Taibbi: The True Story of Mitt Romney and Bain Capital

For a related story read The Federal Bailout That Saved Mitt Romney also from Rolling Stone.

Greed and Debt: The True Story of Mitt Romney and Bain Capital
By Matt Taibbi
August 29, 2012

The great criticism of Mitt Romney, from both sides of the aisle, has always been that he doesn't stand for anything. He's a flip-flopper, they say, a lightweight, a cardboard opportunist who'll say anything to get elected.

The critics couldn't be more wrong. Mitt Romney is no tissue-paper man. He's closer to being a revolutionary, a backward-world version of Che or Trotsky, with tweezed nostrils instead of a beard, a half-Windsor instead of a leather jerkin. His legendary flip-flops aren't the lies of a bumbling opportunist – they're the confident prevarications of a man untroubled by misleading the nonbeliever in pursuit of a single, all-consuming goal. Romney has a vision, and he's trying for something big: We've just been too slow to sort out what it is, just as we've been slow to grasp the roots of the radical economic changes that have swept the country in the last generation.

The incredible untold story of the 2012 election so far is that Romney's run has been a shimmering pearl of perfect political hypocrisy, which he's somehow managed to keep hidden, even with thousands of cameras following his every move. And the drama of this rhetorical high-wire act was ratcheted up even further when Romney chose his running mate, Rep. Paul Ryan of Wisconsin – like himself, a self-righteously anal, thin-lipped, Whitest Kids U Know penny pincher who'd be honored to tell Oliver Twist there's no more soup left. By selecting Ryan, Romney, the hard-charging, chameleonic champion of a disgraced-yet-defiant Wall Street, officially succeeded in moving the battle lines in the 2012 presidential race...

Read the rest here.

Neoliberalism: Rise of the Machine

Miranda: O brave new world that has such people in it!

Prospero: 'Tis new, to thee.

The Tempest Act 5, scene 1

In my reading today I came across this relatively good description of Neoliberalism in economics excerpted below, and its implications for society.  The name for this school is often confusing to some, because it is a school of the right, more akin to political neoconservatism than anything commonly known as liberal.

Here is the schoolbook definition of neoliberalism in economics:

"Neoliberalism is a label for economic liberalizations, free trade, and open markets. Neoliberalism supports privatization of state-owned enterprises, deregulation of markets, and promotion of the private sector's role in society. In the 1980s, much of neoliberal theory was incorporated into mainstream economics."

I have to reiterate my own perspective that economics is not a physical science with rules generally tested by replicable experimentation on the macro level, but is at most a 'social science' that attempts to approximate a complex human reality, like sociology.

Microeconomics 'works' because it is less dependent on the human element, and involves itself with mechanical processes and pricing functions. By 'economics' I am discussing what is called macroeconomics, or the economics not of a discreet process or set of processes called a 'business' but of a broad economy with enormous sets of variables and processes that are far too complex to represent well mathematically.  They most often trim and crush reality to fit some compactly useful model, as in the manner of Nassim Taleb's Procrustean Bed.

When it ventures into the realm of public policy discussions, economics often resembles a belief system very much like a religion.   It is easily twisted to serve the desires and actions of its acolytes while conferring an aura of logic.  But there is almost always some 'leap of faith' made that spans the enormous gulf between the model, its assumptions, and reality.

Economics is only as good as its assumptions, which may in fact be terribly distorted with each step towards a more general application from a simple a priori observation that sounds self-evident at first.  Economics is a veritable cornucopia of non sequiturs encased in obscurantist terminology.

People are reasoning, therefore in their actions they act reasonably. And in the mass of financial transactions that is the market, these rational actors and their actions impute a natural rationality to the market that makes it efficient. Therefore the law of supply and demand and the perfect clearing price of the market, which are central tenets of market efficiency, are not to be interfered with by outside forces, like regulation and government.

And what makes this believable is that this can be true, if people are as good and perfectly wise and uniform in their actions as angels; but they are not, not a one of them, but especially those who are drawn to making their money from money, and especially from speculation in the markets.  This type of activity attracts people from the tails of human behaviour, like most sources of wealth and power.

This assertion  of natural market efficiency sounds good, especially when it is delivered by academics in nice suits with lots of degrees and titles, backed by a multimillion dollar PR campaign that contains well crafted, thinly disguised appeals to more visceral emotions.   But it is a theory that is easily shown to be founded in fantasy to anyone who has driven on a crowded multi-lane highway in rush hour.

And a corollary to this is that the system grades or objectively and perfectly evaluates people on their merits. If one suffers some misfortune or fails to rise 'to the top' of the heap, then this is an objective judgement on them and their value, their character, their worthiness as a human being.   And some would say that this speaks to their status as a fully valued member of that society, to have rights and to vote, to receive food and vital medical attention, and to have families and to procreate.

Because the system is perfectly efficient and rewards the best, the most successful are sanctified by it. I am wealthy, therefore I am among the elect, whether it is marked by an aristocratic title or an enormous bank account.  I am above all the rest, and this proves my value, and provides all the things which are stuffed into my hollowed being.

One can certainly and legitimately use economics, among other things, to support their particular policy arguments to estimate effects. But the listeners should accept this with plenty of skepticism, because the proofs are largely based on statistics, or statistically based models, that are filled with often unspoken assumptions, questionable estimates, and too often critical omissions, both conscious or inadvertent.

But to take an economic model out of its place, and put it above the discussion as policy maker in the manner of a computing machine which spits out the ultimate solutions, to capitalize 'Market' as a type of god on earth, to put that false idol as an unfettered decision-making machine above the individuals of a society and the rule of law, is inhuman, and ultimately a tyranny of the anti-human.

Economics is a tool, in some implementations better than others, but overall not a particularly reliable one.  It is better in 'explaining' than predicting; its explanations are more often rationalizations founded in its malleability and lack of rigor, especially in its use of correlations and assumptions.

The elevation of macroeconomics today reminds one of the perversions of the discoveries in biology that led to the theories of eugenics and the race worship, the mythology of the blood that motivated much of the social thinking and many serious political movements at the beginnings of the twentieth century.   It was when the intelligentsia and the professions, the doctors and lawyers, threw in their lot with the financial and industrial elite that European society began to quickly fall apart.

"I believe that if a canvass of the entire civilized world were put to the vote in this matter, the proposition that it is desirable that the better sort of people should intermarry and have plentiful children, and that the inferior sort of people should abstain from multiplication, would be carried by an overwhelming majority...

Indeed, Mr. Galton has drawn up certain definite proposals. He has suggested that "noble families" should collect "fine specimens of humanity" around them, employing these fine specimens in menial occupations of a light and comfortable sort, that will leave a sufficient portion of their energies free for the multiplication of their superior type."

Source: H.G. Wells, Mankind in the Making

People forget that a whole range of intellectuals and popular thinkers, from George Bernard Shaw to H.G. Wells and a large measure of the economic, professional and political aristocracy of the day, embraced the notion of the natural superiority of certain human types, and the scientific necessity of encouraging their proliferation, and the dominance of the untermensch as not only their right but their obligation.

The medical profession disgraced itself, amongst the first of those in Germany, with their willingness and devotion to implement euthanasia based on these 'scientific principles.' And the elite in the West broadly looked at this movement with quiet compliance and even admiration for the will to make these 'hard decisions.'  It was only when the definition of the master race became increasingly narrow and their methods madly brutal that they recoiled in horror.  But by then it was too late, although many adherents to the basic principles remained sympathetic in England and America.

Science serves at its best, but it does not rule well, except to blind the heart and the mind to madness.

And one might look at these people from the past with revulsion and wonder, but the self-proclaimed ruling class of the West is doing the same thing today, largely by financial means for now. Their rhetoric and reasoning is filled with it, a sense of the obligation of their natural superiority. And if they steal from you, it is a privilege. And if a little of their spoils trickles down, you should be grateful.

There are plenty of believers in the ascendancy of a new master class, as long as they think they are a part of it. You may see them and their ideas on display this week from Brussels and Berlin, to Tampa and Jackson Hole. And they are not members of learning organizations, but protectors and promoters of the status quo.

"There is a lack of critical assessment of the past. But you have to understand that the current ruling elite is actually the old ruling elite. So they are incapable of a self-critical approach to the past."

Ryszard Kapuscinski

If one wishes to have an oligarchy or even a dictatorship based on power and unscrupulous behaviour in which the 'superior,' as one may choose to define them, use the weak as servants and prey, then decide to do so and say it, and hope the people will support it.

But it seems particularly hypocritical and cheap to set up a god of economic science which is elevated to speak these same words as an inspired dictum from above, but which is in reality a false idol carrying the calculated whisperings of its high priests, and then expect the people to bow to it forever without any eventual reaction. 

The Tyranny of Neoliberalism

Unapologetic in its implementation of austerity measures that cause massive amounts of human hardship and suffering, neoliberal capitalism consolidates class power on the backs of young people, workers, and others marginalized by class, race, and ethnicity. Neoliberal capitalism appears to no longer need the legitimacy garnered through its false claim to democratic ideals such as free speech, individual liberty, or justice—however tepid these appeals have always been.  (cf. Glenn Greenwald - Jesse)

In the absence of alternative social visions to market-driven values and the increasing separation of global corporate power from national politics, neoliberalism has wrested itself free of any regulatory controls while at the same time removing economics from any consideration of social costs, ethics, or social responsibility. Such a disposition is evident in the fact that neoliberalism's only imperatives are profits and growing investments in global power structures unmoored from any form of accountable, democratic governance.

The devastating fallout of neoliberal capitalism's reorganization of society, the destruction of communities and impoverishment of individuals and families, now becomes its most embraced mode of expression as it is championed, ironically, as the only viable route to economic stability.

In this widely accepted, yet dystopian world view, collective misfortune is no longer interpreted as a sign of failing governance or the tawdry willingness of politicians to serve corporate interests, but attributed to the character flaws of individuals and defined chiefly as a matter of personal responsibility. In fact, government-provided social protections are viewed as pathological. Matters of life and death are removed from traditional modes of democratic governance and made subject to the sovereignty of the market.  (Don't feed the 'losers' or the undesirables - isolate and then euthanise them, indirectly at first - Jesse)

In this new age of biocapital, or what Eric Cazdyn calls "bioeconomics," "all ideals are at the mercy of a larger economic logic" —one that unapologetically generates policies that "trample over millions of people if necessary." Neoliberalism's defining ideologies, values, and policies harness all institutions, social practices, and modes of thought to the demands of corporations and the needs of the warfare state. They are as narrowly self-serving as they are destructive.  (The individuals, even in their millions, must die if not for the good of the state or the race, then for the good of the market and corporate profits.  - Jesse)

As collective responsibility is privatized, politics loses its social and democratic character, and the formative culture necessary for the production of engaged critical agents is gravely undermined. An utterly reduced form of agency is now embodied in the figure of the isolated automaton, who is driven by self-interest and eschews any responsibility for the other.

As Stuart J. Murray points out, neoliberalism's totalizing discourse of privatization, commodification, deregulation, and hyper-individualism "co-opts and eviscerates the language of the common good." The ascendancy of neoliberal ideology also manifests in an ongoing assault on democratic public spheres, public goods, and any viable notion of equality and social justice.

As corporate power is consolidated into fewer and fewer hands, ideological and structural reforms are implemented to transfer wealth and income into the hands of a ruling financial and corporate elite.  This concentration of power is all the more alarming since both Canada and the United States have experienced unprecedented growth in wealth concentration and income inequality since the 1970s.

Henry Giroux, Days of Rage: The Quebec Student Protest Movement

Chris Hedges On the Current State Of Journalism and Post-Literate Society - The Age of Spectacle

"In our age, the idea of intellectual liberty is under attack from two directions. On the one side are its theoretical enemies, the apologists of totalitarianism, and on the other its immediate, practical enemies, monopoly and bureaucracy. Any writer or journalist who wants to retain his integrity finds himself thwarted by the general drift of society rather than by active persecution. The sort of things that are working against him are the concentration of the press in the hands of a few rich men, the grip of monopoly on radio and the films, the unwillingness of the public to spend money on books...

Wherever there is an enforced orthodoxy — or even two orthodoxies, as often happens — good writing stops. This was well illustrated by the Spanish civil war. To many English intellectuals the war was a deeply moving experience, but not an experience about which they could write sincerely. There were only two things that you were allowed to say, and both of them were palpable lies: as a result, the war produced acres of print but almost nothing worth reading...

The enemies of intellectual liberty always try to present their case as a plea for discipline versus individualism. The issue truth-versus-untruth is as far as possible kept in the background...

The organized lying practiced by totalitarian states is not, as is sometimes claimed, a temporary expedient of the same nature as military deception. It is something integral to totalitarianism, something that would still continue even if concentration camps and secret police forces had ceased to be necessary...

Totalitarianism, however, does not so much promise an age of faith as an age of schizophrenia. A society becomes totalitarian when its structure becomes flagrantly artificial: that is, when its ruling class has lost its function but succeeds in clinging to power by force or fraud. Such a society, no matter how long it persists, can never afford to become either tolerant or intellectually stable.

It can never permit either the truthful recording of facts or the emotional sincerity that literary creation demands. But to be corrupted by totalitarianism one does not have to live in a totalitarian country. The mere prevalence of certain ideas can spread a kind of poison that makes one subject after another impossible for literary purposes.

Totalitarianism demands, in fact, the continuous alteration of the past, and in the long run probably demands a disbelief in the very existence of objective truth. (cf. truthiness - Jesse)

Meanwhile, totalitarianism has not fully triumphed everywhere. Our own society is still, broadly speaking, liberal. To exercise your right of free speech you have to fight against economic pressure and against strong sections of public opinion, but not, as yet, against a secret police force. You can say or print almost anything so long as you are willing to do it in a hole-and-corner way.

But what is sinister, as I said at the beginning of this essay, is that the conscious enemies of liberty are those to whom liberty ought to mean most. The big public do not care about the matter one way or the other. They are not in favour of persecuting the heretic, and they will not exert themselves to defend him. They are at once too sane and too stupid to acquire the totalitarian outlook. The direct, conscious attack on intellectual decency comes from the intellectuals themselves."

George Orwell, The Prevention of Literature, 1946

I feel compelled to say an explanatory word or two about Chris Hedges at this point, about what it is that I 'like' about him, and to answer a couple of inquiries about why some others prefer to ignore him, besides the usual suspects as they say.

As I have said previously, politically I am almost a perfect centrist, in the classical sense of the term. I say this after having taken yet another 'objective test' to place myself on the political spectrum. I do not hold this out as anything of significance other than to say, this is pretty much where I come out, where I am in my thinking at this stage in my life. It is a hard place to be, because one sees the world in shades of grays, in all its complexity, without the comfort of easy forms in black and white. It requires quite a bit more thought and effort than most can afford.

Hedges is a socialist, self-admittedly. And I am not. I am a believer in markets, but in sound regulation of them by an objective, publicly controlled organization, much like a referee or umpire, who transparently enforces the rules which are clear and fair to all. Why? Because people always and everywhere will cheat, some much more readily than others. The meme of naturally efficient markets is a classic 'big lie.'

I believe that widely dispersed, practical rules of organization and decision making within a greater context of general principles are far superior in their effectiveness in the distribution of resources that any sort of central planning, of the right or of the left. As Acton once said, 'no class is fit to govern.' So I like decision making that is broadly based, and subject to compromise. I think the rewards and punishments of the market are an effective stimulus to productive behaviour, provided that the rules do not become slanted by the power of an inequality propagated by cheating.

But I also see that rules alone cannot embody wisdom. There is a need for the conscious hand of humanity to guide the legendary 'invisible hand of the market.'

So I like Hedges, because what he says brings me back to center, even though he is further left. That is how bad things have become in this age of austerity, the willfully immature, and the false bravado of the destructively greedy and ideologically irrational. The western nations have moved and are still moving to the Right, as they did in the 1930's. As corruption enervates the old order, as empires once again crumble, we are re-entering the Age of Spectacle, the time of fire.

And if you stay in place, at the center, you have the false feeling of 'moving left,' relatively speaking. It has become noticeable especially when one compares the Right to their forbears of even ten years ago.

Hedges irritates some of the sacred orthodoxies of the Right without a doubt and to say the least since they are the epitome of intolerance. But he also disturbs the Left, who can be as inflexible and censorious as the Right which they hold in utter disdain for those very qualities. And he tweaks their nose on it, which is doubly irritating for those who are currently not in power.

Hedges has an absolutely wonderful description of this phenomenon of the unseeable center in describing the debates he had with both the new religious right, and the irreligious neo-atheists. The relativity of their extreme views distorts all of their perceptions, so that to both groups, Hedges the religious moderate becomes anathema, for similar reasons of intolerance and vanity.

I think that western society has gone off the tracks, in a loosely cyclical manner, by adopting an unsustainable set of priorities. Rather than forming policies to support the general good of the people, they have instead adopted the objective of the 'greatest good' where that implies the maximization of profit, but for a select few. That was a fateful decision, and I mark it somewhat loosely from 1987 for a number of reasons, not the least of which was the bailout of Wall Street by Alan Greenspan. It had its cultural resonance in the theaters.

"The richest one percent of this country owns half our country's wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation. It's bullshit. You got ninety percent of the American public out there with little or no net worth.

I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now you're not naive enough to think we're living in a democracy, are you buddy? It's the free market. And you're a part of it. You've got that killer instinct. Stick around pal, I've still got a lot to teach you."

Gordon Gekko, Wall Street, 1987

This situation, and history, has a lot to teach us indeed, and I think those lessons have only just begun in earnest.

This historically recurrent principle of the greatest greed rather than the greatest good is killing us. There should be no doubt that it will revert to the mean, a balanced society, once again, but that reversion may be painful, and bloody, if history is any guide. But this too shall pass.

I like to include historical quotes in these pieces, like the extended Orwell quote above, not only to illustrate the situation using powerfully resonant words from greater writers than myself, but also, in a Socratic way, to infuse the quiet understanding that every generation fights perhaps not the same, but similar, battles against ignorance, greed, intolerance, mean-spiritedness, carelessness, lawlessness, fear, hysteria, betrayal, hatred, and apathy.

And so there is hope, always.

We are not facing anything new, anything insurmountable,  but rather the same old enemy, the principalities and powers, the rulers of the darkness of this world, and the ancient spiritual wickedness in high places.  And that is the basic plot line of all human history.

And so we will write our own particular chapter in human history and the book of life, and thereby be remembered by our children and our grandchildren, and perhaps by those who interest themselves in all things human, for all time.





I have to note, most strongly, that the same principle of objectifying the other as a prelude to oppression and the language of violence is a tool of both the extreme right and the extreme left.  Their inflexibility and intolerance of differences in the individual virtually indistinguishable, and in every case is used to justify violence and murder.



I include this clip below in particular because he is describing 'the economic hitmen coming home to roost' which has been a forecast and an image I have used for quite a few years.  And it is happening now, predominantly in parts of Europe, but very much in the US and the UK.  The move on from victim to victim, their ravening hunger insatiable.



As they become more extreme, belief systems tend to resemble their putative opposites more closely, and the center becomes almost imperceptible, if noticed at all and not merely held in complete disdain.

The Road to Serfdom Is Lawlessness: Inside Goldman Sachs

"Giving sophisticated models and fast computers to traders is like giving handguns and tequila to teenage boys. Only complete mayhem can result (and as we saw recently, complete mayhem did result)."

Here is a piece I found interesting from a quant who left Goldman Sachs. It matches what I have seen first hand over the years doing business with the brokers and exchanges, and from friends who joined other high energy Wall Street firms including Lehman and Bear Stearns and Morgan Stanley.

The investment banks and brokers are an adolescent culture, high on macho and low on expansiveness in thinking to put it politely.

I do not have a problem with that, per se. I enjoyed hanging with most of these guys, their odd sense of irreverent cynicism and gallows humour, and the grab-asstic frat life style. It is fun, if you do not take it too seriously. I used to follow an annual race among brokers on the stairs of a large NY skyscraper with interest, a friend phoning in the results. Big money was bet on it. It's a good time, and a means of relieving the tremendous pressures of a high stress profession.

The difficulty is that over the past ten years the financial sector, including the once staid commercial banks, has been absolutely overwhelmed by the hedge fund and investment banking mentality, which in turn has been influencing serious policy discussions in Washington to the detriment of the nation. Most of it had to do with deregulation smearing the boundaries, and opening new opportunities for control frauds through innovation in complexity.

Banks must keep up with their competitors, and if one does it, they all must do it to stay in business. That is why regulation is so vital in this highly competitive sector. One cannot be virtuous as a commercial entity with obligations to shareholders and customers under brothel rules.

Goldman Sachs is primarily a big hedge fund with a lot of political clout and an inside line with the Fed. They have a trading, hedge fund culture these days. It was not always like this. At one time a firm's reputation and their word was everything in a system founded on confidence. With a trading culture it's all about the bottom line, with profit as virtue, and deceit in the name of profit is no vice. You do not wish to have fellows with this mindset running any substantial part of your country.

Quite a bit of that came with their change in status from a predatory trader to mainstream bank in name only, with a predator's instincts and reward system. And this multiplied their potentially negative impact and influence on the entire financial system.

Even worse, their self-centered and short term thinking and clever manipulation of the rules has become the tail wagging the big dog of the country, because the political climate in Washington, and elsewhere, has been largely corrupted by money. And in a bubble economy, the financial centers are where the money is.

Wall Street is like the Gauls (or the Ferengi for the sci-fi fans), ruthlessly obvious and lacking in subtlety, wallowing in the raw and often ostentatious use of amoral power for gain. Washington, on the other hand, tends to effete decadence and studied pretense, the sly and subtle subornation of character and too often the law in the service of power. The mix of these two cultures is an antichrist on the rocks, a deadly cocktail indeed.

I had the opportunity to work with several congressional and even presidential campaigns and administrations starting with Nixon. I don't claim to be an insider, but I have seen a side of things that is transparent to most. I liked that culture as well. I used to go to Washington for the State of the Union message each year, to meet old acquaintances from the Staffs for drinks and chat at Bullfeathers or The Palm to catch up on things, while the big dogs were attending the show. You get the best view of things from the servants, especially if you are benign, an interested non-player.

The deterioration in Washington is evident. These men are not the brightest stars in the firmament, and at times they are downright ignorant of things we might take for granted because they often live a rarefied existence with access to people and information managed by staffs. That is an unfortunate necessity because they are drinking from a firehose of information, and the side effect is a vulnerability to manipulation and well-crafted persuasion.

Their chief ability seems to be to know what to say and to whom, what levers to pull to get something done, making deals, gaining and trading power, and how to get elected. They are great at networking. But this leaves them terribly vulnerable to influence, and group think, and brother, inside the Beltway these days it is all about lawyers, guns (power) and money.

There has always been an element of this, but over the past twenty years, with the whole deregulatory movement, it has become supersized, like a feeding frenzy. I have had the opportunity to discuss this with some older friends in the business and they tend to agree that things have changed.

There are always creepy and seriously warped people who are attracted to the halls of power. I have met a few who were simply chilling. More common are the broken people, with drugs and drink and sex filling the holes in their being, hollowed out by the power and fame that lured them in. But these were always the exceptions.

In government there always had been an element of service to the country and a kind of dignity underpinning the system, a kind of shared camaraderie, that seems to have been tossed in a ditch of expediency and greed, and the lust for power on a mass scale.

What had been the exception is now the rule, at least beneath the urbane, often pietistic, veneer. You can still be tossed out of office in the government for doing things that would still make you a legend on Wall Street.

When the politicos were doing something wrong back then at least they knew it, and they were ashamed of it, despite the usual bluff and bravado. A stiff conversation with a federal prosecutor would make a Congressional staffer's blood run cold. Now it is more like business as usual, and even getting caught is not all that bad, given the current trend to bipartisan professional courtesy, mavericks excepted.

Greed is indeed the greatest good, the fatal flaw behind the decline of the 'me generation.'

The law, that much maligned government of regulations and restraints, abused and fallible as it may sometimes be, is the bulwark of society, and often the only thing standing between the people and packs of ravening wolves.

Those who would tear down the law in some misguided pursuit of reform, or of an adolescent anarchy or utopia of 'no rules' at all, might find it hard to stand when the cold winds of avarice and tyranny of power blow across the land, with no laws to stop or restrain them. The madness serves none, consuming all.

"Equal protection" under the law is the best safeguard that the average person enjoys. Remove the law and you remove the protection, and it is every man for himself, and the individual is irrelevant.

This is why the Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained recovery. And underpinning all of this is the integrity of the regulatory and law enforcement process, and a serious pass at campaign finance reform and limitation of the power of large corporations and organizations to buy influence with other people's money.

The story of the 21st century will be the struggle of the individual versus the organization, the machine controlled by the elite few. A cyclical theme no doubt, but the powerful few seem to become more efficient in their promotion of tyranny on each iteration.

adgrok
Why founding a three-person startup with zero revenue is better than working for Goldman Sachs
By Antonio
23 Jul, 2010

I joined Goldman Sachs in 2005, after five flailing years in a physics Ph.D. program at Berkeley.

The average salary at Goldman Sachs in 2005 was $521,000, and that’s counting each and every trader, salesperson, investment banker, secretary, mail boy, shoe shine, and window cleaner on the payroll. In 2006, it was more like $633,000.

In the summer of 2005, I took one look at my offer letter and the Goldman Sachs logo above it, another look at my sordid grad student pad, and I got on a plane to New York within the week. I packed my copy of Liar’s Poker for reference.

My job on arrival? I was a pricing quant on the Goldman Sachs corporate credit trading desk1. We traded credit-default swaps, both distressed and investment-grade credit, and in the bizarre trading experiment assigned to me, the equity part of the corporate capital structure as well.

There were other characters in this drama. The sales guys were complete tools, with a total IQ, summing over all of them, still safely in the double digits. The traders were crafty and quick-witted, but technically unsophisticated and with the attention span of an ADHD kid hopped up on meth and Jolly Ranchers. And the quants (strategists in Goldman speak)? Mostly failed scientists (like me) who had sold out to the man and suddenly found themselves, after making it through two years of graduate quantum mechanics, with a bat-wielding gorilla peering over their shoulder (that would be the trader) asking them where their risk report was.

Wall Street is inward-looking and all-consuming. There exists nothing beyond the money game, and nothing that can’t be quantified into dollars and cents...

Note to Antonio. I have been where you are now. Watch out for the venture capitalists, and who they attempt to place on your board. They will steal your company and beggar your common shareholders if you allow them, and clap you in financial chains. Keep a close eye on cashflow and burn rates, because if you ever need second tier financing, you're done unless you are very, very lucky. Sandhill Road is the new Tortuga.

A Pox on Both Their Houses: A Failing Presidency and a Country Adrift

An alternative title for this might be, "Of Rats and Sinking Ships."

Larry Summers is reportedly leaving later this year, and Andrew Cockburn reports that Rahm Emanuel, Obama's acutely verbal Chief of Staff is said to be looking for other employment, preferably a high paying job on Wall Street with little work and enormous perks and privileges.

This is the sort of thing that one would expect to be happening at the end of the first term of a President, five years into the job. Perhaps that event is being moved up because Obama is likely to be a one term president, in one of the most spectacular flame outs from high, and in retrospect misplaced, expectations since the Segway.

Obama was clearly the wrong man for the job. He might have been the kind of reformer for the good times, when you really do not need him, dedicated to getting the various squabbling parties to hold hands and sing Kumbaya. Unfortunately, a crisis demands leadership, and Obama is all fluff in that department. Leaders lead, they do not hold other people up as the leaders, and take them to task for their failure to do the risky things when their leader hides behind a non-existent consensus. I hate to say this, but both Clinton and W were far superior leaders, unfortunately with deeply flawed visions and moral compasses.

The Democrats are most likely looking at a November massacre in the election, unless some event occurs to pull the nation together such as an externally focused crisis.

The problem of course is that if one looks at the alternatives, there are none too attractive in the Republican Party which is also deeply tarnished with the financial corruption that actually came to full flower under their stewardship with George W. And part of the reason that legislation for reform languishes is that the Republicans are openly in the camp of the corporatocracy, and obstructing any nascent reform attempts from a small core of independent minded legislators.

Is it time for a Third Party as some have suggested? Maybe, although it seems more likely to me that it will take a much greater degree of pain and collapse for America to wake up and reform its system, from the Media to Washington to Wall Street. Splinter parties at the extremes appear probable in the short term.

And then who knows what might be slouching towards Pennsylvania Avenue, its moment come round at last?

CounterPunch
As Rahm Eyes Exit
Financial Reform Bids Collapse Into Farce
By ANDREW COCKBURN

Word from the White House is that Rahm Emanuel is still fishing around for a lucrative berth in the financial industry (“money first, then the deal” he reportedly barked at a recent industry caller discussing business possibilities in the private sector) so we needn’t hold our breath too hard waiting for the administration to bring law enforcement, or even its emasculated sibling “regulation reform,” to Wall Street anytime soon. Not that the banks have ever really felt threatened, given the conntemptuous ease, which I described here last December, with which they were able to gut the reform bill spawned last in the House of Representatives.

The retiring and long since neutered Senate Banking Committee Chairman Christopher Dodd has his own meek version of a financial reform program currently before the Senate, but this came pre-gutted on the issue of a Consumer Finance Protection Agency dedicated to protecting us from banker loan-sharks. Dodd’s proposed legislation consigns the putative CPFA to the bowels of the Federal Reserve, with a right of veto over any unappealing consumerist initiatives granted to a “Financial Stability Oversight Council” made up of banker-friendly regulators...

Read the rest here.

The Bankers Summit and Some Significant No-Shows

Some White House Banking summit.

A one on one with Jamie Dimon and a few second tier, TARP-bound moneylenders.

John Stumpf of Wells Fargo is running late but surely on his way. Tied up signing some last minute foreclosures. The opening topic must be how to spin 26% credit card interest rates as a consumer benefit.

Ken Lewis of Bank of America is there. LOL. Trying to pick up an unemployment check and cop a plea.

It appears that Goldman's Lloyd Blankfein, John Mack of Morgan Stanley, and Dick Parsons of Citgroup will not be able to make the meeting today with The One regarding executive pay and the failure to lend by the Wall Street Welfare Queens.

The excuses are not the usual: end of year performance reviews, too busy with the office redecorators, trying to settle the tab at Scores, on hold with the Neiman Marcus trophy-wife and office-chippy department, making plans to fix the Superbowl.

The boys were flying commerical to show their solidarity with the homeless people who fly coach, and are encountering traffic delays on their flights out of New York to Washington. Reagan National Airport is closed by fog. It doesn't get much more symbolic than that. Are Dulles and BWI are closed too? No. Jeez, these guys don't bother with alternate plans to visit the White House?

"We're sorry Timmy, but frankly the President DID call him a 'fat cat' last night on 60 Minutes. Did you really expect our guy to show up for coffee today like nothing happened? Larry had assured us that he knows his place. Besides, it worked better when he came up to see us the last time anyway."

It would be cool to be sitting at the gate with Lloyd. Think he is schmoozing there with the people? "Bagels and coffees for the terminal, on me."

Jamie did not condescend to act the plebe, and flew down in his corporate jet. And we do think Vikram was particularly ballsy in sending a delegate, executive figurehead, with a note that he is too busy negotiating the repayment of TARP in order to secure those year end bonuses for the troops.

Note to Lloyd and John and Dick, if you are traveling commercial from NYC to Washington in the winter, you take the train. And if flying you leave early or come down the night before, with dinner at The Palm. I recommend the peas and onions as your side. Carville hangs at the bar sometimes. He's a fun kind of guy.

It is always iffy when flying into National in the winter, except on Oligarch Express. Even Senators know that, and their feet barely touch the ground when they walk.

The Wall Street boys don't bother to show up for a command performance at the White House on some lame travel excuse, except for house banker and Treasury Secretary to be Jamie. Lloyd doesn't need to be Treasury Secretary because he already has one.

This is too good. You can't make this stuff up.