a good addition to house party networking like Gasland had.

Karolina's picture
Antifascist wrote:Hishimoto

Antifascist wrote:
Hishimoto gives lip service to Japan’s antinuclear populist wave, but he is just using Japanese discontent as a platform for introducing Neo-liberal policies of privatization, which if adopted by Japan will be a worst catastrophe than Fukushima itself. Neo-Liberalism and Democracy are antithetical ideologies. In all countries that Neo-Liberal policies are instituted neo-fascist groups have emerged with greater power.

A comprehensive view of this ongoing parasitic privatization of public transportation systems, water resources, education, and utility systems is completely absent from the mainstream media: the process of infection is gradual and invisible even to a host population---until it is too late. National media stations owned by the same private corporations bidding for public assets only cover events like a daily journal leaving out broader continuity from which to construct a narrative of this national privatization takeover. Each case of privatization is covered in isolation as separate debt default incidents requiring selling off public assets to raise emergency funds—like burning one’s furniture to keep the house warm.

Anti, I have just discovered this thread so please forgive me if you have already answered this somewhere earlier—WHAT CAN BE DONE?

This truly is like a virus infecting everyone and everything thoughout the global population, affecting every person and every country and every industry and all else—each according to their own situation. But in reality, it is only carried in individual human beings' MINDS, because it is purely an idealogical phenomena.

Being aware of neo-liberalism really seems like watching a very slow and long science-fiction horror film. It is frightening and shows how neo-liberalism makes an enemy of humanity not only out of every fascist, but also out of every happily ignorant person....and every demoralized, resigned person, as well.

"Go along to get along." is a particularly evil mantra on this planet at this time.

.ren's picture
The level of scholarship on

The level of scholarship on this thread in its critique of the inhumanity of the dominant political and economic system of our day -- neoliberalism -- is impressive.  Is it linked at this deep structural level to an equally inhumane political and economic system that proved itself to be such during a similar time in the thirties and forties?  Hard to ignore the evidence. 

I think you've made your proof Anti. I just don't know who's listening. Unfortunately, such a level of proof requires a recipient educated class of interested intellectuals in order for a discussion to evolve. 

Endless proof piled on proof goes nowhere in an existential environment when no intellectual class exists to in some way bring this level of intellectual argument to the public and the powerful political actors who can, potentially, end these private power trends we are seeing everywhere including post after post over the past two years on this thread.  Neoliberalism is more than touching, it is now potentially smothering us all.  Especially the corporate privatization of everything public, including our very genes and the genes of the food we eat.  The spark of disaster in the Gulf of Mexico that set off this thread is history, we are moving on to fracking the nation, tar sands, to destroying the fragile Arctic eco systems..

When I read Hedges' The Death of the Liberal Class and brought some arguments from that book to this thread more than a year ago now, I realized what he was saying was that intellectual balancing force in society is dead and gone.  I'm right now visiting a friend of mine who teaches in the public schools and still maintains some connections with corporate media.  I've watched the first three episodes of what my friend considers to be one of the more intelligent series concerning our media and politics to come around in this atmosphere: HBO's The Newsroom. Once again I'm being convinced the corporate cable and other versions of media is the final peg in the intellectual death of this modern society.

After listening to Jeff Daniel's "apology" to the masses for media's failure early on, then watching the series move to its superficial portrayal of empty symbolic characters doing the usual power struggle meaninglessness the corporate media will tolerate (including the celebration of Jane Fonda's ironic portrayal of a powerful media mogul), I think it's obvious after three episodes that no one is going to see anything brought out in that series that will come close to the much needed revealing analysis presented on this thread.  What I've seen so far barely qualifies as de rigeour clichés.  It's more like a reassurance to the rich and the powerful: Not to worry, the National myths will remain intact. The smart liberals, progressives and Democrats will be entertained.

The liberal mediatory intellectual horse is dead.  No one's going to bother to make an HBO series featuring the political critiques of a Howard Zinn or a Noam Chomsky.   Such subjects cannot qualify as the expected spectacle now presented as news.  Few people could even understand their perspective.  

Meanwhile the human political world is accelerating to its demise.  Rather than collectively searching for ways to minimize the impending disaster, we may soon see some of the worst examples of authoritarian control measures combined with psychopathic human behavior that our species has yet produced. 

Privatization is an indicator of that trend.  A tiny minority understand it, a few more may feel some concern, but they shrug their shoulders and move on trying to get their kids educated so they can hopefully live that good life that so many still believe is their right.   But many, many more have returned to the mentality that produces reactionaries like a Joseph McCarthy who managed to become a popular figure in the wake of the most glaring example of where this current trend can potentially take our global societies yet.  As Chris Hedges points out in his latest piece:

Chris Hedges wrote:

Human societies see what they want to see. They create national myths of identity out of a composite of historical events and fantasy. They ignore unpleasant facts that intrude on self-glorification. They trust naively in the notion of linear progress and in assured national dominance. This is what nationalism is about—lies. And if a culture loses its ability for thought and expression, if it effectively silences dissident voices, if it retreats into what Sigmund Freud called “screen memories,” those reassuring mixtures of fact and fiction, it dies.

If this election does not bring about some minimal turning from the 2010 movement towards the vast stupidity of an extreme right wing that underlies all forms of fascism, look out.   An uncritical mass that believes it knows what's wrong (Government, Democrats) is implacable in its belief. True Believers all in that Eric Hoffer mold. 

Given the ever growing and seldom ebbing presence of that version of right wing politics on this site -- especially the Koch brothers CATO-influenced version of extremist pseudo intellectualism that has become the hallmark of the Tea Party Libertarian movement, given their persistence, their ability to keep the arguments dumbed down to their level, it's difficult to see much hope for voices like Thom Hartmann's to have much effect.  If he actually endangered their positions of power, I suspect they'd find a way to remove him from the air waves.

How to Think Posted Jul 9 by Chris Hedges

Chris Hedges wrote:

Cultures that endure carve out a protected space for those who question and challenge national myths. Artists, writers, poets, activists, journalists, philosophers, dancers, musicians, actors, directors and renegades must be tolerated if a culture is to be pulled back from disaster. Members of this intellectual and artistic class, who are usually not welcome in the stultifying halls of academia where mediocrity is triumphant, serve as prophets. They are dismissed, or labeled by the power elites as subversive, because they do not embrace collective self-worship. They force us to confront unexamined assumptions, ones that, if not challenged, lead to destruction. They expose the ruling elites as hollow and corrupt. They articulate the senselessness of a system built on the ideology of endless growth, ceaseless exploitation and constant expansion. They warn us about the poison of careerism and the futility of the search for happiness in the accumulation of wealth. They make us face ourselves, from the bitter reality of slavery and Jim Crow to the genocidal slaughter of Native Americans to the repression of working-class movements to the atrocities carried out in imperial wars to the assault on the ecosystem. They make us unsure of our virtue. They challenge the easy clichés we use to describe the nation—the land of the free, the greatest country on earth, the beacon of liberty—to expose our darkness, crimes and ignorance. They offer the possibility of a life of meaning and the capacity for transformation.

Antifascist's picture
Today is one of Hedges’ best

Today is one of Hedges’ best columns.

How to Think by Chris Hedges, July 9, 2012

Also, Karoline wrote,

Anti, I have just discovered this thread so please forgive me if you have already answered this somewhere earlier—WHAT CAN BE DONE?

The assault on Democracy is on a full spectrum of fronts with billions upon billions of tax freed corporate dollars spent over fifty years. The counter-action has to be on the same scale otherwise fascism triumphs. A necessary, but not sufficient condition to role back American fascism is the adoption of an autonomous rebellion consciousness— a Great Refusal. 

What can you do:  Read,

What can you do:  Read, Think, Listen, Talk to Others, Write, Act.  Participate in Power, or abhor the vacuum.  Fight Death Culture with Life.  Do not be intimidated by the passion of the worst or depressed by the lack of conviction of the best.  Bring energy and love, and spark that conviction.

I would rather know how bad it is than act only because I thought the problem was easy to fix.  How far the defense of ideology against reality will go and when the house of cards will fall is not the point.  They are playing a losing hand and are doubling down on going all in.  I like our cards better.

.ren's picture
drc wrote: I would rather

drc wrote:

I would rather know how bad it is than act only because I thought the problem was easy to fix

Those aren't the real choices.

drc wrote:

 How far the defense of ideology against reality will go and when the house of cards will fall is not the point.  They are playing a losing hand and are doubling down on going all in.  I like our cards better.

What makes you believe there is going to be any "side" winning in this?  Speaking of reality, is anyone adequately prepared to truly imagine what a global ecological catastrophe looks like?

Antifascist wrote:

The assault on Democracy is on a full spectrum of fronts with billions upon billions of tax freed corporate dollars spent over fifty years. The counter-action has to be on the same scale otherwise fascism triumphs.

The assault on the planet, the very living biosphere that makes our "democratic" lives possible has been full spectrum on all fronts for longer than that. Once market ideology was applied to the extraction of cheap energy, many of those billions go to continue, even accelerate that assault on the planet.  Our very world views conflict with reality.  Many who want democracy take passive or even willing parts in the process without much of a clue as to how they too contribute to eventual collapse.  If they even trouble to dissent that dissent is turned into a commodity to be bought and sold. These issues are not seperate.

"We've undergone a corporate coup d'etat in slow motion. And it's over. We've lost, and they've won." -Chris Hedges. On January 20, 2012

Our very society desperately needs a rite of passage to a new world view.  As a whole, societies are now little more than perpetual adolescents, arrogantly self absorbed, never achieving that change from a childhood perspective that focuses on demanding immediate wants and needs be met no matter the consequences, with the invisible hand left to decide our demise for us.  Children in traditional societies once went through rites of passage where those views are extinguised along with the child-person the adults had to nurture to that age in order to prepare them for adulthood, then a new adult person was born with social expectations of broader, more communally-oriented understandings of the complexites of relationships of nature and society.  These passages are now increasingly absent from all societies, not just our hedonistic western neoliberal market systems, as the neoliberal psychopathies take over.


drc wrote:

What can you do:  Read, Think, Listen, Talk to Others, Write, Act.  Participate in Power, or abhor the vacuum.  Fight Death Culture with Life.  Do not be intimidated by the passion of the worst or depressed by the lack of conviction of the best.  Bring energy and love, and spark that conviction.

Realize this is a death march, and you are marching with the rest.  Then ask yourself: is that what you really want to do?

How "managed" the dissent may

How "managed" the dissent may be, if all we have is a "death march," we can protest it by being alive. I do'nt think they can manage this apocalypse, but you may be right and we wind up going over the cliff with them from the momentum or the crowd.  I don't see Hedges arguing against a mobilizing sense that life dance and living in the arc of healing and renewal.  I see him condemning putting all our eggs in the institutional and narrative baskets fixed for us.  

Can we reshape our politics or is it going to be death and rebirth?  Or just death?  I want the existential passion to be transcendent of these limits.  No illusions, but no despair leading to cynicism or suicide.  Our hope is not in the Constitution, in the Empire, in the self-justifiying religious myth of our choice.  Our hope is grounded in our being intimate parts of this earth and each other.  Hedges always goes back to love.  Love goes down many paths of suffering with the wretched of the earth and has few victory parades; but it is worth it.

douglaslee's picture
Faustian Economics addressed

Faustian Economics addressed limits a few years ago.


Faustian economics:Hell hath no limits

By Wendell Berry

The general reaction to the apparent end of the era of cheap fossil fuel, as to other readily foreseeable curtailments, has been to delay any sort of reckoning. The strategies of delay, so far, have been a sort of willed oblivion, or visions of large profits to the manufacturers of such “biofuels” as ethanol from corn or switchgrass, or the familiar unscientific faith that “science will find an answer.” The dominant response, in short, is a dogged belief that what we call the American Way of Life will prove somehow indestructible. We will keep on consuming, spending, wasting, and driving, as before, at any cost to anything and everybody but ourselves.

This belief was always indefensible—the real names of global warming are Waste and Greed—and by now it is manifestly foolish. But foolishness on this scale looks disturbingly like a sort of national insanity. We seem to have come to a collective delusion of grandeur, insisting that all of us are “free” to be as conspicuously greedy and wasteful as the most corrupt of kings and queens. (Perhaps by devoting more and more of our already abused cropland to fuel production we will at last cure ourselves of obesity and become fashionably skeletal, hungry but—thank God!—still driving.)

The problem with us is not only prodigal extravagance but also an assumed limitlessness. We have obscured the issue by refusing to see that limitlessness is a godly trait. We have insistently, and with relief, defined ourselves as animals or as “higher animals.” But to define ourselves as animals, given our specifically human powers and desires, is to define ourselves as limitless animals—which of course is a contradiction in terms. Any definition is a limit, which is why the God of Exodus refuses to define Himself: “I am that I am.”

I never knew that God  paraphrased Popeye. Charlton Heston popping a can of spinach is hard to picture. Drc2:

In our limitless selfishness, we have tried to define “freedom,” for example, as an escape from all restraint. But, as my friend Bert Hornback has explained in his book The Wisdom in Words, “free” is etymologically related to “friend.” These words come from the same Indo-European root, which carries the sense of “dear” or “beloved.” We set our friends free by our love for them, with the implied restraints of faithfulness or loyalty. And this suggests that our “identity” is located not in the impulse of selfhood but in deliberately maintained connections.

Thinking of our predicament has sent me back again to Christopher Marlowe’s Tragical History of Doctor Faustus. This is a play of the Renaissance; Faustus, a man of learning, longs to possess “all Nature’s treasury,” to “Ransack the ocean . . ./And search all corners of the new-found world . . .” To assuage his thirst for knowledge and power, he deeds his soul to Lucifer, receiving in compensation for twenty-four years the services of the sub-devil Mephistophilis, nominally Faustus’s slave but in fact his master. Having the subject of limitlessness in mind, I was astonished on this reading to come upon Mephistophilis’s description of hell. When Faustus asks, “How comes it then that thou art out of hell?” Mephistophilis replies, “Why, this is hell, nor am I out of it.” And a few pages later he explains:

Hell hath no limits, nor is circumscribed

In one self place, but where we [the damned] are is hell,

And where hell is must we ever be.

For those who reject heaven, hell is everywhere, and thus is limitless. For them, even the thought of heaven is hell.

It is only appropriate, then, that Mephistophilis rejects any conventional limit: “Tut, Faustus, marriage is but a ceremonial toy. If thou lovest me, think no more of it.” Continuing this theme, for Faustus’s pleasure the devils present a sort of pageant of the seven deadly sins, three of which—Pride, Wrath, and Gluttony—describe themselves as orphans, disdaining the restraints of parental or filial love.

Kind of parallels your notions. Freedom is bound in trust, so in the current reality shows where deciet is heralded as supreme, they hate freedom. When Romney stuffs his money offshore he embodies distrust, what is left of freedom [I think most of it gone] will be shrunk to the point it could be washed away in a duvet.

Karolina's picture
Antifascist wrote:Karoline

Antifascist wrote:
Karoline wrote:
Anti, I have just discovered this thread so please forgive me if you have already answered this somewhere earlier—WHAT CAN BE DONE?
The assault on Democracy is on a full spectrum of fronts with billions upon billions of tax freed corporate dollars spent over fifty years. The counter-action has to be on the same scale otherwise fascism triumphs. A necessary, but not sufficient condition to role back American fascism is the adoption of an autonomous rebellion consciousness— a Great Refusal.

The American fascists were positioned to take over the USA in the 30s, were they not?

FDR was completely aware of their intentions, but by regulating banks and starting his new policies, managed to keep them at bay. Also the US population was suffering poverty and insecurity, so they were looking realistically at where the Great Depression had been taking them and their bloodlines. They wanted to stop the financial terrorism that had brought on all of the distress and vulnerability that they were living under.

I think that when Obama was elected, many people (not FOX watchers, of course) pinned all of their hopes on him. But the real fight of fascism vs. the freedom for all human beings to live healthy lives on a healthy planet, can't be resolved by our 2 major political parties—any more than the war against a deadly virus can be fought out in a political forum where many of the politicians are already infected. Some secretly and some even unknowingly. 

My opinion for some time has been that all that we can do is to memorize FDR's actions, and use them as some of our guiding principles with which to at least regain access to our government—because, unless something changes, it seems that FDR will not be rising from his grave and returning to the White House, no matter who wins the November election.

I would not hallow FDR as if

I would not hallow FDR as if the age of revelation and genius had passed.  He is another of our heroes in the tradition that becomes our "living faith of the dead" that keeps us from the nostalgia worship of the dead faith of the living.  There are many other icons in our past whose lives and examples inform and inspire our own times, but the new thing does not get found by historical re-enactment or by worship at the shrine.  

What our history can do is free us from the ideological frame and narrative of the counter-revolutionary Neoconservative/neoliberalist narrative.  If we know that Socialism is not scary or anything connected to the Godless Communism we are warned about, and if we approach democracy as how to use government to avoid tyranny and govern ourselves, we have a chance to work our way out of this mess.

Karolina's picture
FDR got us out of a mess that

FDR got us out of a mess that is nearest to the one that we are in now. I know that you have read my threads and posts where I speak of other historical figures relevant to whatever is being discussed, so you know that I am not idolizing FDR.

With this Libor fraud, we are in a position to insist on getting the banks regulated, and that will be the first step in working our way out of this mess. Another step would be to find a strong and honest candidate for November.

Antifascist's picture
Chris Hedges: Days of

Chris Hedges: Days of Destruction, Days of Revolt

Above is a link to a recent lecture by Chris Hedges given in Seattle, Washington. But I must tell you where I found it. During the last two years, I have been keeping a close watch on financial websites to learn more about financial markets, terminologies, and political points of view by traders, brokers, financial advisors, regulators, and heads of financial companies. This is my justification for hanging around these financial websites, many of which are extremely right wing. 

Many of these financial professionals have appeared on Thom Hartmann’s program like economist Steve Keen, bank regulator William Black, analyst Gerald Celente, former assistant Treasury Secretary Paul Craig Roberts to Reagan, and Matt Taibbi just to name a few. These financial professionals (here is a short list I am referring to) are a great source for learning how markets work day to day and how they understand economic data, trends, events, and marketing tools. However, what is disturbing to me is their interpretation of political events: nearly all these traders, and brokers are deeply seeped into Libertarianism, Neo-liberalism, and Ayn Randian ideology. Nearly all of them—I am judging by the interviews I listened to of the last few years--are strongly anti-Keynesians; yet, they do not seem to make the distinction between Keynesian methodological principles (wage, interest, prices) and use, or application, of Keynesian style policies. Of course there are exceptions to this rule, but by and large financial professionals are brainwashed in what Polanyi called self-regulating free market doctrine. You would not find a Galbraithian economist among them.

The New York Stock Market, and Chicago futures markets, especially the precious metals markets, are nothing like a free market whatsoever: in fact, many of these same financial experts complain bitterly that the markets are completely manipulated: they call them “Rig Jobs.” Former market trader Max Keiser, legendarily gold trader Jim Sinclair, and multi-billionaire Eric Sprott have bitterly complained of the rigged financial markets for years. They are not communists, but believe whole-heartedly in a free market economic system. Of course, in reality Wall Street is nothing like a free market and it is interesting to see how they try to rationalize what is happening in the actual markets--High Frequency Trading, price setting, insider information, naked short trading-- with their belief in free markets. Some simply blame “government interference.” Most often they deny these rigged markets are really capitalistic and explain instead how they ought to work according to Fredrick von Mise, Milton Friedman, Lew Rockwell, and Ayn Randian mythology. They all seem to agree on two general points: there will be a currency collapse in this country, and Wall Street is absolutely corrupt.

What really seemed to disturb Wall Street traders and investors was the MF Global scandal in which customer money—deposits—were used by MFG to speculate in the market. That customer money is segregated from broker company funds is an iron law of banking. MF Global lost, “vaporized” is the euphemism, $1.6 billion of customer funds. Why were they so upset? It is precisely in financial institutions like MFG that these same professionals keep their own deposits, investments, and company capital.

But now it is even worst. Just this weekend another nstitution which is a futures brokerage trading firm called PFGBest has done the very same thing: client money totaling about $245 million is missing. PFG President Russell Wasendorf tried to commit suicide—not a good sign for clients. So these true believers are really shaken to the bone with this second incident. Twice in nine months there has been massive losses by clients due to misuse of funds. In other words, small companies, farmers, traders in futures, and brokers cannot be sure their business capital is safe (see interview with trader Christopher Olson –he is complaining of a lack of government interference—the ironies abound). Didn’t Marx say something about big corporations devouring smaller companies and leaving only a handful of monopolies remaining causing capitalistic markets to collapse? They still don’t get it. 

So I am reading all this wailing and gnashing of teeth about a corrupt Wall Street by financial professionals and at one of my favorite financial websites guess who I see? Chris Hedges’ lecture posted right at the top of  “” which redirects to another financial site “Jesse’s Cafe Americain.” And Hedges give one helluva lecture. 

And this brings me to President Obama. Hedges talks about Obama and I agree with him. 

It has been nearly four years and this so call Democratic President has done nothing to address the corruption on Wall Street: Obama has instead made himself dependent on the very Republicans, CEOs, financial experts responsible for our economic malaise. He praises them! Obama is as dirty as George Bush, and Bill Clinton. Obama has maintained the status quo if anything, and protected the guilty while persecuting truth tellers. Obama is as Republican as Mitt Romney and just as incompetent. There is no evidence that President Obama would pick a Supreme Court justice any different than Romney or any Republican for that matter. It is not out of the realm of possibility that Obama would call Romney and asks him who to select as a Supreme Court Judge in an act of “bipartisanship.” Think that isn’t possible?  Obama has done worst. I am not going to support a Republican or Republican policies no matter what political party they are from. 

Antifascist's picture
Republican Socialists,

Republican Socialists, Systemic Wall Street Market Manipulation, and Election Fraud. 

It is all the same thing. After years of reports, stock market corruption is starting to hit the mainstream and its scope of fraud is astounding. Investments bank MF Global and brokerage firm PFGBest used client’s funds to gamble on interest rates, futures, and exotic indexes leaving customers struggling to get their “vaporized” funds back. Some clients of PFGBest were former MF Global customers still waiting to get their money back from another gambling binge. Good luck.

Wall Street has been so corrupt for so long that this same mindset has dispersed in a capillary type action across the entire country. Systemic fraud has resulted in manipulated markets where computer programs buy and sell to each other thereby setting the price of the transactions called “wash trades.” Price discovery is short circuited by computer algorithmic triggers that send buy and sell commands twenty five times per five nanoseconds spoofing market direction up or down. Wall street computer programmers, or Quants, creating a computer algorithm could be writing instructions for trading stocks, bonds, setting interest rates, or for counting votes from a voting machine. Digital numbers make no distinction. Long-term institutional experience routinely manipulating markets habitually and logically lead to manipulating elections: only the theater of fraud is different. No single person has to question their conscience and ask if it is right to nullify the votes of millions of citizens, of the millions of soldiers that sacrificed their lives for the idea of a voting democracy. Manipulation of stocks and manipulation of elections derive for the same psychopathic indifference to society and human beings. Systemic fraud is the collective contribution of hundreds of Eichmanns that Lewis Mumford spoke about.

I found a video by Max Keiser recorded in 2007 concerning various market-rigging practices. Wall Street’s bad behavior has been going on for decades especially during Republican administrations. I read an article, “Nixon Administration and Great Socialist Revival,” (New York, September 21, 1970), by John Kenneth Galbraith written in 1970 during which the great Republican socialist Richard Nixon bailed out Penn Central Railroad to the tune of $750 million with 77 capitalist banks joining in the march to utopia. Lockheed Corporation got stuck with loses building the C-5A aircraft that it couldn’t sell so 24 banks came to the rescue after the American comrades handed over $300 million of taxpayer money. Leftists were astonished by the Republicans’ change of heart when Nixon opened the national treasury to big business.

Certainly the least predicted development under the Nixon Administration was this great new thrust to socialism. One encounters people who still aren’t’ aware of it. Others must be rubbing their eyes for certainly the portents seemed all to the contrary. As an opponent of socialism, Mr. Nixon seemed steadfast—on this, even uniquely so. And ever since the end of the New Deal socialism itself had seemed clearly in decline. Conservatives still professed opposition but not much anxiety, Talk of socialist plots had largely disappeared among the followers of the Reverend Billy Graham and diminished among the followers of the Reverend Billie Hargis....But I had come reluctantly to the conclusion that socialism, even in this modest design, was something I would never see. Now I am being rescued by this new socialist upsurge promoted, of all things, by socialists not on the left but on the right. And they have the blessing, and conceivably much more, of a Republican administration.  (John Kenneth Galbraith, Economics, Peace & Laughter, (1971), Meridian Books, page. 101.).

At the same time stock market fraud was so bad Galbraith satirically suggested Wall Street—that bastion of Free Market Capitalism-- must of been infiltrated by a new kind of socialist trying to give capitalism a bad name in a takeover—a coup by Republican socialists traders and brokers who wanted big government to protect them from investment risks. And giving capitalism a bad name they did.

By subjecting their customers to extensive delay in delivering their stock and arousing apprehension as to whether, in fact, any particular transaction would be accomplished, various brokerage houses have recently engendered doubts about capitalism even in the resistant minds of the relatively rich. According to Philip Loomis, the general counsel of the SEC, they also have “occasionally” allowed cash and securities to vanish from their customers’ accounts to be used instead by the firm. This kind of behavior lends itself especially well to propaganda designed to discredit the system. (John Kenneth Galbraith, Economics, Peace & Laughter, (1971), Meridian Books, page. 101.).

And it is still going on today—delayed trades, fake trades, holding companies leveraging holding companies, dipping into customer funds. All this was going on in the 1970s during Nixon’s administration who had a remedy to hedge stock market risk against market uncertainty. The Nixon socialist plan--not unlike Bush II’s $700 billion TARP plan--was to create the Securities Investor Protection Corporation. SIPC was only a billion dollars but remember this was Republican Socialism in its infancy.

The Wall Street vehicle of the new socialism is the Securities Investor Protection Corporation or SIPC, a fund created by the Stock Exchange which is to be guaranteed by the government to the extent of a billion dollars. This will pay off the customers, creditors and victims of the failed houses. Because of some residual opposition to socialism in Wall Street, SIPC is being billed, rather imaginatively, as an insurance fund. Since the firms to be rescued are already in deep trouble, it is the first insurance fund in some time to insure a policy on barns which have already burned down. But this is a detail. As the new socialists see the prospect  (one may assume), several of the larger stock exchange houses will eventually fail. The government will step in to conserve their assets against the claims it has paid. There will be strong pressure to minimize hardship and unemployment by keeping the firms going. The government will oblige firms—the familiar yielding to pressure again. Presently other firms will fail and the government will find itself in a dominant position on the Street and in the Exchange. It will rationalize the now hideously inefficient arrangements by which securities are exchanged, ban short selling and advise innocents who hope to get rich on glamour stocks and go-go funds to be more sensible. The SEC will be disbanded. Socialism will have been accomplished and in the seemly fashion that one would expect of the financial community. This of course, is only a sample scenario. It may not happen. (John Kenneth Galbraith, Economics, Peace & Laughter, (1971), Meridian Books, page. 109.).

Wall Street financial firms have been trying to get too-big-to-fail insurance for decades to bring about that utopian socialist State in which the SEC is finally abolished...after they get public money of course. Not even Galbraith believed these Wall Street socialists would ever reach this stage of utopian socialism in which taxpayers would back up all of Wall Street’s bets, that there would no longer be a need for the SEC because the market trading proletariat would regulate their self thereby causing the State to fade way...but not its bailout guarantees.

However, utopian socialist like Chris Whalen, CEO of Tangent Capital Partners, still carries the red banner. Whalen said today in an interview it is no surprise that

“...regulation always fails. Regulation is a false hope. In the thirties we went from personal responsibilities to regulation. This was part of FDR’s effort to enfranchise, really to bury the Democratic Party in government to give them life... So what is think we need to do is put more onus on the people that run these businesses to do the right thing and if they do the wrong thing put them in jail.  But we shouldn’t have federal deposit insurance and frankly we should get rid of most of the regulators because when we tell our people there is no risk and in fact there is still risk, we are doing them a disservice...But going back to the point about Paragine (PFGBest), the one difference between that and MF Global is we finally got the agency in Washington that is responsible to go into federal court and get an receiver to go after the fraud.” 5 minutes 30 seconds.

But wait. If there is no regulation then how will those that “do the wrong thing” get caught and go to jail? Under this new Republican utopian socialism do the banksters voluntarily reveal themselves and voluntarily go to prison? If there are no regulatory violations by what authority does the federal court address any criminal fraud? And if the taxpayers bail out bad investments with after the fact policies, what is the risk? Are we to put our hope in “personal responsibility” like the clients of  Paragine and MF Global? Mr. Wasendorf, the CEO of PFGBest, was a board member of the National Futures Association (NFA), a private industry association that “self-regulates” the Futures Broker industry. Is Mr. Whalen taking about Wall Street, or a utopian Haight-Ashbury? 

Mr. Whalen, like all Republican socialists, talk about individualistic self-sufficiency, but they really want market socialism. They are very confused people. Mr. Whalen said in this same interview to his company business ethic is “We eat what we kill. (6 min. 33 secs.)” Presumingly he was referring to trading profits and not the customers themselves. But this macho self confidence and self-sufficiency is a myth also. Ann Barnhardt, owner of commodity Brokerage Company Barnhardt Capital Management, Inc had to close her business because of MF Global’s fraud. She also dealt with PFG Best’s Senior Compliance Manager Ms. Lauren Brinati. Barnhardt tells the following story of one Wall Street rugged individualist.

By Ann Barnhardt
July 10, 2012

The same "Senior Compliance Manager" who signed off on the PFGBest affadavit and who is listed on the NFA website as both the "Director of Audits/Investigations" and the "Director of FOREX Compliance", Lauren Brinati, is the same woman whom I and my attorneys dealt with two years ago.Now, hold on to your pantyhose.

One of my attorneys in the Schuyler Roche Crisham firm in Chicago, as livid as I was by the NFA's galactically stupid contention about hedgers being limited to one round-turn per cash inventory cycle, called Lauren Brinati to discuss the NFA's position. Lauren Brinati said that she couldn't discuss the matter with my attorney directly because:

"I don't actually understand any of this stuff. I just sign whatever comes across my desk."
Lauren Brinati, June 2010

Ms. Barnhardt’s professional market advice is the following:

GET OUT. much for Republican Utopian Socialism.

It is a lot like explaining

It is a lot like explaining schizophrenia, isn't it?  Yes, these very certain financialists are very confused.  Surprised?  Well, it is pretty amazing to watch them act out this fantasy, and the presenting behavior is insane, so predicting it is hard for the sane to do.  No one ever "expects" the Spanish Inquisition.

I love Hedges getting space at Goldsilver.  And, it is interesting to find the honest gamblers pissed off that the Casino is rigging the games.  Imagine the stink if this happened in Vegas?  So, good for them to have some sense of integrity.

What remains, however, is that it is not the corruption of the Casino that makes it a bad image for the capitalists and the economy.  I think corruption is inevitable in the money making money game of financialism and that investment capitalism needs to be restructured to make the value creation the incentive before the "money."  If you invest in a great idea, you have to stick with its development and implementation to achieve the "mission" this idea will achieve for humanity and the earth.  You cannot allow 'profit-taking' to undercut the mission of the business.  David Korten makes this easy to understand in AGENDA FOR A NEW ECONOMY.

Rather than confuse the issue with "Utopian Socialism," just refer to Mammon and its worship practices.  This stuff ain't that new, they just have better tools to do it with.

BTW, Eliot Spitzer on Current TV has been great on Wall St. and its issues.  He asks the best questions and has people who know this stuff on his show.  Maybe he can get his revenge for the hooker bust when he was about to bring cases against the banksters in NY.  Check him out.

Antifascist's picture
Hello drc2, Yes, I saw an

Hello drc2,

Yes, I saw an interview with Spitzer and Matt Taibbi

Thom asked what would be a good analogy, or story for understanding how the LIBOR interest rate-fixing scandal profited investment banks and speculators? I don’t think one analogy could fully explain the fraud, but three analogies of slightly increasing level of complexity may make it clearer. 

  1. The LIBOR interest rate fixing is like a customer being able to set his or her own credit risk so that more money could be borrowed based on a false credit score. Banks with low interest rates look financially healthier than what their balance sheets might actually show. 
  2. LIBOR is like a gambler playing cards at a black jack table with the card dealer issuing cards to a player’s advantage over the house and other players. If speculators know what future bank interest rates will be by asking LIBOR for a specific rate, they can win bets on rising or falling interest rates.
  3. LIBOR is like a lottery player who instead of having to select five random numbers from a pool of fifty six numbers, they need only select from a list of ten “weighted numbers” that are more likely to be drawn as winning numbers. LIBOR takes interest rate submissions from twelve banks that they are willing to lend; the four lowest and four highest rates where thrown out and then average the four middle rates to set bank lending rates. Market speculators are more likely to win their interest rate bets if they can request an interest rate level day to day from LIBOR. 
douglaslee's picture
This is a review from Nov

This is a review from Nov 2009 of a book written before the full blowout of republican management. Economics and politics are inseparable, and the idiots in congress will never surrender, because it means admitting they were wrong. What Keynes didn't know is the unknowable, the future. 'Is it probable that probability brings certainty?'-Pascal

The central flaw of the economic orthodoxy against which Keynes fought in the 1930s was to imagine that an insoluble problem – human ignorance of the future – had been solved. The error was repeated in the 1990s, when economists came to believe that complex mathematical formulae could tame uncertainty in the murky world of derivatives. Steeped in history as they were, this was a delusion that none of the classical economists entertained. It began to shape economics only towards the end of the 19th century, with the rise of Positivism, according to which the natural sciences are the only legitimate repository of human knowledge. It was the formative influence of this philosophy on the Chicago School that enabled the orthodoxy of the 1930s to re-emerge triumphant, and the result was an immense boost to the prestige of economics as a discipline. Economists could claim to be scientists, who with the aid of their mathematical magic could pierce the veil that conceals the future. The hegemony of Positivism in economics obscured Keynes’s scepticism about probabilistic knowledge, his most important contribution to the discipline. G.L.S. Shackle set Keynes’s argument out systematically in his neglected masterpiece Epistemics and Economics: A Critique of Economic Doctrines (1972). Shackle is probably the only significant economist to have been influenced both by Keynes and by his arch-rival, F.A. Hayek. He knew both of them well, but argued that neither had digested the full implications for economics of our ignorance of the future. Hayek said that governments could never know enough to plan the economy successfully – a claim vindicated by the miserable record of central planning in Communist countries. At the same time, he attributed near omniscience to markets, and never doubted that if left to its own devices the economy would liquidate mistaken investments and return to equilibrium. Against this, Keynes had shown that there is no market mechanism that ensures revival; economic contraction can be self-reinforcing, and only government action can then create a way out. Shackle took Keynes’s argument a step further, and showed that no economic policy can ensure economic stability indefinitely. ‘Keynesian’ policies are no exception to this rule. Deficit financing and monetary expansion may have worked well in the conditions that existed after the Second World War. It is not clear that they will be so effective today, when globalisation has brought a freedom of capital movements that did not exist then. The lesson of Shackle is that we must be resourceful in devising new remedies, while not losing sight of the fact that none of them works for long.

Doing a little backup research on GLS Shackle, I came across another figure Umberto_Eco, mentioned by the author of the 'Black Swan' theory and book. He thought Shackle abdigated the use of Eco's unread works. Eco coined semiological guerilla warfare tactics to effect cultural manipulation. 

n 1967 he gave the influential lecture Towards a Semiological Guerrilla Warfare,[9] which coined the influential term "semiological guerrilla," and influenced the theorization of guerrilla tactics against mainstream mass media culture, such as guerrilla television and culture jamming.[citation needed] Among the expressions used in the essay, are "communications guerrilla warfare" and "cultural guerrilla."[10][11] The essay was later included in Eco's book Faith in Fakes.

.ren's picture
Excellent review, doug.  It

Excellent review, doug.  It reveals enough about the book to pique my interest in getting it.  So I did, one click, Kindle edition, $9.15, and it's now in my Kindle reading system. Let me offer the full title and a link to Amazon's Kindle offering:

Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism by George A Akerlof and Robert J Shiller (Jan 29, 2009)

The review showed me that this book speaks to some of the current concerns we've been discussion on this board, specifically the concern that the conservative/libertarian ideology has absconded our nation's morality and systematically destroyed any references those of us coming from a more humane perspective about the whole of us can use to regain it.  Anti has done an admirable and scholarly job of demonstrating the utter absence of morality in the capitalist financial system, Chris Hedges shows where the liberal class failed to stand up for itself and now it's a dead voice in the system as well.  What we all need to do is reclaim our moral and ethical voices of authority in this dying system and rebuild with a renewed vision of our humanity.  Animal Spirits seems to offer some valuable insights in that regard.

While you may have provided the core idea behind Keynesianism, you bypassed the introductory paragraphs where Animal Spirits' set of hypotheses are outlined.  These are important for context, and also important to understand the reviewer's own position towards the book, which itself may have flaws worth noting. I didn't get the full importance of your quote until I grasped the "five different ways in which these 'animal spirits' can affect economic behaviour." 

Animal Spirits' hypotheses speak to many of the deeper philosophical issues we've been raising on this thread concerning the dead end that's now more glaringly apparent than ever in the classical liberals' ultimate conclusion from their rationalist's philosophy of logical positivism.  A dead end they ran into during early in Twentieth Century, brought out specifically by Wittgenstein, and the hypotheses reveal how the neoliberal, free market positivists fail to adjust to the glaring paucity of options in their own theory of the rational human choice maker -- specifically the notion that humans making rational selfish choices will create that "known" and stable future (guided by Adam Smith's "Invisible Hand") your quoted section reveals as ultimately a false belief.  There's more here than that the future's unknowable, we've been struggling towards a vision where we can reclaim the mystery of our humanity and the wonder that goes with that mystery, and with that can go a renewed reclamation of word 'spirit', which has been systematically negated as a valid concept by rationalists of all sorts who want fact and reason to be our dominating form of thought.

I could list the other great minds we've brought to this thread who've argued similarly but anyone who has followed our own long discussion here since May of 2010 knows them.  I'll just mention that Roger Foster's Adorno: The Recovery of Experience, that we discussed extensively, and Karl Polanyi and his The Great Transformation published the same year as Hayek's neoliberal/libertarian tome, Roads to Dominion make excellent historical companion reads to prepare for Animal Spirits.

Here are some key paragraphs from the review to prepare for any possibility of a discussion of the alternative points raised in Animal Spirits:

John Gray wrote:

George Akerlof and Robert Shiller’s Animal Spirits was written before the current crisis. Yet, based on research undertaken over many years, it can be read as prefiguring the current disillusionment with economics. The trouble with prevailing theories, in Akerlof and Shiller’s view, is that they assume human beings are more rational than they actually are. ‘This book, which draws on an emerging field called behavioural economics, describes how the economy really works,’ they claim. ‘It accounts for how it works when people really are human, that is, possessed of all-too-human animal spirits.’

They point to five different ways in which these ‘animal spirits’ can affect economic behaviour. First, the state of the economy depends on the level of confidence we feel about the future, but confidence ‘is not just a rational prediction. It is the first and most crucial of our animal spirits.’ Second, a concern for fairness ‘can trump economic motivations’: elementary economics teaches that a rise in demand for shovels after a snowstorm should result in higher prices for shovels; but most people – 82 per cent of correspondents in a survey conducted by two behavioural economists – believe that raising the price would be unfair. Third, the actions of predatory corporations can have an impact on the entire economy: the belief that Enron had acted in bad faith led to people being ‘fed up with financial markets in general’, a shift of a kind that is ‘clearly within the realm of pure animal spirits’. Fourth, people make many of their economic decisions without taking account of inflation: instead of acting to maximise their real (inflation-adjusted) income, they succumb to ‘money illusion’. Finally, human behaviour is heavily influenced by stories, narratives with a dramatic logic that drives people to action. The internet boom at the start of the millennium was not just a response to the development of a new technology; it expressed a view of the world, including the belief that a new era had arrived in which the economic cycles of the past had ceased to operate.

As Akerlof and Shiller represent them, each of these manifestations of animal spirits shows behaviour being driven by forces other than reason. None of them offers rational grounds for action in any sense that most economists would recognise. Even so, the authors insist, these responses must enter into any account of how economies actually work. If economists have failed to explain repeated crises, it is because they have interpreted economic activity through an unreal model of rational decision-making. Thinking of human behaviour in this way allows them to claim a high degree of precision for their discipline, which is presented as a kind of applied mathematics. But they have left psychology out of their equations.

(Emphasis mine -Ren)

Well, modern economists haven't entirely left psychology out of their equations, just most of it.  They've included the theory of the logical positivists' rational psychological theory.  A theory that barely differentiates humans from machines.  But that's not anything close to Adorno's recovery of experience psychology, nor many others whose ideas about the greater dimensions of human mind and behavior we've been raising for discussion. 


Ah yes, I remember going to

Ah yes, I remember going to Uncle Miltie's big economics lecture at Stanford Biz School.  He went on and on, and then concluded with the assertion, "IF people made rational decisions, my theories would work perfectly!"

This guy was making American economic policy.  This was the Great One speaking to an audience or rapt future raptors.  This was how the world worked, if only people would get aboard and make those rational choices.

My jaw hit my knees with an OMG are we screwed epiphany.

I think the metaphoric references to "animal spirits" is a nice way to raise the psychological factors that economists cannot include in their models of finance plus.  When they are fine tuning the logarhythm and tweaking the calculus, they are looking for system averages and trends rather than the way individuals behave or think.   Their heuristic interest is in "the economy" rather than the human beings or the social context.  Particularly at Biz School.

They would lump it all together in the Greed/Fear balance.  Their ideology cannot grasp that we would also value fairness in practice or even have better things to do than work.  When one sets out to understand and explain the world, the way one learns to go about it becomes "required" or "Gospel."  Discovering the limits of our own methods, models and narratives to reveal the world is not always fun.  It is a great relief to know that the heuristic has a value; but every focus limits the field.  Disciplines in the academy do better when they mix it up with others.  


Karolina's picture
.ren wrote:John Gray wrote:If

.ren wrote:
John Gray wrote:
If economists have failed to explain repeated crises, it is because they have interpreted economic activity through an unreal model of rational decision-making. Thinking of human behaviour in this way allows them to claim a high degree of precision for their discipline, which is presented as a kind of applied mathematics. But they have left psychology out of their equations.

(Emphasis mine -Ren)

Well, modern economists haven't entirely left psychology out of their equations, just most of it.  They've included the theory of the logical positivists' rational psychological theory.  A theory that barely differentiates humans from machines.  

In other words, these economists in their theory work believe that essentially, there are only two real psychological divisions to which all human beings can belong.  Every person must be — either a sociopath or a moron.

Well, I guess that is no surprise. 

.ren's picture
Karolina wrote: In other

Karolina wrote:

In other words, these economists in their theory work believe that essentially, there are only two real psychological divisions to which all human beings can belong.  Every person must be — either a sociopath or a moron.

Well, I guess that is no surprise.

I think it's more of a game move on their part than any consideration of our basic humanity in this slice they take out of the whole of our social existence, then label "economics".  And if you aren't into their rational game then it might appear to a bystander you are a moron in their terms.  But everything in our political life these days gets couched in their economic terms, and we who want to be more than rational economic players become sort of moronic if we roll over and let them do that.  I'd say there are a fairly large number of posters on this board who are trying over and over to dominate the board with those rationalistic economic game rules.  And they'd like us to believe we are morons. It would be so much easier for them to promote their sociopathic game on the world.

What's happening is "economics" -- which is really little more than a  self-contained cult or religion as a discipline, not a science -- has come to place itself as the driver of politics and society.  But it's little more than an intellectual game, it has aspects of gambling and gain, winning and losing, and all sorts of game-like characteristics.  Whereas human reality is much more complex than any game.  What we are recognizing (once again) is that, like a game, these economic activities need rules, they need referees, if we are going to allow them to be such a centerpiece to our national cultural narrative.  Thus your own insistence on a return to Glass Steagall.  That's a kind of a logical application of reasonableness to a game gone wild and chaotic.

The reality of our humanity is much more complex and, we keep discovering, beyond the formulation of games, especially games that involve winning and losing.  I've always admired that revelation in what James Carse outlines so pithily in his short but powerful book: Finite and Infinite Games.


Karolina's picture
Sociopath: person who is

Sociopath: person who is unaware that in reality there is only an infinite game —existence—and so typically plays only finite games—competition—as though his/her existence depends on them."

They're not people who exist to play—they're people who play to exist. 

So sociopaths are kind of an oxymoron!

douglaslee's picture
  Glass-Steagal would address


Glass-Steagal would address the first three animal spirits, confidence, fairness, and trust, as it did for the 70 odd years it existed and functioned.

Ren, glad to see that did pique your interest. I remember earlier on this thread covering positivism and seeing it in this review  triggered that recollection. I hadn't heard of Shackle, but Galbraith did acknowledge him somewhat.

I like the Eco tact of semiotologic usage. It has been used against the greater good for some time, whether Luntz, Gingrich, and some of the practicioners of smash mouth politics knew that's what they were doing or not.

Discussion w/Bill Black, and an ex Bain exec, and Alexis Goldstein sec employee now OWS, and a social scientitst touching on dereg, consumption, fraud, accountabiity, trust....etc. The Bain guy says that regulation hurts, and ponzi is good. Alexis Goldstein OWS knows her stuff, as does Bill Black the prosecutor during S&L cleanup resulting in 1000+ criminal convictions.

One of the Animal spirits trust is at issue, as illustrated by moderator Chris Hayes.

Some serious jail time would satisfy fairness,instill trust, restore confidence, and with restitution pay the cost of further investigations. Some immunity might open up the whole putrid cabal, and break their code of silence.

Antifascist's picture
douglaslee, Thanks for those


Thanks for those book suggestions. I really like Eco’s concepts of semiological guerrilla warfare, and culture jamming.

One reason I cancelled my cable TV subscription was because of culture jamming. Remember the reality show “Survivor” game show. I don’t think people realized how the game players island setting was a perfect biblical Genesis story of neo-liberal economic theology explaining how self-regulating free-markets on a mythical island populated by “rational” economic producers, consumers, and barters. Neo-liberal metaphysics replaces the garden dwelling Adam and Eve with a deal seeking bartering Smithian Man. However, in this mythology these Robinson Caruso survivors play competitive games with the losers being “banished” (fired) from the island if they were not cunning enough for other team members. It was entertainment by psychopaths for psychopath acting as an object lesson in a zero sum societal game of winner and losers. I began to witness these same patterns of behavior in my workplace colleagues; intelligent professionals mimicked this same advantage-oriented hyper-competitiveness without any critical reflection whatsoever of its effect on other human beings. This same kind of culture jamming—to interject subconsciously foundational assumptions of a hierarchy of cultural values by which civil society operates, or should operate—has saturated television entertainment. The Discovery Channel is the worst with programs like American Guns (war-against-all militaristic contractualism), Auction Kings (the hustler-dealer), and Deadliest Catch (Employer authoritarianism & employee discipline). All of these programs are designed to disseminate a neo-liberal economic hustler actor model, which only seeks careerist advantage and pecuniary profit. It’s dog-eat-dog competition, it’s sleazy, and it’s psychopathic. Thank goodness all that sick propaganda is not playing in my home anymore.

I am very interested in Shackle’s book, “Epistemics and Economics: A Critique of Economic Doctrines.” The book price is a little steep, but I read some scholarly reviews of Shackles book and his thesis is consistent with our critique of self-regulating market doctrine as subordinated to an autonomous consumer directing the markets by free and reasonable choices. Polanyi questioned these economic assumptions of a self regulating market and the truck and barter Smithian Man. Galbraith has an excellent critique of consumer sovereignty in his book “Affluent Society” which I have reviewed. And Shackles contributes to this critique of free market economics by questioning the so called “rational choice” of economic agents. First, there is the problem of what is “rational.” Secondly there are real life limitations of human knowledge that impacts the rational choices of individuals. Here again we see flaws in an economic theory that postulations a mythical economic agent in a pre-Lapsarian market model free of imperfections: a frictionless world of supply and demand, omniscient agents, reasonable consumers, predictable behavior, tamable mathematical risk, free economic actors, and competitive markets of pure equilibrium. Economic mathematical formulas could perfectly predict the future if only humans were mechanical automatons that lived in a static world without time. Heraclitus told us the cosmos is not static, but exists in a dynamic river of time. Here is a quick sketch of Shackles’ argument.

The bulk of existing economic theory depends upon the hypothesis that individual choose and act rationally, even though a range of rationality concepts are used. Broadly, economists interpret this hypothesis to mean that individuals choose optimally on the basis of their own preferences and subject to external constraints upon their alternative choices. Clem Tisdell, Concepts of Rationality in Economics: Introduction, Including Philosophical Views About Rational Behaviour, Phi. Soc. Sci. 5 (1975), page. 259.

H. Simon has suggested that economic models of choice by economic agents can be usefully divided into those which assume unbounded rationality on the part of economic agents and those which assume bounded rationality.

Extreme models of unbound rationality suppose that economic agents know all their alternative choices and all relevant consequences which follow. In this extreme case, which underlies most general equilibrium theories of economy, economic agents are assumed to be omniscient. Their information is complete and they have no problem in discovering the best choice from their point of view. In retrospect, they are never disappointed by their choice. Agents choose their most desired alternative from available and face no effective barriers of search and calculating cost of discovering it. Let us call such models of choice, models of perfect unbounded rationality. Economic models of the perfect competition are of this type. (Ibid., page 263.).

Shackle’ attack on the use of the rationality assumption by economists is one of the most uncompromising. In his view, equilibrium economics is only viable if all economic agents are rational decision-makers. But economic agents cannot be rational unless they have perfect knowledge of their decision-making environment. (Ibid., page 268.).

Libertarians defend self-regulating free market doctrine by appealing to this economic model of unbounded rationality to argue that government market regulation is unnecessary. Libertarians argue, for example, if a restaurant served contaminated food that sickened patrons the restaurant would go out of business as its reputation becomes known to potential customers. By customers rationally avoiding the unsanitary restaurant, they regulate the market by their autonomous rational choice making government regulation unnecessary. Thom Hartmann has countered this anti-regulatory Libertarian argument by using the bounded rationality model of agent choice. In a small town customers may avoid the restaurant and cause it to close, but this isn’t realistic in a large metropolitan city, or even a small tourist town where a constant flow of new unaware patrons could keep the unsafe restaurant open indefinitely. The Caveat Emptor warning is meaningless for a post festum meal. Agent knowledge is often flawed with incomplete knowledge, false information, or simply having a weak rational by selecting the restaurant solely for its location. Agents with limited knowledge have no rational regulatory effect on market activity thereby making regulatory offices necessary.

I get a kick out of these right-wings complaining of "socialism" when it has been Republicans that have been the most aggressive deficit spenders when in office. Nixon bailed out Penn Central, Lockheed, fixed prices and wages, and set up a billion dollar Securities Investor Protection Corporation (SIPC) to bailout Wall Street’s bad debts. I reviewed Republican utopian socialists in post #1389. Here is a great follow up article,

The New Totalitarianism: How American Corporations Have Made America Like the Soviet Union: Free-market capitalism was supposed to save us from the tyranny of faceless apparatchiks. But that's not what happened.

Now I knew this whole Romney controversy sounded fishy.

Romney insists he left Bain Capital is 1999 and the reason given by the mainstream media—including progressive media personalities like Rachel Maddow--- was that after 1999 Bain was outsourcing jobs, and cannibalizing companies like Dynamics Detail, GST Steel Mill, American Pad and Paper, Stage stores just to name a few victims of his asset stripping. Really? But Romney started raiding corporations in Leverage Buy Outs since starting at Bain in 1984. It was during Reagan’s Presidency that LBO really took off with debt loading profitable companies in the 1980s and 90s so why is Romney whining about a specific date? Surely, Obama’s campaign could find more victims during those years. Was Romney just redefining the debate to be about a calendar date to divert attention away from his toxic business deals after that date? Surely, there were many corporate raids by Romney just as damaging before 1999 as after. It didn’t made sense to me.

Well, here is why 1999 is so important to Romney. Romney left Massachusetts in 1999 to work on the Salt Lake City Olympics Committee Feb. 11. 1999 and his Olympic contract required severing all ties with any companies doing business with the games. There were already problems with corruption in the Salt Lake City Olympics organization and if Romney did not cut all ties with Bain Capital and his membership on all the other associated corporate boards, he would have breached his Olympic contract. In other words Romney is still cleaning up all the shit from his Bain Capital days.

Romney is so crooked that he can’t even stand up straight—the perfect Republican candidate.

Antifascist's picture
Defense contractors go

Defense contractors go Keynesian! With automatic cuts coming due for the defense budget the contractors are clamoring, pleading, opining for...get this...TAX INCREASES! Wait, I thought government deficits were the problem of know...the “takers” increasing the deficit paying for welfare. What happened to AUSTERITY? What about all that INFLATION this government deficit spending will cause! Why should we raise taxes for defense contractors in a post-cold war era? CEO of Pratt and Whitney David Hess and CEO of Lockheed Martin Robert Steven say defense cut would cause, “damage to their industry and their employees if the companies are forced to make cutbacks.” You mean their companies are dependent on tax increases and government spending to decrease unemployment. HEY, ISN’T THAT KEYNESIANISM? Have these CEO forgotten their Fredrick von Mise?

House Armed Services Committee Chairman Rep. Howard McKeon (R-Calif.). In a Wednesday hearing on defense cuts before the Armed Services Committee, members of the defense industry expressed openness to the consideration of tax hikes.

The defense industry has lobbied hard to prevent the automatic cuts, known as sequestration, but it has offered little by way of alternatives. At the hearing, Democratic lawmakers lashed out at the generally reticent executives, pressing them on just what, exactly, they believe Congress should do to avoid the cuts.

"I think everything has to be on the table at this point," said Pratt and Whitney's president David Hess.

 A second CEO, Lockheed Martin's Robert Stevens, offered more equivocal support for including revenue-raising measures, telling legislators, "When we face challenges in our business ... we try to put into the recipe every possible ingredient that might lend itself to the formation of a solution."

Two other CEOs on the panel -- Sean O'Keefe of EADS North America, and Williams-Pyro's Della Williams -- avoided making similar remarks about tax hikes but joined Hess and Stevens in stressing the damage to their industry and their employees if the companies are forced to make cutbacks.

Economist John K. Galbraith has pointed out how the emphasis on production is driven not for the consumer products it creates but for the employment security production provides for society. Galbraith called this the “dependency effect” of production. CEO’s Stevens, Hess, Sean O’keefe and Williams just told us so. They need the defense contracts for the jobs—economic security--they provide!

Quote: a very large degree in recent times, increased output has been sought not for the goods involved but for the effect on economic security. Nothing else serves it so well. To falter on production, even though that production serves the most unimportant of requirements, is to expose some individuals somewhere to loss of employment and income. This cannot be allowed....It is not the lost production that is mentioned. It is always the unemployment. The remedy is, of course, more employment and higher production. Thus, the effort to enhance economic security becomes the driving force behind production.(John Kenneth Galbraith, The Affluent Society, Mentor, 1958, p.94.)

Production creates a dependency effect for production for economic security’s sake. And justification for production is often contrived...and even planned as in this case with the defense contractors. We live in an affluent society. Why not plan production that meet the real needs of society such as education, medicine, housing, and transportation? Industrial planning is already being done by corporations for their economic security and profit.

...we saw how deeply we were committed to production for reasons of economic security. Not the good but the employment provided by their production was the thing by which we set ultimate store. Now we find our concern for goods further undermined. It does not arise in spontaneous consumer need. Rather, the dependence effect means that it grows out of the process of production itself. If production is to increase, the wants must be effectively contrived. In the absence of the contrivance, the increase would not occur. This is not true of all goods, but that it is true of a substantial part is sufficient. It means that since the demand for this part would not exist, were it not contrived, its utility or urgency, ex contrivance, is zero...Clearly the attitudes and values which make production the central achievement of our society have some exceptionally twisted roots. (Ibid., p.127.)

This policy reversal of CEOs, and Republicans is not new. The elite business class denounces taxes, deficits, spending, socialism, and Keynesian economic policies, but they are the first to use these same macroeconomic policies when in power to protect their interests. For example, take Nixonian Republican utopian socialism.

On July 28, 1971, Paul W. McCracken the scholarly head of the Council of Economic Advisers, affirmed stoutly the virtue and efficacy of the current reliance on monetary policy, the unwisdom, even eccentricity, of an direct interference with prices and wages. He conceded that a contemporary observer, the present author [Professor Galbraith] who had urged that the market power of corporations and unions would defeat monetary policy unless unemployment was very sever, “has the merit of being logical within the limits of his peculiar view of the economic system.” But he strongly rejected such peculiarity, dismissed the economic of a freeze of prices as “illusory” and warned solemnly that “General wage and price control would be a serious threat to individual freedom.” 7 That corporations and unions already exercise such control and thus, presumably, endanger freedom was not stressed.

In his stand for principle, Dr. McCracken had the initial support of his President. At a press conference in early August, Mr. Nixon, recurring again to the same observer, said he was “unalterably opposed.” to the “Galbraith scheme which is supported by many of our Democratic Senators,” the scheme being modest direct intervention on wages and prices. The President noted that such policies were favored only by “extremists of the left,” adding generously, “I don’t say this in a condemning way, it is only an observation.”8 A few days later, on August 15, the extremist specter suddenly ceased to stalk: principle collapsed in face of overriding political need. All wages and prices, farm prices and a few others excepted, were frozen. (Money: Whence It Came, Where It Went, by John Kenneth Galbraith, 1975, Bantam Press, p. 348.)

Heads I win, tails you lose.

Heads I win, tails you lose.  Genius!  They talk about "risk takers," but they want investment certainties, not shots in the dark.  There is no risk, just a question of how much they can suck up without losing anything.

Antifascist's picture
I wrote the other

I wrote the other day, 

Well, here is why 1999 is so important to Romney. Romney left Massachusetts in 1999 to work on the Salt Lake City Olympics Committee Feb. 11. 1999 and his Olympic contract required severing all ties with any companies doing business with the games. There were already problems with corruption in the Salt Lake City Olympics organization and if Romney did not cut all ties with Bain Capital and his membership on all the other associated corporate boards, he would have breached his Olympic contract.

So what companies did he not cut ties with? 

Mitt Romney Brought Bain Capital With Him To The Olympics

Sealy Mattress, a company in which Bain had majority ownership -- earning $2 million in yearly management fees -- signed on as a supplier of 5,000 mattresses for Olympic athletes.

Marriott Corp., the hotel franchise where Romney served as a board member,became a sponsor of the games as well, ponying up $4 million to be the official lodging supplier.

Sometimes Romney cleared hurdles to get Bain-affiliated companies involved. He promised Tom Stremberg, the CEO of Staples, that the company's sponsorship would cost as much as the sales it made in the Salt Lake City market during the Olympics -- guaranteeing it wouldn't lose a cent. He then said he'd lobby "SLOC board members and other corporate contacts to switch their office supply contracts to Staples."

Staples, on whose board Romney served, ended up agreeing to spend $1 million more than the other potential supplier, Office Depot. But by then, Office Depot had already signed on the dotted line. Romney tried once more, offering Office Depot $1 million to back out of the deal. The company declined.

Perhaps one of the most oft-told examples of Romney's belt tightening involved him canceling the organizers' budget busting free lunches. Instead, he brought in Domino's Pizza and made board members pay $1 a slice. Domino's was a Bain company.

He can't help himself...he just can't help it.