News & Analysis
Attorney Responds To the Daily Bell
Best Satire of Faux Austrian Economics Ever ... Someone has created a fabulous, richly detailed parody of Austrian economics. They call it The Daily Bell and claim that its perspective reflects Austrian economics. In reality, it satirizes faux Austrian economics' sycophancy toward elite white-collar criminals. – New Economic Perspective/William Black
Dominant Social Theme: The critics are at fault. Blame them.
Free-Market Analysis: Mr. William Black has responded to an article of ours with one of his own, entitled "Best Satire of Faux Austrian Economics Ever." It touches on numerous dominant social themes of the power elite that we regularly analyze.
Overall Reaction: We were a bit surprised that Attorney Black would have such a strong reaction to an article that made many points that are made elsewhere with a good deal more vituperation. True, we focused on him, because he has been conducting a kind of "high-profile" campaign to clean up Wall Street the way he cleaned up the S&L industry. Here is a point-by-point commentary.
S&L Industry Fraudulent Overall: Black is famous for "cleaning up the S&L industry." But Monetary Policy Disasters of the Twentieth Century, written for the Freeman (January 2007) by Kirby R. Cundiff, Ph.D., CFA, points out the following: "...The primary reason for the widespread failures in the Savings and Loans industry was irresponsible monetary policy at the United States Federal Reserve."
Unfortunately, the combination of a Fed-inspired boom plus massive litigation helped reduce an entire industry. The result was INCREASED centralization of power by government and its attached mercantilist (large commercial banking) institutions. Finally, you are left with a corporatocracy. That's where the US is headed, if it's not already there.
Federal Reserve/central banking: Unfortunately, the article does not grapple substantively (that we could see) with the main engine of economic destruction, which is central banking. The Federal Reserve, as the world's chief central bank, FIXES PRICES. It fixes the price of money by determining its value and volume.
When you fix the price of money, you transfer wealth from those who made it to those who didn't and don't know how to use it. This is why lottery winners often end up without money soon after winning large prizes. It's why government wastes so much money. The central banking system should be abolished. That should be FIRST on the agenda if people really want to get their lives, jobs and houses back.
Daily Bell and Austrian Economics: The article claims that the Daily Bell is an "Austrian" publication. As a general statement, the Daily Bell is not formally "Austrian." We defer to those who are more knowledgeable than we are when it comes to the philosophy and details of Austrian economics. We USE Austrian economics as best we can to analyze our world and how it works.
'Sycophancy to criminals': Criminality for the most part these days in the US is defined by law. The court system just sent Raj Rajaratnam of the Galleon Group to jail and fined him nearly US$100 million. Meanwhile, some intrepid (private) investigators have discovered that Congress has been engaging in "insider trading" on a regular basis.
So now we know: The US Congress is free to trade on insider information. The fight to make this known was led in part by Peter Schweizer, according to Daily Beast/Newsweek. "Schweizer had been struck by the fact that members of Congress are free to buy and sell stocks in companies whose fate can be profoundly influenced, or even determined, by Washington policy, and he wondered, do these ultimate insiders act on what they know? Yes, Schweizer found, they certainly seem to."
They also write: "Schweizer's research revealed that some of Congress's most prominent members are in a position to routinely engage in what amounts to a legal form of insider trading, profiting from investment activity that, he says, 'would send the rest of us to prison'."
It's also emerged that Congress CAN likely be prosecuted under existing laws. Will politicians be sent to jail for decades over insider trading? How many? Meanwhile, Wall Street RUNS on insider information.
Until the 1980s, no one had even been jailed for insider trading, so far as we know, and the markets worked just fine (for the elites anyway). Now the regulators are getting ready to prosecute people who use technology to trade. As we long ago predicted, soon it will be a crime to use superior technology. Eventually, as Kurt Vonnegut wrote, it will be a crime to have a high IQ and people will be compelled by law to "dumb down."
Data and Austrian Economics: The article explains that Austrians have a "disdainful response to adverse data – they ignore it." This is untrue. Austrians believe that "data" – certainly numerical data – does not provide a way to predict the future because every law and regulation changes human behavior and thus laws and regulations never work out the way they are intended. US policy is based on "econometrics," which is an entirely phony science. You can't predict the future with numbers. The USSR used to do it all the time.
Stasi: The article mocks the idea that the FBI is America's Stasi, but these days the FBI can wiretap almost at will throughout the US and does so abroad as well, with or without permission. Homeland Security has launched its "See something, say something" program, basically encouraging US citizens to spy on each other. That sort of thing used to happen in countries like Cuba.
The FBI has also expanded abroad, apparently in preparation for expanding US taxing authority. Shortly, the US intends to enforce demands that foreign banks withhold up to 30 percent of American paychecks. In fact, the expansion throughout the world (in at least 90 countries) has been done so surreptitiously that few understand the FBI's modern, worldwide nature, supported by US tax dollars. Also, people in the US are terrified of the FBI, as is Congress. That's why it's not talked about more openly and why Congress is passing so many increasingly authoritarian bills.
When Congress was passing the first unconstitutional Patriot Act, armed men were reported to have roamed the halls. This has been amply documented. There is something very disturbing going on in the US today. Attorney Black might wish to turn his attention to the erosion of US civil liberties via government actions as well as Wall Street.
US Gulag: The article also mocks the statement "ever-expanding gulag of slave-laborers." But according to a Reuters article posted in December 2006, the US has the most prisoners in the world. " ...Tough sentencing laws, record numbers of drug offenders and high crime rates have contributed to the United States having the largest prison population and the highest rate of incarceration in the world, according to criminal justice experts ... A U.S. Justice Department report released on November 30 showed that a record 7 million people – or one in every 32 American adults – were behind bars, on probation or on parole at the end of last year." ... "The more laws that are written, the more criminals are produced." – Lao Tse
Nom de Plume: The article claims that the "author" of the article "uses the nom de plume of Anthony Wile." This is untrue. Black has no insider knowledge about who writes what.
SEC Investigation: This statement is necessary, however, because now the article can bring up an SEC investigation. He writes, "The real Anthony Wile was the infamous subject of an SEC action for securities fraud."
'Infamous' Investigation: It was an infamous investigation, but not for stated reasons. The SEC pursued Wile on and off for a decade based initially on a single press release about a potential merger regarding a company going public. Finally, Wile had had enough. He agreed to the SEC's terms without admitting guilt. The whole idea of the SEC is to "name and shame" individuals and create regulatory barriers so that only the biggest players (who can afford the fines) can prosper.
Ad hominem argument: The article thus descends into ad hominem argument, which is a logical fallacy. The larger issues raised by Daily Bell articles have nothing to do with a particular SEC case.
Fraud: Black writes, "What a perfect accompaniment to an article demanding that the elites who grew wealthy through fraud not be prosecuted." But we have questions: Who are the fraudsters? Is it only the private sector? Many in Congress and the Fed grew rich from Federal Reserve money stimulation and insider trading. Black is not proposing to prosecute any of these individuals, so far as we know.
SEC: What exactly does the SEC do? Over and over, waves of white collar "crime" sweep the US and the Western world generally. The result is the SEC always gets more powers of some sort for the job it didn't do before. The Bernard Madoff case is only one example. The Social Security system is a kind of Ponzi scheme, but it is Madoff that is tagged with that label exclusively and sent to jail. In fact, here is the ultimate response to SEC inaction regarding Madoff:
Seven employees of the Securities and Exchange Commission have been disciplined, but no one has been fired, after investigations into how the agency failed to stop Bernard Madoff's massive Ponzi scheme despite repeated warnings that he was stealing billions of dollars from investors, The Washington Post reports. An SEC spokesman, John Nester, tells the Post that the agency considered "all factors relevant to the imposition of discipline, including the employees' performance before and since the Madoff events." The most severe punishment: one person got "a 30-day suspension without pay and a reduction in pay," the Post says. (PBS)
CFTC Corruption: Then there is this: "Retiring CFTC Judge: We Covered Up Market Manipulation".
NEW DEVELOPMENTS IN THE CFTC SCANDAL: On September 17, 2010, CFTC Administrative Law Judge, George H Painter, issued a "Notice and Order" announcing his retirement from his position. In this notice Judge Painter wrote of a conspiracy at the highest levels of the CFTC (within the ENFORCEMENT DIVISION) where a long time judge of 20 years has been conspiring with past CFTC Chairs to RIG THE ENFORCEMENT OF THE LAW by NOT finding ANYONE guilty of market manipulation. Here are Judge Painter's own words:
"There are two administrative law judges at the Commodity Futures Trading Commission: myself and the Honorable Bruce Levine. On Judge Levine's first week on the job, nearly twenty years ago, he came into my office and stated that he had promised Wendy Gramm, then Chairwoman of the Commission, that we would never rule in a complainant's favor. A review of his rulings will confirm that he has fulfilled his vow. Judge Levine, in the cynical guise of enforcing the rules, forces pro se complaints to run a hostile procedural gauntlet until they lose hope, and either withdraw their complaint or settle for a pittance, regardless of the merits of the case"
A copy of Judge Painter's letter can be found below with a stamp proving that it was received and filed by the CFTC on October 13, 2010. (The Daily Bell)
Power elite: The article points out that Ludwig von Mises and Friedrich Hayek hated fraud. But here is related discussion of a warning from Hayek about the kind of regulatory capture that is occurring today in the US and throughout the West:
Regulatory capture is exactly one of the things Hayek explicitly warned of. He called it "corporatism," and recognized it as destructive of liberty and prosperity. Furthermore, Hayek's work in business cycle theory specifically addressed the kinds of monetary and fiscal manipulations that led to our current crises. These are not examples of the "unfettered free market" nor "unregulated finance," but of government intervention and so-crony capitalism (better called corporatism or mercantilism). – Hillsdale College
Conspiracy: The article states that a favorite motif of the Daily Bell is that there is "an international conspiracy of the top bankers that caused the ongoing global crisis [and that they are] using the Occupy Wall Street (OWS) movement to demand that the fraudulent top bankers that caused the crisis be prosecuted."
Huh? The entire panoply of world government was the work of a relatively few individuals after World War II; these elites set up the UN, the World Bank, global trade associations, and the International Monetary Fund. This has been amply documented. Now there is an International Criminal Court. This is all what? Coincidence?
Inflation: The article states, "A true Austrian-school economist, however, would never admit that central banks could create over $300 trillion in money (over 15 times the GDP of the U.S.) without producing even material inflation over the last 30 years." The article seems to be confusing inflation with "price inflation" here, a common mistake. Much of the money produced by central banks has been trapped by its distributing banks and not yet circulated. Other trillions have been trapped by Japan and China. The money WOULD circulate if it were handed out to individuals. But the Fed will never do something like that.
Bankers' Trillions: The article asks, "Where do the Rothschilds invest or deposit their over $300 trillion?" For the record, we do not know how much the Rothschilds "own." There is a difference between "control" and outright wealth. A quote, supposedly from John D. Rockefeller, explains it well: "Own nothing, control everything."
Other loopiness: The article accuses the Daily Bell of making up other "loopiness" such as the idea that SEALS did not kill bin Laden or that Gaddafi was attacked for his plan to create a pan-African gold dinar. Well ... here is a video of Benazir Bhutto telling David Frost that Bin Laden was murdered early in the 2000s, as just one example of why people would question the May 2011 assassination story: Benazir Bhutto: Bin Laden Was Murdered. Maybe David Frost is "loopy," too.
The point of our articles on Occupy Wall Street has been to point out that the elites are doing what they always do when it comes to deflecting attention from the larger injustice of a central bank that can issue out US$16 trillion to its cronies and colleagues under the fiction of "saving the system."
The idea is always to blame systemic flaws on individuals and protect the larger players who are creating the problems behind the scenes. One does this via "populism" – getting people worked up over Wall Street bankers, etc., and then putting enough of them in jail to distract people from the REAL issues.
It seems to us to be an elite dominant social theme intended to direct attention away from central banking. This is exactly what happened in the 1930s when the massive regulatory bureaucracy supposedly overseeing Wall Street was first created. it left the Fed basically untouched, however, and even provided it with a new structure. It didn't work then and it won't work now.
Conclusion: Put every single horrid Wall Street banker in jail and if the money system itself is not changed then NOTHING will change.
Ed note: We noticed the article (basically) accuses DB of asserting, "the World Trade Center towers were blown up by the U.S." We would challenge anyone to find where we have written these words. We've written over and over there are substantial - enormous - questions about 9/11. We are not alone in this. In fact, certain members of the 9/11 Commission itself have virtually disavowed the official narrative. The Commission's lead counsel, Rutgers's Law Dean John Farmer even wrote a book, The Ground Truth: The Untold Story of America Under Attack that accused the Washington intelligence and military establishment along with the Bush administration of lying serially about aspects of 9/11.
Edited, updated on day of publication (first hour of posting) for accuracy and brevity.
Posted by rossbcan on 11/16/11 11:24 AM
All of a sudden people care because of CBS?
CBS, as other subverted organizations are under severe survival threat (loss of income) because of irrelevancy.
In general, organizations are being forced to become myopic and provide REAL value in their function, on their 'turf', else, perish. Unseen hand of collective choice, then, now and always.
Expect them to be 'born again'.
Posted by Dilence Sogwood on 11/16/11 10:01 AM
No one cared about Congressional insider trading until 60 Minutes/Peter Schweizer.
It's been public information for at least my entire life. It's a reprehensible inequality, but this news is not new.
All of a sudden people care because of CBS?
Posted by flying_pig on 11/16/11 04:05 AM
Mr. Black asks where the inflation is. He should rephrase that to ask where the counterfeiting is, where the printing of money is, where the fraudulent transfer of wealth is, etc.
Or maybe Mr. Black should actually learn some Austrian economics, specifically how changes in the money supply effect the redistribution of wealth.
Posted by amanfromMars on 11/16/11 01:35 AM
Regarding that quote, supposedly from John D. Rockefeller, … "Own nothing, control everything." …. and with further regard to the glowing high tech resume you can read here on a Rothschild …. Click to view link …. [and don't bother wasting your virtual time trying to find out out corporate info on EL Rothschild Ltd., for they don't presently do virtual information/digital intelligence*] one might have reasonably expected the following, which is all about virtual global control, and which was posted to Lynn Forester de Rothschild, at least to be approved to appear in the thread, even if it didn't warrant any further comment, in either agreement or disagreement.
[blockquote]The solution to global problems is simply complex and much easier whenever you know what needs to be done and would be inclined to do it . And one needs to know of the power contained and shared freely in the following two statements, to be able to do it with IT.
Control Words Control Worlds and Deliver Absolute Powers.
EMPower Occupied CyberSpace, which is not an Empty Virtual Void, and you will be Able and Enabled to Remotely Command and Anonymously Control Computers and Communications for Constructive Creativity and Harmful Destruction, with only the Former a Sure Fire Future Winner. [/blockquote]
*All that I would further wish to say is that no virtual presence indicates to any and all who are comfortably au fait with what can be easily done remotely with the presentation of text and/or binary and ternary manipulation of virtual machine codes, that the dangers may be well enough known to be realised to be a systemic exploitable vulnerability against which there is no viable defence or effective attack control …… and one which can be ruthlessly zeroday traded on financial markets for a fortune beyond compare and traditional imagination. And although one would just love it to be always the case, one is not necessarily exceptionally smart whenever one is no dumb blonde bimbo.
Although after a short ponder, can no virtual presence indicate the exact opposite and complete ignorance in a field which is overwhelming all opposition and competition with free and transparent SMART IntelAIgents Sharing of Novel Information on Future Presentations without Past Masters Interference creating Conflicts which deliver Destructive Ponzi Wealth which can disappear in a Flash Crash of System with Dodgy Network Routing.
SMART Works in AI Progress are Impossible to Beat for they always deliver Fab Fabless Treats and Digital Feasts made Attractive for Everybody, which is No Mean Feat but not that difficult whenever one knows what can be done and can do it with practically nothing.
IT's a kind of Majic Mojo Magic, I suppose, and if assumed and presumed as being anything different with unlimited potential and infinite possibilities, would that be quite AIMeme to Foster and Develop/Seed and Nurture/Feed and Harvest. You can most certainly be assured that some bright spark will see the vision and run with it with IT and rightly and deservedly steal the show and have an absolute ball of a time with all that CyberSpace Command and Control has to offer.
Posted by bridgepro on 11/15/11 09:02 PM
The video link to the David Frost interview is inactive.
Posted by dright on 11/15/11 08:41 PM
I smell a flame wars. Goody, I like internet battle. May the duel begin.
Posted by hideandseeker on 11/15/11 07:18 PM
Am I missing something here? Where's the link to the article by William Black?
Posted by NAPpy on 11/15/11 07:11 PM
If this is right:
"First they ignore you, then they laugh at you, then they fight you, then you win" (Gandhi),
then you've provoked a response somewhere between the laughing and fighting.
Posted by dotti on 11/15/11 05:42 PM
I found your post quite informative. Thanks.
My parents were of the generation that they married in 1938. They would have been horrified at all this Homeland Security fraud. So many things that they taught me about America. I remember asking them why the government didn't just pay people (citizens) to tell on each other and their answer was that "we don't do that in America. It turns people on one another--neighbor against neighbor, brother against brother, etc.
It took several generations to "educate" Americans that security was more important than freedom.
Posted by dotti on 11/15/11 05:36 PM
Bluebird, many thanks.
I've been truly busy and have tried to stay away!
I miss all my buds here at DB when I discipline myself to not hang out here.
I'm taking it easy for a few days. I think my body is fighting off a bug of some sort. I don't want to push and then get really sick!
It's good to be here today.
Take care and thanks for the mention.
Posted by dotti on 11/15/11 05:30 PM
I have enjoyed your posts. I read as I have time; post as I am able. I'm taking the rare "sick day" today--yesterday as well. I'm officially retired, but stay way busy. I'm my own boss and I don't get much vacation time--mostly by choice.
As you noted, I am addicted and sometimes have to lurk in the evenings to get my fix. If I am going to post, I try to read early so that there will be someone to hang out with during the day.
When I first came here, I was a bit shy. The elves and regulars brought me along. This has become my main source of news and other forms of intellectual stimulation.
I'm hoping I'll feel like being productive tomorrow. It's great hanging here, but I have lots of things that I need to get done... always.
Anyway. Thanks for the mention!
See you around!!!
Posted by TimurTheLame on 11/15/11 05:26 PM
Re: The article mocks... .Stasi
I seem to recall that Homeland Security recruited Marcus Wolf (RIP 2006) former head of the Stasi for 'expertise'. For those that are not familiar with the Stasi, they were the East German version of the KGB which eventually combined the cleverness of Russian methods with German efficiency. It was said that at it's peak, 1 out of 3 East Germans were snitches. Where do you think the 'see something, say something came from?'
For Black to even bring up the name betrays an arrogant ignorance.
Posted by Bluebird on 11/15/11 04:50 PM
Posted by LilaRajiva on 11/15/11 04:44 PM
I believed I already raised your SEC past with you on this blog, so Mr. Black is hardly saying anything novel.
Secondly, his raising the issue itself is problematic, because it shows the SEC did spend a lot of time on petty matters, while ignoring complaints about Madoff and many others, not to mention the petty matter of Goldman Sachs, or JP Morgan, or the 2008 collapse, or Primex, or dozens of other huge red flags.
Mr. Black asks where is the inflation that ought to have followed on all this past money-printing. Well, GATA and several others, including me, have shown there is plenty of evidence that the gold price was suppressed, so that it would not signal the depreciation of the currency. He fails to mention that the additional money kept the stock market inflated in serial bubbles from the 1980s onward, and finally spilled over into the housing bubble.
Mr. Black has done excellent work on control fraud, so he should know that something is setting the stage for such fraud each time.
By all means, catch the ringleaders and throw them in jail, but make sure you are catching ring-leaders not conducting show trials from political motivations.
Mr. Black laughs at gulags, but the fact is that like no-touch torture, the types of surveillance, psychic control, harassment, and covert censorship practiced today are much more effective than mere incarceration, which creates resistance and martyrs.
Mr. Black fails to address the significant issue that if the government is as controlled as it is, how can we trust it to suddenly change its nature? Mr. Black fails to address the totalitarian nature of such things as Echelon, the Patriot Act legislation, fusion centers, national ID schemes, TSA monitoring/porno-scanning, detention centers, the prison industrial complex that is in bed with the surveillance industry. He talks about corporatism, without suggesting how a new set of bureaucrats would be free of such corporatist control.
He raises good points. But so does Mr. Wile raise many good points.
Mr. Black talks about Mr. Wile's past service, and Mr. Brown's. He doesn't mention that Yves Smith (whose work I applaud) is also a former Goldman Sachs employee. So is practically everyone else with a prominent voice commenting on the crisis.
Past employment alone cannot be the criterion for dismissing credible arguments.
People connected to the elites professionally hold all sorts of opinions. It is not self-evident that this makes them unqualified to speak on the subject.
Mr. Black suggests that concerns about the elites controlling/manipulating events are conspiratorial, because no one is able to document and prove such connections to the last letter.
This is misleading.
There is such a thing as circumstantial evidence. And if there is a preponderance of evidence, people can certainly draw conclusions and voice opinions on their blogs.
Even the business press has concede that a very few companies are in control (if they do not actually own) the market.
Click to view link
Posted by alexsemen on 11/15/11 04:39 PM
Hallo, DB, don't worry ! I suppose that you allready knows that telling the truth is the most risky activity in the world and all history.
Therefore are such veninouse attacks on you !
But you DB, must at least try to tell the truth even sometime it is not all the truth and you make some mistakes which are inevitable when you make such a gigantic effort to unravel at least some correct questions .
Therefore : Honny soit qui male y panse !
Posted by Bluebird on 11/15/11 04:18 PM
I agree with others-you must have hit the nail on the head, Daily Bell. Keep up the good work. I am so grateful for what you do.
Hey, Dotti, we missed you. :-)
Posted by laceja on 11/15/11 03:31 PM
Great exposure. I can well imagine there will be many more readers visiting DB soon. I hope you can goad more main streamers into a public attack.
Posted by Dave Jr on 11/15/11 03:14 PM
Well, that didn't work.
Posted by Dave Jr on 11/15/11 03:12 PM
I wonder if they read the feedback?
Posted by taxesbyanyothername on 11/15/11 02:24 PM
I saw an interview of Mr. Black, he didn't seem all that bad. Boy was I deceived.