Tag Archives: SEC

FTX and the Corruption of America

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By Charles Hugh Smith

Source: Of Two Minds

Thanks to the FTX swindle, we now know the cost of a get out of jail free card in America: $40 million, paid to political elites. It seems even get out of jail free cards have suffered from inflation.

With hefty “donations” (heh) to elites, all wrong-doing is swept under a very capacious carpet. Jeffrey Epstein sprinkled a few million on the elites of Harvard, and he was ushered into this elite circle as an intimate pal. The fact that he was a rapacious predator of children was of no concern. A few million showered on the right people and causes makes evil and criminality disappear.

If a financier looter showers $40 million on “the right people,” mouths the “correct” phrases and issues empty promises to give away his looted billions, he becomes an instant golden boy of the right elites who have the power to protect him from consequences.

This is how America works now: in-your-face corruption is not just accepted, it’s glorified. Let’s score America’s wealth and power elites, regardless of party or political persuasion:

Integrity: zero.

Austerity: zero.

Restraint: zero.

Humility: zero.

Responsibility: zero.

Accountability: zero.

Sacrifice for the common good: zero.

Thrift: zero.

A society whose elites are so self-serving, corrupt, unaccountable and devoid of any sense of good and evil is doomed. Consider the bleatings of America’s power elite on the FTX swindle. Let’s have congressional hearings on this remarkable “financial event” that caught everyone by surprise, etc.

Translation: let’s stage some political theater to cloak the fact that the looters are being protected from consequences. We all know what happens if you’re caught selling a nickel bag on the street: you get a tenner in a hellhole prison.

But if you bribed the right people, you can swindle billions of dollars and walk free as an insincerely apologetic victim of your own success. Golly gee, I don’t understand what happened to all that money, even though I’m not exactly shy about declaring my own genius.

For reasons lost on the rest of us, investigations by the Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ) always come up empty. Gee, the looting was complicated and we can’t figure out who might have broken the laws against fraud, collusion, embezzlement, malfeasance, etc., so we’re letting everyone off the hook.

Or some sleazy, unaccountable intelligence agency is referenced in whispers that the looters are “assets” and therefore untouchable. Where exactly is the rule of law in a society where bribes, political pressure and having knowledge of elites’ skeletons in the closet melt away accountability and consequences?

The rule of law in America is an illusion, a useful myth promoted by PR hacks to cover the tracks of their employers. Corporate wrong-doing–swindles, collusion, fraud, embezzlement, malfeasance–is off the charts, but nobody is responsible. The criminal corporations are duly fined, a tiny clawback of their looting that’s written off as a cost of doing business.

Consider this data base of 6,300 major corporate fines and settlements from the early 1990s to 2015 compiled by Jon Morse. Nobody paid any personal fines or served any prison time for any of these thousands of violations.

There are two systems of “justice” in America: one which grants elites freedom from consequences of their toxic criminality and another one for the rest of us that imprisons hundreds of thousands in the War on Drugs Gulag.

What all the entrenched insiders in America’s parasitic, predatory elites and institutions don’t dare admit is that to protect themselves from consequence, we’ve had to sacrifice everything else. Having stripped the nation of the essential foundation of a just, enduring social order–accountability, consequence, rule of law and a grasp of the difference between good and evil–there’s nothing left but sound and fury, as if they’re hoping the endless political circuses and trails of bread crumbs will forever distract us from their plunder and the injustices of the irredeemably corrupt America they’ve fashioned to protect their wealth and power.

To paraphrase Lao Tzu, if one insists on an extreme of corruption and injustice, that extreme will not dwell long.

The State is at War — with the Future

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By Thomas L. Knapp

Source: The Fifth Column

It’s turning into a long hot summer for the emerging global counter-economy.

In June and July, an international group of law enforcement agencies took down two of the largest “Dark Web” marketplaces, Hansa and Alphabay.

Then on July 25, the US Securities and Exchange Commission issued a weird, barely coherent, press release seemingly kinda sorta but not exactly declaring its own plenary authority over all things cryptocurrency.

On the heels of the SEC’s fit of apparent glossolalia, the US Department of Justice announced its indictment of cryptocurrency exchange BTC-e for “money laundering” even as one of the site’s admins, Alexander Vinnik, was arrested in Greece.

What we’re seeing is the latest bit of backlash from a political establishment scared witless by technologies which threaten to make it superfluous.

A friend of mine who writes under the pseudonym dL notes that “[t]he trajectory of technology follows a repeated path. When first introduced, it gives an asymmetric advantage to the individual. Over time, the state catches up and the asymmetric advantage shifts to the state.” Maybe he’s right. Maybe the political class will be able to nip a bright future in the bud and maintain its grip on power.

On the other hand, Victor Hugo seemed quite sure that “one withstands the invasion of armies; one does not withstand the invasion of ideas.”

We stand at the doorway of a future featuring money without borders, work and trade without permission. That future represents existential crisis for the political class: The end of the state as we know it. Absent the ability to tax and regulate its host, the parasite known as government starves and dies.

The situation is equally dire for the rest of us.

High-profile takedowns like the Silk Road, Alphabay, Hansa and BTC-e, large as they loom in the moment, are mere speed bumps. The road to the future remains open, and the only way to plausibly close that road off entirely is to essentially pull the plug on every technological development since the introduction of the personal computer. What would that look like? Think the Dark Ages, the Great Depression, and North Korea all rolled into one.

There’s no doubt that the American and global political classes are willing to go there. Any number of regimes have done so on a temporary and semi-effectual basis in times of unrest, and American politicians have seriously proposed ideas like an “Internet Kill Switch.” The excuse for such proposals is to protect us from terrorists and drug dealers, but make no mistake: Their real purpose is to protect our rulers  from us.

That’s what’s at stake, folks.  We can free ourselves or we can return to the caves. There is no third alternative.

 

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.