watching for justice...

Federal Court Enjoings NDAA

A federal district judge today, the newly-appointed Katherine Forrest of the Southern District of New York, issued an amazing ruling: one which preliminarily enjoins enforcement of the highly controversial indefinite provisions of the National Defense Authorization Act, enacted by Congress and signed into law by President Obama last December. This afternoon’s ruling came as part of a lawsuit brought by seven dissident plaintiffs — including Chris Hedges, Dan Ellsberg, Noam Chomsky, and Birgitta Jonsdottir — alleging that the NDAA violates ”both their free speech and associational rights guaranteed by the First Amendment as well as due process rights guaranteed by the Fifth Amendment of the United States Constitution.”

The ruling was a sweeping victory for the plaintiffs, as it rejected each of the Obama DOJ’s three arguments: (1) because none of the plaintiffs has yet been indefinitely detained, they lack “standing” to challenge the statute; (2) even if they have standing, the lack of imminent enforcement against them renders injunctive relief unnecessary; and (3) the NDAA creates no new detention powers beyond what the 2001 AUMF already provides.

As for the DOJ’s first argument — lack of standing — the court found that the plaintiffs are already suffering substantial injury from the reasonable fear that they could be indefinitely detained under section 1021 of the NDAA as a result of their constitutionally protected activities.

A private drama followed which in some ways defined the new Chief Justice to his colleagues. Roberts assigned the Citizens United opinion to himself. Even though the oral argument had been dramatic, Olson had presented the case to the Court in a narrow way. According to the briefs in the case—and Olson’s argument—the main issue was whether the McCain-Feingold law applied to a documentary, presented on video on demand, by a nonprofit corporation. The liberals lost that argument: the vote at the conference was that the law did not apply to Citizens United, which was free to advertise and run its documentary as it saw fit. The liberals expected that Roberts’s opinion would say this much and no more.

At first, Roberts did write an opinion roughly along those lines, and Kennedy wrote a concurrence which said the Court should have gone much further. Kennedy’s opinion said the Court should declare McCain-Feingold’s restrictions unconstitutional, overturn an earlier Supreme Court decision from 1990, and gut long-standing prohibitions on corporate giving. But after the Roberts and Kennedy drafts circulated, the conservative Justices began rallying to Kennedy’s more expansive resolution of the case. In light of this, Roberts withdrew his own opinion and let Kennedy write for the majority. Kennedy then turned his concurrence into an opinion for the Court.

The new majority opinion transformed Citizens United into a vehicle for rewriting decades of constitutional law in a case where the lawyer had not even raised those issues. Roberts’s approach to Citizens United conflicted with the position he had taken earlier in the term. At the argument of a death-penalty case known as Cone v. Bell, Roberts had berated at length the defendant’s lawyer, Thomas Goldstein, for his temerity in raising an issue that had not been addressed in the petition. Now Roberts was doing nearly the same thing to upset decades of settled expectations.

 NATO repurposed...

Veterans for Peace Calls for an End to NATO

NATO provides the United States with a pretense of global coalition and legality. Approximately half of the world's military spending is U.S., while adding the other NATO nations brings the total to three-quarters. The head of the Pentagon, Leon Panetta, recently testified in Congress that a war could be made legal by working through either the United Nations or NATO. While no written law supports that claim, it is a claim that has served its intended purpose. NATO also serves as a false legal shield, protecting the U.S. military from Congressional oversight.

The U.S. dominated NATO holds up the past year's war on Libya as a model for the future, with an eye on various potential victims, including Syria and Iran. In so doing, NATO serves as the armed enforcer of the exploitative agenda of the G-8, which has fled Chicago for the guarded compound at Camp David.

NATO's interests are neither democratically determined nor humanitarian in purpose. NATO does not bomb all nations guilty of humanitarian abuses. Nor does NATO's bombing alleviate human suffering, it adds to it. Saudi Arabia is not a target. Bahrain is not a target. Ben Ali and Mubarak were not targets. An analysis of NATO's real motivations reveals a desire to control the global flow of oil, to support dictators who have supported U.S./NATO wars, prisons and torture operations, to back Israel's expansionist agenda, and to surround and threaten the nation of Iran.

Eight people were arrested Monday during a protest at Obama’s 2012 campaign headquarters. The rally, organized by social justice and anti-war group Catholic Workers, was the first organized demonstration — and the first instance of arrests — relating to the NATO counter-protests. It was small (just over two dozen participants assailed security and stormed the campaign headquarters and read a statement inside) but set a tone for actions later this week in asserting that the president and Democratic Party are protest targets alongside NATO generals and corporations like Boeing, who receive large government defense contracts.

For months the question has hovered over Occupy supporters, many of whom are attending NATO protests, partly organized by Occupy Chicago, from across the country: How many of them will manifest as Democratic voters come November? Will the energy that has brought hundreds of thousands into streets and parks across the country over the past half year be co-opted by the party machine? Of course, the small Catholic Workers demonstration is no indication either way. It will be interesting to watch, however, as the week of permitted and unpermitted protest actions continue in the city Obama calls home, the ways in which Mayor Rahm Emanuel and the president are willing to crack down on the dissenting crowds whose support they will ask for in November.

 a republic of the 99%?

US families saddled with debt, have few savings

Another study, released Monday, showed that the distressed financial conditions confronting many Americans and Europeans are matched by consumer outlook on the economy. The Boston Consulting Group’s (BCG) 11th annual Consumer Sentiment Survey conducted in April polled more than 15,000 people in 16 countries.

The BCG survey shows that more than four in ten consumers in the US and Europe do not believe the economy will improve over the next few years and the vast majority plans to rein in spending over the next 12 months. They also blame governments for the economic crisis and their financial distress.

About half of survey respondents said they are not financially secure, while almost a third said they have no savings. “The consumer does not believe the recession is over,” commented Michael Silverstein, senior partner at Boston Consulting. People are worried about wages not keeping pace with inflation and lack of adequate retirement funds, he added.

Nearly a quarter of all workers worry about keeping their jobs, the survey found. In one particularly revealing finding, only 20 percent of parents believe their children will have a better life than theirs. Only the Chinese felt relatively optimistic about their future.

The citizens of Spain have taken to the streets and squares in great numbers to demand their rights. Estimates vary enormously. Spain’s right-wing government claims that 22,000 people came out in Barcelona in the demonstrations on 12th May while the organisers estimate between 200,000 and 250,000. What matters, however, is not the battle of numbers but the prevalent idea that “They don’t represent us”. A quick look at the present situation explains why growing numbers of indignant citizens have taken up this slogan and why they are calling for a Republic of the 99% in which the right of existence is deemed to be fundamental. With an economy at “huge crisis point” after two consecutive quarters of negative growth, an overall unemployment rate of 24.44% and 52.01% for the under-25s, and veering close to a “junk rating” by S&P, the Spanish government has responded with harsh and absurd measures that would make any decent economist shudder. Among the latest are stripping “illegal” immigrants and other vulnerable people of health care and more repressive laws against protestors. The population, or the 99%, is certainly “restless”, as some newspapers put it. The restless ones are not just vandals who burn rubbish bins and destroy property, as we are supposed to believe, or even “terrorists”, according to some elements in the Catalan government. Many of them are thinking hard about alternatives.

As the government partially nationalised and granted a second bailout, this time of €10 billion, to the “vampire bank” Bankia, activists from the Acampada (Occupy) movement were organising a Citizen Rescue Mission. Workshops and debates have been organised for the next three days in the main squares of Spain’s cities to discuss a five-point campaign. This isn’t kids’ stuff. People of all ages are participating, among them indignant grandparents, the “iaioflautas” (a name coined in solidarity with the young Madrid occupiers, dog-flute punks, “perroflautas”, as the President of the Community of Madrid, the ultra-right Esperanza Aguirre, contemptuously calls them). The widely-accepted “Citizen Rescue Plan” is very down-to-earth and based on the sound economic principle of stimulating the productive base. It outlines five demands “for guaranteeing the right of existence of the 99%”: (1) No more money spent on rescuing banks; (2) Quality public health and education; (3) Decent jobs and no early retirement; (4) Decent guaranteed housing; and (5) A universal basic income.

The demand for a universal basic income is growing so fast that the Occupy movement is now working hard to explain its principles to the public. For example, the Barcelona Acampada has a programme of twenty workshops to be held in the plaça de Catalunya and three of these are devoted to basic income, understood as a human right. On Sunday afternoon (13th May) 1,000 people attended a workshop precisely on this theme. The working definition of the Red Renda Básica (Basic Income Network) in Spain is: Basic income is an income paid by the State to each full member or accredited resident of a society, regardless of whether he or she wishes to engage in paid employment, or is rich or poor or, in other words, independently of what any other sources of income might be, and irrespective of cohabitation arrangements in the domestic sphere.

 Who wants to attack Iran and why?

What an Israeli attack on Iran will mean for the Muslims

At the same time, anti-Americanism is reaching dangerous levels in predominantly Sunni countries such as Pakistan and Afghanistan. Both countries have extremist Sunni groups that engage in terrorism, as well as conservative Islamic parties that participate in electoral politics. Any attack on Iran could see a merging of all these Sunni elements as well as of the broader Sunni population, and one could expect widespread anger in the streets.

Such widespread and angry protests could make it almost impossible for Americans or Israelis to travel, work or do business across the Arab world and the Indian subcontinent. Such protests would almost invariably wipe out the gains and aspirations of the democratic movements within the Arab Spring countries, and lead to a reinforcing of Islamic fundamentalist parties, which could be expected to jump on the anti-American bandwagon. Widespread Sunni protests would invariably make the U.S. and NATO withdrawal from Afghanistan planned for 2014 much more difficult and possibly lead to the strengthening of the Taliban. It also could lead to a possible new intifada among the Palestinians, who in any case see little hope of an agreement with Israel on a two-state solution.

Thus any attack on Iran can be expected to unleash a violent reaction throughout the Muslim world, both in the more organized Shia minority camp where Iran has influence and in the majority Sunni countries where Iran may not have influence but anti-Americanism certainly does. The risk will be greater for Israel than for anyone else - a state already isolated and besieged by hostile states. With its conflict with the Palestinians unresolved, it will find itself even more isolated and under threat. The United States will find itself besieged in many parts of the Muslim world, making normal diplomacy unworkable and the effort to enlist Muslim states to support the U.S. war against Al-Qaida more difficult.

Israel needs to carefully consider the consequences of any military action against Iran.

But the resolution does not stop with urging the president to use his authority to prevent a nuclear-armed Iran. If it did, the resolution would be uncontroversial .

But there is also this: The House “urges the President to reaffirm the unacceptability of an Iran with nuclear-weapons capability and opposition to any policy that would rely on containment as an option in response to the Iranian nuclear threat.”

Think about that.

The resolution, which almost surely will pass on Tuesday, is telling the president that he may not “rely on containment” in response to “the Iranian nuclear threat.”

Since the resolution, and U.S. policy itself defines Iranian possession of nuclear weapons as, ipso facto, a threat, Congress would be telling the president that any U.S. response to that threat other than war is unacceptable. In fact, it goes farther than that, not only ruling out containment of a nuclear armed Iran but also containment of an Iran that has a “nuclear weapons capability.”

This sort of “proof” wouldn’t fool a child – but then again, it isn’t meant to prove anything. The successful deployment of war propaganda requires nothing in the way of real evidence but merely the constant reiteration of accusations – so that the casual observer may be led to believe that with that much smoke being generated there must be fire. The key to understanding the Parchin “nuclear chamber” deception is the ancillary “evidence” released by the Institute for Science and International Security (ISIS) – murky satellite images [.pdf] of water around the edges of a building at Parchin.

ISIS is saying this is an attempt by the Iranians to “cleanse” the area in advance of IAEA inspectors visiting the site: yet the idea that radioactivity could be eliminated in this way is laughable. In order to “cleanse” the site, it would be necessary to raze the building – and a great deal of the earth under and around it. The AP/ISIS narrative lacks even the most basic scientific credibility. A more likely explanation for the “activity” around the Parchin site involves the creation of nanodiamonds, which have medical applications in the treatment of cancer. Indeed, if you look at the so-called “nuclear explosives containment chamber” drawn by our anonymous spy, and a photo of an explosives chamber used for the creation of nanodiamonds, they are very similar if not quite identical.

Indeed, the specialty of the “former Soviet scientist” the IAEA and ISIS accuse of helping the Iranians weaponize their nuclear technology – Vyacheslav Danilenko – isn’t nuclear weaponry but the creation of nanodiamonds using just such a method.

It’s been a busy time for the Iran-is-building-nukes mini-industry that has grown up around the Israel lobby’s energetic push for an US attack on Iran. Another discredited tall tale recently pushed by US officials is the myth of Iranian cooperation with al-Qaeda. When US Undersecretary of the Treasury David S. Cohen made the accusation public, last July, it was seized on by the Weekly Standard and other neoconservative outlets as proof positive of an Iranian-al Qaeda “alliance.” Yet the release of documents discovered in the raid on bin Laden’s Abbottabad hideout – showing bin Laden’s unmitigated hostility to Iran – detailed the real reason Tehran released al Qaeda detainees in Iranian jails: AQ had kidnapped an Iranian diplomat and the release was a prisoner exchange.

 so define a "national security interest"....

Long live 'our' Gulf bastards

The al-Khalifas have been way wilier than President Bashar al-Assad in Syria; they have killed only an acceptable number of people. But why is Bahrain substantially "different" from Syria? Because "it hosts the US Navy's 5th Fleet, helping the US military project its might in the Gulf and contain Iran"; and that's not a neo-conservative talking, but Washington director of Human Rights Watch, Tom Malinowski....

Here is Libya conqueror Clinton:

Bahrain is a valued ally of the United States. We partner on many important issues of mutual concern to each of our nations and to the regional and global concerns as well. I'm looking forward to a chance to talk over with His Royal Highness a number of the issues both internally and externally that Bahrain is dealing with and have some better understanding of the ongoing efforts that the government of Bahrain is undertaking. So again, His Royal Highness, welcome to the United States.

Here's a Bahraini government spokesman telling it like it is to Reuters only one day before the Clinton-Crown Prince schmooze:

We are looking into the perpetrators and people who use print, broadcast and social media to encourage illegal protest and violence around the country. If applying the law means tougher action, then so be it.

Translation: we will keep going on a rampage because the masters in Washington have our backs covered.

Not a word from the Obama administration on the arrest of top Bahraini human-rights activist Nabeel Rajab, who Amnesty International declared a "prisoner of conscience", as well as calling for his immediate release. Activist Abdulhadi Alkhawaja, for his part, has been on a hunger strike for three months, protesting his life imprisonment by the al-Khalifa regime.

The Obama administration is proceeding with military sales to Bahrain despite the ruling monarchy’s ongoing repression of pro-democracy protests. On Friday, the State Department announced it will allow a multi-million-dollar weapons shipment to the Bahraini government, citing "national security interests." The announcement came just days after the Bahraini government vowed "tougher action" in its crackdown on protesters. As the United States confirmed the weapons sale, thousands of Bahrainis marched near the capital Manama to call for the release of political prisoners.

Protester: "Of course, our demands in Bahrain, demands of all the people, are the demands of everybody for years: democracy, change of regime, the release of prisoners. These are the demands by everyone else in the world. We want the same things."

In response to the announcement of more weapon sales to Bahrain, the group Human Rights First issued this statement: "The U.S. can be in no doubt about the reality of the repression in Bahrain. Where is the progress that warrants the reward of arms?"

In Robert E. Gamer’s book “The Developing Nations” is a chapter called “Why Men Do Not Revolt.” In it Gamer notes that although the oppressed often do revolt, the object of their hostility is misplaced. They vent their fury on a political puppet, someone who masks colonial power, a despised racial or ethnic group or an apostate within their own political class. The useless battles serve as an effective mask for what Gamer calls the “patron-client” networks that are responsible for the continuity of colonial oppression. The squabbles among the oppressed, the political campaigns between candidates who each are servants of colonial power, Gamer writes, absolve the actual centers of power from addressing the conditions that cause the frustrations of the people. Inequities, political disenfranchisement and injustices are never seriously addressed. “The government merely does the minimum necessary to prevent those few who are prone toward political action from organizing into politically effective groups,” he writes.

Gamer and many others who study the nature of colonial rule offer the best insights into the functioning of our corporate state. We have been, like nations on the periphery of empire, colonized. We are controlled by tiny corporate entities that have no loyalty to the nation and indeed in the language of traditional patriotism are traitors. They strip us of our resources, keep us politically passive and enrich themselves at our expense. The mechanisms of control are familiar to those whom the Martinique-born French psychiatrist and writer Frantz Fanon called “the wretched of the earth,” including African-Americans. The colonized are denied job security. Incomes are reduced to subsistence level. The poor are plunged into desperation. Mass movements, such as labor unions, are dismantled. The school system is degraded so only the elites have access to a superior education. Laws are written to legalize corporate plunder and abuse, as well as criminalize dissent. And the ensuing fear and instability—keenly felt this past weekend by the more than 200,000 Americans who lost their unemployment benefits—ensure political passivity by diverting all personal energy toward survival. It is an old, old game.

 Keeping Occupy from being occupied...

Co-Option at Work in America Today

These methods of co-option follow roughly a seven point process once a social movement that is strong enough to challenge the status quo has been formed. When properly implemented, the process successfully strips social movements of their more radical "excesses" and reworks them into compatibility with more moderate reformist political figures, thus saving the dominant structures from threats from below. This process is as follows:

Step 1: "Diplomatic overtures" and declarations of ideological solidarity with the social movement.

Step 2: The providing of necessary resources and training, often in nonviolent protest tactics, to the movement.

Step 3: Narrowing the focus of the movement's agenda and framing the topics of debate around certain key elements.

Step 4: Assisting in or organizing the actions of the movement.

Step 5: Moving elements in the movement or the movement in its entirety into alignment with certain elite figures, most frequently ones from economics and business.

Step 6: Building allegiances between the movement and other factions or political parties.

Step 7: Integrating the movement into the electoral process by creating them into a voting bloc and transforming their actions into awareness-raising for their political candidate. The politicians who ride into office on United States-backed social movements ultimately betray the ideologies that drove their voting base, and with the triumph of each administration, loans from transnational institutions such as the World Bank and International Monetary Fund flow in, borders are opened to fluctuations of the world market, publicly-owned assets are privatized and sold off the highest bidder, and in the more extreme cases, repression of dissent becomes common. What "democracy promotion" boils down is the exporting of the Western neoliberal form of democracy, the well-oiled plutocracy built atop the sanctity of markets. It is the projection of the "American Dream" -- the idea that material abundance, private property, and enterprise are the necessary requirements for happiness and success. It was through the image of the American Dream that Filene had hoped class-based thinking would be erased -- philanthropy to protect enterprise and property, and mass production (and the rise of debt as common factor in economics) to create the appearance of successful material accumulation.

In the midst of the slow-down of the Occupy movement in the early months of 2012, a strange creation emerged from its dense horizontal network of assemblies, spokes-councils, and working groups. Dubbed the Movement Resource Group (MRG), its nature drew controversy – and for many, condemnation – from the movement that it claimed to represent. It appeared as a vertical blip on the flat radar screen, an image of wealth operating in a space where class and rampant material accumulation were adamantly questioned.

The MRG’s aim was to act as a conduit for funding for the movement, seeking to ease Occupy “as it transitions from being a series of spontaneous actions to a more strategic national movement.”3 It was first launched by Ben Cohen and Jerry Greenfield, the founders of the progressive-minded Ben and Jerry’s Ice Cream. They were quickly joined by other high profile left-wing millionaires and figureheads: Anna Burger of the SEIU labor union, entertainment moguls Danny Goldberg and Richard Foos, and others. Maybe it was because Ben and Jerry’s parent company, Unilever, is a member of the much maligned American Legislative Exchange Council. Or maybe it is because the image of money cozying up to Occupy reeks of the age-old tradition of progressive co-option – a threat very real to all that seek real change. Regardless, MRG did not seem to make much headway, and attention has shifted in both the Occupy movement and the media at large to a new grassroots movement sporting the same rhetoric and tactics of its predecessor – the 99% Spring.

The brainchild of the professional left, the 99% Spring is a joint project of a myriad of organizations, ranging from the Rainforest Action Network to the Institute for Policy Studies to 350.org, all taking part in helping push their agenda far beyond Occupy, transforming its energy and ethos into a structured complex. MRG members don’t seem to be very far from the action, with Anna Burger’s SEIU and Ben Cohen’s USAction adding their support for the 99% Spring.

The other liberal economists named above have made statements similar to those of Stiglitz. They all believe that capitalism can be made to function in the interests of the majority, for the 99 percent as it were, if only we had a government that would regulate it appropriately. And they all think that, if it hadn't been for the neoliberal period of market fundamentalism ushered in by Margaret Thatcher and Ronald Reagan, we'd still all be -- in the words of Stiglitz and Krugman's friend and fellow economist, J. Bradford Delong -- "slouching toward utopia." That it could be in the nature of capitalism, in the working out of its laws of motion, that the problems we face are rooted doesn't enter their minds.

A friend of mine says that Occupy Wall Street has changed the political landscape in the United States. It has opened up new possibilities for discussing and debating what is going on in the world and what we should do about it. He says that we shouldn't be complaining that the occupiers haven't come up with a specific set of demands or developed a full-blown theory of social change. We should be happy that, at last, there is a large and visible outpouring of men and women, young and old, giving witness to economic, political, and social conditions that are no longer acceptable. It is up to us, my friend says, to place our own ideas in the mix, organize around specific demands in our own locales, form our own political organizations.

I agree with my friend. So, let me put forth two arguments aimed at radical economists. First, let us develop our own analysis of the economy and eschew both criticisms of mainstream economics and worshiping at the feet of those few mainstream economists who shed tears for the poor and the unemployed. Liberal economists like Krugman, Sachs, and Stiglitz have not had a single insight into the workings of capitalist economies that compares even remotely to those developed by Karl Marx on nearly every page of Capital, Volume I. Nor will they ever.

 A day for Matt Taibbi...

WAY: Taibbi still needs to be weaned off of liberalism's teat but he is holding some deserving people's feet to the fire....almost on a daily basis...

How Wall Street Killed Financial Reform

Two years ago, when he signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, President Barack Obama bragged that he'd dealt a crushing blow to the extravagant financial corruption that had caused the global economic crash in 2008. "These reforms represent the strongest consumer financial protections in history," the president told an adoring crowd in downtown D.C. on July 21st, 2010. "In history."

This was supposed to be the big one. At 2,300 pages, the new law ostensibly rewrote the rules for Wall Street. It was going to put an end to predatory lending in the mortgage markets, crack down on hidden fees and penalties in credit contracts, and create a powerful new Consumer Financial Protection Bureau to safeguard ordinary consumers. Big banks would be banned from gambling with taxpayer money, and a new set of rules would limit speculators from making the kind of crazy-ass bets that cause wild spikes in the price of food and energy. There would be no more AIGs, and the world would never again face a financial apocalypse when a bank like Lehman Brothers went bankrupt.

Most importantly, even if any of that fiendish crap ever did happen again, Dodd-Frank guaranteed we wouldn't be expected to pay for it. "The American people will never again be asked to foot the bill for Wall Street's mistakes," Obama promised. "There will be no more taxpayer-funded bailouts. Period."

Two years later, Dodd-Frank is groaning on its deathbed. The giant reform bill turned out to be like the fish reeled in by Hemingway's Old Man – no sooner caught than set upon by sharks that strip it to nothing long before it ever reaches the shore. In a furious below-the-radar effort at gutting the law – roundly despised by Washington's Wall Street paymasters – a troop of water-carrying Eric Cantor Republicans are speeding nine separate bills through the House, all designed to roll back the few genuinely toothy portions left in Dodd-Frank. With the Quislingian covert assistance of Democrats, both in Congress and in the White House, those bills could pass through the House and the Senate with little or no debate, with simple floor votes – by a process usually reserved for things like the renaming of post offices or a nonbinding resolution celebrating Amelia Earhart's birthday.

Naturally, since that welfare state is "unsustainable"” we need to be real about things and stop the deficit spending and the stimulus, etc.

This world view ignores the fact that those "superstar" leaders of "hyperefficient" companies have been sucking up a thousand times as much welfare as those low-skilled workers Brooks is talking about. Here’s how the "superstars" of the banking world sometimes earn their bonuses: they borrow trillions from the U.S. Federal Reserve at zero or near zero interest, then they turn right around and lend chunks of that free money to a place like Greece (ex-FDIC Sheila Bair, in a hilarious editorial on the subject, pegged the ten-year yield at 21%), then they pocket the proceeds and call it capitalism.

Brooks’ analysis of the financial crisis leaves out things like the $16 trillion in emergency loans the banks secretly got from the Fed in the years since the crisis. It ignores quantitative easing, bailouts, and the trillions of dollars of bets Wall Street made on the unreal economy during the bubble years that we all ended up paying for, either through taxes or reduced home values or lowered interest on our savings.

The point is, when people talk about “austerity,” they only ever talk about the pain the general population should voluntarily accept, in the form of reduced services and curtailed “stimulus.” No one ever says the financial services sector should have to cut back on its access to easy money, and there hasn’t been much in the way of serious plans to restore some sanity and prudence to the lending and investing business.

If you’re wondering why you should care if some idiot trader (who apparently has been making $100 million a year at Chase, a company that has been the recipient of at least $390 billion in emergency Fed loans) loses $2 billion for Jamie Dimon, here’s why: because J.P. Morgan Chase is a federally-insured depository institution that has been and will continue to be the recipient of massive amounts of public assistance. If the bank fails, someone will reach into your pocket to pay for the cleanup. So when they gamble like drunken sailors, it’s everyone’s problem.

Activity like this is exactly what the Volcker rule, which effectively banned risky proprietary trading by federally insured institutions, was designed to prevent. It will be argued that this trade was a technically a hedge, and therefore exempt from the Volcker rule. Not only does that explanation sound fishy to me (as Salmon notes, it's unclear just exactly how Iksil's trade could be a hedge), but it's sort of immaterial anyway: whether or not this bet technically violated the Volcker rule, it definitely violated the spirit of the law. Hedge or no hedge, we don’t want big, federally-insured, too-big-to-fail banks making giant nuclear-powered derivatives bets.

 Over the edge...

WAY: if you're anything like me, that is, overworked, a bit befuddled but always trying to maintain some awareness of the big picture plus details to boot, this week's news might have almost pushed you over the edge. Complete daily entries could have been written about the shenanigans of both Romney and Obama. Or, now named Oromney and Robama.

Romney can't remember the bullying of John Lauber at Cranbrook. A "prank", a "joke". Certainly sexual preference was not even a consideration. As a classmate of Romney's remarked, "how could the fellow with the scissors forget?" A ‘Pack of Dogs’, The Note.

Then we have Obama "coming out" for same-sex marriage. And the world seemed to stop: according to the NY Times, Obama “took the moral high ground on what may be the great civil rights struggle of our time.” President Obama's Moment. Not that Obama took any real action, Frida Ghitis, but the money started to flow, immediately, WA Post.

My only antidote is to find someone who not only has awareness but can offer up political and economic commentary in a downright satirical and funny way. He's across the water but we present to you John Ward and his Diary of Deception and Distortion, The Slog .

Why?

If you are consumed with greed, enjoy a permanent sense of superiority, are incompetent, suffer from Acute Controlling Syndrome, think ethics are for wimps, or have never created anything worthwhile in your life, the chances are you hold some kind of senior position in one of these professions: politics, the media, investment banking, multinational business, management consultancy, tax accountancy, the Law, or internet service provision.

You are the reason all those pursuits serve your interests rather than mine.

If you have all of those features in your personal make-up, then you are a seriously big wig, engaged in running the world. You are probably a sociopath, perhaps a psychopath, and definitely delusional…to the extent that your ideal world is one in which the small community and the middle classes have been wiped out, and a few very big bananas have near-monopolies on everything.

You are the reason the world is falling apart.

In order to retain your position as an influential idiot dedicated to pauperising everyone except the elite, you are going to talk bollocks almost all the time. (Trans: US – horsesh*t, French – conneries, German – Bockmist). You can get away with doing so, because most of the rest of us are too thick, bored, busy or tired to bother analysing the bollocks that pour forth from your mouth in a never-ending testicular stream.

The Slog is dedicated to the deconstruction of bollocks, and the destruction of all the scams associated with it.

With the Thin Blue Line on a protest march in London today, I was left wondering who would police it. Would any Plods arrest themselves? They are, after all, past masters at nicking the wrong bloke. In mediaeval times, once a year the serfs got to be waited on for the day by the Rich Man in his Castle. It occurs to me that, just for a police protest march, you could have lots of baddies sporting black masks and stripey tops nicking coppers for incitement to quiet, or perhaps behaving in a manner unlikely to cause a breach of the peace.

“It’s a fair cop, Fingers” said PC Dixon, “I’ll come noisy like”. Trouble is, they couldn’t have taken Plod to prison, because the warders were out on strike as well.

I’m talking again about the astronomical obligations faced by American banks in the face of even a small number of failures. Bloomberg has updated these, and they show that the nine largest U.S. banks have a total of $228.72 trillion of exposure to derivatives….around three times the size of the real global economy that doesn’t involved worthlessly ‘leveraged’ paper. And that’s just nine banks owing

$228,720,000,000,000

That’s an average of $25.4 trillion each. 2500 times more than the cap of Bank of America. 12,500 times bigger than JP Morgan-Chase. 25,000 times the size of Capital One.

Now over and over, I am told that “all these obligations are hedged”. But frankly, this is the inconsequential thinking pattern of an infantile delinquent: global banking is by definition a closed circle. To every reaction there will be a reaction. No one bank knows how their ‘bettee’ has hedged – or who with: but in the end, one comes back full circle to a bank already hedged one way and unable to hedge the other. Of course, if the banker is Goldman Sachs, this is standard procedure anyway….but that’s a moral consideration for a banking firm with its own and client accounts: it’s not a financial option for a bank that has already thrown its customers’ money in one direction. The investment system is not the Universe; it is finite, and doomed to imbalance if too much risk is taken.

That the savvy American elite sees the Tsunami coming our way as a result of this is also beyond reasonable doubt.

The level of executive employee share selling among S&P 500 companies is the highest in nearly 10 years. The sheer volume of insider sales (nearly 1,800 by S&P 500 executives over a three-month period according to brokerage Brockhouse Cooper) is hugely indicative of steers stampeding away from a lava flow.