Archive for December, 2013

Noam Chomsky: We’re no longer a functioning democracy, we’re really a plutocracy

Sunday, December 29th, 2013

The world faces two potentially existential threats, according to the linguist and political philosopher Noam Chomsky.

“There are two major dark shadows that hover over everything, and they’re getting more and more serious,” Chomsky said. “The one is the continuing threat of nuclear war that has not ended. It’s very serious, and another is the crisis of ecological, environmental catastrophe, which is getting more and more serious.”

Chomsky appeared Friday on the last episode of NPR’s “Smiley and West” program to discuss his education, his views on current affairs and how he manages to spread his message without much help from the mainstream media.

He told the hosts that the world was racing toward an environmental disaster with potentially lethal consequence, which the world’s most developed nations were doing nothing to prevent – and in fact were speeding up the process.

“If there ever is future historians, they’re going to look back at this period of history with some astonishment,” Chomsky said. “The danger, the threat, is evident to anyone who has eyes open and pays attention at all to the scientific literature, and there are attempts to retard it, there are also at the other end attempts to accelerate the disaster, and if you look who’s involved it’s pretty shocking.”

Chomsky noted efforts to halt environmental damage by indigenous people in countries all over the world – from Canada’s First Nations to tribal people in Latin America and India to aboriginal people in Australia—but the nation’s richest, most advanced and most powerful countries, such as the United States, were doing nothing to forestall disaster.

“When people here talk enthusiastically about a hundred years of energy independence, what they’re saying is, ‘Let’s try to get every drop of fossil fuel out of the ground so as to accelerate the disaster that we’re racing towards,’” Chomsky said. “These are problems that overlie all of the domestic problems of oppression, of poverty, of attacks on the education system (and) massive inequality, huge unemployment.”

He blamed the “financialization” of the U.S. economy for income inequality and unemployment, saying that banks that were “too big to fail” skimmed enormous wealth from the market.

“In fact, there was a recent (International Monetary Fund) study that estimated that virtually all the profits of the big banks can be traced back to this government insurance policy, and in general they’re quite harmful, I think, quite harmful to the economy,” Chomsky said.

Those harmful effects can be easily observed by looking at unemployment numbers and stock market gains, he said.

“There are tens of millions of people unemployed, looking for work, wanting to work (and) there are huge resources available,” Chomsky said. “Corporate profits are going through the roof, there’s endless amounts of work to be done – just drive through a city and see all sorts of things that have to be done – infrastructure is collapsing, the schools have to be revived. We have a situation in which huge numbers of people want to work, there are plenty, huge resources available, an enormous amount to be done, and the system is so rotten they can’t put them together.”

The reason for this is simple, Chomsky said.

“There is plenty of profit being made by those who pretty much dominate and control the system,” he said. “We’ve moved from the days where there was some kind of functioning democracy. It’s by now really a plutocracy.”

Chomsky strongly disagreed with Smiley and West that he had been marginalized for his views, saying that he regretfully turned down dozens of invitations to speak on a daily basis because he was otherwise engaged.

He also disagreed that a platform in the mainstream media was necessary to influence the debate.

“If you take a look at the progressive changes that have taken place in the country, say, just in the last 50 years – the civil rights movement, the antiwar movement, opposition to aggression, the women’s movement, the environmental movement and so on – they’re not led by any debate in the media,” Chomsky said. “No, they were led by popular organizations, by activists on the ground.”

He recalled the earliest days of the antiwar movement, in the early 1960s, when he spoke in living rooms and church basements to just a handful of other activists and they were harassed – even in liberal Boston – by the authorities and media.

But that movement eventually grew and helped hasten the end of the Vietnam War, and Chomsky said it’s grown and become so mainstream that antiwar activists can limit wars before they even begin.

He said President Ronald Reagan was unable to launch a full-scale war in Central America during the 1980s because of the antiwar movement, and he bitterly disputed the idea that antiwar activists had no impact on the Iraq War.

“I don’t agree; it had a big effect,” Chomsky said. “It sharply limited the means that were available to the government to try to carry out the invasion and subdue the population. In fact, it’s one reason why the U.S. ended up really defeated in Iraq, seriously had to give up all of its war aims. The major victor in Iraq turns out to be Iran.”

Despite these limitations, he said the Iraq War had been one of the new millennium’s worst atrocities and had provoked a violent schism between Sunni and Shiite Muslims that had sparked regional conflicts throughout the Middle East.

“The United States is now involved in a global terror campaign largely against the tribal people of the world, mostly Muslim tribes, and it’s all over. The intention is to go on and on,” Chomsky said. “These are all terrible consequences, but nevertheless they’re not as bad as they would be if there weren’t public opposition.”

– To the original article:  ➡

 

Posted in Capitalism & Corporations, CrashBlogging, The Perfect Storm | No Comments »

Cicada 3301

Monday, December 23rd, 2013

– I’ve been a programmer and systems analyst most of my life.  I started with computers the year before I graduated from university (1976) and I’ve loved the work ever since.   Indeed, I threw over the career that my degree in Microbiology qualified me for to pursue the new (then) world of computers.

– I’ve been all around the block with this career, as you might expect, given the years I’ve spent in it.   And I was lucky (or brash enough) to have found my self in widely disparate areas of the field ranging from applications, web-based and database work to the lowest levels of operating systems written in assembly language.   

– But, no matter how much you’ve seen and how far down the rabbit hole you’ve wandered, there’s always more.  The following article brought that home to me clearly.  

– The Internet that we know is not the Internet that actually exists.  Beyond what most of us have seen as either users or programmers, there’s still another entire world out there.

– Digital spelunking, anyone?   I’ve posted links to two articles you may enjoy, below.

– dennis

= = = = = = = = = = = = = = = = = = = = = =

tunnelsWikipedia’s take

A first hand account

Posted in CyberChaos, Tech-Software, Technical | 1 Comment »

David Simon: ‘There are now two Americas. My country is a horror show’

Sunday, December 15th, 2013

The creator of The Wire, David Simon, delivered an impromptu speech about the divide between rich and poor in America at theFestival of Dangerous Ideas in Sydney, and how capitalism has lost sight of its social compact. This is an edited extract

America is a country that is now utterly divided when it comes to its society, its economy, its politics. There are definitely two Americas. I live in one, on one block in Baltimore that is part of the viable America, the America that is connected to its own economy, where there is a plausible future for the people born into it. About 20 blocks away is another America entirely. It’s astonishing how little we have to do with each other, and yet we are living in such proximity.

There’s no barbed wire around West Baltimore or around East Baltimore, around Pimlico, the areas in my city that have been utterly divorced from the American experience that I know. But there might as well be. We’ve somehow managed to march on to two separate futures and I think you’re seeing this more and more in the west. I don’t think it’s unique to America.

I think we’ve perfected a lot of the tragedy and we’re getting there faster than a lot of other places that may be a little more reasoned, but my dangerous idea kind of involves this fellow who got left by the wayside in the 20th century and seemed to be almost the butt end of the joke of the 20th century; a fellow named Karl Marx.

I’m not a Marxist in the sense that I don’t think Marxism has a very specific clinical answer to what ails us economically. I think Marx was a much better diagnostician than he was a clinician. He was good at figuring out what was wrong or what could be wrong with capitalism if it wasn’t attended to and much less credible when it comes to how you might solve that.

You know if you’ve read Capital or if you’ve got the Cliff Notes, you know that his imaginings of how classical Marxism – of how his logic would work when applied – kind of devolve into such nonsense as the withering away of the state and platitudes like that. But he was really sharp about what goes wrong when capital wins unequivocally, when it gets everything it asks for.

That may be the ultimate tragedy of capitalism in our time, that it has achieved its dominance without regard to a social compact, without being connected to any other metric for human progress.

We understand profit. In my country we measure things by profit. We listen to the Wall Street analysts. They tell us what we’re supposed to do every quarter. The quarterly report is God. Turn to face God. Turn to face Mecca, you know. Did you make your number? Did you not make your number? Do you want your bonus? Do you not want your bonus?

And that notion that capital is the metric, that profit is the metric by which we’re going to measure the health of our society is one of the fundamental mistakes of the last 30 years. I would date it in my country to about 1980 exactly, and it has triumphed.

Capitalism stomped the hell out of Marxism by the end of the 20th century and was predominant in all respects, but the great irony of it is that the only thing that actually works is not ideological, it is impure, has elements of both arguments and never actually achieves any kind of partisan or philosophical perfection.

It’s pragmatic, it includes the best aspects of socialistic thought and of free-market capitalism and it works because we don’t let it work entirely. And that’s a hard idea to think – that there isn’t one single silver bullet that gets us out of the mess we’ve dug for ourselves. But man, we’ve dug a mess.

After the second world war, the west emerged with the American economy coming out of its wartime extravagance, emerging as the best product. It was the best product. It worked the best. It was demonstrating its might not only in terms of what it did during the war but in terms of just how facile it was in creating mass wealth.

Plus, it provided a lot more freedom and was doing the one thing that guaranteed that the 20th century was going to be – and forgive the jingoistic sound of this – the American century.

It took a working class that had no discretionary income at the beginning of the century, which was working on subsistence wages. It turned it into a consumer class that not only had money to buy all the stuff that they needed to live but enough to buy a bunch of shit that they wanted but didn’t need, and that was the engine that drove us.

It wasn’t just that we could supply stuff, or that we had the factories or know-how or capital, it was that we created our own demand and started exporting that demand throughout the west. And the standard of living made it possible to manufacture stuff at an incredible rate and sell it.

And how did we do that? We did that by not giving in to either side. That was the new deal. That was the great society. That was all of that argument about collective bargaining and union wages and it was an argument that meant neither side gets to win.

Labour doesn’t get to win all its arguments, capital doesn’t get to. But it’s in the tension, it’s in the actual fight between the two, that capitalism actually becomes functional, that it becomes something that every stratum in society has a stake in, that they all share.

The unions actually mattered. The unions were part of the equation. It didn’t matter that they won all the time, it didn’t matter that they lost all the time, it just mattered that they had to win some of the time and they had to put up a fight and they had to argue for the demand and the equation and for the idea that workers were not worth less, they were worth more.

Ultimately we abandoned that and believed in the idea of trickle-down and the idea of the market economy and the market knows best, to the point where now libertarianism in my country is actually being taken seriously as an intelligent mode of political thought. It’s astonishing to me. But it is. People are saying I don’t need anything but my own ability to earn a profit. I’m not connected to society. I don’t care how the road got built, I don’t care where the firefighter comes from, I don’t care who educates the kids other than my kids. I am me. It’s the triumph of the self. I am me, hear me roar.

That we’ve gotten to this point is astonishing to me because basically in winning its victory, in seeing that Wall come down and seeing the former Stalinist state’s journey towards our way of thinking in terms of markets or being vulnerable, you would have thought that we would have learned what works. Instead we’ve descended into what can only be described as greed. This is just greed. This is an inability to see that we’re all connected, that the idea of two Americas is implausible, or two Australias, or two Spains or two Frances.

Societies are exactly what they sound like. If everybody is invested and if everyone just believes that they have “some”, it doesn’t mean that everybody’s going to get the same amount. It doesn’t mean there aren’t going to be people who are the venture capitalists who stand to make the most. It’s not each according to their needs or anything that is purely Marxist, but it is that everybody feels as if, if the society succeeds, I succeed, I don’t get left behind. And there isn’t a society in the west now, right now, that is able to sustain that for all of its population.

And so in my country you’re seeing a horror show. You’re seeing a retrenchment in terms of family income, you’re seeing the abandonment of basic services, such as public education, functional public education. You’re seeing the underclass hunted through an alleged war on dangerous drugs that is in fact merely a war on the poor and has turned us into the most incarcerative state in the history of mankind, in terms of the sheer numbers of people we’ve put in American prisons and the percentage of Americans we put into prisons. No other country on the face of the Earth jails people at the number and rate that we are.

We have become something other than what we claim for the American dream and all because of our inability to basically share, to even contemplate a socialist impulse.

Socialism is a dirty word in my country. I have to give that disclaimer at the beginning of every speech, “Oh by the way I’m not a Marxist you know”. I lived through the 20th century. I don’t believe that a state-run economy can be as viable as market capitalism in producing mass wealth. I don’t.

I’m utterly committed to the idea that capitalism has to be the way we generate mass wealth in the coming century. That argument’s over. But the idea that it’s not going to be married to a social compact, that how you distribute the benefits of capitalism isn’t going to include everyone in the society to a reasonable extent, that’s astonishing to me.

And so capitalism is about to seize defeat from the jaws of victory all by its own hand. That’s the astonishing end of this story, unless we reverse course. Unless we take into consideration, if not the remedies of Marx then the diagnosis, because he saw what would happen if capital triumphed unequivocally, if it got everything it wanted.

And one of the things that capital would want unequivocally and for certain is the diminishment of labour. They would want labour to be diminished because labour’s a cost. And if labour is diminished, let’s translate that: in human terms, it means human beings are worth less.

From this moment forward unless we reverse course, the average human being is worth less on planet Earth. Unless we take stock of the fact that maybe socialism and the socialist impulse has to be addressed again; it has to be married as it was married in the 1930s, the 1940s and even into the 1950s, to the engine that is capitalism.

Mistaking capitalism for a blueprint as to how to build a society strikes me as a really dangerous idea in a bad way. Capitalism is a remarkable engine again for producing wealth. It’s a great tool to have in your toolbox if you’re trying to build a society and have that society advance. You wouldn’t want to go forward at this point without it. But it’s not a blueprint for how to build the just society. There are other metrics besides that quarterly profit report.

The idea that the market will solve such things as environmental concerns, as our racial divides, as our class distinctions, our problems with educating and incorporating one generation of workers into the economy after the other when that economy is changing; the idea that the market is going to heed all of the human concerns and still maximise profit is juvenile. It’s a juvenile notion and it’s still being argued in my country passionately and we’re going down the tubes. And it terrifies me because I’m astonished at how comfortable we are in absolving ourselves of what is basically a moral choice. Are we all in this together or are we all not?

If you watched the debacle that was, and is, the fight over something as basic as public health policy in my country over the last couple of years, imagine the ineffectiveness that Americans are going to offer the world when it comes to something really complicated like global warming. We can’t even get healthcare for our citizens on a basic level. And the argument comes down to: “Goddamn this socialist president. Does he think I’m going to pay to keep other people healthy? It’s socialism, motherfucker.”

What do you think group health insurance is? You know you ask these guys, “Do you have group health insurance where you …?” “Oh yeah, I get …” you know, “my law firm …” So when you get sick you’re able to afford the treatment.

The treatment comes because you have enough people in your law firm so you’re able to get health insurance enough for them to stay healthy. So the actuarial tables work and all of you, when you do get sick, are able to have the resources there to get better because you’re relying on the idea of the group. Yeah. And they nod their heads, and you go “Brother, that’s socialism. You know it is.”

And … you know when you say, OK, we’re going to do what we’re doing for your law firm but we’re going to do it for 300 million Americans and we’re going to make it affordable for everybody that way. And yes, it means that you’re going to be paying for the other guys in the society, the same way you pay for the other guys in the law firm … Their eyes glaze. You know they don’t want to hear it. It’s too much. Too much to contemplate the idea that the whole country might be actually connected.

So I’m astonished that at this late date I’m standing here and saying we might want to go back for this guy Marx that we were laughing at, if not for his prescriptions, then at least for his depiction of what is possible if you don’t mitigate the authority of capitalism, if you don’t embrace some other values for human endeavour.

And that’s what The Wire was about basically, it was about people who were worth less and who were no longer necessary, as maybe 10 or 15% of my country is no longer necessary to the operation of the economy. It was about them trying to solve, for lack of a better term, an existential crisis. In their irrelevance, their economic irrelevance, they were nonetheless still on the ground occupying this place called Baltimore and they were going to have to endure somehow.

That’s the great horror show. What are we going to do with all these people that we’ve managed to marginalise? It was kind of interesting when it was only race, when you could do this on the basis of people’s racial fears and it was just the black and brown people in American cities who had the higher rates of unemployment and the higher rates of addiction and were marginalised and had the shitty school systems and the lack of opportunity.

And kind of interesting in this last recession to see the economy shrug and start to throw white middle-class people into the same boat, so that they became vulnerable to the drug war, say from methamphetamine, or they became unable to qualify for college loans. And all of a sudden a certain faith in the economic engine and the economic authority of Wall Street and market logic started to fall away from people. And they realised it’s not just about race, it’s about something even more terrifying. It’s about class. Are you at the top of the wave or are you at the bottom?

So how does it get better? In 1932, it got better because they dealt the cards again and there was a communal logic that said nobody’s going to get left behind. We’re going to figure this out. We’re going to get the banks open. From the depths of that depression a social compact was made between worker, between labour and capital that actually allowed people to have some hope.

We’re either going to do that in some practical way when things get bad enough or we’re going to keep going the way we’re going, at which point there’s going to be enough people standing on the outside of this mess that somebody’s going to pick up a brick, because you know when people get to the end there’s always the brick. I hope we go for the first option but I’m losing faith.

The other thing that was there in 1932 that isn’t there now is that some element of the popular will could be expressed through the electoral process in my country.

The last job of capitalism – having won all the battles against labour, having acquired the ultimate authority, almost the ultimate moral authority over what’s a good idea or what’s not, or what’s valued and what’s not – the last journey for capital in my country has been to buy the electoral process, the one venue for reform that remained to Americans.

Right now capital has effectively purchased the government, and you witnessed it again with the healthcare debacle in terms of the $450m that was heaved into Congress, the most broken part of my government, in order that the popular will never actually emerged in any of that legislative process.

So I don’t know what we do if we can’t actually control the representative government that we claim will manifest the popular will. Even if we all start having the same sentiments that I’m arguing for now, I’m not sure we can effect them any more in the same way that we could at the rise of the Great Depression, so maybe it will be the brick. But I hope not.

David Simon is an American author and journalist and was the executive producer of The Wire. This is an edited extract of a talk delivered at the Festival of Dangerous Ideas in Sydney.

 

– To the original Article:  ➡

– research thanks to Gus H.

 

Posted in Capitalism & Corporations, Conflict, Corporate takeover of Government, Corruption, CrashBlogging, Culture - How not to do it, Financial melt-down, Human Rights, Politics - The Wrong Way, Social Breakdown, The Perfect Storm, Wealth Disparity | No Comments »

“Managing Transparency”

Sunday, December 15th, 2013

By George Monbiot of the UK’s Guardian – 2 December 2013

Politicians and officials are desperately seeking to justify their transatlantic assault on democracy.

Panic spreads through the European Commission like ferrets in a rabbit warren. Its plans to create a single market incorporating Europe and the United States, progressing so nicely when hardly anyone knew, have been blown wide open. All over Europe people are asking why this is happening; why we were not consulted; for whom it is being done.

They have good reason to ask. The Commission insists that its Transatlantic Trade and Investment Partnership should include a toxic mechanism called investor-state dispute settlement. Where this has been forced into other trade agreements, it has allowed big corporations to sue governments before secretive arbitration panels composed of corporate lawyers, which bypass domestic courts and override the will of parliaments(1).

This mechanism could threaten almost any means by which governments might seek to defend their citizens or protect the natural world. Already it is being used by mining companies to sue governments trying to keep them out of protected areas(2,3); by banks fighting financial regulation(4); by a nuclear company contesting Germany’s decision to switch off atomic power(5). After a big political fight we’ve now been promised plain packaging for cigarettes. But it could be nixed by an offshore arbitration panel. The tobacco company Philip Morris is currently suing Australia through the same mechanism in another treaty(6).

No longer able to keep this process quiet, the European Commission has instead devised a strategy for lying to us. A few days ago an internal document was leaked(7). This reveals that a “dedicated communications operation” is being “coordinated across the Commission”. It involves, to use the EC’s chilling phrase, the “management of stakeholders, social media and transparency.” Managing transparency should be adopted as its motto.

The message is that the trade deal is about “delivering growth and jobs” and will not “undermine regulation and existing levels of protection in areas like health, safety and the environment”. Just one problem: it’s not true.

From the outset, the Transatlantic Trade and Investment Partnership has been driven by corporations and their lobby groups, who boast of being able to “co-write” it(8,9). Persistant digging by the Corporate Europe Observatory reveals that the commission has held eight meetings on the issue with civil society groups, and 119 with corporations and their lobby groups(10). Unlike the civil society meetings, these have taken place behind closed doors and have not been disclosed online.

Though the Commission now tells the public that it will protect “the state’s right to regulate”(11), this isn’t the message the corporations have been hearing. In an interview last week, Stuart Eizenstat, co-chair of the Transatlantic Business Council, instrumental in driving the process, was asked whether companies whose products had been banned by regulators would be able to sue(12). Yes. “If a suit like that was brought and was successful, it would mean that the country banning the product would have to pay compensation to the industry involved or let the product in.” Would that apply to the European ban on chicken carcasses washed with chlorine, a controversial practice permitted in the US? “That’s one example where it might.”

What the Commission and its member governments fail to explain is why we need offshore arbitration at all. It insists that domestic courts “might be biased or lack independence”(13), but which courts is it talking about? It won’t say. Last month, while trying to defend the treaty, the British minister Kenneth Clarke said something revealing:

“Investor protection is a standard part of free-trade agreements – it was designed to support businesses investing in countries where the rule of law is unpredictable, to say the least.”(14) So what is it doing in an EU-US deal? Why are we using measures designed to protect corporate interests in failed states in countries with a functioning judicial system? Perhaps it’s because functioning courts are less useful to corporations than opaque and injust arbitration by corporate lawyers.

As for the Commission’s claim that the trade deal will produce growth and jobs, this is also likely to be false. Barack Obama promised that the US-Korea Free Trade Agreement would increase US exports by $10bn. They immediately fell by $3.5bn(15). The 70,000 jobs it would deliver? Er, 40,000 were lost. Bill Clinton promised that the North American Free Trade Agreement would create 200,000 new jobs for the US; 680,000 went down the pan(16,17). As the commentator Glyn Moody says, “the benefits are slight and illusory, while the risks are very real.”(18)

So where are our elected representatives? Fast asleep. Labour MEPs, now frantically trying to keep investor-state dispute mechanisms out of the agreement, are the  exception(19); the rest are in Neverland. The LibDem MEP Sir Graham Watson wrote in his newsletter, before dismissing the idea, “I am told that columnists on The Guardian and The Independent claim it will hugely advantage US multinational companies to the detriment of Europe.”(20) We said no such thing, as he would know had he read the articles, rather than idiotically relying on hearsay. The treaty is likely to advantage the corporations of both the US and the EU, while disadvantaging their people. It presents a danger to democracy and public protection throughout the trading area.

Caroline Lucas, one of the few MPs who remains interested in the sovereignty of parliament, has published an early day motion on the issue(21). It has so far been signed by only seven MPs. For the government, Kenneth Clarke argues that to ignore the potential economic gains of the trade agreement “in favour of blowing up a controversy around one small part of the negotiations, known as investor protection, seems to me positively Scrooge-like.”(22)

Quite right too. Overriding our laws, stripping away our rights, making parliament redundant: these are trivial and irrelevant beside the issue of how much money could be made. Don’t worry your little heads about it.

– To the original Article:  ➡

– Research thanks to Piers L.

 

 

Posted in Capitalism & Corporations, Corporate takeover of Government, Corruption, CrashBlogging, Financial melt-down, Human Rights, Politics - The Wrong Way, Social Breakdown, The Perfect Storm | No Comments »

The Ayn Rand-Worshipping Sears CEO That Blew Up His Multibillion Dollar Empire

Wednesday, December 11th, 2013

The invisible hand waves goodbye to America’s most delusional CEO.

 

Once upon a time, hedge fund manager Eddie Lampert was living a Wall Street fairy tale. His fairy godmother was Ayn Rand, the dashing diva of free-market ideology whose quirky economic notions would transform him into a glamorous business hero.

For a while, it seemed to work like a charm. Pundits called him the “ Steve Jobs of the investment world.” The new Warren Buffett. By 2006 he was flying high, the richest man in Connecticut, managing over $15 billion thorough his hedge fund, ESL Investments.

Stoked by his Wall Street success, Lampert plunged headlong into the retail world. Undaunted by his lack of industry experience and hailed a genius, Lampert boldly pushed to merge Kmart and Sears with a layoff and cost-cutting strategy that would, he promised, send profits into the stratosphere. Meanwhile the hotshot threw cash around like an oil sheikh, buying a $40 million pad in Florida’s Biscayne Bay, a record even for that star-studded county.

Fast-forward to 2013: The fairy tale has become a nightmare.

Lampert is now known as one of the worst CEOs in America — the man who flushed Sears down the toilet with his demented management style and harebrained approach to retail. Sears stock is tanking. His hedge fun is down 40 percent, and the business press has turned from praising Lampert’s genius towatching gleefully as his ship sinks. Investors are running from “Crazy Eddie” like the plague.

That’s what happens when Ayn Rand is the basis for your business plan.

Crazy Eddie has been one of America’s most vocal advocates of discredited free-market economics, so obsessed with Ayn Rand he could rattle off memorized passages of her novels. As Mina Kimes explained in a fascinating profile in Bloomberg Businessweek, Lampert took the myth that humans perform best when acting selfishly as gospel, pitting Sears company managers against each other in a kind of Lord of the Flies death match. This, he believed, would cause them to act rationally and boost performance.

If you think that sounds batshit crazy, congratulations. You understand more than most of America’s business school graduates.

Instead of enhancing Sears’ bottom line, the heads of various divisions began to undermine each other and fight tooth and claw for the profits of their individual fiefdoms at the expense of the overall brand. By this time Crazy Eddie was completely in thrall to his own bloated ego, and fancied he could bend underlings to his will by putting them through humiliating rituals, like annual conference calls in which unit managers were forced to bow and scrape for money and resources. But the chaos only grew.

Lampert took to hiding behind a pen name and spying on and goading employees through an internal social network. He became obsessed with technology, wasting resources on developing apps as Sears’ physical stores became dilapidated and filthy. Instead of investing in workers and developing useful products, he sold off valuable real estate, shuttered stores, and engineered stock buybacks in order to manipulate stock prices and line his own pockets.

Eddie’s crazy didn’t stop there. As a Wall Street creature fantastically out of touch with the kind of ordinary folks who shop at Sears, he inserted his love of luxury into the mix, trying to sell Rolex watches and $4,400 designer handbags through America’s iconic budget-friendly brand.

As his company was descending into Randian mayhem, Lampert continued to cheerfully inform stockholders that his revolutionary ideas would soon produce earth-shattering results. Reality: Sears has lost half its value in five years. Since 2010, Sears has closed more than half of its stores. Sears Holdings is financially distressed and Lampert’s own hedge fund has reduced its stake in the company. The Sears store in Oakland, California, open for business with boarded-up windows, has even been cited for urban blight.

– to the original story:  ➡

 

Posted in Capitalism & Corporations, CrashBlogging, Financial melt-down, Mental Irrationality, The Perfect Storm, Water Shortages, Wealth Disparity | No Comments »