A mythic aura engulfs the Kennedy administration. It was Camelot reborn, a time of prosperity and optimism, when all of our ugliness and problems were concealed beneath the glossy pages of Life magazine. The burbs were the only way to live, and a split-level house complete with manicured lawn represented the “good life.”
But, it was also the era when the amorality so necessary for the efficient management of empire came out of the closet.
We’d always been a nasty people from the very first slaughter of a Native American village in 1637 when John Underhill led a night attack on a sleeping Pequot village nestled on the banks of the Mystic River in Connecticut. He burned the village and slaughtered the survivors, including women and children. The body count came in at between 600 and 700 people.
But for all the blood, there was a certain piety to Underhill’s action. He was inspired by the biblical King David.
"And it came to pass, after the year was expired, at the time when kings go forth to battle, that David sent Joab, and his servants with him, and all Israel; and they destroyed the children of Ammon, and besieged Rabbah." – 2 Samuel 11.1.
This pious gloss was to continue throughout our history. McKinley justified his annexation of the Philippines and the brutal war that followed by asserting:
[T]hat there was nothing left for us to do but to take them all, and to educate the Filipinos, and uplift and civilize and Christianize them, and by God’s grace do the very best we could by them, as our fellow-men for whom Christ also died. And then I went to bed, and went to sleep, and slept soundly, and the next morning I sent for the chief engineer of the War Department (our map-maker), and I told him to put the Philippines on the map of the United States (pointing to a large map on the wall of his office), and there they are, and there they will stay while I am President!
It was a policy in which indigenous people were given a choice between salvation or slaughter. Ours was a noble empire spread by the bullet and the Bible.
Shortly after Kennedy assumed the president there was a tectonic shift, so subtle that is passed unnoticed. It had become the practice of the White House press corps to ask an incoming president who his favorite author was. For example, Eisenhower’s favorite writer was Eric Hofer, author of The True Believer.
When the press asked Kennedy the same question, he named Ian Fleming, creator of James Bond, Agent 007 with his license to kill.
Amorality was out of the closet and Hollywood started churning out James Bond flicks starting with 1962’s “Dr. No.”
Who can forget the suave manner in which Sean Connery gunned down his adversaries with a psychopathic detachment? No remorse, no trauma, just a man following orders with a sardonic half smile.
In some respects, Bond became the role model and hero for the New American Empire that was emerging out of the Cold War. It was an era that hatched the cockamamie plots to assassinate Castro by poisoning his beard.
When our plots to assassinate world leaders who didn’t toe our line came out during the 1975 Church Committee investigation into the FBI and the CIA, the public was still capable of outrage.
No more.
Now Obama has appointed a seasoned assassin, Lt. Gen. Stanley A. McChrystal, to head the NATO campaign in Afghanistan, and there’s been nary a whimper. Now, instead of a biblical justification, we simply refer to his appointment as “new eyes.”
Perhaps the press will start calling him Lt. Gen. 007.
--Case Wagenvoord
Monday, May 25, 2009
Sunday, May 24, 2009
Mad Math
The only viable response for a financial wizard whose been gulled is denial.
One can be gulled in a variety of ways. There’s the old fashioned con game in which the perpetrator knows he’s trying to cheat the mark out of his money. Then there’s the sincere gull in which a group of individuals convince themselves that a given methodology or approach is so sound that there are no alternatives.
It was the latter that snookered our financial wizards, and the methodology that suckered them in was the belief that risk could be mathematically predicted. According to Martin Hutchinson, the mathematical modeling was based on the mistaken assumption that market movements were random. Were this the case, then future movements of the market could be predicted using linear mathematical equations.
Unfortunate, it wasn’t true.
As Hutchinson points out, randomness only applies in situations in which “tiny variations cause a discrete change in results. Since tiny physical variations are themselves unpredictable, their results are truly random.” Examples are the fall of the ace of spades when the deck is shuffled or the drop of a ball on a roulette wheel.
That isn’t how the market behaves. Hutchinson tells us:
This true randomness almost never holds for economic activities. Some of them are governed by complex underlying equations, impossible for mediocre mathematicians to solve, which produce pseudo-random “chaotic” behavior, in which prices or other variables appear to move randomly but are in reality mostly determinate.
In other words, it is another classic example of fools trying to force the nonlinear movements of the market into linear equations that look good on a computer screen, but don’t tell you shit about what’s going to happen. (It was a situation similar to nineteenth century medicine’s belief in the curative power of magnets which, “draw off the noxious electrical fluid that lay at the foot of suffering.”)
It was a these mathematical models that led Bernanke to pronounce “the great moderation,” a utopian age in which risk had been brought under control, or so he said just before the economy entered “the great meltdown.”
Instead of randomness, chaos and the unknown drive the market, both of which don’t respond to linear, exponential or normal equations with which mathematicians are most familiar. Unknowns can never be expressed mathematically since mathematicians known none of the factors that go into them.
But, what the hell! When you’re dealing with guesswork, it makes your life a lot easier if you can justify your actions with a mathematical formula that is so complex it looks authoritative, even though it is dead wrong.
It is proprietary mathematical models such as these that the banks are using to market their toxic paper to model instead of to market. Of course their crap is worth sixty cents on the dollar, they tell us, because they have the mathematical models to prove it, even though you can’t see them because they are proprietary.
I must correct myself. The banks aren’t holding toxic paper; they’re holding toilet paper so gentle on our assholes we don’t even know we’re being reamed.
After all, numbers never lie. Do they?
--Case Wagenvoord
One can be gulled in a variety of ways. There’s the old fashioned con game in which the perpetrator knows he’s trying to cheat the mark out of his money. Then there’s the sincere gull in which a group of individuals convince themselves that a given methodology or approach is so sound that there are no alternatives.
It was the latter that snookered our financial wizards, and the methodology that suckered them in was the belief that risk could be mathematically predicted. According to Martin Hutchinson, the mathematical modeling was based on the mistaken assumption that market movements were random. Were this the case, then future movements of the market could be predicted using linear mathematical equations.
Unfortunate, it wasn’t true.
As Hutchinson points out, randomness only applies in situations in which “tiny variations cause a discrete change in results. Since tiny physical variations are themselves unpredictable, their results are truly random.” Examples are the fall of the ace of spades when the deck is shuffled or the drop of a ball on a roulette wheel.
That isn’t how the market behaves. Hutchinson tells us:
This true randomness almost never holds for economic activities. Some of them are governed by complex underlying equations, impossible for mediocre mathematicians to solve, which produce pseudo-random “chaotic” behavior, in which prices or other variables appear to move randomly but are in reality mostly determinate.
In other words, it is another classic example of fools trying to force the nonlinear movements of the market into linear equations that look good on a computer screen, but don’t tell you shit about what’s going to happen. (It was a situation similar to nineteenth century medicine’s belief in the curative power of magnets which, “draw off the noxious electrical fluid that lay at the foot of suffering.”)
It was a these mathematical models that led Bernanke to pronounce “the great moderation,” a utopian age in which risk had been brought under control, or so he said just before the economy entered “the great meltdown.”
Instead of randomness, chaos and the unknown drive the market, both of which don’t respond to linear, exponential or normal equations with which mathematicians are most familiar. Unknowns can never be expressed mathematically since mathematicians known none of the factors that go into them.
But, what the hell! When you’re dealing with guesswork, it makes your life a lot easier if you can justify your actions with a mathematical formula that is so complex it looks authoritative, even though it is dead wrong.
It is proprietary mathematical models such as these that the banks are using to market their toxic paper to model instead of to market. Of course their crap is worth sixty cents on the dollar, they tell us, because they have the mathematical models to prove it, even though you can’t see them because they are proprietary.
I must correct myself. The banks aren’t holding toxic paper; they’re holding toilet paper so gentle on our assholes we don’t even know we’re being reamed.
After all, numbers never lie. Do they?
--Case Wagenvoord
Saturday, May 23, 2009
Falling Up
Unfortunately for us—and for reformers trying to rescue our post-bubble economy—the history of economic thought has been rewritten in infantile caricature, to give the impression that today’s stripped-down, largely trivialized junk economics is the apex of Western social thought.
--Michael Hudson
That’s history for you—always moving in the direction our ideological prejudices think it should. In the eyes of the corporate state, anything that adds a point or two to an enterprise's profit is “destiny.” Anything that reduces the margin of profit is an anomaly.
This explains why there are people out there who still believe that:
America’s new generation of financial assets that resulted from the recently invented financial process known as “securitization” are fundamentally sound in value, and that an over-reaction on the part of investors to the subprime crises has resulted in a panic-induced collapse in their valuations.
All we have to do, they tell us, is restore confidence in the market, which financial wizards are doing, hand-over-fist, by making the banks appear more profitable than they really are using accounting gimmicks such as marking to model and the creation of pie-in-the-sky scenarios for economic recovery. Once this confidence is restored, they assure us, the toxic assets will no longer be toxic and the latest of our collapsed economic bubbles will miraculously re-inflate itself and God will still be in his heaven.
It’s kind of like believing in the tooth fairy.
When a fool steps off the edge of a cliff, he believes his fall to be progress. I suppose that, in one respect, it is destiny at work. That’s the problem with those who believe in destiny: down is up.
--Case Wagenvoord
--Michael Hudson
That’s history for you—always moving in the direction our ideological prejudices think it should. In the eyes of the corporate state, anything that adds a point or two to an enterprise's profit is “destiny.” Anything that reduces the margin of profit is an anomaly.
This explains why there are people out there who still believe that:
America’s new generation of financial assets that resulted from the recently invented financial process known as “securitization” are fundamentally sound in value, and that an over-reaction on the part of investors to the subprime crises has resulted in a panic-induced collapse in their valuations.
All we have to do, they tell us, is restore confidence in the market, which financial wizards are doing, hand-over-fist, by making the banks appear more profitable than they really are using accounting gimmicks such as marking to model and the creation of pie-in-the-sky scenarios for economic recovery. Once this confidence is restored, they assure us, the toxic assets will no longer be toxic and the latest of our collapsed economic bubbles will miraculously re-inflate itself and God will still be in his heaven.
It’s kind of like believing in the tooth fairy.
When a fool steps off the edge of a cliff, he believes his fall to be progress. I suppose that, in one respect, it is destiny at work. That’s the problem with those who believe in destiny: down is up.
--Case Wagenvoord
Thursday, May 21, 2009
Seeking a Cure
America needs a twelve-step program. We are addicted to looking at the world through the cracked lens of an ideology that died with the Soviet Union. One symptom of our addiction is the need for an enemy, any enemy. If we aren’t threatened by someone or something, we feel naked and exposed.
Over the decades, we have accepted a state of heightened anxiety as the norm. The result is a diabolical feedback loop in which we seek to assuage our anxiety by building up our military-industrial complex. Yet the more military hardware we amass, the more anxious we feel; so we add even more hardware in the hope that we will finally feel secure in our chronic insecurity, which we never do.
And, our media is ever willing to feed our fears since doing so boosts ratings and circulation. Today’s Times contained two items guaranteed to keep us on our toes. It seems Iran launched a missile capable of reaching Israel and Europe. Given the nuclear armaments stockpiled by both Israel and Europe, Iran would have to be brain dead to launch an attack. But then, when has reason ever been allowed to get in the way of anxiety? This calls for another Missile Defense System!
The second item reveals the shocking fact that 1 in 7 released detainees join the jihad. Given the treatment the suffered in detention, that figure shows a remarkable restraint on the part of the world’s Muslims.
Jihad is such as lovely buzz word. It’s much more compressed and alien sounding than Communism. It’s only a matter of time before a Beltway hack coins the neologism, Jihadism, which would make as much sense as Warism.
Of course, there is a metanarrative at work that can be described in one word: oil. It’s running out and we want to control what’s left of it, and being addicted to enemies and arms, our knee-jerk solution is to control it militarily.
It is an old saw that in discussing military matters, amateurs focus on strategy while experts focus on logistics. From a logistical point of view, the idea of America controlling the world’s oil supply militarily is a pipe dream. We could only do so by maintaining a long and very vulnerable supply line, and we’d burn a hell of a lot of fuel doing so. The current military rate of consumption is 3.5 million gallons of oil each day.
The Chinese, on the other hand, had the good sense to dump their ideology. In doing so, they have discovered that it is a hell of a lot cheaper, and burns hell of a lot less fuel, to fly trade delegations around the globe to ink contracts for future oil deliveries and oil field development.
China has gas and oil contracts with Brazil, Ecuador, Bolivia, Colombia, Venezuela and Cuba, along with pipeline deals with Uzbekistan and Turkmenistan. The bulk of China’s oil imports come from Africa and it has interests in Burma, Vietnam and Malaysia.
All of this without firing a shot.
A congressional study groused that the Chinese contracts come with ”none of the pesky human rights conditions, good governance requirements, approved-project restrictions and environmental quality regulations that characterize US and other Western government investments.” Our missionary zeal dies hard.
China gets the oil, while we get a lot of flag-draped coffins and an ever-deepening addiction to enemies and firepower.
--Case Wagenvoord
Over the decades, we have accepted a state of heightened anxiety as the norm. The result is a diabolical feedback loop in which we seek to assuage our anxiety by building up our military-industrial complex. Yet the more military hardware we amass, the more anxious we feel; so we add even more hardware in the hope that we will finally feel secure in our chronic insecurity, which we never do.
And, our media is ever willing to feed our fears since doing so boosts ratings and circulation. Today’s Times contained two items guaranteed to keep us on our toes. It seems Iran launched a missile capable of reaching Israel and Europe. Given the nuclear armaments stockpiled by both Israel and Europe, Iran would have to be brain dead to launch an attack. But then, when has reason ever been allowed to get in the way of anxiety? This calls for another Missile Defense System!
The second item reveals the shocking fact that 1 in 7 released detainees join the jihad. Given the treatment the suffered in detention, that figure shows a remarkable restraint on the part of the world’s Muslims.
Jihad is such as lovely buzz word. It’s much more compressed and alien sounding than Communism. It’s only a matter of time before a Beltway hack coins the neologism, Jihadism, which would make as much sense as Warism.
Of course, there is a metanarrative at work that can be described in one word: oil. It’s running out and we want to control what’s left of it, and being addicted to enemies and arms, our knee-jerk solution is to control it militarily.
It is an old saw that in discussing military matters, amateurs focus on strategy while experts focus on logistics. From a logistical point of view, the idea of America controlling the world’s oil supply militarily is a pipe dream. We could only do so by maintaining a long and very vulnerable supply line, and we’d burn a hell of a lot of fuel doing so. The current military rate of consumption is 3.5 million gallons of oil each day.
The Chinese, on the other hand, had the good sense to dump their ideology. In doing so, they have discovered that it is a hell of a lot cheaper, and burns hell of a lot less fuel, to fly trade delegations around the globe to ink contracts for future oil deliveries and oil field development.
China has gas and oil contracts with Brazil, Ecuador, Bolivia, Colombia, Venezuela and Cuba, along with pipeline deals with Uzbekistan and Turkmenistan. The bulk of China’s oil imports come from Africa and it has interests in Burma, Vietnam and Malaysia.
All of this without firing a shot.
A congressional study groused that the Chinese contracts come with ”none of the pesky human rights conditions, good governance requirements, approved-project restrictions and environmental quality regulations that characterize US and other Western government investments.” Our missionary zeal dies hard.
China gets the oil, while we get a lot of flag-draped coffins and an ever-deepening addiction to enemies and firepower.
--Case Wagenvoord
Wednesday, May 20, 2009
Making the Invisible Hand of the Market Visible
According to the right’s revisionist history of the Great Depression, FDR prolonged it with his New Deal programs. Had he left well enough alone, the Invisible Hand of the Market would have restored economic balance in short order. To them, it was an unforgivable sin to retard our economic recovery with programs that relieved the suffering of millions. It is better that the many suffer so the few may recover.
The Invisible Hand of the Market is an ideology that is treated with the same mystical awe as is God. Like God, the Invisible Hand knows when a sparrow falls. Unlike God, the Invisible Hand builds a fire, cooks it and sells the burn flesh to the starving for a neat profit.
There is one other difference. While God is forever hidden from us, we can make the Invisible Hand visible. Here is what you do:
· Place your elbow on a table with your forearm perpendicular to the surface.
· Make a fist.
· Extend you middle finger heavenward.
There you have it, the Invisible Hand of the Market.
--Case Wagenvoord
The Invisible Hand of the Market is an ideology that is treated with the same mystical awe as is God. Like God, the Invisible Hand knows when a sparrow falls. Unlike God, the Invisible Hand builds a fire, cooks it and sells the burn flesh to the starving for a neat profit.
There is one other difference. While God is forever hidden from us, we can make the Invisible Hand visible. Here is what you do:
· Place your elbow on a table with your forearm perpendicular to the surface.
· Make a fist.
· Extend you middle finger heavenward.
There you have it, the Invisible Hand of the Market.
--Case Wagenvoord
Tuesday, May 19, 2009
A Cheerful Little Thought
Here’s a cheerful little thought from Obama’s top economic advisor, Lawrence Summers, in which he justifies dumping toxic waste in poor countries:
[T]he economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable and we should face up to that. The measurement of the cost of health-impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health-impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wage[1]
There you have it: because the cost per unit of the poor is less than the cost-per-unit of the rich, it follows, ergo/post-hoc/post-haste, that it makes more economic sense to snuff a peasant than a lord. When you kill the poor, you kill idlers, sustenance farmers and slum dwellers; when you kill the prosperous, you kill people just like us, and that simply won’t do!
This is what happens when rational thought is divorced from ethics and morality. The result is the value-free thinking so valued by the social sciences (in its self, a contradiction in terms). The ultimate expression of this type of “thinking” was the holocaust, which was bureaucratic slaughter writ large. It was all policy, goals and objectives. It succeeded because of the management skills that were brought to bear on the question of how to kill all the Jews.
Chris Hedges calls this moral nihilism and cites Fyodor Dostoevsky’s Notes from the Underground as an example of it when he points out that,
The main character in Notes from the Underground carries the bankrupt ideas of liberalism to its logical extreme. He becomes the enlightenment ideal. He eschews passion and moral purpose. He is rational. He prizes realism over sanity, even in the face of self-destruction.
There are four moral absolutes which any society must live by if it is to be considered moral: Don’t kill, don’t steal, don’t lie and don’t exploit. You will notice that a prohibition against gay marriage is not included. However, a corporate society loves to get its knickers in a knot over gay marriage because it diverts the public’s attention from the fact that corporatism is quite willing to trash all four of the moral absolutes if it will add a point or two to its profit margin.
All ideologies are exercises in moral nihilism. They all proceed along the steel tracks of their linear thinking and care not who or what is destroyed in the process. Every ideology constructs a castle in the sky, complete with turrets, pediments, gargoyles and towers. Within the walls of this castle, shut off the reality and the world, the ideologue can make his pronouncements with the absolute certainty of one who knows only his master’s voice, be it Marx, Freidman or Rush.
Yes, Summer’s logic is as impeccable as it is amoral; it is an amorality that is well suited to the corporate state as it fights for its survival in this, the swan song of the Age of Capitalism.
--Case Wagenvoord
[1] Richard York, Brett Clark and John Bellamy Foster. “Capitalism in Wonderland.” Monthly Review 61, No. 1 (2009): 6
[T]he economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable and we should face up to that. The measurement of the cost of health-impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health-impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wage[1]
There you have it: because the cost per unit of the poor is less than the cost-per-unit of the rich, it follows, ergo/post-hoc/post-haste, that it makes more economic sense to snuff a peasant than a lord. When you kill the poor, you kill idlers, sustenance farmers and slum dwellers; when you kill the prosperous, you kill people just like us, and that simply won’t do!
This is what happens when rational thought is divorced from ethics and morality. The result is the value-free thinking so valued by the social sciences (in its self, a contradiction in terms). The ultimate expression of this type of “thinking” was the holocaust, which was bureaucratic slaughter writ large. It was all policy, goals and objectives. It succeeded because of the management skills that were brought to bear on the question of how to kill all the Jews.
Chris Hedges calls this moral nihilism and cites Fyodor Dostoevsky’s Notes from the Underground as an example of it when he points out that,
The main character in Notes from the Underground carries the bankrupt ideas of liberalism to its logical extreme. He becomes the enlightenment ideal. He eschews passion and moral purpose. He is rational. He prizes realism over sanity, even in the face of self-destruction.
There are four moral absolutes which any society must live by if it is to be considered moral: Don’t kill, don’t steal, don’t lie and don’t exploit. You will notice that a prohibition against gay marriage is not included. However, a corporate society loves to get its knickers in a knot over gay marriage because it diverts the public’s attention from the fact that corporatism is quite willing to trash all four of the moral absolutes if it will add a point or two to its profit margin.
All ideologies are exercises in moral nihilism. They all proceed along the steel tracks of their linear thinking and care not who or what is destroyed in the process. Every ideology constructs a castle in the sky, complete with turrets, pediments, gargoyles and towers. Within the walls of this castle, shut off the reality and the world, the ideologue can make his pronouncements with the absolute certainty of one who knows only his master’s voice, be it Marx, Freidman or Rush.
Yes, Summer’s logic is as impeccable as it is amoral; it is an amorality that is well suited to the corporate state as it fights for its survival in this, the swan song of the Age of Capitalism.
--Case Wagenvoord
[1] Richard York, Brett Clark and John Bellamy Foster. “Capitalism in Wonderland.” Monthly Review 61, No. 1 (2009): 6
Monday, May 18, 2009
Winning Dead Hearts and Minds
Mike Whitney tells us 93 children and 25 adult women were killed in an U.S. airstrike on the Afghan village of Bala Baouk.
The youngest was an eight-day-old baby.
Whitney notes that, “Neither Obama nor anyone in his administration has acknowledged that 93 children were killed,” because they're too busy winning hearts and minds to notice.
That’s progress for you. Now we conduct a My Lai from the air. It’s neater that way.
It helps that our supine media doesn’t bother to rush any photojournalists into the area to record the carnage.
What carnage?
--Case Wagenvoord
The youngest was an eight-day-old baby.
Whitney notes that, “Neither Obama nor anyone in his administration has acknowledged that 93 children were killed,” because they're too busy winning hearts and minds to notice.
That’s progress for you. Now we conduct a My Lai from the air. It’s neater that way.
It helps that our supine media doesn’t bother to rush any photojournalists into the area to record the carnage.
What carnage?
--Case Wagenvoord
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