The Capitol I Once Knew and Loved

by Stephen P. Pizzo

http://www.stephen.pizzo.com 

Yesterday's insurrection at our Capitol startled and depressed me in several ways. But mostly it sent my mind back a quarter-century or more.

When I awoke this morning I found myself musing about my early days as a reporter...back in the late 80s and thru the 90s ... when I traveled often to DC. It was, of course, way before 9/11, and the Capitol was wide open.

If I had business at the Capitol, I would just bounce up the steps and walk right into the rotunda, no metal detectors, nothing. One day, a friend with a House aide dragged me to the dead center of the rotunda and pointed up to the dome. "Whenever I get discouraged with how things go around here," he said, "I come and stand here and I look up. At that moment I tell myself, 'I am standing on the most powerful spot on the planet.'"

And I felt it. It felt pretty damn good.

Then he took me to an obscure corner of the rotunda and opened an equally obscure door. Behind it, very old and worn white marble steps descended. Before I could step forward he grabbed my arm and said, "Wait, I want you to know something about these steps. Abe Lincoln used these steps whenever he came to the Capitol." I stepped down them as slowly and full of purpose as I have ever walked down any set of steps. And it felt amazing to be so personally in touch with that particular part of our history.

Then I rambled around in the bowels of the Capitol until I came upon the trolly that takes members of congress the short hop from the Capitol to their offices across the street. I was heading there any way to interview a member of the House, so I jumped aboard. There I was, this insignificant little reporter, sitting arm to arm with members of Congress, one among equal travelers.

Again, no one stopped me. No one challenged me. The Capitol...the "People's House" was open to the people. Wide-open. And I felt that ownership.

The same conditions existed over at the Rayburn building where I was headed. I jumped into an elevator where, once again, the high and mighty and the lowly, stood arm to arm, equals, if for only a minute. The doors opened into long shiny white marble hallways that stretched on and on. American and state flags stood outside each member's office door. And all those doors were wide open. I could, and did, walk into any of them I chose and was greeted politely and professionally by a receptionist.

Of course, after 9/11 all that changed in an instant. And now, after yesterday, security will be tightened another dozen notches as American of old goes into the history books and the new security state is further reinforced. With each tightening caused by acts of terror, Americans are pushed farther and farther away from their House, their Senate, their White House, their Supreme Court. And this during a time when what's needed is for Americans to be able to feel what I felt all those years ago...a sense of pride and ownership.

It's all unimaginable ... but in light of what happened yesterday, sadly unavoidable. For example, if the Secret Service is not talking about moving Biden's inauguration indoors, they are making a big mistake. These right-wing nutters know all about sniper rifles, and some own them. Surely some of those who participated in yesterday's riot are veterans of our Middle Eastern wars, so they know all about snipers.

Well, anyway, thanks for letting me stretch out on your couch and get all this off my chest. I may not have liked covering G. W. Bush or the WH antics of Bill Clinton, but I sure did like Washington DC of those times.

It made me feel proud, rather than ashamed and apprehensive.

Riding the Fiscal Tiger

By Stephen P. Pizzo

www.stephen.pizzo.com

As I write this the Senate is arguing over whether to increase cash aid to those hard hit by the pandemic from $600 to $2000. There's no doubt among those of us out here in the real world that even two grand is not going be enough for many. But, as serious as things are right now, this is a small matter when compared to the fiscal mess America faces going forward, as hard decisions collide with even harder facts.

While being a deficit hawk is considered a “Republican thing,” I am a lifelong progressive, and I worry a great deal about two things: 1) ever-expanding deficits, and 2) the Fed responding to every major economic crisis by flooding the markets with virtually free “fiat currency.” (https://www.investopedia.com/terms/f/fiatmoney.asp )

Businesses, banks, and Wall Streeters have become addicted to the Fed's flood of liquidity as if it were heroin. Evidence lays in their response any time the Fed tries to bump up rates or threatens to turn the money faucet off. When that happens, or even the hint it might happen, Wall Street firms panic, and the hue and cries from the corporate bond world is deafening. And for good reason, the Fed is buying a lot of their corporate debt.

“The Fed holds an expansive list of other companies indirectly, including names like Apple and Goldman Sachs, through exchange-traded funds it has purchased. In addition, it has purchased bonds in speculative-grade companies as well as ETFs, including the SPDR Bloomberg Barclays High Yield Bond, a fund in which the Fed holds a $412 billion position.”

https://www.cnbc.com/2020/06/29/the-fed-is-buying-some-of-the-biggest-companies-bonds-raising-questions-over-why.html

Meanwhile, even as the Fed floods markets with liquidity, the vast majority of working Americans haven't seen much of it and instead remains stuck with incomes that have not seen an inflation-adjusted jump in over four decades.

“Sluggish and uneven wage growth has been cited as a key factor behind widening income inequality in the United States. A recent Pew Research Center report, based on an analysis of household income data from the Census Bureau, found that in 2016 Americans in the top tenth of the income distribution earned 8.7 times as much as Americans in the bottom tenth ($109,578 versus $12,523). In 1970, when the analysis period began, the top tenth earned 6.9 times as much as the bottom tenth ($63,512 versus $9,212).”

https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/

So, where is all this funny-money going? Look no further than the stock market. Even in the throws of the worst pandemic in a century, stocks reach new highs almost daily. Should the Fed turn the money machine off, stocks would drop by a terrifying amount...40%...maybe 50%. So it's like riding a tiger...you would love to get off, but dare not.

“The Fed's actions have essentially made mainstream alternatives to stocks impractical for most investors. Those who want to keep cash available can expect little or no interest at all, and with inflation still positive, that means savers are losing purchasing power every month on their cash savings... Low rates are also bolstering the case for other high-risk assets.” ( ie: stocks and corporate debt.)

https://www.fool.com/investing/2020/12/16/the-fed-just-gave-stock-market-green-light-2021/

But flooding the markets with liquidity isn't a solution, but a treatment, a treatment that has its natural limits...not unlike in physics...sooner or later you hit a point of diminishing returns. As we reach that tipping point, no amount of liquidity will bring this sick patient around. At that point, unless something different is done, you get depression...the real kind.

Also at that very moment, the growing federal deficit becomes a very real anchor around the country's neck. No matter how much money the Fed pumps out, it not only no longer boosts but actually starts hurting the economy. Dollars are like stock...the more of them in circulation, the less each is worth. So the dollar plummets in value, requiring more dollars to buy the same amount of anything. It's not hyper-inflation, yet, but either the Fed has to stop pumping funny-money into the system or hyperinflation is the only outcome.

Add to all this the continuing stream of annual federal budget deficits, which for 2020 came in at a breathtaking $3.1 trillion.

At this point the overall federal deficit is becoming a fiscal Chernobyl...a hard-to-control core meltdown, where $27.6 trillion or more obligations accrue hundreds of billions in interest payments to the deficit, meaning that, even if the Fed turned off the printing presses, the deficit would continue to balloon all on its own. https://www.usdebtclock.org

The federal deficit represents the money we owe to both foreign bond investors, (China holds over 5% of US debt,) (https://www.scmp.com/economy/china-economy/article/3112343/us-debt-china-how-big-it-and-why-it-important) and to ourselves (bonds sold to Americans.)

There is a “cheap” way to pay down we owe, but it would require the Fed sparking raging inflation, slashing the value of the dollar. And, since we must repay all those bonds in dollars, it effectively slashes the actual cost of repayment.

Of course, as the old saying warns, “every shortcut has its rent,” and the rent for that short cut would be unacceptably high. Bond investors would be very unhappy, and unlikely to consider US bonds a safe harbor in the future. The Fed could attract them back, but that too would be unacceptably high. The Fed could significantly raise interest rates. But that in turn would strangle any recovery by raising the cost of borrowing for already struggling businesses. It would also significantly raise the cost of government borrowing, which in turn would further increase the deficit.

Once more we learn, the hard way, that there really is no such thing as a free lunch.

With those moves off the table, the only other apparent option would be for the government to significantly slash spending. But at a moment when federal relief spending is the only thing that keeps millions of Americans' heads above water, that option would be cruel in the extreme.

So, as the nation battles a budget-busting, deficit exploding national emergency, what's the answer to this dilemma. There is one solution, unused and vilified by all conservatives and even some centrist Democrats...raise taxes.

You won't hear many in Congress pushing for tax hikes, even among Democrats. Instead, most of the talk is how much more to add to the deficit to pay for worthy stuff now while worrying about the deficit sometime down the road.

But higher taxes on those who can afford them, and who have garnered so much from previous tax cuts, it the only sane answer. Those tax cuts for the rich have also helped feed the federal deficit while enriching the already filthy rich:

“By the end of 2025, the tally of tax cuts will grow to $10.6 trillion. Nearly $2 trillion of this amount will have gone to the richest 1 percent. By then, the total impact on the deficit will be $13.6 trillion, including interest payments.”

https://itep.org/federal-tax-cuts-in-the-bush-obama-and-trump-years/

So the Biden administration needs to quickly and strongly propose revoking most of the tax cuts for the rich passed by Republicans from George W. Bush to Donald Trump. On top of that an emergency review of the US tax code is required to ferret out and close (really close) tax code loopholes.

That would start the process of refilling the federal coffers with enough money to begin paying down the federal deficit. That has only been tried once in my lifetime, and that was during the Bill Clinton administration. Clinton raised taxes on corporations and top earners and, for the first time since Eisenhower was president we had enough surplus to begin paying down the deficit.

Revoking many if not most of the tax cuts passed during the W. Bush and Trump terms really are the only sustainable solution. Will the Biden administration, and Democrats have the guts to grab this “third-rail” and take the necessary heat to get this done … for the good of the nation and future generations? We'll see.

If they don't, and instead keep “kicking the can down the road,” we'll be coming to a sorry dead-end.

Once Again I Solve Everthing

By Stephen P. Pizzo

http://www.stephen.pizzo.com

Unaffordable Life-Saving Drugs:

How about creating an"eminent domain." doctrine for life-saving drugs?

It's an idea that's time has come, and for many of the very same reasons that eminent domain laws were passed to allow local and state governments to force the sale of a piece of property needed for important public purposes.

Over the past decade life-saving drugs have been priced out of the reach of many who desperately need them. The more life-threatening the disease, the higher the drug is priced – a sick twist on the old gag, “Your money or life?”

I could launch into a Sanders-like diatribe about the excesses of free markets and capitalism but, in this case, there's a simple solution, one that can satisfy all sides.

First let's understand an important, and little mentioned, fact about the R&D end of the pharmaceutical business. Drug companies like to complain that they have to spend millions do develop groundbreaking drugs. What they fail to mention is that, even before they get their hands on those formulas, US taxpayers have already dumped tens of millions into their development.

“A new report shows taxpayers often foot the bill to help develop new drugs, but it's private companies that reap the lion's share of profits. In one case, the federal government spent $484 million developing the cancer drug Taxol — derived from the bark of Pacific yew trees — and it was marketed under an agreement with Bristol-Myers Squibb starting in 1993. The medical community called it a promising new drug in the fight against ovarian and breast cancer.

Since then, Bristol-Myers Squibb has sold $9 billion worth of Taxol worldwide, according the the General Accounting Office report released today. The National Institutes of Health have received just $35 million in royalties from Bristol-Myers, however.

The Medicare program alone paid nearly $700 million over a five-year period, to buy a drug the government helped develop.” (Source)

So the government usually has a lot of skin in the game long before drug companies start to test and market a new drug, something they don't like to talk about. Some of that government funding even goes directly to pharmaceutical company-run laboratories.

Okay, so to the solution; pharmaceutical eminent domain:

Any life-saving drug that is put on the market at a price an independent medical panel deems largely beyond the reach of average patients, would be sent to an arbitration board that would set a fair market price for the purchase by the US Government of that drugs patent(s).

Pharmaceutical companies would be paid a fair price, a price high enough for the patent that it would continue to encourage drug companies development of new drugs.

This would create an entirely new calculation for drug companies. Rather than pricing new life-saving drugs a the highest possible price, they would have to calculate what they could earn selling the patent to the US Government against what they could earn over the years if they priced the drug below the level that would trigger an imminent domain action against that particular drug.

Drugs that become the property of the government through this imminent domain process would be administered and marketed by Medicare, priced on a sliding scale of a patient's ability to pay. (We are, after all, talking about life-saving drugs here.)

Without an pharmaceutica eminent domain  option hanging over drug companies, they will always go for the gold when pricing new, life-saving, drugs because, what do they have to lose? Nothing.

What do you have to lose? Your life.

Iraq and Afghanistan

Even though most US troops have been withdrawn from Iraq and Afghanistan, there are still many there and, if some folks in DC have their way, more will follow in the months and years ahead. This is a continuation of what seems to be a shockingly flat learning curve.

There really are not great arguments for remaining militarily engaged in any part of that terminally dysfunctional region. But, when confronted with the many good arguments against such ongoing engagements, proponents of engagement drag out their last weapon: the guilt-trip.

They say that, maybe it was our invasion of Iraq that unleashed this spiral of never-ending violence. And even if it wasn't, the fighting that followed our invasions killed and injured hundreds of thousands of civilians and destroyed what little public and private infrastructure they had. So we can't just pack up and leave now. We need to help them put their Humpty Dumpty back together again.

To which I say, hogwash.

True, citizens of both Iraq and Afghanistan have suffered terribly from the events kicked off by George W. and his sidekick, Dick. But we too have paid a price for it all, and will continue paying it for decades to come. Already the cost of those two wars have been estimated on th low end at at least $2 trillion and, when costs of veteran care and other ongoing costs, it could top $4 trillion – money that could have, and should have, gone to fill very real and growing public and humanitarian needs here at home.

On top of that, over 6,800 US service members and over 6,900 contractors have died in the wars in Iraq and Afghanistan. And an unusually high percentage of young veterans have died since returning home, many as a result of drug overdoses, vehicle crashes, or suicide.

So, as the song goes, “You gotta know when to hold-em, and know when to fold-em.” And it high time to fold-em...both of them, Afghanistan and Iraq. And throw Syria into that mix as well, since there seems to be a growing itch to jump into that Middle East tarpit as well.

As long as the combatants and politicians in those troubled countries think they can sucker the US into sending money, arms and troops to play their sectarian games, they have no incentive whatsoever to seek other solutions. (I shudder to think how many Swiss bank accounts are brimming over with US aide money, but I would wager it would reach well into the hundreds of billions of dollars. Wanna bet?)

So, out now. All the way out. And then stay out. Everyone has paid a terrible price for this “bring democracy to the Middle East” folly. Time to call and end to it and let them figure out exactly what is they want, and are willing to live with.

Israel & Palestine

Here's another bit on never-ending trouble we need to clean our skirts of once and for all. If you're looking for either pure victims or pure heroes, look elsewhere, you won't find ANY here.

On one side we have a bunch of largely Europeans, packing 5000 year-old Biblical title reports that show they once owned the entire area from the sea to the borders of Jordan and Syria. And they are now here to reclaim it..all of it.

On the other side are the Palestinians... a group that, as it has been said, and proven many times, “never miss an opportunity to miss an opportunity.” Time and again, when some kind of agreement appeared at hand, the Palestinians' leadership (a term I use loosely) sabotaged the deals.

Here again we see American interventions produce more, not less trouble. (“Hi, I'm from America, and I'm here to help.” Run!) And, like the wars we just discussed, our involvement with this never-ending pissing match has cost us dearly.

U.S. military aid to Israel was $2.775 billion in 2010, $3 billion in 2011, $3.07 billion in 2012 (and $3.15 billion per year from 2013-2018.) Washington also provides aid to Palestine totaling, on average, $875 million annually. (Imagine what that money could pay for here at home. And you will have to imagine that, since it didn't provide squat here at home.)

The Israel lobby wheels out a battery of arguments in favor of arming and funding Israel, including the assertion that a step back from such aid for Israel would signify a "retreat" into "isolationism." But would the United States, a global hegemon busily engaged in nearly every aspect world affairs, be "isolated" if it ceased giving lavish military aid to Israel? Was the United States "isolated" before 1967 when it expanded that aid in a major way? These questions answer themselves.

"If it weren't for US support for Israel, this conflict would have been resolved a long time ago," says Josh Ruebner.(national advocacy director for the US Campaign to End the Occupation and author of Shattered Hopes: Obama’s Failure to Broker Israeli-Palestinian Peace) (Source)

Israel has become so accustomed to the US caving to their demands, it now lobbies our Congress directly, like a de facto US state, encouraging opposition forces in Congress to reject the policies of a sitting US President. Imagine that. Oh,wait, you don't have to imagine it, do you:

So, the solution agaun is clear: Walkaway. Stay away.

What would happen, you ask? Well, on the Palestinian side what would happen is they would realize that no one was going to come to their rescue the next time they dig their heels in and refuse to accept anything less than the entire loaf. And that they themselves will have to rein in their Hamas factions before those nuts get the entire Palestinian population embroiled in another bloody war with Israel...which would likely be the last one.

For Israel our total disengagement would also send a message: Game Over. So, you don't want to get out of the West Bank? Fine. It's yours. In which case Israel's ever thinning democratic veneer would be stripped away. Once stuck with all those Palestinians – who are outbreeding Israelis by a long shot -- then officially part of Israel, they would have to decide... do we let them vote? If they do let them vote, Palestinians will out-vote white Israelis and would like rally much support form Israeli Arabs as well. Don't let them vote and Israel would become a full-fledged apartheid regime....and good luck with that.

By announcing we're out of ideas and out of patience with both sides, both sides will be tossed hot potatoes they will have to juggle themselves. Then let self-interests shape their decisions, unencumbered by hopes some outside force will charge to their rescue.

Might A House Divided Be A Better House?

By Stephen P. Pizzo,

Racontuer-at-Large

Those of us who paid attention in school may remember Lincoln's warning that “a house divided cannot stand.”

True then, but now? I'm beginning to think not, not now, not today.

While a lot has also remained the same since Lincoln's warning, today the consequences are even more serious.

Many, maybe most, in the deep south still chaff under the yoke of a Yankee-dominated central government seated in Washington, DC. And now those Yankees have heaped one final insult to their defeated secessional ambitions... exiling their beloved Confederate battle flag.

Slavery is gone, but racial tensions are as high as ever, not just in the deep south, but in every major city in the Union.

Christianity, once the dominate faith from coast to coast, north to south, is still strong, but rapidly losing its grip on that dominance, and they don't like it. Increasingly the term “persecution” laces their angst-filled protests. And here too, those “liberal Yankees” have heaped one final insult upon the faithful; letting men marry men, and women marry other women.

Science has made enormous strides over the past century and half, the fruits of such that make our lives better fed, better housed, healthier, more productive and less burdensome. Yet science has joined the “suspicious” central government as a major source of angst and distrust among millions; they suspect conspiracies are afoot, see scientists as concocters of lies and disinformation and demonic attackers of religious scripture. Even vaccines, which have saved countless billions of lives over the decades, are now under suspicion among many.

Then there's the battles over our shared physical environment. Even as it decays before our very eyes, millions of otherwise sane American citizens deny it and, rather than rising to the occasion, cling furiously to the very activities that lay at the center of those declines.

Of course I could go on and on; resistance to gun regulation, even as rivers of blood flow in our streets, resistance to strong financial market regulations, even as the bills from numerous previous financial meltdowns accrue interest in our burgeoning national debt.

Yet there are major constituencies on both sides of every single one of these issues. Both sides believe, unshakably in most cases, that they are completely right and the other side, the “Libs” or “Right Wingers,” are completely wrong. And they're not about to change their minds, not about any of it, not now, not ever.

And, since that's the case, both sides will do whatever it takes to gum up the works so the other side cannot prevail.

Which brings us back to Lincoln's admonition, and an opportunity to evaluate it in terms of our own times. He was of course right, though his goal was to preserve a single union. But looking at that statement today leaves me to wonder. Today the nation is still divided, but it's the House where that division threatens most. Our House is, both figuratively and literally, divided, as is the US Senate. And, at the bottom of it all, the electorate. And it should now be becoming abundantly clear that this House cannot stand. In fact, it is already not standing, but failing, completely.

Which begs the question: If this house cannot stand, due to the host of intractable disagreements on policies, fiscal, social and military, might it not be wise to divide this house, this time peacefully, thoughtfully, purposefully.

What would be the advantages to such a separation? Without getting into the fine points of where the borders would be drawn, let's just assume it's, once done, there would be a Red State and Blue State assemblage. (Of course many voters would find themselves on the wrong side of a border and will, over time, either accept their minority voting status or move. Time will take care of that.)

First, both new entities would finally get federal governments that reflected their citizens world, social, fiscal views. That would, in turn, create legislatures that could function. Citizens would finally get to see their views translated into policies they can see and feel.

Second – and I consider this the most important – both liberals and conservatives would at last have an opportunity to field test their most precious beliefs. Reds could slash taxes on corporations, cut social programs to the bone, outlaw abortions, ban same-sex marriages, repeal all affirmative action laws, bar foreign immigrants, deport undocumented aliens in wholesale lots. Blues could increase taxes on corporations and the rich, use the extra tax revenues to boost their social safety nets, modernize their infrastructure, and outlaw greenhouse gas producing fuels.

I think I know which side would shine over the coming 50- to 100-years but, who knows. The issue is that nothing...and I mean nothing, is going to get done under the current state of dis-union. Conservatives and liberals are, quite simply, “wired” differently. There is no chance of reconciliation here. This marriage is over, all but for the divorce.

Since the end of the Civil War the notion of breaking up the Union has been the ultimate sacrilege. But now, today, look around. Think carefully. If we can no longer function as a single family, why not mutually agreeable separation, with visitation rights?

Why not allow both the Right and the Left a chance to find out, once and for all, which has the best workable solutions to our modern-day challenges? Surely neither has all the answers. Each will have some successes and some failures. Scientists would call this a “controlled experiment,” which is, of course, the only kind of experiment that yield results which can be trusted.

Or we can just keep doing what we've been doing. Which means we will keep getting what we've got; a central government that does not function, that cannot come to grips with the serious, even life-on-earth threatening events, facing the nation. A central government that fiddles while Rome burns.

Paris, huh. What now?

By Stephen P. Pizzo 

Will this week’s Paris attacks become just the latest in pop-up terrorist attacks where we mourn the dead and move on, until the next one?

Likely.

But … and this is becoming a bigger and bigger “but” with each such event ... maybe not. Maybe this time someone will come up with an actual effective response.

After all, since these fundamentalist, nihilist groups thrive in their 10th-century throwback religious, cultural venues, they will not be going away. Instead they will continue their barbarian-like crusade(s) against those they decide are unworthy of liberty or life.

Sure developed societies have more economic vim and vigor, superior infrastructures and large modern military machines. These jihadists can pose no genuine strategic threat, right?

Actually, no. They can. And, in some ways they already have. And, if they continue pulling off stunts like 9/11, Madrid and London train/subway bombings, Mumbai attack, the downing of airliners and now Paris, they will succeed. They will not succeed in taking over developed nations, but rather ruining them, destroying everything that makes them worth fighting for: freedom of speech, freedom of travel, freedom of assembly and the machinery of “business-as-usual” that lubricates the very gears of of all that in free societies.

For example, if airliners keep falling out of the sky, filling TV screens at home with the latest horror, how many ordinary folk will still want to fly to Orlando for a week at Disney World? Will happy newlyweds eagerly climb aboard a plane in Newark to honeymoon in Hawaii? How many business travelers will put up with wasting hours of their valuable time standing in increasingly intrusive security checkpoints at every port or entry or exit?

Airlines, which almost always operate on the thinnest of margins, will not be able to raise fares to make up for the dramatic plunge in revenues. And once all checked in luggage will have to be searched, all ot it, not just the 5% that are searched now, you and your luggage may never meet again, at least not at your intended destination.

It would not be more than a decade of this and the only remaining airline would be nationalized just to enable developed nations could cling to an ever-shaky claim of normality, that “the terrorists aren't winning.”

Planes will not be the only form of public transport affected. Buses, trains, urban subway systems, each offer terrorists the most bountiful of killing grounds. Imagine a New York City where working folk are too terrified to go to work because, to get there, they have to literally risk their lives underground locked in a metal tube every day. How many will take that risk just for a paycheck?

And so-call public venues will become increasingly un-public venues as attacks on large crowds chill such gatherings. The “public square” Americans are so found of celebrating... well forget about that too after more public squares run red with public blood. Rock concerts, campaign gatherings, protest marches; each suddenly takes on the potential of becoming fatal, causing even the most hardened activist to rethink their activism; “Yeah, I know I have said I am willing to die for this cause, but I'm sure as hell not willing to die for that, whatever the hell 'that' is.” And so once vibrant democracies become less and less vibrant.

No business venture is more fraught with risk than the restaurant. Even in the best of cases, restaurants come and go like buses at a bus stop. Once terrorists shoot up or bomb enough restaurants, those who do dare dining will be seated at tables far from windows or doors, to make them less attractive targets. And al fresco dining? Forget about it. Who wants to eat an meal while feeling like a sitting duck in a carnival shooting booth? (“Please pre-pay for your meal in case you have to flee before finishing.”)

Little by little, unchecked, terrorist attacks on all things modern, Western, democratic and financial, will force one developed society after another to become less and less open, less and less efficient, less and less risk-oriented, less and less fearless, less and less free.

So, if what you ever wondered if terrorism could ever pose a genuine strategic threat to modern societies, there it is. It is not a process in which modern cultures reach down raise backward cultures out of darkness, but one in which backward cultures reach out and pull modern cultures , down into their familiar darkness, their sectarian and social dysfunction, down into their hell.

I began by asking if the latest Paris attacks would spark a fresh response, or just more of the same. Well, I don't know. I tend to doubt this particular attack will result in any spectacular changes. It may take more before every nation affected understands they are the fogs in a classic “boiling-a-frog” process, as I described above.

But when the change in tactics by those being attacked does come, what on earth could it be? After all, we've tried bombing the crap out of them already. We tried ground invasions and occupations. We tried lavishing billions in cash on terrorist breeding ground regions. We tried buying off their politicians and generals. Not only has none of that worked, but it's only made matters worse.

So what's left to try? It's good to remember that every time developed nations have tried to sort out secular issues and redrawn borders “for them,” it only made matters worse for the generations that followed. Short of killing every man, woman and child in the entire region, what can/should be done?

I don't know. After attacks like the most recent one in Paris, my Sicilian genes vote loudly for the killing the whole lot of them and being done with it. Of course, once I calm down, I understand that is not a choice on anyone's to-do list. (Okay, maybe Dick Cheney.)

I do think though that, if not a nailed down solution, we can at least come up with a list of things that need to happen, one way or another:

• Stop trying to accommodate the mass exodus flooding Europe with refugees from these troubled lands. Not because I think they pose a danger to Europe, but because letting them all leave Syria, Iraq, Afghanistan etc, is bleeding those nations, not of their terrorists, but of the very educated professional and small business classes they will need to rebuild. If allowed to continue the only people left in these countries will those who only know war, those filled with free-floating hatred of... whatever. So stop it. Yes, it will cruel to force these masses to continue living in those war zones. But they represent the future of those countries. Without them, there is no future. The other reason to make them stay is they may well prove a more effective counter-force to the ISIS types. Forced to stay they will also be forced to take stands, to fight, to organized, to resist, from within. It is, after all, their countries, their people, their wars.
• Most European countries now have large Muslim communities. These communities tend to be separate from their host countries. This is natural and expected. Immigrants like to hang with folks that speak their native tongue, have the same customs etc. And being a non-white immigrant in a predominantly white country brings with a long list of hurdles, some expected and many unjust. Nevertheless, these Muslim communities still share a responsibility to the country housing them. If they expect to stay and work and send their kinds of public schools in the hope they will have better lives they have had, then they need to start policing their own communities, They need to aggressively finger individuals or groups within their communities that not only threaten their host country's citizens, but threaten their own dreams for a better life. If they refuse to do so then they can't complain when rightwing politicians point them out as part of the problem, and start passing laws they won't like very much.
• France, England, Germany and Brussels all have long lists of their own Muslim citizens who have gone to the Middle East to join ISIS or al Qaeda, and worry about what will happen when they return home. Which begs the question; why do they have to be allowed to return home in the first place? If they have evidence that a citizen trying to return to Europe has been working at any level with terrorist groups, then refuse them reentry. Revoke their citizenship and let them figure out how best to get back into the good graces of the civilized world. Meanwhile them not returning home means the already overstretched security services will have one less suspect to keep an eye on. Finally, now stranded in the very “caliph” hell scape they left home to fight for, their online whining will serve a warning to anyone else thinking of taking a similar leap into that abyss.
• It's long past time to reel in our so-called “allies” the Saudis. Their insistence on continuing to fund its radical and violent Whabbai version of Islam has been, and continues to be, a part of the problem. Any any Saudi “prince” caught funding terrorist activities or groups, needs to be blacklisted from any and all travel or financial dealings with the rest of the world. Bang. Just like that. No more coddling that pack of spoiled wastrels.

That's a start, not a solution, but a start. We have to be ready to try different things, things that have, for diplomatic reasons and political correctness have been off the table. Because if we just decide the Paris attacks and others are just part of our “new normal,” we will not care much for the world it creates, and not in some distant dystopian future, but quickly, in our own lifetimes.

And, if it is allowed to get that bad, citizens in affected developed – devolving – societies, will get very angry. And that in turn will force politicians in those countries to an all-out military response, ala World War II. Millions will die, citizens in cities like Damascus will get a taste of what it was like to have lived in Dresden in 1945. And then what?

Well, once that dust settles we'd find ourselves back in 1918, when Britain, France and Germany decided to divide up the Middle East to suit themselves, drawing borders where they liked, ignoring tribal lands, sectarian divides or the needs or wants of the indigenous populations. And all they accomplished was to set the stage for today's chaos.

So, short of “killing every man, woman and child” in that region, we need to figure this out, and soon. More of the same just ain't gonna cut it.

News For Real: Why The One-Percenters Keep Winning

News For Real: Why The One-Percenters Keep Winning

Why The One-Percenters Keep Winning

By Stephen P. Pizzo,

 Raconteur-at-Large

Those of us who have been life-long liberal/progressives have long complained about the influence of money and vested interests in politics. It’s our meme, what the dogmas of “trickle-down economics” and tax cuts are to the conservative camp. (Never mind that decades of data show's neither actually works...)

But conservatives have something that does work, and its worked for centuries. It's what makes the Koch brothers and their ilk such successful bulwarks against much needed change. This tool, or weapon, if you will, is well described by Francis Fukuyama in his book, The Origins of Political Order.

“Any institution or system of institutions benefits certain groups in a society, often at the expense of others, even if on the whole the political system provides public goods like domestic peace and property rights. Those groups favoted by the state may feel more secure in their person and property, them may collect rents as result of their favored access to power, or them may receive recognition and social status. Those elite groups have a stake in existing institutional arrangements and will defend the status quo as long as they remain cohesive. Even when society as a whole would benefit from institutional change, such as raising taxes in order to pay for defense against an external threat, well-organized groups will be able to veto change because for them the net gain is negative.”

It is probably a good time now to point out that Fukuyama wrote these lines in the chapter of his book entitled “Political Decay.” He calls this stage of a political evolution, “stable dysfunctional equilibrium, since none of the players will individually gain from changing the underlying” status quo they have no intention of allowing change to happen, no matter how dysfunctional that renders governance:

“...the fact that societies are so enormously conservative with regard to (preserving existing) institutions means that when the original conditions leading to the creation or adoption of an institution change, the institution fails to adjust quickly to meet the new circumstances. The disjunction in rates of change between institution and the external environment then accounts for political decay...”

This, he writes, is a naturally occurring accretion of power into the hands of fewer and fewer within a state. And the more powerful the few become, the easier it is for them to defeat demands for change from the many below them:

“This kind of collective “action-failure" is well understood by economists....entrenched interest groups tend to accumulate in any society over time, which aggregate into rent-seeking coalitions in order to defend their narrow privileges. They are much better organized than the broad masses, whose interests often fail to be represented in the political system.”

The results of this disproportionate sway over the political apparatus can be seen today in the dysfunction in Washington. Though “dysfunction” is actually a misnomer. It would be better called “mandated dysfunction.” What we are seeing is not a failure to act, but a mandate not to act. That mandate being enforced by the handful at the very top of the domestic fiscal mountain. They have no need for change, since everything is working just fine for them. In fact, the only thing that threatens “their thing,” as the Mafia called their rackets, is change. Change is enemy. So it is to be stopped dead in its tracks wherever it tries to emerge.

Besides the obvious and growing disparity in distribution of wealth, this condition risks more than human suffering. With climate change beginning to wreak havoc around the globe, the elite see any shift to alternative solutions as direct threats to their long-established and still profitable enterprises. So the very existence of our species may depend on figuring out ways to unsaddle these overlords of the status quo:

“The ability of societies to innovate institutionally thus depends on whether they can neutralized existing political stakeholders holding vetos over reform.

Opportunity does eventually emerge to do just that when this process of power-accretion moves from the “dysfunctional equilibrium,” to unstable dysfunctional equilibrium. But then the choices get a bit unsettling for most progressives.

“The stability of dysfunctional equilibria suggest why violence has played such an important role in institutional innovation and reform. Violence is classically seen as the problem that politics seeks to solve, but sometimes violence is the only way to displace entrenched stakeholders who are blocking change. The fear of violent death is a stronger emotion than the desire for material gain and is capable of motivating more far-reaching changes in behavior.”

And therein lays the rub. Liberals and Progressives tend to eschew violence as way to solve social problems. And we are proud of that, and rightfully so. Violence is one of those “shove all the chips on the table” moves. One can never be certain it will turn out to their advantage. It may go the other way, making the oligarchs even more powerful, more oppressive. So instead, we try reason. 

Which leaves us with a dilemma:

“It is not clear that democratic societies can always solve this type of problem peacefully...This means that the burden of institutional innovation and reform will fall on other, nonviolent mechanisms... or that those societies will continue to experience political decay.”

And that, my friends, is why the One-percent continue to win;-when push comes to shove, we don't shove back hard enough.  

Wall Street's Borg Collective

By Stephen Pizzo, News For Real

08/24/2015 -- The world’s stock markets are in a tailspin. Another tailspin. Market crashes, which used to be a once-every-generation affair, now seem to visit us about once every seven or eight years.

Why?

Are the world's workers becoming less and less productive? No, just the opposite, they're working harder, for longer and for less money every year.

Are companies less profitable? Nope. Just the opposite there too, for the most part.

So what's up doc?

Blame it on the very technology you're using to read this now. The Internet, and related networking technologies, have changed how money in these markets flow.

In the past investors were like herds of roaming bison, in search for the next green pasture. They were widely dispersed. Separate herds went off in their own directions, following their own instincts, in search for their next buffet. Some did better than others. And, by the time word got out that some other herd had found a bonanza, by the time the others got there the bounty had been pretty much consumed.

Which is why those herds of investors back in the day were considerably less reactionary and more stable than we see today.

Today what we have is a hyper-connected, worldwide investing “blob” that moves as a single herd, able to move en-mass, almost instantly, to exploit a new real, or imagined, opportunity. They are the investment world's version of Star Trek's “Borg Collective.”

So one quarter everyone wants to be in bonds, the next the herd gets a whiff of smoke (a Fed move up on rates,) and the entire herd stampedes, running mindlessly in all directions until it comes to a collective agreement on what they believe the next big opportunity might be. Then they all head to it.

In the short run such behavior creates it's own affirmation. After all, when everyone whats to buy the same thing, at the same time, the price of that thing shoots up. And so the herd is happy and, as long as it stays happy, the price keeps going up.

But, as they say on Wall Street, “trees don't grow to the sky,” so, sooner or later the greater-fool theory breaks down as fewer and fewer buyers are willing to buy at increasingly ridiculous valuations. And then it crashes.

In the past crash in one market segment, while unpleasant, was rarely catastrophic to overall market as there were “other herds” grazing happily there. But no more. Now all the money heads where the Borg Collective has decided to in its collective “wisdom.” And why not? Even those who know what's likely to eventually happen, they also know that, when this mega-herd moves, prices move up. So why not pocket some sure money while it lasts?

Of course that's the trick in this new markets normal; how long to stay with the herd. When to hold-em, and when to fold-em. In the end way too few fold-em while there's still money to made. So most of the collective herd panic all at once when the obvious becomes, well, obvious.

That's it. That's why the market dove a thousand points at its opening this morning. Of course it will go back up again. The collective herd, while in panic mode now, is already on a search for the next market(s) they can pump for all they're worth.

And remember; resistance is futile. Those markets will be assimilated, exploited, gutted.