Bill Mitchell — It is fuelled by stupidity … That’s not stupidity that’s fraud

Yesterday, we saw the movie – The Big Short – which is entertaining to say the least but depressing in its message that widespread corruption in the corporate and public sectors not only goes unpunished, but is handsomely rewarded. I have also been watching the documentary series Making a Murderer – which follows the stunning and mystery-laded treatment of an American man caught up in a corrupt criminal justice system in the US state of Michigan. In that series, it appears that the criminals are those on the wrong side of the bars. 

I thought The Big Short was the macro version of Making a Murderer, which is a microscopic account of a small town and its nefarious police and legal fraternity. But apart from the corrupt and plainly unethical conduct exhibited by Wall Street, the rating agencies and the bank that fed on all the ridiculous products that were created to make complex what, in fact, was a simple strategy – make money of real estate, there was also plain dumbness at the centre of the collapse and the crisis. Dumbness created by a dangerous Groupthink where patterned behaviour was inculcated into the financial system and, ultimately, came back to bite most of us.

While the representations of cocky, sharp, bright financial market traders with PhDs in physics or mathematics in a sequence of movies about the GFC and its aftermath lead to the conclusion that these conspirators knew what they were doing and were happy to profit for themselves at the expense of those they considered to be dumber, a recent academic research study has revealed that the traders themselves were oblivious to what they were doing and became entranced themselves by their own image. 

That is what Groupthink does – it builds an impervious layer for those trapped inside the group – they are insulated from reality, consistent logic, criticism and behave in self-reinforcing ways that may involve enlarged deviations from anything reasonable, smart or evidence based. Groupthink makes people dumb and compliant. The GFC was in no small measure the product of that sort of dumb compliance, which is not to reduce the enormity of the corruption involved. It, however, does reinforce my view that we should ban all these speculative products that provide no beneficial input to the real economy, if only because the sociopaths that are attracted to creating and selling them are too dumb to know what they are doing.… [paragraphing introduced for readability] 

Kind of sums it up.

However, I think that perhaps Bill overemphasizes the role of groupthink in the financial crisis overall. The FBI warned in December 2004 of massive fraud taking place in the mortgage market, and Bill Black and others have documented the prevalence of control fraud.

Sorting out stupid and complicit is not a simple matter, and the probably go hand in hand.

Bill Mitchell – billy blog
It is fuelled by stupidity … That’s not stupidity that’s fraud
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

We can stop earth-killing asteroids. But how will we pay??? How fucking stupid are we becoming?

How fucking stupid are we becoming as a species? (Maybe a question for Roger Erickson.)

Newsweek (that magazine is still around?) poses this question on its cover: "How would we "pay" to protect ourselves from an "earth-killing" asteroid?"

So we'd limit ourselves to not making keystrokes on a computer when faced with planetary destruction? Suicide by stupidity.

Funny...we never do that when fighting war. Newsweek couldn't see that?

Amazingly, Dark Money Appears To Be Just As Dumb As No Money!

(Commentary posted by Roger Erickson)



Have you seen this essay about "dark art" of politics?

The Dark Money Man: How Sean Noble Moved the Kochs’ Cash into Politics and Made Millions

Amazingly, Dark Money appears to be just as dumb as no money!

(Since neither of the last 2 election cycles got as much bang as the big-spending buckaroos expected.)

Humans. Ya gotta love 'em.

Dumb enough to be resistant to their own stupidity.

Is there something awe inspiring hiding in all that stupidity?

Or is it just more dumb luck, eventually expressed on a yet greater scale? :)

Proud To Be An American

Commentary by Roger Erickson

Really?

Even though, in our relentless pursuit of more static assets to hoard, we're Leaving People With Nothing? And, Washington DC is not the only city where such institutional atrocities occur. Forget No Child Left Behind. What about all the rest of our citizens?

And it's not just individuals which we're mistreating. We're killing whole cities, by pursuing hedge fund & investor-driven "bankruptcy strategies" in order to increase purely fiat "returns to shareholders." Like the case ongoing in Detroit, where derivative contracts have been granted super-priority over human pensions. Aren't functioning citizens considered a "return" to all the other citizenship shareholders?

And not just the here and now which we're screwing up. Please simply read the story about the discrepancy between Corporate Welfare NOT being pre-paid by a tax on initiative, while minimum care for retirees IS yoked to a completely unnecessary, pecuniary FICA tax on aggregate demand. That's been going on for 3 generations running now! When you read Luther Gulick & FDR admitting that the FICA taxes were never necessary, and are pure politics .... well, your blood ought to boil and your bitter tears of shame should flow (in any order). 

Do you realize that you, your parents AND your grandparents were over-taxed, like sharecroppers or peasants abused and held down by royalty? Do you wonder why? Please tell me if you come up with any valid reason.  

At a bare minimum, our Middle Class should be in the streets with pitchforks, putting an immediate end to FICA taxes altogether, and even levying reparations for 80 years of suicidal financial repression. Financial repression does as much good for the USA as depriving 99% of Army soldiers of adequate weapons and ammo during a war. WHAT is the point?

Sequestering more community assets than others in your community is NOT what capitalism was EVER all about. What, exactly, is the purpose of trying to hoard high-value dynamic assets (e.g., human initiative, aka fiat, aka fiat currency) and treat it as a low-value static asset? As any yokel could tell you, "That don't make no sense!"

Can we get back to doing the things that used to make us proud to be American? And capitalist too? An American capitalist doesn't have to be synonymous with the venal stupidity and ignorance which we now see being practiced. The old combination used to imply generous, dynamic, far-seeing ingenuity. Do you see any valid reason NOT to return to the old description of American capitalism?

Is That It? Is That the Best We Can Do?

Dollar pressured on rising speculation of US easing
The dollar fell to a one-month low against the yen on Monday after ... speculation the Federal Reserve may launch another round of quantitative easing.

We're disproving the old adage:
..Fool me once, shame on you.
..Fool me twice, shame on me.
..Fool us thrice .... (must we go there? again? no term limits on our own stupidity?)

The message being? "We're gonna do nothing ... again, and see if it works this time. Now don't everyone run for the exits all at ... [where'd everyone go?]"

Keep saying nothing until it stops working? 

Weepin Buddha on an incline!

  Is that the best we can do?

Cue palm slap here.