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Gender: Female
Hometown: Ann Arbor, Michigan
Home country: USA
Member since: Thu Sep 25, 2003, 02:04 PM
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Journal Archives

The Hubris of Trying to Eliminate Cash


People like hard currency and use it every day. It is a check on centralized power. It is private and peer-to-peer. And despite or because of that, some want to get rid of it...While investigating Bitcoin, Antonis Polemitis once poked fun by imagining how the media would react to the introduction of cash. He titled his parody, "Bizarre Shadowy Paper-Based Payment System Being Rolled Out Worldwide." Cash has been dubbed "bills" among "the shadowy community of anti-banking libertarians who have been the primary users of cash to date," the article explains, and "though hard to imagine, cash operates with no consumer protection at all. If your ‘bills’ are stolen or lost, they are gone forever."

A later section of the article is titled "Perfect for Criminals":

The launch of cash has provoked a reaction from law-enforcement agencies worldwide that universally condemned the development. “Cash is a 100% anonymous and untraceable payments technology. It is like a weapon of mass destruction launched against law enforcement,” said Mike Smith, the recently confirmed FBI Director. “It is the perfect payment mechanism for criminals, drug cartels, terrorists, prostitution rings and money launderers. We don’t know how we will be able to combat such a technology and fully expect that a new generation of super-criminals will emerge, working in the shadows of a world where they can conduct their illicit affairs without leaving a trace.”

Polemitis quotes the fictional banking superintendent of New York State: "I can’t think of any reason that a law-abiding individual would want to use cash," he declared. "At a bare minimum, we believe there should be a licensing procedure for individuals or businesses that plan to use cash, a ‘Cash-License’ as it were. This license will limit ‘cash’ to trust-worthy individuals who keep detailed auditable records of all their cash transactions in order to keep New York safe from criminals.”

At the time, I laughed.

Today I worry that the parody is prescient. Kenneth Rogoff, a professor of public policy and economics at Harvard University, is as good a place to begin as any. Under the headline, "Paper money is unfit for a world of high crime and low inflation," he declares in the Financial Times that "it is time to consider whether paper currency is vestigial, or worse," in part because "phasing out currency would address the concern that a significant fraction, particularly of large-denomination notes, appears to be used to facilitate tax evasion and illegal activity."


Wolf Richter: Housing Hit the Wall of Wall Street in May


It always starts with a toxic mix. Last fall when sales that had been predicted to continue their miraculous ascent were suddenly swooning, soothsayers dealt with it by developing a whole plethora of excuses. At each new disappointment, they dragged out new excuses. But in May, the toxic mix came to a boil, and now there are no more excuses: sales plunged and inventories jumped. The housing market is buckling under its own inflated weight...And what excuses they’d come up with! Last fall, the fiscal cliff, the threat of a government shutdown, the possibility of default that was belittled by everyone supposedly made home buyers uncertain. But these issues were swept under the rug, and sales continued to drop into the winter. Polar vortices were blamed, though in California, where the weather was gorgeous, sales dropped faster than elsewhere. Then the spring buying season came around when massive pent-up demand was supposed to sweep like a tsunami over the land. But sales continued to decline. So tight inventories were blamed. There simply weren’t enough homes for sale, it went. Alas, in May, new listings rose 6.5% from a year ago to a four-year high in the 30 markets that electronic real-estate broker Redfin tracks. People were dumping their homes on the market; new listings soared 25.5% in Ventura, CA, 15.8% in West Palm Beach, and 15.4% in Baltimore. This is what it looked like for all 30 markets combined:

The onslaught of new listings added to the unsold inventory and pushed up the total number of homes for sale by 9.1% to the highest level since August 2012. And in this elegant manner, the final excuse of tight inventories causing the plunge in sales went up in smoke. This rise in inventory has been going on all year. Yet, as Redfin pointed out with a soupçon of irony, it was “surprising to some, given the speculation about extremely low inventory creating intense pent-up demand among buyers who have been waiting for months with low interest rates burning holes in their pockets.”

Real estate is local. During the last housing bust, some areas started to crater in early 2006, while others hung in there for a while longer. San Francisco’s bubble hit its peak in November 2007, and everyone thought that the city, being so unique, would be immune to the pandemic of housing mayhem. A month later, it cratered. So this time too, it isn’t impacting all markets equally. In 10 of the 30 markets, inventories were actually down. But in some of the hottest markets a year or two ago, inventories skyrocketed: up 14.6% in Los Angeles, 15.5% in Washington, DC, 16.2% in San Diego, 23.1% in Sacramento, 27.9% in Orange County, 30.9% in Riverside-San Bernardino, CA, and up – I’m not kidding – 33.4% in Phoenix. And this inventory isn’t selling: in the 30 markets, sales in May plunged 10% from a year ago. Now that homes are coming on the market in large numbers, buyers, faced with sky-high prices and higher mortgage rates, went on strike:

In some of the hottest markets of 2012 and 2013, sales are falling off a cliff: down 11.6% in Las Vegas, 12.2% in Chicago, 12.3% in Seattle, Orange County, and Los Angeles, down 12.5% in Washington, DC, 13.1% in Long Island, 13.5% in San Francisco, 14.6% in Sacramento, 20% in Phoenix, and down 20.8% in San Diego. These are ugly numbers. But, but, but… the median sales price still rose 8.2% in May from a year ago, though that’s down from the 14.5% increase in May 2013, and from the 20% at the peak of 2012. Redfin reported that its agents had observed “the shift away from a sellers’ market, with buyers having more power and less competition.” But apparently, “many sellers still haven’t read the memo.”

Since early 2012, Wall Street players, armed to the teeth with the nearly free and limitless money that the Fed in its infinite wisdom has made available specifically for these purposes, piled into the market, buying up hundreds of thousands of homes helter-skelter and turning them into rental properties. It switched these homes from for-sale lists to for-rent lists, where many languished unperturbed, and it drove up prices in record time. Current homeowners welcome that. But first time buyers, the natural force in the housing market, were effectively pushed aside and are now priced out of the market. Even many current homeowners who want to sell are locked into their homes as they cannot afford the next home, given higher mortgage rates and sky-high prices. At these prices, even investors can’t buy these homes and rent them out at a profit. In many areas of the country, that business model is kaput. So they pulled back too. This is how the Fed fixed the housing market. The only thing lacking in this “fixed” housing markets are willing and able buyers. So inventories are piling up, and someday sellers will “read the memo.” Then prices will be whittled down to where they make economic sense in this economy. We’ve been through this before. Only this time, it’s different: the Fed, which so eagerly took credit for having “fixed” the housing market, is going to be hard-pressed to cut interest rates further, or do anything else it isn’t already doing.

Harvard Business Review calls bullshit on today's "capitalists"


Fourteen years ago, the 1% got the tax breaks and regulatory rollbacks which they had repeatedly assured us would usher in an era of boundless prosperity. What was ushered in instead was the worst economic disaster since the Great Depression - an ongoing disaster that is exacerbated by the austerity-mongering neoliberal vampires who still control our economy.

Now, even the Harvard Business Review is calling out the neoliberal nonsense about "entreprenuers", pointing out that the short-term view of the financial markets values "disruptive innovation" less than "efficiency innovation" (i.e., cutting jobs).

When the man who invented the term "disruptive innovation" (Clayton Christensen) says captialism does not value his brainchild, you know that Wall St. has jumped the shark...Christensen is a good teacher. Unlike most business school writers, he actually clarifies the topic he is writing about, as opposed to burying it in jargon, like Theory Z. In the article I'm referencing, he sub-divides innovation, and thereby uncloaks for us how the business jargon has mashed true innovation together with cost-cutting. (Sorta the same way today's Democratic Party has mashed progressivism together with corporate welfare.) Christensen defines three kinds of innovation:

Performance-improving innovations replace old products with new and better models. They generally create few jobs because they’re substitutive.

Efficiency innovations help companies make and sell mature, established products or services to the same customers at lower prices.

Market-creating innovations, our third category, transform complicated or costly products so radically that they create a new class of consumers, or a new market.

Then, he goes on to essentially say that one of the fundamental tenets of capitalism, a tenet that underlies the austerity mania, is no longer true:

A fundamental tenet of economics is that some of the inputs required to make a product or service are abundant and cheap—like sand. We don’t need to account for such inputs and can waste them, if need be. Others are scarce and costly and must be husbanded carefully. Historically, capital was scarce and costly. So investors and managers alike were taught to maximize the revenue and profit per dollar of capital deployed.

While it’s still true that scarce resources need to be managed closely, it’s no longer true that capital is scarce. A recent Bain & Company analysis captures this point nicely, concluding that we have entered a new environment of “capital superabundance.” Bain estimates that total financial assets are today almost 10 times the value of the global output of all goods and services, and that the development of financial sectors in emerging economies will cause global capital to grow another 50% by 2020. We are awash in capital...witness the $1.6 trillion in cash on corporate balance sheets.

People have been pointing to all the unspent capital, which politically-aware people understand is just parked until the crooks can buy a tax-amnesty. (I would add the estimated $20 Trillion parked in tax havens by the super-rich over the last 30 years.) We should be shouting what Christensen says:

it’s no longer true that capital is scarce.

Therefore, austerity can be seen as a form of looting - privatization (and subsequent under- or dis-investment in public assets) and the ruthless extraction of the life savings of the middle class, as it struggles to keep its head above water....

U.S. Funds “Terror Studies” to Dissect and Neutralize Social Movements By Glen Ford


“In the language of ‘terrorism studies,’ the human beings involved in these social movements are 'contagions,' as in vectors of disease...The goal of “terrorism studies” is “to find possible vectors of resistance, which are to be identified and eradicated, like a disease.”

The U.S. Department of Defense is immersed in studies about...people like you. The Pentagon wants to know why folks who don’t themselves engage in violence to overthrow the prevailing order become, what the military calls, “supporters of political violence.” And by that they mean, everyone who opposes U.S military policy in the world, or the repressive policies of U.S. allies and proxies, or who opposes the racially repressive U.S. criminal justice system, or who wants to push the One Percent off their economic and political pedestals so they can’t lord it over the rest of us. (I’m sure you recognize yourself somewhere in that list.)

The Pentagon calls this new field of research “terrorism studies,” which is designed to augment and inform their so-called War on Terror. Through their Minerva Research Initiative, the military has commissioned U.S. universities to help it figure out how to deal with dissatisfied and, therefore, dangerous populations all around the world, including the United States.

The Minerva Initiative was the subject of an article in The Guardian newspaper by Dr. Nafeez Ahmed, an academic who studies international security issues. The Initiative seeks to sharpen the U.S. military’s “warfighter-relevant insights” into what makes people tick, and get ticked off at power structures, in regions “of strategic importance to the U.S.” Since the U.S. is an empire seeking global hegemony, and sees the whole world as strategic, the Minerva program’s areas of interest involve – everybody on the planet.

Total War Against the Planet

  • The Minerva project paid Cornell University researchers to find out when social movements reach a “critical mass” of people – a “tipping point” at which they become a threat to the powers-that-be. In the language of “terrorism studies,” the human beings involved in these social movements are “contagions,” as in vectors of disease. Neutralizing them becomes a job for “warfighters.”

  • The University of Washington is studying “large scale movements involving more than 1,000 participants” in 58 countries, to see how these folks kept their movements going.

    So, now you know why U.S. intelligence agencies are tapping the telephones and Internet communications of virtually the entire population of the planet. They are mapping every conceivable human network, sifting through the myriad patterns of human association to find possible vectors of resistance, which are to be identified and eradicated, like a disease. American military and intelligence enlisted academics to study the dynamics of "the 2011 Egyptian revolution, the 2011 Russian elections, the 2012 Nigerian fuel subsidy crisis and the 2013 Gazi park protests in Turkey" – all with the aim of preventing similar “contagions” from spreading.

    The United States military sees itself as engaged in a total war against the entirety of planet Earth: all of its people, its social movements and dynamics, are enemy territory, including the people of the United States.
    When American rulers say they are defending U.S. national security interests against all potential enemies, what they really mean is they are defending the prevailing capitalist order against any social movement that might oppose it, anywhere on Earth. They want to put the hole planet on lockdown, and have enlisted U.S. universities in their global fascist project.
  • The surprising ages of the Founding Fathers on July 4, 1776

    For the Journal of the American Revolution, Todd Andrlik compiled a list of the ages of the key participants in the Revolutionary War as of July 4, 1776. Many of them were surprisingly young:

    Marquis de Lafayette, 18
    James Monroe, 18
    Gilbert Stuart, 20
    Aaron Burr, 20
    Alexander Hamilton, 21
    Betsy Ross, 24
    James Madison, 25

    This is kind of blowing my mind...because of the compression of history, I'd always assumed all these people were around the same age. But in thinking about it, all startups need young people...Hamilton, Lafayette, and Burr were perhaps the Gates, Jobs, and Zuckerberg of the War. Some more ages, just for reference:

    Thomas Jefferson, 33
    John Adams, 40
    Paul Revere, 41
    George Washington, 44
    Samuel Adams, 53

    The oldest prominent participant in the Revolution, by a wide margin, was Benjamin Franklin, who was 70 years old on July 4, 1776. Franklin was a full two generations removed from the likes of Madison and Hamilton. But the oldest participant in the war was Samuel Whittemore, who fought in an early skirmish at the age of 80. I'll let Wikipedia take it from here:

    Whittemore was in his fields when he spotted an approaching British relief brigade under Earl Percy, sent to assist the retreat. Whittemore loaded his musket and ambushed the British from behind a nearby stone wall, killing one soldier. He then drew his dueling pistols and killed a grenadier and mortally wounded a second. By the time Whittemore had fired his third shot, a British detachment reached his position; Whittemore drew his sword and attacked. He was shot in the face, bayoneted thirteen times, and left for dead in a pool of blood. He was found alive, trying to load his musket to fight again. He was taken to Dr. Cotton Tufts of Medford, who perceived no hope for his survival. However, Whittemore lived another 18 years until dying of natural causes at the age of 98.



    Dear Friends and Activists,

    Another day, another breathtakingly corrupt Supreme Court decision in
    the Hobby Lobby case. Now they say that corporations, the most amoral
    legal entities ever contrived, can impose on their employees the
    religious dogma of their owners.

    We call for the immediate impeachment of the 5 legal hacks posing as
    Supreme Court justices on our highest court.

    Impeach The Supreme Court 5 Action Page:

    And after you submit the action page above, we'd love to send you one
    of our "Impeach The Supreme Court 5" bumper stickers for no charge,
    not even shipping, and all you have to do to get one is submit the
    form on the return page, or on this one:

    Impeach The Supreme Court 5 bumper stickers:

    Of course if you can make a contribution of any amount, this is what
    makes it possible for us to send free stickers to anyone who cannot
    make a donation right now. And if there is anything left over it goes
    right into the Citizens United, The Movie, production, now shooting,
    to dramatize all these issues in entertaining full length feature
    film form.

    All this just further underlines the urgency of immediately launching
    a constitutional amendment that speaks the truth that corporations
    are NOT people, and that money is NOT speech. In fact, impeachment of
    these wayward legal ringers is the SAME policy initiative.

    Because after we replace enough bought off members of Congress to get
    this constitutional amendment on the road to ratification, we will
    automatically, and at the same time, have enough votes to start
    impeaching these reactionary judicial activists for their crimes
    against critical thinking.

    In the next alert we will start to break down the pathetically lame
    jusifications for this latest legal hatchet job, but suffice it for
    the moment to say that it all comes back to the unadorned fiction
    that corporations are "people." And there is no end to the evil that
    will flow from that foul stream until we take action now to stop it.

    You may forward this message to any friends who would find it

    Contributions to The People's Email Network are not tax-deductible
    for federal income tax purposes.

    If you would like to be added to our distribution list, go to

    In Banking World, Fraud Is an Epidemic



    Weekend Economists Celebrate the Boys of Summer June 27-29, 2014

    Yes, it's baseball season. Despite the world-wide soccer/football games in Brazil, summer belongs to the diamond crowd.

    Baseball is a bat-and-ball game played between two teams of nine players each who take turns batting and fielding.

    The offense attempts to score runs by hitting a ball thrown by the pitcher with a bat and moving counter-clockwise around a series of four bases: first, second, third, and home plate. A run is scored when a player advances around the bases and returns to home plate.

    Players on the batting team take turns hitting against the pitcher of the fielding team, which tries to prevent runs by getting hitters out in any of several ways. A player on the batting team who reaches a base safely can later attempt to advance to subsequent bases during teammates' turns batting, such as on a hit or by other means. The teams switch between batting and fielding whenever the fielding team records three outs. One turn batting for both teams, beginning with the visiting team, constitutes an inning. A game comprises nine innings, and the team with the greater number of runs at the end of the game wins.

    Evolving from older bat-and-ball games, an early form of baseball was being played in England by the mid-18th century. This game was brought by immigrants to North America, where the modern version developed. By the late 19th century, baseball was widely recognized as the national sport of the United States. Baseball is now popular in North America and parts of Central and South America and the Caribbean, East Asia, and Europe.

    In the United States and Canada, professional Major League Baseball (MLB) teams are divided into the National League (NL) and American League (AL), each with three divisions: East, West, and Central. The major league champion is determined by playoffs that culminate in the World Series. The top level of play is similarly split in Japan between the Central League and Pacific Leagues and in Cuba between the West League and East League...wikipedia

    Does anyone have any first-hand information on the Rotary Club?

    Weekend Economists' Sumer Is Icumen In June 20-22, 2014

    "Sumer Is Icumen In" is a medieval English rota of the mid-13th century. It is also known as "The Cuckoo Song".

    The title translates approximately to "Summer Has Come In" or "Summer Has Arrived". The song is composed in the Wessex dialect of Middle English. Although the composer's identity is unknown today, it may have been W. de Wycombe. The year of composition is estimated to be c. 1260.

    This rota is the oldest known musical composition featuring six-part polyphony (Albright, 1994), and is possibly the oldest surviving example of independent melodic counterpoint.

    It is sometimes called the Reading Rota because the earliest known copy of the composition, a manuscript written in mensural notation, was found at Reading Abbey; it was probably not drafted there, however. The British Library now retains this manuscript.

    Middle English lyrics

    Sumer is icumen in,
    Lhude sing, cuccu;
    Groweth sed
    and bloweth med,
    And springth the wode nu;
    Sing, cuccu!

    Awe bleteth after lomb,
    Lhouth after calue cu;
    Bulluc sterteth,
    Bucke uerteth,

    Murie sing, cuccu!
    Cuccu, cuccu,
    Wel singes thu, cuccu;
    Ne swic thu naver nu.

    Sing, cuccu, nu; sing, cuccu;
    Sing, cuccu; sing, cuccu, nu!

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