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Meet Chris Hedges on September 24 In NYC

Days of Destruction, Days of Revolt
Blueprint for Accountability
Monday, September 24, 2012 at 7:00 pm EST

Culture Project
45 Bleecker Street, New York City

Join author, journalist, war correspondent & columnist for Truthdig, Chris Hedges,
for an intimate conversation and questions about his latest book, Days of Destruction, Days of Revolt.

Presentation will be followed by a book signing with Chris Hedges.

General admission tickets $15.
Student & Senior tickets $10.

Purchase at CultureProject.org

Please pass this along to anyone who you think might find it to be of interest.

Video of Chris' appearance at Impact 2012

Credibility Trap: Why Wall Street Always Wins

There is an interesting new book by Jeff Connaughton called The Payoff: Why Wall Street Always Wins. It describes the lack of the rule of law on Wall Street and the complacency, if not complicity, of the government.

This is the credibility trap, and deep capture. Justice, for some.

Reform is a neglected stepchild, when all serve their own interests first.

Even the first reform movement, The Tea Party, was bought off and diverted by clever ad campaigns, and became the bullyboys for the monied interests. And Occupy Wall Street was broken by the concerted actions of the government. As the facade of fraud stumbled they turned quickly to force. And the public looked on passively, approvingly, pretending confusion and indifference. What do they want?

At the heart of it are the Banks. They must be taken down, broken apart, their ashes scattered, as was done in the 1930's.

I am deeply pessimistic that corporate America will do the right thing for the country as Connaughton suggests, even to save capitalism from themselves. Big business has never stood for the people, and rarely taken the long view. They are dead souls of the status quo. They are the Pax Romana, purveyors of desolation.

"The inability to identify with others was unquestionably the most important psychological condition for the fact that something like Auschwitz could have occurred in the midst of more or less civilized and innocent people. What is called 'fellow traveling' (collaboration) was primarily business interest: one pursues one’s own advantage before all else and, simply not to endanger oneself, does not talk too much. That is a general law of the status quo."

Theodor Adorno

As always, freedom languishes, when the people act foolishly, or not at all. Until things get bad enough, and they do something monumentally stupid by giving power to their oppressors in a fit of fear and reckless anger.

"What I worry about is that when problems are not addressed people will not know who is responsible, and when the problems get bad enough — as they might do for example with another serious terrorist attack, as they might do with another financial meltdown — some one person will come forward and say: ‘Give me total power and I will solve this problem.’

David Souter, US Supreme Court Justice

"Most damningly, Connaughton writes about something he calls "The Blob," a kind of catchall term describing an oozy pile of Hill insiders who are all incestuously interconnected, sometimes by financial or political ties, sometimes by marriage, sometimes by all three. And what Connaughton and Kaufman found is that taking on Wall Street even with the aim of imposing simple, logical fixes often inspired immediate hostile responses from The Blob; you’d never know where it was coming from.

In one amazing example described in the book, Kaufman decided he wanted to try to re-instate the so-called "uptick rule," which had existed for seventy years before being rescinded by the SEC in 2007. The rule prevents investors from shorting a stock until the stock had ticked up in price. "Forcing short sellers to wait for the price to tick up before they sell more shares gives a breather to a stock in decline and helps prevent bear raids," Connaughton writes.

The uptick rule is controversial on Wall Street – I’ve had some people literally scream at me that it doesn’t do anything, while others have told me that it does help prevent bear attacks of the sort that appeared to help finally topple already-mortally-wounded companies like Bear Stearns and Lehman Brothers – but what’s inarguable is that Wall Street hates the rule. Hedge fund types or employees of really any company that engages in short-selling will tend to be most venomous in their opinions of the uptick rule...

Similarly, when Kaufman tried to advocate for rules that would have prevented naked short-selling, Connaughton was warned by a lobbyist that it would be "bad for my career" if he went after the issue and that "Ted and I looked like deranged conspiracy theorists" for asking if naked short-selling had played a role in the final collapse of Lehman Brothers. Naked short-selling is another controversial practice. Essentially, when you short a stock, you're supposed to locate shares of that stock before you go out and sell it short. But what hedge funds and banks have discovered is that the rules provide "leeway" – you can go out and sell shares in a stock without actually having it, provided you have a "reasonable belief" that you can locate the shares.

This leads to the obvious possibility of companies creating false supply in a stock by selling shares they don't have. Without getting too much into the weeds here, there is an obvious solution to the problem, which essentially would be forcing companies to actually locate shares before selling them. In their attempt to change the system, Kaufman and Connaughton discovered that the Depository Trust Clearing Corporation, the massive quasi-private organization that clears most all stock trades in America, had come up with just such a fix on their own. Kaufman recruited some other senators to endorse the idea, and as late as 2009, Connaughton and Kaufman were convinced they were going to get the form. "I said to Ted, 'We’re going to change the way stocks are traded in this country.'"

But before the change could be made, Goldman, Sachs issued "data" showing that there was "no correlation" between naked short selling and price movements. When Connaughton asked an Isakson staffer what the data said, the staffer, intimidated by Goldman, replied, "The data proves we're full of shit." Connaughton looked at the data and realized instantly that it was a bunch of irrelevant gobbledygook, even firing off an angry letter to Goldman telling them the tactic was beneath even them.

But Goldman’s tactic worked. A roundtable to discuss the idea was scheduled by the SEC on September 24, 2009. Of the nine invited participants, "all but one" were for the status quo. Connaughton expected the DTCC representatives to unveil their reform idea, but they didn’t:

Afterwards, I went over to [the DTCC representatives] and asked, "What happened?" Sheepishly, and to their credit, they admitted: "We got pulled back." They meant: by their board, by the Wall Street powers-that-be..."

Matt Taibbi, A Rare Look At Why the Government Won't Fight Wall Street

Ten States With Highest Percent of People Who Pay No Federal Income Tax

Just who are these people who don't 'take personal responsibility for their lives' and 'who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it -- that that's an entitlement.'

Red marks the ten states with the highest percentage of non payers of Federal Income Tax. Blue is for the ten states with the lowest percentage.

Many people who pay no Federal income tax do so because they are elderly, students, unemployed, or working people with very low incomes.

Why Do Some People Pay No Federal Income Tax

These people may pay many other taxes including the payroll tax, state tax, sales tax, gasoline tax, property tax, fees, tolls, and so forth.

As you may recall, the move to the Earned Income tax credit and child credits for working parents was part of the move away from welfare enacted during the 1990's as a means of giving people more incentives to work. It allowed them to subsist on low incomes by providing income tax credits in lieu of direct government assistance.

There is no question that the economic collapse has considerably increased the number of people who pay no income tax because of underemployment and unemployment. Additionally the median wage has been stagnant for decades, and the steady increase in inflation has been driving more people into the ranks of the working poor.

One way to impact this would be to enact policies that would increase employment AND the median wage, so people would have more disposable income for tax purposes.

However, this runs counter to the current extractive policies that favor the top few percent through tax loopholes, financialization schemes, and various forms of subsidies achieved through lobbying and the weakening of long standing regulation against frauds, monopolies, insider dealing and cartels.

The wealthiest complain that, on the whole, they pay the most taxes, even though the amount they pay may be a smaller percentage of their income than many ordinary wage earners. This is like the young man who killed both his parents appealing to the mercy of the court because he is an orphan.

One of the reasons they pay the most taxes is that they have gamed the system to take the most income, not by productive activity that enriches everyone, but through fraud and loopholes and influence peddling and government bailouts and subsidies. The growth of a monied interest, wielding inordinate political influence and economic power in the US, is becoming a problem of historic proportions, not seen since the last Great Depression. It is often a precursor of significant social change.

This tension of wealth inequality seems to repeat every couple of generations as reforms are enacted, and then people forget why they were put in place. This will be resolved as well, one way or the other.  The urge to self-destruction is very strong among the monied interests.  Its what they do as a form of revenge, for being born.