The Institutional Corruption of the Privileged, Or the Corruption of Institutions By the Powerful

Is it the elite institutions that corrupt the privileged by failing to teach them the virtue and necessity of civic justice, or is it a recurring class of fortunate sociopaths who corrupt the institutions of a people with the power and influence of their ill-gotten wealth?

It is an interesting question.

I think it speaks more about a period of time than it does about a particular institution in most cases, although there are certainly institutions whose influence can become rather pernicious under certain philosophies and leadership, at least according to history.

The credibility trap and will to power, when it arises in a generation, has an insidious influence on most social institutions, because the prevailing attitude of those who set the example and control those institutions for an entire nation becomes one of personal greed and the 'law of the jungle.'  And so lawlessness becomes fashionable.

And the public at large at long last has become sick of it, the cynical deception and greed, the wickedness in high places among the privileged in the financial system, the media, the universities, and in the political offices.

This is nothing new.   It is a cyclical thing.   People suffer hardship, and they embrace justice because they have felt the sting of injustice.  And then they get comfortable, and sociopaths and narcissists use their cunning to skirt the law and rise to powerful positions, and a portion of the people are swayed by deceptive slogans and philosophies, and they forget.

Do you find yourself listening to things like this and saying, 'well then, that is how things are, and it is naive to expect anything different.  Better to go along to get along.'   If so, then you have become captive to the foul spirit of the age, and it is time to wake up.

Men go mad in crowds, said Mackay, but they come back to their senses one at a time.

This matter is of interest to all, of course, because until there is meaningful reform of the key systems of our nation there can be no sustainable recovery, and no meaningful administration of justice.

Here is a brief excerpt video of a speech by Ralph Nader, and below that, another speech given at Harvard in 1905 by Theodore Roosevelt.




Here is a link to the entire speech if you have the time to listen to it.

And here is a similar speech at Harvard given in a different age of excess, monopolies, and bad behaviour, covered in gilding.

"The very rich man who conducts his business as if he believed that he were a law unto himself thereby immensely increases the difficulty of the task of upholding order when the disorder is a menace to men of property;  for if the community feels that rich men disregard the law where it affects themselves, then the community is apt to assume the dangerous and unwholesome attitude of condoning crimes of violence committed against the interests which in the popular mind these rich men represent. This last attitude is wholly evil; but so is the attitude which produces it.

We have a right to appeal to the alumni of Harvard, and to the alumni of every institution of learning in this land, to do their part in creating a public sentiment which shall demand of all men of means, and especially of the men of vast fortune, that they set an example to their less fortunate brethren, by paying scrupulous heed not only to the letter but to the spirit of the laws, and by acknowledging in the heartiest fashion the moral obligations which can not be expressed in law, but which stand back of and above all laws. It is far more important that they should conduct their business affairs decently than that they should spend the surplus of their fortunes in philanthropy. Much has been given to these men and we have the right to demand much of them in return.

Every man of great wealth who runs his business with cynical contempt for those prohibitions of the law which by hired cunning he can escape or evade is a menace to our community; and the community is not to be excused if it does not develop a spirit which actively frowns on and discountenances him.

The great profession of the law should be that profession whose members ought to take the lead in the creation of just such a spirit. We all know that, as things actually are, many of the most influential and most highly remunerated members of the bar in every centre of wealth make it their special task to work out bold and ingenious schemes by which their very wealthy clients, individual or corporate, can evade the laws which are made to regulate in the interest of the public the use of great wealth."

Theodore Roosevelt, Address at Harvard University, June 28, 1905

Postnote:   My friend who is a lawyer and a humanist, a wise and honorable man of letters and learning, had this to say:

It is the people, not the institutions.  I have tired of hearing the argument from my friends about how we could not expect anything better from various folks given the perverse incentives.  I cannot accept that.  I know of several people who have failed to take advantage of their good government jobs when they moved to the private sector.  They have done reasonably well, but they have not enriched themselves at the expense of everyone else.  I know of even more who have prostituted themselves.  The institutions may provide the opportunity, but it is the person who acts on it.

Gold Daily and Silver Weekly Charts - The Downward Spiral of Hysterical Dumbness

Gold and silver took their usual price hits this morning in NY, afternoon in London.  Gold managed to climb all the way back to a slight gain while silver remained slightly lower.

It is all about the Federal Reserve and China this week.

The Fed is considering finally getting off the 'zero bound' of interest rates, largely to reload their policy options for the next financial paper asset panic.

China has a real economy that is definitely slowing, and reaping the results of some bad policy decisions of their own.

I hope there is no doubt in your mind that the physical gold market is tight globally, with bullion available for immediate delivery commanding a premium.

We keep hearing different plans being proposed by the Anglo-Americanized government of India to monetize the gold held in their temples, and now, a program to stimulate domestic gold mining.

China, Russia and the Mideast are not relenting in their strong demand for physical gold at these prices, and the Indian officials are doing what they can to please the Western financiers who are struggling to sustain their gold pool.

Even though all the figures I am seeing suggest that this tightness will resolve with a higher market clearing price to increase supply, as you might expect, I would not rule out something incredibly reckless on the part of the Western central bankers, to try and pretend and extend their pointless 'perception management'.

I still have a gut feeling that they have been co-opted and confounded by the bullion banks, that same crews that have been at the center of so many other serial financial criminal actions for the past ten years.

I am studiously avoiding hysterical commentary both pro and con the metals these days.  While it is fun stuff and makes for great headlines, it is not the sort of thing that is constructive to the real objective of protecting our wealth during a time of profound but difficult to predict changes.

I think we will have to watch and see what the facts are, and allow them to lead and modify any of our decisions as best we can, calmly and with a basis in the situation as it is.

Let's see what happens.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - It's All About Monetary Policy In the Financialized Economy

As you may have heard the Fed will decide whether to get off the zero bound this week, or not.

The economy does not call for it. This nonsense about a 'tight labor market' is mainstream media baloney, with the Labor Participation Rate so low, and wage growth stagnant.

No the Fed wants to raise rates as I have said to give themselves some policy room to deal with this latest financial paper assets bubble which they have helped to create, both by commission and omission.

They will most likely raise at either the September meeting this week, or at one of the two occasions they will have before year end.

I suspect strongly that they would like to do two 25 basis points raises before next fall's presidential elections.

The Fed fears the stock and bond markets. That is the only thing that would keep them on the sidelines.

And this is another strong indication of our the financialisation of the economy has co-opted common sense and a regard for the well-being of the public at larger, rather than the financially dependent one percent.

The broader stocks in the SP look like a 50-50 bet, but the NDX is in a formation that is more bullish 'if it works.'

Have a pleasant evening.