Notes & Addenda on Subjective Due Process

Being older has some definite disadvantages, which I feel acutely every morning on attempting to arise to a new day. On the other hand, it does give you historical perspective, and I was wondering to myself, what is so different now versus the Watergate era in terms of responding to frankly unconstitutional acts at the highest level of government in the United States? The answer, I think, is fairly obvious: there is no longer any institutional integrity in Washington, D.C.

With regard to two separate episodes in recent history, the war in Libya and the targeted assassinations of two American citizens a few days ago, and before that the systematic violations of the FISA statute and the Fourth Amendment by the Bush Administration (and we may as well throw in the White House-sanctioned violations of the Eighth Amendment and the Convention Against Torture while we're at it): what you can say about all these events is basically the same thing: (1) everyone very readily agrees that the actions taken by the President were or are illegal and/or unconstitutional; and (2) Congress never does anything about it.

Realistically, each of the illegal actions described above dwarfs by an order of magnitude the actual crimes committed during the Watergate burglary, including the Watergate coverup actions (the illegal spying scandal, the Valerie Plame matter and the torture regime also had very extensive coverup aspects attached to the scandals, at least as involved and criminal as Watergate's coverup).

I think it's instructive that former Senator Russ Feingold attempted to bring a censure motion against President Bush arising fom the illegal spying matter, but he got nowhere and attracted very little support from his own party, in fact. Then he lost his reelection bid in 2010. I'm sure such facts are not lost on the craven souls who inhabit the Congress today; what's in it for me to be a hero? Still, this does not explain the institutional lethargy or passivity in the face of criminality, since if the Congress acted as a body there would be protection in numbers, as there was in the 1970's.

That's about as far as I get with this "analysis:" identifying a key difference between now and 1973. President Obama seems to have internalized this political style and has learned that it's better not to offer any explanations for unconstitutional actions, since the Senators and Representatives don't really raise the point themselves. Any legislative action, such as the brief flurry of harrumphing over the violation of the War Powers Resolution involved in the Libyan war (or, if you're old fashioned like me, the violation of the Constitutional provision regarding the exclusive right of the Congress to declare war), quickly blows over and MediaWorld is on to the next big thing before any damage registers.

I suppose what this really means is that Cheney's concept of the "Unitary Executive," or Nixon's claim that "if the President does it, then it's not illegal," has become the new reality. I suppose that Obama is aware of the federal statutes and Constitutional provisions which he violates, but with no Congressional oversight or restraint, the only remaining criterion for decision is how well his actions will play on the campaign trail. In this regard, I'm sure he's right in his appraisals. Whacking a Muslim troublemaker who records anti-American screeds, as Anwar al-Alaki did, puts the defenders of Due Process into something of a box - are you trying to protect America's enemies? The response, that the defense of a Constitutional principle is important so that we remain a government of laws, not men, sounds weak and insipid compared to the macho action of blowing a terrorist sky-high with a Predator drone.

Congress has bought into the same approach; it's easier, the imagery is better, it doesn't involve complicated legal theory, it plays better to a voting populace with attention deficit disorder on a mass scale. One way or the other, it's the way we've drifted, and I guess we'll find out, in the fullness of time, where it all leads.

Subjective Due Process

Our amiable, enigmatic President made good on one of his new "policies" recently and assassinated an American citizen, Anwar al-Alwaki, in Yemen, dispatching him and some other people by means of a Predator drone strike. Technically speaking, prima facie as we say, this presents a Constitutional problem. The Fifth Amendment to the Constitution (part of the Bill of Rights) provides that

"No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.^"

<sup>Notice that the Founding Fathers were pretty practical guys. They didn't say you could never off a traitor, with or without a lot of legal rigmarole, serving in the armed forces if he were to betray his fellows to the enemy in the heat of battle, for instance. This exception does not apply to the "Muslim cleric" (otherwise known as an American citizen), however. He would seem to fall into the general category of "person."

Except for the chronic malcontents, liberal bloggers and the like, no one seems terribly troubled about Awlaki's assassination outside of the Muslim community. I watched Bill Maher Friday night and Bill and most of his guests, which included Salman Rushdie and the former governor of Michigan, Jennifer Granholm (who has accepted a teaching post at John Yoo University in Berkeley), were all fired up about this latest display of vicarious macho by the O Man. Maher loves the difficulties this sort of behavior presents to the Neanderthal Republicans: how can the Republicans complain about a guy who puts out hits on American citizens without Due Process?

One guest, Seth MacFarlane, the creator of "Family Guy," was somewhat more circumspect. He pointed out some of the difficulties that might ensue if we go to a system of complete subjective due process where the national leader can have American citizens killed when he feels like it. One difficulty he raised was the idea that this power could fall into the wrong hands, implying, I think, that the power is currently in the right hands and was appropriately used to kill Alwaki. (As Jack Nicholson said in the movie, maybe that's just as good as it gets these days.) MacFarlane asked how we would feel if Michele Bachmann had such a power.

That's a little farfetched. It's farfetched because Michele Bachmann is not going to get elected President. A more realistic hypothetical is to ask how we would feel if Rick Perry got elected. Rick Petty already has an extensive track record of presiding over the state elimination of people, and he's said that the 234 executions in Texas during his governorship do not disturb his sleep at all. He felt good about all of them. We might add to this factor Perry's statement that if Ben Bernanke "printed more money" before the election, and was foolish enough to cross the Red River after doing so, that Texans "would treat [Bernanke] pretty ugly." I assume Perry meant that Bernanke would be shot, because most things in Texas mean someone is going to get shot.

So let's see where we are here. What would be the distinction in principle between Rick Perry's decision to order the assassination of Ben Bernanke and Obama's decision to order the killing of Anwar al-Alwaki? Just to make the quiz easier, I'll give you a clue: there is no distinction. In both cases a President decided that a person posed a threat to the safety and security of the United States. Indeed, Perry's defenders would point to historical precedent, because "debasing the coinage" of the United States was, at times, a capital offense, as mentioned in the Fifth Amendment. Obama's precedent establishes that a President does not have to prove anything in court, or even obtain an indictment, before he orders an American citizen killed. If the "kill warrant" needs some connection to the War on Terror, well hell, President George W. Bush said the entire world was now a battlefield (that's why he could arrest Jose Padilla, an American citizen, in Chicago, and incarcerate him for years without Due Process), the War on Terror never ends, and therefore anything that happens anywhere which (the President thinks) makes the United States weaker or less able to defend itself (such as devaluing its currency) justifies whatever sanction the President feels like meting out.

A reductio ad absurdum? No, not at all. Anyway, Thomas Jefferson, John Adams and Alexander Hamilton had far more direct experience with the perils of tyrannical power than the contemporary politicians dealing with this problem, and for that very reason they "instituted laws among men" built on the principle that subjectivity in due process was much too dangerous. It will inevitably be abused, terribly and irrevocably, as those tyrants of 1930's Europe, who built careers out of ruling with subjective brutality, should have convinced everyone once and for all.</sup>

Abra-cadabra, you're rich again

This flow-chart diagram of the Eurozone bailout plan is fun in the same way that plotting the flow of the Federal Reserve's conjuration of money is fun; to wit, it raises the question and riddle: at what precise point is the money created?

The European scheme is really a doozy in this regard, but that's the whole purpose of the complexity. When you're reaching into your silk top hat and pulling out a trillion or two, you want to make sure the audience is watching the pretty blonde in the leotard as you do so.

I've been giving a lot of thought to the whole business of "fiat money regimes" and sovereign indebtedness lately. In some ways, it seems that "money" is to economics what "energy" is to physics. It's the basic unit of everything, but it's not possible to define it precisely. "Money" has had this quality since the abandonment of the gold standard during World War II and the substitution of floating fiat currencies in its place. Pegging the amount and distribution of paper money according to how much gold was available was itself certainly arbitrary as well (what's so special about gold, other than Spanish explorers used to kill a lot of Native Americans, north and south, to get the stuff?), but at least there was an anchoring principle to the issuance of fiat. Bretton Woods (1944) changed all that, but the emerging dominance of the United States as the world's great military and economic power probably disguised the fundamental nature of the change. The dollar was as good as gold, in effect, and the issuer of the world's reserve currency had no great motivation to debase its own fiat; quite the contrary.

So a kind of "gentlemen's agreement" arose by which the world's central banks agreed that international monetary regimes would keep it down to a roar, as far as wild printing of money was concerned. Unbridled issuance leads to hyperinflation and debasement, and pretty soon it's 1922 in Germany again, and people are burning their marks for fuel because it's cheaper than trying to buy firewood with the stuff.

But now, but now...one point made forcefully in Richard Heinberg's The End of Growth was that the great spawning and proliferation of debt, both public and private, over the last fifty years, which have brought the modern industrial world to the brink of bankruptcy, were enabled by the belief that economic growth would always allow these nations to catch up to the exponential functions of interest-bearing debt. So it didn't matter if we went in the hole now; these debts were an "investment" in future growth of national GDP, and it would all even out. Countries running at a big deficit, the United States chief among them, would simply borrow now and grow our way back to prosperity. And underlying this belief was that cheap and abundant fossil fuel energy, which finds it way into practically every aspect of a modern economy, would remain cheap and abundant.

It isn't going to work out that way. The demand for petroleum and its distillate liquid fuels keeps going up at a rate exceeding the ability of the oil industry to keep pace, driving the price higher (despite the Depression we're mired in) and stymieing all efforts to emerge from the Depression. The United States, as the most oil-dependent nation on Earth, feels the effects most acutely. 90% of our passenger-miles, our just-in-time delivery systems for food outlets and Big Box stores, our international import dependency, our massive, inorganic agri-business practices, the airline industry, the military-industrial complex, all depend for profitability on cheap, abundant oil. Which increasingly doesn't exist. But if growth isn't possible, how can the locked-in costs of the entitlements and the exploding future burdens be paid for?

Thus, whatever that gentlemen's agreement may have been, the Federal Reserve (which is a fine institution, founded in 1913 and dedicated to the prosperity and well-being of all Americans - h/t: Dan - maybe that will throw the Fed's new spy program off the scent, depending on the algorithm) was faced, after 2007, with cratering housing, jobs and stock markets. Such things do not play well in America. One way we could have dealt with such problems would have been a frank and honest assessment of the actual standard of living of the American middle class. If you have borrowed massive amounts of money in the past in order to pay for your "requirements," and it turns out you're going to have to pay all that money back in the future, with interest, and you can't do that because you don't have the money, then it's somewhat unrealistic to say that you were as rich in the past as you said you were. The same thing can be said about the federal government, which has a $3.8 trillion lifestyle based on $2.2 trillion in income.

This is America, however, and whether these are the Days of Awe or not, we don't go in for that kind of truth-telling. It doesn't fit our narcissistic style. My back-of-the-envelope calculations usually arrive at a figure of about 60%; that is, America, across the board, is about 60% as wealthy as it claims to be. This number (like some sort of totemic pi of the national economy) has a way of showing up everywhere; for example, tax receipts furnish about 60% of the federal government's revenue. When the stock market fell in 2007-2008, it fell about 40%. When all the water has been wrung out of the housing market, prices will have fallen to about 60% of their peak level. This symmetry is not accidental, in my opinion. It's reflective of an underlying reality.

Be that as it may, Ben Bernanke's first order of business was to see if he could not re-inflate the housing bubble, the source of imaginary wealth for the American commoner. No go there. Ben was so desperate to do so, however, that he kind of dropped his top hat as the rabbit jumped out of his pants. There was very little artifice in how he went about money conjuration in that case. He declared the existence of about $1.3 trillion and used it to buy mortgage-backed securities from Fannie, Freddie and banking institutions, placing all that dodgy stuff on the balance sheet of the Hallowed Federal Reserve. Blatant, you could say, but unavailing. The next time around, Bernanke was more indirect; in order to goose the stock market, Ben launched QE II, the bond-buying program where he used the Primary Dealers as fronts to purchase Treasury bonds, then relieved the PDs of their temporary burden through the "POMO" routine. All in all, Bernanke has conjured more money out of thin air in the last 3 or 4 years than the Federal Reserve had in its previous almost 100-year history.

Somewhere in that Rube Goldberg contraption up above, the Europeans are planning to do something similar. I haven't found the Sweet Spot yet, but it's there. I commend them on their Old World, Baroque complexity. I'm disappointed they would copy the Americans so obviously, but they got the idea from Tim Geithner, so what do you expect? McDonald's, Disneyland, and now this. Soon there will be no point in going over there at all.

A flash in the Texas Panhandle

It's possible that Rick Perry is just too dumb to win the Presidency. That's an odd sentence to write, because I'm talking about the Presidency of the United States here, not President of the National Academy of Sciences or President of the local chapter of the Rotary Club. You know, a position where some measure of intelligence is actually expected, or the norm. Yet, despite my sentimental attachment to the Perry campaign, the weird basis of which I have described on prior occasions, I'm reaching the conclusion (not reluctantly) that this hayseed is just too dumb even for America. Those who have called Perry "Bush without the brains" are on the right track.

Although I never actually thought Bush was unintelligent, despite occasional bleatings to the contrary. Bush's IQ was definitely higher than the controlling mean for the Washington press corps, for example, and by "controlling mean" I refer to that baseline average of insight and complexity which sets the standard for national reporting. Individual reporters are more intelligent than this average, but they have to dumb it down in order to maintain a job and an audience. Dan Froomkin of the Washington Post was an excellent example of this limiting factor. But Bush's ability to humiliate and bamboozle the press, in general, on a constant basis was actually fairly impressive. As the signal example of Bush's skill, I always think of the Valerie Plame matter. Somehow or other, in ways I can't quite fathom, Bush seemed to convince the moronic Washington press corps that he was an innocent bystander to the "outing" of Valerie Plame as a CIA operative, even though he talked daily to people, such as Dick Cheney and Scooter Libby and Karl Rove, who were involved in the matter up to their eyeballs. Bush claimed at the outset that he would "conduct a search" for the people responsible for Plame's blown cover; you know, those people who sat in his Oval Office every day of his Presidency. And yet the Washington press never figured that out, even though Representative Henry Waxman conducted a hearing where Bush's "White House security team" admitted that they were never even asked to open a file on the source of the leak. Why would Bush "search" when Cheney had already told him? That was a master stroke by the Old Bushter, to pull off that caper unscathed, and bespeaks a fairly crafty intelligence. Along with an absolute, complete contempt for the media people he fooled with his lies and evasions.

Perry, on the other hand, has sustained the one wound which is mortal for national candidates: people, including the press, are already laughing at him. This didn't really happen to Bush until after the Katrina fiasco and his "heckuva job" comment to the incompetent idiot he'd placed in charge of FEMA. (Katrina, in this additional sense, was surely an Act of God.) Once everyone started laughing at Bush, his power began to wane, which is why Bush rushed to pass the Military Commissions Act in 2006, with its blanket exoneration of all crimes of war and against humanity which he and his henchmen had committed (that was the actual purpose of the rush job in Fall, 2006, of course; unless I missed something, I don't believe that Khalid Sheikh Mohammed, the Gurgling Confessor, has been placed on trial yet [5 years later] in Cuba, although that was the ostensible reason for the hurry, and not the impending seating of a Democratic-controlled House in January, 2007). You know, that's actually another instance of Bush being much, much smarter than the Washington press corps - he pulled off that Military Commissions statute, unconstitutional though it was, without anyone noticing his true motivation, which to me was as plain as the Space Needle would be if suddenly moved to Death Valley.

By way of contrast, the C+ student from Texas A&M just looks more and more out to lunch with each one of these painful, embarrassing Republican debates. He can't explain his "ideas," such as they are, with any clarity whatsoever. He's utterly lost trying to think in public. The coup de grace may have been delivered last night by "Saturday Night Live," where Alec Baldwin played a clueless, stumblebum Perry in a debate to oafish, moronic perfection. Even the Washington press corps would wonder how we could have fallen so low if this guy got elected. So I think they're going to cut Ol' Rick off at the pass and stop his run for the White House.

That's actually a pretty good litmus test: when a candidate is too dumb for the media in this country, you know we've got a real lamebrain on our hands.

As the world twists

Today, September 23, 2011, at 9:04 am, Greenwich Mean Time, Earth's axis of rotation was perpendicular to the line connecting the center of the Sun to the center of the Earth; thus, autumn began at that moment.

Meanwhile, down here on the surface of Spaceship Earth, that marvelous blue and white orb which has been infested with a particularly maladapted and hugely destructive species for a tiny fraction of its total existence (and the Earth still has about 5 billion years to go before the Sun begins its fatal expansion to a red giant and incinerates this place once and for all, thus assuring that for probably the last 99.99% of its existence, the Earth will be blessedly human-free), the arguments currently are about how various forms of paper counters of wealth are in conflict with each other, and the various games that can be played to make a given country's money seem as if it is worth more than the paper it is written on. The United States, which long ago gave up productive enterprise in favor of devoting itself to just such paper-manipulating games as the exclusive means of not only maintaining one's vital heat, but of expanding the mansion out in the Hamptons and stocking the garage with several high-number-model Mercedes Benzes, has decided, this time around, to use its central bank, the Federal Reserve, as a means of controlling "long term interest rates."

It will accomplish this ruse by Operation Twist. In this game of make-believe, the Federal Reserve will use part of its stock of Treasury debt by which the Treasury "owes" money to the Federal Reserve, to the tune of about $400 billion, to purchase longer-dated Treasury "debt" in the 6 to 30 year range. The Fed owns about $1.2 trillion of Treasury "debt" (it is the largest "creditor" of the Treasury in the world, and it "purchased" all of these bills and bonds by conjuring the money out of thin air, or, if you prefer, by pulling the money out of its ass). The Fed will "sell" $400 billion of shorter-duration bonds to "raise the money" to "purchase" the longer-dated stuff. The Fed will then pretend to "receive" coupon payments from the Treasury (by making data entries on its computers noting the creation of money representing the payments) and then will use part of this "money" to pay the Fed's operating expenses (this is one of the Fed's sources of "revenue"), and promptly remit the "balance" of the money to the Treasury which it just received from the Treasury.

Once the Fed's big decision was announced, the Dow Jones immediately fell 400 points. A reasonable person might opine that all of this talk about the hallucinatory essence of the American money system might cause rational people to believe that the whole economic situation is too ludicrous to be part of, that one must flee it in favor of something more substantial and real, like a cave and an acre of tomato plants. In such thinking one would be incorrect. Wall Street was freaked out because the Federal Reserve was not hallucinatory enough. Operation Twist simply takes previously hallucinated money and transforms it into long-dated Treasury bonds. The "Quantitative Easing" episodes, by contrast, conjured substantial amounts of new "money" on the Fed's computer, over $2 trillion worth, and most of this money found its way into the rarefied atmosphere of the Titans of Wall Street, to speculate and play dumb big money games with.

However, this time around the Federal Reserve, intimidated by certain know-nothing governors who threatened, in essence, vigilante justice if the Chairman should venture into "money printing" again, kept things on the down-low. Well, hell, that's not going to work. You can't actually expect the American economy to prosper on its own merits. That's not how we do things around here. It's why we liked that magical period between about 1998 and 2006. Money just sort of happened. People got rich while watching "The Weakest Link," chugging a Budweiser and filling out a re-fi form. That's more like it!

How we gonna stay rich if Chairman Ben starts bogarting the punch bowl? This is unnatural. It's damn near unAmerican, as I have come to understand the term.

Katch-22 in Kandahar

"To summarize: our invasion and occupation is what enables the Taliban to recruit massive numbers of Afghan teenagers into their cause. And now, we have to stay until we either kill all the people who hate us and want us gone from their country or propagandize deradicalize them into meekly accepting our presence. Once there are no more Afghans left who want us gone, then we can leave. For those of you who have been cynically claiming that this war has no discernible purpose other than the generalized benefits of Endless War for political officials and the Security State industry, now you know." -Glenn Greenwald, summarizing a Washington Post article on current plans for de-radicalization of Afghan youth.

Yossarian didn't know whether he believed in reincarnation or not; he just knew he wanted to stay alive, and if Eastern mysticism did the trick, that was good enough for him. Even if it meant that instead of being a B-25 navigator based on Pianosa during World War II, he was now a grunt in America's seemingly endless war in Afghanistan.

"Think I'll ever get back to New Jersey?" he asked Doc Daneeka, as they sat on a couple of canvas chairs in front of the medical tent.

"It depends," said Doc Daneeka.

"Depends on what?" said Yossarian.

"On whether you survive this war," said Doc Daneeka.

"Interesting you should say that," said Yossarian. "I've been thinking of ways I could get out of this war and get back to New Jersey. At last. And one of those ideas involves you."

"I'm not surprised," said Doc Daneeka. "Although I think you'll find New Jersey is not quite the garden spot you remember from 1942."

"I can't even figure out why we're fighting this war. Or why I'm here. Every day, the Taliban try to kill me."

"They're trying to kill everybody," grunted Doc Daneeka. "Don't think of yourself as so special."

"So why do you think we stay here?" asked Yossarian.

"Because they want us to leave," said Doc Daneeka. "As long as they want us to leave, we have to stay."

Yossarian nodded, sensing what was coming.

Doc Daneeka went on: "If they want us to leave, it means they're not ready for democracy and we have to stay."

"Until they're ready for democracy?" asked Yossarian, taking a shot.

"No, until they ask us to stay. When they ask us to stay, it means they're ready for us to leave."

"So if they ask us to stay, we know we can leave," said Yossarian, half to himself, filling in the blanks.

"Right," said Doc Daneeka. "They'll never be ready for democracy. Not even we are crazy enough to wait for that. Meanwhile, the war must go on, and we must keep killing them until they ask us to stay."

"Doesn't it seem unlikely that they'll ever ask us to stay if we keep on killing them?" asked Yossarian.

"It's only unlikely until we kill all the ones who want us to leave and only those who want us to stay are left," said Doc Daneeka, staring straight ahead as he took a swig from his beer bottle.

"But if we keep killing all the ones who want us to leave, won't that just make the ones who want us to stay angry about our killing all the ones who want us to leave, and then the ones who want us to stay will want us to leave, but we can't leave then because they want us to?" Yossarian took a deep breath, exhausted by articulating this fine web of logic.

"That's right," said Doc Daneeka. "As long as we keep killing all the ones who want us to leave, we'll keep turning the Aghans who want us to stay into Aghans who want us to leave, so we have to stay and keep killing those same Afghans until there are only Afghans who want us to stay."

"Then we can leave," said Yossarian.

"Right," said Doc Daneeka. "Or until there are no more Afghans at all."

"Can they have a democracy with no people?" asked Yossarian.

"Probably not," admitted Doc Daneeka.

"It's Catch-22 all over again," said Yossarian.

"Some things never change," said Doc Daneeka. "Especially in war."

"So about that Section 8," said Yossarian.

"Same problem as last time. The war's crazy, you aren't. I can't Section 8 you out of a war you think is crazy to fight when it's a war that's crazy to fight. Sorry."

"If I thought it was sane to fight this crazy war, would I be crazy enough for you to say I was insane and didn't have to fight?" asked Yossarian.

"Maybe, but not in this life."

The fish weren't biting anyway

Enough of a break for now. I feel that I'm missing out on opportunities to chime in on this Rick Perry "Ponzi scheme" "controversy," and that's intolerable, given the close, quasi-symbiotic relationship which has always (okay, almost never) existed between the Perry Campaign and Waldenswimmer (which is to say, they quoted me at length once; think about it: there will probably come a day when I can say that I was quoted by the campaign of the President of the United States of America. Awesome.)

Anyway, my main complaint about the abuse of such terms as "Ponzi scheme" to describe Social Security is that, as with so many other usages which evaporate into the MediaCloud (TM pending) and become completely amorphous, this perfectly good, sensible term becomes debased and useless because of the lack of precision so characteristic of this dumb-ass country. Social Security is not a Ponzi scheme. It has many problems, chief among them the fatal demographics of this country and the fact that on a cash flow basis (the only basis that counts) Social Security is already in the red, 6 years earlier than forecast in the recent past. So we're hosed.

Still, it's not a Ponzi scheme. Charles Ponzi ran a Ponzi scheme, Bernie Madoff ran a Ponzi scheme. The cardinal characteristic of this species of confidence fraud is that the fraudster, such as Madoff, solicits investments which he represents will be placed in income producing assets. He promises a steady, lavish rate of return. The gullible marks turn over their money. The fraudster then takes this money, skims enough to buy and maintain his chateau in the Loire Valley and waterfront house in Palm Beach, sets himself up with lavish cash flow, and then begins doling out the "returns" (say 12% per year) to the suckers, who are unaware that their own money and that of later "investors" who bought from Madoff on the recommendation of themselves and other suckers is being used to fund these fictitious gains. Then a smart Greek like Harry Markopolis comes along, realizes in an instant that nobody can pay out returns like that, year after year, in a dogshit economy like the United States, and proceeds to bust the con.

That's a Ponzi scheme. It's really beautiful in its simplicity and sheer criminality; the crook gets rich using only what Willy Loman had, "a smile and a shoeshine."

But that's not Social Security. As I listen to more and more of Rick Perry, I am reaching the conclusion that even by Republican candidate standards, this is a pretty dim bulb. His explanation for his charge against Social Security is that younger workers won't receive their promised benefits. Yeah, true; it's likely that those now retired or nearing retirement aren't going to receive all of their benefits either, and for the same reason. The program just doesn't work anymore. Today's retirees (the Boomers, who are reaching Social Security age at the rate of 10,000 people per day) are counting on about 1.75 workers per retiree for their support. In a dead jobs market. With average wages, in real terms, declining. Indeed, the Census just released numbers showing that the average male worker in the United States, in inflation-adjusted dollars, earns less than such a worker in 1968 America. As I said to the research scientist at the Great Southwestern University, that sounds completely believable. 1968 was absolutely an affluent, wonderful time here in the U.S.A, provided you weren't involved in fighting one of the first of the completely useless wars America concocted. Or unless you were Martin Luther King, Jr. Or Bobby Kennedy. Okay, nothing is ever entirely perfect, even if you had a new black Mustang.

Social Security worked fine back then, too. It was easy; the tax was light, the earners were many, the country was rich. None of these things is true anymore. The latest monthly disaster report was just issued by the Department of the Treasury, which confirms the ongoing trend. Total FICA receipts (including disability) were about $43 billion; the outlays, including disability payments, were about $60 billion. The shortfall was made up by payments from the "Trust Fund," which doesn't exist; that is to say, the difference was made up the usual way, by public borrowing, or by having the Federal Reserve pay the interest which the Treasury owes the Federal Reserve on the Treasury bonds held by the Federal Reserve to the Treasury (I just like saying that).

Consider the viability of a system which requires 1.75 workers to support each retiree (many of such retirees are still of working age, actually - such as your faithful blogger here, who is still working - please, no applause necessary), a retiree cohort increasing by 10,000 golfers per day. And all of this is happening against the background of a crap job market, massive unemployment, declining real wages, and a political class who keep reducing the FICA tax (thus hamstringing the funding mechanism further) in an effort to curry favor with the electorate. Rather than ideological rhetoric about "Big Government," the C+ student from Texas A&M should focus rather on the inherent unworkability of this thing (I'm still trying to help, Rick - shucks, I just cain't quiiiiiiiiiitttt you!). But you can't call this "fraud," because the facts are open and obvious. Liberal economists may emphasize the "moral imperative" of recognizing the validity of the Trust Fund (which I have always characterized as a crime scene), others may talk about "tweaking" the system, but it doesn't make any difference in the long run. The money isn't there, it's not going to be there, and as younger voters come into their own, they're going to dump this thing. And who can really blame them?

Social Security is doomed, but not because it's a Ponzi. Because its day has come and gone. Because we'd rather spend a trillion on the military to fight wars to secure our oil supplies. Because we'd rather go on being energy pigs. Because we're a country in name only. Because, fundamentally, we don't give a shit. Because frankly, Scarlett, it's not 1968 anymore.