Thursday, April 11, 2013

Catching Up On Links . . .

Several important stories have surfaced over the past several weeks, including:

A Failed Whale, And How To Fix It, by Alexis  Goldstein [The Nation]
Jamie Dimon, CEO JP Morgan
Describing JP Morgan CEO Jamie Dimon's role in the "London Whale" scandal that lost JP Morgan billions.  According to Goldstein:  "Even in the wake of the financial crisis, the bailouts and ongoing bank malfeasance, Washington has remained deferential to the financial industry. Regulators parrot the industry's talking points and use them as an excuse to water down important parts of the Dodd-Frank Wall Street Reform and Consumer Protection Act. And congressional representatives on both sides of the aisle continue to introduce bills to slowly gut Dodd-Frank.  What has JPMorgan Chase been doing while Washington is so dutifully doing its bidding? In the words of the stunningly comprehensive [Senate] subcommittee report [on the London Whale scandal], JPMorgan Chase 'manipulated models; dodged OCC oversight; and misinformed investors, regulators, and the public about the nature of its risky derivatives trading.' Lest you think this is all, rest assured that there is more: JPMorgan was also hiding losses and ignoring its own internal warnings that risk was increasing dramatically."

King Cotton's Long Shadow, by Walter Johnson [New York Times]
Answering the question of "What was the role of slavery in American economic development?"  According to Johnson:  "The most familiar answer to that question is: not much. By most accounts, the triumph of freedom and the birth of capitalism are seen as the same thing. The victory of the North over the South in the Civil War represents the victory of capitalism over slavery, of the future over the past, of the factory over the plantation. In actual fact, however, in the years before the Civil War, there was no capitalism without slavery. The two were, in many ways, one and the same."

Who Will Get the Real Mortgage Crisis Profits? by Peter Miller []
Describing the massive profits housing giants Fannie Mae and Freddie Mac received in 2012, and wondering who will ultimately reap these rewards if Fannie Mae and Freddie Mac are privatized.

Inside the Belly of the Beast: Corrections Corporation of America and the Recession, by Hadar Aviram [California Correctional Crisis Blog]
Describing the business model of the private for-profit prison industry, particularly in recessionary times.  According to Aviram:  CCA institutions - of which it operates 67 and owns 49 - are located in 20 states and in DC (6 of their institutions are, at this point, vacant). After an initial period of time, population in its private institutions averages 89%. A minimum occupancy is often, albeit not always, mentioned in its contracts with the states to whom it provides services. The business model is structured around the concept of a "per-diem", that is, the state pays a price per-inmate-per-bed-per-day. . . .  Who are CCA's main customers? Well, the federal government, for one. Revenues from federal clients comprise 43% of CCA's total revenue for the years 2010 and 2011. But of the states that contract with CCA, California is a major contributor, providing CCA with 13% of its management revenue."

[photo courtesy of Steve Jurvetson, via Creative Commons]

1 comment:

  1. "... in the years before the Civil War, there was no capitalism without slavery. The two were, in many ways, one and the same."

    This is a meaningless statement since in the years before the Civil War slavery existed almost everywhere, under every political and economic system on earth.

    What was special about the capitalist countries of the West, with regard to slavery, was not that slavery existed, but that it was challenged and ended. In every other part of the world, slavery was viewed as legitimate and went virtually unquestioned. In fact, slavery still exists in many parts of the world today.

    While some form of "capitalism" and slavery may have existed side-by-side, they were never "one and the same". Capitalism did not start to realize it's full expression and potential until after the end of slavery and the establishment of free, representative governments.

    "Socialism is a new form of slavery." -- Alexis de Tocqueville

    Slavery is, however, at the very heart of socialism. If one claims a "right" to certain things - food, shelter, medical care, etc. - and he cannot or will not provide those things for himself, he is, in effect, claiming that others have a corresponding responsibility to provide those things for him. He is asserting a "right" to the fruits of another man's labor - slavery.