Bill Totten's Weblog

Thursday, April 30, 2009

Viral Flu

Earth's Oldest Trojan Horse-Invaders

by Elaine Supkis

Culture of Life News (April 26 2009)

Viruses are one of the Elder Earth Life Forms. They use us as their Trojan Horses to invade new territory. I was one of the very earliest US victims of the infamous Hong Kong flu. I got it from a Vietnam Vet who returned from Nam, came home, partied and collapsed. I was with the Free Clinic on night shift and I gave him mouth-to-mouth resuscitation until the oxygen arrived. Three days later, I was walking down the street when I felt very peculiar. It was as if I was sinking into the sidewalk. But no, I was literally collapsing.

I was not taken to the hospital because the doctors I worked with decided to treat me at home with them working with Free Clinic staff, in shifts. They thought, at first, this was no big deal but were very concerned that my fever was shooting upwards, rapidly. I then had trouble breathing. Being semi-conscious, I decided to deliberately cough up the increasing congestion in my lungs so they put a pan next to my head and I would turn and choke it up, frequently.

The fever kept rising. I became very delirious. The staff ran out of ice so they went on the FM radio to ask for ice and local restaurants delivered ice. My fever was now 105 degrees. I was told, much later, that they were discussing how the coffee maker was not working. I briefly came out of my seeming coma and said, 'Put the coffee on me, I'll heat it up for you'.

By then, the staff got a report back that the soldier I saved had died. They were already using greater and greater care, not to get sick themselves. By day three, two of the staff were now sick, too. But no one abandoned me and for that, I am eternally grateful. I would have died.

As it was, they kept me hydrated and finally, I came out briefly to the surface to tell everyone, at about three am [known as the hour of death, by the way] to whisper, 'If a bird sings in the window at dawn, I will live'. And there was this big bush outside the window. At dawn, a wren perched there and began to sing and sing. I sighed and fell asleep and the fever dropped to a mere 101 degrees and I survived … barely.

My brain was fried. I couldn't read or write. I didn't know who I was. Amnesia is very peculiar. I didn't know my parents who seemed to have appeared out of nowhere. My father put up one of my paintings so I could see it. He said, I asked who painted it. I said, 'That is a wonderful picture, it tells me things about myself. It is the best picture in the whole world. Who painted it?'

Afterwards, I was knocked by pneumonia, lost half of the teeth on my right jaw and had to have a dental surgeon come in to operate. I was a child genius before it but now, had to work to learn things. I told everyone, for years, this actually helped me a great deal because it forced me to think harder and longer in order to comprehend things and the labor was where the value lay. This meant, I had to really collect information before figuring things out.

People are increasingly scared of the newest incarnation of this old disease. This is NOT AIDS. That disease is extremely noxious, spreads via sex and like all sexual diseases, is nearly impossible to get rid of, runs along merrily for millennia and the more you keep people alive who have it, the more they spread it. All viral diseases of the Hong Kong flu type race through populations and then vanish for several generations.

Due to evolution, these flues have their own 'hockey stick' graphs. They are not like sexual diseases that simply spread outwards, relentlessly but fairly slowly. These pig flu/avian flu viruses move at tremendous speed and end just as swiftly.

When I got sick, the doctors sent samples to the Federal health authorities for testing. I saw a copy of the report. It said, 'What the hell is this?' written off on one side of the report. Viruses have to go dormant and then mutate in order to flourish. They are the nearest life form on earth to the classic 'go to infinity, fast' model that I talk about all the time. This is rather funny because viruses are one of the oldest life forms if not the oldest. They prefer non-oxygen environments and when mutations in the early earth waters created photosynthesis organisms, these multiplied very rapidly, pushing hard on the viral community.

Which retaliated by 'eating' the photosynthesis creatures. This is why viruses took up housekeeping inside of cellular living creatures. And like bacterium, they are activists who are tremendously successful. Which is why they have these regular boom/bust cycles. That is, not all victims of viral attacks die. And when they survive, they are protected by antibodies [which are very, very ancient!] which is why viral kills come in cycles that are often twenty years apart. This is also why only parts of the population are badly hit.

My parents, for example, as well as the oldest two doctors who attended me, didn't get this disease at all! Anyone my generation, though, was a prime target. So the doctors forbade anyone under thirty from visiting me! Heh! Once we were certain I was not a danger to others, I could have visitors.

Running around in panic because of a viral surge is useless. You can't easily hide from it. Sometimes, we must endure unpleasant visits from our fellow living creatures. Viruses are living things, by the way, just as we are. So is bacterium, plankton, et cetera. All single celled creatures once ruled this planet and used all of its resources for multiplying and dividing. We cannot banish them.

Looking at humans on a more cosmic scale, we are identical to them: we are in the middle of the final stages of our own, epic 'hockey stick' growth cycle and are heading towards a crash. As do all living things that end up maxing out natural resources. All of us fear death and understandably so. But Death will visit, invariably. Even the greatest religious figures who found religions die.

Even the very gods die, when the Zodiac stars shift over the eons. We cannot live life in fear of death. During the Black Plague, a truly noxious death visitation, people decided to stop wailing and crouching in fear and began to do the opposite. And the urge to celebrate, have fun and live even as death swings its scythe is one of the more admirable parts of our psychology. Animals, when they get sick, just lie down and passively die [except when they have rabies, another viral innovation that has a mere single celled entity driving its victim to work on behalf of the virus!]. Humans defy Death.

And this is why the latest flu story both worries me and yet, doesn't worry me. These things are inevitable. I hope my own children don't get it. I hope, if they do, they get the care I got which saved my life. And I hope hospitals understand that the best way to deal with this is to use OLDER PEOPLE TO CARE FOR THE SICK who are suffering from this disease.

That is, there should be medical protocols for symptoms of this disease. If a patient shows any of these, only certain members of the staff should attend. My doctor and the nurse who got the Hong Kong flu from me also got very, very sick. If proper protocols were used in the beginning, they would have been spared that suffering. But they did suffer less than I and this is due them being cared for instantly whereas, I didn't know I was ill until it became very obvious.

In conclusion, all of us survivors of the Hong Kong flu should be the ones to care for the victims of this flu. And we should respect viruses more and know that they can evolve faster than we can fight them off. This is their nature, they are one of the Elders on Earth.


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Bill Totten

The Despotism of the Image

by Dmitry Orlov

Club Orlov (November 22 2006)

Editor's note: This is the heartiest laugh I've had for a long time, and it's because Orlov zeroes in so well on the dominant culture's irrational attachment to the images of the car and the suburban house. - JL

The ostensible goal of this Web site, and the small but enthusiastic community that surrounds it, is to change the culture. We all recognize that the contemporary mainstream culture of over-consumption and unbridled growth is toxic on every level - physical, emotional, and cultural - and is accelerating on a collision course with resource depletion, climate disruption, and environmental devastation. We all want to jump off in time, or, perhaps lacking the necessary courage, to find ourselves lucky enough to be thrown clear.

What this means in reality is anything but clear, and the best that most of us manage is some small display of personal virtue - recycling plastic packaging, bicycling instead of driving, taking the train instead of flying, growing a bit of our own food, eating organic, using energy-efficient light bulbs, investing in renewable energy, and so forth. These are the tokens by which we recognize each other. How such personal virtues are defined is a matter of personal taste: some consider driving a hybrid car sufficient, while others prefer eliminating cars from their lives altogether. Some seemingly necessary steps, such as learning to live without oil-based plastics and other synthetic materials, seem beyond all of us.

It seems to be something of an article of faith that if we all did enough of such things, whatever they may be, then the problem, whatever it happens to be, and however we choose to define it, would in due course be solved, and civilized life would go on just like before. Just yesterday, in company, light after-dinner conversation happened to breeze past the topic of energy, and how the British were lucky to discover coal just as timber was running out, and were then lucky enough to discover oil and natural gas before the coal ran out. And now that they have all but run out of oil and natural gas, "there will be enough renewables to power it all!" was the swift retort. To those of us who have the right technical background, and understand the physical quantities involved, this claim is preposterous, but I knew better than to object.

You see, I realize that it is a requirement of this culture that we all project an image of unbounded optimism and faith in our technological prowess. Anything less is automatically labeled as defeatist, fatalistic, and lacking in imagination. What is meant by this word is not the active work of the intellect, mind you, but the passive, voluntary acceptance of a set of common imaginings, or images. The most important images comprising this artificial reality, the ones at the core of this realm of enforced fiction, are the ones that, on the surface at least, have to do with personal dignity and physical comfort.

I sometimes have a chance to observe a clash between two competing images: that of personal virtue (bicycling) and that of personal dignity and personal comfort (driving). I am a year-round bicyclist in a northern city where temperatures occasionally dip below freezing, and where it sometimes snows. It is a liberal city, meaning that many people here share this sense of personal virtue that attaches to tokens of eco-friendly behavior, such as bicycling to work - not that they would consider doing it themselves, of course, unless the distance were short and the weather perfect. But quite a few of them wish to experience this virtue vicariously, and, seeing me suited up and wearing a helmet, strike up conversations with me in the elevator, on the way to work, especially if it's hot or cold or raining or snowing. Often they ask me how I keep my feet from freezing (I wear wool socks) or how I avoid falling down on ice (I use studded tires) or how I negotiate those steep hills (I push hard with both of my legs).

My answers, although offered quite cheerfully, are invariably greeted with silent disappointment, and it is interesting to ask why that is. Perhaps it has something to do with this: bicycling for me is not a matter of personal virtue, but a way of conveying myself between places with a maximum of pleasure and a minimum of fuss and aggravation. I do so with complete personal dignity and physical comfort, because my experience of these things is based on my actual emotional state (which is generally placid) and physical comfort (which, for me, involves a healthy dose of pain, and results in good health and a sense of well-being). My suspicion is that the dignity and comfort of my car-dependent elevator companions does not have a basis in personal experience, but is bound up with some other, atavistic impulses, which find their fullest expression in the image of the automobile. They are disconcerted to find it bested by a primitive, engineless, two-wheeled contraption.

It is possible to erect a virtual mountain of rational, logical, quantifiable arguments against cars and in favor of bicycles. A most amusing line of analysis involves computing their relative effective average speeds. First, compute the total cost of ownership of a car, including purchase price, financing costs, maintenance costs, registration, tolls, traffic tickets, and so forth. Now, include all external costs: road construction and maintenance, damage to health caused by air and water pollution, loss of productivity due to death and maiming in auto accidents, associated legal costs, and, of course, military budgets needed to equip the armed forces to fight for and defend the oil.

Now, take the drivers' average income and hours worked, and find out how many hours of labor it takes to cover all of these costs. Add to that the actual time spent driving. Now take the number of vehicle miles traveled, and divide it by the total number of hours spent both driving and earning enough money to pay for cars. Rather than give you the answers, I encourage you to do your own homework, but I can tell you that the end result of this exercise is always the same: the bicycle is faster than the car, and, depending on one's assumptions, driving is slower than walking.

Another amusing line of analysis involves the subject of public safety. There are some overall practical limits on how long one's daily commute can take, generally under an hour each way, regardless of distance traveled or form of transportation used. Thus, the relevant safety-related statistic is still accidents requiring hospitalization and fatalities, but per unit time rather than per unit distance. And here, it turns out, bicycles are somewhat safer than cars, even in congested urban areas lacking in bicycle paths or bicycle lanes. And although everyone's health suffers from the effects of car-related air pollution, the daily exercise of bicycling mitigates against them to some extent, further increasing the gap.

Thus, from the point of view of public safety, bicycles win as well. Similar types of analysis can be applied to trains, rickshaws, or pogo sticks, with similar results. In short, there seems to be no point in looking for rational explanations for why people prefer cars, or even to think of cars as serving a need for transportation. Their perceived comfort and convenience is but a culturally engineered mirage; if the convenience were real, Al Gore would have made a film about it, perhaps titled "A Convenient Truth: Why I Drive a Car". It is about time we acquiesced to the fact that their primary function is to satisfy a powerful set of atavistic urges.

In its anatomy, the automobile is clearly descended from a certain quadruped ruminant of the equine family, cross-bred with a buggy. Along the way, it gained some predatory genes, giving it a rather vicious disposition, and an often vicious aspect to its facial expression (headlights and grille). It has two eyes (headlights) and four legs (wheels). It likes to run in herds, but resists being overtly constrained, either in direction or in speed. It obeys foot-signals from spurs (gas pedal) and hand-signals from reigns (steering wheel).

There is a large variety of breeds, most of which are prized for their ability to run fast, although they rarely do so. Their main function is to impart a certain sense of nobility to those who own them, whether by giving a gentleman-on-horseback aspect to the driver, or a lady-in-a-carriage aspect to the passenger. As with horses, their sometimes overpowering flatulence does nothing to degrade this sense of nobility.

The car's secondary function is to allow its owner to wield power over life and death. If it were regarded strictly from a public safety perspective, private ownership of cars would have been banned long ago. In fact, what makes a car so enticing, and makes it such a powerful image within the public imagination, is that it is "an inherently dangerous instrumentality", as a lawyer once put it. Unlike a horse, which has two eyes and a brain, and, left to its own devices, will avoid running into things, a car is only too happy to collide, and requires constant vigilance.

This trivial but active supervision, which, to avoid sudden death or serious injury, must be maintained at all times, is at once intensely boring and exciting. Iggy Pop once captured the spirit of this contradiction: "In the death car, we're alive!" In a car-dependent society, millions of people are at all times actively involved in the act of avoiding instant death. In due course, cars and the carnage they produce come to be regarded as forces of nature.

One periodically hears of plans to create "smart highways", and, looking beyond the obvious implication that the current highways are indeed "stupid", it becomes obvious that the cars that travel them are "stupid" as well. Redesigned purely with transportation in mind, an automobile would look quite different.

Three wheels is quite enough, and four is quite excessive, as evidenced by many examples, from race-winning solar cars to Buckminster Fuller's Demaxian vehicle. The drive wheel, front and center, would steer, but would also be designed to run in a groove, eliminating the need to steer except when maneuvering. Hitches front and back would allow cars to be linked together into trains for improved efficiency. When not hitched to the car in front, a simple infrared sensor would regulate the speed so as to keep the proper braking interval. Minimum and maximum speed limits would be bar-coded onto the pavement, and the car would obey them automatically. The engine would be an outboard, lowered onto the front wheel using a hoist and clipped in position, to make it easy to switch out for maintenance or replacement. The bottom of the car would be sheer and watertight, and its drive wheel would have paddles on its sides, allowing it to traverse bodies of water. For storage, it would pivot and stand upright within a small footprint.

But such design exercises are futile: they are a rational approach to an irrational set of requirements. Stupid cars, and the people for and by whom they are designed, will be with us for a long time. Their image is indelibly imprinted on the public imagination whenever little boys roll their little toys around the playroom floor, murmuring "Vroom! Vroom!"

Conversely, it is the downfall of our current public transportation systems that they are designed strictly with transportation and public safety in mind, and fail to satisfy the atavistic urges of their ridership. In adhering to the image of a safe and foolproof public service, they fail to deliver either the thrill of victory or the agony of defeat, and the unsatisfied commuter must make do with impatience, unease, and boredom.

A properly designed streetcar would have either no doors at all, or doors that shut definitively and with great force after a peremptory warning. It would not stop at stations but only slow down just enough to allow passengers to jump on and off. It would be equipped with running boards and external handrails, allowing passengers to display their acrobatic skill by riding on the outside, saving themselves the cost of a fare.

To keep the lawyers at bay, all passengers would be required to sign a waiver absolving the streetcar company of all liability, and traffic laws would be amended to give streetcars absolute right of way in all circumstances and to place all other traffic automatically at fault in case of collision. The fronts of streetcars could then be equipped with plows to sweep aside any object blocking the tracks, eliminating delays due to accidents. The inevitable carnage would provide a constant stream of public safety lessons, courtesy of the tabloid press.

Not only would such a system be cheap and efficient to operate, but it would also, in due course, breed an agile and alert ridership, whose daily displays of bravery and physical stamina would produce a camaraderie and an esprit de corps that is so sadly lacking in the effete and pampered commuter of today. Of course, such a service is an impossibility, for it would go against the image which public transportation is called upon to fulfill: the image of a public charity, serving the young, the old, the poor and the unwell; in short, something called upon to exist for the benefit of those unlucky few who can not drive.

In more and more places, public transportation is made untenable by a condition known as "suburban sprawl", which, more than anything else, fosters car-dependence. The cause of suburban sprawl is the suburban house, and, just as it would be a mistake to look at the car strictly as a form of transportation, it is a mistake to look at the suburban house strictly as a form of housing. Although it provides a set of modern amenities, it must also conform to a certain image, and, just as with the car, we will find that it is this image that best explains both its typical location and its typical form.

It is a common misconception that the main function of a suburban home is to provide shelter, when it is quite obviously and clearly to provide parking. In a car-dependent society, access is controlled by limiting and controlling one's ability to park. Public parking is always limited and often not available, and semi-public parking - at stores, malls, office parks, and other private institutions - is limited to those who have money to spend or otherwise have some business to transact there. While the car confers freedom of movement, it is the freedom to move, via public roadways, between places where one is not free but must fulfill some specific social function, be it working, shopping, or some other socially sanctioned activity. Even if you wish to escape the oppressive strictures of society for a while, and spend time in a wilderness area, you will find that, in a car-dependent society, even wilderness keeps business hours, and closes its parking lots shortly before dark.

In short, the only freedom the car confers is the freedom to drive to and fro between places where you are not free, and the only true exception to this rule is your own driveway. No proper suburban home can be without one: it is your own private highway that leads to your own private house. This image dictates that it be expensively and unnecessarily paved, and not with paving stones, for then it would be a walkway rather than a driveway, but with asphalt. Suburban driveways are not paved for the benefit of the cars, which can handle dirt roads, and clearly not for the benefit of the now commonplace off-road vehicles, but for the benefit of satisfying some innate drive within their drivers: the urge to own a piece of the road.

The symbolic function of the suburban home is to serve as the final resting place at the end of the long drive home. Peace and quiet are considered to be its most essential features, and although the overt preoccupation is with safety and security, its source is an irrational urge for ultimate peace. If a suburban dweller were to trade both the car and the house for an apartment within city limits, the increased chance of becoming a victim of violent crime would be more than offset by the decreased chance of dying in an auto accident, and so the choice is not a rational one from the standpoint of safety.

The real concern is not with safety but with the embodiment of an abstract image of peace. Zoning regulations and bylaws restrict noisy hobbies and deviations from community standards, for it is a sacrilege to violate the eternal slumber of the suburbanite. The ideal suburb features an unbroken expanse of manicured grass dotted with little neoclassical monuments, all slightly different yet all essentially the same. This is the essential decor of a cemetery: the house is in fact a family crypt. Not surprisingly, the final destination of the death-car is the death-house.

All other functions of the death-house, save one, are superfluous, since people can, and do, eat, sleep, and have sex in their cars. As cars grow larger and commutes become longer, more and more of the living is done inside the car, with the sepulchral dwelling only used to unwrap fast food, keep beer cold, and fall asleep in front of the television set. But the death-house has one room that is essential, because it offers services a car cannot provide. This is the bathroom, and it contains the shower, and, of course, the toilet. And not just any toilet: a chamberpot or a bucket of sawdust simply would not do. No, it must be a most unlikely contraption that allows one to defecate directly into a pool of drinking water (which may be deodorized according to taste) and flush it down with copious amounts of more drinking water. How curious it is that while other carnivores have an instinct to bury their feces, to avoid spreading disease, these ones insist on mixing theirs into their drink! Various expensive artifices, none entirely successful, are then needed to keep the drinking water and the sewage apart.

If the urge to defecate into drinking water seems irrational, then what of its ultimate purpose, which is to deny that the body smells? The flush toilet is a tool for denying that the body smells on the inside; the shower, with the help of enforced daily ablutions and chemical deodorants, does the same for the exterior. The urge to deny that humans smell like humans is very strange, because these same people happily tolerate the smell of their cats and dogs, who rarely bathe and smell precisely as they should. In fact, humans do smell, no worse than dogs or cats, and the healthier specimens generally smell just fine, although a junk food diet makes for a rather unpleasant funk. The obvious suspicion is that these people, who drive death-cars and live in death-houses, make every day a bath day because they feel compelled to present an odor-free facade, out of fear that the subliminal stench of death they cannot help but sense wafting all around them might be emanating from them.

Contemporary mainstream culture of over-consumption and unbridled growth, which we would so much like to change, to save ourselves, or to save the planet, or a little of each, is not now, and was never a rational proposition. It is the realization of dark, irrational, self-destructive urges, which were programmed into us through some evolutionary accident, and which are now, and for a short time longer, being given their fullest expression by the availability of cheap and abundant energy.

Appeals to rationality or good sense are futile, because the motive force is a set of indelible, immutable images, which are imprinted on simple minds and at an early age. These images are easy to ridicule, and although ridicule can be powerful, its effectiveness is restricted to those few who have the capacity to understand it. Voltaire was quite thorough in his treatment of the Catholic church, and yet these priests are still with us today, blessing things indiscriminately and fondling altar-boys, because the average churchgoer never had any use for Voltaire.

A much more promising approach is to create new images, of great seductive power, and still simple enough to leave a deep impression on a simple mind. This is the stuff of dangerous politics and revolutionary change: a path rife with unintended consequences, and certainly one to avoid. All that remains is the possibility of an individual effort to free yourself from the despotism of the image.

As for the rest of the consumers who are sold on the images of death, dignity, and comfort, we can be sure that the free market will meet their demand. Those with deep pockets will receive a truly luxurious death that may include a personal museum of transportation and library set amid formal gardens, while those at the opposite end will only be able to afford death in a brown paper bag, but is that not the essence of consumer choice? We should hope that their culture of death dies with them, and, being numerous and diverse, we should hope that this happens long before our species becomes an endangered one.


For a wealth of articles on car-free consciousness and the road-fighting movement of the 1990s, see the archive of the Auto-Free Times (renamed Culture Change) Magazine, at

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Bill Totten

Wednesday, April 29, 2009

Madoffing the US Financial System

by Zeus Y

of two (April 22 2009)

We are seeing unfold before us nothing short than the Madoffing of the U.S. financial system. The recent reports of profitability for the major financial companies - Bank of America, Goldman Sachs, Citigroup, et cetera are exactly Bernie Madoff on a large scale.

Here is the recipe: 1) Cannibalize incoming capital and investment to keep the bonus, fee, and salary gravy train going for broker and firm, 2) Sustain the illusion of solvency by paying dividends and claiming a profit, and 3) Ensure through accounting tricks that liabilities are never counted. It's very easy. Hand out phony returns, based on laundered incoming bailout and investment money. Skim your take. Hide liabilities. Delude people into thinking you are profitable.

Investment banks have all they need to keep the fraudulent charade going: 1) Highly fungible bailout money, much or most of which has no strings, no requirement even to notify lending authorities where the money is going, 2) The power to price assets, including so-called "toxic assets" (sic), in any way that suits them [freed from "mark to market" accounting], 3) An immense amount of greed, entitlement, opportunism, and nihilistic amorality among the leaders and managers of financial institutions, and 4) political enablement which accedes to "too big to fail" blackmail, conducts inconsequential and invisible "stress tests", and assures institutions that no matter how badly or corruptly they perform they will not be taken over.

Forget that manic or addicted behavior has never been solved by enablement. Enablement, in fact, only makes the problem worse by delaying the inevitable and necessary coming to terms.

The Financial Accounting Standards Board's (FASB) recent ruling that banks can establish prices for their assets any way they choose leaves us with a huge valuation-of-assets problem: "I think it's a mistake. If it's too cold in the room, you don't fix the problem by holding a candle under the thermometer", William Poole, former Federal Reserve Bank of Saint Louis president, told Reuters at a conference in New Orleans. "It may increase reported bank earnings by twenty percent, but it has nothing to do with the reality of bank earnings. It's very important to maintain that distinction", Poole said. (

This might alternatively by called the "ninety trillion dollar blender" problem ( South Park did an unfortunately "truth is stranger than fiction" satire on the finance industry in which the industry leaders claimed a Margaritaville blender was worth ninety trillion dollars. FASB's ruling allows them to do just that. If you live by the market (including wildly inflated values), then you should die by the market. Even if you feel your assets are undervalued, you should at least give an accounting as to what they are, why you think they are undervalued, and submit your reasoning to public scrutiny and debate.

As far as I know there is no such requirement presently, and therefore no transparency or accountability. Banks can simply assign whatever worth is convenient for their purposes. This gets back to the counterfeiting charge I leveled against credit default swaps. This is simply phony money. If I can say my pen is worth three million dollars and then borrow against that to try to make a quick buck in some investment scheme, I am committing fraud. Banks do it, and they are acting legally? If past performance is any indication of future behavior, investment banks are probably right now continuing to make highly risky, highly leveraged investments to stoke their personal largesse, while hoping for a Hail Mary patch for their company's books. These addicts won't be kept from their crack.

I know President Obama is trying with his conventional approaches to buy time, space out damage from financial mismanagement, and avoid a panic. There is probably some wisdom to that. However, trusting these companies to right their own ship after the atrocities they have consistently committed is suicidal. Why don't we just pick off these institutions one at a time. I am almost certain that even generous stress tests have shown the major players to be insolvent.

Instead of indulging in corporate welfare to bail out these crooks, force the worst in order, one by one, into receivership (with adequate time in between to absorb and reallocate assets), wipe out the stockholders and bondholders, and sell off the healthy parts. If fraud has been committed, seek criminal conviction and set up a special civil court to allow stockholders and bondholders to seek damages. This will help avoid the "Oh, crap" factor and attendant market panic.

However, it will also mean we as a society will need to take the heat and full responsibility. Gray Davis, according to the documentary Enron: The Smartest Guys in the Room, had the power to do this with Enron (go in and take them over), but he demurred, as Obama has, to the mistaken notion that private market players are always the better arbiter of the mistakes created by those same players.

This protracted travesty is the logical outcome of an economy increasingly dependent upon financialization -the notion that, "Your money can work for you; you don't have to work". Increasingly endless and abstract mechanisms must be developed to create a notion of "growth" that has lost its foundation in real productivity. Our whole economy is being kept afloat by international demand directed, at first, at our derivatives and other phony high-yield financial vehicles, and now (in a reactive spasm) conveniently directed at our "secure" bonds (which is as you noted, Charles, another emerging bubble).

As long as we insist upon enabling this money-for-nothing illusion in ourselves and our financial institutions, our problems will get worse and our character will take a beating.


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Bill Totten

Obama's Secret Plan

In which we speculate that perhaps Obama has a secret plan to discredit the investment banker cabal and thus undermine their vast political power and reach.

by Charles Hugh Smith

of two (April 22 2009)

Many observers, partisans non-partisans alike, have been mystified by President Obama's continuation of the Bush/bankers/Treasury's "privatize bonuses, socialize risks" campaign of taxpayer-funded bank bailouts, phony slight-of-hand "transparency" and political support for blatantly bogus accounting of banks' profits, assets and losses.

The failure of the Obama administration to pursue real regulatory "change" (such as actually enforcing regulations that are already on the books instead of throwing bankers new squeeze toys like "relaxed" mark-to-fantasy accounting) has moved many from mystification to outrage.

Where's the "change" in this continuation of Bush/bailout policies? What is the rationale of a supposedly "progressive" president in filling his financial administration with "investment banker Borgs"?

Let's begin our speculation with a question: if a new President (of either party) wanted to destroy the political power of the investment banker cabal which currently holds sway over Treasury and Congress, what path would actually lead to success?

Does anyone seriously believe that a new President could dent the vast political power of the Financial Aristocracy with a Jimmy Stewart-like speech excoriating the bankers and their minions for gutting the U.S. economy? The chances of that having any effect are zero.

How about tightening regulations? And what happens when lapdogs in Congress quickly rush to gut the regulations or the regulatory forces supposedly empowered to enforce them? If you doubt the power of bankers, please look at what has happened to attempts to limit the most egregious excesses of credit card usury and outrageous junk fees: they're thwarted or watered down every time.

Does anyone seriously believe an obstructionist opposition which supported Bush's giveaways and staggering deficits for eight long years has any credibility? The moment to do something about deficits was 2003, and the moment to vote down bailouts was last Fall (hmm, now there's an appropriate season) when the TARP debacle was shoved down the nation's throat by the Financial Aristocracy.

Does anyone seriously believe the Democrats who cheerily absorbed millions in donations from scalawags and crooks in Fannie Mae, Goldman Sachs et al while obstructing regulations which might have limited the damage have a lick of credibility? To be a partisan in this age is to be either blind or brainwashed.

So let's face it: any President who sought to destroy the political power of the Investment Banker Aristocracy in a frontal assault would be defeated if not destroyed. Any president of either party who dares even mess around the edges of the real power structure gets "the treatment".

Is there any strategy would might actually work? How about "give them enough rope to hang themselves"? President Dwight Eisenhower has long been dismissed as a do-nothing who "got lucky" in his two terms. Perhaps - but he was also a canny politico who didn't say much because he preferred to give his opponents plenty of stout rope. And sure enough, most of the time they promptly hanged themselves with their own excesses.

If you set out to completely discredit the bankers and eviscerate their political power, you'd proceed exactly as Obama has done, enabling it to reach its reductio ad absurdum conclusion of fat bonuses and tax-funded bailouts in the trillions of dollars, at which point the public will rise up in fury, doing the work which was impossible for you, a new "liberal" president.

Imagine the uproar had Obama sought to send the bankers straight into deserved bankrupty and eliminated their looting; he would have been thwarted and second-guessed at every turn by politcos, pundits and the ultra-wealthy Aristocracy whose perks and privileges were threatened, not to mention a Republican Party spoiling to be spoilers.

What better way to discredit the bankers than to give them plenty of rope to complete their tarnished, fraudulent "plan to save Capitalism from itself"? How can they complain when their own bankrupt policies have been supported?

What better way to trigger "change" that even the banking Aristocracy are powerless to stop than to give them everything they want: no restrictions on stupendous bonuses, no punishment or prosecution, no mark-to-market rules with actual bite, no limits on accounting legerdemain, and on and on and on?

You want the sharks to gather? Then keep chumming the water with banker-designed policies; hey, even denounce the tax rebellion movement as "off base". Make like you're doing the banker/Plutocracy's bidding in every possible way. And what will be the result?

A complete repudiation of the entire Bush/Treasury/banker bailout and "free pass" to further plundering. And when the public rises up in righteous fury, then you appear to bend, almost reluctantly, to "the public will".

If you set out to gut the political power of the banker/financial Plutocracy which holds Congress on a tight leash, this is the only way to do so: goad the public to rise up with such fury that they cannot be denied, lest every politico who seeks to protect the status quo be swept aside in the next election, regardless of party, age, religion or any other bastion of "voter support" they were counting on to save their bacon from an aroused public's righteous wrath.

If Obama had refused to support the bailout, the screams that he was "destroying the foundation of the US economy and our way of life" would have been ceaseless and deafening, for a stunned and stupefied public had failed to process what was actually happening beneath the MSM propaganda about "saving the banking system to save the nation".

Obama can now say, "I did everything you wanted". Is it a carefully craft Secret Plan or merely the fumbling results of a status quo politico? Either way, it's brilliant because it's the only possible pathway to a future not dominated by trickery, fraud, collusion, obscurity, propaganda and the looting of what's left of the US Treasury and economy.

Can abject, impoverished debt-serfs distracted by hundreds of channels of idiotbox TV, iPods, American Idle, oops, I mean Idol (now there's a Master's Thesis topic for ya), "professional sports" (aka gladiators and circuses) and all the other avenues of marketing which are sold as "entertainment" rather than what they really are, propaganda and distraction - can a nation of debt-serfs actually awaken from their "entertainment" stupor long enough to register outrage at the looting of their nation and liberties by a small Plutocracy?

We shall see. If the looting which is finally sinking through the endless layers of propaganda doesn't spark a bloodless revolution demanding real change in who actually runs the nation's policies, money and regulatory structures, then nothing will.

Is there even a shred of evidence that Obama might have thought this out one layer deeper than 99.999% of the bankers, critics, pundits and opponents? perhaps one: Paul Volker. Volker - remember him? Where has he been? Trussed up and gagged in some Treasury basement? He'd slipped from the media radar until very recently, when he somehow escaped from the duct tape and Treasury guards and had the audacity to stand up and call inflation targets pure theft.

Whew. Was that a breath of fresh air or what? I see two possibilities: either Obama really is just another standard-issue tool of the Financial Plutocracy, and Volker resigns in disgust within a year to protect what's left of his once-sterling reputation, or Obama is giving the Banking Plutocracy all the rope it needs to hang itself. In that case Volker is the "Trojan Horse" in the system, the one who will emerge after the extremes have finally goaded the public to an anger which cannot be diverted by propaganda and "entertainments".

So watch Volker. If he resigns, then Obama truly believed the absurdity that bailing out the bankers and enabling their continued looting of the nation is "the fix we need". If Volker stays, even in the shadows, there may be more intelligence afoot in our leadership than has yet been revealed.


New excellent reader essay, a provocative must-read: Madoffing the US Financial System (Zeus Y.)

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Bill Totten

Tuesday, April 28, 2009

The Joker

Clusterfuck Nation

by Jim Kunstler

Comment on current events by the author of
The Long Emergency
(2005) (April 27 2009)

Things come out of the woodwork. All of a sudden it's a mutant H1N1 swine flu, with bird and human DNA accessories. We don't know where this is taking us. It could be a media blowover, like SARS, or it could be a big deal, shutting down travel and assemblies of humans. It would be a very big deal if it killed, proportionately, as much of the population as the 1918 flu event - the worldwide toll then was roughly thirty to one hundred million out of a global population around 1.7 billion. Now the world population is over 6.5 billion. The only thing anyone can predict at the moment is that there will be a lot of very worried health officials and politicians out there in the days ahead.

This flu epidemic comes just as global economy itself lies comatose in the economic intensive care unit, with IV lines of dollars, euros, yen, and renminbis transfusing its hollowed-out carcass. It's an odd time for attention to be diverted from that awful spectacle. The cash transfusions have sent the Cable TV gang into raptures of "optimism" - meaning they expect debt securitization to resume as before, along with Yuletide-level credit card shopping sprees in the malls, a mass splurging on new cars, and a renewed frenzy of house-building in the Florida buzzard flats. Those "green shoots" and sprouting "mustard seeds" they report seeing may themselves be a flu-like symptom. I don't know what the so-called Mexican swine flu will lead to, but the global economy as we've known it is a goner.

Even if the Mexican swine flu turns out to be something of a false alarm, it will require billions of dollars in unexpected new outlays for prevention operations here in the USA - reinforcing the false idea that the nation has bottomless resources (the same idea that has been driving the bail-out fiesta). My guess is that the fear emanating from the story will be a potent generator of paranoia in the meantime, leading to widespread closures of things, canceling of events, restrictions on travel (official or otherwise), and a sell off in the financial markets. And that's if the flu turns out not to amount to anything.

If the flu is the real deal, it will surely drive a stake through the faintly-beating heart of that invalid global economy, and possibly even continental-scaled economies like the US, the Euro-zone, and China - any place where things and people have to move long distances to keep life going. The US, obviously, suffers in this instance from its proximity to Mexico, and the fact that so much of our food comes from places that employ casual Mexican labor. A serious flu outbreak would be a short path to food shortages in the US, with our three-day supermarket inventories and just-in-time shipping methods. It would not be such a bad idea now to lay in supplies of beans, brown rice, cooking oil, onions, and toilet paper.

The big story at the end of last week was New York Attorney General Andrew Cuomo's pursuit of former Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke in the matter of Bank of America's gobbling of Merrill Lynch last fall. It is alleged that the dynamic duo importuned BOA chief Ken Lewis to avoid disclosing some important particulars to the BOA shareholders, as required by law. The outstanding stage-whisper coming from all this was the word "indictable" in reference to messers Paulson and Bernanke. It goes to show how swiftly events can move beyond "unthinkable" in extraordinary times. Now, former Merrill Lynch chief John Thain - of thousand-dollar trash-basket infamy - has come back out of the woodwork to backbite BOA's Ken Lewis over who-said-what in regard to a treasure chest of bonuses divvied up during the blur of TARP payouts last fall. Thain complains of being unemployed since then - though one wonders why he doesn't just shut the fuck up, buy half of Nantucket with his untold millions of booty, and learn to play the oboe or something. This giant CEO cat fight was just getting interesting when the Mexican flu pulled the news-plug on it.

Of high interest to those confused and perplexed over President Obama's actions so far in the banking fiasco, I commend a great piece by fellow blogger-on-the-margins Charles Hugh Smith: Obama's Secret Plan {1}. This analysis is low on the paranoia and high on the Machiavellian maneuvering insight. The basic idea is that Mr Obama has gone along with all the TARPing and PPIPing because it was tactically the only way that he could give the Wall Street plutocrats enough rope to hang themselves - and that this was the only reality-based strategy that could get public opinion in the mood for real change. It explains a lot, if it's true. Alternately, it would be very sad to learn that Mr Obama really believes he can rev back up a securitized-debt-and-consumption fiesta by turning the Federal Reserve into an ATM.

In any case, the banking-and-investments sector has been on auto-pilot for a few weeks. Lesser banks are crashing around the country (Idaho, Florida, California last week), but the remaining Big Boyz are still lurching through the landscape like so many Frankenbanks, jazzed up on electric surges of digital cash. There are ever more hints of a peasant uprising against the castle of privilege, but no sign just yet of the flaming brands and shaking fists from the village below. This flu thing will put the schnitz on their distempers for a while.

For an excellent background briefing on flu matters, I direct you to a recent blog by Elaine Meinel Supkis {2}. Have a healthy week.




My new novel of the post-oil future, World Made By Hand, is available at all booksellers.

Bill Totten

Nato's 'good war' in Kosovo degraded international law

Nato's military action against Slobodan Milosevic is often held up as a triumph of justice over legality. But was it right?

by Aidan Hehir

Irish Times (March 23 2009)

TEN YEARS ago today Nato, the North Atlantic Treaty Organisation, launched Operation Allied Force against the Federal Republic of Yugoslavia. Nato claimed to be undertaking a humanitarian intervention, accusing Slobodan Milosevic's regime of a campaign of aggression and forced displacement against the ethnic Albanians in Kosovo, Serbia's southern province. Military action was a "moral imperative", according to then US president Bill Clinton.

The campaign itself was a success; it lasted just 78 days, Nato did not suffer a single casualty and at its conclusion Nato personnel were literally welcomed with open arms by the Kosovo Albanians. Milosevic's power was fatally undermined and within two years he had been toppled and sent to The Hague to stand trial for war crimes.

In many ways Operation Allied Force has come to be nostalgically remembered as the zenith of a better era. In 1999 "The Third Way" and "Ethical Foreign Policy" were terms which provoked hope rather than cynicism and Nato's actions appeared to affirm the power of people to force their governments to "do something" in the face of humanitarian tragedy abroad.

The then fresh-faced Tony Blair was regarded at worst as a naive "do-gooder" while Clinton's reputation for circumspection in foreign affairs has been retrospectively heightened by the eight years of war and international divisiveness which characterised George W Bush's administration; Clinton's "good war" in Kosovo has been regularly contrasted with Bush's "bad war" in Iraq.

Operation Allied Force was a spectacle of force the ordinarily cautious and sceptical could proudly support; this was not a war fought for interests or revenge, it was, according to Blair, "a war fought for values". Milosevic was the archetypal Balkan bad guy, the Kosovo Albanians clear victims and Kosovo had no oil or major strategic value.

It was the war the liberal left could, and indeed did, support while the anti-war movement failed to mobilise beyond the political margins. Mainstream media coverage, albeit periodically nervous, was favourable throughout, aided to a significant extent by Nato's polished Public Relations machine and the verbal dexterity of its chief spokesman Jamie Shea.

Lacking Security Council authorisation, Nato's campaign was illegal but this was deemed of minor importance and a function of an anachronistic legal framework which privileged states rather than the people who lived within them. Nato's actions were described as "illegal but legitimate" and evidence of a new dispensation among Western states to alter the norms governing the use of force.

Human rights, long rendered impotent by the restrictions of international law and the narrow national interests of the powerful few, were now, it seemed, finally to be realised. Supporters of Nato's intervention, emboldened by righteous victory, loudly heralded ever more exuberant predictions of the coming era. We were entering, according to Geoffrey Robertson QC, "the age of enforcement". Everything, it seemed, was possible now that power had been harnessed by justice. Events since, however, have not evolved according to this optimistic analysis.

It is a matter of some irony that the invasion of Iraq in 2003 was decried as a violation of international law by many of the same commentators who enthusiastically welcomed Nato's "illegal but legitimate" intervention just four years earlier.

The coalition which prosecuted the pointedly named "Operation Iraqi Freedom" explicitly drew parallels between their "liberation" of Iraq and the intervention in Kosovo. Supporters of Operation Allied Force were left to express wounded surprise at the commandeering of their humanitarian arguments. It would be an exaggeration to claim that Nato's intervention directly led to the invasion of Iraq but equally it is disingenuous to disavow any correlation; legal systems do not thrive when their most powerful subjects subvert their seminal prescriptions and it is not surprising that the "illegal but legitimate" argument advanced by Nato in 1999 has contributed to the unprecedented contemporary crisis of confidence in the UN framework.

What of the "age of enforcement"? The international response to the violence in Darfur from 2003 on - far worse than that which occurred in Kosovo - suggests that Western states have not undergone a conversion to an ethical foreign policy.

The high-publicity international campaign calling for intervention in Darfur and the massive anti-war protests against the invasion of Iraq suggest that in contrast to the analysis widely proffered at the time of Nato's intervention, public opinion has a limited influence on the foreign policy of even liberal Western states. Operation Allied Force has not led to any substantive reform of international law in favour of human rights apart from a nebulous commitment to a "responsibility to protect" at the 2005 World Summit. States in the developing world, fearful of neo-colonialism, have been to the fore in opposing legal reform but so too have Western states reluctant to subject themselves to international scrutiny or accept any commitment to intervene.

Kosovo itself has had a difficult ten years; though initially greeted as liberators the UN and Nato were soon accused of obstructing Kosovo's independence leading to the March 2004 riots when Albanians vented their fury at the international administration. Kosovo remains deeply divided, violent and economically underdeveloped and while the Kosovo Assembly declared independence in February 2008, Kosovo enjoys few of the traditional trappings of statehood, not least political autonomy.

Righteous, albeit illegal, vengeance has been a common narrative of popular culture. Frustrated by laws which appear to protect oppressors, heroes from Batman to countless John Wayne cowboys have "done the right thing" in defiance of "the rules". We have come to venerate many political actors who have similarly subverted the law in the name of morality.

Yet, history shows that the rejection of law in favour of morality carries enormous danger and echoes of vigilantism. Those who have orchestrated or supported the forcible subversion of one set of ostensibly immoral laws in favour of the pursuit of "justice" have often found that in the process they have unleashed forces beyond their control.

The excesses of the Bush administration and Blair's later zealotry owed much to Nato's actions in 1999 and as we assess the current predicament of international politics, and especially the increasingly impotent and sidelined UN system, the role of Operation Allied Force in the degradation of international law must be acknowledged.


Aidan Hehir is a senior lecturer in international relations at the centre for the study of democracy at the University of Westminster

(c) 2009 The Irish Times

Bill Totten

Monday, April 27, 2009

Newspapers' Self-Inflicted Wounds

by David Sirota

Truthdig (March 26 2009)

At Northwestern University in the mid-1990s, the journalism professor with the most devoted student following was an understated teacher who said that substantive writing and reporting isn't everything, it's the only thing. Alternately despondent and sanguine, he reminded me of Grady from the book Wonder Boys (1995) when he told us that he spent weekends drinking in his closet and that he corrected papers in green ink because "green is the color of hope".

Professor Kupetz has since left Northwestern, and journalism is today running dangerously low on his emerald-hued optimism. Judging by the fatalistic declarations after this month's collapse of newspapers in Denver and Seattle, the industry is morosely drinking in its closet, wondering what went wrong.

Most newspaper postmortems insist that decreased ad revenues brought on by the Internet and the recession caused journalism's problems, not self-inflicted wounds. If that was entirely accurate, then readers might lament newspapers' decline as a loss of must-read content. Instead, Pew polls find "many Americans wouldn't care a lot if local papers folded".

In light of that, allow me to use these dwindling column inches to float an alternate hypothesis: While technological and economic forces certainly battered newspapers, journalism also delivered a one-two punch to its own jaw.

First, financially strapped newspapers undermined their comparative advantage by replacing audience-attracting local exclusives with cheaper national content. Then, the providers of that national content diverted resources from tough-to-report investigative journalism that builds loyal readership and into paparazzi-like birdcage liner that unconvincingly portrays politicians, CEOs and their minions as celebrities.

"In place of comprehensive, complex and idiosyncratic coverage, readers of even the most serious newspapers were offered celebrity and scandal, humor and light provocation", says journalist-turned-director David Simon, whose HBO series The Wire examined this trend.

The most preventable tragedy was the deterioration of quality. Downsized local publications were all but forced to rely on more national content, but that content didn't have to become so vapid.

Beltway scribes didn't have to miss the lies about the Iraq war or the predictive signs of the Wall Street meltdown. Election correspondents weren't compelled to devote four times the coverage to the tactical insignifica of campaigns than to candidates' positions and records, as the Project for Excellence in Journalism found. Business reporters didn't need to give corporate spokespeople twice the space in articles as they did workers and unions, as a Center for American Progress report documents. National editors weren't obligated to focus on "elevat[ing] the most banal doings" in the White House to "breaking news", as The New York Times recently noted.

But that's what happened. Rather than investing in the valuable steel and concrete of hard reporting, national news outlets began printing the most worthless kind of commercial paper - rumors, personality profiles and other such speculative derivatives that consumers could find elsewhere. News, in short, mimicked finance: Just as Wall Street made bets on bets with credit default swaps and then watched investors bolt, print journalism mass-produced gossip about gossip, and now sees its audience flee.

Can we blame readers? If local news is gone and national news aims to celebrify Washington, can we really fault Americans for paying attention to chatter about Hollywood hardbodies rather than about DC's paunchy pocket protectors?

I'd say no. If it's a choice between a scoop on Vin Diesel's latest movie and a local reprint of the Washington Post's A1 cliche on the "hard-charging approach" and dating strategy of mid-level Obama aide Jim Messina, most of us will (understandably) tune into the B-movie star, not the bureaucrat - and neither Google nor AIG has anything to do with that decision. Until the news industry acknowledges that truth - until it relearns professor Kupetz's lessons - no rationalization, green ink or private benders will save journalism.


David Sirota is the best-selling author of the books Hostile Takeover (2006) and The Uprising (2008). He is a fellow at the Campaign for America's Future. Find his blog at or e-mail him at

(c) 2009 Creators Syndicate Inc.

A Progressive Journal of News and Opinion. Editor, Robert Scheer. Publisher, Zuade Kaufman.

Copyright (c) 2009 Truthdig, LLC. All rights reserved.

Bill Totten

Usury Country

Welcome to the birthplace of payday lending

by Daniel Brook

Harper's Magazine (April 2009)

On a whitewashed church pew in Johnson City, I sat alone as James Eaton stood over me delivering a sermon. It was a Monday, and this was Eaton's office. One of the inventors of payday lending - the business of making small, short-term loans from retail locations at steep rates - Eaton operates out of a converted service station, with a tarp sign in red and white: HERE'S WHERE IT ALL STARTED. EAST TENNESSEE'S FIRST, OLDEST & FINEST. He had suggested we conduct our interview in his reception area, on the pew he brought up years ago from his wife's childhood church in Alabama. I balanced my coffee cup perilously on. the green-felt pew pad as I listened to him enumerate his own good works - his donations to a Bible college, his support for a rural congregation of evangelical Harley-Davidson enthusiasts. Eaton's homily was heartfelt, if meandering and peppered with such biblical malapropisms as Jesus having "healed those leopards". As he preached, customers kept trudging in past us to the counter, where they wrote postdated bad checks and walked away with twenties at several hundred percent interest, all transacted above a vast American flag dangling from the countertop.

"Good to see y'all!" Eaton greeted each customer, his chirpy voice cracking with enthusiasm. "Good to see you too", generally came the more muted reply.

In his sermon, Eaton recounted a real-life Christmas Carol. "We opened up just before Christmas", he said. "A grandmother brought a little girl in here, holding her hand. And I cashed her a hundred-dollar check, and I looked down at the little girl. I said, 'Now what's Santa Claus going to bring you for Christmas? What's he going to put under your tree?' And the grandmother looked at me and said, 'Mr Eaton, we had to decide whether we would put up a tree this year or the little girl would get a present'. And I said, 'I understand, I grew up that way'. But I felt sorry. I took money out of my pocket and I said, 'Go get that little girl a Christmas tree. Every little girl deserves a Christmas tree.' They go off. The very next day here's the woman pulling up with a Christmas tree sticking out of the back end of her car. The funniest thing, she comes in here, 'Mr Eaton, I don't have anything to decorate the Christmas tree'. So back in my pocket, handed her some more money, she goes on her way. That little granddaughter is cashing checks with me today."

"She manages one of your stores?" I asked.

"She comes in and cashes checks", he clarified.

It was to be a two-hour oration. As I sat on the pew, sipping my coffee and taking notes halfheartedly, my eyes wandered from the American flag behind Eaton to the poster over his left shoulder: Martin Luther King, preaching to the masses at the March on Washington. The best-known trope of King's address that day was, of course, his famous "dream". But King began his speech with a very different metaphor. "In a sense", he said,

we've come to our nation's capital to cash a check ... A bad check, a check which has come back marked "insufficient funds". But we refuse to believe that the bank of justice is bankrupt. We refuse to believe that there are insufficient funds in the great vaults of opportunity of this nation. And so we've come to cash this check, a check that will give us upon demand the riches of freedom and the security of justice.

In King's broader vision, the creditors were not simply the descendants of slaves but all Americans living in poverty, whose nation had made them promises long past due. Months before his death in 1968, King began planning a second march on Washington that would serve as culmination of a Poor People's Campaign, an interracial movement of blacks, Latinos, and Native Americans, as well as Appalachian whites. "When we come to Washington in this campaign", King declared, "we are coming to get our check". Rallying striking sanitation workers in Memphis just a few days before his assassination, King declared that "it is criminal to have people working on a full-time basis and a full-time job getting part-time income". But in the decades since King's speech, working full time for a part-time income has become the fate of greater and greater numbers of Americans. In fact, the US minimum wage, adjusted for inflation, has never regained its 1968 value. The average income of a full-time worker at Walmart, today the nation's largest private employer, is only slightly more than $17,000 a year. Fully 47 percent of Americans now report living paycheck to paycheck.

During the Gilded Age of the late nineteenth century, the race-based legal oppression of slavery was replaced with the economic bondage of sharecropping - a race-neutral system that ensnared blacks and whites alike. In his short lifetime, King helped lay waste to more legal barriers, those of racial segregation, but in the past twenty years a new, race-neutral form of economic exploitation has arisen in their place. This twenty-first-century sharecropping is called payday lending; and each indentureship under it begins, fittingly enough, with a bad check.

Like many payday-lending pioneers, Eaton came out of the credit-bureau business, back when, credit bureaus would keep tabs with the local department store on who had fallen behind on bills. When that industry was consolidated nationally, Eaton began looking for another line of work. He settled on short-term loans - cash today to tide a worker over until payday, offered at triple-digit annual interest rates. Eaton took out a second mortgage on his house and opened up Check Cashing, Inc on December 2 1991.

"I ran a little bitty ad in the paper in the personals section", he told me. "We will hold your check till payday".

A few weeks later, the son of an old colleague from the credit-bureau business flew into town to offer him a job. "He flew up here on that little private plane right then to try and hire me", Eaton explained. Between customers he chatted with the well-heeled visitor, but Eaton, with his' promising new business venture, wasn't looking for work.

"Three or four weeks later he called. 'James, I want to come up there and find out what you were doing again. I have been thinking about that and I'm interested in it.' I said, 'Allan, you come on up'. So he flew back in. And we was opening up our office in Kingsport. He spent the day with us up there."

W Allan Jones, the jet-setting visitor, went on to found Check Into Cash, the first of the national payday lending chains. With a knack for marketing, Jones rechristened the transaction Eaton called "check cashing" as "the payday advance". It was Jones who saw the potential to expand someone else's business concept into a coast-to-coast empire. Jones saw how payday lending could be to finance what McDonald's is to food.

In the early 1990s, there were fewer than 200 payday lending stores in America; today, there are over 22,000, serving ten million households each year - a $40 billion industry with more US locations, in fact, than McDonald's. Today, Jones's company, based in his home' town of Cleveland, Tennessee, is the second or third largest of its kind. With 1,200 stores in thirty-two states, it is roughly equal in size to Virginia-based Check 'n Go but smaller than South Carolina's Advance America, founded by the director of scheduling and advance in the Clinton Administration, William Webster.

Getting a payday loan is, in Check Into Cash's trademarked phrase, "Quick, Easy, and Confidential". The only paperwork required is a two-sided form with blanks soliciting contact information about the customer, her spouse, her landlord or mortgage holder, and three acquaintances in the area. An applicant need only fill out the sheet, show proof of employment and a bank account, and then write a bad check, dated her next payday, for the loan amount plus the fee. (In Tennessee, typical advances range from $50 in cash for a $58.82 check, to $200 for a $230 check.) On that next payday, the customer cashes her paycheck and buys back the check in cash for its face value.

Such is the process in principle, but seldom does it work out that way. When the next payday arrives, most borrowers can't afford to repay, so they extend the loan until the following payday by paying another finance charge. (In Tennessee and many other states, a borrower technically cannot "extend"' the transaction, but lenders make it a trivial process to pay back the loan and immediately take out a new one, adding another finance charge on top.) Like a sharecropping contract, a payday loan essentially becomes a lien against your life, entitling the creditor to a share of your future earnings indefinitely. Even the industry-sponsored research cited on the Check Into Cash website shows that only 25.1 percent of customers use their loans as intended, paying each one off at the end of their next pay period for an entire year. Government studies show even lower rates of customer payoff. North Carolina regulators found that 87 percent of borrowers roll over their loans; Indiana found that approximately 77 percent of its payday loans were rollovers. This is hardly surprising, of course: if your finances are so busted that a doctor visit or car repair puts you in the red, chances are slim that you'll be able to pay back an entire loan plus interest a few days after taking it out. "On average", Jeremy Tobacman, a Wharton professor who studies the industry, drily put it, "payday borrowers seem to be over-optimistic about the future".

Once caught in the cycle, the borrower faces a choice each payday - pay Check Into Cash $30 or pay Check Into Cash $230. Unlike conventional loans, in which the creditor issues the debtor a lump sum to be repaid with interest in installments over time, the largest single transfer in a payday loan goes from debtor to creditor. With payday lending, the "debt trap" is not a figure of speech: the loan is actually structured as a trap.

In 1997, Tennessee became the nineteenth state in the union to explicitly legalize payday lending, which before then had operated in a legal gray area. Allan Jones and his family donated more than $29,000 to state legislators during the run-up to the vote. As in other states, the industry used a clever rhetorical strategy to cast interest-rate caps, or usury laws, as a form of government paternalism. Legislators, they argued, should grant their constituents the autonomy to make their own financial decisions. The idea that certain constituents needed their representatives to take care of them for their own good so clearly echoed themes from the state's past that no one had to explicitly connect the dots. Industry representatives highlighted the race-neutrality of payday lending to corral votes. "They hired a Noah's Ark of lobbyists", Steve Cohen, a state senator, memorably remarked to the Associated Press. "They hired a black lobbyist to get black votes. If we'd have had a transsexual, they would have hired a transsexual lobbyist." By creating the appearance of a multiracial coalition against government overreach, they presented the deregulation of usury as a latter-day civil rights issue.

In the peroration of the "I Have a Dream" speech, King lists a series of improbable places where freedom one day will ring, among them "the Lookout Mountain of Tennessee". Today, under Chattanooga's Lookout Mountain sits a strip mall whose tenants include a Check Into Cash. On Friday, October 31 2008 - the ultimate payday, the end of both a week and a month - I loitered in the parking lot and watched customers file in on their lunch hours to extend their loans. Since payments are due on the customer's actual payday, and branches are rarely open before 9:00 am or after 6:00 pm, there is inevitably a crush at lunchtime. A mix of black and white, young and old, the customers drove everything from a dented sedan with a Chattanooga Housing Authority parking permit to a spotless Nissan SUV. When I asked the African-American woman in the SUV about her loan, she politely brushed me off: "I don't want to talk about that. It's personal." Jack Atkins, a pockmarked white man driving a minivan, told me he'd been a customer for about a month. "It's been working out for me", he said.

Susan Jolliff was on her lunch break from her $8.96-an-hour job in quality control at Intersign, which manufactures vinyl signs for motel-room doors. As she left Check Into Cash, she stuffed a stack of twenties into her wallet, rattled off her phone number to me, and rushed into the supermarket. We spoke the following week. Jolliff had taken out her $175 loan three months earlier, after her wallet was stolen with the remainder of her stimulus-package tax-rebate cash in it. The company by now had more than recouped its principal in finance fees, but still she was unable to pay it off. "I figured it would take maybe a month", she said. "Maybe rewrite it once and then pay it back. But no. We get a bonus at work every month, and the last couple of months it's been kind of low, but hopefully next month ..."

But she harbored no malice toward Check Into Cash's employees. "As far as the people who work in there, they're nice as can be", she said. So nice, in fact, that a few weeks ago when an employee accidentally re-loaned Jolliff the full $205 instead of the $175 principal, Jolliff courteously corrected her, "'Oh no, I'm supposed to get one seventy-five and you're supposed to get thirty', I said. 'You better watch that or you're going to be in trouble'."

Steven Winslow, who worked for a year as a store manager for Check 'n Go after dropping out of a clinical-psychology graduate program, explained that these chummy customer relationships are carefully cultivated by the payday-lending chains. We met at a Check Into Cash store near the Knoxville private school where he teaches, appropriately, drama and personal finance. At store-manager training, he told me, the mantra was "Your repeat customer is your lifeblood". Managers were encouraged to be on a first-name basis with their customers, to ask after their families.

The first few times a customer came in, Winslow said, he'd make small talk about their kids. Soon they wouldn't even look him in the eye. "It's a person in desperation crossing their fingers that they can pretend this will work", Winslow said. And when it invariably doesn't, the borrower feels tremendous shame and guilt. But the store manager feels anger, too. "It was my money. You take it personally in that you're responsible for taking this company's money and giving it to somebody, [and then] your job is on the line- on the basis of Joe Blow's pay history - their habits, their character, their integrity, their decision, their choice, their difficulty, their crisis, their tragedy."

What Winslow described was lives disintegrating in time-lapse, with a new shot snapped every two weeks; Maybe the customer started bringing in a family member or a friend, who would spot the cash to pay the loan and then get it back after the re-loan transaction. If a customer fell behind on payments, Winslow's staff would start making up to twenty collection calls a day to the debtor's home and workplace, as well as Co her friends, landlord, boss - anyone who got listed on that first innocuous form. Other customers, to save face, would take out a loan from another payday lender to pay the first. "Once you're borrowing from Check Into Cash to pay Advance America to pay Check 'n Go, it's just a matter of time", he said. "You go to the second lender, it's game over. It's game over."

Like just about everything in Cleveland, Tennessee - a city of 40,000 that is either in the middle of nowhere or, as the locals say, "halfway to everywhere" - the Bald Headed Bistro is owned by Allan Jones. And as with his other holdings, the Bistro is not an anonymous line on some enormous balance sheet but aspires to be a projection of the man's very essence. Its decor purports to channel the rustic ambience of Jones's ranch in Jackson Hole, Wyoming, and its name pays homage to Jones's hairless pate. The men's room walls are decorated with framed photos of the regulation-sized football field he built in his back yard. I climbed atop an itchy cowhide barstool and asked the bartender, a student at a local evangelical college, if this was the nicest place in town. By far, he told me. "The next closest place is Outback". The restaurant is so nice, in fact, that members of the Cleveland City Council come over for dinner each Monday after their weekly session. The restaurant, he said, caters to "people of that area".

The local gentry did, in fact, seem well represented at the tables, but there were also patrons who looked far less affluent, perhaps out celebrating special occasions. The weathered gentleman in one couple, who looked to be out for a night away from the kids, sported a giant USMC forearm tattoo. At another table, an older woman was dressed for dinner in an orange University of Tennessee T-shirt.

Whether or not they are Check Into Cash employees - or customers - everyone in Cleveland, Tennessee, is indebted to Jones. Anyone who patronizes the library, which resides in a converted Victorian that Jones donated to the city, has him to thank. Jones paid to renovate the bandstand on the courthouse square, and he also owns and maintains Cleveland's most historic building, Craigmiles Hall, a Gilded Age opera house where, Clevelanders will proudly tell you, John Philip Sousa played once. Even Ron Haynes - a local legal-aid lawyer who refuses to eat at the Bistro and swears he would sue Jones, if Jones hadn't gotten Tennessee's legislature to write the payday-lending law in such a way that made it impossible to do so - cuts him a check at the end of each month; like the rest of downtown, his legal-aid office is a Jones-owned property.

Jones himself resides on a 400-acre horse farm on Anatole Lane, out at the northern edge of town. For decades Cleveland's elite lived on Centenary Avenue, a block of stately homes quite close to downtown, but after Jones began building his estate in 1993, Cleveland's entire executive class relocated to Anatole, ideally situated between the airstrip for private planes and the Cleveland Country Club. I drove up to Anatole hoping to get a glimpse of the Jones mansion and football field, but little of the compound was visible from the road. The entrance to Jones's property is monitored by a gatehouse whose pointed metal dome suggests a king's palace in the Brothers Grimm. Many surrounding homes are built in a style one might call Plantation Revival - columned white monstrosities like something out of Gone With The Wind.

Such Deep South style is almost as a historical as the Mitteleuropean guard tower: on the eve of the Civil War, Bradley County, of which Cleveland is the county seat, was ninety percent white (as it remains today). Tennessee's plantations and slaves were largely elsewhere, spread out in the flat, cotton-producing region near Memphis. When secession came, Bradley County voted to remain in the Union, and it was dragged out only by the western, slave-holding part of the state. Cleveland, had very little to do with the old inequality; Allan Jones has ensured that it will have everything to do with the new inequality.

The Check Into Cash headquarters are near downtown, in a former shopping mall that Jones bought out of bankruptcy in 1998. When I walked into the corporate reception area, the first thing I saw was a photo montage, shaped like a United States map, from which Allan Jones's face stares out amid piles of cash. From there I was taken in to meet the company's president, Steve Scoggins. A compact man in a brown sweater-vest, Scoggins gave me a tour of the vast cubicle farm as he laid out the demographic logic of the company's store siting. The marketing company Nielsen Claritas breaks down American consumers into dozens of niche markets, he said, and Check Into Cash's targets are in demographic #44: "Homespun Families", which forms a subset of the larger "Mass Middle Class" category. Forty-fours have a median household income of $40,351; they eat at Shoney's, enjoy NASCAR, and watch The 700 Club. "Financially, they're a strong credit market", a Claritas poster in the offices declared. Alongside this poster hung two maps of metropolitan Phoenix, coded to show where high concentrations of 44s live. "We locate almost exclusively in retail strip centers", Scoggins explained. It's just a matter of identifying the 44s, finding their local strip mall, and setting up shop.

I tried to push Scoggins to discuss the distressing predicament in which his customers invariably end up. His own industry research, I pointed out, showed that only one-quarter of payday-lending customers are consistently able to pay off their loans when they come due. Why, I asked, do customers think they can pay back the loan when the vast majority of the time they can't?

"I don't know", Scoggins said. "I don't try to pretend to understand how our customers think". As the Community Financial Services Association, the payday-lending industry's trade and lobbying group in Washington, puts it, "payday advance customers represent the heart of America's middle class" - a terrifyingly accurate statement that testifies to the financial instability of all but the most affluent Americans. Unlike with check cashing, the market for payday loans isn't the underclass. The 28 million Americans who have no bank account (a number that includes twenty percent of African Americans and Latinos) don't have the checkbook with which to write the necessary bad check. Millions more are ineligible for payday loans because they're unemployed or are paid off the book's.

Most of the ten million households with payday loans are young families headed by adults who graduated from high school but not college; one of the few surveys of payday-lending customers showed that roughly two-thirds of them are under forty-five, and a similar proportion have children living at home. In the Cleveland headquarters, Lynn DeVault, who sits on Check Into Cash's board of directors, gave me an admirably clear-eyed assessment of the typical borrower. "The customer is early thirties", she said. "They make thirty thousand, thirty-two thousand dollars of income - and they have no savings. And they're at a very critical point in their life: they may have just bought a house or maybe they just have their first child entering school [and they] really need money for things like a band instrument." It's an enormous market, as Judy Powers, another executive, told me: "Nationwide the savings rate now is like zero percent. And it's because expenses have just gone up and up and up, wages have not kept pace, and people don't have anything extra to put away."

A disproportionate number of Claritas's 44s work in manufacturing, construction, or transportation - jobs like factory worker, auto mechanic, and truck driver - and are concentrated in the Deep South, across the Midwest heartland, and along the Appalachian spine. The traditional American dream of family and of home ownership surely has great resonance. These are many of the same people who, despite flat or flagging incomes, kept buying bigger houses through the infamous "liar loans". The payday loan, too, is a liar loan of sorts, though the relevant lie is told not to the banker or mortgage broker but to yourself: that you're still making it, you've hit a brief rough patch, everything will work itself out soon. You end up at the payday-lending office only if you have caught at least a glimpse of prosperity, and are desperately trying to keep this mirage in view.

From customers in such straits, Allan Jones has amassed a fortune, which in 2005 was valued at half a billion dollars. The profit margins are similar to those in conventional banking, but as with fast food, payday lending derives those profits from innumerable small-value transactions taking place at thousands of outlets. The business works according to the classic logic of deregulation. Profits on loans of a few hundred dollars can be significant only in a regulatory environment in which anything goes. If customers weren't trapped - if they really paid off their $20 or $30 finance fees at the end of one pay period - payday lending wouldn't be profitable at all.

When I finally had the opportunity to sit down with Allan Jones in his office, he immediately sized me up. "Did you wrestle?" he asked. I did not, as it happens, despite my low center of gravity - my height and weight are (I would later learn) almost precisely those of Jones himself during his high school glory days on the mat. Today, he is rotund and neckless, like a snowman. His office resembles somewhat the dark and sumptuous lair of a railroad baron circa 1889, channeling that bygone era when every square inch of a proper room needed urgently to be adorned with something, anything. A palm-in-chinoiserie urn stood along one wall; in a corner sat a coffee table with a photograph of Jones and President George W Bush. Behind Jones's desk sat a scale model of one of his jets, a Cessna Citation II, alongside two faux Frederick Remington equestrian statuettes and an oil painting of a fox hunt. Magnetic in his television ads, Jones was fidgety and disheveled in person. His open-collar white shirt with monogrammed WAJ cuffs was splashed with a reddish-brown stain somewhere along the coffee-to-barbecue-sauce spectrum. The downturn in the economy was weighing on him. "I've laid off my horse trainer", he said. "I've really had to cut back".

Jones needed to swap his son's Audi for his own Ford F-150 pickup truck, and he offered to bring me along. As we drove through Cleveland, Jones mumbled a stream-of-consciousness narration - rattling off his acts of munificence as if they spoke for themselves. Jones knew I wrote frequently about architecture, so he was particularly keen to show off his works of historic preservation. The bandstand on the courthouse square, he told me, was renovated from the original blueprints at a cost of $75,000. He bragged, of Craigmiles Hall, "I own one of the most photographed buildings in Tennessee". A self-described "Cleveland State dropout", Jones didn't consider himself anything so lofty as an architect; but Jones as architect - as the hidden hand that designs the spaces in which people live - was everywhere evident on Cleveland's streets. Jones pointed out all the trees he'd donated, often just a few years beyond spindly saplings, which lined many of the roads. "I donated all these trees. I hope they remember me when I'm gone", he said.

The intended highlight of my tour, I soon discovered, was to be the Jones Wrestling Center at Cleveland High School. Inside this vast hangar of a building, two dozen boys sparred on mats, learning to master a new take-down. "Move your leg like a windshield wiper", their coach instructed. Jones gave me a brief tour, beginning at the Wall of Fame, where his own exploits - 1972, second in state in the 155-pound weight class - were immortalized along those of others, including his son. We continued on as he showed off the other choice features of the million-dollar facility: in the visitors' locker room, for instance, a-flat-screen TV broadcasts a live feed of the Cleveland team warming up. "We're gonna make you watch us warm up", Jones said. "We're gonna intimidate the hell out of them".

For someone who lives in a gated 400-acre compound, Jones remains extremely accessible to the people of Cleveland. He attends all the wrestling tournaments, the Friday night football games, and the annual Halloween block party. Never, he says, has an irate customer confronted him - not once. He called information in front of me, on speaker phone, to demonstrate that his home number was listed. Jones and his family are so unaccustomed to criticism that when the Ohio state legislature recently cracked down on payday lending, delivering sharply worded speeches against the industry, his eldest son, age twenty, was deeply shaken. "It's still affecting him", Jones said. Being the son of Cleveland's richest citizen and leading philanthropist - the kid with the regulation-sized football field in his back yard - he had never seen anyone come out swinging at his father; "He grew up here in the epicenter of it, and everybody is fine with it", Jones assured me.

Up in Ohio, Jones said, industry critics tarred him as a predatory lender who targets minorities, as if this were some kind of civil rights issue. But Jones knows better. "Black or white is immaterial. Credit is green. Capital is green."

During my afternoon with Allan Jones, one of the only times he betrayed any emotion was when he asked if I knew about Tall Betsy, the Halloween character he invented. He began to recite a poem:

Your bones, she'll throw in that ole well
at Arnold School, and no one will tell

your parents. They'll worry and fret.

They'll search all over for you, I'll bet.

So go home early on Halloween night

and November 1st, you'll be all right.

"Who wrote that?" I asked when he was finished.

"I did", he said, and then clarified: "I made it up. I just had somebody put it to a rhyme." Jones said his mother had told him about Tall Betsy when he was a child to teach him about the importance of punctuality, but he had embellished the tale. He created a Betsy costume and wore it at his daughter's birthday party in first grade, and it was such a hit he began to dress up - in drag, on stilts - each Halloween in front of his Centenary Avenue home. One year, a local news reporter asked him the story of Tall Betsy. "I was a young guy, a single dad", he told me, "and this girl was good-looking, so I started trying to keep her there, and I started making this shit up as I went".

Jones recently decided he's too old to dress up, so at dusk on October 31 each year, his Tall Betsy getup is displayed in the foyer of Cleveland's history museum, in front of the conference room he endowed. I joined the townspeople's pilgrimage to view the relic. A grandmotherly, red-headed docent told the tale of Tall Betsy at fifteen-minute intervals - first to a fidgety first-grader in a Hawaiian shirt and then to two angelic blonde sisters whose bearded father sported a camouflage hat. Between shifts, I asked the docent the origins of the tale. Betsy was a real woman, she insisted. She only mentioned Jones as "the man who brought back Tall Betsy", as if he were reviving a town tradition, not making one up out of whole cloth.

From the history museum, I paraded with the crowds to Cleveland's downtown for the annual block party, another creation of Jones's. With thousands of children mobbing Centenary Avenue each Halloween to see him in character, Jones, like the sorcerer's apprentice, saw no choice but to create a second town tradition as a distraction from the first. "This thing got so big that all my neighbors got mad", Jones told me. "So I created the block party ... to try to get them the hell off my street".

Downtown, I found the streets packed with trick-or-treaters and their parents walking down "Treat Street", to gorge at the M&M Snack-foods tent. Independent vendors along the periphery hawked two-dollar barbecue sandwiches and deep-fried Oreos. A country act and a classic-rock cover band performed on the live-music stage set up in front of the courthouse, whose roof was patrolled by armed police. Jones had told me to look for him downtown - "I'll walk around in a Tall Betsy sweatshirt, just kind of blend with the crowd" - but he must have blended in well, because I never saw him.

It was a poor people's march of sorts, though not of the sort that Martin Luther King envisioned. Most locals were grateful that their economy is as bountiful as it is Cleveland has two Walmarts, after all, in a rural South full of one-Walmart towns. Unlike in the rest of America, brutal inequality has been a permanent feature of the local landscape. On the eve of the Civil War, the North was three times wealthier than the South and yet the South had two-thirds of the nation's richest men. In a 1929 edition of the daily Cleveland Banner, there ran a full-page ad that could almost be republished today: to "Northern and Eastern manufacturers contemplating locating in the South" the city promised a ten-year tax exemption and the "best of labor conditions".

Each year, the rest of the country looks a little more like Cleveland. In 1949, Tennessee's poverty rate was twice that of California. Today, they are equal. During the civil rights era, when middle-class Californians from Berkeley came to the South for sit-ins and voter-registration drives - they were shocked - and rightly so - by the poverty they saw. But today Berkeley, a capital of our laissez-faire tech and finance economy, was as of the most recent census the second most unequal city in America, right below Atlanta. The South, with its "right-to-work" laws and consequently meager rates of unionization, is no longer a region apart; once an aberration, its low-regulation, high-inequality economy has become a model for the nation.

One can laugh at Allan Jones's petty-acts of charity - the $75,000 bandstand, the saplings by the interstate entrance ramp, the high-tech wrestling gym - but as a nation we have come to rely on private acts of generosity to meet our basic needs. Rather than tax Bill Gates enough to stock our school libraries, we tax him at a lower rate than his secretary and hope he finds it in his heart to donate some books. Increasingly, the schools in our wealthier districts set up "local educational foundations", funded by parents and local businesses, so that when a student in the district takes up the tuba, the instrument is purchased by the fund; whereas for a student in a poor district to do the same, her parent has to buy it - perhaps by taking out a payday loan. During one of his fits of hometown boosting ("Cleveland's a great little town!"), Jones even suggested that I move there myself. Only later did I realize that, in a sense, I already had.


Daniel Brook is the author of The Trap: Selling Out to Stay Afloat in Winner-Take-All America (2007). His last article for Harper's Magazine, "Mall of America", appeared in the July 2007 issue.

Bill Totten