Financial Elites and the Enronization of America (Part II)

<<<Return to Part I

The Enronization of Our Critical Thinking Skills

Undoubtedly the Enronization of our media has evolved into the Enronization of our educational system. Though this is a topic that commands the devotion of an entirely separate article, the financial elites have heavily influenced the curriculum taught at leading American educational institutions for decades now. For example, over the last century, the Rockefeller family has donated millions upon millions of dollars to leading economic schools such as the University of Chicago and Harvard Business School. Even if you don’t buy into the strong likelihood that millions of monetary donations to educational institutions buys the financial oligarchs' influence over our educational curriculum, you should at a minimum consider this possibility. Perhaps it is the monetary influence of financial elites such as the Rockefellers that is largely responsible for erroneous economic beliefs about inflation and our monetary system that persist today.

To grant further support to the suggestion that the financial elites likely utilize their money to guide certain aspects of the curriculum at leading educational institutions in America, recall that in 2002, David Rockefeller stated in his own autobiographical memoirs:

For more than a century ideological extremists at either end of the political spectrum have seized upon well-publicized incidents such as my encounter with Castro to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as “internationalists” and of conspiring with others around the world to build a more integrated global political and economic structure - one world, if you will. If that’s the charge, I stand guilty, and I am proud of it.

The only difference today is that the cabal working against the best interests of the US and all American families is no longer secret, but well documented and well known.

Since the above statement is sure to stir up cries of conspiracy regardless of the fact that it is directly attributable to a member of the financial oligarchy, let us take a minute to consider the Enronization of our critical thinking skills. Why do those with a keen interest in suppressing the truth about the origins and nature of our current global financial crisis have great success in doing so merely by simply using the word “conspiracy” to marginalize the well-constructed arguments of others? Why do the people that attempt to discredit these truthful revelations never offer more than flimsy verbal accusations devoid of any evidence to validate their accusations?

And why do we rarely, if ever, challenge the fact that the vast preponderance of people that flippantly dismiss valid arguments about our current global financial crisis are those whose personal wealth depend upon deluding masses of people about the health of our stock markets and the soundness of our financial institutions and monetary system? Today, the Enronization of our institutional education system has dulled our aptitude of critical thinking to such a degree that we now look to others to do our thinking for us. Instead of challenging the propaganda that makes zero sense, we are all too willing to be duped into believing erroneous concepts just because they are written in a textbook or a newspaper.

As a prime example of this, consider the propensity of Central Banks and the IMF to pre-announce massive gold sales that they rarely execute. From a purely logical standpoint, can anyone well versed in logic truly argue one beneficial reason for doing so? In 1999, when now UK Prime Minister pre-announced the sale and actual eventual execution of 400 tonnes, or more than half, of the Bank of England’s gold reserves, his announcement promptly caused the gold market to plummet to $250 an ounce, the lowest price in the last decade. For an institution interested in making profits, it is a foregone conclusion that pre-announced large sales of gold reserves will significantly depress prices; thus what is the reason behind such an announcement other than to purposely depress prices? Yet, when skeptics are presented with such evidence and can offer no valid counter-argument, instead of intelligently considering the validity of another’s viewpoint, too often we are apt to shut off our brains and repeat beliefs that have been repeatedly rammed down our throats rather than critically assessing the situation for ourselves.

In the seminal book about warfare, The Book of Five Rings, legendary samurai Miyamoto Musashi wrote,

True enlightenment can be seen by what a person has done, not by what he says. Those who have missed the mark may chatter all day long about this and that, but they have never done anything. Anyone can make a good argument, but few can show good results.

If we as Americans wish to stop the Enronization of our country and to reinstitute our rights of self-determination and our Constitutional rights to a sound monetary system that are paramount to a free society, we must judge people not by what they say but by what they do. We must listen not to those that present hollow arguments and that can demonstrate no positive track record of results, but rather focus on the thoughtful arguments of the few that have been able to illustrate the intelligence and validity of their views because their predictions have been vetted over time.

As a nation, we have become Enronized because we too often focus on the false arguments of those that are well versed in the art of persuasion yet have a persistently poor track record of results. As a prime example, consider this video of Congressional testimony where former US Treasury Secretary Hank Paulson disingenuously claims that he advocates greater transparency in US markets when in fact, Goldman Sachs (GS), under his direct leadership, aggressively lobbied to repeal laws that granted financial markets transparency. We are much too apt to accept the words of people rather than to take the more intelligent approach of analyzing their actions to judge the validity of their words.

The Enronization of Our Leaders

The final phase of the Enronization of America has occurred through our power structure and politics. The financial oligarchs that wish to suppress the truth about their role in this crisis have been very opportunistic in forming close relationships with the highest echelons of government and then using this inordinate power to polarize the masses and further consolidate their power. The revolving door among Central Banks (i.e the Bank of Italy, the Bank of England, the US Federal Reserve), Goldman Sachs, the US Treasury, JP Morgan (JPM), and Citigroup (C) has been well documented so I won’t repeat the prolific work of others here. However, using politics or nationalism as a divisive maneuver is often a favored tactic of the financial elites, so we must remain vigilant against immoral attempts to deflect our attention away from the true causes of this crisis, such as the scapegoating of immigrants or other shameless tactics.

When obfuscation of fact and misinformation systemically replace transparency and integrity as they have in our modern society, we have little chance of producing a favorable outcome to this current crisis. Twenty-six banks have failed thus far in the United States this year and every single bank failure announcement, without fail, has occurred on a Friday afternoon after market close so that the revelations of these bank failures cannot adversely affect markets while they are open. Additionally, such announcements are timed as such to grant investors two weekend days to forget about these failures.

America has been Enronized over the past several decades not because of Democrats and not because of Republicans, but because of the financial oligarchs that have ruled and continue to rule our country. The Enronization of America has happened under President Clinton’s watch, it continued under President Bush’s watch and it is now progressing under President Obama’s watch. Until we wake up and correct many of the flaws in our thinking and in our justice system, the Enronization of America will continue. Arthur Shopenhauer, a noted German philosopher, once stated, “All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.”

We have already passed through the first stage where truth has been ridiculed. For several decades, those that attempted to reveal the price suppressions schemes executed by governments and Central Bankers against gold and silver were ridiculed as conspiracy loonies. Today, the evidence of this manipulation is so overwhelming (please reference all of Ted Butler’s tireless work to expose silver price manipulation) that men that dwell firmly inside the confines of the mainstream, men that previously would never have dared to publicly state such sentiments just 10 years ago, are now stepping forward and publicly acknowledging the existence of price suppression schemes that interfere with free markets (i.e., Donald Coxe, chairman of Harris Investment Management in Chicago).

Today we have progressed to the second stage of truth, when truth is violently opposed. Within the past year, former Treasury Secretary Hank Paulson testified multiple times in Congress that it is not reality that is important to stock markets, but only what people think they know, even if what they think is wrong. Though he did not make that statement in these exact words, Paulson regularly emphasized the vital importance of consumer confidence to the performance of capital markets. In the end, confidence levels measure consensus belief and often have very little correlation to the reality of underlying economic fundamentals. In a bear market, such as the one in which we are currently engaged, it is safe to say that rising stock markets serve as a barometer of deceit. The greater the deceit by our leaders, the more likely stock markets will act irrationally and rise when there is no foundation to support the rise, including the most recent rally that we have witnessed in US markets in March and April of 2009. I will go on record here in believing that we will see another waterfall decline in US and global markets by the end of this summer.

It is no wonder, given the propensity of our leaders to deceive, that US consumer confidence jumped to its highest level this month since last November. As long as markets react positively to lies that prevent the masses from understanding the grave situations of our faltering economy and monetary system, our government and financial leaders will continue to prevent people from knowing or understanding the truth. One merely has to consider that FASB conveniently altered mark to marketing regulations immediately prior to first quarter 2009 earnings season and immediately prior to stress tests that were to be conducted on these same institutions to realize that our current administration is not any more interested in disclosing the truth or increasing transparency than previous administrations. Again, we would be wise to remember Miyamoto’s sage advice to judge someone not by his or her words, but by his or her actions.

The fragility of America’s emotional state regarding the dire economic situations that existed during the last US Presidential campaign left America vulnerable to blindly accepting anybody that promised change, but again we must consider the actions, not the words, of this current administration. We must look at the men appointed to “solve” this crisis and understand that almost all of these men come from the same unethical institutions such as Citigroup, Goldman Sachs, and JP Morgan, that were largely responsible for creating this crisis. The most efficient way to solve a crisis caused by lack of ethics and morals is not to put the most morally bankrupt people in the nation in charge. It should disturb us all that men like Paul Volcker have been appointed to lead a Presidential advisory board when he once stated in reference to rising gold prices in the 1980’s:

That day, the U.S. announced that the dollar would be devalued by 10%. By switching the yen to a floating exchange rate, the Japanese currency appreciated, and a sufficient realignment in exchange rates was realized. Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake.(Source: Volcker’s memoirs printed in the Nikkei Weekly, November 15, 2004).

Men that clearly state a position that collusion to rig markets is preferable to the transparency and integrity of free markets should never be appointed to any position of leadership in our country. Despite the lack of leadership from the financial elites during this crisis, they have made it clear that their agenda of concealing the truth from us will not prevent them from shamelessly pinning us with the blame for their errors by increasing our taxes and devaluing the purchasing power of our dollars.

And this is precisely why the energy of those that participated in the recent teabag protests is improperly focused. Yes, our government has contributed to the instability of our economic infrastructure. However, the government is not the root cause or the prime perpetrators of our global financial crisis. This honor belongs to the financial oligarchs and the fraudulent monetary system they have instituted. Today, governments have devolved into nothing more than an instrument of execution for the financial oligarchs. The late great John F. Kennedy was the last US President to understand and recognize the massive flaws and amorality of our modern day monetary system, as evident in his signing of Executive Order 11110. Were the honorable President Kennedy still alive today, but a regular citizen, voicing the exact same displeasure against our current monetary system as he did half-a-century ago, I have little doubt that those in power would have already marginalized his arguments and labeled him as a “conspiracist”.

The End Game: How to Stop the Enronization Process

The lack of transparency and the veil of secrecy that has existed in our financial world for a very long time now have enabled the Enronization of America. Furthermore, the misinformation campaigns that the financial elite have engaged upon for decades have further supported and maintained the ignorance of the masses. If one merely focuses on gold and silver markets, one can uncover a mountain of deceit. Consider that when Central Banks lease gold, they still claim it as an asset on their balance sheets, an obviously fraudulent practice. In fact, I could fill another ten pages with the deceitful reporting practices of Central Banks regarding gold that I have uncovered, but I don’t want to dilute the central focus of this essay, which is not to focus on the Enronization of commodity markets but to focus on the systemic-wide problems of fraud in America. This is not an indictment of American citizens, but an indictment of those that reside at the very top of the power structure, and most specifically, the financial elites.

In the end, let us not look to the words of our financial and government leaders for truth, but to their actions. If there has ever been another institution in the history of America with a persistently worse track record of accomplishing their stated mission than the US Federal Reserve (that of maintaining price stability), I can not think of one. Thus, we should permanently shutter institutions that have a track record of utter failure and that have consistently failed to act in the interests of their citizens. This list would include the US Federal Reserve as well as the Bank of England, the Bank of Japan, and the ECB. We should also permanently shutter those financial institutions led by corrupt executives that have cumulatively made billions from the purposeful deception and bankrupting of American families. Finally, if you are a shareholder with voting rights, it is incumbent upon you to exercise your rights at general meetings to oust all corrupt directors and executives at corrupt firms. Because it is near impossible to regulate morality, the only sustainable solution to stopping the Enronization of America is to remove the very institutions and people responsible for this process. As current administrations of major governments all around the world have demonstrated an unwillingness to do so, it is patently clear that this movement must originate from the people.

If we all desire the freedom of self-determination that is impossible with a corrupt monetary system, this change will have to come from the people. If we all desire a sound monetary system devoid of the ability to be mercilessly manipulated by elements of the US Treasury, the US Federal Reserve, the Bank of England, Goldman Sachs and JP Morgan, this change will have to come from the people. If we all are opposed to leaving a legacy of indentured servitude to the financial elite for future generations, then this change will have to come from the people. The alternative consequence of our inaction will be the manifestation of Shopenhauer’s third stage of “truth as self-evident” at a not-so-distant time in the future when it will be far too late to affect a positive outcome from our current financial crisis.

Comments

[User 353732:]

Seduction and temptation.The story of society.
It is not that Americans cannot distinguish the right thing from the wrong or do not want to do the right. The governing elites in the Big 4 (BigGovernment, Big Business, Big Media and Big Labor) have made a bargain with a majority of the voters which is: instant gratification and the outsourcing of decision making by the people to the elites. In return, the elites are allowed to acuumulate wealth,power and fame. As long as scores of millions of fellow Americans believe( even if it is not true) that the bargain benefits them as individuals or as special interests the bargain will remain intact. People know what the right thing is but still become complicit in the wrong thing because the temptation of pursuing immediate false and shallow wishes overcomes the knowledge that instant gratification is at the expense of longer , more enduring and better rewards. People often choose the lower good over the higher because the lower is at hand and the higher is remote.
Americans DO want transparency, decency, integrity and courge in public business and government life but they know it will come at great cost . At the moment, however, the want is a mere Velliety; but velleity does not lead to action.When it becomes a Will, then action and transformation become possible.

May 03 09:54 AM

[athena:]

What you are describing is the wholesale commoditization of America. Value is relative to perception and manipulation and available to the highest bidder. Now I see the same attitude toward
personal relationships, sex and finally children and marriage.
Internet porn, sugar daddy sites, ritalin, octomoms, sexting, gay marriage, --anything goes.
So how can you reverse that kind of thinking? On a social level, call it the Ebaying of America.

May 03 10:37 AM

[Alan von Al...:]

"this change will have to come from the people... this change will have to come from the people... this change will have to come from the people"

At its inception, which is to say a period of 25 years when Hancock and Adams and Otis rallied Boston, when Paine shocked Philadelphia from its bourgeoise slumbers, and Henry roared self-righteously in Virginia, the population of our infant nation was 3 million, of which 20% were deemed competent to cast a ballot. Lawyers were few in number.

A majority of Americans voted for Barack Obama. His party has a populist mandate and a majority in Congress. Business supports the "stimulus" doctrine, free health care, anything and everything government cares to propose. More regulation? Absolutely.

Athena's comment above asks an important question.

May 03 11:16 AM

[djc:]

The reason its so easy to dupe the american people is that they /want/ to believe -- they wanna believe the worst is over, and many of them judge whats good and bad by how much their portfolios or 401ks have come back. They will not want to rock this boat, and convincing them of the author's arguments (which I believe are essentially correct) will mean they will have to take the perceived harder road, short term. My 401k is up ! It must be getting better, so our 'leaders' must be doing it right !

Until the sad truth is self-evident, there will be no motivation for the public at large to look 'under the hood'. A cursory glance at whats gone on over the past number of years presents alot of points of financial minutiae that can be complex enough as to make the lay person 'let someone else handle it', and also obscures the connectedness of all points taken in sum. Those who look and understand see the pattern -- most dont, and have no motivation to do so, as their comfy way of life would be threatenned by the sad truth. Itll have to be more than threatenned for people to act.

As far as the tea parties, I thought they were well directed -- but the media provided some indirection to the motivations. I heard alot of em say these protesters didnt know anything about the boston tea party, as in these times we /are/ represented. We ARE ? We the people are /not/ represented. The obvious miss of this point was repeated across the news spectrum. Molding the perception of the masses has never been easier than it is now, and the task has been taken on by our mainstream media with gusto.

Ive been a patriot all my life. The idea of America can still bring tears to my eyes -- but alas, the loss of moral character has made the execution of the idea of 'America' flawed, counterproductive, and downright destructive.

Got mine, up yours.

May 03 11:33 AM

[UbuTranscen...:]

Mr. Kim,

Kudos to you sir, for your clarion call to action.

A century ago, it took a generation of struggle to rein-in the Robber Barons, railroad trusts, big oil, big steel and, of course, the big banks (some of the same players: Goldman Sachs, JP Morgan, et al). We should expect a long struggle this time, too.

Today, the stakes are bigger and the situation far more complex and global. No single stroke of a pen, as happened with the Sherman Anti-Trust Act, will bring us significantly closer to 'efficient' markets or even the illusion of a 'level playing field' for individual investors.

At best, I believe, we can hope to achieve someday a more level playing field for the the behemoths of finance, and curb their appetite for preying on mere humans. Then, we will each be able to tread in the shadow of a cyber-financial beast of our own choosing with more confidence in our financial security. Truly, a Brave New World awaits us and we shall not pass through that portal unscathed.

I suppose you will be targeted for derision and worse, which can only mean there is a stinging truth to your words.

Thank you for your courage, Ubu.

May 03 11:53 AM

[nobby73:]

"Already long ago, from when we sold our vote to no man, the People have abdicated our duties; for the People who once upon a time handed out military command, high civil office, legions — everything, now restrains itself and anxiously hopes for just two things: bread and circuses"

When Juvenal wrote these words in the 2nd Century A.D., it was out of frustration that the people were so easily distracted and did not notice the debasement of their currency and the destruction of democracy by the self-serving elite.

I find the similarities with the state of America today with the state of the Roman Empire in that time stunning. There were some glories for the Empire until the total collapse with the sacking of the capitol in 410, by Visigoths under Alaric, but by the end, there was nothing left for Rome to offer as an entity other than its spoils.

The fate of Rome was sealed by the selfishness and greed of the elite and the belief that what was good for them must be good for Rome - the moral equivalence of the 11 CEOs awarding themselves $865m in a 2 year period their companies lost $64 billion in value. Also, people need to ask themselves why their senators and congressmen are so enormously wealthy?

I am not an American, but I believe in America you can find the best and the worst of human behaviour. The vital challenge for the country is making it possible for the best to wrestle control from the worst. However, if history is a guide, there is not much hope.

As W.B. Yeats said, "The best lack all conviction, while the worst are filled with passionate intensity."

May 03 01:43 PM

[SeekingTruth:]

Why would money have to be backed by just gold and silver?
Why not include all precious metals and commodities of high value, including oil?
In today's world, even medical services could be considered.

I have had many of the same thoughts well expressed in your article, but our system, as it stands , assures that substantial improvements will NOT take place - guaranteed.

It's a "fix the dike only after it fails" type system i.e. Katrina and TVA 5.4 million cubic yards "toxic coal fly ash spill" onto homesites and into the Emory river are recent examples. Even the "fixes " are almost always less than satisfactory, and cost vast multiples of proper preventive measures.
Financial meltdowns, and financial ongoing parasitic effects due to present and future money laundering shell games are also guaranteed.
It's our system, change and improve it , or get used to it.

May 03 03:19 PM

[Sober Realist:]

Excellent essay!
I, along with millions of other American families, am among the heap of wreckage that the corrupt financial and political elite of this country have laid waste to.
The financial oligarchs have their tentacles deep into the political structure of this country. Extracting them from it and whittling our government down to a much smaller, managable size (working for the people and in fear of the people, not vise versa) is what is needed. At the current rate of corruption, the time is approaching fast.
Prior to 1930, the cost of our government compromised just 12% of the total econmy. To cover the 12% government spending share of the economy with enough tax revenue, the average person had to work 1.4 months per year. Today, the government extracts 45% of the economy by its spending, plus another 13% of the economy via its un-funded regulatory mandates - - leaving less than half of the economy to the free-market private sector. Today's government spending requires the average person to work 5.3 months to support government. That's a 4 fold increase in the size of the government in less than a century.
Slow, gradual government expansion over time is not recognized by the masses which gradually become dependent upon it. This leads to serfdom to the state. America is more a socialistic nation, and less a free-market economy, then ever before in its history, because our total economy has become significantly more government-dominated and dependent. Our founding fathers are rolling in their graves and weeping for the children of this once great land. We are being extin­guished and stupefied as a people, reduced to a flock of timid, subservient sheep of which the government, along with the financial oligarchs, is the shepherd. The despotism of dependency is destroying our country.

May 03 06:00 PM

[bota:]

Velleity was misspelled in a previous, very articulate comment. I believe the average American consumer may miss that exception to the "ie" rule. I would also be impressed if he could apply the standard formula for mortgage payment calculation P=Ai/[1-e**-n*ln(1+i)] where Payment (monthly), Amount (of loan), interest (decimal), and number (of payments) define the letters. e=2.7183... and ln(x) refers to the natural logarithm of x.

Stock holders own a companies management, Bond holders own its physical property. Home owners in England prior to last year's retraction of the Magna Carta, had held freehold rights to the British soil since 1215. Lest we forget, citizens are the stockholders in Government.

May 04 04:37 AM

[Bill Herbert:]

>>The Enronization of America has happened under President Clinton’s watch, it continued under President Bush’s watch and it is now progressing under President Obama’s watch. Until we wake up and correct many of the flaws in our thinking and in our justice system, the Enronization of America will continue.<<

Actually, I believe that it began during the Reagan administration, with the strong attempts to destroy the unions, ship jobs overseas, thwart the power of the IRS to collect taxes owed, cook the books of major corps, and play financial games with the capital structure of corporate America.

The eighties was also when the leveraged buyout craze began, whereby American jobs were lost forever to foreign companies, many of which were set up by the same people who took control of formerly great companies here in America. It was basically just a huge financial shell game.

The whole leveraged buyout phenomenon was about extracting value from companies and deriving enormous "profits" through leverage and tax deferral, while often leaving a smoking, debt-laden ruin that used to be a strong, viable company where thousands of hard-working Americans made their livelihood.

The Reagan gang also allowed the first massive real estate bubble to occur, by steadfastly refusing to provide adequate regulation to the S&L sector, which devolved into a free-for-all crime spree of money stolen from depositors through numerous bogus real estate deals. Then the "RTC" sent the bill for all the shenanigans to the American taxpayer.

"Diamond" Don Regan, a former Merrill CEO, was named Treasury Secretary and promptly loosened many controls on Wall Street, including Reg-T oversight, short selling, and conflicts involving investment banking and research. The SEC became a joke under Reagan, and has remained so. The IRS was deliberately marginalized and underfunded, as was the SEC. Let's also not forget the massive defense spending, much of it at truly ludicrous prices, that enriched many CEOs and investors, but started America on its way to becoming the largest debtor nation in world history.

Ironically, it was George Bush #1 who decried the "Voodoo Economics" that he saw would lead to financial ruin down the road. The real reasons the nineties were so successful for many Americans were the collapse of the Soviet Union, which was a fifty-year meltdown that finally ended, and the "tech" boom that gave America the jump on the rest of the world in everything from PCs to the internet to industrial robotics, all leading to real gains in efficiency and prosperity. Neither of these had much of anything to do with the massive neocon-inspired defense buildup which was mostly squandered money, or the 'free market' economics that were championed under Reagan - although the Fox News crowd tries to turn Reagan into some kind of hero for simply being in office while these events occurred.

George Bush #1 lost a close election to Clinton, thanks to Ross Perot and a general distrust of wealthy elites by the broad populace. It was time for a guy who grew up poor and made his own mark by hard work and political savvy, not by inheritance and Wall Street connections. Clinton was a fairly successful President, but you are right, he did almost nothing to stop the financial abuses, concentration of power, corruption on Wall Street and the credit card industry, and so on.

George Bush #2 was obviously a wall-to-wall disaster for America, and now all the chickens are roosting and we have a huge tab to pay - thanks to corporate thievery, massive tax dodging, and extremely wasteful spending on many boondoggles and our military machine.

It's not pretty, and there are no quick fixes - Obama was dealt a hand full of bad cards, and the answer to the debts will be massive inflation - it always has been, and will be again. Given time, and a less corrupt Congress, we can solve the problems and restore financial sanity and a modicum of integrity to our society. It won't be easy, but recognizing the problem is the first step.

Congratulations on the two great articles.

May 04 07:26 AM

[muskokajpm:]

Indeed velleity was misspelled, and perhaps even a tautology in that context. The misspelling was corrected in the following clause, However, the possessive of a company is company's. As you pointed out there are many excellent and articulate comments on the Kim articles. I enjoyed them all.
As for the complexities of mortgage calculation, it would appear, from the reports of home owner difficulties, that a large proportion of the population doesn't even understand the wording of the contracts into which they enter, let alone the mathematics.


On May 04 04:37 AM bota wrote:

> Velleity was misspelled in a previous, very articulate comment.
> I believe the average American consumer may miss that exception to
> the "ie" rule. I would also be impressed if he could apply the standard
> formula for mortgage payment calculation P=Ai/[1-e**-n*ln(1+i)] where
> Payment (monthly), Amount (of loan), interest (decimal), and number
> (of payments) define the letters. e=2.7183... and ln(x) refers
> to the natural logarithm of x.
>
> Stock holders own a companies management, Bond holders own its physical
> property. Home owners in England prior to last year's retraction
> of the Magna Carta, had held freehold rights to the British soil
> since 1215. Lest we forget, citizens are the stockholders in Government.

May 04 10:42 AM

[TinyTim:]

Nice essay, Mr. Kim-

"It only seems as if such transgressions are more numerous today because of the recent attention given them in the media, but in reality, they have neither proliferated in frequency nor expanded in egregiousness."

If you read economic history, govt transgressions have been common since the founding. In fact, even in England and the Netherlands before that, the interplay between the government and what I call the plutocracy, would cause you great pain and anguish. I recommend "Wealth and Democracy" by Phillips.

It appears as if the pendulum has swung to the populist side with the election of Obama. I didn't vote for him (preferring to write-in Ron Paul), but I wouldn't be surprised under the circumstances if he takes an axe to Wall St after the current crisis blows by.

I'm a lot more concerned with the financialization of America and the growing obscurity and complexity of this finance, which eases the type of behavior you deplore. Combine that with lax and faulty regulation and law making (the rule of unintended consequences is greatly magnified in Washington), conflicting interests by accounting firms, brokerage houses and ratings services, the attitude of entitlement by the plutocracy, and their ability to influence and subvert legislation and you will be pretty far from free markets.

May 04 06:54 PM

[Yoon Kim:]

There are fundamental aspect of human nature which have not evolved in the last 5000 years leading our societies to repeat the mistakes in history.

Emmanuel Goldstein's book "The Theory and Practice of Oligarchical Collectivism" succintly paraphrases my point:

"
Throughout recorded time, and probably since the end of the Neolithic Age, there have been three kinds of people in the world, the High, the Middle, and the Low. They have been subdivided in many ways, they have borne countless different names, and their relative numbers, as well as their attitude towards one another, have varied from age to age: but the essential structure of society has never altered. Even after enormous upheavals and seemingly irrevocable changes, the same pattern has always reasserted itself, just as a gyroscope will always return to equilibrium, however far it is pushed one way or the other.

The aims of these three groups are entirely irreconcilable. The aim of the High is to remain where they are. The aim of the Middle is to change places with the High. The aim of the Low, when they have an aim -- for it is an abiding characteristic of the Low that they are too much crushed by drudgery to be more than intermittently conscious of anything outside their daily lives -- is to abolish all distinctions and create a society in which all men shall be equal. Thus throughout history a struggle which is the same in its main outlines recurs over and over again. For long periods the High seem to be securely in power, but sooner or later there always comes a moment when they lose either their belief in themselves or their capacity to govern efficiently, or both. They are then overthrown by the Middle, who enlist the Low on their side by pretending to them that they are fighting for liberty and justice. As soon as they have reached their objective, the Middle thrust the Low back into their old position of servitude, and themselves become the High. Presently a new Middle group splits off from one of the other groups, or from both of them, and the struggle begins over again. Of the three groups, only the Low are never even temporarily successful in achieving their aims. It would be an exaggeration to say that throughout history there has been no progress of a material kind. Even today, in a period of decline, the average human being is physically better off than he was a few centuries ago. But no advance in wealth, no softening of manners, no reform or revolution has ever brought human equality a millimetre nearer. From the point of view of the Low, no historic change has ever meant much more than a change in the name of their masters.
"

Today's financial elites overthrew yesterday's elites by selling rest of us the mantra that capitalism = meritocracy without consideration for collusion of the wealthiest to stay in power to write the rules.

May 04 11:51 PM