Showing posts with label Congressional corruption. Show all posts
Showing posts with label Congressional corruption. Show all posts

Wednesday, April 18, 2012

ALEC New Mexico - Anti-Democracy in the High Desert

 A Glimpse at the work of National ALEC

There has been no shortage of comments about ALEC on the national stage once enough of the organization's "pet projects" were collected and publicized.  As usual, the most egregious examples were the first to be cast into the light.  However, ALEC prefers to routinely operate as quietly and invisibly as possible.  It is the ultimate "back room" operation with just enough visible connections to succeed in accomplishing its reactionary goals amid a literal "army" of connections and associations in the background to provide the cash and enjoy the profits.  

Just a few ALEC's accomplishments in states under Republican control will sound familiar enough, but hidden just below the radar, we see a veritable cloud of similar antics now passed into law everywhere the opportunity materialized after the 2010 election.

ALEC = State Laws Against Abortion Rights Established Under Roe vs. Wade

ALEC = State Stand Your Ground Laws in 22 states

ALEC = State Voter Suppression by Registration and ID Laws

ALEC = Ending State Law Requiring Equal Pay for Women

ALEC advertises itself as a bipartisan organization which assists state legislators with bills which will benefit its corporate sponsors.  It isn't actually bipartisan, of course, it has an almost purely Republican membership.  There are one of two Really Stinky Blue Dog Democrats who routinely participate in ALEC's anti-democracy activities at the national level.

Although these so-called Democrats pay serious attention to being essentially invisible in ALEC's legislative moves, their association is revealed in legislation they sponsor.

In fact, ALEC is notable for this same kind of "invisibility."  The organization just bumped along below the radar until the murder of Trayvon Martin in Florida.  One defense bandied about for the shooter was derived from the Florida "Stand Your Ground" law.  This particular bit of legalized savagery was introduced in the Florida legislature by Republicans who got the text for the law from an ALEC conference.  The law was supplied to the ALEC conference by the executives of the national NRA who also provided staff to assist the legislators.

The law's journey after this beginning was well lubricated by financing from the corporate arms manufacturers and a small collection of 2nd Amendment crazies.

This basic story has been repeated in most of the states which emerged from the tea bag explosion of 2010 with a Republican take over of the Governor's mansion and both the respective state Senate and House.  In the most egregious cases, such as Wisconsin and Michigan, the corruption also spread to the state Supreme Courts.  

In these cases citizens found themselves with absolutely no Constitutional capacity to slow or stop the cascade of regressive ALEC legislative proposals which began to flow immediately.  MeanMesa must also note that this dismal predicament was made possible primarily by voters who did not vote in the 2010 election.  A rabid, semi-literate minority took charge.  Worse, it was a minority which had been carefully groomed by massive corporate financing and an utterly lurid, anti-democratic cabal of drooping evangelical, wing nut theocrats and an ugly batch of thinly disguised law firms such as Freedom Works -- along with an unsavory collection of millionaires and billionaires thrown in for good measure.

Commenting much more about ALEC's national priorities would amount to "water over the bridge," but MeanMesa is determined to prowl around a bit in the other side of the story -- the hidden side.  The outrages in Wisconsin and Virginia may be tasty headline material, but what about all the little creepy moves which have been made elsewhere across the country?

ALEC in New Mexico

New Mexico didn't take the plunge found in tea bag territory.  Yes, the state elected a Republican Governor -- a previously failed Democrat who attempted her elevation to "better things" while being a prosecutor.  Martinez found plenty more campaign contributors once she changed parties.  Further, she enjoyed the passing advantage of replacing a popular Democrat whose feet began turning to clay very quickly after he left office.

The State House and Senate remained in Democratic control after the 2010 race, although Democratic majorities decreased.  Unlike states where Republicans took control across the board, New Mexico maintained a Congressional Democratic presence at the national level and a generally respected State Supreme Court.

Further, unlike states where Republicans and ALEC were very interested in gaining a position from which they could launch another one of their predictable State Treasury "looting festivals," New Mexico has never been rich.  Of course, there were a few "jewels" which would catch ALEC's fancy, but much of the nut case evangelical parts faltered in the face of a long standing domination by the Catholic Church.

So what was left for the ALEC vultures in the high desert?

Although a MeanMesa visitor might, at first, assume that ALEC and its local Republican representatives would have encountered "slim pickin's" as they sized up the looting possibilities from such a poor place, it turns out that this is not the case.  This post is about what bills ALEC folks jammed through the State Government.  They are not exactly what one would expect, but the distinctive smell is still all around it.

The following list names State of New Mexico bills which were initially composed by ALEC legislative experts, handed to Republican New Mexico State lawmakers at ALEC "Conferences" and then introduced in the New Mexico legislature. What is shown below is the result of research done by The Center for Media and Democracy -- ALEC Exposed.  (Read the entire article here.)

(NOTE: In an effort to peacefully coexist with the mechanics of Blogger, MeanMesa has disabled the superscripted footnote references in this reprint of the source article.  All of this information is in the original research.  Access it by following the link.)

So, what did these bills have to "do" or "be" to show up on the list of ALEC legislation in New Mexico?

The reason they are on the list has a few different sides, each of which is important.  However, first, take a look at the bills.  (Read the entire article here.)

New Mexico

(This page includes tips from reporters, citizens journalists, and others identifying New Hampshire bills (introduced or passed) that resemble ALEC model legislation. CMD encourages the use of this forum and encourages further detailed research to verify all claims.)
  • HB 386 (introduced 2/7/11) "Transparency in Private Attorney Contracts" is similar to ALEC's "Private Attorney Retention Sunshine Act"
  • HB 318 (introduced 2/2/11) "Crime of Organized Retail Theft Act" is similar to ALEC's "Organized Retail Theft Act"
  • SB 324 (introduced 1/31/11) "Licensure of Secondhand Metal Dealers" is similar to ALEC's "Responsible Scrap Metal Purchasing and Procurement Act"
  • House Joint Memorial 24 (introduced 1/27/11), "Requesting Governor to Withdraw New Mexico from the Western Climate Initiative" is similar to ALEC's "State Withdrawal from Regional Climate Initiatives"
  • HB 229 (introduced 1/27/11) "Parental Notice of Abortion Act" is similar to ALEC's "Parental Consent for Abortion Act"
  • HB 105 (introduced 1/19/05) "Income Tax Deduction for Organ Donation" is similar to ALEC's "Organ Donation Tax Deduction Act"

Why ALEC Wants Bills Like These

We mentioned before that ALEC bills have a few revealing "similar" sides to them.  In fact, these "similarities" also explain why a little blog like MeanMesa would take such umbrage with the process and its results.  Let's look at precisely what we mean by these "similarities" because they don't seem to be exactly what we might have expected for routine GOPCon "looting" mischief.

Further, the "most interesting" of all the ideas which reach a legislator's office will almost inevitably have one or more of the following qualities:

1. they will increase the number of favorable votes in the next election
2. they will result in "campaign contributions" from the special interests 
who will benefit from them
3. they will directly benefit either the legislator himself or some of his good friends


...all without seriously screwing up the existing state economy or completely outraging any sizable existing voting block.

1.  The CONTENT of ALEC Bills

Normally, New Mexico elected officials receive letters and phone calls from their constituents requesting or suggesting new legislation that someone or other wanted introduced and passed in the State Legislature.  If these ideas are clearly something which would benefit the State, and if enough of these phone calls and letters arrive at the State Legislator's office, the elected Representative or Senator calls on staff and instructs them to write the proposed legislation.

No one particularly expects legislators to be able to just sit down with a marker and a napkin to rough out a final form with legislative content.

(Chart - MeanMesa)

Right here, we arrive at the first identifying quality of ALEC sponsored bills.  They are not written by legislators or by their staff in a normal way.  Instead, the "template" for the words, terms and text of these bills comes directly from ALEC.

This is the first reason that they have wound up on the list. Because they are clearly and unavoidably so similar to ALEC "templates" that there can be no doubt at all that the content originated there.  In most cases a few "cosmetic" adjustments are introduced to the ALEC form before it moves on to the New Mexico legislature, but usually not many.

2. The ORIGIN of ALEC Bills

As mentioned above, the basic idea of a representational democracy is that State Congressmen, once elected, have a good reason to respond to the needs and wishes of the New Mexicans who elected them.  Further, this is not just a handy "high flung" talking point extracted from a High School Civics text.  Believe it or not, this basic idea should be the "main engine" for legislation in the state's Roundhouse.

However, in the case of ALEC sponsored bills, this basic idea is not in place.  ALEC, in the organization's well financed "conventions" and "conferences," has already usurped this traditional idea of responding to constituents. 

In "think tank bunkers" far from New Mexico a process similar to the traditional idea of representative democracy unfolds -- however, those interests whom are being "represented" are not the constituents of the elected legislators in New Mexico.  Instead, the phone calls, emails and letters received in the "think tank bunker" all come from folks who, well, want something.

Anyone among these folks seeking to be "represented" who might be too timid to actually put his "wishes" in writing, can, of course, just send his lobbyist to do the dirty work.  Publicity-wise, this is very convenient.  The ALEC "go-to" scoundrels need not be prowling around the Roundhouse to accomplish this.  It can all be done very, very quietly at the "everything is on the house" bar at an ALEC "convention."

Although the New Mexico legislators enjoying those free drinks won't be paying anything, New Mexicans back home will be -- once the ALEC "template" becomes State Law.

(Chart - MeanMesa)
An Anecdote About ALEC "Conferences"

(Read this entire Center for Media and Democracy's PR Watch here.)

Where Do Donations from Corporations or Corporate Foundations Go?

Campaign CashFor one, they help subsidize legislators' trips to attend ALEC meetings. ALEC has reported to the IRS that it has liabilities of about one million dollars a year for "scholarship funds." These are not scholarships for kids who do well in school; they are financial gifts called "scholarships" to help cover the costs of the family vacations that legislators and their families take to ALEC conventions at resorts every August, after their state legislative sessions end. For these conventions, legislative members are charged a registration fee that is substantially less than what corporate members pay. Some undisclosed number of legislators have their airfare and hotel costs for trips to these posh hotels paid by ALEC. As part of the registration process, legislators can arrange for childcare, which ALEC dubs "Kids Congress," for six-month old babies to teens for $250. ALEC reports that it has spent over $250,000 for childcare for meetings in 2009.

ALEC also spends about $600,000 a year on what it describes as the "recruitment and retention of ALEC State Legislator members." For an organization that claims such devotion to the free market, it is difficult to imagine an ordinary business justification for spending $600,000 to recruit and retain legislative members who only contribute about $80,000 a year in income to ALEC. But plainly, such a lop-sided loss must be covered by other returns on investment. Indeed, ALEC brags about how over 1,000 of its model bills get introduced in statehouses each year, but sticks to its claim that its bill factory does not count as "lobbying."

ALEC's corporate "state chairs" -- companies whose identities are not publicly disclosed by ALEC -- are expected to raise "state scholarship funds" for state legislators to attend ALEC conventions. ALEC's by-laws from 2007 also provide that the legislators who serve as state chairmen have a "duty" to work with the corporate state chairmen "to raise and oversee expenditures of legislative scholarship funds." In other words, select corporations work directly with legislators to raise money from other corporations to subsidize trips for legislators to ALEC events. State chairmen are also tasked with "working to ensure introduction of model legislation." The scholarship funds are apparently essential to ALEC's operations, because most state legislators work as public servants part-time and earn, on average, about $46,000 a year. Without ALEC's subsidy, not as many of them would likely be willing or able to use the ALEC convention as a family trip. But ALEC membership does provide other rewards for legislators. It allows them to rub elbows with rich, out-of-state potential donors to their election campaigns and also to build similar relationships with ALEC's state corporate members.

Right here, we may as well present the list of New Mexico State Senators and Representatives who have "ties" with ALEC -- lots and lots of "R's."  (Note: links are left enabled, but superscripted footnote references have been removed.  These can be found at the link privided.  Read the original article from SourceWatch/ALEC Exposed here.)

New Mexico Legislators with ALEC Ties

House of Representatives

Senate

(Image source - Congressional Web Sites)

So, if you're ALEC, and you have a few stinky little laws you would like to impose on the citizens of New Mexico, these are your guys.  More than likely, some of the legislation proposed by these two actually fits into one or more of the traditional reasons State legislators write and sponsor bills at the Roundhouse.  Some (check out the list of "ALEC Template" bills) clearly don't.

In fact, those bills being introduced which "clearly don't" fall into some combination of the three categories of "normal reasons" for a legislator to introduce something still have to come from somewhere.  So, where do they come from?

(Diagram - MeanMesa)


3. What ALEC Bills Are About - Follow the Money

When we see the phrase "follow the money," we usually draw a sigh of relief because we assume that in no time at all, we will be presented with a nicely convincing "smoking gun" to follow it.   Yet, when we look at the list of ALEC "template" bills these two have jumbled through the State Legislature, we just don't see the kind of outrage which we might have, at first, expected.

"Outrage?"

Yes.  A "legislative outrage" bill would simply hand over all sorts of state concessions to, for example, a corporation as an incentive to move here.  There might be tax breaks, state financed infrastructure, relaxed zoning, and so on.  It turns out that ALEC's think tank bill writing experts are far more sophisticated than this.

However, a single thread runs through just about every idea that can be cooked up by one of ALEC's "back room oligarchs."  Here it is:

"Any money which can be extracted from the State budget anywhere is a plus because, after it reverts back to the General Fund, it can be looted."

For example, when we see Southern states eliminating women's health services, the plan is richly lubricated with "red meat" anti-abortion schemes to further inflame the local evangelical base.  They like it because it kills Roe vs. Wade.  ALEC likes it because it eliminates state funding for women's health clinics.  Whatever money is saved by the change, you guessed it, flows back into the state's general fund where it can be looted later.

Other bills quietly eliminate expensive corporate costs arising from State laws.  Some add or subtract criterion to laws which deliver a benefit to an ALEC sponsor.  Some are "party favors" for single interest groups -- groups which, although they may travel under the furling banners of 2nd Amendment rights and the NRA, are actually the accountants for gun and ammunition manufacturers and marketers.

Done properly, almost no ALEC "template" bill has anything showing which might be a clue as it to its actual purpose.



(Diagram - MeanMesa)

We see the special interests of the oligarch class, each time, cleverly disguised as something else and also, each time, thinly coated with the latest "conservative" agenda element to placate the unthinking, uninformed and uninterested voters.  In fact, those "unthinking, uninformed and uninterested voters" are exactly the ballots these little skunks count on to get re-elected.  When these voters are properly inflamed over issues such as abortion, immigration, gun control (the popular "stand your ground and shoot first" justifiable homicide laws) and dozens of others, they show little interest in looking after their own interests when they cast their ballots.

This is the case across the United States, not just in New Mexico.

ALEC legislation routinely steals from both those who think these laws are great and those who think they are hideous.  It just takes a little longer than the shaky bank robber with the rusty pistol to "seal the deal."

What ColorOfChange is Doing About ALEC

Perhaps the most effective player among the main thrust to expose ALEC and publicize the organization's main contributors has been a relatively new group called ColorOfChange.  Another hero in this battle is Ed Schultz who has generously placed ColorOfChange speakers in front of his national network cameras often in the last months.

To their credit ColorOfChange publicity has already split away some of ALEC's largest corporate sponsors, but don't worry.  There is still a nice bunch of billionaires in ALEC's back room who know a good thing when they see one.  The ColorOfChange bunch knows where to hit something as invisibly grotesque as ALEC -- in the pocket book.

MeanMesa has posted a few links (below) for visitors wishing to read more on this subject.  There is plenty more waiting for you on your Google.

Links for Further Reading About ALEC


http://colorofchange.org/press/releases/2012/4/17/colorofchange-responds-alec-announcement-it-will-e/
http://www.alec.org/meetings/
http://www.thenation.com/article/162478/hidden-history-alec-and-prison-labor
http://www.prwatch.org/news/2011/07/10887/cmd-special-report-alecs-funding-and-spending
http://www.alecexposed.org/wiki/New_Mexico
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Friday, July 8, 2011

Millisecond Trading -- The Ultimate Parasite

Adding A Tapeworm to Cancer Stage Capitalism

Although millisecond trades on the Wall Street and commodities market had "their moment in the light" for a few minutes during the last year, that faux-media "illumination" didn't have much staying power.  If a tycoon from the "barely legal" trading cartels even took notice, the embarrassment resulted in nothing more than spending an extra couple of afternoons at the golf course until the stink blew over.

We have to face it.  Millisecond trading is simply too complicated a story to ever possibly compete with the "no sex, sex scandal" of the Weiner variety.  Now that the story is not only cold, dead and buried in yesterday's news, it has had a stake quietly driven through its heart by direct order of the billionaire masters of the corporate media.

Unhappily, once the process was rehabilitated by this lack of public attention, the millisecond trading scheme is now roaring forth at full power and profit.  If you're lucky enough to have a few US currency bills, grab your wallet!  That advice holds whether you are in the stock market or not.

If MeanMesa intends to resurrect the story, a short explanation might be in order.

How Millisecond Trading Works

Abbreviated Model of Normal Investment Cycle
In the very simplified chart above, we see the traditional elements of an investment.  When a product of business has a good likelihood of turning a profit, an investor is willing to accept the risk of lending his capital to the enterprise.

The enterprise, as a result of being capitalized, is able to pursue a business plan which will create a profit and increase the value of the enterprise.  The investor then enjoys a corresponding increase in the value of his investment.  His holdings in the product of enterprise can then be sold for more than he invested.

The timetable required for such an increase varies.  Although a rapid increase in the value of an investment is not infrequent, most normal investments take a period of time which corresponds to the amount of time it takes the business to start making a profit.

During the entire period between the initial investment and the first profits of the business, the investor is exposed to the risk of his decision.  At any point along the way, the business might falter and the value of the original investment might decrease correspondingly or, in some cases, vanish all together.  Further, the momentary value of even a potentially profitable investment may often have periods of increased value and decreased value as the cycle unfolds.

One way to view this is to simply say that the investor who finally enjoys a profit from the increased value of his capital is, in fact, being "paid" for accepting the risk exposure during the time that the business might have collapsed.  The amount of profit the investor can expect from a successful venture is "spelled out" very clearly in the beginning of the process.

If the value of the business increases by a certain amount, the investor has the reasonable expectation of seeing his original investment increase by a pre-arranged percentage of that amount.  All the "ups and downs" which might occur as the business works toward a profit are, so to speak, taken in stride by the investor, and written off as a predictable part of the risk exposure he agreed to take.

From the "market perspective," the value of the business is, in fact, "gaining ground" each time its stock increases in value.  Further, the amount that the value of the business is increasing during these times is reflected in the higher value of its stock.  When the stock goes up, the business enjoys an additional value in the amount that the stock increases.

However, what happens if the business doe not receive the full value of such increases?  And, even more interesting,  how could that happen?

Now, we can examine the effect of millisecond trading as it interferes with this scenario.

Model Showing Effect of Millisecond Trading

The chart above shows that the investor is receiving a slightly less amount of the increase in the value of his investment as a result of the millisecond trading.  In fact, both the investor and the business are getting less.  During the periods when the value of the stock is increasing, the business is not getting the full additional value corresponding to the rising stock price because a small amount of the increase is being diverted to the millisecond trader.

Comparing the actual amount the business is receiving from the stock increase to the amount it would have received without the intervening millisecond trades, we see that the business suffers from a slightly diminished influx of capital value.  As the business suffers, the investor will eventually also suffer.   His investment would have increased more if the value of the business had increased more which it would have done if the full amount of the stock value increases had flowed to the business instead of being diverted to the millisecond trader.

A Few Important Observations About Millisecond Traders

The begin with, we can note that the "period of ownership" for the millisecond trader is extremely short.  This "fast turn around" idea is precisely the feature which makes a millisecond trader a millisecond trader.  Trades can be accomplished literally in milliseconds, and risk exposure is limited to the same, short time frame.

Of course, there is no actual investment in any business or product.  In fact, the nature of the enterprise which has offered its stock means nothing to the millisecond trader.  Instead, a set of highly competitive, yet profoundly sterile, algorithms scan the activity on the market, millisecond by millisecond, then "jump in" and "jump out" based on subtle trends in trading prices.

MeanMesa has looked over a few articles on this subject and selected one which seems especially direct and accessible to the "market layman."  In this article by Bryant Urstadt, a specific, successful, millisecond trader is presented as an example.  This is a rather long article (Trading Shares in Milliseconds) but a very interesting one, and a few quotations are provided here.  MeanMesa encourages visitors to spend 10 minutes with Urstadt's article.

Trading Shares in Milliseconds
by Bryant Urstadt

Narang is the head of Tradeworx, a hedge fund and financial-technology firm that makes purely automated trades; all decisions are reached and acted on at near light speed by computers running preprogrammed algorithms. “Actually, we run two businesses,” he says. “The first trades in and out of shares in about a second and holds them for an average of two or three days. That’s the medium-speed fund. The high-speed fund could make thousands of trades a second and holds them for a matter of minutes.”

By the end of the day, his computers will have bought and sold about 60 million to 80 million shares, with the heaviest activity in the last hour of trading, from three to four in the afternoon. Tradeworx and similar firms around the country will race to close billions of bets that hinge on things like tiny differences between the prices of shares in an exchange-traded fund holding the S&P 500 and the individual shares that make up the same index. The profits go to the company with the fastest hardware and the best algorithms—advantages that enable it to spot and exploit subtle market patterns ahead of everyone else. At the end of a typical day, 44the Tradeworx high-speed business holds no shares at all. Come Monday, Narang will look to trade millions more shares. It seems like a lot, and it is, but Narang estimates that he’s probably only somewhere in the middle of the top 50 traders by volume.

The article also presents the following example of some of a millisecond trader's "work."


explains a lot about how high-frequency trading works and why it angers some observers, as Joseph Saluzzi and Sal Arnuk, the principals of the New Jersey–based Themis Trading, made clear in their 2008 white paper “Toxic Equity Trading Order Flow on Wall Street.” Imagine that a mutual fund enters a buy order, telling its computer to start by offering the current market price of $20.00 a share but to take any asked price up to $20.03. A high-speed trader, Saluzzi and Arnuk explained, can use a “predatory algo” to identify that limit by “pinging” the market with sell orders that are issued in fractions of a second and canceled just as fast. It might start at $20.05 and work its way down to $20.03, canceling and reordering until the mutual fund bites. The trader then buys closer to the current $20.00 price from another, slower investor, reselling to the fund at $20.03. Because the high-frequency trader has a speed advantage, he is able to do all this before the slower party can catch up and offer shares for $20.01. This speedy player has found the buyer’s limit, gathered up and sold an order, and snipped a few pennies off for himself.

This single example explains a great deal.  In this scenario, high speed traders entered the market, "rode" this specific stock for a very brief period while it was increasing in value as a rate which satisfied the search parameters of the algorithm, then sold it, garnering the $.02 per share margin as a "trading profit."

We can also note the numeric scope of what Urstadt is reporting here.

1. Example Narang is one of 50 or so "top traders" in the millisecond market.
2. Example Narang bought and sold "60 to 80 million shares" on the day Urstadt was describing.

Let's do some math.

50 "top traders" X 60 million "trades per day" = 3,000,000,000 shares have passed through this process each market day. 

If the "$.02" margin per share traded is typical, these "top 50" traders went home with around $30 million in the day's "take."  There are roughly 330 market days per year, moving the annual profits into the $9,900 Million range, say $10 Billion dollars.

All without exposing themselves to any measurable "investment risk."

What's the Point?

All of this might be interesting to those among us who live and die on the stock market, but to MeanMesa visitors who tend to be a bit more plebian in their monetary habits, what does this story actually tell us?  That is, what's the point of this post, anyway?

There are a couple of good ones.

The first is to be reached as we simply add this millisecond trading to the accumulated damages being routinely inflicted on our economy by not only it, but many other such "little jewels."  All of these "comfy little" industries exist only in the vacuum of regulation so carefully sponsored by the autocrat and his market cronies.

Utilizing this financial gizmo, yet another example of illicit, upward wealth redistribution becomes clear.  A few well connected traders have been able to install themselves as almost invisible parasites, diverting what would have otherwise been quite legitimate investment money into their own pockets.  Under the statutory cover (i.e. the absence of regulation) provided by the GOPCon looters in the Congress, this bunch has been quietly extracting their $10 Bn per year "profits" for decades.

The second point may be more in the class of an "overview" of the larger economy considered as a whole.  Ironically, we can presume to describe this effect as inflation -- the precise "boogy man" which both the Fed Bank and the GOPCons routinely use to frighten us lesser folks.  However, this particular type of inflation is not derived from idiosyncrasies of the global market, bad weather or government spending, the "usual suspects."

Instead, this is what we might call "sponsored inflation," that is, a carefully designed scheme, quite premeditated and planned, to simply install a minute diversion process into the economic life sustaining flow of "free market" investments.  The US economy relies on this flow of investment money to fuel our basic economic process.

Every dollar of investment capital which flows through this process becomes worth just a bit less as this parasitic process continues.  Both the benefits of capitalization for the enterprises on the market and, hence, the potential return on investment for the purchaser of such stocks are routinely diminished, making a single dollar caught up in the process worth less than it would have been worth otherwise.

Urstadt's article, notably, expresses some concern about the gaseous nature of this trading process, but, after that has been said, generally finds it legal, valid and legitimate although potentially dangerous.  The Republican loot-monkeys in the Congress clearly consider it "just fine," especially with the generous campaign contributions made possible from these "businesses" with $ Billions of dollars in profits, no risk and practically no "business expenses" beyond paying off the law makers who are protecting their scheme.

Not to belabor an already well worn point, but MeanMesa wishes to remind visitors of the election approaching.  If anything is ever to be done about this on-going insult to the economic health of our country, it will begin with the results of that election.



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Friday, January 28, 2011

Mr. Smith Goes To Congress

We all know that the original version of this posting was the wonderfully populist old 1939 film "Mr. Smith Goes To Washington."  It is, the star, Jimmy Stewart, played the stalwart "true believer" in American democratic ideals.

In our modern day, we see something similar -- at least, something of a similar image.  Beyond the image of the new Tea Baggers in the House, however, there lies an unsettling and unseen further story.  With this posting, MeanMesa will, once again, drop off the cliff of tedious reality into the glittery world of our own fiction.  Join us as we watch Mr. Jack Smith, the recently elected Tea Bag Congressman from the fictional state of North Virginia on his first tour of the US House of Representatives.

Mr. Smith is accompanied on this tour by the senior Republican Congressman from North Virginia, Representative Billy "Bubba" Blowhard.  As we begin, it is Mr. Smith's first day at the Capitol.

Mr. Smith Goes To Washington

"Congratulations on your election, Jack.  It'll be great to have another real American from North Virginia in the 112th Congress.  I'm sure that Speaker Boehner is anxious to meet you and offer his own greetings, too.  Right now, though, it might be a good idea to show you around this place so you can get your bearings."

"Thanks Bubba!  I've already been shown my office by the House staff, but I've never had a chance to see the rest of the place."

"Well, I hope you've got your walking shoes on -- we've really enlarged the old House quite a bit.  There have been lots of additions just to accommodate the folks who moved in here with us."

"But Bubba, aren't there still the same number of Representatives?"

"Oh sure, but I was referring to the other folks we'll be needing to keep the wheels of government turning while we're in charge.  You know, before we took over to make government smaller and get rid of the special interests, we had to go all the way over to K Street to pick up our campaign contribution checks.  Since we're in charge now, we decided to just move all that closer to where the action is, if you get my meaning."

The pair were walking out of the House Chamber through a nondescript doorway located at the side of the Speaker's Chair.  The new Congressman was startled as they entered a long hallway which appeared to be three or four times longer than the House Chamber itself.  As he first glanced at the scene, it seemed that there were literally hundreds of doors opening to offices along the corridor.

"Wow, Bubba.  You guys really have expanded the House offices.  Are there Representatives in all these rooms?"
"Heh, heh.  No Jack, these are the new offices we've built for the K Street Mall additions.  We had to find room for a few thousands lobbyists who needed to come right up on the Hill so they could be a little more convenient for us.  There are so many offices in here that a new Congressman can get lost.  That's why I wanted to show you around.  You'll need to be able to find the right 'go-to' places once you start doing business."

"Bubba, it looks like there are more lobbyists here than there are voters in my District back home in North Virginia."

"Don't worry, Jack.  The leadership has prepared a little map which shows who's where.  Naturally, we didn't want the thing to go public, so we're only handing it out to the new Congressmen when we can do it quietly.  Here, take a look.  Right now, we are right here."

The senior Congressman pointed to a small spot at the right edge of the floor plan.

The "Secret Map" To the
 New "K-Street" House Mall 
(image source MeanMesa)
"Now, you can see the, uh, Market Trading Floor here in the center.  This list of offices goes by the numbers.  Just find the lobbyists you're looking for on the list, check the floor plan to see where they are and you'll be able to go right to the correct office."

1.  House Chamber  (Market Trading Floor)
2.  The Greed Grotto where members can go for quiet reflection.
3.  The "Media Images Classroom" where members can learn to speak bad English with a Southern drawl and wear bad ties.
4.  The "Big Pharma Patio" where members can slip in for a couple of drinks and get their "marching orders" from the Pharmaceutical Corporations.
5. and 6.  The "Back Room" where there are no cameras or microphones.  Members can have conferences here when they want to be sure that absolutely no one can see what they are doing.  Right next to the "Back Room" is the "Closed Door" where we can make deals with each other to serve the public interests and stuff.
7.  The "No Bid" Conference Room is for making contracts with military suppliers and the like.
8.  The "East Lobbyist Lounge" where our friends can gather to talk to each other.
9.  The "Emergency Supplemental Luncheonette" where we put together funding for unpopular stuff like wars and invasions.  They serve great sandwiches free to members.
10.  The "Big Bank Bar B Que Pit" where we authorize mergers for our special banking friends.  They serve fabulous ribs at the "Pit."
11.  Is the "ROI Market Ticker" office.  All the Lobbyists watch this pretty closely to make sure they're getting their bosses' money's worth.
12. through 18. These are the close-in offices for the our "Deregulation Services Administration."  The main "Deregulation Office" is just over there in room 44.  We make the "sweet deals" over in 44, then come along over here to work out the details.  You'll notice that we have a separate office for each kind of deregulation, oil, banking, Wall Street, Health Care and the like.  For example, Room 17 here is for pollution deregulation.
19. through 26. These are the "Deregulation Tax Specialties" offices where we go to work out the tax side of the changes we make while we are dis-assembling old "job killing" regulation bills, if you know what I mean.
27. through 31.  All the offices on the South Wing are dedicated to "Campaign Cash Management."  Now, although that might seem like something boring, it's at the heart of the entire mall.  Our Congressional "Money Bin" is in 28, and out "Citizens United Cash Memorial" is in 31, right on the corner with a great view of the Supreme Court.   We manage all the  conflict of interest payments to our boys on the Supreme Court in office 29.
32. Is the "West Side Lobbyist Dining Room."  Hey, everybody's got to eat!  
33.  The "Free Market Petroleum Lounge" is a kind of "freshening up" spot for our friends from the oil industry when they come to visit.  Sometimes, Big Oil leaves "campaign contributions" out on the reception table with the fresh fruit and candy.  Of course, members can help themselves.
34. through 38.  All these offices are where we manage our "International Accounts."  For example, "Off Shore Assets" are managed in 35,  and "International Special Friends" business is handled in 37.  Our favorite international "Military Contractors" are located in 38.  "Jet Liners, Tankers and Useless War Planes Sales" are in 36.
39. Is the "Member Spa and Whoopee Health Center" run by the health insurance corporations.  It's free, and it's private.  There are different girls in there every week.
40. Is a "Members-Only Alcohol and Drug Treatment."  Maybe you've wondered where in the hell we send all the members who fall down in front of the cameras on the Floor.  They just wander over there, and we report that they have entered treatment.  It's a good place to run into the Speaker.
41. through 43. These offices on the North Wing are all "Talking Points Management and Distribution Centers."  You will drop in here every morning before you have any public exposure.  The CATO guys and the Heritage Institute will have the day's list of talking points ready to go, and your job will be just slip them into any public statement you might make that day.  Just act like you have thought about whatever it is.  The media will be full of the same line no matter who is interviewed that day or the subjects.
44. Is the "House Hedge Fund and Holding Company Office."  That door will be closed to you unless you're invited in by the House leadership.

"So, Jack, there you have it.  Hang on to the little map, and make sure your staff knows where to go for what around here.  Now, have a great time, make some money and do the country's business!"

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Wednesday, January 19, 2011

The Size of Armies, The Size of Ambitions

Although history never actually becomes fluid, the interpretation of history seems to have no problem conforming its message and meaning to the issues of the moment. Regardless of the issues. Regardless of the moment.


Fifty years ago in 1961 President Eisenhower delivered his farewell address as he was leaving office. Quite aside from the contemporary inclination to deify old Presidents, MeanMesa must insist that the General be only given his kudos when they turn out to be deserved, but that they, nonetheless, be given.


Eisenhower cannot be allowed to become a metaphor. He was a man. Quite a man.

(image source)
Dwight David Eisenhower
34th President of the United States



Ike was a man comprised of many sides. Some were humanizing -- his alleged connection to Marilyn Monroe. Some were indisputable evidence of vision and political savvy - the interstate highway system. Some were military accomplishments so immense that they threatened to leave the flesh and bones of the actual man behind -- the invasion and recapture of Europe as a five star, General of the Armies in WWII. Some revealed a quiet, steadfast bravery -- staring down the USSR as the ghostly reality of nuclear MAD (Mutual Assured Destruction) floated across the Warsaw Pact. Some were marked by questionable motives and unpleasant consequences -- the CIA's destruction of the Iranian democracy.

(image source)
Dwight D. Eisenhower, General of the Army

Now that the "feathers have been furled" one more time, we can return to the now famous speech. Most MeanMesa visitors are quite familiar with the "military-industrial complex" part, but right here, we can also take just a little bit more comprehensive look at a bit more of the speech's content. For visitors wishing to read the speech in its entirety, link here.


MeanMesa's appreciation to www.ourdocuments.gov.

Eisenhower's 1961 Farewell Address (excerpted)

III

Throughout America's adventure in free government, our basic purposes have been to keep the peace; to foster progress in human achievement, and to enhance liberty, dignity and integrity among people and among nations. To strive for less would be unworthy of a free and religious people. Any failure traceable to arrogance, or our lack of comprehension or readiness to sacrifice would inflict upon us grievous hurt both at home and abroad.

Progress toward these noble goals is persistently threatened by the conflict now engulfing the world. It commands our whole attention, absorbs our very beings. We face a hostile ideology-global in scope, atheistic in character, ruthless in purpose, and insidious in method. Unhappily the danger it poses promises to be of indefinite duration. To meet it successfully, there is called for, not so much the emotional and transitory sacrifices of crisis, but rather those which enable us to carry forward steadily, surely, and without complaint the burdens of a prolonged and complex struggle - with liberty at stake. Only thus shall we remain, despite every provocation, on our charted course toward permanent peace and human betterment.

Crises there will continue to be. In meeting them, whether foreign or domestic, great or small,there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties. A huge increase in newer elements of our defense; development of unrealistic programs to cure every ill in agriculture; a dramatic expansion in basic and applied research-these and many other possibilities, each possibly promising in itself, may be suggested as the only way to the road we which to travel.

But each proposal must be weighed in the light of a broader consideration: the need to maintain balance in and among national programs - balance between the private and the public economy, balance between cost and hoped for advantage-balance between the clearly necessary and the comfortably desirable; balance between our essential requirements as a nation and the duties imposed by the nation upon the individual; balance between action of the moment and the national welfare of the future. Good judgement seeks balance and progress; lack of it eventually finds imbalance and frustration.

The record of many decades stands as proof that our people and their government have, in the main, understood these truths and have responded to them well, in the face of stress and threat. But threats, new in kind or degree, constantly arise. I mention two only.

IV

A vital element in keeping the peace is our military establishment. Our arms must be mighty, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction.

Our military organization today bears little relation to that known by any of my predecessors in peace time, or indeed by the fighting men of World War II or Korea. 

Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United State corporations.

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence-economic, political, even spiritual-is felt in every city, every state house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

an alert and knowledgeable citizenry can compel the proper meshing of huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

Akin to, and largely responsible for the sweeping changes in our industrial-military posture, has been the technological revolution during recent decades.
In this revolution, research has become central; it also becomes more formalized, complex, and costly. A steadily increasing share is conducted for, by, or at the direction of, the Federal government.

Today, the solitary inventor, tinkering in his shop, has been over shadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers.

The prospect of domination of the nation's scholars by Federal employment, project allocations, and the power of money is ever present and is gravely to be regarded.

Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.

It is the task of statesmanship to mold, to balance, and to integrate these and other forces, new and old, within the principles of our democratic system-ever aiming toward the supreme goals of our free society.

Please pay especial attention to the highlighted sections.

Looking at Eisenhower's Words in 2011
The title of this posting notes the sizes of armies and the sizes of ambitions. In the time since Eisenhower was President, the world has continually changed. The current state of the world, the current state of our US national ambitions and the idea of "balance" are all not only new but also dynamically fluid. In our midst, as a nation, are those who have not yet noticed that the earth has shifted under their feet.

All the ideas of force which guided Dwight Eisenhower have been transformed, too. We can see a few of the inevitable incongruities when we apply our conclusions over our present situation.

Since the time of the speech in 1961, the military industrial complex has grown more voracious every year and more expensive with every budget. During the Cold War, this "tit for tat" approach seemed to make sense. Now, it turns out that we as a country continue to "tat" long after the rest of the world -- including our current competitors and opponents -- has ceased to "tit."

In WWII the US was actually pleasantly surprised to discover that we could so effectively arm ourselves and fight. Military approaches during that conflict and a few following it, notably Korea, amounted to massed troops and total industrial commitment. This strategy was basically successful in the Cold War, too. Further, we have seen our more modern military opponents adopt this strategy. Iraq, for example, had a massive army equipped with rather respectable Soviet hardware. Other countries such as North Korea and Iran have taken this same dubious course. Both are starving themselves and their faltering economies trying to sustain such an immense expense.

Our great national competitor, The Peoples Republic of China, however, has not fallen for the bait. In that case, we see a highly reasoned approach to military expenses. The gigantic Peoples Liberation Army is primarily designed for internal and border operations, a claim made credible by its lack of mobility. Strategic arms designed to project power, although formidable, pale with respect both to ambition and cost when compared to those of the US. MeanMesa believes that the PRC's economical response to the necessity of an arm's build up is probably fairly consistent with at least the pragmatic essence of Eisenhower's warning. (see chart below)

Continuing, the most recent "ambition" of this nation was to capture and exploit the Iraqi oil reserves to the benefit of our own local oligarchs. Given the nature of the Iraqi military, our own forces were well suited to the job. Suddenly, however, our national opponents, seeing that waging any more of these "old wars" was both militarily foolhardy and too expensive, switched tactics to projection of power through the mechanism of the promotion of terror.

This could have been a moment of clarity for our realizations about our military industrial complex, but it occurred in an environment where the same sinister complex enjoyed a well crafted control of the very media which might have exposed it. In fact, the day which will greet tomorrow at dawn sees these oligarchic reactionaries in charge of the House of Representatives, the Supreme Court and the Fourth Estate (the media). The oligarchic influence in our Senate, although incomplete, remains capable of obstructionism and manipulation unseen before in the country -- a sickening shadow of the concept of representational democracy.

Further, it would be an overly limiting mistake to continue to think strictly of the military industrial complex, per se. That categorization will be far more useful when we direct it simply to encompass our unruly collection of oligarchs. Given Eisenhower's long service in the US military, the dangers he saw in the military industrial complex were understandable. What Eisenhower saw as a select threat, it turns out, was only the first, visible evidence of  what would, by this present day, have the quiet but robust trappings of oligarchy and class war.

Those who benefited the most from the fiscal military industrial largesse during the Cold War served as an example for their equally "cash infatuated" peers of today. This group of highly organized and politically protected (at least, protected from competition if not prosecution) oligarchs saw the "treasure" at hand, and that "treasure" was entirely defined as access to the remarkable flow and reservoir of US tax dollars.

The bad habits rapidly spread to other areas beyond the initial "military industrial" sector. Highly profitable petroleum corporations received huge tax subsidies. Congressmen argued not about the security requirements of the nation, but instead, about which contributors, contractors and plants were in which Congressional Districts. Highly profitable pharmaceutical companies received the free product of massive, federally financed research not to mention huge federal payments for medications at non-negotiable, "no-bid" prices.

The ugly mechanism is always the same. Voters could be frightened by international enemies, their well developed petroleum dependence, their illnesses -- many of which derived from unregulated industrial pollution, the future of their jobs and wages or simple abstractions concerning the destruction of their religious freedom, guns or other features of a carefully fabricated, yet perilously unexamined "exceptionalism."

If we were to translate Eisenhower's concern with the "military industrial complex," adding the now inescapable corporate socialism of the present day, to our present situation, we would be forced to redefine and expand the threat far beyond what was becoming apparent in 1961 with those over eager bullet and missile factory owners. 

Regardless of the precise terms in his farewell address, Eisenhower was describing a class war.

The last remnants of anything resembling "balance" are a thing of our modern past. Processes such as this one have embedded "tipping points," fulcrums, the position of which will determine the direction of any further, social motility. When every aspect of government protection of such corporate interests is coupled with the grotesque products of "reciprocal maintenance" harvested from a constant flow of new threats each eliciting a new set of expensive, "undeniably necessary" counter measures, all that remains constant is the relentless extraction of more tax money to corporate coffers.

For any MeanMesa visitor interested in charts and schedules which might depict this problem more graphically:

(graphic source)

The comparison noted between the US and the Chinese approach:

Military Expenditures of the PRC (graphic source)

And a glimpse of the relative costs of various, recent US military adventures:

The Wars of Defense and Oligarchy (image source)

Finally, in hopes of bringing this to a more personal level for MeanMesa visitors, comes the final chart.  It presents the actual spending per citizen in the respective countries listed.  The circular chart to the right compares the total amount of spending for the same countries.


Military Spending per Person (image source)

Facing the Consequences


As we review the incredible amount of our personal fortune which has been diverted to this small class of economic opportunists -- oligarchs, by any other name -- we see the price we have already paid for this grave misdirection of our national effort and our national wealth. We know the names of the players, both corporate and Congressional. We have patiently watched as the endless cycle of threat, fear, greed and response has played out during our own lifetimes and during those of our parents.

Now, as we watch our nation slowly advance to its likely nadir of respect and power, we can see -- or, at least, imagine -- what might have been done with such immense resources. We see the same faces who cajoled, voted and validated all this looting, cheaply redecorated, in our government now claiming to having "turned over a new leaf." They expect us to be as easily fooled as we always were before.

At this point, MeanMesa could address more recent outrages -- for example, the trillion dollar F22's and F35's, war satellites, H-bomb systems, and undoubtedly dozens of "secret" other cases -- but the point is made. The rampage may have been painted in more comfortable colors, but it continues unabated.

We must now direct our attention to Eisenhower's last paragraph. It speaks of statesmanship, balance and principle. This is the timeless part of his speech. It is the part which reaches us perhaps more clearly than any of the rest.

We must locate candidates with these qualities. After that, we must support them. elect them and hold them to such attractive promise.

Exaggerated? MeanMesa sees this challenge as immediate as that of holding our future as a hot coal in one's palms.

MeanMesa's compliments to the President




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