Category Archives : Greenberg’s Law of Counterproductive Behavior

If you see a behavior that seems to you to be counterproductive, perhaps you have misunderstood what the behavior was trying to produce.

The Lessons Richard Bowen’s FCIC Testimony Should Have Taught the Nation 1   Recently updated !

William K. Black has written another astounding piece on the New Economic Perspectives web site.  The piece is titled The Lessons Richard Bowen’s FCIC Testimony Should Have Taught the Nation.

The financial crisis was driven by history’s three most destructive epidemics of financial fraud:  appraisal fraud, liar’s loans, and the sale of fraudulently originated mortgages to the secondary market through fraudulent reps and warranties.  One cannot understand, effectively investigate, or prosecute the senior financial officers who led these fraud epidemics without a detailed technical understanding of the fraud schemes and the financial markets. This first column is intended as a resource for those willing and able to make the investment towards achieving that understanding.  Because people like me and Bowen no longer train FBI agents and prosecutors, and because the Obama administration’s most senior officials have been unremittingly opposed to prosecuting the financial officers that led the three fraud epidemics, no FBI agent or prosecutor has the necessary technical understanding.  My second column explains why this makes the FBI, the SEC, and the Department of Justice’s (DOJ) failure to draw on Bowen’s expertise all the more harmful and indefensible.

No spoiler alert is required either about Holder’s reaction to Bowen providing the Department of Justice (DOJ) with a criminal case against Citi’s controlling officers on a platinum platter.  Holder, as always, refused to prosecute the banksters whose frauds drove the financial crisis.  He eventually brought a civil action to get some useless fines from Citi rather than from the Citi officers who looted Citi, Fannie and Freddie, and Treasury.  Holder also failed to thank Bowen when Holder announced the civil settlement with Citigroup and refused to use the golden opportunity of the press conference announcing the settlement to ask other whistleblowers to come forward.  All of this, of course, is SOP for Holder and Loretta Lynch, President Obama’s choice to be his successor.  Lynch failed to prosecute HSBC or its responsible officers for its extraordinary crimes on behalf of genocidal regimes, terrorism sanction busters, and massive money laundering for the Sinaloa drug cartel.  You can only read it in right wing publications, but she is also accused of not speaking to either of the two key whistleblowers about HSBC.  Lynch’s nomination is being held hostage by the Republicans for all the wrong reasons.

The piece is long, and I must admit I had to stop before the end and before I vomited.  However, the piece is not that technical.  I understood it fully and I am no accountant nor an economist.  Why even a Nobel Prize winning economist could understand this article if they would only deign to read it.  The trouble is that these prize winning economists make their theories about how an honest market would work, while having no appreciation that massive fraud is actually how many markets work.  It never occurs to them to listen to the law enforcement people who understand fraud when they see it.  They also don’t listen to banks’ own experienced bank enforcement executives who shout out about the fraud, and are summarily crushed by their fraudulent bosses.

I included in my excerpt the paragraph that mentions Loretta Lynch so that I can refer back to it anytime I need to explain why I am dead set against her nomination for Attorney General.

You’ll have to read at least enough of the article to understand why I categorized this article under Greenberg’s Law of Counterproductive Behavior. You won’t have to read much to be hit over the head by the figurative 2 by 4 of the reasons.

Obama Official: Congress Should Freeze Its Iran Penalties

ABC “News” has the AP story Obama Official: Congress Should Freeze Its Iran Penalties.

The administration argues that congressional action now would scuttle delicate international negotiations underway in Switzerland to reach an agreement that would prevent Iran from being able to develop nuclear weapons.

“If we are able to secure a comprehensive understanding, we will structure the nuclear-related sanctions relief in a way that is phased, proportionate and reversible,” said Adam Szubin, acting undersecretary of treasury for terrorism and financial intelligence. “We will need to see verified steps on Iran’s part before sanctions are lifted and we believe that powerful U.S. legislative sanctions should not be terminated for years to come so that we continue to retain important leverage years into a deal.”

He said if a deal is not reached, the administration would work with Congress to ratchet up sanctions pressure on Iran.

Well, this shows that the Obama Administration is only half as insane as the Republicans (and too many Democrats) in Congress.

Iran came to the table despite sanctions, not because of them.  Do we want them to back out of the deal just to prove what I said (and Fareed Zakaria said)?

See my previous post Netanyahu enters never-never land.

Iran proposed to cap its centrifuges at very low levels, keep enrichment levels well below those that could be used for weapons and convert its existing enriched uranium into fuel rods (which could not be put to military use). Peter Jenkins, the British representative to the International Atomic Energy Agency, told the Inter Press Service , “All of us were impressed by the proposal.” But the talks collapsed because the Bush administration, acting through the British government, vetoed it. It was certain, Jenkins explained, that if the West could “scare” the Iranians, “they would give in.”

What was the result? Did Iran return to the table and capitulate? No, the country withstood the sanctions and, unimpeded by any inspections, massively expanded its nuclear infrastructure. Iran went from 164 centrifuges to 19,000, accumulated more than 17,000 pounds of enriched uranium gas and ramped up construction of a heavy water reactor at Arak that could be used to produce weapons-grade plutonium.

As I have  said before, the truth must be told at least as often (if not 10 or 100 times as often) as the lie.  I can’t do it all by myself, but I can do my share.

Iran is currently helping Iraq (and us) by fighting against ISIS in Iraq. To show our appreciation for the help, we threaten to impose tougher sanctions. If there were anything we could do to convince Iran that they needed nuclear weapons to get any respect from us, the Congress seems hellbent on doing it.

So I categorized this current post under Greenberg’s Law of Counterproductive Behavior – “If you see a behavior that seems to you to be counterproductive, perhaps you have misunderstood what the behavior was trying to produce.”

Perhaps a comment on the ABC story on the ABC web site has the answer:

The Republicans want to scuttle any possibility of a deal with Iran, because then they can say that Obama failed. Worse, the Millenialists and Christer nuts in the Republican Party want Iran to develop the Bomb, and use it as an excuse for Armageddon.


Are the Republicans and Netanyahu Actually Heroes?

I read this response to an article on The Daily Kos.  I’ll call it Are the Republicans and Netanyahu Actually Heroes?  I think the following paragraph excerpted from the comment best summarizes the point the commenter was making:

When a segment of the Iranian ruling establishment thinks that the correct strategic choice is always on the opposite side of what the Jewish guy thinks, or in this case what the conservative Christian Republicans think, it’s not that hard to picture them being maneuvered into accepting whatever Rouhani’s guys agree to in Geneva.  Picture Rouhani sending a trusted emissary to talk to the Majlis hardliners and all he’ll have to say is “you should support this deal because the Republicans and the evil Jooz are against it.”  As soon as they hear “Jooz,” half of those hardliners will all be falling over each other to support the deal. (using the mis-spelled version of the word to convey the very real and very dispiriting but also very predictable anti-Semitism involved).

My response to this possible ploy was  the following:

Should we Forgive The Republicans and Netanyahu

This convoluted strategy almost sounds plausible.  If the Senate, the House, and Netanyahu are all part of a carefully orchestrated scheme from the Whitehouse to get the Iranians to accept the deal, will it even be possible to make this public after the deal is signed?

If it can’t be made public for fear of losing the deal, will the Republicans and Netanyahu have sacrificed their careers for the good of the nation and the world?

If the Republicans are willing to sit in prison for three years for violating the Logan Act just to achieve a deal on nuclear proliferation, they will deserve secret medals of freedom from Obama.

This definitely puts this idea in the class of examples of Greenberg’s Law of Counterproductive Behavior.

Ali Soufan: Torture contractors shocked CIA interrogators

MSNBC has the segment from The Rachel Maddow Show, Ali Soufan: Torture contractors shocked CIA interrogators.

Ali Soufan, former FBI special agent who took part in the interrogation of Abu Zubaydah, talks with Rachel Maddow about how the Senate torture report squares with his experience and why the CIA switched to torture interrogations they knew don’t work.

For a long time I have known about the claim from professional interrogators that torture is a counterproductive technique. This is the reason why I am categorizing this blog post under Greenberg’s Law of Counterproductive behavior “If you see a behavior that seems to you to be counterproductive, perhaps you have misunderstood what the behavior was trying to produce.”

This especially applies to the ordinary citizens who still want to torture suspects. Are they just ignorant of the facts about torture, or do they have some ulterior motive that I cannot even guess?

And now that I think about it, what about people in the Bush White House? What were their motives? Were they actually trying to silence the suspects lest they implicate the Bush administration or its allies?

Important Revelations In New Leaks of CIA Torture Report   Recently updated !

The Real News Network has the video Important Revelations In New Leaks of CIA Torture Report.

On top of all of that, you have all these investigations now going on of everyone except a criminal investigation of the people involved in the torture. So CIA has referred the staffers, the people who work for Senator Feinstein and the committee, to the Department of Justice for investigation under the CIA’s what apparently is a [completely] bogus claim, that the staffers somehow took material off of a computer that they were authorized to use for the purposes of this preparation of the report. But the CIA, really as a way of intimidating the committee and Senator Feinstein, has said, we want the Senate staffers investigated. One investigation.

So now we know what the argument between the CIA and Senator Dianne Feinstein is all about.

So let’s talk about some of the findings that have come out. One–and these are from Al Jazeera that I’ve taken these, as well as some other sources. The CIA lied to Congress and to journalists about the results of the torture they carried out on over 100 of these what they called high-value detainees but were not that in fact in many cases. They claimed that the torture resulted in plots being broken up. In other words, the torture works narrative, and it’s completely false. And then they then solve the plots with torture, supposedly. Of course, that’s the story of the film about how they got bin Laden, and part through torture, Zero Dark Thirty, all apparently a pack of lies. So that’s one thing that will be in this report. The CIA apparently took on–I mean, he Senate committee took on these narratives and prove them to be false.

So now we know how much credence Dick Cheney has when he says how useful the torture was.

Perhaps other revelations in the video explain why George W. Bush is staying out of the limelight and has take up painting. He’s hoping he can avoid prosecution for his war crimes.

Perhaps Obama’s deference to the CIA is consistent with his warlike foreign policy. Is the CIA in complete control of foreign policy? If they start a war, the President is obligated to see it through. It has nothing to do with proving “manhood” and everything to do with protecting his family from the CIA. See my previous post Foreign policy and the definition of ‘manhood’.

What Neocons Want from Ukraine Crisis

Consortium News has the story What Neocons Want from Ukraine Crisis.  Robert Parry lays out a picture of what is going on that even the most devious amateur politician may not have thought of.

Though I’m told the Ukraine crisis caught Obama and Putin by surprise, the neocon determination to drive a wedge between the two leaders has been apparent for months, especially after Putin brokered a deal to head off U.S. military strikes against Syria last summer and helped get Iran to negotiate concessions on its nuclear program, both moves upsetting the neocons who had favored heightened confrontations.

Putin also is reported to have verbally dressed down Israel’s Prime Minister Benjamin Netanyahu and then-Saudi intelligence chief Prince Bandar bin Sultan over what Putin considered their provocative actions regarding the Syrian civil war. So, by disrupting neocon plans and offending Netanyahu and Bandar, the Russian president found himself squarely in the crosshairs of some very powerful people.

If you are not a professional politician, you might have trouble conceiving of how devious politics can be. My recent experience in local politics has shown me what a rank amateur I am.  I am pretty sure I have been had, but I can’t figure out by whom.  It is probably because of Greenberg’s Law of Counterproductive Behavior which states –

If you see a behavior that seems to you to be counterproduct…you have misunderstood what the actor was trying to produce.

In the case of the Robert Parry article, I think he is trying to straighten out my misunderstanding about what various players are trying to produce.  I suspected some of the players he mentioned, but I was surprised by some others that he mentioned.

Are Democrats who Propose Cuts to Social Security “Stupid” or Just Doing Risk-Analysis? 1

Naked Capitalism has the story Gaius Publius: Are Democrats who Propose Cuts to Social Security “Stupid” or Just Doing Risk-Analysis? It’s not a pretty story.

I’ll give you the finish to whet your appetite for reading the article.

Naturally there’s a risk with this strategy. Consider the 2012 presidential election. That 4% popular vote differential was not much of a margin, and if Romney hadn’t become “Mr. 47%” in most people’s eyes, it’s conceivable he could have pulled closer. But there’s just no way the Rubins and the hedgies and all their minions are going to allow an anti-billionaire “Warren populist” into the general election. They have to stick with a free-market type.

So the very best they can hope for is a newbie who can lie, pretend to be something he’s not, a man or woman without a track record. (Remind you of someone? Obama in 2008, Kid “Hope and Change” and “Yes We Can”?) That brings out the Hopeful and swells the numbers. Otherwise they just have to go with what’s available and roll the dice. By 2012 no one was Hoping, certainly not in great numbers, not after four years of Grand Bargains and promises betrayed (do click; it’s a stunning list). Many were just voting not-Romney, those who voted at all.

So yes, there’s some risk to this neoliberal calculation and strategy. In 2012 they took the risk and it paid off, in a 4% popular vote victory. Could the strategy still lose occasionally? Yes, but again, given the demographics and with appropriate pushback in the states, it’s increasingly less likely.

And even if it does produce a loss, consider the alternative from the Rubin side of things. What do you do? (1) Put a real FDR in the White House and let him challenge the whole billionaire system, or (2) risk having to count your money in electoral exile for a just few years, then try again?

I don’t see the Rubins of the world ever making the first choice. And I do think they’ve really thought this through. To return to where we started, very few of these men and women are stupid.

Side thought — Keep the above in mind when scoping out the 2016 race. We have a neoliberal front-runner with a track record and an unwillingness to speak on most issues. Where’s the turnout going to come from?

I should add that it is always dangerous to attribute motives to people when you have not asked them for an explanation of their motives.  However, if you want to figure out if their behavior is counterproductive or not, you do have to try to figure out what they intend to produce.

Fruits of Republican Folly

The American Prospect has the article Fruits of Republican Folly by Robert Kuttner.

Since Barack Obama took office, the two Republican factions have complemented each other in a successful “good cop, bad cop” effort to ratchet down public spending. Wall Street creates one sort of crisis; the Tea Party creates another; government takes the hit. Except for the short-lived stimulus of the American Recovery and Reinvestment Act in 2009, this is the first prolonged slump of the postwar era in which government cut rather than expanded public spending.
With everything else having been cut, the pressure has shifted to the big social-insurance programs—so-called entitlements—that have thus far been protected. Once again, the corporate right and Tea Party right have called for a grand bargain targeting Social Security and Medicare.

Can anyone please explain why President Obama is so hell bent on cutting the throats of the Democratic Party and its elected Congress People?

Can he  really be so ignorant of what every postwar President of either party has known about how to deal with a slump?

To brag on his “accomplishment” as shown in my previous post What So Proudly We Hail, shows that he is either completely ignorant, smoking something that is not Federally permitted, being held hostage, or some other explanation.

Notice that I have placed this post in the category of Greenberg’s Law of Counterproductive Behavior.  Which translates to, please explain to me what Barack Obama is trying to accomplish.  I am pretty sure, I no longer know.

Romney foolishly said the Federal Reserve should not do more monetary stimulus

Reuters has the article Romney says new Fed stimulus would risk inflation.

Republican presidential front-runner Mitt Romney on Monday said the Federal Reserve should not go ahead with another round of monetary stimulus to boost the U.S. economy, because it would risk kicking up inflation.
“Another round of quantitative easing is not the solution for the economy, and could mean inflation down the road,” Romney told Faux Noise. “It’s not the right thing to do.”

Of course the Fed wouldn’t have to do monetary easing if the Congress would agree to a stimulus plan that included direct government spending on all the things that Elizabeth Warren would have the government spend it on.

Be that as it may, worrying about inflation at some unknown distant point in the future while the Fed has been unable to produce enough inflation now is a silly thing to be thinking about with the current problems we have.  If the fed were able to produce its target rate of inflation, it would certainly be able to take action if the inflation rate exceeded its target.  Given how hard it has tried to boost inflation and how unsuccessful it has been, if it finally does manage to create some inflation, all it would have to do is stop its current efforts or perhaps reverse them, to stop inflation from getting out of hand.

Given how hard the Fed has tried to boost inflation and how little inflation we have – we actually have deflation in the housing market – can you imagine the even higher deflation in the housing market that we would have had had the Fed not intervened?

Why is some inflation in the housing market good and large deflation extremely bad?  For years, people have made plans based on a fairly small, but dependable rate of inflation in the housing market.  The banks have always factored this into their plans as well.  The inflation is what allowed homeowners to sell a fairly illiquid asset, real estate, when they had to in order to move to where the jobs are.  This inflation is also what allowed homeowners to build their equity so that they would have something on which to retire.  This equity buildup due to inflation was magnified to the homeowner because of the leverage they were using with the borrowed mortgage money to finance the purchase of the real estate.

Take this all away, and even deflate the asset on which they borrowed money and you have leverage working against the homeowner.  They cannot move to a better job market because they would have to raise money in order to pay off their mortgage on a home that was worth less than the mortgage on it.  Not only is the falling house price not adding to their nest egg for retirement, it is actually shrinking their retirement nest egg.

Excess equity in a house is also a resource you can use if there should be unexpected disasters such as unexpected illness, sudden death of the wage earner, divorce, or loss of a job and long term unemployment.  If you are underwater in your mortgage instead of having excess equity, not only is the house not a resource you can tap, it is actually an extra burden to bear.

With all these actual or imaginable problems facing the middle-class, they are desperately trying to cut their spending and trying to save money in ways that compensate for the housing problem.  This is why businesses have not enough freaking customer to keep their existing employees and factories busy.  Giving companies even more than the trillions of cash they are already sitting on is not going to make the middle-class become better customers.

As a matter of fact, companies taking trillions of dollars out of the economy and parking them in non-productive financial derivatives until the economy turns around is one of the many factors keeping the economy from turning around.

So taking money out of the hands of the corporations and putting it back into the economy would be a good thing to do.  This means raising taxes on corporations and the wealthy individuals that control them.  It makes absolutely no sense to do the opposite by lowering their taxes and allowing them to pull even more money out of the economy.  This pulling money out of the economy may be the very reason that the Fed’s pouring money in is having such little effect.

That the Republicans can pretend that they don’t see these realities  and then propose solutions that will make matters much worse, makes you want to apply Greenberg’s Law of Counterproductive Behavior.  What are the Republican’s trying to do?  The answer involves the book The Shock Doctrine. You may actually have to read more than what I have posted about the book to see the connection.  The short answer is that they are trying to shock the middle-class into accepting lower wages, poorer working conditions, and cuts to government investment in the education and health of the people.  With globalization, they intend to make money from customers elsewhere.  Or maybe they just think they can steal the existing customers from their competitors faster than their competitors can steal customers from them.  Somehow, they intend to have enough customers without having to pay living wages to workers.  Can they not see that a person who is a worker in one context is a customer in another?

You have to ignore this identity of worker and customer to think that Mitt Romney’s idea of business management being blindly applied to macroeconomics would be successful.


Why Progressive Austerians do the Greatest Damage

In William Black’s excellent blog, New Economic Perspectives, he has written the post, Why Progressive Austerians do the Greatest Damage.

To many people, it seems paradoxical that conservatives target not the worst social programs, but the best.  There is no paradox.  Bad government programs are desirable from the right’s perspective – they discredit government intervention.  Good government programs pose an existential challenge to conservative memes, so they are the prime target for attack.

This is exactly the kind of paradox that falls under Greenberg’s Law Of Counterproductive Behavior, which states:

If you see a behavior that seems to you to be counterproductive, perhaps you have misunderstood what the actor was trying to produce.

I recommend Black’s article to you because it has many other interesting things to say besides the one I focused on above.

As an exercise to the reader, I suggest seeing if you can name the politicians who are most guilty of being progressive auterians.  Also ask yourself if you are guilty of being a progressive auterian.