Part II of a conversation with Paul Volcker

with Paul Volcker
in Current Affairs, Business
on Wednesday, September 30, 2009 * * * * *

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Part II of a conversation with Paul Volcker

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Keywords:
Obama
Business
regulation
economy
lehman
banks
wall st.
finance

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    1. robdverity  10/13/2009 08:05 PM Report

      Richard Engel NBC 10/7/09

      Due to delayed ‘activation’ of pertinent sites, taking second choice of several irrelevant choice(s).

      Brian Glyn Williams and David Kilcullen, both orthodoxy spewing foils for the MI oligarches, were disingenuous to a fault. Especially Williams. To full of certitudes - an ipso facto disqualifier. Anathema! Richard Engel, two nights earlier, was much more credible.

      Richard Engel, NBC (Charlie Rose 10/07/09), gave (at last) an honest assessment of Af-Pak. But, alas, with a paradoxical conclusion, i.e., not to leave posthaste, despite a realistically hopeless outlook. Engle lamented leaving the Pakistani’s after exhorting them to take up the battle against the Taliban. ???? I don’t get it. It’s their problem to resolve (or not) in any level of efficiency (or not) they chose. The Pashtun (Source of Taliban) are 15 per cent of Pakistan. In other words doable if they have the will.

      Engle could discern no distinction between Taliban and al Qaeda, and the Taliban were Pashtun (but all Pashtun are not Taliban). He further asserted that drone missiles were not the answer because of civilian casualties and lack of target definition.

      As an aside, for those who like to keep score against the 3,000+ World Trade Center 9/11/2001 deaths, the raw score in body count is more than settled with Afghan troops killed at 11,522; Afghan civilians killed at 7,589; [1,371 coalition troops, contractors and six journalists]. So the eye-for-an-eye, and a tooth-for-a-tooth (until we’re all blind and toothless crowd) should be satiated.

      Given that and the fact that Osama bin Laden has apparently safely ensconced himself out of reach, what is our objective? The elusive end-game? How about an Hippocratic Oath takeoff, of “Second, Do no (more) harm!” The hardliners are shuddering, but remember tough guys we’re already more than even based on body count - what other metric is there as far as vengeance?

      Formulations to consider, where: O = Outcome, T=US Troops, E = Enemies, C = Created, V = Vanquished (killed), I = Indifferent.

      Scenarios: 1- Add 40,000 to 68,000 troops and 75,000 contractors already there. 2-Add 20,000 troops. 3-Add none. 4-Add none and remove all troops and contractors.

      Assumptions: 1- For each Enemy (Pashtun) killed a MINIMUM of three other Pashtuns will grieve and harbor resentment, 2- The current rate of say (11522+7589)/68000x8 = 35 Pashtuns/US troop/yr vanquished (euphemism for killed) per 1,000 troops will continue.

      Therefore, the outcomes O for for the four scenarios are shown below:

      Where: Outcome O = T in thousands x Vanquished per year per thousand = Annual Pashtun Kill.

      Scenario 1: O = (68k + 40k) x 35 = 3780 / yr

      Scenario 2: O = (68k + 20k) x 35 = 3080 / yr

      Scenario 3: O = (68k + 0 k) x 35 = 2380 / yr

      Scenario 4: O = (68k - 68k) x 35 = 0 / yr

      These hypotheticals could be reduced by strategical policies and actions. But at whatever level, they have consequences. If it can be safely assumed that at least three generations carry emotional trauma for at least three survivors of the ‘vanquished’ 150 enemy-years (E-yrs) will be created for each Pashtun killed. Therefore, for the four scenarios the following potential E-yrs of terrorists will be created ©.

      Scenario 1: C = 150 E-yrs x 3780 = 567,000 Enemy-years

      Scenario 2: C = 150 E-yrs x 3080 = 462,000 Enemy-years

      Scenario 3: C = 150 E-yrs x 2380 = 357,000 Enemy-years

      Scenario 4: C = 150 E-yrs x 0 = 0 Enemy-years

      Reminder, these figures are for one year. Another eight years increases Scenario 1 to 4,536,000 Enemy-years for example.

      Simplistic example: they experience casualties when they go out on patrols in the remote outposts. When they don’t, they don’t. DUH!

      Iraq will never REALLY resolve their Sunni - Shia problem until we leave and they are forced to reach an accommodation one way or another, equitable or not. Repressive a la Sadam or not, they’ll own it.

      Af-Pak as well will never REALLY resolve their Pashtun (aka Taliban, al Qaeda) problem until we leave and they are forced to reach an accommodation one way or another, equitable or not.

      WE NEED TO CUT OUR LOSSES, PULL OUT AND COME HOME - NOW!!

      So, there you go Mr. President, for every 1,000 troops sent to Af-Pak, the potential for diminishing the NY sky-line is increased by 5,250 Enemy-years, for each year they are deployed. Such scientifically, mathematically derived S.W.A.G. precision is undeniable. Ignore at your own peril and demeaning of your newly acquired Nobel peace prize. Prove it and bring em home!

      With all these potential enemies (below), we can’t waste resources on a select few. And we can’t conquer the world - even though the list is long enough to warrant paranoia - we have to ramp up our intelligence, ramp down our arrogance, and pressure ME peace settlements.

      Yemen and Somalia are probably more real threats anyway. Terrorism is not geography, it’s an idea. Like Engle said, when someone says he’s al Qaeda, he pretty much is (regardless of race, creed or location on the planet) We had to work at this world-wide disenchantment..Note the innumerable number of countries represented.

      Abu Nidal Organization (ANO), Abu Sayyaf Group (ASG), Al-Aqsa Martyrs Brigade, Al-Shabaab, Ansar al-Sunnah, Armed Islamic Group, Asbat al-Ansar, Aum Shinrikyo, Basque Fatherland and Liberty (ETA), Communist Party of Philippines/New People's Army (CPP/NPA), Continuity Irish Republican Army (CIRA), Gama'a al-Islamiyya (IG), HAMAS , Harakat ul-Jihad-i-Islam/Bangladesh (HUJI-B), Harakat ul-Mujahadin (HUM), Hizballah, Islamic Jihad Union, Islamic Movement of Uzbekistan , Jaish-e-Mohammed , Jemaah Islamiya Organization , Al-Jihad , Kahane Chai (Kach) , Kurdistan Workers’ Party (PKK), Lashkar e-Tayyiba (LT) , Lashkar i Jhangvi (LJ) , Liberation Tigers of Tamil Eelam (LTTE) , Libyan Islamic Fighting Group, Moroccan Islamic Combatant Group, Mujahadin-e Khalq Organization, National Liberation Army (ELN), Palestine Liberation Front – Abu Abbas Faction, Palestinian Islamic Jihad – Shaqaqi Faction, Popular Front for the Liberation of Palestine, Popular Front for the Liberation of Palestine - General Command, Al-Qa’ida, Al-Qa’ida in Iraq (Tanzim Qa’idat al-Jihad fi Bilad al-Rafidayn), Al-Qa’ida in the Islamic Maghreb (AQIM), Real IRA, Revolutionary Armed Forces of Colombia (FARC), Revolutionary Nuclei, Revolutionary Organization 17 November, Revolutionary People's Liberation Party/Front, Shining Path, United Self-Defense Forces of Colombia.

    2. esantoro  10/09/2009 01:26 PM Report

      robdverity:

      Thanks for the fleshing out of a few of the details.

      My original intention was just for the pleasure of venting my anger in some creative way. I thought I'd do up my own cards on a $400 color printer and put them up on Ebay just for kicks. Then I got to thinking how good such cards could be if the right people are involved.

      Topps has already done a Madoff card. The deck I'm thinking of wouldn't even include Madoff, as it is interested in bigger fish to fry.

      I'll have to see Moore's "Capitalism," as that bit about the insurance policy on the employee is just the type of behavior that would get Walmart included in the deck.

      "Confiscatory Monopoly": This gives me a good idea for a weekend project: rewrite the yellow and orange playing cards for the standard Monopoly game.

      1. The interest rate on your subprime loan has just quadrupled: Pay $500.

      2. Citibank has overexposed itself and you are forced to bail it out: Pay $200.

      3. Ben Bernanke and Hank Paulson have forced Congress and American Taxpayers to bail out Big Business: IF you own any property on Park Place or Boardwalk you may get out of jail free; otherwise, stay put.

      4. The interest rate on your your student loan just doubled: Pay $50

      So on and so forth. While we're at it we should give LIFE a makeover, too.

    3. robdverity  10/06/2009 08:41 PM Report

      esantoro - Agree with the intrigue of your idea. My support capability has been ravaged by the lack of fiduciary duty of the system I now find so repugnant. But my experience magnified many times over is exactly the fodder that would make your idea have potential.

      Moyers would be a great asset if could be enlisted.

      Indeed, an idea like yours could (feebly) help in righting our sinking ship of fate. Well researched cards (maybe with academic help) with factual (non-libelous material) could help exposing the extent of the corruption that I think has to be rampant. Hallmark cards might be interested.

      Patenting may be a consideration - as it would be easy to co-opt - even by the "scumbags" themselves. They would gladly capitalize on their own putrefaction.

      Example of their depths: Michael points out that corporations buy "dead peasants" insurance. Wallmart bought a million dollar policy on one of their sick employees and collected. Another $5.0 million. Widows got zilch of course.

      Michael could probably help with a pot load of already mined data, but would have to be prepared to share.

      Great idea. Hope I can buy a deck some day. [How about "Confiscatory Monopoly," where properties are purchased with subprime loans from bankers a la Citibank et al with packaged and sold through collateralized debt obligations, insured with credit default swaps yadda, yadda. A re-creation of the whole house-of-cards, exposing the lack of adult supervision (regulation).] The themes and takeoffs could be endless. But a caveat - it may be deemed too depressive. Good luck.

    4. esantoro  10/06/2009 11:41 AM Report

      I brought up this idea on the forum several months ago, and thought I'd suggest it again.

      Several months ago I started collecting images and information to create a set of trading cards: "Scumbags, Scalawags, and Scoundrels: The 50 Most Unpatriotic Americans," AKA "American Cockroach Trading Cards." Then I thought there could be a more positive counterpart to this deck, "Heroes, ____, and ____ :The 50 Most Patriotic Americans" (Haven't yet figured out the title for the latter).

      Each card would have a picture of the individual or institution and some useful facts and information. Some kind of card game could develop from this, something like "Fantasy Hegemony vs Democracy". Values of cards would rise and fall, based on information that develops in relation to respective individuals and institutions.

      Anyway, I think it's an intriguing idea, especially if anyone wants to collaborate. I think it's something that has a chance of catching on.

      robdverity, interested?

      Though I think Moore's brand of social criticism rests a bit too much on the surface and lacks a more penetrating insight into how social, economic,and political mechanisms work, I'd rather have a Michael Moore than not.

      I think that this trading card project might be something he'd support and promote. I'll put out a feeler email to Moore and see if it gets some nibbles.

      This is just one of those ideas that won't go away, and the cards and ensuing game seem suited for our 30-second soundbite era.

      I should also email Thomas Frank, David Sirota, and Bill Moyers, as it would be integral to get professional journalists in on the project.

    5. robdverity  10/05/2009 10:00 PM Report

      Afterthought. Michael's film is Capitalism vs Catholicism as a side line. Rather surprising to me. The Church seems more venal to me, so this bit of courage - bucking the orthodoxy of the (elitist) establihed system - was encouraging. Course Rome remains silent (far as I know). Awaiting political wind no doubt.

    6. robdverity  10/05/2009 09:04 PM Report

      I'm a little shell-shocked as I'm coming off an afternoon of watching Michael Moore's "Capitalism, a love story."

      My warning of a Plutocracy subverting our democracy was fortified by Michael's term "Plutonomy."

      He also validated my prejudices against the anointed-at-the-top CEOs such as Robert Rubin and Citibank, Larry Summers, Tim Geithner and the biggest scoundrel (physically and morally) Henry Paulson. The world would have been a better place had they miscarried or aborted. Trial and incarceration for crimes against humanity would go along way to purging the system of putrefaction and moral hazard.

      Simplistic? Perhaps. Save the sophistication and double-talk for the courts. Straight forward messages are way overdue. Publicly asking AIG, Citigroup et al for our money back was the right kind of theater. Simple request for simple people (not of course for the financial wise-guys).

      Danger of acting as a defusing medium, with the idea that maybe someone cares. Well fat chance.

      All systems are vulnerable to corruption. Capitalism hides it somewhat under the guise that greed-is-good, profit nearly holey - so rigging the system (a la repeal of Glass-Steagall etc - think Robert Rubin, Citigroup) for exploitation of the masses is acceptable.

      Corruption under Socialism should (in theory) expose the exploitive dislocation by the skewering of wealth. You know it's (gasp choke)redistribution. If 1% accumulates more than the remaining 99%, it's more obvious and surely against the laws, guidelines and definition of socialism. Whereas under capitalism, the rational - according to Michael - is that we each think that we too can reach the top. Save that for the ambitious (egregiously greedy) out there.

      Capitalism would be (more) workable under a level playing field, which is only possible if politicians are statespersons and not venal whores. Consequently whores like Chris Dodd, Barney Frank and virtually all members of Congress are basically for sale to the highest bidder. This sadly includes Obama - purchased in toto by Robert Rubin and Larry Summers and Citigroup et al. When a system is this corrupt revolution may be the only answer. Not to worry, we aren't that aware (despite Michael) or hopeless - yet. Even the unemployed doubtless think they can get back in the game. I wonder. We still produce more "value" in paper (CDOs, CDSs) than things.

      Michael draws parallels to Rome - justifiably.

    7. esantoro  10/03/2009 02:52 PM Report

      Volcker knows what's going on and he knows it's unbecoming in his crowd to show passion. But he knows we are up the creek without a paddle. He can even make suggestions here and there that leadership of the past 20 years has been non-existent because he has nothing to lose. I just hope that before he goes out, he will name names and list numbers.

      I still think the elephant in the room is white backlash against the Civil Rights movement. Had there not been such a movement, we would not be seeing today in such brazenness the raping of the United States. There would have been some social controls in place precluding the psychological rationalizing that permeated the financial world. As the country browns up, establishment folks decided they will grab up all they can while there's still something to grab.

      But you know what? This kind of tacky greed has has always been among America's true colors, ever since John Smith couldn't get these twits to do a lick of real work. Only in times of artificial prosperity, when much of the rest of the world was destroyed by war, can America hide from this ugly fact about itself.

    8. kelabit  10/03/2009 09:32 AM Report

      it seems like there is still value in posting your interviews on google -- have you decided not to do so and instead post only on this site?

    9. robdverity  10/01/2009 03:39 PM Report

      When (IF) the economy recovers to the point of the Feds start considering raising interest rates to curb inflation a carbon or gasoline tax of $0.50 - $1.00 per gallon should be considered instead. Should reduce demand, thus deflationary. An offset to inflationary tendencies?

    10. robdverity  10/01/2009 03:13 PM Report

      Volcker redeemed himself somewhat by acknowledging the problematical position we’re in regarding need for income via taxes (carbon, value added - with adjustments for regressivity), growth of K-street (lobbyists - venality, bribery, corruption; my words), and expenditure reduction. All for future considerations after some economic recovery.

      Too benign! Too sanguine! The K-street problem is dramatic, underplayed, destructive and a grave danger to our system. The plutocrats, products of the several influential oligarches, have arrogated our system for their own egomaniacal purposes; and have usurped our democracy - possibly irretrievably. Obama, contrary to outward superficialities, is insidiously contributing to this subversion. The two (of several) most powerful oligarches, finance and MI, have him and the legislators in their pockets.

      It started during the campaign, with Citigroup et al via Robert Rubin with Larry Summers and others; assuring no finance reform not OK’d by the financial oligarchies. The saddest, the most callous, however, is the MI oligarchic plutocrats that have entrenched themselves with so many purchased (bribes) lawmakers that sustained conflicts are locked-in for as long as the public will tolerate them. Volunteers, no draft, no viewed coffins, monitored news by the Pentagon’s Rendon Group, 250,000+ no-bid contractor mercenaries, Halliburton, Xe (aka Blackwater), ArmorGroup (the deviates) - making 100+ times a private or corporal. Over 250 civilian Afghanis killed assuring multiple generations of hatred.

      Obama couldn’t stop any of this (Iraq or Af-Pak) unless the Military-Industrial Oligarches gave him an all clear. Until then he remains a puppet, and our system an oligarchic plutocracy. Democracy on paper only. A lingering illusion.

      Volcker knows this and if he were as wise of a statesmen as he seems to posture himself, he should have been more vociferous about it than merely mentioning it in passing. But his whole demeanor is too much that way. The problem deserves some passion. Having the best democracy one can buy, makes it a plutocracy by definition. We’ve been bought and sold and don’t even know it. The venal whores are all yachting this weekend. Are you?

      Some smart people need to start a movement for a constitutional amendment for single term limits, say eight years staggered, to blunt campaigh contribution influence. But this would take so long that the tipping point (of no return) will be passed. Alas, it was a nice experiment while it lasted. The greed-corruption-corrosion cycle wins again. Ask the Romans.

    11. REMant  10/01/2009 12:14 PM Report

      Taxing energy sources or other such for the purpose of reducing their use will either end up producing no revenue, or be astronomically inflationary, depending on whether the Fed prints money to make up for the effect of it or not, because Keynesian and monetarists will have no truck with limits imposed by the market.