Time magazine’s Justin Fox left out an important lesson not learned from last year’s bankrupcy of Lehman Bros.

In his analysis “Three Lessons of the Lehman Brothers Collapse,” Fox managed to conclude that 1) the financial system is fragile, 2) government action is helpful, and 3) crisis limits democracy.

NEW YORK CITY, N.Y. — Time magazine’s Justin Fox left out an important lesson not learned from last year’s bankrupcy of Lehman Bros.

In his analysis “Three Lessons of the Lehman Brothers Collapse,” Fox managed to conclude that 1) the financial system is fragile, 2) government action is helpful, and 3) crisis limits democracy.

However sexy Fox’s “lessons” may appear, they really hide an ugly reality: powerful forces manage the financial system, the federal government, and the limits of democracy.

And it’s all managed by stupid people. Really stupid people. The difference between these stupid managers and stupid criminals “as seen on teevee” is purely artificial.

Truth be told, the real lesson lost in the Wall Street meltdown of 2007 is that having money does not equal having brains; it equals sustaining stupid, ancient systems.

Had America learned this lesson, for example, with the sports card and comic book busts of the 1980s and 1990s, never would have happened the Asian financial crisis in 1997, the dot.com bubble in 2000, or the implosion of the Enron Corporation in 2001.

Reporters Bethany McLean and Peter Elkind can attest to the Texas energy giant’s demise; they wrote the best-selling book on it that became the 2005 documentary film, Enron: The Smartest Guys in the Room.
McLean and Elkind’s title is, of course, tongue-in-cheek; the company’s top executives were anything but rocket scientists.

To be fair, Douglas Rushkoff, the author of Life, Inc.: How the World Became A Corporation and How To Take It Back, would rather paint Enron and Lehman’s handlers less the court jesters and more the video game players.

“The marketplace in which most commerce takes place today is not a pre-existing condition of the universe. It’s not nature. It’s a game, with very particular rules, set in motion by real people with real purposes,” Rushkoff wrote in his “Economics is Not a Science” essay on Edge.org.

But, who are these stupid people that invented the operating system on which our high-tech global economic platform runs?

“13th-century monarchs,” Rushkoff explained.

And these guys knew nothing of natural science when they lived; they just assumed power for themselves, and how could they not when the religious institutions of their day just so happened to brand scientists as blaspemers and heretics?

Right, Galileo?

By Rushkoff’s logic, Wall Street’s trillion-dollar bailout following Lehman’s collapse last September played out just like another play in the monarchist’s old playbook.

In fact, the man who allowed Lehman to fall — President George W. Bush — even admitted the play’s existance last December: “I’ve abandoned free-market principles to save the free-market system.”

Remember: Bush isn’t the sharpest knife in the drawer either. But neither is his Democratic opponent, Sen. John Kerry. Both were C students at Yale. Bush, however, had a higher four-year average (one-point) than the loser in the 2004 presidential election.

Interestingly enough, with $167 million under his belt, Sen. Kerry is still the wealthiest member of Congress, though his wealth is down 28 percent since Roll Call’s last annual examination. Also, if you take into account his wife’s $1 billion net worth from her ketchup fortune, Kerry’s wealth is probably greater.
In other words, don’t cry for the Kerry household.

Actually, if you read Time’s Fox right, there’s no need to cry over any spilled wealth now.

“But while there are surely lots of potholes and wrong turns ahead, there’s ample evidence that the economy — both in the U.S. and worldwide — is in the early stages of a rebound,” he wrote. “And we have decisions made by government officials to thank for that.”

What evidence? What officials?

Since Fox failed to mention one of either, take the word of Joseph Stiglitz, the former chief economist at the World Bank, University Professor at Columbia University, and 2001 Nobel Laureate in Economics.
Bear in mind that Stiglitz destroyed Fox’s hollow claims.

“We’re going into an extended period of weak economy, of economic malaise. The U.S. will grow but not enough to offset the increase in the population,” Stiglitz told The Telegraph/UK last week. “If workers do not have income, it’s very hard to see how the U.S. will generate the demand that the world economy needs.”

Fox oddly agreed with Stiglitz on the point that is also the title of Stiglitz’s op-ed piece reflecting on the lessons of Lehman’s fall, “For All Obama’s Talk of Overhaul, the U.S. Has Failed to Wind in Wall Street.”
Fox said that President Barack Obama’s proposed financial reforms are “not so much” in the vein of President Franklin D. Roosevelt’s “New Deal” during the Great Depression.

Stiglitz went deeper, noting that “gambling, trading, and speculation” will continue in the market without justification, check, or balance as American taxpayers underwrite the whims of these financial institutions.
Stiglitz also called Lehman’s demise a demonstration in “incompetence” and suggested that the powers-that-be at the Federal Reserve (Ben Bernanke) and the Treasury Department (Henry Paulson) should have been better prepared in handling the situation, considering the rising signs of the “financial bubble.”

“Lehman Brothers was a symptom of a dysfunctional financial system and regulatory failure. It should have taught us that preventing problems is easier, and certainly less costly, than dealing with them when they become virtually intractable,” he wrote.

However, after reading Rushkoff’s essay, one might call Stiglitz naive for thinking that the whiz-kids on Wall Street ever really thought they had taken any risks with other people’s money at all and therefore needed protection from themselves.

“If science can take on God, it should not fear the market. Both are, after all, creations of man,” noted Rushkoff.

In response to Rushkoff’s analysis of the economics trade, scientific historian George Dyson, replied:
“How to best transcend the current economic mess? Put Jeff Bezos, Pierre Omidyar, Elon Musk, Tim O’Reilly, Larry Page, Sergey Brin, Nathan Myhrvold, and Danny Hillis in a room somewhere and don’t let them out until they have framed a new, massively-distributed financial system, founded on sound, open, peer-to-peer principles, from the start. And don’t call it a bank. Launch a new financial medium that is as open, scale-free, universally accessible, self-improving, and non-proprietary as the Internet, and leave the 13th century behind.”

The Obama administration announced its willingness to extend three provisions of the Patriot Act that the Justice Department says it doesn’t really use.

WASHINGTON, D.C. — The Obama administration announced its willingness to extend three provisions of the Patriot Act that the Justice Department says it doesn’t really use.

The provisions include access to business records, monitoring of “lone wolf terrorists,” and running roving wiretaps.

The Justice Department has said that the business records provision has been used 220 times in three years; the lone wolf provision has never been used; and the roving wiretaps provision on average of 22 times a year.
But the Obama administration said that it may use these provisions sometime in the future when there is a need, though supports adding more privacy protections.

Civil rights groups say that these laws enacted after the attacks of Sept. 11, 2001, give the federal government the right to invade citizens’ private records and telecommunications conversations.

President Barack Obama campaigned as a presidential candidate on reviewing, not striking down, the Patriot Act once in office.

According to the American Civil Liberties Union, Obama’s stance is better than the previous president’s, but could hopefully advocate more safeguards to international communications, protests, and religious assemblies.

The Department of Homeland Security is one step closer to having a building all its own.

WASHINGTON, D.C. — The Department of Homeland Security is one step closer to having a building all its own.

The ground breaking for the $3.4 billion, 176-acre complex happened earlier this month.

It’s the biggest federal building project in the D.C. area in the 70 years since the Pentagon.

Currently, 15,000 federal employees are split among 35 offices in the area.

The ground breaking event held historical significance because it occured on Sept. 11, eight years after the attacks on the Pentagon and the World Trade Center towers.

The complex itself will be located in a long-unused corner of Washington, D.C.

Food and Drug Administration has approved the new H1N1 flu vaccine.

WASHINGTON, D.C. — Food and Drug Administration has approved the new H1N1 flu vaccine.

The new vaccine is to be distributed this October, according to Health and Human Services Secretary Kathleen Sebelius.

Limited supplies of the vaccine will arrive specifically on Oct. 15, Sebelius told Congress last week.

“We will have enough vaccine available for everyone” eventually, Sebelius said.

However, Sebelius added that if citizens don’t want it, they don’t have to get the vaccine.

The adervtising boycott of a controversial right-wing media personality seems to be working, according to the boycott’s organizers.

OAKLAND, Calif. — The adervtising boycott of a controversial right-wing media personality seems to be working, according to the boycott’s organizers.

“Fox News Channel has consistently claimed they haven’t lost revenue as advertisers abandon Glenn Beck, but the numbers prove otherwise,” said James Rucker, Executive Director of ColorOfChange.org.

Using industry data, Rucker’s group estimated that half of Beck’s advertising revenue has disappeared since the boycott started a month ago.

That figure comes out to a loss of  $568,000 out of $1,060,000 as 62 national advertisers have dropped their support of Beck’s program.

The boycott started last month when Beck said that President Barack Obama was a “racist” who “has a deep-seated hatred for white people.”

ColorOfChange.org said that to date,  over 180,000 people have signed its boycott petition.

“It’s clear that we are making an impact at Fox News Channel – data that we have for last week shows that Beck’s top three advertisers were Beachbody (creator of P90X Exercise Equipment), Egg Genie and Telebrands (creator of Jupiter Jack),” said Rucker.

ColorOfChange.org bills itself as the largest African-American online political organization in the country with over 600,000 members.

ABC News reported that the lead organizer of a march on the U.S. Capitol last week had falsely attibuted the size of its crowd to the national news service.

WASHINGTON, D.C. — ABC News reported that the lead organizer of a march on the U.S. Capitol last week had falsely attibuted the size of its crowd to the national news service.

Matt Kibbe, president of FreedomWorks, said at the rally that ABC News reported that one million to 1.5 million people were there.

However, ABCNews.com actually reported that the crowd was up to 70,000 strong, according to the local fire department.

ABC News Radio reported the crowd as “tens of thousands.”

When asked why Kibbe citied ABC News, Brendan Steinhauser, spokesman for FreedomWorks, said he didn’t know.

Kibbe apologized for spreading the false attibution the day after the protest on his blog.

“[ABC] didn’t say it. I regret misrepresenting the network, as their coverage that day was fair and honest,”  Kibbe wrote.

A majority of physicians in the United States back the “public option” to healthcare finance reform.

BOSTON, Mass. — A majority of physicians in the United States back the “public option” to healthcare finance reform.

Sixty-three percent of physicians back a proposal that includes both non-profit government finance option and for-profit private health insuance, according to a new study.

That means that 75 percent of physicians support the public option, if the doctors who support a single-payer health finance system are also included.

This finding came ina Robert Wood Johnson Foundation (RWJF) study published in Monday’s New England Journal of Medicine.

The national poll included 2,130 physicians across America, as well as self-identified members of the American Medical Association.

“Policy makers should listen to their doctors,” said Risa Lavizzo-Mourey, president and CEO of the Robert Wood Johnson Foundation.

The research was performed by Salomeh Keyhani, M.D., M.P.H., and Alex Federman, M.D., M.P.H., from Mount Sinai School of Medicine in New York City.