Protester With A Bullhorn Interrupts State Media Coverage of the G-20

This is priceless.



Pure counter-meme digital insurgency.

Priceless: How The Federal Reserve Bought The Economics Profession

And immediately the Spirit impelled Him to go out into the wilderness. And He was in the wilderness forty days being tempted by Satan; and He was with the wild beasts, and the angels were ministering to Him." - Mark 1:12-13


There's a great piece in the Huffington Post this week on the cozy associations between The Fed and the field of Economics.

Perhaps you'll recall that back in July:

"More than 250 prominent economists warned that critics of the Federal Reserve are putting 'the independence of U.S. monetary policy...at risk,' and they urged Congress to back off lest it undermine the Fed's ability to manage the economy and thwart inflation."
(WSJ: Experts Tell Congress to Lay Off the Fed)

Then in August we were presented with:

6 economists on why Ron Paul’s Fed audit idea is wrong

Robert Schiller, Yale University
Lee Ohanian, UCLA
James Hamilton, UC-San Diego
Anil Kashyap, University of Chicago
Michael Woodford, Columbia University
Michael Feroli, JPMorgan

Lots of credentialed academics on that list. You have to wonder whether or not we're really getting an objective, unbiased opinion from these expert economists. Just pick one of the names at random and decide for yourself. Take Anil Kashyap for instance:

“Prior to joining the Chicago Booth faculty in 1991, Kashyap spent three years as an economist for the Board of Governors for the Federal Reserve System. He currently works as a consultant for the Federal Reserve Bank of Chicago, and serves as a member of the Economic Advisory Panel of the Federal Reserve Bank of New York, and as a Research Associate for the National Bureau of Economic Research (NBER).”

Oh where oh where would we be without our beloved Experts? If you want see how far the rabbit hole of love between Ivory Tower economists and the Fed goes, The HuffPost has done most of the heavy lifting for you:

Priceless: How The Federal Reserve Bought The Economics Profession

The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found.

This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists. In the Fed's thrall, the economists missed it, too.

"The Fed has a lock on the economics world," says Joshua Rosner, a Wall Street analyst who correctly called the meltdown. "There is no room for other views, which I guess is why economists got it so wrong."

One critical way the Fed exerts control on academic economists is through its relationships with the field's gatekeepers. For instance, at the Journal of Monetary Economics, a must-publish venue for rising economists, more than half of the editorial board members are currently on the Fed payroll -- and the rest have been in the past.

Further down the rabbit hole:

Three Decades of Domination

The Fed has been dominating the profession for about three decades. "For the economics profession that came out of the [second world] war, the Federal Reserve was not a very important place as far as they were concerned, and their views on monetary policy were not framed by a working relationship with the Federal Reserve. So I would date it to maybe the mid-1970s," says University of Texas economics professor -- and Fed critic -- James Galbraith. "The generation that I grew up under, which included both Milton Friedman on the right and Jim Tobin on the left, were independent of the Fed. They sent students to the Fed and they influenced the Fed, but there wasn't a culture of consulting, and it wasn't the same vast network of professional economists working there."

But by 1993, when former Fed Chairman Greenspan provided the House banking committee with a breakdown of the number of economists on contract or employed by the Fed, he reported that 189 worked for the board itself and another 171 for the various regional banks. Adding in statisticians, support staff and "officers" -- who are generally also economists -- the total number came to 730. And then there were the contracts. Over a three-year period ending in October 1994, the Fed awarded 305 contracts to 209 professors worth a total of $3 million.

More:

Gatekeepers On The Payroll

The Fed keeps many of the influential editors of prominent academic journals on its payroll. It is common for a journal editor to review submissions dealing with Fed policy while also taking the bank's money. A HuffPost review of seven top journals found that 84 of the 190 editorial board members were affiliated with the Federal Reserve in one way or another.

"Try to publish an article critical of the Fed with an editor who works for the Fed," says Galbraith. And the journals, in turn, determine which economists get tenure and what ideas are considered respectable.

...

Affiliations with the Fed have become the oxygen of academic life for monetary economists. "It's very important, if you are tenure track and don't have tenure, to show that you are valued by the Federal Reserve," says Jane D'Arista, a Fed critic and an economist with the Political Economy Research Institute at the University of Massachusetts, Amherst.

Robert King, editor in chief of the Journal of Monetary Economics and a visiting scholar at the Richmond Federal Reserve Bank, dismisses the notion that his journal was influenced by its Fed connections. "I think that the suggestion is a silly one, based on my own experience at least," he wrote in an e-mail. (His full response is at the bottom.)

Galbraith, a Fed critic, has seen the Fed's influence on academia first hand. He and co-authors Olivier Giovannoni and Ann Russo found that in the year before a presidential election, there is a significantly tighter monetary policy coming from the Fed if a Democrat is in office and a significantly looser policy if a Republican is in office. The effects are both statistically significant, allowing for controls, and economically important.

They submitted a paper with their findings to the Review of Economics and Statistics in 2008, but the paper was rejected. "The editor assigned to it turned out to be a fellow at the Fed and that was after I requested that it not be assigned to someone affiliated with the Fed," Galbraith says.

Publishing in top journals is, like in any discipline, the key to getting tenure. Indeed, pursuing tenure ironically requires a kind of fealty to the dominant economic ideology that is the precise opposite of the purpose of tenure, which is to protect academics who present oppositional perspectives.

And while most academic disciplines and top-tier journals are controlled by some defining paradigm, in an academic field like poetry, that situation can do no harm other than to, perhaps, a forest of trees. Economics, unfortunately, collides with reality -- as it did with the Fed's incorrect reading of the housing bubble and failure to regulate financial institutions. Neither was a matter of incompetence, but both resulted from the Fed's unchallenged assumptions about the way the market worked.

Paul Krugman, meet Maxine Johnson.

Krugman opines in the NYTimes:

Obama is a Kenyan-born Nazi Muslim planning to euthanize seniors while putting them in concentration camps. The Clintons were drug-runners who murdered Vince Foster. Why do people believe this stuff?

Yes, there’s a lavishly funded industry pushing these stories. But Glenn Beck, Rush Limbaugh, and all the others wouldn’t succeed without a receptive audience. So what makes that audience so receptive?

Here’s a thought: maybe we can learn something from Bernie Madoff.

How did Madoff pull off his scam? A lot of it probably involved affinity fraud: Madoff’s victims, largely affluent Jews, trusted him in large part because he seemed like one of them.

What I think is going on here, at least partly, is that the peddlers of anti-progressive lies are managing to convince a certain kind of American — white, socially conservative, etc. — that the hate-mongers are people like them; and, even more important, that progressives are Those People, people not like them.

Right. So apparently the only people who are against the health care reform bill are those racist, socially conservative whites who are too bigoted to see that this is all for their own good.

Paul, have you met Maxine Johnson? (Hat tip: Tafaraji)



Remember the lady that was hauled out of the McCaskill townhall meeting? How could you miss it?



Turns out that that lady was one Maxine Johnson, a veteran activist for the Republican Liberty Caucus:

The relative tranquillity established during the meeting was briefly punctured near the end when police arrested a man in a dispute over a political sign. Jefferson College policy prohibits signs in the field house for events, a McCaskill aide said. Police arrested a man after he grabbed the sign of veteran activist Maxine Johnson, who ran for St. Louis alderman this year. The sign was not about health care — it was apparently a Rosa Parks poster.

The Jefferson County sheriff's office identified the man arrested as James Winfrey, 67, of Cedar Hill. He was held on suspicion of third-degree assault.

A witness, Connie Bollinger of the Overland area, said Winfrey just "came over and grabbed" the poster.

McCaskill, watching the exchange transpire from behind the microphone, expressed disappointment that it could overshadow the otherwise peaceful discourse.

I think if Krugman got out a little more he'd see that people like Maxine Johnson aren't exactly unique. Take poor Kenneth Gladney for instance, who recently received a royal ass whooping:

On the evening of August 6, 2009, Kenneth Gladney was attacked outside a town hall meeting hosted by Democratic Congressmen Russ Carnahan. Kenneth Gladney was handing out flags emblazoned with the traditional phrase “Don’t Tread on Me” when he was attacked by members of the Service Employees International Union.

Your Fellow Countrymen are Screaming at their Elected Officials. What the hell is going on in America?

What do you think about these outbursts of anger and frustration?

A) These people are organized right-wing nuts.
B) These people were bussed in by the insurance companies to spread fear and misinformation.
C) These people are racist "birthers" and "teabaggers".
D) Some people have legitimate concerns but are being drowned out by A, B, and C.

At least some of these folks have to be regular people, right?



Peeved Americans roundup:















One exchange in particular from the video of Specter's town hall meeting was very telling and informative.

After watching the video of the town hall meeting, I found question twenty very intriguing because I think it shows that some on the American Right are perhaps on the brink of getting a clue about how to express disagreement in public without the susceptibility of looking like a lunatic to calm observers.

At one point, questioner number twenty—a bald man in a light blue shirt and khakis, one of the many overly-vigorous protesters in attendance—stands up and points out the obvious tension in the room to Specter. He goes on to ask rhetorically: "If you guys think that we want health care reform so bad, do this: Let's have a referendum, and do that. We'll tell you if we like your plan or not." Specter shrugged his shoulders in response as the crowd launched into another round of indignant applause. Specter then stated that he thinks it's a "fascinating idea", saying later, "That's one of the ideas I'm going to take back to Washington."

Even though the chances of that happening are slim, this was without a doubt the only meaningful exchange in the video I saw. And to my knowledge, no such thing has ever been suggested with regard to a piece of federal legislation in America.

Is it really such a "fascinating idea", though? After all, having referendums on major policy questions is nothing new. Questioner number twenty made me realize that his question brought up the possibility of the referendum-based system of the Irish in the Euro-sphere debates being cloned and applied here in America. Could the Lisbon Treaty Euro-style referendum battles that took place in Ireland happen here in the future with regard to future pieces of legislation?

The health care reform opponents remind me a lot of the "Euro-skeptics". If they weren't so preoccupied with shouting slogans and projecting anger, the American Right could push to hold a referendum on the health care reform proposal in much the same way in which Ireland rejected the Lisbon treaty. They don't seem to be that smart just yet, though.

The American Revolution (version 2.0) continues on The Hill

Carbon trading must be globally regulated

Carbon trading must be globally regulated

By Simon Linnett
Published: 11:00AM GMT 31 Jan 2008

Simon Linnett, Executive Vice-Chairman of Rothschild, has called for a new international body, the World Environment Agency, to regulate carbon trading.

In a recently published paper, Trading Emissions, for the Social Market Foundation, Mr Linnett argues that the International problem of climate change demands an international solution.

Unless governments cede some of their sovereignty to a new world body, he says, a global carbon trading scheme cannot be enforced and regulated.

* The full paper - Social Market Foundation

"An urgent global response." This was how Nicolas Stern described the problem of carbon dioxide emissions, in his recent review of the economics of climate change. The sense of an impending crisis infuses our all debates on this issue.

The human causes of climate change are now well established. The overall measures we must take - a reduction of our emissions - is painfully obvious.

But like a group of rabbits caught in the headlights, our actual means of escape remain unclear. We know what our end goals are, but how do we get there? How can governments achieve delivery?

The first step must be to recognise the scope of the problem. Unlike other pollutants, such as litter or nuclear waste, CO2 emissions have impact on a global level - and only on a global level.

This means we have to deal with the issue internationally. The problem is literally too big for any one country to handle. Old alliances, divisions and 'special relationships' are a meaningless hindrance.

I believe it is essential that governments and the private sector work together to solve the problem. As a banker, I suppose I would say that, but only such a partnership will we be able to harness what Al Gore called the multitude of little solutions, which all add up to a better outcome.

Only the private sector can successfully develop those solutions, but only governments can provide a framework for them to be applied internationally.

As a banker, I also welcome the fact that the 'cap-and-trade' system is becoming the dominant methodology for CO2 control. Unlike taxation, or plain regulation, cap-and-trade offers the greatest scope for private sector involvement and innovation.

Furthermore, taxation and regulation can only be levied at local or national levels, whereas cap-and-trade can operate on a global level. And remember, the problem is global.

But for the private sector to participate enthusiastically in a global carbon trading market, governments must collectively establish a robust framework within which trading can occur. It must be long, loud and legal:

* Long: it is going to be around for a long time;

* Loud: it will be the dominant mechanism for sponsoring changes in behaviour and we are going to make this perfectly clear to the world's people; and

* Legal: we will enforce it through law.

A key implication of creating a legal yet global system of trading, is the loss of sovereignty it implies. Governments must be prepared to allow some subordination of national interests to this world initiative, on the issue of emissions. This need not mean a new system of government, above individual nations.

But it would mean a change to the way treaties are agreed and worded. Instead of saying "we will cut emissions by x per cent by date y" (pledges which are inevitably broken), such statements will have to morph to "we will make our contribution to a scheme which cuts, across certain industries and gases, emissions by x per cent by date y."

The European nations already do this, on certain issues, yielding sovereignty to the EU. And in time, the EU itself will eventually have to yield to a larger body - one which includes the economic powerhouses of India and China.

The cynicism that greets such programmes is well known, since the Asian economies seem bent on rapid expansion. However, I believe that both India and China will soon recognise the benefits of joining a global carbon trading scheme.

First, a properly constituted, one-member-one-vote system would mean that they have a proper 'say'. More importantly, since the allocation of the emissions cap might trend towards recognising world populations rather than current levels of emission, both countries would stand to gain a great deal.

If emissions trading could expand into different areas of economic activity, so too could its message. When an individual receives an electricity bill, they will come to know what the cost of turning on the gas or a light was to the environment.

Perhaps they will gain a new appreciation of their burden on the broader world. Similarly, if the scheme were to expand geographically to include India, China and, ultimately, the US, so too could the prospect be realised of such allowances becoming the reserve currency of the world, taking over that role held for most of the 20th century by gold.

So emissions trading could establish a new world order for a sustainable planet, one based on the sharing of the earth's ability to absorb harmful emissions. To allocate that 'resource' fully and properly will, in turn, require resourcefulness and imagination across the globe.

*Simon Linnett is an Executive Vice Chairman of Rothschild. He has enjoyed 25 years of privatisation and PPP experience with the Bank, leading that effort for the majority of that time.

For the last 10 years, Simon has been in dialogue with both UK and, more recently, EU administrations about the future evolution of emissions trading of which he has long been a proponent. This paper represents his personal views only.

Stop. Think. Observe the pattern.

This issue becomes easier to conceptualize if you begin to think of it in terms of a list of general themes which present a matrix of challenges to global governance. Try to think of it in terms of a set of themes which are said to require supra-national collective action and global solutions. The financial crisis, the war on terrorism, proliferation, the management of pandemics, alternative energy, climate change, international standards of trade, border control, state failure, genocide: all of these, at one point or another, have been citied as key issues which permit no national or regional solution.

Compare. Contrast. See associations.


Carbon trading must be globally regulated:

"A key implication of creating a legal yet global system of trading, is the loss of sovereignty it implies. Governments must be prepared to allow some subordination of national interests to this world initiative, on the issue of emissions. This need not mean a new system of government, above individual nations."

Sovereignty and globalisation:

"The world’s 190-plus states now co-exist with a larger number of powerful non-sovereign and at least partly (and often largely) independent actors, ranging from corporations to non-government organisations (NGOs), from terrorist groups to drug cartels, from regional and global institutions to banks and private equity funds. The sovereign state is influenced by them (for better and for worse) as much as it is able to influence them. The near monopoly of power once enjoyed by sovereign entities is being eroded.

As a result, new mechanisms are needed for regional and global governance that include actors other than states. This is not to argue that Microsoft, Amnesty International, or Goldman Sachs be given seats in the United Nations General Assembly, but it does mean including representatives of such organisations in regional and global deliberations when they have the capacity to affect whether and how regional and global challenges are met.

Moreover, states must be prepared to cede some sovereignty to world bodies if the international system is to function.

This is already taking place in the trade realm. Governments agree to accept the rulings of the World Trade Organisation because on balance they benefit from an international trading order, even if a particular decision requires that they alter a practice that is their sovereign right to carry out.

Some governments are prepared to give up elements of sovereignty to address the threat of global climate change. Under one such arrangement, the Kyoto Protocol, which runs through 2012, signatories agree to cap specific emissions. What is needed now is a successor arrangement in which a larger number of governments, including the United States, China and India, accept emission limits or adopt common standards because they recognise that they would be worse off if no country did.

All of this suggests that sovereignty must be redefined if states are to cope with globalisation."

See the dots. Connect the dots.

Carbon trading must be globally regulated:

"The first step must be to recognise the scope of the problem. Unlike other pollutants, such as litter or nuclear waste, CO2 emissions have impact on a global level - and only on a global level.

This means we have to deal with the issue internationally. The problem is literally too big for any one country to handle. Old alliances, divisions and 'special relationships' are a meaningless hindrance."

"The ultimate challenge is to shape the common concern of most countries and all major ones regarding the economic crisis, together with a common fear of jihadist terrorism, into a common strategy reinforced by the realization that the new issues like proliferation, energy and climate change permit no national or regional solution."

Remember, the problem is global.

Remember, the problem is global.

Remember, the problem is global.

Germans flock to gold bars vending machine at Frankfurt airport

Germans flock to gold bars vending machine at Frankfurt airport

Germany has devised the ultimate in credit crunch vending machines: Gold to Go.

After inserting your euros in the slot there is a familiar whirring noise as if the machine is readying itself to spit out a can of lemonade or a bar of chocolate. Instead there is a satisfying clunk as a prettily wrapped bar of the world's favourite precious metal thuds into the dispenser.

"It's better value than the bank," Romy Erhardt of TG-Gold-Super-Markt told The Times, "And it's very convenient — no waiting time — you just put in your cash and a minute later you are an investor in gold."

The prototype gold-dispenser has been installed in Frankfurt airport and today there was a queue of passengers mulling over whether to buy one gramme, 5 grammes or ten grammes of gold.

The one-gramme bar was available for €30 (£25). Other options — rather like a high-end coffee machine it has five selections — included a Maple Leaf Five Canadian dollar coin and a Kangaroo Fifteen Australian dollar coin. Both represent about one tenth of an ounce of gold and the price on today was hovering around €80.

"The price is updated every 15 minutes," Ms Erhardt explained. "The vending machine is linked to the computer which we use for our online gold outlet."

...

The online company Cash4gold.com meanwhile is reporting 25,000 transactions a month. And Exboyfriendjewelry.com — whose testimonials are full of stories about the cathartic effect of selling jewelery given by former husbands and lovers — is thriving.

The Germans are particularly interested, partly because of the collective memory of the currency collapse after two world wars.

Some high street jewellers even buy dental gold to be melted down. "German investors have always preferred to hold a lot of personal wealth in gold, for historical reasons," said Thomas Geissler, head of the Stuttgart-based TG-Gold-Super-Markt.

There is a German fascination with gold that goes even deeper than anxiety about failing currencies. One of Germany's best loved fairy tales, a classic bedtime story, features a donkey that excretes gold coins every time that one shouts the magic word "Bricklebrit!"