Economics Lesson by John

This explains why poor people need "safety nets" for which rich people have no need. 

Conservative

Some claim that the U.S. is more conservative. The problem is the term conservative has become meaningless.  Most of the people who call themselves "Conservative" are not conservative at all.

Daniel Larison:

Tim Stanley puts together a list of “some of the things that make Americans more conservative than the British.” Several of the things he mentions may help explain why some Americans are more inclined to vote Republican, but they don’t prove that Americans are more conservative than the British. If anything, they prove just the opposite. For instance, Stanley writes:
Having so much space means they don’t share the British obsession with conservation of the natural habitat. Nor do they accept the notion of limits. Austerity is an alien idea in a land where natural wealth seems limitless and every man has a birthright to exploit it. Jimmy Carter style pessimism is a no-no.
Stanley has just listed the stereotypical American rejection of at least three things that are at the heart of any meaningful definition of conservative, and then said that these are reasons why Americans are more conservative than the British. Stanley is right that lack of interest in conservation, rejection of limits, opposition to austerity, and disapproval of pessimism make many Americans more likely to be Republican voters. These are also the reasons why temperamental and philosophical conservatism fares so poorly in the political coalition that identifies itself with ideological conservatism. If there is one thing truly alien to a conservative temperament, it is the rejection of limits. The Republican nominees believe that there ought not be any limits to American power in the world, and if they do exist at the moment they ought to be overcome. They are convinced that growth can be without limit as well. As far as they are concerned, acknowledging and respecting limits are the equivalent of embracing national decline. Unfortunately, it is exactly their rejection of limits that exhausts national strength and natural resources more quickly and hastens the coming of decline in the future.

 The "rejection of limits"  that's the key.  Peak cheep oil, rejected, global climate change-rejected..  Attacking Iran -suicidal foolish.  This is what "conservative" means today.  Not very conservative at all.

John Ballard

My dear friend, John Ballard, from the late Newshoggers has agreed to join the pamphleteers here at MEJ.

Sunday Tweets

(Cross-posted at Accidental Blogger)

Yes. I still love my Twitter feed. Since learning they could be embedded, this morning I an experimenting with a blog post of Twitter messages.

►Somebody dropped the ball.

President Obama hasn't updated his Myspace page since announcing his reelection campaign in early April. myspace.com/barackobama
— Andrew Kaczynski (@BuzzFeedAndrew) September 9, 2012

 ► A man who died at a Ho Chi Minh City hospital last month was a victim of what is probably Vietnam’s first-ever recorded case of the brain-eating amoeba Naegleria fowleri. The Hospital of Tropical Diseases said Wednesday (August 29) a male patient named P.V.T., 25, of Phu Yen Province died from primary amoebic meningoencephalitis – a rare and usually deadly disease of the central nervous system caused by the amoeba. 

According to his family, T. and his friends swam in a lake to catch oyster in a rural village near his hometown in mid-July. T. then developed fever and headache and was admitted to Gia Dinh People’s Hospital in HCMC. He was diagnosed with meningitis and transferred to the Hospital of Tropical Diseases on July 30. 

Tests there showed the patient was infected with Naegleria fowleri. His condition got worse with unconsciousness, high fever and respiratory failure. He died the following day. (More at the link)

►A third of the world's socks are produced in a single town in China with scores of factories producing only that one product.

"I'm very worried. This year is much worse than 2008-9." - China sock manufacturer bit.ly/SuJsiA
— Patrick Chovanec (@prchovanec) September 9, 2012

Back in the sock factory, Xu says 73 clothing firms have gone under this year, with some leaving behind debts of billions of yuan. Things have not been so bad since 2003, when foreign buyers stayed away because of the Sars crisis. Usually Xu goes to the US once a year; this time, he has made three trips – but one major customer halved its usual $5m order anyway. Sales to civilian customers are down by at least a fifth. 

It is a sign of the times that his firm, Huazhong, considers the boom in sales to the Syrian army as a rare bright spot. "Last year they bought 870,000 pairs. This year it's 960,000 already," he says. Few might imagine that camouflage or khaki ribbed socks came in so many varieties, but French, Singaporean and Saudi Arabian soldiers have proved exacting customers.

Who knew?

►Here's a message from hashtag #uppers, now trending. He makes a good point. Check the hashtag link to see what else people are saying. (Reader advisory: hashtags have a very short shelf life so if you'r reading this later fuggedaboutit.)

Why did Obama's 2008 convention speech sound so optimistic? Because it was delivered BEFORE the economic crisis #uppers
— Wyeth Ruthven (@wyethwire) September 9, 2012

►Well, this has been fun, folks, but it's very time-consuming and I have a lot to do. Besides, this final Tweet just came up and I need to quit playing around and get busy reading something serious. I only peeked but this links to an essay talking about the ONE-state solution to the Pal/Israeli conflict. I have long imagined that the combined creativity and energy of Palestinians and Jews working together could produce a country historically unique, capable of becoming the power center for all the Levant.

The Triumph and Tragedy of Greater Israel bit.ly/Rs0OeH
— S. Abbas Raza (@SAbbasRaza) September 9, 2012

Middle Earth Journal - the new Phoenix

I shut down Middle Earth Journal when I moved to Newshoggers but after four years Newshoggers has died.  An Archive can be found here but it's history.  Even though I now post at The Moderate Voice I am going to raise Middle Earth Journal from the ashes.  There will be cross posts from TMV and original content as well.  In addition I hope to recruit one or two co-bloggers.  The online pamphleteers are back.

Weekend Book Review - Ayn Rand and the World She Made

With the Ayn Rand cultist Paul Ryan becoming the Republican Vice Presidential Candidate today I thought this might be a good opportunity to republish my reveiw of the Ayn Rand Biography by  Anne C. Heller from 2010.

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The picture on the left may represent the beginning of the deregulation frenzy that resulted in the current world wide economic disaster. It was taken in 1974 by David Hume Kennerly and pictured are President Gerald Ford, Alan Greenspan, Ayn Rand, Rand's husband Frank Conner and Greenspan's mother Rose Goldsmith. The occasion was Alan Greenspan being sworn in as chairman of the Council of Economic Advisers. The significance of the picture is that Ayn Rand is there next to her disciple Alan Greenspan but to understand the significance you must understand Rand herself and her philosophy. Anne C. Heller helps us do that with her excellent biography of Rand,Ayn Rand and the World She Made

I recommend this book not because I agree with anything Ayn Rand stands for but because it's a really good read and it's necessary to understand Rand and undererstand how we arrived where we are today. Heller makes it clear that Rand and her life are much more interesting than any of the creations in her fiction and there are times you forget that you are not reading fiction. I am going to concentrate on Rand's early life in this review - it's important because narcissists and sociopaths like Rand are either created early if not born that way.

Alyssa Zinovievna Rosenbaum was born in St Petersburg, Russia in 1905 of Jewish parents. While it's often said that it was the Bolshevik revolution that was responsible for Rand's philosophy and world view according to Heller the foundation for Rand's philosophy predates the revolution.

When Rand was five or so, she recalled, her mother came into the children's playroom and found the floor littered with toys. She announced to Rand and Rand's two-and-a-half-year-old sister, Natasha, that they would have to choose some of their toys to put away and some to keep and play with now; in a year, she told them, they could trade the toys they had kept for those they had put away. Natasha held on to the toys she liked best, but Rand, imagining the pleasure she would get from having her favorite toys returned to her later, handed over her best-loved playthings, including a painted mechanical wind-up chicken she could describe vividly fifty years later. When the time came to make the swap and Rand asked for her toys back, her mother looked amused, Rand recalled. Anna explained that she had given everything to an orphanage, on the premise that if her daughters had really wanted their toys they wouldn't have relinquished them in the first place. This may have been Rand's first encounter with injustice masquerading as what she would later acidly call "altruism." Her understanding of how power can be acquired by a pretense of loving kindness would grow only more acute with time.
Perhaps it's little wonder, then, that from the age of four or five onward, Rand developed a keen sense that anything she liked had to be hers, not her mothers, the family's, or society's, an attitude that readers of her 1943 novel The Fountainhead will recognize in the perverse and complicated character of Dominique Francon. As a corollary, she claimed not to care about being approved of or accepted by her family and peers. Since she generally wasn't accepted, the proud, intelligent child appears to have learned early to make a virtue of necessity. In her twenties and thirties, she would construct a universe of moral principles built largely on the scaffolding of some of these defensive childhood virtues.

The second influence in Rand's life came when she read a serial in a French Boys magazine, The Mysterious Valley. It was there that Rand met Cyrus Vance, a handsome and heroic figure and in Rand's eyes a hero in every way. Rand would spend the rest of her life looking for a Cyrus Vance and creating him in her fiction.

Rand herself was an elitist who lived on cigarettes, amphetamines and chocolate. Elitism was also what she was marketing in her novels. Her characters like Galt and Roark were unbelievable because they were little more than abstract principles personified. Her vision of capitalism was simple and had a grade school like quality to it.

But Rand has impacted us all and still does. The principal architect of our current economic crisis, Alan Greenspan was a disciple for most of his life but after looking at the havoc he had created had to recant. (Via Digby)

"I have found a flaw" in free market theory, Greenspan said under intense questioning by Representative Henry Waxman, the Democratic chairman of the Government Oversight Committee of the House of Representatives. "I don't know how significant or permanent it is," Greenspan added. "But I have been very distressed by that fact."

Pressed by Waxman, Greenspan conceded a more serious flaw in his own philosophy that unfettered free markets sit at the root of a superior economy.

"I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms," Greenspan said.

Waxman pushed the former Fed chief, who left office in 2006, to clarify his explanation.

"In other words, you found that your view of the world, your ideology, was not right, it was not working," Waxman said.

"Absolutely, precisely," Greenspan replied. "You know, that's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well."

But she still has her followers in important places today like the Republican's wonder boy, Congressman Paul Ryan.

It's important to know what motivates the enemy and the Rand cultists are still with us.  As Digby notes Rand's followers are passing out free books.  For that reason this is an important read for anyone concerned about how Ayn Rand is still an influence.

Note:

I received a copy of this book from the publisher for this review.

Book Review - The Trust

It's not easy writing a review for a mystery novel and The Trust by Norb Vonnegut is no exception. I can't say too much without being a spoiler but I'll try.

Successful investment manager Grove O'Rourke receives a mysterious call from his wealthy mentor, Palmer Kincaid and suspects something is wrong. The next day Kincaid's body washes ashore an apparent accidental drowning victim. O'Rourke is contacted by Kincaid's daughter to get the family's financial affairs in order. He suddenly finds himself in charge of Palmer Kincaid's charitable organization, The Palmetto Foundation. One of the first issues involves The Catholic Fund and a mysterious priest, Father Frederick Ricardo. The Catholic Fund has given 65 million dollars to the Palmetto Foundation and Father Ricardo now wants to dictate where that money goes. O'Rourke is suspicious and that is only reinforced by attorney Biscuit Hughes who has discovered that The Catholic Fund is the owner of a Sex Superstore in Fayettville, North Carolina. At the same time O'Rourke's investment firm in New York is being taken over Morgan Stanley and the FBI is asking questions about him.  O'Rourke himself is contacted by the FBI but agent Torres has lots of questions but few answers.  Then Palmer Kincaid's widow is kidnapped and O'Rourke is forced to join forces with agent Torres to save her.

If you like mysteries this is a great read that includes murder, a kidnapping and financial shenanigans. It is often hard to separate the good guys from the bad ones.

Note:

I received a review copy of this book from the publisher.

Book Review - Guest of Honor

In 2008 the United States elected a black President - the result was a very negative reaction by about 25% of the population. It's not the first time there was a reaction to shifts in racial equality. In his concession speech in 2008 John McCain mentioned T.R, Roosevelt's dinner with Booker T. Washington in 1901. Like most of us this was the first time author Deborah Davis had heard of this historical event. She became curious and researched the history of the event and wrote Guest of Honor: Booker T. Washington, Theodore Roosevelt, and the White House Dinner That Shocked a Nation.

The first half of the book is a mini biography of both T.R Roosevelt and Booker T. Washington. For me this was very informative since I had little knowledge of this period of US history. TR was born into wealth and privilege and Booker T. was born a slave but their lives had many parallels. They first met in 1898 when they discussed the performance of the black soldiers that were part of TR's Rough Riders.

While Booker T. continued to build Tuskegee TR used the popularity of the Rough Riders to become governor of New York. Being TR he manged to upset the New York Republican political machine. The machine convinced McKinley to choose TR as his Vice President just so they could get him out of the State House. TR continued his communication with Booker T and agreed to visit Tuskegee. Fate had other ideas and when McKinley was assassinated TR suddenly found himself President and Booker T suddenly found himself an adviser to the President of the United States.

On October 16, 1901 TR had a evening meeting with Booker T. In addition TR had a big family meal planned that included a hunting friend from Colorado. He made the decision to invite Booker T to dinner. Both men recognized the danger - TR almost withdrew the invitation and Booker T almost turned it down. But the dinner happened and the next morning it was reported in the press.

A summary of TR's daily agenda was read by a reporter at the Washington Post and suddenly realized that a black man had dined with the President at the White House.

"Booker T. Washington of Tuskegee, Ala., dined with the president last evening." he wrote in his column. That one line caused the telegraphs to start clicking furiously in the capital, their shocking message reverberating across the nation like a thunderclap.

In the South the reaction was immediate and angry. TR was blasted for the invitation and the "uppity" Booker T for accepting. The loss of slavery was bad enough for the South but the idea that "coons" were social equals was just too much. The press in the North was for the most part positive.

Although both men were able to accomplish a great deal that dinner haunted them for the rest of their lives.

This is a very readable book covering the history of the US 30+ years after the civil war. It is valuable because it gives us not only a picture of how things have changed in the century since TR was President but also how much really hasn't changed.  I recommend this book to anyone interested in this short period of history.

Cross Posted At The Moderate Voice

Note:

I received a review copy of this book from the publisher.

Book Review - The RX Factor

I read mostly non-fiction and when I read fiction is usually Science Fiction. But I also like a good suspense thriller once in awhile. The RX Factor by J. Thomas Shaw certainly qualifies. There is certainly enough suspense and enough murders and assassinations to qualify it as a thriller. In addition there is a lot of corporate and government malfeasance.

Dr Ryan Mathews discovered a cure for ovarian cancer. His company did not have the resources to do the human testing so he sold out to a large pharmaceutical company. Human testing commenced and the results were not good - it didn't work. Ryan's wife came down with ovarian cancer and she was part of the human testing. When the testing was canceled Ryan stole the last two doses his wife required. He was caught and fired from the large pharmaceutical. All of the tests indicated his wife was going to die within months so the decision was made to move to the Bahamas for the last few months of her life. His wife and children were killed in a plane crash on the way to the Bahamas and Ryan spent the next few years drinking in paradise. One day Ryan met another medical researcher there to spend some time with her aunt and uncle. When her relatives ship was blown up Ryan partnered with her to find out what was going on and the adventure began. Many murders and attempted murders in addition to many surprises. It came to Ryan's attention that his drug had worked and the results had been tampered with. But why - the big pharmaceuticals don't want to cure people. People who are well don't buy drugs. More adventures and murders along the way and an ending that unearths an even more sinister plot.

A really great read that I had trouble putting down and the ending was a shocker.

Cross Posted At The Moderate Voice

Note:

I received a review copy of this book from the publisher.

The RX Factor
by J. Shaw Thomas

Weekend Book Review - The Monster

Do you like a good crime novel – a corporate crime novel? If so The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America--And Spawned a Global Crisis by Michael W. Hudson is for you. Unfortunately it's not a fictional novel but the history of the mortgage crisis that may yet bring down the US and world economy.
This book is not directly about the foreclosure crisis but about the seeds of that crisis – deceptive and fraudulent mortgages that left desperate people worse off than before and without a chance of meeting the obligations of the contracts they had signed.
The seeds were initially planted over 30 years ago in the form of deregulation of the financial industry. The seeds sprouted in the late 80s and blossomed into the S&L crisis. Little if anything was learned and the deregulation continued – still more seeds were planted. By the early and mid 90's the players that had escaped the S&L crisis and even some who didn't were back at it writing predatory sub prime loans. The deception and outright fraud was becoming even more prevalent easily circumventing the few new consumer protections. At about the same time mortgage backed securities were a hot commodity. The Wall Street investment banks had stayed clear but a familiar name in the most recent crisis, Lehman Brothers, saw an opportunity it couldn't pass up. As the money to be made in subprime mortgages increased so did the deception and fraud as well as involvement by more and more Wall Street banks.
Like any good crime novel this story has a cast of villains and victims. Of course this is not a novel so the people are real. One of the main characters is Roland Arnall who grew a small Orange County S&L into the mortgage giant Ameriquest. The way it grew was to place sales and profit above all else. There was nothing an Ameriquest salesman would not do to close a loan.

At the downtown L.A. branch, some of Glover's coworkers had a flair for creative documentation. They used scissors, tape, Wite-Out and a photocopier to fabricate W-2s, the tax forms that indicate how much a wage earner makes each year. It was easy: Paste the name of a low-earning borrower onto a W-2 belonging to a higher-earning borrower and, like magic, a bad loan prospect suddenly looked much better. Workers in the branch equipped the office's break room with all the tools they needed to manufacture and manipulate official documents. They dubbed it the "Art Department."
........
What if a customer insisted he wanted a fixed-rate loan, but you could make more money by selling him an adjustable-rate one? No problem. Many Ameriquest salespeople learned to position a few fixed-rate loan documents at the top of the stack of paperwork to be signed by the borrower. They buried the real documents—the ones indicating the loan had an adjustable rate that would rocket upward in two or three years—near the bottom of the pile. Then, after the borrower had flipped from signature line to signature line, scribbling his consent across the entire stack, and gone home, it was easy enough to peel the fixed-rate documents off the top and throw them in the trash.

There was lots of money to be made so neither the investment banks that were packaging the loans or the investors buying them questioned the loans themselves. But the continued growth depended on a continued influx of new loans and rising home values – it was in effect a Ponzi scheme. When the housing bubble deflated in 2007 the Ponzi scheme collapsed.
I recommend The Monster: You can pretend it is fiction and have an enjoyable read or you can learn about how greed driven fraud and deception resulted in the worst economic crisis since the great depression. While Wall Street and the bankers are still quick to blame those who don't make their mortgage payments you will see who the real victims are.
Note:
I received a review copy of this book from the publisher.
Cross posted at The Moderate Voice

The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America--And Spawned a Global Crisis
by Michael W. Hudson