New Economic Perspectives has the post Bullet-Pointing the Big Bank Bamboozlement by Dan Kervick.  I have said before on this blog that there are usually many economic forces pulling on the economy, but the trick is to figure out what forces are dominating at any given time and what forces are so small that they can be ignored for the time being.

I liked this article because it mentioned a number of forces that I had never considered.  I’ll quote a few of the bullet points on only the topic of low interest rates.  For the rest, you’ll have to read the article itself.

But at this point, does anybody really know what central bank policy would actually be most conducive to getting back to trend growth? Let’s run it down, PowerPoint style, shall we?

• Are Fed asset purchases holding long-term interest rates down? Certainly.
• Are those low rates leading to a healthy situation in the housing market, or to another dangerous bubble?  An open question.
• Are asset purchases injecting money into the bank accounts of the affluent and large financial institutions? Yes.
• Are asset purchases also draining interest income from the economy? Yes.
• Are asset purchases contributing to a wealth effect by boosting the prices of equities? Possibly.
• Are asset purchases contributing to a negative wealth effect by suppressing the interest earnings of retirement savings and other long-term assets? Possibly.

I knew I was going to make a post about these ideas because of the reasons mentioned above even before I saw this last throw-away bullet point.

Oh, and one other random point to note:

• Is Lawrence Summers, a crony capitalist insider and a virtual poster boys for everything we have done wrong in America over the past 30 years, a leading candidate to take over the central bank? Yes.

Shortly after I posted the cartoon in the previous post Handy comparison chart: Janet Yellen vs. Larry Summers, I read the letters to editor in The Boston Globe.

The letters were Comparison of Bulger, Summers was insensitive, not clever and Cartoon crossed the line.

Here is the cartoon in question:

The sad part of it is that these letter writers do not understand how appropriate the cartoon is. If you measure the total pain inflicted on the world, Larry Summers may have Whitey Bulger beat by orders of magnitude. In our society we don’t seem to understand the damage white collar crime does.

What does the press have to do to get people to see the problem? Neither serious articles nor cartoons seem to be reaching people.

The Daily Kos has the article Handy comparison chart: Janet Yellen vs. Larry Summers.

It’s the simple unfairness of of having to work so much harder to reach the top, and if you do, you’re seen as the “gendered” pick. It’s symbolic of every time a highly-qualified woman hits the glass ceiling when forced to compete with a loud, arrogant blowhard with a strong sense of self-entitlement and undeserved mystique of greatness.

Since I have not written enough on this topic lately, I leave you with this cartoon that the article used.

At Reader Supported News, I read the article Confidential Memo at the Heart of the Global Financial Crisis by Greg Palast.

When a little birdie dropped the End Game memo through my window, its content was so explosive, so sick and plain evil, I just couldn’t believe it.

The Memo confirmed every conspiracy freak’s fantasy: that in the late 1990s, the top US Treasury officials secretly conspired with a small cabal of banker big-shots to rip apart financial regulation across the planet. When you see 26.3 percent unemployment in Spain, desperation and hunger in Greece, riots in Indonesia and Detroit in bankruptcy, go back to this End Game memo, the genesis of the blood and tears.

The Treasury official playing the bankers’ secret End Game was Larry Summers.

Don’t let the style of the article fool you.  Though Greg Palast doesn’t use the serious tone that we have come to expect from reporters, he is a very serious reporter and investigative journalist with the credentials to back him up.

What could President Obama be thinking when he puts forward Larry Summers for Chairman of the Federal Reserve Board? That is not a rhetorical question, and the answers that come to mind are truly frightening.

William Black has written the piece Bhide: Pick a “Boring” Fed Chair because Supervision is the Key and it requires “Dullness”.  There is a lot in the article that is obviously based on his own experiences as a regulator.

Bhide has just witnessed the greatest spree of elite looting in history, but somehow missed it entirely.  Had Greenspan and Bernanke understood that deregulation was “bound to produce looting” and given the “regulators in the field” their full support there would have been no financial crisis.  Greenspan did not muster even “lukewarm support” for the Fed’s supervisors – he attacked them savagely for daring to criticize the banks that were large control frauds.  Bernanke appointed two economists as his top (anti) supervisor to ensure he would not suffer their practice of speaking truth to power.  A Fed Chair who made it her mission to restore effective supervision would not choose “boring”, “dull,” or “bureaucratic” people.  She would be putting a giant bull’s-eye on her back and would ensure that she never have another boring day.

I wonder how  hard the American people need to be hit upside the head with the evidence of this obvious plundering by the elite bankers of this country before they insist on reform.  There is no reason why Elizabeth Warren should be so alone in her insistence on fixing the problem.

I have also often mentioned this point brought out by Black’s article:

Control fraud begat additional control fraud and created the perverse incentives that spread “echo” epidemics of control fraud through other professions (loan brokers, appraisers, and auditors) by creating a “Gresham’s” dynamic in which bad ethics tends to drive good ethics out of the markets and professions.

I observed this at the time of the dot com bubble.  Year after year people were making money hand over fist with ridiculous investments in these enterprises which were almost certain to fail.  The mutual fund managers who only made their customers 12% per year gains by making prudent investments were drummed out of the business because they weren’t making 90% returns like their colleagues who were willing to throw caution to the winds.  I wanted to invest with the cautious mutual funds, but they were disappearing right before my eyes.  Fortunately for me there were enough cautions mutual funds left to keep me protected from the dot com  bubble.

New Economic Perspectives (NEP) has the video NEP’s William Black appears on HuffPost Live.

The legal culture of big-time settlements can short-circuit the law, protecting wrongdoers from punishment, trial or even an admission of guilt. That’s just what the government has done for the major banks implicated in sweeping mortgage fraud. Is it too late to rectify the big banks role in the housing and financial crisis? Bill and other panelists speak with Alyona Minkovski on this subject.

I post this especially for reader DavidF who thinks that money spent on welfare is as serious a problem to solve as is the problem of the country’s elites robbing us blind. So here are my numbers as hinted at in the above video. I am waiting to see David’s numbers for his case of the money wasted on welfare payments to the poor being as serious an issue.

The Real News Network highlighted the video below titled This Is The Instruction Manual To Pillaging The World.

If my posts about The Shock Doctrine by Naomi Klein and all the posts referring to that post are too poorly done or too verbose, the above video captures it all in a nutshell. (A little blue wording in this video, but if you’re an adult, you can take it.)

New Economic Perspectives has the post “Makers and Takers:” They’re Projecting Again!

The post uses this video below as its launch point.

Woman: “It kills me every time i hear senators, especially republicans, talk about those takers. they’re just taken. the takers. i paid taxes for over 30 years and i have a rare illness and now i’m disabled. the state of arizona raised the eligibility for a program that was paying $100 a month for my medicaid to 3.4%. consequently, i was cut off. $100 a month, which meant (breaks down) i could no longer go to physical therapy. do it intentionally to cut as many people as they can for as long as they can from benefits that are desperately needed and it’s just not right. we’re the takers.”

This is a powerful video in itself, but you don’t get the full import of the headline until you read the post on New Economic Perspectives. I think the following snippet makes the point.

That’s the point the DC/New York “villagers” don’t want to talk about very much. They’ll credit people with not being likely to vote for people who label them “moochers,” but they won’t credit people with understanding that the real “takers” are not themselves, but the very people who are projecting that insult onto them.

Maybe that’s because the villagers don’t intend to talk about who the real takers are. But I think that people are smart enough to come to understand that anyway. And when they do, there will be hell to pay for those who guilt-tripped them in order to distract them from the reality of the real takers and their outrageous takings.

The point about who the real takers are is one that is the subject of many posts on my blog.

Alternet has the article How Billionaire ‘Philanthropy’ Is Fueling Inequality and Helping To Destroy the Country. It gives another side to my feeling that philanthropy from billionaires might seem laudable, but if they had not used predatory practices to gain near monopolies so that they could have billions of dollars to give, the world might actually be a better place.

I’ll show an extensive quote from one section of the article to demonstrate why I am so upset with MIT for accepting a large donation from the Koch brothers to build a cancer research center and name the building after the Koch brothers.

David and Charles Koch, together worth $35 billion, have perfected this philanthropic misanthropy perhaps better than anyone else. Their Kansas-based Koch Industries is the second largest private company in the country after Cargill, with annual revenues estimated to surpass $100 billion. Together they control thousands of miles of oil pipelines from Alaska to Texas; fertilizers, minerals and biofuels; Brawny paper towels, Dixie cups and Lycra.

A research team at American University found that from 2007 to 2011, Koch foundations gave $41.2 million to 89 nonprofits and sponsored an annual libertarian conference. The report details how Koch Industries’ $53.9 million federal and state lobbying budget routinely goes hand-in-glove with Koch-affiliated nonprofits’ “public advocacy” for reasons having little to do with the public and everything to do with the brothers’ sprawling business interests. Koch lobbyists advocate for bills like the Energy Tax Prevention Act — which sought to roll back the Supreme Court ruling allowing EPA regulation of greenhouse gases — that are then supported in congressional testimony by “experts” from Koch-funded nonprofits.

Though private foundations cannot legally “be organized or operated for the benefit of private interests,” the study’s authors note that IRS enforcement is largely “sporadic and somewhat mysterious,” and even in the case of an investigation communications between the foundation and the government are generally kept from the public. The Koch nonprofit machine has exploited this loophole for all it’s worth, testifying before congressional committees at least 49 times since 2007.

For decades, Koch philanthropy has also waged ideological warfare within U.S. universities, contributing over $30 million to 221 universities since just 2011. Here, the payoff couldn’t be plainer. A 2012 report in Academe documented the Koch-funded coup in Florida State University’s economics department, showing how “in exchange for his ‘gift,’ the donor got to assign specific readings, select speakers brought to campus and instruct them with regard to the focus of their lectures, shape the curriculum with new courses and specify the number of students in the courses, name the program’s director, and initiate a student club.”

The Charles G. Koch Foundation gave FSU $1.5 million to sponsor two assistant professors, fund fellowships and shape curricula promoting free-enterprise doctrine. It then created an advisory board to distribute money to faculty and ensure their work aligned with the foundation’s ideology.

The Kochs have tapped many useful allies, academic and non, in their collegiate ploys. A year before the FSU story, Inside Higher Ed exposed how administrators at Clemson University cultivated the Koch Foundation to build its “Institute for the Study of Capitalism,” receiving $1 million for the effort. BB&T, the financial institution whose former chairman and CEO John Allison heads the Koch-backed Cato Institute, regularly pays universities to chair favorable professors, typically in economics. Cooperative institutions are rewarded with Koch dollars as a bonus. American University’s Investigative Reporting Workshop found 10 such universities, where BB&T-chaired professors coincided with Koch cashflow.

Perhaps what they have done to economics departments in other schools will give pause to a certain reader of this blog who told me that we shouldn’t look a gift horse in the mouth with regard to the MIT donation.  This reader has many personal connections into and pride for the Sloan School at MIT and the economics department at MIT.  Would he be so proud if those schools started teaching and preaching Kochian economics?

Any MIT alumni or alumnae out there want to join my protest movement of stopping all gifts to MIT and making sure they know why you are stopping?

The New York Times business section has the story Trash Into Gas, Efficiently? An Army Test May Tell.

In a former Air Force hangar outside Sacramento, his company, Sierra Energy, has spent the last several years testing a waste-to-energy system called the FastOx Pathfinder. The centerpiece, a waste gasifier that’s about the size of a shower stall, is essentially a modified blast furnace. A chemical reaction inside the gasifier heats any kind of trash — whether banana peels, used syringes, old iPods, even raw sewage — to extreme temperatures without combustion. The output includes hydrogen and carbon monoxide, which together are known as syngas, for synthetic gas, and  can be burned to generate electricity or made into ethanol or diesel fuel.

The naivete of this report would be astounding if I hadn’t mentioned this is on the business page. Do the reporters have the technical expertise to know why this story is highly doubtful from the get go?  Actually, a college course in physics or perhaps even a high school course might give you the knowledge you need in order to raise some fundamental questions.

A chemical reaction that occurs in a blast furnace at temperatures above the combustion point of the material put into the furnace will do a fast oxidation (FastOx) that is usually called combustion.  So there may be some materials whose combustion point is higher than the temperature of the blast furnace, but most will simply combust (also known as burn, also known as incinerate).

There are something like 118 elements (maybe 102 found in nature) in the chemical periodic table.  Unless we are talking about nuclear or radioactive reactions, one element does not turn into another element.  So the output from this process may contain “hydrogen and carbon monoxide”, but it also includes 99 other elements in the same proportions by weight as were put into the blast furnace.  What do we do with those elements after the hydrogen and carbon monoxide are extracted as syngas?

To generate the heat of a blast furnace requires some kind of fuel.  There is no mention in the article of this fuel as one of the inputs.  How much will the fuel cost compared to how much economic benefit will be derived from the useful products (minus the cost of disposing of the non-useful products)?

One of the useful outputs according to the article is carbon monoxide which is usually considered a product of incomplete combustion.  In minute quantities, carbon monoxide is lethal if inhaled.  I sure hope they have some great technology to make sure none of it escapes.  (Of course, they could have meant carbon dioxide which is not directly lethal except for it being a greenhouse gas that we already are producing in excess.)

As for solving the military’s supply line problems with supplying fuel in combat situations, how is supplying the blast furnace with fuel any easier than supplying diesel or gasoline to the field?  To get the byproducts out of the blast furnace and turn it into anything that can power a tank would require some kind of technology not mentioned in this article.