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The Market Ticker: A Clear And Present Danger?

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by Karl Denninger

An interesting title in an email sent to me overnight — but I don’t quite see it the way the writer had hoped.

Let’s first dispense with the underlying claim: There’s something sinister, evil, or simply unlawful about protesting — exercising First Amendment Rights — if the message goes on for more than some period of time or if anyone is inconvenienced.

Uh, no.  That’s not the test.  It never has been and isn’t now.

Remember that our President (whoever it is at any given point in time) shuts down entire cities on a regular basis for political purposes.  Think not?  Wrong.  Anyone remember Clinton’s famous haircut?  But that was just one example; Presidents have in the modern era literally closed entire freeways end-to-end for hours at a time.  I got caught in that more than once when I lived in Chicago and it just recently happened in LA with President Obama.  It’s almost a national sport and yet I hear nobody claim that it’s illegal to inconvenience entire cities for the political perquisites of a single individual.

And note carefully folks — in both the case of the President going somewhere in the US to make a speech or fundraising dinner and the OWS folks marching on the NYSE, the underlying purpose and intent is political speech.  Both create disruption and that disruption is intentionalThe President could choose to not make his speech, and he could choose to drive a Chevy, dismissing his detail should he so choose (and accepting the risk thereupon) but he doesn’t.  Likewise the OWS protesters could choose to not make their speech, they could choose to not march today, but they chose not to.

So I am forced to dismiss out of hand the argument that because people and private businesses are inconvenienced that this is a violation of the law.  Sorry, but until I as a private businessperson or just an old-fashioned private citizen am entitled to compensation from the President personally when he shuts down an entire freeway for hours so he can have his little security bubble, not to mention every other place he goes, this claim amounts to nothing more than “The divine right of Kings” and we’re not supposed to have Kings in this nation.

Second, there is a deeply-disturbing undercurrent that has surfaced in the last week or so at these protests, and it has nothing to do with the protest and everything to do with the cities and other governments involved. 

I speak of NY’s (and Oakland’s) acts regarding the media.

The First Amendment, including not only the freedom of speech but also freedom of the Press, is sacrosanct.  It is the second to the last guardian of our representative republican form of government.

 ‘Our liberty depends on the freedom of the press, and that cannot be limited without being lost.’ – Thomas Jefferson

There is no need for an arbitrarily-issued (or denied) “Press Pass” to be a member of The Press.  Being a member of The Press is a function of what you’re doing, not whether you have a permit.  Like the remainder of the Bill of Rights one does not need a permit to exercise a right.

If you are holding a camera and filming, in still or video, for dissemination to the public, if you are carrying a recorder and interviewing people for dissemination to the public you are a member of The Press.  NYPD refuses to issue “press credentials” to “online reporters” (e.g. moi) which is a clear violation of the rights of those who report in other than their “approved” media.  Note that having and carrying a Press Pass is itself nothing more than a convenience factor for the police in identifying those who would be engaged in such protected activity, since again, a right needs no permission slip for its exercise.

NYPD is reported to have closed airspace over Zucotti Park during their recent raids to the press and both arrested and in at least one documented case beat a reporter. 

THIS IS POLICE-STATE BEHAVIOR AND MUST NOT STAND.

No legitimate law enforcement activity taken in a public space can legitimately exclude The Press.  The Press is well-aware that being present in such a circumstance carries the risk of injury or worse.  That’s part of the game, just as it is when a reporter embeds in a war zone.  You do it because it’s part of the job, and you willingly accept that risk. 

There is an obvious question in these reports that is raised: NYPD and/or Bloomberg doesn’t have jurisdiction over airspace; the FAA does.  If NY authorities actually issued this order it was blatantly and intentionally unlawful.  If such a closure was issued by the FAA it should be findable as a NOTAM or similar bulletin; I’ve failed to find same.  In other words such a “closure order” by NYPD or Bloomberg appears to be blatantly unlawful.  That a CBS chopper was grounded by the NYPD, however, was reported by a Reuters editor; it thus appears to be a credible report.

The fact of the matter is that when authorities exclude The Press from viewing and reporting on acts that they take in a public space and enforce that exclusion through the use of force, as occurred in this case, it is by definition that they are doing so because they do not want the public to see what they intend to do.  That is, their intended actions are known to them in advance to be over the line of what the people will tolerate and/or are over the line of legal law-enforcement behavior. 

The very act of exclusion declares intent — that is “scienter” — to commit violent felonies upon the people.

This is the lesson of history: Regimes exclude reporters because they intend to commit large-scale mayhem, violate people’s rights and even commit wholesale murder.

The first two Amendments to the Constitution are present for the specific purpose of preventing this behavior by the government — by the ever-present explicit threat of exposure of such behavior to white-hot sunlight where the people may judge it, and, God forbid, so the people have the means in the gravest extreme to put a stop to it.

At the root OWS is about massive injustice.  We’re not talking about small exercises of improper influence and lies either — this is about really, really big ones.  Take, for example what Matt Taibbi wrote about yesterday:

Last week, a federal judge in Mississippi sentenced a mother of two named Anita McLemore to three years in federal prison for lying on a government application in order to obtain food stamps.

Apparently in this country you become ineligible to eat if you have a record of criminal drug offenses. States have the option of opting out of that federal ban, but Mississippi is not one of those states. Since McLemore had four drug convictions in her past, she was ineligible to receive food stamps, so she lied about her past in order to feed her two children.

Ok, so the law is that you’re ineligible to receive food stamps if you have a conviction for a drug offense.  She had four and lied; ergo, she committed fraud.  The amount of the fraud was $4,367 — the taxpayers got rooked out of that money by the black letter of the law. 

For committing this fraud Anita drew three years in prison.  Now you can argue that this punishment is too harsh if you wish, but the fact remains that it’s illegal to commit fraud and if you do it and get caught, you risk going to prison.  She did it, albeit to feed her children (one presumes), she got caught, she then made full restitution and got three years anyway.

Now here’s the problem: Both Citibank and Goldman rooked people out of hundreds of millions of dollars, it is alleged.  They were allowed to neither admit or deny culpability and pay back only a fraction of the harm done while nobody went to prison.  Even worse Citi’s former risk manager testified under oath that by 2007 fully 80% of their loans violated the quality guidelines that were allegedly in place so as to prevent the buyers from being rooked and documentary evidence was produced that the board of directors was informed that it was happening.

Nor is that all: Wachoiva pled guilty to laundering hundreds of millions of dollars of drug money for Mexican Drug Cartels.  Some part of that money undoubtedly went to buy guns that were then used to kill both Americans and Mexicans.  Did anyone go to prison?  Nope — Wachovia got a “deferred prosecution agreement” and simply paid a fine.

Pfizer got caught twice illegally promoting drugs for “off-label” uses (a felony) and was committing the second offense while negotiating a settlement on the first.  The CEO, Jeff Kindler (general counsel at the time of the first offense, CEO at the time of the second) was rewarded by being elected to the board of the NY Fed!  Again, Pfizer simply paid a fine for admitted criminal conduct but nobody went to prison.

Remember folks, the standard here is that using drugs for unlawful purposes is a serious offense.  Just ask Anita, who covered up her previous convictions for unlawfully using a substance we don’t like very much and drew three years in prison for doing so.

If these offenses were “one time” deals you might find a way to excuse them.  But they’re not.  Citi, among others, has repeatedly violated these anti-fraud laws.  As I recently wrote upon the majority of the firms brought up on such charges had previously been charged and consented to injunctions — they were therefore serial offenders and even worse were violating court orders along with the law at the time. 

Yet nobody has gone to prison.

The argument is often raised by the political elite, including Obama, that the acts in question are “not illegal.”  That’s nonsense.  Violating an injunction is contempt of court and is most-certainly illegal.  Fraud, beyond trivial amounts of money, is a felony.  Intentionally filing knowingly-perjured documents in a court is a felony and yet the very first criminal indictment for the practice of doing so on a routine basis, with something like 100,000 admitted acts, was issued just this last week in Nevada (bearing some 600 counts.)

Civil disobedience and serious movements of protest tend not to arise unless the injustice being complained about is pernicious and impacts large swaths of the population.  Granny might wave a sign in front of the courthouse if she gets screwed by a bad judgment, but it’s not until millions of people get hosed that you have people willing to live in a tent in near-freezing weather to make a political statement.

We’re there folks.

Those who wish to argue that there is “recourse to the political system by simply voting” have a more than two-decade record to contend with that says it doesn’t work, exactly as MLK and the other civil rights marchers did.  The fact of the matter is that neither major political party gives a flying f$3k about the frauds committed on a daily basis by major businesses, especially in the banking sector.  Small business, on the other hand, is an entirely-different matter.  There’s a user on the forum who’s former boss went to prison for forging time records in his small trucking company.  The large trucking companies do the same thing literally every day and the number of times you’ve seen someone go to prison for this offense is an effective zero.  Were I to have committed fraud when I ran my Internet company I’m sure I would have done hard time for it.  But when I was able to document a rank violation of the law relating to local exchange carriers I couldn’t get anyone in the regulatory or law enforcement apparatus interested in enforcing the law, even though I had written proof of the violation!

When this sort of thing becomes a business model and the people get screwed to a grand degree, as has occurred in this case, exactly what sort of recourse would you suggest the people use?  I argue that non-violent protest and demonstration is all you’ve got that meets the criteria.  The other options are to put a stick in your teeth, in which case you’re living in a feudal society and not a republic, or to engage in vigilante justice and hang the offenders in public from the nearest lamppost, in which case you’re living in anarchy.  Neither is acceptable conduct and neither has a reasonable probability of doing more good than harm.

If you remember we’ve tried the “wave signs and then go home” protest form too — that led to exactly…. nothing.

Thus, durable and continuing political speech, exercising all of one’s right of free expression, is all that’s left in the political sphere.  The boundaries of The First Amendment are intentionally wide when the subject matter is a political protest for exactly this reason — the other two alternatives in the choice of actions available to the people are to either live in oppression or rise in revolution, and if the first is all that one admits as “reasonable” (arguing that durable and continuing political protest is “inappropriate” or even worse, “illegal”) then the latter becomes, over time, inevitable.

We must not go there as a nation and people.

The Market Ticker – Clear And Present Danger?

[The Market Ticker]


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