Clive Crook's Groupthink

I stayed in my apartment in Astoria, Queens last night because of a dental appointment this afternoon.  Because I keep basic cable there, I watched the mainstream Bloomberg news channel.  Luckily, David Stockman was on.

Stockman has written an interesting book, The Great Deformation,  in which he predicts a collapse of the dollar and advocates a gold standard.  Stockman's prescription is contrary to the preferences of Wall Street, Bloomberg LP, big businessmen, and bankers. However, it is not outlandish.  Without Stockman's insider knowledge of the Reagan administration, I advocate the same ideas; I am delighted to see him on mainstream television.

The program involved former Reagan official  Stockman debating Bloomberg's Clive Crook, a good-looking journalist with an English accent.  Crook says that he likes some of Stockman's analysis, but he longs for "the old David Stockman" who was mainstream and did not advocate outlandish ideas like  dissolution of the federal government  and a gold standard.  Crook was dismissive and insulting; his argument was ad hominem and unsubstantial.  Instead of saying why he thinks that a gold standard won't work, Crook claimed that by advocating a gold standard Stockman placed himself outside the mainstream.

Most good ideas are rejected at first. Nikoa Tesla was told that AC electricity was a perpetual motion scheme; talking pictures were thought to be a fad, as was television.  Who cares if the US establishment, which has created the current dismal social-and-economic situation, finds Stockman's ideas to be outlandish? Their failed ideas have destroyed America's progress.

Anyone who has studied group dynamics knows that Crook's tactics are characteristic of groupthink.  All groups depend on conformity.  Although the pro-Fed establishment is not a small group in the same sense as the jury in Twelve Angry Men, it is a group with norms.  The historical record of the current financial system has been poor all along. The Fed caused the Great Depression; it caused the 1970s Stagflation, and Stockman is right: It has gotten worse since Alan Greenspan's appointment during the Reagan years.

Because the in-group faces a great loss if it loses the Fed or sees restrictions placed on its ability to print money for itself, it needs to defend the status quo. Rather than defend the indefensible, Crook applies power-and-influence tactics aimed at silencing Stockman.  

In a sense, Crook is right: Stockman's ideas are irrelevant to the current group in power. This includes both Democrats and Republicans.  When the Fed was established in 1913, the founders did not anticipate abolition of the gold standard. An argument for abolition of the gold standard would have seemed irrelevant to Woodrow Wilson, who had been a gold Democrat (he did not vote for William Jennings Bryan in 1896).   Twenty years later FDR abolished the gold standard.  The reverse can occur today. 

Democrats the Party of the Socio-Economic Elite

I have been going through campaign contributions of a variety of elite Americans: Nobel Prize winners, honorary degree recipients from Ivy League colleges, Hollywood screenwriters, and top-ranked actors.  They are predominantly Democrats, and, if they contribute, they predominantly contribute to the Democratic party.  I'm now wondering whom, exactly, the Republican Party represents.  It doesn't seem to represent high-paid professionals, high-achieving academics, or famous entertainers, so it must be that the GOP is the party of the working poor--the so-called middle class whom America's federal government, led by the Democratic Party for most of the past century, has impoverished.  To show that the Democratic Party is the party of the average American, the case has to be made that America's bailout generation is selfless--that Oprah Winfrey and Paul Krugman do not think of themselves, even unconsciously, in their political decision making.  Such a claim is far fetched.  Pigs do not fly, but they do act in their own interest.
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Eurogroup's Jeroen Dijsselbloem: When Eurozone Banks Need Money, We Steal

Dutch Labor Party politician Jeroen Dijsselbloem   is head of Eurogroup  and president of the Board of Governors of the European Stability Mechanism (ESM), according to Wikipedia.  The ESM provides financial assistance to members in financial trouble.  "ESM member states can apply for an ESM bailout if they are in financial difficulty or their financial sector is a stability threat in need of recapitalization."

Reuters reports that Labor Party Politician Dijsselbloem has expressed open-mindedness to ongoing government stealing of bank depositors' money.  Reuters writes:

European officials have worked hard this week to stress that the island's bailout was a unique case - after a suggestion by a Eurogroup chairman that the rescue would serve as a model for future crises rattled European financial markets.

Murdoch-linked Newsmax's Tom Blumer accuses Reuters and Associated Press in earlier articles of mischaracterizing Dijsselbloem's remarks.  The media, including the Murdoch conglomerate, has consistently mischaracterized the US bailout, so it is not surprising that AP and Reuters now distort information about Europe.  

Dijsselbloem illustrates the special role of labor as handmaiden-in-theft to the global banking system. In American history labor was initially in favor of hard money and price stability, according to Arthur Schlesinger in The Age of Jackson.  The inflationist wing of the labor movement triumphed as the money center banks saw increasing advantage in centralization. Progressivism involved the integration of labor into the inflationist nexus, in part because some labor unions contributed to Populist calls for inflation during the late nineteenth century.  Labor began to see its role as aiding its members at the expense of most workers through the same inflationary process that aids Wall Street, real estate developers, and big business executives.   

That was after JP Morgan and other late nineteenth century businessmen's failure to consolidate industry through mergers and large trusts (now called corporations), and labor's concomitant failure to take wages out of competition by creating "one big union."  The collapse of  Teamster Jimmy Hoffa's National Master Freight Agreement in the 1970s coincided with a decline in labor's power as American financial interests realized that they could jettison labor's interests in exchange for currency subsidization from China and other exporters.  This followed the abolition of the gold standard and the freeing of the Fed to counterfeit with unabashed greed at Americans' expense.

Dijsselbloem's amoral willingness to steal from bank depositors is reflective of the labor movement's continuance of its willingness to engage in an alliance with the global banking system despite its raw treatment from the financial elite.  Like a whipped dog, the labor movement continues to back financial interests that have sucked its own members, along with the majority of American workers, dry.

Personally, I keep some money in banks, but small amounts scattered across several banks.  I favor small banks over large ones.  Commodity holdings, including gold, silver, and platinum, are more volatile in the short run, but avoid some of the risks of government stealing. (The US government stole the public's gold in 1933, though, so this strategy is not risk free.) Although smaller banks are less sophisticated when you need help with issues like trusts and estates, they are friendlier and more emotionally supportive.  

 With thieves like Dijsselbloem in influential positions around the world (his equivalents have been in power in the US for decades), a holding of commodities and cash as well as bank deposits is the way to go.

Sharad Karkhanis, RIP

Sharad Karkhanis, a political scientist, a librarian and a professor emeritus of Kingsborough Community College, has died.  According to Jeffrey Wiesenfeld, Sharad will be cremated in accordance with Hindu law.  At CUNY Sharad was the spearhead of resistance to union incompetence and corruption. He published a newsletter, The Patriot Returns, that he had snail mailed (paying significant mailing costs out of his own pocket); with the advent of the Internet, he emailed it to, he estimated, 13,000 CUNY faculty.  His newsletter featured biting humor that more often than not induced out-loud laughter.   Sharad pulled no punches in lambasting the Professional Staff Congress, CUNY's inept, corrupt, and extremist faculty union.  At one point Susan O'Malley, a PSC officer,  whom he crowned the Queen of Released Time because she spent little time teaching, sued him for libel (also here and here).

Sharad assembled a network of activists, both within and outside of CUNY, and he often served as a lynchpin for resistance to the PSC's bizarre initiatives.  He was a supporter of Israel.  As well, he attended the Ron Paul event in Manhattan with me and another friend in April 2011.

Sharad was a fighter who cared about what was right.  He visited me at my home in Town of Olive several times, making a long drive from Brooklyn. He was thoughtful and generous.

Sharad, you will be missed. RIP.