Central Park Five – Evasion And Vindictiveness

Here’s how official New York is dealing with the lawsuit brought by the wrongly convicted five, via Huffington Post:

Meanwhile, the New York City government is actively fighting a $250 million civil suit that the Central Park Five and their family members filed in 2003, accusing the city as well as the individual police officers and prosecutors who worked on the case of violating their civil rights.  In September, the city also began waging a legal war with the filmmakers, asking a court to force Burns’ company, Florentine Films, to turn over all notes and outtakes not included in the final documentary for city review, saying it could use the material to defend itself. Earlier this month, city lawyers filed additional documents claiming that Ken Burns and his colleagues are not journalists and therefore aren’t entitled to invoke legal privileges to protect their work product.

Lawyers for Florentine have moved to quash the city’s subpoena on the grounds that they do indeed consider themselves journalists, and that reporters in New York cannot be compelled to share their work product with government officials.

And of course no one is responsible because they were just doing their jobs:

Some of the people involved with the arrests and prosecution of the Central Park Five continue to maintain they did nothing wrong or that the teenagers were, in fact, somehow connected to the crime. A New York Police Department-commissioned review, which was made public in 2003, asserted that the police officers involved did nothing wrong.

The Huffington Post attempted to contact the prosecutors, and police at the center of the Central Park Five convictions. Most did not respond to requests for comment or declined interview requests pointing to the ongoing civil suit. The New York Police Department did not respond to a request for information about the status of the detectives involved in the investigation or interrogations at the center of the case and the vacated convictions. Linda Fairstein, head of the sex crimes unit in the district attorney’s office during the case, left in 2002 to write crime novels that feature a female prosecutor as the heroine. Elizabeth Lederer, the prosecutor who handled the Central Park jogger trials, today leads a unit in the district attorney’s office that investigates labor corruption, and teaches at Columbia University’s Law School. Detective Mike Sheehan, one of the officers involved in securing the teenagers’ confessions, left the police force in 1993 to become a crime reporter for New York television stations. After hitting a police horse and getting fired from his last job, Sheehan began writing and consulting on an NBC crime drama.  None of the three responded to requests for comment.

What on earth is the basis to continue to maintain that “…the teenagers were, in fact, somehow connected to the crime?”  I mean, besides a pathological desire to evade responsibility?

We talked a little about who, and whether, and how, and to what extent any of these people should be held accountable for what happened in that case.  But we can’t even get to that discussion.  In a real sense, the crime against the Central Park Five is ongoing, almost a quarter of a century later.  We don’t know yet the full extent of what it is that the guilty people should be held accountable for.

You would think that maybe the prosecutors could at least stop stonewalling their victims, or at least answer media questions, but they close ranks just like bad cops protecting each other.  But what really irks you is that they’re doing this when they are in the far more powerful position and always have been.  This is like a king who wants for nothing stealing a loaf of bread from a poor peasant and then using his royal position to quash the peasant’s plea to get his bread back not to mention silencing and intimidating anyone who takes up the poor peasant’s plight.  And where is the media coverage?  How dare they ignore this profoundly corrupt abuse of power.

There are no words.  It’s unspeakable.  I don’t know what we’ve become when we spend so much time and attention on the next frivolity while something like this goes unaddressed.  And what saddens me most is that the prosecutors are supposedly lawyers, screened for character and fitness.

Maybe that’s where a lot of problems are.  We have no concept of character and fitness.

“Mistakes Were Made” In The Central Park Jogger Case?

That’s it?  That’s where the paper of record thinks this should all end up?

How forgiving we are prepared to be when the wrongdoer is a prosecutor:

The petition against Ms. Lederer, in part, reduces her life in public service to a single moment, the jogger case. In fact, she has a lengthy résumé of unchallenged convictions in cold cases, having pursued investigations of forgotten crimes. No one lives without error. And designating a single villain completely misses the point and power of the documentary. The jogger case belongs to a historical moment, not any one prosecutor or detective; it grew in the soils of a rancid, angry, fearful time.

Well, I’m not sure either that going after the prosecutor “completely misses the point and power of the documentary” or that it “reduces her life in public service to a single moment” any more than her victims have had their lives reduced to a single moment, the difference being that her victims didn’t do anything wrong whereas she did.

My God this is a curious viewpoint being expressed here.  There’s a lot of blame to go around?  No doubt:

Politicians called for blood. Donald Trump campaigned for the return of the death penalty. Much of the news media failed to note the vast inconsistencies in the case. Among the skeptics, people like me had mumbled, rather than shouted, our doubts.

Advocates for the accused were undercut by demonstrators who marched outside the courthouse in 1990, and chanted that the attack had been a hoax or that the jogger’s boyfriend had done it. At least two defense lawyers dozed through parts of the trials. At parole hearings, the boys denied having any contact with the jogger, but acknowledged having been in the park that night with a mob that had hassled or hurt others.

Ms. Lederer wrongly told the jury that hair found in the clothing of one of the boys “matched” hair from the victim, a seeming corroboration of the confused, rambling confessions. Even at the time, that overstated the evidence. More than a decade later, DNA tests would show that the hair did not come from the jogger.

Mistakes were made. But not just by Elizabeth Lederer, who is not discussing the matter in public.

So let me get this straight.  Ms. Lederer is to be let off the hook so completely that even at this late date she is to be given a pass on even so much as publicly expressing contrition?  Really?  And until she was recently called out on it in the wake of the Burns documentary, she was still listing the jogger case as one of her big professional accomplishments?

I don’t agree.  She can at least apologize for her role in ruining five lives.  For Chrissakes.

Beyond that if there are no consequences for her or the media or the other players in the drama, well, truth be told I don’t care.  It wouldn’t bother me to see everyone professionally diminished, for example, but it wouldn’t bother me if they aren’t, either.  I’ll agree that perhaps the cycle of retribution should be curtailed.  As a matter of prudence.

But the five victims have had a lawsuit pending for ten years.  The powers that be have apparently stonewalled it.  For the love of God that has to stop.  Give them all a lot of money.  Not a little; a lot.  That’s the only thing that can be done – if we’re not going to have retribution, that is – and it provides a measure of accountability as well as a remedy for the harm inflicted, the only kind of remedy that can actually help balance things out a bit.

And before we leave this topic for now, let’s also note that whereas the defense lawyers are faulted for “dozing” during the trial – although I’m sure it wasn’t during any important parts – and even the media, and even the writer, come in for some criticism here, along with the public at large, judges are conspicuously absent from the critique and so are jurors, which merely confirms that a jury is never blamed for a wrongful conviction but are viciously blamed for a ‘wrongful acquittal’, such as OJ Simpson or Casey Anthony.

There’s a long way to go in the examination of conscience that a lot of people should be doing as a result of this case.  And the New York Times article demonstrates that most of what went wrong here is so intractably embedded in the players’ subconscious minds that it isn’t going to go well, if it gets done at all.

I’ll say it one last time, though, for emphasis.  Pay these guys.  And apologize.  Now.

h/t Scott Greenfield

“…a society that punishes people for trying to be decent human beings is profoundly inhuman.”

An interview with David Graeber over at Naked Capitalism.

He’s talking mainly about economic disincentives to doing good in the world that appear to be a feature of our “capitalist” economy.

I can’t agree with a lot of Graeber’s verbiage – you know, “power structures”, things like that – and like the founding fathers I don’t care much for “democracy” either.  In other words, the democracy leaning to anarchy that characterized the Occupy movement and Graeber’s thinking about what to do at this point doesn’t strike me as being much of a solution to anything.

But in terms of identifying what’s wrong now, Graeber and I are in complete agreement.  While of course I approach all this from a different and somewhat less scholarly position – more ‘lawyerly’ than scholarly – the basics of the issue are the same for both Graeber and me.  In fact, I identified the debt problem – and a solution (updated here) – publicly before his most recent magnum opus (Debt – the First 5,000 Years) came out.

Graeber’s insight that the debt game has altered the role of government (“…which is increasingly becoming the legal cover and muscle behind debt and rent extraction”) is also important, but the solution to that is not so much to turn all of government and society upside down, which is the constant temptation of the revolutionary, but rather a return to first principles by the third branch of government (the judiciary) in general, and the legal profession in particular.

To take just one example, evictions are judicial processes.  As I have noted before, they are ridiculously easy to do, not to mention the fastest existing judicial process by far.  This is a reflection of a lot of what is wrong, true, but the solution is so simple:  change the law.

Do we have to change hearts and minds as well?  Certainly, and especially in the legal profession and the judiciary.

The anthropological approach to these issues is academically interesting and has a lot to offer, but it still amazes me how little regard there is for the legal profession and by extension – and somewhat distressingly – the rule of law.  The problems Graeber is speaking about fit very neatly – and pretty much entirely – into the ‘law’ category, much more so than the ‘anthropology’ category, but no one talks to lawyers about it.

That’s strange, I think, and maybe even a big part of the underlying problem:  a pall of despair over the rule of law and lawyers.

We’ve probably brought it on ourselves.

Perspective (Updated)

As in, the complete loss of same.

I wonder if there will be a report of the details of how and when Dzhokhar Tsarnaev relieves himself in his cell.  We’re now interested in the mother, who may or may not have discussed “jihad” with her obviously troubled older son before the Boston Marathon mayhem.  Soon we can justify routinely listening in to conversations between sons and mothers because such conversations might lead to bombing or shooting in the name of some fanatical cause or other, which then leads to the all-important “terrorism” appellation.

This is probably the simplest of category errors.  There are troubled people.  Dysfunctional families.  Mental illness.  We don’t deal with any of this very well, and so occasionally it blows up on us, literally.  Then when it does, we obsess about it, and saturate ourselves with our category error to make absolutely sure that we make the error, that no hint of introspection or thoughtfulness intrudes that might shift our focus.

This is about “terrorism”, we tell ourselves, over and over and over and over, so much in fact that it’s time for someone to admit it:  it must not be about terrorism or we wouldn’t be trying so hard to convince ourselves.

Or, if it is about terrorism, it’s not the way we think it is.  It’s not about the acts, or the terrorists; it’s still about us.  Fred Reed has it pegged, I think:

From the point of view of cost and benefit, terrorism is a brilliantly effective form of warfare, especially against heavily armed countries of the First World. The reasons are several. First, terrorism offers no target to the basically World War Two militaries of advanced countries. If five Saudis, two Pakis, a Russian and a disaffected American blow up a building in Chicago, against whom does the US seek revenge? Is it against Russia, Pakistan, Saudi Arabia and the United States, none of whose governments had anything to do with the attack?

Second, the return on investment is phenomenal. For example, the attack on New York cost perhaps several hundred thousand dollars. Yet it drew the US into multiple drawn-out, losing wars costing hundreds of billions of dollars, and transformed America from a reasonably free country into a rapidly deepening Orwellian gloom. A tiny input, a stunningly large effect. If terrorism were a hedge fund, it would be the hottest buy on the planet.

It is truly slick. The terrorists don’t do serious damage to the attacked country. (The casualties in New York, unusually large for a terror attack, if folded into the year’s traffic casualties would hardly have been noticed.) They stimulate the victim society to damage itself. TSA, Homeland Security, militarized police, warrantless searches in train stations, ever-tightening electronic surveillance of citizens, neutering of the Constitution and the abrogation of civil rights: bin Laden didn’t do these things. He couldn’t possibly have done them. He stimulated us to do them to ourselves. Genius.

Read the whole thing.

We need to get a grip on ourselves.  There might be a lot to say about what happened in Boston two weeks ago, but if it’s not about terrorism – and it isn’t – then there is little reason for general interest beyond our usual macabre, and thankfully fleeting fascination with plane crashes or bus accidents.  The most likely and well supported narrative here is not very sexy at all:  broken and dysfunctional family; strong-willed and capable but very troubled young man determined to do something - and if it hadn’t been motivated by “jihad” it would have been motivated by something else; and a 19 year old stoner who, probably due to immaturity and the difficulty of resisting strong-willed psychopaths who are often revered given certain relationship parameters - like for instance that it’s an older brother with seven years on you that has become a father-substitute due to the actual father’s lengthy absence.

It’s not a narrative that provides an outlet for much anger and frustration; it’s not a narrative that sells a lot of news copy.  The only virtue it has is that it’s probably much closer to the truth of the situation, at least to people who haven’t completely lost perspective.

Update:  Finally, the press turns its megaphonic attention elsewhere.  Another well worn narrative, but it’s a relief at this point.

Theme Of The Day (Updated)

This is true terror:  being right when everyone else is wrong, and not only wrong but invested in being wrong.

Echoing Voltaire, Szasz recalled the doctor’s tragic life in an autobiographical sketch in 2004:

“It taught me, at an early age, the lesson that it can be dangerous to be wrong, but, to be right, when society regards the majority’s falsehood as truth, could be fatal. This principle is especially true with respect to false truths that form an important part of an entire society’s belief system. In the past, such basic false truths were religious in nature. In the modern world, they are medical and political in nature.”

In related news, somehow an Illinois man surived thirteen years in prison after having been convicted of a murder he did not commit.  Note the compensation he’ll get from Illinois:  $175,000.

About $13,000 per year.

Also disturbing:  it’s a pretty minor news story.  Can anyone explain to me why the Boston bombing of a week ago was so incredibly huge and this story, while covered, is so minor by comparison?  It’s not that I think they should be equally prominent, but doesn’t the actual disparity seem wildly disproportionate?

Update:  43 years. Jesus

SCOTUS’ True Leanings

It is the common thread that ties all of the otherwise seemingly diverse rulings and ideologies together:  contempt for, or maybe fear of, freedom and equality before the law for what might be termed “ordinary” folk.  This was on display in a unanimous ruling issued earlier this week in the case of Kiobel v. Royal Dutch Petroleum.

The statute at issue, 28 U.S.C. 1350 (known as the Alien Torts Statute) is a model of elegant clarity and simplicity from an earlier era, namely the era right around our nation’s founding:

The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.

The one line statute gets clubbed to death in 35 pages of “statutory interpretation“, and eventually of course it winds up not meaning what it obviously says at all; indeed it more or less means nothing after the SCOTUS is through with it.  Sort of like 42 U.S.C. 1983, which ostensibly deals with an entirely different sort of wrong but to the SCOTUS it’s the same issue:  how to keep down the rabble in fly-over country and their ilk anywhere else in the world with the temerity to come into a federal court – a federal court! – making outrageous demands.  Remember the scene from the Wizard of Oz when they finally get in to see the Wizard?

Bad Wizard, SCOTUS!

https://www.youtube.com/watch?v=NZR64EF3OpA

Technically, the issue in the Kiobel case is whether the statute can be applied to conduct occurring outside the United States.  The obvious answer to that question is that this is precisely what the statute is for, and indeed it has no other intelligible purpose.  How the SCOTUS winds up deciding the opposite is illustrative.

First, let’s stipulate to the legion of cases dealing with questions of statutory interpretation wherein it is said that if the statute has a plain meaning, no further interpretation should be done.  The “plain meaning” thing is a favorite of conservatives in other contexts, such as when it makes a criminal defendant or a personal injury plaintiff or any other litigant who’s an individual going up against some institution lose; this time, however, the plain meaning of the statute favors the little against the big and so suddenly we don’t like “plain meaning” anymore.  Now we get to “interpret” the statute, which means we can rationalize throwing the little guy out of court, which is what we want to do in the first place because: a) little people are messy and unappealing; and b) if we open the courthouse doors to them they’ll clog up our dockets with their silly little concerns - like in this case, oh, genocide – when we have important criminal cases brought by the government that we have to address.

So how is this “interpreting” done so that it doesn’t seem to be the thought process I just described even though that’s what it really is?

Well, they start with this “presumption” on the first page of the opinion:

“[w]hen a statute gives no clear indication of an extraterritorial application, it has none,”

One might think that it’s a pretty clear indication that a statute has “extraterritorial application” if, without it, it’s unintelligible and without purpose – and of course you are never supposed to interpret a statute out of existence, that’s another rule of “interpretation” -but never mind that for now.

As support for this “presumption” the SCOTUS can go all the way back to 1932 and a case called Blackmer v. United States, but since the linguistic formulation of the presumption in Blackmer isn’t quite good enough for our purposes here – which is to screw the little guy – we’ve changed it in our oh-so-clever SCOTUS fashion.  See, Blackmer in referring to this presumption says: “… the legislation of the Congress, unless the contrary intent appears, is construed to apply only within the territorial jurisdiction of the United States…” and if you read that in context it’s not clear that the 1932 SCOTUS is setting up any kind of formal “presumption” at all; it’s probably just stating the obvious matter of factly.

But again, never mind.  We have an agenda - remember?  – screw the little guy.

So we go up to 1949 and now the off handed musings of the 1932 SCOTUS are formalized into a rule of interpretation, but of course intellectual honesty was more common then so they didn’t change the wording:

The canon of construction which teaches that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States, Blackmer v. United States, supra, at 437, is a valid approach whereby unexpressed congressional intent may be ascertained.

That case is Foley Bros. v. Filardo.

Then we bring ourselves up to 1957 and the case of Benz v. Compania Naviera Hidalgo, and the language of the “canon of construction” has not been altered, but the 1957 SCOTUS adds by way of explaining itself further:

And so here such a “sweeping provision” as to foreign applicability was not specified in the Act.^[7] The seamen agreed in Germany to work on the foreign ship under British articles. We cannot read into the Labor Management Relations Act an intent to change the contractual 147*147 provisions made by these parties. For us to run interference in such a delicate field of international relations there must be present the affirmative intention of the Congress clearly expressed.

This language was dicta, summarizing the Court’s rationale not modifying the rule, but it sure came in handy as the Rehnquist SCOTUS began to come into its own in the 1990′s, with its barely disguised hostility to any ordinary-individual-initiated litigation, which apparently all belongs in small claims court, or maybe on Judge Judy, where the rabble can go and obtain whatever piddling relief they might deem themselves entitled to.  I mean, who cares, right?  We’ll let them sue each other.  Gives them something to do.

But again, we can’t come right out and say things like that, so we do a little mixing and matching:

In applying this rule of construction, we look to see whether “language in the [relevant Act] gives any indication of a congressional purpose to extend its coverage beyond places over which the United States has sovereignty or has some measure of legislative control.” Foley Bros., supra, at 285. We assume that Congress legislates against the backdrop of the presumption against extraterritoriality. Therefore, unless there is “the affirmative intention of the Congress clearly expressed,” Benz, supra, at 147, we must presume it “is primarily concerned with domestic conditions.” Foley Bros., supra, at 285.

The dicta of Benz gets combined with the rule of Foley Bros, and presto!  The “presumption” has acquired that draconian strictness pressed mercilessly down upon the rabble for which the Rehnquist court, Lloyd Blankfein and Jamie Dimon have become so widely admired.

It was 1991 and the case was EEOC v. ARAMCO.  That case dealt with the extraterritorial application of Title VII civil rights claims, a claim that would have failed under the older, less draconian formulation of the presumption anyway, but this is the Rehnquist SCOTUS and we’re really getting fond of applying really strict rules even when we don’t have to, as long as it permits us to tell the little guy ‘no’.

So now we’ve gone from 1932 musings, to a “rule of construction” and “presumption” by 1949 providing that “…unless a contrary intention appears…” US statutes do not apply extraterritorially to a tentative “..unless there is the affirmative intention of the Congress clearly expressed…” US statutes do not apply extraterritorially in 1991.  And this becomes how we do things.

And then by 2010 some poor slob is trying to sue an Australian bank in the wake of all that bankster perfidy, and of course we can’t have the rabble suing banks because we have our “policies” doncha know that this will all be handled by some “Troika” or other, and by this time we have our rationale “well settled” even though it’s a pretty major deviation from the original idea in 1932, but anyway it’s really handy and ladies and gentlemen I give you Morrison v. National Autrailian Bank.  And all the verbiage doesn’t really matter because the bottom line is, as it has been for so long now, that the bank wins and the little guy loses.

And so finally – and it had to come to this – the question becomes are we going to extend our illegitimate “presumption” so far that we will toss the rabble out of court even when the issue is human rights abuses under international law, which would seem to be specifically contemplated by the Alien Tort Statute when it mentions the “laws of nations”.  Of course this means, and the Plaintiffs in Kiobel alleged, things like extrajudicial killings, crimes against humanity, torture, arbitrary arrest and detention, and so forth.  The idea is that the international companies doing business (and having copious assets) both in Nigeria, where these things allegedly occurred, and the United States - to which the Plaintiffs fled and were in fact granted asylum – had a hand in these atrocities and by being forced to compensate the victims maybe they would think better of participating in such things and maybe even take some affirmative steps to ameliorate them, what with all the financial pressure of having to compensate victims and all.

In other words, this would be litigation having the salutary effects of compensating victims of human rights abuses and providing economic incentives to human rights abusers to stop being, well, human rights abusers.  And we have lots of lawyers in this country that need good paying work and maybe this would be good paying work for them so you kill two birds with one stone.

But this is the SCOTUS, and so obviously such litigation cannot be permitted.  This kind of thing is all handled by the State Department, just like financial institution corruption and wrongdoing is all handled by the Securities and Exchange Commission.  That way everything truly ‘important’ gets run through Washington, important referring to any sizable amount of money changing hands, or anything coming within arguable range of some DC determined ”policy” or other which increasingly means pretty much anything, period.  Because Washington apparatchiks and wonks like Ilya Shapiro are really smart and they should run everything, along with the morons prestigious economists at the Federal Reserve.

And I’ll just throw in that the SCOTUS is obviously wrong here.  The Alien Tort Statute’s only discernible purpose is to authorize just the kind of lawsuit the Petitioners in Kiobel brought, that is, a tort occurring outside the US.  Torts occurring inside the US are obviously cognizable in some state or federal court anyway, so the way they’re reading it the statute is purposeless nonsense.  And, are they going to apply that same “presumption” the same way when the USG wants a criminal statute to have extraterritorial application?

Ugh.

Golden Conspiracy Theories

Conspiracy theories are very popular among the gold bug set.  They are especially popular after the dollar price of gold takes a beating for some reason.  Thus you have articles like this, which I would recommend not because I necessarily agree with it but because it does have information, such as details concerning how the “physical” gold market operates, that you probably won’t see elsewhere.

Here’s something to consider, though.  The dollar price of gold really doesn’t matter at all except to three groups:  a) gold bugs who are holding gold as an investment; and b) monetary authorities (central bankers) and their high priests (economists) and other followers, who are very hostile to gold as a matter of preserving their job security, prestige and power; and c) those who oppose (b) for ideological, political or moral reasons.

In other words, more than other economic data the price of gold is a heavily political thing.  And very polarized, very difficult to compromise.  You go one way or the other on it and it doesn’t just change one thing, it changes everything.

Which is kind of scary, when you think about it.

Required Viewing – The “Central Park Five”

Apparently to be aired on the PBS network tonight.

Maybe they won’t pull any punches here, which would be good because this is an important story.  The degree and extent of our system’s failure here is not, unfortunately, so much shocking as it is instructive.  I don’t know all the details.  It would be interesting to learn how anyone ever got to the bottom of it, after the system achieved its beloved “finality” and the jailhouse doors had been closed, locked and the key long since discarded.

Of course the kids were innocent.  Vulnerable.  And innocent.

I hope it turns out to be a parable.  About them, of course.  But especially about us.  I don’t imagine it’s going to be too flattering.  From everything I know, it shouldn’t be.

What’s Up With Cyprus? (Updated)

Maybe cozying up to Russia is not such a good idea if you’re a member of the EU :

Emergency loan (2012)

Since January 2012, Cyprus has been relying on a €2.5bn (US$3.236 billion) emergency loan from Russia to cover its budget deficit and re-finance maturing debt. The loan has an interest rate of 4.5% and it is valid for 4.5 years.^[19][20] It was originally expected that Cyprus would be able to fund itself again by the first quarter of 2013.^[20]

…………….

On 13 March 2012, Moody’s slashed Cyprus’s credit rating to Junk status, warning that the Cyprus government would have to inject more fresh capital into its banks to cover losses incurred through Greece’s debt swap. On 25 June 2012, the day when Fitch downgraded bonds issued by Cyprus to BB+, which disqualified them from being accepted as collateral by the European Central Bank, the Cypriot government requested a bailout from the European Financial Stability Facility or the European Stability Mechanism.^[16]

So Moody’s, which is at this point little more than an enforcement arm of the Fed, the ECB and the IMF, upgrading and downgrading pretty much as they see fit, tightens the screws on Cyprus and fucks up their relationship with Russia, whereupon the Cyprus government inexplicably begs its tormentors, those same internationalist bullies – amazingly operating under the foreboding handle of the “Troika” – for “help”.  The Troika then steals from depositors in Cypriot banks and confiscates the country’s gold.

Nice.

Power and money seem so closely connected some days.

Meanwhile, even as the Troika seems desperate to get its hands on some gold, the price of gold plunges amid much breathless fanfare and media coverage.  Perhaps the Troika’s impressive show of force in the Cyprus fiasco has people thinking that the banksters are firmly in control for the foreseeable future.

Update:  Meanwhile, Greece has been such a good, good little boy that there’s even some debt relief dessert on the table! Yay!

A Glimpse… (Updated)(x2)

…inside the mind of a central banker.  Very interesting stuff.

Let’s go step by step through this important interview.

SPIEGEL: Ms. Reinhart, central banks around the world are flooding the markets with cheap money in order to spur economies and support governments. Are these institutions losing their independence?

And here we come to our first objection:  the premise of the question is wrong.  Central banks are not “flooding the markets” with cheap money; what they have done so far is to shore up failed financial institutions through injection of reserves, which for the most part are just sitting there.  Very important to understand this.

Anyway, her answer to the misleading question begins:

No central bank will admit it is keeping rates low to help governments out of their debt crises. But in fact they are bending over backwards to help governments to finance their deficits.

This is not puposely untruthful.  Certainly, a primary beneficiary of a low interest environment is the borrower of last resort, which is the government, which when it swings into action in that role is a thing to behold.  I mean look at US deficits over the last few years.  But what is inadvertently revealing here is that in Carmen’s mind the government and the central bank are separate, and the central bank “helps” the government out of its “debt crisis”.  Yet the central bank is a creature of government, created by statute.  And it answers to the government.  And it would not exist unless that were true.  Carmen suffers from cognitive dissonance, at least a little, because in this whole area you have to get used to people talking out of both sides of their mouths.  Especially central bankers.

And this particular central banker is perhaps more candid than she should be for her own good:

You have to deal with the debt overhang one way or the other because the high debt levels are an impediment to growth, they paralyze the financial system and the credit process. One way to cope with this is to write off part of the debt.

Discussion of debt write offs is off the table.  Except around here.

Moving on, then:

But we are in an environment where politicians are very reluctant to do write-offs. So what happens is that money is transferred from savers to borrowers via negative interest rates.

She’s not even part right.  It isn’t “money” that’s being transferred; it’s income.  To a central banker the two are almost synonymous.  That is a category error, I think.  In any case, keeping interest rates artificially low might be bad for a lender’s income in theory, but generally isn’t in practice.  Because as interest rates descend into the zero bound range “spreads” tend to increase in percentage terms.  To illustrate, at 20% interest rates for savings I might be able to get away with lending at 25% or even 30%, making the spread between what is saved and what is lent 20-50%.  But at 1% interest for savings I can still get away with lending at, say, 4% making the spread between what is saved and what is lent 300%.

See?  A low interest rate environment might be terrible for savers, but it’s great for lenders.

Continuing, then:

SPIEGEL: Do you think it is wrong for Europe to focus on austerity measures with inflation at such a low level?

Reinhart: No. Restructuring, inflation und financial repression are not substitutes for austerity. All these measures reduce your existing stock of debt. Unless you do austerity you keep adding to the debt. There is no either-or. You need a combination of both to bring down debt to a sustainable level.

I think she’s misspeaking a bit here, but the core idea she is expressing is that “austerity” reduces the rate at which you add to the debt.  I mean, it isn’t as if any sane person, and especially a central banker, would advocate an out and out reduction of debt, even by the government.  That would be disastrous.

She’s a little clearer here:

SPIEGEL: So what should be done?

Reinhart: The best way of dealing with a debt overhang is to never get into one. Once you have one, what can you do? You can pray for higher growth, but good luck! Historically it doesn’t happen — you seldom just grow yourself out of debt. You need a combination of austerity, so that you don’t add further to the pile of debt, and higher inflation, which is effectively a subtle form of taxation …

There’s the prescription:  Austerity plus “higher inflation”.  Higher growth is impossible, she thinks.  But of course she is egregiously wrong about that, although it would take another fairly long post to explain why.

But in any case, here’s the problem.  “Austerity” means the government cuts back its spending; but to achieve “inflation”, there has to be new circulating money; and the central bank can essentially only funnel new money into the economy at this point through loans to the government, because private borrowers are tapped out and the government is effectively the only borrower left.  And as regular readers over here should know by now, new money can only be borrowed into existence.  There is (as a practical matter) no other way, the system does not permit any other way, and the “helicopter drop” allusion was meant as a joke precisely because the audience knew that new money can only be borrowed into existence, not dropped from helicopters.

So here is what the central bankers are doing about the “crisis”.  They began by recapitalizing and further consolidating the “banking sector”, which had pretty much already become a creaking socialist boondoggle and now was transformed into a complete zombie 20th century artifact:  not “failing” (dying) anymore since it is being propped up through literally trillions of dollars of “loans” – like keeping a dead person twitching with copious shots of adrenaline or something – but all that money just sits there because there’s no one to loan to.

This effort has failed and the central bankers know it.  Nevertheless, the second phase of their “rescue” is to buy up huge amounts of government debt, the only rational purpose of which is for the government to spend the money into the economy so that we might see some”inflation”; but at the same time admonishing the government that it must not spend the money into the economy because unless we have “austerity” we’ll just keep “adding to the debt”.

This is incoherent, although it may have this one virtue:  to stave off collapse of the financial system and governments for a little while longer than it would otherwise occur.

But here’s an interesting thought I had about all this.  At least it’s interesting to me.  The central bank is just a debt machine, and “debt” of course shares etymology with “death”.  And having essentially given us a zombie banking system they are now proposing to give us zombie governments.

Somehow this – transforming our governing institutions into the collectivist equivalent of the undead – doesn’t seem like much of a solution to me.  But this is where the economists are taking us.  You heard it right from the horse’s mouth.

Update:  One thing we can do, apparently, is steal seize the gold from the relevant government when we’re not sure if the “austerity-inflation” prescription is working.  Hmm.  One question arising from this development is the degree to which the Eurocrats will resort to this option faster than the Fed, which after all still has “reserve currency” privileges.  Not to mention, ultimately, the biggest stick.

Update 2:  Here’s one potential consequence of the government becoming over-indebted:  you have to start turning real estate over on the cheap to the daughters of foreign billionaires, just to keep the lights on.  On the bright side, it will go well with their Easter bonnets.

Foreclosure Nation – Redux

This is, of course, entirely predictable.  If you’ve been paying attention.

After all, why did people’s homes go into foreclosure in the first place?  Because for whatever reason they weren’t paying their monthly bankster tribute.  Usually this is because they are unable to, or feel they are.  And “usually” is to understate pretty dramatically.

What, if anything, has changed such that people who a couple of years ago could not (or felt they could not) pay their monthly nut now feel differently and are flush with cash?

Nothing.

So the “forebearance” has run its course and the relentless “process” resumes, making people homeless.  Including children.  And people are up in arms over all this because they have seen countless news stories - in print, and on the nation’s airwaves - showing this devastating humanitarian crisis afflicting their neighbors.

Okay, that’s not true.  Nobody’s up in arms over it and the media such as they are don’t report it, if they’re even aware of it, which they probably aren’t because they are busy with all the toadying.  But just because a disaster doesn’t make “news” doesn’t mean we don’t have a disaster on our hands.

It wasn’t long after I started this blog, way back in 2010, that I tossed off some thoughts about the whole foreclosure thing.  I noted how weird things were getting and how there was no end, and no solution, in sight.  I’ve come back to the issue.  Often.  Really often.

Of course, it’s hard to get above the ambient noise.

(Another) Puff Piece

We just can’t get enough of the heroic feats of police officers.  Or at least CNN can’t.

Somehow I don’t think shouting “I’m a lawyer! I’m a lawyer!” would have had the same calming effect on the TSA agents in a similar situation.

No such thing as an “off duty” lawyer, either.  They won’t even let you quit.

Explain This

The media were all over the arrest – before it even happened.

The point is purely rhetorical.  There is no explanation other than the obvious one:  law enforcement and the media are way too cozy.  It may be that the New York Post is one of the worst offenders in this regard, but it’s a problem across the board.

The ramifications of this are, shall we say, significant.  I’m displaying rare restraint and understatement there.

For example, lots of handwringing, “fear” and “wondering” by law enforcement all over the country in the wake of the assassination of the District Attorney of Kaufman County, Texas and his wife.  Now, I shouldn’t have to say this again but I will:  this was a terrible, heinous and despicable act by whoever did it.  I’m not equivocating on that.

The point is, we all know about it.  It’s a “harrowing saga”.

But why isn’t this a harrowing saga that everyone knows about?

And this is just a tiny sample of - what shall we call it? – disparity of treatment.  When you look at it objectively, it’s a steady drumbeat of one very lopsided viewpoint fed to the public day after day after day, in ways big and small, subtle and not-so-subtle.  I mean, look at this.  The cops are not just looking for a rapist; they are looking for a “fiend”.

That’s the not-so-subtle part.

Does this affect the jury pool?  You’d better believe it.

 

Delicate Subject: Defense Lawyering Is Dangerous Too

The District Attorney of Kaufman County, Texas was apparently found shot to death along with his wife.  A few months ago, one of the assitants in that same office was shot to death outside a courthouse.

These are, of course, terrible crimes.  And it is certainly not out of bounds to believe that the killings were related to the work the men did, which colloquially is often described as “putting the bad guys away”.  The bad guys are, after all, bad guys.  At least some of them are.  And bad guys do bad things like shooting you when you cross them, or when they believe you have crossed them.

All that said, there is something else that needs pointing out about this story.

In the first place, it is quite a story.  Front page on CNN, all over the web.  I’m not saying it shouldn’t be, and since you’re dealing with gun deaths there isn’t a lot of mental effort required to conclude that you’re dealing with homicides.

But here’s the thing:  defense attorney deaths don’t become the top story on CNN.  And it’s not as if there aren’t defense attorney deaths that don’t raise some questions.  Like this one.  And this one, and this one, which were, in fact, gun deaths.

And how about this one?

The ones that aren’t obvious homicides are the scariest.  If you’re in the hot seat, that is.  Because people are slow to perceive the risk.  In fact, most people never perceive the risk, even when it is pointed out to them, even when it makes sense objectively.

One reason why?  They don’t see that risk confirmed, affirmed, validated in the media, like the risk to prosecutors and to cops.

So when Mark Hasse, the assistant district attorney that was shot to death outside that Texas courthouse in January, packed a pistol and varied his routine to make himself less of a target, no one called him “crazy” for doing that.  And indeed he surely was not:  there’s nothing good about being shot to death but it does tend to vindicate the taking of precautions that may have seemed unnecessary or pointless beforehand.  Mark Hasse’s friends and colleagues took him seriously.  As they should have.

But a defense attorney who believes himself to be at risk is likely to be met with at least skepticism.  If not ridicule.  And the defense attorney’s risk is in many ways greater - and frustratingly far more subtle – for the threat he perceives is not as likely to be so crude and so obvious, since it probably comes from law enforcement that is already busy and adept at covering its tracks.

And there is this inescapable fact:  the law enforcement apparatus that poses the threat to you is the very same one that will “investigate” anything that happens to you.

You may think that homicides disguised to look like something else are far fetched.  But once you have uncovered, say, a law enforcement perjury scheme and appear to be the only witness that can prove it, it doesn’t look like such a remote possibility to you.

I guess this is a matter of perspective.  But the truth of the matter is, a defense attorney in that position cannot afford to disregard the risk.  And he shouldn’t.

Servitude

This is not about helping “troubled borrowers“; it’s about maintaining the status quo, and in particular preserving the biblical adage that the borrower is the servant of the lender.

I would say that it is also dishonest, inasmuch as anyone with any relevant knowledge and minimal intelligence must be aware that this is not a real solution to anything.

There is a simple concept that is vital to understanding why Fannie and Freddie are extending “forebearance” to “troubled borrowers”.  Under the most basic principles of accounting, a loan is an asset – an account receivable – of the lender(s).  If the loan is written off as being uncollectable, the lender can no longer claim that it is an asset.  With enough write-offs like that, a lender goes under when the assets disappear, because the liabilities never do, unless you pay them or go bankrupt.

In other words this is about saving banks, not helping borrowers.

“Forebearance” is the only kind of solution the powers that be can contemplate because it keeps creditors creditors and debtors debtors.  The entire monetary and banking system depends on that.  But the very idea of “leniency” carries with it a class differential that we like to think we left behind us in the middle ages.  You can only be lenient to your inferior.  You can only accept leniency with gratitude towards your superior.

This characterizes a master-slave relationship, not a free market exchange of any kind.  Sooner or later such relationships rupture, often violently, for political reasons.  In the meantime, a solution could be had at any time that would resolve the economic and political problems before they become too serious, but such solutions have not really been seen since antiquity.  Jubilees used to occur because some wise and enlightened ruler realized it was necessary and not only decreed it but smoothed over the inevitable problems that go along with a jubilee.  In modern times, a jubilee will never come from an enlightened ruler.  It will have to come from an enlightened populace.

There is no reason to be optimistic.  As I’ve said many times, the scenario playing out is simply a 21st century version of Dickens’ literary portrayals of the conditions leading up to the French Revolution.

Although I must defer to David Graeber on the history and anthropology of all this.  I’m just a lawyer.

Sometimes.

On strike.  Sometimes.