Reckless Endangerment

After reading Rex Murphy's comment my first thought was: surely Murphy has read Ayn Rand. I intend to read Reckless Endangerment because it now seems to be moving with the new CBC columnist trend. (I know Murphy's column was in the National Post).
I am not enamoured with this columnist as he squelched me, pity me, at an Author's reading, when I asked a question about then PM Paul Martin which was not poltically correct at the time.

Murphy has become noticeably more conservative in his writing with PM SH. Cheers;

It's a basic axiom of western democracy that 'church and state' must be separated so that the one does not influence the other.

But what has happened is that the financial and political sectors have entwined - and the political sector is being run by the financial..and the financial by the political.

So, the CEO's of Fannie and Freddie are not private lenders, subject to accountability of the market, but are 'friends and supporters' of politicians (eg, Barney Frank and Obama)..who rely heavily on their support for their own political power. And so, this same political power will bail out Fannie and Freddie, and pass bills that increase their power..etc.

The enormous dependency of the political elite on these massive financial corporations means that these two 'sets' of people are inviolate and unaccountable. And their tentacles spread into the MSM, the universities, charities, foundations.. The middle class, aka the Tea Party, is smothered within its power..at least, this megalithic monster is trying to do that.

I still have faith in America and Americans - the Tea Party America.

It was an overwhelming bipartisan vote in Nov 1999 that repealed the Glass-Steagall Act, which had regulated the banking industry since 1933.

That was after nearly two decades of lobbying by Wall Street.

Point being ... that's why the American people have finally understood it's their political class that created the mess.

Fortunately, and give then finance minister Paul Martin some credit, the Canadian banking system continued to insist that you needed a verifiable source of income before you would qualify for a mortgage.

Of course, you'd have to look further back into the American psyche to figure out how the concept of pride of home ownership through hard work morphed into ‘it's part of the American dream that every American has a house.'

A chicken in every pot somehow evolved into a house for every American citizen.

Canada is well on its way to killing Trudeaupia.

It'll take some time yet before the USA begins to unravel its entitlement culture. November 2012 would be a good time to start.

The media and the progressives have been successful up until now to cast all the blame on Wall St. On the other hand it isn’t as simple as blaming it all on Dodd and Frank either, although it is crazy that these foxes in the hen house were allowed to write Financial reform for Obama.

The entanglement of government with big business in the USA has been going since our Liberals and Power Corp de facto ran our country. There is no lack of blame to go around for the US mortgage crisis. But understanding what went wrong to cause the crisis is key to reducing the odds of it happening again. Hopefully Reckless Endangerment helps to get at the root causes.

Specifically let’s understand all the conflicts of interest between the reigning government of the day and financial institutions such as Goldman Sachs and Moody’s (where Buffett held an interest). They are all potentially part of the machinery to help Obama set things up to raise the debt ceiling so that GS can make money issuing more government debt or even worse so that Obama can write Keynesian cheques to poor voters and buy 2012?

In short, the borrowers and the lenders and the credit rating agencies are all conflicted and trust went out the window, it will take years to restore it.

Wouldn’t it be nice if the CBC made a contribution to global politics and had Rex Murphy do an expose on this issue instead of its usual faux scandal attacks on PMSH …..e.g. Afghan detainees.

Very good ET.
May I recommend a book: DiLorenzo's, Hamilton's Curse.

Hamilton wanted extreme centralization, a central bank -- economic nationalism.
Corruption is inevitable.
And Lincoln was Hamilton's boy.

When you talk about the intertwining of the political and money elites, this is exactly what Hamilton wanted. A big increase in the public debt to lock moneyed interests into government, to make the monied elite favour government expanion to ensure its bond interest, and to enable the aggrandizement of the STATE. Jefferson lost, Hamilton won. We live in Hamilton's world!

This is not Rex's cuppa tea. His understanding is highly derivative and superficial.
Note the "greed" giveway and the utterly superficial demonization of Wall Street.
Note the complete absence of any mention of the Federal Reserve whose deliberate and extreme inflation of the money supply made all this possible.

I never blame people who run behind a truck scooping up wads of cash being shovelled off the back. Tho, I 'spose, it's more apt to use the helicopter metaphor here, eh?

What is Rex pining for: a reform of human nature!?

ET: Separation of Church and State. Separation of Money and State to which end central banking needs to be ended and in its stead we need a free market in money.

me no dhimmi - it's not my 'cuppa tea' either but any entanglement of two different areas of power in a nation is dangerous. So, no to church and state, and no to financial and state.

I agree with you against the demonization of Wall Street; that's too simple and slick.

But it's the corruption of power...that entanglement of two different forces-of-power and control over our lives...that's dangerous. That's totalitarianism...

In economics this phenomenon is called rent seeking. When it happens in the free market, the free market eventually takes care of it when businesses fail and better ones come along. When it happens in government what do we get? Bigger government and entrenched monopolies.

The Roman Grain subsidy, Indian affairs, DOT, wheat board, Fannie Mae and Mac... all the same pile. What else is new? When will we learn is the question...

I have to say that Rex missed another bet. None of this would have been possible without the full and complete cooperation of the mainstream media and the business media. -Nobody- called these people to account, nobody even mentioned what they were doing. It was just never, ever mentioned.

Indeed, it was not mentioned to the point that no one even knew what a mortgage backed security was until the whole thing exploded in 2008.

Curious that the Rex Murphy dog did not bark.

When the Glass-Steagall Act (1933) was repealed by a combined congressional vote of 362-57 in November, 199, it's now obvious that both political parties had a hand in this debacle.

In some dusty old tome I once read it is written that when there is lack of vision the people perish.

No where is that axiom more evident than in the US today. When making money means more than creating wealth. When amassing toys takes precedence over having children. When getting degrees is more important than using your brains and talents. When you destroy half the societal foundation (church) then complain that the other half (state) has become too powerful/expensive. When your myopic greed overtakes your better judgement, the people perish. Oh they don't simply drop dead in the street. Their souls rot from the inside out. Fools think themselves wise. Foregoing the Eternal they lust after the empty pea pods found only at the bottom of the hog's slop trough. Fighting over pittance they lose the only thing they can truly call their own. They lose their souls. Free men and free nations are debt free except for the eternal debt of Love.

"But what has happened is that the financial and political sectors have entwined - and the political sector is being run by the financial..and the financial by the political."

This is not new. "Ever so has it been". Western civ still uses what I like to call the "1850's business model": A single individual/family owning a vast private enterprise that subordinates large numbers of individuals to maintain its profit and authority. That in itself has its roots in feudalism and monarchy.

What has changed is the scale. There still is a "single individual/family"(legal definition of corporation as "person"). The entanglement is not mutually exclusive (in practice) and won't likely ever be, no matter how hard we try. Disentanglement tends to lead to accusations of blind bureaucracy interfering with free enterprise, or the opposite, in collusion with it; its a pendulum for which there is no apparent stable middle ground. But scale has made the swing of the pendulum into a steamroller. It probably makes another great depression not only probable, but likely. Big has to become small again to reduce its individual impact, so it can grow big again...:)

set you free - the mortgage catastrophe in the US could not have happened, until Fannie Mae was permitted to buy junk mortgages. This was done in 1994, in a bill written by Barney Frank ( Democrat ) and signed into law by Bill Clinton, Democrat, under the guise of " increasing home ownership ".

The law was implemented at Fannie Mae by James Johnson and Franklin Raines( Johnson was campaign manager of Walter Mondales campaign, Raines worked in the Clinton White House.

As executives of Fannie Mae, they manipulated it's financial statements, resulting in over $100 million in bonuses for Johnson, and over $90 million for Raines. Raines eventually was found guilty of extensive financial fraud, and Fannie Mae was forced to pay a $400 million fine. Of course the taxpayers did not make out nearly so well, as they had to put up the trillion dollars for cleanup of the bad loans, and got the present recession to boot.

It was a massive abuse of the system organized by liberal democrats that produced the meltdown and recession , not the repeal of Glass Steagall.

This abuse

Unfortunately, all we've seen so far is act one. Between the mortgage backed securities and no-performing loans, the banks are stuck with a Tier 1 Capital hit they can't afford. The housing market will stay frozen due to clouded title.

And the class action suits by the institutional investors are just now starting to be filed against the banks that sold this stuff.

This wll end in blood. How could it not?
Alredy we see mob flash crowds. Its the last gasp of every culture thats fallen.
This is a well established pattern where Justice is denied the people who actually produce while the legions of users take control. An elite class always pisses in its own pool till no one can survie except to flee. Police become corupt as do the Judges. The Supoer rich can't get enough, so they swindle thrrew government burdons on the noraml citizan to the point its even useless to try to get a head. Credentalism is the method used Here. In Japan its blood type. Ask the once proud State of California.
When you bar the gates to hope, madness will be your reponse.

Posted by: small c conservative at July 17, 2011 4:40 PM

True. And the repeal of Glass-Steagall made it official.

Another culpable party not mentioned were the rating agencies. When S&P and Moody's rated the sub-prime mortgage backed securities as "AAA", that allowed pension funds and other parties to buy them, which they did with great abandon. It wasn't just Fannie and Freddie buying sub-primes; pension fund managers loved them because they offered higher yields than Treasuries and other corporates (and since many pension fund managers get a bonus based on how they perform against standard benchmarks, getting those higher yields put money in their pockets). The importance of that AAA rating can't be over-stated; most public and many private funds can only purchase AAA securities. With the low interest rates on Treasuries engineered by Alan Greenspan (and later Bernanke), many funds weren't making enough money to meet their goals. The sub-primes seemed like a gift from heaven. (As an aside, Greenspan wasn't really interested in low rates to stimulate the economy; what they did was lower the cost of servicing the US debt. At the same time, the Treasury was calling and retiring 30 year bonds, and shortening the duration of remaining bonds with an emphasis on 2 and 5 year durations, which had much lower coupon rates than the 10 and 30 years.)

The rating agencies were far from independent; they were paid by the very companies offering the bonds for sale. And since no sharp cookie ever woke up saying "I'd like to be a bond analyst" instead of a Wall St wheeler dealer, the ratings agencies tended to be staffed by people who easily swallowed whatever story the gurus of Goldman dreamed up.

So there was a situation where the actual mortgage sellers (Countrywide and WaMu, for example) carried no risk; they packaged their bonds to Wall St almost immediately the papers had been signed, and got paid. The Wall St brokers carried virtually no risk; they were able to keep the best paper for themselves, and packaged the remaining dreck as fast as the printers could churn out a prospectus. (Goldman's client agreement states explicitly that their in-house trading group - the "prop" desk - could and would carry out trades contrary to the advice provided to their clients.) They got paid. The ratings agencies carried no risk; they got paid for their AAA stamp of approval right away, and if the bonds later failed - well, no one has ever sued them for malfeasance.

So the only parties in the deal who carried the bag were the suckers who relied on the honesty and integrity of Wall St banks and the rating agencies - Fannie, Freddie, pension funds, and other investors hungry for yield. Fannie and Freddie were surely culpable, but the others swallowed the snake oil sold by Wall St, who pocketed billions of dollars in profits, and paid only minor fines. Moody and S&P paid no fines at all.

if you think it's bad now, wait until this technology from Cornell University is sufficiently advanced...all you'll see is taxes go up and not remember voting for them to...oh, wait...the lpoc already perfected it years ago....

Time cloaking is possible because of a kind of duality between space and time in electromagnetic theory. In particular, the diffraction of a beam of light in space is mathematically equivalent to the temporal propagation of light through a dispersive medium. In other words, diffraction and dispersion are symmetric in spacetime. That immediately leads to an interesting idea.

Just as its easy to make a lens that focuses light in space using diffraction, so it is possible to use dispersion to make a lens that focuses in time. Such a time-lens can be made using an electro-optic modulator, for example, and has a variety of familiar properties. “This time-lens can, for example, magnify or compress in time,” say Fridman and co.

This magnifying and compressing in time is important. The trick to building a temporal cloak is to place two time-lenses in series and then send a beam of light through them. The first compresses the light in time while the second decompresses it again. But this leaves a gap. For short period, there is a kind of hole in time in which any event is unrecorded. So to an observer, the light coming out of the second time-lens appears undistorted, as if no event has occurred. In effect, the space between the two lenses is a kind of spatio-temporal cloak that deletes changes that occur in short periods of time.

The device has some limitations. The Cornell time cloak lasts only for 110 nanoseconds—that’s not long. And Fridman and co say the best it can achieve will be 120 microseconds.

But this crazy technology is in its infancy, so it’s possible to create longer and larger time distortions. That would be fantastic. Imagine a future where a short war could be hidden in a time bubble and there’s no way for anyone outside to know that it happened.

ET, it's a basic axiom of history that all empires destroy themselves from within and that economic failures are usually at the root of it. When such crises hit, increasingly authoritarian measures are used to arrest the problem, or appear to arrest the problem. And as the authoritarian nature of the state increases, more and more of its citizens become disfranchised from it, further weakening its internal public support.

As for MND's Di Lorenzo, his Hamilton's Curse is mere propaganda by a southern secessionist. As if some kind of decentralized US would lead to utopia. Where lack of centralization leads is Afghanistan. The choice is not between centralization and utopia, the choice is between centralization and anarchy. All systems fail and all systems become corrupt.

No other empire has lasted, why should that of the United States?

bemused - actually, there are people who, in their research, refer to different operative temporal modes (admission, I'm one of them).

You'll find another in the works of Koichiro Matsuno, a bioengineer. You can google..

But your example of a war that no-one knew about because it was trapped in a different time bubble wouldn't occur. That's because these different temporal modes are linked to different spatial modes..and what we actually experience (that war) is linked to local space and 'perfect' or linear time. The key is that the spatial and temporal modes are connected...Hard to explain.

cgm @ 11:46; such is history, but as a Canadian I believe as do many, if not all, of the many, many of my acquaintances who are American citizens; "We the people" changed history.

Coupling this concept with the advent of instant global communications has and will reduce the effect of even democracy indifference.

Whether you believe the establishment of the United States of America was the result of "intelligent design" as many Americans do or the "evolution of civilization" which surely the most diehard Darwinist will accept as a practical evolutionary concept I do not think the U.S.A. will disappear shortly.

Ce'st la vie the "tea party"; Cheers