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The Rule Of Law

Seriously folks?

You don't understand why The Ticker has faded to black?

REALLY?

Let me start with this: Why do drug dealers shoot each other on street corners?

Answer: Joe the drug dealer cannot call the cops and tell them that Jack the drug dealer ripped him off and sold him a bag of oregano instead of weed. Joe also can't sue Jack. Thus, when the threshold of his tolerance is crossed Joe has only the use of direct force available to him because he has no recourse to the law to settle his dispute with Jack.

The FIRST foundation of civil society is The Rule of Law. Without it there is literally nothing other than the Law of the Jungle, commonly known as "he who has the biggest teeth (or the most guns) and is willing to use them first wins."

Let me remind you that Han Solo, who is widely regarded through the Star Wars series as a hero, shot first at Mos Eisley. George Lucas edited that in the second release of the film (and later had to put it back after fan outrage) but it is a fact that Han shot first in the original theatrical release. Why did Han shoot first and kill Greedo? Because he knew there was no Rule of Law and he had no recourse to the law, which incidentally was later proved to be an exactly correct expectation when he was made an ornament in Jabba's castle.

Now I want you to stop reading, go get an adult beverage or a cup of coffee, and think long and hard before you continue reading about the above.

Why?

BECAUSE THE ABOVE IS THE ISSUE THAT, IF WE FAIL TO ADDRESS IT IN THE PRESENT TENSE, RUNS THE RISK OF RESULTING IN AN IRREVOCABLE SERIES OF EVENTS IN THIS COUNTRY UP TO AND INCLUDING POSSIBLE CIVIL WAR.

Did you go get your drink, consume it, and think?

Good -- you may now continue.

This site was founded back in the early part of the financial crisis, spring of 2007 to be exact, because the Rule of Law was being blatantly disregarded -- specifically, with regard to "Prompt Corrective Action" and banks that were paying out dividends with fictitious earnings.

Did anyone go to prison for doing that? No.

Did anyone go to prison for selling "good investments" to clients that they described in their own internal emails and on recorded internal conference calls as "vomit" and "dog squeeze"? NO.

Did anyone go to prison for claiming to Congress (and all testimony to Congress is under oath) that they were "adding liquidity" to the system during the meltdown when I found, in public records, that in fact over $60 billion was pulled from the system into the maw of Lehman's collapse? That facially appears to be perjury, incidentally. The answer is again NO, and one of the people directly responsible (at the time the head of the NY Fed) was actually rewarded for this act (among others) by being appointed to head the Treasury Department (Tim Geithner.)

Did anyone get prosecuted for the felony of perjury in filing literally hundreds of thousands of knowingly false documents in foreclosure actions across the country? NO.

How many hundreds of thousands of Americans lost jobs and homes as a direct result of this? How many lives were ruined? Now ask this: How many people were made whole on the damage they suffered as a result of these acts, all of which were facial violations of the law?

NONE.

It is broadly illegal to price-fix via any mechanism where market power exists. So says 15 United States Code, Chapter 1. Go read it. Virtually the entire US Medical System operates on business models that are facially in violation of that section of law. The latest outrage is an off-patent device called an "Epipen" used for severe allergic reactions; if you need one and don't have it you have a very good chance of dying. They cost about $60 10 years ago, and are about $100 today anywhere else in the world. Except here in the United States -- where they're $400, and if you get on a plane, buy a bunch and bring them back to sell (to make a profit and undercut the price) you go to prison. The exact same sort of price-fixing with the direct support of the US government and FDA is present in virtually every area of medical practice -- from drugs to devices to hospitals. All of this facially appears to be illegal; were I to even have had a discussion with a competitor on fixing pricing when I ran my Internet company that would have been a federal offense.

How many people are dead -- broke -- or both as a direct result of these practices? There is an entire industry that accounts for nearly one dollar in five spent on all items in our economy and it has multiplied its share of spending by a factor of roughly six through the use of these tactics. You, I and everyone else in the country are being overcharged by a factor of five times as a result, it's destroying the Federal budget and has or will destroy state and local budgets also. You can't run a car repair shop without quoting prices before you start turning wrenches and yet it is essentially impossible to get a price, nor to bind the hospital to any figure they give you, for a procedure before it is done.

What did you see James Comey do in regards to Hillary Clinton and her "private" email server, on which she knowingly stored and transmitted classified information? The head of the FBI - the nation's top police officer - stood at the podium and described, facially, a felony violation of the law, which I remind you does not require intent, and then said "no prosecutor would bring the case." Then, one business day later, he sat in Congress and described knowing that a second felony violation of the law, perjury, had taken place in that he admitted he knew she had lied before Congress about 'never' having done so and yet he insisted that he needed a "referral" to "investigate" said act.

If you were being interviewed because the FBI thought you robbed a bank and on your kitchen table was a bale of marijuana do you think they'd need a "referral" to bust you for the weed? You know damn well the handcuffs would be on you in seconds, so why weren't they on Hillary?

Next, if there was no intent as Comey claimed he could not find why did she lie repeatedly, both to the public and Congress, about the presence of classified information on her server? You don't lie about something you aren't trying to hide and you don't hide something that doesn't incriminate you! Prosecutors argue this every single day before juries and get thousands of convictions every year on exactly that basis -- the accused lied about something they did and that lie is evidence that they knew what they were doing was wrong as that's the only reason to lie about it!

Another section of the same law attaches liability to anyone who is involved in these acts and fails to report them. That facially involves Bill and Chelsea Clinton as well as Hillary's entire senior staff! This issue is, again, not just limited to Hillary's conduct. As persons with security clearances (with the possible exception of Chelsea) they all were aware of the law and their positive obligation to immediately report any breach of security of classified information, and failure to do so is a criminal offense.

Finally, contrary to Comey's assertions (which were also a lie, and since they were made to Congress were also Perjury, a felony violation of the law) there indeed are people who not only have been but are being prosecuted for quite-similar violations of the law with regard to classified data. Specifically there are service members who have been arrested, not just demoted or had their security clearances revoked, for putting classified information on unauthorized devices. One, Kristian Saucier, faces 20 years in prison; there is no apparent public evidence that this individual ever allowed anyone outside of trusted Navy circles to see the images. Comey made the blanket statement that the government does not prosecute people who do not give said information intentionally to our enemies; his statement before Congress was a lie.

If you believe this is a singular instance you have your head firmly planted somewhere that the sun never shines. As yet another example out of literally hundreds I cite the recent shooting at Pulse; 50 people died. The wife of the shooter has disappeared and the FBI has pointedly refused to answer as to where she is, despite the fact that it has been disclosed that she drove the shooter to the club and knew he was going to do it. That makes her an accessory just as you or I would be charged with murder if we drove our girlfriend or boyfriend to a bank to rob it and he or she shot dead a teller. There are now reports circulating that this woman was allowed to flee the country and is in the Middle East where she cannot be extradited nor has she been indicted. Before you say one more word about how "blue lives matter" you first have to account for and subtract back off the 50 murders that didn't matter when we had someone who we could charge with them that was both alive and able to be arrested, indicted and prosecuted.

If I, as an ordinary person, fire a gun I own every single round that comes out of the barrel until it comes to rest. Even if I am perfectly justified in drawing and firing that weapon if I shoot an innocent person I remain responsible for the round that did not go where I intended it to and the results of same. Now contrast this with the police of any stripe, who may fire indiscriminately, emptying weapons containing dozens of rounds even into targets that are facially wrong such as a pair of women in a truck when they are seeking a man in California, and yet they are never held accountable for the damage those rounds do to either person or property.

How many people are dead in Orlando not as a result of a terrorist but rather due to the rounds fired by police, along with their intentional 3+ hour delay in entering the building? Where are the manslaugher (or felonious assault) charges for the persons who were hit with wildly-sprayed rounds from police weapons during that breach? Why has there been no accounting for those rounds and the persons killed by them? Why is there never any accounting for said rounds fired by the police wildly and with outrageous disregard for innocent persons in the vicinity? You or I would be charged immediately for such a flagrant display of gross negligence, likely with multiple felonies.

Now consider all of the above flagrant violations of the law, all of which were observed by many officers of the law of all stripes -- federal, state, county and local. Exactly how many of said officers made an arrest and processing of said suspects (including other police officers, CEOs or politicians) for behavior they personally witnessed that was (and is) a facial violation of the law, turning over same to a prosecutor?

Effectively zero.

If that's not enough the shooter in Dallas was cornered -- "treed" if you will, isolated in a parking garage from which he could not escape. Rather than wait him out and arrest him, then go through this entire pesky "due process" thing including a trial and sentence even though he was not presently shooting at anyone the police instead mounted a bomb on a robot and blew him up. You got that folks? Yeah, he was obviously guilty as hell but if you catch someone having just killed your daughter and he's cornered in your shed, either out of ammo or choosing not to shoot at that time, you cannot blow the shed up rather than arrest him! Due process of law? What's that?

Boobus Americanus cheered that on too and yet what you just invited the next guy to do is throw a grenade or make damn sure he has a really BIG bomb with him instead of surrendering when cornered! If one person has no right to due process of law THEN NEITHER DOES ANYONE ELSE -- including the cops.

Folks, all of what has gone on of late is traceable and chargeable to the destruction of The Rule of Law. The destruction of millions of American's financial status, their wealth, their freedom, their health and frequently their very lives are destroyed because CERTAIN PEOPLE, namely the rich, politically powerful, those wearing a "blue" costume of some sort or those who happen to run big corporations can and do whatever they wish and are simply not prosecuted for violations of the law that you, I, or anyone else would be and are.

When you back a bear into a corner it will attack you because it perceives that as the only remaining course of action that it has available to it other than death.

We created the conditions under which drug dealers resort to shooting each other because we made the consensual act of trade in and consumption of certain substances a crime, and by doing so denied them any other recourse under the law for disputes among themselves.

They are at fault for shooting at one another but it is our responsibility because we intentionally removed their recourse to the law.

We created the conditions under which millions of Americans, most of whom are not drug dealers, believe they have no recourse to the law through our willful and intentional acts and then we sit still, swill beer and post on Facebook when the fact that ordinary Americans have no recourse to the law as soon as someone rich, powerful or wearing a costume who wants to screw them is shoved in our faces instead of demanding that all of this crap stop. That message - "you have no recourse" - has been driven in day after day as every "important person", cop or company you care to name pulls some stunt that would result in anyone else facing down an immediate felony indictment and walks away laughing or, equally as bad, collects hugs, donuts and, for corporate executives, million dollar bonuses.

Specifically, and in reference to recent events, it is our refusal to demand that police officers be held accountable for every round they fire just as is any other person.

It is our refusal to demand that those in political power who perjure themselves are prosecuted while if you lie you go to prison for obstruction of justice.

It is our refusal to demand that "law enforcement officers" who aid and abet someone who can facially be indicted for multiple counts of murder "disappearing" be held accountable as accessories after the fact and indicted themselves, never mind refusing to demand that our former Attorney General and current President who between them, along with dozens of other "sworn officers", knowingly armed drug dealers also face indictment for their acts.

It is our refusal to demand that the cops who claimed they had video footage of an innocent man shooting and plastered same all over the media when they knew they did not be prosecuted for intentionally causing him to be subjected to death threats and have his reputation destroyed while if he had told the slightest untruth to said cops he would have been charged with obstruction, lying to investigators or both. Worse, instead of tendering that demand and sticking to it we bring the cops donuts, pay for their lunches and post all sorts of laudatory crap on social media, cheering on the lies!

It is our refusal to demand that an officer who claims to pull over a car for a broken tail-light when both lights are clearly illuminated on the dashcam video and then shoots said motorist be immediately brought up on murder charges and as prime evidence of his guilt we use his intentionally false statement that he was stopping the car for a broken taillight.

It is our refusal to demand that police officers who steal property under so-called "civil forfeiture" when they have no actual offense they can charge the owner with be prosecuted and imprisoned for grand theft and the entire department so-involved dismantled for Racketeering, exactly as you or I would be if we all got together and held people up at gunpoint claiming that they had committed some crime, stealing everything they owned.

It is our refusal to demand that executives in the medical and pharmaceutical industries face the music for conduct that facially appears to violate hundred-year old anti-trust laws that not only mandate a decade long prison sentence for said executives they come with company-ruining fines big enough on a per-count basis to destroy any corporation that pulls this crap.

It is our refusal to demand that all of the "finance professionals" who sold mathematically impossible schemes in the pension and insurance space to teachers, police officers, firemen and others go to prison and have their firms confiscated for promising that which is impossible.

And it is our refusal to hold accountable all in a given role who are aware of this rank corruption, have taken an oath to uphold the law and have violated that oath by either not doing their job directly or sitting silently while others refuse to do so. It is illegal for a person to be associated with Daesh even if they do not personally commit a terrorist act. Given that fact why can any member of a police force or other government agency, whether federal, state or local, cover up or refuse to investigate blatantly unlawful behavior without everyone involved in same being charged as co-conspirators when the law clearly defines that someone who acts as an accessory before or after the fact is equally liable.

If this issue -- the utter destruction of The Rule of Law -- is not addressed now there is a very real risk that the spiral of events that has been growing, first slowly and now exponentially, could erupt into literal war within our own nation.

If it does you had better get up and look in the damned mirror because it is the collective inaction and refusal to demand the restoration of the Rule of Law by the American people that has and will lead to this outcome. There is no violent repression -- by police or anyone else -- that can stop it.

Only restoring the Rule of Law so everyone has equal recourse to the law will stop and reverse what is otherwise inevitable.

It is for this reason that I have decided that for the present I am going to go enjoy whatever time is left in a reasonably-peaceful society here in America instead of writing for your consumption, for I neither believe that this relatively-peaceful state of affairs will persist for long nor do I believe any material number of people will lift a single finger to do anything about it other than whining on so-called "social media."

Eight years is enough time to see whether or not there is any indication that any material percentage of the public gives a good damn and absent a marked change in the evidence my verdict is in.

Han was not wrong in his assessment of the state of Rule of Law in the Star Wars Universe. We must not, as a society, allow that assessment among people in this nation to continue on the path it is on here in the United States or the outcome will be the same.

~~~

USA Watchdog Interview

Greg Hunter does a nice job, and asked me to appear -- here it is, embedded at the bottom.

The take-away from this, if you don't feel like watching the interview, is quite simple: Without the Rule of Law we have nothing, and our nation currently faces a critical fiscal emergency at the federal level just a few years down the road -- certainly, during the next President's term.

There is no way out of that box without taking on the medical monopolies. None.

That's the math.

2009 / Obamacare was an attempt to "buy more time" along with protecting said monopolies from a market-driven incipient collapse. This was rank public corruption on a grand scale, and it did nothing more than add a small amount of time, much like closing "watertight" doors on the Titanic when the water can cascade over bulkheads (as I expected it would and wrote on at the time) because all it could do is force more people onto a sinking ship. The compound growth nature of federal spending on medical care has remained unaltered; it was not flattened to zero, or even to the expansion of nominal GDP. Worse, the expansion rate for Medicaid, several years after its one-time expansion under Obamacare (in other words the one-time effects are gone), exceeds that of Medicare -- so those who claim the cost escalation is due to people getting older are lying through their teeth.

The bigger-picture issue, and the one that threatens to turn this entirely-predicted fiscal catastrophe (one that I've talked about for 25 years and written about pretty-much continually for the last 8 right here in The Ticker) into an economic and social disaster never before seen in America (but seen repeatedly in other nations such as Venezuela and Argentina!) is that innovation has effectively collapsed at the same time.

Why?

Because innovation is in the main about entrepreneurship; individuals setting up small businesses and taking "moonshot" risks. The reason the USSR collapsed, and in fact every socialist or communist nation eventually collapses, is that without the dangling gold ring (no, folks, it's not made out of brass!) you can grab for and keep nobody has an incentive to take such "moonshot" risks with their own capital, whether that capital be intellectual or physical.

Today, if you're an "entrepreneur", you can open a coffee shop, a restaurant, or (provided you don't care about religious convictions) a bakery and your risks can be somewhat quantified.

But the corner coffee shop will never propel the nation forward on innovation.

Consider people like Edison, Bell, Crapper or even Ford. All changed the world. Edison made roughly 1,000 attempts before he hit the right combination for a working electric light. Bell of course took the telegraph and turned it into the telephone. Crapper, well, you know what he invented. And Ford took cars from the realm of bespoke, hand-assembled devices that only the most-wealthy could afford and made them accessible to the common man. These were transformative changes, not incremental ones.

What this nation needs is a lot of people like Edison -- or myself -- getting out there with projects that are highly innovative and risky. The problem today is that if anyone who is politically or corporately powerful can ignore the law they can and will either step on the inventor or simply steal whatever is created despite such actions being illegal and there's nothing the person who did the inventing can do about it. At the same time if an inventor tries to do the same thing to those very same big corporate and political people they will go to prison and be bankrupted.

This asymmetry was a material part of why I got out of the Internet business in 1998; in a rapidly-evolving industry when only a few "choke points" develop where such asymmetry exists -- and where those who can evade anti-fraud and collusion laws with impunity begin to coalesce and exert that power -- anyone without the ability to flaunt the law is at such a severe disadvantage the smart move is to reduce the value you have at the time to money and walk off the playing field. Your only other sane option is to attempt to become large enough that you acquire that same immunity. But at that time this asymmetry was much smaller than it is today. Today it is literally in every line of business, everywhere. For example I have utterly no reason to believe that if I brought to market the software that I have written to automate homes and save energy, a package that contains a fair number of innovative features some of which I've never seen in any other product, it would not be immediately stolen by some large corporation (whether in the US or not) and despite the fact that copyright infringement is a criminal offense the best I could do would be to try to sue at a cost of hundreds of thousands of dollars -- during which time my business would be destroyed. As a result there is no logical reason for me to package and market that product, and while I have no idea if that is indeed one of those "moonshot" success stories (because it hasn't happened yet) it is exactly those moonshot attempts, only one of a hundred or so that bears out, that has provided essentially all of the true ground-breaking innovation in this nation over the last two hundred years.

Add to the recent record the insults of this nature since the 2000 tech wreck. The intentional creation of serial bubbles, the intentional and retroactive "pass" given to the illegal Travelers merger and Greenspan by Congress and President Clinton, the intentional refusal to prosecute screamingly-obvious fraud that not only bankrupted millions of Americans but caused others to pay 50, 100% or 200% too much for property that was in fact worth a fraction of its ask during the housing bubble (a distortion that the government has intentionally rebuilt to a large degree in the 7 years since and now is just as much a threat to success as it was in 2006!), the serial nature of violations of the law by myriad large corporations, crimes which for the ordinary person (or not-big-company) would carry hard felony prison time and more. Just look at companies such as Herbalife which recently admitted that its "recruitment" techniques were legally indefensible -- why would they have agreed to change said techniques if they were confident they'd win in court? Let me remind you that in 1967 the television series "Dragnet" featured a scheme in which recruitment (rather than retail sales of product) was the primary reason to get involved; the purveyor went to jail after a mathematician established that such schemes can never in fact produce the promised profits for any material percentage of the recruits because the number of people who must be recruited expands exponentially and quickly exceeds the population of the nation (or world.) Here we are nearly 50 years later and guess what's still making the rounds?

Ask me, as an entrepreneur, to start a business under a set of laws that proscribe a particular set of behaviors and I'm fine with it; nearly all of these laws, in my opinion, are in fact good and fraud is bad. But if you ask me to do so while competitors who are 10, 100, 1,000, 10,000 times my size or have some patron in the political process allowing them to break every one of those laws without a single person going to prison or the company being shut down my response to a request that I take on that risk and innovate becomes this:

Without entrepreneurs -- people like myself -- there is no innovation.

There is no "next great thing", in the main.

Oh sure, there are exceptions that occasionally come out of large companies, but the rule still holds: If, as an entrepreneur, you cannot rely on recourse to the law and equal treatment among competitors then your incentive to take highly-speculative "moonshots" with your own capital is greatly diminished or destroyed.

The risk of the breakdown of civil society and rampant, lawless violence is very real as well. I have written countless articles on exactly this point; if someone believes that when the lights come on behind them for speeding that they're going to be murdered by a cop possessing grossly superior firepower and armor instead of getting a traffic ticket then on a purely-analytical level an entirely-expected outcome when the lights come on is for such a person to shoot first!

Now let me be clear: The person who does the shooting is to blame, of course, for the simple reason that doing so is a naked act of lawless aggression. It thus cannot be excused or condoned.

However, we as a nation and body politic are responsible for cultivating that man's belief that he's going to die because he was caught speeding. We specifically cultivated that belief by allowing a cop to fire on an unarmed man in Miami with his hands up and not be immediately arrested on felony assault charges, as just one of myriad examples. The two ladies in the truck in California that had their truck riddled with bullets when Dorner was being sought, yet no charges were brought, is another. Those who say there's no racial component to this sort of abuse have their head firmly planted up their ass; nobody amasses 50 traffic stops that are legitimate rather than blatant harassment in less than a decade yet still holds a valid driver license, but the guy who was shot in Minnesota indeed had said stops and a valid license, never mind that there is not one jurisdiction in this nation where a person suspected of a serious felony, as the cop's lawyer has alleged, is pulled over on a "routine" traffic stop protocol -- there is an explicit felony protocol for such cases and it exists precisely because if someone believed to have committed an armed robbery in fact did commit the crime they know damn well they're caught as soon as the lights come on and are going to jail -- see above for why that might lead them to shoot first if you give them a tactical advantage. Duh.

But the real problem with our loss of The Rule of Law is not so much in the risk of the breakdown in civil order, and this is belied by simple statistical facts.

Even with the recent political screamfest about cops being shot, even with gangbangers on the street, even with the crime and violence we have today the murder rate has in fact shrunk tremendously over the years; in fact it stands at about half of what it was as recently as 1990 despite all the screaming by media outlets and politicians alike for "more" gun control and "more" monopolies on the use of force. The facts just are; you're less-likely, statistically, to be murdered today (by anyone, whether you're a cop or not) than at any time since the 1960s.

No, the real risk when The Rule of Law disappears is the destruction of entrepreneurial reward, and the fact that the people you most want to engage in entrepreneurial activity are precisely those who have the intellectual and analytical firepower to look at the world around them, see this corruption for what it is and properly factor it into their risk:reward calculations. They will, in ever-increasing numbers as the corruption increases, stick up the middle finger rather than innovate and take risk.

Without said entrepreneurs the fiscal mess staring us in the face will, as a matter of mathematical certainty, consume the nation.

THAT is the problem -- not cops being shot and the potential outbreak of civil unrest.

You, I and rest of the nation have the power to compel the return of The Rule of Law and prosecution of those who have and do blatantly violate its strictures even though they are currently "shielded" by virtue of being politicians, government employees, or the directors, officers and managers of large corporations. We have the power to demand and enforce cessation of this lawless conduct best described as racketeering through lawful, peaceful and intentional inaction. We can financially strangle those organs of government and thus all dependent on those that refuse to comply. Since a tiny percentage of the population in fact produces virtually all real economic expansion if even a small minority of those people go on a general production strike, a perfectly-lawful act, continuation of the current state of affairs becomes fiscally impossible.

I will consider resuming my regular Ticker activity, or for that matter resuming being an entrepreneur, when I see evidence of said shift in attitudes and actions among the American population.

Karl Denninger-Only Way Out is Stop Lawlessness Top to Bottom - YouTube

https://www.youtube.com/watch?v=6_gxEBnPm7w