The Costs of “Good” Economics

By James Kwak

If there is a central argument to 13 Bankers, it is that politics matters. The financial crisis was the result of a long-term transformation of the financial sector and its place in the overall economy, and that transformation occurred because of—and contributed to—a shift in the political balance of power.

Daron Acemoglu and James Robinson, authors of Why Nations Fail, take up this theme on a much broader scale in their recent article in the Journal of Economic Perspectives, “Economics Versus Politics: Pitfalls of Policy Advice,” burnishing their reputations as two of the most subversive thinkers around. People have always known that economics and politics are related: that economic power produces political power and that political institutions constrain economic policy choices. Still, however, at least for the past several decades, the universal assumption has been that good economic policy is always good policy, full stop: for example, that it is always good to eliminate market failures.

This is what Acemoglu and Robinson contest. For example, assuming for the sake of argument that unions create economic distortions, unions also engage in politics on behalf of workers and, in some cases, lower-class people more generally. Policies that weaken unions not only reduce this economic distortion, but weaken the political power of the working class—which was already outgunned by capital to begin with. Given the role of unions in supporting participatory political institutions, this can be bad for democracy and for economic growth in the long run.

One specific consequence of weaker unions is that “income will typically be redistributed from workers to the managers and owners of firms.” This is often rationalized on the grounds that the “owners” of firms include, to some measure, workers themselves (primarily through their retirement account investments). But small investors have nowhere near the political organization and impact of unions (especially since their investments are largely funneled through mutual funds, whose executives do not share their political preferences).

Acemoglu and Robinson back up this conceptual insight with their usual impressive array of historical examples from around the globe. For example, the more economically efficient organization of mining contributed to autocracy in Sierra Leone, while the less efficient organization contributed to democracy in Australia. Privatization of state firms in Russia—which virtually every economist at the time supported—resulted in a concentration of wealth that was widely perceived as illegitimate and helped make possible the Putin regime. Financial deregulation in the United States is another of their examples. Some of the constraints on banks established in the 1930s and 1950s probably made little economic sense, such as restrictions on interstate banking. But the elimination of those constraints helped create larger, more politically powerful banks, which contributed to the deregulatory wave whose consequences we know all too well.

This all seems obvious. So why is it subversive? For some time now, progressives have been arguing that “free market” economic policies are bad because they ignore market failures, and therefore government policy should eliminate focus on eliminating market failures—it’s just good economics. That’s all well and good. But Acemoglu and Robinson make a significantly stronger case against pure economism. Even “good” economics can be bad for society, when the political dimension is taken into consideration.

One implication is that traditional cost-benefit analysis is incomplete: it’s not just economic costs and benefits that matter, but political ones as well. More broadly, it means that progressives—or anyone who opposes the tendency to reduce all public policy to economic factors—shouldn’t fight every battle on the terrain of economic efficiency. Of course, evaluating the impact of policy on the political landscape is both difficult and contentious. But that doesn’t make it any less relevant.

72 responses to “The Costs of “Good” Economics

  1. markets.aurelius

    Excellent post, James. I think it is important to air out these issues now, just as was done in the 1930s.

    I don’t think anyone would gainsay market-based outcomes are preferred to state-directed outcomes, regardless of whether the state mechanisms evolved out of a capitalist, mercantilist, aristocratic, socialist, theocratic or communist ordering of particular societies’ institutions. Hayek, and even Keynes, demonstrated as much.

    What is most interesting is how we as humans seem to converge on these super-inefficient allocative schemes regardless of where we start, something you allude to above. Putin’s Russia is not too far different from modern post-Mao China, post-Weimer Germany, post-Republic Rome, or, for that matter, post-financial crash America and Europe. There has been a massive concentration of wealth and power among cadres that have demonstrated a remarkable capacity to engineer rent-seeking cartels inside of pre-existing social orders, regardless of their origins.

    The common element among all these social orderings is the almost unimaginable venality of those who succeed in such rent seeking, and the unbridled effort they devote to ensuring control over the societies in which they operate. America is no exception in this regard, as the daily struggle of the banks and used-to-be investment banks over control of the law-making process daily demonstrates. They’ve been remarkably successful in rent-seeking, and are able to literally pay for its continuance via paying legislators to do their bidding: Once control over the law-making is secured, it’s implementation can be directed and funded (or not, as is so apparent now at the various agencies responsible for enforcing laws and regulations). Once that happens control over how the state treats the personal wealth of the successful rent seekers can be written into laws that are favorable to the venal class. Then control over the wealth generation and preservation is assured, and an increasing share of a society’s output can be secured, until, as we see now, the slimmest fraction of the population controls vast shares of their society’s wealth.

    It’s a unsettling to live in such societies: Just as surely as the above evolution is all-too-obvious, the eventual dissolution — most often violent, as history shows — of such orderings is a foregone conclusion. One needn’t be a JM Keynes or Robin Collingwood to see how this plays out.

  2. I’ve been working in the same area recently. My article in the American Prospect (http://prospect.org/article/what-would-pigou-do), argues that economic inequality creates a negative political externality. Taxing it, just as Pigou would suggest, via a steeper and more graduated income tax, helps to reduce this externality.

    My recent work suggests that reduced (private) unionization (and offshoring of production) have been key to increasing the bargaining power of firms (and reducing that of labor) which has led to the increased inequality we’ve seen at the very top. This becomes a reinforcing cycle which may be difficult to stop.

  3. Nice to read, reasoned, and intelligent pieces and responses. As time passes, do not the Rich and Powerful consolidate their positions – – making change almost impossible – – short a Revolution? What can be done NOW, to break the Cycle? The RW, Rhetoric about Free Market Capitalism, makes me sick! They are also playing, well-intentioned Tea Party Members, and Red Necks,” by wrapping themselves in the Flag; and, the boogey man of Socialism/Communism.” Unchecked, it seems to me that the Oligarchical Circle will close rapidly; and the Masses will be permanently reduced to, “fiefdom,” in the newly created Urban/Suburban Feudal System. The concentration of Wealth in the hands of a very Few today, is beyond Comprehension. Will my Grand Children, then, be forced to live in an Economic Caste System; where, there is little hope of rising above one’s existing status, or current Station in life; with, little or no means to acquire the needed Education and/or Training to move up; nor, the ability to acquire enough influence to even participate in the Cronyism of the New Order? Are we destined to become a Nation of, “Ass Kissers.” and; Informers/Spies, to curry favors from the Rich – – Eternal Dynasties that comprise the Ruling Oligarchy? Give an Old Grandfather some, Hope! if, any exists today.

  4. Follow up Comment: If the Cycle can’t be broken; and my fears play out; at what point do we urge the Young to migrate to another part of the World, in an attempt to start a new Life; or, is that even a consideration, given the tentacles – – of Power, Wealth, and Greed?

  5. @Donald Larson – look, Pops, don’t tell me you can’t help bring down – with MASSIVE brute force – the psychos with security clearance who use the Patriot Act technology to find women to eat – cut and pasted from the article: “….The allegation against Vargas is one of a batch of corruption cases in recent years against NYPD officers accused of abusing the FBI-operated National Crime Information Center database to cyber snoop on co-workers, tip off drug dealers, stage robberies and – most notoriously – scheme to abduct and eat women….”.

    http://www.huffingtonpost.com/2013/07/08/fbi-ncic-database-nypd_n_3560619.html?utm_hp_ref=new-york

    Plenty of women would be happy to pay Snowden $$ to get their hands on the NAMES of the predators.

  6. I’m horribly pedantic generally but think it worth noting the typographical repetition of “eliminate” in “…government policy should eliminate focus on eliminating market failures…” as it could legitimately confuse someone.

  7. Andy McLennan

    I once read an interview with the Swiss minister of health in which he explained that a key design principle of their health care system was solidarity. That is, the system is universal, not a patchwork of different systems for the old, the poor, the employed, veterans, and so forth. This was explicitly a piece of political engineering: since all voters get the same thing, they are all motivated to vote for politicians who will make it better.

  8. Moses Herzog

    James Kwak says above (quoting Acemoglu and Robinson and assumably agreeing): One specific consequence of weaker unions is that “income will typically be redistributed from workers to the managers and owners of firms.”

    Damn James, what in the hell are you talking about??? Ronald Reagan told us many times, large “capitalist” corporations are against “redistribution of income”. And Saint Ronnie would never lie to us…..

    http://inthesetimes.com/working/entry/15257/mcdonalds_franchise_drops_compulsory_payroll_debit_cards/

    http://grahambrokethemold.blogspot.com/2010/02/is-401k-really-good-for-you-or-just.html

    http://www.motherjones.com/politics/2013/02/our-walmart-black-friday-union

    http://www.nydailynews.com/news/national/walmart-hit-new-discrimination-lawsuit-article-1.1173047

  9. http://rt.com/shows/sophieco/bint-saud-egypt-revolution-688/

    Union of Ethical Scientists is a necessity in USA. It’s a group that deserves the right to be unified as human beings.

  10. Per Kurowski

    When government tries to eliminate what it considers market failures, the risk is it creates a systemic regulatory failure instead.

    Those from a credit rating point of view perceived as “The Infallible”, like sovereigns and the AAAristocracy, and who was already much favored by the markets, ended up favored even more by bank regulators, which thereby created an odious discrimination against “The Risky”, like the small businesses and the entrepreneurs.

    I invite you to read “The ‘Mistake’ that shall not be named”, which was recently published in the Journal of Regulation and Risk – North Asia, Volume V Issue II Summer 2013.

    https://docs.google.com/file/d/0B2Sn_liAX-Y-bEw0Ry1wSmZHNzA/edit

    And if you want to download the whole journal you can go to http://www.scribd.com/doc/149858219/Journal-of-Regulation-Risk-North-Asia-Volume-V-Issue-II-Summer-2013

  11. Bruce E. Woych

    Friendly Fascism: The New Face of Power in America
    By Bertram Gross

  12. Bruce E. Woych

    Dirigisme or dirigism (from Latin “dirigere” – to direct) is an economic system where the state exerts a strong directive influence over investment. It designates a capitalist economy with a strong directive, as opposed to a merely regulatory, role for the state.[1]

    http://en.wikipedia.org/wiki/Dirigisme

    (or is this a “mixed” offshoot of 20th century managerialism?) BW

  13. Anonyomouse

    That’s a fantastic concept Bruce. Unfortunately most of our regulators work for the love of money as their end justification. Rather than the desire to influence citizens in the correct direction, for they believe themselves that the dangers of their policy’s are outweighed by the potential good that same regulation returns to it’s investers. It’s a small group of like minded folks with great powers and laws on their side who don’t like being told they are wrong. They would rather die or kill you before a full admittance.

  14. And, old sport; Reagan, while, a true Patriot, was terribly naïve. For all his bluster about Big Government; Big Spending; and, HighTaxes; he nearly Tripled the National Debt; raised Taxes six times; and, doubled the Military Budget; after being, “played,” by Cap Weinberger; and, to the tune of $1.43 Trillion Dollars. Reagan also has given us – – in one sound bite: the summation of what he knew about Economics: “Deficits Don’t Matter!” Reagan was a below average Commander-in-Chief; and, Guardian of the Treasury. He could run his mouth though – – like many of us. Voted for the Guy on both Occasions; but, heck; what did I know?!

  15. Not the smartest kid in class; but, the definition sounds an awfully like State Controlled/Directed Capitalism in China today. During the past 15 years; the Chinese have raised 400 Million from Poverty; to the Level of the Region’s Definition of Middle Class. The Government has also, “Banked,” $3.2 Trillion Dollars. (And, yes; I know that China is having It’s own economic problems today.)

    Meanwhile, in the United States during that same 15 year, period, under our, supposedly, Enlightened System of Free Market Capitalism; the Country has sent 50 Million People to the Poor House; impoverished millions more, that are just, barely holding on; and Bankrupt the Nation.

    It seems to me that Rich Predators have abused the Freedoms accorded to all of us under both, our Democratic Political System; and, what was intended to be, the, “Light of the World,” System of American Capitalism – – to ENRICH themselves. They clearly have loop-holed, both Systems, to, literally, steal the riches of Main Street; and, Billions – – if not, Trillions – – from the U.S. Treasury.

    Thus, one wonders if Democratic Capitalism is incompatible with, “The Nature of Man.” What say, U – – or, any of You? I just want to pass this Course.

  16. Bruce E. Woych

    don larson: (@)” is … Democratic Capitalism is incompatible with, “The Nature of Man.”
    =============
    i don’t know if you are involved with the history of ideas, but what you question is many layers deep and very profound in that depth. The nature of man, as well as natural law, human nature and all themes in that class is a very polemical and contentious set of ideas. Is nature conflict based or harmonious becomes polarized and politicized as foundations for rationalizations all the time.
    Meanwhile, the idea or ideal of a democratic capitalism (small case lettering) is a generic approach (I believe…) to a good deal of post World War II thinking which has become in conflict with itself as the terms of each part of the compound have historically changed. Capitalism, left to itself, is a tool for progression but it is easily co-opted by the most aggressive and transgressive people under rationales that appeal to conflict as natures’ own solvent. IT is all in the complex emergence of whether the process is progressing inclusively or exclusively. Therefore “capitalism” tends to lend itself to being in contradiction to democratic process unless it involves an interest in cooperation for competition (in the extreme: warfare. But note that “war” is ALL against an external opponent. A better “peaceful” example is ecological crisis which tends to bring people together for a common cause)..
    If we assess democratic capitalism, surprisingly, you will find that a good deal of Catholic economic work is pushing that phrase and it involves a moral restraint upon economic transgression. These can be very interesting to browse. One moral / theological work that attempts this appeal is by Michael Novak: “The Spirit of Democratic Capitalism.” But technically speaking this is an appeal to Metaphysics more directly than nature; unless this is linked to human nature as the pivotal dualism at its foundation.
    Finally I would urge anyone attempting to challenge people in thought about a democratic capitalism to realize that a competitive based system must be designed as the original bottom up democracy was conceived. Community as unity is not always in the interest of shareholder based corporate structure. Participatory Democracy seems to come closer to a foundation for such a compromise between the two, but perhaps stakeholder interests should be aligned with shareholder vested interests in a participatory capitalism before any of it is possible. As long as society and the real economy is segmented and stratified in power relations, the possibility of a true Democratic Capitalism is just an ideal utopian illusion.
    But don’t blame Nature…The rudiments and potentials are all in the cultural-historic foundations and the path dependent institutions we have perceived as TBTF agencies and brokers of collective survival. .

  17. Considering that faulty intelligence was good enough to go invade because of USA security interests – “…we worked with the information that we had….”,

    it seems like you have WAY more “information”, Woych, so your interest in maintaining the suicidal and non-sustainable status quo borders on metaphysical belief :-)

  18. Annie, have no clue how one of your responses had anything to do with one of my posts here. Please go back and read my post – – then, your apparent, response. Your, “Pops.”

  19. and I have no idea how you can’t connect the dots, Pops, between the world of your grandchildren and cops in NYC using FBI databases to lure women that they want to cook and eat….

    so there you go, another problem with “reality”….

  20. Annie, your response was not rational. Can you please stay on one topic at a time; without jumping about, like a Spring Tail? Must be my age; because I am having difficulty following your logic. Pops

  21. Scot Stirling

    In other words, the study of economics doesn’t tell you what to value, any more than the study of geometry tells you where to stand. Improved economic efficiency may be a way to accomplish a goal, but it isn’t the goal.

  22. Bingo! Scot. You just raised the critical issue in my mind, at least. Actually, it should be the, “prior, first question.” If the issue of Values has any merit today. In fact, I believe that Value questions aren’t raised soon; the Nation will self-destruct, or collapse; in the pursuit of what seems to be the ONLY thing that matters today: The Almighty Dollar! Do Values like ethics, morality, honesty, compromise, promises, trust, fairness & equity, matter anymore; or, may one increase his/her bottom line, by any means possible – – if one can get away with it? Has the notion of the, “common good,” been vanquished,” from our lexicon? When it comes to Economics – – is it just, “dog eat dog; or every man for himself?” Lot’s of critical issues coming down the line. As a generalized guiding principle relative to so many issues that may confront us, seems to be: “BECAUSE WE CAN – – SHOULD WE?” if, “IT,” will produce large profits? Couple of examples: because we CAN administer Chemo to a terminal patient – – and spend $100,000 – – SHOULD WE? if the prognosis is 3 – 6 months, or less; and the Family has no means to pay for the services? These are the kind of, “Death Panel,” issues that are likely surfacing today; but, taken out of Context, by the RW, Wacko Birds. Or, consider the one that is coming that will likely blind-side many (most?), of us. The coming competition of Robots and Machines with Man, for Jobs? Artificial Intelligence and, the Physical Dexterity of Robots is progressing faster than most of us realize. As an example; if Corporates can increase profits and shareholder value; should they – – at any cost; even though such technology would render Millions of Human Beings – – Obsolete – – in terms of having a marketable skill that is needed in the Economy? (Can’t work or produce, because the, “Bot’s,” CAN do it better and faster, and probably cheaper; than, Human Workers? May the Elite, Puppet Masters render one, as unemployable, and, relinquished you to the scrap heap of Humanity?)
    Think you will always have a job – – any job – – don’t be so sure.
    I would like to pick up on this very important issue at a later time; as it is a special interest of mine. Good comment, though, Scot.

  23. Anonyomouse

    You hit the unsustainable nail health care issue right on the head there Mr Larson.

  24. Bruce E. Woych

    I think we need to make distinctions between ethics, morality and professional standards of practice. The real question of “values” versus value is on the line.

  25. Bruce E. Woych

    don larson: consider what is happening under the cover term of “contingency workers” and you will find the thread to the dreaded future.

  26. Why just discuss the economic distortions caused by unions? Why not discuss the economic distortions caused by limited liability corporations? They are much more serious. Why not discuss the economic distortions caused by government enforcement of contract law? Why not discuss the economic distortions caused by crime prevention? Why not discuss the economic distortions caused by the existence of a unified medium of exchanged, e.g. money?

    Besides, there is no real argument that efficiency and economic distortion are at odds. In fact, there is a lot of solid mathematics showing that price based optimization systems cannot be efficient if savings are allowed. For efficiency, you generally need some form confiscation. It falls out of the mathematics.

  27. That would be a, “Thank You,” Bruce.

    The, “Bot’s,” aren’t fully mobilized yet; and, since the Year – 2000; only 200,000,” Breadwinner Jobs have been created. The rest: low-level temp, or, full-time, jobs that pay between, $19,000; and $21,000 per year. The future does not bode well for the rank & file American Worker with little, or no skills.

    Can you handle a, Conspiracy Theory? Is it possible that the, “Puppet Masters,” have found the, “Ultimate – – or Final Solution,” to the Planet’s Population and Environmental Problems? They must know that the Planet can’t support 9 Billion People by the year, 2040. Heck, we can’t support 7 Billion, now; especially, at a level that even closely resembles – – Middle Class. And, why spend Trillions on Fixing the Environment; when the Planet will heal itself; with the demise of perhaps, Billions of People.

    No doubt about it; the Machines are coming; and, most working stiffs do not have a clue. But, imagine for a minute; how things might improve: Take Fast Foods as an example. Robots which can take orders with nary a mistake; they operate 24/7, never complain, or mess up an order. Tables and Bathrooms will be immaculate all the time. And, the best part: no wages, no benefits, no tardiness, no chit-chat, that cuts down on productivity; never needs a potty or smoke break; and so much more. Now, apply those possibilities to so many other Industries. Read somewhere recently, that “Bot’s,” will work at 99+, percent efficiency; while the average efficiency rating today in the Work Place is about 61.4%. And, the Smug, Educated Class can’t get too comfortable either. Each new Generation of Robots will threaten another Class of Workers – – at even higher levels. Look what Galileo, is doing in Medicine now; and that is just the Tip of the Iceberg. Exciting – – but very scary stuff. What are people with ordinary intelligence to do? Repair Bots? Not for long. They will repair their own. And, as one weighs the implications of these Technological Advances; not a word has been said about the process of blending Man and Machine. A Google Futurists spoke to this issue some weeks ago.

    So much more; but suffice for now.

  28. Anonyomouse

    If this were permitted to continue for an extended time period don, you would find the people migrating toward the cities, so much so that you would either be a farmer, or a city folk, there would be no imbetweens. The same problems would exist but the inability of the masses would force them to double or triple up to conserve reasources.
    And kaleburg, you must first have correct laws before you can talk about the economic distorsions of crime prevention. And we don’t now.

  29. Would it be consequential and relevant to discuss the Greatest Distortions of all? Those resulting from years and years of manipulation by Financial Engineers; who have rewritten the rules that have literally destroyed any meaning of Free Market Capitalism; over the past 40 years. Seems to me everything is Controlled: All Social, Economic, And Political Systems, for the benefit of the Rich – Elite, Class. Questions: How does the reckless printing of Money, relate to Free Markets? Or, pumping $750 Billion into a TARP program that benefits the Richest among us: or, the “Pay to Play,” Culture that dominates the Congress today? Free Market Capitalism in America Today? Don’t make me laugh! It’s a Power Game that can only be played by those with extreme wealth. What the Super Rich want – – they get; including most of the Wealth of Middle America; and, the U.S. Government, over the past 35 years. Capitalism dead? Why, of course not, – – old sports. Predator Capitalism and Rent Seeking are doing very well in America today. As one Wall Street Trader said over a glass of spirits: “If you ain’t doing someone; someone is doing you!”

  30. @don Larson – your “values” are so screwed up in that you went after me instead of after the current system of “investment” in technology that spies on citizens that permitted a psycho to infiltrate the NYPD and use that security apparatus technology to hunt down women THAT HE COULD EAT.

    What is wrong with you?

    Banksters did the same thing with the same technology and on a massive scale – the Prima Facie evidence is overwhelming regarding the economic genocide.

    So no matter how many times you slap me as being “illogical” and then pontificate from a continuing position of rationalizing and manipulating the malice in your heart regarding wealth extraction, it won’t change the “trickle down” technology investments that elevated psychotics into positions of power over the “normals” via The Patriot Act. I have the right to defend my life – and brute force is the only option – I slap back and there would be no waste of taxpayer $$ taking psychos to court.

    Hope Snowden will start selling the NAMES.

  31. Analyzing the real time data of the “fruits” of billions in investments in “security” is NOT illogical. It is the very definition of LOGIC.

  32. Dear Annie, Your last response has to be one of worst, illogical rants that I have read, on this more, intelligent, posting site. You appear to be a sick, and bitter Woman. Lighten up; your approach is going, “nowhere.” (You need not respond; I can’t understand; nor, help you.)

  33. Private, for-profit health insurance is a mafia protection racket. And the only reason that big corps were given another year to “implement” the ACA was so that they have time to weasel out of coughing up the $$ that the IRS can shake down poor people for in the way of fines.

    REAL health care is MAIN STREET commerce. IT Tech heavy biopharmas cropping up like cancer, themselves, chasing down a molecule to sell as a cancer treatment agent is the OPPOSITE of Main Street commerce. That’s why it is not “affordable”, nor does it have anything to brag about in the way of efficacy. It’s the most sadistic extraction of wealth to date – a monstrosity.

    As for how many people from India does it take to screw in a light bulb, well, the joke is on you people denying the entire earth’s population the right to operate in the physics of time called “NOW” to make their lives less miserable by hurling numbers in nanosecond time on mainframes around the planet – that’s not “CURRENCY”, is it? Nor a light bulb…

    byte me :-) – and keep stalking….Israel will not stand because the Annies were EATEN by CHASE banksters…NYC “values” being promoted by a smerconish” Comcast idiot promoting HIS yidsocial politics through legalizing prostitution so that a Spitonher can run for political office to get his hands on taxpayer $$$$. When is a woman going to be a *legal* position that deserves payment? Keep sucking out “education” currency to give to Spitonher to pay for LEGAL prostitutes while Mothers are hurled on the street because they did NOT deserve to own a home?

  34. @Woych – the protection of the pimp’s job is the latest “value” driven support for weenie politicians in NYC by an NSA agent of stalking – COMCAST – by throwing the weight of MASS MEDIA propaganda behind the legalization of prostitution.

    In your vast knowledge of the origin of “ideas”, why did no one ever have the idea that securing the financial health of *pimps* – AKA temporary worker Hollowood model adopted by medical research and hospital administrators to pay off the mob protection racketeers – is not a real “moral value”.

    Legalizing prostitution is a DIRECT assault on the financial security of women who are NOW in the throes of motherhood – raising kids NOW.

    What child EVER wants to come home to see his Mom being cruelly banged by some stranger off the street? Pimp job security is more important than EDUCATION on MAIN STREET?

  35. Bruce E. Woych

    @Annie: “More Bang for your Buck!”

    http://jonathanturley.org/2013/07/09/the-rise-of-the-science-philistines-canadas-chief-science-regulator-announces-that-scientific-discovery-is-not-valuable-unless-it-has-commercial-value/

    “The Rise of The Science Philistines: Canada’s Chief Science Regulator Announces That “Scientific Discovery Is Not Valuable Unless It Has Commercial Value.” ”
    Published 1, July 9, 2013
    JONATHAN TURLEY
    Res ipsa loquitur (“The thing itself speaks”)

    Read it and weep…

  36. Bruce E. Woych

    Published on Mon May 13 2013
    Explore This Editorial :

    http://www.thestar.com/opinion/editorials/2013/05/13/harper_governments_nrc_makeover_is_shortsighted_and_wrongheaded_editorial.html

    “Scientific discovery is not valuable unless it has commercial value.” That’s an extreme position for anyone to hold, but coming from the country’s chief scientist, it’s a sign that something is very wrong.

    The comment, made by National Research Council president John MacDougall, is an expression of the philosophy behind the federal government’s makeover of Canada’s science agency into a tool box for industry. Gary Goodyear, minister of state for science and technology, announced last week that the NRC will shift its focus away from so-called basic research — science for no immediate purpose other than knowledge-gathering — to “large-scale research projects that are directed by and for Canadian business.” In other words, the government is set to transform the agency’s $900-million budget into a business subsidy.”

  37. Bruce E. Woych

    http://www.dailyfreeman.com/articles/2013/07/10/news/doc51dcbc6ac9064907529092.txt?viewmode=fullstory

    By The Associated Press

    BALTIC, Ohio — In parts of Ohio and Pennsylvania where horse-drawn buggies clip-clop at the pace of a bygone era, Amish communities are debating a new temptation — the large cash royalties that can come with the boom in oil and gas drilling.

    In some ways, Amish attitudes toward hydraulic fracturing, or fracking, are as different from the outside world as their clothes and traditions. Instead of worries about air and water pollution, they’re focusing on people’s souls.

    “Amish are no different than anybody else. The power of big money can bring spiritual corruption,” said Jerry Schlabach, an Amish resident of Berlin, Ohio.”

  38. You are another dime a dozen dellusional and nasty futurist, Larson – boring in the final analysis. Who is going to fight off 14 million coming to get the 7 million? How many drones should you be shipping to your buddies in the Middle East TODAY?

    The BILLIONS spent on technology to gather “intelligence” can’t be defended by anyone no matter how many times you call me a bitter ranter – which in itself is proof of the failure to assess the REALITY.

  39. @Woych – too small of a gene pool among the Amish, it’s starting to show

    Big pharma educating med students – that’s already happened and the result is an epidemic of autism among the kids of the parents who believe in a pill for it all.

  40. COMCAST is promoting the legalization of prostitution as a way to get Spitonher back into having his finger in the pie to extract tax $$ – bottom line. And COMCAST is a main agent of the NSA?!

    If you were to do a Boolean word search on this “baseline scenario” web site, comments and articles, it would reveal that there is a consistent vocabulary of about 500 words that have no definition that is set in stone – so it is either a deliberate generator of NOISE to cover crimes, or the 480 people and their sycophants ALLOED to run the global economy with “ideas” are retards. I say both.

  41. Bruce E. Woych

    http://truth-out.org/news/item/17472-stopping-the-tpp-a-victory-in-the-global-revolt-against-corporate-domination

    Stopping the Trans-Pacific Partnership: Global Revolt Against Corporate Domination
    Wednesday, 10 July 2013 09:20 By Margaret Flowers and Kevin Zeese, Truthout
    [Excerpt]
    “Using the friendly term, ‘partnership,’ the administration is negotiating a sweeping free trade agreement, the Trans-Pacific Partnership (TPP), which could potentially involve the entire Pacific Rim as well as a sister agreement with European nations. This is being done largely in secret and in a way that subverts the democratic process.

    Former US Trade Representative Ron Kirk, who now has a lucrative job in the private sector advising transnational corporations for the law firm Gibson Dunn, said that if people knew what was in the TPP, there would be no way to get it signed into law. As he told one interviewer, if the text were made public negotiators would be walking away from the negotiations because they would be very unpopular.

    The new US Trade Representative, Obama’s classmate Michael Froman who worked at CitiGroup, and the more than 600 corporate advisers involved in writing the TPP, have direct access to the text of the treaty, but members of Congress have only limited access and the public and media are excluded. Recent calls for transparency by members of Congress have been denied, so the extent of what we know comes from leaks.

    We do know that the TPP is less about trade and more about entrenching corporate property rights. It will establish a judicial system that gives corporations greater power than sovereign nations and bypasses the democratic process. The TPP will affect the global economy so that corporations control all aspects of our lives from wages, food safety, the price of medications and our rights to clean water and air to Internet freedom and more.”

    http://truth-out.org/news/item/17472-stopping-the-tpp-a-victory-in-the-global-revolt-against-corporate-domination

  42. Bruce E. Woych

    http://www.commondreams.org/headline/2013/07/10-3

    Published on Wednesday, July 10, 2013 by Common Dreams
    ‘Daylight Robbery': UK Announces Privatization of State-Run Mail Service
    Royal Mail sell off will hamper mail service and hurt working conditions, unions warn
    – Jacob Chamberlain, staff writer

  43. Just the beginning; the Corporate Oligarchy raises it’s Ugly Head. Gees, don’t know how much more I can take of this Democratic – – Open & Free Market – – Capitalism.

  44. UK going, “Private,” on it’s Mail Service? Well . . . OK. There may be times when the, “Privates,” can do it better; BUT, NEVER CHEAPER! Therein lies the Rub; and the Ruse!

  45. Anne, give it a rest! You are so far below my pay grade; than I can’t spend anymore time trying to connect, your, “loose screw – dots.” Be done – – will you; and, get on to something else. Maybe, even, get a Life!

  46. J Denver (12/31/43 – 10/12/97)
  47. Amerika has shapeshifted into a fascist state ruled, owned, and controlled by the predatorclass and predatorclass oligarchs.  Sadly the people are too stupid to recognize the noose tightening by the second around their necks!   Via ZeroHedge. 

    http://www.zerohedge.com/news/2013-07-11/what-every-student-america-needs-know-about-federal-reserve

    (“It is a Clausewitzian principle that individuals, organizations and nations will expand their power until some superior or equal power effectively opposes them and stops them. Because the Fed’s power has no equal, we can expect the Fed’s power to continue to increase indefinitely.

    At some point, however, history shows that the slaves and victims of oppressors gain strength and confidence when they feel a desperate determination to live.

    But that point is still far off. The numbers of the righteous are far exceeded by those who want freshly printed debt-money from Ben Bernanke. Things have not yet reached the desperate, life-threatening stage which is when most revolutions occur.”)

    There is no righting these horrible wrongs.  There is no balm in Gilead!

    Get stocked, locked, cocked, and ready to rock!!!

    Burn it all down!  Reset!!!  It’s the only option for the 99%!!!

  48. Ok; let’s get ready to rumble! . . . or, maybe not! The tight Bond between, the Predator Class, the Fed, and the Crony Politicians (not to mention the influence of the Military Industrial Complex); makes penetration of these self-centered, and evil power centers, impossible. What is surprising, is how Quiet, College Students have been. They are – – or, soon will be – – the biggest losers of all!

  49. Fascist propaganda Don! It will not be easy or bloodless but history proves, every tyrannous empire falls. And good point about college students – they will graduate with monstrous debt and little opportunity for gainful employment. Of course the predatorclass will nurture their own. – but the rest of the nations college students are in for a rude awakening!

    But as long as Honey Boo Boo and Duck Dynasty can thrill and educate the masses, – there’s no reason to worry about the menacing future of a fascist state. All is well in the land of Oz.

  50. Anonyomouse

    You can ride the train, or be the conductor. But the timer is out of your hands.

  51. curb your (free market) dogma….

  52. Bruce E. Woych

    http://www.justice-integrity.org/

    The topics include:
    The arrogant, undemocratic and near-lawless culture becoming more apparent on the U.S. Supreme Court as it concluded its 2012-13 term last week.

    Politicization of the Justice Department as it pursues cases applying different criteria according to the clout and other status of the targets.

    Arbitrary United States rationales to increase arms deliveries to Syrian rebels, thereby increasing devastation in the civil war in apparant violation of international law.

    Hypocrisy and arguably lawbreaking in U.S. surveillance on the American public. The Flickr photo above right shows German protesters against spying wearing masks of Edward Snowden, the former NSA contractor.

    Assaults on “Economic justice,” such as doubling on July 1 the interest rate paid by millions of young people for their student loans.

  53. Bruce E. Woych

    http://jonathanturley.org/2013/07/12/who-do-you-trust-us-or-your-lying-eyes/#comment-609482

    JONATHAN TURLEY
    Res ipsa loquitur (“The thing itself speaks”)

    http://jonathanturley.org/2013/07/12/who-do-you-trust-us-or-your-lying-eyes/

    Who Do You Trust, US or Your Lying Eyes?
    Full article Submitted By: Mike Spindell, Guest Blogger
    =================================================
    selected quotes from the comment section:
    Bruce E. Woych 1, July 13, 2013 at 3:14 am
    The diabolical Henry Kissinger once famously quipped, ‘A country that demands moral perfection in its foreign policy will achieve neither perfection nor security’

    But compare that to a tried and true American: Mark Twain’s adage that :
    “…you cannot have an empire abroad and a republic at home.”

    ….lifted from a comment on this blog posting by Dredd 1, July 13, 2013 at 8:56 am

    “If Tyranny and Oppression come to this land, it will be in the guise of fighting a foreign enemy.” – James Madison
    ================================================
    It might be of some interest to inspect the fact that the same is true with the economy. What TBTF does not get away with so easy at home in the USA, they export to other countries and practice unfettered. Then as the “dependency path” and traps grow more insidiously complex, they bring the tactics into play internationally (which means back “at” us from behind the international corporate Vail… and the claim that it is essential to a growth economy which allows a distorted perspective such as “austerity’ to appear not only necessary but essentially healthy…AKA: a “GOOD” economy.
    It is the the cost…it’s the price!

  54. Anonyomouse

    Not to discriminate with the ages here, today, but we lost that battle with Clearence Thomas back there somewhere say in 91 or so. A hat trick of sorts, which only breed upon itself and financialized the economy and worse. I refer back to tony’s expected last sentence in this case.

  55. Bruce E. Woych

    Anonymouse: That was just “judicial capture”. the ongoing dismantling of the balance of power between the branches is an insidious consolidation and concentration that you should not become complacent about. It is continues to decay under a planned obsolescence that shifts power bases in blatant plane view and apparently without too much concern for scrutiny or discretion:
    see:

    http://www.justice-integrity.org/

    Justice Integrity Project
    ‘Justice’ Should Be More Than A Fancy Word
    Written by Andrew Kreig
    The topics posted at the Justice center include:
    The arrogant, undemocratic and near-lawless culture becoming more apparent on the U.S. Supreme Court as it concluded its 2012-13 term last week.

  56. Bruce E. Woych

    http://money.cnn.com/2013/07/14/news/companies/fabrice-tourre-trial/index.html?iid=HP_LN

    Fabrice Tourre is among the very few Wall Street traders to land in court for misleading investors.

    NEW YORK (CNNMoney)
    The trial of the infamous ex-Goldman Sachs trader Fabrice “Fabulous Fab” Tourre, which starts Monday, could put a face on the type of Wall Street recklessness that imploded the housing market and almost sank the economy five years ago.
    “This is one of the few opportunities that a court has had to punish conduct associated with the financial crisis that put this country into a grave recession,” said attorney David Marder. Marder is a former assistant director of the SEC’s Boston office who now defends clients against SEC charges.

    Ever since the economy took a nosedive in 2007, there’s been a big public outcry blaming Wall Street and its shenanigans. There have been several penalties levied, notably a $550 million settlement that the Securities and Exchange Commission reached with Goldman Sachs (GS, Fortune 500) in 2010. But trials have been few and far between.

    Tourre is accused of knowingly selling bad investments that he expected would unravel. When he goes to court, it will be the first such trial since the 2009 acquittal of two former Bear Stearns hedge fund managers, Matthew Tannin and Ralph Cioffi, who were also accused of misleading investors.

    http://money.cnn.com/2013/07/14/news/companies/fabrice-tourre-trial/index.html?iid=HP_LN

  57. Anonyomouse

    I’m certain that the list is long as far as people misleading investors, the $ derivative count alone should set off alarm bells to anyone paying attention. And our court system is just about as messed up and inefficient as at any time in history, and shows no signs of changing any time soon either.

  58. Anonyomouse

    I lifted this from Bruce’s link

    “[Tourre's] hand was caught in the cookie jar,” said Marder. “In most of the cases, the investment bankers of the worldcould claim

    that everybody was sophisticated, they were all big boys and they were all entitled to make their own judgment calls. This case is

    different because the SEC was able to identify the specific facts [about the investment] that Mr. Tourre had.”

    Reminds me of the 2 year old (just happened to be black) child who want to grab an extra gumball from the machine. He got the gum

    ball but then couldn’t raise the ball up enough to get his hand out so it basiclly got stuck. The store owner did not have the key

    to the machine, and rather than turn both the boy and the machine upside down and have him let go of the ball, they waited the 30

    minutes for the company to arrive with the key.

    Of course by then the child was crying and the adults were sweating, they had to take apart the whole machine and remove all the

    gumballs which took another half hour. Finally they removed all the balls, and then had to explain to the boy that he had to let go

    of the gumball in order to get his hand free. He did, and they all went over to sit on the bench since they had been standing

    through out the whole ordeal. Well a few minutes later, when the boy finally caught his breath, he’s says, “boy the was tramatic, I

    think I a few more gumballs”.

  59. Bruce E. Woych

  60. Bruce E. Woych

    Wed Jun 26, 2013 at 11:58 AM PDT
    Here’s how Darrell Issa manufactured the IRS ‘scandal’
    by Jed LewisonFollow

    http://www.dailykos.com/story/2013/06/26/1219172/-Here-s-how-Darrell-Issa-manufactured-the-IRS-scandal

    “Obviously, if Issa wanted a comprehensive investigation, he should have asked for a review of all politically oriented scrutiny. Instead, he asked for exclusive focus on tea party and conservative groups. Under the most charitable interpretation of this, it never occurred to Darrell Issa that anyone other than the tea party groups could have been targeted. If that’s true, it suggests he just doesn’t care about whether the IRS “targets” anyone other than his political allies.

    But I think the most likely explanation here is that Issa was simply trying to cook up a scandal, even though it did nothing to address the genuine problems with the way campaign finance and tax laws are written. He probably figured that in the best case scenario, he’d be able to get away with his fraud. And in the worst case scenario, he’d get a slap on the wrist from a few reporters, but endless approval from his political supporters. It’s exactly the kind of thing you’d expect from Mr. Grand Theft Auto.”

    Originally posted to The Jed Report on Wed Jun 26, 2013 at 11:58 AM PDT.
    Also republished by Daily Kos.

  61. Anonyomouse

    Off topic, but.

  62. Bruce E. Woych

    (massive response in the comment stream; growing daily)

    http://jonathanturley.org/2013/07/22/irish-politician-calls-obama-as-war-criminal-and-hypocrite-in-parliament/

    Clare Daly in Irish Parliament.

    Obama gets her “Irish” up…no double talk here! I love this woman!
    Clare Daly interview: 27 minutes

  63. Bruce E. Woych

  64. Bruce E. Woych

    http://rwer.wordpress.com/2013/07/23/edward-snowden-Edward Snowden and…..-financial-speculation-taxes/
    …. Financial Speculation Taxes
    July 23, 2013 deanbaker1
    from Dean Baker
    [Excerpt]
    “This is important background for understanding the effort in Washington to block financial speculation taxes. The basic argument for such taxes is that we have a vast amount of high-speed trading that serves no productive purpose. Much of this trading uses sophisticated computers to get ahead of major orders and siphon off much of the profits for themselves. It’s a high-tech version of insider trading.

    The point of a financial speculation tax is to discourage this sort of rapid trading. Since this trading involves buying and selling stock or derivatives in a fraction of second, even a very modest tax would provide a large disincentive. Such a tax would have almost no impact on normal investors.

    And it could raise lots of money. Iowa Senator Tom Harkin and Oregon Representative Peter DeFazio proposed a bill with a tax rate of just 0.03 percent (3 cents on a hundred dollars). The Joint Tax Committee of Congress estimated this tax would raise close to $40 billion a year in revenue. Virtually all of this money would come at the expense of the financial industry. The impact on individuals with 401(k)s and other long-term investors would be almost invisible.

    In fact, research shows that trading volume is likely to fall roughly in proportion to the increase in trading costs. For example, if this tax raised trading costs by 20 percent, then the turnover of stock in a typical 401(k) would fall by roughly 20 percent, leaving total trading costs virtually unchanged.

    In short, this tax seems like a win-win proposition. It raises lots of money for the government, while making the financial markets more efficient and possibly less volatile. Everyone comes out ahead except Wall Street.

    This tax would be a huge deal for the big Wall Street banks, which is why they are using everything in their arsenal to try to stop it. At the moment much of their attention has been devoted to sinking a speculation tax that seems likely to go into effect in the European Union (EU). The Wall Street banks have enlisted the Treasury Department to throw up every obstacle imaginable to prevent the EU from adopting the tax.

    However they also concerned about growing support for a speculation tax in the United States. Since the financial crisis this idea has very much entered the mainstream, with many prominent economists, columnists and politicians endorsing it. Even the International Monetary Fund now supports increasing taxes on the financial sector.

    The financial industry has used its lobbyists to develop a number of arguments against a financial speculation tax. Most of their arguments don’t pass the laugh test.”

  65. Brilliant idea Bruce, thanks for sharing. “Everyone comes out ahead except Wall Street.”. Hopefully the spaniels in our government will push this simple and necessary “speculation tax” forward to deincentivise the TBTF oligarchs from profiting on speculation that serves absolutely NO public good.

  66. I have favored a millage tax on every transaction that takes place on Wall Street each day, for some time. All, “buy – – sell,” transactions, bonds, stocks, real estate, etc.; would be subject to said Tax. Over three Billion Transactions a day. The money should be ear-marked to pay down the National Debt. It might even have a Sunset Clause. The Robber Barons on Wall Street were a major contributor to the Crash of 2008; thus, it would be fitting to have them contribute to the pay down of the Nation’s Debt..

    The Marginal Tax Rate needs to be returned to the level it was before Reagan was elected. The difference between what it is today; and, what it was previously; could be ear-marked to pay down the National Debt, as well.

    Here’s the clincher: An Inheritance Tax earmarked to pay down the National Debt. Let the Rich leave their Off-Spring an, agreed on inheritance ( one, five, 10 Million); then the rest goes to pay down the National Debt. Man came into this World without anything – – thus, he goes out the same way; but, is allowed to leave a $$$ Legacy to One’s Children. This too, could be set to expire when the Debt is paid down to an acceptable level.

    Finally,add a Federal Luxury Tax on high ticket items; and, help reduce the YEARLY Operating Budget Deficit. Cut the Military Budget back to the Clinton Era; and, eliminate all Corporate Welfare Subsidies. Going to a Single Payer – – National Health Care Plan would save the Government Billions as well.

    don