Big Pharma Markets to and Profits from a 'Can't-Pay-Attention Nation'

 Are you a child who would rather look out the window and imagine yourself flying or doing something else cool than doing math problems in school? Then you are psychologically ill. Here, drugs! Kids, remember--don't do drugs...except for these. They are just as bad as the ones they sell on your school playground and they don't make you better! In fact, all they do is turn you into an addict who will experience the pain of withdrawal symptoms once a rational human being with your better welfare in mind decides to save you by taking you off them. Doesn't that sound great? ~A.M.A.

Some of you might remember back in the days when it was illegal to advertise prescription drugs anywhere other than established medical journals and trade magazines, before Pharma companies started hiring strippers to make calls on doctors' offices and keep those ineffective overly prescribed drugs flowing to a nation of daydreaming overweight hypochondriacs. Oh, American Exceptionalism -- you are the greatest oxymoron/misnomer for a non-existent concept ever! Unless they changed the definition of exceptional to mean stupidly docile and unquestioningly gullible. Absurd, you say? Not anymore, folks. Not if you have a lot of money. Fun fact: the generic name for Adderall is "amphetamine salts." No attempt at misdirection there. You are making your child take a drug that would get you 10 years in prison if you bought it from anybody other than the legal corporate drug dealing establishments whose products actually have worse side effects than the illegal kind. And dig this: symptoms for ADHD are nearly as arbitrary as those for fybromyalgia or Lyme Disease--both of which were once considered non-ailments, malingerer's diseases. So, any random professional expert can observe a child acting like a child ("what? my child would rather be outside playing than inside at school being bored to death doing long division? Please prescribe a drug that will cause health complications later in life in addition to stunting their growth, killing their appetites and forming what might turn out to be a lifelong addiction, as well as creating a human now with a predilection toward addiction. A co-opted medical system profiting from selling useless AND dangerous chemicals as a bogus treatment for made-up illnesses. Another fun fact: for a drug to be approved by the FDA, all it has to demonstrate that it "as effective as the placebo," the sugar pill that makes "mind over matter" equally effective for your high cholesterol as the FDA approved $250 bottle of pills. So, if you get a disease, just convince yourself that consuming more sugar is the key to becoming healthy once again, Type II diabetes be damned.

Monday, December 16, 2013 by Common Dreams

Our Children are So Screwed

A twenty-year marketing campaign has made highly powerful stimulants into household names... and they're just getting started

- Jon Queally, staff writer


Having chemically-saturated the youth market, the drug marketeers for powerful stimulants like Adderall are now bringing their message to the adult masses. What came first: the disorder, the cure, or the marketing campaign to sell both?

“You’re talking about a product that’s having a major impact on brain chemistry. Parents are very susceptible to this type of stuff.” –Roger Griggs, pharma exec who now objects to ad campaigns

In the case of medicating a generation of children who were said to be "unusually hyperactive," the answer to that question is addressed by an in-depth investigation by the New York Times on Monday showing that the meteoric rise of diagnoses of attention deficit hyperactivity disorder (A.D.H.D.)—a trend that spawned a pharmaceutical gold rush over the last twenty years—was, in fact, fueled by an industry-led marketing campaign that targeted struggling children, worried parents, and an army of doctors willing to diagnose and prescribe.

And what's worse? The deep-pocketed, pill-pushers are now looking to expand.a 'Can't-Pay-Attention Nation'

As the Times reports:

The rise of A.D.H.D. diagnoses and prescriptions for stimulants over the years coincided with a remarkably successful two-decade campaign by pharmaceutical companies to publicize the syndrome and promote the pills to doctors, educators and parents. With the children’s market booming, the industry is now employing similar marketing techniques as it focuses on adult A.D.H.D., which could become even more profitable.

Dr. Keith Conners, a psychologist and professor emeritus at Duke University—who called the rising rates “a national disaster of dangerous proportions”—points out that though A.D.H.D is likely to occur in about 5 percent of the population, recent data from the Centers for Disease Control and Prevention show that the diagnosis had been made in 15 percent of high school-age children, and that the number of children on medication for the disorder soared from 600,000 in 1990 to 3.5 million today.
“The numbers make it look like an epidemic. Well, it’s not. It’s preposterous,” he told the Times in an interview. “This is a concoction to justify the giving out of medication at unprecedented and unjustifiable levels.”

In example after example, the marketing push created by the drug manufacturers show happy children and happy parents citing the wonders of the drugs, which go by their increasingly well-known names—stimulants like Adderall, Concerta, Focalin and Vyvanse, and nonstimulants like Intuniv and Strattera. As the Times reports,  

every single one of the companies who market these pills has been fined by the FDA for false advertising.

"The decision to start long-term medication should be motivated by observations of patients and physicians, not stimulated by rosy ads." –Kurt Stange, professor of family medicine

But the ads keep coming, it seems, because the ads work.

According to the Times:

Profits for the A.D.H.D. drug industry have soared. Sales of stimulant medication in 2012 were nearly $9 billion, more than five times the $1.7 billion a decade before, according to the data company IMS Health.

Even Roger Griggs, the pharmaceutical executive who introduced Adderall in 1994, said he strongly opposes marketing stimulants to the general public because of their dangers. He calls them “nuclear bombs,” warranted only under extreme circumstances and when carefully overseen by a physician.

Psychiatric breakdown and suicidal thoughts are the most rare and extreme results of stimulant addiction, but those horror stories are far outnumbered by people who, seeking to study or work longer hours, cannot sleep for days, lose their appetite or hallucinate. More can simply become habituated to the pills and feel they cannot cope without them.

According to Griggs and others, the idea that drugs like Adderall are being marketed directly to the public is perhaps the key flaw.

“There’s no way in God’s green earth we would ever promote” a controlled substance like Adderall directly to consumers, Mr. Griggs said as he was shown several advertisements. “You’re talking about a product that’s having a major impact on brain chemistry. Parents are very susceptible to this type of stuff.”

And Kurt Stange, a professor of family medicine and community health at Case Western Reserve University, agrees and recommends that this practice be banned.

In an op-ed published alongside the Times reporting, Stange writes:

Drugs have harms as well as benefits, and the harms are greater when drugs are indiscriminately prescribed. Consumer advertising, delivered to the masses as a shotgun blast, rather than as specific information to concerned patients or caregivers, results in more prescriptions and less appropriate prescribing.

There is no evidence that consumer ads improve treatment quality or result in earlier provision of needed care. Research has shown that the ads convey an unbalanced picture, with benefits and emotional appeals given far greater weight than risks. Clinicians can work to override these miscues, but this steals precious time from activities that can provide real benefit to patients. In the packed agenda of the patient visit, in which so many real concerns and evidence-based care are available to make a difference in people's lives, the intrusion of marketing risks harm.

Advertising also provokes a subtle shift in our culture -- toward seeking a pill for every ill. While there are many for whom stimulants and other medications can be a godsend, the case of attention deficit hyperactivity disorder is a prime example of how, too often, a pill substitutes for more human responses to distress. U.S. clinicians prescribe stimulant medication for A.D.H.D. at a rate 25 times that of their European counterparts. The complex decision to start a long-term medication should be motivated by the observations of teachers and parents and children, in the context of a relationship with a caring clinician − not stimulated by rosy ads.

 ~~~~~~~~~~~~~~

Isn't your child's health worth the risk of further increasing the obscene wealth of the officers, board and shareholders of  FDA approved and sanctioned legal corporate drug dealers? 

Why do you hate America?

'Snowden Vindicated': Judge Rules Against 'Indiscriminate' NSA Spying

Monday, December 16, 2013 by Common Dreams
Snowden: "Today, a secret program authorized by a secret court was, when exposed to the light of day, found to violate Americans’ rights."
- Sarah Lazare, staff writer

In the biggest legal blow to the National Security Council since the dragnet spying scandal broke in June, a federal judge ruled Monday that the U.S. government "almost certainly" violated the constitution by mass collecting data on nearly every single phone call within or to the United States.

“Today, a secret program authorized by a secret court was, when exposed to the light of day, found to violate Americans’ rights," declared NSA whistleblower Edward Snowden in a statement on the ruling released by journalist Glenn Greenwald Monday afternoon. "It is the first of many."

"This is a vindication for our fellow citizen Edward Snowden who came forward because he believed the government was violating our constitutional rights." –Glenn Greenwald, journalist

In a 68-page statement released Monday, U.S. District Court Judge Richard Leon issued stinging criticisms of NSA metadata snooping, declaring, “I cannot imagine a more ‘indiscriminate’ and ‘arbitrary invasion’ than this systematic and high-tech collection and retention of personal data on virtually every single citizen for purposes of querying it and analyzing it without judicial approval."

Leon, who was appointed by former President George W. Bush, ruled in response to a lawsuit brought by conservative activist Larry Klayman that phone metadata collection violates Fourth Amendment protections against unlawful searches and seizures without demonstrating any role in preventing "terrorist" attacks.

Leon granted Klayman's demand for a temporary injunction on the grounds that the lawsuit was likely to win. Yet, he did not immediately implement his ruling, pending a government appeal.

Nonetheless, Leon's opinion is being widely lauded as "the first significant legal setback for the NSA’s surveillance program since it was disclosed in June," as Josh Gerstein writes for Politico.

Because it takes aim at a 1979 Supreme Court ruling that the Obama administration says justifies the NSA secret spying, Leon's legal argument could have far-reaching consequences. "If upheld on appeal, the judge's reasoning could force the spy agency to reconsider other domestic spying programs that involve warrantless collection of "metadata" about Americans' communication," writes Andrea Peterson for The Washington Post.

The ruling is certain to "influence other federal courts hearing similar arguments from the American Civil Liberties Union," write Spencer Ackerman and Dan Roberts in The Guardian.

“This is a strongly worded and carefully reasoned decision that ultimately concludes, absolutely correctly, that the NSA’s call-tracking program can’t be squared with the Constitution," declared ACLU Deputy Legal Director Jameel Jaffer in a statement emailed to Common Dreams. "We hope that Judge Leon’s thoughtful ruling will inform the larger conversation about the proper scope of government surveillance powers, especially the debate in Congress about the reforms necessary to bring the NSA’s surveillance activities back in line with the Constitution."

Snowden and his supporters say the ruling underscores the vital importance of Snowden's revelations.

“I acted on my belief that the N.S.A.'s mass surveillance programs would not withstand a constitutional challenge, and that the American public deserved a chance to see these issues determined by open courts,” said Snowden.

"This [ruling] is a vindication of the constitutional rights of American citizens, who had intimate information collected about us without our consent," said Glenn Greenwald on a Monday MSNBC interview about Leon's ruling.

He added, "This is a vindication for our fellow citizen Edward Snowden who came forward because he believed the government was violating our constitutional rights."

City of Dallas effectively bans fracking

RT - December 13, 2013

The Dallas City Council passed Wednesday new restrictions that bar hydraulic fracturing within 1,500 feet of a home, school, church, and other protected areas. The new rules effectively ban the practice within the city.

The council approved the ordinance in a vote of 9-6, with Mayor Mike Rawlings voting for it.

The city is on the edge of the Barnett Shale area, predicted to be a treasure trove of onshore natural gas reserves. However, the new limit placed on hydraulic fracturing - known as fracking - effectively bans the practice.

“[W]e might as well save a lot of paper and write a one-line ordinance that says there will be no gas drilling in the city of Dallas,” said council member Lee Kleinman, who opposed the measure. “That would be a much easier ordinance to have.”

A gas industry representative for Trinity East, a Barnett Shale gas company that was prepared to drill, lamented the measure as a death for prospects in Dallas.

“You just can’t drill under these conditions,” said Dallas Cothrum, according to CBS DFW. “It’d require more than 250-acres of property and in an urban area it’s just not possible.”

Petroleum engineer Bill Crowder of Dallas indicated that the economic and legal wrangling over fracking in the city is not yet over.

“I want you to look me in the eye next February or March,” he said, according to the Dallas Morning News, “when I ask you, ‘What the heck were you thinking?’”

Another council member, who supported the limits, said the ordinance doesn’t ban drilling, but is aimed at keeping residents safe.

“I think this is about making sure people are protected in their neighborhoods,” council member Carolyn Davis said, according to KERA News. “It is the right thing to do.”

Dallas had previously outlawed fracking within 300 feet of protected areas.

The new ordinance keeps protections on parkland and flood plains, though KERA News reported that the ordinance does allow for drilling in parks if certain requirements are followed and the Texas Parks and Wildlife Department gives its mandatory approval.

The council also passed Wednesday an amendment that calls for a two-thirds majority vote to override the measure.

Hydraulic fracking is the highly controversial process of injecting water, sand, and various chemicals into layers of rock in hopes of releasing oil and gas deep underground. The practice is opposed worldwide, as shown by global protests against fracking in October, for its damning environmental impacts.

Supporters say it brings jobs and opportunities for energy independence, though detractors have pointed to exaggerated employment claims.

The latest move by Dallas highlights similar aims in other cities to ban fracking. Voters in four cities in the state of Colorado recently succeeded in either banning or suspending hydraulic fracturing, despite heavy spending by the oil and gas industry to the tune of $870,000 to defeat the measures.

All four of those measures passed in Colorado will face legal challenges by the fracking industry along with the office of Governor John Hickenlooper, which has expressed the position that the municipalities lack the authority to determine the use of the state’s natural resources.

The Turnkey Totalitarian State

Politics is Funny? (It is when you're a cynical bastard like me)

3D Printed Organs and Batteries in the Not-too Distant Future

Kyle Maxey | November  2013
Engineering.com

Surveys conducted by the German Organ Transplantation Foundation (DSO) say the number of organ transplant donors has plummeted 18 percent in the past year. With the demand for organ transplants increasingly overtaking supply, physicians are hopeful that new technologies (such as 3D printing) could one day fill in these gaps.

As a first big step, researchers at the Fraunhofer Institute for Interfacial Engineering and Biotechnology (IGB) in Stuttgart recently announced that they’ve created a bio-ink suitable for printing a number of tissue types.

The key to the new ink’s versatility is its gelatin base. Gelatin, a derivative of collagen, is one of the main constituents of human tissues. While gelatin is normally in a gelatinous state at room temperature, the IGB researchers have created a way to keep the material in a liquid form. This makes it easier for the 3D printer to manipulate the material, depositing it onto a sterile sheet where it can then be cured with a UV light and rendered solid.

According to the IGB, “researchers can control the chemical modification of the biological molecules so that the resulting gels have differing strengths and swelling characteristics. The properties of natural tissue can therefore be imitated – from solid cartilage to soft adipose tissue.”

While 3D printed organs are still a long way off, IGB’s material is an important step forward in this burgeoning medical field. “Only once we are successful in producing tissue that can be nourished through a system of blood vessels can printing larger tissue structures become feasible,” says IGB researcher Dr. Kirsten Borcher.

In the coming decades, the population of elderly people will dramatically rise around the world, increasing the demand for advanced biotechnology. If 3D printing technology can mature in time to meet these growing demands, it will find a huge market and be able to contribute to a higher quality of life.

New inks and tools allow 3-D printing of lithium-ion technology.

By Mike Orcutt | November 2013
MIT Technology Review

By making the basic building blocks of batteries out of ink, Harvard materials scientist Jennifer Lewis is laying the groundwork for lithium-ion batteries and other high-performing electronics that can be produced with 3-D printers.

Although the technology is still at an early stage, the ability to print batteries and other electronics could make it possible to manufacture new kinds of devices. Think of self-powered biomedical sensors, affixed to the skin, that would continuously transmit vital signs to a smartphone. Or existing products could be made more simply and efficiently.

For example, the plastic shell of a hearing aid is already 3-D printed for a custom fit inside a wearer’s ear. But the electronics are manufactured separately, and the batteries are often the type that must be replaced frequently. If the electronics and a rechargeable battery were printed together, the final product could be made more rapidly and seamlessly.

Lewis has taken two important steps toward printing electronic devices. First, she has invented an arsenal of what she calls functional inks that can solidify into batteries and simple components, including electrodes, wires, and antennas. Second, she has developed nozzles and high-pressure extruders that squeeze out the batteries and other components from an industrial-grade 3-D printer. Lewis’s inks use suspended nanoparticles of the desired materials, such as compounds of lithium for batteries and silver for wires. These materials are mixed into a variety of solutions, and the resulting inks are nearly solid when unperturbed but flow when a certain amount of pressure is applied. Once printed, the materials return to solid form. Printing a battery from a single nozzle can take minutes, but Lewis’s custom 3-D printing technology can deposit inks from hundreds of nozzles at the same time.

The printing technology works at room temperature, not the high temperatures normally required to work with high-performing electronics. That makes it possible to print the materials on plastic without causing damage. The battery materials themselves aren’t revolutionary, she says; “this is really more a revolution in the way things are manufactured.”

Her printed lithium-ion batteries are as tiny as one millimeter square but perform as well as commercial batteries, because Lewis can render microscale architectures, and position structures with 100-nanometer accuracy, to mirror the structures of much bigger batteries.

Lewis’s group holds eight patents for its inks and is working on licensing and commercializing the technology in the next few years. Although she says the initial plan is to provide tools for manufacturers, she may eventually produce a low-end printer for hobbyists.

Facebook's Future Plans for Data Collection Beyond Imagination

Facebook's dark plans for the future are given away in its patent applications.
December 4, 2013 | Alternet (via Counterpunch)

“No one knows who will live in this cage in the future, or whether at the end of this tremendous development, entirely new prophets will arise, or there will be a great rebirth of old ideas and ideals, or, if neither, mechanized petrification, embellished with a sort of convulsive self-importance. For of the fast stage of this cultural development, it might well be truly said: ‘Specialists without spirit, sensualists without heart; this nullity imagines that it has attained a level of civilization never before achieved.’”
—Max Weber, 1905

On November 12,  Facebook, Inc. filed its 178th patent application for a consumer profiling technique the company calls “inferring household income for users of a social networking system.”

“The amount of information gathered from users,” explain Facebook programmers Justin Voskuhl and Ramesh Vyaghrapuri in their patent application, “is staggering — information describing recent moves to a new city, graduations, births, engagements, marriages, and the like.” Facebook and other so-called tech companies have been warehousing all of this information since their respective inceptions. In Facebook’s case, its data vault includes information posted as early as 2004, when the site first went live. Now in a single month the amount of information forever recorded by Facebook —dinner plans, vacation destinations, emotional states, sexual activity, political views, etc.— far surpasses what was recorded during the company’s first several years of operation. And while no one outside of the company knows for certain, it is believed that Facebook has amassed one of the widest and deepest databases in history. Facebook has over 1,189,000,000 “monthly active users” around the world as of October 2013, providing considerable width of data. And Facebook has stored away trillions and trillions of missives and images, and logged other data about the lives of this billion plus statistical sample of humanity. Adjusting for bogus or duplicate accounts it all adds up to about 1/7th of humanity from which some kind of data has been recorded.

According to Facebook’s programmers like Voskuhl and Vyaghrapuri, of all the clever uses they have already applied this pile of data toward, Facebook has so far “lacked tools to synthesize this information about users for targeting advertisements based on their perceived income.” Now they have such a tool thanks to the retention and analysis of variable the company’s positivist specialists believe are correlated with income levels.

They’ll have many more tools within the next year to run similar predictions. Indeed, Facebook, Google, Yahoo, Twitter, and the hundreds of smaller tech lesser-known tech firms that now control the main portals of social, economic, and political life on the web (which is now to say everywhere as all economic and much social activity is made cyber) are only getting started. The Big Data analytics revolution has barely begun, and these firms are just beginning to tinker with rational-instrumental methods of predicting and manipulating human behavior.

There are few, if any, government regulations restricting their imaginations at this point. Indeed, the U.S. President himself is a true believer in Big Data; the brain of Obama’s election team was a now famous “cave” filled with young Ivy League men (and a few women) sucking up electioneering information and crunching demographic and consumer data to target individual voters with appeals timed to maximize the probability of a vote for the new Big Blue, not IBM, but the Democratic Party’s candidate of “Hope” and “Change.” The halls of power are enraptured by the potential of rational-instrumental methods paired with unprecedented access to data that describes the social lives of hundreds of millions.

Facebook’s intellectual property portfolio reads like cliff notes summarizing the aspirations of all corporations in capitalist modernity; to optimize efficiency in order to maximize profits and reduce or externalize risk. Unlike most other corporations, and unlike previous phases in the development of rational bureaucracies, Facebook and its tech peers have accumulated never before seen quantities of information about individuals and groups. Recent breakthroughs in networked computing make analysis of these gigantic data sets fast and cheap. Facebook’s patent holdings are just a taste of what’s arriving here and now.

The way you type, the rate, common mistakes, intervals between certain characters, is all unique, like your fingerprint, and there are already cyber robots that can identify you as you peck away at keys. Facebook has even patented methods of individual identification with obviously cybernetic overtones, where the machine becomes an appendage of the person. U.S. Patents 8,306,256, 8,472,662, and 8,503,718, all filed within the last year, allow Facebook’s web robots to identify a user based on the unique pixelation and other characteristics of their smartphone’s camera. Identification of the subject is the first step toward building a useful data set to file among the billion or so other user logs. Then comes analysis, then prediction, then efforts to influence a parting of money.

The way you type, the rate, common mistakes, intervals between certain characters, is all unique, like your fingerprint, and there are already cyber robots that can identify you as you peck away at keys.

Many Facebook patents pertain to advertising techniques that are designed and targeted, and continuously redesigned with ever-finer calibrations by robot programs, to be absorbed by the gazes of individuals as they scroll and swipe across their Facebook feeds, or on third party web sites.

Speaking of feeds, U.S. Patent 8,352,859, Facebook’s system for “Dynamically providing a feed of stories about a user of a social networking system” is used by the company to organize the constantly updated posts and activities inputted by a user’s “friends.” Of course embedded in this system are means of inserting advertisements. According to Facebook’s programmers, a user’s feeds are frequently injected with “a depiction of a product, a depiction of a logo, a display of a trademark, an inducement to buy a product, an inducement to buy a service, an inducement to invest, an offer for sale, a product description, trade promotion, a survey, a political message, an opinion, a public service announcement, news, a religious message, educational information, a coupon, entertainment, a file of data, an article, a book, a picture, travel information, and the like.” That’s a long list for sure, but what gets injected is more often than not whatever will boost revenues for Facebook.

The advantage here, according to Facebook, is that “rather than having to initiate calls or emails to learn news of another user, a user of a social networking website may passively receive alerts to new postings by other users.” The web robot knows best. Sit back and relax and let sociality wash over you, passively. This is merely one of Facebook’s many “systems for tailoring connections between various users” so that these connections ripple with ads uncannily resonant with desires and needs revealed in the quietly observed flow of e-mails, texts, images, and clicks captured forever in dark inaccessible servers of Facebook, Google and the like. These communications services are free in order to control the freedom of data that might otherwise crash about randomly, generating few opportunities for sales.

Where this fails Facebook ratchets up the probability of influencing the user to behave as a predictable consumer. “Targeted advertisements often fail to earn a user’s trust in the advertised product,” explain Facebook’s programmers in U.S. Patent 8,527,344, filed in September of this year. “For example, the user may be skeptical of the claims made by the advertisement. Thus, targeted advertisements may not be very effective in selling an advertised product.” Facebook’s computer programmers who now profess mastery over sociological forces add that even celebrity endorsements are viewed with skepticism by the savvy citizen of the modulated Internet. They’re probably right.

Facebook’s solution is to mobilize its users as trusted advertisers in their own right. “Unlike advertisements, most users seek and read content generated by their friends within the social networking system; thus,” concludes Facebook’s mathematicians of human inducement, “advertisements generated by a friend of the user are more likely to catch the attention of the user, increasing the effectiveness of the advertisement.” That Facebook’s current So-And-So-likes-BrandX ads are often so clumsy and ineffective does not negate the qualitative shift in this model of advertising and the possibilities of un-freedom it evokes.

Forget iPhones and applications, the tech industry’s core consumer product is now advertising. Their essential practice is mass surveillance conducted in real time through continuous and multiple sensors that pass, for most people, entirely unnoticed. The autonomy and unpredictability of the individual —in Facebook’s language the individual is the “user”— is their fundamental business problem. Reducing autonomy via surveillance and predictive algorithms that can placate existing desires, and even stimulate and mold new desires is the tech industry’s reason for being. Selling their capacious surveillance and consumer stimulus capabilities to the highest bidder is the ultimate end.

Sounds too dystopian? Perhaps, and this is by no means the world we live in, not yet. It is, however, a tendency rooted in the tech economy. The advent of mobile, hand-held, wirelessly networked computers, called “smartphones,” is still so new that the technology, and its services feel like a parallel universe, a new layer of existence added upon our existing social relationships, business activities, and political affiliations. In many ways it feels liberating and often playful. Our devices can map geographic routes, identify places and things, provide information about almost anything in real time, respond to our voices, and replace our wallets. Who hasn’t consulted “Dr. Google” to answer a pressing question? Everyone and everything is seemingly within reach and there is a kind of freedom to this utility.

Most of Facebook’s “users” have only been registered on the web site since 2010, and so the quintessential social network feels new and fun, and although perhaps fraught with some privacy concerns, it does not altogether feel like a threat to the autonomy of the individual. To say it is, is a cliche sci-fi nightmare narrative of tech-bureaucracy, and we all tell one another that the reality is more complex.

Privacy continues, however, too be too narrowly conceptualized as a liberal right against incursions of government, and while the tech companies have certainly been involved in a good deal of old-fashioned mass surveillance for the sake of our federal Big Brother, there’s another means of dissolving privacy that is more fundamental to the goals of the tech companies and more threatening to social creativity and political freedom.

Georgetown University law professor Julie Cohen notes that pervasive surveillance is inimical to the spaces of privacy that are required for liberal democracy, but she adds importantly, that the surveillance and advertising strategies of the tech industry goes further.

“A society that permits the unchecked ascendancy of surveillance infrastructures, which dampen and modulate behavioral variability, cannot hope to maintain a vibrant tradition of cultural and technical innovation,” writes Cohen in a forthcoming Harvard Law Review article:

“Modulation” is Cohen’s term for the tech industry’s practice of using algorithms and other logical machine operations to mine an individual’s data so as to continuously personalize information streams. Facebook’s patents are largely techniques of modulation, as are Google’s and the rest of the industry leaders. Facebook conducts meticulous surveillance on users, collects their data, tracks their movements on the web, and feeds the individual specific content that is determined to best resonate with their desires, behaviors, and predicted future movements. The point is to perfect the form and function of the rational-instrumental bureaucracy as defined by Max Weber: to constantly ratchet up efficiency, calculability, predictability, and control. If they succeed in their own terms, the tech companies stand to create a feedback loop made perfectly to fit each an every one of us, an increasingly closed systems of personal development in which the great algorithms in the cloud endlessly tailor the psychological and social inputs of humans who lose the gift of randomness and irrationality.

“It is modulation, not privacy, that poses the greater threat to innovative practice. Regimes of pervasively distributed surveillance and modulation seek to mold individual preferences and behavior in ways that reduce the serendipity and the freedom to tinker on which innovation thrives.” 

Cohen has pointed out the obvious irony here, not that it’s easy to miss; the tech industry is uncritically labeled America’s hothouse of innovation, but it may in fact be killing innovation by disenchanting the world and locking inspiration in an cage.

If there were limits to the reach of the tech industry’s surveillance and stimuli strategies it would indeed be less worrisome. Only parts of our lives would be subject to this modulation, and it could therefore benefit us. But the industry aspires to totalitarian visions in which universal data sets are constantly mobilized to transform an individual’s interface with society, family, the economy, and other institutions. The tech industry’s luminaries are clear in their desire to observe and log everything, and use every “data point” to establish optimum efficiency in life as the pursuit of consumer happiness. Consumer happiness is, in turn, a step toward the rational pursuit of maximum corporate profit. We are told that the “Internet of things” is arriving, that soon every object will have embedded within it a computer that is networked to the sublime cloud, and that the physical environment will be made “smart” through the same strategy of modulation so that we might be made free not just in cyberspace, but also in the meatspace.

Whereas the Internet of the late 1990s matured as an archipelago of innumerable disjointed and disconnected web sites and databases, today’s Internet is gripped by a handful of giant companies that observe much of the traffic and communications, and which deliver much of the information from an Android phone or laptop computer, to distant servers, and back. The future Internet being built by the tech giants —putting aside the Internet of things for the moment— is already well into its beta testing phase. It’s a seamlessly integrated quilt of web sites and apps that all absorb “user” data, everything from clicks and keywords to biometric voice identification and geolocation.

United States Patent 8,572,174, another of Facebook’s recent inventions, allows the company to personalize a web page outside of Facebook’s own system with content from Facebook’s databases. Facebook is selling what the company calls its “rich set of social information” to third party web sites in order to “provide personalized content for their users based on social information about those users that is maintained by, or otherwise accessible to, the social networking system.” Facebook’s users generated this rich social information, worth many billions of dollars as recent quarterly earnings of the company attest.

In this way the entire Internet becomes Facebook. The totalitarian ambition here is obvious, and it can be read in the securities filings, patent applications, and other non-sanitized business documents crafted by the tech industry for the financial analysts who supply the capital for further so-called innovation. Everywhere you go on the web, with your phone or tablet, you’re a “user,” and your social network data will be mined every second by every application, site, and service to “enhance your experience,” as Facebook and others say. The tech industry’s leaders aim to expand this into the physical world, creating modulated advertising and environmental experiences as cameras and sensors track our movements.

Facebook and the rest of the tech industry fear autonomy and unpredictability. The ultimate expression of these irrational variables that cannot be mined with algorithmic methods is absence from the networks of surveillance in which data is collected.

One of Facebook’s preventative measures is United States Patent 8,560,962, “promoting participation of low-activity users in social networking system.” This novel invention devised by programmers in Facebook’s Palo Alto and San Francisco offices involves a “process of inducing interactions,” that are meant to maximize the amount of “user-generated content” on Facebook by getting lapsed users to return, and stimulating all users to produce more and more data. User generated content is, after all, worth billions. Think twice before you hit “like” next time, or tap that conspicuously placed “share” button; a machine likely put that content and interaction before your eyes after a logical operation determined it to have the highest probability of tempting you to add to the data stream, thereby increasing corporate revenues.

Facebook’s patents on techniques of modulating “user” behavior are few compared to the real giants of the tech industry’s surveillance and influence agenda. Amazon, Microsoft, and of course Google hold some of the most fundamental patents using personal data to attempt to shape an individual’s behavior into predictable consumptive patterns. Smaller specialized firms like Choicestream and Gist Communications have filed dozens more applications for modulation techniques. The rate of this so-called innovation is rapidly telescoping.

Perhaps we do know who will live in the iron cage. It might very well be a cage made of our own user generated content, paradoxically ushering in a new era of possibilities in shopping convenience and the delivery of satisfactory experiences even while it eradicates many degrees of chance, and pain, and struggle (the motive forces of human progress) in a robot-powered quest to have us construct identities and relationships that yield to prediction and computer-generated suggestion. Defense of individual privacy and autonomy today is rightly motivated by the reach of an Orwellian security state (the NSA, FBI, CIA). This surveillance changes our behavior by chilling us, by telling us we are always being watched by authority. Authority thereby represses in us whatever might happen to be defined as “crime,” or any anti-social behavior at the moment. But what about the surveillance that does not seek to repress us, the watching computer eyes and ears that instead hope to stimulate a particular set of monetized behaviors in us with the intimate knowledge gained from our every online utterance, even our facial expressions and finger movements?

Dallas Police Rule Change Gives Officers 72 Hours To Get Their Stories Straight After Shooting Citizens

from the "Accountability-is-for-bullet-riddled-civilians dept"
Techdirt

The Dallas Police Department can't seem to get its officers' statements on shootings to agree with recordings of the incidents. So, it's doing what any forward thinking law enforcement agency would do -- changing the rules.

Any Dallas officer involved in a police shooting — whether the officer fired a weapon or witnessed the gunfire — will now have the right to remain silent for 72 hours under a new department policy.

And even before they give a statement about the shooting, the officers can watch any available video before they give a statement.

Very convenient. This policy change, which was ushered in under the cover of the Thanksgiving holiday, will help ensure that DPD officers don't find their statements directly contradicted by the inconveniently unblinking eye of the camera, as happened just recently.

On October 14th, Dallas police officer Cardan Spencer shot a mentally ill man four times in the stomach. According to Spencer's partner, Christopher Watson (who wrote the report), the man (Bobby Gerald Bennett) moved "in a threatening manner" towards him and the other officer. Watson's statement even went so far as to say Bennett "lunged" at them. A statement released by the DPD a few hours after the shooting claimed the situation "escalated."

A surveillance camera caught the entire confrontation on tape. Less than 20 seconds pass before Spencer opens fire. See if you can catch a glimpse of the "lunge" or the "escalation."

Bennett never lunges. He doesn't do anything more threatening than stand up from the chair he was sitting in. Four bullets later, Bennett is on the ground. Somehow, being shot four times by a DPD officer is "aggravated assault," a charge the DPD pressed (it was later dropped) while Bennett was still in critical condition.

As a result of this, Spencer was fired and Watson suspended for making false statements. But this was only after Bennett's mother took the video to the media. Before she did this, DPD Chief David Brown watched the video and claimed his own officer's statement trumped his lying eyes.

"The unfortunate thing here is that Officer Watson's statement really overrode what the video showed," Brown said. "We had not at that point determined if the video captured the entire incident, or if the video had not been altered in any way. We put a lot of credibility on officer's statements until we have other evidence to prove otherwise."

Not so much anymore. Former DPD officer Cardan Spencer may be facing assault charges for shooting Bennett. Perhaps the saddest aspect of this whole debacle is the fact that Bennett's mother called the police because she was afraid her son (who has mental issues and was off his medication) might hurt himself.

As this has caused the DPD considerable embarrassment (not the least of which is the chief claiming a recording of the shooting is less trustworthy than statements given by an officer later suspended for making false statements), the only solution was (apparently) to buy time for officers to fix their narratives should inconvenient recordings surface.

Supposedly, this 72-hour waiting period is better for memory. Chief Brown refers to research by Alexis Artwohl which indicates recall of traumatic events increases over time. Immediate statements may be less accurate. That may be, but this report has been available since 2002 and there hasn't been a large shift in policies regarding police shootings across the nation. This looks like nothing more than someone finding the justification they need to install an insular policy that will allow bad cops to be even worse. This gives shelter to liars by allowing them to craft a plausible narrative that can't be undone by a single surveillance video.

This also doesn't explain why police insist on questioning suspects and eyewitnesses immediately after a criminal incident. But Artwohl has an explanation.

Artwohl, the memory expert, said officers treat civilian witnesses differently because officers won’t always be able to find the person again. That usually isn’t true of officers, she said.

Unsurprisingly, attorneys for the Dallas Police Association "applauded" Chief Brown's application of an additional layer of paint to the thin blue line. Anything that makes it easier to defend cops who are threatened by people standing motionless is a win for the PD's lawyers.

Defense attorney Mark Bennett flips the scenario to show just how outrageous this policy would be if it was applied to anyone else.

As a result of this incident, the Dallas Police Department changed its policy regarding gang-related shootings. Instead of pressing gang members for statements immediately after shootings, police officers will advise them that they have seventy-two hours to get together and make up a story, and will provide them, during that time, with any video the police can find, so that they can conform their stories to the video.

It makes no sense, does it, that police policy should not just permit but encourage members of a criminal street gang who witness a gang-related shooting to take three days to talk to each other and their lawyers and review the facts that are beyond dispute before making a statement?

It makes sense only if the police want the perpetrators of such shootings to walk free. The idea would be farcical if the criminal street gang were anything other than the police.

It's a farce, alright. The DPD has just ensured no one will trust the narratives constructed by its officers. And every citizen who's been paying attention will know to hang onto their recordings for at least 72 hours, rather than see it twisted into "evidence" that keeps bad cops employed.

TEPCO to Dump Fukushima Radiation Into the Pacific Ocean

by WashingtonsBlog

TEPCO is planning on dumping all of the radioactive water stored at Fukushima into the ocean.

The industry-controlled nuclear regulators are pushing for dumping the radiation, as well.

As EneNews reports:

Juan Carlos Lentijo, head of IAEA’s mission to Fukushima Daiichi, Dec. 4, 2013: “Controlled discharge is a regular practice in all the nuclear facilities in the world. And what we are trying to say here is to consider this as one of the options to contribute to a good balance of risks and to stabilize the facility for the long term.”

Shunichi Tanaka, chairman of Japan’s Nuclear Regulation Authority, Dec. 4, 2013: “You cannot keep storing the water forever. We have to make choice comparing all risks involved.”

Xinhua, Dec. 4, 2013: Lentijo said that TEPCO should weigh the possible damaging effects of discharging toxic water against the total risks involved in the overall decommissioning work process. [...] Tanaka highlighted the fact that while highly radioactive water could be decontaminated in around seven years, the amount of water containing tritium will keep rising, topping 700,000 tons in two years. [...] nuclear experts have repeatedly pointed out that [tritium] is still a significant radiation hazard when inhaled, ingested via food or water, or absorbed through the skin. [...] fisherman, industries and fisheries bodies in the Fukushima area and beyond in Japan’s northeast, have collectively baulked at the idea of releasing toxic water into the sea [...] TEPCO will be duty-bound to submit assessments of the safety and environmental impact [...]

NHK, Dec. 4, 2013: IAEA team leader Juan Carlos Lentijo [...] said it is necessary and indispensable to assess the impact the tritium discharge might have on human health and the environment, and to get government approval as well as consent from concerned people.

Japan Times, Dec. 4, 2013: “Of course . . . public acceptance for this purpose is necessary,” said Lentijo, adding strict monitoring of the impact of the discharge would also be essential.

AFP, Dec. 4, 2013: [L]ocal fishermen, neighbouring countries and environmental groups all oppose the idea.

See also: Gundersen: They want to dump all Fukushima’s radioactive water in Pacific — Tepco: It will be diluted, then released — Professor suggests pumping it out in deep ocean (VIDEOS)

In the real world, there is no safe level of radiation.

And there are alternatives.

Dr. Arjun Makhijani – a recognized expert on nuclear power, who has testified before Congress, served as an expert witness in Nuclear Regulatory Commission proceedings, and has been interviewed by many of the largest news organizations – told PBS in March:

We actually sent a proposal to Japan two years ago, some colleagues of mine and I, saying you should park a supertanker or a large tanker offshore, and put the water in it, and send it off someplace else so that the water treatment and the water management is not such a huge, constant issue. But [the Japanese declined].

TEPCO – with no financial incentive to actually fix things – has been  irresponsible and has only been pretending to contain Fukushima. And see this.

Instead of doing something to contain the radiation, they’re going to dump it.

Facebook isn’t Your Friend

The Unvarnished Truth
by DAVID CRONIN


A few days ago, I was told by the organisers of a “social media” festival that the hashtag was my “new best friend“. As I’ve never hugged a hashtag or cried on the shoulders of one, I felt it was important to question this “wisdom”.

Like millions of others, I’m addicted to Facebook and, to a lesser degree, Twitter. I check these websites so frequently that I often forget they are owned by vast corporations.

Some of these firms’ activities are inherently anti-democratic.

Facebook’s Brussels office is headed by Erika Mann, a former German member of the European Parliament. She has long fought to enable the interests of big business triumph over those of ordinary people.

During her 15 years as an MEP, Mann continuously advocated that the European Union should liberalise its trade with the United States.

At one point, it seemed that her calls were being ignored by political leaders on both sides of the Atlantic. All that changed in February this year, when Barack Obama expressed his support for such an agreement during his State of the Union address. Talks aimed at reaching a very broad trade and investment deal were formally launched in July.

Now wearing her Facebook hat, Erika Mann is still extolling the apparent virtues of “free” trade at every available opportunity.

In April, she spoke at a conference in Dublin, where Facebook’s international headquarters are located. Mann argued that it would be “extremely important” for an eventual deal to make the standards faced by internet companies in the EU and US “more coherent”.

While Mann claimed that she did not wish to see standards becoming “identical”, it is highly improbable that she will be pushing for more robust rules. Facebook recently submitted detailed recommendations to MEPs about how to weaken a new data protection law.

Information leaked by the courageous whistleblower Edward Snowden demonstrated that Facebook has been helping the National Security Agency to undertake espionage on a massive scale.

Before those revelations were made, Erika Mann claimed that Facebook was “leading the way” both in protecting privacy and in helping the digital sector to flourish. Her assurances now appear risible.

Facebook isn’t alone in hoping that the trade agreement will lead to “regulatory convergence” on different sides of the Atlantic. The European Commission has drawn up a paper for the talks, which indicates its willingness to copy and paste demands made by the car industry. The paper suggests that whenever either the EU or the US feels the need to have new rules on the amount of pollution vehicles may cause, they will consult each other with a view to finding a common approach.

In practice, this is a recipe for preventing Europe from having tougher emissions standards than the US.

Few qualms

Mann has few, if any, qualms about lobbying her former colleagues. She has spoken at events within the European Parliament’s buildings on a number of dossiers.

Last year, she addressed a conference on data protection organised by one of the assembly’s committees. She also spoke at a reception sponsored by the beer industry, during which she voiced support for “voluntary initiatives” undertaken by those behemoths of booze eager to portray themselves as responsible.

That wasn’t simply a case of Mann meeting some old pals for a knees-up. Facebook had clinched a huge advertising contract with Diageo – owner of Guinness and Smirnoff – a few months earlier.

Her participation in the beer-fuelled reception involved sending a signal to law-makers that they should abandon any plans they may have to ban or restrict the marketing of alcohol. The idea that the drinks industry can be expected to behave responsibly is, of course, daft. The only objective of corporations is to amass as much money as they can.

Following a scandal in 2011 in which a few MEPs were recorded stating they would be happy to receive bribes from journalists posing as lobbyists, the European Parliament drew up a code of conduct. In theory, the code applies to both sitting and former MEPs.

And yet a Parliament spokeswoman told me: “from what I gather of your description of Mrs Mann’s activities, it doesn’t seem that she has breached the code of conduct”.

The code states that former MEPs should not benefit from the Parliament’s “facilities” if they wish to engage in lobbying “directly linked” to EU law-making. According to the spokeswoman, this clause did not relate merely to accessing the Parliament’s buildings but to such perks as use of its car-parks and libraries.

If Mann is undertaking lobbying on the Parliament’s premises, there is strong prima facie evidence that she is not playing by the rules. But it seems that the Parliament’s administration is happy to overlook how former MEPs are usurping democracy by cajoling their old colleagues into tweaking laws to placate certain vested interests.

A leaked internal paper from the European Commission indicated that it plans to make extensive use of Twitter and Facebook to sell the so-called benefits of a trans-Atlantic trade deal.

Fortunately, the Commission’s officials aren’t the only people who know to tweet, share and “like”.

Given that Facebook’s Brussels office wants a trade deal to be concluded, it behoves those of us opposing the deal to flood the pages of Facebook with the unvarnished truth. We should spare no effort in calling out the lobbyists seeking to destroy the last vestiges of our democracy.

The Stock Market Bubble

Back to the Future on Wall Street
by MIKE WHITNEY


Wall Street is buzzing, and it’s all about bubbles.

In fact, according to Google Trends, interest in the term “stock bubble” was higher in November 2013 than anytime since October 2008.

And that should be expected given that the Dow Jones just broke through the 16,000-mark while the NASDAQ sailed-past the 4,000 milestone for the first time in 13 years. And did I mention that S&P 500 just closed above 1,800 for an all-time high?

While surging stocks are not proof of a bubble, they do draw attention to the condition of the underlying economy which is still in deep distress 5 years after the recession "ended." With "official" unemployment at 7.2% (and real unemployment twice that figure), GDP barley growing, droopy personal consumption, flagging durable goods, shrinking revenues, flatlining wages, falling incomes, widening inequality, plunging consumer sentiment, 47 million Americans on food stamps, and myriad other signs of persistent economic stagnation; the so called “recovery” is anything but robust. So where are stocks getting the oomph to keep rising?

That’s not a question that bothers the bubble deniers who have started popping up on the business channels like they did prior to the housing and the dot.com busts. These so called “experts” assure the public that all the bubble talk is just scaremongering by disgruntled Cassandras who don’t understand that current valuations are reasonable. They say that soaring prices reflect “strong fundamentals.

Uh huh.

Last week, serial bubblemaker, Alan Greenspan, made an appearance on Bloomberg TV where he scoffed at the idea of a stock bubble saying, “It’s a little on the upside, (But) “This does not have the characteristics, as far as I’m concerned, of a stock market bubble.”

There you have it from Maestro himself. No bubble here. Move along now.

Others, however, are not as confident as Greenspan. They think stock prices have less to do with fundamentals than they do with the Fed’s uber-accommodative policy which has kept short-term rates set below the rate of inflation for 5 years straight, providing a subsidy for risk taking. They also point to Fed chairman Ben Bernanke’s $85 billion per month asset purchase program, called QE, which has expanded the Fed’s balance sheet by $3 trillion lifting stock and bond prices across the board. Stock prices are based on Central Bank intervention. Fundamentals have nothing to do with it, nothing at all.

As for the bubble; judge for yourself:

Margin debt on the New York Stock Exchange is currently at its highest level ever. It’s even higher than before the crash in 2007. When investors borrow a lot of dough to buy stocks, you’re in a bubble, right? Because that’s what a bubble is, tons of credit pushing up prices. And when something bad happens, like the Lehman Brothers default, then all the over-extended borrowers have to dump their stocks pronto, which causes firesales, panics and financial meltdowns. Been there, done that.

So why is there so much margin debt now, you ask?

Because of zero rates. Because of QE. Because speculators think the Fed will keep prices high by pumping more liquidity into the system. It’s called the Bernanke Put, the belief that the Fed will prevent stocks from falling too fast, too far. Margin debt is a reasonable reaction to the Fed’s policy, which is why the Fed is ultimately responsible for the risky behavior.

Now check this out from the New York Times:

“Since the dark days of 2008, the Nasdaq has risen more than 150 percent, twice as much as the old-school Dow industrials. Money has been pouring into social media stocks. As of Friday, Twitter had risen nearly 60 percent since it went public only a few weeks earlier.

Once again, new “metrics” are being applied to justify stratospheric valuations. Twitter is losing money. A price-to-earnings ratio? There is no E in the P/E. But its stock is trading at 20-odd times the company’s annual sales. Good enough….

Eight months ago, Snapchat was valued at $70 million. Today, it is valued at $4 billion, even though it has zero revenue. Six months ago, Pinterest was valued at $2.5 billion. Today, it is valued at $3.8 billion — and no revenue there, either. And last week news broke that Dropbox was said to be seeking a new round of funding that would value the company at $8 billion, up from $4 billion a year ago.” (“Disruptions: If It Looks Like a Bubble and Floats Like a Bubble”, New York Times)

Did you catch that? A company with zero revenue is worth $3 billion more today than it was 8 months ago. So we’re back to the bad old days of the dot.com bust. This is the result of low rates and QE. It has nothing to do with fundamentals. We’re not talking earnings here. We’re talking manipulation, intervention, and central planning.
 
Then there’s this from the Wall Street Journal:

“Investment funds aimed at individual investors are barreling into collateralized loan obligations, a complex and volatile type of security that was shaken by the financial crisis.

Lured by annual returns of as high as 20%, some mutual-fund managers are buying CLOs through investment funds that purchase stakes in loans to companies with low credit ratings…. …

The biggest buyers of these securities usually are hedge funds, insurers and banks. But mutual funds and business-development companies, which pitch themselves to individual, or retail, investors, have collected more than $60 billion in money from clients this year, according to Keefe, Bruyette & Woods, Inc. and fund-data provider Lipper.

CLO returns are higher than on corporate bonds and other loans, but CLO prices could plunge if the risk rises that companies will run into trouble repaying their loans. That happened in 2011, and some fund managers say retail investors are mostly unaware that the firms they invest in are buying CLOs…” (“Volatile Loan Securities Are Luring Fund Managers Again”, Wall Street Journal)

So the big boys are climbing further out the risk curve to scratch out a higher rate of return on their investments; investments which–by the way– will eventually cost ”retail investors” (you and me) a bundle. 

 

And the reason these financial institutions are engaging in such risky behavior is because rates have been stuck at zero for 5 years, forcing them to look for higher yield wherever they can find it. It’s all part of the Fed’s Pavlovian conditioning. First you turn the interest rate dial to zero, then you juice stock’s prices with QE. And then you wait for the suckers (Mom and Pop) to reenter the market so you can cut them down like corn stalks in a combine. Works every time, just take a look:

“One development that has experts concerned is the return of individual investors, who are known for getting into the stock market near peaks…One way to measure their activity is to look at net inflows into stock mutual funds (excluding exchange-traded funds). When investors put more into stock funds than they take out, it’s called a net inflow. When they withdraw more than they invest, it’s a net outflow.

This year, net inflows totaled $176 billion through Nov. 20, according to Lipper…Most of that money is coming from bank accounts and money market funds…”

So the sheeple are about to get sheared again, right? Just like Bernanke and his Wall Street buddies planned from the get go. But, guess what? Just as Mom and Pop are getting back into stocks again, the big boys are getting out. Take a look at this report from BofAML from the Macronomics blogsite:

”BofAML clients were net sellers of US stocks for the fifth consecutive week, in the amount of $2.3bn. Net sales were led by institutional clients, who returned to net selling following a week of muted buying.

Institutional clients remain the biggest net sellers year-to-date, with cumulative net sales of over $23bn—larger than in either 2008 or 2010. …..Hedge funds were also net sellers for the second consecutive week, while private clients returned to net buying after a week of selling. This group has been a net buyer for 23 of the past 26 weeks.” (“Credit: All that glitters, ain’t gold”, Macronomics)

How do you like that? So once the chickens get lured back into the henhouse, the door slams shut and the fox fires up the stove for another big feed. Isn’t this how it always works out?

Now check this out in Forbes about ”cov lite” loans:

“Covenant-lite loan activity in 2013 is smashing all records, and appears to be picking up speed. Through Aug. 8 there has been $162 billion of covenant-lite loan issuance in the U.S., more than five times the amount seen at this point in 2012, and easily topping the $86 billion of cov-lite deals logged all of last year.” (“Cov lites” soar to new record”, Forbes)

Unfortunately, cov lites are a particularly lethal form of lending which strips “typical lender protections” from credit agreements. Here’s the scoop from the New York Times:

“Leveraged loans became popular before the 2008 collapse but nearly disappeared afterward, regarded as a symbol of unbridled lending. But they started to return in 2010 and are now back in force, with volumes of $548.4 billion this year through Nov. 14, already exceeding the precrisis level of $535.2 billion in 2007.

The type of leveraged loans that Learfield took out are known as covenant-lite, financial lingo for loans that lack the tripwires that could alert investors to any potential financial troubles at the company that could affect repayment. More than half of all leveraged loans issued this year have been the so-called cov-lite types, double the level seen in 2007 on the eve of the credit crash.” (“New Boom in Subprime Loans, for Smaller Businesses”, New York Times)

So, let’s recap: The Fed has managed to spark another surge in risky lending (that “exceeds precrisis levels”) that threatens to blow up in investors faces leaving them less prepared for retirement than they are today.

Check.

And there’s more. Take a look at the recent stock buyback frenzy, which is where companies buy their own stock to goose the price instead of investing in plants, equipment, hiring, or any other type of useful, productive activity. This is from Bloomberg:

“Multiple expansion through share buybacks have been driving indeed the stock market higher greater than earnings have. …. Buybacks rose by 18% Quarter-over-quarter to $118 billion in 2013, up 11% year-over-year to $218 billion.”  (Bloomberg)

Even so, Greenspan sees no bubble. Stock prices are based on good old fundamentals, like earnings. What could be more fundamental than earnings, right?

Take a look at this from the Testosterone Pit:

“Corporate earnings will grow this year at their lowest level since 2009. Revenue growth at public companies is almost non-existent. Companies are buying back stock at a record pace to boost per-share earnings.”  (“What Really Bothers Me About this Stock Market”,  Michael Lombardi, Testosterone Pit)

Huh? So earnings aren’t so hot either?

Apparently not. And that means the fundamentals are actually weak, which makes sense since the economy is in the crapper.

Then we ARE in a bubble, after all?

Yep. And when it bursts it’s going to cost a lot of people a lot of money.  Just like last time.

Funnies for the Holidays

The Money Changers Serenade: A New Plot Hatches

Paul Craig Roberts

Former Treasury Secretary Timothy Geithner, a protege of Treasury Secretaries Rubin and Summers, has received his reward for continuing the Rubin-Summers-Paulson policy of supporting the “banks too big to fail” at the expense of the economy and American people. For his service to the handful of gigantic banks, whose existence attests to the fact that the Anti-Trust Act is a dead-letter law, Geithner has been appointed president and managing director of the private equity firm, Warburg Pincus and is on his way to his fortune.

A Warburg in-law financed Woodrow Wilson’s presidential campaign. Part of the reward was Wilson’s appointment of Paul Warburg to the first Federal Reserve Board. The symbiotic relationship between presidents and bankers has continued ever since. The same small clique continues to wield financial power.

Geithner’s career is illustrative. In the 1980s, Geithner worked for Kissinger Associates. In the mid to late 1990s, Geithner served as a deputy assistant Treasury secretary. Under Rubin and Summers he moved up to undersecretary of the Treasury.

From the Treasury he went to the Council on Foreign Relations and from there to the International Monetary Fund (IMF). From there he was appointed president of the Federal Reserve Bank of New York, where he worked to make banks more profitable by allowing higher ratios of debt to capital, thus contributing to the financial crisis.

Geithner arranged the sale of the failed Wall Street firm of Bear Stearns, helped with the taxpayer bailout of AIG, and rejected saving Lehman Brothers from bankruptcy in order to create the crisis atmosphere needed to more fully subordinate US economic policy to the needs of the few large banks.

Rubin, a 26-year veteran of Goldman Sachs, was rewarded by Citibank for his service to the banks while Treasury Secretary with a $50 million compensation package in 2008 and $126,000,000 between 1999 and 2009.

When a person becomes a Treasury official it is made clear that the choice is between serving the banks and becoming rich or trying to serve the public and becoming poor. Few make the latter choice.

As MIchael Hudson has informed us, the goal of the financial sector has always been to convert all income, from corporate profits to government tax revenues, to the service of debt. From the bankers standpoint, the more debt the richer the bankers. Rubin, Summers, Paulson, Geithner, and now banker Treasury Secretary Jack Lew faithfully serve this goal.

The Federal Reserve describes its policy of Quantitative Easing — the creation of new money with which the Fed purchases Treasury debt and mortgage backed securities — as a low interest rate policy in order to stimulate employment and economic growth. Economists and the financial media have parroted this cover story.

In contrast, I have exposed QE as a scheme for pumping profits into the banks and boosting their balance sheets. The real purpose of QE is to drive up the prices of the debt-related derivatives on the banks’ books, thus keeping the banks with solvent balance sheets.

Writing in the Wall Street Journal (“Confessions of a Quantitative Easer,” November 11, 2013), Andrew Huszar confirms my explanation to be the correct one. Huszar is the Federal Reserve official who implemented the policy of QE. He resigned when he realized that the real purposes of QE was to drive up the prices of the banks’ holdings of debt instruments, to provide the banks with trillions of dollars at zero cost with which to lend and speculate, and to provide the banks with “fat commissions from brokering most of the Fed’s QE transactions.” (See: www.paulcraigroberts.org )

This vast con game remains unrecognized by Congress and the public. At the IMF Research Conference on November 8, 2013, former Treasury Secretary Larry Summers presented a plan to expand the con game.

Summers says that it is not enough merely to give the banks interest free money. More should be done for the banks. Instead of being paid interest on their bank deposits, people should be penalized for keeping their money in banks instead of spending it.

To sell this new rip-off scheme, Summers has conjured up an explanation based on the crude and discredited Keynesianism of the 1940s that explained the Great Depression as a problem caused by too much savings. Instead of spending their money, people hoarded it, thus causing aggregate demand and employment to fall.

Summers says that today the problem of too much saving has reappeared. The centerpiece of his argument is “the natural interest rate,” defined as the interest rate at which full employment is established by the equality of saving with investment. If people save more than investors invest, the saved money will not find its way back into the economy, and output and employment will fall.

Summers notes that despite a zero real rate of interest, there is still substantial unemployment. In other words, not even a zero rate of interest can reduce saving to the level of investment, thus frustrating a full employment recovery. Summers concludes that the natural rate of interest has become negative and is stuck below zero.

How to fix this? The way to fix it, Summers says, is to charge people for saving money. To avoid the charges, people would spend the money, thus reducing savings to the level of investment and restoring full employment.

Summers acknowledges that the problem with his solution is that people would take their money out of banks and hoard it in cash holdings. In other words, the cash form of money provides consumers with a freedom to save that holds down consumption and prevents full employment.

Summers has a fix for this: eliminate the freedom by imposing a cashless society where the only money is electronic. As electronic money cannot be hoarded except in bank deposits, penalties can be imposed that force unproductive savings into consumption.

Summers’ scheme, of course, is a harebrained one. With governments running huge deficits, who would purchase bonds at negative interest rates? How would pension and retirement funds operate? Would they also be subject to an annual percentage confiscation?

We know that the response of consumers to the long term decline in real median family income, to the loss of jobs from labor arbitrage across national borders (jobs offshoring), to rising homelessness, to cuts in the social safety net, to the transformation of their full time jobs to part time jobs (employers’ response to Obamacare), has been to reduce their savings rate. Indeed, few have any savings at all. The US personal saving rate is currently 2 percentage points, about 30%, below the long term average. Retired people, unable to earn any interest on their savings from the Fed’s zero interest rate policy, are being forced to draw down their savings in order to pay their bills.

Moreover, it is unclear whether the savings rate is an accurate measure or merely a residual of other calculations. With so many people having to draw down their savings, I wouldn’t be surprised if an accurate measure showed the personal savings rate to be negative.

But for Summers the plight of the consumer is not the problem. The problem is the profits of the banks. Summers has the solution, and the establishment, including Paul Krugman, is applauding it. Once the economy officially turns down again, watch out.

Comics

 

Fracking-Friendly Bills Flourish as Industry Donations Skyrocket

Friday, November 22, 2013 by Common Dreams
'House Majority Leadership showed they’ll sacrifice anything for the oil and gas industry'
by Sarah Lazare, staff writer

A wave of legislation friendly to the fracking industry in the House of Representative appears to be following skyrocketing donations from the fossil fuel industry.

A Citizens for Responsibility and Ethics in Washington report this week reveals that from 2004 to 2012, oil and gas industry contributions to Congressional campaigns climbed 231 percent in fracking states and districts.

Several bills passed in Congress this week suggest these contributions are paying off.

In a landslide 252 to 165 vote, the GOP-controlled House rammed through the fracking industry friendly HR 1900 on Thursday that would fast-track pipeline construction if signed into law.

It follows two other bills passed in the House earlier this week that would make it easier to get fast permits for oil and gas drilling on federal lands and roll back federal fracking regulations.

While none of these bills is expected to advance in the Senate, critics charge they nonetheless reveal a Congress hijacked by the fracking industry.

"This week, House Majority Leadership showed that they’ll sacrifice just about anything for the oil and gas industry, whether it’s the hunters and fishermen who enjoy using our public lands, parents trying to protect their children from the health impacts of fracking, even the rights of property owners along proposed gas pipeline projects," said Earthjustice Senior Legislative Representative Jessica Ennis.

"The reason for this loyalty? Look no further than a damning report out yesterday showing a 231 percent increase in industry contributions to candidates in areas of fracking activity," she added.

Lawmakers Vote to Keep Drone War Deaths Secret

Friday, November 22, 2013 by Common Dreams
House Intelligence Committee rejects provision that would count those killed in US bombings
by Sarah Lazare

The House Intelligence Committee on Thursday rejected 15 to 5 what supporters call a "modest" proposal to require that the Obama administration publicly report those killed by U.S. drone strikes overseas.

"By blocking transparency the House [committee] denies accountability for the slaughter committed against innocent lives in drone strikes," said Suraia Sahar of Afghans United for Justice in an interview with Common Dreams. "This is a gross disregard for human life."

The provision, proposed by Rep. Adam Schiff (D-Calif.), had already passed the Senate Intelligence Committee earlier this month. It would have required that U.S. agencies involved in drone wars produce annual reports in which they account for all deaths in U.S. drone strikes overseas and identify the civilians and alleged combatants killed.

"The production of this report will require minimal resources, but will provide a modest but important measure of transparency and oversight," said Schiff in a statement released Thursday. While the bill failed along party lines, with Republicans voting "no," Schiff said he plans to continue efforts to advance the legislation in the House. Supporters say that in order for this bill to move forward, constituents must pressure Republicans both in the House and Senate to get on board.

The bill failed despite a lobbying blitz earlier this week by attendees of a global summit demanding an end to Obama's ongoing drone wars. Groups including delegates from regions terrorized by U.S. drones, such as Yemen and Pakistan, appealed directly to Congress to end the deadly strikes. The groups charged that, at the very least, an increase in transparency and oversight is needed.

"People complain justifiably that the Obama administration is not being transparent," said Robert Naiman, policy director for Just Foreign Policy, in an interview with Common Dreams. "But Congress also is not being transparent. Every day this drone policy continues, Congress is voting through its inaction to do nothing."

While Obama administration officials have been famously secretive about the lives lost in U.S. drone attacks, they have repeated the unverified claim that civilian deaths have been minimal. Yet this is contested by experts and witnesses, including Bureau of Investigative Journalism researchers who have documented high numbers of civilian deaths in Pakistan and Yemen.

In a drone war that operates behind a veil of secrecy, critics charge that any step towards transparency, no matter how small, is a positive one.

"Even this defeat is a victory," said Naiman. "It is the first time in ten years of drone strike policy that there was any congressional vote on anything. Now we can see who is trying to do something and who is blocking. There has been a dramatic increase in transparency just as a result of this vote."

The MPAA Is Going After Schoolchildren

Pirating Creativity
by TRAVIS EBY

For years now the Motion Picture Association of America (MPAA) has been trying its best, unsuccessfully, to enforce its “intellectual property” claims upon those who would dare share and distribute media. They are of course not the only ones trying to get IP enforced; we have seen the same trends in music and gaming. Since it has long become clear that they cannot stop the sharing of media on the internet, the MPAA is going for the gold: Get pirates when they are young. In other words, the MPAA has gone to work getting its mission inserted into the public school curriculum.

A nonprofit group called the Center for Copyright Information, supported by the MPAA and other groups, is in the early drafting phases of a school curriculum to teach children the supposed value of copyright. Of course, this whole plan is not without critics. Some argue that Hollywood studios and music labels are simply trying to promote their own biased agendas, while others say that such a curriculum would use up valuable classroom time needed to simply cover the basics.

There are two fundamental things for us to look at here, and they are both highly problematic. These are public education and intellectual property.

Public education is an environment wherein children are taught that there is such a thing as objective authority figures. This may not be overt, especially given how many well meaning and sincere public educators are out there, but the fact remains that public schools are among the first places where children start to be molded into compliant, servile people. There is not a whole lot of room for individuality, and even less room for questioning the teacher’s lesson plans. It is the perfect place to instill far-reaching values, such as statism, when children are at their most intellectually vulnerable.

Intellectual property is a ruse the political class uses to control free market — a clever tool to inhibit competition. There is no logical way to own something like an idea, and there is no logical argument against people sharing information, including media of all kinds. By enforcing claims on “intellectual property,” the political class inhibits competition, innovation and creativity.

But they would have us believe otherwise. They argue that IP protects creativity, that it protects competition, and that it protects the market. But if this is truly the case, then why would so many be fighting to undermine it? They also argue that sharing their supposed intellectual property is hurting the industry and costing people jobs. This of course flies in the face of the billions of dollars the movie industry, the music industry, and the game industry rake in every year. But they would still seek to get these regressive values into the minds of schoolchildren.

The fact of the matter is that sharing information, including media, is a massive check against the mandated market control of these big media groups. In many ways it has actually served to help them due to more people having access. It has also pushed them to innovate and make their products worth more to the general consumer. In other words, real market forces have created arguably better products. For years IP has stifled innovation, and it has been through revolutionary market forces that we have seen some exciting changes in the media industry. One such example is the Steam video game client that, while still a player in IP, has been making more and more quality games available for dirt cheap. In many cases, some will stop pirating because the games they might be interested in are available for so little money.

In short, not only is IP a regressive, anti-freedom framework, but the notion that they are so desperate that they would seek to get into the minds of children means that they are scared. Not to mention that their efforts will most likely meet with derision from the older siblings of these kids and create even more media sharing than before, thereby furthering their own demise.

Simply put: They are losing. Let’s keep it that way.

An Orgy of Thieves

The American Criminal Elite
by JEFFREY ST. CLAIR and ALEXANDER COCKBURN


All through the 1980s and 1990s, professorial mountebanks like James Q. Wilson and Charles Murray grew plump from best sellers about the criminal, probably innate, propensities of the “underclass,” about the pathology of poverty, the teen predators, the collapse of morals, the irresponsibility of teen moms.

There was indeed a vast criminal class coming to full vicious potential in the 1990s: a group utterly vacant of the most elementary instincts of social propriety, devoid of moral fiber, selfish to an almost unfathomable degree. The class comes in the form of our corporate elite.

Given a green light in the late 1970s by the deregulatory binge urged by corporate-funded think tanks and launched legislatively by Jimmy Carter and Ted Kennedy, by the 1990s, America’s corporate leadership had evolved a simple strategy for criminal self-enrichment.

First, lie about your performance, in a manner calculated to deceive investors. This was engineered by the production of a “pro forma” balance sheet freighted with accounting chicanery of every stripe and hue, willingly supplied by Arthur Andersen and others. Losses were labeled “capital expenditures”; losing assets were “sold” to co-conspirators in the large banks for the relevant accounting period.

Later, using Generally Accepted Accounting Principles, slightly more realistic balance sheets would be presented to the SEC and the IRS.

Flaunting the “pro forma” numbers, corporations would issue more stock, borrow more money from some co-conspiratorial bank, buy back the stock for the chief executives, who would further inflate its value by dint of bogus accountancy, sell the stock to the chumps and bail out with their millions before the roof fell in, leaving pension funds like CalPERS holding the bag. The fortunes amassed by George W. Bush and Dick Cheney are vivid illustrations of the technique.

The scale of looting? Prodigious. This orgy of thievery, without parallel in the history of capitalism, was condoned and abetted year after year by the archbishop of the economy, Alan Greenspan, a man with a finely honed sense of distinction between the scale of reproof merited by the very rich and those less powerful. When Ron Carey led the Teamsters to victory way back in 1997, Greenspan rushed to denounce the “inflationary” potential of modestly improved wage packets. Even though declared innocent by a jury of his peers, Carey was forbidden ever to run in a union election again. And so it goes now with the drumbeats about raising the minimum wage.

Where were the sermons from Greenspan or his successor Ben Bernanke about the inflationary potential of stock-option fortunes lofted on the hot air of crooked accountancy and kindred conspiracies?

Let someone die in a gang-banger crossfire in South Central, and William Bennett will rush to indict an entire generation, an entire race. Where are the sermons from Bennett, Murray and the Sunday Show moralists about the CEOs scuttling off with their swag, leaving their employees to founder amid wrecked pensions and destroyed prospects? A street kid in Oakland is in the computer by the time he’s 10. No “criminal propensity” profiles for grads of the Wharton or Harvard business schools.

You have to go back to Marx and Balzac to get a truly vivid sense of the rich as a criminal elites. But these giants did bequeath a tradition of joyful dissection of the morals and ethics of the rich, carried on by Veblen, John Moody, C. Wright Mills, William Domhoff, and others. But by the mid-1960s, disruptive political science was not a paying proposition if you were aiming for tenure. A student studying Mills would be working nights at the soda fountain while the kid flourishing Robert Dahl and writing rubbish about pluralism would get a grad fellowship.

Back in the 1950s, people were reading stuff about the moral vacuum in affluent suburbia by writers like Vance Packard and David Riesman. Presumably, inner loneliness soon became inner joy. There was nothing wrong about putting one’s boot on a colleague’s neck and cashing in. Where are the books now about these proving grounds for the great corporate criminal cohort of the 2000s, who came of age in the Reagan years?

In fact, it’s nearly impossible to locate books that examine the class of corporate executives through the lens of cool, scientific contempt. Much of the current writing on CEO culture is published in magazines like Fortune, Businessweek or Forbes. And though there are a few authors — like Robert Monks (Power and Accountability) — who focus their attention on executive culture, nowhere will you find empirical studies on the sociobiological roots of the criminal tendencies of the executive class.

Why? The rich bought out the opposition. Back in the mists of antiquity, you had communists and socialists and populists who’d read Marx, and who had a pretty fair notion of what the rich were up to. Even Democrats had a grasp of the true situation. Then came the witchhunts and the buyouts, hand in hand. Result, a Goldman Sachs trader could come to maturity without ever once hearing an admonitory word about it being wrong to lie, cheat and steal, sell out your co-workers, defraud your customers.

The finest schools in America educated a criminal elite that stole the store in less than a decade. Was it all the fault of Ayn Rand, of the Chicago School, of Hollywood, of God’s demise?