Paul Krugman sees lots of villains in the current downturn. Of course, there are those people who think that free markets are a good thing, so they obviously are to blame. Then there are the Bushites, who did not believe enough in the wonder and majesty of governmental powers, so they failed to create Paradise on Earth.
But there is more. Krugman on other occasions has blamed the Chinese for our economic malaise, but now he has another culprit: those "socially useless" speculators.
I find it most interesting that Krugman resorts to the Last Refuge of an Economic Scoundrel when he points the finger at those people who do not have everlasting trust in the promises made by politicians. Now, there are times when Krugman rejects the "speculators are at fault" argument. For example, I don't recall Krugman agreeing with Ken Lay's contention that the short sellers brought down Enron, although given Krugman's explanations of the downturn, Lay's point would be as legitimate as anything from Krugman.
(Note: I believe that Lay was wrong. Short-sellers by themselves cannot make a stock price plunge and stay down permanently any more than they can bring down an entire economy.)
When the government of Great Britain 40 years ago was inflating like mad and engaging in all sorts of accounting trickery, currency buyers began to short the Pound. Of course, the officials of Britain's Labor government did not blame their reckless policies; no, it was the fault of the "Gnomes of Zurich." Yes, those bad men in Switzerland were conspiring to bring down the Pound.
Unfortunately, that mentality exists today, and I am not surprised that it is Krugman leading the anti-speculation charge. Anyone familiar with finance know that speculators and short-sellers do not control markets; they expose the shortcomings of market participants. Speculators did not short Enron stock because they thought it would be fun; they shorted it because they believed (correctly) that it was overpriced.
In his column today, Krugman declares that a lot of financial transactions are "socially useless," and should be taxed. My guess is that he would include short-selling among those transactions, and in that he is aping his spiritual mentor, John Maynard Keynes, who believed that the sale of stock in secondary markets also was "socially useless."
Krugman, in his condemnation of the "speculators," ignores the 800-pound gorilla sitting in the room: the moral hazard that government created in the financial markets that ultimately led to the financial meltdown. Why does he ignore things like the "Greenspan Put" and the various bailouts? Easy, government-caused moral hazard does not fit his socialist worldview.
In Krugman's world, private enterprise itself is the cause of instability, and government (as long as the Right People are in Charge) is the white knight. Thus, it hardly surprises me that he resorts to the "Gnomes of Zurich" nonsense.
Friday, November 27, 2009
Thursday, November 26, 2009
Happy Thanksgiving!
I wish all of my readers a happy Thanksgiving day, complete with all the usual fare. As a Christian, I believe every day should be a day of thanksgiving, but nonetheless it always is nice to have a day here and there in which we can celebrate by eating (and eating) good food and enjoying family and friends.
A few years ago, I wrote this piece, reminding the readers that a day in which we are supposed to offer prayers of thanks to God has been co-opted by the state. Yes, it is not exactly the kind of thing we are supposed to say on Thanksgiving, but I also will say that I am grateful the government has not destroyed all of our liberties, at least not yet.
So, Happy Thanksgiving!
A few years ago, I wrote this piece, reminding the readers that a day in which we are supposed to offer prayers of thanks to God has been co-opted by the state. Yes, it is not exactly the kind of thing we are supposed to say on Thanksgiving, but I also will say that I am grateful the government has not destroyed all of our liberties, at least not yet.
So, Happy Thanksgiving!
Wednesday, November 25, 2009
Bowman: Law is a Weapon, Not a Shield
Besides inheriting the English language, Americans also enjoyed the fruits of the legal system developed in Great Britain which, over time, was to be known as a "shield for the innocent," according to the great jurist William Blackstone. This view of law was reflected in our own Declaration of Independence in which the purpose of government was not to lord it over subjects, but rather to protect the God-given rights that people already owned.
Fast forward to 2009 in which very few people in power believe this about law, and nowhere is contempt for the legal principles of Blackstone and Thomas Jefferson more evident than in American law schools. As prosecutors become the living dictators of criminal law, the very concept of law has been perverted to become something other than a "shield" to protect the rights of the innocent. Law today -- and especially federal criminal law -- is nothing more than a weapon that federal prosecutors wield against people supposedly to keep them in line. As the Great Harvey Silverglate has written in his wonderful book, Three Felonies a Day, federal criminal law today more reflects the law of the old Soviet Union with its "crimes of analogy" than anything we inherited from Great Britain more than two centuries ago.
An unfortunate legacy of this terrible development has been the matriculation of federal prosecutors into law schools, where their own perverted views of law are now taught as being morally and legally legitimate. One such person is Frank O. Bowman, a law professor at the University of Missouri. I came upon this man through an interesting article in The New York Times in which the paper noted in a surprised manner that both leftists and conservatives have joined forces to oppose the abuses that federal criminal law has wrought.
Of course, being that the Times served as the main cheerleader for the disgraced Michael B. Nifong, the now-disbarred prosecutor who pursued charges in the infamous Duke Lacrosse Case that he knew were false, it is not surprising to see the "Newspaper of Record" take the side of the prosecutors. They interviewed Bowman, and he clearly did not disappoint:
First, and most important, the notion that "corporate power" is equal to the power of the state is laughable. I don't recall any "corporate" forces from Wal-Mart gunning down innocent people (and paying no price) and Wal-Mart does not enjoy the immunity from being punished for criminal acts, as do the people championed by Bowman and his ilk. Corporations cannot engage in home invasions like your friendly police force, and if someone from a corporation guns you down, the killer -- unlike your friendly police protectors -- is likely to be prosecuted.
In fact, Bowman's former employer, the federal government, recently argued in the Pottawattamie case that prosecutors should be absolutely immune from any legal consequences, even when it is clear that they knowingly tried to frame innocent people. Instead, the government argued that no one has a Constitutional right not to be framed.
Second, the view of law being a "counterweight" violates every foundation upon which Anglo-American law was built. This "counterweight" view is a backdoor way of approving the tactics which prosecutors use to gain convictions of innocent people. As Harvey Silverglate has noted, federal criminal law is so abusive and prosecutors are so powerful (there is no "counterweight" to their power, and they are demanding even more power) that innocent people find it in their own best interests to plead guilty to something because the alternative is too terrible.
Third, as I note in an upcoming article on federal criminal law in Regulation Magazine, the very basis for "white collar crime" law is the elimination of the Constitutional protections that we supposedly enjoy, including presumption of innocence, and the establishment of the mens rea principle. As LSU law professor John Baker noted in an article about the "father of white-collar crime laws," Edwin Sutherland, the law specifically targets people for what they are, not for what they do.
(Sutherland and his followers believed that almost all business transactions should be viewed inherently as being "criminal." It is clear that Bowman follows in that tradition.)
As former Supreme Court justice Robert Jackson pointed out in a 1940 speech, federal criminal law is written in a way that permits prosecutors to target and individual, and then look for crimes with which to charge that person. Keep in mind that in 1940, prosecutors did not have the RICO statutes and most of the "fraud" laws that they can bundle into just about anything.
Thus, Bowman and many other law professors of his ilk are arguing that we in reality need to do away with the Constitution -- and the Rule of Law -- altogether. Instead, they want us to depend upon the good will of prosecutors and, at the same time, give them unlimited power over our lives.
No doubt, Bowman believes that he is morally superior to the rest of us and would make a wonderful and benevolent and fair dictator. However, I prefer the words of Lord Acton, who was a far more learned and good man than Bowman ever could hope to be: Power corrupts, and absolute power corrupts absolutely.
Fast forward to 2009 in which very few people in power believe this about law, and nowhere is contempt for the legal principles of Blackstone and Thomas Jefferson more evident than in American law schools. As prosecutors become the living dictators of criminal law, the very concept of law has been perverted to become something other than a "shield" to protect the rights of the innocent. Law today -- and especially federal criminal law -- is nothing more than a weapon that federal prosecutors wield against people supposedly to keep them in line. As the Great Harvey Silverglate has written in his wonderful book, Three Felonies a Day, federal criminal law today more reflects the law of the old Soviet Union with its "crimes of analogy" than anything we inherited from Great Britain more than two centuries ago.
An unfortunate legacy of this terrible development has been the matriculation of federal prosecutors into law schools, where their own perverted views of law are now taught as being morally and legally legitimate. One such person is Frank O. Bowman, a law professor at the University of Missouri. I came upon this man through an interesting article in The New York Times in which the paper noted in a surprised manner that both leftists and conservatives have joined forces to oppose the abuses that federal criminal law has wrought.
Of course, being that the Times served as the main cheerleader for the disgraced Michael B. Nifong, the now-disbarred prosecutor who pursued charges in the infamous Duke Lacrosse Case that he knew were false, it is not surprising to see the "Newspaper of Record" take the side of the prosecutors. They interviewed Bowman, and he clearly did not disappoint:
Some scholars are skeptical about conservatives’ timing and motives, noting that their voices are rising during a Democratic administration and amid demands for accountability for the economic crisis.
“The Justice Department now acts as a kind of counterweight to corporate power,” said Frank O. Bowman, a law professor at the University of Missouri. “On the other side is an alliance between two strands of conservative thinking, the libertarian point of view and the corporate wing of the Republican Party.”
First, and most important, the notion that "corporate power" is equal to the power of the state is laughable. I don't recall any "corporate" forces from Wal-Mart gunning down innocent people (and paying no price) and Wal-Mart does not enjoy the immunity from being punished for criminal acts, as do the people championed by Bowman and his ilk. Corporations cannot engage in home invasions like your friendly police force, and if someone from a corporation guns you down, the killer -- unlike your friendly police protectors -- is likely to be prosecuted.
In fact, Bowman's former employer, the federal government, recently argued in the Pottawattamie case that prosecutors should be absolutely immune from any legal consequences, even when it is clear that they knowingly tried to frame innocent people. Instead, the government argued that no one has a Constitutional right not to be framed.
Second, the view of law being a "counterweight" violates every foundation upon which Anglo-American law was built. This "counterweight" view is a backdoor way of approving the tactics which prosecutors use to gain convictions of innocent people. As Harvey Silverglate has noted, federal criminal law is so abusive and prosecutors are so powerful (there is no "counterweight" to their power, and they are demanding even more power) that innocent people find it in their own best interests to plead guilty to something because the alternative is too terrible.
Third, as I note in an upcoming article on federal criminal law in Regulation Magazine, the very basis for "white collar crime" law is the elimination of the Constitutional protections that we supposedly enjoy, including presumption of innocence, and the establishment of the mens rea principle. As LSU law professor John Baker noted in an article about the "father of white-collar crime laws," Edwin Sutherland, the law specifically targets people for what they are, not for what they do.
(Sutherland and his followers believed that almost all business transactions should be viewed inherently as being "criminal." It is clear that Bowman follows in that tradition.)
As former Supreme Court justice Robert Jackson pointed out in a 1940 speech, federal criminal law is written in a way that permits prosecutors to target and individual, and then look for crimes with which to charge that person. Keep in mind that in 1940, prosecutors did not have the RICO statutes and most of the "fraud" laws that they can bundle into just about anything.
Thus, Bowman and many other law professors of his ilk are arguing that we in reality need to do away with the Constitution -- and the Rule of Law -- altogether. Instead, they want us to depend upon the good will of prosecutors and, at the same time, give them unlimited power over our lives.
No doubt, Bowman believes that he is morally superior to the rest of us and would make a wonderful and benevolent and fair dictator. However, I prefer the words of Lord Acton, who was a far more learned and good man than Bowman ever could hope to be: Power corrupts, and absolute power corrupts absolutely.
Tuesday, November 24, 2009
Even the New York Times takes notice of our efforts
Over the past several years, I have been part of a movement of people of many backgrounds challenging the near-dictatorship that we have of prosecutors, and especially federal prosecutors. One of the worst offenders of supporting the abuses of prosecutors has been the "Newspaper of Record," a.k.a. the New York Times. However, today the Times has a different take, and has publicized the efforts of people like the Great Harvey Silverglate and Radley Balko in exposing the abuses committed by this untouchable class of prosecutors.
While the Times piece mostly is sympathetic, at the end it quotes former federal prosecutor and now law professor Frank O. Bowman as basically saying that any of us who oppose this federal abuse, especially in the area of "white-collar crimes," is a corporate stooge. The article is worth reading, but I will be dealing with Prof. Bowman in a future post, as his are fighting words, and I am up to the fight.
While the Times piece mostly is sympathetic, at the end it quotes former federal prosecutor and now law professor Frank O. Bowman as basically saying that any of us who oppose this federal abuse, especially in the area of "white-collar crimes," is a corporate stooge. The article is worth reading, but I will be dealing with Prof. Bowman in a future post, as his are fighting words, and I am up to the fight.
Sunday, November 22, 2009
Unemployment Nation
The rate of unemployment in this country continues to grow, and in response the government is trying to bankrupt us with even more spending. This map outlines the growth of unemployment county-by-county since January 2007.
Of course, Paul Krugman will claim that this "proves" that the government must print even more money, as all True Keynesians believe that printing money is how an economy generates wealth. For those who wish to learn more about the man who gave us the "Keynesian solution," here is a great piece by Murray Rothbard about John Maynard Keynes.
Of course, Paul Krugman will claim that this "proves" that the government must print even more money, as all True Keynesians believe that printing money is how an economy generates wealth. For those who wish to learn more about the man who gave us the "Keynesian solution," here is a great piece by Murray Rothbard about John Maynard Keynes.
Saturday, November 21, 2009
ObamaCare: It will be an unmitigated disaster
It now seems inevitable that the Congress will pass the "healthcare" bill, and we are going to be stuck with a huge financial disaster. I wrote commentary for the website of the Foundation for Economic Education, in which I compare this moment to the 1938 disaster at Munich.
One thing we need to understand is this: the government of the United States is broke. It is as broke as the government of California, of Michigan, and of nearly every other state. The notion that the Federal Reserve and Congress have "stopped" the recession by pouring newly-printed money everywhere is pure foolishness. This government cannot take on a new, multi-trillion-dollar program for which the means to pay is going to be invoking confiscatory taxation.
This will be disaster for the U.S. economy. Americans have come to believe that the government can order anything, and it will be done. That is not how an economy works; if that were true, North Korea would be the world's wealthiest nation, and the Iron Curtain never would have fallen.
Furthermore, we can look for massive numbers of new criminal penalties in this "law," and that means that increasing numbers of medical providers will be arrested and imprisoned. Don't think this won't affect you and your family; as the government criminalizes more and more actions that formerly were legal, an increasing number of people will be caught in the federal maw and have their lives destroyed.
What people forget is that when government criminalizes activity that should be legal, we will see less and less medical care provided, and fewer people willing to risk medical careers. Now, most Americans now approve of the fact that the USA has one quarter of the world's prisoners, but some of them will change their tunes when either they or their friends and loved ones will be paraded before the TV cameras wearing chains and orange jumpsuits.
This will be touted as a huge political victory for Obama and the Democrats. However, I predict that as the reality of this horrible bill comes to the fore, there are going to be some Democrats next year who are going to wish they had voted against it.
One thing we need to understand is this: the government of the United States is broke. It is as broke as the government of California, of Michigan, and of nearly every other state. The notion that the Federal Reserve and Congress have "stopped" the recession by pouring newly-printed money everywhere is pure foolishness. This government cannot take on a new, multi-trillion-dollar program for which the means to pay is going to be invoking confiscatory taxation.
This will be disaster for the U.S. economy. Americans have come to believe that the government can order anything, and it will be done. That is not how an economy works; if that were true, North Korea would be the world's wealthiest nation, and the Iron Curtain never would have fallen.
Furthermore, we can look for massive numbers of new criminal penalties in this "law," and that means that increasing numbers of medical providers will be arrested and imprisoned. Don't think this won't affect you and your family; as the government criminalizes more and more actions that formerly were legal, an increasing number of people will be caught in the federal maw and have their lives destroyed.
What people forget is that when government criminalizes activity that should be legal, we will see less and less medical care provided, and fewer people willing to risk medical careers. Now, most Americans now approve of the fact that the USA has one quarter of the world's prisoners, but some of them will change their tunes when either they or their friends and loved ones will be paraded before the TV cameras wearing chains and orange jumpsuits.
This will be touted as a huge political victory for Obama and the Democrats. However, I predict that as the reality of this horrible bill comes to the fore, there are going to be some Democrats next year who are going to wish they had voted against it.
Thursday, November 19, 2009
Third World Dictators and the Pottawattamie Case
We saw a most extraordinary thing recently in the chambers of the U.S. Supreme Court, where lawyers representing the prosecutors of this country demanded absolute immunity no matter how outrageous and dishonest their conduct. (The Pottawattamie County v. McGee case involves prosecutors who knowingly framed two innocent people for a murder, forcing those men to spend more than two decades in prison before being released.)
As I read through the information, I have come to realize that what prosecutors want is a court system in which they can operate like Third World dictators. In such a system, they are absolute rulers, and whatever they want, they get, and if they are found to have lied, engaged in lawbreaking, suborning perjury, whatever, well, "sh*t happens."
Guess what? If the U.S. Supreme Court grants their wish, look for prosecutors to be even more emboldened in their lying and lawbreaking. From what I can tell, there are a lot of people in this country who want our system of "justice" to reflect what happens in places like Zimbabwe and North Korea.
More than one person has told me something akin to, "I have traveled all over the world and can say that ours is the best system of justice out there." Maybe that is true, but I have a question in reply: If our system is the best in the world, why do so many people want to change it into something from the Third World?
I will say up front that I have absolutely no confidence in the U.S. Supreme Court to do the right thing and affirm the rule of law. Instead, they will tell us what great guys the cops and prosecutors really are and how we need to protect them from the "bad guys."
As I read through the information, I have come to realize that what prosecutors want is a court system in which they can operate like Third World dictators. In such a system, they are absolute rulers, and whatever they want, they get, and if they are found to have lied, engaged in lawbreaking, suborning perjury, whatever, well, "sh*t happens."
Guess what? If the U.S. Supreme Court grants their wish, look for prosecutors to be even more emboldened in their lying and lawbreaking. From what I can tell, there are a lot of people in this country who want our system of "justice" to reflect what happens in places like Zimbabwe and North Korea.
More than one person has told me something akin to, "I have traveled all over the world and can say that ours is the best system of justice out there." Maybe that is true, but I have a question in reply: If our system is the best in the world, why do so many people want to change it into something from the Third World?
I will say up front that I have absolutely no confidence in the U.S. Supreme Court to do the right thing and affirm the rule of law. Instead, they will tell us what great guys the cops and prosecutors really are and how we need to protect them from the "bad guys."
Wednesday, November 18, 2009
"Arise, Shine" CD Has Arrived!
I received my new Dan Forrest, Jr. CD, "Arise, Shine," yesterday, and it even was better than I had anticipated. If you love good, contemporary choir music, this CD certainly fits that bill.
The music is wonderfully-balanced, and has both sacred and secular texts, including texts from Mark Twain and Robert Louis Stevenson. You can hear excerpts of each track on Dan's website, but trust me when I say that the CD really is good. The singers are from Bob Jones University, which has first-rate departments in music and the arts.
Like all lovers of good choral music, I await the next CD that Dan produces!
The music is wonderfully-balanced, and has both sacred and secular texts, including texts from Mark Twain and Robert Louis Stevenson. You can hear excerpts of each track on Dan's website, but trust me when I say that the CD really is good. The singers are from Bob Jones University, which has first-rate departments in music and the arts.
Like all lovers of good choral music, I await the next CD that Dan produces!
Monday, November 16, 2009
Krugman: It is China's Fault
A friend of mine suggested calling this site, "Krugman in Wonderland," but my wife objects, so it is obvious I need to keep peace in the family. Nonetheless, I am grateful to Paul Krugman for providing so much material that helps keep me writing. Granted, this perch is not as lucrative as Krugman's New York Times location on the editorial page, but a person has to do what he can.
The latest outrage comes today in his column that blames China for much of the economic downturn. Granted, today's column is not as outrageous as his column last Friday in which he claims that the way to end unemployment in the United States is for Congress to write laws making it nearly impossible to fire workers. Yeah, they have tried that in Spain, which has had double-digit unemployment for years, as employees carry liabilities that make it a real danger for companies to employ anyone.
Without going into a lot of detail about how currencies work in relation to one another, Krugman attacks the Chinese government for following a policy to keep its currency, the yuan, low relative to the U.S. Dollar. China does this in order to make its goods attractive for export, as the government there is trying to emulate what Japan did in promoting its own export-first policy.
Because I am no fan of government fiat currencies, I am not going to approve of China's policies, which actually punish the Chinese workers who must pay much more for their goods than they would if the yuan could float in a free market. Nonetheless, Krugman contends that somehow China is making itself better off at the expense of everyone else. That simply is not true. He writes:
No, the Chinese are not playing a "dangerous" game; they are playing a stupid game, because they are not permitting themselves to enjoy the fruits of their very hard labor. At the same time, one must remember that the U.S. Government has played a very dishonest game with the Chinese.
Why do I say that? Well, because it is true. For the last decade, the U.S. Government has sold trillions of dollars of debt (which the Federal Reserve System is rapidly depreciating with inflation-ravaged dollars) to China, and in return, Americans get consumer goods. Now that the Chinese realize that they have been played for suckers, our "experts" now accuse them of starting the problem in the first place, as though it was the Chinese who created the housing bubble and run the Fed.
Granted, that kind of logic is hard for someone like Krugman to understand, as he believes an economy is nothing more than a "blob" into which we throw newly-printed money. Like Aaron, who told Moses that the Golden Calf simply appeared after he threw gold jewelry into a fire, Krugman believes that an economy magically appears simply when governments print money. Which story is less believable? I'll let readers decide.
The latest outrage comes today in his column that blames China for much of the economic downturn. Granted, today's column is not as outrageous as his column last Friday in which he claims that the way to end unemployment in the United States is for Congress to write laws making it nearly impossible to fire workers. Yeah, they have tried that in Spain, which has had double-digit unemployment for years, as employees carry liabilities that make it a real danger for companies to employ anyone.
Without going into a lot of detail about how currencies work in relation to one another, Krugman attacks the Chinese government for following a policy to keep its currency, the yuan, low relative to the U.S. Dollar. China does this in order to make its goods attractive for export, as the government there is trying to emulate what Japan did in promoting its own export-first policy.
Because I am no fan of government fiat currencies, I am not going to approve of China's policies, which actually punish the Chinese workers who must pay much more for their goods than they would if the yuan could float in a free market. Nonetheless, Krugman contends that somehow China is making itself better off at the expense of everyone else. That simply is not true. He writes:
So picture this: month after month of headlines juxtaposing soaring U.S. trade deficits and Chinese trade surpluses with the suffering of unemployed American workers. If I were the Chinese government, I’d be really worried about that prospect.
Unfortunately, the Chinese don’t seem to get it: rather than face up to the need to change their currency policy, they’ve taken to lecturing the United States, telling us to raise interest rates and curb fiscal deficits — that is, to make our unemployment problem even worse.
And I’m not sure the Obama administration gets it, either. The administration’s statements on Chinese currency policy seem pro forma, lacking any sense of urgency.
That needs to change. I don’t begrudge Mr. Obama the banquets and the photo ops; they’re part of his job. But behind the scenes he better be warning the Chinese that they’re playing a dangerous game.
No, the Chinese are not playing a "dangerous" game; they are playing a stupid game, because they are not permitting themselves to enjoy the fruits of their very hard labor. At the same time, one must remember that the U.S. Government has played a very dishonest game with the Chinese.
Why do I say that? Well, because it is true. For the last decade, the U.S. Government has sold trillions of dollars of debt (which the Federal Reserve System is rapidly depreciating with inflation-ravaged dollars) to China, and in return, Americans get consumer goods. Now that the Chinese realize that they have been played for suckers, our "experts" now accuse them of starting the problem in the first place, as though it was the Chinese who created the housing bubble and run the Fed.
Granted, that kind of logic is hard for someone like Krugman to understand, as he believes an economy is nothing more than a "blob" into which we throw newly-printed money. Like Aaron, who told Moses that the Golden Calf simply appeared after he threw gold jewelry into a fire, Krugman believes that an economy magically appears simply when governments print money. Which story is less believable? I'll let readers decide.
Saturday, November 14, 2009
Some Links to Cheer Us Up
I was doing a web search today and found the website Government Is Good. Now, I always love good satire and figured that whoever put up this thing was going to provide some laughs.
Whaddyaknow? This site is serious! It is put up by a professor of (What else?) politics at Mount Holyoke College in Massachusetts, a bastion of Political Correctness in America's most Politically Correct state. If you read this site -- and it will take a long time, for this guy looks as though he has written this copy for years -- you will discover that GOVERNMENT GIVES US RIGHTS!! According to Prof. Douglas J. Amy, Americans were not free until the government was created in 1787.
Better yet, he claims that the U.S.S.R. (on this 20th anniversary of the demise of the Berlin Wall) failed because it could not adequately tax-and-spend. I am not kidding. You can read it here.
So, the next time you read about police busting into a house, shooting up the family dogs, and maybe killing innocent people, rejoice. Yes, Douglas Amy will tell you that those hooligans are protecting your rights!!
MEANWHILE, THE DEA IN MEMPHIS recently arrested a childhood friend of mine on a charge of illegally writing prescriptions. Now, lest anyone think I have been unfair calling mainstream news organizations whores of the Department of Justice (sic), notice that the article used by this news organization was a DOJ press release.
Why take the time to write "news" copy when government agents will do it for you? Yes, not only does government "protect our freedoms" by arresting us, but the media proudly trumpets the First Amendment by pretending that government PR is "freedom of speech."
I will be writing more about this case in the future, but for now let me just say that from what I already know, it provides more proof that the U.S.S.A. is a place there liberty, justice, and simple fairness no longer have much, if any, of a constituency.
Happy Reading!
Whaddyaknow? This site is serious! It is put up by a professor of (What else?) politics at Mount Holyoke College in Massachusetts, a bastion of Political Correctness in America's most Politically Correct state. If you read this site -- and it will take a long time, for this guy looks as though he has written this copy for years -- you will discover that GOVERNMENT GIVES US RIGHTS!! According to Prof. Douglas J. Amy, Americans were not free until the government was created in 1787.
Better yet, he claims that the U.S.S.R. (on this 20th anniversary of the demise of the Berlin Wall) failed because it could not adequately tax-and-spend. I am not kidding. You can read it here.
So, the next time you read about police busting into a house, shooting up the family dogs, and maybe killing innocent people, rejoice. Yes, Douglas Amy will tell you that those hooligans are protecting your rights!!
MEANWHILE, THE DEA IN MEMPHIS recently arrested a childhood friend of mine on a charge of illegally writing prescriptions. Now, lest anyone think I have been unfair calling mainstream news organizations whores of the Department of Justice (sic), notice that the article used by this news organization was a DOJ press release.
Why take the time to write "news" copy when government agents will do it for you? Yes, not only does government "protect our freedoms" by arresting us, but the media proudly trumpets the First Amendment by pretending that government PR is "freedom of speech."
I will be writing more about this case in the future, but for now let me just say that from what I already know, it provides more proof that the U.S.S.A. is a place there liberty, justice, and simple fairness no longer have much, if any, of a constituency.
Happy Reading!
Thursday, November 12, 2009
The Day of the Bear
The nasty juggernaut known as the U.S. Department of Justice usually gets it man, regardless of whether or not the man targeted has committed any crimes. Armed with weapons that might even have pricked the conscience of Josef Stalin, federal prosecutors have been on a rampage ever since the economy melted down, as the government seeks to blame business people for the problems caused by the government and its inflation machine known as the Federal Reserve System.
However, every once in a while, there is good news to report, and on Tuesday afternoon, the government’s lousy case against former Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin was deep-sixed by a jury that could recognize the prosecutors’ dearth of evidence. I don’t have much confidence in federal juries, and I am sure that I never would be permitted to serve on one (Oh, joy), but on this day, a federal jury in Brooklyn did its job and did it well.
When I first wrote about this case last year, I figured that Cioffi and Tannin would be railroaded into the nearest federal prison. My years in writing about the Abomination Formerly Known as the U.S. Department of Justice (sic) have left me jaded, as I have watched innocent people be tossed into the hell called the U.S. Bureau of Prisons.
However, I did not count on a few things. First, and most important, Cioffi and Tannin had the personalities that would allow them to fight back. Not every person is equipped to go to trial and survive; these men could do it, and they did it beautifully.
Second, they had a legal team that shot down everything that the federal prosecutors threw at them. Third, Judge Frederic Block could smell the dishonesty of the government’s case and he was not afraid to do his job. Unlike most federal judges, Block did not see himself as being an arm of the prosecution, and that made a huge difference in the trial.
Fourth, the government had no case. NO case. The prosecution based their entire case upon snippets of emails that the defendants had sent in which they appeared worried about the state of their hedge funds, which were based upon mortgage securities that soon would have the same value as Confederate money in 1866. In fact, just before the trial began, prosecutors dumped a number of these supposedly damning email snippets in the media to make it look as though they had a legitimate case.
However, once the emails were shown in their entirety, their damning nature disappeared. I closely followed this case and had a sense of where it was headed. (Interestingly, most of the media chose to present a rosy picture of the government’s case, and at the breaks, reporters were seen laughing and joking with the prosecutors.) Only the prosecution’s side was presented in most news broadcasts and stories, although a freelancer writing some pieces for the New York Times did manage to violate his newspaper’s pro-prosecution of business people policy and write articles like this in which he noted many of the government’s weaknesses. (He did fail to point out – as did all of the reporters – that one prosecution witness openly rebelled against prosecutors and told them in no uncertain terms that he had withdrawn a statement to prosecutors he had made earlier after he found out the context of a certain action by Cioffi. In this situation, prosecutors found themselves forced to cross-examine their own witness.)
One of the worst offenders in the media was Forbes, which was a subject for something I recently wrote about how the media covers these government inquisitions. Forbes and CNBC were especially terrible in their coverage, using the execrable Jacob Zamansky as their correspondent of the trial, despite the fact that Zamansky had a huge financial interest in the men being found guilty.
Zamansky’s coverage of the opening day was especially dishonest, and it contradicted what observers in the courtroom knew to be true. For example, Zamansky wrote:
What you have just read was a lie. A big lie. A whopper. The government already was on its heels at the opening statements. Prosecutors had their narrative, and like the band in "Animal House" that tried to march through a wall, they stuck to it no matter how many times the defense tore holes in that argument. Given the government’s strategy, a flock of parrots could have made the same presentation.
Most people are going to be shocked at the acquittal precisely because people like Zamansky were feeding them the line that the government had a powerful case and prosecutors were as skillful in presenting their "mountain of evidence" as Itzhak Perlman plays the Suite from "Carmen" on his violin. In reality, the government’s case was about as skillfully presented as my attempts to play the Carmen Suite on a violin. (No one confuses my playing with that of Perlman.)
The fact that the defense was eviscerating the "they lied to investors" from the opening arguments was ignored by most of the pro-prosecution press. However, the biggest howler came from prosecutors Ilene Jaroslaw and Patrick Sinclair, who made off-the-record remarks that the Brooklyn jury was too unsophisticated to understand the intricacies of the case.
This is amazing, simply amazing. First, and most important, the last thing that Jaroslaw and Sinclair wanted was for their presentation to be eye-glazing and they were hoping that the defense would present the argument that securities markets were very complicated and maybe jurors should not try to figure out what constituted a crime and what was not a crime. Zamansky’s quote above was accurate in that the prosecution’s strategy all along was to paint Cioffi and Tannin as liars. (What Zamansky did not do was to demonstrate accurately just how the defense took apart one of the "simple" arguments in its opening statements, using clear language that even a reporter from Forbes should have been able to understand.)
Second, the reason that the trial was held in Brooklyn instead of Manhattan was because the court-shopping prosecutors wanted a Brooklyn jury, reasoning that a jury of working-class people would not be able to relate to a couple of once-wealthy Wall Street traders. Jaroslaw and Sinclair purposely wanted what they believed would be an "unsophisticated" jury that would not understand the information the defense was going to present. Thus, to claim that the jury’s alleged "stupidity" was the reason that they lost is the ultimate proof that federal prosecutors are an arrogant lot.
After the trial, off-the-record interviews with prosecutors yielded such arrogance:
However, interviews with jurors afterward yielded something quite different than a bunch of rubes that did not deserve to be in the presence of the majesty of the feds. Indeed, jurors looked at everything, from every alleged damning email to the question of whether or not the trial should have been in Brooklyn in the first place, given both men worked in Manhattan.
The jurors asked each other what was the context of each of those emails, refusing to cherry-pick one or two lines, as the prosecution was doing. The following provides an excellent example of what jurors actually did, as opposed to what prosecutors claimed:
If anything, the slanderous and dishonest post-acquittal remarks by prosecutors drive home just how contemptuous federal prosecutors are of everyone else. The jury did not acquit because they were too stupid and vapid to understand the clarity of the prosecution’s case; they acquitted because they did understand that the government’s simple, clear presentation was not true, or, at very best, did not do a good job of meeting the "reasonable doubt" standards.
I was not surprised at the acquittal, given what I knew was presented in court. My only fear was a federal jury being, well, a federal jury that throws sops to those poor, underpaid prosecutors who claim they only are trying to do justice.
In the end, however, the jury did its job, and judge did his job, the defendants were innocent, and the prosecution continued to lie. Oh, and the media will continue to be the media. Like the Bourbons, they "learn nothing and they forget nothing."
However, every once in a while, there is good news to report, and on Tuesday afternoon, the government’s lousy case against former Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin was deep-sixed by a jury that could recognize the prosecutors’ dearth of evidence. I don’t have much confidence in federal juries, and I am sure that I never would be permitted to serve on one (Oh, joy), but on this day, a federal jury in Brooklyn did its job and did it well.
When I first wrote about this case last year, I figured that Cioffi and Tannin would be railroaded into the nearest federal prison. My years in writing about the Abomination Formerly Known as the U.S. Department of Justice (sic) have left me jaded, as I have watched innocent people be tossed into the hell called the U.S. Bureau of Prisons.
However, I did not count on a few things. First, and most important, Cioffi and Tannin had the personalities that would allow them to fight back. Not every person is equipped to go to trial and survive; these men could do it, and they did it beautifully.
Second, they had a legal team that shot down everything that the federal prosecutors threw at them. Third, Judge Frederic Block could smell the dishonesty of the government’s case and he was not afraid to do his job. Unlike most federal judges, Block did not see himself as being an arm of the prosecution, and that made a huge difference in the trial.
Fourth, the government had no case. NO case. The prosecution based their entire case upon snippets of emails that the defendants had sent in which they appeared worried about the state of their hedge funds, which were based upon mortgage securities that soon would have the same value as Confederate money in 1866. In fact, just before the trial began, prosecutors dumped a number of these supposedly damning email snippets in the media to make it look as though they had a legitimate case.
However, once the emails were shown in their entirety, their damning nature disappeared. I closely followed this case and had a sense of where it was headed. (Interestingly, most of the media chose to present a rosy picture of the government’s case, and at the breaks, reporters were seen laughing and joking with the prosecutors.) Only the prosecution’s side was presented in most news broadcasts and stories, although a freelancer writing some pieces for the New York Times did manage to violate his newspaper’s pro-prosecution of business people policy and write articles like this in which he noted many of the government’s weaknesses. (He did fail to point out – as did all of the reporters – that one prosecution witness openly rebelled against prosecutors and told them in no uncertain terms that he had withdrawn a statement to prosecutors he had made earlier after he found out the context of a certain action by Cioffi. In this situation, prosecutors found themselves forced to cross-examine their own witness.)
One of the worst offenders in the media was Forbes, which was a subject for something I recently wrote about how the media covers these government inquisitions. Forbes and CNBC were especially terrible in their coverage, using the execrable Jacob Zamansky as their correspondent of the trial, despite the fact that Zamansky had a huge financial interest in the men being found guilty.
Zamansky’s coverage of the opening day was especially dishonest, and it contradicted what observers in the courtroom knew to be true. For example, Zamansky wrote:
My own view is that the government did an excellent job of keeping the case simple and focused, stressing that "the defendants are not on trial because the hedge funds collapsed or because of the market meltdown. The defendants are on trial because they lied to investors."
The defense, on the other hand, chose to educate the jury on hedge funds, leverage and CDOs. Their strategy appears to be to blame their clients' behavior on the fog of war.
We saw similar strategies in the Enron trial. In that case, prosecutors kept it simple by pounding home the idea that former bosses Ken Lay and Jeffrey Skilling lied to investors; the defense focused on off-balance sheet partnerships and other financial complexities.
What you have just read was a lie. A big lie. A whopper. The government already was on its heels at the opening statements. Prosecutors had their narrative, and like the band in "Animal House" that tried to march through a wall, they stuck to it no matter how many times the defense tore holes in that argument. Given the government’s strategy, a flock of parrots could have made the same presentation.
Most people are going to be shocked at the acquittal precisely because people like Zamansky were feeding them the line that the government had a powerful case and prosecutors were as skillful in presenting their "mountain of evidence" as Itzhak Perlman plays the Suite from "Carmen" on his violin. In reality, the government’s case was about as skillfully presented as my attempts to play the Carmen Suite on a violin. (No one confuses my playing with that of Perlman.)
The fact that the defense was eviscerating the "they lied to investors" from the opening arguments was ignored by most of the pro-prosecution press. However, the biggest howler came from prosecutors Ilene Jaroslaw and Patrick Sinclair, who made off-the-record remarks that the Brooklyn jury was too unsophisticated to understand the intricacies of the case.
This is amazing, simply amazing. First, and most important, the last thing that Jaroslaw and Sinclair wanted was for their presentation to be eye-glazing and they were hoping that the defense would present the argument that securities markets were very complicated and maybe jurors should not try to figure out what constituted a crime and what was not a crime. Zamansky’s quote above was accurate in that the prosecution’s strategy all along was to paint Cioffi and Tannin as liars. (What Zamansky did not do was to demonstrate accurately just how the defense took apart one of the "simple" arguments in its opening statements, using clear language that even a reporter from Forbes should have been able to understand.)
Second, the reason that the trial was held in Brooklyn instead of Manhattan was because the court-shopping prosecutors wanted a Brooklyn jury, reasoning that a jury of working-class people would not be able to relate to a couple of once-wealthy Wall Street traders. Jaroslaw and Sinclair purposely wanted what they believed would be an "unsophisticated" jury that would not understand the information the defense was going to present. Thus, to claim that the jury’s alleged "stupidity" was the reason that they lost is the ultimate proof that federal prosecutors are an arrogant lot.
After the trial, off-the-record interviews with prosecutors yielded such arrogance:
But some inside the US attorney's office think the case was handled perfectly well. The real problem was that the jury just never understood the case. In interviews with jurors after the case, the prosecutors learned that the jury seemed unaware that they had presented clear evidence of certain facts.
"It is frustrating to lose a case not because the jury disagrees with your evidence but because they just aren't able to follow anything," one person familiar with the thinking in the office said.
However, interviews with jurors afterward yielded something quite different than a bunch of rubes that did not deserve to be in the presence of the majesty of the feds. Indeed, jurors looked at everything, from every alleged damning email to the question of whether or not the trial should have been in Brooklyn in the first place, given both men worked in Manhattan.
The jurors asked each other what was the context of each of those emails, refusing to cherry-pick one or two lines, as the prosecution was doing. The following provides an excellent example of what jurors actually did, as opposed to what prosecutors claimed:
One of the main documents in the case was an e-mail message that Mr. Tannin sent from his private G-mail account to the e-mail account of Mr. Cioffi’s wife. He wrote that the subprime market – the market to which the funds were tied – "looked pretty damn ugly," and that if a recent report was correct, "then the entire subprime market is toast." Days later, during a conference call, Mr. Tannin told investors that "we’re very comfortable with exactly where we are."
When the defense asked that the entire e-mail be read before the jury, a different picture emerged, according to a juror, Aram Hong, the director for food and beverage at a hotel. The complete e-mail, said Ms. Hong, suggested that the defendants were considering two options. The first was to close the funds, and the other was to approach the flagging subprime mortgage market as a buying opportunity. "They decided, ‘We need to make a decision now. And we need to be aggressive whichever way we go,’"Ms. Hong said.
Defense lawyers argued much the same throughout the trial.
"The entire market crashed," Ms. Hong said. "You can’t blame that on two people."
If anything, the slanderous and dishonest post-acquittal remarks by prosecutors drive home just how contemptuous federal prosecutors are of everyone else. The jury did not acquit because they were too stupid and vapid to understand the clarity of the prosecution’s case; they acquitted because they did understand that the government’s simple, clear presentation was not true, or, at very best, did not do a good job of meeting the "reasonable doubt" standards.
I was not surprised at the acquittal, given what I knew was presented in court. My only fear was a federal jury being, well, a federal jury that throws sops to those poor, underpaid prosecutors who claim they only are trying to do justice.
In the end, however, the jury did its job, and judge did his job, the defendants were innocent, and the prosecution continued to lie. Oh, and the media will continue to be the media. Like the Bourbons, they "learn nothing and they forget nothing."
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