Saturday, February 11, 2012

Who Is Citizens United?

A Propaganda Primer, Updated
Propaganda is the bread and butter of covert action. - Gregory Treverton
When we see the term, “Citizens United” in the newspapers these days, it most often appears in quotation marks, referring to the January 2010 Supreme Court decision Citizens United v. Federal Election Commission.  That is the 5-4 decision that has opened the floodgates for money from all sorts of dubious sources to pour into the presidential campaign.  Who knows if that was their purpose when Citizens United brought suit in defense of their right to air a film critical of Hillary Clinton?  What I have found out about this organization, starting with my investigation into the death of Deputy White House Counsel Vincent W. Foster in 1993, is that a better name for it might be “Certain Citizens United for Ulterior Purposes.”  The article that follows, modified only slightly since I first posted it on my web site in April of 2000, explains why:
In North Korea, we are told, the only radios people are permitted to own can pick up only one station, and that station, of course, broadcasts only the government line. In the United States we have thousands of radio stations, television stations, newspapers, and magazines. But when it comes to really important matters, they, too, only report the government line. Think of what they have told us about the Kennedy and King assassinations, the Oklahoma City bombing, Pan Am 103, TWA 800, EgyptAir 990, the Waco massacre, the NAFTA, the GATT, the World Trade Organization, the death of Vincent Foster, and U.S. policy toward Iraq, Kosovo, or Palestine for starters. Whether one thinks of oneself as a conservative or a liberal and subscribes to the publications and listens to the opinion leaders appropriate to his political orientation, he will be hard-pressed to find even a single dissenting voice in any of the regular news organs on any of these important matters. Rather, what one will encounter is a chorus of name-calling for anyone with the audacity to question the official government line.
The big difference between North Korea and the United States, one is forced to conclude, is the degree of sophistication of the propaganda. In the United States the illusion of choice of information sources is maintained quite effectively, not altogether unlike the maintenance of the illusion of choice in elections. But the illusion goes well beyond the standard media. When we talk only of the government mouthpieces who make up the "mainstream,"we have only begun to plumb the depths of the propaganda sophistication in this former land of the free. This is merely the propaganda crust. Beneath it is found the propaganda sub-strata. In "America’s Dreyfus Affair, the Case of the Death of Vincent Foster" we had a glimpse at a small part of the sub-strata, some of the players among the fake right. Among those identified were Christopher Ruddy, our propaganda masters' designated lead critic in the Vincent Foster case, Floyd Brown, head of Citizens United, one of those myriad groups with scant apparent means of support, and Brown's top assistant who later became Rep. Dan Burton's lead Clinton investigator, David Bossie.  
We call them "fake right" because they are obviously not sincere in their opposition to the putatively left-wing powers that be, most notably the Clinton administration and its media supporters. They make a big fuss about going after the Clintons, but in the end they pull their punches and refuse to use the best evidence against them. The fake right on the propaganda crust like The Washington Times, the American Spectator, National Review, and the Weekly Standard even rip into those presenting the most powerful evidence of their criminal behavior while the fake right sub-strata, at best, look the other way.
In Dreyfus 5 we saw one very good way of identifying members of the propaganda sub-strata. That is the unjustified publicity they often receive from those on the crust. The Washington Post told us how Citizens United had two full-time researchers looking into the death of Deputy White House Counsel, Vincent Foster, researchers who curiously didn't seem to be scoring any hits in what the military would call a target-rich environment.  Here is part of the relevant passage:
Before leaving the subject of apparent cloak-and-daggery involved in the Foster "political firestorm," we must mention a couple of very curious organizations showcased by [Dan E.] Moldea [in his book Washington Tragedy, How the Death of Vincent Foster Ignited a Political Firestorm]. Referring to a March 13, 1994, article in The Washington Post, he writes, "[Michael] Isikoff also spotlights Floyd Brown, the chairman of Citizens United, a nonprofit conservative group, which has hired two full-time investigators to investigate Foster's death. One of the investigators is David Bossie, known by some as a young attack dog who has been brought on, specifically, to investigate President Clinton in a practice known as opposition research." He also reminded us that Brown had been behind the production of the Willie Horton commercials which played on racial fears and made Michael Dukakis, in his presidential campaign against George Bush in 1988, appear to be soft on crime.
That Isikoff article—and particularly that passage—had jumped out at me when I first read it, but certainly not because I believed it was true. I surmised that what I was witnessing was the propaganda technique that would later reach its finest flower in the Moldea book. The Post, I suspected, was intentionally showcasing Citizens United to give the group free publicity, building them up as legitimate, though unscrupulous, overzealous, and exceptionally-partisan conservative opponents of Bill Clinton. Those thinking of themselves as conservative would then gravitate toward the group rather than form their own groups while everyone else would be given an easy explanation as to where all these scurrilous, irresponsible and unfounded charges against the Clintons might be coming from. For their part, Brown and his group could be counted on the create a lot of sound and fury primarily about minor and complicated Clinton financial shenanigans centered around the joint vacation-home investment with the McDougals [Jim and Susan] known as Whitewater, with perhaps a sexual peccadillo or two thrown in for spice.
These were my suspicions because, active as I was in looking into the Clinton administration misdeeds by this time and although I lived and worked in the Washington area, I had never heard of Citizens United. Most importantly, in the small world of people nosing into the Foster death the paths of the "two full-time investigators" had never crossed mine. Bossie had not been named as one of them, as Moldea implies, and, at any rate, I had not heard of him either. I also wondered how, if they were spending so much time on the case they were yet to come up with anything that had been made public, considering all there was to come up with. I tracked down a phone number for the group and called them, asking them who the two Foster investigators were. The woman on the other end of the line didn't know what I was talking about and couldn't find anyone there at that moment who did. I requested that she have one of their two investigators call me so we could compare notes should she ever ferret him out and asked her to send me some of the group's material. I never heard from the "investigators," but I did get some material from them although it took at least a month to arrive. The literature was slick and expensive-looking, with a number of boxes to check at the bottom of the last page for how much money I would send them, ending on the top end at some outrageously high figure, but the disclosures of Clinton misdeeds were so bland and the organization had been so languid in responding to my initial inquiry, one had to wonder why anyone would be moved to send them a dime. The distinct impression left with the perceptive reader was that the plea for contributions was there to give the group some visible means of support. To this day I have never read or heard of the first thing with respect to the Foster case that this organization has ever uncovered or publicized.
Later when I learned that Bossie had ended up, in spite of his lack of legal, law-enforcement or even journalistic experience, as Rep. [Dan] Burton's chief investigator of the Clinton scandals, I was not at all surprised. I was even less surprised when he turned out to be the guy held responsible for the Burton-discrediting selective release of Webb Hubbell's prison tapes. It is no less than what one should expect of a fake-right operative.
The second organization that Moldea mentions, one that almost provides comic relief in the Foster death saga, the Clinton Investigative Commission, is discussed later in this article
More recently, the liberal Newsweek, in a cover story about practitioners of the new high-tech journalism, featured nominal conservatives Matt Drudge and Christopher Ruddy, among others, while The Washington Times managed to find news in the fact that Dave Bossie had launched a web site, whose URL they thoughtfully supplied.
We will find no better example of the mainstream media steering people toward fake opposition than a rather long article that recently graced the front page of America's most widely-read newspaper, the Wall Street Journal.  Here excerpts are copied from
"Lonely Causes: Really?....Committee to Impeach Clinton (Again) Gears Up”
Wall Street Journal - p.A1
By Barry Newman
April 19, 2000
WASHINGTON -- The Committee to Impeach the President Again has crossed Independence Avenue and is advancing on the House of Representatives when it bumps into Lewis Uhler, an antitax lobbyist. [CIC] shows him a letter the committee is hand-carrying to the Speaker of the House.
"Impeach Clinton again?" says Mr. Uhler… "It's not enough to roll him out at the end of the year and be done with it...." The lobbyist lowers his voice for seriousness: "But at least there's a chance to press him on tax cuts….”
[On Capitol Hill] today is Scott Lauf…At 28, he is a tasseled-loafer Capitol Hill regular and [CIC’s] impeach-him-again point man; on this occasion, that means he gets to tote a ream or two of letters in a cardboard box.
Also along is Jack Clayton, 60, who wears a black raincoat and stares at his feet as he talks. He says, "I come from the religious right, a term I despise. Until they acknowledge the religious left, it's a disgrace." He grew up in Alabama and sounds like a courtly preacher, with a whiff of brimstone….
Apart from a vigorous yet contained contempt for William Jefferson Clinton, what every member of the Committee to Impeach the President Again wants most is to see the guy convicted by the Senate for something….Let independent counsels and prosecutors wave white flags....
Let a prurience-pummeled public turn to electing somebody else. The impeach-him-againers are sticking to their guns. The cause is their energizer. Defeat is no excuse for surrender.
"Maybe it's over with the trial," says Mr. Lauf, "but it isn't over with us." Mr. Clayton says, "The easy way out was to say it's all about sex; anybody who says it's all about sex has a mind that's all about emptiness….”
Thus, as their friend the tax lobbyist calls, "Keep up the pressure!" the committee passes through the metal detector and into the marbled halls of the House. Their letter to House Speaker Dennis Hastert objects to a federal inquiry on the possibility of policing politics on the Internet. This bears on impeachment because the committee has a Web site
(….(Now a dead link – DCD)
Under a statue of the late Sen. Ernest Gruening of Alaska, Mr. Lauf confers with a guard and reports: "He says we have to deliver it here. Want to go up anyway?" Unanimous, the committee makes a break for it, quickstepping past more heroic statuary until Mr. Lauf asks another guard for directions. "Where's your pass?" says the guard. The committee turns around and meanders back.
A young woman in jeans and a sweatshirt stands behind the appointments desk. "Can you call up to the Speaker's office?" Mr. Lauf asks her. He explains about delivering the letter. "Give it to me," she says. "I'll get it to the Speaker." Mr. Lauf isn't sure. "Can you stamp it with the office you represent?" he says.
"Office I represent?" says the young woman. She takes the letter, initials it and -- bang -- the Committee to Impeach the President Again is out the door.
How different it was the first time around. The committee (it was just the Committee to Impeach the President then) delivered a million petitions to Congress. The day the Starr report came out, its Web site absorbed 240,000 hits. At pivotal moments, its forces took to the sidewalks, handing out little paper cups (for White House drug tests), wearing prison outfits ("Criminals for Clinton") and overcoats in August (blizzard of lies), and giving away peaches on impeachment day. They made the Washington Times twice, the Comedy Channel once -- and evoked a rude gesture from Democratic operative James Carville's chauffeur.
"It was exhilarating," says Mr. Lauf. "It got us excited."
The committee has not forgotten. On Feb. 12, 1999, its Web site bewailed "the most shameful day in the history of the U.S. Senate," but a week after the Clinton acquittal, and every week since, it has posted an "impeachment update" bulging with impudent questions: "Is Clinton's pardon of terrorists grounds for removal?" "Is Clinton still snorting coke?"
Surfers wash up 3,000 times a day; some send money. Of course, other Billbashing sites still abound. Yet the committee's site maintains that only real steps will finally punish that man, Mr. Clinton.
Real steps of the shoe-leather kind, that is. So, with the Speaker off-limits, it's time for the men who would impeach again to step across the street for a march down the long, unpoliced halls of the Cannon House Office Building, where lesser representatives and their staffers inhabit small offices behind big doors.
And they're off, crisscrossing halls, opening doors, presenting letters, requesting responses -- and pointing out the name of their committee. Every receptionist who sees it brightens and chirps "Sure!" or "Wonderful!"
Mr. Lauf chirps back, "We're hopeful," and he smiles.
Two hours and 60 offices later, they repair to a place called Tortilla Coast, take a table, order lunch and talk strategy.
"We're calling for another inquiry," Mr. Lauf says…. "More is coming out every day." Mr. Clayton writes up a list of outstanding offenses….. : "Chickengate, Cattlegate, Chinagate . . . "
A new impeachment bombshell could land any second.
"Look how quickly the hearings and House vote took," says Mr. Lauf. "Six weeks….” On their way out, they meet another lobbyist friend and give him and a woman he's with their protest letter. "Impeach again?" the woman says in a faint voice. "Again?"
The lobbyist introduces her as Paige Ralston, deputy press secretary to none other than the Speaker of the House….
As the Committee to Impeach the President Again pushes back up Capitol Hill, Mr. Lauf has a spring in his step. "This," he says, "is going to be a great year."
No doubt you noticed the mocking tone, the contrast between these obvious buffoons and sober, sensible citizens who want to pretend that everything is just fine with our leadership. You might have also noticed that the article had absolutely nothing of substance in it. There was nothing that one might call news.
It might not be news, but it's certainly good propaganda. See how they managed to provide the whole country with the group's web site. If you hadn't guessed by now, they are one of the more egregious fake right outfits that I identified in Dreyfus 5. Here is some of what I had to say: 
...another patently phony Clinton-opposition group accounts for no more than a flickering zephyr in Moldea's "political firestorm" account, but he appears to take them seriously, nonetheless. That is the bizarre outfit that fashions itself the Clinton Investigative Commission. In his penultimate endnote, Moldea credits "investigative reporter" Byron York of The American Spectator with having written a "hilarious exposé" of the group (speaking of outfits lacking evident economic viability, the neo-conservative Weekly Standard, Moldea tells us in his text, had a review by York of Ruddy's book in which he concluded "the conspiracy theorists simply have too much invested in their scenarios to conclude that the evidence proves them wrong."). One can't help wondering what awesome investigative and literary skills York had to bring to bear to make this crew appear ridiculous. It could hardly be more obvious that their entire reason for being is to make all suspicions of the Foster death appear almost humorously absurd. That our clandestine community has gone to such lengths as to manufacture such ruses is just about the best evidence we have that we are dealing with something far more important here than a simple suicide. Consider the fact that on Saturday, October 19, 1997, (It would be a Saturday.) The Washington Times, on the heels of its ringing endorsement of the Starr suicide conclusion, permitted under the heading "More questions than answers on Vince Forster [sic]," its first and only skeptical letters to date on the Foster case. The first and by far the longest of the letters almost comically mixes up the facts in the case. It is signed "Scott Lauf, Director of Communications, Clinton Investigative Commission, Annandale (VA)." Lauf maintains once again that Foster was left-handed, the apparently erroneous assertion over which Ruddy had been crucified on national TV by Mike Wallace, and tells us that park policeman Kevin Fornshill "stated to the FBI that there was no gun in Mr. Foster's hand, that both palms were face up and his arms were laid by his side as if in a coffin." (Here he is putting the testimony of several other witnesses into the mouth of Fornshill, who, in fact, claims not to have seen a gun, but he said that after discovering the body he never bothered to look to see if there was a gun in the hand.). 
We also noted that in the group's hokey initial fund-raising letter about the Foster case, a fictitious address was provided for the group's purported parent organization.
Although the name is not given in the Wall Street Journal article, the web site tells us that this is, indeed, the same old Clinton Investigative Commission peddling the same old easily-discredited malarkey about Vincent Foster's death. With a little browsing around, we find this article:
The Unsolved Mystery between Vince Foster & the White House 
by Scott Lauf March 17, 1999
One of the greatest unsolved scandals of the Clinton presidency is the death of Deputy White House Counsel Vince Foster, whose corpse was discovered in Ft. Marcy Park, VA on July 20, 1993. Barely six months into the first term of President Clinton had passed and the Grim Reaper had visited the White House. The intense controversy and immense pressure from the Oval Office forced two independent counsels, congressional committees, and numerous media outlets to fastidiously jump to the conclusion that this death was a suicide.
But the Clinton Investigative Commission brought national and international attention to the many inconsistencies and descrepancies [sic] of the Foster death, alone in the political arena for quite some time. We were joined by many larger and now more famous groups, authors and writers later.
Three months before the Lewinsky scandal captured the news headlines for all of 1998, Ken Starr's "official" report on the death of Vince Foster in October 1997 was intended to be the final verdict on this case, and thus forever silence those who believe he was murdered.
The report said Mr. Foster was clinically depressed and therefore took his own life. Furthermore, gunshot residue was found on his mouth and a revolver was found in his right hand substantiating the suicide theory.
While Starr may have done a fine job in presenting evidence to Congress of perjury and obstruction in the Lewinsky matter, he has utterly failed in his duties to look into the far more egregious and controversial crimes like Filegate, Whitewater, Travelgate—and, of course, the death of Vince Foster. But rather than question Starr himself for his reasons to ignore these other crimes, it is more worthy to criticize his ridiculous report which is still being cited by Clinton supporters as the end-all-be-all of the Foster tragedy. For far too long his report has left too many unanswered questions which have yet to be addressed.
To start with a blatant discrepancy of logic, Mr. Foster was left-handed. So why was the gun found in his right hand, as the Starr report asserts? Furthermore, the probability of the gun remaining in his hand from a self-inflicted gunshot is practically impossible and defies the laws of physics.
While Mr. Starr cites various experts and witnesses to buttress his theory, he clearly ignores those who paint a different picture. The testimony of park policeman Kevin Fornshill, who was the first to arrive at the scene, stated to the FBI that there was no gun in Mr. Foster's hand, that both palms were face up and his arms were laid out as if he was ready for a coffin. And then there is Patrick Knowlton, a passer-by in the park who told the FBI he saw two cars --- one with Arkansas plates and a man in the driver's seat --- in the parking lot shortly before Mr. Foster's body was discovered.
Other anomalies have surfaced over the years in this strange death. Where was Mr. Foster in the missing three hours before his death? Why was the bullet not found in the park after an extensive FBI search which even uncovered Civil War-era musket balls? Why were semen, blond hair and carpet fibers found on Mr. Foster's clothes, but not ground soil on his shoes? Why were items removed from Mr. Foster's office by White House staffers before the FBI came? Why was the "suicide note" forged and then torn into 27 pieces, only later to be discovered in Mr. Foster's briefcase?
All of these questions remain unanswered because they can't be answered. Vince Foster was murdered. The only real mystery is the actual motive—or motives. But the First Couple would rather you not know about Foster and his seedy dealings with them which date back to their days in Little Rock in the 1980s. The truth about Foster would forever tarnish their so-called "legacy."
The Clinton Investigative Commission brought these descrepancies [sic] to light in the largest direct mail campaign against an incumbent president in American history. The resulting outrage brought pressure on Congress to impeach Clinton the first time and inspired dozens of other independent efforts, additional studies and commentaries, books by authors and campaigns against Bill Clinton's cover-up.
Again, the Clinton Investigative Commisssion [sic] brings attention to this crime. Until it is solved.
But the Clintons do know there is still lingering evidence out there which points directly to the White House and they will do anything to prevent it from coming to light. Let us all pray that the truth will be told before other "mysterious" deaths become statistics in the infamous Clinton Body Bag.
To obtain a copy of the report of CIC's extensive investigation into the murder of Vince Foster, please send request to CIC Foster Report, P.O. Box 97171, Washington, DC 20090-7171, or e-mail
To the old erroneous information about the witness Kevin Fornshill we now have added new erroneous information about the witness Patrick Knowlton. Knowlton did see two cars in Fort Marcy Park and one had Arkansas tags, but he didn't see anyone in it. The main significance of what he saw is that the car did not fit the description of Foster's car and Foster was already dead in the back of the park. Knowlton's insistence in sticking to his account is what got him harassed on the streets of Washington, DC, and why he has filed suit against several government officials, some of whom work for the FBI. You can read all this genuine, accurate news for yourself at FBI Cover Up
Mr. Lauf is also quite misleading when he suggests that only Clinton supporters have hailed the Starr report on Foster. All the fake right organs on the propaganda crust have, too, and that includes the Wall Street Journal and The Washington Times. Mr. Lauf would no more point this fact out than the Journal or The Times would report on the existence of or tell us that the Starr report had a 20-page letter from Knowlton's lawyer attached to it by order of the three-judge panel that appointed Starr, and that the letter provides an abundance of genuine evidence that utterly destroys the suicide-from-depression thesis.
As a matter of fact, Lauf and the Clinton Investigative Commission won't tell us that, either.   That is just one more obvious reason why such putatively conservative propaganda crust organs as these publicize it.  And not at all to our surprise, they are joined by the putatively liberal Los Angeles Times, which begins its July 28, 1996, reprint of a Washington Post article as follows:
WASHINGTON — "No time to explain. This is a crisis. I'm in Little Rock completing my investigation of the murder of Vince Foster. I need your help."
That scrawled note on Holiday Inn stationery two months ago was another reminder to 86-year-old Aileen West of McMinnville, Ore., that the intrepid Ronald Wilcox is still on the Foster case. Wilcox had written her earlier about death threats and a dramatic meeting with Hillary Rodham Clinton.
"I insisted on meeting in a public place (for obvious reasons)," he wrote of a meeting the White House says did not occur. "This is a dangerous woman. . . . I prepared for vicious battle. And then, there we were. She was seated with a crowd of paid bodyguards around her. . . . Years of work, of sleepless nights and attempts on my life, all came down to this moment. . . . 'Mrs. Clinton,' I said in a loud voice . . . 'I will not make any deals with the White House.' A gasp, her anger turned to fury, and I continued: 'I will not rest until you and your husband are in jail.' "
With letters like these, Wilcox and his organization, the "Clinton Investigative Commission," raised more than $1 million last year from West and thousands of other people around the country eager to see the commission's work continue, its backers say.
But what is that work exactly? And who is Ronald Wilcox?
The commission's executive director, Wilcox claims to be a nationally known political commentator who informs donors about what he learns from "people in the know" about the probe into the former White House deputy counsel's July 1993 death. "I have talked to the top person on the Vince Foster investigation," he said in a telephone interview. "I can't say who that is--I will end up in a body bag."
In a recent mailing, he described the commission as "the most important player in the entire Whitewater/Foster saga." Others question that description. "Never heard of them," said Richard Viguerie, a conservative direct-mail fund-raiser.
"I've never seen them, run across them, heard of them," said congressional investigator David Bosse, a onetime employee of Citizens' United, another anti-Clinton group that uses direct-mail fund-raising.
Really, could there be any better evidence that all these mainstream organs and the groups that they lampoon while publicizing, such as Citizens United and the Clinton Investigative Commission, are all on the same team, every bit as much so as the “good guys” and the “villains” in a traveling professional wrestling troop?
For the most recent revelations in the Foster death case, see “Foster Case Resignation Letter Surfaces,” “Documents Reveal Judges’ Deliberations on a Death,” and the four Miguel Rodriguez tapes.  The most revealing thing of all is that not a peep about any of this has been reported by our propaganda crust and only the first of the Rodriguez tapes has been mentioned in bump-and-run fashion by one organ in the propaganda sub-strata. 
David Martin
January 27, 2012
For its part, in so far as it mentions the Foster case at all, the mainstream press continues to tout the feckless efforts of the phony critics.  Here we see their propaganda technique at its absolute worst in the third paragraph of The Washington Post’s page A3 article in the January 31, 2012, article on the impending retirement of Dave Bossie’s former boss, Rep. Dan Burton.  Notice that at this point Vincent W. Foster, Jr., is no longer deemed worthy even of mention by name:  “Burton, who announced Tuesday his plans to retire at the end of 2012, once shot watermelons in his backyard to examine bullet angles related to the suicide of a top White House aide. His staff subpoenaed the wrong man and released false tapes of an imprisoned former confidant of the Clinton family.” 
On February 1 a tape of a telephone conversation between Rep. Burton and the late Reed Irvine, the head of Accuracy in Media at the time, was put on YouTube.  That tape reveals, among other things, Burton’s lack of sincerity in his prior promise to Irvine that as the new chairman of the House Oversight and Government Reform Committee he would re-investigate the Foster case.  One can expect that the news contained in that conversation will be ignored by the mainstream press.
David Martin
February 1, 2012
See also “Taped Exchange Exposes “Pit Bull” Dan Burton as Yapping Lap Dog.”

Iraq war veteran: 'US Government doesn't care about poor working people'

U.S. Marine Vs. Freddie Mac

This is no bailout for Main Street America

A home advertised for sale at a foreclosure auction in California
A home advertised for sale at a foreclosure auction in Pasadena, California. Photograph: Reed Saxon/AP
Big announcements of breakthrough legislative deals during election campaigns should be taken with huge grains of salt. Generally more rhetoric than reality, they sometimes contain real concessions made by politicians seeking votes. So it is with Thursday's Washington announcement of $25bn to help homeowners. Something significant is happening, but it lies below the surface of the headlines.
Typically, modern governments intervene in two ways when – as has been true since 2007 – free-enterprise capitalist economies produce particularly bad versions of their recurring economic "downturns". One economic policy is aptly called "trickle down" economics. It involves throwing heaps of money at the top of the economic pyramid – to mammoth banks, insurance companies, and other corporations at or near economic collapse. Policy-makers hope that such help for these institutions will revive their activity and thereby trickle down – as credit and orders for medium-sized and small businesses, and then, finally, to jobs and maybe wage increases for the majority of workers.
The alternative is "trickle up" economic policy. It involves government financial aid aimed chiefly at helping the mass of workers. That policy's goal is for the assisted workers to resume purchasing, which will, in turn, boost business revenues and so rebuild prosperity.
The historical record is quite clear: trickle down is no better or more effective a policy to end deep recessions and depressions than trickle up. In the last great capitalist downturn of the 1930s, the Roosevelt administration first tried trickle down. Its poor results, coupled with profound political pressures from below – the Congress of Industrial Organizations (CIO) membership drives that brought new millions into labor unions and the surging socialist and communist parties – forced Roosevelt to add major trickle up policies. They worked better, but not well enough to overcome the Great Depression.
Of course, large corporations, their shareholders and stock markets prefer trickle down. They get bailed out and they "recover", while the rest of us watch to see what may or may not trickle down. The US working class has been waiting for over four years. Precious little has yet trickled down. The majority of citizens prefer trickle up and for parallel reasons. Which kind of policy prevails depends on which side wields more power over the policy-makers.
Under Bush and Obama, trickle down has dominated overwhelmingly since the current crisis began in 2007. There were a few trickle-up measures: modest individual income tax cuts, repeated but very ineffective efforts to help those subjected to foreclosure, and extensions of unemployment compensation benefits. However, they were utterly dwarfed by what the Treasury and the Fed poured out in trickle-down bailouts. By 2011, it was clear that the Bush-Obama trickle-down policy had failed to end this second-worst economic downturn in a century.
The Obama team was beginning to learn what the Roosevelt team had learned sooner in their Great Depression. It turns out that bailouts for the top of the economic pyramid, which never trickle down, leave an economically depressed mass at the bottom. Governments that also try to pay for trickle-down policies by imposing "austerity programs" on the bottom only make matters worse. Sustained depression at the bottom eventually threatens the top: first economically and then also politically.
That happened sooner and more powerfully in the more depressed and more politically mobilized conditions of the 1930s. But the Tea Parties and the Occupy Wall Street movement, in their radically different ways, suggest something comparable unfolding now in the US. In Europe, the process is further along, as the Greek example shows.
The Obama team began in 2011 to supplement a wholly inadequate trickle-down approach with some limited trickle-up elements. The biggest of these have been the reductions in the social security deduction on paychecks. Another small step is this week's modest help for homeowners facing foreclosures. It will not help the majority of those in such danger – for example, the 50% of mortgages owned by Fannie Mae and Freddy Mac are ineligible. It will help the rest, but not much.
Consider simply that the negative equity of US homeowners is estimated now at $ 700bn. That is how much more they owe on their homes than those homes are worth. This new bill proposes $26bn in aid for that problem. No such timidity attended the trillions provided for the trickle-down bailouts since 2007. The banks are happy with this proposed settlement's low cost to them.
While the government's help to homeowners is far from adequate or just, it represents a partial and late recognition of trickle-down economics' inadequacy as policy. It further concedes the need for some trickle up. What happens next depends on the evolution of this crisis and of the political forces gathering strength.
Those factors will determine how long the beneficiaries of trickle-down economics can sustain the policy's dominance and continue to shift its costs onto the mass of people through austerity programs. Those same factors will also determine whether we see next a further shift to trickle-up economics – or a more basic challenge to an economic system whose instability is so severe and so socially costly.

WSJ Economist: Ron Paul's 0% Income Tax = Massive Insourcing of Jobs into America

A Tale of Two Settlements

So yesterday, there were two big settlements: Greece, and the Mortgage Mess.

Completely independent of each other, both settlements not only happened on the same day, they happen to highlight two issues which ought to be bugging us all like cockroaches crawling through our underwear.

Issue One is how in both cases, the Too Big To Fail banksters won—and they won big. Again. Insofar as the mortgage settlement goes, they got what amounted to a speeding ticket, while getting a Get-Out-of-Jail-Free card on the worst of the robo-signing and illegal foreclosures scandal. And insofar as the Greek situation goes, the banksters have gotten the IMF, the ECB and the EC to essentially put the Greek people’s collective nuts in a vise and squeeze until they scream “θείος!” (“Uncle!”)

Issue Two is the mainstream media’s spin on these two settlements: How the completely cheerleadery, near-sycophancy of the MSM serves to both obscure how big the banksters won in both settlements, and to give us all a false sense of security. From the MSM, we hear that Greece has been “bailed out” and the Mortgage Mess has been “fixed”, and that the banksters are “getting their comeuppance”—so we get the false sense that the world is right as rain, and everything can slowly go back to normal.

But the world is not right. We will not be going back to normal any time soon. The banksters are not getting righteous justice.

Rather, the two settlements go to show how crony-corrupt our particular epoch’s Global Capitalism really is: The banksters rape the people of two countries, and the mainstream media cheers.

Let’s go over each of the two settlements, and pick apart their implications.

The Mortgage “Settlement”

The ballyhooed “Mortgage Settlement” is a big ol’ pile of crap—plain and simple. President Obama called the $25 billion deal the biggest settlement since the one with Big Tobacco—but that settlement, at $350 billion, was over ten times the size of this one. Actually, 14 times bigger, to be precise. And when you look at actual out-of-pocket costs (which I will below), you realize the Big Tobacco settlement was sixty times bigger.

And of course, the mortgage mess is a helluva lot bigger than the suits involving Big Tobacco.

To understand why the settlement is a steaming pile of shit, we have to understand two things: What the problem is, and what the settlement brings to the table to solve the problem.

This is the problem: About 20% of all homeowners are underwater, adding up to about $700 billion in negative equity in the U.S. housing market today. That is, if you add up the difference between what underwater homeowners owe on their mortgages and what they could realistically get in the current housing market, it totals $700 billion. On average, that’s about $50,000 per house.

Additionally, 750,000 people lost their homes to foreclosure between 2008 and 2011—of which many (most?) were processed improperly. Processed illegally, in many (most?) cases.

As to whether “many”, “most” or “all” of those foreclosures were processed merely improperly or in fact criminally, we’ll now never know: The settlement releases the banks from prosecution for these 750,000 foreclosures.

That was one part of the settlement: No Federal prosecutions.

The other part of the settlement was how much the banks had to pay. And that dollar figure is pathetic when you look at the headline number—but even worse when you look at the actual number.

The mortgage settlement totals just shy of $25 billion. But of that figure, only $5.8 billion is “fresh money”—that is, money that the banks have to put up out of pocket.

The rest is loan modifications—that is, changing one loan for another. Essentially an accounting move, not a cash-bleeding penalty.

So the banks are paying out—in total—a mere $5.8 billion, while they are getting bullet-proofed from Federal prosecution for all the mortgage shenanigans they were carrying out.

That is what the ballyhooed “Mortgage Settlement” comes down to: The Obama administration plea-bargained a serial killer down to a speeding ticket.

And insofar as the rest of the settlement money goes—the refinancing of about $19 billion—the refinancing marginally lowers the payments for some of the 14,000,000 homeowners who are underwater. Less than half actually, as the settlement does not cover mortgages held by Fannie Mae and Freddie Mac. But it guarantees that the banks have first dibs to recover their money, if and when some of these 14,000,000 homeowners begin to default.

(Yves Smith at naked capitalism has a much more detailed discussion of the financial implications of the settlement here. Her reporting and analysis have been the best in the business, insofar as the Mortgage Mess and this execrable settlement is concerned.)

In other words, the banksters won—again.

The most despicable part is how much the banksters will have to pay to those families whose homes were improperly—illegally—fraudulently—foreclosed upon:

The princely sum of between $1,500 and $2,000.

Now, I’m not saying that someone who didn’t keep up with their mortgage payments and lost their home to foreclosure should get their house back for free just because of faulty paperwork—I’m not saying that at all. Nor am I saying they should get a gazillion dollars from the bank for screwing up the paperwork in a foreclosure that was justified.

The problem is, a non-trivial number of those 750,000 lost their homes even though they were up to date on their payments. Hell, there were even cases where people who were foreclosed upon and had their homes taken away from them who did not owe a mortgage loan on their property. (Example here.)

All of this happened because of the foreclosure mills and the famed robo-signing. Banks declared a loan in default, fobbed off the property to a specialty law firm—a “foreclosure mill”—which then in turn hired minimum wage workers to illegally sign the documentation to carry out the foreclosures. That was “robo-signing”.

The robo-signing was forgery—plain and simple. It was fraud. The fact that many—perhaps even most—of these foreclosures were justified does not excuse the use of fraud to carry out the foreclosures. And the fact that a non-trivial number of those foreclosures were completely unjustified—and in some cases amounted to the bank stealing people’s homes—makes this settlement unconscionable.

With this settlement, there will be no more criminal prosecution—even for cases where the bank literally stole people’s houses!

All the bank has to do is pay between $1,500 and $2,000. For stealing your house.

Prosecuting the robo-signers would have led to prosecutions of the foreclosure mills—which would have led to prosecutions of the banks which pressured the foreclosure mills to hire the robo-signers—which would have meant jail-time for the bank executives who ordered this criminal activity.

That’s how prosecutors work: They go after the small-fry, then get ‘em to flip on the big-fry.

However, with this settlement, the banks are released from further investigation of robo-signing—and therefore, of the improperly foreclosed houses—and therefore, the executives who ordered these illegalities and ordered this fraud are bullet-proofed from prosecution—and thus shielded from their richly deserved jail-time.

Sure, New York’s Attorney General can still proceed with his suit of MERS, the mortgage service provider—but MERS doesn’t have deep pockets, and isn’t even really the instigator of this whole mess.

It was the Too Big To Fail banks, and the criminal banksters who lead them. They were the ones who should be prosecuted, tried, convicted, and jailed.

But the banksters got off scot free: Serial killers, who plea-bargained their way down to a speeding ticket.

The Greek “Bailout”

On March 20, Greece has to pay out roughly €15 billion, to cover maturing bonds. Of course, they don’t have €15 billion. So they need a bailout. Again.

Greece is broke—there’s no other way to put it. It has debts which total 160% of GDP. So they’ve been negotiating with the International Monetary Fund (IMF), the European Central Bank (ECB), and the European Commission (EC), trying to get more money to avoid bankruptcy.

The Greeks want to avoid bankruptcy—while the Troika of the IMF, the ECB and the EC want to avoid a default. If there is a default, all sorts of events are triggered involving derivatives and other nasty pieces of financial weaponry, which will send the eurozone’s banking system into a tailspin.

Will the European financial system go bankrupt in the event of a Greek default? No one really knows—and no one really wants to find out.

So both sides have an incentive to sit at the table and reach an agreement.

However, because of the ongoing crisis, there is one inescapable problem that both parties are facing:

Greece’s economy is shrinking—fast. Year-over-year, tax revenue has fallen close to 20%. Businesses are shutting down—and the businesses that are opening up are mostly unemployed professionals trying to set up one-man shops. Unemployment is steadily rising, especially youth unemployment, which inevitably leads to streets protests and social unrest.

So when a country’s economy begins to shrink—and its tax revenue falls—and it begins to teeter on the edge of social instability—it begins to lose the ability to meet its financial obligations.

This is what is happening in Greece, because of the four months it has taken to finally find some kind of deal to save Greece.

Now, the deal on the table is for Greek bondholders to take a €100 billion haircut on €350 billion of outstanding debt—which is actually not that much, considering Greek yields are in the 32% range, but whatever.

What’s key is, the European financie ministers are insisting that the Greek levels of indebtedness shrink from 160% of GDP to 120% of GDP by 2020—

—even as the austerity measures the Troika is imposing severely cuts the public sector, reduces the minimum wage by 22% to €8,200 a year, and overall forcibly shrinks the Greek GDP on top of the natural shrinkage taking place because of the Greek depression.

I’m no Keynesian, as Paul Krugman can tell you. But the fact is, if you fire big chunks of your public sector, reduce the minimum wage, and squeeze higher taxes from the population, the GDP is gonna shrink.

So if the GDP starts to shrink, no way can you reduce debt levels from 160% of current GDP to 120% of 2020’s GDP.

In fact, if you’re hell-bent-for-leather on squeezing a country and insisting it pay down the debt, you are essentially setting the country up to ask for yet another bailout in the near-term future.

This is what the Troika is doing—all so that it can keep the European financial sector from realizing the losses on its stupid Greek loans.

So Greece and the Greek citizenry suffer, so that European banks don’t take a giant crap on top of Angela Merkel, Nicolas Sarkozy, Mario Draghi and Jean-Claude Juncker.

Ironically, had Greece been allowed to default and/or go broke back in May of 2010, when this mess first reared its ugly head, the Greeks and the eurozone would have been in much better shape today: Greece would have suffered Iceland’s short term fate—a crash—but then recovered, albeit slowly and painfully, but on a much sounder financial footing.

But in the European banker’s efforts to save their Greek investments, they have prolonged the Greek agony, while killing the Greek economy worse than an outright default and bankruptcy.

In fact, it is still possible to allow Greece to fail and let the chips fall where they may. But the eurozone leaders are so adamant about saving their banking sector, that they refuse to consider the possibility.

So rather than cutting off the gangrenous limb, they’re letting the gangrene spread, and get a lot worse—all in order to save the fucking banks. Again.

The MSM Cheerleading

This is what the New York Times had to say about the mortgage “settlement” when the news came out:
Advocates for homeowners facing foreclosure expressed cautious optimism after the settlement was announced Thursday morning in Washington. “We’re hopeful,” said Joseph Sant, a lawyer at Staten Island Legal Services’ homeowner defense project. “But we had a lot of programs that are good on paper. What will make the difference is that it’s vigorously enforced.” 
President Obama declared the deal the largest federal-state settlement in the nation’s history. 
“No compensation, no amount of money, no measure of justice is enough to make it right for a family who’s had their piece of the American dream wrongly taken from them,” he said. “And no action, no matter how meaningful, is going to by itself entirely heal the housing market. But this settlement is a start.”
Of course, the Times fails to point out that this settlement is not “a start”—rather, it is the end: The end of prosecutions against the banksters for their fraudulent foreclosures, the end of meaningful reform.

The mortgage settlement is a speeding ticket for a serial killer.

Yet the Times has the gall to add:
More than just an attempt to aid consumers and stabilize the housing market, government officials cast the settlement as an effort to finally hold banks accountable for their misdeeds, more than three years after the mortgage collapse brought on a full-scale financial crisis.
“Accountable”. Right. At $2,000 a pop for in many cases outright stealing a home, that’s the New American Accountability.

And talk about burying the lead! The Times piece waits four paragraphs to mention that fraudulently foreclosed homeowners are getting $1,500 to $2,000 as settlement for the illegal foreclosures. And then it waits another twenty paragraphs before acknowledging that it’s pretty paltry, the amount that will be paid to illegally foreclosed homeowners.

But then, the Times gets worse: Almost as if to add insult to injury, this morning—the day after the mortgage “settlement” announcement—it ran an editorial about—get this—how the mortgage settlement highlights the crappy architecture that the housing boom created in America! And how this crappy architecture ought to be fixed somehow! As part of the mortgage settlement!

Other MSM outlets had similar milquetoast coverage.

Over at Salon, Obama apologist Andrew Leonard can’t really spin the agreement as anything other than a complete disaster—so I guess kudos for having at least a shred of honesty for giving the true facts and meaning of the settlement in the first few paragraphs of his piece.

But then Leonard goes and writes:
A more interesting question to consider, however, is how the housing relief contained in this settlement fits into other administration housing policy efforts currently in the works.
First off, government negotiators are still working on roping another nine mortgage providers into the deal, which could raise the overall settlement total from $26 billion to around $40 billion. [Whoopie: All of $14 billion, thrown up at a $700 billion problem.] In March, the rejiggered HARP refinance program will kick in, presumably allowing hundreds of thousands of homeowners to refinance at currently rock bottom mortgage rates. There is also strong pressure coming from the Federal Reserve and the White House to convert currently unoccupied foreclosed homes owned by the Fannie Mae and Freddie Mac into rental properties, a step that would remove excess inventory from the housing market. [And of course, create excess rental inventory.] 
Each individual nibble here is unlikely to make a profound difference, but taken together, all these initiatives add up to the most concerted effort the Obama administration has taken to date to bring relief to the housing sector. It’s also worth noting that it’s all happening without any help whatsoever from Congress. The approach does not address the desire for punishment that so many would like to see meted out upon the banks, but it will likely help spur additional economic growth. At a point when the economy already seems to have solid momentum toward recovery, every extra bit of help is gravy.
[Bracketed text and boldface by yours truly.]

I said that Leonard has at least some honesty left in him—but Felix Salmon at Reuters has absolutely none.

His lead sentence:
The long-awaited mortgage settlement is here! And it looks like a good one.
I’m fucking not kidding.

Then Felix Salmon—or rather, Felix Shill—goes on:
If you’re a bank shareholder breathing a sigh of relief, then, don’t. The only thing you’re protected against, now, is lawsuits over robosigning. [But then robosigning and fraudulent foreclosures were the biggest potential criminal and civil litigation issues.] Were those likely to cost $25 billion if they had gone to court? It seems unlikely to me that they could have raised that much. Other big-money lawsuits over securitization can and almost certainly will still be brought — which means that the big banks all still have significant litigation risk hanging over their heads. 
So why did they do this deal? Well, for one thing, it’s not nearly as expensive as it might look at first glance. It’s not like they’re paying out $25 billion and getting nothing but a bit of immunity in return. A huge chunk of the money will go towards principal reductions on underwater mortgages — which means that it’s not really a cash outlay at all.
Notice how he starts off saying that bank shareholders shouldn’t breathe a sigh of relief—then deceptively says how the banks are shelling out $25 billion, when in fact it’s only $5.8 billion in fresh cash. But then at the end of the quoted passage, he admits how “a huge chunk of the money” is “not really a cash outlay at all”—as if this is a good thing.

Well, actually, it is a good thing—for the banksters and the bank shareholders. Which is Felix Shill’s—I mean, Felix Salmon’s real audience.

In Geneva recently, I had lunch with FT Alphaville’s Izabella Kaminska, in a restaurant in the old section of town. Izabella is a very smart woman: She was of the opinion that mainstream financial journalists aren’t deliberately dense, or beholden to vested interests—rather, she thought that they were simply sloppy: Pressed for time, not entirely familiar with the matters at hand, Izabella thought that they tended to take the easy way out, by simply regurgitating what they were told by bankers and authorities, and not applying critical thinking.

I wish I could agree with her—but I can’t. The Times piece might be excusable: Though it doesn’t highlight the real issues, and it buries some of the outrageousness of the settlement, there is an underlying tone of not-quite-buying it with regards to the mortgage “settlement”.

That very tone points to how the Times writers and editors realize that the settlement was a bunch of bullshit—a pass on the banksters.

Yet they didn’t follow through. They didn’t slice-and-dice the settlement, and report how pathetic it really is.

Someone like Andrew Leonard—an essentially partisan journalist who nevertheless tries to be somewhat fair—made a try at honesty with regards the mortgage settlement. But then spent a big chunk of his piece saying, basically, “Though it’s just crumbs off the banksters table, we ought to be thankful, because enough crumbs almost make a slice of bread!”

The most despicable is Felix Salmon: He is rah-rah-banksters-hurrah!, insofar as the settlement is concerned—which proves that he is nothing but a shill for the banksters, trying to get in good with them, at the cost of his intellectual honesty, not to mention his moral soul.

That’s the state of the financial MSM: Yeay us.

Greek deal limbo weighs on markets

LONDON (AP) -- Stock markets fell Friday after Greece's crucial international bailout was put on hold by its partners in the 17-nation eurozone, a day after it seemed that the country's tortuous journey to pacifying its creditors had reached a conclusion.
Greek Prime Minister Lucas Papademos and heads of the three parties backing his government agreed to deep private sector wage cuts, civil service layoffs, and significant reductions in health, social security and military spending.
Investors breathed a sigh of relief that the agreement would allow Greece to get a euro130 billion ($173 billion) bailout package and avoid a bankruptcy next month that could send shockwaves around the financial markets.
But finance ministers from the other 16 eurozone states threw a spanner in the works late Thursday and insisted that Greece had to save an extra euro325 million ($430 million), pass the cuts through a restive parliament and guarantee in writing that they will be implemented even after planned elections in April.
The renewed hurdles in the way to the avoidance of a Greek default, which could send shockwaves around the global economy, dented sentiment in the markets Friday. Stocks were down through the Asian session into Europe's, with the benchmark index in Athens 1.6 percent lower by midday local time.
In Europe, the FTSE 100 index of leading British shares was down 0.3 percent at 5,876 while Germany's DAX fell 0.9 percent to 6,728. The CAC-40 in France was 0.6 percent lower at 3,403.
The euro was also subdued, trading 0.1 percent lower at $1.3262.
Wall Street was poised for a lower opening too — Dow futures were down 0.4 percent at 12,785 while the broader Standard & Poor's 500 futures fell 0.6 percent to 1,341.
The prevailing view remains that a deal will be cobbled together but the uncertainty is weighing on stocks. Once all the demands have been fulfilled, the eurozone will give Greece the green light to start implementing a separate bond swap deal with banks and other private investors designed to slice some euro100 billion ($132 billion) off Greece's debt load.
"For all the rhetoric it is probable that a deal will still be reached because the consequences of not doing so would be so damaging for the EU as a whole," said Gary Jenkins, managing director at Swordfish Research.
However, it is possible that the Greek politicians "suffer from negotiating fatigue and decide that putting their people through the austerity measures are not worth it."
Earlier in Asia, Japan's Nikkei 225 index fell 0.6 percent to close at 8,947.17. Hong Kong's Hang Seng lost 1.1 percent to 20,783.86 and South Korea's Kospi dropped 1 percent to 1,993.71.
However, mainland Chinese shares edged higher with the benchmark Shanghai Composite Index gaining 0.1 percent to 2,351.98. The Shenzhen Composite Index also gained 0.5 percent to 903.64.
Oil prices tracked the bulk of equities around the world lower — benchmark oil was down $1.08 to $99.27 per barrel in electronic trading on the New York Mercantile Exchange.

9/11 Incontrovertible Proof the Government is Lying

Ron Paul 2012! (Music Video)

'Greece being forced to buy arms'

Daniel Cohn-Bendit
A leading European parliamentarian has accused France and Germany of forcing Greece to buy billions of euros in arms in exchange for their bailout money.

France and Germany, while publicly urging Greece to make harsh public spending cuts, bullied its government to confirm billions of euros in arms deals, Franco-German lawmaker Daniel Cohn-Bendit alleged on Friday.

The accusation drew a stern denial from the French government.

Cohn-Bendit said he had met last week in Athens with Papandreou, a long-time friend of his, and accused German Chancellor Angela Merkel and French President Nicolas Sarkozy of blackmailing the Greek leader.

Cohn-Bendit accused France and Germany of making their contributions to an IMF-led rescue package for the debt-ridden Greek economy contingent on Athens honoring massive arms deals signed by Papandreou's predecessor.

"Mr. Fillon and Mr. Sarkozy told Mr. Papandreou: 'We're going to raise the money to help you, but you are going to have to continue to pay the arms contracts that we have with you,'" Cohn-Bendit said.

On Friday, eurozone leaders approved a 110-billion-euro Greek aid package in an emergency summit in Brussels.

The meeting was held in an effort to restore confidence in the euro after the Greek crisis rattled financial markets worldwide.


Argentina limits daily financial transaction per person to 1.000 Pesos (230 dollars)

Argentina limits daily financial transaction per person to 1.000 Pesos (230 dollars)

Argentina limited the use of cash in the country’s financial markets as President Cristina Fernandez tightens oversight of currency transactions to help contain capital flight and prepare for what is anticipated a ‘difficult’ year for the Treasury and the Argentine economy.

The government will restrict daily cash transactions to 1.000 Pesos (231 US dollars) per person, down from 10.000 Pesos, according to a statement in the Official Gazette. The measure affects activity in the stock and bond markets, investment funds and in the futures markets. Operations above the limit will have to be done through Argentine bank accounts that are authorized by the central bank.
“They are forcing a higher level of formality in the economy, as cash transactions allow more irregularities,” said Felipe Hernandez, an analyst at RBS Securities Inc. in Stamford, Connecticut. “This is in line with other measures to prevent money laundering, for which the government has been under a great deal of pressure.”
The move is aimed at combating money laundering and terrorist financing, according to the statement in the Official Gazette.

The insiders are selling heavily

CHAPEL HILL, N.C. (MarketWatch) — Corporate insiders are now selling their companies’ stock at a rate not seen since late last July.
That’s a scary parallel indeed, since that late-July spike in selling came just days before one of the more painful two-week periods in the stock market in years.
In early August, as you may recall, the U.S. government lost its triple-A credit rating, and the bottom dropped out of the stock market. Between the last week of July and the second week of August, the Dow Jones Industrial Average DJIA -0.69%   dropped 2,000 points.

DJIA 12,801.23, -89.23, -0.69%
To be sure, heavy insider selling doesn’t always lead to this much market weakness, or this immediately. And there were a lot of other things going on last summer that aren’t present today.
Still, on the theory that corporate insiders — officers, directors and largest shareholders — know more about their firms’ prospects than do the rest of us, it can’t be good news that they are selling at such a heavy pace.
Consider a ratio calculated by Argus Research of the number of shares insiders have sold in the open market to the number that they have bought. Last week, according to the latest issue of Argus’ service, the Vickers Weekly Insider Report, this sell-to-buy ratio stood at 5.77-to-1. And among insiders at companies listed on the New York Stock Exchange, this ratio was even more lopsided at 8.2-to-1.
Making these recent readings even more worrisome, according to Argus Research, is that they came on markedly stepped-up activity among corporate insiders. This increases our confidence that the ratio accurately reflects prevailing sentiment among a broad cross-section of the insiders.
In fact, Vickers is so alarmed by recent insider trends that this week it is selling big chunks of its two model portfolios and putting the proceeds in cash. After the sales, its “Insider Model Portfolio” will be nearly 30% in cash and its “Risk Model Portfolio” will be more than 60% in cash.

Bad news for bulls

MarketWatch columnist Mark Hulbert discusses why the Dow transports are lagging not leading the current Wall Street rally and why that's not a good thing for bulls or Dow Theorists. Photo: Getty Images.
To put recent insider behavior into context, consider what they were doing in the latter part of November, the last time I focused a column on the insider data.
In the last full week of that month, for example, the sell-to-buy ratio stood at 0.81-to-1 — a far cry from the 5.77-to-1 registered in the first week of February.
And, of course, the market is a lot higher now than where it stood then — more than 1,600 Dow points higher, in fact. ( Read my Nov. 29 column, “Corporate insiders are smiling.” )
Given recent insider selling, it’s more likely that the next 1,600 point Dow move will be down than up.
Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. He has been tracking the advice of more than 160 financial newsletters since 1980.