The Koch Brothers, The Cato Institute, And Why Nations Fail

By Simon Johnson

A dispute has broken out between the Cato Institute, a leading libertarian think tank, and two of its longtime backers – David and Charles Koch. The institute is not the usual form of nonprofit but actually a company with shares; the Koch brothers own two of the four shares and are arguing that they have the right to acquire additional shares and thus presumably exert more control. The institute and some of its senior staff are pushing back.

According to Edward H. Crane, the president and co-founder of Cato, “This is an effort by the Kochs to turn the Cato Institute into some sort of auxiliary for the G.O.P.” Bob Levy, chairman of the Cato board, told The Washington Post: “We would take closer marching orders. That’s totally contrary to what we perceive the function of Cato be.”

Far from being just an unseemly row between prominent personalities on the right, this showdown reflects a much deeper set of concerns for American politics and society. And it raises what I regard as the central question of an important book, “Why Nations Fail: The Origins of Power, Prosperity and Poverty,” by Daron Acemoglu and James Robinson that will be published on March 20.

Professors Acemoglu and Robinson assert that “institutions,” by which they mean the rule of law and constraints on government power, are critical to economic development – having great influence on which countries become rich and stay that way, and which countries over the last 200 years have failed to grow or collapsed into civil disorder. (Disclosure: I have done a great deal of joint research with Professors Acemoglu and Robinson, but I wasn’t involved in writing this book.)

At one level, the Acemoglu and Robinson argument lines up well with the standard Cato Institute – and libertarian – view of the world. At the back of Cato publications is the statement, “In order to maintain its independence, the Cato Institute accepts no government funding.” Without question, excessive power in the hands of governments can be bad for economic growth.

But the Acemoglu and Robinson point is not just about how things may become awful when the government goes off-track (a right-wing point). They are also more deeply concerned about how powerful people fight to grab control of the state and otherwise compete to exert influence over the rest of society (a left-wing perspective).

The outcome to fear is some form of “extractive institutions,” meaning a set-up in which most of society is pressed down by working arrangements – e.g., various forms of forced labor – or civil disorder or a more general lack of property rights. They provide many historical and contemporary examples of what this means in their book (and you can see previews of some items, nicely illustrated with photos, on their blog).

“Secure property rights” is a key term for the Cato Institute and others on the right of the American political spectrum – nothing could be more important to a libertarian. But Professors Acemoglu and Robinson trace the development of such property rights in detail to the spread of political rights across a broad cross-section of society, including to people who are not (or do not start their lives among) the well-to-do.

In historical terms, Professors Acemoglu and Robinson see the progressive era at the beginning of the 20th century, including the development of countervailing power for the government against powerful private business interests, as an essential part of what has gone right in the United States of America.

Many libertarians, on the contrary, feel that the country started to go off-track at exactly this moment – for example, some blame the 16th Amendment (introducing the federal income tax in 1913), while others point the finger at the rise of social insurance programs (culminating in Social Security in the 1930s).

Libertarians, such as those who work at the Cato Institute, do not like the state and do not trust the federal government. The Acemoglu-Robinson view is much more nuanced: states are often captured by powerful elites and very much used as a tool of oppression, but it is also possible for liberal democracies to develop in which the government not only helps people but behaves in a way that is conducive to widely shared economic prosperity.

In this context, the Koch brothers are an important topic of discussion — or cause for concern. In the new Bloomberg billionaire index, released this week, the Koch brothers are each worth $33.5 billion. If they choose to act together, as often seems to be the case, including in the case of Cato, they are the richest pair in the world.

Professor Acemoglu is concerned about the Koch’s well-organized attempts to exert sway over American politics (e.g., through Americans for Prosperity and its affiliated organizations). But he feels that American democracy is sufficiently strong and will prevail. If he is right, the Koch brothers are unlikely to end up calling the shots as corporate titans did in the Gilded Age at the end of the 19th century (the term was coined in “The Gilded Age: A Tale of Today,” by Mark Twain and Charles Dudley Warner in 1873).

The Acemoglu-Robinson book is ultimately upbeat about the United States. We have built strong economic and political institutions and these will prevail.

I’m not so sanguine. Partly this is because of my work on the rise and continuing power of big banks (including my 2010 book with James Kwak, “13 Bankers”). It’s also because of my more recent work on the history and likely future of the federal government budget – and the national debt (as James and I discuss in “White House Burning,” which will be out next month). The interests that would undermine government are strong and growing stronger, with rich individuals leading the charge.

Professor Acemoglu feels that a new progressive era will soon be upon us and corporate power will end up curtailed. I’m surveying the political landscape closely for anyone who can play the role of Teddy Roosevelt, using legal tools to break monopoly “trusts” and shifting the mainstream consensus decisively toward imposing constraints on the abuse of power by powerful individuals.

So far, I see no one truly in the Roosevelt tradition with a realistic chance of election, while the rich become more powerful and the powerful become even richer.

Professor Acemoglu and I are debating this and putting forward our competing views of the latest events, on Twitter at present. He’s @WhyNationsFail and I’m @baselinescene. Join us there to continue the conversation.

An edited version of this post appears this morning on the’s Economix blog; it is used here with permission.  If you would like to reproduce the entire column, please contact the New York Times.

74 thoughts on “The Koch Brothers, The Cato Institute, And Why Nations Fail

  1. Yet again, its is the behavior and arrogance of the Koch like minded people, who rush to get their policy’s out that cause oil spills. Build and over design houses using energy so they can profit off that, keep insurance rates high tapping money, the list really never ends for people wanting to stay high and play games. In their world resources are unlimited and power is all encompassing, they believe in using people as machines, to meet deadlines, made by these same offenders. This just can’t end well and I am amazed the problem continues unabated.

  2. Underlying this problem is a fundamental… a inherent scaling dilemma arising with biological altruism… (something Ayn Rand never understood and the Cato Institute needs to address):

    Issues in Scaling Civilization: The Altruism Problem

    The sad reality is that the Koch brothers are able to take advantage of an unfortunate truth… money’s very roots are in transferring intention and decision from one to another.

    Decision Technologies: Currencies and the Social Contract

    A recognition of this unfortunate reality makes clear the need for the speech-related micro-transaction and mechanisms for its networking. This is related to scaling issues which have been problematic since our hunter-gatherer origins.


    A simple, neutral utility for political contribution built upon the apparently as yet unrecognized potential of the political microcontribution in particular… can go a long way towards creating a better balance in the political landscape… as well as bringing the citizen to the ‘governance’ table as a more frequent and meaningful participant.

    Such a utility may work best when its useful for charitable contribution as well but this ‘virtual cash card’ formulation could be workable in either the more narrow form of political contribution only… or going in the other direction… as a more general purpose account (similar to Suze Orman’s debit card)… Or perhaps even as an industry supported non-profit service similar to a C-Span.

    The political microtransaction is a fundamental necessity for scaling political speech. I believe that eventually this will be recognized.

    The Chagora Model: Scaling Speech

  3. “Professor Acemoglu feels that a new progressive era will soon be upon us and corporate power will end up curtailed. I’m surveying the political landscape closely for anyone who can play the role of Teddy Roosevelt, using legal tools to break monopoly “trusts”…”

    I think we’ll know in the next 3-5 years, but I lean towards Professor Acemoglu’s view for two reasons:

    1. The concentrated power in banking is unsustainable. We’re already seeing and hearing signs that bankers are starting to reorganize themselves. Beyond that, though, the wealth and power they accrued over the last few decades was somewhat unnatural and therefore illusory. They didn’t deliver much if any value for the money they received. People and businesses now know this, and bankers won’t be able to keep playing the same game. The financialization of our economy appears will wane because financialization of any economy must wane eventually.
    2. A “hero” is not required in order to usher in a new era. Just because there’s no Teddy Roosevelt doesn’t mean there won’t be a progressive shift. Paraphrasing from Moneyball: Teddy Roosevelt may not be walking through that door, but Teddy Roosevelt in the aggregate definitely appears to be. I could be wrong, but I imagine in the near future there will be more AGs looking to extract more from large monopoly “trusts,” not less. “Hero” Schneiderman’s failure at the moment notwithstanding, government agents as a group are wising up.

  4. Tremendous fun to watch the Cato staff go apoplectic when confronted with a hostile takeover. They refuse to have thier pristine product undone, sullied, by a majority stockholder of all things. What will the Koch brothers do next, *shudder*, outsource the writing of Randian white papers to China?

    The horror. The horror.

    Perhaps they should unionize.

  5. Simon, wow, what an article. First, thanks so much for the reference to the new publication. Sounds like a must read.

    Most importantly, I read with total fascination. Imagine someone trying to spit in the faces of the Koch Brothers. Geez, when with the injustice end (heeheehee). I am certainly a progressive, but have very strong libertarian beliefs (actually I think this combination makes perfect sense), and CATO has never been at or near the top of my list of beloved “think” tanks (places where those who have lost frontline political power go to become apologists for their political views and support their torch bearers). I kind of put the Kochs into the same evil bag with the Cheney team and the Hitler elite. That is to say that they have a firm belief in becoming the determiners of the future of this company, damned the cost. So much for the Kochs, just one man’s opinion, who finds it difficult to think of a truly constructive contribution to this society which has been associated with the Kochs and their megalithic rent seeking enterprise(s).

    Second, I am anxious to read the book because I share your less than sanguine views of the future of this country. Yes, it does have strong political, economic and social institutions. Sadly, on a daily basis it seems, I watch as these institutions get more and more corrupted in the American plutocratic state. Liberty is a huge part of our national heritage, and even that seems to have become truncated, if not outright corrupted in the name of national security. Financial stability has been a sourse of national pride, and yet we see a massively corrupted tax code, a FED which endlessly supports a completely out of control bankng sector now set on “speculating” the US and world to hell. And these things are simply the tip of the iceberg of America’s sad decline from a state of grace into what I view as a slow descent into ruin. I keep looking for things about which to be optimistic. They are sparse and weak at best. The current sham of a GOP primary season is just more grist for my negativity. I am not a Republican (left the party late in the Reagan years, and I am so proud of my decision. Sadly, I also haven’t been able to maintain allegiance to the vastly corrupted Democrats either. So, I am an Independent Progressive semi-Libertarian whose only real political hero in Washington is Bernie Sanders. I might have more, but refuse to pay enough attention to that sewer to find others.

  6. Testify Bayard Testify!

    I do find it curious that some libertarians disavow the work of the CATO institute and do not truly consider them truly libertarian! Perhaps Simon or one of his “invited commentary” experts can address this controversy???

    And, BTW – in 1999 and right before the not-so-gentle end of the secular bull market the CATO boys published an article about privatizing Social Security. Distilled, the article stated that the private sector could not match the government’s low cost of administration (I thought the private sector was ALWAYS more efficient than the government) but private returns would be better… A year later, the S&P plunged about 50% – so you make up your mind as to who you would like to administer this social safety net… Wall St. or the Social Security Administration? (I’ll stay with the Soc. Sec. Admin!)

    Simon, of course, highlights the “Willie Sutton” approach to both predatory capitalism AND the dangers of big government – Willie Sutton robbed banks because “that was where the money is.” The same with large public institutions (Social Security, Education, Military, etc.). The huge budgets of these programs is so attractive to predators that they engage in political machinations in order to gain control of those dollars – thus one of the many dangers of both “Big” Government AND “Big” Corporations – the essence of Simon’s article and debate!

    Finally, a legitimate discussion outside the standard and tired framework of big government vs. small government and the separate discussion of corporate dominance… they should be discussed in the same context. Kudos to Simon, James and their colleagues for breaking out of the traditional confines of discussion!!!

    I, too, am an independent who voted for Reagan the first time but became disgusted by 1984. I, too, recognize the corruption of the Democrats but know that their stench is less on social issues – they are not openly hostile towards women or minorities and generally are not as hawkish (with a few noticeable exceptions). The present day Republican base is so anti-intellectual, misogynist and bigoted that I tremble when I think of these guys running things again. That does not mean I am happy with Democrats… just more disenchanted with the Republicans.

    I am glad that academics are finally getting around to abandoning this “binary” approach/advocacy to/for economic systems (Capitalism – good, Socialism – bad) and acknowledging that some socialism (social security, medicare/medicaid, etc…) is actually good and some regulated capitalism (not too regulated) is good, too! The debate should not be “all or nothing” but, rather, what is the proper amount of socialism to provide for the welfare of the people and what is the proper amount of capitalism to advance the country both economically and in the fostering of innovation!

  7. Good read, Simon. I would like to hear your take, and those of the commenters, on someone like George Soros, who uses his great wealth, earned gambling in the FIRE economy (unlike the Kochs who play, for the most part, in the real economy) to fund causes he finds worthy. Is it ok for plutocrats to try to shape public opinion if you tend to agree with their politics?

    I also find the Huzzahs! for Bayard puzzling, since he went Godwin early, comparing the Kochs (and “Team Cheney”) to Hitler.

  8. Hi, Bayard…it’s been awhile.
    I was struck by this phrase in your comment “these things are simply the tip of the iceberg of America’s sad decline from a state of grace into what I view as a slow descent into ruin.” It rang a little bell for me because while I am tempted to share this nostalgic idea of our country declining from, as you put it, “a state of grace,” I know most Americans were never fortunate enough to experience that exalted state.

    Throughout the greatest part of our history, women, people of color, recent immigrants and poor people have not enjoyed full political rights or economic opportunity. While African American males were granted the franchise after the Civil War, they had it in the South for only a few short years before Jim Crow snatched it away. Fast-forwarding to the mid-20th century, racism, sexism, and anti-semitism plagued the country even during the “glory days” when the rich (we are told) actually paid taxes and income inequality was not as vast as it is today.

    Like you and Dr. Johnson, I fear the country descending into ruin, and I’m not so sure the descent will be slow. But I would suggest that the loss of that “state of grace” may be largely a loss by white males of a condition they experienced, to some degree, at the expense of others. Or at least it was not really shared by most of us “others.”

    So I guess my point is: things were never that great for most Americans. And how can we do better now?

  9. Carla,
    In 1973 I worked as a level 1 apprentice roofer and my hourly wage was $6.93 per hour. Now, using the dept. of labor’s inflation calculator, that wage, had it kept up with inflation, would be about $36.00 per hour. But that same job in that same area now pays about $10.00 per hour.
    At the time I was 18 years old and my two co-workers were African-Americans, and… their earnings were the same as mine. Now though, whites, and blacks alike, in that same area, have difficulty getting those jobs because jobs of this type are not offered openly to anyone outside of the hispanic community.
    As unlikely as this might seem, at 56 my circumstances have been so desperate that I have sought work in this vein and I have stood in throngs with ‘illegals’ vieing for work of any kind. Ironically, and, I have been passed by because I am white, and I have been chosen because I am white. I have also found it necessary to ‘fly’ a sign with ‘WORK?’ on it so that potential employers would know why an old white guy was there. People do have some interesting reactions to this new reality. What is maybe the most interesting aspect here though, is that in places, Home Depot parking lots for example (SoCal), there are ordinances against solicitation and so, I was unable to use my sign. Consequently though, folks would have trouble understanding why I was loitering with the illegals. But of course the illegals do not need signs for anyone to know why they are there, soliciting. Simply put, as a legal citizen I was at a disadvantage and threatened with citations for doing what the undocumented workers were doing openly, but of course, they were not flying signs.
    Anyway, I think there were better times, not so long ago.

  10. Simon,
    Missing from this pessimistic view is the role of social movements in pushing for change. It not simply though the beneficence of enlightened leaders that change happens but also because there is significant agitation for change from below. Probably a combination of responsive and visionary leaders and democratic social movements will get us some distance towards where we need to be going.

    Also, I want to point out that the Koch’s and the contemporary Right have created a self-reinforcing cult of their own will via using the justification of libertarian ideology. They have become “a law unto themselves” via the justifications of this political ideology in combination with their great personal wealth. I have been writing about this “cult of the will” here:

  11. To tag along with Ray and show the destruction of the dollar, about that same time minimum wage was around $2.50/hr. You could buy gas for 50 or 60 cents a gal, that’s say 5 gal of gas. Today’s minimum wage is @ $7.50/hr, and soon a gal of gas could cost $5-7/gal depending on your location. So you can see how your dollar has been eroded away at 4 or 5 to 1 along with nearly everything associated with transportation. Not to mention ones ability to be independent.

  12. I’m surveying the political landscape closely for anyone who can play the role of Teddy Roosevelt, using legal tools to break monopoly “trusts” and shifting the mainstream consensus decisively toward imposing constraints on the abuse of power by powerful individuals.

    So far, I see no one truly in the Roosevelt tradition with a realistic chance of election, while the rich become more powerful and the powerful become even richer.

    It is important to remember that TR was an accident. He became president after McKinley was shot, and had been nominated for VP because (a) the NY GOP was an important part of that party and (b) NY GOoPers wanted him out of the way (i.e., out of NY state politics) where he was interfering with their grift. Nobody expected him to become president: recall that Mark Hanna’s response to McK’s death was, “Now that damn cowboy is president.” Furthermore, TR was concerned that Hanna would oppose his nomination for president in 1904, but Hanna died early that year.

    The moral: TR did not have a realistic chance of election before becoming president. I don’t know enough to understand what his political base was that allowed or enabled him to do what he was able to, however. Perhaps a combination of an actual base, that was too small to elect him president as a non-incumbent, plus enough others who would support or at least defer to him once he was president.

  13. Excellent post, Simon. I look forward to picking up Professors Acemoglu and Robinson’s book.

    I am struck in your synopsis by the close similarities between their’s and de Ruggiero’s “The History of European Liberalism.” The English translation was done by Robin Collingwood in 1927 and published by Oxford Press. I also am reminded of “The Collapse of the Third Republic: An Inquiry into the Fall of France in 1940,” by William L. Shirer.

    Most folks forget the behind-the-scenes power struggles prior to and during the Depression. The plutocracy bled their societies dry and consolidate wealth and power over the course of decades, which gave them unfettered access to and control of the various law-making and regulatory functions in their respective societies. In America, TR threw up a major challenge, but didn’t really derail the evolution of plutocracy in the U.S.A. It took FDR to call an all-out war against the plutocrats.

    Most folks don’t read history any more and cannot imagine the courage required for FDR to take the stands he took and the risks entailed. He literally sailed between Scylla and Charybdis — the appealing Communist narrative engulfing the world at the time on one side, and the growing power of the Fascists on the other, who were propelled by the plutocracies in their respective societies.

    By the time the Nazis rolled thru Paris (without, btw, a shot being fired in anger), French society was so polarized that many welcomed the Fascists. France may have been a special case, coming off a failed revolution and various dictatorships beginning in the early 1800s. Italy, too, was late in the game coming to democracy. England and the English-speaking Anglosphere seem to be the only societies with the requisite social DNA needed to produce the antibodies required to fight the Fascist inclinations arising from the extreme divisions of wealth in Europe during the Depression and the Communists’ appeal. But it wasn’t a foregone conclusion the Brits would resist either the Communists or Fascists — prominent members of U.K. society favored both.

    de Ruggerio concluded his treatise saying, “… the crisis of Liberalism, grave and deep-seated as it is, is not so irreparable as it may appear to superficial observers and impatient heirs.” (p. 434) Sadly, he was wrong.

    Like de Ruggiero, “Professor Acemoglu feels that a new progressive era will soon be upon us and corporate power will end up curtailed,” as you note. “I’m surveying the political landscape closely for anyone who can play the role of Teddy Roosevelt, using legal tools to break monopoly “trusts” and shifting the mainstream consensus decisively toward imposing constraints on the abuse of power by powerful individuals.

    “So far, I see no one truly in the Roosevelt tradition with a realistic chance of election, while the rich become more powerful and the powerful become even richer.”

    Sadly, history may be on your side.

  14. Boycott Koch Industry products, as this conglomerate is one of the WORST POLLUTERS in the USA:

    “University of Massachusetts at Amherst’s Political Economy Research Institute, shows Koch Industries as one of the nation’s top 10 polluters/emitters. See detailed emissions breakdowns –

    If you work for a living, the brothers want you to work for a lot less, have no collective bargaining rights, and be beholden for the few crumbs thrown your way.

    All you CATO folks need to do is take a look at Wisconsin to really see how these cats roll…….time to wake up.

  15. Norquist quip “I’m not in favor of abolishing the government. I just want to shrink it down to the size where we can drown it in the bathtub.”

    This differs from Cato’s pragmatic view that “holding the line on taxes constrains only one of the four tools (taxes, tax deductions, spending without taxation, and regulation) used by government to alter economic outcomes”

    So, once you drown government what’s left? A Greek/Latin classical education knows the answer to that question; most likely some kind of dictatorship or one party (oligarchy) rule. This is just one step to consolidate GOP power and silence who doesn’t fall in line with the current story line..I would be very concern on what happens next.

  16. So what kind of political system do we end up with if the wealthy segments of society co-opt our central institutions? Doesn’t sound anything like democracy to me.


    “Let’s remember who the Kochs are — billionaire brothers who have done more to spread anti-science, pro-pollution disinformation than any other people on the planet:

    A 2010 report found Koch Industries now outspends Exxon Mobil on climate and clean energy disinformation
    We have video proof David Koch pulls the strings of the Tea Party extremists
    We know Koch-fueled Americans for Prosperity takes credit for bullying GOP lawmakers into climate denial

    Of course, the Cato Institute has been a bastion of anti-science, pro-pollution disinformation for a long time, with research fellows like Patrick Michaels, who is a serial deleter of inconvenient data. This power grab would just make it official that Cato is a wholly-owned subsidiary of Koch Industries.”

    Link to the Koch Bros. civil filing: (as posted in the article above)

    The fiction of Non-Partisan status for CATO is now vulnerable to critical review, and it is high time that some American Jurist Intellectuals tackle to snake pitted abuse of tax exemption that is art and parcel of the “foundation” corporate arm of the Koch Bros strategic power. CATO as Congress to the Imperial Corporation? Does the Emperor even need clothes?

  18. Bob Levy, chairman of the Cato board, [ALSO] STATED upon interview:
    Cato Institute Is Caught in a Rift Over Its Direction
    Published: March 6, 2012

    “We can’t be perceived as a mouthpiece of special interests,” Robert A. Levy, chairman of Cato’s board, said in an interview. ”
    At a tense meeting in November at Dulles Airport outside Washington, David Koch and two family emissaries laid out what they described as the “intellectual ammunition” they envisioned that Cato could provide by supplying its brand-name research and scholars to Koch-financed political advocacy groups, according to Mr. Levy.

    The one Koch-financed group mentioned by name at the meeting was Americans for Prosperity, which played a major role in the Republicans’ 2010 takeover of the House and is now preparing for the November election.”


    March 4, 2012
    Think Tank in Koch Brothers Dispute Could Find Its Tax Status at Risk
    By Debra E. Blum
    “Charles and David Koch, the billionaire brothers active in Tea Party politics, last week sued the libertarian Cato Institute, which Charles Koch helped found more than 30 years ago, in a move that would ensure their control over the institution.

    But in filing the lawsuit, the brothers may well have tipped off the Internal Revenue Service to concerns that the organization has never deserved to be a charitable institution eligible to receive tax-deductible contributions or other benefits of tax exemption, says a former head of the tax agency’s charity division.

    Marcus Owens, a Washington lawyer, says the lawsuit filed in Kansas state court reveals a “fatal flaw” in Cato’s structure. The lawsuit and other documents about Cato’s legal status show that the think tank gave ownership shares to its founders, including, it appears, the right to sell the organization. That goes against federal law, which has strict rules that forbid any one person or group from having ownership rights.”
    Full Article:

  20. Being the Information Age and all, there is nothing worse than a “serial deleter”!!!

    (hey, Bruce)


  21. rl-

    About your whiteness being an impediment to your hire-ability.

    Please realize that many Latinos have done these jobs and gotten stiffed by the employer and/or threatened by the employer with retaliation should they complain to someone. Such employers are unlikely to get away with such abuse with documented citizen workers who insist on filling out legitimate paper work including forms that the IRS requires! This is likely why you are undesirable to these employers who routinely shop for cheap cash-paid day workers at Home Depots – the reason is more economic and tax-related than racial!

    The reason the employer can get away with this criminal behavior is because they have captured their regulators! The same with poultry and hog processing plants in the south – the abuse of illegal immigrant workers is not prosecuted in these plants and, as such, documented workers are less desirable – they can attempt redress through the justice system and this is considered an undesirable feature of workers like you – documented and knowledgeable of the law.

    So I would assert that white workers such as yourself seeking employment in industries where such illegal immigrant labor abuse – including poor wages – is rife should re-direct their scorn to those who do not enforce the law… instead of arguing that it is a racial issue. The employers just do not think they can abuse you like they can abuse the undocumented worker who is more likely to have darker skin!

  22. The open direct move by Koch to take controlling domination over the CATO shadow government speaks of a driving greed for power itself, and betrays its own despotic pathology in action. Never enough, KOCH is the ultimate iconic consumer.

    Wake-up Call
    Resist the Corporate State
    Looting Public Assets: here come the Koch brothers!

    “First Wisconsin, then your back yard.
    This isn’t just about unions- the big scam is about power plants and a vertical monopoly for the Koch Brothers with total disregard for the public interest. In a word: looting.”
    With the “Tin Man” the “Scare Crow” and the noisy “Lion” running around loose from state to state for the Republican Party of Koch Industries, the OverLord Wizards made their move to take over the Emerald cities’ fortified tank-think under one command. …..With Dorothy dropping out of the race early, ….To To was seen with a leg up on the White House fence in total defiance of any National Security nearby.
    The saga of the Koch Republic in the early days of the transition…

  24. Covert Operations…
    Read more

    “The Kochs are longtime libertarians who believe in drastically lower personal and corporate taxes, minimal social services for the needy, and much less oversight of industry—especially environmental regulation. These views dovetail with the brothers’ corporate interests. In a study released this [2010] spring, the University of Massachusetts at Amherst’s Political Economy Research Institute named Koch Industries one of the top ten air polluters in the United States. And Greenpeace issued a report identifying the company as a “kingpin of climate science denial.” The report showed that, from 2005 to 2008, the Kochs vastly outdid ExxonMobil in giving money to organizations fighting legislation related to climate change, underwriting a huge network of foundations, think tanks, and political front groups. Indeed, the brothers have funded opposition campaigns against so many Obama Administration policies—from health-care reform to the economic-stimulus program—that, in political circles, their ideological network is known as the Kochtopus.”

    Read more
    A Reporter at Large
    Covert Operations
    The billionaire brothers who are waging a war against Obama.
    by Jane Mayer August 30, 2010

    Read more

    Report: Koch Industries Oil Affiliate Has Major Interest in Tarsands, Keystone XL Pipeline
    By: Scarecrow Wednesday October 5, 2011 6:45 am

    “The good folks over at InsideClimateNews have been tracking the assault by Koch Industries on the environmental and health regulations and global climate science.
    Now they’ve come across a link between Koch Industries and the Keystone XL Pipeline project and tar sands oil development. And the link was sitting there in plain sight.”


    Published on Tuesday, March 6, 2012 by Common Dreams
    “This Is Our Land:” Lakota Form Human Blockade to Stop Tar Sands Trucks
    – Common Dreams staff
    “Lakota members yesterday formed a human blockade to stop trucks carrying tar sands equipment through the Pine Ridge Indian Reservation. The action resulted in the arrest of 5 protesters.
    Brenda Norrell reports:
    PINE RIDGE, S.D. — Lakotas on Pine Ridge Indian land in South Dakota were arrested as they blockaded tarsands pipeline trucks from entering their territory on Monday, March 5……



    “This Is Our Land:” Lakota Form Human Blockade to Stop Tar Sands Trucks

  27. “This Is Our Land:”
    “This Is Our Land:”
    “This Is Our Land:”
    “Lakota human rights activists Alex White Plume, Debra White Plume, Sam Long Black Cat, Andrew Iron Shell and Terrell Eugene Iron Shell were arrested late Monday. They were charged with disorderly conduct and taken to the jail in Kyle, S.D.”

  28. @Simon Johnson, markets.aurelius and Bayard Waterbury…stop waiting for the reincarnation of Teddy Roosevelt, and guts it up. Give away just some portion of your fortunes to Occupy, and actively join the movement. What is wrong with you guys?

    @Logic — “quote, unquote” “Logic” — I don’t think rl was making a racial statement at all. He was pointing out that white guys are getting killed in this Depression, too. Please go back and read his comment more carefully.

    If just one-third of the 99 percent would stand up, the 1 percent would flee in terror. Unfortunately, almost none of the 99 percent read this blog, and the media specifically misleads, and encourages “magical thinking.”

    Now, it seems to me that people like Simon Johnson, James Kwak, Bayard Waterbury and probably the anonymous markets.aurelius, having benefitted so much from this system in the past, and seeing its dangerous decline now, have a greater reponsibliity than the average, kept-in-the-dark-American, to change it.

    But I know it is expecting a great deal of privileged white males to ask them to actually DO anything to help the country in a time of crisis.

    It will probably require the rest of us, and the leadership will have to spring from within. Ready, citizens?

  29. @Bruce E. Woych: I may agree with many of the things you have to say, but with respect, I don’t think it serves either your purpose or a larger one to hog the comments section of this site, or any other. Very best– Carla

  30. Thanks Carla, and yes my comment was about the state of our nation, and not about my “whiteness”. The not being hired due to my age and skin color is mostly because without a sign most potential employers don’t realize that the old white guy is there for the work. But some potential employers also assume that any middle-aged white man in such a dire position must have some mental or drug/drinking issues. But I have also been hired by folks who later told me that they don’t trust hispanics around their stuff. Life is much more complicated than what Logic’s comment suggests.

    Plus, I would be willing to bet that I have been cheated by employers as many times as most illegal workers have. I am currently transporting trucks and equipment to the oilfields in North Dakota and for nearly 3 weeks now I have been without any compensation while waiting for a truck to be repaired. I just so happened to be transporting a large travel-trailer so I have a free place to stay, but, I’m stranded on the outskirts of Twin Falls, Idaho and here I languish even though the truck in question is down for reasons that have nothing to do with me. But I am the one who goes unpaid. Plenty of
    ways to cheat working citizens too.

  31. @rl love…if you decide to come further east, contact Occupy Cleveland. Ask to be put in touch with Franco, and he will contact me. Not sure I can help, but we have a community here. In any case, I hope things improve for you, and for all of us. We are all in this together. It’s just that a lot of people don’t know that yet.

  32. Carla,
    In a world with so much ugliness, your offer is inspirational, thanks.

    A few months back I tried to spend some time with the Occupiers in LA but I became frustrated while trying to find a place to park, so…I got back on the freeway. I was living in a 3/4 ton van at the time and downtown LA is not a good place for that. The estimates have 50,000 homeless living in LA, it is crazy place right now, vast amounts of mental illness and drunkeness and etc.

    I actually have a job now hauling ballast rock for the building of railroad spurs. This to facilitate the transporting of oil from North Dakota to the refineries by rail. The job in fact pays well but I’ve just been unlucky in regards to the truck I was issued and my employer and I had the misfortune of being victims of a crooked shop and now, the shop owner refuses to release the truck until he is paid 10k in cash even though he assured me that my employer could pay over the phone with a credit card. The rub though is that the work done should only have cost about 5k so my boss refuses to pay unless his credit card is accepted because he then has the option of disputing any unwarranted charges, of which there are most certainly many. Meanwhile I have loads of blogging time.


  33. Yes Carla, your plight is going to become more expensive. Primary b/c the environment around you will become more expensive. Fuel in your area is soon (mid year) to be diverted to western new york and central Pa. So the Pitts and clev area will lose supply to the 40 cent higher price paid by those citizens. And that’s on top of any national increase in prices for any # of reasons. Plus I think once you get down to brass tax, the ones you prod to help the 99%? are closer akin to the problem than the solution. And the solution will most certainly evade the 99%, because their own party politics will add up to percentage of the real party politics and be absorbed into that structure.

    No, the only thing that will motivate the 1%, is to see their work being destroyed, like it currently is in Greece. Offenders buildings and windows are graffieied each and every nite and stay that way until the owners clean them back up. Upon which they are immediaetly graffieied again. You simply steal your paint, and get to work.

  34. @Carla: I am on topic. There is no “space” hogged in electronic space.
    Select and elect, I stay on my ground orientation to provide a sequence of contextual information that I try to inter-relate. The topic is KOCH and CATO. My material is presented to support a more complete scope along with the details of relative scale interests. The only reason this stream is valuable is to share understanding about vital issues. Your personal dialogue is just personal. Take a look at the stream and show me where the “information” and “data” is that advances an understanding of the “topic” (KOCH / CATO). Or is it a problem that I interrupted your personal dialogue? Truthfully, the personal interactions and trivial dialogues are the interruption in my opinion. Sorry to have broken your train of gossip with my sequence of references, but frankly Scarlet, I don’t give a damm.

  35. Ya know…. banks very well understand the potential in nickling and diming’ their customers..

    They understand scale. SO should citizens.

    Sooner or later the political microtransaction… this potential to scale speech will be making a wake-up call to an out-of-touch Establishment.

    It’s actually incredible to me that its taking this long to get across and until recently that I’ve had so little interest…

  36. Greece is a failed nation. The mainstream media treats this is a non-event, however. In fact, yesterday Moody’s declared Greece in formal default. This morning, the mainstream media barely whispered the news. We apparently don’t need to understand why nations fail, but rather how to cover it all up when they do, so that it’s business as usual for their owners, the banksters. There is something extraordinarily wrong in rotten Gotham, even by corrupt standards. To learn the financial news I depend on zerohedge. Today illustrates why. “Greece Has Defaulted: Here Is Where We Stand”

  37. Anonymous,
    Actually… there was extensive coverage of Greece’s default in yesterday’s financial news. Maybe the zerohedge folks are just running behind a little.

  38. Bruce,

    Quality instead of quantity might be a good cliche for you today. We all know that rich people use their wealth to influence things in their favor. Tell us something that we don’t know. And enough already with the unsupported claims and innuendo:

    “A 2010 report found Koch Industries now outspends Exxon Mobil on climate and clean energy disinformation”
    “We have video proof David Koch pulls the strings of the Tea Party extremists”
    “We know Koch-fueled Americans for Prosperity takes credit for bullying GOP lawmakers into climate denial”

    What report, which video, how do they know? That is what we need a link to… instead of just more articles with more unsupported claims:

    From the article linked above:”Steven McFadden writes that this action “could become an international focal point:”” It “could”, how so? Due to TransCanada surreptitiously building a gigantic pipeline via the back-roads on Dakota land. Get real!

    So… for you to talk about wasting the reader’s time is ludicrous. Almost as ludicrous as a hand-full of Lakota Indians protecting the land that their people litter with what appears to be endless garbage (no support needed, I’ve seen this with my own eyes just like most every American has). (These are also the people who drove entire herds of buffalo over cliffs if I remember correctly[?]{unsupported but openly so}).

    And who are you to tell me what I should be reading? Try providing support from your links that actually save your reader some time. Do you think that the rest of us are too dumb to find related material… or are you just feigning support by providing a seemingly endless array of articles. Support has much less to do with quantity than it does quality and most of us are all too familiar with the superficial crap that makes up the bulk of American media.


  39. There is NO hope in , or compromizing, or reaching across the socalled isle with Nazi’s and tyrants. They must be killed! They must be ruthlessly and thoroughly defeated!

    History proves this point time and time again. Either they live and thrive and the rest of us are slaves or soap – or we kill them – there is no other way to right these monstrous wrongs.

    Fascists, nazi’s, and tyrants must be eliminated permanently – as in removed from the face of the earth . There is no other choice. It’s kill or be killed.

    Buckle up and put your trays in the upright and fixed position – we ‘re about to enter some turbulence !

  40. I guess the libertarian response would be, that the danger of rich individuals exerting too much influence on politics is only possible when the state is to big, and thus politics matter too much.

  41. If the rule of law and constraints on government power, are critical to economic development, how do Professors Acemoglu and Robinson explain China? China’s rule of law is a joke, and there are no constraints on government power. Yet China’s economic performance in recent decades is perhaps the best ever recorded.

    To a lesser degree, some other emerging markets pose the same problem for their thesis.

  42. Nice post.

    It’s critically important you address the primary libertarian rejoinder – if the state was not so big, we wouldn’t need to control it, because corporations wouldn’t be so interested in capturing it.

    The primary flaw in the libertarian argument is the presumption that rule of law actually exists as something independent of the society in which it is embedded. That an institution can exist outside of any social transactional environment.

    Libertarians claim to be pragmatists, but they are often idealists of the highest order. A pragmatist – someone like James Madison – accepts that a free society is one in which powerful forces are carefully balanced, with institutions holding the deciding force. Some reasonable Balance of Power is a predicate to Rule of Law, but the mechanisms to maintain social balance of power may not fit within the idealistic purity of the libertarian agenda.

    To the Koch brothers, however, the libertarian agenda is merely something to be manipulated to achieve favorable government regulation or enforcement.

  43. Carla, sorry for not having responded to your post earlier, I forgot to check to be notified of responses and just read it today. I truly feel your pain. I am a white male, soon to be 66 years old. I grew up in Maryland, and still remember the day there when I started fourth grade in 1956 and was seated next to a black girl named Joyce Speed. We instantly became fast friends, much to the chagrin of some of my classmates who had not grown up to see the races as equal. Thank God my parents taught me to see things truly this way, and I later became one of MLK’s greatest fans.

    As you subtly hint, things have not always been anywhere near a state of grace for those of your race (assumption read in, if not true, apologies for making it), women, and others of the largely non-white, non-male semi- or fully disenfranchised group of Americans who have added and continue to add remarkable things to the vast American cultural quilt. I am always disturbed, or even deeply chagrined that a country that preaches opportunity, freedom and equality has so tragically failed so much of its populace in these areas on significant levels. No white politician “back in the day” as they say, ever seemed to understand that contstructing Section 8 apartment projects, all of which became massive ghettos eventually, and arranging for “welfare” payments to the poor. was a vastly unuseful way to enable the subculture membership to escape poverty. Their focus was never on the educational opportunities that could change things, or getting away from absurd programs which continued to enforce segregation in very underhanded ways.

    Perhaps what bothers me the most is that in pursuing such policies, the advocates sacrificed all of the amazing contributions to the cultural, economic health of this nation that could have arisen from a focus on true equal rights and opportunity. Even now, the War on Drugs, we all know, is a not so subtle attempt to continue the oppression, along with other policies that see the imprisonment of vast numbers of the American underclasses. And, no, I am not a Johsonian liberal. I am not a bleeding heart. But I am strongly convinced that when we allow absurd prejudices of any kind to negatively influence our thinking, everyone loses. This is a part of the growing American tragic narrative. I want it to finally change. I am not optimistic.

  44. Jack, there are lots of reasons for China’s “apparent” economic success. I say apparent because most of us know that in China, a tiny minority is actually benefitting from its system of government or economic policies. Most Chinese live miserable lives and many truly hate what is going on. Yes, they have a burgeoning middle class of a couple of hundred million, but that leaves nearly a trillion of their population essentially with nothing. 85% of their population is simply lucky (maybe) to be alive, but will never see any real benefits, and will always live in fear of losing the little they have. Our press tends to inflate the Chinese story, much as we did with the Soviet Union, which could never really compete with the US during its life, and which we built up as a co-equal superpower to feed the idea that our military should continue to become larger and larger, and aside from the early domination of Eastern Europe, in the latter years, this even proved to be too much for it to control with its thugishness. China now is not dissimilar.

  45. You must be on crack with this drivel! Pure progressive bs spouted from
    the hypocritical mouth of a pseudo intellectual . You are a joke!

  46. @TonyForesta, “History proves this point time and time again. Either they live and thrive and the rest of us are slaves or soap – or we kill them – there is no other way to right these monstrous wrongs.”

    Yup, it always does pivot when a certain % of the military pivot into mutiny against the rabid-raccoon with incurable avarice puppet masters. But the military is 1% of the population and the filthy rich are also 1%. And we’re in a LOUD and aggressive misogynist led *shut up the women* political phase – so I’m afraid that until we OCCUPY TOWN HALL we’re going to not know who to take out….seems like 1% is the magic number – could start with that pervert drug addict – the high priest of the radio waves for the predators…a good start right there – trust me, LOTS of women sharp shooters ready to get rid of the rabies-infested monkey brains…especially the 40 million WOMEN who made down payments of their life savings on NORMAL mortgages and got rolled by VULTURE religionists to pay for a decade of war – now rents are beyond the reach of wages – so there’s no place to call *home* – which means bye-bye to CIVILIZATION and society – mission accomplished.

    “….Freedom’s just another word for nothing left to lose…”

    50% of the human species (women) have had enough *isms* from monkey brains…lock and load…hey, we ALL have some of that in our gen pool history, don’t we – the survival instinct that KNOWS it’s time to whittle away the psycho genes….

  47. True that Annie. We’ll fight these battles anyway! The predatorclass is bent on total domination and the subjugation, enslavement, or eradication of the rest of us. Unpleasant as it may be – It’s kill or be killed. Better to know this grim truth and prepare – than to go like sheep to the slaughter, or moths to the flame.

  48. @Tony – I just saw the teaser for the movie “The Hunger Games” and was horrified. Killing each other for their pleasure is the next fly-your-freak-flag *entertainment* fodder for the predator class…??!!

    What you said, we can at least choose the time and place – and it won’t be for their entertainment…

    @woych – contact me about rl love – I got a website you can visit to see what he’s all about – it’s in the category of “you can’t make this stuff up” about *religionists*….btw, “Russia Today” cable news was part of the line-up of free channels at a hotel in the poor man’s Vegas in Nevada :-) – never knew about it until you provided a clip from the Keiser Report…

    AmericaElects has a *serious* group of people who have thrown their hat in the ring – the General is interesting….looks like the *real* candidate is going to come from their June Convention, and taking a cure from Wisconsin, if the *votes* are contested, everyone who actually voted for the AmericaElects candidate will be happy to show up in the street to be counted :-) so that there is no whisper campaign of *fraud*.

  49. ooops – taking a cue from Wisconsin, not cure – hate automatic spell check – lol

  50. @Annie: Thanks so much Annie. I had a feeling he was on our channel to disrupt things. I was sorry to see Carla get pulled into it, she has always been sharp and clear. I think we know what we are about…and I really appreciate you !

  51. Lest we forget: The education of a Rolling Stone: (from the Real News)
    Matt Taibbi on Bank of America
    Matt Taibbi on Wall Street and the Farce of Self-Regulation: Goldman Sachs Should Be Prosecuted

    Matt Taibbi: Is the SEC Covering Up Wall Street Crimes?

    Matt Taibbi: Why Isn’t Wall Street in Jail? -how the financial crisis is connected to Wisconsin and…547 Views

    Banksters USA: Thom Hartmann & Matt Taibbi – The People vs Goldman Sachs

    PT 4-5 The Great American Bubble Machine

    PT 5-5 The Great American Bubble Machine

    Matt Taibbi on Corporate Tax Holidays

    Foreclosure Scam -The Largest Fraud Ever Perpetrated on Americans?: Matt Taibbi: Banks are fleeing…

    Matt Taibbi on a Government Shadow Budget that benefits Wall Street

    Eliot Spitzer’s Banking Fraud Series: They Got Away With It with Matt Taibbi

  52. Always relish your links Bruce. Inciteful, poignant, and wise. One would hope that in civilized society inciteful, poignant, and wise voices would be heard and that leadership would work in the people’s best interest. Sadly the world we inhabit is instead ruled by ruthless fascists, tyrants, and psychopaths – a den of vipers and thieves bruting faux patriotism and love thebabyjesus propaganda to a numb and ignorant public, while robbing and pillaging the people and raping the earth for otherworldly profit.

    “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness”

    It’s us or them! In a world where there are no laws – there are no laws for anyone predatorclass biiiiaaatches!!!

  53. “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their…… [Okay, stop right there, they are actually only as equal as their own two parents. And if for some reason the parents did not get a fair shake, then the offspring of those parents will also not get a fair shake, (and that is compliments of the creators). So you see a word or a phrase is only to be taken literally, until it is proven to be false.]…….Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.

    This is why I promote a constitutional convention ideal to straight out the law.

  54. Real World Economic Review:
    Real-world economics review > The Plutonomy Reports
    The Plutonomy Reports
    March 14, 2012
    from Edward Fullbrook

    “…here is one of several sections on plutonomy from my paper “The Political Economy of Bubbles” in the new issue of Real-World Economics Review. It is centered on the three Citigroup Plutonomy Reports.”

    (This article is worth filing for future reference).

  55. Every person has the *right* to make their lives less miserable through honest work – skills that contribute to life-maintenance – food, clothing, shelter, health care. Simple. And once those needs are met, leisure time evolves and people can pursue higher values – truth, beauty and goodness.Which means that a person has time to learn how a lightening bolt is formed – electrons basically flash mobing, tweeting each other to line up in one spot :-)) – or wha’ever else floats your boat…

    ALL faux-political, social-engineering *isms* concocted by monkey brains on imagination are based on getting something for nothing – the debt-based fiat $$$$ *financial* schtick. There are no BIGGER freeloaders than bankers and their parroting SLUTS in Delusional City.

    And as TonyF noted, it is unpleasant, but there comes a time and place when a JUST WAR is inevitable – happens every thousand years or so. The savage psychopath has not been weaned out of the human race – basically only certain white cultures consistently kept their numbers down (unfortunately not in USA, yet), but the rest of the world has always been subjugated by the liars and thieves who turn to war killing when the booty that someone else built up is too big to resist – craven avarice….at its HEART, this massive theft of homes and health care to support wars of CHOICE is congolese SAVAGE. I believe that the villagers left standing *get it* and are readyfor the next ambush – Prez has no control over gas pump prices after a decade of war in messupotamia?! Well, golly, time for a change in energy strategy – no?

    The *moral hazard* matters more than a psycho can imagine…

  56. annie,
    I suppose that the culmination of name-calling and its tell-tale sign of the unsupported claim, which children sometimes resond to with: “neener, neener”, is when the name-calling has so little support that the recipient does not even know what he is being called. In other words, what are “*religionists*”?

    “Charles and David Koch recently filed a lawsuit attempting to seize majority control over the libertarian Cato Institute. According to Jerry Taylor, a senior fellow at Cato, this effort is part of a longstanding effort by the Kochs to transform Cato from a warehouse for radical libertarianism into something more purely concerned with electoral politics:

    Last year, [the Kochs] used their shares to place two of their operatives – Kevin Gentry and Nancy Pfotenhauer – on our board against the wishes of every single board member save for David Koch. Last Thursday, they used their shares to force another four new board members on us (the most that their shares would allow at any given meeting); Charles Koch, Ted Olson (hired council for Koch Industries), Preston Marshall (the largest shareholder of Koch Industries save for Charles and David), and Andrew Napolitano (a frequent speaker at Koch-sponsored events). […]

    Why are they forcing out Cato board members, all strong, principled libertarians who have been heavily involved with Cato – financially and organizationally – for years? The answer was given in early November of last year when David Koch, Richard Fink (he of many Koch hats), and Kevin Gentry met with Cato board chairman Bob Levy. They told Bob that they intended to use their board majority to remove Ed Crane from Cato and transform our Institute into an intellectual ammo-shop for American for Prosperity and other allied (presumably, Koch-controlled) organizations.”

  58. Cato Senior Fellow: Koch Brothers Want To Take Over Cato Because ‘Cato Wasn’t Doing Enough To Defeat’ Obama
    By Ian Millhiser on Mar 5, 2012 at 9:50 am
    (title for above quoted excerpt)

  59. @Woych – Matt (coiner of the “Giant Vampire Squid” moniker:-)) keeps on keeping on, admiring his persistence:

    putting the derivatives on the COMMERCIAL accounts (or what were commercial accounts before Glass-Steagall was over-turned) – there you go, TonyF, another reason to whack ’em :-) Basically there are no “investor banks” anymore, are there? There’s just mooching and stealing everything from everybody…

    And this is a good idea – no matter where it came from – LOL:

    Love the ending of this clip – about 10 minutes in (still hoping to visit Italy one day):

    @Bruce – 2005 was a rip-roaring year for Urantia Book *forums*…the *devil* was in over-drive….still get the occasional poltergeist stalking me :-))

  60. Thanks for that link Owen Owen…There are more than a few items there of interest…
    Regards to Tony Foresta as well, and Happy St Patty’s to all as we enter a New Spring Season.

  61. You are very welcome there Bruce, I wondered just how far he was going to go and not alert the public about the run around costs of derivatives, (I can see the desperate gas tax counties turning red as we speak). I wish you luck holding down the fort as I go on my fishing trip some time next week.

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