Monthly Archives: March 2015

President Cruz Will Never Happen–TPM

the best of the internets

People who come off like assholes don’t get elected president. From college and law school to the Senate and seemingly everywhere in between, Cruz has found small groups of admirers while convincing the vast majority of people as a consummate asshole.

There are few people I do not take seriously in politics. Or to put it more specifically, there are few people I fully discount in the context of national elections. Ted Cruz is one of those people. By contrast, I think it is highly unlikely that Rand Paul can make it in the GOP primaries, let alone a national election. There are so many intra-party disputes, so many iffy stories lurking in the background for him and his father and a lot more. But there are enough unexpected and cross cutting aspects to Paul that I can’t be sure. Always important, many people who don’t agree with anything Paul…

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Naked Capitalism: Banksters Own Justice


Bill Black: The DOJ and the SEC Spurn their Ace in the Hole – Richard Bowen

Posted on March 25, 2015 by

Yves here. This is the second post in a devastating series on why major banks and their executives got away with large-scale, systematic fraud in the runup to the crisis (see the first post here). Bill Black uses Citigroup whistleblower Richard Bowen as a case example of how derelict the DOJ and SEC were in the performance of their duties.

Here, Black describes how historically frauds and criminal conduct were pursued primarily by regulators and the FBI. However, not only were regulations were weakened, but the Bush Administration ended criminal referrals: “References to the criminal referral coordinators disappeared or were removed from the bank examiners’ manuals.” FBI staffing for white collar crime was cut drastically as the war on terror was given precedence.

That meant, as Black describes, whistleblowers became more important than ever as not just a source of information for civil and criminal prosecutions, but as key witnesses. Yet in many cases they are problematic. They are often disaffected former employees who call out the bad conduct they saw after they were terminated, or were so badly roughed up by their former employer for becoming an internal dissident that they were traumatized and don’t hold up well on the stand. Hence, as Black explains, the failure to take advantage of a stellar whistleblower like Richard Bowen. As Bowen put it, “Not only did they bury my testimony, they locked it up.”

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Originally published at New Economic Perspectives

In this second column about Richard Bowen, I discuss the failure of the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) to make use of his expertise and testimony.  Bowen was the Citi SVP who blew the whistle on Citi’s senior managers’ strategy of knowingly buying massive amounts of fraudulently originated loans sold to Citi through fraudulent reps and warranties and then reselling those toxic mortgages (primarily to Fannie and Freddie) through false reps and warranties.  My first column described that strategy and the failures of the Financial Crisis Inquiry Commission (FCIC) to understand how damning Bowen and Clayton’s testimony was.  Clayton was the dominant “due diligence” firm for secondary market mortgage sales and was designed to be an easy grader.  The two great epidemics of mortgage origination fraud (appraisal fraud and liar’s loans) were so endemic and so crude that even Clayton found a 46% incidence of false reps and warranties by the sellers to the secondary market who fraudulently originated the loans.  That incidence grew to 54% by the second quarter of 2007.

Bowen led Citi’s 220 person mortgage loan underwriter team.  Bowen’s team initially found in 2006 that the loans Citi was purchasing for resale had a 40-60% incidence of not meeting Citi’s loan standards.  By 2007, despite Bowen’s stark warnings to senior management, that percentage climbed to 80 percent.  The response of Citi’s senior management to Bowen’s repeated written warnings that Citi was engaged in massive fraud was (a) to increase Citi’s purchases of toxic mortgages, (b) to buy far more (endemically fraudulent) liar’s loans, and (c) to retaliate against Bowen and destroy his banking career.  My first column in this series explains why Bowen posed such a threat to the top managers’ fraud scheme that those managers decided their only choice (other than honesty) was to destroy Bowen’s banking career.

Bowen was the perfect witness and expert consultant from the DOJ and the SEC’s perspective to assist in the prosecution of the elite frauds leading Citi and other banks.  He had the key expertise – loan underwriting.  Underwriting and suborning controls are the early “tells” for spotting accounting control fraud by lenders and loan purchasers.  In order to follow the fraud “recipe” the firm’s underwriting and controls must be rendered a sham.  This makes Bowen, as the SVP in charge of a large team of underwriters whose warnings proved so prescient the ideal witness against not simply Citi’s controlling officers, but all other firms’ officers following the fraud recipe.

Bowen was, of course, the ideal witness in a prosecution of Citi’s top leaders for their fraud scheme.  Bowen put them on repeated, written notice of the massive fraud scheme.  Bowen demanded that it stop.  Citi’s top managers instead expanded the scope and the severity of the fraud scheme, achieved an astounding 80% of false or unsupportable reps and warranties by Citi in its sales of toxic mortgages to the secondary market, and retaliated against Bowen for being right and demonstrating integrity.  Bowen was Citi’s controlling officers’ greatest nightmare.

In my first column in this series I demonstrated the need for the FBI and the prosecutors to understand a detailed, technical analysis of the fraud schemes and have experts that could explain the points to a jury in understandable terms.  Bowen was ideal for the first task.  I don’t know how good he would have been in explaining it to a jury, but that is a skill that can be developed through practice.

I have written several columns in which I have explained the indifference and incompetence of the DOJ’s response to the financial whistleblowers.  The first point to make is that because of a different form of incompetence – the Bush (II) administration’s destruction of the criminal referral process at the banking regulatory agencies and the Obama administration’s even more inexplicable refusal to restore an effective criminal referral process the sole means by which the FBI and the DOJ could succeed in prosecuting the elite fraud is through whistleblowers.  (They could also use people like me as experts, but we all know that Holder would prefer to drink a cup full of broken glass rather than accept help from people like me.)

The Essential Need to Restore the Criminal Referral Process

The single most distressing fact about the Obama administration’s refusal to restore an effective criminal referral process at the banking regulatory agencies is that doing so would be the first thing any competent law enforcement professional would do.  Banks do not make criminal referrals against their controlling officers.  The FBI white-collar section is staffing is down (on a good day) to about 2,200 agents and we have over 1,000 industries (not firms – industries) in the U.S.  Three things are obvious from those three facts.

  1. The system won’t work – we have far too few FBI agents assigned to white-collar fraud
  2. The FBI agents cannot “walk a beat” – they only investigate if there is a criminal referral
  3. FBI agents will rarely have expertise in the industry they are investigating

Whistleblowers are episodic, so they inherently cannot deal effectively with the fraud epidemics that drive our worst crises.  Few whistleblowers have access to the “C-Suite” where the worst “control frauds” are led.  Some whistleblowers really are disaffected employees.  Other whistleblowers are psychologically damaged by the retaliation.  Divorce is common and they may become depressed, paranoid, and have substance abuse problems.  They may not have great credibility on the witness stand.

Competent and vigorous government financial regulators are typically superior witnesses compared to whistleblowers.  They are rarely subject to similar damaging psychological pressures.  They have nice titles and expertise in their fields.  They have no personal axe to grind.

In the savings and loan debacle (less than one-hundredth the size of the current crisis) our agency, the Office of Thrift Supervision (OTS) made over 30,000 criminal referrals.  The referrals produced over 1,000 felony convictions in cases designated as “major” by DOJ.  The cases that were prosecuted were hyper-prioritized through the “Top 100” process.  We worked closely with the FBI to prioritize the worst 100 fraud schemes.  That represented slightly over 300 S&Ls and 600 individuals.  They were nearly all prosecuted and despite having the best criminal defense lawyers in the world we achieved a 90% conviction rate.  The ability of the regulators to take the lead in successfully prioritizing cases for prosecution is one of the collateral advantages of superb regulatory criminal referrals.

The largest collateral advantage, however, is even more subtle.  The only reason the Top 100 list was created and DOJ and the FBI made prosecuting the elite S&L frauds a top priority was our criminal referrals.  Reporters love numbers and we eagerly released regularly updated numbers on our criminal referrals.  As the number of referrals soared into the thousands and there were only a small number of prosecutions DOJ came under strong criticism with ever new update on our criminal referrals to prosecute.  It had no capacity to prosecute the number of frauds we were referring and no national system for prioritizing its cases.  Creating the Top 100 list was DOJ’s brilliant response.  Once DOJ began successfully prosecuting the elite frauds it got great praise not only from the regulators, but from the media and the public.  DOJ’s senior leadership and President Bush came to understand that elite frauds drove the S&L debacle.  They assured the public that they would bring the elite criminals that led those frauds personally to account for their crimes.

“Attorney General Richard Thornburgh prefaced a Justice Department report on savings and loan fraud with this promise: ‘The American public can be assured.., that prosecution of white collar crime—‘crime in the suites’–and particularly savings and loan crimes, will remain a top priority of the Department of Justice.’  In a speech to U.S. Attorneys in June 1990 President Bush stated, ‘We will not rest until the cheats and the chiselers and the charlatans [responsible for the S&.L disaster] spend a large chunk of their lives behind the bars of a federal prison.’  The president was unequivocal about his plans for attacking financial institution fraud: ‘We aim for a simple, uncompromising position. Throw the crooks in jail’” (Big Money Crime, Calavita, K, Pontell, H., Tillman R., 1997).

Readers know that President Obama and Attorney General Eric Holder have been unwilling to summon and express even remotely similar moral clarity and have granted the elite bankers who led the three fraud epidemics de facto immunity from prosecution.

Even before we made our criminal referrals we were often greatly aiding the eventual prosecution.  First, we trained our examiners to recognize likely accounting frauds.  Second, we trained them to respond by asking the senior officers, in writing, a series of very difficult questions – and documenting in writing the officers’ response.  Bowen provides an excellent example of the difference.  Bowen put Citi’s senior officers on written notice of Citi’s massive frauds.  That is invaluable to DOJ’s ability to prosecute of those managers.  Our examiners and “supervisory agents” did the same thing, but they also took a second step that Bowen could not take.  They required answers to questions that the senior officers were desperate to avoid answering – and lying to a federal regulator is a felony.  The old saying is correct; it is often the cover up that leads to

Competent regulators aren’t supplicants.  We demanded the immediate end to fraudulent practices.  It is far better to stop a fraud than to seek to sanction it years later.  We (OTS’ West Region) would not have allowed any liar’s loans to be made or purchased by a financial institution that we regulated.  This is not a hypothetical claim.  Liar’s loans began to become material in 1990 in Orange County, California.  They weren’t called liar’s loans in that era, but “low documentation” (low-doc) loans and they were far less likely to cause losses than were liar’s loans during the most recent crisis because the modern loans were loaded with other features that greatly increased the risk of default and the risk of loss upon default.  Nevertheless, our examiners promptly identified these loans as inherently unsafe and unsound and inherently unfair to the borrower.  As a result, beginning in 1991, despite being in the midst of countering the S&L debacle, we broke out a team and drove liar’s loans out of the S&L industry.  The worst of the worst lenders, Long Beach Savings, voluntarily gave up federal deposit insurance and its charter as an S&L, converted to an essentially unregulated mortgage bank, and changed its name to Ameriquest for the sole purpose of escaping our regulatory crack down.  Ameriquest also targeted blacks and Latinos for its predatory loans.  (I recommend reading Michael W. Hudson’s book, The Monster, about Ameriquest.)  As MARI reminded the entire mortgage industry in its 2006 report on fraudulent liar’s loans, those loans in the early 1990s caused material losses.

[M]any members of the industry have little historical appreciation for the havoc created by low-doc/no-doc products that were the rage in the early 1990s. Those loans produced hundreds of millions of dollars in losses for their users.

“Hundreds of millions of dollars in losses” from what was only a few billions of dollars in liar’s loans should be ample to send the warning not to make liar’s loans, but it is not remotely sufficient to cause a crisis.  Indeed, our crackdown on liar’s loans that began in 1991 was so prompt and effective that the loans caused no major failures.

OTS criminal referrals went through what we would now call “continuous improvement.”  Every major office had an experienced “criminal referral coordinator” who met with his FBI counterparts at least quarterly to get feedback on our referrals for the purpose of maximizing their usefulness to the FBI.  The coordinator would then train our staffs and work with them in preparing major referrals to incorporate the feedback from the FBI.  A typical major referral would be 30 pages long and have hundreds of pages of attachments of the key excerpts from the vital documents, complete with useful tabs and cross-references to ease the reader’s access to the most important information.  The referral was the roadmap to a successful investigation and prosecution.  It explained and documented the fraud scheme, the perpetrators, the most important documents and excerpts, witnesses, key supervisory correspondence, and testimony taken under oath in our enforcement actions.

The criminal referral process only begins the transfer of expertise from the regulators to the FBI and the prosecutors.  For the most important and complex cases we would “detail” an experienced examiner who was part of the team that examined the S&L to the FBI.  The examiner would serve as the FBI’s internal expert.  Given grand jury secrecy (6 (e)) this is particularly valuable because the FBI and AUSA can rarely share either documents or testimony obtained through the grand jury process with the regulators.  An examiner who is “detailed” to the FBI and no longer receives his instructions from the regulators can be sworn as an agent of the grand jury and continue to provide expertise to the FBI and the prosecutors.

Our examiners and supervisors often served as fact witnesses in the trial.  They were able to share with the jury the tough questions they asked the senior managers and the responses they received.

The regulators played an important role in training the FBI and the prosecutors about the industry and its fraud schemes to aid their ability to investigate and prosecute elite frauds by the controlling officers.  At peak, 1,000 FBI agents were assigned to the S&L investigations.  The federal S&L regulators (and we sometimes received critical support from state regulators) had roughly 1300 professionals available to assist the FBI and the prosecutors.  Each of those 1300 regulatory professionals, of course, had greater industry expertise than any FBI agent or prosecutor.  The combined expertise of the regulators, FBI agents (and IRS and Secret Service agents and accountants), and prosecutors produced the greatest success in prosecuting elite white-collar criminals in history.

At peak, in response to the vastly larger and more destructive fraud epidemics that drove the recent crisis there were roughly 250 FBI agents assigned to all cases of mortgage fraud nationwide.  The vast bulk of them were assigned at all times to cases in which the FBI in essence served as a collection agency for the most fraudulent lenders.  The result has been the greatest strategic failure in prosecuting elite white-collar criminals in DOJ’s modern history.

Under Bush (II) and Obama, however, DOJ has refused to prosecute any senior bank officer who helped lead the three most destructive financial fraud epidemics in history.  Most Americans assume that only the elite bankers that led the three fraud epidemics have received this de facto immunity from criminal prosecution, but that immunity has extended to senior bankers at even bankrupt and notoriously fraudulent mortgage banks and junior officers at the large banks.  The Bush administration brought an inept prosecution of two relatively junior Bear Stearns hedge fund officers that failed in 2009.  There have been no prosecutions of even junior officers of the large banks who took even modest leadership roles in the three fraud epidemics in the following six years.   The three fraud epidemics caused our financial crisis and Great Recession which is estimated to cause the U.S. a $24 trillion loss of GDP and over 10 million jobs.  (Both numbers are far larger in Europe.)

The Death of Criminal Referrals

The criminal referral process at the banking regulatory agencies was effectively ended, without any public notice or rationale, by the second President Bush.  References to the criminal referral coordinators disappeared or were removed from the bank examiners’ manuals.  The result was that OTS and the Office of the Comptroller of the Currency (OCC) admitted that they made zero criminal referrals in response to the most recent crisis.  FCIC says that the Fed made three referrals for discriminatory lending.  The FDIC was smart enough to refuse to answer the question.  Despite recurrent criticism the Obama administration has never announced that it has ordered the creation of an effective criminal referral process at the banking regulatory agencies.  The Obama administration cannot claim that it is vigorously pursuing the frauds when it refuses to do the simplest, fundamental things that we know how to do and know are essential to successful prosecutions.  The Obama administration does not need to reinvent the wheel.  We know exactly how to create a superb criminal referral system at the banking regulatory agencies.  Any administration that wished to enforce the law against elite bank frauds would have made this there first action.

Whistleblowers are DOJ’s Only Means to Prosecute

The Obama administration’s failure to reestablish and effective criminal referral process and to appoint regulatory and prosecutorial leaders who will make the prosecution of elite bank fraudsters a top priority leaves DOJ with only one avenue of successful prosecutions of those elite banksters – whistleblowers.  (Again, Holder would far rather fail than accept the repeated offers of help of those of us with a track record of success.)  This makes Bowen a vastly more important asset to the DOJ and the SEC today than he would have been during the S&L debacle.  He and few whistleblower peers are the DOJ’s and the SEC’s only “ace in the hole.”  Holder, however, constantly folds rather than playing his sole ace in a criminal prosecution of the elite banksters.  Of course, the pretense that Holder or Obama actually want to bring successful prosecutions against the elite banksters doesn’t fool anyone at this juncture.

Given the death of criminal referrals by the regulatory agencies, if Holder were serious about enforcing the rule of law against the elite bankers who led the three fraud epidemics he would make every effort to recruit whistleblower like Bowen.  He would constantly be asking for them to come forward and vigorously seek leads on potential whistleblowers that the FBI could personally approach and ask for their help.

Virtually every major DOJ case against the largest banks was made possible by whistleblowers, including the cases against Citi, JPM, Bank of America, HSBC, Credit Suisse, and Standard Chartered.  DOJ refuses to prosecute the elite bankers who led the three fraud epidemics even when it brings actions made possible by the whistleblowers’ revelations.  Holder loves to attend the press conferences announcing these settlements and non-prosecutions (oxymoronically referred to as “deferred” prosecutions).  The press conferences provide the ideal opportunity for Holder to praise the whistleblowers, ask for new whistleblowers to step forward, promise the whistleblowers that their information, if credible, will lead to prosecutions of the elite banksters, and explain how whistleblowers should contact DOJ.  Holder and his subordinates have done this in zero cases.  They fail even to mention the whistleblowers.  Again, if Holder actually wanted to prosecute the banksters we know he would never act in the manner he consistently does when it comes to whistleblowers.

The problem, of course, is not limited to Holder and the non-prosecutors he selects to not prosecute the banksters but instead get useless fines assessed solely against the bank rather than the officers looting the bank.  As I have been urging for years, the most obvious thing we could do to in the whistleblower context to aid prosecutions of the elite banksters would be for President Obama to award the whistleblowers medals in a televised Rose Garden Ceremony in which he thanked them for their service, called on whistleblowers to come forward, and explained how they should contact DOD.  The President should also have the whistleblowers attend the State of the Union Address as Mrs. Obama’s guests.  His SOTU address, of course, would praise their actions and the TV cameras would show them to the world.  This would be great public policy and great politics for the President and his Party.  When a president refuses to take actions that are substantively desirable and politically brilliant he is either terminally inept or in the pocket of the elites that the whistleblowers are unmasking as venal frauds.

Holder and the SEC’s Refusal to Harness Bowen’s Expertise

I am simply using Bowen as a prominent example of DOJ’s refusal to harness the expertise of the whistleblowers.  The three most prominent whistleblowers who made possible the civil fraud cases against Citi (Bowen), JPM (Alayne Fleischmann), and Bank of America (Edward O’Donnell) were exceptionally good witnesses for the prosecution.  They were not disaffected employees.  They were trying to protect their banks from harm and to cause them to act with integrity and professionalism.  They did not wait until after a disaster to protest – they risked their careers by warning in advance of the disaster and their warnings proved correct because of their great expertise.  They were the victims of retaliation for the unforgivable crime of trying to do the right thing when their bosses stood to be enriched by looting the bank by inducing employees to do the wrong thing.  I explained earlier why competent, vigorous regulatory witnesses are typically less vulnerable to effective cross-examination than whistleblowers.  In these three cases, however, the whistleblowers are so stellar that they would be exceptions to that rule even if the regulators were competent and vigorous.  The regulators were neither during this crisis.

The most obvious way in which these whistleblowers could aid the DOJ and the SEC is as fact witnesses about the actions of their bosses and their reactions to the whistleblower’s warnings.  However, given the death of criminal referrals, the exceptionally pathetic quality of the regulatory leadership, and Timothy Geithner’s open hostility to prosecuting the banksters’ who interests he had so assiduously promoted in his role as a faux regulator at the NY Fed and his continuing destructive role as he gradually became President Obama’s principal financial advisor, the FBI, SEC, and DOJ receive virtually no expertise from the regulators as to the industry or its fraud schemes.  In these tragic circumstances Bowen, in particular, is invaluable as a consultant to the FBI, SEC, and the DOJ.  They should be in at least weekly contact with him about dozens of cases.

Again, underwriting and controls are the “tells” because they must be suborned and perverted so extensively that the bank officers will make and/or purchase tens of thousands of loans it knows to be fraudulent.  I have explained how establishing this fact allows effective prosecutions of the bank’s senior officers.  Bowen is therefore perfectly positioned because he was a vital internal control in charge of underwriting.  He also knows how loan origination and secondary market sales work.  He should be serving as DOJ’s lead expert witness in scores of prosecutions of elite bankers.

In his recent Bloomberg interview, however, Bowen revealed that DOJ has not communicated with him in over 18 months.  A September 21, 2013 article in the New York Times by William Cohan contains an equally depressing revelation.

Then, in July [2008], Mr. Bowen went to the Securities and Exchange Commission. “I testified before the S.E.C.,” he told an audience in Texas earlier this year. “I told them what had happened.” He gave the S.E.C. more than 1,000 pages of documents. “Mr. Bowen, we are going to pursue this,” the agency told him. He never heard back. “Not only did they bury my testimony, they locked it up,” he said in his speech. (The S.E.C. has denied my numerous requests under the Freedom of Information Act for access to Mr. Bowen’s file, even though he has given his permission, claiming that the material was ‘confidential’ and included Citigroup ‘trade secrets.’ On Sept. 11, the S.E.C. denied my administrative appeal of its decision.)”

Yes, we wouldn’t want Citi’s fraudulent “trade secrets” to slip out lest they prompt the ghost of Charles Keating to sue Citi for infringing the fraud “recipe” he made infamous 30 years ago.

As always, the message is that the DOJ and the SEC refuse to take the most obvious, foundational actions essential to success that any professional would take if he or she sought to restore the rule of law and end Wall Street, the City of London, and Switzerland’s corrupt financial cultures.  The Obama administration’s “revealed preferences” are obvious.

And, yes, Bush (II) was even worse.  Bowen went to the SEC when Bush’s appointees ran it.  But there is something particularly disgusting about Holder’s hypocrisy, at the very moment he was ignoring Bowen, in going to the Wall Street Journal and claiming:  “The Obama administration is scouring Wall Street for whistleblowers….”  Lies, damn lies, and Holder.

Naked Capitalism on Neo-Liberalism


Comments on David Harvey’s “A Brief History of Neoliberalism”

Posted on March 23, 2015 by

By Lambert Strether of Corrente.

I like physical bookstores (as opposed to virtual bookstores like the one to your right) because real shelves are easy to browse. Serendipitously, then, I encountered David Harvey’s A Brief History of Neoliberalism, bought it, and read it. Harvey[1] is a Distinguished Professor of Anthropology at CUNY but it could well be that anthropologists (like David Graeber) are better equipped to interpret our political economy to it than either politicians or economists. Here are two reviews of the book: Thom Hartmann, and Monthly Review; it’s also mentioned in a bibliographic review of neoliberalism in Theory, Culture, and Society

What we might call “the question of the state” — its nature, our experience of it, and its legitimacy, whether in particular or in general — has been coming up on the zeitgeist leaderboard lately; see the lively discussion at Naked Capitalism yesterday. And it does seem clear that since what Harvey labels “the neo-liberal turn” in the mid-70s — marked, if not defined, by the Powell Memo, the formation of the Business Roundtable, the advent of Thatcher and Reagan, and after which real wages were flattened and most gains from productivity necessarily accrued to the 1% and the 0.01% — the relationship of the citizen (now we say “consumer”) to the state changed. When, for example, I entered the labor market in the mid-70s, I had expectations for state provisioning of services that I no longer have (some measure of dignity with Social Security and Medicare) and assumptions about the limits of state power that I no longer hold (the Fourth Amendment). I know that readers who entered the labor market at later dates may not share the expecations and assumptions of my youthful self, but will perhaps consider expanding their sense of what was once possible, and could be again. Harvey’s book, then, is useful in understanding the neo-liberal turn, and may be useful in shaping what is to come next.

My aim in this post is to spark conversation and test out talking points. So, I’m not going to summarize Harvey’s thesis; see the reviews above. Rather, I’m going to quote great slabs of material from the Brief History — I know, I know, “That’s not writing. It’s typing” — and intersperse them with not-entirely-random commentary.

Two posts at Naked Capitalism provide some background on neoliberalism: First, Nathan Tankus’s 2013 interview with Philip Mirowski, where Mirowski proposes that

[Neoliberals] are constructivists, redefining and building a strong state to institute and maintain the kinds of markets they think will not come about on their own[2]. For the [neoliberal thought] collective, the most propitious time to make such bold interventions is during a crisis, when they are mobilized to define ‘exceptions’[3] to previous rules.

Hence “shock doctrine,” and so forth. Second, my own “Neoliberalism Expressed As Simple Rules,” which is not a theoretical treatment, but rather provides simple ways for you to spot neoliberals “in the wild”: The quasi-theological “because markets” as the axiom on which every neoliberal policy proposal rests, and the imperative “go die” is your fate if you don’t have the wherewithal to function in the markets they set up. (As a corollary, neoliberals exempt themselves from their own rules, rather like Ayn Rand collecting Social Security.)

I’m going to look at what Harvey as to say in four topic areas, most of which have come up in the NC comment area at one time or another:

  • Neoliberalism Defined
  • Neoliberalism and Elite Power
  • The Neoliberal State
  • Neoliberalism vs. Neoconservativism

In all these topic areas, “the question of the state” is paramount.

1. Neoliberalism Defined

Here is Harvey’s definition of neoliberalism (page 2):

Neoliberalism is in the first instance a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices.

Because markets. If you’ll reread that paragraph, you’ll see that these views are so pervasive as to have been transformed into common sense; they are certainly shared by both legacy parties and the political class, and ideas that are not neoliberal (single payer, for example) are not permitted within the Overton Window that defines legitimate discourse; they cannot be expressed, and perhaps cannot even be thought. For example, the “tragedy of the commons” is a stable of neoliberal discourse, and is not merely untrue, but defines the only sane way to govern common pool resources like watersheds out of existence.

Here is Harvey’s description (pages 2 – 3) of “the neoliberal turn,” a phrase I obviously like:

There has everywhere been an emphatic turn towards neoliberalism in political-economic practices and thinking since the 1970s. The process of neoliberalization has, however, entailed much ‘creative destruction’, not only of prior institutional frameworks and powers (even challenging traditional forms of state sovereignty) but also of divisions of labour, social relations, welfare provisions, technological mixes, ways of life and thought, reproductive activities, attachments to the land and habits of the heart. In so far as neoliberalism values market exchange as ‘an ethic in itself, capable of acting as a guide to all human action, and substituting for all previously held ethical beliefs’, it emphasizes the significance of contractual relations in the marketplace. It holds that the social good will be maximized by maximizing the reach and frequency of market transactions, and it seeks to bring all human action into the domain of the market. This requires technologies of information creation and capacities to accumulate, store, transfer, analyse, and use massive databases to guide decisions in the global marketplace. Hence neoliberalism’s intense interest in and pursuit of information technologies (leading some to proclaim the emergence of a new kind of ‘information society’). These technologies have compressed the rising density of market transactions in both space and time.

This paragraph is so rich I hardly know where to begin. For a lunatically precise reductio ad absurdum of “contractual relations” and “habits of the heart,” see Andrew Ditmer’s “Journey into a Libertarian Future,” parts one, two, three, four, five, and six, with its oft-repeated catch-phrase “in a rights-respecting manner.” For “maximizing the reach and frequency of market transactions,” see many NC posts on the claims for “shopping” vs. the realities of the tax on time and (with ObamaCare) the deliberate obfuscation of market offerings by vendors. And on information technologies, see Greenwald, Snowden, et al.

Harvey also claims (pages 159 – 60) that “accumulation by dispossession” is a key feature of the neoliberal dispensation:

The main substantive achievement of neoliberalization, however, has been to redistribute, rather than to generate, wealth and income. I have elsewhere provided an account of the main mechanisms whereby this was achieved under the rubric of ‘accumulation by dispossession’. By this I mean the continuation and proliferation of accumulation practices which Marx had treated of as ‘primitive’ or ‘original’ during the rise of capitalism. These include the commodification and privatization of land and the forceful expulsion of peasant populations (compare the cases, described above, of Mexico and of China, where 70 million peasants are thought to have been displaced in recent times); conversion of various forms of property rights (common, collective, state, etc.) into exclusive private property rights (most spectacularly represented by China); suppression of rights to the commons; commodification of labour power and the suppression of alternative (indigenous) forms of production and consumption; colonial, neocolonial, and imperial processes of appropriation of assets (including natural resources); monetization of exchange and taxation, particularly of land; the slave trade (which continues particularly in the sex industry); and usury, the national debt and, most devastating of all, the use of the credit system as a radical means of accumulation by dispossession. The state, with its monopoly of violence and definitions of legality, plays a crucial role in both backing and promoting these processes. To this list of mechanisms we may now add a raft of techniques such as the extraction of rents from patents and intellectual property rights and the diminution or erasure of various forms of common property rights (such as state pensions, paid vacations, and access to education and health care) won through a generation or more of class struggle. The proposal to privatize all state pension rights (pioneered in Chile under the dictatorship) is, for example, one of the cherished objectives of the Republicans in the US.

Most of these techniques of primitive accumulation can be put under the heading of “enclosure”; to Harvey’s list we might add Monsanto’s attempt to privatize the germ plasm, the privatization of education both in charter schools and the general crapification of the university; and the conversion of law enforcement into a profit-making state enterprise, and not just in Ferguson.

However, I understand Harvey to be making the claim that these forms of extraction have come to outweigh profit in capitalism’s current, neoliberal implementation. I’m not so sure about that.

2. Neoliberalism and Elite Power

Here (page 15-16) Harvey describes the state of play in the mid-70s that drove the neo-liberal turn.

To have a stable share of an increasing pie is one thing. But when growth collapsed in the 1970s, when real interest rates went negative and paltry dividends and profits were the norm, then upper classes everywhere felt threatened. In the US the control of wealth (as opposed to income) by the top 1 per cent of the population had remained fairly stable throughout the twentieth century. But in the 1970s it plunged precipitously (Figure 1.2) as asset values (stocks, property, savings) collapsed. The upper classes had to move decisively if they were to protect themselves from political and economic annihilation. The coup in Chile and the military takeover in Argentina, promoted internally by the upper classes with US support, provided one kind of solution. The subsequent Chilean experiment with neoliberalism demonstrated that the benefits of revived capital accumulation were highly skewed under forced privatization. The country and its ruling elites, along with foreign investors, did extremely well in the early stages. Redistributive effects and increasing social inequality have in fact been such a persistent feature of neoliberalization as to be regarded as structural to the whole project. Gérard Duménil and Dominique Lévy, after careful reconstruction of the data, have concluded that neoliberalization was from the very beginning a project to achieve the restoration of class power. After the implementation of neoliberal policies in the late 1970s, the share of national income of the top 1 per cent of income earners in the US soared, to reach 15 per cent (very close to its pre-Second World War share) by the end of the century

Clearly, I think Harvey’s right to focus on the 70s; dear Lord, the leisure suit… Terrible music… It all must have meant something! However, when discussing elite angst, Harvey surely should include the 60s, as well as (perhaps) the idea that the reaction of a significant part of the elite to the New Deal was “Never again!” (Obama was able to actualize this elite desire when the time came in 2009.) I’d also like a better understanding of what “had to move decisively” meant in practice. How were the decisions taken? Clearly, however, I agree with Harvey that distributing wealth and power upward is a feature, not a bug, of the neoliberal project. (See the work of Outis Philalithopoulos on the nature of the thought collective that did the project work.) I also like very much the idea that even then, the elites were looking for new forms of power trans-nationally; elsewhere, Harvey mentions the New York bailouts of the 70s as a parallel case to Chile; I think the same thing happened after the failure of the Tahrir Square movement; dictators and wannabe dictators everywhere could tell themselves “not to worry.”

Reinforcing (page 19-20) the political character of the neoliberal project:

[We can] interpret neoliberalization either as a utopian project [q.v. Hayek, Friedman, the Chicago Boys, and other members of the neoliberal thought collective] to realize a theoretical design for the reorganization of international capitalism or as a political project to re-establish the conditions for capital accumulation and to restore the power of economic elites. In what follows I shall argue that the second of these objectives has in practice dominated. Neoliberalization has not been very effective in revitalizing global capital accumulation[4], but it has succeeded remarkably well in restoring, or in some instances (as in Russia and China) creating, the power of an economic elite. The theoretical utopianism of neoliberal argument has, I conclude, primarily worked as a system of justification and legitimation for whatever needed to be done to achieve this goal. The evidence suggests, moreover, that when neoliberal principles clash with the need to restore or sustain elite power, then the principles are either abandoned or become so twisted as to be unrecognizable. This in no way denies the power of ideas to act as a force for historical-geographical change. But it does point to a creative tension between the power of neoliberal ideas and the actual practices of neoliberalization that have transformed how global capitalism has been working over the last three decades.

As a caveat, Harvey’s discussion of class[5] leaves a good deal to be desired. In the passage above, for example, we have a process of “global capital accumulation” and we have “economic elites,” but the relationship between the two is not specified. However, I think Harvey’s idea that neoliberalism did not rejuvenate capitalism (as the New Deal surely did) but did increase the political power of the owners of capital (if that is what Harvey means by “economic elites) has a lot of be said for it. It speaks to the experience that most of us have of gradually crapified work and life experiences, at least where we encounter systems that have been prey to neoliberal infestations, while those who own and control those systems reap outsized rewards.

3. The Neoliberal State

Here (pages 79-81) Harvey presents a list of contradictions that, he claims, make the neoliberal state “a transitional” or “unstable” political form. (One might argue that a political class that is capable of producing a Clinton vs. Bush race in 2016 is about as stable as you can get, but then the ancien régime was stable, too; until it wasn’t. “If something cannot go on forever, it will stop,” and call me Pollyanna, but I can’t see continued dynastic conflicts causing anything other than disgust in the electorate, even with politics as degraded as it is.)

[The Neoliberal State] appears to be either a transitional or an unstable political form. At the heart of the problem lies a burgeoning disparity between the declared public aims of neoliberalism––the well-being of all––and its actual consequences––the restoration of class power. But beyond this there lies a whole series of more specific contradictions that need to be highlighted.

1. On the one hand the neoliberal state is expected to take a back seat and simply set the stage for market functions, but on the other it is supposed to be activist in creating a good business climate and to behave as a competitive entity in global politics. In its latter role it has to work as a collective corporation, and this poses the problem of how to ensure citizen loyalty. Nationalism is an obvious answer, but this is profoundly antagonistic to the neoliberal agenda. …

2. Authoritarianism in market enforcement sits uneasily with ideals of individual freedoms. The more neoliberalism veers towards the former, the harder it becomes to maintain its legitimacy with respect to the latter and the more it has to reveal its anti-democratic colours. This contradiction is paralleled by a growing lack of symmetry in the power relation between corporations and individuals such as you and me. …

3. While it may be crucial to preserve the integrity of the financial system, the irresponsible and self-aggrandizing individualism of operators within it produces speculative volatility, financial scandals, and chronic instability. ….

4. While the virtues of competition are placed up front, the reality is the increasing consolidation of oligopolistic, monopoly, and transnational power within a few centralized multinational corporations: the world of soft-drinks competition is reduced to Coca Cola versus Pepsi, the energy industry is reduced to five huge transnational corporations, and a few media magnates control most of the flow of news, much of which then becomes pure propaganda.

5. At the popular level, the drive towards market freedoms and the commodification of everything can all too easily run amok and produce social incoherence. … The reduction of ‘freedom’ to ‘freedom of enterprise’ unleashes all those ‘negative freedoms’ that Polanyi saw as inextricably tied in with the positive freedoms.

Every one of these contradictions speaks to the legitimacy of the neo-liberal state. I’d focus on “authoritarianism in market enforcement,” since that is exactly what ObamaCare does (and is what retirement will turn into, with a “marketplace” of its own, if we aren’t careful). That’s also what debtor’s prisons do, and its what law enforcement as a profit center does. A regime that forces its hand in your pocket for a fee every time you turn around, actively seeks to decrease what you have in your pocket in the first place, and then delivers increasingly crapified services, all with no means of redress within the electoral system, is a regime that, sooner or later, will face a legitimacy crisis.[6]

4. Neoliberalism vs. Neoconservativism

Here (page 81 – 82) Harvey explains how neoconservativism provides one way for the elite to resolve the contradictions listed above.

If the neoliberal state is inherently unstable, then what might replace it? In the US there are signs of a distinctively neoconservative answer to this question.

It is interesting to note how neoliberalization in authoritarian states such as China and Singapore seems to be converging with the increasing authoritarianism evident in neoliberal states such as the US and Britain. Consider, then, how the neoconservative answer to the inherent instability of the neoliberal state has evolved in the US.

[Neoconservatism] proposes distinctive answers to one of the central contradictions of neoliberalism. If ‘there is no such thing as society but only individuals’ as Thatcher initially put it, then the chaos of individual interests can easily end up prevailing over order. The anarchy of the market, of competition, and of unbridled individualism (individual hopes, desires, anxieties, and fears; choices of lifestyle and of sexual habits and orientation; modes of self-expression and behaviours towards others) generates a situation that becomes increasingly ungovernable. It may even lead to a breakdown of all bonds of solidarity and a condition verging on social anarchy and nihilism. In the face of this, some degree of coercion appears necessary to restore order. The neoconservatives therefore emphasize militarization as an antidote to the chaos of individual interests. For this reason, they are far more likely to highlight threats, real or imagined, both at home and abroad, to the integrity and stability of the nation. In the US this entails triggering what Hofstadter refers to as ‘the paranoid style of American politics’ in which the nation is depicted as besieged and threatened by enemies from within and without.

Well, yes. Neoconservativism providing a militarized solution to the problems neoliberalism created for itself. (It could be, however, that neoliberalism has introduced a contradiction there as well; Iraq and much of our latest imperial work was done with mercenaries (because markets); is it really possible for mercenaries to appeal to national sentiment?)


All I can say is that I hope this random walk though A Brief History of Neoliberalism inspires some conversation. Readers, does the “neoliberal” turn as a historical moment make sense to you? How would you date it? Is Harvey’s description of neoliberalism sufficiently nuanced and grounded to apply specifically to our time, while being general enough to suggest historical parallels? Are there any aspects of or turns of phrase in Harvey’s language that you find especially attractive? Are the militarized solutions of the neocons specific to either of the two parties, or accepted by both? Is “the question of the state” on the agenda? Should it be?


[1] Harvey published his book in 2005. Here (p 189) he warns of the coming great financial crash of 2007-2008: “Such a mix of indicators elsewhere would almost certainly have necessitated IMF intervention.”

[2] Hence ObamaCare. Because markets.

[3] Carl Schmitt, Political Theology: “Sovereign is he who decides on the exception.”

[4] Had it been, Silicon Valley wouldn’t be awash in so much cash that there’s no place to invest it that yields an adequate return (absent accounting control fraud, as in the housing crisis).

[5] Harvey writes (page 40):

But what exactly is meant here by ‘class’? This is always a somewhat shadowy (some would even say dubious) concept. Neoliberalization has, in any case, entailed its redefinition. This poses a problem. If neoliberalization has been a vehicle for the restoration of class power, then we should be able to identify the class forces behind it and those that have benefited from it. But this is difficult to do when ‘class’ is not a stable social configuration. In some cases ‘traditional’ strata have managed to hang on to a consistent power base (often organized through family and kinship). But in other instances neoliberalization has been accompanied by a reconfiguration of what constitutes an upper class. Margaret Thatcher, for example, attacked some of the entrenched forms of class power in Britain.

Hmm. I would say — without, I grant, proferring a definition of my own — that “dynamic” would be a better word than “shadowy,” and that it’s not reasonable to demand that class be a “stable social configuration.” Even the great division between those who sell their labor and those who bu it isn’t all that stable looked at in detail, when you consider the rise of the precariat, of System D, and so forth, all of which have happened in decades, not centuries. Dynamics like these are what drive the mysterious labor force participation rate, for example.

[6] To be fair, this could be exactly why the elites regarded the New Deal as illegimate.

Political Cartoons from Tom Toles – The Washington Post

Humor: The Borowitz Report

Disturbed Man Tries to Get Into White House



WASHINGTON (The Borowitz Report) – A disturbed Canadian man wants to try to get into the White House, according to reports.The man, who was born in Calgary before drifting to Texas, has been spotted in Washington, D.C. in recent years exhibiting erratic behavior, sources said.

In 2013, he gained entry to the United States Senate and was heard quoting incoherently from a children’s book before he was finally subdued.

More recently, he was heard ranting about a plan to dismantle large components of the federal government, such as the Internal Revenue Service and the nation’s health-care program.

Despite a record of such bizarre episodes and unhinged utterances, observers expressed little concern about his plans to get into the White House, calling them “delusional.”

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Naked Capitalism on Big-Dick Militarism


The Big Dick School of American Patriotism, and What We Make of It

Posted on March 18, 2015 by

Yves here. I find it difficult to relate to the “low grade security anxiety” described in this post, given that I lived for a few months in London in the early 1980s, where IRA bombings were a much more real (and still objectively low odds) threat than terrorism is in the US, and that hijacking in the 1970s and early 1980s were far more frequent occurrences than now. But it is disturbing to see American exceptionalism increasingly connected to military macho. Perhaps that compensates for our falling level of intellectual accomplishment.

By Nan Levinson, whose new book, War Is Not a Game: The New Antiwar Soldiers and the Movement They Built(Rutgers University Press), is based on seven years she spent not-quite-embedded with military-related antiwar groups around the country. As a freelance journalist, she writes about the military, free speech, and other aspects of civil liberties, culture, and technology. She teaches journalism and fiction writing at Tufts University. Originally published at TomDispatch

Let’s face it: we live in a state of pervasive national security anxiety. There are various possible responses to this low-grade fever that saps resolve, but first we have to face the basis for that anxiety — what I’ve come to think of as the Big Dick School of Patriotism, or (since anything having to do with our present version of national security, even a critique of it, has to have an acronym) the BDSP.

The BDSP is based on a bedrock belief in how America should work: that the only strength that really matters is military and that a great country is one with the capacity to beat the bejesus out of everyone else. Think of it as a military version of 50 Shades of Grey, with the same frisson of control and submission (for the American citizen) and the assumption that a good portion of the world is ripe to be bullied.

The BDSP is good citizenship conflated with JROTC, hosannas to sniper kills, the Pentagon’s commemoration of the 50th anniversary of the Vietnam War — what are we celebrating there anyway? — Rudolph Giuliani pining for a president who loves America in Reaganesque fashion, and the organizers of South Boston’s St. Patrick’s Day, who wouldn’t let the local chapter of Veterans For Peace march with their banners because, so the story goes, they didn’t want the word “peace” associated with veterans.

Of course, the Big Dick School of Patriotism isn’t new — revolutionary roots, manifest destiny, history as the great pounding of hooves across the plain, and all that. Nor is it uniquely American, even if there is something culturally specific about our form of national hubris on steroids. Still, there have been times in our history when civilians — some in power, some drawing strength from numbers — have pushed back against the military and its mystique, or at least have demanded an accounting of its deeds. And of course, until the Cold War bled into 9/11, there was no national security state on the present gargantuan scale to deal with.

As he was leaving office, President Dwight D. Eisenhower famously warned against the overweening power of what he called “the military-industrial complex.” As a senator, J. William Fulbright similarly warned of “the arrogance of [American] power” and used his Foreign Relations Committee chairmanship to challenge the Vietnam War — whereupon Fred Friendly, president of CBS News, got that network’s executives to agree to preempt “Captain Kangaroo” and cover those hearings live.

On the populist side, there was General Smedley Butler, who campaigned against the military in his retirement, the Bonus Marchers of Great Depression Washington, and of course the massive antiwar resistance and remarkable insubordination of American soldiers during the Vietnam War. Similarly, some soldiers from the all-volunteer force of our era worked to undermine the U.S. occupation of Iraq in various (though far less pervasive) ways, including conducting “search and avoid missions” in which they would park, hang out, and falsely report that they were searching for weapons caches.

These days, no one in America directly takes on the military. Not the president, who just requested $534 billion for the new Pentagon budget, plus an additional $51 billion for supplemental war funding. Not Congress, where therange of debate over an “authorization” of war in Iraq and Syria goes from “hawks,” who want assurances that we’ll blow ISIS to oblivion by any means, to “doves,” who want assurances that there will be no “boots on the ground” while we blow ISIS into oblivion. Certainly not the courts, which, among other things, have consistently refused to let military objectors invoke their right to disobey illegal orders. And not American citizens who are now well trained to spend their time thanking their all-volunteer warriors for their sacrifices before turning back to the business of everyday life.

It seems to matter little to anyone that, since 9/11, what is supposed to be the greatest fighting force in the world has been stymied by modestly armed insurgencies — in response to which we keep buying our military yet newer props like the wildly overpriced, over-touted, and underachieving F-35 fighter plane, and sending them back to clean up the very messes they helped produce not so long before. There never seem to be any consequences to this repetitive course of action. Well, none if you don’t count the squandering of whatever political capital this country had after 9/11, or the way a million or so veterans injured in Iraq and Afghanistan will require costly care for the rest of their lives, or the billions spent on war rather than the environment, infrastructure, education, or [fill in your favorite civic need here].

Okay, it’s true that a tiny crew of largely overlooked politicians like Jim McGovern of Massachusetts and Barbara Lee of California did try to limit war funding; that Obama did finally resist calls for invading Syria (before he began bombing it); and that the Supreme Court did rule that the Stolen Valor Act of 2005, which criminalized lying about military awards, was unconstitutional.

But how much attention gets paid to all that? Massively less than to the glories of American Sniper.  Or to Commander-in-Chief Obama reassuring soldiers that, regardless of race, creed, class, religion, or whom we choose to love, “when it comes to our troops, when it comes to you and your families, as Americans we stand united. We are proud of you. We support you. And we can never thank you enough.”

And why would anyone with political ambitions claim otherwise when there’s no gain, no glory in it? After all, the American public may be weary of war, but a widely-cited annual poll found a majority of them in favor of taking on ISIS, even if it embroils us in a big-dick war in Syria. 

Making the Military into a Clique

So what gives? How do you explain an America in which, despite the disastrous record of the U.S. military these last 13 years and the growth of extremist Islamic groups in the same period, there is essentially no pushback in this country.  One obvious answer is that it’s easy to keep valorizing the military when you have nothing to do with it. That big, busy, well-funded world-unto-itself currently includes less than 1% of the population. Add in their families and the civilians who work on or near military bases (or in the Pentagon) and, as a rough estimate, perhaps you have something in the vicinity of 5% of Americans who interact with the military on a regular basis. For the other 95% or so, the rest of us, what that military does, especially in distant lands, is just a blip on the busy-busy screen of our consciousness. Yet the further we get from the military, the more beguiled we are by it.

It helps, of course, that young Americans don’t have to worry about being drafted against their wishes. The last citizen was drafted in 1973 and, despite calls in these years for the reinstatement of conscription, no one in the BDSP seems in any hurry to do so. “One lesson learned from Vietnam,” the father of a Marine told me, “is if you’re going to start a war, don’t even pretend to threaten the sons and daughters of the upper middle class and the rich.”

It isn’t just the absence of threat that distances the public from American war making, however. It’s also the inbred nature of the military itself.  In the Vietnam years, when about one-third of the troops who fought were conscripts, all soldiers spent a year “in-country.” This meant individuals rotated in and out of the war zone at different times rather than as intact units, and soldiers circulated back into civil society regularly. This was certainly good for civil society — we heard about the war directly from the people fighting it — but it wasn’t so great for the armed forces.

So when the change came to an all-volunteer service, the military made a point of training and deploying units together to increase cohesion. And cohere they do, from a long, grueling period of training and indoctrination through an all-encompassing military world in which you live, work, and play with the same people 24/7 to the secret handshake of shared jargon and experience that is meant to bond you for life.

Not coincidentally, this makes dissent within the military ever less likely. A number of soldiers and marines have told me over the years that they deployed to Iraq or Afghanistan with their units despite misgivings about the wars they were to fight because, if they hadn’t, someone else — usually someone they knew — would have had to go in their stead. The result of all this cohesion is the sort of cliquishness that would make a 13-year-old whispering in a school cafeteria blush. I’d guess that it also makes politicians who aren’t fully enrolled members of the BDSP leery of challenging the military on what may be matters of life and death.  It certainly leaves the citizenry in that position.

Yet separate from us as those soldiers may be, they’re still our troops, our movie heroes, and (I suspect) our source of guilt, because they fought our wars while we were otherwise engaged. Contemporary war may be sanitized for the American public and no longer televised Vietnam-style, but all that shaking of our heroes’ hands and wringing of our own hands about their victimization comes out of some sense of responsibility sloughed off. 

The Personnel Is Political

A draft would certainly make a difference in this increasingly strange civilian-soldier nexus, but its absence is hardly the only reason that Americans now hold our armed forces sacrosanct in a way that once would have seemed foreign indeed. For starters, the military functions as a powerful lobby in Washington, which is increasingly effective when it comes to reinforcing a hands-off approach to its affairs and blocking outside scrutiny. Take, for example, theMilitary Justice Improvement Act of 2013.  It would have moved prosecution of felony-level sexual assault cases from the military chain of command, which controls most aspects of an enlistee’s life, to independent military prosecutors. Trust us, insisted the top brass, we can police ourselves, never mind that one in five servicewomen reported unwanted sexual contact and 25% of them said the offender was someone in their chain of command. The bill fell to a filibuster in the Senate last year.

One strategy the military employs in dealing with Congress is something called “jointness.” It’s a relatively recent coinage for cross-service cooperation in research, planning, procurement, and operations. While it’s focused on increasing operational flexibility and efficiency among branches of the military, it’s also meant to heighten intra-service collaboration when it comes to lobbying for funding. (The stratagem of awarding lucrative contracts in key congressional districts of both parties doesn’t hurt either.)

Although the Pentagon’s budget has decreased in recent years, that follows enormous growth in the post-9/11 decade — as much as 40% in real terms between 2001 and 2012. The administration’s new budget request is supposed to take into account the end of two costly wars, yet it still exceeds the $499 billion cap called for by sequestration, and that base budget is only part of what we’re spending overall on American war-making.

When you’re a hammer, the saying goes, everything looks like a nail. And when more than half of the federal discretionary budget goes to the military, every international problem looks like a job for them. According to theNational Security Strategy report the White House released in February, “Any successful strategy to ensure the safety of the American people and advance our national security interests must begin with an undeniable truth — America must lead.” And who will be, as they say, at the tip of the spear? “Our military is postured globally to protect our citizens and interests, preserve regional stability, render humanitarian assistance and disaster relief, and build the capacity of our partners to join with us in meeting security challenges.”

In other words, one attitude that increasingly grips this country is that, if it’s going to be done at all, it’s probably going to be done by the military. It has been sold to us as the best, maybe the only functioning part of the government. Not surprisingly, then, the most recent annual Gallup poll found that almost three-quarters of those surveyed had “quite a lot” or a “great deal” of confidence in the military.  Since 2001, that public confidence has never fallen below 66%.

In touting “Toward the Sounds of Chaos,” its most recent recruiting campaign for the Marines, ad agency J. Walter Thompson claims that enlistment “provides an opportunity to face down everything from traditional warfare to the natural disasters that necessitate highly organized humanitarian assistance.” This spreading send-in-the-Marines mentality — one form of the post-9/11 BDSP way of life — keeps us from a reasonable assessment of the best uses of our military forces.

Last fall, for instance, President Obama dispatched about 3,000 Army personnel to Liberia to build and staff treatment facilities for Ebola patients. Once upon a time, the U.S. was quite capable of mounting a genuine civilian humanitarian relief mission. Now, if you’ve got thousands of physically able workers on the payroll with a job description that includes risk, I suppose that deploying them to a disease zone makes sense. Still, if you needed hospitals built and staffed, wouldn’t it make more sense to send in civilian builders, nurses, and doctors? 

Be Afraid, Very Afraid

In truth, the Big Dick School of Patriotism is invested in keeping only one “branch” of government functional: the U.S. military and the national security state that goes with it, even as it trumpets constant terrors and threats this country must face.

The National Security Strategy lists terrorism, cyber-vulnerability, climate change, and infectious diseases as rising threats to global security. That’s a frightening enough quartet and hardly a complete list of actual dangers. Amid them, our headlines fill regularly with “threats” that are nightmarish, but soon dissolve like bad dreams in the morning light. The latest, from a video by the Somali terrorist organization al-Shabab, was to the Mall of America in Minnesota and, farfetched as it was, the media and the political class ran with it. I found the Mall of America pretty scary on a regular shopping day, but such endless threats and the hysteria that surrounds them do make our self-protective instincts kick in. Jeh Johnson, the head of Homeland Security, even warned mall-goers to be particularly careful because, he said, “it’s the environment we’re in, frankly.”

Is it?  It’s increasingly hard to tell in BDSP America. Fear can be a useful political tool because people who believe they’re surrounded by enemies are primed to accept almost anything. When you feel you’re losing control, the response is often to try to get more control, which is part of the appeal of the BDSP crew, with their exaltation of swarms of people in uniforms equipped with tanks and guns.

When that swarm is reputedly the best trained, most effective military since the Roman Legions exited the planet, that ought to be a lot of control. Except, of course, that it isn’t. Or tell me that things don’t seem more out of control now than 13 years ago, after calamity rained from the sky and the BDSP types whooshed in to save us all.

The eternal emphasis on militarism, even when it’s portrayed as triumphalism, has the effect of ratcheting up anxiety. Security is one of the basic things a government owes its citizens, but security is both a state of being and a state of mind. If security is always at issue, how can we ever feel safe?

In the end, maybe the Big Dick School of Patriotism comes down to this: we embrace the idea of an all-powerful military because at a time when the world seems such a fragile and hostile place, if even our military won’t keep us safe, who will?

Unless there just might be a better way to go through the world than by carrying a big dick?

Common Dreams on Losing the Class War

Four Numbers that Show the Beating Down of Middle America

(Photo: Chris Devers/flickr/cc)

There’s something perversely wrong with a society that creates $30 trillion in new wealth while putting six million more children on food stamps.

The mainstream media rarely publishes facts like this. The super-rich keep building up their own numbers, as quietly as possible. And our leading members of Congress have little need for numbers, except for budget cuts and the strings of zeros at the end of their campaign contributions.

But numbers have the power to reveal the dramatic fall of the middle class over the past 35 years.

1. 138,000 Kids Were Homeless while 115,000 Households Were Each Making $10 Million Per Year 

Recent data has shown that the richest .1% (115,000 households) have each increased their wealth by an astonishing $10 million per year. As they counted their money on a frigid night in January, 138,000 children, according to the U.S. Department of Housing, were without a place to call home.

2. The Average U.S. Household Pays $400 to Feed and Clothe Walmart, McDonalds, and Other Low-Wage Workers 

The Economic Policy Institute reports that $45 billion per year in federal, state, and other safety net support is paid to workers earning less than $10.10 an hour. Thus the average U.S. household is paying about $400 to employees in low-wage industries such as food service, retail, and personal care.

Walmart’s well-advertised $1 raise will cost the company about $1 billion a year. Its profits last year were about $25 billion.

The sordid tale gets even worse, as told by a PBS report: Walmart has spent about $6.5 billion per year on stock buybacks to enrich investors, approximately the same total annual amount billed to taxpayers for food stamps, Medicaid, housing, and other safety net programs for the company’s underpaid employees.

3. As $30 Trillion in New Wealth was being Created, the Number of Kids on Food Stamps Increased 70%

Before the recession, 12 out of every 100 American children got food stamps. After the recession, 20 out of every 100 American children got food stamps.

That’s nearly a 70 percent increase, from 9.5 million kids in 2007 to 16 million kids in 2014, at the same time that U.S. wealth was growing by over $30 trillion. Even with that incomprehensible increase in wealth our nation was not able to ensure food security for millions of its most vulnerable citizens.

4. Despite the Decline in Food Security, the Food Stamp Program was Cut by $8.6 Billion and the Money Paid to Corporate Agriculture 

As more and more children go hungry, the largest agricultural firms continue to take taxpayer money to supplement their billions in profits. The 2014 farm bill cut $8.6 billion (over the next ten years) from the food stamp program, of which nearly half of all participants are children. Meanwhile, $14 billion is annually paid out to the largest 10 percent of farm operators.

Beaten Up, Broken Down 

The mainstream media highlights the resurgent economy, the booming stock market, and the drop in unemployment. But the stock market has enriched only about ten percent of America, handing them millions of dollars since the recession, while the newly available jobs are well below the skill levels of college-trained adults and often without health care and retirement benefits. Too many once-prosperous Americans are beaten up and broken down, waiting in vain for our elected leaders to stop the redistribution of our national wealth.

Paul Buchheit is a college teacher, an active member of US Uncut Chicago, founder and developer of social justice and educational websites (,,, and the editor and main author of “American Wars: Illusions and Realities” (Clarity Press). He can be reached at

LUV News on War Against Iran



By Chris Floyd

I was going to write a careful, reasoned commentary on this article in the Washington Post — “War With Iran is Probably Our Best Option” — written by a highly respected fellow at the Foreign Policy Institute of Johns Hopkins University’s School of Advanced International Studies, Joshua Muravchik. But in the end all I could find to say was this:  I hope this slavering, shrivelled-up, dead-souled little coward finds himself on the front lines of the war he advocates.

I’m sick to death of these timorous motherfuckers sitting on their well-wadded asses pushing for wars they’ll never fight. I want to see Muravchik standing on the Iranian frontier with a rifle in his hand.

I want to see him put his puffy gray face and his well-coifed hair in the line of fire. He’s so goddamned tough with other people’s lives. “Yes, we might absorb some strikes,” he writes. He knows damn well he’ll never “absorb” a strike; that’s for other people, that’s for the cannon fodder this piss-ant empire sends to its wars.

No, by God, if he wants war, if he thinks it’s “probably our best option,” then let him drag his ageing ass over to Iran and put it on the line. Or else let him his shut his fucking mouth.

And I’m sick to death of the gilded robber barons like Jeff Bezos who publish bellicose bullshit like this day after day, wailing for war on Iran, on Russia, on Syria. I want to see Bezos in the front line too. Let him slap on some body armor and wade into the fight, in Tikrit, in Aleppo, in the Donbass.

He won’t do it. Muravchik won’t do it. None of them will do it. Every single one of our war-mongers and war-profiteers and policy wonks and politicians who endlessly call for war and war and more war, every single one of them would run a mile — would run a hundred miles — from the slightest threat to their own soft, pasty, well-protected persons.

They want OTHER people to die. They want OTHER people to kill. It makes them feel good. It makes them feel tough. It makes them feel righteous. It makes them want to run to the toilet in their sleek, comfy, carpeted office buildings and jerk themselves off at the excitement of it all.

Just as long as THEY don’t have to fight. Just as long as THEY don’t have to “absorb” any strikes. Just as long as some piece of riffraff does the dirty work for them.

I wish I could stand in front of this blood-thirsty coward and tell him this to his face. And then spit in his face. Then put a goddamned rifle in his hand and parachute him into Tehran. Go ahead, Muravchik. Go ahead, Bezos. You boys are so bad, you’re so tough, you’re so hard and hot for war. Go fight it yourself, you cowardly motherfuckers.

Humor: The Borowitz Report

WASHINGTON (The Borowitz Report) – After a challenging week for the legislative body, the approval rating of the United States Congress has shrunk to a point where it is no longer detectable by the technology currently available, a leading pollster said on Friday.

Davis Logsdon, who heads the highly regarded Opinion Research Institute at the University of Minnesota, said that his polling unit has developed highly sensitive measurement technology in recent years to gauge Congress’s popularity as it fell into the single digits, but added that “as of this week, Congress is basically flatlining.”

“At the beginning of the week, you could still see a slight flicker of approval for Congress,” he said. “Then—bam!—the lights went out.”

Logsdon said, however, that people should resist drawing the conclusion that Congress’s approval rating now stands at zero. “They may have support in the range of .0001 per cent or, say, .0000001 per cent,” he said. “Our equipment just isn’t advanced enough to measure it.”

Logsdon said that the swift descent of Congress’s approval rating below detectable levels has surprised experts in the polling profession. “A couple of years ago, when they shut down the government, I wondered, What could they possibly do to become less popular than this?” the pollster said. “Now we know.”

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Naked Capitalism: Bernie Sanders on Subsidies to the Rich

Bernie Sanders Blasts “Robin Hood in Reverse” Subsidies to the Rich, Calls for Full Employment

Posted on March 12, 2015 by

Bernie Sanders gave a forceful, if sobering, assessment of the state of the economy from the perspective of working men and women, as well as retirees, and focused on the hypocrisy of corporations and the wealthy that poor-mouth as a way to extract even more subsidies and tax breaks. Sanders called for an end to socialism for the rich, or what he calls “Robin Hood in reverse” and demanded the government do more to promote job creation and better wages.

The fact that a speech like this is noteworthy is a testament to how the Democratic party has become a pro-corporate venture which generously allows women, gays, Hispanics, and people of color to join in the looting.

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