The global scam that may prove terminal for Barclays, Lloyds and RBS

By Ian Fraser

IanFraser.org, July 1, 2012: Executives and former executives of the Royal Bank of Scotland, Lloyds Banking Group, HSBC and Barclays are at risk of criminal action, including possible extradition to the United States, in the wake of evidence of their concerted attempts to rig global interest rates, according to senior legal experts.

RBS, Lloyds and HSBC are also facing even larger fines than Barclays’ £290 million fine because of their involvement in the alleged international cartel.

William K Black, an associate professor of economics and law at the University of Missouri-Kansas City, told the Sunday Herald that anyone who is found to have manipulated Libor or condoned such practices at a senior level in a bank should face criminal prosecution. He suggested UK based directors and staff, such as the former RBS chief executive Fred Goodwin, could be liable for extradition to the US.
Black, a world-leading expert on financial crime said:

“The reports of systematic falsification of Libor reports, if accurate, constitute felonies under US antitrust law that should be prosecuted vigorously, as should the systematic cover up.”

The US Justice Department has confirmed its criminal division is investigating banks other than Barclays. It said:

“The Justice Department’s criminal investigation into the manipulation of Libor and Euribor by other financial institutions and individuals is on-going.”

Industry sources said executives from Barclays, HSBC, Lloyds and RBS are at risk of extradition hearings, since evidence suggests that US dollar Libor was was one of the benchmarks that was manipulated. Seventy percent of the $500 trillion global swaps market is based on US dollar Libor, with American counterparties likely to have been most affected.

Move America’s economic debate out of its time warp

By Jeffrey Sachs

FT Blogs, July 12, 2012: America’s economic debate is stuck in a time warp. On the one side, Mitt Romney’s conservative advisors defend tax cuts for the rich and spending cuts for the poor as if we hadn’t just lived through 30 years of failed Reaganomics. On the other side, Paul Krugman defends crude Keynesianism as if we’ve learned nothing in recent years about the severe limitations of short-term fiscal stimulus. Both sides merely raise their decibel levels at each announcement of bad news, as with last Friday’s data showing the failure of the US economy to generate sufficient new jobs in June.

The two sides of the debate live in timeless and increasingly irrelevant ideologies. The prescriptions of free market economics peddled by the Republicans – slash taxes and spending, end financial and environmental regulations – are throwbacks to the 1920s, far more naïve than even modern conservatives such as Milton Friedman and Friedrich Hayek, who recognised the need for government intervention for the poor, the environment, health care and more. Today’s free market ideologues are uninfluenced by the lessons of recent history, such as the financial crisis of 2008 or the devastating climate shocks hitting the world with ever-greater frequency and threatening far more than the economy. Their single impulse is the libertarianism of the rich: the liberty to enjoy one’s wealth no matter what the consequences for the economy or society.

The other side is only a little better. In Paul Krugman’s telling, we are in the 1930s.  We are in a depression, even though the collapse of output and rise of unemployment in the Great Depression was incomparably larger and different in character from today’s economic stagnation.  Krugman channels Keynes, yet Keynes lived in a very different era.

In Krugman’s simplified Keynesian worldview, there are no structural challenges, only shortfalls in aggregate demand. There is no public debt problem. There is no global competitiveness challenge, since “competitiveness” is a myth when applied to national economies. Fiscal multipliers are predictable, timeless, persistent, and large. All growth reversals can be solved through larger deficits. Politicians can be trusted to design short-term stimulus spending programmes of hundreds of billions of dollars. Tax cuts are about as good as increases in government spending, and short-term boosts in spending are about as good as long-term public investments.  Not one of these conclusions stands scrutiny.

Why have we come to this vacuous debate between a free-market extremism and a Keynesian superficiality that addresses none of the subtleties, trade-offs, and uncertainties of the real situation? There are probably two main reasons. First, the world is noisy and overloaded with media messaging. Getting heard seems to require a short, sharp and exaggerated idea endlessly repeated: economics as a media brand. Second, the world is facing novel problems at the global level, and novelty is hard to factor into economics, which is a rigid, ideological, theoretically based, and largely backward-looking field.

Here are some of the new problems of macroeconomic significance.
First, the financial markets are global while regulation is at best national (and sometimes almost non-existent or criminal). This is killing the euro, but it is also undermining financial regulation and monetary policy everywhere. The US and UK are far more interested in defending Wall Street and the City than in fixing the global regulatory landscape. Germany has been much more interested in coddling its errant banks than in fixing the eurozone banking system.
Second, the world of work is being fundamentally transformed. Low-skilled work is the work of offshore workers, or immigrants, or machines.  In high-income countries, the only route to middle class jobs is through education, skills and active labour market policies that match jobs and needs. Germany and other countries of northern Europe have generally succeeded in creating these institutions.  The US and southern Europe have generally failed.  Keynesian aggregate demand cannot create long-term employment for the low-skilled workers left to sink or swim in today’s globalised labour market.  Only temporary bubbles (such as the dotcom bubble of the late 1990s or the housing bubble of the 2000s) briefly employ the low-skilled, but soon they unemployed again when the bubbles burst.

Third, tax collections today are little more than a Swiss cheese of tax evasion and tax havens for the rich and corporations. VAT and payroll taxes can still be collected while capital income of all kinds increasingly escapes taxation. These trends greatly exacerbate the market forces pulling to increase inequality of wealth and income.

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The Zombification of the West

By BRET STEPHENS The Wall Street Journal, July 9, 2012: When is an economic crisis more than just an economic crisis? When is it also a political crisis? And when is it something else altogether: social, demographic, institutional, moral, intellectual—in short, civilizational?

The euro zone's troubles shouldn't be difficult to understand: Pair overspending governments with over-regulated economies and sooner or later the Continent was bound to lose the confidence of the markets.

Normally, such a crisis could be resolved by slashing corporate and marginal tax rates and red tape in order to encourage investment, enterprise and risk-taking. Instead, European policy makers have pursued every conceivable fix, from serial bailouts to a banking union, in order to circumvent having to address the core problems. As a result, the crisis continues to worsen: In Spain, for instance, bank-deposit flight has only gathered pace since last month's $125 billion bank bailout. ...

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How Quisling Leaders Surrender National Independence to Global Corporate Control

See also: The Facist New World Order

Why Mish is wrong about tariffs

Mish reports that,

Mitt Romney has pledged to designate China a "currency manipulator" and impose duties on its imports if the yuan isn't allowed to float freely.

If Romney increases tariffs, says Mish

three things will happen, all of them bad:

1. Prices will rise
2. Growth will slow
3. China will retaliate with tariffs of its own or by buying more goods from Europe instead of  goods from US produces 

In essence everyone will pay higher prices for goods and services in hopes of bring back a few hundred manufacturing jobs (while losing tens-of-thousands of jobs in the ensuing economic slowdown).

On Point 1, Mish is correct. Prices would rise. But is that bad if it means your neighbor returns to work?

On Point 2, Mish is clearly wrong. If Americans resume manufacturing shoes and shirts, computers and car parts for one another, the net effect would be increased consumer spending, not only nominally, due to higher prices, but also in real terms, as millions of the presently unemployed once again receive a pay check.

On Point 3, Mish fails to explain where China will buy oilseed, pulp and paper, copper and other commodities it presently buys from the US, or why it would matter if China did buy elsewhere since all are fungible commodities that the US can sell to those who would otherwise have bought what China buys from sources other than the US.

As for the rest of China's US purchases, they're pretty much a drop in the bucket.

What's more, it's difficult to see China deliberately hurting the US when the terms of China's trade with the US are currently so overwhelmingly in China's favor. But if Chinese tariffs were to hurt US exports significantly, they would tend to drive down the value of the dollar, making the US more competitive internationally, precisely Romney's objective.

Mish's final point, that tariffs would "bring back a few hundred manufacturing jobs," is highly misleading. Tariffs that truly protected American industry would bring back literally millions of jobs, many of them well paid.

So, yes, with tariff protection, Americans would end up paying more to buy from one another instead of buying wherever in the World they can get the lowest price. But which do Americans want:

to trash their neighbor's job to save a few bucks on a shirt, a pair of pants, or to save a thousand or two on the price of a car?

Or is America a nation where people actually give a damn about one another?

Even balanced trade between the West and Rest threatens your job

Earlier I explained how the US/EU's half-trillion-dollar-a-year trade deficit with China has destroyed millions, and probably not less than several tens of millions, of jobs in the West.

But even if trade were balanced, the West suffers job losses as a result of trade with Third World nations where many factory workers still still earn no more than a dollar or two a day.

How so?

Because whereas importing a pair of jeans with a price at the factory gate in China of less than five dollars displaces several hours of a US garment worker's labor, the countervailing export of five dollars worth of Hollywood movies or Canadian oil or gas generates no more than a minute or two of North American employment.

The reason for that lies in the ten- to twenty-fold difference in wages that still exists between the West and the Rest, a circumstance that David Ricardo, author of the principle of comparative advantage, did not envisage when considering trade in wine and cloth between England and Portugal.

True, if David Ricardo's theory of comparative advantage were applicable, which it isn't, then US garment workers displaced when China took half the US textile and garment market between 2001 and 2012 might find employment as Hollywood actors, camera operatives or make-up artists.

But of course they won't, anymore than significant numbers of the Detroit machinists who lost their jobs as China and other Third World nations took most of the North American car parts industry will become computer programmers or IT workers. For one thing, most software and IT jobs have already gone to India, China and other countries where brains as good as those available in North America can be hired for less than one tenth the price.

For most of those driven out of the labor market by cheap Chinese textiles, electronics, computers and car parts, that's it: they'll never get a job comparable to the one they lost and many will not get a job at all.

So much for the benefits of global free trade via the miracle of comparative advantage so often touted by liberal economists with Nobel prizes.

How globalization destroys Western prosperity

Liberal economists committed to the cause of globalization reassure those concerned about cheap Third World imports destroying jobs in the West with some vague reference to David Ricardo's principle of comparative advantage, which so they imply, proves that unrestricted international trade is always beneficial to all parties.

Thus Joseph Stiglitz, in his latest pot-boiler, makes a hand-waving reference to "China's comparative advantage," while Jeff Rubin assures his readers that concerning the invariable benefit of free trade, Ricardo "nailed it."

But what the shills for globalization fail to mention is that comparative advantage, as Ricardo defined it, presupposes immobility of capital, a condition that certainly does not apply in a globalized economy, where international corporations readily move capital and technology from high- to low-wage countries, thus robbing the latter of the benefit of the capital and technical expertise accumulated through the sweat and toil of generations.

But in any case, the principle of comparative advantage can only apply where there is two-way trade. But today, in its trade with the Third World, the West imports massively greater quantities of goods than it exports, the resultant deficits being covered by loans.

For example, in 2011, the US imported from China, alone, goods valued at $399 billion while selling to China goods valued at only $104 billion (Source), the difference being largely covered by Bank of China investment in pieces of paper, aka US Treasury bills.

The 27 nations of the EU are also buying their brain out in China, running up a trade deficit of around $200 billion a year (!56 billion Euros in 2010, Source).

No wonder Vladimir Putin has announced the decline of the West.

US GDP per capita is $48,000 per year. Applying that figure to the EU also, the half-trillion-dollar annual US/EU trade deficit with China represents the loss of over six million jobs, assuming that the imported goods could be produced at home for the same price that they are sold for in China.

But firms such as Dell, Microsoft, Hewlett Packard, Apple, Walmart go to the trouble of outsourcing to China, Brazil, Indonesia and Bangladesh only because it greatly lowers their cost.

How much it lowers their costs overall is hard to estimate. But according to the Wall Street Journal, a pair of American-made jeans that retail for $300 would retail for only $40 if made in China.

So the Western trade deficit with the the Third World displaces a disproportionate amount of local output. And whether the overall displacement ratio is two, three, six or eight, it is certain that cheap imports from the China and the rest of the Third World explain why, despite mass legal and illegal immigration plus natural population increase, the US has seen no gains in employment throughout the entire Obama presidency.

Likewise, the trade deficit with the Third World must explain much of the economic stress in Greece, Italy, Spain and Portugal, as well as the resumption of recession in Britain, a nation once the Workshop of the World, but now able to export little other than financial derivatives, marmalade and biscuits.

The Cause and Cure of the Second Great Depression

Image source

The Second Great Depression, which afflicts the West while the Rest booms, is the direct result of the 1994 General Agreement on Tariffs and Trade (Gatt) now administered by the World Trade Organization (WTO). The Gatt agreement opened the Western economies to free trade with four billion Third Worlders working for pennies an hour.

The immediate impact was slight. It takes a while to mobilized tens and hundreds of millions of the children of peasant farmers to work in the sweatshops, factories and plantations of of BanglaDesh, Indonesia, China and Africa. And as the process got underway, the US tech sector boomed, the stock market zoomed, banking was deregulated, the profits of finance exploded, and Bill Clinton was easily reelected US President in 1996.

But by 2000, the steam was going out of US high-tech. Software developers were learning how to exploit cheap Asian brain-power and Chinese universities were turning out more engineers and programmers than all the universities in the West combined. Tens and then hundreds of thousands of IT jobs moved to India, along with MicroSoft's call center. In the Philippines, University accounting courses taught American accounting rules to students preparing to do off-shored back-office work for US financial and accounting firms.

The result? Al Gore lost the US Presidential election to "compassionate conservative" George W. Bush.

In response to the tech-sector bust, The Greenspan Fed slashed interest rates and set off a real estate boom. Construction is labor intensive, and it stimulates local industries: lumber, cement and steel, so that by 2004 the US economy was good enough to get "humble foreign policy" George W. Bush reelected, notwithstanding that he had launched the US on the NeoCon war for global hegemony. In fact, the war for global hegemony was one reason the US economy was as good as it was in 2004. Spending on weapons and pre-emptive war in Iraq was a key factor preventing the US from falling into recession despite the massive bleeding of manufacturing, design, engineering and research jobs overseas.

Within a year of Bush's reelection, the Greenspan Fed pricked the property bubble with 17 consecutive interest rate increases. The housing crash and the consequent financial crisis ended the Republican hold on the White House.

But nothing much went right for Democrat President Obama. GM and Chrysler went broke. Most of the banks went broke. Dell computer gave up snapping Asian-sourced components together in Texas, instead bringing fully assembled boxes from China. Brutal violence continued in Iraq. The struggle to subdue Afghanistan seemed endless. And today, as the presidential election approaches, US Unemployment remains over 9% according to the headline rate, or 16% according the the U6 definition, and even higher if you take account of those who just gave up looking for work. And an unprecedented number of Americans are on food stamps or some other form of welfare.

Nobel Peace Prize winner, Obama, has done what he could within the limits of the clearly inadequate advice he received.  With the aid of "we have a technology called the printing press" Ben at the Fed, he's printed trillions of dollars, he's expanded the wars to Libya, Syria, Yemen and Pakistan. But the dark shadow of depression still falls across the land: meaning that Republican Romney's up next.

What will President Romney do? Pursue the wars, surely, and, as a buyout specialist, restructure the US economy. But can a Romney administration revive the US economy where the Obama administration failed? Sure, although whether it will do so is another matter.

What to do?

The terms recession and depression are ill-defined, but it is impossible to end either a persistent recession or a great depression without ending mass unemployment. So to end America's economic malaise, the US must instigate policies that lead to the creation of tens of millions of new jobs within four years. These jobs will be mainly for the low-skilled factory operatives and construction workers who've lost their jobs to off-shoring and outsourcing or to the housing bust.

How to do it according to the pundits?

In the public realm, only two approaches are commonly promoted: those of the Keynesian and of the Austrian Economics school.

The Keynesian solution:
According to the Keynesians, more spending is all that is required. Since the private sector won't spend enough, the government must spend more. This Obama has done. The Obama administration has run a budget deficit of more than $5 trillion over four years, yet US unemployment is higher now than when Obama was elected.

To the Keynesians, the failure of the Obama administration to end the depression has been due to the failure to run large enough deficits. Maybe if the deficit had run at 16% of GDP instead of only 8%, or perhaps 24%, then all would have been well.

But there are two problems with this:

First, the debts created by the deficit have to be repaid.

Second, little if any of the deficit spending does anything to increase national output of useful goods and services that generate income that will ease the eventual repayment of debt. Mostly, the money's gone on such things as the wars, Homeland Security and its blue-gloved goons feeling up airline passengers thus destroying a huge chunk of the US tourism industry, and shoving politically correct propaganda down kids' throats in the name of education.

 The Austrian dream:
The Austrians are too nutty to take very seriously, but their dream is to return to a gold-based currency, end the money-printing Fed, without which they believe, incorrectly, that government deficit spending would be impossible, and let all those who borrowed too much go broke. Then the Austrian school fanatics, with their hoards of "physical gold," will be able to buy up prime down-town real estate, the stock market, whatever, for pennies on the dollar.

Oh, and then the economy will recover -- somehow.

What would actually work

You cannot, as the Keynesians believe, pay wages for unproductive work with printed money indefinitely. Debts increase but real income to support the debt does not, so prosperity is ultimately destroyed. And you cannot, as the Austrians believe, revive the economy by sending much of it into bankruptcy.

Which means finding ways of employing idle resources, both human and physical, in ways that generate a positive net return.

Which means promoting new, productive investment at home, not abroad.

What are the greatest restraints in the West to investment at home? There are three:

First, is the corporation tax, which should be abolished. Corporate income should be taxed only once, and that should be when received in the hands of shareholders as dividend payments.

Second, is the minimum wage, which denies employment to those whose labor is worth less than the minimum wage, i.e., most of America's black youth, half of the youth workers in Spain, etc.

Third, is the freedom to import goods and services produced under conditions, or in ways, that contravene Western standards on environmental protection and workplace health and safety.

Putting the solution into place

Eliminating the corporation tax:
Eliminating the corporation tax is easy. Just do it. The immediate result will be a reduction in government revenue and an increase in the government deficit, but in time there will be a compensating increase in income and sales tax revenue from the resultant increase in investment and the consequent expansion of the economy.

Eliminating the minimum wage:
Eliminating the minimum wage is a little more complicated. The solution, as I have discussed elsewhere is a wage subsidy scheme that, in effect, eliminates the minimum wage so far as employers are concerned, but not for employees, who will therefore receive a living wage.

Such a scheme will make redundant most welfare programs and the bureaucratic empires that administer them, resulting in a massive saving in government spending. Among other savings will be huge reductions in the cost of crime and mental illness to which mass unemployment gives rise.

Most importantly, though, this scheme creates a huge addition to the labor force in the West that is competitive in cost with the labor force of the Third World. This new resource will result in a wave of business start-ups, both large and small. Once again Western firms will be able to make shoes and shirts, computers and car parts in competition with overseas producers. At the same time, those formerly unemployed will gain workplace skills that increase the market value of their labor, and thus their future income. 

Creating a level international playing field:
Eliminating the regulatory disadvantage of home industry will require a blunt instrument. Each nation or trade zone must calculate the cost to its own industry of unfair competition due to overseas workplace and environmental regulation and then impose an across the board tariff to compensate. Such a measure will do a great favor to workers in the Third World, where governments will be forced to adopt Western standards of environmental protection and workers' rights.

With these three measures, Western prosperity will be rapidly restored, and the need for the ultimate Keynesian economic stimulus, World War III, will be eliminated. Unfortunately, the leadership of US/NATO seems unanimous in support for the NeoCon war for global hegemony. So whether the Second Great Depression is ended in one way or another, we'll likely all end either broke, due to endless "stimulative" and totally unproductive war spending,  or dead.

Related:

Rolling Stone Magazine: The Sharp, Sudden Decline of America's Middle Class

When Pop Sci Turns Toxic

The best of popular science provides the non-specialist with both a sense of delight that comes with discovery, and a feeling of awe at the ability of the human mind to extract, often by means of only a few simple logical steps, some fact totally new and astoninshing about the world in which we live.

Not surprisingly, the most able popularizers of science have often been among the most able scientists. And among the great scientists of the 20th Century, Richard Feynman, whether explaining the space shuttle Challenger disaster, or why it is not the flanges on the wheels that keeps a rail locomotive on the tracks,  was among the most effective popular exponents of science.

But Richard Feynman had little time for social science.

Because of the success of science, there [has emerged] a kind of pseudo-science. 

Social science is an example of a science that is not a science. They follow the forms. [They] gather data, but the don't get any laws. The haven't found any yet. Maybe someday they will.  They are not scientific. They sit at a typewriter and they make up something. Maybe true, maybe not true, but it has not been demonstrated.

I might be quite wrong. Maybe they do know all these things. [But I have] found out how hard it is to really know something: how careful you have to be about checking the experiments; how easy it is to make mistakes. 

I see how they get their information and I can't believe they know it: they haven't done the work necessary; they haven't done the checks necessary; they haven't taken the care necessary.

I have a great suspicion that they are intimidating people.

Yesterday, I wrote about CalTech Prof. Leonard Mlodinow's book Subliminal, How Your Unconscious Mind Rules Your Behavior where the author presented what I believe to be narrow, and most probably false, interpretations of the results of various studies in psychology.

But were these examples of what Feynman called "intimidation?"

Well, consider Mlodinow's claim that the tendency to exaggerate one's own popularity, looks, intelligence, etc., is due to a kind of delusional thinking that can be "a problem." Perhaps this idea is, itself, "a problem," a kind of intimidation, in fact. After all, the only people who don't over assess their own merits are those classified as mentally ill and suffering from clinical depression.

Perhaps we know our limitations only too well, but put a gloss on things to keep our spirits up and maintain appearances, an interpretation that suggests a whole different idea about the underlying cause of clinical depression.

And here are three other ideas advanced by Mlodinow on the basis of "studies show" etc., that look very much like pseudoscience applied to the task of politically correct intimidation.

Mlodinow describes a test employed to investigate the way people associate words and ideas. It would be both tedious and pointless to describe the exact method, which so far as one can tell, is just a clever word/idea association test.

Among the things these tests reveal is that people tend to associate men with the sciences, women with the arts.That most people associate men with science is hardly surprising. Only six women have won the Nobel Prize for physics versus several hundred men.The association of women with the arts is more surprising. What proportion, after all, of the great artists and sculptors, poets and playwrights were women?

But no matter, to Mlodinow, these associations are evidence of "gender bias," or "gender stereotyping." And in the same way, Mlodinow finds widespread evidence of "pro-white" and "anti-black:" sentiment among Americans, of whom many, Mlodinow tells us "are (consciously) appalled at learning that they hold such attitudes."

But wait a minute, if I associate, say, the word "black" with "crime," where's the evidence that I am "anti-black?" What's the proof that an association of words is "an attitude?"

I will resist the temptation to resort to a bloggish expostulation concerning the mental capacity of Caltech professors, for such is the author of this astounding non sequitur. But his view is, surely, a clear case of what Feynman would today have called sitting at a computer keyboard and making something up, which may be true, may be not true, has not been demonstrated, but seems intended to intimidate.

Consider this: give me the name Garbo and I will give you the name Greta.Does that mean anything? Only that in the media environment in which I have been immersed for last 50 years and more the name Garbo has usually if not invariably been associated with the name Greta. Other than that my association of the names almost certainly means nothing.

Likewise, if you give me the word "black" I might very well, among a number of alternatives, give you the word "crime." Does that mean I think (a) all black people are criminals, or (b) that blacks account for a disproportionate percentage of the US prison population, or (c) that I consider black people are an inherently inferior race to my own race of green people with pink stripes. Obviously, to (a) no, to (b) so I understand, and to (c) I don't think of race in such dimwitted terms.

In other words, I have no need to accept Mlodinow's offensive, and indeed intimidating, imputation that I am guilty of racial bias and stereotyping merely because I associate certain words or concepts in ways that reflect the use of those terms in the cultural atmosphere I breathe.

In a final chapter, which is very much an exercise in sitting at a keyboard and making stuff up, Mlodinow, gives us the psycho. insight into the scientific method. Scientists, he tells us, engage in "motivated reasoning." What that means is they adopt hypotheses and then focus on supporting evidence while dismissing evidence to the contrary. Wow, who'd have thought it?

But then Mlodinow puts his personal toxic spin on the phenomenon. Motivated reasoning, Mlodinow tells us, "helps us believe in our own goodness and competence, to feel in control, and to generally see ourselves in an overly positive light."

Oh yeah! But what's that got to do with science?

What happens in science is that the creative individual, a Galileo, Darwin, Einstein, formulates a hypothesis and then look for evidence in its support. He works like a mine prospector who, having staked a claim, will likely work the claim until it yields gold or leaves him broke. With hindsight, it might have been better to have staked a claim over there rather than here, but having invested so much here, it makes no sense to work some other claim until the potential of this claim has has been fully evaluated.

And if scientists didn't work that way, nothing much new would ever be discovered. Only the consensus view would be considered, and as a consensus view, it would never be seriously tested. It's only because of the cranks out there, who insist on working out the implications of the theory of the constant velocity of light, or the possibility of time reversal, or some other crazy thing, that science advances.

But to Mlodinow, the cranks are just that. People with warped judgment, inadequate people who have to engage in warped thinking to feel good about themselves. They are, so Mlodinow would have one believe, people who cannot see that the Big Bang theory of the origin of the universe long ago made fools of the steady staters, people like Fred Hoyle, one of the greatest scientists of the 20th Century.

Thus, Mlodinow writes:

... to any disinterested party, the evidence landed squarely in support of the big bang theory, especially after 1964, when the afterglow of the big ban was serendipitously detected ... What did the steady state researchers proclaim? ...Thirty years later another leading steady state theorist, by then old and silver-haired, still believed in a modified version of his theory.

But then this just in:

Scientists glimpse universe before the Big Bang

November 23, 2010 by Lisa Zyga
Enlarge

(PhysOrg.com) -- In general, asking what happened before the Big Bang is not really considered a science question. According to Big Bang theory, time did not even exist before this point roughly 13.7 billion years ago. But now, Oxford University physicist Roger Penrose and Vahe Gurzadyan from the Yerevan Physics Institute in Armenia have found an effect in the cosmic microwave background (CMB) that allows them to "see through" the Big Bang into what came before. 

Huh! Before the big bang?

Big bang doesn't allow that. And Sir Roger Penrose of the Oxford Mathematical Institute may be a silver-haired, but he's no fool.

 In fact it is Mlodinow who seems the very perfect example of a scientist engaged in "motivated reasoning." Thus, on climate change he writes of

...a thousand unanimous scientific studies [that] can converge on a single conclusion, and people will still find a reason to disbelieve."

But if those thousand "unanimous papers" are contradicted by a single valid study, they must be called in question by any rational person.

But not by Mlodinow. If you don't believe we're all doomed unless we slash the World's GDP by 90% or whatever it is that the scientific consensus led by non-scientist Al Gore and the UN Panel on Climate change insist, then you're not rational and "studies show it."

The cover of Mlodinow's book is printed with a transparent film overlay with multiple instances of the word "Buy," the purpose being, presumably, to motivate book browsers to buy the book on an irrational subliminal impulse. I suggest anyone interested in not wasting their money, resist the impulse.

Is Pop Psychology Mostly Bunk?

CanSpeccy: June 27, 2012. Most books stores have dozens of books about psychology. But do they tell us anything useful?

Some surely must, but reading Leonard Mlodinow's latest contribution: Subliminal, How Your Unconscious Mind Rules Your Behavior, I begin to wonder about the pop psych genera.

Mlodinow, for example, discusses our apparent inability to assess ourselves realistically. Ninety-four percent of college professors, Mlodinow reports, say they do "above average work," while 25% of US high school seniors rated themselves among the top 1% in ability to get along with others. "Ironically," he says, "people tend to recognize that inflated self-assessment and overconfidence can be a problem -- but only in others."

But is this so-call "above average effect" due to faulty self-assessment, which is to say self-deception, or to the fact that most of us, reasonably enough, try to do good PR for ourselves?

When devious stock market manipulator Joseph Patrick Kennedy, father of President John F. Kennedy, was about to sail from New York to take up his appointment as US Ambassador to Britain -- or rather to the Court of St. James, to use the correct British terminology -- he was asked by a reporter: "Are you really qualified for the job?" To which Kennedy replied: "If Marlene Dietrich asked you to go to bed with her, would you say you weren't very good at it?"

Which reminds me of the time I published a scholarly journal. When I launched it, one editor, a Fellow of the Royal Society, remarked, "you realize there aren't any good people in this field," which was no great exaggeration. But for 23 years I never spoke a negative word about that journal or its "distinguished" contributors, except possibly in my sleep, and in due course it came to be rated on the basis of citations analysis as the most "prestigious" journal in a field that included almost 100 international titles. So was I self-deceived for 23 years about that journal and its contributors, or simply doing what a publisher has to do, which is to promote his authors?

But what particularly roused my skepticism about pop psychology, and indeed about much of psychology in general, was Mlodinow's account of an experiment by Stanley Schachter and associates in which an attempt was made to solve the riddle of the relationship between emotion and its physiological and behavioral accompaniments. More specifically, do we run from a charging bull because we are afraid or are we afraid because we run away?

This is a question that particularly interests me, having published in a most august journal the claim that both views are incorrect, since as I maintain, emotion and its bodily correlates are related to one another in a feedback loop as both cause and effect (But don't buy the Science Magazine "content": it's only three paragraphs long, and the first paragraph is a joke.)

In outline, what Schachter and co. did was to measure the behavioral response (making a phone call) of test subjects (all males) to a stimulus (attractive young woman) under normal (at ground level) or anxiety provoking (on a high swaying bridge) conditions. What they found was that being on a high swaying bridge at the time of stimulus presentation increased the likelihood of the subject making the call. The conclusion drawn by the authors from the study was that prior emotional and physiological arousal (i.e., due to being on a high swaying bridge) increased the emotional interest of the male subjects in the female object of arousal.

Apart from the rather weak statistical support for this conclusion, there is no indication in Shachter's own account of the experiment that any attempt was made to control for the effect of physiological and emotional arousal of the female "stimulus" from the effect of being on a high, swaying bridge. Yet adding a little color to the cheeks surely adds to a girl's appeal. Moreover, there is no evidence that any effort was made to insure that the experimental result was unaffected by the expectations of the experimenters and their accomplice. Yet it is one of the most well established assumptions in psychology that expectations influence outcomes.

So I reject William James' ingenious notion that we run away not because we are afraid, but that we are afraid because we run away. Rather I maintain that fear evokes the "flight or fight" response, the increase in heart rate, blood sugar, blood flow to the brain, etc., and that that response then damps the emotion, so that we are not petrified with fear, but utterly focused and fully primed emotionally as well as physically for fight of flight. That is why Charles Darwin observed in The Expression of the Emotions in Man and Animals, that the arousal of anger can make one feel good:

A physician once remarked to me as a proof of the exciting nature of anger, that a man when excessively jaded will sometimes invent imaginary offences and put himself into a passion, unconsciously for the sake of reinvigorating himself; and since hearing this remark, I have occasionally recognized its full truth.

But the effect, I maintain, is not experienced until the emotion has evoked a physiological response that exerts a feedback effect on the central nervous quelling the initial emotional response, while empowering appropriate action in response to the arousing stimulus. That, pretty clearly, was Dawin's view, also, for he said:

Anger and joy... [lead] to energetic movements, which react on the heart and this again on the brain.

And, talking of Marlene Dietrich, she could act: Shanghai Express 

Continued as: When Pop Sci Turns Toxic

Havoc in the Eurozone: Was that the whole point?

Greg Pallast, writing in the Guardian says:

The idea that the euro has "failed" is dangerously naive. The euro is doing exactly what its progenitor – and the wealthy 1%-ers who adopted it – predicted and planned for it to do.

Specifically, he says it was the intention of the Canadian Nobel-prize-winning economist, Robert Mundel, who urged the creation of the Eurozone, to hobble European governments by denying them the freedom to print money thereby devaluing their currencies to cover the cost of welfare programs and union-exacted pay raises by means of the inflation tax.

If so, the thing seems to have misfired. Instead of restraining government spending it has led to government spending financed by debts that cannot be repaid, which in turn threaten the stability of the entire financial system.

But a final judgment must depend on the end game. If the Eurozone breaks up, it will have proved a costly and destructive failure. If, instead, those seeking to exploit the crisis as a trigger to force full European integration and the formation of a common tax system and treasury, the result will also be a failure as a means to straight-jacket European governments, since the pan-European government thus formed will have the same freedom to print money as had its predecessor nations.

Thus, the only possibility of success, from what Pallast claims to be Mundel's point of view, is if the Eurozone can be stabilized and the indebted countries forced to cut wages and government services and pay back the gigantic debt load they have accumulated.

So, whichever way you look at it, the Eurozone, appears to have been a bad deal for nearly everyone in Europe, with the exception of Germany and one or two other North European states, which have benefited in trade from the weakness of the Euro resulting from the lack of competitiveness of most of their Eurozone partners.

How the West Is Winning Battles and Losing the War With Islam

As Europe is overrun by migrants from the Third World, it is increasingly clear that the West is an empire in rapid disintegration, and that the racial, cultural and religious identities of its constituent peoples will soon to be almost wholly obliterated.

The point is made nicely in a piece by Colin Liddell on the stupidity of liberals.

the idea that the Muslims are backward and need to catch up with us is clearly wrong. Indeed, it is entirely the other way round. In terms of demographic effectiveness, the Muslims are streets ahead of us, as are Non-Islamic Africans, Hispanics, and Indians. This might be one tiny little point lost in the great big bundle of Western technological, cultural, and consumerist superiority, but come back in a hundred years and see the difference it makes.

In response to which there is the comment:

 Nature endowed us with sex for a purpose: to replicate ourselves. We have an education system, a media and an entertainment industry dedicated to disguising this basic [fact]. Perhaps we should stop listening to the hostile elite that controls those institutions and return to our traditional value system that developed the West, Christianity, and start listening to the Pope and his Protestant counterparts in these matters. They are at the very least promoters of policies that will energize us in the race war being waged against us. 

Precisely. Why is so hard for liberals and leftists like Richard Dawkins, the late Christopher Hitchens and their vast army of admirers to understand that simple biological reality. Or are they all self-hating racists intent on the genocide of their own people?

On the whole, the latter seems quite possible. Certainly during the interwar years, there was a vogue for genocide among the leftist elite in Europe, as exemplified by the appeal of Fabian socialist George Bernard Shaw to the chemists "to discover a humane gas that will kill instantly and painlessly. Deadly by all means, but humane, not cruel," for use in the disposal of the unemployed and other useless eaters.

Since then, Hitler's use of gas chambers has given the wholesale liquidation of supposed undesirables a bad name, so genocide has to be conducted by other means. Social manipulation and brainwashing now provide a slow but sure means to destroy the nation states of Europe, and replace them by a mongrelized population of Third Worlders and demoralized remnants of the original ancient peoples.

UK Government proposes law to cover up Iraq war crimes

UK soldiers 'beat innocent Iraqi men in black ops jails but new secret justice law means their torture will be hidden forever.'

The Mail on Sunday can today reveal devastating new claims of abuse by British soldiers carried out at a secret network of illegal prisons in the Iraqi desert.

One innocent civilian victim is said to have died after being assaulted aboard an RAF helicopter, while others were hooded, stripped and beaten at a camp set up at a remote phosphate mine deep in the desert.

The whereabouts of a separate group of 64 Iraqi men who were spirited away on two RAF Chinooks to a ‘black site’ prison, located at an oil pipeline pumping station, remain unknown.

Read more

Egyptian President, Mohamed Morsi, American Satrap

By Aangirfan

USA TAKES OVER EGYPT

Morsi, who worked at NASA on the development of space shuttle engines. Only American citizens can work at NASA. Morsi's children are American citizens. (The US /Egyptian Chronicles!)

The USA has got its candidate into power in Egypt.

Mohamed Morsi, 62, a US-trained engineer, has been declared president of Egypt ...

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Rampant Racism at the University of Minnesota

Lendley Black, President of the University of Minnesota believes white people should be ashamed of being white, or so one must assume from this video, sponsored by the University, which seeks to shame and demoralize white people for the mere fact of their being white.

In the video, to be white is said to be a privilege. And it's not just said, it's written over the faces of the rather stupid white people who volunteered to be in the video, or the rather despicable white people who accepted payment to appear in the video.

Why is it a privilege to be white?

Because, according to some poor child who probably means everything for the best:

"people see us, Not (double underlined) a color."

Think about that. What she's saying, and what's written on her face (a nice humiliating touch that), is that American white people are incapable of acknowledging those of color as people with a personality, with rights, etc., to be judged on their merits, but see them only as objects.

That's blatant nonsense. It's also a blatant anti-white racist slur.

The slur is repeated in different words by a young witless white male saying:

"We're privileged because we don't get stared at when we walk into the room."

Meaning, clearly, that all white Americans are so crassly ill-mannered as to rudely stare if a colored person walks into the room, which in any case flatly contradicts the claim of the girl that white people see a non-white only as a color, i.e., as a person of no account, someone at whom one has no reason to stare.

Then there's the middle aged female agent of political correctness intoning the words written on her face:

"We're privileged we don't get followed by security when we go shopping."

But what is the assumption here? That white people should be ashamed that their behavior provides no statistical basis to indicate they are a special security risk?

Then there's a female complaining that:

"We're pulled over when we're in the wrong neighborhood."

Does she really likes the idea of getting into the wrong neighborhood and being mugged, raped, or what?

Then there's some dopey guy saying:

"We're privileged because society was set up for us."

Really. It's hard to believe George Washington, John Adams, James Madison or Tom Payne would have done anything for the benefit of this brainwashed moron whose ancestors were probably still hoeing turnips in the old country long after America's founding.

Then he tells us:

"And our silence, keeps it in place."

What it keeps in place, he fails to mention. Presumably the white American tradition (alleged) of staring rudely at a non-white person when they walk into the room.

Then to end it, there's the same simple-minded innocent that the video began with saying:

"We're privileged. And that's unfair."

But a privilege is:

A special right, advantage, or immunity granted or available only to one person or group of people.

And no such right, advantage, or immunity granted or available only to white people has been demonstrated.

This video is simply an expression of white self-hatred. A bizarre pathology that flourishes, apparently, in the intellectual environment of a state-funded institution of higher education.

Students should boycott the University of Minnesota - Duluth as a gesture of solidarity with white people and in opposition to racist hate speech.

Enrollment numbers are all that most university administrators care about. It determines how much taxpayers' money they get to spend on indoctrinating taxpayers' children to hate their own parents, etc., and how much the school president and football coach get paid. Slash the enrollment numbers as an expression of public disapprobation and the universities will rapidly change course.

Source

More about UM's hate whitey campaign here.

The Kahn Academy: The Future of Education?

Thinking of Universities and how toxic their mix of alleged education and politically correct indoctrination can be, prompts mention of the Kahn Academy. If you learn nothing else useful from this lousy blog, you may well find Salman Kahn's educational resource of real value.

Kahn is a hugely well educated and hugely gifted instructor who has developed an approach to online learning that offers promise of eliminating much of the ruinously expensive and politically corrupting bureaucratic educational establishment that is one of the most destructive state elements sucking the life-blood from Western nations.

Here, on 60 Minutes, Kahn explains his approach to on-line learning. What Kahn has developed is the mechanism for the kind of flexible, personalized, non-politicized and cost-effective education system we argued for here.

In essence, the process is this. Instead of teachers lecturing students and giving them homework assignments to test their learning, Kahn's approach has online instructors lecturing students at home in short, manageable segments, while teachers monitor and assist students in exercises to test how well they have assimilated the lessons viewed.

According to this paradigm of learning, the teacher serves as a tutor, checking to see that assigned lessons have been learnt, trouble-shooting when students run into difficulties in understanding, and directing students to appropriate material to take them to the next stage.

This scheme of education eliminates the lock-step advance of an entire age-group, for the lecturing is one-on-one, over the internet. Each student can thus take whatever lessons that logically follow from what he has successfully mastered so far. The teacher, as tutor, assists each student with whatever part of the program he happens to be working on now. By the time of high school graduation, some kids will have mastered advanced university or even post-graduate material, while others will have attained only a much lower standard. But that lower standard will have been fully mastered, because the student has been tutored at every step of the way and not advanced from any stage until that stage has been mastered.

University administrators like Lendley Black, President of U Minnesota, Duluth, who think it the role of the university to brainwash students instead of teach them to be self-confident and accomplished young adults, will soon be redundant. New media are making the traditional university, with its astronomical costs, its rampant political corruption and its remarkable educational inefficiency increasingly insupportable.

Bloomberg News: How the US Government spends more subsidizing banks than on education

When JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon testifies in the U.S. House today, he will present himself as a champion of free-market capitalism in opposition to an overweening government. His position would be more convincing if his bank weren’t such a beneficiary of corporate welfare.

To be precise, JPMorgan receives a government subsidy worth about $14 billion a year, according to research published by the International Monetary Fund and our own analysis of bank balance sheets. ...

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Obama: American Tyrant

Rachel Maddow: Obama the two-faced: Abandoning the rule of law in the name of the rule of law.

Obama's Harvard Law Professer, Roberto Unger:

President Obama must be defeated in the coming election.

He has failed to advance the progressive cause in the United States.

He has spent trillions of dollars to rescue the monied interest and left workers and homeowners to their own devices.

He has subordinated the broadening of economic and educational opportunities to the important but secondary issue of access to healthcare in the mistaken belief that he would be spared a fight.

He has surrendered the politics of democracy to the rule of money.

He has reduced justice to charity. His policy is financial confidence and food stamps.

Unless he is defeated, there cannot be a contest for the reorientation of the democratic party as the vehicle of a progressive alternative...

Joseph Curl: Obama: enemy of the US Constitution.

From the very beginning, the president and his administration made clear they had no intention of enforcing laws they didn’t like. Mr. Obama and his minions decided that they would simply stop enforcing the Defense of Marriage Act, no longer prosecute growers of “medical” marijuana, and let some states walk away from provisions in the No Child Left Behind law (which, by the way, was co-authored by Sen. Edward M. Kennedy, Massachusetts Democrat, and passed the Senate by a 91-8 vote).

Mr. Obama’s Justice Department has even more flagrantly flouted the laws of the land. Out of the blue, Attorney General Eric H. Holder Jr., the nation’s chief law enforcement officer, reinterpreted America’s gambling laws (and dumped the decision on Christmas Eve so as to avoid scrutiny). More recently, Mr. Holder has decided to thwart congressional oversight by refusing to release documents on the disastrous “Fast and Furious” gun-running scheme, and he is actively fighting Florida for trying to expunge dead people from its voter rolls.

Now comes Mr. Obama’s decision to stop enforcing America’s immigration laws. The new policy states that illegal immigrants who were younger than 16 when they entered the country are eligible for a two-year exemption from deportation. Of course, the “deferred action process,” as Homeland Security Secretary Janet A. Napolitano called it, will apply to illegals up to age 30. (Think when they legally get their driver’s licenses they will also be handed a voter registration card?)

Rachel Cohen: Obama decrees that law-abiding illegal immigrants need not obey immigration law

Judge Andrew Nepolitano: Obama claims the right to incarcerate persons even after a jury has found them not guilty

Jesse Ventura: When You Go To ANY Airport In The U.S. You Are NOT Protected By The Constitution Or Bill Of Rights. John Whitehead: Barak Obama: a Law Unto Himself?

How liberals truly hate England

The gratuitous denigration of things English – the reign of Elizabeth I

By Robert Henderson

England Calling, June 14, 2012

Allan Massie, a Scot be it noted, decided to celebrate the Diamond Jubilee of Queen Elizabeth II  with a deprecating piece on her great predecessor and namesake, Elizabeth I designed to pour  cold water on the idea that hers was a glorious reign. (http://www.telegraph.co.uk/history/9307110/Lets-not-overlook-the-gory-details-of-Gloriana.html). He complains of the general treatment of Catholics, the use of torture on Catholic priests and those who harboured them,  nudges the reader to consider the likes of Francis Drake to be hovering on or going over edge of piracy and in best liberal bigot fashion invokes the ultimate condemnation of English adventurers of the time by dwelling on Sir John Hawkins’ involvement in the slave trade. In addition, Massie belittles the defeat of the Amada and Elizabethan military exploits on the continent, bemoans English involvement in Ireland and stands aghast as he considers the Earl of Essex’s execution of one in ten of his army after they failed to press hard enough in battle.  As for the great intellectual glory of the reign, the  sudden flowering of literature symbolised by Shakespeare,  this is dismissed of being only a tailpiece to the Elizabethan age.

Massie, a professional historian so he has no excuse, has committed  the cardinal sin of historians by projecting the moral values and customs of his own time into the past. For a meaningful judgement Elizabeth’s reign has to be judged against the general behaviour of European powers of the time and that comparison , ironically, shows   Gloriana’s England’s   to be considerably nearer to what Massie would doubtless consider civilised values than any other state in Europe.

There were no terrible wars of religion as there were in France ; no Inquisition as there was in Spain.; no burning of those deemed heretics as there was under Mary Tudor.  Torture was used  in Elizabeth’s England, and in the reigns which immediately followed,  but sparingly and  only for cases which had national importance,  normally involving treason,  such as those involved in the Gunpowder Plot which took place only two years after Elizabeth’s death .  On the continent it was a commonplace of judicial process.  English law, by the standards of the time, was generally remarkably fair, not least because of the widespread use of juries. Those who gasp with horror at Essex’s execution of his troops should bear in mind that in the First World War several hundred British soldiers were shot for behaviour such as desertion and failing to go forward when ordered  over the top.

In Elizabeth’s reign the first national legislation anywhere in the world to provide help to the needy was passed, a legislative series which began in 1563 and culminated in  the Poor Law of 1601. This legislation put a duty on every parish to levy money to support the poor and made it a requirement to provide work for those needing to call on the subsistence provided by the Poor Law.   Educational opportunities, whilst far from universal, increased substantially.  Despite , by pre-industrial  standards,  very high inflation and the inevitable bad harvests, which included a  series of poor years in the late 1590s,  the population grew  substantially, possibly  by as much as a third from 3 to 4 million (http://www.bbc.co.uk/history/british/tudors/poverty_01.shtml). London expanded  to be the largest city in Europe by the end of the  Elizabeth’s reign with an estimated  population of  200,000 by 1600 (http://www.londononline.co.uk/factfile/historical/ ).

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Oregon State U fires Author of Slide Show: "Global Warming Cracked Open"

Oregon State University chemist, Dr. Nickolas Drapela, who created the slide show Global Warming Cracked Open has been summarily fired from his position as a “Senior Instructor” in the Department of Chemistry.

According to Gordon Fulkes, writing at WUWT "The department chairman Richard Carter told [Drapela] that he was fired but would not provide any reason. Subsequent attempts to extract a reason from the OSU administration have been stonewalled. Drapela appears to have been highly competent and well-liked by his students. Some have even taken up the fight to have him reinstated."

Dr. Drapela's slide show is concerned not with the science of global warming, or lack thereof, but with the politics. It asserts that under the leadership of Piss Prize winners such as Barack Obama and Al Gore, the World is being driven to accept a fascist New World Order that will mean the destruction of the nations of the World, Israel apparently to be excepted, with the elimination of most of the World's population through cultural, psychological and economic means.

I agree. Naturally, Dr. Drapela had to go.

 Via WRH