AUGUST   2020


Friday, August 23, 2013


“If pro is the opposite of con, what is the opposite of Congress?”
Will Rogers
I find it curious that Charlie Humphrey Keating Jr (above) spent his adult life crusading against pornography, which he called a “Perversion for Profit”. At the same time he saw no perversion in profiting from duping naive investors, even telling his sales agents, “...the weak, meek and ignorant are always good targets.” Charlie did not invent hypocrisy, nor the investment scam, nor even political graft. But when asked if he had bought five U.S. Senators, Charlie responded forcefully, “I certainly hope so.” It was Charlie's sociopathic self-serving arrogance which made him famously wealthy and infamously despised. And then Charlie got his hands on a bank.
A holding company is a thing where you hand an accomplice the goods while the policeman searches you.”
Will Rogers
Once upon a time in America there were two kinds of banks, commercial banks, with few restrictions on their investments, and “Savings and Loans”. Federal regulations kept S&L's the dull, cautious bedrock of private home ownership. But even real estate suffers the boom and bust of capitalism, better known as the “business cycle”. So politicians, following an ideology of greed, created the Depository Institutions Deregulation and Monetary Control Act (DIDMCA) of 1980, which among other things, lifted the limit S&L's were allowed to invest in things other than homes. In the decade after, S&L's went from 53% of their money being in home loans, to less than 30%. Seeking profit bankers then invented the Certificate of Deposit, or CD's, which allowed them to pay higher interest rates and compete with commercial banks for investors. But paying higher interest rates meant each new customer also cost more. In the world of academic economics this is known as an “asset-liability mismatch”. In Charlie Keating's world this was known as a business opportunity.
“Don't gamble. Take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it.”
Will Rogers
Charlie had arrived in Phoenix, Arizona  (above) in 1976, having been chased out of Cincinnati, Ohio by the Federal Securities and Exchange Commission. Once in town he proceeded to duplicate the behavior which had gotten him into trouble in Ohio, metamorphosing a faltering home construction company into American Continental Corporation, a holding company with maze of 54 divisions (and a few secret overseas operations), $6 billion in assets, 2,500 employees and a couple of corporate jets. When federal regulators started sniffing around Charlie even got economics guru Alan Greenspan to write him a letter of recommendation. Forbes Magazine, although impressed with Charlie's explosive growth, noted, “It seems almost impossible to find anyone who actually likes Charlie Keating.” His own brother admitted that Charlie was impatient and aggressive - but he left out, greedy. And then in 1980, Ronald Reagan won the White House, and geed became “good”, and deregulation, such as DIDMCA, became the mantra of the day. In 1984, Charlie used American Continental to buy Lincoln Savings Bank of California, for $51 million. He fired the management wholesale, and converted it into his personal bank.
“Big business don’t go broke any more. The minute it looks bad for them, they combine with something else and issue more stock.”
Will Rogers
Three years later an audit by three investigators for the San Francisco office of the Federal Home Loan Banks Board found that Lincoln had unreported losses of $135 million, and had exceeded the new looser limit on risky investments by $600 million. But what Charlie had learned from his first run-in with financial regulators back in Ohio was that it paid to have friends in high places. He had made over $1 million in political contributions to five U.S. Senators – Alan Cranston (D-Ca), Dennis DeConcini (D-Az), John McCain (R-Az), John Glenn (D-Ohio) and Donald Riegle (D-Michigan). Charlie now insisted that his “Keating Five” have a joint sit down with the three investigators from the FHLBB.
“Ancient Rome declined because it had a Senate. Now, what's going to happen to us, with both a House and a Senate?”
Will Rogers
On Thursday, April 9, 1987, the investigators were flown to Washington to be intimidated by the five senators in person. DeConcini explained that “Our friend at a big employer and important to the local economy.” Former Astronaut and former Marine Senator John Glenn had little patience for such niceties. “To be blunt”, he told the bureaucrats,. “You should charge them (Lincoln Savings) or get off their backs.” The regulators worked up the courage to explain that it appeared money was being siphoned out of Lincoln to fuel false profits at American Continental. That converted their audit into a criminal investigation. The Senators backed off and rushed to tell Charlie.
“There ought to be one day - just one - when there is open season on senators.”
Will Rogers
Charlie was not happy "his" senators had not shut down the investigation. . He even called Senator John McCain a “whimp” to his face, and went looking for politicians more willing to do his bidding. When the San Francisco regulators persisted in recommending that Lincoln Savings be seized, the Reagan administration appointed a new head of the FHLBB, who forgave Lincoln for any past violations and started a brand new audit, this time run from Washington, D.C., where it could be controlled.  Charlie always said if they just relaxed the rules, the Savings and Loan industry could be “the biggest moneymaker in the world.”
“A lobbyist is a person that is supposed to help a politician make up his mind—not only help him but pay him.”
Will Rogers
It was at this point that the tellers at Lincoln Savings were ordered to begin pushing their customers to switch their savings from insured CD's to the uninsured American Continental bonds. Twenty -three thousand eventually fell for this sales pitch. Thanks to the delay in moving against him, Charlie had now bypassed the bank entirely. He was siphoning cash directly out of the customers' pockets into his. Federal Deposit Insurance Corporation chairman Seidman would later call this “one of the most heartless and cruel frauds in modern memory.”
“The short memories of the American voters is what keeps our politicians in office.”
Will Rogers
By December of 1988, even the bought politicians had become convinced Charlie was a fraudster. In January they finally ordered him to stop transferring money out of Lincoln savings. Three months later, both American Continental and Lincoln Savings and Loan went bankrupt, and those 23,000 dupes, who had trusted the tellers and managers at their neighborhood bank, lost their life savings by buying $288 million in uninsured bonds. Among the many suicides this crime produced, was that of Anthony Elliott, who slit his wrists after losing his life savings - $200,000 – to feed Charlie's ego. Anthony's Thanksgiving Day 1990 note asked, “My government is supposed to serve and protect, but who?" He then answered himself, writing, "Those who can gather the most savings from retired people. . . . It takes billions to fill the pockets of spendocrats”.
“I tell you folks, all politics is applesauce.”
Will Rogers
The FDIC had to shell out $3.4 billion to cover the insured part of Charlie's looting of Lincoln Savings. Finally, in December of 1991, the state of California convicted Charlie of 17 counts of fraud, racketeering, and conspiracy. In January 1993, the feds convicted him of 73 counts of fraud, racketeering and conspiracy. In 1994 the Resolution Trust Corporation, which had been created to clean up the Reagan deregulation mess, won the largest judgement against a private person in American history - $4.3 billion, against Charlie Keating. Still, somehow, after serving just 4 ½ years in jail, Charlie Keating was released, free and clear. He now lives with his daughter in Phoenix, Arizona, maintaining to this day that he was a political prisoner, and if the government had just left him alone, today all those investors, even Anthony Elliot, would be rich.
“There are three kinds of men. The ones that learn by readin’. The few who learn by observation. The rest of them have to pee on the electric fence for themselves.”
Will Rogers
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Wednesday, August 21, 2013


I am a reluctant member of the “me” generation. As such I foresee a time in the not too distant future, when some moral adolescents will argue there is a need for a college course entitled “The History of Men”, to fill the yawning gap between what men have achieved and the scant notice they have received for it. How many of you, dear readers, realize it was a man who invented the tooth brush? The suppository? The zircon diamond? Men have labored too long in the shadows of history. In fact, we should probably redefine the entire field to some non-feminist dominated title, like, say, “His Story”. And once we have corrected this idiotic “poor me” issue, we can move on to other idiotic poor me issues like “The oppression of Christians in modern America”.
One evening in 1775 Samuel Johnson was quoted as saying, “Patriotism is the last refuge of a scoundrel”, but the greater truth is “I am the victim ” is the first refuge of every jackass caught with his hand in somebody else's cookie jar. It ain't evil to feel sorry for yourself. It's human. We all do when caught by our own hypocrisy. We've been doing it for two or three million years, and we ain't likely to change now. But, as the famous social critic Anonymous once put it, “He who smell it, dealt it.” Words to live by.
Yes, history is a sexist term, because most historians have traditionally been men. You can't blame men for that. Well, okay, you can. But arrogance is a human condition suffered by both sexes and all races, and all religions. Focusing on the arrogance of Caucasian males seems a limited field of study – at least to this Caucasian male. And who can say how the next generation will define sexism, when I'm not really certain how this one does? Is a man giving up his seat on a bus to a woman, a sexist? How about a man not giving up his seat to a woman? Seriously, what is the rule? And if it is written down somewhere, was it written by a woman, because if it was I think that raises the issue of bias.   Or is it sexist of me to even suggest that?
I could spend the next eight or nine hundred words arguing this issue, squeezing most of the jokes out of it in the process. But frankly, its one of those messy social issues that doesn't really have a solution. It is what you call situational. If the woman is pregnant, or old, or looks tied, you should give up your seat. If the man is old or tired or pregnant, he should keep it. Men and the women are entitled to their own opinions about what is the decent and fair thing to do. Face it - the best that your generation can do is to stumble on, knowing you are making the same stupid mistakes my generation made, and our ancestors made, men and women, black, white, yellow and red, rich and poor, all the way back up the trees. There is enough blame to go around. It is best to remember that to say “People are just people” is not a compliment, an excuse nor even a conclusion. It is conundrum
Take religion: please. When we talk about religion, I think we are rarely actually talking about religion. It can be argued (I might say obvious) that true Christianity is incompatible with true capitalism. In fact to some degree all religion was invented as a response to the selfish short sighted greed of a true capitalist in full hoarding behavior. I'm sure religious fanatics in Ephesus threw the money changers out of the Temple of Artemis at least once or twice. And I'm sure they were arrested for it. Because that's why they did it – to get arrested. Its why the anti-abortion protesters crowd outside the clinics, today. And its why, if the police don't arrest a few now and then, they start shooting the doctors and nurses. They are seeking to provoke a response. It's why the Westboro Church in Topeka , Kansas demonstrates against homosexuals at the funerals of straight veterans. The publicity is the point of any public act. And public acts are rarely religious acts, even ones like anti-abortion protests.
Can you image how ticked off Jesus of Nazareth was when the Jewish cops did not arrest him after his monetary protest in the temple in Jerusalem? He wasn't trying to tick off the Romans. He was trying to get a response from the Jewish leadership. And if Jesus was a man and not God himself, then what he did may have have evolved over time, if he had been given any, but his motivations for doing it, would not have. Of course, if Jesus was not a man, but a God, then neither his motivations nor his acts themselves would evolve. And this is why I believe in evolution – because a universe without evolution never has a chance of getting better. And that is the end of hope.
We came down out of the trees two or three million years ago with a single set of emotional reactions to stimuli. The stimuli have change somewhat over the millennium, but we have not displayed any new responses to them. Not a one. Take Capitalism, please. I see it as a self fulfilling prophecy of a future shortage. As any first year economics student will tell you, hoarding is how you create a shortage. I may be hungry tomorrow, which is why I am hoarding today. But hording is only possible during periods of bounty. You can't hoard what you don't have. And bringing home other people's trash (or their money) and piling it up in your living room or your stock portfolio is how you become a hoarder. To put it another way, wealth to a capitalist is a form of comfort food, and if allowed to remain untreated, it spreads. A society controlled by and for hedge fund managers and bankers will become morbidly and morally obese.
This is why the true capitalist is sycophantic with a true sociopath. Sociopaths have feelings. But their feelings are always about themselves. And capitalists have a morality, but theirs must always show a profit. Any morality that is always profitable is usually false, because if it doesn’t cost you anything, you will support anything. It's like believing in free love when you are 18. You have plenty of hormones and energy, but no money. Of course you believe in free love. But when you get older and develop arthritis, free love becomes more of an obligation. Show me a forty-five year old committed to free love and I will show you a man either recently or about to be divorced.
And that is why a billionaire is, on the face of it, a bad thing. At that level of wealth, a million dollars to buy a few politicians is spare change. And since politicians can then make it legal for the billionaire to make another billion while stopping their competitors, spending a million to collect a billion is a thousand percent profit. And it suggests an addendum to John Action's phrase, "Power tends to corrupt, and absolute power corrupts absolutely.” Lord Action added the sentence, “Great men are almost always bad men.”, which I agree with except, for Gandhi, and Jesus and Superman. But my addendum would be, “Greed makes you stupid.” And following the commutative  rules of social algebra, the greedier you are, the dumber you are, the fatter you are.
To a food addict there are never enough donuts. I know this is true as I have never had my fill of donuts. And to a wealth addict, there is never enough money in the world. Ask Mitt Romney, or the Koch brothers about this one. Knowing this, con men are constantly inventing new forms of money to tempt the money addicts, be it the futures market, the derivatives market or the “bitcoin”, or are as I like to call it the “Bite coin”, as in a fish biting on the hook. It's a fraud. Everyone knows it's a fraud. But you “bite” because the worm wiggling before your eyes looks so juicy and easy to swallow.
We have swallowed these hooks about once every decade since Ronald Reagan was elected President, producing one disaster after another, each worse than the one before - the savings and loan disaster in the 1980's, the dot com disaster in the 1990's, and the mortgage disaster in the 2000's. And my sense is we are right now swallowing another one. It turns out Karl Marx was right. Capitalism will bury itself, in donuts or bitcoins or derivatives or junk mortgages, or some other stupid thing, until the capitalists have all the money in the world and there is nothing left to buy. Which is, of course, the end of capitalism.
Now, that clashes with the Puritan concept called predestination, which held that God must love the wealthy, because he makes them wealthy, and in the modern context, the rich get richer because they know something you and I don't. Billionaires are the new Gnostics. They are smarter than us. We should follow their advice. But, of course, no true capitalist is going to tell us how to get rich, because they think of money as “their” money. That is how they got rich, by not sharing their money. That is how they stay rich. Following the advice of a true capitalist is like getting directions for an ocean voyage from a shark. The path they suggest invariably leads directly to their front door, and gets there just about lunch time.
That is why the journey of life never arrives at its destination because each generation changes the destination. Today we get directions from the shark, and tomorrow, if we are not eaten by the shark, from the minnow, until it grows big enough to eat us. The young (little fish) are optimistic, the greedy and selfish (big fish) are successful, the stupid (crabs) are violent and the old (walruses) are bitter. And most of those creatures reside inside each and every one of us. That's the way it is, folks. That's the way it has always been. As Pogo put it, “We have met the enemy, and he is us.” Words to live by.
But for some dumb reason, we keep trying for “better”, to form a “more perfect union”: Because we keep being born, because of the constant need for optimists to make the world function. Retirement and retreat behind monastery walls or gated communities is not an indicator of a healthy or a wealthy society, as has been amply proven by the Dark Ages and Moa Zedong's Great Leap Forward, and early 21st century Florida. It is evidence of a culture that has turned into a cul de sac. We can't back up, so the only escape is to either go forward very, very fast, to smash through the backyard fence (a revolution), or slowly turn around and go back the way you came, but keep going forward. Those have always been and will always be our only choices.
What I am suggesting is that we stop refusing to fix anything until we cab fix everything in the entire world. That is so dumb it is ideological. And ideology always fails because everything always fails eventually, a reality that ideology was invented to deny. I am suggesting that we concentrate on just patching things up, plugging the dike, rather than trying to drain the ocean. I think the Bible even said something about this, lighting a candle instead of cursing somebody or something. Words to live by. Let the next generation do their own damn patching. What, are they too good to get their hands dirty?  It will give them something to do. Idle hands are the Devil's whatever, you know. Words to live by. It will give the lazy unborn punks some purpose to their lives. All you have to do is leave the world a little screwed up. We don't even have to tell them we are doing for their own good.
Listen: to insist on fixing the whole world in one fell swoop is an act of selfishness. And I think the “Me” generation has been selfish enough, don't you?
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Sunday, August 18, 2013


I learned at a very early age, there are some emotional rocks you just don't want to throw. And in the summer of 1828, editor of the pro-Adams and Clay Cincinnati Gazette, Charles Hammond, picked up the wrong rock, and had it hit him and his client, square in the head. Wrote lawyer Hammond, “General Jackson's mother was a COMMON PROSTITUTE, brought to this country by the British soldiers! She afterward married a MULATTO MAN, with whom she had several children, of which number General JACKSON IS ONE!!!” Clearly, you just don't say something like that – and certainly not with exclamation points! - about a guy's mother.
By any measure Elizabeth “Betty” Hutchinson lived an amazing life. She married Andrew Jackson Sr. on February 7, 1759 in the fishing village of Carrickfergus, where Belfast harbor meets the Irish Sea. Two weeks after the couple's first anniversary, the French privateer Francois Thurot landed about 600 hungry men on a nearby beach, and in a short but vicious fight captured Carrickfergus. The French held the town and castle (above) for five days, stole the church's silver, ransacked the village, stealing food and clothing before finally returning to the sea, where Captain Thurot was killed and his ships captured. The raid was also a disaster for the Jacksons. They were poor and any economic disruption hit them hard. Five years later, in 1765 Andrew Sr., Elizabeth and their two young sons, emigrated to America.
They landed at Charleston, South Carolina, and then traveled 100 miles northwest to join the Protestant Waxhaw settlement, farming the Piedmont clays along the border between the Carolinas, near the Catawba River. Two years later Andrew senior was killed in a “lumber accident”, leaving a pregnant Elizabeth a widow with two young boys. She was forced to work as a servant on her brother-in-law's farm, and when Andrew was born two months later, he was named after his departed father. And as if the fates had not already dealt Elizabeth a lousy enough situation, they now delivered her a revolution.
The American War of Independence may have begun in Massachusetts, but its last act burned through the Carolinas on way to its curtain call at Yorktown, Virginia. Lord Cornwallis, commander of British forces in the South, described the region as a “hotbed of rebellion”. All three of Elizabeth's sons joined the local militia, and on June 10, 1779, were among the 1,500 men thrown against a British outpost at Stono Ferry, on James Island, south of Charleston. One son, Hugh, died of heat prostration in the battle. Her other two sons, Robert and 13 year old Andrew, hid in the salt marshes for two days before being captured.
They then joined the 6,000 other prisoners kept in chains below decks of the obsolete 74 gun HMS Torbay, and the schooner Pack Horse, rotting at anchor in Charleston harbor. One commissioner would write later of their imprisonment; “These men were numbers by no means proportioned to the size of the vessels...fed on salt provisions, without the least medical aid, or any proper kind of nourishment. The effect that naturally followed, was a Small-Pox with a fever of the putrid type; and to such as survived the Small-Pox, a putrid dysentery...” Every morning began with the removal of those who had succumbed overnight. Both Robert and Andrew contracted the dreaded pox. Of the 25,000 Americans who died in the revolution, 8,000 died in battle and another 8,000 died aboard British prison hulks. The death toll off Charleston had become so high by November of 1780, that even Mr De Rosette, charged with supplying food for the prisoners, became alarmed. Some how the courageous and determined Elizabeth Jackson managed to convince the British commander to let her two young rebels come home.
She rode on horse back, holding the dieing Robert on the saddle in front of her, while Andrew walked barefoot alongside. Robert lived only two more days after making it back. But as soon as Elizabeth was certain the frail and skinny Andrew would live, she journeyed back to Charleston to nurse her sister's two sons, still suffering aboard the damned Torbay.
It was shortly after her return to Charleston that cholera broke out aboard the Torbay, and began killing the prisoners in even greater numbers. Elizabeth contracted the disease, and was taken in by a wife of a carpenter named Barton. Elizabeth died in her home, and Mrs. Barton honored Elizabeth by burying the stranger in her own best dress, in an unmarked grave on a small hillock, somewhere near downtown Charleston. Later in his life, Andrew Jackson admitted he no idea where to find his mother's grave. "I knew she died near Charleston,” he wrote, adding she had gone there to nurse, “her nephews, William and Joseph Crawford, Sons of James Crawford, then deceased.” He wanted to find her grave, he added, “that I might collect her bones and inter them with that of my father and brothers." But it has never been located
When the Adams camp questioned his wife's morality, Jackson cursed and swore revenge. When they sang, “Oh, Andy, Oh, Andy, How many men have you hanged in your life, How many weddings make a wife,” Jackson issued a challenge to a duel. But when they called his mother a whore, Jackson was reduced to tears - or so said the pro-Jackson press. Wrote a pro-Jackson editor, “"Is this enough to damn any cause?...But it is in character with the dynasty. In 1800, John Adams denounced the illustrious Jefferson as a miserable debauchee--a cheat--a blackguard--a political renegade--a pensioner of the French Government, and a notorious paramour of his servant black Sal. The language held towards Gen. Jackson by the younger Adams, corresponds with the attacks on Jefferson under the elder. The triumph of the people will be the same in both cases. So let it be."
But 200 years later we know that Jefferson (above) did sire children with his slave Sally Hemmings. That while Secretary-of-State, Jefferson admitted conducting an affair with a married woman, that Jefferson did directly design and sponsor political smears on George Washington, John Adams and Alexander Hamilton, all the while pretending to be their friend. Those are facts. In other words, what the 'elder' Adams campaign said about Jefferson in 1800 was true. And the 'elder' Adams still lost. But the supporters of Adams in 1828 were not yet finished with Andrew Jackson.
The “Coffin Handbills” first appeared in 1824, and reappeared four years later. They were clearly approved by John Quincy. The allegations of adultery had followed Jackson for forty years by 1828. John Quincy would have been a fool not to have used them given the religiously hypocritical political culture of 1828 – as opposed to the religiously hypocritical political culture of now. Jokes about Jackson's mangled language and spelling had been around even longer. And the charges that the Tennessean had a Napoleon complex, were of the same kind applied to George Washington. But calling his mother a whore, and branding Jackson a product of “miscegenation”, those charges had never appeared in any Adams press, anywhere, before it appeared in the Cincinnati Gazette. Where did it come from?
The assumption among historians has always been that it was an act of desperation by Hammond, born of his frustration and fury, sensing the election slipping away, and approved by Henry Clay (above). After all, it was Jackson himself who charged that his old enemy Clay was managing the Adams campaign, “like a shyster, pettifogging in a bastard suit before a country squire.” 
But there is another possibility – that this poison pill was in fact the product of Martin Van Buren, AKA, the “Little Magician”, “the Red Fox of Kinderhook,” and The Great Manager”. By leading Hammond to publish a bizarre accusation, which offended all but the most fervent supporters of John Quincy Adams, Van Buren would have earned all those colorful titles. Did he? Was he that smart? Or were the Adams supporters that blinded by hate?
Elizabeth supposedly had left a written message for her now orphaned son. “You must keep in mind that friends worth having will...expect as much from you as they give to you....In personal conduct be always polite but never obsequious. None will respect you more than you respect yourself. Avoid quarrels as long as you can without yielding to imposition. But sustain your manhood always. Never bring a suit in law for assault and battery or for defamation. The law affords no remedy for such outrages that can satisfy the feelings of a true man.” Well, maybe...but it is so clever, so perfect at responding to criticism of the adult Andrew Jackson, that I suspect it was written not by the dearly departed Elizabeth, mother of Andrew Jackson, but by the hand of the Karl Rove of 19th century America, super hero or super villain, but always viewed bigger than life, Martin Van Buren (above), himself.  And if the one, why not the other?.
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