This is a nice article here, profiling the OWS protests and their deliberate avoidance of raising single people up as leaders.
http://www.alternet.org/story/153223/occupy_wall_street%3A_a_leader-full_movement_in_a_leaderless_time/?page=entire
This echoes an NPR planet money podcast I listened to a few weeks ago that discusses the focus on consensus within the OWS movement, and its parallels with some radical economic ideas.
It will definitely be interesting to see what comes of all of this.
Sunday, November 27, 2011
Saturday, November 26, 2011
Unbelievable...and scary...
I just read this article in the Guardian. If you haven't read it, you probably should.
http://www.guardian.co.uk/commentisfree/cifamerica/2011/nov/25/shocking-truth-about-crackdown-occupy
I have been dismayed by the mainstream media position that the OWS protesters don't have a "platform" or any coherent ideas. Then to support their claim they ask 3 different people one thing that they are protesting, and when each person says a different thing, they stand back and say "see!"
However, if you asked 100 people to list the top 10 reforms they'd like to see, and then charted the frequency of like responses, I bet you would start to see what the platform would look like. And the answer, is that the platform is challenging the status quo in a way that challenges just about every power structure in this country, financial and political.
The extremely disturbing thing from this piece is that the Department of Homeland Security is involved. The department formed by the Bush administration purportedly to protect us from terrorists, is coordinating with mayors across the country and telling them how to quell protests. This is happening in a country that had freedom of speech implanted in our DNA from the first western dissidents to land in what became New England. This implies that DHS is operating under orders from President Obama, because presumably they wouldn't do this without his direction. This is just unacceptable, and if it is true, should outrage anyone that the federal government is funneling its powers to stop protests.
I, personally, wish I could do more. I wish I could just say f*ck it, and fly out to New York, and do whatever I can to help. But I can't. I have a house, a job, and a beautiful family, and their stability is far more immediately important to me.
My hope rests on those younger than I. Those undergraduate or graduate students who are a year or two away from graduating. They are watching this unfold, and are discussing it with their economics professors, with their sociology professors, and their political science professors. And I'm guessing only about 60% of them come out of college and find full employment soon. The rest are underemployed, or unemployed, and they should be furious, smart, motivated, and without the responsibilities that I proudly shoulder as a husband and father.
http://www.guardian.co.uk/commentisfree/cifamerica/2011/nov/25/shocking-truth-about-crackdown-occupy
I have been dismayed by the mainstream media position that the OWS protesters don't have a "platform" or any coherent ideas. Then to support their claim they ask 3 different people one thing that they are protesting, and when each person says a different thing, they stand back and say "see!"
However, if you asked 100 people to list the top 10 reforms they'd like to see, and then charted the frequency of like responses, I bet you would start to see what the platform would look like. And the answer, is that the platform is challenging the status quo in a way that challenges just about every power structure in this country, financial and political.
The extremely disturbing thing from this piece is that the Department of Homeland Security is involved. The department formed by the Bush administration purportedly to protect us from terrorists, is coordinating with mayors across the country and telling them how to quell protests. This is happening in a country that had freedom of speech implanted in our DNA from the first western dissidents to land in what became New England. This implies that DHS is operating under orders from President Obama, because presumably they wouldn't do this without his direction. This is just unacceptable, and if it is true, should outrage anyone that the federal government is funneling its powers to stop protests.
I, personally, wish I could do more. I wish I could just say f*ck it, and fly out to New York, and do whatever I can to help. But I can't. I have a house, a job, and a beautiful family, and their stability is far more immediately important to me.
My hope rests on those younger than I. Those undergraduate or graduate students who are a year or two away from graduating. They are watching this unfold, and are discussing it with their economics professors, with their sociology professors, and their political science professors. And I'm guessing only about 60% of them come out of college and find full employment soon. The rest are underemployed, or unemployed, and they should be furious, smart, motivated, and without the responsibilities that I proudly shoulder as a husband and father.
Wednesday, November 23, 2011
My suggestions for financial regulation...
These have been percolating in me for some time.
Preferably these would be coordinated with the EU...
1) Total compensation of anyone within the finance industry is capped at 50 times the median household wage in the united states ($49,445 per 2010 census). This is roughly $2,500,000 which i think is really generous.
2) Proprietary trading is illegal
3) All bonus income to people in the finance industry, whether in cash, stock, warrants, options, or gains on warrants or options, are taxed at 50%. I think this is fairly generous, considering economic research suggests a 70% top marginal tax rate is better.
4) All people in the finance industry are required to participate in 250 hours a year of community service in a city whose median income is within 20% of the national average.
5) Securitizing debt and selling to off-balance sheet special purpose vehicles is illegal. Debt may be securitized and sold, but only to individuals, corporations with actual operations (whether financial or otherwise), or to non-profits. It cannot be sold to non-operating companies, state, or local governments.
6) The entire congressional committee overseeing banking regulation must turnover 100% every four years and they are prohibited from taking campaign donations from people working in the financial industry.
Some of the predictable responses to this:
"Oh my gosh, if we do this, all those wonderful people in Wall Street will move to Hong Kong and make billions of dollars there and we will lose!"
My retort: A) I'll call your bluff, I think a fairly small proportion of people will do this. It's been shown that barely anyone moves to different states within the US due to tax structures, so I doubt people will move their entire family to another country and B) I don't really care. I would prefer that our country create value by actually building things rather than gambling. Secondly, there was a time when the best and brightest in our country became engineers or researchers. Today they go work on Wall Street or get law degrees and...wait for it....go work on Wall Street. I think we would be better served funneling our best and brightest into other vocations.
"Whatever you come up with, the smart people in Wall Street will find out a way around it"
My retort: that is why it is important that we hire smart people into regulatory bodies and constantly evolve the rules to reign them in. Fool me once, shame on you and all that.
"Community service? What the hell?"
My retort: People who work in the finance community, and for that matter, anyone riding a speculative bubble, get completely detached from the real world. In the real world, people care about each other, and have to make tough choices about how to best allocate their limited resources. I think everyone should donate their time to their community, and I think financiers in particular need to. Then maybe they will develop some sort of conscience and break out of the group-think that dominates the industry.
Preferably these would be coordinated with the EU...
1) Total compensation of anyone within the finance industry is capped at 50 times the median household wage in the united states ($49,445 per 2010 census). This is roughly $2,500,000 which i think is really generous.
2) Proprietary trading is illegal
3) All bonus income to people in the finance industry, whether in cash, stock, warrants, options, or gains on warrants or options, are taxed at 50%. I think this is fairly generous, considering economic research suggests a 70% top marginal tax rate is better.
4) All people in the finance industry are required to participate in 250 hours a year of community service in a city whose median income is within 20% of the national average.
5) Securitizing debt and selling to off-balance sheet special purpose vehicles is illegal. Debt may be securitized and sold, but only to individuals, corporations with actual operations (whether financial or otherwise), or to non-profits. It cannot be sold to non-operating companies, state, or local governments.
6) The entire congressional committee overseeing banking regulation must turnover 100% every four years and they are prohibited from taking campaign donations from people working in the financial industry.
Some of the predictable responses to this:
"Oh my gosh, if we do this, all those wonderful people in Wall Street will move to Hong Kong and make billions of dollars there and we will lose!"
My retort: A) I'll call your bluff, I think a fairly small proportion of people will do this. It's been shown that barely anyone moves to different states within the US due to tax structures, so I doubt people will move their entire family to another country and B) I don't really care. I would prefer that our country create value by actually building things rather than gambling. Secondly, there was a time when the best and brightest in our country became engineers or researchers. Today they go work on Wall Street or get law degrees and...wait for it....go work on Wall Street. I think we would be better served funneling our best and brightest into other vocations.
"Whatever you come up with, the smart people in Wall Street will find out a way around it"
My retort: that is why it is important that we hire smart people into regulatory bodies and constantly evolve the rules to reign them in. Fool me once, shame on you and all that.
"Community service? What the hell?"
My retort: People who work in the finance community, and for that matter, anyone riding a speculative bubble, get completely detached from the real world. In the real world, people care about each other, and have to make tough choices about how to best allocate their limited resources. I think everyone should donate their time to their community, and I think financiers in particular need to. Then maybe they will develop some sort of conscience and break out of the group-think that dominates the industry.
MF Global bankruptcy showing nothing has changed
Brad Delong has a wonkish post about the MF Global bankruptcy here:
MF Global bankruptcy analysis
I heard that MF Global was leveraged something like 40:1. Lets say investors gave them $100. They then went to a bank and borrowed $4,000 to buy debt floated by countries in southern Europe. Well, that failed. Now what is happening is that the people settling the bankruptcy cannot find all of the initial $100. So really their leverage was greater than 40:1.
Why this annoys me, and it doesn't seem like the media is really laying this out, is that this sort of thing is almost EXACTLY what was going on constantly between 2005 and 2008, and is apparently still going on. Highly leveraged, highly speculative bets being placed all over the place with the risk being masked and spread out to regular investors.
The largest single line of credit floated to MF global was securitized and sold off, probably to investors who didn't understand the real nature of what they were buying. So these people who were told that they were buying investment grade bonds are now getting screwed.
The initial investors to MF global are getting screwed, and not in the acceptable way. When you invest somewhere, you risk losing your money if the investment goes poorly. However, it is different when you lose your money because your principle can't even be found. It loos like $1.2B is missing.
What remains to be seen is how screwed John Corzine will be. The FBI is investigating him and the firm to see how badly they went astray of various laws.
MF Global bankruptcy analysis
I heard that MF Global was leveraged something like 40:1. Lets say investors gave them $100. They then went to a bank and borrowed $4,000 to buy debt floated by countries in southern Europe. Well, that failed. Now what is happening is that the people settling the bankruptcy cannot find all of the initial $100. So really their leverage was greater than 40:1.
Why this annoys me, and it doesn't seem like the media is really laying this out, is that this sort of thing is almost EXACTLY what was going on constantly between 2005 and 2008, and is apparently still going on. Highly leveraged, highly speculative bets being placed all over the place with the risk being masked and spread out to regular investors.
The largest single line of credit floated to MF global was securitized and sold off, probably to investors who didn't understand the real nature of what they were buying. So these people who were told that they were buying investment grade bonds are now getting screwed.
The initial investors to MF global are getting screwed, and not in the acceptable way. When you invest somewhere, you risk losing your money if the investment goes poorly. However, it is different when you lose your money because your principle can't even be found. It loos like $1.2B is missing.
What remains to be seen is how screwed John Corzine will be. The FBI is investigating him and the firm to see how badly they went astray of various laws.
Defense spending in context
It's thanksgiving and I don't feel like working today, and I'm getting all worked up over the news.
So the supercommittee failed. The thing that irks me is the response by Leon Panetta, the secretary of defense, who is basically saying if we cut military spending then the world will end, and he won't do it.
http://seattletimes.nwsource.com/html/nationworld/2016829870_militarycuts23.html
This chart shows historical department of defense spending, in constant 2005 dollars, since 2001, with estimates going forward. The estimate out to 2013 is from the white house's budget office, and after that I straight-lined it to 2023. The dark blue line is me phasing in a $500B cut over 10 years. To me, that doesn't look all that severe, particularly since we are removing ourselves from two war zones (Iraq and Afghanistan). Our current spending is over $600B PER YEAR. So this is less than a 10% cut from current levels.
Now from the perspective of a Keynesian, this is not the time to be cutting government spending. This will result in active military and military contractors losing their jobs, and a suppliers of equipment to the military having to cut people and capital investment. I'm ok with that, since we need to always be asking ourselves what the optimal allocation of tax dollars looks like. I think there are better things we can do with our tax dollars than fund a gargantuan military presence that is essentially allowing the rest of the developed western nations to under-invest in their military because they know that captain america will always swoop in. I'd like to stop swooping. I'd like our country to invest in fixing our interstate highway system, modernizing air traffic control, fixing and modernizing our energy grid, our sewer systems, and the thousands of dams in the country that are on the verge of failing catastrophically.
Secondly, who the hell does Panetta think he is! In this country, elected officials pass budgets that tell the federal government how much to spend and what to spend it on. If Panetta doesn't want any checks on his power, maybe he should apply for a job in the Egyptian military.
So the supercommittee failed. The thing that irks me is the response by Leon Panetta, the secretary of defense, who is basically saying if we cut military spending then the world will end, and he won't do it.
http://seattletimes.nwsource.com/html/nationworld/2016829870_militarycuts23.html
Suddenly faced with the increased prospect of such cuts, Pentagon officials said Tuesday that they were pushing back at Congress and not even planning for the spending reductions, which are to take effect in January 2013.The cuts that are to go into affect beginning in 2013 are $500B over 10 years. $500B sounds like a lot of money, but it as usual, no-one in the media wants to put that into context, so here is some:
This chart shows historical department of defense spending, in constant 2005 dollars, since 2001, with estimates going forward. The estimate out to 2013 is from the white house's budget office, and after that I straight-lined it to 2023. The dark blue line is me phasing in a $500B cut over 10 years. To me, that doesn't look all that severe, particularly since we are removing ourselves from two war zones (Iraq and Afghanistan). Our current spending is over $600B PER YEAR. So this is less than a 10% cut from current levels.
Now from the perspective of a Keynesian, this is not the time to be cutting government spending. This will result in active military and military contractors losing their jobs, and a suppliers of equipment to the military having to cut people and capital investment. I'm ok with that, since we need to always be asking ourselves what the optimal allocation of tax dollars looks like. I think there are better things we can do with our tax dollars than fund a gargantuan military presence that is essentially allowing the rest of the developed western nations to under-invest in their military because they know that captain america will always swoop in. I'd like to stop swooping. I'd like our country to invest in fixing our interstate highway system, modernizing air traffic control, fixing and modernizing our energy grid, our sewer systems, and the thousands of dams in the country that are on the verge of failing catastrophically.
Secondly, who the hell does Panetta think he is! In this country, elected officials pass budgets that tell the federal government how much to spend and what to spend it on. If Panetta doesn't want any checks on his power, maybe he should apply for a job in the Egyptian military.
Wednesday, October 26, 2011
Good editorial in Rolling Stone on OWS
I feel like the Occupy Wall Street movement and the related "We are the 99%" is getting some fair representation outside of the conservative echo-chamber. This Rolling Stone editorial is a good one:
OWS's Beef: Wall Street Isn't Winning - it's Cheating
Speaking of the conservative echo-chamber, take a gander at this if you want to see the Heritage foundation completely miss the point.
The Conservative's Guide to OWS
I haven't read the whole thing, but to me it sounds like the two sides are talking past each other, because of the Conservative's insistence of defending the status quo at all costs. The OWS movement is essentially saying "The socio/political/economic system today isn't working. These are the things we want to change." Then this Heritage foundation blog counters "But the changes you suggest don't fit within our current socio/political/economic system, thus what you are asking for is ridiculous."
Kind of like telling the painter "I don't want my house to be red, paint it blue." And the painter responds "I only have red paint buddy, deal with it."
The Constitution is an old document. It has survived extraordinary tests over time, but it could not have foreseen the society we live in today. It is time for some amendments to restore it's efficacy, and to take it back from the 1%.
OWS's Beef: Wall Street Isn't Winning - it's Cheating
Speaking of the conservative echo-chamber, take a gander at this if you want to see the Heritage foundation completely miss the point.
The Conservative's Guide to OWS
I haven't read the whole thing, but to me it sounds like the two sides are talking past each other, because of the Conservative's insistence of defending the status quo at all costs. The OWS movement is essentially saying "The socio/political/economic system today isn't working. These are the things we want to change." Then this Heritage foundation blog counters "But the changes you suggest don't fit within our current socio/political/economic system, thus what you are asking for is ridiculous."
Kind of like telling the painter "I don't want my house to be red, paint it blue." And the painter responds "I only have red paint buddy, deal with it."
The Constitution is an old document. It has survived extraordinary tests over time, but it could not have foreseen the society we live in today. It is time for some amendments to restore it's efficacy, and to take it back from the 1%.
Thursday, October 20, 2011
Can I just say that I am thrilled to see this story...
Can I just say that I am thrilled to see this story:
http://www.businessinsider.com/here-are-the-four-charts-that-explain-what-the-protesters-are-angry-about-2011-10?utm_source=twbutton&utm_medium=social&utm_campaign=bi
I'm thrilled because this is a blog entry by the CEO of and editor of a publication called "Business Insider." Further, it was sent to me in a weekly email I get from LinkedIn with top stories from the week. This isn't on the front page of "Mother Jones," or "Anarchist Weekly" (if that exists), or on a poster held by an Occupy Wall Street protester. This feels like it is finally permeating the consciousness of the main stream.
I know some people can look at this sort of information and feel fine about it. They don't have any moral outrage when faced with these charts. Or maybe they write them all off because they were assembled by partisans. But at least it's getting out there in a way that more people can see and digest the info.
http://www.businessinsider.com/here-are-the-four-charts-that-explain-what-the-protesters-are-angry-about-2011-10?utm_source=twbutton&utm_medium=social&utm_campaign=bi
I'm thrilled because this is a blog entry by the CEO of and editor of a publication called "Business Insider." Further, it was sent to me in a weekly email I get from LinkedIn with top stories from the week. This isn't on the front page of "Mother Jones," or "Anarchist Weekly" (if that exists), or on a poster held by an Occupy Wall Street protester. This feels like it is finally permeating the consciousness of the main stream.
I know some people can look at this sort of information and feel fine about it. They don't have any moral outrage when faced with these charts. Or maybe they write them all off because they were assembled by partisans. But at least it's getting out there in a way that more people can see and digest the info.
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