September 15, 2015
Crisis: Gag Orders, "Political Insurrection", Debts, Refugees, Lehman Brothers

 "They who can give up essential 
   liberty to obtain a little temporary
   safety, deserve neither liberty
   nor safety."
   -- Benjamin Franklin
   "All governments lie and nothing
   they say should be believed.
   -- I.F. Stone
   "Power tends to corrupt, and   
   absolute power corrupts
   absolutely. Great men are        
   almost always bad men."
   -- Lord Acton

Prev- crisis -Next


Federal Court Lifts National Security Letter Gag Order;
     First Time in 14 Years

2. "A Political Insurrection in Britain"
3.  Are We Heading Into a Debt Supernova?
'We Are Stubborn': Refugees Still Set on Germany Despite
     Border Controls
5. Lehman Day: Making Fun of the Second Great Depression

This is a Nederlog of Tuesday, September 15, 2015.

This is a crisis blog. There are 5 items with 6 dotted links: Item 1 is about an American federal court that, for the first time in 14 years, lifted a gag order
that seems to normally come with a "national security letter" (which may have
been given to more than 1 in a 1000 adult Americans!); item 2 is about an interview with Tariq Ali (forty years befriended with Jeremy Corbyn) that I found interesting; item 3 is about the threat of a debt supernova, that is taken seriously by some serious economists; item 4 is about the refugee problem the European Union has, and tries to solve by mounting more and more bureaucratic hurdles for refugees to enter Europe; and item 5 is about the fact that it is today 7 years ago that Lehman Brothers went down.

1. Federal Court Lifts National Security Letter Gag Order; First Time in 14 Years

The first article today is by Jenna McLaughlin on The Intercept:
  • Federal Court Lifts National Security Letter Gag Order; First Time in 14 Years
This starts as follows:

A federal district court judge in New York has fully lifted an 11-year-old gag order that the FBI imposed on Nicholas Merrill, the founder of a small Internet service provider, to prevent him from speaking about a National Security Letter served on him in 2004.

It marked the first time such a gag order has been fully lifted since the USA Patriot Act in 2001 expanded the FBI’s authority to unilaterally demand that certain businesses turn over records simply by writing a letter saying the information is needed for national security purposes.

Like other NSL recipients, Merrill was also instructed that he could not mention the order to anyone.

I say. This is a very good judicial decision, simply because the FBI was given powers under the "Patriot Act" which it shouldn't have and cannot have in any real democracy:
  • National Security letters that force someone to hand over information to the FBI are undemocratic (and in my eyes illegal)
  • The order not to tell anyone about such a letter from the FBI is only fit
    for a very authoritarian and completely undemocratic government.
Next there is this:

Merrill said the court ruling allowing him to discuss the details of the sealed request in full will allow him to ignite a debate among Americans about the unchecked surveillance powers of the U.S. government.

“For more than a decade, the FBI has fought tooth and nail in order to prevent me from speaking freely about the NSL I received,” Merrill said in a press release published by the Calyx Institute, where he serves as director.

U.S. District Court Judge Victor Marrero’s decision “vindicates the public’s right to know how the FBI uses warrantless surveillance to peer into our digital lives,” Merrill said. “I hope today’s victory will finally allow Americans to engage in an informed debate about proper the scope of the government’s warrantless surveillance powers.”

Yes, indeed. But there still is this, that shows the enormous authoritarian scope the FBI has had for many years:

Merrill is not free to talk quite yet, however – he will remain under gag order for 90 days, giving the government time to appeal.

The Electronic Frontier Foundation estimates that over 300,000 National Security Letters have been issued since 2001. The Justice Department concluded in 2008 that the FBI had abused their power, often gathering information on large numbers of U.S. citizens, infringing on their First Amendment rights, and leaving hardly any paper trail, until changes were adopted in 2006.

First, Merrill still is not free to speak (yet). And second, "300,000 National Security Letters" means that something like more than 1 in a 1000 of ALL adult Americans have been served these authoritarian undemocratic letters, possibly all with an order to shut up telling anyone.

That is not democratic law: it is pure authoritarianism, and therefore I am glad - if this happens! - that Nicholas Merrill may tell all.

2.  "A Political Insurrection in Britain"

The next article is by Amy Goodman on Democracy Now!:

  • "A Political Insurrection in Britain": Tariq Ali on Election of Jeremy Corbyn as New Labour Leader

This starts as follows:
Jeremy Corbyn has been a member of the House of Commons since 1983 and has a long history of voting against his Labour Party, which had moved considerably to the right under Tony Blair and Gordon Brown. Corbyn’s victory presages the prospect of a return to the party’s socialist roots, championing the renationalization of public transportation, free university tuition, rent control, and a national maximum wage to cap the salaries of high earners. We speak to longtime British editor and writer Tariq Ali, who has known Corbyn for 40 years. He calls Corbyn the most left-wing leader in the history of the British Labour Party.
For those who want some background: Here is the Wikipedia on Tariq Ali.
Here is Ali on Jeremy Corbyn and the importance of Corbyn's victory:

But his victory marks a huge shift in English politics. And the big problem here now is the following, that we have the most left-wing leader in the history of the British Labour Party in power as leader, and we have a very right-wing parliamentary Labour Party, which has been effectively created by Blair and Brown, by ending democracy in the party, by parachuting office boys and office girls to become members of Parliament, so that they have no one of note in Parliament today. That’s the contradiction that Jeremy faces. And I think one of the things he will have to do is to restore democracy in the party, give party conferences once again real meaning, and move forward. But, you know, that will happen, and it will take some time
OK. And here is a bit from the interview on the comparison between Jeremy Corbyn and Bernie Sanders (which - I take it - was the the theme of Chris Hedges' last column):

AMY GOODMAN: For our American audience, Tariq, is Jeremy Corbyn becoming leader of the Labour Party with these 200-to-one odds about three months ago equivalent to Bernie Sanders winning the Democratic nomination for president, the socialist senator from Vermont?

TARIQ ALI: Well, it is very similar, Amy, except that Jeremy is very good on foreign policy issues. I mean, he has been very strong attacking all the imperial wars. He has been very strong on the right of the Palestinians to national self-determination. He has denounced wars, and, as we heard earlier, he has linked the refugee crisis to the wars that are creating refugees. And Bernie has, of course, been very good attacking the corporations and the oligarchic aspects of American political and social life, so in that sense he is similar, but he has been very reluctant on foreign policy issues. Nonetheless, it would be the equivalent, you’re right, that if somehow Bernie Sanders became the official candidate of the Democratic Party to take on the Republicans, I mean, they would be—people would be squealing with anger, the traditional elites, but it would be a step forward. And that step has already been taken now in England.

I agree with that estimate (and don't see it as a reason to drop Bernie Sanders as a presidential candidate).

Finally, here is Tariq Ali on the character of Jeremy Corbyn:
So, Jeremy has been, you know, all the time I have known him—and I say this about very few politicians, Amy, as viewers will recall, but he has been one of the most honest politicians I know. He has got integrity. He has been consistent. And he has fought for the causes which large numbers of progressive people all over the world believe him—believe in. And he’s been like this for 40 years.
I accept that, though it remains to be seen how effective Jeremy Corbyn will be,
in part also because Blair and Brown - as was said above - filled the Labour Party with their own kind of insignificant careerists.

This is an interesting interview.

3. Are We Heading Into a Debt Supernova?

The next article is by Washington's Blog on his blog:

  • Are We Heading Into a Debt Supernova?

This starts as follows:

Financial luminaries such as Ray Dalio, Bill Gross, Kyle Bass, BCA Research,  Ken (“Excel”) Rogoff, John Mauldin and Martin Armstrong think that we’re at the end of a debt supercycle.

Former director of the Office of Management and Budget said we’re facing a “debt supernova“.

Former Fed chief Alan Greenspan said recently

Debt, deficits and entitlement programs are all coming to a head in a few months, all over the world.

I don't know how convincing that is, firstly because I am not a "financial luminary"; secondly, because I distrust Alan Greenspan; and thirdly also because
I do know sufficiently much about economics to know that (i) it is not a real science, if only because (ii) almost all economists missed predicting 2008.

But there is a reference in the article that backs it up. This is by Tyler Durden on Zerohedge:

  • Citi Just Made "Global Recession In 2016" Its Base Case Scenario

This starts as follows (with boldings in the original, but some text suppresed here (and if you want it, click the last dotted link):

Over the weekend, we reported that in a dramatic turn of events, the research division of Japan's second biggest brokerage house, Daiwa, did what nobody else has done before and released a report in which it made a global financial "meltdown", one resulting from nothing short of a Chinese economic cataclysm its base case scenario, its base case. It added that the impact of this global meltdown would "be the worst the world has ever seen." To wit:

Of all the possible risk scenarios the meltdown scenario is, realistically speaking, the most likely to occur. It is actually a more realistic outcome than the capital stock adjustment scenario. (...) If China’s economy, the second largest in the world, twice the size of Japan’s, were to lapse into a meltdown situation such as this one, the effect would more than likely send the world economy into a tailspin. Its impact could be the worst the world has ever seen.

That is Japan's "second biggest brokerage house", which was followed, it seems within 48 hours, by a similar report by Citigroup, whose chief economist is the Dutch-born American-British economist Willem Buiter, also known as Heleen Mees's former lover [1]:

This is Citi's punchline: "A global recession starting in 2016, led by China is now our Global Economics team's main scenario. Uncertainty remains, but the likelihood of a timely and effective policy response seems to be diminishing."

There is considerably more in the article. Do I consider it convincing? No, but it
does show the economy is far from healed, in spite of the present gains for the rich.

And while I know the rich make money on the moment, I still insist it is crisis, since the non-rich hardly advanced, and there are 90 or 99 non-rich against 1 rich person.

4. 'We Are Stubborn': Refugees Still Set on Germany Despite Border Controls

The next article is by Ranlah Salloum on Spiegel On Line:

  • 'We Are Stubborn': Refugees Still Set on Germany Despite Border Controls

This is from the beginning of the article:

On Sunday evening, Germany introduced temporary border controls along its frontier with Austria in response to the massive numbers of refugees that have been making their way to Germany in recent weeks. Officials from Germany's 16 states sounded the alarm back on Thursday, warning that refugee hostels were full and that they could no longer process the huge numbers of newcomers.

The temporary border controls -- which could last as long as two weeks, according to Bavarian Interior Minister Joachim Herrmann, who spoke on public radio on Monday morning -- are intended to give Germany a chance to catch its breath while at the same time ratcheting up the pressure on other European Union member states to accept a quota system for the distribution of asylum recipients across the bloc. EU interior ministers are meeting on Monday to try to find a solution.

I say. And I note there seem to be a million more Syrians (only Syrians!) who are trying to leave their country. (Incidentally, there are some 17 million Syrians, according to Wikipedia.)

It seems to me that the European governments are trying to "solve" the problem by making it more and more difficult for any refugees to come to Europe. Here is a statement by Germany's interior minister Thomas de Maizière:

Refugees, he added, "can't simply choose" in which country they want to apply for asylum.

I don't see why not, though I agree the problem is quite serious.

5. Lehman Day: Making Fun of the Second Great Depression Crowd

The next article is by Dean Baker on Truthout:

  • Lehman Day: Making Fun of the Second Great Depression Crowd

This starts as follows:

This week marks the seventh anniversary of the collapse of Lehman Brothers, the huge investment bank. This collapse set off the worldwide financial panic that brought Wall Street to its knees. The anniversary of this collapse, September 15, is the day set aside to ridicule the people who warned of a second Great Depression (SGD) if the Treasury Department and the Federal Reserve Board didn't rescue the Wall Street banks.

Incidentally, the CEO of Lehman Brothers was Richard Fuld Jr. who "earned" nearly 500 million dollars, and still seems to have all: See my Corporate psychopaths from January 7, 2012. He surely profited enormously.

But that is by the way. Here is more on the argument of the article:

Just to recount the basic story, there is no doubt that without a government bailout most of the big Wall Street banks would have gone under. Citigroup and Bank of America were both effectively bankrupt and remained on life support with hundreds of billions of dollars of government subsidized loans well into 2010. The remaining investment banks, Merrill Lynch, Morgan Stanley, and Goldman Sachs were all facing bank runs. These would have been unstoppable without the helping hand of big government. Many other financial institutions also would have been brought down in the maelstrom, but these giants were for sure dead ducks at the time of the bailouts. 
OK - that seems definitely true. Then there is this:
There is no doubt that the initial downturn would have been more severe if the market was allowed to work its magic and put these banks out of business. But the question the SGD gang could never answer is how this collapse would prevent the government from boosting the economy immediately afterward. After all, then Federal Reserve Board Chair Ben Bernanke once ridiculed people who questioned the ability of the government to boost the economy, commenting the government "has a technology, called a printing press…"
Yes, indeed. Incidentally, Bernanke said so in 2002, but it is true that the government still has the printing press, and uses it, but mostly to help the
banks rather than the ordinary people.

There is also this:
Rather than sitting through a decade of double-digit unemployment, why would Congress not pass a large stimulus package supported by aggressive monetary policy from the Fed? There certainly was no economic obstacle to this path. And the claim that political gridlock somehow would have prevented any stimulus flies in the face of history. Even Republicans have supported stimulus to counter economic slumps.
That is true. But it didn't happen in 2008-2009, because the bank managers convinced the politicians that austerity for the many but billions of money for themselves and their corporations - including the continuance of paying millions a year to corrupt bank managers, because their banks "were too big to fail" - would "save the economy".

Well, it did not save the economy. It saved the banks, which should have folded;
it saved the bank's managers; it saved their riches; it didn't solve the crisis but merely shifted it forward and downward to millions of ordinary people who are
paying for it; and in fact it changed very little economically, for the same dangers and most of the same debts still exist.


[1] Incidentally... I checked this out today because I have written (it turned out) 12 times about Heleen Mees, between 2006 and 2014, but all but one of these articles were written in Dutch, and in most articles she was only mentioned briefly, and my arguments mostly concerned her kind of - quite silly - feminism.

The reason for this footnote is that Heleen Mees fell from such fame as she had by getting into conflict with her former lover,
Willem Buiter - but while the Wikipedia file on Mees is quite explicit about it (including her demanding 20 million dollars from Buiter, which is about 40 times as much money as I received in my whole life) the Wikipedia file on Buiter does not contain either "Mees" nor "Heleen" and doesn't mention the conflict at all.

So... who cleaned Buiter's file on Wikipedia? (For I don't consider this fair. I am no party in the conflict, but either both should be mentioned in both Wikipedia lemmas or - perhaps, but that would be falsifying history - in neither lemma.)

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