We are on the verge of finding out that one of the greatest and most disgusting coverups of all time was committed in State College, PA by none other than Joe Paterno and his minions and it will extend vertically and horizontally across the state. This is the case of a college football program ripping a page out of the playbook of The Vatican and they will come up similarly soiled. I strongly recommend everyone reading this read the Grand Jury account to see the extent of former Paterno assistant coach Jerry Sandusky’s predation. Please consider reading the account of Sandusky-Grand-Jury-Presentment and then ask yourself if – and I stress if – this was relayed to Paterno then he needs to leave his position and Penn State has so much explaining to do that it should have started decades ago. I don’t usually find myself attracted to these kinds of stories but this one speaks to the loss of innocence, sports corruption, and administrative capture in supposedly above-reproach academic institutions. There is even the possibility that a murder or permanent relocation of Centre County, PA District Attorney was linked to his failure to prosecute Mr. Sandusky at a time that no doubt would have prevent some of Sandusky’s most horrific abuses of power.

This is  sad story because you have a man in Joe Paterno that presumably for many many years lived an exemplary life only to be swallowed up by the temptations of absolute power and the image he had commendably created. He had a predator in his midst that he felt should simply be relieved of his keys and access to the locker rooms. This is vintage Catholic Church stuff but in this case you have a legacy that will be remembered for facilitating countless acts of sexual molestation by Mr. Sandusky. I found the Grand Jury PDF extremely hard to read but more importantly found myself amazed that apparently Mr. Paterno read the same thing….AND DID NOTHING!

Mr. Paterno is probably the most important man in the history of the state of Pennsylvania and that is not an overstatement. He represented the right way to comport yourself as a coach and member of the community. Was it all a lie? Probably not but at the very least Mr. Paterno’s errors of omission proved equally perilous relative to Mr. Sandusky’s errors of commission. Penn State Athletic Director Tim Curley and vice president for business and finance Gary Schultz are being charged with perjure for their failure to report what they were told by a graduate assistant coach to the appropriate authorities. Immediately upon silencing himself the aforementioned GA was promoted again and again and again. I wonder why? Looks like a duck, walks like a duck…

Sadly Penn State students continue to chant “We Want Joe” and “Joe Pa-Ter-No” in support of their beloved coach. That is fine but I hope they understand this is not a game and very serious allegations are currently being investigated with the potential to render their support of Joe Pa looking childish at best and completely insensitive to the condition of the victims at worst. I would suggest they focus on their classes and hope that all of these horrible allegations are a bad dream. Innocent until proven guilty but the trend line is heading in the wrong direction.

1. $560.1 million – this represents the total handouts to Solyndra, with $535 from the Department of Energy and a $25.1 million tax break from the state of California…0.015% of Obama’s 2011 Federal Budget.

2. $700 billion – this represents the Bush-Paulson carried out and Obama-Geithner stewarded Troubled Asset Relief Program…18.97% of Obama’s 2011 Federal Budget

3. $1 trillion – unilaterally issued Federal Reserve program called the Term Asset-Backed Securities Loan Facility (TALF) designed to infuse money into the pockets of already under water consumers with the aim of goosing consumption…27.00% of Obama’s 2011 Federal Budget

4. $144billion to $323 billion – the first number represents what the disastrous F35 was supposed to cost and the second what it will cost when it is completed…8.75% of Obam’s 2011 Federal Budget

5. $22 billion 30 people – the cost in dollars and deaths of the V-22 (aka Osprey) one of the Pentagon  and the Military Industrial Complex’s favorite cash cows along with the aforementioned F35. As NPR’s Graham Smith reported:

“In a nutshell, the story of the Osprey is it cost more in time, money and lives than anything else the Marine Corps ever bought”

Three major accidents gave the Osprey its bad reputation and earned it the nickname “The Widowmaker.”

The worst, in Arizona in 2000, killed 19 Marines.”

SO when considering who to pick on and who to hold accountable by any means necessary it is important to acknowledge that the folks at Solyndra are deserving of the criticism they are receiving for extorting money from the federal government, but it is way more important to address the Big Fish as it were feeding at the tit of the Pentagon. I can’t defend Solyndra’s actions but I hope that this brief post put them in perspective relative to a far more important and costly addiction to tools of war and the propping up of Wall Street. The Occupy Wall Street movement has brought attention to the crimes of Wall & Broad. An even greater level of extortion has been occurring in the parallel and opaque universe that revolves around the Pentagon.

At least Solyndra was an attempt to wean us off our addiction to hydrocarbons, while the Pentagon could be excused for being under the impression that it’s charter is solely to perpetuate and lubricate that addiction.

According to the FDIC you Mr. Big Banker (i.e., 109 banks with more than $10 billion in assets) have no qualms with giving depositors a measly 0.8% annually, while the country’s 7,651 local/smaller banks paid 1.29% vs. values of 0.49% and 0.69% in 2009 [275], respectively, even though it was you not them that we the taxpayer bailed out and we Generation X will continue to feel the austerity backlash of for years to come. It doesn’t take a rocket scientist or a fifth-grader for that matter much in the way of mental exertion to understand how easy it is to mint huge profits when you borrow money from The Fed or investors for the aforementioned paltry rates and lend it to private citizens or the Tim Geithner led Treasury at 3-4%, however, in doing so you Mr. Banker are failing to do what you most likely state in your charters “furnishing money to firms and funding capital investments.” [276] We need our banks to act as utilities not casinos. Banks must stop making in the words of the Bank of England’s Andrew Haldane mirages look like miracles and just do your boring but admittedly useful service to society absent extraordinarily leverage and quarterly bonuses. If they refuse Generation X must by any means necessary make them stop because their reckless gallivanting is only hurting the long-term viability of this country and in a more circuitous way this planet and possibly even the true principles of democracy. This will involve Generation X when we get the reins of power putting serious constraints on capitalism and more specifically the financial sector including the ten steps listed below:

1) always and everywhere demand that Wall Street mark all their assets and liabilities to market.

2) decreasing leverage ratios to less than 10:1 (See LTCM),

3) increasing counter-cyclical capital requirements to ≥19% or even 40-50% of risk-adjusted assets (See Eugene Fama[1], Switzerland[2], and the People’s Bank of China[3]) effectively reinstating a crucial provision of the Depression-era and highly effective Glass-Steagall Act of 1933 [277, 278]. Increasing capital requirements is imperative from a structural perspective regardless of the country or generation in question because as Simon Johnson former IMF chief economist put it “equity capital is…“loss-absorbing,” meaning that only after losses wipe out all of the equity do they need to be apportioned between creditors. Banks’ capital, therefore, is what stands between bad loans and insolvency.” [279] However, the pushback from banks against such a TBTF firewall lies in their being a slave to returns on equity that are not adjusted for risk, which means that the socialized risk and the privatized profit are immense at the peaks and the troughs alike. Banks across the world including liberal bastions like Sweden – where capital requirements at its Big Four average 12.55% well above US institutions [280] – will forever resist this idea as “a bit strange” or “not realistic” because it prevents them from levering the farm and projected fictitiously robust quarterly earnings. To this hyperbolic phraseology former Chilean Minister of Finance Andres Velasco suggests all non-bankers “would be well advised to ask for another drink.” [281]Capital resisters have friends in high places included The Big Banks eternally unquestioning servant the New York Fed, actually would decrease capital requirements an amazing and pompous proclamation when you consider how this bank’s former boss Tim Geithner, current boss and former Goldman Sachs executive Bill Dudley, and its entire board of directors are essentially cherry picked by the banks it is charged with overseeing and hopefully scolding in bad times (Note: And the banks wonder why Main Street is skeptical of the phrase “self-regulation”.) [282]. However, even the editorial page of The Wall Street Journal far from a liberal or socialist enclave ardently backed a 14% capital floor across all implicit and explicitly TBTF firms. Unfortunately the Basel III committee that conjures up capital requirement policy on a global scale sided with the MegaBanks in requiring no more than 10% and as little as 7% for the 30 largest TBTF instutions globally, but the rub is that these requirements would not be instituted until 2019. As Jamie Dimon told his daughter when she asked him to define ‘financial crisis’ “’it’s the type of thing that happens every five, ten, seven, years.’ And she said: ‘why is everybody so surprised?’ So we shouldn’t be surprised…” So that means that if The Great Recession officially ended  in 2009 we could potentially incur 2-3 crises before the Basel consortia get their head out of their ass and take offensive rather than defensive and asymmetrically feeble measures to insure that when banks fail only the shareholders and employees pay the toll. Instead Basel has permitted another wider and deeper case of socialized risk and privatized profits for the next decade at the very least.

4) limiting loan-deposit spreads to ≤4.5-5%, marking everything to market all the time no exceptions,

5) graduated bank taxes based on the percentage of funding that is short-term/”hot”[4],

6) putting a 2% ceiling on the percentage of US deposits individual banks can have at any one time,

7) pushing the murky world of derivatives trading onto Over-The-Counter (OTC) exchanges and eliminating non-agriculture (i.e., necessity vs. portfolio allocation decisions) and certain energy sector participants entirely (i.e., those overweight on derivatives due to unsafe capital cushions), what Michael Masters of Masters Capital Management, LLC respectively called “Bona Fide” Physical Hedgers and Wall Street bank controlled. Translation: leave the agricultural hedging to farmers not Gordon Gecko-types whose flippant money misallocation has a disproportionate effect on global food prices given that equity markets are 240 times larger than commodity futures contracts *$44 trillion vs. $180 billion in 2004). This radical notion was supported in January 2009 by of all people Abdalla el-Badri OPEC’s secretary-general in the aftermath of his group’s most volatile peak-to-trough ever, although what we are talking about here is across the board derivatives in the commodity arena, because while oil powers machines food powers and sustains people [283].

- Worse still speculation demand is exponentially and positively correlated with commodity/food price increases creating a nasty and pro-cyclical Positive Feedback Loop of Mass Destruction (PFLMD).

- The Traditional Speculators “provide liquidity by both buying and selling futures”, while the nascent Index Speculator Mafia “buy futures and then roll their positions by buying calendar spreads. They never sell. Therefore, they consume liquidity and provide zero benefit to the futures markets.” (i.e., Zero Social Benefit!)

- Speculative commodity-linked Exchange Traded Funds (ETFs) had $277 in investments at the end of 2009, which was 50 times the $5.5 billion at the turn of the 21^st century.

- Mega lobbying shops like the Chamber of Commerce and Business Roundtable are going to have to do better than the pseudo-research they released via their intellectual servants at Keybridge Research that spoke to derivatives regulation as a 160,000 job and $6.7 billion corporate spending destroyer. As even Keybridge’s president – and former Clinton National Economic Council member – Robert Wescott said when confronted by The Times Andrew Ross Sorkin “the client had asked us” to put the report together. “It was a hypothetical study.” [284] Well that is a fine how do you do in the direction of sound and empirically derived scientific research. Just do what “the client” asks and the scientific method be damned! And economist wonder why their credibility is waning with every passing day and documentary (See “Inside Job”. No really see it you’ll be blown away by the lack of academic integrity and transparency in the likes of Columbia’s Glenn Hubbard and Frederic Mishkin or Harvard’s Martin Feldstein).

establishing a predatory lender watch list and agency,

9) reengineering bonus payouts in a manner similar to what is commonly called “contingent core Tier-1 capital” or “CoCo” whereby deferred, say 10-years, payments convert to bonds in the long-term if bank’s Tier-1 capital falls below some predefined safety cutoff (See 2 above) preventing the intoxication brought on by short-term profitable but highly levered ventures [285, 286]. This would better synchronize managers’ schemes with those of shareholders and prevent needless large scale bailouts based on “size, interconnectedness, lack of substitutability, global (cross-jurisdictional) activity and complexity”, which a report by Reuters implicates 30 of the planet’s largest commercial banks including HSBC, Deutsche Bank, and JP Morgan Chase [287],

9) eliminating the influence and conflicts of interest associated with the Big Three rating (i.e., Moody’s Corp, Fitch Rating[5]), Standard and Poor’s) and accounting (i.e., Deloitte Touche Tohmatsu, Prcewaterhouse Coopers, Ernst & Young, and KPMG[6]) firms as both trios are corrupt and painfully lagging indicators of reality OR explicitly writing into law that the rating firms must be paid at all times by purchasers rather than issuers, and

10) a federal version of New York’s 1921 Martin Act which is currently being used to investigate Goldman “Vampire Squid” Sachs and broadly speaking gives attorney generals “broad powers to pursue financial corruption and a wide berth to conduct civil or criminal investigations by issuing subpoenas, taking depositions and compelling document production.” [288] The Act was employed with a high degree of efficacy and bite by New York’s recent AGs turned Governor Andrew Cuomo and Eliot Spitzer.

11) demanding that all bonuses for all employees be directly coupled to a given bank’s most risky ventures in the form of restricted stocks that can’t be sold an earlier than 5-10 years from the day they are issued, and require that at least eighty cents of every dollar in revenues comes from raising capital for companies and advising small businesses on how to grow and increase employment in this country not somewhere else. As it stands only fourteen cents in every dollar goes towards the latter, while the eight cents mentioned is derived from buying and selling of securities according to John Cassidy [289].

[A] The father of the “Efficient Market Hypothesis” told CNBC’s “Squawk Box” host Joe Kernen on Friday May 28^th, 2010 that elevated capital requirements needed to be discussed as a pushback mechanism against TBTF and TBTS banks.

[B] As was noted earlier Switzerland’s Big Two Credit Suisse and UBS have combined assets in excess of 6.5×GDP, which means if they can impose these types of restrictions we can most assuredly to the same or stronger here in The States where the same figure for our 8,430 FDIC-insured banks is 70% of GDP.

[C] In the immediate aftermath of The Fed’s QE2 bombshell the People’s Bank of China announced its equivalent of an increase in capital although they call it the Required Reserve Ratio (RRR) to 18.5%. The PBC wanted to “sterilize over-liquidity and get the money supply under control in order to prevent inflation or over-heating” in the event that “hot” capital began to flow en masse into China as it was only 1997 that their Asian Tiger neighbors failed to do so and were scorched once by speculative yield hogs and secondly by the IMF and World Bank’s lending based on vertical and lateral imposition of austerity.

[D] Short-term/”hot” makes banks great and small more susceptible to liquidity crises and likely to require substantial bailouts.

[E] The rating agency’s good seal of approval was instrumental if not required to create the $3.2 trillion of subprime mortgages that exploded before our eyes in 2007-2008.

[F] This was once the Big Five until a little firm called Enron and its accountant Arthur Andersen blew up in 2002. In March of 2010 we saw a redux of the disastrous consequences of the intimate accountant-banker relationship with the Repo 105 scandal that embroiled Ernst & Young’s tacit approval of Lehman Brothers construction of such transactions. Repo 105 quite simply is an accounting trick whereby a firm in this case Lehman Brothers sells some of its assets in the short-term (i.e., days or weeks) to another party and books the transaction as a sale even though the cash it receives to delever is used – following a public audit of its balance sheet – to repurchase or Repo those dodgy assets with interest. Lehman performed this kind of dodgy accounting with the assistance of Ernst & Young just before the end of financial quarters in order to facilitate its balance sheets mustard test. This was a practice that was implicitly approved of throughout Wall Street and by the SEC but one that former NY Attorney General and current Governor Andrew Cuomo didn’t take kindly to bringing charges – that were later dropped in the summer of 2011 – against Lehman’s accountant in December of 2010. Merry Christmas Ernst & Young! This Repo market boomed just prior to The Great Recession to $12 trillion according to Yale economist Gary Gorton. In normal times these transaction don’t remove the highly levered assets from the bank’s balance sheet but low and behold Ernst & Young broke out the whiteout for their friends over at Lehman, with the “105” coming from the fact that the bonds Lehman was selling were worth 105% of what they were being sold for allowing the buyer to make a healthy profit upon repurchase days later. According to the Chapter 11 Proceedings Report filed by the law firm Jenner & Block “Lehman did not disclose its use…of Repo 105 to the Government, to the rating agencies, to its investors, or to its own Board.” Notice the report said nothing about Lehman’s accountant Ernst & Young. This Repo 105 technique was a nontrivial component of Lehman’s efforts to stay afloat as it was used to push $50 billion off of its ledger in Q2 of 2008.

http://vimeo.com/27757870

I hear you on taxes. In Paul’s nirvana- roads, infrastructure, and the “instruments of interstate commerce” that do fall within Congress’s Constitutional purview would be paid with user fees, tolls and perhaps some targeted VAT’s (though admittedly he’s far less enthusiastic about that). He does not believe in the Department of Education and would like to see it de-funded. Poor results, a massive Congressional boondongle and virtually zero Constitutional support for its existence in his mind.

At any rate, what I will say for RP is that these are sincerely-held philosophical POV’s as opposed to actual policy initiatives. As a Constitutionalist- a “President” Paul would never attempt to use the Executive Office to directly repeal the 16th Amendment (Federal Income Tax) or think he had the power to interfere/obstruct Congress’s spending authority. He would undoubtedly submit budget proposals envisioning a dramitically smaller government and drastically reduced tax rates (across the board). That is certainly the “Buyer Beware” element of RP that any independent or liberal needs to take into account when considering a vote for him. On the bright side- the wars and torture would end and the Fed may finally get audited. Also, domestically you would know exactly where he stood- and there would likely be more than enough Democratic/Liberal and Non-Libertarian/non-Tea Party Republican Congressmen to check any “super extreme” initiatives/proposals coming from the White House.

I have pasted my response to the show below because while it deserves the attention it gets PTSD has a new cousin in The Great Recession Fallout which I simply describe as Post-Unemployment Stress Disorder. I should know I have it and have it bad on some days better on others………..even though I now have a job!

It was also nice to hear Karzai call it how it is with respect to our motives in Afghanistan and for that matter Iraq. However, he has zero credibility at this point given his willingness to take from his Sugar Daddy with one hand and launch invective infused fireballs with the other. The same goes for our hectoring of Mexico and infusion of US made weaponry and technology to stop the flow of drugs northward without looking within at our structural issues related to drug addiction and the outlawing of benign drugs like marijuana and hallucinogenics. Our prisons are chalk full of petty criminals as even our right-wing dominated Supreme Court recently acknowledged albeit along partisan lines.

Karzai is not worth fighting for, dying for, or defending within the confines of the UN. He is to too greedy and hypocritical to prop up. He reminds me of that kid in high school or grade school that had a mental stranglehold on the strongest but dumbest kid in class and used to pillory the behemoth when he wasn’t around only to ascribe his words to his arch enemies when the unsuspecting “heavy” returned. Karzai will tell Obama and Bush before him anything to keep the likes of Blackwater and our military at his beck and call as he networks and profiteers, while simultaneously telling any Afghani that still listens to him how he is doing all he can to lift the yoke of oppression. He is doing nothing of the sort and in the meantime we are being played in the name of heroine and the consolidation of tribal power. Wait that sounds an awful lot like the post-Lehman bailout designed by MegaBank insider Hank Paulson! Hellow NEWMAN!!!!

Ms. Schlaes
With all due respect your NLRB canard is beyond fiction. Haven’t we done enough to emasculate unions in this country all ready? Don’t MegaBanks and the biggest of the big multinationals already have politicians in their pocket? Doesn’t Scott Talbott’s consistent presence in DC on behalf of the Financial Services Roundtable mean there needs to be a yang to the lobbying yang of the aforementioned along with chronic lobbying criminals like the Koch Brothers? Would you be more content if to paraphrase Grover Nordquist we reduced the size of unions where we could drag them into a bathroom and drown them in the bathtub? It is true that the Big 3 automakers unions got drunk with power as do factions of the teacher’s unions but you are implying their elimination or castration are you not? All parties need to share in the austerity and haircuts but at this point it is only the “have very littles and “have nots” with the “haves” making out like the plutocracy that they strive to be and are at the present time. Please consider an empirical look at who is to blame besides Fannie/Freddie and the Unions because a crisis like that that has occurred most recently surely is not the fault of these two alone?
See graph below

Governor Brewer and her henchman Mr. Pierce had the right idea with respect to “illegal invasion” and the fact that “it can’t be tolerated”, however, their scopes were aimed at the wrong target. As I noted before Latin-American migration to Arizona was, is, and never will be the problem for two very important reasons: 1) Arizona is the native land of many of the people being pushed out a/o excluded and 2) the export of jobs from the state not the import of people is Arizona’s problem. Job creation not Scarlet Letter divisiveness and profiling is the only way out of this quagmire for Arizona.

It is true that “illegal invasion” is a serious problem in the southwest and for that matter the entirety of North America, but it is not of the human variety and it will not be combated with hollow proclamations or misguided marginalization of neighbors. Rather the “illegal invasion” I speak of is not as of yet even illegal, but it should not in the words of Mr. Pierce be tolerated, because while it might not affect the sovereignty of Arizona ipso facto it will affect natural resource availability and quality, wild-fire frequency, intensity, and breadth, agriculture, and the state’s $6.9 billion a year tourism industry. This equates to 3-5%[1] of GDP (~$6.9 billion per annum) and according to Arizona’s Office of Tourism this industry generates 173,000 jobs and is tops among the state’s four other major export industries (i.e., aerospace, microelectronics, agriculture and food producing, and mining? And from the You Can’t Make This Stuff Up Department the posting [535] from which I extracted this data states quite emphatically “…that the travel industry has a stabilizing and diversifying effect on Arizona’s economy, posting consistent growth year after year. On the flip side, other export industries such as microelectronics are much more volatile and factors such as emerging technologies can have a significant impact on the GDP each year…travel spending and earnings are up…over the last nine years, showing a trend of growth and vitality throughout the entire state.” And to additional weight to the dependence of Arizona on tourism, which relies heavily on recreational activities, which in turn rely heavily on the outdoors the states own figures estimate that they pull in $960 million in travel-related construction resulting in 13,400 jobs and $660 million in additional earnings. So the question now is clearly one of ecological economics. How much is Arizona willing to pay to maintain its ecosystems in the face of increasing pressure from invasive species? It is not as if the state is completely blind to the paradox of being strong on immigration while weak on invasive species, which it could be argued will have a greater influence on the state’s long-term tourist destination viability. In its most recent report the states Invasive Species Advisory Council identified thirty-nine invasive species and their present status [536]. Of these Public Enemy # 1 is saltcedar (Tamarix spp.) a species of woody shrub that invades altered drainage basins forming dense stands that eventually outcompete native riparian species such as willow (Salix spp.) and cottonwood (Populus deltoides) altering the hydrology and salinity of these ecosystems to a point that shy of extensive and intensive intervention the aforementioned species and accompanying fauna.

With respect to wild-fire intensity and frequency southern Arizona is ground zero for another aggressive and heretofore unstoppable invasive – surely in need of some good ol’ fashion Brewer-Pierce legislation – species called Buffelgrass (Pennisetum ciliare) a deep rooted (6-10 feet), readily dispersed via seed (e.g., wind, water, animal fur, and clothing/footwear), cosmopolitan grass that has transformed the state’s fire-resistant deserts to highly flammable and equally unpredictable grasslands. Witness the two May/June 2011 wildfires 150 miles northeast of Phoenix and in the Buffelgrass hotspots southeast of Tucson which ranked as the third- and fifth-largest in the state’s recorded history, respetively. Buffelgrass is also an invasive of ill-repute that out competes native vegetation and adversely effects native fauna abundance and fitness by reducing forage and mating success. To make things worse and hopefully raise the eyebrows of those in Arizona so consumed with immigration reform that they can’t think of anything else I ask you what is the one thing you think with respect to Arizona’s great outdoors? Well if you answered cactus I have news for you! By most empirical accounts Buffelgrass’ greatest impact has been and will continue to be on the southwest’s saguaro cactus “…the iconic plant of the Sonoran Desert Ecoregion…”, along with desert tortoise and mule deer according to the Southern Arizona Buffelgrass Coordination Center in Tucson. The case of Buffelgrass is what economists might call procyclical [537, 538] and what we in the biological sciences call a positive feedback loop [539]. The former is described as any aspect of policy that magnifies economic or financial volatility, whether positive or negative, while the latter simply refers to any biogeochemical process that facilitates secondary, tertiary, or quaternary processes that in turn allow the primary process of interest to continue at its current pace or even speed up. But in order to assure that I convey the sense of the problem Arizona and the entire U.S. of A. faces as it pertains to invasive species NOT invasive humans I will take a dramatic detour relying on the procyclical definition outlined by the good people at The Economist on September 18^th of 2008 [540]. Recall that it was this very two week period that saw the collapse of Lehman Brothers with Wall Street types immediately turning their predatory gaze towards the giant insurer AIG as well as The Thundering Herd of Merrill Lynch [541, 542]. There could not have been a more stressful, scary, and uncertain time for the financial services industry in the US let alone the world. This is the type of scenario we are creating with the avoidance of our role in spread of and duty to stop the flow of invasive species onto this continent. Procyclicality and by association positive feedback loops in ecosystems like the ones created by Buffelgrass and Saltcedar in Arizona force systems to recognize losses and succumb to external forces all at once, impairing their buffer-capacity and triggering the binary extirpation (i.e., there one day gone the next!) of species/firesale of assets, which in turn drives the prospects of native reestablishment and future diversity down even more. Under more “normal” conditions such price and valuation declines or in the case of ecosystems buffer capacity and reestablishment decline at the hands of procyclical shocks or positive feedbacks resulting from species introduction, respectively, “…hit the books far more slowly,” allowing for equilibration and integration of the shock or introduced species in a manner that allows the system to continue its daily function. As I have described this is not what happens when invasive species are carelessly introduced and aggressively spread across unsuspecting and ill-equipped ecosystems.

There are moments when you realize that for the most part we get what we pay for with respect to politics, fiscal/monetary policy, energy, agriculture, etc.

President Obama actually having to acknowledge the birthers and the silly nature of our obsession over the marriage of two excessively privileged and subsidized young people is one of those moments.

It is true that we need comedic distractions from all the bad news and for that I thank the Republicans for their many comical presidential candidates. But this short-term obsession with the unimportant is preventing us from debating and solving the long-term structural issues that will face our kids and our kid’s kids.

The US Fed’s chairman Ben Bernanke presided over the first press conference in Fed history answering some very probative questions. These are the types of questions our politicians should be asking of Dr. Bernanke. But they don’t because they know we are consumed with birth certificates and celebrity weddings.

As I noted in a post on The Times website:

“When the most “left” of senators Bernie Sanders and “right” of congressmen agree you know the only solution is to “End The Fed”. It is an opaque cabal that will not receive more sunlight by simply holding regular press conferences. Politicians do the same all the time and they are as crooked as the day is long. These 2 men are the most honest members of congress and take as little money as is possible from Wall Street and this country’s socially irresponsible corporations. They don’t trust The Fed and with men like Alan Greenspan running the show I don’t either. Ben Bernanke is a decent man and an extremely smart man but he took on the wrong job for such a man. End The Fed!”

Anyway that is to be expected but what isn’t being discussed is the growing volatility of global oil markets. I am going to go about explaining the decoupling of global and US oil prices using a couple of graphs as is my traditional angle of choice.

The first graph shows the relationship between the price of oil measured as Brent (Global indicator of choice) and West Texas Intermediate or WTI (What we like to focus on here in The States). This relationship has traditionally been quite tight deviating ever so slightly on a daily basis, HOWEVER, since 2001 the difference between the two (See Inset) has grown dramatically more frequent, intense, and ephemeral creating the types of volatility that only the most elite of commodity traders/shops can capitalize on leaving the rest of us to experience peak-to-trough spreads worthy of your favorite roller coaster. This is a problem because the glide path that would permit a more sustainable and cooperative transition to greater energy efficiency is not conducive to the profit margin of these folks.

Which brings me to the obvious resulting question: what is the true price of oil? Well lets use whats known as linear regression to get at the answer to this question. Using the plot below of average US price per gallon gasoline relative to the two big oil indicators we can derive equations that would allow us to estimate with a relatively robust degree of certainty what the “price at the pump” will be when places like Saudi Arabia run out of oil or petro-dictatorships like Libya are thrown into more turmoil than already present in the latter and most likely to spread to the former. Using this regression technique we get at $ per gallon estimates for 3 scenarios: Saudia Arabia went offline, the entirety of the Middle East went offline, or the world’s oil supply were taken offline (Unlikely now but inevitable given that we can’t create oil rather we only “discover” it!).

It turns out that if Saudi Arabia were out of play we could expect the “price at the pump” to inflate to $12.54 to $14.02.

If the Middle East were taken out of play for any number of reasons including the recent spate of revolutions or impending water shortages – just to name 2 very real long-term threats – we could expect $34.53 to nearly $39 per gallon.

And last but not least if all the oil in the world became depleted to the point of being nearly extinct………Well can you say $64.45 a gallon? I can and I would rather for the sake of humanity that we approach this number along a glide path rather than by way of an extremely violent and sure to be deadly conflagration. These are the types of data that politicians and the Media Industrial Complex need to be discussing on this anniversary of one of the most horrendous privatized environmental disasters in this nation’s history. Instead we hear from the likes of comedians like Bobby Jindal and Obama’s proclamations about “clean coal”. Spare us gentlemen!