Yet the system of corruption depends on another factor beyond secrecy, one that is perhaps even more important: impunity. Impunity means that the rich and powerful escape from punishment even when their malfeasance is in full view.
Impunity is epidemic in America. The rich and powerful get away with their heists in broad daylight. When a politician like Bernie Sanders calls out the corruption, the New York Times and Wall Street Journal double down with their mockery over such a foolish 'dreamer.'
The Journal recently opposed the corruption sentence of former Virginia governor Bob McDonnell for taking large gifts and bestowing official favors — because everybody does it. And one of its columnists praised Panama for facilitating the ability of wealthy individuals to hide their income from 'predatory governments' trying to collect taxes. No kidding.
Our major institutions, the ones that should know better, are often gross enablers of impunity.
Jeffrey Sachs, The Age of Impunity, 13 May 2016
"The bureaucrats, politicians, professional enablers, and financial elite are so intricately complicit in, and so benefited by, the broken system which we have now that they cannot talk about the systemic problems that are driving the real economy into a perpetual stagnation. They may talk a good game, and pledge themselves to reform in passing, but quickly turn the conversation to some emotional distraction, some other group of people to blame, some other social cause, anything but the serious subject of substantial financial reform.
They are very much a part of the problem, if not at the heart of it.
They cannot engage in effective reforms because in doing so they would: a) indict themselves and their predecessors and colleagues, and impugn their reputation for competency and/or integrity, and b) would hamper their very lucrative careers in a system that they cannot afford to change or meaningfully reform.
There are very serious consequences for speaking the truth these days. Insiders do not speak ill of other insiders, or they lose access to information and power. This explains much of our current problems.
Perhaps the slogan for these pampered princes and princesses should be 'it may be a rotten, broken system, but I am personally doing just fine by it.'
"A credibility trap is a condition in which the financial, political and informational functions of a society have been compromised by corruption and fraud, so that the leadership cannot effectively reform, or even honestly address, the problems of that system without impairing and implicating, at least incidentally, a broad swath of the power structure, including themselves."
This is the credibility trap.
Jesse, Above the Law: The Age of Impunity and the Credibility Trap, 17 May 2016
Stocks managed to put together the usual Monday rally, without the vanguard of false news of peace. And that rally faded badly in tech, but with the SP 500 holding it a bit higher.
Gold and silver were under a bit of pressure, but proved a little more resilient than normal.
VIX fell.
Price discovery is a fundamental principle of markets in what is often appropriately called 'market capitalism.'
When that process is subverted, malinvestment and harms to productivity and the prosperity of the public become commonplace.
This is what we are experiencing now.
Have a pleasant evening.
