Bill Black — How Immoral are Laissez Faire Ideologues? Ask about Drones.

Capitalism prioritizes capital formation and accumulation over labor (people) and land (the environment) because growth. this results in negative externalities that are socialized "for the good of the system" ( read those that own and control the system).

The issue of drone is indicative but actually minuscule in comparison to the effect of prioritizing economic liberalism, really bourgeois liberalism, over social and political liberalism, and favoring capital over labor and land. Human lives are priceless, and environmental degradation runs into the trillions.

This is not even genuine economic liberalism owing to market asymmetries that bias the working of markets aa information transfer systems, warping the signal. For example, socializing negative externality results in market price not reflecting true costs.

New Economic Perspectives
How Immoral are Laissez Faire Ideologues? Ask about Drones.
William K. Black | Associate Professor of Economics and Law, UMKC

See also

AP News
Travelers face chaos as drones shut London’s Gatwick Airport

Gregory Katz And Jill Lawless

T.J. Coles — Out of Control: A Brief History of Neoliberal Deregulation in the USA

Backgrounder. Using government capture to favor special interests ("capital").

Truthout
Out of Control: A Brief History of Neoliberal Deregulation in the USA
T.J. Coles, Clairview Books | Book Excerpt

Bloomberg — Big U.S. banks could see profit jump 20% with deregulation

The deregulation winds blowing through Washington could add $27 billion of gross profit at the six largest U.S. banks, lifting their annual pretax income by about 20%.

American Banker
Big U.S. banks could see profit jump 20% with deregulation

Bloomberg

Pam and Russ Martens — Wall Street’s Latest Plot: Blame the Financial Crash on the French

Wall Street appears to have a plan to get the deregulation it wants by pinning the start of the epic financial crash of 2007-2010 on (wait for it) the French, rather than its own unbridled greed, corruption and toxic manufacture of junk bonds known as subprime debt that it paid to have rated AAA by ethically-challenged and deeply conflicted rating agencies. (The same rating agencies that are getting paid by Wall Street to rate its debt issues today.)...

Wall Street On Parade
Wall Street’s Latest Plot: Blame the Financial Crash on the French
Pam Martens and Russ Martens

Nafeez Ahmed — Age of Empire

In early December 2016, the British government published its new Annual Report on the UK National Security Strategy adopted in 2015. The document was, in many ways, a blueprint for a new form of empire. In the name of defending national security, it unveiled Britain’s plan to build a “permanent” military presence in the Gulf to defend its access to “the flows of energy and trade in the region”; deploy more troops into Eastern Europe, near Russia’s border; and promote the sale of “defence equipment and services from UK-based suppliers to overseas partners and allies”.

But perhaps the most Orwellian element of the document was its celebration of Britain’s role in delivering economic aid to developing countries, to lift them from poverty. It announced that the government had set up a new £1.3 billion Prosperity Fund to enable the UK “to deepen relationships with countries across the globe”. The fund uses Official Development Assistance resources to promote “reforms” in support of “economic growth in development countries”. This will reduce poverty by creating “opportunities for international business, including UK companies”.

Critics point out that this is really just a euphemism for making the world safe for British corporations. The reforms tied to British aid fit well with neoliberal capitalist orthodoxy: privatisation, deregulation, and liberalisation of the economy to open it up to foreign investment, while lowering taxes and decreasing state spending.

As British historian and development expert Mark Curtis has shown in an extensive report for the NGO War on Want, such British overseas aid policies have done little to resolve poverty, but instead have carefully cultivated corporate power. To date, 101 mostly-British companies — like Shell, Glencore and Tullow Oil — now control over $1 trillion worth of Africa’s oil, gold, diamond, coal, and platinum....

Same primitive accumulation, expropriation and enclosure, and exploitation.

The emergence of capitalism in England, for instance, was an inherently violent and repressive process. Over 400 years ago the seeds of English capitalism were sown amidst mass evictions of peasants from public lands. Formerly landed peasants, who were compelled by threat of force to paytribute to local lords, now found themselves a landless proletariat, with no choice but to sell their labour power for wages to the same people who had robbed them. This process of enclosure gradually enforced a new social condition — the dispossession of people from access to the sources, means, and technologies of production. This was, and still is, the fundamental basis of modern capitalism.

The dispossession of land inside England accelerated in tandem with the expansion of the British Empire along similar lines. Britain’s seizure of India began with the conquest of Bengal in 1757 and continued under the East India Company for more than five decades. Once the company was displaced by the British state, expansion continued, especially into Northwest India — soon followed by the scramble for Africa, and penetration of the Middle East....

Corporate and government land grabbing from indigenous communities is now at an all time high. A study by the Washington DC-based Rights and Resources Initiative (RRI) finds that despite using and inhabiting up to 65% of the world’s land with a population of around 1.5 billion, indigenous peoples and local communities only have legal rights to 18% of it....

Weapons of Reason
Age of Empire
Nafeez Ahmed

Why Deficits Hurt Banking Profits — Sharmini Peries interviews Michael Hudson

The post is actually about the establishment push to establish a market state through privatization and deregulation in order to extract rents by replacing what is left of the FDR New Deal welfare state that publicly provides social benefits through the government's policy space as a currency sovereign.

While Hudson doesn't go into the history prior to Bill Clinton, this push was initiated by Jimmy Carter's fiscal conservatism, accelerated under Reaganomics, was amplified by Bill Clinton under the aegis of Robert Rubin, cemented in place by Alan Greenspan, and continued by Bush and Obama. Now Trump is setting about advancing the job dismantling the remnants of New Deal.

The aim of neoliberals is to prevent governments from spending money to revive growth by running deficits. Their argument is: “If a government can’t run a deficit, then it can’t spend money on roads, schools and other infrastructure. They’ll have to privatize these assets – and banks can create their own credit to let investors buy these assets and run them as rent-extracting monopolies.”

The bank strategy continues: “If we can privatize the economy, we can turn the whole public sector into a monopoly. We can treat what used to be the government sector as a financial monopoly. Instead of providing free or subsidized schooling, we can make people pay $50,000 to get a college education, or $50,000 just to get a grade school education if families choose to if you go to New York private schools. We can turn the roads into toll roads. We can charge people for water, and we can charge for what used to be given for free under the old style of Roosevelt capitalism and social democracy.”

This idea that governments should not create money implies that they shouldn’t act like governments. Instead, the de facto government should be Wall Street. Instead of governments allocating resources to help the economy grow, Wall Street should be the allocator of resources – and should starve the government to “save taxpayers” (or at least the wealthy). Tea Party promoters want to starve the government to a point where it can be “drowned in the bathtub.”

But if you don’t have a government that can fund itself, then who is going to govern, and on whose terms? The obvious answer is, the class with the money: Wall Street and the corporate sector. They clamor for a balanced budget, saying, “We don’t want the government to fund public infrastructure. We want it to be privatized in a way that will generate profits for the new owners, along with interest for the bondholders and the banks that fund it; and also, management fees. Most of all, the privatized enterprises should generate capital gains for the stockholders as they jack up prices for hitherto public services.”...

Michael Hudson
Why Deficits Hurt Banking Profits

Sharmini Peries interviews Michael Hudson

Sam Ben-Meir — The Failed Dogma of Neoliberalism

During her political prime in the 1980s, Thatcher said she was out to change the soul, to change the conceptual universe in which people live, and her idea that “there is no alternative” (TINA) became so deeply embedded in our psyches and in our consciousness that it seems we could no longer imagine that there is an alternative to capitalism.

The neoliberalism of Thatcher was characterized by deregulation (especially in the financial sector), the suppression of labor, attacks on trade unions, and the privatization of state-owned corporations. Both Thatcher and Ronald Reagan oversaw the shift toward a more laissez-faire version of capitalism, which in effect reversed the post-1929 movement towards increased state-intervention and social-democratic capitalism.

It is long overdue that we lay this TINA concept to rest.…

Consortium News
The Failed Dogma of Neoliberalism
Sam Ben-Meir | Professor of Philosophy, Eastern International College

Bill Black — “Liberal” Economists Cheered the New Democrats’ Deregulation of Finance

Bill excoriates Clintonism and so-called Democratic "liberals."

New Economic Perspectives
“Liberal” Economists Cheered the New Democrats’ Deregulation of Finance
William K. Black | Associate Professor of Economics and Law, UMKC

Diane Coyle — Capitalism and the law

Short review of The Great Leveler: Capitalism and Competition in the Court of Law by Brett Christophers. 

I greatly admired his previous book, Banking Across Boundaries, and this new one has the same compelling combination of analysis and historical detail. The theme this time is capitalism as a constant balance between competitive markets and market power, these two forces applied by laws and their enforcement. Anti-trust laws are enacted or enforced with greater rigour when monopoly power gets out of hand. Intellectual property laws are strengthened after periods of cut-throat competition. In contrast to those – often Marxist – writers who have seen a single direction of travel toward ever-greater monopoly power, Christophers argues here that there is a cycle. He cites Kalecki, but also Marx’s dialectics: “Monopoly produces competition, competition produces monopoly,” Christophers quotes Marx as writing in a letter of 1846.…

Christophers ends with Lenin’s prediction that the future is capitalist monopoly on the international stage, monopoly imperialism. I have more confidence in self-correcting mechanisms. We will see.

The Enlightened Economist
Capitalism and the law
Diane Coyle | freelance economist and a former advisor to the UK Treasury. She is a member of the UK Competition Commission and is acting Chairman of the BBC Trust, the governing body of the British Broadcasting Corporation

John Komlos — 15 Curses of Unregulated Markets

Markets don’t work the way economics textbooks say they do. While I do believe in the power of markets to cultivate social good, they have many natural limitations that any credible scientific approach must recognize for public policies to be effective. Listed here are fifteen curses—yes, I call them curses—that markets must deal with to work as the textbooks say they do.

Evonomics
15 Curses of Unregulated Markets
John Komlos | Professor Emeritus of Economics and of Economic History at the University of Munich 

David Dayen — Greenspan Imagines Better, Alternate Universe in Which Greenspan Was Not Fed Chair

Alan Greenspan, the policy failure whose tenure at the Federal Reserve helped create the conditions for the largest financial crisis in nearly a century, was inexplicably given a major newspaper platform on Monday to opine about regulation, which he ideologically abhors.

So it came as a surprise to read the second paragraph of his Financial Times op-ed, wishfully describing an alternative history of 2008, if only there had been robust regulation.

“What the 2008 crisis exposed was a fragile underpinning of a highly leveraged financial system,” Greenspan writes. “Had bank capital been adequate and fraud statutes been more vigorously enforced, the crisis would very likely have been a financial episode of only passing consequence.”

Greenspan must have temporarily forgotten that he had the power to accomplish both of these priorities as Fed chair.

Before the Consumer Financial Protection Bureau, the Fed had primary responsibility over consumer protection, including rule-writing, supervision, and prohibition of unfair and deceptive practices. They even were charged with resolving consumer complaints.

Greenspan famously did none of this during the inflating of the housing bubble from 2002 to 2006, instead extolling the virtues of adjustable-rate loans and mortgage securitization, even as fellow Fed governors and the FBI publicly warned about looming fraud. The responsibility for vigorously enforcing fraud statutes, then, fell to Greenspan, and he ignored it.…

The wizard behind the veil has no clothes.

The Intercept
Greenspan Imagines Better, Alternate Universe in Which Greenspan Was Not Fed Chair
David Dayen

Yves Smith — How Oligopolies Undermined Competitiveness and Produced Inequality

More on the neoclassical myth of the free market that provides the foundation for neoliberalism, neo-imperialism, and neocolonialism. Ordinary Americans were OK with neo-imperialism and neocolonialism when they were among the beneficiaries through trickle down. Not they are now noticing that they themselves are becoming marks. It always comes down to asymmetrical power, which the mob's crony-run propaganda machine in turn always suppresses.

Naked Capitalism
How Oligopolies Undermined Competitiveness and Produced Inequality
Yves Smith

Marshall Auerback — The Financial Crisis Of 2008 Can Be Laid At The Door Of The Clinton Administration

The usual hagiography, particularly amongst Democrats, is that the US got seriously off track during the Bush (II) presidency after the golden years of prosperity under the Presidency of Bill Clinton. That myth has afflicted much policy making amongst the party today, notably within the Obama Administration, which hired a lot of the ex-Rubinites responsible for creating the mess.

And there’s a lot more evidence that has come out to support the view that Clinton’s crew truly was “the wrecking crew” when it came to dismantling many of the protections that had afforded much financial stability to the US for much of the post World War II era....

Macrobits by Marshall Auerback
The Financial Crisis Of 2008 Can Be Laid At The Door Of The Clinton Administration
Marshall Auerback

Seems We Can't Blindly Trust Either Political Party - Bill Clinton Was As Bought As They Come (Bush & Obama ... & us too?)

   (Commentary posted by Roger Erickson)



Maybe even more bought than Dubya? And what does that portend about who
REALLY owns Obama?

What'd Mark Twain supposedly say? "It is easier to fool people than to convince them that they have been fooled."

Picking up an theme once discussed in comments at Warren Mosler's blog, do we have a simple class war between two industry segments?

DNP - bought by the banking (& entire F.I.R.E.) industry? 

GOP - bought by the oil & F500 & MICC & general mfg industry?

While the MiddleClass is kept divided & conquered, bickering over which serf-master to capitulate to? Worse, are these two lobbies now colluding, to permanently own the US Middle Class?

Can we at least get a 3rd party (software industry? Labor/MiddleClass?) or no parties at all? Instead, just distributed democracy, like during George Washington's 2 original terms?

Seems we can't blindly trust either political party, and need to set our sights on trusting our distributed electorate ... and what's left of our democracy.

If this concept resonates with you, then read on. The following is posted, with permission from Chuck Spinney. It may appear later on his personal blog.

*****

---------- Forwarded message ----------
From: Chuck Spinney

Attached herewith is an important report in the Guardian. It places the deregulation of Wall Street during the Clinton Administration into a particularly smarmy perspective by examining documents just released by the Clinton library. Note the connections to players now in the Obama Administration.

This report paints a revealing albeit depressingly familiar portrait of how the iron triangle of individuals and money moving between government executive positions, and private sector, together with friendly legislators in Congress encourages corruption that leads ultimately to taxpayer bailouts. Consider please the following:
1. Note how the memos make it look like President Clinton was being rushed, implying a certain degree of passivity and manipulation by advisors. But before taking this at face value, bear in mind, Clinton was never a passive actor; quite the opposite, he was a highly energetic president. He set the tone, and he picked these advisors; he stayed with them; and he passed many of them on to President Obama.

2. Note that the repeal of Glass Steagall -- Clinton’s signature deregulation of the financial markets and perhaps the major contributor to the rise of speculation that culminated in 2008 crash -- was not a last minute affair. In fact, the memos show effort to repeal reaches bat to at least in February 1995 and May 1997 and the reference to eating the paper after you read it suggests a degree of malevolent cynicism.

3. Note the tight connection between the repeal Glass-Steagall and the pending Citigroup merger with Travelers Group, and particularly, the central the role played by Secretary of the Treasury Robert Rubin in the promotion of the of that repeal. Rubin was Secretary of the Treasury from 11 January 1995 to 2 July 1999 -- the period covered by the memos contained in the Guardian report.

4. Finally, the reader should note that four months after leaving the Treasury Department, in Oct 1999, Rubin joined Citigroup. Here is a contemporary portrait painted by a 27 October 1999 report in the New York Times,

“Mr. Rubin, 61, a former top official of Goldman, Sachs & Company, said yesterday that he had joined Sanford I. Weill and John S. Reed, the chairmen and chief executives Citigroup, in what Mr. Reed described as a ''three-person office of the chairman'' that will oversee what has become the first true American financial conglomerate since the Depression.
The appointment came less than a week after the Clinton Administration and Congress agreed on a compromise bill that would overhaul the laws that regulate the financial industry, a measure that removes many of the restrictions preventing banks, securities firms and insurance companies from buying one another or engaging in one another's businesses. Both Mr. Rubin and Citigroup strongly supported the bill, which would greatly benefit the company. Mr. Rubin said he played a role in arranging the final compromise that will probably lead to the repeal of the so-called Glass-Steagall legislation. But he said that had nothing to do with his decision to join the company.”

By 2007 Rubin was Chairman of Citigroup. And in 2008, nine years after the repeal of Glass Steagall, the worst financial crisis since the Great Depression hit Wall Street to trigger the worst and longest recession since the Great Depression. That crisis, among other things, collapsed the stock markets, destroyed retirement nest eggs, wrecked the housing markets, and put millions of people out of work — and our nation has still not recovered. Then the “best government money can buy” added insult to injury by bailing out of the banks that created the mess, while ducking the issue of re-regulating their behaviour with anything close to proven power of defunct Glass-Steagall Act. Some observers are now warning the government’s failure to reign in speculative behaviour is setting the stage for yet another crash (e.g., here and here)

And what about Rubin’s role? According to information in Wikipedia, on 3 December 2008, shortly after the financial collapse, the Wall Street Journal characterized Rubin’s mix of oversight and management responsibilities at Citigroup "murky." In an interview with the Journal, Rubin defended himself, saying: "I think I've been a very constructive part of the Citigroup environment." But, the Journal reported that Citigroup shareholders suffered losses of more than 70 percent since Rubin joined the firm and that he encouraged changes that led the firm to the brink of collapse.[23] Investors filed a lawsuit in December contending that Citigroup executives, including Rubin, sold shares at inflated prices while concealing the firm’s risks. A Citigroup spokesman said the lawsuit was without merit.[24].

But what happened to Rubin personally? According to a 20 September 2012 report in Bloomberg, Rubin received a total compensation of $126,000,000 from Citigroup between 1999 and 2009. Among other things, the former eagle scout is now co-chairman of the prestigious Council on Foreign Relations.

Chuck Spinney   The Blaster

---------------------

Wall Street deregulation pushed by Clinton advisers, documents reveal

Previously restricted papers reveal attempts to rush president to support act, later blamed for deepening banking crisis

Matthew Stoller — When You Say “It’s the Economy” You Are Buying Into Deregulation

Liberals don’t remotely understand their own history, they are intentionally misled by their leaders so they misplace blame for bad governing decisions. Take financial deregulation, a central tenet of modern governance. The main point of financial deregulation, which happened from the late 1960s to the early 1980s, wasn’t to shift wealth upwards, though that was a consequence that later became central. It was to get the public to stop believing that the government could do anything about the economy....

That line of thinking among the natural opponents of deregulation is basically the victory of the bad guys right there. The people who run our financialized state want you to think the economy is a thing with agency, a thing beyond human or political control. They want you to believe that in the face of this God, the President is essentially powerless. But that’s false. It’s all a choice. The government is intimately involved in all aspects of markets and economics, it is inherent. Who to prosecute, who to subsidize, who to meet with, which rules to pursue, what to sell, etc. It’s all statecraft. Deregulatory statecraft is just about making the natural constituencies of social justice believe that there’s nothing to be done, except on the margins.

Which is crazy....

Observations on Credit and Surveillance
When You Say “It’s the Economy” You Are Buying Into Deregulation
Matthew Stoller

The real problem: Democrats/Progressives, embrace neoliberalism and free market fundamentalism

Good post over at Daily Kos that talks about how Democrats/Progressives, etc have really been the enablers of Republican free market fundamentalism because Dems, themselves, believe in it, too!

All of us here in the MMT community see this and understand this and have been frustrated by it for so long, however, until we get a Democratic Party or a Progressive movement that once and for all casts off its neoliberal bindings then nothing will change.

Check out this paragraph...

"The problem is that the neoliberals are still firmly in control of the Democratic Party. No Democratic leader is willing to admit the idea of having free-trade agreements with 3rd world nations means a race to the bottom with wages. No Democratic leader is incline to propose rolling back 40 years of disastrous deregulation. Instead Democrats push things like legalized gay marriage, which while being a positive development for civil rights, is exactly what the "culture warriors" of the Republican Party want. It continues to distact people away from the item that the vast majority of people are most concerned with - jobs and wages. Before anything else, the Democrats need to challenge the most basic premise of the far-right -market fundamentalism."

The rest of the post can be accessed here.

Look at who Democrats nominated in 2008 and who they reelected: Obama. The neoliberal doctrine intensified under his watch. He's negotiating secret trade deals, cutting deficits, raising taxes on working people and looking away as labor unions get decimated even more.

And who is the "dream candidate" of the Democratic Party for 2016? Hilary Clinton...the ultimate neoliberal. Her husband was the welfare cutting (real welfare, like, for needy people), Glass-Steagall ending, Wall Street deregulating, surplus running, king of all time who is still revered by Democrats.

David Ferguson — Cruz lashes out at Senate GOP over shutdown failure (via Raw Story )

Cruz lashes out at Senate GOP over shutdown failure (via Raw Story )

In remarks to an Iowa Republican group on Friday, Sen. Ted Cruz (R-TX) said that his government shutdown and debt default plan would have worked at repealing the Affordable Care Act — also known as Obamacare — if Senate Republicans had only backed…

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Bill Black — Teaching White-Collar Crime

If you never read anything else by Bill Black, please read this and share it widely. It is an excellent summary of Bill's work in documenting control fraud by CEOs as the primary cause of the US financial crisis, and also why nothing has been done about it.

New Economic Perspectives

Teaching White-Collar Crime

William K Black | Associate Professor of Economics and Law at the University of Missouri – Kansas City

Yves Smith — How Goldman Made $5 Billion By Manipulating Aluminum Inventories (and Copper is Up Next)

Neoliberal capitalism at its finest. Free to frontrun and manipulate markets.

Naked Capitalism

How Goldman Made $5 Billion By Manipulating Aluminum Inventories (and Copper is Up Next)
Yves Smith

Ethan Cox — The Real Tragedy of Lac-Mégantic

Self-regulated railway industry was a disaster waiting to happen....

Behind the bickering over the latest round of cuts to railroad regulation and safety inspections, however, is a broader issue. In 1999 the Liberal government of the day deregulated Canada's railroads by amending the Railway Safety Act to implement Safety Management Systems (SMS). This change eliminated the role of Transport Canada in the oversight of railroads, and passed the onus onto the individual companies to regulate themselves.

A 2007 report from the Canada Safety Council raised the alarm about the dangers of this approach and called Canada's railway network a disaster waiting to happen, arguing that the government should return oversight to Transport Canada.

Deregulation "allows rail companies to regulate themselves, removing the federal government's ability to protect Canadians and their environment, and allowing the industry to hide critical safety information from the public."

The report found major safety issues and frequent derailments, and even spills of oil and other hazardous substances, were common. One rail company, believed to be CN, was singled out for having "a truly dismal safety record."

The Tyee
The Real Tragedy of Lac-Mégantic
Ethan Cox, Today, TheTyee.ca
(h/t Dan Lynch via FB)

More neoliberalism at work.