Exorbitant Privilege

[Please note: The word “Featured” on the left side above was NOT inserted by this blogger, but apparently was inserted by WordPress, and it cannot be removed. NO post in this blog is sponsored.]

The Book of the Week is “Exorbitant Privilege, The Rise and Fall of the Dollar and the Future of the International Monetary System” by Barry Eichengreen, published in 2011.

“Often these individuals had little professional training, there being no meaningful federal or in some cases, even state licensing requirements.”

No, the above refers to neither tax preparers nor life coaches.

The author was referring to the bandwagon-jumpers who worked for lenders taking advantage of the excessive deregulation that resulted in the 2008 subprime mortgage crisis in America.

The author listed some factors favoring, and some disfavoring the American dollar’s ability to maintain its global power as a currency and store of value. However, one major factor the author completely neglected to mention (a glaring omission) was that of cryptocurrencies.

Anyway, Brooksley Born, head of the Commodities Futures Trading Commission, raised the alarm in the late 1990’s on the excessive deregulation that was to lead to the subprime crisis. She deserves more of a historical footnote than she has since received, because sadly, greedy alpha males are better propagandists than prescient, conscientious public-officials such as she.

The author contended that one major reason the American dollar will continue to maintain its dominance in the world, is that other industrialized nations can’t agree on what financial instrument should replace the American dollar as a stabilizer of the world’s other currencies. The greenback has compiled a longer history of trustworthiness, value-consistency, related liquidity-maintenance, and other benefits, in connection with transactions and international trade balances, more than any other instrument. China’s policy of keeping its central banks’ foreign-reserves balance a secret, reduces China’s currency’s trustworthiness.

The powerful U.S. government backs up its currency through treasury bonds and bills, while a (sometimes contentious) collective of European countries (not one government) must agree on how to act when a monetary crisis rears its ugly head. It stands to reason that disagreement or indecision leads to uncertainty, which leads to instability, and a possible worsening or hastening of, the collapse of modern civilization.

The aforementioned are just a few reasons why 54 countries pegged their currency’s values to the American dollar, while 27 pegged theirs to the euro, as of 2009. As is well known, the George W. Bush administration did a number on the U.S. economy, as “… tax cuts and unfunded spending increases [on two extremely expensive wars and a Medicare drug benefit] pushed the budget from surplus in 2000 to a structural deficit of 4 percent of GDP in 2007-2008.” The next two years saw the American government’s debt explosion at its worst.

The author outlined several possible (yet raucously controversial) ways to keep the American dollar globally powerful, through cost-cutting:

  • In a period of non-war– less defense-spending;
  • Reforming healthcare;
  • Raising the retirement age– less pension spending;
  • Liberalizing immigration policy — helps fund Social Security going forward; and
  • Increasing taxes of all kinds.

Read the book to learn a lot more about how the American dollar has fallen in stature in recent decades, and about other geopolitical international: monetary, financial and economic issues; explained for laypeople.

Boomerang

The Book of the Week is “Boomerang, Travels in the New Third World” by Michael Lewis, published in 2011. As the effects of the early 2000’s financial shenanigans began to be felt around the world, the author traveled to newly impoverished countries (Iceland, Greece, Ireland, Germany and the United States) to try to understand their situations, economically, politically and culturally. Human nature is such that very few people see the big picture before it’s too late. Besides that, it takes a long time for the victims to learn who really instigated and funded insidious propaganda campaigns or nefarious activities, if they ever do learn.

Kyle Bass, investment banker from Dallas, raised the alarm prior to the 2008 subprime mortgage crisis, but was shouted down by greedy alpha males with hubris syndrome. So he bet against the sheep and made a killing. But he believed the lowest-risk alternative to the securities market was physical gold, and nickels.

Iceland saw the U.S. in the 1980’s enjoying its material wealth, and wanted a piece of that. Iceland’s prime minister David Oddsson ushered in tax cuts and privatization, and greased the wheels of trade. In this way, the government was enticed into the vortex of excessive-deregulation-induced capitalistic greed. Around 2000, fishing industry regulations produced a maximally efficient, maximally profitable oligopoly that prompted Icelanders who weren’t in the fishing industry, to engage in aluminum smelting, and other economically rewarding careers.

The internet has facilitated the forming of relationships between hegemonic financial entities and overseas suckers. Beginning in 2003, young adults in Iceland found that speculative trading in stocks and currency was much more lucrative than fishing.

Ironically, Iceland– whose economy was based on fishing– was ready to take the bait, and become the fish. The former fishermen thought they’d succeed in the financial-services industry because fishing and money-management both involve risk-taking. However, the former requires specific physical and survival skills; the latter, knowledge and experience in the securities markets, business, economics and politics. Icelanders had none of the latter.

Unsurprisingly, when the money started rolling in, the newly rich started to buy houses and cars they couldn’t afford. Human nature is also such that, when people move numbers around on a screen, they don’t feel like they’re moving real money. The bankers and traders in Iceland were borrowing tens of billions from foreigners in the short term, “…then re-lending the money to themselves and their friends to…” overpay for a large financial stake in other banks, sports teams, and other assets. Astute sellers saw the writing on the wall, and left Iceland holding the bag.

European regulators were asleep at the switch. If U.S. financial institutions had been the targets, or had been engaging in such activity, there would have been more early awareness and safeguards in place, in fending off hostile takeovers.

The Americans have their lawyers, directors and officers, and consultants as the first line of defense. Their financial institutions didn’t play the fool the same way major banks in Iceland did. They were largely the lenders and sellers, not the borrowers. But they still got in trouble (!), and also needed adult supervision going forward to bail themselves out.

Incidentally, the SPAC affiliated with former U.S. president Donald Trump needs to continue to find foreign entities (like those that Iceland’s became) with whom he shares the same ethics (or lack thereof), to establish his new media empire. Here’s a little ditty about the situation thus far:

FUN, FUN, FUN

sung to the tune of “Fun, Fun, Fun” with apologies to the Beach Boys.

Well, he’s got his base’s-money
and he’s cruising to his next train WRECK now.

Seems like he forgot all-about
the REAsons he was banned from Big TECH now.

And with the hate-speech blasting
with over-whelming noise full of DRECK now.

And he’ll have fun, fun, fun
till the hackers take his network away.

(Fun, fun, fun till the hackers take his network away.)

Well, the Dems can’t stand him
’cause he’s STILL hogging media space now.

(He’s still hogging space now, he’s still hogging space.)

He gives American politics
a persistent Nix-onian face now.

(He’s still hogging space now, he’s still hogging space.)

A lotta critics try to nail him
but he spins a propaganda chase now.

(He’s still hogging space now, he’s still hogging space.)

And he’ll have fun, fun, fun
till the hackers take his network away.

(Fun, fun, fun till the hackers take his network away.)

Well, he knew all along
that his foes were getting wise to HIM now.

(He needs a new crew now, he needs a new crew.)

And since his stunts are getting old,
they’ve been wishing that his fun is all through now.

(He needs a new crew now, he needs a new crew.)

And things are coming to a head
and his lawyers got a lot to do now.

(He needs a new crew now, he needs a new crew.)

And he’ll have fun, fun, fun
till the hackers take his network away.

(Fun, fun, fun till the hackers take his network away.)

And he’ll have fun, fun, fun
till the hackers take his network away.

(Fun, fun, fun till the hackers take his network away.)

wo wo wo wo woo woo

(Fun, fun, fun till the hackers take his network away.)
(Fun, fun, fun till the hackers take his network away.)
(Fun, fun, fun till the hackers take his network away.)
(Fun, fun, fun till the hackers take his network away.)
(Fun, fun, fun till the hackers take his network away.)
(Fun, fun, fun till the hackers take his network away.)

Anyway, in October 2008, the party was over for Iceland. Lots of fire insurance was bought, and lots of Range Rovers were set on fire. Finally, in February 2009, the aforementioned Oddsson was ousted as head of the central bank.

The story in Greece was that the government was corrupt, overpaid and overstaffed. No tax collection took place because 2009 was an election year. Corporate employees only (not the self-employed) were the only workers who paid income taxes. All three hundred Parliament members evaded real-property taxes through dishonesty. Cash transactions with no paper trail facilitated the evasion of sales taxes throughout the country. There was wilful ignorance (unbelievably sloppy accounting) that masked just how serious the financial crisis was.

Read the book to learn much more about other aspects of the crisis– the alarm-raisers in Iceland, Ireland and the United States, the one protestor in Ireland, the German mentality, and the responses of a few local American politicians.

Somebody Down Here… / How Football… BONUS POST

The first Bonus Book of the Week is “Somebody Down Here Likes Me Too” by Rocky Graziano with Ralph Corsel, originally published in 1981.

Born in January 1921, Graziano grew up in Little Italy and the East Village in Manhattan. However, when he wed in 1943, he moved in with his wife’s well-to-do family on Ocean Parkway in Brooklyn; of which he nostalgically remarked, “They got Coney Island and Nathan’s hot dogs and Sheepshead Bay with all that good seafood, and they got Ebbetts’ Field and the Dodgers and a few bums like Leo Durocher…”

Nonetheless, his poverty-stricken childhood experiences and abusive father soured him on life at an early age. He continually ran afoul of the law, but his mother, who loved him unconditionally, kept bailing him out. For such boys in his generation (rejected by the military because he was an ex-con), the only way to escape his bad environment was to succeed in the “rackets” or make it big in show business or become a professional boxer. Read the book to learn how he turned his life around when he put his mind to do two of the three.

The second Bonus Book of the Week is “How Football Explains America, by Sal Paolantonio, published in 2008.

Incidentally, Vince Lombardi sought to recruit wayward boys such as Graziano for the high school football team he coached in New Jersey in the late 1930’s. He used the Englewood police department as his talent source.

Another interesting bit of information from the author in describing how professional football evolved into its current state: safety rules had to be imposed so the sport could turn its barbaric reputation around. For, in 1905, there occurred “…battered faces, broken ribs, bloody skulls, and at least 18 recorded on-field fatalities.”

Read the book to learn many other ways football and American culture became intertwined.

One for the Earth

The Book of the Week is “One for the Earth, Journal of A Sierra Club President” by Susan D. Merrow with Wanda A. Rickerby, published in 1992.

The Sierra Club, founded in May 1892, began with about one hundred members. Its original goal was to prevent the Sierra Nevada mountain range in California from becoming further polluted. Sadly, through the decades, the need for such an organization has grown exponentially. The Sierra Club Legal Defense Fund, a group that began using the Club’s name, actually helped raise more funds than otherwise for the Club, but took public stances with which the original group disagreed.

Beginning in May 1990, Merrow was appointed president of the Club for a year’s term. She had acquired previous experience teaching adult education classes and lobbying the Connecticut state government on environmental matters. Her new job– for which she received no salary, only reimbursement of expenses– required constant travel. Volunteers did the bulk of the Club’s work. Her and her employer’s major frustration with the then-federal government was that it was regressive in connection with all kinds of energy issues.

The Club’s lobbyists were awfully busy contacting politicians about: incinerators, recycling, composting and source reduction, increasing gas mileage and decreasing emissions in newer cars, advocating for stopping oil drilling in the Arctic, reducing pollution on land and in the sea and in the air, and arguing for stricter waste-disposal laws, etc., etc., etc.

It might be recalled that a year prior, the Exxon Valdez oil spill left about 380,000 birds dead, and resulted in severe health issues for many animals and plants, including hundreds of species of mollusks, fish and coral-reef animals, dolphins and whales. The then-legal case that might compensate injured parties (Alaska and the United States) for the disaster was still pending. However, in April 1990, Exxon suggested that it pay $100 million to settle the civil and criminal charges against it. Tens of studies done by the National Oceanic and Atmospheric Administration (NOAA) showed grievous (and probably irreparable) harm that (if a dollar value had to be put on it) was estimated at $1.1 billion.

After Iraq invaded Kuwait in August 1990, astute people knew that the Clean Air Act that was then working its way through the Congressional-passage process would become diluted by profiteers aided by propagandists. In autumn 1990, the Bryan Bill– mandating the manufacturing of more fuel-efficient cars– was stalled too, by lobbyists in the oil and auto industries, and by other presidential supporters.

The First Gulf War wreaked environmental destruction (now forgotten by Americans) consisting of “… soot from 600 burning oil wells… cloud over farmland and villages in Turkey and Iran… rain filled with toxic chemicals, polluted both the air and water. Severe respiratory illness, cancer, and ruined crops…”

On a diplomatic mission, the author visited staffers at three different magazines: Good Housekeeping, Sports Illustrated, and Seventeen. She hoped to get articles published for targeted readers of their respective, widely different demographic groups in whose interest it was to save the earth.

One concept the author conveyed was that protecting the habitat of one species, aids in the survival of all of the other species in that habitat. So ensuring a safe environment for the bobolink helps: “…lichens, apple trees, ladybugs, sumac, earthworms, chipmunks, monarch butterflies, white birches, wild blueberry bushes, goldenrod, red foxes– even humans.” The flip side is that one negative consequence leads to another when the food chain is disrupted (See this blog’s post, Rat Island).

Read the book to learn what happened to the Johnston-Wallop bill, and much more about the author’s trials, tribulations and triumphs.

Back to the US-Threats War – BONUS POST

In case you missed it: Facebook is the new USSR.

Back to the US-Threats War

sung to the tune of “Back in the USSR” with apologies to the Beatles and rights-owners it may concern.

Facebook got outed on its policies.
The website didn’t work last week.
I couldN’T keep in touch with my families.
The press enjoyed a dreadful leak.

Back to the US-threats war.
We know how disruptive you are, yeah.
Back to the US-threats war.

Been away so long, I was bored to tears.
Gee it’s good to see my wall.
You can’t wait to REsume inciting fears.
Some say you’re heading FOR a fall.

Back to the US-threats war.
Back to the US, back to the US.
Back to the US-threats war.

Well, your Instagram really tricks it out.
It’s addictive and unkind.
And all those haters make me rant and shout.
That highest bidder’s always on your, your, your, your, your, your, your, your, your, mind!

[Bring it on, yeah sure alright yeah yeah]

Hey, back to the US-threats war.
We know how disruptive you are, yeah.
Back to the US-threats war.

Well, your Instagram really tricks it out.
It’s addictive and unkind.
And all those haters make me rant and shout.
That highest bidder’s always on your, your, your, your, your, your, your, your, your, mind!

Oh, show me round your polarizing political fights.
Take me to your lies and smears.
I unwittingly help the infoTAINment dance.
I love to see my allies’ jeers.

Back to the US-threats war.
We know how disruptive you are, yeah.
Back to the US-threats war.

[Really, really ?!]

We’re back, we’re back…

The Cult of Smart – BONUS POST

The Bonus Book of the Week is “The Cult of Smart, How Our Broken Education System Perpetuates Social Injustice” by Fredrik deBoer, published in 2020.

The author discussed trends that have already been ongoing for decades. The government agencies that make or change policy blame teachers and schools for the failings of the American education system, because those are the elements in the system that they can control.

The author argued that one major elephant in the room is inherited traits of the students, which educrats obviously can’t control. But bringing up that issue invites accusations of racism or eugenics– both taboo topics that might result in cancel culture.

Studies have shown that genetics plays a larger role in a student’s ability to learn than policymakers want to acknowledge. Instead, government is perpetuating the elitism of American education because educrats themselves want to stay in power and /or make money, or are deluding themselves into thinking they’re bettering education. In reality, the monetization of the system has pressured a huge number of interested parties to lie with statistics, and simply lie.

Two misleading claims included those with survivorship bias. In 2013, Stanford University, in updating a study, omitted 8% of the data consisting of underperforming charter schools (which had been closed since the first study). They then bragged that the charter-school students had made modest gains against public-school students, in standardized test scores. The other example was an elite New York City public high school whose entrance exam allows the school to select the cream of the crop when accepting students; in this way, it could boast of its high number of celebrity alumni.

One issue the author could have mentioned relevant to genetics and academic ability, included that of the American college entrance exam, the SAT. It used to be called the Scholastic Aptitude Test. The definition of aptitude is talent, which is genetic– innate ability– for which students cannot study. When educrats realized this, they changed the name to Scholastic Assessment Test. This way, the test might validly measure students’ skills that could be learned. But it might not.

One concept the author could have discussed– that would jive with his view of a more relaxed way of preparing young people to become mature, responsible adults– is that of the two kinds of smarts: street smarts and academic (book) smarts. He thought that kids who are not cut out to be students, could be counseled to acquire the former, which is learned; whereas, he believed the latter involves inherited traits.

It is interesting to note which American presidents, beginning in the twentieth century, possessed each of the two smarts. It is easy to see that having either one or both, does not necessarily indicate a president’s success in office, given: how history has treated him, and historical events during his tenure.

It can be argued that the presidents all had street smarts, else they wouldn’t have previously won any elective office. Yet, they could have been elected because they surrounded themselves with crack political strategists and public relations experts who burnished their image– although they acquired reputations for incompetence or wrongdoing in office. But street smarts could mean the ability to emerge unscathed from scandals.

Presumably, there is general consensus on academic smarts– when the president graduated from an Ivy League college, or earned a law degree, or was known as an intellectual (but there are exceptions). Here they are:

SS = Street Smarts; AS = Academic Smarts; both; neither.

Theodore Roosevelt, William H. Taft, Woodrow Wilson: both.

Warren Harding: AS only.

Calvin Coolidge: both.

Herbert Hoover: neither.

FDR: both.

Harry Truman: SS only.

Dwight Eisenhower: SS only.

JFK: arguably AS only.

LBJ: arguably neither.

Richard Nixon: AS only.

Gerald Ford: both.

Jimmy Carter: arguably neither.

Ronald Reagan: SS only.

George H.W. Bush: AS only.

Bill Clinton: both.

George W. Bush: neither.

Barack Obama: both.

Donald Trump: arguably neither.

Joe Biden: arguably SS only.

Anyway, read the book to learn of the author’s recommendations for an approach to American education that is socialistic, kinder and gentler; one he thinks that would improve it immensely.

Made In China

The Book of the Week is “Made in China, A Prisoner, an SOS Letter, and the Hidden Costs of America’s Cheap Goods” by Amelia Pang, published in 2021.

“A guard grabbed a prisoner by his hair, twisted his head, and smashed his face into a heater… They beat him with electric batons until his body convulsed, then hung him by his wrists for two weeks– with his toes barely touching the ground.”

No, the above describes not the Holocaust, not a lynching, but a forced-labor camp in China in 2008 (!)

In the last few decades, the Chinese government has committed human rights abuses against its own citizens– not only dissidents, but also against a group called the Falun Gong (a group that practices exercises, meditation, and espouses certain lifestyle choices). Such citizens are sent to slave-labor camps, where they are tortured and starved but kept alive long enough to serve their sentences by making consumer goods (for export) for no pay amid extremely squalid conditions; they are charged with crimes and punished through what would be considered a complete violation of American-style due process.

In China, as of 2013, the camps numbered an estimated one thousand, at minimum. The author wrote that in all her research, she found only one American company that was ever prosecuted for importing consumer goods from such a camp in China, in the course of twenty years. The camps are bad enough, but to add more shock value to the already unspeakable horrors, the camps are a source of black-market transplant-organs in China, estimated to be worth $1 billion. In December 2013, China said it would be converting its reeducation (brainwashing) camps to ones that imposed labor for drug rehabilitation instead. However, the lipstick on the pig didn’t change the pig.

The main focus of the book was the true story of a man named Sun– a Falun Gong member who was sentenced to two and a half years to an aforementioned camp. He risked his life to hand-write a note containing a desperate plea for help, that ended up in the package of a Halloween product purchased by a woman in Oregon in the United States.

In 2016, Big Brother was growing ever more intrusive in China, as Turkic Muslims (the Uyghur tribe and Kazhaks), were targeted for “blood tests, fingerprints, voice recordings, and facial scans.” An estimated three million of twelve million of them are detained in the camps. They live in a location where China borders more than a few strategically located nations on the Silk Road– still a crucial trade route. The Chinese government doesn’t want any rebellious behavior from them. Reeducation is the goal, besides the economic benefits for China. All of them are forced to speak Mandarin, or else.

The author wrote with some alarm, that the torture chambers for victimized ethnic groups are arguably genocidal. She suggested that China’s atrocities might become comparable to the Holocaust all over again. But– this is not a Hitler situation, and is unlikely to become one. This, because Hitler had grand designs to take over the world through arming a military that committed imperialism, and creating a master race through eliminating the Jews and others he deemed genetically inferior– through genocide.

Matters will eventually come to a head when a significant proportion of the two minority populations are in the camps, and the export market is oversaturated with goods made by them, sold through big-name companies like Nike, Apple, BMW, Amazon, etc. An economic slowdown will mean a reduction in the need for the camps. (That’s NOT to say that the camps should exist, or that nothing should be done to stop the atrocities.)

International outcry will eventually reach critical mass, so that pressure will be brought to bear on China to reduce its human rights abuses, through economic punishments. Unlike most of the rest of the world, –like clockwork every two years– the United States holds elections for some powerful federal and state offices during which, a significant number of Chinese voters can influence political candidates to take a stand on this issue.

Anyway, read the book to learn additional details about Sun’s fate, and how the situation can be changed for the better.