Article 43

 

Sunday, May 27, 2012

The Awakening Part 6

abandon.gif

The Oligarchy’s Rule of Law: From Russia to Oklahoma

By Mark Ames
The Daily Banter
May 27, 2012

At the end of the 1990s, after the total collapse of the mass-privatization experiment in Boris Yeltin’s Russia, some of the more earnest free-market proselytizers tried making sense of it all. The unprecedented collapse of Russia’s economy and its capital markets, the wholesale looting, the quiet extermination of millions of Russians from the shock and destitution (Russian male life expectancy plummeted from 68 years to 56 years,) the terrible consequences of imposing radical libertarian free-market ideas on an alien culture - turned out worse than any worst-case-scenario imagined by the free-market true-believers.

Of all the disastrous results of that experiment, what troubled many Western free-market true-believers most wasn’t so much the mass poverty and population collapse, but rather, the way things turned out so badly in Russia’s newly-privatized companies and industries. That was the one thing that was SUPPOSED TO GO RIGHT. According to the operative theorydeveloped by the founding fathers of libertarianism/neoliberalism, Friedrich von Hayek, Ludwig von Mises, Milton Friedman and the rest - a privately-owned company will always outperform a state-run company because private ownership and the profit-motive incentivize the owners to make their companies stronger, more efficient, more competitive, and so on. The theory promises that everyone benefits except for the bad old state and the LAZY.

That was the dominant libertarian theory framing the whole ”SHOCK DOCTRINE” privatization experiment in Russia and elsewhere. In reality, as everyone was forced to admit by 1999, Russia’s privatized companies were stripped and plundered as fast as their new private owners could loot them, leaving millions of workers without salaries, and most of Russia’s industry in far worse shape than the Communists left it.

Most of the free-market proselytizers - ranging from Clinton neoliberal Michael McFaul (currently Obama’s AMBASSADOR TO MOSCOW) to libertarian PINOCHET FABOY Andrei Illarionov (currently with the CATO INSTITUTE) - blamed everything but free-market experiments for Russia’s collapse.

But some of the more earnest believers whose libertarian faith was shaken by what happened to Corporate Russia needed something more sophisticated than a crude historical whitewash.

Lucky for them, Milton Friedman provided THE ANSWER to a Cato Institute interviewer: Russia lacked ”RULE OF LAW - another neoliberal/libertarian catchphrase that went mainstream in the late 80s. Without “rule of law,” Friedman and the rest of the free-market faithful argued, privatization was bound to fail. Here’s Friedman’s answer in the Cato Institute’s 2002 ECONOMIC FREEDOM OF THE WORLD REPORT:

CATO: If we reflect upon the fall of communism and the transition from the centrally planned economy to a market economy, what have we learned in the last decade of the importance of economic freedom and other institutions that may be necessary to support economic freedom?

MILTON FRIEDMAN: We have learned about the importance of private property and the rule of law as a basis for economic freedom. Just after the Berlin Wall fell and the Soviet Union collapsed, I used to be asked a lot: “What do these ex-communist states have to do in order to become market economies?” And I used to say: “You can describe that in three words: privatize, privatize, privatize.” But, I was wrong. That wasn’t enough. The example of Russia shows that. Russia privatized but in a way that created private monopolies - private centralized economic controls that replaced government’s centralized controls. It turns out that the rule of law is probably more basic than privatization. Privatization is meaningless if you don’t have the rule of law. What does it mean to privatize if you do not have security of property, if you can’t use your property as you want to?

Others expanded on Friedman’s rationalization, arguing that without this “rule of law” to protect their private property, the new private owners of Russia’s industries were incentivized to plunder their companies as quickly as possible for fear that the state would steal their companies back. Of course, all this rationalizing was undermined by fact that Russia’s oligarchs stole their companies in the first place, and thieves do tend to steal what they’ve stolen. But never mind - the libertarian ideology was salvaged, as Russia’s privatization experiment was declared “not a real free-market” without Friedrich Hayek’s “rule of law” in place.

The reason I’m bringing this up now is because over the past month, one of America’s most rapacious oligarchs, Aubrey McClendon, was exposed by Reuters for plundering Chesapeake Energy, the second-largest natural gas producer in the country after Exxon-Mobil. McClendon, co-founder, CEO and until a few weeks ago Chairman of Chesapeake, was discovered running a hedge fund inside of Chesapeake, personally profiting on the side from large trading positions that his public company Chesapeake took in the gas and oil markets.

Reuters also discovered that McClendon took small personal stakes in natural gas wells bought by Chesapeake, then borrowed against the wells’ reserves from the same banks that Chesapeake borrowed from - basically, the banks kicked back sweet lending deals to McClendon on the side as McClendon arranged less-than-sweet loans to his publicly-owned company, Chesapeake, kicking profits from Chesapeake’s shareholders and employees’ pockets into the banks and into Aubrey’s accounts.

The loser in all this, as always: Employees, retirees, and shareholders. As Reuters reported, Chespeake is one of a small handful of companies whose employee 401k RETIREMENT packages consist mostly of Chesapeake stock, and the company requires employees to hold on to their stock for the maximum amount of time allowed by law:

Thousands of Chesapeake workers have retirement portfolios that are heavily invested in Chesapeake stock, which has declined sharply following revelations about Chief Executive Aubrey K. McClendon’s business dealings.

But while retail and institutional investors have sold the stock, employees don’t always have that option.

It’s not the first time McClendon has been caught plundering Chesapeake at the expense of shareholders, pension fund investors and employees: In 2008, McClendon bet and lost about $2 billion worth of Chesapeake Energy stock he owned - 94% of Aubrey’s personal stake in Chesapeake on a margin call when natural gas prices collapsed. Aubrey bet that natural gas prices would continue soaring, you see.

But like his peers in the oligarchy class, Aubrey’s loss became everyone but Aubrey’s loss: He was awarded a “CEO bailout” by his board of directors, who honored Aubrey with a $75 million “bonus” to bring his total pay in 2008 to $112 million, making Aubrey McClendon the highest-paid CEO in Corporate America that year. Even though Chesapeake’s earnings dropped in half, and its stock fell 60%, WIPING OUT up to $33 billion in shareholder wealth.

Now, we’re learning, Aubrey was profiting in other ways off of Chesapeake that same year.

There is so much more to hate about Aubrey McClendon than this - the millions McClendon poured into Gary Bauer’s gay-bashing outfit “Americans United To Preserve Marriage” and the Swift Boat Veterans for Truth, the role McClendon and his Whirlpool heiress wife played in STEALING waterfront land from Benton Harbor, an African-American slum and the poorest city in Michigan, in order to expand an exclusive golf course country club for residents of St. Josephs, where McClendon owns several plots of land. McClendon’s wife, Katie, is from St. Joseph’s; so is Katie’s cousin, Fred Upton, the Republican Congressman from St. Joseph’s. Aubrey and his wife are what pass for royalty (sans noblesse oblige) these days: Katie from the Whirpool fortune, Aubrey an heir to the Kerr-McGee fortune. (If you’ve seen the movie Silkwood, you might remember Kerr-McGee as the company that iced the labor union activist played by Meryl Streep.)

This is just one of many stories about how publicly-traded companies have been and can be transformed into elaborate schemes to LOOT AND STEAL from the public and enrich a tiny handful of oligarchs. We saw this in the 1980s when Reagan deregulated the Savings & Loans, which were quickly transformed into a means of looting, fraud and plunder; we saw it in the 2000s, after the de-regulation of the financial sector.

The problem goes much deeper than Milton Friedman’s “rule of law” fetish. “Rule of law” is just another red herring diversion to provide cover for continued oligarchy plunder, failure and barbarism. The problem is systemic, and more importantly, ideological. We still operate under the same neoliberal/libertarian major premises we inherited from the Hayek-Mises-Friedman era, an ideology that considers notions like “the public good” to be quaint delusions at bestas opposed to today’s still-dominant, still-standing foundational ideology, which says that freedom equals the ruthless pursuit of individual self-interest, the unlimited acquisition of private property and wealth, framed within a cold, dystopian “rule of law.”

That is where the problem starts. That is why, every week, I could tell another story about another Aubrey McClendon or Dick Parsons, and it will never end until the ideology that enables them is buried.

Would you like to know more? Read previous “Class Warfare” columns by Mark Ames including “Failing Up With Citigroup’s Dick Parsons” and “The One-Percent’s Doctrine For The Rest Of Us: We Are Not Human Beings, But Livestock Whose Meat They Extract As ‘Rent’”.

Mark Ames is the author of Going Postal: Rage, Murder and Rebellion from Reagan’s Workplaces to Clinton’s Columbine.

SOURCE

---

The Poverty of Nations

By Robert Hunziker
Firebrand Magazine
May 27, 2012

There is plenty of wealth to go around in the world, but its tied up in too few hands for democratic capitalism to operate efficiently for society at large. Thus, in order to maintain civil order, totalitarianism increasingly becomes a byproduct of this conundrum.

According to the Forbes 2011 survey of billionaires, they hit all-time new records for total wealth and numbers (the total count of billionaires is 1,210), thanks to reverse Robin Hood taxation policies that impoverish government coffers, i.e., Federal Tax Receipts, whilst transferring those dollars, via a doctored tax code, into the pockets of tens of thousands of millionaires and billionaires. The total count of what Forbes refers to as High Net Worth Individuals is 871,000 people worldwide worth over $30 million each, implying total wealth of $26-to>$50 trillion; $26 trillion is nearly twice the size of the U.S. economy.

Wealth creation has increasingly become the key measurement of capitalismҒs efficacy ever since Adam Smiths magnum opus An Inquiry into the Nature and Causes of the Wealth of Nations (1776) aka: The Wealth of Nations, wherein he expounds upon how rational self-interest and competition lead to economic prosperity for society at large, American industry and government have been guided by these free-market principles. For over 200 years, with bumps & lumps along the way, prosperity reigned, and Adam Smith would be smiling. But, for reasons he describes within his own treatise, Adam Smith would be frowning today because of the sorry state of capitalistic nation-states.

Again and again, Smith warned the general public that a true laissez-faire economy could become a conspiracy of business and industry scheming to influence politics and legislation against the best interests of the consuming public.

Smith, the father of economics and the prophet of capitalism is idolized by capitalists the world over; however, he would not recognize todayҒs democratic capitalism because his greatest concerns about conspiracies scheming to influence politics, undermining his theory, have come to fruition. As a result, capitalism is a failed institution for society at large. Rather, it has morphed into a quasi-totalitarian plutocratic nation-state that resides within a hollow shell of democracy.

Smiths economic principles depend upon freedom of markets translating into prosperity for “society” at large. His is a broad view of economic consequences. However, economic results, especially over the past three decades, have increasingly narrowed, funneling riches into fewer hands and penalizing society at large, i.e., the broad middle/working classes, accomplished by the political Right’s adoption of neoliberal principles, and these principles have largely been adopted by both political parties. Therefore, both Democrats and Republicans are at fault for the disastrous state of capitalistic democracy and the subsequent evolution into a quasi-totalitarian state ruled by an elite plutocracy.

How did this happen?

Ever since President Reagan and PM Thatcher, in the 1980s, blessed the policies of: (1) deregulation, particularly financial deregulation, (2) privatization, (3) minimalist government, and (4) diminishment of unions, the world of capitalism has spun out of control and into the hands of neoliberal theory & practice, embracing, and enlarging upon Reagans and Thatcher’s policies to the point of sky-is-the-limitӔ engineering of legislation and policy in favor of only the rich, protected by an increasingly authoritarian state.

Coincidentally, in the mid 1980s, Americas finance, insurance, real estate (FIRE) sector of the economy overtook manufacturing as the major contributing sector to U.S. Gross Domestic Product. Today, FIRE is twice as large as manufacturing.  The upshot is financial interests, as the predominate sector of the economy and working hand-in-glove with neoliberal themes, mold U.S. legislation in their favor.

Additionally, in the eighties, the most significant tax legislation in generations occurred with the Tax Reform Act of 1986, removing numerous tax loopholes and lowering taxes across the board, a reform that was broadly embraced by America. Since then, over 15,000 changes have legislated a Reverse Robin Hood tax code crowned by George W’s tax cuts, designed like a subprime mortgage, i.e., designed to make people see certain good things and not recognize the fine print where the devil is in the details, worth vast amounts to the wealthy but worth very little to everybody else these changes in estate taxes, top tax rates, capital gains, and dividends, further enrich the wealthy beyond imagination!

As explained by Jacob S. Hacker and Paul Pierson in Winner-Take-All-Politics, Simon & Schuster, 2010,Step by step and debate by debate, our public officials have rewritten the rules of the economy in ways that favor the few at the expense of the many.  By gradually making changes over the past 30 years, and supercharged by W, the rich have been put on wealth-creation testosterones like never before, laying the groundwork for just six members of the Walton family, whose patriarch founded Wal-Mart, to have as much wealth as the bottom 30 percent of the entire U.S. population.

Today, the United States is controlled by a small cadre of super wealthy families, spearheaded by innocuous-sounding tax-free organizations like Americans for Tax Reform, founded in 1985, headed by America’s most powerful conservative voice, Grover Norquist. The entire Republican Party pays homage to Norquist, and he, in turn, takes his marching orders from the wealthy families who operate behind the curtain, the Wizards of Oz of Americas quasi-totalitarian state.

According to Chris Hedges, Truthdig, March 26, 2012, “Totalitarian systems always begin by rewriting the law. The defense of freedom and truth becomes a crim… Citizens are colonized. And it is always done in the name of national security.”

Last year President Obama signed the National Defense Authorization Act (NDAA), which act negates the writ of habeas corpus, the most powerful cornerstone of civil rights since the Magna Carta. Every English-speaking jurist since the 12th century must have turned over in the grave. Subsequently, May 2012, U.S. District Judge Katherine B. Forrest overruled the domestic military detention provisions of the act, an act that was roundly supported by Democrats and Republicans. This is a clear, and extremely troubling, clarion call for how far off course democracy has strayed.

Praise the likes of Chris Hedges as an offset to our spineless press corps and weak-kneed politicians, who, on a daily basis, supplicate for morsels of Newspeak at the White House Briefing Room.  Unfortunately, AmericaӔs only defense against a surge towards complete totalitarian control by the plutocrats, the Democratic Party, has proven helplessly weak, and seemingly, frightened by its own shadow, e.g., the democrats completely blew it even when they had control of the presidency and the Congress.

The very fact that Hitlerian enactments like the National Defense Authorization Act are legislated absent out-and-out sweeping objections by the national news, and pass with strong bipartisan support, is clear evidence the country is numb to the threat of totalitarian impulses. A couple hundred years ago, this inane act would have been cause clbre for revolution.

Throughout history, access to a proper understanding of the state of affaires, when tainted, has always worked in favor of mass revolutions against the prevailing order. The French Revolution, for example, is indebted to Claude FauchetҩȒs weekly addresses to crowds of 5,000-8,000 people at the Palais Royal, lecturing on Jean-Jacques Rousseaus 1762 work, The Social Contract with follow up discussions about a more equitable distribution of wealth. The American Revolution is likewise indebted to pamphleteers like Samuel Adams, Thomas Paine, and Patrick Henry, todayҒs heroes but yesteryears street activists.

However, it is improbable that Adams, Henry, and Paine could operate in the same fashion today as they did 200 years ago. The USA Patriot Act would likely stop them dead in their tracks. This Act is riddled with nebulous provisions that leave the doors wide open for the government to take whatever action it deems necessary, depending upon the subjectivity of the enforcer(s).

More than likely, the three Founding Fathers would be classified as terrorists and thrown in jail. Adams’ “Committees of Correspondence,” which served as a shadow government opposed to the British, disseminated seditious information.  Henry was one of the most outspoken exponents of revolution in defense of historic rights. Paines Common Sense pamphlets preached revolution and independence. These men, revered as America’s Founding Fathers, prove the adage: “timing is everything.”

Those Founding Fathers, without a doubt, today would register as rapidly blinking lights within the National Security Agencys (NSA) Utah Data Center, scheduled to open in 2013, which is a heavily fortified $2 billion project of immense secrecy. Its purpose will be to intercept, decipher, analyze, and store vast swaths of the world’s communications. This is finally the completion of the infamous “total information awareness” program created by George W’s henchmen but blocked by Congress in 2003.

The NSA data center will store and analyze private emails, phone calls, Google searches, parking receipts, travel itineraries, bookstore purchases, etc. Plus, it’s The Big Enchilada of spying; the NSA data center is a code-breaker, able to de-encrypt financial information, stock transactions, business deals, diplomatic secrets, legal documents, and any transmission that is encrypted. This is Big Brother come to life. The old insider NSA saying, “Never Say Anything” is now more apropos than ever before. Most likely, this will put many of worlds terrorists in unemployment lines, but what about average citizens? How do they protect themselves in a hollowed democracy?

Christopher Hedges (Democracy Now interview May 17, 2012 by Amy Goodman) believes taking to the streets and revolutions are inevitable, but as he says, the Stamp Act took place in 1765, ten years before the American Revolutionary War (1775-83.) In other words, revolutions take a long time to develop; however, that was then. Today, revolutions can happen overnight, witness the Arab Spring spontaneous combustion is in vogue.

Revolution, or not, there is good news as a result of the 2008-09 worldwide financial meltdown. This scrape with Armageddon has focused the attention of the world on the cozy relationship of Wealth, Wall Street, the Fed, Congress, and the Presidency. Collaterally, it has focused attention on inequities and the rise of plutocracy, including neoliberal policies, e.g. austerity, as practiced by the EU and IMF and World Bank, resulting in hundreds of thousands of people in capitals around the world openly demonstrating and sloganeering against Austerity, Big Banks, Wall Street, and the Wealthy.

Capitalism is at war, being fought in the streets.  The massive demonstrations around the world the past couple of years are not for naught. When tens/hundreds of thousands of citizens take to the streets, as in Madrid, Paris, Athens, Manhattan, Hadramout, Moscow, Montreal, Santiago, and London over time, things happen! People do not stand in the cold, in the rain, in the harsh elements for the fun of it… out of the blue, untoward things happen very unexpectedly!

Thus, capitalisms bankrupt failure to provide for its citizens at large is on display for the world to see, and this failure is, in large measure, caused by the misallocation of “The Wealth of Nations,” leaving “The Poverty of Nations” in its wake.

Whether the nuts and bolts of effective totalitarian control by plutocrats can effectively deal with a degenerating world that is increasingly split into two distinct camps, the rich and the working poor, remains to be seen. Capitalism is not functioning as an institution of socio-economic order for society at large. No, it is failing on all fronts other than with the highest order, the First Estate.

What a strange paradox: Billionaires/millionaires set new all-time records while their capitalist nation-states suffer record debts amidst austerity measures for the middle and working classes.

Is this the Wealth of Nations?

Robert Hunziker, a former hedge fund manager, is a professional independent negotiator for worldwide commodity actual transactions and a freelance writer for progressive publications as well as business journals with several articles published in Counterpunch, The Firebrand Magazine, Z Magazine, UK Progressive Magazine, and Engineering & Mining Journal. Mr. Hunziker earned an MA degree in economic history at DePaul University/Chicago, and he resides in Los Angeles. He can be contacted at .

SOURCE

---

Stock Market Referendum

In an ever changing world, we need to always re-invent ourselves, and our institutions when they become unbalanced. For many years the Stock Market worked in a good way to help people start up companies, and those who supported that upstart to build a hopeful retirement system. It was never intended to be an end in itself as it has become. In a day and age when CEO’s receive 1000% more than the people who hold stocks, this only leads to less and less opportunity for healthy business practices. In a way, we have allowed CEO’s to become dictators of the finances, and just as we deplore and hate dictatorships in this day and age, we should not look the other way when it is used to give only one person or a small group control of a nation through financial malevolence.

If the stock holders would unite and vote, they can demand, and even force change into a more democratic system. A system that still allows a person to become filthy rich, but also a system that {allows the stock holders} to become wealthy as well. The reason we do not have new companies, and new inventions is because one company has total control. This is not a stock market that will lead us into the long haul, and even in the short term, it is a very disturbing trend. Most people who buy, or invest do not know the power they hold. If I own one thousand shares, I have just as much say at the person who owns one hundred. At least that seems the way it is when ever they release company information and ask for people to vote on issues of what the company should be doing with all this extra money. For some strange reason, people always say: Let the CEO have billions first off the profits?

Who is to say this CEO has any idea what to with that much money? Are they going to invest that money into the community? Can an international CEO have a community, or are they so superior to the rest of us? We do not realize that through proper petitions, we can create ballots, and determine a more ethical system. Why does any one person deserve a billion dollar bonus? Did they make the company, or did the population that buys the product and the stocks? If in reality, it is the people that are making this extra billion in profits, would it not serve all the stock holders to say: Wait! If you have that much extra money, then you need to make it even across the board. If the CEO owns a billion stocks, then they get a billion, yet if a person only owns a hundred, then they deserve a reward for they believe in the company as much as the CEO.

I would hope all people who buy and sell stocks start to make new laws on the way it is run. As of right now, a person or company can buy and sell stocks by the second. This computerized scheme works well for organized pc criminals, but it takes profits from all stock holders. We should return to buying stocks once per day. If a person or even a computer could only buy once a day, {it would stop this crashing} of the stock market. People, and banks would have more time to investigate companies. This slow down would create new jobs as people would create new ways to help regulate banks and other companies. Something that they do not do. With out rules, people can justify using the stock market with impunity. The billion dollar bonus is your tax money. Why should bonuses not be taxed just like tips from a waiter? The laws can always be amended, yet it will take the people who want change to participate.

- Anonymous

Posted by Elvis on 05/27/12 •
Section Revelations
View (1) comment(s) or add a new one
Printable viewLink to this article
Home
Page 1 of 1 pages

Statistics

Total page hits 9368129
Page rendered in 1.6214 seconds
43 queries executed
Debug mode is off
Total Entries: 3182
Total Comments: 337
Most Recent Entry: 08/15/2019 09:50 am
Most Recent Comment on: 01/02/2016 09:13 pm
Total Logged in members: 0
Total guests: 8
Total anonymous users: 0
The most visitors ever was 114 on 10/26/2017 04:23 am


Email Us

Home

Members:
Login | Register
Resumes | Members

In memory of the layed off workers of AT&T

Today's Diversion

Our lives begin to end the day we become silent about things that matter. - Martin Luther King Jr

Search


Advanced Search

Sections

Calendar

August 2019
S M T W T F S
        1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31

Must Read

Most recent entries

RSS Feeds

Today's News

ARS Technica

External Links

Elvis Picks

BLS Pages

Favorites

All Posts

Archives

RSS


Creative Commons License


Support Bloggers' Rights