July 29, 2010

How A “Great Recession” Is Lied to an End (Zandi and Blinder)


Yesterday saw the release of a report, “the first of [its] kind”, purporting to gauge the “comprehensive…effects of the financial-market policies”, i.e. the Bailout including the Obama corporate stimulus, on the economy.
It’s really just a propaganda broadside, written by two hacks, the appropriately named Alan Blinder, and Moody’s own Mark Zandi. It goes without saying that we regard Moody’s with all the respect it deserves, and especially its much-vaunted (by Zandi in this paper) “Analytics Model”, which they used for the report, is supposed to inspire not laughter but awe. (It’s also encouraging to learn that their methodology is similar to that used by the administration and the CBO, and that the results obtained were similar. Now that’s good company.)
I won’t bother parsing their phony baloney numbers, since I’m instead going to focus on the ideology of the piece. But their basic claim is that without the government’s actions, “GDP in 2010 would be about 11.5% lower, employment would be less by some 8.5 million jobs, and the nation would now be experiencing deflation.” They believe most of this effect is from the Bailout proper, with some added effect from the stimulus.
This tabloid sure has a flashy title: “How the Great Recession Was Brought to an End”. So evidently “great recession” is their term for the GDP hiccup as the Bailout took over from the “normal”, “Great Moderation” version of neoliberal kleptocracy; kleptocracy 1.0. So at least when it comes from Obama hacks we can range that term alongside “jobless recovery”, since that’s the “recovery” being hailed in this piece, the alleged “end” of this “Great Recession.” The recovery is jobless, all right; everything the administration says and does is intended to normalize permanent unemployment at >9% (the bogus U3), closer to c. 20 % (U6). This report says (p.19) that while the NAIRU is currently decreed to be 5.5%, the real goal is to normalize at 9%. Thus this paper can cheerfully feature >9% unemployment through at least 2012 as part of the End of the Great Recession. Let the good times roll. (Meanwhile, if the Great Recession has really Ended, why is Obama leading this drumbeat for “austerity”? That sounds like a contradiction. Nowhere do Zandi and Blinder say anything like, “all this is predicated on gutting Social Security, the way “the markets” are allegedly demanding. But then, they omit a lot of things, as I’ll get to shortly.)
What are the basic premises of this tract? What reality does it deny?
Most of all, it denies the astronomical bloat of housing prices and all the toxic assets derived from these prices. Without the Bailout “the nation would now be experiencing deflation”? (p.1) The nation has to experience deflation. That’s a law of reality where your prices were blown up to become an $8 trillion bubble. But ZB (ZandiBlinder) says insolvent assets should be propped up. “The volume of transactions was small, but the TALF appears to have improved the pricing of these assets, thus reducing pressure on the system as a whole.” (p.11) (Until the next crash.)
Deflation must be the result as reality finally takes a hand. Exponential growth is unsustainable. So by ZB’s own contention the Bailout did nothing but temporarily stave off the inevitable, guaranteeing far worse destruction in the end, and having allowed untold trillions more in social wealth to have been destroyed by the banksters, and all for no purpose at all but to enable these criminals to continue looting. This is the Mission Accomplished ZB celebrates. Their basic method in deriving all these conclusions is founded in (and founders upon) a metric of the exponential debt machine.

Our basic approach was to treat the financial policies as ways to reduce credit spreads, particularly the three credit spreads that play key roles in the Moody’s Analytics model: The so-called TED spread between three-month Libor and three-month Treasury bills; the spread between fixed mortgage
rates and 10-year Treasury bonds; and the “junk bond” (below investment grade) spread over Treasury bonds. All three of these spreads rose alarmingly during the crisis, but came tumbling down once the financial medicine was applied. The key question for us was how much of the decline in credit spreads to attribute to the policies, and here we tried several different assumptions. All of this is discussed in Appendix B.

Throughout the piece they propagate the fraudulent theme and term “recovery”, resorting constantly to class war obfuscations like “the U.S. economy”. Whose “economy”? Of course, measures like “GDP” in themselves, aside from all their other problems, fraudulently aggregate the positions of diametrically opposed interests locked in a zero sum struggle. Look again to the term “jobless recovery”, really think about it, really draw in a breath to sense how redolent of crime this all is.
What did this study project as the cost of the next crash? The next, far worse crash which has been rendered inevitable by the Bailout, but could have been averted by letting the permanently insolvent system crash once and for all then rather than later? Well, the “study” left that out. Obviously this study has zero validity unless it projects this cost and factors it in.
How did they estimate the Bailout’s ongoing cost? Scores of millions more daily? Even if one believed their numbers for the TARP, the facilities, and so on, what about those toxic MBS stinking up the balance sheets of the Fed and the GSEs, both officially authorized to embezzle taxpayer money unto infinity in order to keep this toxic crap propped up for the sake of the banksters’ balance sheets, to accommodate their control fraud and personal “bonus” looting? Is any of that in there? It is not.
How did they calculate the fiscal reverberations of the even more intensified anti-democratic stranglehold of the banks and even more obscene wealth inequality, both of these direct (and intended) effects of the Bailout? There are no class war costs factored in at all. It’s just like the idiots who parsed the health racket bailout with an electron microscope trying to find the alleged way it was marginally better than the status quo. I didn’t see any of them factoring in the monstrous costs of further entrenching the insurance and drug rackets, or the costs of forcing the people to buy worthless protection at extortionate prices, the same way any Mafia gang would enforce.
With those preceding questions I was still talking about quantifiable money costs. I suppose it could go without saying that the whole thing is a repulsive exercise in sociopathic wonkery and technocracy. Not a word about morality, justice, freedom. Not a word about how the worst robbers in history are getting off scot free (so far), get to keep the trillions they stole, and are being allowed to continue committing the same crimes which already destroyed the economy, stealing billions more in the exact same way. Justice has been spit upon. Morality has been raped. By their own testimony here Zandi and Blinder are committed to our permanent enslavement under the tyranny of these finance terrorists. As if, even if any of the numbers in here were true, that could be meaningful compared to the cost of our servitude in perpetuity.
Here’s just a few quotes on the theme, and I’ll have some more going forward:
“Without capital injections from the federal government, the financial system might very well have collapsed.” (p.12)
“The financial system is still not functioning properly…but it is stable. Evidence of normalization in the financial system is evident in the sharp narrowing of credit spreads.” (p.12)
So our jobless recovery takes place under the auspices of a system which “isn’t functioning properly”, but which at least is “stable” from the point of view of the criminals. Which is of course all that matters. That’s what is to be “normalized”. (I came into this piece intending to refer to how Obama was seeking to “normalize” permanent unemployment above 9%. I wasn’t surprised to see ZB using that word as well.)
“TARP has also been useful in mitigating systemic risks posed by the mountain of toxic assets owned by financial institutions. Because institutions are uncertain of these assets’ value and thus of their own capital adequacy, they have been less willing and able to provide credit.” (p.12)
“Institutions are uncertain of these assets’ value” means they’ve been uncertain how far the government will go to prop up worthless paper at exorbinant prices.

While the effectiveness of any individual element certainly can be debated, there is little doubt that in total, the policy response was highly effective. If policymakers had not reacted as aggressively or as quickly as they did, the financial system might still be unsettled, the economy might still be shrinking, and the costs to U.S. taxpayers would have been vastly greater.

Why? What would it have cost to achieve our liberation from financialization? ZB don’t say, but they do lay out their four allowable scenarios (and therefore the four they supposedly tested).

To quantify the economic impacts of the fiscal stimulus and the financial-market policies such as the TARP and the Fed’s quantitative
easing, we simulated the Moody’s Analytics’ model of the U.S. economy under four scenarios:

1. a baseline that includes all the policies actually pursued

2. a counterfactual scenario with the fiscal stimulus but without the financial policies

3. a counterfactual with the financial policies but without fiscal stimulus

4. a scenario that excludes all the policy responses.

The differences between Scenario 1 and Scenario 4 provide the answers we seek about the impacts of the panoply of anti-recession policies. Scenarios 2 and 3 enable us to decompose the overall impact into the components stemming from the fiscal stimulus and financial initiatives. All simulations begin in the first quarter of 2008 with the start of the Great Recession, and end in the fourth quarter of 2012. (p.4)

So it’s three corporatist policy responses plus doing nothing. Not modeled: Letting Wall Street perish while the government mustered its resources for a Main Street triage. Or they could have tried a truly Keynesian/New Deal, a direct stimulus and job creation program with no Bailout or corporatist stimulus. Those are just two examples of alternatives which ZB declare in principle to be unpolicies. That’s because they’re corporatist ideologues.

While all of these questions deserve careful consideration, it is clear that laissez faire was not an option; policymakers had to act. Not responding would have left both the economy and the government’s fiscal situation in far graver condition. We conclude that Ben Bernanke was probably right when he said that “We came very close in October [2008] to Depression 2.0.”

While the TARP has not been a universal success, it has been instrumental in stabilizing the financial system and ending the recession. The Capital Purchase Program gave many financial institutions a lifeline when there was no other. Without the CPP’s equity infusions, the entire system might have come to a grinding halt. TARP also helped shore up asset prices, and protected the system by backstopping Fed and Treasury efforts to keep large financial institutions functioning.(p.7)

It’s also fitting that they began their simulations in Q1 2008, since the ideology of the piece is that we can and should return to the status quo ante, say 2005.
“Broadly speaking, the government set out to accomplish two goals: to stabilize the sickly financial system and to mitigate the burgeoning recession, ultimately restarting economic growth.” (p.2)
Actually that’s three goals. ZB regards restarting growth as more of a magical process than a goal, no doubt. That’s the way it is with believing in something according to fundamentalist faith. But exponential growth cannot be sustained, and in fact the real economy hasn’t grown in over a decade. All so-called growth has been just the same old financial tricks. As for the two proclaimed goals, mitigating the recession is meaningless in itself, if there’s no plan for a better world to be the result; and “stabilizing” (there’s that Orwellian word again) the rackets is a positive evil.
ZB rewrites TARP history:

The Troubled Asset Relief Program (TARP) was established on October 3, 2008 in response
to the mounting financial panic. As originally conceived, the $700 billion fund was to buy “troubled assets” from struggling financial institutions in order to re-establish their financial viability. But because of the rapid unraveling of the financial system, the funds were used for direct equity infusions into these institutions instead and ultimately for a variety of other purposes.

As I recall, it wouldn’t have been sufficient to buy the toxic crap at the prices the banksters were demanding, so Plan B was accounting “forbearance” (i.e. abetting fraud) while “injecting capital”, i.e. shoveling loot.

But with the banks deteriorating rapidly and asset purchases extremely complex [I like that euphemism for bankster intransigence], the TARP was quickly shifted to injecting capital directly into major financial institutions. Initially, this meant buying senior preferred stock and warrants in the nine largest American banks, a tactic subsequently extended to other banks…..

The largest use of the TARP funds has been to recapitalize the banking system via the Capital Purchase Program. At its conception, the CPP was expected to amount to $250 billion. Instead, its peak in early 2009 was actually about $205 billion, and as financial conditions have improved, many of the nation’s largest banks have repaid the funds. There is only $67 billion outstanding in the CPP. Banks also paid an appropriately high price for their TARP funds in the forms of restrictions on dividends and executive compensation, and additional regulatory oversight. These costs made banks want to repay TARP as quickly as possible. Since nearly all CPP funds are expected to be repaid eventually with interest, with additional
proceeds from warrant sales, the CPP almost certainly will earn a meaningful profit for taxpayers.

I like the touch about the “appropriately high price.” But this can’t hide how grotesqueries like BofA and Citi were allowed to pay back the TARP in order to resume bonus looting, all of it enabled by government-sanctioned accounting fraud. It’s all a propaganda exercise, just like the bogus stress tests.
ZB joins in, proclaiming the stress tests valid:

The Treasury and Federal Reserve ordered the 19 largest bank holding companies to conduct comprehensive stress tests in the spring of 2009, to determine if they had sufficient capital to withstand further adverse circumstances—and to raise more capital if necessary. Once the results were made public, the stress tests and subsequent capital raising restored confidence in the banking system.

They move on to flat out lies about the TARP and the housing market.

The housing bubble and bust were the proximate causes of the financial crisis, setting off a vicious
cycle of falling house prices and surging foreclosures. Policymakers appear to have broken this cycle with an array of efforts, including the Fed’s actions to bring down mortgage rates, an increase in conforming loan limits, a dramatic expansion of FHA lending, a series of tax credits for homebuyers, and the use of TARP funds to mitigate foreclosures. While the housing market remains troubled, its steepest declines are in the past…..

In fact, TARP has been a substantial success, helping to restore stability to the financial system and to end the freefall in housing and auto markets. Its ultimate cost to taxpayers will be a small fraction of the headline
$700 billion figure: A number below $100 billion seems more likely to us, with the bank bailout component probably turning a profit.(p.2)

Even if that turned out to be technically true, we of course can’t legitimately separate the TARP from the Bailout in general. (Or say TARP = Bailout.) But we’re very familiar with the Big Lie of doing so.
As for the bubble-headed dogma about permanently reflating the bubble (“This time housing prices will go up forever!”, ZB are evidently screaming), I think we know how ridiculous that is. But they’re sure trying hard. Indeed, they even bring in Phil Gramm for a cameo:

Three rounds of tax credits for home purchasers were also instrumental in stemming the housing crash. The credit that expired in November was particularly helpful in breaking the deflationary psychology that was gripping the market. (p.16)

So they ape Gramm’s “nation of whiners” having a “mental recession”.
Finally, to reiterate that unemployment normalization figure: “Unemployment is still close to 10% at the end of 2010, but closer to 9% by the end of 2011.” (p.4)
This will have been two years since the official End of the “great recession”. Zandi and Blinder don’t venture further, but we’ve heard plenty from the administration to the effect that Obama considers this figure permanent. That’s what they’re willing to say politically. We can only imagine what the real desired number is, as the destruction of what few real jobs remain in Bailout America continues at full fury.
Meanwhile the hacks will do what they can to make it all look normal, and like a “recovery”. All we the peasants have to do as we free fall into impoverishment and indenture is retain faith in magic words like “recovery” and “growth”.
This “study” by Zandi and Blinder will try to do its part whitewashing the Bailout’s infinite crimes. And as they say, “we welcome other efforts to estimate these effects.” No doubt there will be such efforts.
If only an effort like the one I wrote today could get the same dissemination.

July 28, 2010

Madison’s Federalist #51: Corporate Power vs. the Naked Citizen


In his Federalist #51 James Madison writes of how the government of the temporally strong is merely a form of chaos.

Justice is the end of government. It is the end of civil society. It ever has been and ever will be pursued until it be obtained, or until liberty be lost in the pursuit. In a society under the forms of which the stronger faction can readily unite and oppress the weaker, anarchy may as truly be said to reign as in a state of nature, where the weaker individual is not secured against the violence of the stronger.

This is true, as we know from the corporate statist chaos (where all state action only disintegrates and assaults according to the dictates of corporate power) we now endure as the great terminal scourge of the previous stage of American history. As we’re now undergoing the transition to the next stage of history, a transition being forced by Peak Oil, by the terminal collapse of the exponential debt economy, and by the vicious forces of neoliberalism itself, we must make the most pivotal choice we’ve had to make since the 18th century.
If Madison’s proclaimed desire,

[I]n the latter state, even the stronger individuals are prompted, by the uncertainty of their condition, to submit to a government which may protect the weak as well as themselves; so, in the former state, will the more powerful factions or parties be gradually induced, by a like motive, to wish for a government which will protect all parties…

was ever honored in practice, has long since been overthrown. I suppose the kind of cretin who sincerely worships “the strong” as defined by the souldead corporate system, which exalts only the lowest kind of thugs – belligerent, grasping, obnoxious, free-loading, unproductive, lazy about everything except stealing, anti-intellectual, anti-cultural, ugly, loutish, basically stupid except for some level of animal cunning – I suppose the type (like Bush or Obama) who worships this subhuman cohort can be content with this state of affairs.
But freedom-loving human beings must deplore and revile it from the core of our souls.
So we must seek to reconstitute a “government”, by which I mean human communities, which will in fact as well as in words nurture and protect all productive, freedom-loving parties, while smashing all criminals.
From that point of view, we have to look back at #51 with great suspicion. Whatever Madison’s intent for it, today it presents sinister aspects.
The subject matter is federalism, how to achieve the necessary checks and balances to both augment government power but also keep it in harness, and maintain the reins in the right relation to one another. Along with #10, #51 is viewed as Madison’s great epitome of this federal ideal which both increases and harmonizes power.
His two main points are:
1. The United States will have a double federalism, that of the federal government vis the states, and that of the divisions into branches within the governments at both levels.
2. The question of how to prevent predatory factions from overtaking the government. That’s our main concern today.
Here Madison offers two ways of constraining faction.

It is of great importance in a republic not only to guard the society against the oppression of its rulers, but to guard one part of the society against the injustice of the other part. Different interests necessarily exist in different classes of citizens. If a majority be united by a common interest, the rights of the minority will be insecure. There are but two methods of providing against this evil: the one by creating a will in the community independent of the majority — that is, of the society itself; the other, by comprehending in the society so many separate descriptions of citizens as will render an unjust combination of a majority of the whole very improbable, if not impracticable.

So we can have either an asocial power center like an hereditary aristocracy which stands outside politics itself, or politics can be somehow forcibly fragmented and splintered. Society must be divided into so many fragments and possible combinations that no tyrannical faction is likely to arise. Madison is cryptic about how this splintering is supposed to occur.
Indeed, this and subsequent passages, when we compare them to the history which has ensued, cry out to be read in a Machiavellian way. Madison broaches the possibility of an “independent will” among yet outside the community? In his telling this will would be majestically asocial yet somehow would operate for the community’s benefit. Since Madison immediately disposes of the idea, one could try to argue it’s unfair to him to subject it to close scrutiny.
But this would be wrong, because what has US history since produced, as by now its overwhelming feature? Precisely this independent will: But in the form of corporations, this will is not at all impartially “next to” yet outside the community. It’s not asocial, but aggressively anti-social. It’s not impartial and apolitical, but radically destructive of all politics.
And needless to say, it has not operated to the community’s benefit, but to our harrowing detriment as the corporate assault has ravaged our communities, our economy, our social stability, our happiness and peace of mind, our freedom and humanity. These are all the charred corpses strewn about on the scorched earth of corporatism. That’s where the real manifestation of what Madison called the “will independent…of society itself” has gotten us.
And what about this community fragmentation, which Madison himself calls his desired policy? Why would atomizing the citizenry be so important if the people truly agreed on social and economic basics? Because in everything he and Hamilton and the other federalists write, they’re anxious to obfuscate the facts of class war and set up a system where the rich can dominate.

….creating a will in the community independent of the majority — that is, of the society itself.

This is a recipe for disaster, as they should’ve known even in 1787-8. A clue to the federalist pathology is how they’re constantly saying it’s the peasant majority who threatens the minority of their economic and alleged social betters; how the real threat of tyranny is from the bottom up. But even then it was the fact that throughout history tyranny had almost always come from the top down, the power elites oppressing the majority.
And so it has been though American history. Whatever Madison’s intent, we can read this only one way today. Since at least the latter 19th century, the whole trend of US history, radically accelerating over the last 40 years, has been a double assault according to Madison’s prescription in #51, but inverting his proclaimed intent.
1. The elites have constructed the corporate will outside society, as a predator against it, as the vehicle of class war upon it.
2. At the same time they’ve sought to atomize the people, to dissolve all social, economic, and political bonds so that each individual stands naked, confused, demoralized, and alone before the awesome corporate power.
This puts the “anarchy” passage in perspective. Here Madison drops the misdirection of playing off the terms “majority” and “minority” against one another and substitutes the more ecumenical “stronger” vs. “weaker”. Now when we read this it becomes clear that the predator minority is “the strong”, while the vast majority of the people are expected to be the weak.
Toward the end Madison reintroduces the concept of the “independent will”, this time with an unmistakable tone of menace:

…whilst there being thus less danger to a minor from the will of a major party, there must be less pretext, also, to provide for the security of the former, by introducing into the government a will not dependent on the latter, or, in other words, a will independent of the society itself.

Today I can’t help reading that as written in totalitarian code: Since the numerical majority is likely to resist the tyranny of the elite minority, the minority will have to construct an aggressive shock force outside society and politics to assault both society and politics. This shock force will be the corporation

July 26, 2010

Afghan Sunshine (Wikileaks and Transparency vs. Corporate Tyranny)


Today Wikileaks, in collaboration with the NYT, the Guardian, and Der Spiegel, released 92,000 pages of documents on the Afghan war. So far it looks like strong reinforcement of everything we already knew.
From The Guardian:

The war logs also detail:

• How a secret “black” unit of special forces hunts down Taliban leaders for “kill or capture” without trial.

• How the US covered up evidence that the Taliban have acquired deadly surface-to-air missiles.

• How the coalition is increasingly using deadly Reaper drones to hunt and kill Taliban targets by remote control from a base in Nevada.

• How the Taliban have caused growing carnage with a massive escalation of their roadside bombing campaign, which has killed more than 2,000 civilians to date.

And the NYT:

The documents — some 92,000 reports spanning parts of two administrations from January 2004 through December 2009 — illustrate in mosaic detail why, after the United States has spent almost $300 billion on the war in Afghanistan, the Taliban are stronger than at any time since 2001……

The archive is a vivid reminder that the Afghan conflict until recently was a second-class war, with money, troops and attention lavished on Iraq while soldiers and Marines lamented that the Afghans they were training were not being paid.

The reports — usually spare summaries but sometimes detailed narratives — shed light on some elements of the war that have been largely hidden from the public eye:

• The Taliban have used portable heat-seeking missiles against allied aircraft, a fact that has not been publicly disclosed by the military. This type of weapon helped the Afghan mujahedeen defeat the Soviet occupation in the 1980s.

• Secret commando units like Task Force 373 — a classified group of Army and Navy special operatives — work from a “capture/kill list” of about 70 top insurgent commanders. These missions, which have been stepped up under the Obama administration, claim notable successes, but have sometimes gone wrong, killing civilians and stoking Afghan resentment.

• The military employs more and more drone aircraft to survey the battlefield and strike targets in Afghanistan, although their performance is less impressive than officially portrayed. Some crash or collide, forcing American troops to undertake risky retrieval missions before the Taliban can claim the drone’s weaponry.

• The Central Intelligence Agency has expanded paramilitary operations inside Afghanistan. The units launch ambushes, order airstrikes and conduct night raids. From 2001 to 2008, the C.I.A. paid the budget of Afghanistan’s spy agency and ran it as a virtual subsidiary.

This enhances the clarity of the general picture: administrative and strategic incompetence, corruption, an attitude of utter callousness toward civilian life, the increasing effectiveness of the Taliban’s defensive measures, above all how this is a corporate war being waged with hijacked public resources for criminal ends.
We in the blogosphere knew all this, but will Assange’s turning the jingo NYT into a journalistic accomplice help get the message out to a broader audience? 
By making the release of the documents a collaborative effort with major MSM outlets, Wikileaks founder and impresario Julian Assange seems to have made a smart tactical move. This co-opts the generally hostile MSM and tries to force focus on the story itself rather than the fraudulent meta-story of whether or not this information should have been released in the first place. (Though we’ll no doubt see plenty of that as well.)
[We should be on the lookout for another bogus media provocation. Who knows whether or not it was an accident that right-wing and liberal corporatists came together last week for a splendid little race flap just when the Washington Post’s extraordinary series on the Pentagon corporate welfare state should have been the dominant story.]
Assange won’t reveal his sources, so we don’t know if this was another example of Bradley Manning’s heroism. He hasn’t been charged in relation to any of these leaks. But regardless we should compare Manning’s position, that of someone who actually tried to do his duty as a soldier and a citizen and looks to be severely abused for it, to that of the great capital criminals of our own or any other time, the likes of Blankfein, Dimon, Hayward, the weapons purveyors, Obama and Bush, and all the corporate and government gangsters, how they have only prospered and seem to go from strength to strength as they destroy America for no ideal higher than their verminous greed.
(Obama’s reaction to the release is typical. He blames everything on Bush while condemning the exercise in transparency itself. It’s exactly the same combination of unaccountability, remorselessness, and hatred for democracy you’d expect. Have you ever seen cockroaches scatter when a light is turned on? A commitment to transparency, of course, was one of Obama’s key campaign promises. But from day one in power he has reviled any light shone upon him and his fellow criminals.)
The almost complete destruction of democracy is just one of their ultimate crimes. (They’re not completely there yet; while Citizens United was more the formal consummation of a crime than a significant change, the defeat of net neutrality and public broadband access would signal the eradication of Internet democracy itself, the last real democratic space available to those who can access it.)
This is why transparency is such a critical issue. It’s not just a point of process, the way a liberal would typically say; by now we must exalt and demand it as a sacred ideal in itself.
As I wrote before, the “secrets” of a country which faces no existential threat have no practical reason to exist. And in a country whose economy has matured and then become decrepit to the point of rentier oligopoly, there are similarly no valid economic secrets. By now all the produce of the mature sectors is simply the work of the society itself, and therefore all the information which exists is similarly the public’s property. Not the corporations’, and not the government’s.
So there are no practical or moral reasons for elite secrets to exist. Given what we know of how malevolent a role secrecy has almost always played throughout history, how no matter what its pretext it usually also was enlisted to serve the criminal ends of power elites, it follows that if elite secrecy has no practical or moral standing, then it becomes ipso facto impractical and immoral. It’s a moral affront to the rights of the people, and a clear and present danger to the health of our democracy. By now it’s a core duty of citizenship to demand total sunshine for all elite information. Or, to put it a different way, “elite” information has no right to exist. Just like every other elite monopoly, this one must be broken up and restituted to the people.
(As I said in that previous post, this doesn’t apply to our individual, personal, bottom-up information. That truly is our individual property. Of course there too the elites, whether it be Facebook or the government, try to steal what’s ours and use it for their own power and profit goals. So a corollary is that the elites have zero right to our informational property, since all their purposes are, as I described, illegitimate. By definition elite activities have no practical or moral standing.)
So we must hail the all-too-rare true journalism of transparency as exemplified by Julian Assange and Wikileaks. They’re doing great work. As for the incipient martyrdom of Bradley Manning, I don’t know what can be done there. Bloggers like Greenwald try to interest the populace in the plight of our heroic citizen whistleblowers who are under such assault by the same administration which refuses to “look backward” to the Bush administration’s veritably Nazi crimes because Obama’s committing all the same crimes himself. But so far the people don’t seem all that interested. Nor do they seem all that concerned about the crimes themselves.
Things look grim. But one thing which can only help is sunshine. The more the better. We the people should have zero tolerance for pretensions to secrecy on the part of any elite, and regard any such claim as if the elitist had uttered the worst racial slur. That’s how unacceptable elite claims of secrecy should be among civilized people.
So that just brings us back full circle to what’s always our starting question: Can we save civilization itself? Is there even anything left to save?

July 23, 2010

Federal, that is Corporate, Usurpation (Hamilton’s Federalist #17)


We continue our critique of The Federalist with Hamilton’s #17.
He starts by claiming the federal government would never want to usurp what are properly State powers. However, his depiction already sounds dubious even given when he wrote it.

Allowing the utmost latitude to the love of power which any reasonable man can require, I confess I am at a loss to discover what temptation the persons intrusted with the administration of the general government could ever feel to divest the States of the authorities of that description. The regulation of the mere domestic police of a State appears to me to hold out slender allurements to ambition. Commerce, finance, negotiation, and war seem to comprehend all the objects which have charms for minds governed by that passion; and all the powers necessary to those objects ought, in the first instance, to be lodged in the national depository.

“Commerce, finance, negotiation, and war”. Oh, that’s all. (He even concedes that this federal government is likely to be filled with those minds are “charmed” and “allured” and “governed” by the lust for power. He just blithely claims that these greedy officials will somehow restrain themselves from what he’d consider usurpation. So even with Hamilton we see the extreme naivete of the “reformer”, assuming he really believes what he writes.) In other words, why would a body which is already such a massive depository of power want to usurp what meager powers it leaves to the states?

The administration of private justice between the citizens of the same State, the supervision of agriculture and of other concerns of a similar nature, all those things, in short, which are proper to be provided for by local legislation, can never be desirable cares of a general jurisdiction. It is therefore improbable that there should exist a disposition in the federal councils to usurp the powers with which they are connected; because the attempt to exercise those powers would be as troublesome as it would be nugatory; and the possession of them, for that reason, would contribute nothing to the dignity, to the importance, or to the splendor of the national government.

Since when have such drawbacks ever stopped anyone? Even in the 18th century, let alone today, those seeking power tended to care little for dignity or splendor if those got in the way.
In any event, we know that this prognostication has been proven false. The basic reason is that the powers Hamilton says are proper for the central government, if they’re exercised in a tyrannical way, are more than sufficient to subsume the powers of the states. So why would they ever need to directly usurp these?
As we’ve seen, the BP administrative zone, surrendered and enforced by the federal government, also subsumes all state powers under the general tyranny, which I imagine would be defended under the Commerce clause if they had to constitutionally defend it. (I haven’t actually seen anyone trying to defend the constitutionality of it; then again who other than a few Internet radicals are even asking the question? Certainly not the corporate media. My Internet search for “BP constitutionality” turned up endless squawking about the constitutionality of the $20 billion escrow fund. But looking through the first several pages, and some others selected at random, I found not one entry about the constitutionality of the government’s abdication of sovereignty in the Gulf. That’s quite a piece of data on our state of corporate tyranny right there.)
It’s unfortunate for Hamilton’s thesis that he singles out agriculture among “other concerns” as something which is definitely within the states’ authority, since the agriculture is one of the sectors which has seen corporate tyranny advance the furthest.
How is it within the federal purview according to Hamilton that the federal government is raiding small food producers? The answer of course is that it’s not. But then, neither was the central government’s policy of massive subsidies for industrial agriculture. But the assault on small producers is implicit in the support for massive corporate producers. Federal agriculture policy makes no sense from the point of view of the public interest and none from the federalist point of view. Indeed, as we just saw the arch-federalist Hamilton expressly rejects it.
Yet it makes perfect sense if the federal government has actually become a corporatist tyranny.
The three basic elements of corporatism are:
1. The government, in the American case mostly the federal government, relinquishes authority and thereby abdicates sovereignty. It abrogates all responsibility to restrain corporate rackets from larcenous and destructive behavior. Criminal behavior is either legalized de jure through the rigging of the law, or de facto through regulators and police refusing to enforce the law and the corruption of the courts.
2. The government steals public property by privatizing it for pennies on the dollar (or even letting corporations destroy it and then forcing taxpayers to pay for cleaning up the mess) and conveying taxpayer money to the gangsters in the form of corporate welfare.
3. The federal government as goon assaults any lower level of government, and any other group or individual, who acts in any way contrary to corporate aggrandizement.
If you look at what the federal government has done, I doubt you’ll find any example in recent decades which doesn’t embody one or more of these. I couldn’t think of any.
On the other hand, the features which aren’t corporatized, like Social Security, are older and are precisely the targets of the “austerity” assault.
So there again we see the progress of corporate tyranny, as I laid out in my recent series (parts one, two, three, and four). The Bailout, for example, is a fully corporatist policy, representing the basic logic and an escalation along the lines of the logic. Meanwhile the system must also purge whatever’s left of pre-corporatist policy. That’s a main goal of “austerity”, besides just moving on to the next stage of robbery.
But no, Hamilton thinks the State governments can restrain this federal monster. Indeed, he continues with his conceit that the real danger is to the federal government from the states.

It will always be far more easy for the State governments to encroach upon the national authorities than for the national government to encroach upon the State authorities…..

The superiority of influence in favor of the particular governments would result partly from the diffusive construction of the national government, but chiefly from the nature of the objects to which the attention of the State administrations would be directed.

It is a known fact in human nature, that its affections are commonly weak in proportion to the distance or diffusiveness of the object. Upon the same principle that a man is more attached to his family than to his neighborhood, to his neighborhood than to the community at large, the people of each State would be apt to feel a stronger bias towards their local governments than towards the government of the Union; unless the force of that principle should be destroyed by a much better administration of the latter.

Or simply that the force of the latter destroys the power of the former.
(I should also mention how the states have become dependent upon federal largess. So the feds have not only bullied and usurped the state power but bought it as well. Hamilton doesn’t seem to anticipate this either.)
Although it’s secondary to the discussion at hand, within the course of claiming State power will be sufficient to restrain and even to overcome federal power, Hamilton gives another creepy paean to government power as such which I’d like to quote.

There is one transcendant advantage belonging to the province of the State governments, which alone suffices to place the matter in a clear and satisfactory light, — I mean the ordinary administration of criminal and civil justice. This, of all others, is the most powerful, most universal, and most attractive source of popular obedience and attachment. It is that which, being the immediate and visible guardian of life and property, having its benefits and its terrors in constant activity before the public eye, regulating all those personal interests and familiar concerns to which the sensibility of individuals is more immediately awake, contributes, more than any other circumstance, to impressing upon the minds of the people, affection, esteem, and reverence towards the government. This great cement of society, which will diffuse itself almost wholly through the channels of the particular governments, independent of all other causes of influence, would insure them so decided an empire over their respective citizens as to render them at all times a complete counterpoise, and, not unfrequently, dangerous rivals to the power of the Union.

Even aside from how we know that this proved to be false, which is the subject of our discussion, this provides an insight into the statist, imperial intent of Hamilton in everything he advocated. Democracy was repugnant to him not primarily because it allegedly couldn’t provide a stable, peaceful society, but because it couldn’t sustain and wouldn’t countenance his imperial lusts. To this day that remains the main reason for opposition to true, decentralized, positive, participatory democracy: Because it would reject empire and tyranny.

July 22, 2010

Hamilton’s Statism (Federalist #16)


The Federalist #16 reads like Alexander Hamilton’s statist manifesto. It contains dire speculations on what might happen under a loose confederacy.
After saluting the Lycian and Achaean Leagues as examples of loose confederacies which did work, Hamilton moves on to a lurid account of the death of confederacies. Having already discussed the vice of disobedience and lawlessness among the subordinate levels of a confederacy, but having left corporations out of account, he now moves to discuss the violent consequence of this disobedience.
It seems much of the violence is to come from the top down.

It remains to inquire how far so odious an engine of government, in its application to us, would even be capable of answering its end. If there should not be a large army constantly at the disposal of the national government it would either not be able to employ force at all, or, when this could be done, it would amount to a war between parts of the Confederacy concerning the infractions of a league, in which the strongest combination would be most likely to prevail, whether it consisted of those who supported or of those who resisted the general authority.

The powerful states would combine to defy the center and oppress the weaker. They’d engage in demagogy and rig elections. They’d bring in foreign powers to assist them against the center. The civil war would ensue. “The first war of this kind would probably terminate in a dissolution of the Union. This may be considered the violent death of the Confederacy.”
Hamilton considered more likely, because he considered it already at hand, the confederacy’s non-violent, “natural” death.

Its more natural death is what we now seem to be on the point of experiencing, if the federal system be not speedily renovated in a more substantial form. It is not probable, considering the genius of this country, that the complying States would often be inclined to support the authority of the Union by engaging in a war against the non-complying States. They would always be more ready to pursue the milder course of putting themselves upon an equal footing with the delinquent members by an imitation of their example. And the guilt of all would thus become the security of all. Our past experience has exhibited the operation of this spirit in its full light. There would, in fact, be an insuperable difficulty in ascertaining when force could with propriety be employed. In the article of pecuniary contribution, which would be the most usual source of delinquency, it would often be impossible to decide whether it had proceeded from disinclination or inability. The pretense of the latter would always be at hand. And the case must be very flagrant in which its fallacy could be detected with sufficient certainty to justify the harsh expedient of compulsion. It is easy to see that this problem alone, as often as it should occur, would open a wide field for the exercise of factious views, of partiality, and of oppression.

If we consider that a government’s purpose is to preserve and enhance the liberty and prosperity of the people in the face of all threats, including all forms of organized crime, then we can see how today’s government, having been hijacked by the corporations, now in most ways languishes in desuetude as Hamilton describes here, even as in other ways it menaces us with tyranny on behalf of those same criminals.
Hamilton contemplates how the central government in a loosely structured confederacy would need the dread standing army to enforce its policy upon the recalcitrant states.

It seems to require no pains to prove that the States ought not to prefer a national Constitution which could only be kept in motion by the instrumentality of a large army continually on foot to execute the ordinary requisitions or decrees of the government. And yet this is the plain alternative involved by those who wish to deny it the power of extending its operations to individuals. Such a scheme, if practicable at all, would instantly degenerate into a military despotism; but it will be found in every light impracticable. The resources of the Union would not be equal to the maintenance of an army considerable enough to confine the larger States within the limits of their duty; nor would the means ever be furnished of forming such an army in the first instance.

In American history the prospect of a standing army was rightly viewed as a stark milestone of tyranny. This healthy aversion retained some vigor well into the 20th century, and it’s a mark of abdication and enervation that in the latter half of that century America threw away this totem of freedom and embraced the militaristic taboo. Of course, at the moment Hamilton was writing the Constitution he exalted provided explicitly for a standing army, although no doubt neither he nor anyone else contemplated the monstrosity of the modern military-industrial complex, existential tyranny and corporate welfare bloat to a monumental extent. Few intuitions throughout history have been as well confirmed by bitter experience than the traditional revulsion at the very thought of a standing army. “We may indeed with propriety be said to have reached almost the last stage of national humiliation”, as Hamilton wrote in #15.
What Hamilton describes here is again what we have today. This army is implicitly oppressive. Recent years have seen the Constitution’s own posse comitatus protections under assault. And while Hamilton is correct that maintaining this military complex is impracticable physically and financially, nevertheless it is being propped up by the simple expedient of theft from the people.
(Then there’s the horror of the death and destruction these private wars wreak abroad, but I suppose the imperialist Hamilton wouldn’t care so much about that.)
So Hamilton tries to establish what a nightmare would ensue if the states continued as a loose confederacy, though as we know federalism did not spare us this same nightmare. Part of the reason why is found right in the midst of his paean to “the majesty of the national authority”.

The result of these observations to an intelligent mind must be clearly this, that if it be possible at any rate to construct a federal government capable of regulating the common concerns and preserving the general tranquillity, it must be founded, as to the objects committed to its care, upon the reverse of the principle contended for by the opponents of the proposed Constitution. It must carry its agency to the persons of the citizens. It must stand in need of no intermediate legislations; but must itself be empowered to employ the arm of the ordinary magistrate to execute its own resolutions. The majesty of the national authority must be manifested through the medium of the courts of justice. The government of the Union, like that of each State, must be able to address itself immediately to the hopes and fears of individuals; and to attract to its support those passions which have the strongest influence upon the human heart. It must, in short, possess all the means, and have aright to resort to all the methods, of executing the powers with which it is intrusted, that are possessed and exercised by the government of the particular States.

So the federal government must be empowered to directly “carry its agency to the persons of the citizens”, because in this way it can “address itself immediately to the hopes and fears or individuals”. All of this is predicated on the “common concerns” of the people. But all this rings false in the age of corporate kleptocracy because these common concerns, if they ever did exist, no longer do.
Today the federal government either itself blasts away all barriers between the naked individual citizen and the massed corporate power, as in refusing to enforce anti-monopoly policy or anti-pollution laws, or it removes any impediments to the corporations’ smashing these safeguards themselves, as in the way the activist “supreme” court has been removing impediments to the direct buying of elections by throwing out campaign finance laws. In many cases it acts as the violent thug arm, as a glorified goon, as it intends to do in the case of the health racket mandate. US history going back to the 19th century is replete with examples.
In this shooting gallery, what “common concern” could the government be said to uphold? On the contrary, the federal government is a completely corrupted agent of corporate anarchy. If Hamilton opposed all forms of “anarchy”, meaning chaos, then he’d have to lament the failure of his great project. At any rate his federalist argument is now obsolete.
But Hamilton keeps focusing on refractory state legislatures, even though he concedes these may be acting on behalf of the people. Look at this bizarre sentence:

If the people were not tainted with the spirit of their State representatives, they, as the natural guardians of the Constitution, would throw their weight into the national scale and give it a decided preponderancy in the contest.

Maybe I have an unusual view of these things, but I think if the state legislature and the people agree then it’s probably more likely it’s the legislature which is “tainted with the spirit” of the people, and not the other way around. Which may be what Hamilton really means.
He does make a concession:

Attempts of this kind would not often be made with levity or rashness, because they could seldom be made without danger to the authors, unless in cases of a tyrannical exercise of the federal authority.

So Hamilton does concede the possible tyranny of the federal government (in which case it would no longer possess authority) and the right of the people to make attempts to resist and overcome it, as indeed he must having been a revolutionary soldier himself.
So that’s what we the people must strive to do, in the form of political and economic relocalization, striving to recover economic resiliency and political self-respect, at the individual, family, group, community, movement levels. Hamilton wraps it up writing of what he once knew, when he too fought as a revolutionary against monstrous tyranny.

And as to those mortal feuds which, in certain conjunctures, spread a conflagration through a whole nation, or through a very large proportion of it, proceeding either from weighty causes of discontent given by the government or from the contagion of some violent popular paroxysm, they do not fall within any ordinary rules of calculation. When they happen, they commonly amount to revolutions and dismemberments of empire. No form of government can always either avoid or control them. It is in vain to hope to guard against events too mighty for human foresight or precaution, and it would be idle to object to a government because it could not perform impossibilities.

Revolution is a sort of political singularity where all the pre-existing “good government” arguments break down. That’s because such upheaval is forced into being by the extremes of tyranny and criminally imposed poverty. These nefarious forces corrupt and abuse every part of the life of the country, including its political forms and ideas. So the people must rise to the fray seeking their leading ideas and images elsewhere. They must look to the horizons of hopes for the future and cherished treasures of the past. At this singularity future and past no longer separate, but simply embody the ideal of the great change from the noxious present. That’s where we have to go searching with our tattered treasure maps.

July 21, 2010

Obama to Run as Republican in 2012

Filed under: Health Racket Bailout — Tags: — Russ @ 1:16 am


I’ve written many times about Obama’s predilection for, not just corporatist policy, but flat out Republican policy, for example here and here.
For a long time my assessment of this person was that he was a corporatist by ideology and, even more important, a status quo elitist by personality. He prefers neoliberal corporatism, worshipping the “savvy businessmen”, but he’d worship the elites and want to be part of the cool crowd no matter what kind of system he came up in – Nazi Germany (if he were white), Stalin’s USSR, even the Founders’ original republic, whatever.
I also regarded him as politically incompetent. I discussed Obama as exemplary of the Peter Principle, how his career up until 2009 was just one long swindle where he never had any responsibility or accountability and his way was smoothed by powerful helpers, but once he became president and had nowhere to hide, and actually had to produce in the eyes of billions who aren’t part of his cult, he was suddenly unmasked as incompetent and clueless. I’ve also noted his basically mediocre mind. He may have more raw intellectual power than Bush, but he’s just as narrow-minded, just as mentally inert, just as shallow and vapid.
My main piece of evidence for his political incompetence was the fact that he couldn’t even get the spoils system right. That the winning party doles out jobs to its supporters is such an institution that even the schools weren’t embarrassed to teach about it when I was growing up.
Yet Obama left many Bush cadres in place, as well as appointed new Republicans to vacant positions. Even if people wanted to believe Robert Gates already represented some “post-partisan” paradigm (which is a load of crap), OCC head John Dugan was a pure Bush political appointee. Obama left him in place. Is it possible that there was no hard-working Democratic operative who would’ve wanted the OCC job? I find that hard to believe. That’s just the most prominent example, but there are innumerable others.
Similarly, Obama named Republicans like Ray LaHood and Jon Huntsman respectively Transportation Secretary and ambassador to China. He also staffed many lower positions with corporate cadres who are Republican by affiliation.
I’ve also seen figures showing that most of the districts which received the greatest stimulus disbursements were Republican-held districts! Now, I know Obama’s shtick was how he was going to lead us all to the post-partisan Promised Land, but nobody took that seriously during the campaign. That’s standard boilerplate, the kind of lie it’s OK to tell since nobody would ever believe it. So when starting with the stimulus “negotiation” (where he caved in before the fight even began) he really started acting not just in a non-partisan way but in a seemingly pro-Republican way, I chalked that up to a snivelling little kumbaya appeasement mentality. And when he persisted in this behavior I said “he’s an idiot.”
So for awhile I had the picture of a corporate ideologue who was also incompetent and wimpy. But sometimes, when I looked at examples of Democrats who are alleged to be Republicans at heart (e.g. the banksters’ favorite lackey in the House, Melissa Bean), I wondered if Obama might not also consciously consider himself a Republican. He’s certainly cynical enough and enough of a sociopath that he could have calculated how “In a perfect world I’d be a Republican, but in this world my best bet is to pose as a Democrat, since all the stupid liberals will swoon over my race and my bullshit pseudo-progressive rhetoric.”
So I was entertaining that idea, when I read this NYT magazine piece, which convinced me. If this piece is accurate, then Obama loathes the Democratic party. Not just the “progressive” wing, but the establishment, the fund-raising machine, the Congressional delegation, the whole works.
The piece tells us how Obama keeps attacking Congress as such while refusing the pleas of Pelosi and other to attack just the Republicans. How he wants to privatize Social Security and Medicare and reinstate the Bush tax cuts. How he attacked his own stimulus, his own policy, that’s how repulsive he found it to be associated with a Democratic piece of legislation. How much he hates fund-raising, and how proud his flunkies are of the fact that they flout Party requests on that score. (Also how he destroyed his own grassroots organization once he was elected and it was no longer convenient.)
Now, we who reject both kleptocratic parties don’t care about that, but isn’t a member of either party, let alone a party leader, supposed to be a partisan? But if anything, Obama’s an implicit Republican partisan. Not just on the policy, but even on the propaganda, everything he does is explicitly or implicitly not just pro-corporate but pro-Republican.
So all that’s why I’ve come to think he really is a closeted Republican. And given his real inclinations, and the possibility of a primary challenge in 2012 (for as moribund as the Dems are I have to think there will be some sort of revolt, however picayune), and how discombobulated the Republicans are likely to be (Romney? really? Petraeus?), I’m going to say that I think there’s a slight but non-zero chance that Obama will flip parties and run as a Republican. It wouldn’t be much crazier than lots of other scenarios I hear seriously discussed.
(Besides, that’s the kind of crazy prediction where there’s no penalty if you’re wrong, since wrong predictions are a dime a dozen, while if you’re right you may look like a genius. 🙂 )

July 19, 2010

Critique: Hamilton’s Federalist #15


H/T Barry Ritholz
Alexander Hamilton commences Federalist #15 with a contemplation of the intellectual path which is beset by “sophistry” but which also potentially encompasses the “spacious field” of creative political thought and action.

If the road over which you will still have to pass should in some places appear to you tedious or irksome, you will recollect that you are in quest of information on a subject the most momentous which can engage the attention of a free people, that the field through which you have to travel is in itself spacious, and that the difficulties of the journey have been unnecessarily increased by the mazes with which sophistry has beset the way. It will be my aim to remove the obstacles from your progress in as compendious a manner as it can be done, without sacrificing utility to despatch.

Of course the sophistry in question is that of the anti-federalists, those who deny “the insufficiency of the present Confederacy to the preservation of the Union.” For Hamilton, a word like “preservation” always refers to empire, and given that premise his argument is unassailable.

It may perhaps be asked what need there is of reasoning or proof to illustrate a position which is not either controverted or doubted, to which the understandings and feelings of all classes of men assent, and which in substance is admitted by the opponents as well as by the friends of the new Constitution.

And so we today, amid the desolation of this republic, ask the same question and make the same incontrovertible argument. We too must range over the spacious field while rejecting reactionary sophistry. We’re in Hamilton’s same position, we face the same imperative, we make the same argument, and he would have to assent.
He launches into a jeremiad which reads today like a bizarre inversion of our day, now that we live according to the full logic of his empire.

We may indeed with propriety be said to have reached almost the last stage of national humiliation. There is scarcely anything that can wound the pride or degrade the character of an independent nation which we do not experience. Are there engagements to the performance of which we are held by every tie respectable among men? These are the subjects of constant and unblushing violation.

I feel the need to update some of his questions, and modify some, though not all, of his answers.
Are we being reduced from citizens to debt slaves, and our government to an embezzling wastrel, and all to serve the extractions of gangsters?

These remain without any proper or satisfactory provision for their discharge.

Has this government hijacked our military and, in conjunction with corporate mercenaries, waged private wars in order to seize territory and wealth for the benefit of these gangsters?

These are still retained, to the prejudice of our interests, not less than of our rights.

Are we in a condition to resent or to repel the aggression? We have neither troops, nor treasury, nor government.

Are we even in a condition to remonstrate with dignity? The just imputations on our own faith, in respect to the same treaty, ought first to be removed.

“Are we entitled by nature and compact to a free participation in the navigation of the Mississippi [and the Gulf of Mexico]?”
BP “excludes us from it”, with Obama’s government as its hired goon.

Is public credit an indispensable resource in time of public danger?

It has been run up by government embezzlers in order to increase the danger.

Is commerce of importance to national wealth?

No, only to the rent-looting of corporate interests.

Is respectability in the eyes of foreign powers a safeguard against foreign encroachments?

Everywhere the worthless war increases hostility, creates enemies, while China, Russia, Iran, North Korea and others gather all the fruits.
“Is a violent and unnatural [increase] in the [price] of land a symptom of national distress”?

Is private credit the friend and patron of industry?

No answer needed.

To shorten an enumeration of particulars which can afford neither pleasure nor instruction, it may in general be demanded, what indication is there of national disorder, poverty, and insignificance that could befall a community so peculiarly blessed with natural advantages as we are, which does not form a part of the dark catalogue of our public misfortunes?

Yes, all that we read and write compiles and discusses this dark catalogue.

This is the melancholy situation to which we have been brought by those very maxims and councils which would now deter us from adopting the proposed Constitution; and which, not content with having conducted us to the brink of a precipice, seem resolved to plunge us into the abyss that awaits us below. Here, my countrymen, impelled by every motive that ought to influence an enlightened people, let us make a firm stand for our safety, our tranquillity, our dignity, our reputation. Let us at last break the fatal charm which has too long seduced us from the paths of felicity and prosperity.

Our situation is the same, except that we’ve not yet done the work of proposing the new Constitution.
I could continue to rewrite the next few sentences.

It is true, as has been before observed that facts, too stubborn to be resisted, have produced a species of general assent to the abstract proposition that there exist material defects in our national system; but the usefulness of the concession, on the part of the old adversaries of [democratic] measures, is destroyed by a strenuous opposition to a remedy, upon the only principles that can give it a chance of success. While they admit that the government of the United States is destitute of energy, they contend against conferring upon it those powers which are requisite to supply that energy. They seem still to aim at things repugnant and irreconcilable; at an augmentation [or diminution; either way, depending upon whether one’s a liberal or rightist blade of astroturf] of federal [power], without a diminution of [corporate power]; at [the abdication of] sovereignty in the Union, and complete independence [for the corporations]. They still, in fine, seem to cherish with blind devotion the political monster of an imperium in imperio. This renders a full display of the principal defects of the [kleptocratic federal system] necessary, in order to show that the evils we experience do not proceed from minute or partial imperfections, but from fundamental errors in the structure of the building, which cannot be amended otherwise than by an alteration in the first principles and main pillars of the fabric.

This is striking:

Except as to the rule of appointment, the United States has an indefinite discretion to make requisitions for men and money; but they have no authority to raise either, by regulations extending to the individual citizens of America.

Hamilton’s complaint is how under the Articles of Confederation, the federal government has no power to requisition men or taxes. But today, in what must strike Hamilton as a paradox, the federal government has largely renounced both, specifically for the purposes of enabling corporations to amass greater loot while both they and government shed all responsibility.
In his Ancien Regime and the French Revolution Tocqueville discusses how under the Ancien Regime all economic and political power was centralized while all elite responsibility was dissolved. This enraged the people, who remained subject to the obligations of the system while seeing every day how worthless and reckless the elites were; but it also concentrated enough workers in Paris, the manufacturing center, that once their discontent reached critical mass it was an almost effortless motion to topple the monarchy.
Today’s kleptocracy has followed but refined the model. Today’s elites are every bit as worthless and privileged and predatory; but even as economic power has been centralized, the infrastructure itself has been completely disintegrated. Where are “the workers”? Overseas, mostly. What’s still here is mostly a castrated “service” class of flunkeys which is physically dispersed anyway. What’s more important, government has released the “citizen” from all the old obligations. Ending the draft, replacing the citizen army with a professional volunteer force, and rolling back most taxes, replacing them with the more insidious indirect tax of borrow-and-spend, and all the while encouraging debt consumerism as the new model of civilization itself: In these ways the corporatist system has been able to prepare most of its crimes without directly annoying or even alerting the people at all.
So I’d be very interested to see Hamilton’s reaction to this state of affairs, after his impassioned cry that the Articles don’t allow for the federal government to raise money and men the way a responsible imperial government would.
He follows with much talk of coercion. He seems to think the only options all involve rigorous top-down action.

Government implies the power of making laws. It is essential to the idea of a law, that it be attended with a sanction; or, in other words, a penalty or punishment for disobedience. If there be no penalty annexed to disobedience, the resolutions or commands which pretend to be laws will, in fact, amount to nothing more than advice or recommendation. This penalty, whatever it may be, can only be inflicted in two ways: by the agency of the courts and ministers of justice, or by military force; by the COERCION of the magistracy, or by the COERCION of arms. The first kind can evidently apply only to men; the last kind must of necessity, be employed against bodies politic, or communities, or States.

I of course add “corporations”. But this federal government has, since the 19th century, systematically allowed corporations to exist more and more outside the law (except where empowering them to use the law as a weapon of aggression), while using its “coercion of arms” to defend them from the rightful consequences of their actions, to drive peace and justice out of the world.

There was a time when we were told that breaches, by the [corporations], of the regulations of the federal authority were not to be expected; that a sense of common interest would preside over the conduct of the respective members, and would beget a full compliance with all the constitutional requisitions of the Union. This language, at the present day, would appear as wild as a great part of what we now hear from the same quarter will be thought, when we shall have received further lessons from that best oracle of wisdom, experience. It at all times betrayed an ignorance of the true springs by which [corporate] conduct is actuated, and belied the original inducements to the establishment of civil power.

I made substitutions for the words “States” and “human”, which updates the passage.
Here Hamilton gets to the core of things:

Why has government been instituted at all? Because the passions of men will not conform to the dictates of reason and justice, without constraint. Has it been found that bodies of men act with more rectitude or greater disinterestedness than individuals? The contrary of this has been inferred by all accurate observers of the conduct of mankind; and the inference is founded upon obvious reasons. Regard to reputation has a less active influence, when the infamy of a bad action is to be divided among a number than when it is to fall singly upon one. A spirit of faction, which is apt to mingle its poison in the deliberations of all bodies of men, will often hurry the persons of whom they are composed into improprieties and excesses, for which they would blush in a private capacity.

What we have today is the equivalent of the Article of Confederation (in terms of failure) as a free-fire zone for corporate gangs.
He goes on to lament a centrifugal force he considers inherent to the Articles, how those at the lower levels of that Confederation must always want to “fly off from the common center” if not held in the central government’s firm grip.
However true this may have been then, and however desirable this firm grip was from the federalists’ point of view, what strikes us today in reading the passage is how it’s precisely today’s corporations who fly off from the center in terms of having any responsibilities, accountability, or obligations at all, even as the government continues to allow them to aggressively press privilege, prerogative, and simple brute force, all of it fraudulently dignified with the term “rights”.
Today we have the worst combination of the Ancien Regime, aggressive privilege and “right” completely divorced from any responsibility or restraint whatsoever, and the Articles of Confederation, a central government weak by design in the face of these “eccentric orbs” as Hamilton calls them. And we can throw in the modern police state, ever more aggressive in blocking (e.g. BP) and trouncing (e.g. the Toronto G20) all attempts of the people to demand accountability. The next step can only be kick-in-the-door fascism.
All of this represents the complete and irrevocable corruption of the federalists’ “republic” by and for the corporations. What Hamilton says here of the constituent States under the Articles applies most of all to this federal government.

Each State, yielding to the persuasive voice of immediate interest or convenience, has successively withdrawn its support, till the frail and tottering edifice seems ready to fall upon our heads, and to crush us beneath its ruins.

This is no passive collapse, but a corporate-wired demolition. The enemy’s goal is to erect barbed wire and guard towers around the ruins. The time to get out of the doomed edifice is now. 

July 17, 2010

Finance Reform Sham, CFPA Sham, SEC/Goldman Sham


I’ve written more than enough on the sham finance bill and didn’t see the need for another piece on it . (My most recent.) But I thought this post mortem was true and typical.

The ink is not even dry on the new rules for Wall Street, and already, the bankers are a step ahead of everyone else.

In ways large and small, the broad overhaul of the nation’s financial regulatory system that was approved by Congress on Thursday will eat into the profits of the nation’s banks.

So after spending many millions of dollars to lobby against the legislation, bankers are now turning to Plan B: Adapting to the rules and turning them to their advantage.

Even when it comes to what is perhaps the biggest new rule — barring banks from making bets with their own money — banks have found what they think is a solution: allowing some traders to continue making those wagers, as long as they also work with clients.

Banking chiefs concede they intend to pass many of the costs associated with the bill to their customers. The legislation, which is expected to be signed into law by President Obama next week, is intended to address the causes of the 2008 economic crisis and curb the most risky behavior on Wall Street.

“If you’re a restaurant and you can’t charge for the soda, you’re going to charge more for the burger,” said Jamie Dimon, the chairman and chief executive of JPMorgan Chase, after his bank reported a $4.8 billion profit for the second quarter on Thursday. “Over time, it will all be repriced into the business.”

Here are the banksters openly saying they’ll never take less than the extortionate amount they already extract. They regard their robberies as their divine right. As if we needed it, there’s a further declaration of war upon us, and further confirmation that humanity and the banksters cannot coexist in the same world.
So I think that’s adequate commentary on this vile sham of a “reform” bill.
Meanwhile, in order to confirm for anyone who still had doubts about whether or not Obama ever wanted a real CFPA, Geithner has gone out to oppose the appointment of Elizabeth Warren as its chief. (For a good post on Geithner as wingnut welfare poster boy, a complete failure throughout his worthless life at being anything other than a serviceable villain, see here.)
We knew this already, after the original white paper was so weak, eschewing vanilla requirements, and when the administration then without a fight let the thing be subverted and “pre-empted” in the House. So it’s no surprise today when they’re still hacking away at any possible effectiveness on its part, though that’s already a moot point. As I’ve always said, if you have to rely upon heroic personnel for effective regulation, then you can’t have sustained effective regulation over time. In a corporatist system, “regulation” can’t work.
Now, after howls of protest, the administration is publicly backpedaling, disclaiming any such opposition. So no doubt more nonsense will ensue.
I’ll just mention that the canonization of Warren seems overblown to me. She’s an administration cadre, a Harvard cadre, supports the system, supports the Bailout. The best one can say is that maybe she’s as good as it gets within the system, which is saying little.
Indeed, from the public interest point of view, wouldn’t it be better if someone more obnoxious were appointed? That would render the scam more brazen, obvious, and offensive. If you agree the bill’s a sham and want the people to understand that, why would you want an anodyne piece of window dressing like Warren to be part of it? It contradicts our educational mission.
It’s in light of this that we should consider the Goldman settlement. It’s a $550 million fine, and Goldman admits a marketing “mistake” and pledges to “reform” its policies. The SEC will distribute some of the proceeds to ACA and IKB, and Goldman agrees this amount is not mitigatory of any future civil awards. There’s all the standard crap about how Goldman agrees to closer oversight and how the SEC pledges to provide that oversight. It looks like a de facto global settlement as far as the SEC’s concerned.
I suppose from the reformist point of view there’ll be endless argument over whether or not this is a win for Goldman. From the point of view of taking back our country from these gangsters, the only question is whether or not this was a significant step toward the complete destruction of Goldman and all casino banking.
It seems not to be. On the contrary, the “best” case scenario seems to be that gamblers outside the bank hope the settlement will circumscribe the way Goldman can rig the game to the clients going forward.
But the game itself, which is purely destructive from any broader point of view, is to continue in its full ferocity.
Indeed, if the perception here is that the game will be less rigged vs. the client gamblers, then the settlement is a retrograde step, since one of the few good trends we’ve been seeing is the growing realization that Goldman’s a criminal against everyone including its own clients.
So anything that seems to improve the position of the clients is bad for the American people. From our point of view, it would’ve been better if the settlement had more obviously been a whitewash. Or even if Goldman had fought all the way and won. Insidiousness is always worse.
The corporate media will do all they can to spin this as a win for everyone, and as sufficient regulatory vigilance. Thus the NYT is calling it a “high-water mark” for regulators, trying to simultaneously exalt it as a big win but also lower expectations going forward. The spin will be: The SEC/Obama got tough, “investors” will be better protected; but Goldman is also vindicated of the worst charges, and implicitly the casino is now in better shape, and the American people should have more confidence in it going forward.
It’s all a Big Lie.

Four Poems

Filed under: Poetry — Russ @ 2:12 am
A shredding moment of frost isn’t enough
To change our attitude –
The fresh seal of morning stooped to grace
Our yawns with beatitudes,
And almost piqued our interest.
Time rains so steadily, an uncaused storm,
Steady patter and white noise is a stifling erosion,
And everything muddled by jade.
I look across to your eyes, a haziness
Clouding ideas with cold coffee to perk it up.
A fine museum of weariness slouches by.
An empty space for daydreams,
Memories enchant with drowsiness,
Bland smile a residue of a long-dead moment.
Alone I can laze, stretch, drag outside and ponder,
Losing time with reminders of dying,
Like these slow hours dying by.
Where did all that shine go?
How did the rain drench this discard of my soul?
Right and prayer, weak effigies, dilute through the stops
Like failing strength, and fail, and fall, weak like we feel.
Or they’re just a mirror of what we are.
I don’t need the shine any more.
I’ve forgotten enough to turn and go,
And follow you out through a different exit.
This is for a moment, one recollection of where we diverge,
Balanced, twenty minutes history,
And then it fades like a ghost summoned then blasted by the wind,
Just fuel for its spiteful play,
As it disperses the hopeful lonely face away.
Our pride and drive to conquer makes us worship
Freedom down the centuries.
In our age of the tyrant’s good hunting
Where our souls sleep with freedom,
It makes sleep violent; we awaken constantly.
We scan the darkness
But can’t see where freedom lies.
But the wish inside our vanishing sight,
That freedom shares its own dream and seeks to be lived again,
As we could reach to touch it,
Just a minor glance, not truly felt,
To print the dream’s periphery,
To edge it softly toward us…….
Are we certain of this night?
Is it an ecstasy we dream?
To awaken, we could fear it was never phasing there.
We try these windings of thought
To mark out the path from our spirit inside to the life without;
The magic wave across the moonlight suggests
This spangled plain as sky to us and not the darker fate,
To wrestle silent all night and fall asleep too late,
To wake again beside the faith in freedom,
The counterpoint to fearful dreams,
Contrasting toward our yesterdays, another silent tide.
If we felt the next reminder we were reaching through the night
As if loneliness would be negated and blessed by reality.
Where the appointed sentinels of night
Patrol the milestones lost of light,
Each midnight receding as in a backward flow of time,
Each a false sanctuary which helpless tears of memory try to render tangible
In hours of waking prayer,
We cast this dream between us as the last struggle to share the night;
We can cross ourselves with interludes of silence.
So I sleep with you, beside a silent harmony,
Without forgiveness of the silent fate
My night has doomed for me.
Summer’s pageant, judgement to appeal
Of distant wind, tomorrow’s promised ice –
The wish for love is a pastoral
I dreamt with you, one summer, long ago.
The new dream is a colder spring;
A rain of hope and haze over the aftermath,
Sprinkling starfall evaporates back to the sky
To resume its fixture as stars;
So the rain and hail becomes affixed.
The spangled banner of night is our history
Written across the night sky.
The waves of yesterday still radiate;
They pretend the rush of lovecould renew
Our dying feelings, lost like love was bright
Reflection; still I wish to see you there
In the moonlight clearing,
Beckoning me to you.
Summer’s poetry wished its rain between us;
The empty range bleak truth can call its own.
I reach through the hail-blight, the rushing lines like comets
Calling me to step across the line of light.
Do you wish to move slow, is delay the secret
To mortgage more time for the old harmonies?
The love which compasses our childhood dreams,
The tears, the drowning joy, the religious faith?
And the antique travail, glowing like a sunset;
Faith in fate, dying, but still a sensation.
Do we lie our liberation into ice,
And life’s generation into violence?
Death was promised as well, and we want to forget.
So love becomes a played-out tragedy,
And shelters in the shadows of collapsing truth,
Stale echoes, soul fabrications.
This song of faith is an afterthought of being,
Like the nonexistent starlight that still hypnotizes heaven.
Here a sort of life lingers, pretending,
A promise we pretend has no threat to reveal its lie,
Never to pass into treason, lost like love was bright.
Still my eyes follow traces of your memory,
As if you still existed
When I finally thought I saw you.
Destiny, please wait, just a few more hours;
My tired limbs struggle to hasten to you.
The circling stars measured endless time’s seeming,
But the seeming’s now fleeting,
Trailing waves of dead sentiment,
And now opposing winds push me back while I pursue.
What sound directs me, in approaching you?
I glance off tangents, mesmerized by chaos.
I wilt upon a thought of death, never having found you.
Yet I stumbled once upon a moment of belief,
And there, a glimpse of heaven beyond you.
There I mark your silhouette,
And there I find the strength inspired
To run again toward you, to clasp the flesh this time,
And not just in the dream of a thousand times before.
I always say today’s the time,
And my sedimentary utopias pile up.
I dreamt I found a way to love and promise you divinity,
And forget you ever walked away from me.
Then, drunken in the starlit waves of specious sanctity
I dream lame melodies, tinny chimes of fate stirred by empty winds.
History might miss us,
Storming wildly over the horizon’s massing millions,
All eyes blurred away by the violent stirring light.
I could worship you before this,
I could wish your fate forever,
You could answer me with comets,
Pulsing symphonies of beauty, marked by fireworks,
There to drown us all in ecstasy.
I shiver, I fall tired between the darkness,
Hearing magic trails of crystal sound to echo from the ends of time
To lead me onward, as fate tests weakness and strength.
Dreaming you, I was always dreaming me,
And climbing up from the memories,
If I sometimes stumble and fall back a bit,
I no longer feel I begin to fall forever.

July 16, 2010

Critique of Federalism (Madison’s Federalist #14)


In Federalist #14 James Madison continues his defense of the federalist idea by rebutting the claim that the physical extent of the proposed country would be too large for effective and equitable governance. Today, Oil Age transportation and communication technology have made this a moot point, though how long it will remain so as we pass beyond the oil Peak is an open question. At any rate, physical logistics in themselves have thus far not seemed to play much of a role, and on that point at least Madison appears vindicated so far.
But in the course of his argument he takes the opportunity for some peculiar asides regarding democracy which I’ll examine in this piece.
Before proceeding I’ll describe again where I’m coming from, and what I think is politically needful today.
As aspiring relocalizers we’re of course skeptical on its face of any alleged timelessness of Madison’s pro-federalist argument. We now believe in positive democracy. It’s a normative value in itself, a moral imperative, and, as a matter of practicality, the only form of government which is not a proven failure (unlike representative “democracy”). Meanwhile, we know the decentralized economy can also be run by the people. This has been proven, for example, in the Spanish cooperatives of the 1930s. So all forms of economic paternalism, from Madison to Lenin, have been proven false. We’ve long since come of age and must no longer let thugs convince us that we can’t run our own affairs. We can do for ourselves. It’s precisely those parasites who have no right to exist, morally or as a practical matter.
So here’s the call:
1. Participatory democracy and economy, as a positive good.
2. Political and economic relocalization as a political imperative vs. tyranny.
3. Political and economic relocalization as a physical imperative in the face of Peak Oil.
It’s in the sunshine of this framework that we unfold the critique of federalism and call for the devolution of federalism, levering the real center of power’s gravity close to the soil from which it grows in the first place.
In what follows, it’s always the case that much of Madison’s argument becomes both obsolete, since energy descent’s enforced relocalization renders the federalists’ imperial aspirations moot; and beside the point, since we’ve recognized the political failure of the “republic” form, and democracy remains our only option, unless we wish to submit to slavery once and for all. So in both cases, the decision is determined by circumstances and argument is moot.
But let’s proceed. Madison opens up with the question of whether the proposed country is too big and the claim that only a republic can be politically capacious enough to encompass ever-greater geographical scales.

The error which limits republican government to a narrow district has been unfolded and refuted in preceding papers. I remark here only that it seems to owe its rise and prevalence chiefly to the confounding of a republic with a democracy, applying to the former reasonings drawn from the nature of the latter. The true distinction between these forms was also adverted to on a former occasion. It is, that in a democracy, the people meet and exercise the government in person; in a republic, they assemble and administer it by their representatives and agents. A democracy, consequently, will be confined to a small spot. A republic may be extended over a large region.

This is quite presumptuous, since he starts with the dogma that the union has to become a great empire, then acts as if this is self-evident truth as he goes on to “prove” that we can’t have democracy because it can’t scale up, and then accuses opponents, at least many of whom oppose the imperial assumption in the first place, of being confused about the different capacities of democracy and republic to sustain empire. (Madison and Hamilton both consistently take the desirability of this centralized empire-seeking republic for granted, then argue as if they’ve proven it’s the best system and that all they have to do is dispose of some technical arguments. It’s begging the question throughout.)
Well, that’s also a moot argument. America’s imperial days are over. It’s clear today that the only purpose of the empire is to enable corporate looting of taxpayer money, and at the same time only the most larcenous extractions enable the propping up of this empire at all. It’s a monstrous rathole from any point of view. The imperialist strivings of federalism are utterly discredited, and we can declare those arguments dead and buried. Today reality and our political desires are trending in the opposite direction from Madison’s day. We have the bloated tyrannical empire and want to guide its inevitable unwind in such a way as to be as beneficial to the people as possible.
Madison then goes on to describe in detail the geography of the states in order to prove transportation problems aren’t insuperable. It’s interesting that he cites Britain as one of the examples with which the size of the union was comparable, since the US had just won independence in part by exploiting the British empire’s physical extension, which under those economic and military conditions became overextension. (And did he recall how the patriots quickly dropped in their own counsels any serious demand for parliamentary representation, since any effective logistics for that were clearly impossible?) This is so obvious it’s hard to believe Madison was unaware of it as he wrote. At any rate, it reminds us again of the modern US’s extreme military and economic overextension. Hundreds of bases, hundreds of thousands of troops, a dozen aircraft carrier groups to patrol tens of thousands of miles of sea lanes, and all of it to prop up a wealth-destroying system.
That geographical lunacy highlights how, during the Oil Age at any rate, geographical power concentration, the way Madison and Hamilton emphasize, is a misdirectional concept.  For geographical centers we have to substitute power concentrations, as wielded by disembodied corporations*, and the disempowered people for regional extremities.
Having satisfied himself on the geography, Madison goes on to make some political points.
He claims a version of the idea later to be encoded in the 10th Amendment.

In the first place it is to be remembered that the general government is not to be charged with the whole power of making and administering laws. Its jurisdiction is limited to certain enumerated objects, which concern all the members of the republic, but which are not to be attained by the separate provisions of any. The subordinate governments, which can extend their care to all those other subjects which can be separately provided for, will retain their due authority and activity. Were it proposed by the plan of the convention to abolish the governments of the particular States, its adversaries would have some ground for their objection; though it would not be difficult to show that if they were abolished the general government would be compelled, by the principle of self-preservation, to reinstate them in their proper jurisdiction.

The fact that the federalists furiously resisted the enshrining of a Bill of Rights is already suspicious, and we know how the 10th Amendment turned out in practice: A demagogic political meme at most, something always to be cited and deployed in a purely cynical, hypocritical manner. (Once Bush came in, every Republican suddenly forgot where he put his little pocket Constitution.)
What’s most interesting to me about that Madison quote is how, even though it seems to concede a real federalist spirit, it does so only from the point of view of the interests of the central government. The guarantor of the integrity of state governments is to be how useful and necessary they are for the weal of the federal government. But we true democrats don’t care about the efficacy of government as a value in itself, but only insofar as a more effective government is more effective at promoting our democratic endeavor, the vibrancy of our freedom, and our economic opportunity and prosperity. As James Otis said of the English constitution, “its end, its use, its designation, drift, and scope” must be liberty above all. This was universally agreed among the rebels, who saw how the British government’s actions were abrogating this imperative. So we today recognize the same obligation of our constitution, and measure a system of government by how well it embodies this responsibility, or with what depravity it derogates it. 
Therefore it’s good that Madison moves next to conceding in advance the integrity of our endeavor.

A second observation to be made is that the immediate object of the federal Constitution is to secure the union of the thirteen primitive States, which we know to be practicable; and to add to them such other States as may arise in their own bosoms, or in their neighborhoods, which we cannot doubt to be equally practicable. The arrangements that may be necessary for those angles and fractions of our territory which lie on our northwestern frontier, must be left to those whom further discoveries and experience will render more equal to the task.

Therefore the project is to be considered always in flux, in accordance with the needs of the age. That includes geographical features and it implicitly includes political forms. (As proven by the radical morphological action, for which it had no explicit authority, of the late Convention of whose work Madison and Hamilton were now acting as champions.)
Finally he reiterates the idea of how the benefits of unions as well as the power lines can run directly or inversely with geographical extremity.

[A]lmost every State will, on one side or other, be a frontier, and will thus find, in regard to its safety, an inducement to make some sacrifices for the sake of the general protection; so the States which lie at the greatest distance from the heart of the Union, and which, of course, may partake least of the ordinary circulation of its benefits, will be at the same time immediately contiguous to foreign nations, and will consequently stand, on particular occasions, in greatest need of its strength and resources. It may be inconvenient for Georgia, or the States forming our western or northeastern borders, to send their representatives to the seat of government; but they would find it more so to struggle alone against an invading enemy, or even to support alone the whole expense of those precautions which may be dictated by the neighborhood of continual danger. If they should derive less benefit, therefore, from the Union in some respects than the less distant States, they will derive greater benefit from it in other respects, and thus the proper equilibrium will be maintained throughout.

But as we discussed, we know today benefits, responsibilities, power, have no necessary connection with mere geographical extent. The most far-flung geographical tentacles can nevertheless leverage their influence to extract the most absurd and tyrannical subsidies from the center, or conversely anyplace can become a quarry and a mine and a dump. Just look at what’s happening in Madison’s very core with the Marcellus Shale.
At the end Madison gives his great peroration, calling upon the people to reject the naysayers and heed the call to union. It’s moving indeed, except that today we know much of what the anti-federalist writers prophecied has come true, while much of what the federalists promised has been betrayed.
Madison asks an excellent question: “Why is the experiment of an extended republic to be rejected merely because it may comprise what is new?” He asked that in the day of a failing system which needed to be replaced.
And we today must and may ask the same question, and demand the same willingness to experiment toward something new.
[* Just to chuck this in at the bottom here, that’s a conceptual parallel with how the Oil Age brought the advent of the rather disembodied quantum physics as an “advance” beyond the more down-to-earth classical physics. And just as these disembodied corporate power centers are phenomena of the Oil Age which must perish post-oil, so quantum theory looks like it’ll return to the realm of mysticism from whence it arose as the oil surplus will no longer be there to enable such extravagant experiments as those of the CERN particle collider.] 
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