ON BANKS, SECRECY & EXPOSURE: A Mingling of Disparate Articles

    “A tiny economy in Europe, Cyprus, is threatening to unravel the global financial system. In Cyprus, as was the case with Greece and Ireland, we are seeing historic pathologies influence current policy.  To understand why the European response to the crisis has been so ineffectual and halting, one has to look to history.

    The analysis starts with Germany, which dominates European monetary and financial policymaking. Germany, as the largest and most powerful nation in the Eurozone, essentially exercises veto power over the crisis response efforts. As it does so, however, it is impaired and heavily influenced by its own horrific failings of nearly a century ago.

    The European Central Bank is very slow to run an expansionary monetary policy in large part because Germany fears it will ignite inflation. To Germans, the risks of inflation touches off nerves from the hyperinflation of the 1920s and ’30s, which brought about the destruction of the Weimar Republic, the loss of savings, and, ultimately, the rise of Adolf Hitler.

    The suggestion of tapping pension funds that has been made as a potential solution also sets off a visceral response in Germany where history has proven the dangers of such ideas. German pensions were tapped to finance both world wars. Such an idea remains anathema to German

    It may be that what we have not been told about the little island of Cyprus and its banking policies is merely an undercurrent of deeper issues and secrets.  Certainly, a bailout of Cyprus’s banking system comes across as a bailout of Russians with shadowy wealth. It’s increasingly clear that, in addition to the banks, governments, major corporations, universities and other such bodies view the defense of their secrets as a desperate matter of institutional survival.  It is curious that where secrets have been divulged (wiki leaks), states have gone to extraordinary lengths to severely punish and/or threaten to punish anyone who so much as tiptoes across the informational line. In all those cases, the government has pursued maximum punishments and generally taken zero-tolerance approaches to plea negotiations. Prosecutions reflect an obvious institutional terror of letting the public see what is locked behind the closed doors not only of the state, but of banks and universities and other such institutional “pillars” of society. This is a Wizard of Oz moment, where we are being warned not to look behind the curtain.

    What will we find out? There are all sorts of things we both know and don’t know about the processes that keep societies running. Child labor in Asia keeps our sneakers and furniture cheap. Oil and other raw materials are secured only by the cooperation of corrupt dictators. We already have seen a banking system that uses computerized insider trading programs (Libor) to steal from everyone who has an IRA or a mutual fund or any stock at all by manipulating markets.  When JP Morgan Bank speculated and lost six billion dollars, some of which was Federally insured, neither it nor any of its officers suffere any legal consequences or repercussions.

    Secrets are out there.  Everyone from hackers and citizens to journalists are digging in search of them. Sooner or later, there will be a pitched battle. It is the public’s legitimate right to know will be pitted head-to-head with presidents, generals and CEOs.  There is no conceivable legal justification for keeping the people from knowing the policies of their own country.  When that happens, we’ll all be left standing face-to-face with the reality of how states actually function.

     Even where citizens try to work for the monetary good of its government, incluing  the U. S. government, there is the fear of regulatory capture and political influence. Many believe that individuals within executive branch agencies and departments cannot be trusted with acting on information that their long-time business partners are defrauding the government. The regulatory capture story is one that the industry has “captured” the agency and exercises influence on its decision. The political influence story is similar. The influence comes from politically elected officials above the agency. Those officials may have been captured by special interest groups. The solutions to the problems may be at odds with each other: political oversight might curb regulatory capture at the agency level but increase potentially problematic political influences. In turn those officials may be captured by special interest groups. Political oversight just moves the capture problem up one step in the command chain.”

Why Europe’s Response to the Cyprus Crisis Has Been Ineffectual

by Daniel Gross Mar 24, 2013 4:45 AM EDT

Wikileaks Was Just a Preview: We’re Headed for an Even Bigger Showdown Over Secrets

Matt Taibbi Blog Rolling Stone POSTED: March 22, 10:53 AM ET

 Noise Reduction: The Screening Value of Qui Tam

Anthony J. Casey, University of Chicago Law School; Anthony Niblett, University of Toronto – Faculty of Law

March 21, 2013

A MOMENT OF GUARDED OPTIMISM: Secretary of State John Kerry & Secretary of Defense Chuck Hegel

   While watching Good Morning Vietnam the other night, I was struck by a striking incongruity. There were American troops fully armed with M-16s, 50 caliber machine guns, helicopter gunships, napalm and burning villages.  The guarded and often terrified civilians, women and children were not of the same ethnic, cultural or religious backgrounds as the troops.  The question raised was why were these obviously foreign troops trying to conquer this country. To this day, after perhaps million Vietnamese and 50,000 American deaths, there is no satisfactory answer that has ever been offered.

    In a like manner, we see now every day American troops, fully armed “patrolling” among an indigenous populations literally on the other side of the world.  The locals are of an entirely different cultural, religious and experiential background. America is once again trying to singularly force its cultural mores and values on extremely resistant populaces.  This is still a fools mission.

    One common thread tying these two disparate wars together are the two veterans named above.  Each were involved in combat in Vietnam such that they have real life experiences with war and its effects. Respectfully, their experiences are radically broader then so many of the war mongering neocons.  We know that if the military industrial complex had remained in power, America would likely have continued its policy of war, invasion and “nation building” where it was neither wanted, needed nor prudent.

    That having been noted, the question for the near future is whether Kerry and Hegel, along with Obama, will choose shape America’s foreign policy in a less belligerent manner?  Kerry’s offer recently of aid to Syrian rebels of just food and medical supplies was a very limited and careful offer. 

    This bodes well, if it is indicative of the beginnings of a considered approach. The world is a complex place. How the Afghanistan war resolves and ends, if it does, will be telling. Whether, in the next four years, America chooses and is able to shift its self imposed burden of being the world’s policeman off its shoulders and onto that of the global community is an important question.

    With these two men, with their backgrounds, life experiences and the lessons they have drawn from them, there may be Hope. I am “guardedly optimistic”.