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Thread: FUNDAMENTAL QUESTION Re: Why Scott Brown Won -- Erik Jansen

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    Default FUNDAMENTAL QUESTION Re: Why Scott Brown Won -- Erik Jansen

    Thanks for the sharp analysis, EJ, which has made me reconsider several of the articles I've read about the Scott Brown election.

    You raise one point here which I am very, honestly, curious about. I am not disputing your analysis -- I think it is very clearly true and supported by long history -- I'm just wondering why this happens:

    Quote Originally Posted by EJ View Post
    But they blame the bankers less for buying the favors than they do the politicians for selling them. As many Democrats and Republicans swam in that sewer.
    Why do Americans "blame bankers" [or XXX industry] "less for buying the favors than they do the politicians for selling them". I mean, has it not penetrated the collective consciousness by now that the bankers -- [or whatever industry, pretty much all large corporations do this in their own respective fields]... the bankers:

    • First, they buy off the politicians with campaign contributions and other favors. In fact, the oft-mentioned "revolving door" makes it difficult to even draw the line between politicians and the industries they oversee in this country, as noted by the lengthy list of highly placed "ex"-bankers advising the Obama administration on banking reform.
    • Second, they draft the favorable legislation and loopholes themselves.
    • As a final step, they accept the favors and loopholes which they have designed and in most cases the politicians have rubber-stamped, verbatim.

    This is the common ingredient in scandal after scandal, not just finance scandals. Doesn't the fact that "As many Democrats and Republicans swam in that sewer" suggest that the common element is not government, but something outside it?

    To me, the attitude of blaming bankers less than government seems rather like, suing the police for failing to prevent a robbery while waving away the actual robber scott-free. Suing the doctor for failing to stitch you up properly, while testifying in favor of paroling the mugger who actually stabbed you. If that happens in any other context, the same people would say that it was a ridiculous example of the need for tort reform. Whether a regulator falls down on the job or actively betrays you, it nevertheless seems to me like the regulated party is clearly the instigator. The situation wouldn't have happened if it were somehow just the regulator alone.

    But it's a chicken-and-egg question, I'll admit. Mainly due to the "revolving door".

    In any case it seems to me like part of the solution is to get better police and doctors, not to drown the doctors in a bathtub.

    My own speculation: perhaps part of the problem is the fact that Americans have come to see Government as an alien, impenetrable, inscrutable entity which they have no hope of influencing. (Probably with good historical reasons --) But we live in a Democracy, at least in theory; if this is the case, we need to fix it, not simply reject all government. At least in theory, we are the government and the government is us; it should be accountable. Americans can't have forgotten this, it's the supposed justification why our troops are in hundreds of countries -- to promote democracy, accountability, and self-rule against its adversaries. If government is always the enemy and always intrusive and oppressive, then why are we sending our sons and daughters to bleed out on the sand for it in foreign countries that don't want it from us anyway?

    (Please spare me the Winston Churchill quip; a pithy witticism doesn't explain our zeal and enthusiasm spending trillions of dollars and thousands of lives to do this.)

    Then again, most Americans, working in a business, probably believe that businesses are more accountable than government; (probably with much less historical reason!!) But the only way to hold a business accountable is very indirectly, through the market, and the message is often inscrutable... If AIG's derivatives sales slip, is it because The People have decided that derivatives themselves are unsafe, or AIG is badly managed, or is it because Goldman is selling better derivatives, or because the market is saturated? Or because AIG's latest ad campaign sucks rotten eggs? One of the strengths of iTulip is that it analyzes broad cross-market trends, but surely it's obvious that analyzing an individual company's sales is much of the time like reading tea leaves. The company's management can pull whatever illusions that they want to see, out of the sales figures. Themed boycotts rarely hold up more than a couple months, and rarely cost a business more than a few marginal points. I find it ridiculous to imagine citizens can send messages to businesses or hold them accountable in any clear manner by means of the market, in most cases. Why do people believe that businesses are more accountable than government?

    Lastly, there is an element of Upton Sinclair involved: "It is difficult to get a man to understand something when his salary depends on him not understanding it." I think collectively people are less afraid of government than they are afraid of the possibility of losing their livelihoods, so they attack government rather than undertake the harder and more personally risky task of reforming whatever industry is under discussion. But that doesn't make the reform of the particular industry any less necessary or important; and after awhile, the un-addressed problems with the industry tend to fester.

    So who wants to speculate? Who wants to explain it to me?

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    Default Re: FUNDAMENTAL QUESTION Re: Why Scott Brown Won -- Erik Jansen

    Necron,

    I think you are over analyzing.

    Bankers wanted to buy favors - this is unsurprising and completely consistent with their role in the system.

    Politicians, on the other hand, are chartered to represent their constituents. However much money bankers fork out, it is the constituencies' vote which is what gets a politician into office (and keeps him there).

    It is understandable if special interest lobbies achieve some political headway on areas which are not clearly against the public's interest - i.e. farm subsidies in other states.

    The present situation, however, is clearly viewed as a zero sum game: the more money thrown at the banks to subsidize, the less money there is for programs to help the constituent's with jobs. That the money being thrown at the banks ultimately comes from the constituents doesn't help either.

    That politicians have been pandering to the banks in the past year even as their constituents have been suffering under double digit unemployment, stock market losses, etc etc is thus very much a visceral betrayal.

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    Default Re: FUNDAMENTAL QUESTION Re: Why Scott Brown Won -- Erik Jansen

    Quote Originally Posted by necron99 View Post
    Why do Americans "blame bankers" [or XXX industry] "less for buying the favors than they do the politicians for selling them".
    (Is "XXX" the porn industry or the fill-in-the blank industry ?)

    I'd suggest not getting too caught up in the debate of whether it's the Banksters or the Politicos who are most to blame. They are in bed with each other and by and large dominated by the same Elitists (*) who move back and forth at will between private and public positions.

    Just as the Democrats vs Republicans battle has for too long been entertainment to distract us from the evils that infiltrate both parties, similarly the Banksters vs Politicos battle risks becoming a distraction from the real problems and possible remedies.

    (*) For what looks to be a good book on these Elitists (I haven't read it yet) see
    SHADOW ELITE: How the World's New Power Brokers Undermine Democracy, Government, and the Free Market
    (Basic Books; December 1, 2009) by Janine R. Wedel
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    Default Re: FUNDAMENTAL QUESTION Re: Why Scott Brown Won -- Erik Jansen

    Thank you to c1ue and Pythonic Cow for thoughtful responses.

    However, with respect, I must tell you c1ue, that you are merely repeating the premise that I am taking issue with.

    Quote Originally Posted by c1ue View Post
    Bankers wanted to buy favors - this is unsurprising and completely consistent with their role in the system.
    As far as I understand it, it is nobody's legitimate "role in the system" to buy favors. Buying political favors is indisputably abuse of the system, isn't it? Nobody is content to argue that, say, Labor Unions, or the ACLU, have a perfectly unsurprising and consistent role in the system to purchase favoritism for themselves. Why would this be unsurprising about bankers? Favoritism, particularly bought with cash, is unfair, so people who seek it are abusing what is supposed to be a fair system. As far as I understand it, bankers' role in the system is to warehouse our cash accountably, issue credit, and make prudent investments. Period. It is never a fair game when the referee can be bribed.

    Sure if a sportsman bribes a referee, the referee gets fired. But the sportsman also gets blamed and punished, not patted on the back and put back in the game. Why are people not surprised and annoyed when the bankers, or any group, abuses the system? That was my earlier point about policemen and doctors. Nobody suggests that the solution to referee game-fixing is to abolish all referees; yet you hear a lot of people arguing that the solution to governmental corruption is to "drown" [the referees] "in a bathtub" and hand over all authority to the people who are offering the bribes. How would this not destroy the game itself?

    To me, your response is a bit like saying that "Burglars rob people -- this is unsurprising and completely consistent with their role in the system." Yes, that is the definition of a burglar, but that doesn't stop people from persecuting and jailing them. But wait, aren't burglars good for the economy because they stimulate demand, on the part of their victims? They motivate people to work harder by taking their savings away, thus forcing their victims to work diligently and earn more money? Isn't that a legitimate role in the economic system?

    If you can't condemn the people who ask for, and often work very hard to obtain, favors that are unethical, immoral and frequently illegal -- instead condemning only the people who comply with such requests -- then you have no basis for condemning anyone at all.

    This is one of the fundamental things that has been flabbergasting me about America for the past several decades. It didn't used to be this way. Sometime around the 1980s, somehow our ethics changed, so as to say that, if you're not trying to cheat, then you're not doing your job. It used to be the ideal that you tried to achieve as much as you possibly could without cheating. What happened?

    Pythonic Cow has a better response, by saying that bankers and politicians are all in cahoots to rip off the general public anyway. Still I ask, what happened? We didn't used to accept this as a normal part of life. I like his analogy that the kabuki between bankers and politicians (or, other industries, such as energy companies & politicians) is as false as the kabuki between Democrats and Republicans. Still that begs the question, how and why did this kabuki originate, why is it so effective, and how were so many Americans drawn into taking sides in this meaningless farce? Can we do anything to shatter the hypnosis of this particular kabuki?

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    Default Re: FUNDAMENTAL QUESTION Re: Why Scott Brown Won -- Erik Jansen

    Aetius had a good article on this that he refered to in this thread.

    Banks are not monolithic structures. They are not simply, "the banks". Some banks lend to people, some banks lend to business. Some banks lend to other banks, and themselves. Some banks don't lend at all, but help other banks lend to each other. Some banks will do some, all, or none of the above. There are all kinds of banks.

    Regardless of their complexity and size, who they are or what they do, all banks share several fundamental features. The DNA of the genus. The biological essence of what makes a bank, a bank.

    All banks are nothing more than a bundle of lawful contracts called limited liability joint stock corporations. All banks have corporate charters that define their purpose and give them life. Humans - who are constrained by law and fiduciary duty from any other pursuit but the maximum return on investment to shareholders -operate all banks. All banks reward human performance with material gain, peer acceptance, and cultural power.

    By considering fairly these common characteristics of banks, it turns out that banks are operating exactly as designed, without malice or evil intent. They are just carrying on carrying on. Our anger and mistrust of banks is dangerously misdirected when we endeavour to repair a system by tinkering around the edges of the symptoms. If it is the inequity and the unbridled risk to us all we are most concerned about, screaming at bankers will accomplish nothing. And accomplishing nothing is the status quo. And the status quo is toxic.
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    Also relevant is another article by him - Why is Lloyd Blankfein

    Lloyd Blankfein is the name of the human who is the Chief Executive Officer (the big man) of the global finance corporation called Goldman Sachs. Goldman Sachs is one of history's most successful human endeavours, a legal set of contracts that has accumulated over a trillion dollars in wealth. As CEO of Goldman Sachs, Lloyd Blankfein is an agent of the corporation - the top agent - and so another set of legal contracts rewards him with a share of that wealth in return for his agency service. His share amounted to about 65 million USD's in 2007.

    Lloyd Blankfein is ranked among the top 1% of all humans in financial wealth and power by any earthly measure. Except for this fact, and all facts that trail from it, Lloyd Blankfein is a pretty average human in all other regards. There are thousands of Lloyd Blankfein's atop thousands of similar bundles of legal entities - as well as a number of illegal ones. However, there are billions of humans of exact biology on the planet, 99 out of every one hundred (or more) without the wealth, power, and prestige of the very few Lloyd Blankenfein subsets.

    One might expect that in a situation such as this, the 99% side would simply knock Lloyd Blankfein on the head with a stick and take all his stuff. There are more of them, after all. Strange however, that they don't. In fact, on the occasion that anybody ever tries to force a more equitable arrangement (as sometimes happens) members of the 99 club chuck the pushy bugger into jail. Or worse.

    How did it come to pass that such a system grew and flourished where the set up is so head scratchingly inequitable? Why does the near entirety of the human race voluntarily acquiesce to such a system?
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    Default Re: FUNDAMENTAL QUESTION Re: Why Scott Brown Won -- Erik Jansen

    I liked the responses to this question which appeared on the other thread, so I'm going to reproduce them here, for the moment without any comment.

    Quote Originally Posted by jtabeb View Post
    Umm bankers get to create unlimited amounts of FIAT Credit maybe?
    Quote Originally Posted by Marek View Post
    Great question. Perhaps because we are very cynical about our government but idolize success in business?
    Quote Originally Posted by Chomsky View Post
    Couple reasons I can see right off the bat. The public has no control over the bankers, but it does elect the politicians, and thereby expects more from them and feels all the more spurned when they curry favor for special interests. Also, the politicians sell out for SO LITTLE compared to what the bankers get in return, which makes the sellout seem all the more craven.
    Interesting responses which may shed light on the ways Americans are dazzled by a false Kabuki conflict between industry and government.

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    Default Re: FUNDAMENTAL QUESTION Re: Why Scott Brown Won -- Erik Jansen

    Quote Originally Posted by necron99 View Post
    Pythonic Cow has a better response, by saying that bankers and politicians are all in cahoots to rip off the general public anyway. Still I ask, what happened? We didn't used to accept this as a normal part of life. I like his analogy that the kabuki between bankers and politicians (or, other industries, such as energy companies & politicians) is as false as the kabuki between Democrats and Republicans. Still that begs the question, how and why did this kabuki originate, why is it so effective, and how were so many Americans drawn into taking sides in this meaningless farce? Can we do anything to shatter the hypnosis of this particular kabuki?
    This particular kabuki (nice choice of word, thanks) is not a recent or one time thing. Large human organizations and societies are vital, but grievously flawed. Governments and businesses have been dancing together for a long time.

    My sense is that essentially a new life form, meta-human activity, has been forming over the last few tens of thousand years. It's still in its protean infancy, evolving rapidly, with some occasionally outrageous variants.

    It's our individual responsibility to do what we can to survive, prosper and guide others, for our brief time in this life.

    P.S. -- The printing press and now the internet are accelerating the evolution of this meta-human life form. See further http://www.thedailybell.com/755/The-...ott-Brown.html, a good read on Scott Brown, the printing press and the internet.
    Last edited by ThePythonicCow; 01-22-10 at 01:22 AM.
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    Default Re: FUNDAMENTAL QUESTION Re: Why Scott Brown Won -- Erik Jansen

    Quote Originally Posted by necron99
    As far as I understand it, it is nobody's legitimate "role in the system" to buy favors.
    I think it depends on what your definition of 'buy favors' means.

    For one thing, favor can be obtained in many ways without directly passing money to the favor-giver.

    How do you legislate against giving a helping hand to a relative? A school mate? A golfing buddy? A crying child?

    While certainly we can try to legislate against specific forms of favor-buying - whether it is direct bribes, nepotism, jobs for relatives, etc etc there are infinite ways by which social or financial advantage can be conveyed.

    This doesn't excuse it.

    My point is simply that the TBTF banks are demonstrating to the rest of the banking system what the price is for NOT 'buying favors' means; the rest of the banking system is getting ground into dust even as those who 'played the game' are basking in the warmth from Fed printing presses. It is quite conceivable that there are some in the 'favor' game who play merely to survive.

    Be that as it may, ultimately the failure here is with the politicians.

    They have a fiduciary duty to their constituents which has been betrayed.

    What I wonder about is whether politicians can be sued for a failure to carry out their fiduciary duty; a corporate officer can be.

    Don't get me wrong, I do think that buying favors is wrong. But besides being impossible to prevent, it is an artefact of the human condition.

    Quote Originally Posted by necron99
    Sure if a sportsman bribes a referee, the referee gets fired. But the sportsman also gets blamed and punished, not patted on the back and put back in the game.
    The difference is that a referee has a clear set of rules he is intended to enforce. Thus it is easy to objectively evaluate when said referee is failing in his/her fiduciary duty. Politicians are not so easily evaluated - and definitely aren't by most of their electorate.

    Secondly if a cash bribe is detected, certainly something is amiss. But what if the referee's wife is really good friend's with the sportman's wife? If the referee was given a 'leg up' into the big leagues via a recommendation from a specific team owner? If the sportsman owes money to the referee? If the sportsman and the referee have lunch together 3 times a week and split the bill?

    Quote Originally Posted by necron99
    To me, your response is a bit like saying that "Burglars rob people -- this is unsurprising and completely consistent with their role in the system."
    I think this is not a correct depiction. What is going on right now is more or less completely legal.

    Is it bullshit? Yes. Is it immoral? Yes. Is it destructive? Yes.

    But in an America more focused on the law as opposed to the spirit of the law, nothing happening is 'wrong' in the illegal sense.

    I've also never said that the bank system consists of buying politicians' favors. The bank system has a clear purpose, but nothing within this purpose precludes using any and all legal mechanisms available to make money. The ROI on the Goldman/JP Morgan/Morgan Stanley campaign contributions for Obama has clearly been quite impressive.

    It is the above by which I have long believed the American system is f***ed.

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    Default Re: FUNDAMENTAL QUESTION Re: Why Scott Brown Won -- Erik Jansen

    I'd like to suggest that it may be a question of ideology.

    Americans seem to value their democracy less than their free market capitalism. Perhaps they see a more visceral connection to their daily lives and way of life, dependent more on business than on government.

    But enmity towards bankers themselves is universal it appears. Americans are just being human like everybody else. Where Americans have been historically different however, is in their very short patience with injustice and inequality. I find it odd that now, when they need it most, Americans seem to be electing to sit it out. Which is a bummer for everybody.

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    Default Re: FUNDAMENTAL QUESTION Re: Why Scott Brown Won -- Erik Jansen

    Americans have been sold on the idea that money trumps anything. Amazing what people will give up for it.

    People want to pretend that moral character does not matter. That its all about money and facts and science and other practical considerations. But there was a fine line between George Washington becoming "King of America" or becoming merely our first President. I blame the quality of character in America for the situation. We tolerate a lack of it too often these days. Bankers, Politicians? They are really one and the same. Same team at least.

    This is nothing new. It's merely old fashioned corruption and cronyism. What is different from the past is how they were able to divert attention from what they were doing with a phony standard of living. Very few complained until it hit them personally in the pocket book. Whores, bought off by a few trinkets and a big house they could not afford.

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