Monday, October 29, 2012

Mini-Rant About Nate Silver

On an investing website, the writer commented how he trusted few polls and considered Nate Silver a partisan. He claimed Silver's slant is evident in posts and the comments they allow are evidence as well. The writer mentioned leaving comments that the Times would not post. Some commenters on the financial website defended Silver. I did not. I left the comment below.


Once the media shanked Occupy + Obama’s approval ratings hovered near 40, they still needed to defend their man. Recall that it was the media in the primaries which dumped Hillary (1st female POTUS) for Obama (1st black POTUS) in ’08. As their man, they knew he had let down the base, had not reformed Wall St, had caved in negotiations with Boehner, had left the patriot act/bush tax cuts in place, and had one major accomplishment (Obamacare) which over half the nation disliked. His only path to victory was to trash the other side’s candidates as munchkins, fire up the Dem base, demoralize the GOP base, have a media shield and glide to victory Nov 6th on ‘inevitability’. The media has done their part by manufacturing a ‘war on women’ since planting odd birth control questions into the Dec GOP debate, creating a national race flamewar out of 1 murder in Florida with Trayvon Martin, sniping at Romney for things he turns out to be right about, manipulating the sham debates, and creating a phony facade of evil Mitt (he may be but come on, he’s Mormon). X has noted here how the GOP has gone after the FED a bit, but the two GOP candidates who voiced serious challenges to the FED (Perry + Paul) were marginalized very quickly. The media shapes public opinion. Look at their control of the debates with no mention of housing, true Wall St reform or illegal immigration.

Where do polls come in? Polls matter. Polls are a part of the narrative and shape public opinion. Marginally attached voters seeing Obama leads of 5-8 pts would think it’s inevitable he’d win so they’d 1. stay at home if they dont like him or 2. make sure to vote for the ‘winner’. Please note that at every moment when polls showed a narrowing of the race in the summer, some national poll would come out with an Obama +7 margin which below the fold would be due to a D+10 to D+19 sample. In what America is the election going to be D+19? PPP used this basis for a poll. Even now, polls with a tie usually show a D+7 skew, which is the same as the huge adv the ems had in turnout in ’08. When a poll is released, it becomes news to report, which is then picked up by the media and used to massage the narrative of an inevitable Obama win.

Silver is a poll man for the NY Times, which is the grand central station for SWPL and liberal credential. He is paid to produce data and small articles for NY Times readers. I know, I am one. NY Times readers don’t want to her how tight the race is or how their savior might possibly be rejected. I’d also say that Silver this year has been reactive rather than a leader in making announcements or reacting to changes in the race. Referencing my prior comment, he doesn’t have the Obama camp’s internal polls anymore so he’s just a normal pollster. A normal man paid by the Times.
 
I still think Obama pulls it out, but I have a college friend who is one of the speechwriters for our Sec of Labor. He hasnt renewed his lease yet.

Saturday, October 27, 2012

One Man's Midlife Crisis - "The Coup" - By John Updike

After reading Steve Sailer's references to John Updike's "The Coup" in random posts involving Obama, I decided to look for it at Half Priced Books. They managed to have a hardcover (score) copy for $5. After racing through some KGB books, I decided to read Updike's fictional account of a post-colonial African country and its interesting, revolutionary leader. The book has little details that showcase the Cold War post-colonial chaos that was sub-Saharan Africa. It is a fun read, and I recommend it. I have a different interpretation of this book though, and looking at the Amazon reviews, I dont think anyone else picked up on it. The book is written by the lead after the events as he is living in exile. This book is one man's midlife crisis and review of his life and masculinity. The women of this book tell the story of Ellellou, explain his problems, and reflect the life that created a revolutionary dictator.

The plot of the book follows Ellellou (age early 40s) in power as he comes in from the remote wild with a new mistress, Kutunda, back to the capitol. While in power, he visits his three wives and reflects on his life. He then goes on a mission to find the head of the executed king with his fourth wife, loses power due to a counter-revolutionary coup (as well as his 4th wife never to be seen again), lives as a nobody temporarily, and then returns to see his tree other wives carrying on, like his nation, without him. It is a nice little insert that there is a note that revolutions must set up a new system within five years or peter out, which is roughly where he is in his coup stage (five years on).

The Women

Kutunda - She is the mistress that he brings in from the wilderness. He has erectile dysfunction problems with her when he orders the king executed. She eventually plays him. If there was an outside force involved with a counter-revolutionary coup, it is easy to think that they planted Kutunda after seeing Ellellou take a 4th bride who was a plaything. She is far savvier than one would expect a backwoods girl. She flatters him after sex, addressing an intuition that somethign is wrong with him. He needs the encouragement now.

Sittina (3rd wife) - Ellellou visits Sittina first upon returning to the capitol. She is a beauty of his native Kush, who similar to him spent years in the US at university. They have no children together, and she has children from other men. He's a cuckold. She is his love from his return to Kush days in the old King's restored rule after colonialism fell. Those were his virile days, his days of building up teh revolution as well as carrying it out. He was in the prime of his life. She is closest to him in spirit of when he loves himself the best; the image of the educated revolutionary leader. She is the only one that he says "I love you" to, and she is the one he ends up with in exile. She is his love from his glory days of rising power, when he is a man at peak influence, thought and power.

Kadongolimi (1st wife) - Ellellou visited Kadongolimi second, and this is his nostalgia for old Kush and the tribal culture he grew up with before leaving Kush with the French army. She calls him Bini. She knows his secrets. Being of the family and tribe, she carries the common experience. She is a source of grounding. They were cousins bonded in marriage with all the tribal rituals. As he grew to manhood, she was his guide with knowing the world and women. She had to teach him things. They never had children (I doubt the story of the daughter after Kadongolimi's death), and he was a cuckold with big momma. She reflects his relationship with his country, his reign, his people. She went from skinny to fat, and she died along with his old country or Ellellou's dreams for his country during his removal from power. When he visits her home after his return, she is dead and just a burial site in the old home that would alwasy welcome him.

Candy Cunningham (2nd wife) - Candy is the American girl that he brought back from his university days. She sought him out. She is the Western guilt liberal who wants to use him, wants to be a part of the outside, and reflects how the elements he was exposed to in the US changed him and made him alien in his home country. It is at college that he was introduced and converted to Islam. It is at college that he learns about Marxism. Like Kang, she has a nickname for him and knows his dirt. He returns to Kush with these lessons, and Candy, to start a revolution. She was a phase for him that he was partially attached to, just as he is partially attached to his beliefs. He does not love her. They never had any children together. He lets her live a fantasy with him, which is completely destroyed upon going to Kush. Similar to his dreams of a glorious revolution. She leaves Kush in the end with a divorce just as Ellellou leaves Kush for exile and a normal life.

Sheba (4th wife) - Sheba is a teenage bride during his days of dictator. She is simple, beautiful, a bit drug dependent, and she is a chief's prize for ruling. There is a shallow connection, just as Ellellou has a shallow connection to his country the further he is from the revolution. She is like his Mercedes, a token of his power and rule. He never knows if she gets pregnant by him, but he imagines it. Sheba is that grasp at retaining young and fresh. Just as shallow as the connection was, she is gone in a flash the moment he slips from power. Sheba reflects that fleeting power phase of his life.

There is plenty of commentary on the US and USSR in the later stages of the Cold War as they scrambled for influence and clients in the 3rd world. The flashbacks tell the tale of late '50s America at the university stage and the black American community prior to the disruptions in the '60s. As far as our main character is involved, and his story, it is rather prsonal. This book doesn't explain the coup that brought Ellellou to power. It flirts with showing how Ellellou was deposed. This book is a story of how a man in his 40s reviewed his life up to that point. The women of the book tell his tale and reflect just who was that mysterious man that overthrew and killed the King but was gone in a flash.

UPDATE: The book is set as a memoir, so Ellellou's focus on the children of his wives not being his is telling. He has nothing to leave behind in exile. No country reformed, no children. He is obsessed with having no tangible legacy. What kind fo man has no legacy? Even at the end, a child says his name "Ellellou" does not mean freedom as Ellellou has previously explained in the book. What kind of man has a false identity? This is a rejection of even the basic claim of his manufactured identity, his very self.

Tuesday, October 23, 2012

Carol Loomis - Water Carrier for America's Financial Overlords

Since Robert Rubin has no official biography, I looked for interviews or magazine artcles about his rise. A writer popped up with two puff pieces that fluff Mr. Rubin as well as shield him from any criticism for his role in the grand scheme of our financial crisis. Looking at the author, Carol Loomis, it appears that she has been a huge outlet for Mr. Warren Buffett. Her puff pieces on Rubin are here and here. Here she is the vehicle for Warren to explain why he's giving all his money to charity. This woman is a PR operator for the extremely powrful and rich.

Ms. Loomis was an editor-at-large for Fortune, was the reporter closest to Buffett and even prepared Berkshire's annual reports. Herpuff pieces on Rubin allow him to absolve himself from any wrongdoing at Citi, while simultaneously avoiding bringing up how he was given the job at Citigroup after forcing through Glass-Steagall which Mr. Weill lobbied millions to get passed to build Citigroup. Here is her description of his job at Citi in 2003:

But his contract, though splendidly lucrative, largely insulates him from executive peril by specifically sparing him line responsibilities. Instead, his beat is "strategic managerial and operational matters." The risk assessment on all that: If the world blows up, and tries to take Citi with it, fixing the mess won't be Rubin's job.


This is a sinecure. It also might be a post that would keep Citi in touch with the goings on in DC as far as regulatory moves. Why is he getting this job if it doesn't involve responsibility and has no risk? It's a payoff for his work as Treasury Secretary during the '90s. Her fluff piece doesn't explore that. Her whole goal is to spotlight just how awesome Robert Rubin is. That is her job with Rubin and Buffett. You are not supposed to begrudge them for their wealth, in fact Buffet wants to be taxed more and give away all his wealth to charity. Didn't you read that interview with the nice lady who set up my company's annual reports?

Loomis has done her part in building up the Buffett myth. It is a shame she would not use her access and voice to explain how Rubin received what are in effect payoffs for his work in the USG. She could ask Buffett why his investments now seem to only be in government backed entities or companies that seem to get a quasi-monopoly due to government interference (Burlington Northern transports oil instead of pipelines Obama keeps blocking). This is a financial example of access journalism. This is the danger of corporatism. This is a human face showing how the media is compromised by financiers.

Monday, October 22, 2012

Book Review: The World Was Going Our Way - Christopher Andrew

The Mitrokhin archive was used as the basis for a two volume review of the KGB's long sordid history. The first volume covered the KGB's activities in general but focused on within Russia. The second volume covered the KGB procedures and influence on the global stage. The battle for the 3rd world was the location not just of proxy wars during the Cold War for rival ruling factions but the setting for the ideological war between free market USA and the communist USSR. The KGB had an active hand in this war of minds, military exports and money. The Mitrokhin archive provides plenty of details, but compared to volume one, this book is a bit weaker. Part of the problem might be the subject matter as Stalin's cruelty to Russia and the surveillance state of the USSR is such an interesting read. Random 3rd world politicians and leaders who can't keep their act together and accepted money or arms from the KGB just feels like Chicago politics on a global scale. I'd only recommend this book ifyou are a foreign policy nerd.

There is something very interesting about Castro, which reveals much about lefties. Castro wasn't an actual socialist when he was trying to overthrow Cuba's old guard. Castro was influenced heavily by his brother Raul and Che. The KGB made contact with those two and used them to turn Castro towards the USSR. Castro implemented the state police and surveillance techniques of the USSR. He did turn it into a commie land of nightmares. He used it as his vehicle for dictatorship. The lefties who glorify him are glorifying a thug who used (uses still but less on the international stage) communism just for personal power. The blinders hide the murders and torture by Castro and Che, which is no different than other groups or people admired by lefties. AWhat is different is that they have never dared to admit he's a selfish dick. It is a bit of an interesting what if to ponder about Castro had he never turned Cuba into a tropical marxist island. We can never have that discussion in the public though because to o so would admit that it was wrong of him, and that the socialist dream is wrong. After all, where is Michael Moore going to bring people for photo op phonyhealth care to contrast to the US system?

Thursday, October 18, 2012

Focus on the 1% Takes Heat Off Wall St

The devious minds that slowly took over direction of the US economy and captured the watchmen (regulators + politicians) are pretty smart. Previously, I have written about the bust out, which was the financial coup performed on America and the way the banks have captured our press. The Wall St banking interests are full of well connected and intelligent people. As I wrote before, they can exert influence on the media due to their financial funding and power over the biggest media outlets. Allowing the OWS movement to receive media attention, voice their insane demands, make a mockery of pinpoint TBTF Wall St bank reform, shifted the talk from Wall St reform to an attack on an idea: the 1%. This shifted heat from Wall St to the entire 1% overclass.

What the US went through in 2007-2009 was a financial shock to the core dollar zone. Previous problems had been on the periphery like the Asian banking crisis, Mexico or random post-Communism countries. The US crisis was different and should have sparked reform. We know it did not, and assets are even more concentrated no in fewer banks while TBTF banks have increased their use of derivatives. The mood in the nation in late 2008 to 2009 was definitely one of 'get the bankers'. In a rare move of sheep wakign up, Paulson's original three page plan for TARP created enough citizen blowback to cause Congress to slow him down. The mood in early 2009 was strong enough to get the Tea Party moving and cause President Obama to tell bankers 'the only thing standing between you and the pitchforks is me' (paraphrasing). President Obama doubled down on bailouts, and signed the messed up Dood-Frank reform bill into law. People were still unhappy with the TBTF banks and were wondering why the guy they thought was a populist offering hope + change had not jailed any bankers? The banks were even suffering some PR problems that they felt they should address.

How does the focus on the 1% help them? The focus on the 1% spreads the attack to a wider base. The concept moves from US vs. the Wall St banks to Little Guy vs. 1% overclass. I was not surprised to find out that a documentary from 2006 even uses this 1% title and concept. I do think we could use a wealth tax aimed at the 1% which would spur investment by the top 1% while not taking money out of the income-consumption cycle. Don't raise taxes on income in a depression, but target wealth sitting in accounts that is earning paltry interest in our ZIRP investing world. If you start looking at numbers, to be a top 1% income earner takes $350,000 in annual income. That is the salary of many lawyers, doctors, great salesmen, and countless other well paid management employees in the US. I work in a job that sees many American salaries, you'd be surprised who can reach that even at small companies of 150-200 people. Are they the problem in our economy? No. The hatred even gets heaped on CEOs and executive management at goods and service producing firms. Steve Jobs was part of the 1%, but the man brought you those wonderful gadgets. There are countless chemical + basic necessities executives who are in the top 1%. Shifting the anger at the banks to the anger at an entire class, that does act like selfish bastards at times but who doesn't, potentially throws the baby of (goods producing sector )out with the disgusting bathwater (corrupt Wall St-Wash DC system).

There lies the major scare tactic that defeated the call to reform. Once OWS revealed its ugly side and its laundry list of Port Huron sounding demands, people not only turned from watching, but turned their frustration on the entire 1% and away from Wall St reform. Wall St reform has not been addressed at all in debates. The breaking up of the TBTF banks should be priority number one in getting the economy moving, but it isn't on either candidates' agenda. OWS was a chance for reform. It suffered self inflicted wounds. It also received plenty of press, which made the issue of banking reform turn into an issue of reforming capitalism. After Clinton's turn to big biz fundraising, the consensus of free market capitalism is too widespread for overthrow of the entire system to be sold to the public. America is not going to back the overthrow of their entire system. Pinpoint banking reform, which leaves many smaller banks and the goods producing economy untouched, would hurt only the Wall St banks. This parasitic group must be dealt with before the entire economy can get moving again. The TBTF banks will fight this as it is their survival at stake. Wall St can now breathe easier as the entire anger that should be directed at them is now aimed at an entire group that they can hide amongst or behind at their choosing. Wall St banks are sharp bastards, and they deflected a threat at a peak time of frustration as well as redirected that anger towards an entire class rather than six big banks.

Wednesday, October 17, 2012

If Obama Loses Prediction....

If Obama loses, Hollywood will come out with a nice TV show about a lovable liberal who tried hard but couldn't beat the onslaught of the republican right. It will spotlight someone, actual historical politician or fake ideal like "West Wing", who represents all of the righteous elements of the Democrat party. This person will also be in the mold of the enlightened centrist a la Kennedy whom we all know could never rise to the Democrat nomination today.

1. Lead will be white male, another fantasy of modern DNC.
2. Period piece so cast can be mostly white to hide what the DNC is today. Best prediction is either a late '90s true liberal  to contrast with Clinton that gets voted out during early Bush years, a good late '70s liberal who faded away as Reagan came in, or a peace late '60s/early '70s liberal who railed against 'Nam and Nixon.
3. This will be an AMC or HBO series. It is not meant to be a big ratings show. In fact, if it were network, it wouldn't get good ratings due to the death of dramas on network TV. It needs the protection of low ratings expectations but potential for critical acclaim. This needs to be the new Mad Men or Breaking Bad, which are both ending soon.
4. This will win at least one Emmy in its premiere season.
5. This will be a gentle propaganda tool. Policy and issue propaganda to contrast to anythign Romney/Ryan will try. Not overt, but small touches like when Henry Francis said on Mad Men this past season that he wouldn't have Mayor Lindsay meet with Romney since he was a 'clown'. If you pay attention to when Henry Francis said this in 1967, this was when George Romney was the frontrunner for the GOP nomination. George Romney had not said his famous brainwashing joke, which the media used to portray him as an idiot and Nixon pounced on to destroy him. The only reason Henry Francis would say that would be if writer Matt Weiner wanted his SWPL fans to hear a character call someone named "Romney" a clown on TV.

This will happen if Obama loses. If he wins, I'd put odds on it at 20-1. This will happen.

I may have some inside information.

Sunday, October 14, 2012

Health Care Prediction: Return of the Midwives

Hollywood has been running some documentaries and TV docuseries surrounding the cost of delivering babies + the general health care concerns of pregnancy + delivery. This is a subset fo the entire media complex of airing how expensive health care is, how it is complex and awful, and how we should do something about it. A popular one involving birth on Netflix is the "Business of Being Born". Babies keep coming, and will never stop. These media nuggets are preparing the nation for a return to widespread use of midwives.

It is true that having a kid involves high costs and seemingly nonstop use of high tech gadgets that create more concerns or scary moments than there really are. These docs spotlight those problems. They also spotlight the issue of c-section use. Usually, they avoid saying 'this is all to reduce liability in the event that some dirty lawyer tries to sue us', but you and I know that is at the heart of the matter. It is defensive medicine. Rather than put through tort reform (needed in general but necessary for all nationalized health care systems), the controlling liberal elite will gently prod us towards midwife usage. This is all about controlling costs for that eternal dream: universal healthcare.

Let's review the pitch:
1. Nostalgia: It returns us to a pre-medical professional past.
2. Feminism: Rekindles the woman to woman nature of delivery before those pesky MDs got involved.
3. Cost: Even when in hospitals, it is much cheaper per delivery + with the number of normal, regular risk deliveries this could be a huge cost saver to our medical system.
4. Technology: open, honest ratings of each midwife, and if in the hospital, if anything goes wrong tech is there to step in.

The table is set with the media spotlighting it. Targeting the SWPL set, PBS has a new British series import called "Call the Midwife". Being a midwife also appeals to educated women who want to be semi-attached to the workforce as they get paid per birth, as they can reduce hours for years when they have kids and bump back to normal hours when they want to without damaging their 'career'. It also appeals to women who don't want to go to med school but can use the status bump of delivering babies.

In 2003, the midwife attended birth rate was 8%, which was double the 1990 rate of 3.9%. By 2020, the midwife attended rate will be 20% and rising higher.

The Great American Bust Out

Like many Americans, I am sitting in my home in year five of the Great Depression 2.0 still a bit shell shocked by everything. We know something bad happened. We know fraud was and is rampant. We don't have anyone in jail high or low involved in the entire mortgage, easy money fraud pyramid (we'd probably jail 2 million). We also know that the corruption runs deep and reaches the top of our power structure from the military to politics to the media. I tend to synthesize things. I love considering the big picture. I love to look at history with a wide view, thinking through long term consequences. Our predicament and how we got here has vexed me in this regard, but I've come up with a theory. What we have witnessed since the early '90s, while slowly built since the Carter admin, is a classic "Bust Out". This is a mafia style bust out on a national scale.

A couple years ago, CNBC ran a nice article on the great William Black's idea that this financial fraud is a bust out. Black is right that financial sharks, hired because of their personality that is skewed that way, will run a financial operation like a mob bust out to strip it of all wealth unlike a regulator's concept of a normal financial executive. A bust out is when an outside force runs up debts on a mark in trouble. They use the goods for themselves or they turn around and sell the products purchased for pure gain. The debt never is repaid. In the end like in Goodfellas, the place is torched for the insurance money. As I blogged how the banks have protection from press coverage on the true large scale problems that have caused and continue to pose, this will go unreported.

The inflation of the '70s was horrific as the dollar felt the ramifications of war spending (LBJ's Nam ramp up), domestic spending (LBJ's Great Society), and the Nixon closing the gold window. That anchor of the gold convertibility held things stable, and once closed, it sent the financial system searching for firm ground. All commodities rose in price, and some skyrocketed (this is why polyester became the textile material of the '70s replacing cotton). Add to this the problem of Texas no longer being the 'swing producer' in the global oil markets, and suddenly the US was vulnerable to oil blackmail. OPEC did this to the US for our blind support of Israel in the early '70s and raw costs increased for all manufacturing firms. Cost push inflation followed. American consumers were protected from this a bit by the ability to demand higher wages. While inflation was raging, at least Americans saw their wages rise nominally.

Volcker ended this. He gave the FED credibility by saying it inflation would be stopped. With the repeal of the usury laws, Volcker could send the FED rates to the high teens and force the economy into a severe recession. Milton Friedman also did great work to make sure that everyone was worried about inflation. He had some tremendous speeches and interviews that aired on national TV about the dangers of inflation. Everyone was afraid of the return of 70s inflation. By the time Volcker had left, the currency was stable, bond investors were happy with the direction of the US economy, and the economy went through a structural realignment. Deregulation was a sweeping force that started under Carter and continued right down to Clinton's last year in office. Volcker did a great job, but unfortunately, the FIRE economy was born and asset inflation was unleashed.

Manufacturing lost its power in America, as did all of the raw materials suppliers. Check out this manufacturing employment chart since 1960. Pre-1980 employment cycles line up with 'inventory management recessions'. Starting in 1980, automation, global wage arbitrage and environmental regulation forced manufacturing employment down. Our manufacturing output is still high, but we use fewer people. This also acts as a lid on manufacturing wage increases, which has ripple effects on other industries as well. More and more citizens found themselves employed in the FIRE economy. This economy really hit its stride starting in the Clinton admin. Here's a great graph on the financialization of the economy since 1987. The FIRE economy was the primary recipient of FED policy goodies as they were the primary receivers of money supply expansion. They were a jobs engine, a growth engine, and the primary way to control the allocation of capital. Asset inflation helped them as fees of all sorts grew and expanded the client base. Asset inflation meant their 2% fee on assets under management grew each year. It was genius. The FED nourished this problem by continuously expanding the money supply, creating a more indebted population where their debts were big bank assets.

The Wall St sharks pulled off a financial coup. The S&L crisis destroyed much of their nationwide competition, plus legislation allowed bank branches to cross state lines. Consolidation concentrated more assets into fewer hands (my New England fave: Shawmut was bought by Fleet who was bought by Bank of America). Clinton's political advisor James Carville mentioned that when he came back to life, he'd want to come back as a US bondholder. The banks poured money into DC, had legislation changed, loosening the last of the shackles on finacialization, and then legalized gambling in the form of derivatives took off (completely unregulated). Another victory that now stands supremely important was the law change that made student debt non-dischargable in bankruptcy in the late '90s. The last triumph was the change in bankruptcy law in 2005. Once in hock to the banks, there was no escape.

The stock market rise of the '90s didn't involve citizens going into debt for stock gains. The governments saw a budget suprlus era due to the capital gains returns for taxpayers in the 90s. The stage was set though once the bust set in. The bubble that was blown after the stock collapse was to expand credit for all those banks and investment firms that had blown money in venture capital and loans for silicon valley, tech, internet start ups. The FED never can control exactly where liquidty and credit shows up. We saw the rise of the giant bubble of the 2000s. In this chart, household debt is pretty stable from '65 to '87, then jumps 10% points over the '87 to early '90s period, then jumps 30% points from the early 90s to 2008 with the big blow off in the post 2000 stretch. The federal government also saw its debt balance sheet blowout after 2001.

This is the bust out. The bankers have taken credit out in the name of the AAA rated US government and the AAA rated US mortgage payer/consumer/citizen. With that debt bubble and the Bush tax cuts, early bubble money went into wealthy hands first, which became more money for the FIRE economy to manage, invest and allocate. The rise of mortgage debt helped everyone in the FIRE economy from securitizers on Wall St, to note salesmen, to traders, to RE agents, to builders, to insurance companies that hold the mortgage backed securities. The military industrial complex saw their piece of the pie grow as the debt the federal government took out primarily went to military spending. Pratt + Whitney recently had a multidecade first where their military orders surpassed their commerical orders for jet airplanes. All sources of US debt are combined at 350% of US GDP. This numbers has barely budged since the financial crisis. The bust out is why.

The banks hold a significant chunk of this debt, and they will not write any of it down because they are so levered that they would go insolvent if they had to honestly report their balance sheet situation marked to market value. What is despicable is the fact that with TARP, the spring 2009 bailout doubledown, QE 1/2/3 and other financial backstops, the banks have transferred a lot of bad debt onto the government's (taxpayers') or the FED's balance sheet. They get to keep racking up fees and charges, handing out bonuses with all the risk gone. It's now the US taxpayer who is on the hook. The MI complex has seen a decade of profit, and the Wall St cronies have seen a decade of profit and socialized losses. This is all charged to the US taxpayer. We're stuck with the bill. The loans that we are not holding from the banks are loans that the bankruptcy law change altered in their favor or student loans that are enforced by the power of the federal government. Our coming currency/bond crisis will hurt everyone.  Banks will not be immune, but they will be better prepared than you or me. Next comes privatization of assets for the busted out entity (the US) and a forced change to our way of life. That is the vulture phase of the bust out.

The Wall St mafia pulled off a financial coup. The big banks then proceeded to bust out the AAA rated US taxpayer. The most devilish thing that is similar to how a mob does it to a reputable businessman is that the American Empire was in the post-WW2 golden era, had gone through the problems of the '60s/'70s, and was watching the death rattle of its global rival. The successful businessman doesn't see it coming, but has some minor problem. The mob then steps in as a silent partner or supplier of a small capital stake. Then the looting begins. While slowly starting in the late Carter administration, the entire process was a 25 year effort that hit overdrive in the '90s. When the fraud, the schemes and the rot became widespread, they called on their bought government to bail them out and socialize the losses. Nothing has changed since the crisis moment, and the rot still exists. Until the banks are broken up, until the debt is written down + refinanced, until true reform + regulation enforcement begins, until derivatives are properly managed, and until finance becomes just a segment of the US economy, nothing will change.

Saturday, October 13, 2012

Why Do Nerd Schools Keep Sports Programs?

With affirmative action admissions in the Supreme Court, I thought about my days at good old Cornell. Cornell has few blacks and most live in the self segregating dorm or the all black fraternities and sororities. When the Ivy league signed a pact to not offer sports scholarships to retain some integrity in their programs and scholastics, they probably did not forsee the money machine big time football and basketball would become. Had they anticipated it, they would have never added that rule, and they would have minted tax free money through their programs. Since they are not competitive in big money sports, they don't make a good money by having sports teams. If I had to bet, I'd say they actually lose money on operating all teams except men's hockey (ivy League = great hockey). They do compete in sports other than football or basketball, but why do they keep them around? The same could be said for small lbieral arts colleges throughout the Northeast like Swarthmore, Williams and Bates. It's rather ugly, but it comes down to donors and minority admissions.

If alumni played a sport at an elite college, they would have a dedicated reason for donating money. They are giving it back to their old tennis program or the soccer squad. It creates a connection between the big university and the individual student that is outside the grueling academic setting. A positive impression may be left or nostalgia. Not just for alumni, but this is a donor avenue for parents of prospective students. Cornell received plenty of donations from a wealthy type A financial guru, and surprisingly, his son made the team (family is worth a post: vehicular homicide, pro tennis, money, corrupt courts). He was good, but dad wanted to make sure one of his boys went to an Ivy. This is an alternative source for fundraising.

The other reason is a bit uglier, but it is helping the minority, specifically black, admission numbers. I love to pick on Cornell as it was my alma mater. Familiarity breeds contempt. Cornell has a whopping 588 african american students out of 13,950. That is a low 4%. It's well below proportional representation to the black population of the USA (12.5%). Cornell avoids fire from black groups as they have an AA studies program as well as a self segregating black dorm. Those were the prizes of the black student takeover of the student union in 1968. The even sadder picture of the 588 black student number is that at least 72 of those students are athletes. I went through roster pictures. I'd bump that up to 80 depending on the mixed race issue. One in eight black students on campus is an athlete. Without athletic exceptions, black enrollment drops to 3.5%.

Sports are a way to supplement the selection of black students for elite universities. Without sports, these schools would be even harder pressed to find the applicants to fill the bare minimum of what they have to have for non-asian minority enrollment. Sports might be an operating loss for these universities, but they have their positives. They act as a different donor source. Sports act as a supplement for black admissions that shields these schools from criticism of their like minded liberal friends. Due to the visibility of sports, the impression is made that schools like Cornell are more diverse than they really are. If these sports programs lose money, it is simply a write off for politically correct protection.

Friday, October 12, 2012

The Two Pronged Threat Banks Use Against the Media

I love Zero Hedge. It’s a blend of genius and wacky, and it has great contributors and tinfoil hat contributors. The commenters are absurd in a drunk, bitter uncle manner. It is one of the few outlets that pulls back the curtain on the financial workings of modern America. While not perfect, it’s probably the most cutting edge financial news source in America. Naked Capitalism has been one of the best blogs on the net for digging up financial media corruption and obfuscation. Calculated Risk and Dr Housing Bubble have done similar work, especially with regards to housing. There is something missing in the mainstream media’s reporting on a topic. The NY Times with all its warts, has the greatest resources and is at ground zero for financial reporting. In classic cathedral style there is the slant or bias when showcasing a FIRE economy topic. Normal whitewashing happens, which is frustrating but there is a bigger blocking method in play. Despite countless articles on the financial crisis, bailouts, zero interest rate policy and foreclosures, the mainstream media conveniently avoids the major threat that is the complexity, interconnectedness, and concentration of assets in the hands of the too big to fail banks. The problem is that the mainstream media consolidated through the years and has seen erosion of revenues that make the conglomerates much more susceptible to their stock valuations, which the financial industry controls. The NY Times is the worst offender and carries the greatest shame.

The NY Times has been owned by the Sulzberger family for over 100 years. They took the paper public in the 1960s with a two tiered equity structure that lets them hold 88% of the shares in the class with prime voting rights. They are the chief priests of the newspaper industry. The Times owns many different properties so their guidance of the public debate affects not just NY public opinion but countless other regions through the authority of those media properties. The Sulzbergers are members of  the unelected elite who hold power in our society. What they deem appropriate to discuss or say is what you may not agree with today, but your friends and family members of good taste and education will swallow. Sadly, the Sulzbergers thirst for money and the NY Times desire for acquiring properties allowed it to be compromised by both the FIRE economy and also Carlos Slim. This has changed their reporting, and removed the teeth in their reporting or any appearance of impartiality to immigration reporting. Through the ownership structure of their firm’s equity, the greed of the Sulzbergers is to blame here. They made the paper vulnerable to maintain a ridiculously rich lifestyle.

Take a look at the stock chart for the NYTimes; now go out to ‘all’ chart. They peak with the peak of the US equity markets in 2000 and steadily decline. The NYTimes never recovered like the S&P did in the 2000s reflationary period because of a threat to their advertising business model: craigslist. Craiglist has become a behemoth for classifieds. It has sucked advertising dollars away from print media that used to make up the backbone of its revenue. The online availability of news also destroyed the other pillar of revenue: subscription sales. If they lost ads they could raise subscription fees. Not anymore. Print media was at risk. This is part of the genius of the big banks and real estate (FIRE). They are huge advertisers.  Wall St is an oligopoly. They share the pie and all enjoy the bonuses. They don’t need to advertise in print, but they do. The National Association of Realtors could set up an online system that was the only resource for viewing homes far superior to print and never advertise again in print, but they don’t. They do not because they want that leverage on the media. The mainstream media didn’t warn anyone of the housing bubble despite plenty of warning signs. The mainstream media has not called for a break up of the TBTF banks despite holding 77% of US financial assets and $250 trillion in derivatives. They would lose the advertising revenue. How much weaker would earnings be if they lost the advertising revenue gathered from the real estate listings or from bank advertisements? It would be crushing. That is a threat to the papers that keeps the focus soft on banking and real estate problems. Don’t look too closely or we’ll pull ads.

The second sword of Damocles that the banks have hanging over the NYTimes (and other big media corps) is their ownership stake in the equity. Look at the NYTimes (major holders). There is Carlos Slim as an  8% holder. Then the list is: T.Rowe Price at 7.6%, Contrarius at 6.15%, vanguard at 4.5%, Global Thematic at 3.8%, Kahn Bros at 3.1%, Blackrock at 5.7%, Citadel at 2%, Deutsche Bank at 1.7% and Goldman Sachs at 1.5%. Slim is an interesting case as he provided short term funding of $250 million for the Times in 2009 (after stock purchases) when liquidity dried up everywhere.  That was huge as prior to the loan and after, they had a debt load of roughly $600 mil. The Times paid him back early with asset sales that included most of their Red Sox stake. He still owns 8% of the equity. This may influence coverage of Mexican immigration and Mexican-American issues like gun running for cartels by the Obama administration. If Slim could have that influence, wouldn’t the institutional ownership of 30% of the company’s stock by 10 financial firms, some that are interconnected, affect coverage of the financial crisis, bailouts and subsequent looting of the American piggybank? How can the Times or their properties exercise any independence to continually cover the TBTF banks and continuous subsidies and ZIRP of the FED when their stock could become out of favor with a single financial institution and cause meltdown? Stock pricing is on the margin, so if Wall St wanted, those shares would be sold quickly.

The Times stock is low. This is the Sulzberger fortune. They live off the dividends. They need good news. They have a negative operating margin and have had a rough last few quarters. Craigslist isn’t going away. They need advertising. If they don’t get the FIRE advertising, they are in a world of hurt. Even if they get the advertising dollars, if one of the major holders decides to rate them a sell, they will suffer. CEOs and CFOs of public companies have to do dog tricks in front of analysts and institutional investors. I can’t imagine being a CEO of a firm that could criticize or save a firm. That would be immense power. That power and possible good use for shaping national economic policy would be weakened with the financial firm on the side to sell at a moment’s notice or downgrade the company. The FIRE economy found a 2nd avenue to make the media dance to their tune; power of the market.  The moment the NYTimes and other publicly traded media firms get tough on the FIRE economy and our corrupt financial system, the banks can put in some sell orders or rotate out of those stocks, and it’s lights out. Because of the incestuous nature of Wall St and hedge funds with funding, a hedge fund can do the selling to ‘raise cash’ for redemptions with a wink back to a targeted TBTF bank. Because of high frequency trading, selling orders could trigger any algorithm sending the stock price down in a flash crash. With a  weakened equity position, their debt to equity ratio would skyrocket. In a firm with growing revenues or new product launches, this is tough but doable. The NYTimes has no new product line. The NYTimes had revenues of 3.2  billion in 07/08, and has had revenues of 2.3 billion the last two years. They cannot afford a lower stock price. They are hostages.

The Sulzbergers publish all the news that is fit to print. They share all the news that they choose to print. There are reports on foreclosures, the Wall St-DC connection, campaign donations and other chicanery, but the big picture items remain untouched. The Times may rail against income inequality, but they will not come clean about the financialization of the US economy increasing income inequality or immigration destroying the labor value of our poorer citizens. Unfortunately, due to their financial situation they cannot print all the news that would generate eyeballs, sales and prestige. A Pulitzer would be awarded to the reporter who unearthed the financial crimes of our century. A crusade worthy of the old muckrakcers that cleaned up the meat industry or broke up Standard Oil is there if only they could print it. The Sulzbergers needed money. The Sulzbergers needed to maintain their life of leisure. In the process of maintaining thatpower and wealth as a true 1% family, they sold out their paper’s integrity.  One of the greatest crimes in American financial history goes underreported in the hometown of the paper of record. The USA sucks in millions of new Americans unchallenged by the premier paper in the USA because of financial problems. To modify a line from Fight Club, the people you owe eventually own you.

Wednesday, October 10, 2012

A New Defintion of Passable + Black Men Rejecting Their Moms

Identity is incredibly important. It's who you are, how you portray yourself and the basis of your point of view and interaction with the world. This is why people who have a strong identity seem to be secure, confident, assured, and stable. If you don't know who you are, how can you interact with others or make sense of the world. A weird wrinkle in American history is the concept of 'passing' or being passable. In the original idea, it was if a non-white could pass for white. There were advantages to this through the laws in America, but like so many things, we live in 'negative society' where everything is inversed from days of old. Now the key is to 'pass' for the other, the minority, the different. No community is a better example of this than the black community, not just due to the benefits through affiramtive action preferences, but for acceptance as 'cool' or part of the in crowd. Consider the comedy of Halle Berry stating she belives in the one drop rule, which was a 'horror' for discriminating against blacks, and considers her daughter who is 1/4 black to be "black". A few years ago, I came across a website that mentioned this in a peculiar way. Blacks don't say they enforce that code, but sometimes the mask slips, and you get the truth. Passing was considered a shameful rejection of one's racial identity as they craved acceptance in white society. Passing of that nature doesn't exist anymore, but passing for the 'other' does and in odd places. Blacks still seek acceptance from whites, but they do it in different ways now.

This website post explains why a black guy dug Indian girls (the comments are great). I quote, “they look just like hot light skinned black girls.  Brown skin, long straight hair, European features, they already have the total package everyone works so hard to find.” A black guy is saying everyone (all black men) works hard to find a woman who has straight hair (non-black hair characteristics), European features (non-black facial features), but has brown skin. For decades, if not centuries, some black women would try to pass for white to be accepted in white society or for the step up in opportunity. Now, the new concept of passing is for a girl to be just black enough to bring home to momma. I will swear that this is behind black men's love of Rashida Jones who is cute, but doesn't deserve the attention she gets from black men. The key is she is basically a white woman that because of her dad being Quincy, the brothers can tell mom that Rashida is a sister.

When reading something like that, you get the feeling black guys are looking for a white woman they can call black so they are being true to their black identity. RooshV had a post on black guys looking for white women, and tried to spin it off as a pursuit for thinner women. I'll give him some points on that, as the thinner women thing explains some of it (American blacks = Roosh's blind spot). It does not explain the chubby to rotund white girl with black guy (of all sizes) phenomenon. Last time I went to Denny's it felt like 'take your fat white girl to lunch' day. What's the average weight of a white woman who sleeps with a black man? 180 pounds? Come on, Roosh. Why would they date land whale white girls? It is especially odd considering men selecting women who share similar facial features or the idea of men selecting women who look like their moms. Black men preferring white women, and chubsters, not Cindy Crawford types, is a weird concept as it is a rejection of what they grew up with and search for a completely different look. it is also a search not for the ideal of that other (Cindy Crawford), but a bloated, grainy imposter.

This is a bit of a reach, but it might go back to Alexis de Tocqueville's comment on the nature of blacks in America (pg 135, Democracy in America),

"makes a thousand fruitless efforts to insinuate himself among men who repulse him; he conforms to the tastes of his oppressors, adopts their opinions, and hopes by imitating them to form a part of their community."


It may have been a status marker to be with a white woman when Jack Johnson did it, and even up to the '80s. Now with a generation of intermingling in the rearview, and the common pairing of land whale white girl with black guy, it has become a joke. There is no status bump. Side note: a black friend once theorized that black men date fat, divorced white women because they know the white guy is paying child support and alimony so they don't have to have steady work. I do think de Tocqueville is onto something though as it is a cry for acceptance by these black men. Similar to a black man making it and trading in his attractive black girlfriend or wife for a white woman (Bryant Gumbel/Tiki Barber). It is leaving that black community with its tough streets in the rearview mirror.

Like many things about black Americans, it is a double edged sword. Keep puffing your chest out to your boys that you have a white girlfriend but you keep it real while you're riding in the passenger seat of a minivan with her kids in the back, to soccer practice. Sure, you are proud of your identity as a black guy, but you left black women behind and rejected the image of the woman who raised you. Due to cultural traits, you're most likely leaving behind the women who raised you (momma and gramama) for a white chubster. "Yeah I'm black, but I'm not one of those blacks. My girl ain't ratchet". It is human nature to aim to be a part of the winning team, but at society's core, there are just some harsh lines of separation. Humans seek acceptance and they seek status amongst their peers. We just all do it in different ways.

Tuesday, October 09, 2012

New Favorite Miniseries: "The Way We Live Now" (2001 BBC)

During the heat blast that was this summer, I spent a weekend shacked inside with the AC blasting with a wife suffering summer cabin fever. She has become a "Downton Abbey" fan, and I suggested we watch the well reviewed miniseries "The Way We Live Now". With alcohol in hand, we ripped through the entire series in a weekend. Just about everything in this miniseries is top notch. It is an adaptation of the Victorian mega-serial book of the same name, and it is wonderful social commentary of that 1870s Victorian era. The characters are rich, three dimensional people, the storylines are mostly specific to that time yet some are timeless, and the male-female relationships are fantastic. I definitely recommend you add this to your Netflix instaque as it is a fun and thought provoking miniseries. I can just see Spielberg or some Hollywood bastard adapting this to contemporary America and setting it in NYC in say the late '90s or mid-2000s. It would be awful, but suckers would watch it anyway as the story's framework is so good. Even if a US version were made with a huge budget, this would still rank as my favorite TV miniseries.

When discussing the series, my wife asked me who my favorite character was. There was not one particular character that really drew me in, but I did love whenever certain pairs were in a scene together. It was as if the pairing made the characters better than they were on their own. The pairs would be Augustus Melmotte and his daughter Marie (or as I called them Poirot + Moaning Myrtle), and Felix Carbury and his mom. When Augustus is in scenes with his daughter, the actors conveyed that sense of history that the characters shared. There is mystery to Melmotte's past, his money, his business, and his aura. His daughter knows where the bodies are buried. She pierces the cloud of BS, and the street level schemer in Augustus comes out. There is a line they share where Melmotte says (paraphrasing) "don't you remember when we were in the gutter with nothing". Melmotte is making reference to their obvious past living in a Jewish ghetto somewhere. Felix and his mother amplify each other's faults. Felix is a bit of a rake. His mother only encourages his schemes. He also manipulates his mother because he knows the prize that he is. Felix has a distant chance at inheriting a title, as well as charm and good looks, and he can marry for money. When you see his mother solo, you know where Felix gets the manipulation skills. Together they are wonderfully devilish. The interesting thing about both pairs is that the same gender parent is deceased so the duos have a weird partner as well as parent-child thing going. All four actors were good onscreen, and their chemistry made the pairings realistic.

A final thought is that despite being set nearly 150 years ago, the running theme of the series is love and the sexual marketplace. Who does what to whom, who is reaching, who is settling, who is conning who, and what makes a person valuable are all on display here. Just about every current 'type' is on display even then: the plain jane, the handsome in a rich way, the alphas, the betas, the high value young virgin, the lower value pretty + loose older woman. Considering that this was set well before the social welfare state was created, one does see how that external money transfer system as well as middle + upper middle class women working more has completely overthrown the systemt hat was in play for centuries. We are living in dating chaos, but it is of our own doing.

Monday, October 08, 2012

Book Review: "The Sword + the Shield" by Christopher Andrew

Sometimes I miss the Cold War. I do. The USSR was the standard bad guy when we played with toys guns, and if you lost the coin flip, your team was the USSR during backyard sports games during the Olympics. They were also "commies". They had smoking hot bad women. They spied. They had the power to obliterate us. We had an enemy that we could call our equal, even if we kind of new we had advantages and much nicer lives. I'm happy now that their nukes are not automatically on American coordinates. It's fine that that threat is done with, but it does seem simpler than now at times. It's just nostalgia inside looking for something from my childhood to comfort me. I picked up the two part Soviet spy book series by Christopher Andrew on the Mitrokhin archive that was exfiltrated in the early 1990s. "The Sword and the Shield" is book one, and it is a great read. It is tough sledding at times because it is so detailed and you might lose track of names if you don't pay careful attention. If you love spy stuff, check it out. It's 500+ pages of spy recruitment, close calls and eventual capture or forced retirement.

Some thoughts inspired by the book....

This book did make me consider Walter Duranty's reporting incredibly dangerous and one of the greatest crimes against national security to the USA and UK ever. His reporting covered the misery and horros of Stalin's USSR. Because of this, the myth of the worker-peasant state lived for decades. It fed young socialists and pinkos with the illusion that the Soviets were the only ones fighting fascism and not that bad. It kept the romantic lie alive. This created the rationale behind many early traitors to the UK and USA, most critically in the Magnificent Five in the UK and the US nuclear program. Those traitors hurt the UK and USA, creating problems that haunted us in the '50s. How long would it have taken the Russkis to make the bomb had they not received two perfect copies of the details from two sources? It is frustrating to read those sections and not curse why children don't learn more about this and less about the evils of McCarthyism.

Wait, I know why. McCarthyism did work to destroy the CPUSA in the US and destroy the Russian illegal spy network. If you read the book, McCarthyism did work and did halt Soviet spy rings. It didn't help with technology spies, but the Soviets only had walk ins to use for spies after McCarthy. Every movie set in the '50s now has the overzealous anti-Commie and the aww shucks, nice liberal guy who gets blackballed. More people have been blackballed in movies than in real life (pure guess). My theory on why kids hear about the evils of McCarthy and not the evils of Hiss, White, the Magnificant Five and the scientists who betrayed the US/UK is that so many people questioned and attacked by McCarthy were academics and yes, Jewish. Academics have long institutional memories, and so do the Jews. Hollywood is also heavily Jewish (and proud of it). They crank out a Holocaust documentary or movie every year, yet skip over Stalin's murderous rule. They also love to showcase those evil McCarthites. Why? Jewish hollywood and the CPUSA, which had a ton of Jews were his targets. They will demonize McCarthy even if he did have some rationale, which turned out to be valid. The Communist leaning ring of the Rosenbergs and Fuchs gave the Soviets the bomb secrets.

The author does have a blind spot, and my guess is that he didn't want to wade too far from his subject material, but there is more to the lack of new spy recruits than just their loss of faith in the worker-peasant myth and enthusiasm for the new left in the West. Reading up on history of that period in US academia, those students would have been getting tons of commie propaganda and glorification from their professors. The economic growth rates of the 50s in the USSR were pretty high. These students didn't want to turn on the US to send secrets to the USSR because they viewed the USSR as successful. Their goal was to turn the USA into a commie state. The hippies and yippies of the '60s were pretty radical, and they wanted to overthrow the entire system. Why waste time sending secrets to the USSR when you can turn the USA into the USSA? It was outside the scope of his book, but that is the impression I get looking at contemporary American history.

Wednesday, October 03, 2012

Different Explanation for Nixon's Ouster

President Nixon is such a unique case in American electoral politics. Neil Young said Nixon had a rock star's career path and wrote a song about Nixon "Campaigner". No one has accomplished what Nixon did with his '68/'72 victories after his defeats in '60 (POTUS) and '62 (CA Gov). His resignation and the scandal that forever stains his presidency seem a bit odd as time passes. Maybe Nixon's genius rehabilitation efforts have worked on me, but I now find I'm sitting in that Murphy Brown position of thinking "Nixon got a bad deal" (season 6 "Angst for the Memories"). Roger L. Simon's recent column on the media coup that happened with Watergate, and the media running the show todaygot me thinking about Watergate causes. The lesson from Watergate was 'the cover up is worse than the crime' or 'the cover up is what nails you'. Looking deeper at Watergate, the lesson should be that the leviathan United States Government and it's true power holders, the media and universities, will not be stopped.

Nixon had an awesome resume and a brilliant mind (graduated 3rd in his Duke Law class). He was also raised in a strict household with great strain, and those demons tormented him throughout his political career. He rose to fame as part of the HUAC Commie hearings, especially his actions and handling of the Alger Hiss case. He was a fierce anti-communist who rode that wave to VP on Ike's ticket. Per the book Nixonland, he was also everything the East Coast Establishment hated, but he used that to his advantage to tap that outsider vibe that many non-SWPL americans felt. His domestic policy was basically rubber stamping the lib creations of Congress. Nixon created government programs and departments that no Republican wants now (EPA/OSHA). He also closed the gold window and began the oddities of the '70s stagflation and even our current financial distress. He had a fantastic approach to foreign policy. His methods varied per the problem or the opponent, completely contrasting the current "one size fits all overthrow + create a democracy" method. His interest was in US security and fighting back against the spread of Communism. His Vietnamization strategy for the Vietnam War allowed for US withdrawal in and orderly fashion, his Middle East balancing act as well as opening relations with China which took advantage of the Sino-Soviet split and then detente. It is superhawkish, but I look at the Operation Condor policy as a necessary evil to combat the psychopaths in Commie movements in South America. Ever talk to kids who grew up
under Communism? Their stories will forever stick with me. Nixon got run out for covering up a burglary by minions down the chain on his campaign staff.

Nixon got nervous and didn't just nip it quickly. How fast does the story die if there is no cover up and when questioned about it months later, Nixon says "we had some low level staff get overzealous, and they will go to jail for their actions"? Believe me, if you read Nixonland, you'll read how the Dems, especially the convention, in '72 were such a mess that McGovern had no shot in hell. Nixon won every state except Massachusetts, so I doubt a small burglary in the back pages of the Wapo would've made waves. The real driver of the Watergate scandal was the defensive moves by the FBI as Nixon tried to clean it up with an outsider as well as the desire of the media to assert their place at the top of the pecking order.

Motive #1 - FBI power struggle that insiders wanted to see go their way. The Deep Throat source spoonfed Woodward and Bernstein, mere crime beat reporters, the information of the FBI's investigation. Why? Felt was passed over for promotion to the top spot as Nixon attempted to appoint an outsider to clean up the FBI after Hoover's death. Felt guided the Watergate reporting, and without him, do Woodward and Bernstein even make the connections to that small time burglary and CREEP? Felt's fight against Nixon's attempt to reduce the autonomy of the FBI and bring it under presidential control smells strongly of the Cathedral wanting to assert itself.
 
Motive #2 - Nixon's admin in '71-'72 made power moves w/media. Nixon's strong Silent Majority speech tested well, and was punced on immediately by the media on TV as it was broadcast. Nixon's team used a speech at the Regional Republican Conference in Des Moines by VP Agnew a week later on television as well to target the media's control over public opinion. Agnew's money line quote in the speech is:
 
"The American people would rightly not tolerate this kind of concentration of power in government. is it not fair and relevant to question its concentration in the hands of a tiny and closeted fraternity of privileged men, elected by no one and enjoying a monopoly sanctioned by government?"
 
Agnew speech struck at the heart and power of television news. He was swinging at the media. He was going after the Cathedral. The key part is the very last bit I quoted. Agnew recognizes that this is an unelected crew of powerful men who have tv station licensing granted by the very government they skewer when not controlled by Democrats. The media was legitimately cared about licensing. This was pre-cable. If the stations were not licensed, how can a network exist? It was powerful. The Cathedral was just figuring out TV, and this was a tool they would need to work on and use to their advantage. How else did northerners learn about the Civil Rights struggle? How else was Vietnam's horrors shown to people eating their TV dinners?
 
Notice the Watergate timeline of when reporting started on Watergate. The break in happens on June 17th at 2:30am. By the print time on June 20th, the no. 2 man in the FBI is tipping reporters to look into this burglary. There are some theorists who think Nixon feared the burglary was a set up already to make him look bad. To this day, G. Gordon Liddy still doesn't know why they broke in (he has some odd theories). Even if Nixon's crew did order this, and he was busted not just for the break in but for the corruption in his admin, including insane fundraising, this does seem like theater of the plot against the king sort. "Cathedral takes Nixon down using small time crime reporters uncovering a giant conspiracy with the no. 2 man in the FBI leading them at every step of the way." It's a brilliant coup. Cathedral asserts control as it explains in the theater of Congress, TV and power that now a POTUS cannot break the law but the media can do whatever it takes to do it's job: mold public opinion.

Monday, October 01, 2012

Why was Solzhenitsyn Marginalized?

After reading the first two volumes of Solzhenitsyn's "The Gulag Archipelago" (reviews here + here), I was struck how I had never learned about him in any literature of 20th century world history class. How did he not enter the picture considering how wonderful some of his prose is? Considering my Cold War childhood and fall of Communism adolescence, Solzhenitsyn's writing would have been very timely. Solzhenitsyn is proof positive that no matter how great the writer or thinker, no matter how truthful the message, no person is powerful enough to withstand the onslaught of the cathedral. His speech at Harvard sealed his fate.

Solzhenitsyn was a Nobel Prize winning author who revealed the horrors of the Soviet system dating from its inception, as opposed to the convenient blame focused on Stalin's Great Terror. The KGB chiefs wanted to get rid of him, while some wanted him in the country under surveillance. He was a problem they couldn't solve. In a KGB history book I am currently reading, the KGB actively spied and messed with him while he was in Switzerland to the point that when he went to the US he had high fences around his property and lived as a recluse. Within a decade of being in the USA, he was marginalized and made inconsequential. Why? He had finally seen the West, and he called the West out for the situation that the Cathedral had ruled, fostered and controlled.

Solzhenitsyn was invited to speak at Harvard's 1978 Commencement. The Ivies pay speakers well and love to get prestigious names. Student's personal politics can interfere with selection (Cornell in '02 ruled out Giuliani due to personal taste on the committee), but the goal is to get a big name. Solzhenitsyn was a huge name as a dissident of the USSR who had won a Nobel. His speech is tremendous (please read it here). It was also not what the students were expecting. At the link I provided, there are also immediate responses by the media. This tells you why and how Solzhenitsyn was finally tamed. He dared to question the direction of the US, he dared to emphasize a need for God, he dared to question humanism, and he ripped the power of the unelected press in his speech. Solzhenitsyn also pointed out how liberals in the West pulled back criticism of the USSR because it is a political and philosophical bedfellow. In a short speech he defied them. The Cathedral would not let this stand.

The Cathedral counterattacked in op-eds, and then did the best thing possible: he was not invited to speak elsewhere or on TV. His opinion was shut out despite living in the USA until the early '90s. Solzhenitsyn was the most famous East-West political asylum chess piece in the Cold War from America's supposed enemy yet then media froze him out. The Cathedral treated him just as they treated his hypothetical example in his speech. Released KGB files show how the KGB reveled in his marginalization. The Cathedral did what the KGB never could do. For US students to read the Gulag Archipelago after that Harvard speech would give students an avenue to read his speech, to question the West, and to question the Cathedral. Solzhenitsyn was a danger not just to the Soviet system, but to the Cathedral's hold on power. He had to be taken care of, and the Cathedral did what they do best. He was marginalized and removed from curriculum. I did not hear about this wonderful writer until after I left the education system. In a weird twist of fate, it is as if he became an unperson in the eyes of the Cathedral.