This article was first published on AlterNet

It’s Nobel Prize season again. News reports are coming out each day sharing the name of the illustrious winner of the various categories — Science, Literature, etc. But there’s one of the prizes that’s a little different. Well, that’s putting it lightly… you see, the Nobel Prize in Economics is not a real Nobel. It wasn’t created by Alfred Nobel. It’s not even called a “Nobel Prize,” no matter what the press reports say.

The five real Nobel Prizes—physics, chemistry, literature, peace, and medicine/physiology—were set up in the will left by the dynamite magnate when he died in 1895. The economics prize is a bit different. It was created by Sweden’s Central Bank in 1969, nearly 75 years later. The award’s real name is the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.” It was not established by Nobel, but supposedly in memory of Nobel. It’s a ruse and a PR trick, and I mean that literally. And it was done completely against the wishes of the Nobel family.

Sweden’s Central Bank quietly snuck it in with all the other Nobel Prizes to give retrograde free-market economics credibility and the appearance of scientific rigor. One of the Federal Reserve banks explained it succinctly, “Few realize, especially outside of economists, that the prize in economics is not an “official” Nobel. . . . The award for economics came almost 70 years later—bootstrapped to the Nobel in 1968 as a bit of a marketing ploy to celebrate the Bank of Sweden’s 300th anniversary.” Yes, you read that right: “a marketing ploy.”

Here’s a Nobel family member describing it: “The Economics Prize has nestled itself in and is awarded as if it were a Nobel Prize. But it’s a PR coup by economists to improve their reputation,” Nobel’s great great nephew Peter Nobel told AFP in 2005, adding that “It’s most often awarded to stock market speculators. . . .  There is nothing to indicate that [Alfred Nobel] would have wanted such a prize.”

Members of the Nobel family are among the harshest, most persistent critics of the economics prize, and members of the family have repeatedly called for the prize to be abolished or renamed. In 2001, on the 100th anniversary of the Nobel Prizes, four family members published a letter in the Swedish paper Svenska Dagbladet, arguing that the economics prize degrades and cheapens the real Nobel Prizes. They aren’t the only ones.

Scientists never had much respect for the new economic Nobel prize. In fact, a scientist who headed Nixon’s Science Advisory Committee in 1969, was shocked to learn that economists were even allowed on stage to accept their award with the real Nobel laureates. He was incredulous: “You mean they sat on the platform with you?”

That hatred continues to simmer below the surface, and periodically breaks through and makes itself known.  Most recently, in 2004, three prominent Swedish scientists and members of the Nobel committee published an open letter in a Swedish newspaper savaging the fraudulent “scientific” credentials of the Swedish Central Bank Prize in Economics. “The economics prize diminishes the value of the other Nobel prizes. If the prize is to be kept, it must be broadened in scope and be disassociated with Nobel,” they wrote in the letter, arguing that achievements of most of the economists who win the prize are so abstract and disconnected from the real world as to be utterly meaningless.

The question is: Why would a prize that draws so much hatred and negativity from the scientific community be added to the Nobel roster so late in the game? And why economics?

To answer that question we have to go back to Sweden in the 1960s.

Around the time the prize was created, Sweden’s banking and business interests were busy trying to ram through various free-market economic reforms. Their big objective at the time was to loosen political oversight and control over the country’s central bank.

According to Philip Mirowski, a professor at the University of Notre Dame who specializes in the history economics, the “Bank of Sweden was trying to become more independent of democratic accountability in the late 60s, and there was a big political dispute in Sweden as to whether the bank could have effective political independence. In order to support that position, the bank needed to claim that it had a kind of scientific credibility that was not grounded in political support.”

Promoters of central bank independence made their arguments in the language of neoclassical market efficiency. The problem was that few people in Sweden took their neoclassical babble very seriously, and saw their plan for central bank independence for what it was: an attempt to transfer control over economic matters from democratically elected government and place into the hands of big business interests, giving them a free hand in running Sweden’s economy without pesky interference from labor unions, voters and elected officials.

And that’s where the Swedish Central Bank Prize in Economic Sciences came in.

The details of how the deal went down are still very murky. What is known is that in 1969 Sweden’s central bank used the pretense of its 300th anniversary to push through an  independent prize in “economic science” in memory of Alfred Nobel, and closely link it with the original Nobel Prize awards. The name was a bit longer, the medals looked a little different and the award money did not come from Nobel, but in every other way it was hard to tell the two apart. To ensure the prize would be awarded to the right economists, the bank managed to install a rightwing Swedish economist named Assar Lindbeck, who had ties to University of Chicago, to oversee the awards committee and keep him there for more than three decades. (Lindbeck’s famous free-market oneliner is:  “In many cases, rent control appears to be the most efficient technique presently known to destroy a city — except for bombing.”)

Notice there's no mention that Hayek actually won the Swedish Central Bank Prize in Economics...

For the first few years, the Swedish Central Bank Prize in Economics went to fairly mainstream and maybe even semi-respectable economists. But after establishing the award as credible and serious, the prizes took a hard turn to the right.

Over the next decade, the prize was awarded to the most fanatical supporters of theories that concentrated wealth among the top 1% of industrialized society of our time.

In 1974, five years after the prize was first created, it was awarded to Friedrich von Hayek, the leading laissez-fair economist of the 20th century and the godfather of neoclassical economics. Milton Friedman, who was at the University of Chicago with Hayek, was not far behind. He won the prize just two years later, in 1976.

Both Hayek and Friedman were huge supporters of the political independence of central banks. In fact, they built their careers on bashing government intervention in economic matters. Hayek developed a whole business cycle theory that blamed government and government-controlled banking systems for all economic problems. Friedman came out with a whole new subsection of neoclassical economics called “Monetarism” that had a scientific formula worked out, specifying exactly how much money central bankers needed to keep floating around in the economy to keep inflation low and unemployment high enough to keep big business happy. No democratic control over banking policies needed, just let the free-market do its thing!  The Swedish central bankers couldn’t get better spokesmen for their cause.

But Hayek and Friedman’s usefulness went way beyond Sweden.

At the time of the prizes, neoclassical economics were not fully accepted by the media and political establishment. But the Nobel Prize changed all that.

What started as a project to help the Bank of Sweden achieve political independence, ended up boosting the credibility of the most regressive strains of free-market economics, and paving the way for widespread acceptance of libertarian ideology.

Take Hayek: Before he was won the award, it looked like Hayek was washed up. His prospect of ever being a mainstream economist was essentially over. He was considered a quack and fraud by contemporary economists, he had spent the 50s and 60s in academic obscurity, preaching the gospel of free-markets and economic darwinism while on the payroll of ultra-rightwing American billionaires. Hayek had powerful backers, but was stuck way out on the fringes of reactionary-right subculture.

But that all changed as soon as he won the prize in 1974. All of a sudden his ideas were being talked about. Hayek was a celebrity. He appeared as a star guest on NBC’s Meet the Press, newspapers across the country printed his photographs and treated his economic mumblings about the need to have high unemployment as if they were divine revelations. His Road to Serfdom hit the best-seller list. Margret Thatcher started waving around his books in public, saying “this is what we believe.” He was back on top like never before, and it was all because of the fake Nobel Prize created by Sweden’s Central Bank.

"Unemployment iz necessary karmic price ov past inflationary policies"

Billionaire Charles Koch brought Hayek out for an extended victory tour of the United States, and had Hayek spend the summer as a resident scholar at his Institute for Humane Studies. Charles, a shrewd businessman, quickly put the old man to good marketing use, tapping Hayek’s mainstream cred to set up Cato Institute in 1974 (it was called the Charles Koch Foundation until 1977), a libertarian thinktank based on Hayek’s ideas. [Read eXiled eXclusive: Charles Koch told Hayek to use Social Security.]

Even today, Cato Institute pays homage to the Swedish Central Bank Prize’s marketing role in the mainstreaming of Hayek’s ideas and Hayek’s influence on the outfit:

The first libertarian to receive the Nobel Prize was F.A. Hayek in 1974. In the years leading up to the prize announcement, Hayek had reached a professional and personal nadir. Unable to maintain an appointment in the United States, Hayek had returned to Austria to take up a position at the University of Salzburg, Austria. With the announcement of the prize in 1974, however, Hayek’s work, and the fortune of Austrian economics, took a remarkable turn.

Hayek’s influence on Cato is profound. Two of Cato’s first books were by Hayek: A Tiger by the Tail: The Keynesian Legacy of Inflation & Unemployment and Monetary Policy: Government as Generator of the “Business Cycle.” Perhaps more than any other intellectual in the twentieth century, Hayek has inspired Cato and its researchers to develop policies that ensure a free society. When Cato moved into its current location in 1992, its auditorium was named in Hayek’s honor.

Friedman’s Nobel Prize had a similar impact. After getting the prize in 1976, Friedman wrote a best seller, got his own 10-part PBS series “Free to Choose” and became President Ronald Reagan’s economic advisor, where he had a chance to put the free-market policies he developed in Chile under Pinochet.

Like Hayek, Friedman was a big Pinochet fanboy. He would spend the rest of his time denying it, but he was deeply involved and invested in the Pinochet’s totalitarian free-market experiment. Chilean economist Orlando Letelier published an article in The Nation in 1976 outing Milton Friedman as the “intellectual architect and unofficial adviser for the team of economists now running the Chilean economy” on behalf of foreign corporations. A month later Letelier was assassinated in D.C. by Chilean secret police using a car bomb.

President Bush gives his pet free-market troll a pat on the head...

Friedman’s monetary theory was used by Federal Reserve Bank Chairman Paul Volcker to restrict the money supply, plunging American into a deep recession, doubling the unemployment rate, and had the added bonus of getting Reagan elected President. . . . And Hayek and Friedman were just the beginning.

For instance, in 1997 two economists won an award for their derivative risk models that minimized risk, just before derivatives would explode in the 2000s real estate-bubble.

The award was shared by economists Robert Merton and Myron Scholes for their work in figuring out how to value derivatives so as to minimize risk. The two economists used their Nobel-worthy economic models to run “the world’s biggest hedge fund,” which was called Long Term Capital Management (LTCM). And the fund really lived up to its name. Nine months after winning the Swedish Central Bank Prize in Economics, LTCM went belly-up, racking up over $1 billion in losses over a period of just two days. It was of course bailed out by then-Federal Reserve Chairman Alan Greenspan, who considered LTCM “too big to fail.”

Then there’s Vernon Smith. In 2002, Vernon Smith, adored and funded by Libertarians like Charles Koch, won the “Nobel” — his patron looked at the money he spent funding Smith’s academic career as a successful speculatory venture, saying simply: “The Koch Foundation’s gift was an excellent investment.” Smith’s research basically entailed setting up theoretical “wind tunnels” to test how free-markets would respond in various conditions—all in a way that has nothing to do with reality.

As of 2011, 10 out of the 69 economists who’ve won the fake Nobel prize are Koch-connected libertarians.

It will take a brave act to bring this sham to the attention of the public. One year, one of the prize winners will have to speak out, and explain this ruse to the public as he wins the award.

This article was first published on AlterNet

***

Yasha Levine is an eXiled editor and co-founder of the S.H.A.M.E. Project. Read his book: The Corruption of Malcolm Gladwell.

Click the cover, buy the book!

Exiled editor Mark Ames went on The Thom Hartmann Show yesterday to talk about the Class Warfare waged here in America through mortgage fraud and foreclosure fraud, and abroad in Afghanistan…and the hidden story of accused massacre killer Sgt. Robert Bales.

Watch:

Back in April I wrote a couple of articles about how rampant speculation by Koch Industries, Goldman Sachs and other big players in the energy markets has been driving up the price of oil. Immediately, a bunch of freemarket sockpuppets came out of the woodwork and infested our comments section, repeating the same invisible-hand-knows-best bullshit: Speculators are a force of good, not evil; they don’t drive up prices, but in fact help keep them low. Sounds plausible, right?

Well, a few weeks ago Senator Bernie Sanders leaked a small batch of secret energy trading data compiled by the U.S. Commodity Futures Trading Commission which showed that in the summer of 2008, when the price of oil was spiking to a record $148 per barrel, the oil commodities market was one giant speculatory cesspool dominated by the largest fraud-ridden banks, investment funds and oil companies in the world, including Goldman Sachs, JP Morgan Chase, BP and Koch Industries.

Thinkprogress’ Lee Fang recently wrote about the leaked data:

As experts from Stanford University, Rice University, the University of Massachusetts, and authorities have concluded, rampant oil speculation was the prime driver of the record high prices for crude oil three years ago.

Notably, the top speculators are noncommercial players, meaning they are companies that simply and buy and sell crude contracts with no interest in actually refining and selling the product. Each contract in the list represents 1,000 barrels of oil. The documents show the total volume of trades made on one specific day shortly before the record high price of $148 per barrel.

The data, though revealing, still does not give a complete picture of trading strategies. Speculators invest in multiple private exchanges, and trading tactics can shift from day to day. Moreover physical plays, such as buying up large quantities of actual oil and storing it on tankers or in large containers, are still largely hidden from public view.

I looked at the underlying data myself, and what it shows ain’t pretty: For instance, as far as the oil futures are concerned, speculators from financial and commodity trading outfits accounted for 65 to 80 percent of the entire market. Just the two top speculators of the bunch—Goldman Sachs and Dutch/Swiss energy trading company Vitol SA—represented 20 percent of the market, while the top five players—which included Morgan Stanley, Barclays and JP Morgan Chase—accounted for more than 30 percent of all oil trading activity. (A bit of oil speculation trivia: Vitol was the first company to buy oil from Libya’s rebels a few months back, and just made $1 billion on the gamble.)

And here’s the kicker: not only did speculators dominate the energy market, they appeared to be playing both sides of the bet—meaning that they had positioned themselves to make money on both the expansion and the popping of the oil bubble. The Wall Street Journal made this stunning admission itself in an article published last month, which they naturally buried way down in the article:

The list was drawn up amid intense scrutiny faced by the CFTC during the 2008 spike. The CFTC sought data on rapidly growing corners of the commodity markets, including private contracts negotiated “over-the-counter.”

Commodities are traditionally traded on exchanges via futures contracts, which the CFTC regulates. But the CFTC typically sees the impact of over-the-counter trades indirectly, as when a bank sells a contract and buys related futures. And banks often offset the trades internally.

Over-the-counter trading exploded in recent years amid rising investor interest in riding the wave carrying prices for oil and other commodities higher.

“We were under enormous pressure to find out what was going on,” says Jeffrey Harris, then the CFTC’s chief economist.

Wall Street was the biggest presence because banks often take one side of over-the-counter trades.

Goldman topped the list, with the equivalent of 451,997 contracts that would profit if oil rose, or “long” bets, and 419,324 contracts that would pay off if prices dropped, or “short” bets. Much of that likely represented Goldman being on the other side of client trades, according to people familiar with the matter.

You might remember that the good folks at Goldman have been known to bet “on the other side of client trades” before. Most recently, Goldman Sachs bet against crap mortgage-backed securities at the height of the real estate bubble in 2006, even as it was selling/peddling them as sure-bet investments to their clients.

SEC accuses Goldman Sachs of defrauding investors

Marcy Gordon, AP Business Writer, On Friday April 16, 2010

The government on Friday accused Wall Street’s most powerful firm of fraud, saying Goldman Sachs & Co. sold mortgage investments without telling the buyers that the securities were crafted with input from a client who was betting on them to fail.

And fail they did. The securities cost investors close to $1 billion while helping Goldman client Paulson & Co., a hedge fund, capitalize on the housing bust. The Goldman executive accused of shepherding the deal allegedly boasted about the “exotic trades” he created “without necessarily understanding all of the implications of those monstrosities!!!”

The civil charges filed by the Securities and Exchange Commission are the government’s most significant legal action related to the mortgage meltdown that ignited the financial crisis and helped plunge the country into recession.

So is the Wall Street Journal saying that Goldman Sachs was doing exactly the same thing in the oil/energy futures markets as it did with CDOs and mortgage-backed securities? Was the firm helping drive the price of oil sky high and steering its investors into the market, only to simultaneously bet that the whole thing would come crashing down? It appears that may be exactly what they were doing…and Goldman wasn’t alone, either. The data clearly shows that just about all the big financial/trading houses had the same one-to-one long/short spread. And that includes Koch Industries’ commodity trading subsidiary, Koch Supply & Trading LP, which had $9.75 billion in bets riding on the price of oil going up, and $11.1 billion on it going down.

You can check out all the energy speculation data for yourself here.

While most Americans find this not just odious but bad for everyone who’s not an oil speculator, the Cato Institute’s Mark A. Calabria, director of Koch-oriented financial regulation studies, sees things another way: “Speculators deliver value and help price assets more precisely.” That’s right, they price them higher so as to extract more money from peasants like me and you.

Yasha Levine is an editor of The eXiled. You can reach him at levine [at] exiledonline.com. Want to know more? Read Yasha Levine’s previous posts on the Koch-oil speculation connection: “The Koch Brothers: Dark Lords of Derivatives” and “Koch Industries Lackeys Admit to Manipulating Oil Prices…and Gloat About It, Too.”

This story first appeared in TheNation.com

The headline that topped the Drudge Report Tuesday morning had frightening news for its millions of readers: yet another credit ratings agency downgraded America’s debt, this time to “C”—at or near “junk” status in the letter-rating scales used by the big three ratings agencies, Standard & Poor’s, Moody’s and Fitch. Clicking on the link takes the reader to a CNBC article [1] headlined, “US Debt Rating Should Be ‘C’: Independent Agency.”

The agency turns out to be not one of the big three but an outfit called Weiss Ratings. Scratch the surface, and it turns out that Weiss Ratings is far from “independent,” and the rating, itself, is bogus. Weiss Ratings, headed by Martin D. Weiss, an investment advisor who has more than once run afoul of the SEC, downgraded US debt to “C” (which the article says is equivalent to BBB- or “near-junk” status) despite that the fact that the last time the US defaulted on external and domestic debt obligations was 1790 [2]. Even the Economist has acknowledged [3], “Talk of America defaulting on its debt is just that.”

Meanwhile, CNBC failed to disclose the ratings agency has a content-distribution licensing agreement with TheStreet.com [4], whose chairman and co-founder is CNBC host Jim Cramer.

Cramer’s company owned Weiss Ratings until last year, when TheStreet.com sold it back to Weiss for an undisclosed sum. Since then Weiss and Cramer’s firm TheStreet.com have had a cross-licensing agreement to promote each other’s ratings. CNBC should have done journalistic due diligence. But instead it hyped the rating. At the very least, portraying a ratings agency as “independent” on CNBC when a top CNBC on-air personality has a business interest in that relationship is misleading.

Jim Cramer has a history of making controversial investment calls. The host of the popular CNBC show “Mad Money” has come under fire from the New York Times and Jon Stewart’s Daily Show [5] for repeatedly misleading his viewers. In a videotaped interview in 2006, Cramer boasted about how to manipulate stock prices by spreading false rumors.

Weiss also has a history of misleading investors. In 2006, the same year that Cramer’s company bought the Weiss Report, the SEC accused Weiss of misleading investors and violating securities laws, and slapped the investment advisor and his company with a combined $2.1 million fine. Among other things, the SEC charged [6] Weiss with making false claims that readers who followed his advice earned up to 400% returns: “In fact, during the relevant time period, many subscribers who followed each Weiss Research trading recommendation – as Weiss Research encouraged its subscribers to do – experienced overall returns that were substantially lower than Weiss Research’s profit examples and most actually lost money.”

This isn’t the first time Weiss has been charged by the SEC with violating securities laws: In 1972, the SEC suspended Weiss for four months [7], charging that Weiss’s investment publication “had been used to promote the sale of a fraudulent unregistered investment contract.”

Although Cramer hasn’t been charged or fined by the SEC, he is notorious for repeatedly misleading his viewers with some of the most disastrous investment advice any television stock picker has given.

To read the rest of this story click: TheNation.com.

Mark Ames is the author of Going Postal: Rage, Murder and Rebellion from Reagan’s Workplaces to Clinton’s Columbine.

Click the cover & buy the book!

People don’t seem that interested in talking about Wall Street’s unpunished and ongoing rape of America anymore these days. And that’s too bad. Because Koch Industries has a lot more in common with Wall Street than most people realize.

Here’s a hint to how deeply the Kochs are involved in the same shady financial machinations we usually associate with Wall Street scammers: an investigation just released by the Center for Public Integrity reveals that the Kochs were major players in the fight against financial regulation in 2009 and 2010, bankrolling an army of lobbyists who swarmed Congress and shredded the fin-reg bill.

That’s right, we can thank the Kochs for the $400-600 trillion of so-called “over-the-counter derivatives,” essentially unregulated bets on everything from mortgages to oil prices to weather conditions, still being traded in the dark today, despite the fact that they were what sucked money out of the real economy, caused the meltdown of the world’s financial markets, precipitated the bank bailouts and are currently pumping up world food and energy prices:

[Koch Industries] spent heavily on lobbyists who worked to shape the 2010 Dodd-Frank Act and other vehicles for financial reform. The Koch lobbyists focused, in particular, on provisions aimed at regulating systemic risk in the financial markets, and the use of derivatives. … And in past Congresses, Koch lobbyists labored to preserve the exemption, known as the “Enron Loophole,” that excused energy commodity contracts from regulation.

But the Dodd-Frank law gave the Commodity Futures Trading Commission and the Securities and Exchange Commission the authority to craft new rules to subject traders in the energy industry to increased regulation and transparency, capital and margin requirements, and supervision by a derivatives clearing house. Koch lobbyists worked to favorably shape the bill, and have not stopped working since it was passed.

Within a few weeks after President Obama signed the legislation, Koch lobbyist Gregory Zerzan had secured a coveted meeting with SEC Commissioner Troy Paredes, a Bush appointee, and his counsel, Gena Lai, to discuss how the government would implement the law.

Everyone was focused on demonizing Goldman Sachs and friends, not realizing that the Kochs and other shadowy billionaire families were right there with them. A Bloomberg article from the summer of 2010 gives a bit more detail about intersection of Koch and Wall Street interests:

Industry groups backed by Koch Industries Inc. and Cargill Inc. are fighting a Senate bill that would reshape almost 30 years of policy that allowed the $605 trillion over-the-counter derivatives market to surge and helped trigger the financial crisis in 2008.

Legislation introduced by Senator Christopher Dodd, a Connecticut Democrat, would give the Commodity Futures Trading Commission authority over most of the U.S. market, the broadest expansion of its authority since becoming an independent agency in 1974.

[...]

At stake is control of one of Wall Street’s most lucrative businesses. Trading revenue in unregulated markets last year generated an estimated $28 billion for five U.S. dealers including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, according to company reports collected by the Federal Reserve and people familiar with banks’ income sources.

The over-the-counter derivatives market has escaped the commission’s reach since the first interest rate swap was traded in 1981. The transactions fell outside a law requiring that all futures be traded on regulated exchanges. Before swaps came along, risk-management trading outside of the exchanges was generally restricted to “forwards,” or bilateral trades that provided for physical delivery between commercial parties, such as a farmer and a grain elevator.

What has not been reported is that a big part of Koch Industries’ expansion over the past few decades has occurred in the dark realms of unregulated derivative trading. The Kochs weren’t just playing the market for themselves, but provided financial and risk management services to other companies. Now their clients include airlines, utilities, oil companies, pension funds, hedge funds and endowments.

It’s no secret. You can read all about in a brochure put out by the good folks at Koch Supply and Trading LP, one of the Koch Industries subsidiaries that provides financial services. The company trades in all sorts of derivatives, including crude oil, fuel, natural gas, electricity, emissions credits, metals, fertilizer, currency, municipal bonds, interest rates…the list goes on and on. Hell, they even trade in Leninist carbon credits and brag about being the first to offer clients weather derivatives—that’s when you place bets on the chance of rain.

But Koch Industries is not just a regular financial/risk management services provider. Because the company is a major producer and/or distributer of many of the commodities that it bets on, it not only has insider knowledge but physical control of market conditions. That gives it a whole lot of power to game and manipulate markets from both the speculative and physical ends—something that even the most powerful investment houses can’t do on their own. Best part is: only insiders know how much or how little manipulation exists because the derivatives are exempted from regulation.

Remember when Enron conspired to shutdown their power plants to jack up the price of electricity in California?

On one tape, an Enron official named Bill tells an employee called Rich at a Las Vegas power plant to take the plant offline on a confected excuse. The conversation took place on January 17 2001, in the last days of the Clinton administration, as blackouts were rolling across California, cutting off electricity to more than one million people, and after the energy secretary, Bill Richardson, had ordered generators across the west to direct their output to the troubled state.

“Ah, we want you guys to get a little creative, and come up with a reason to go down,” Bill says on the tape. “Anything you want to do over there? Any cleaning, anything like that?”

“OK, so we’re just comin’ down for some maintenance, like a forced outage type thing?” Rich replies, according to transcripts published yesterday. “I think that’s a good plan, Rich,” Bill says. “… I knew I could count on you.”

Is it so far fetched to think that the Kochs would do something similar with oil, ethanol, natural gas, fertilizer or any of the other commodities that they physically control? Of course they’re doing it. Why else would they fight to keep the “Enron Loophole” from being regulated out of existence?

As the Bloomberg article noted, the Kochs are not the only secretive multi-billionaires scamming America by gaming unregulated markets completely under the radar. So, if you’re a salaried journalist and want to dazzle your editors with a great story, you might want to look into the role that “family-owned” Cargill, Inc., the largest private company in America, has played in pumping up world food prices. That I’ll give out for free. Anything else will cost money.

Want to know more? Check out the new The eXiled Vs. The Koch Brothers page. And watch Dylan Ratigan giving us props for breaking the Koch/Tea Party story first:

This article first appeared in The New York Press.

There was a strange moment last week during President Obama’s speech at Cooper Union. There he was, groveling before a cast of Wall Street villains including Goldman Sachs chief Lloyd Blankfein, begging them to “Look into your heart!” like John Turturro’s character in Miller’s Crossing…when out of the blue, the POTUS dropped this bombshell: “The only people who ought to fear the kind of oversight and transparency that we’re proposing are those whose conduct will fail this scrutiny.”

The Big Secret, of course, is that every living creature within a 100-mile radius of Cooper Union would fail “this scrutiny”—or that scrutiny, or any scrutiny, period. Not just in a 100-mile radius, but wherever there are still signs of economic life beating in these 50 United States, the mere whiff of scrutiny would work like nerve gas on what’s left of the economy. Because in the 21st century, fraud is as American as baseball, apple pie and Chevrolet Volts—fraud’s all we got left, Doc. Scare off the fraud with Obama’s “scrutiny,” and the entire pyramid scheme collapses in a heap of smoldering savings accounts.

That’s how an acquaintance of mine, a partner in a private equity firm, put it: “Whoever pops this fraud bubble is going to have to escape on the next flight out, faster than the Bin Laden Bunch fled Kentucky in their chartered jets after 9/11.”

And that’s why this SEC suit accusing Goldman Sachs of fraud is really just a negotiating bluff to give Obama’s people some leverage—or it’s supposed to be, anyway—according to the PE guy. He dismissed all the speculation that the fraud investigations would turn on other obvious villains like Deutsche, Merrill, Paulson & Co., the Rahm Emmanuel-linked Magnetar and so on.

“You don’t get it, Ames. Even Khuzami, the SEC guy in charge of the Goldman case, is a fraud; the fucker was Deutsche’s general counsel when they pulled the same CDO scam as Goldman. You have no idea how deep this goes.”

And it’s clear that a lot more people here are aware of how fundamentally rotten things are but they’re not willing to face the big fraudonomics bummer yet, preferring instead to stick with specific accusations.

My position on this was, “Good, throw the book at those crooks too, I don’t see what the problem is here.”

This was exactly what I argued a week ago, during a verbal slapfight with that acquaintance of mine. We were making a scene in a Midtown yuppie restaurant, arguing over just how much damage Wall Street had caused, and what to do about it.

His position was indefensible, and he knew it, so he switched tactics:

“OK Ames, which bankers would you throw the book at? Because you’re arguing that they’re all guilty. So which ones do you go after? Two of them? Three? Half of them?”

“Every last one of them. Lock ’em up in one of their private prisons.”

“Not gonna happen, Che.”

“Che? Me? Listen, Scarface, I’m about law and order. Don’t any of you PE degenerates believe in that anymore?”

“OK, here’s the deal, Che. I’m going to walk you through this nice and slow so that even an agave-sweetened hippie like you can understand this. Stick with me, this is gonna be a little complicated. Ready?”

And so he began:

“Let’s say the government decides one day, ‘You know, we oughta listen to Che here, let’s throw the book at every firm and every executive that our people can make a case against. Because you know, gosh, it’s all about rule of law and blind justice, just like Che says.’ OK, so now this means indicting just about every serious player in finance, so they take down Goldman Sachs, they take down Citigroup, JP Morgan, BofA… and they also serve all the big funds who are at least as guilty, if not more. So they shut down Pimco, Blackrock, Citadel… maybe they indict Geithner and Summers, haul in some of Bush’s crooks… right?”

“Too bad they don’t serve popcorn here, this is getting good.”

“OK, now guess what you’ve just done? You’ve just caused the markets to completely tank. Remember what happened after the Lehman collapse? Remember how popular that made every politician in Washington? Still wondering why they coughed up a trillion bucks? They were scared for their lives; that’s why they voted for that bailout. You’d have done the same goddamn thing. But if we go after everyone guilty of fraud and theft, the market crash this country would see would make 2008 look like Sesame Street. Open that can of worms labeled ‘Fraud’ and the whole fucking economy collapses. You may as well prosecute people for masturbating. No one will know where the fraud investigation stops and who will be charged next—everyone will try to cash out, and the markets will tank to zero. And guess what happens when the markets tank to zero? Every fucking American with a retirement plan, or an investment portfolio, or a 401k—every state pension plan in the country, every teacher’s pension fund, every fireman’s pension—every last one of them will be wiped out. That’s what the Lehman collapse taught us.”

“Us? It didn’t teach us anything but that this country is run by maniacs.”

“Jesus H. Christ, Ames– you’re even more clueless than the idiots who managed the Lehman collapse. I mean, didn’t everyone get it how badly those idiots screwed up with Lehman? It was the biggest screw-up this hemisphere has ever seen. You had Secretary Paulson and Fed Chief Bernanke scratching their asses not knowing what to do, so then they go, ‘OK, we’re supposed to be a free market economy, and we’re supposed to be the Republicans—let’s try something different for a change since nothing else is working. Let’s go out on a limb and actually give this “free market” thing a whirl. Who knows? Maybe the “free market” really works the way we always say it does. Nothing else seems to work, let’s let the free market decide Lehman’s fate. Maybe corporate-socialism isn’t the answer.’ So they hung Lehman out in the free-market, and BAM! The. Shit. Hit. The. Fan. No shit, dudes—the free market is for suckers, didn’t your daddy teach you idiots that? Not only did Lehman collapse—everything collapsed; confidence in the entire system collapsed. And here’s what I’m trying to explain to simpletons like you: Our economy is just a confidence game. Don’t ask me how it got this way, don’t care.”

I tried saying something insulting to him, but he just talked right over me, lurching forward baring his laser-whitened teeth.

“I’m sure you have the answer, you and Ron Paul and all the other pot-smoking libertarian do-gooders have it all figured out. But what I’m saying is, no confidence means end of the confidence game. That’s what Lehman showed. Every single player in finance suddenly had to face the fundamental problem—this whole fucking economy is built on fraud and lies and garbage. So when Lehman collapsed, every single player panicked, going, ‘If Lehman was nothing but a Ponzi scheme—and I know what I’m running is a Ponzi scheme—holy shit, that means everyone else is running a Ponzi scheme too! Run for the exits!’ No one trusted anyone else, everyone pulled out, and the entire global economy collapsed just like that. And that meant your parents, my parents, every teacher, every fireman, every person in the country going into retirement, every price on every asset—wiped out.

“And here’s what I’m trying to get you to understand: In the grown-up world, when an entire country’s savings accounts are wiped out because of some do-gooder and his law books and his Thomas Jefferson ‘What about free and fair markets?’ crap, that is a big problem—people don’t give a fuck about Jefferson and ‘free and fair markets,’ they just want their savings to be worth something. And people are right: Jefferson was an imbecile. He should have been a folk singer, not a Founding fucking Father. But that’s another issue that’s over your head—the point is, the guy who destroys this economy because it’s ‘the right thing to do’ will have to flee for his life, and whatever president or political party was in power when that decision was made will be out of power for the next 200 years. That’s why Washington panicked and passed ‘the bailout,’ they didn’t want to be the fools whom all the Ponzi victims blame for tanking the Ponzi scheme, so they broke the glass and pumped up a newer, bigger Ponzi scheme. It was an expensive 14 trillion dollar lesson in, ‘Stay the fuck away from free-market experiments, assholes!’ How naive are you people to actually believe that ‘free market’ crap? The problem is when people in power are stupid enough to listen to guys like you: all the do-gooder libertarians and the do-gooder free-market Republicans who forgot that they’re supposed to lie. Hello!”

“Libertarian, me? Since when was I ever a libertarian?”

“That’s my point: Fools like you don’t even know who you are anymore. They forgot that they’re supposed to lie about all that libertarian free-market shit, keep it far the fuck out of policy. But instead of just lying about free-markets while secretly propping up Lehman, the idiots actually tried pulling off a ‘free-market’ miracle, and we had to pay $14 trillion just to find out what I could have told them for no fee at all, which is: ‘Hey, assholes, you’re supposed to be hypocrites, OK? You’re supposed to be two-faced free-market liars, not libertarian Quakers! You’re not supposed to believe in anything—your job is to get up in front of the public and lie about free markets and the rest. Period.’

“That’s it, how fucking hard is it? Look, watch my face: Say one thing out of one side… and do the other out of the other side. Got that? Let everyone else whine and cry about, ‘Ooh, that’s not fair, ooh, that’s a bailout, that’s socialism, that’s corruption.’ That’s what losers do—they whine. You, for example, Che—you whine all the time, and look at you… Can you pay the bill for this meal? Is there a libertarian on earth who can afford to buy a decent meal in Manhattan? And now, look at me: I’m a hypocrite. Hell yes I am! I lie every day of my life, I lie to myself in my sleep. Hell, I’m lying to you right now, in fact I don’t even know what the fuck I’m saying anymore because I’m so used to lying. And yet—who’s the guy with the black card? Who’s the one who’s going to pick up the check tonight? Guys with power, guys like me, we lie. You got that? ‘Lie’ as in ‘My Lai’ the massacre—as in, ‘My Lai you long time, me so free-markety.’ You distract the dumbshits with free-market B.S. because hey, for whatever reason, that’s what the public likes to hear, it doesn’t really matter what lie you feed them so long as it’s the lie that puts them in a trance. And then behind the scenes, you do the very opposite: You fix the game, you cover up this problem here with those funds there, you move shit around, you skim budgets and you subsidize the system, you cover up the bad shit and once in a while throw a has-been to the wolves to keep the public entertained—that’s the way the system works, and anyone who’s an adult understands that. And everyone who doesn’t understand that can go form an online libertarian chat group and complain with all their little libertarian friends about free markets and Jekyll Island and ‘Wahhh! It’s not not fair, waahhhh!’”

“What’s with the libertarian accusation?”

“It’s just that you all sound the same to me. Libertarians, hippies—is there really a difference? You all whine alike: ‘It’s not fair, man! Ooh! You can’t do that, it’s fraud, it’s corruption, ooh no!’ Or: ‘It’s the income inequality, man; Goldman Sachs controls us all man; it’s socialism for the rich; it’s all too scary for my retarded 5-year-old libertarian brain!’ Seriously, anytime I meet libertarians like you—”

“Listen—I’m not a fucking libertarian, OK? I want free handouts. How clear do I have to make this? Me—handouts. Me—Big Government. I want to collectivize your productive cash, because I am a resentful parasite. Are you capable of processing a single word of what I’m saying to you, Spaz?”

“Uh-huh, sure, whatever. Here’s the thing: I think it’s great that you and your friends memorized Road to Serfdom in between Star Trek episodes—no really, I’m happy for you. Yeah, we’re all so proud. But here’s the thing: We grown-ups are really, really busy now trying to sort out the free-market mess you made with that Lehman move of yours. Yeah, so why don’t you run along to your libertarian chat rooms and have your little debates about Jekyll Island and the gold standard, because it really means a lot to us. And report back to me as soon as you have it all figured out, m’kay? Just get the fuck out of my face and leave the adults alone.”

It got a lot more vicious and personal than this, but when our verbal slap-fight ended—and he paid the bill—I thought about what he said, and it made a lot more sense. Fraud has become so endemic in this country that it’s woven its way into America’s DNA, forming a symbiotic relationship that can’t be undone without killing off the host. [See below: Fraudonomics: 10 Fun Fraud Facts] If they push it just a little too hard, the entire American economy could crash, asset values could tank, and that means tens of millions of extremely pissed off retirees and Baby Boomers. As the Wall Streeter put it: “Whoever is responsible for bursting this latest bubble by exposing all the fraud—and tanking all the markets—will not only be out of power for at least a generation, but they’ll all have to get radical reconstructive surgery on their faces and seek political asylum somewhere remote. No one wants to be that guy, and that’s why it’s not going to happen.”

That may be true, but all bubbles do eventually burst, all Ponzi schemes do collapse for good at some point. The only question is when. For those of us not on the verge of retiring, the sooner we have this day of reckoning and get it over with, the better.

*      *     *

Fraudonomics: 10 Fun Fraud Facts

Ever since I got kicked out of Russia and forced back home, I’ve been collecting all kinds of news articles about fraud, in a document file titled “America Is Russia.” Here’s a little taste of the wonderful world of American Fraud:

1). Accounting Fraud: Last year, America’s leading banks were insolvent. They had tens or hundreds of billions in losses on their books, and the only way to wipe those losses out would be to either a) own up to the mess, raise enormous amounts of money on top of all the bailout money; or b) get out a big fat eraser, and wipe those losses off the books as if they never existed. The first option was nice and all, but a real hassle. So Geithner and Larry Summers chose Door Number Two: Accounting Fraud. They forced the FASB to accept a rule-change in the accounting methodology called “mark-to-model” which let banks decide how much their assets were worth, rather than letting the markets decide. So if for example a BofA owned a complex security called “Orion Butt Fungus” that was worth 5 pesos on the open market, but BofA was too broke to go out and raise 5 pesos to cover that loss, under the new accounting rules, the government told BofA that rather than pricing “Orion Butt Fungus” at what the market will actually pay for it, why not first ask, “How much would BofA like ‘Orion Butt Fungus’ to be worth, in a perfect world?’” If BofA answers, “Doyee, gee I dunno, how about $500 million?” then under the “mark-to-model” accounting rules, BofA could now value “Orion Butt Fungus” at $500 million, and voila! Their problems are over. That wasn’t so hard, was it? Suddenly, BofA looks like it knows how to pick winners! And no one’s going to second-guess them, because everyone else is mark-to-modeling their “Orion Butt Fungi” too! The end result: under the old rules, BofA would have had to raise money just to cover its debts, sort of like you and me have to do, and that’s just a lot of money going to waste. But now that its portfolio is so profitable, BofA has a much easier time raising money, which it uses to pay ginormous bonuses to its executives.

2). Big Pharma Fraud. Remember that scene early in Fight Club, when Edward Norton explained his job, when it was more profitable to let a car defect go and pay whatever lawsuit settlements come from the deaths, and when it’s better to recall the cars because the number of deaths will result in too many lawsuits? This is humanitarian do-gooder stuff compared to the savage real-world fraud-for-profit model that drives America’s drug companies. It’s really simple and it goes like this: the more fraud a drug company commits, so long as it’s off-the-scale fraud with the most horrible consequences for the victims, the drug company’s profits always outdo the criminal fines and lawsuits by factors of 20, 30, 100… It’s as simple as that. Because the billion in penalties here or the two billion in class action lawsuit settlements there are always far less than the tens of billions you earn from pushing harmful drugs on unsuspecting idiots. To wit: Between May 2004 and March 2010, a handful of top drug companies like Pfizer, Eli Lilly and Bristol-Myers paid over $7 billion in criminal penalties for bribing doctors to prescribe drugs for unapproved uses, with sometimes deadly consequences. However, as a Bloomberg report noted, the fines are always a fraction of the profits—Pfizer alone paid almost $3 billion in criminal fines since 2004, yet that was just one percent of their total revenues; Eli Lilly got busted bribing doctors to prescribe a schizophrenia drug, Zyprexa, to elderly patients suffering from dementia, even though company-run clinical trials showed an alarming death rate of 31 people out of 1,184 participants (double the placebo rate). Whatever—the market for elderly dementia patients meant billions in extra revenues. So Eli Lilly continued pushing Zyprexa on the elderly for another four years until it the Feds busted them. Eli Lilly got hit with $1.42 billion fine, but that was peanuts compared to the $36 billion it earned on Zyprexa sales from 2000-2008. To make it happen, the drug companies buy off all the checks and balances: lawsuits revealed the enormous bribes they pay to doctors, and even America’s medical journals are so corrupted by drug company influence that they’re no longer reliable as much more than hidden advertisements, according to a recent UCSF study. Medical journals are 5 times more likely to publish “positive” drug reviews than negative reviews, and one-quarter of all clinical trials are never published at all, leading doctors to prescribe drugs assuming they have all the information. The result: prescription drugs kill one American every five minutes …while Americans pay more for drugs than anyone in the world, spending a total of $12 billion on drugs in 1980 to spending $291 billion in 2008—a 1,700% increase. America is ranked only 17^th in the world in life expectancy.

3). Alan Greenspan: Fraudonomics Maestro. America’s central banker from 1987-2006 once told a do-gooder regulator not to fuck with the bankers’ fraud schemes, because in Greenspan’s mind, fraud was not a crime and didn’t need to be regulated. Then Greenspan forced the regulator, Brooksley Born, to resign. Just in time for his next and final act as Central Bank chief: from 2001-2004, Greenspan pumped up the biggest housing bubble in human history by holding rates down to nothing, while touring the country promoting the glories of subprime and Alt-A mortgages. Then in late 2005, when the bubble was ready to burst, Greenspan tendered his resignation and switched over to the other side, signing lucrative contracts with three investment firms all of which bet big against gullible American homeowners, and reaped billions. First, Greenspan signed up to work for Deutsche Bank, which is being sued for securities fraud for selling an Abacus-like CDO to a Warren Buffett-owned bank, M&T; Greenspan also worked for Pimco, which earned $2 billion in a single day in September 2008, when Fannie Mae and Freddie Mac were nationalized with Greenspan’s lobbying help; and lastly, Greenspan went to work for Paulson & Co., the hedge fund that raked in $1 billion off the same Abacus CDO deal that brought the SEC fraud suit against Goldman Sachs. It’s an unusually perfect record for Greenspan, given his atrocious forecasting record at the Fed. It recalls the old Greenspan circa 1984-5, when he worked as a lobbyist for Charles Keating trying to push regulators off his back and vouching on the record for Keating’s character…Keating was eventually jailed for fraud in the worst savings and loan collapse of all.

4). Municipal Debt Fraud. America’s $2.8 trillion municipal bond market is rife with fraud of the sort you’d expect in an emerging tinpot economy: opacity rather than transparency, plenty of corruption and kickbacks, resulting in decimated budgets and services cutbacks in communities across the country. The problem all stems from way the bonds are issued these days: instead of holding open tenders, nearly all are the result of backroom deals. Back in 1970, only 15 percent of municipal bond contracts were awarded through no-bid contracts; last year, 85% of muni bond deals were assigned in no-bid, non-transparent agreements of the sort that made Halliburton rich in Iraq. Studies show that no-bid bonds invariably cost municipalities more than bonds resulting from open tenders. So far, fraud and corruption charges have been leveled against state employees and city councilors in Florida, New York, New Mexico, Alabama and California, to name a few. Muni bond defaults soared from just $348 million in 2007 to $7.4 billion in 2008—that’s an increase of 20 times– with growing numbers of cities, counties and states on the verge of bankruptcy. And here’s the real kicker: the biggest bailed-out banks and funds stand to make huge profits again if California’s state and city bonds fail–meaning they make big fees selling the bonds in corrupt deals, then they bet against the bonds buying CDS derivatives. Right now Wall Street has a $27 billion bet against the California bonds they helped to sell–and you better believe Wall Street will use every trick in the book to push California into bankruptcy and make those CDS bets pay off big. In fact just last year, the big banks made $1 billion in fees by selling off Obama-stimulus-backed Build America Bonds which were basically a way of massively overpaying bankrupt banks to lined up bankrupt cities and states with skittish investors to fund corrupt projects–like the San Francisco Bay Bridge modernization, which went from $1.8 billion to $13.6 billion, $8 billion just in interest. Good news is that Wall Street is making tons of money, which is always something to cheer–and of course, the bill is all being charged to regular car-driving suckers, who pay a $5 toll today to cross the bridge, up from $2 in 2003.

5). Journalism fraud. The Washington Post got caught whoring out their venerable editorial staff to corporate lobbyists for anywhere from $25,000 to $250,000 a date, depending on the access. The Atlantic Monthly admitted to TalkingPointsMemo that it routinely sold access to its editorial staff for cash. As for business journalism, all sorts of articles and studies have asked the obvious question: “How did every mainstream business outlet miss the financial collapse of 2008?” Among all the self-flagellating mea-kinda-culpas, you won’t find the word “fraud” in their answer. Speaking of business journalism and fraud, The Business Insider, one of the top business news blogs, published a pair of articles defending Goldman Sachs against the SEC fraud charges. The author of the articles defending Goldman Sachs is Business Insider’s co-founder and editor, Henry Blodget. In 2003, Blodget himself was charged with securities fraud by the SEC for repeatedly misleading clients into buying stocks of companies that in private emails Blodget referred to as “piece of shit.” Under the terms of Blodget’s settlement with the SEC, he agreed to a lifetime ban from the securities industry, and he paid $4 million in fines and disgorgements. Since he is not barred from the world of business journalism, Blodget was able to post an article last Friday headlined: “HOLD EVERYTHING: The SEC’s Fraud Case Against Goldman Seems VERY Weak.”

6). Fraudonomics K-12. If you want your kid to grow up to succeed in a fraud-based economy, you need to teach him the ABC’s of cheating starting at a young age. This is one area where America’s schools aren’t failing their students. Cheating is so rampant in schools that nowadays if the student doesn’t cheat on his exam, chances are his teacher or administrator will cheat on his test for him. One in five elementary schools in Georgia are currently being investigated for tampering with the students’ standardized test scores—although suspicious patterns of erasing and remarking answers showed up in half of the state’s elementary schools. In California, as many as two-thirds of its public schools admitted to fudging its students’ standardized test scores. A survey of graduate school students found that 53 percent of business school grad students admitted to cheating, more than any other grad school discipline. Overall, up to 98 percent of college students today admit to cheating, compared to just 20 percent who cheated in 1940.

7). Boardroom Fraud. Corporate America’s boardrooms are stacked up these days in tight, intertwined relationships that turn public companies into crime scenes, plundering money from unsuspecting shareholders and divvying up the loot among the directors and top executives. In 2008, Chesapeake Energy’s stock price collapsed from $74 per share to $9.84, wiping out $33 billion in shareholder value. The CEO, Aubrey McClendon, gambled and lost 94% of his stock in the company on a margin call, personally losing about $2 billion. So what did the board of directors do? They voted to award McClendon $112 million for 2008, the highest of any CEO in America. Shareholders were outraged, calling it a “bailout,” and several pension funds tried suing Chesapeake, but the courts in Oklahoma blocked the lawsuits. That’s because Aubrey McClendon is sort of the George Bush of Oklahoma—a spoiled fuck-up with a rich and powerful granddaddy—Robert Kerr, former governor and senator, and founder of Kerr-McGee—meaning plenty of VIP connections for the loser grandkid. So on Chesapeake’s board, you had Aubrey’s cousin, Breene Kerr; Frank Keating, Republican ex-governor of Oklahoma whose son Chip (and Chip’s wife) works for Chesapeake; Don Nickles, Republican ex-Senator of Oklahoma who co-funded with Aubrey the Republican anti-gay marriage campaign in 2004; Richard Davidson, the former head of Union Pacific, whose corrupt board of directors (which included the head of the US Chamber of Commerce) lavished Davidson with tens of millions in bonuses and a $2.7 million per year pension when he retired… Now multiply a board of directors like this by the sum total of “Corporate America” and you get…a corrupt, tin-pot corporate culture masquerading as a civilized First World corporate culture. That’s us. (You can read about this problem in an excellent new book Money For Nothing: How The Failure of Corporate Boards is Ruining American Business and Costing Us Trillions.)

8). Corrupt credit rating agencies. The only way big institutional investors like pension funds could justify buying a piece of the Orion Butt Fungus CDO pie was if ratings agencies like S&P or Moody’s gave it a top-notch seal of approval: AAA rated, with a little star on the forehead for good behavior. And in the world of fraudonomics, good behavior looks like this email from a Standard & Poor ratings analyst in December 2006:

“Rating agencies continue to create an even bigger monster _ the CDO market. Let’s hope we are all wealthy and retired by the time this house of cards falters.”

The happy ending to this story is that a huge percentage of thieving scum like this emailer saw their hopes become reality: they got wealthy and retired before the CDO market crashed in a trillion-plus dollar heap of shit. And if they didn’t retire, even better—because bonuses in 2009 were soaring, thanks to the always-gullible American taxpayer.

9). Regulatory Fraud: In the OTS, OCC, Fed, pension benefit guaranty agency and of course the SEC, where whistleblowers were routinely ignored because the regulators were too busy painting their monitors while surfing sites like www.fuck-my-wife.com.

• 10). Judicial Fraud: Juvenile court judges in Pennsylvania took millions of dollars in kickbacks from privately run prisons in exchange for sentencing thousands of innocent kids to juvenile prison terms. Chronic on-the-bench masturbation is running rampant: an Oklahoma judge was accused of using a penis pump on the bench, while nearby in Texas, a Harris County judge masturbated and ejaculated on a defendant’s hand. Speaking of Texas, the entire juvenile prison system there was turned into a sex abuse racket involving Texas state officials–over 750 official complaints about prison administrators molesting or raping underaged inmates in all 13 juvenile facilities had been officially logged between 2000 and 2007.
• 
  
• The list goes on and on. Hell, even our literature was corrupted with fraud: James Frey’s addiction “memoir” A Million Little Pieces turned out to be A Million Pieces of Bullshit, the biggest literary fraud of our time. Fooled readers sued, Oprah chewed him out and Frey is now a bestelling “fiction” author. Frey was just one literary con-artist among many, recounting fake tales of street prostitution, being raised by wolves, even fake Holocaust memoirs (read John Dolan’s article about literary frauds).

This is just scratching the surface, but you get the point. We’re way past the point of redemption. No wonder everyone’s dreaming of a violent apocalypse to wipe the slate clean, and take us away to another plane where everything would be better. Anything but this.

Mark Ames is the author of Going Postal: Rage, Murder and Rebellion from Reagan’s Workplaces to Clinton’s Columbine.

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