Daily Archive: 12/14/2011

Dec 14 2011

White House Statement: Obama Will Sign NDAA

Welcome to the new America. With the “last minute” changes to the National Defense Authorization Act, the White House Press Sectary announced that President Obama will sign it contrary to his earlier threat to veto the bill. The bill would deny suspected terrorists, even U.S. citizens seized within the nation’s borders, the right to trial and subject them to indefinite detention.:

We have been clear that “any bill that challenges or constrains the President’s critical authorities to collect intelligence, incapacitate dangerous terrorists, and protect the Nation would prompt the President’s senior advisers to recommend a veto.”  After intensive engagement by senior administration officials and the President himself, the Administration has succeeded in prompting the authors of the detainee provisions to make several important changes, including the removal of problematic provisions. While we remain concerned about the uncertainty that this law will create for our counterterrorism professionals, the most recent changes give the President additional discretion in determining how the law will be implemented, consistent with our values and the rule of law, which are at the heart of our country’s strength. This legislation authorizes critical funding for military personnel overseas, and its passage sends an important signal that Congress supports our efforts as we end the war in Iraq and transition to Afghan lead while ensuring that our military can meet the challenges of the 21st century.

As a result of these changes, we have concluded that the language does not challenge or constrain the President’s ability to collect intelligence, incapacitate dangerous terrorists, and protect the American people, and the President’s senior advisors will not recommend a veto.  However, if in the process of implementing this law we determine that it will negatively impact our counterterrorism professionals and undercut our commitment to the rule of law, we expect that the authors of these provisions will work quickly and tirelessly to correct these problems.

Benjamin Wittes at Lawfare gives a quick and dirty analysis from conference report for the NDAA (pdf):

  • The Senate has prevailed on the question of AUMF reaffirmation. The House bill, recall, would have contained a general reaffirmation of the AUMF, whereas the Senate language would only have reaffirmed that the existing AUMF authorized detention operations. The conference report has adopted the Senate approach. (See Sec. 1021.)
  • A watered-down version of the Senate’s mandatory detention provision remains in the bill. (See Sec. 1022.) On the quickest of reads, it seems to apply only to those who are “members of” or “part of” (not supporters of) Al Qaeda and those associated forces that act in coordination with it or at Al Qaeda’s direction, not to the Taliban. It does not extend to citizens and applies to permanent resident aliens only for conduct in the United States to whatever extent the Constitution permits. And it contains the following new disclaimer: “Nothing in this section shall be construed to affect the existing criminal enforcement and national security authorities of the Federal Bureau of Investigation or any other domestic law enforcement agency with regard to a covered person, regardless of whether such covered person is held in military custody.” To put it simply, what has emerged is mush.
  • The conferees have adopted the Senate’s approach to codifying the Guantanamo review process. (See Sec. 1023.) The House had laid out detailed procedures to replace those in President Obama’s executive order. The Senate, by contrast, had merely required the promulgation of procedures that tweaked aspects of the executive order around the edges. The final bill, with very minor adjustments, looks like the Senate version.
  • The Senate’s requirement for new procedures for status determinations for “long-term detention” has survived-with slight tweaks. (See Sec. 1024.) The House got inserted language that clarifies that these procedures-which include counsel and a hearing before a military judge-are not required for detainees who have access to habeas. And the definition of “long term detention” is left to the Defense Department. So the provision, depending on how the executive branch implements it, could be important or could apply to a null-set of detainees.
  • The House bill’s requirement that the administration create a national security protocol governing detainee interactions with the outside world has survived-but with an important change. (See Sec. 1025.) The House version required a national security protocol for each detainee. The conference report, by contrast, requires a single national security protocol governing the Guantanamo population at large.
  • The conference report unsurprisingly contains language forbidding the expenditure of fiscal year 2012 money building detention facilities in the United States to house Guantanamo detainees. (See Sec. 1026.)
  • It also contains language forbidding the use of fiscal year 2012 money to bring Guantanamo detainees to the United States-including for trial. (See Sec. 1027.)
  • It also contains the Senate version of the overseas transfer restrictions for Guantanamo detainees. (See Sec. 1028.)
  • The House’s requirement for consultation between prosecutors and the Pentagon before initiating a terrorist prosecution has survived for foreign Al Qaeda figures and detainees abroad. (See Sec. 1029.)
  • It also contains the uncontroversial clarification of the right to plead guilty in military commission capital trials. (See Sec. 1030.)
  • The House’s prohibition of civilian trials is gone.

h/t David Dayen at FDL

Dec 14 2011

The Dictatorship of the “Democratic” Party

Immigration Officials Picking Up US Citizens for Deportation

By: David Dayen, Firedog Lake

Wednesday December 14, 2011 7:00 am

The Obama Administration swears that their deportation program has only captured criminals and sent them back to their home countries. Recently acquired data shows that to be false. Now we’re learning that not only non-criminals have been caught up in the immigration net. So have American citizens.



There are few hard statistics on the number of American citizens held for deportation, but obviously when you get more aggressive about deporting people – as the Obama Administration has, with a record 1.1 million deportations during his tenure – you’re going to get a higher number of incidents like this. And these are wrongful arrests, illegal actions being taken by immigration authorities. It’s far more than just the cost of doing business.

The cases profiled here involved individuals charged on misdemeanors. But we know that represents a minority of those deported. So the likelihood is high that there have been cases of American citizens not convicted of a crime somehow falling into the immigration net and getting scheduled for deportation. In fact, a few of them probably were deported, though ICE claims that they cancel any deportation orders if the individual claims citizenship.

And this, from an ACLU lawyer, is correct: “It’s sort of like the canary in the mine. If those who have the full due process rights of U.S. citizens are being detained, it tells us a lot about potentially unlawful people who do not have those protections.” Exactly.

Florida’s Politicians (But Not Its Residents) Love Private Prisons

By: WhyIHateCCA, Firedog Lake

Wednesday December 14, 2011 10:45 am

Congresswoman Debbie Wasserman-Schultz represents Southwest Ranches, Florida, which has been at the epicenter of a debate over a proposed immigration detention facility. Residents of the town have consistently demonstrated their opposition to the facility, which they feel was designed and planned without much public knowledge of the proceedings.

Basically, they think they have been fleeced by CCA, who hopes to build the facility on land it already owns, into having a detention center that they fear will lower property values and present a risk to public safety.

Unfortunately, they’ve got a pretty poor representative in Ms. Wasserman, who’s basically taking a “lesser of available evils” approach. She initially called a town hall meeting to allow residents to voice their opposition and learn more about the project. After more than 250 people showed up to let CCA and the town council know they didn’t want a private prison, Wasserman, who had called the meeting, decided she would support the project. She now thinks it’s a good idea and that the town should move forward, saying she thinks “it is going to be far better to have that ICE detention center there than to have any other facility that would have a much more negative impact on residents there.” Other than a lead paint producing puppy mill, I can’t really imagine what would be worse for a community than a privately operated, for-profit human rights violations incubator. But there’s no chance she could have been partially swayed by the nearly $20 million CCA has spent lobbying the federal government over the past decade. Right?

Unfortunately for the residents of Southwest Ranches, Wasserman isn’t alone in ignoring her constituents interests and supporting a company with a long track record of failing to live up to its contracts. The mayor of Southwest Ranches just basically told his constituents to pound sand, because the deal is done. CCA owns the land, and has for a decade, so he says there’s really nothing residents can do to stop the construction at this point.

After FBI Director Testimony, Veto of Defense Authorization Bill Appears Likely

By: David Dayen, Firedog Lake

Wednesday December 14, 2011 11:32 am

Mueller made the comments despite changes to the bill that attempted to give the Administration several loopholes to bypass indefinite military detention on a case-by-case basis. So coming after the conference committee report, it looks like the White House counter-terrorism advisers will recommend a veto. It’s highly unlikely to believe that Mueller was freelancing here.

As we’ve discussed, this does not reflect a White House uncomfortable with statutory indefinite military detention. The Administration opposes the bill because it would put too MANY constraints on their counter-terrorism activities. They would prefer to exist in a legal gray area, without binding rules on indefinite detention. In this case, Mueller appears upset that the military would get first crack at these terrorist suspects rather than the FBI. So there is no nobility here. But the result could be the one civil liberties defenders advocate: a veto of the NDAA.

Let’s just review where we’re at, then. The government could shut down on Friday. The parties are far apart on a bill to avoid the expiration of a payroll tax reduction and extended unemployment benefits, both of which would create a fiscal drag of up to 1% of GDP. Doctors will see a 27% cut in their reimbursement rate for Medicare on January 1 if nothing is done. And the one area where the parties agree, this defense authorization bill, is likely to draw a Presidential veto.

It’s such a wonder why Americans hold no faith in their government.

Record High Anti-Incumbent Sentiment Toward Congress

by Frank Newport, Gallup

December 9, 2011

PRINCETON, NJ — About three-quarters of registered voters (76%) say most members of Congress do not deserve re-election, the highest such percentage Gallup has measured in its 19-year history of asking this question. The 20% who say most members deserve to be re-elected is also a record low, by one percentage point.



A substantial majority of Republican (75%), independent (82%), and Democratic (68%) voters agree that most members of Congress do not deserve re-election — a sign of rare consensus about the legislative body in which both parties currently hold a leadership stake.



How this antipathy toward Congress plays out in next year’s congressional elections remains to be seen. Americans were not as negative last October, before the 2010 midterm elections, yet voters flipped 63 seats from Democratic to Republican control and gave the House to the GOP in the process. This was the largest seat gain by any party since 1948.

More evidence that "independents" don’t "swing"

thereisnospoon, Hullabaloo

Monday, December 12, 2011

“(I)ndependent” voters don’t shift party allegiance from election to election, so much as stay home out of apathy and to punish their preferred party for not doing its job.



Pollsters looking to see how to “win back” so-called “independent” voters will often do focus groups with people who crossed party lines from one election to another–say, those who voted for Barack Obama in 2008 but then voted for Republicans in 2010. They then analyze the data they get from those people to tell Dem politicians like President Obama what they must do to “win back” those independents.

But this is the wrong way of going about it. Sure, those “switcher” voters are out there. But they’re dwarfed in number by the people who hold an allegiance to the Democratic Party and progressive principles in general, and may have voted in the big presidential election of 2008, but failed to turn out to vote in 2010. That’s a much bigger cohort–and not only is it bigger in size, it’s more winnable and courting it doesn’t create resentment and anger within the Party base.



Smart Democratic consultants would do well to do focus groups with Dem voters from 2008 who stayed home in the midterms, and aren’t sure whether they’re likely to come out in 2012. See what is driving their anger and apathy, and what they want in terms of policy and message. And then insofar as decisions are made based on focus groups and polls, tailor the message to those people. My suspicion? You’ll find a lot of those very sorts of people at Occupy protests around the country.

Update:

President Will Not Veto Defense Authorization Bill, Despite Detention Provisions

By: David Dayen, Firedog Lake

Wednesday December 14, 2011 1:32 pm

After its FBI Director told Congress that the revisions to the defense authorization bill did not satisfy his concerns with the bill, the White House issued a statement of Administration policy saying that they would not veto the bill, despite an earlier threat.



(T)he changes do offer a variety of possible loopholes for the executive branch to carry out counter-terrorism policy as they see fit. Military custody is no longer “required” in the bill, and FBI policies are nominally preserved, though in a strange way that would seem to be impossible to implement. The President has a few extra pieces of discretion to take terrorist suspects out of military custody and into an interrogation process outside military purview. In addition, federal courts could still be used for terrorism cases.

Remember that the White House has little problem with indefinite military detention. They just want to be able to dictate when it gets used and on whom. So they obviously see enough flexibility here to carry out unconstrained intelligence gathering and detention policies.

Dec 14 2011

Times Person of the Year: It Is Us, The Protesters

It started with a 26 year old Tunisian street vendor who set himself on fire sparking protests that over threw the government. The protest has spread to Egypt, Yemen, Jordan, Libya, Syria, Israel, Greece, Wisconsin, Ohio, New York City and across the United States to Chicago, Houston, Oakland, Portland, and Los Angeles. Russians have taken to the streets in the largest protests since the overthrow of the Soviet Union that may end the career of Vladimir Putin. It has been a year of protests that have changed the world. And we aren’t done.

Now Time magazine has named me, you, all of us, the Protester, the Person of the Year.

History often emerges only in retrospect. Events become significant only when looked back on. No one could have known that when a Tunisian fruit vendor set himself on fire in a public square in a town barely on a map, he would spark protests that would bring down dictators in Tunisia, Egypt and Libya and rattle regimes in Syria, Yemen and Bahrain. Or that that spirit of dissent would spur Mexicans to rise up against the terror of drug cartels, Greeks to march against unaccountable leaders, Americans to occupy public spaces to protest income inequality, and Russians to marshal themselves against a corrupt autocracy.Protests have now occurred in countries whose populations total at least 3 billion people, and the word protest has appeared in newspapers and online exponentially more this past year than at any other time in history.

Is there a global tipping point for frustration? Everywhere, it seems, people said they’d had enough. They dissented; they demanded; they did not despair, even when the answers came back in a cloud of tear gas or a hail of bullets. They literally embodied the idea that individual action can bring collective, colossal change. And although it was understood differently in different places, the idea of democracy was present in every gathering. The root of the word democracy is demos, “the people,” and the meaning of democracy is “the people rule.” And they did, if not at the ballot box, then in the streets. America is a nation conceived in protest, and protest is in some ways the source code for democracy – and evidence of the lack of it.

We will take to the streets and the ballot boxes and back to the streets until we have won the “war” against the oligarchs, the banks and the billionaires.  

Dec 14 2011

Punting the Pundits

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Katrina vanden Heuvel: Russia’s Great December Evolution

On December 10, in what one Russian blogger called “The Great December Evolution”-a play on the Bolsheviks’ Great October Revolution-tens of thousands of people protested peacefully in central Moscow. It was the most striking display of grassroots democracy and activism since the early 1990s. Police showed restraint, and Moscow’s mayor even provided free bus rides to protesters who had arrived at the wrong location. “Everything is flowing and changing,” a Russian friend e-mailed me Sunday night. [..]

The air of infallibility Putin has enjoyed-and counted on -for the past decade is deflated.

Also gone is the nearly unconditional support most Russians had not just for Putin but for the system he has built and presided over in the past decade. That system, at least in the popular thinking, and according to legitimate polls, brought stability and prosperity after the chaos and poverty of Yeltsin’s 1990s. But for many Russians, especially younger ones, those days are a fading memory and the quest for political and free speech rights is sharpening. The involvement of so many young people in Moscow’s protests is, as one journalist put it, “a game-changer….All at once, a generation understood it has two options: to leave the country, or to start the struggle.”

Amy Goodman: Climate Apartheid

Despite the pledges by President Barack Obama to restore the United States to a position of leadership on the issue of climate change, the trajectory from Copenhagen in 2009, to Cancun in 2010, and, now, to Durban reinforces the statement made by then-President George H.W. Bush prior to the Rio Earth Summit in 1992, the forerunner to the Kyoto Protocol, when he said, “The American way of life is not up for negotiation.”

The “American way of life” can be measured in per capita emissions of carbon. In the U.S., on average, about 20 metric tons of CO2 is released into the atmosphere annually, one of the top 10 on the planet. Hence, a popular sticker in Durban read “Stop CO2lonialism.” [..]

So it seems U.S. intransigence, its unwillingness to get off its fossil-fuel addiction, effectively killed Kyoto in Durban, a key city in South Africa’s fight against apartheid. That is why Anjali Appadurai’s closing words were imbued with a sense of hope brought by this new generation of climate activists:

“[Nelson] Mandela said, ‘It always seems impossible, until it’s done.’ So, distinguished delegates and governments around the world, governments of the developed world, deep cuts now. Get it done.”

Carole Joffe: Facebook Twitter You Tube RSS Email Updates

Vulnerable Women and Contraception: Obama Turns Clock Back Nearly 100 Years

“For a woman to ‘ask her physician’ for a safe and effective contraceptive  presupposed that she had a physician, that she could afford a contraceptive, and that the physician would be willing to give it to her, regardless of her marital status.”

These are the words of the historian Sheila Rothman, writing about the setbacks Margaret Sanger faced in the 1920s and 1930s in trying to realize her vision of making birth control widely available to all women, including the poorest-and about the ultimate “ownership” of contraceptive services during that era by physicians. Sanger’s original vision was a fleet of clinics, to be run by public health nurses. But as Rothman and others have documented, when she attempted to open such clinics, she experienced repeated arrests and the closures of her facilities, as contraception was then illegal. In the years leading up to the 1965 Supreme Court Griswold decision, which legalized birth control for married persons, only physicians were legally permitted to provide such services, and as the quote from Rothman implies, this situation put poor women at a tremendous disadvantage.

Rothman’s critique, written in the 1970s about events in the ’20s and ’30s,  is remarkably relevant to today’s leading reproductive controversy: the Obama administration’s overruling of the FDA decision to allow over-the-counter status of Plan B, an Emergency Contraceptive product, for young women under the age of seventeen. If one substitutes “teenager” for “woman” and “Plan B” for “a safe and effective contraceptive” in Rothman’s quote, one can readily appreciate how, once again in America’s longstanding reproductive wars, the needs of the most vulnerable are willfully neglected.

Laura Flanders: What a Difference an Occupation Makes

It was never a genuine question. Money media prattled on about Occupy Wall Street’s supposedly ineffable demands the same way they batted aside the end capitalism signs to wonder what the Seattle protesters had on their minds. That said, the Occupy movement has always been more about doing than demanding and this week, OWS stepped it up another notch.

On December 6, OccupyYourHomes joined with local community organizers to take on the housing crisis. In twenty-five cities, protesters interrupted house auctions, blocked evictions and occupied foreclosed homes. In East New York they moved Alfredo Carrasquillo, Tasha Glasgow and their two children into a foreclosed home that had stood empty for three years. I attended the action Tuesday and couldn’t drag myself away. Even as the rain drizzled and the temperature sank, I watched the numbers of protesters grow and thought of the many, many members of underfunded community groups I’ve spoken to over the years. Among those, Community Voices Heard, New York Communities for Change, Picture the Homeless, Organize for Occupation, VOCAL-NY and Reclaim the Land. They talked on GRITtv about toxic loans and targeted neighborhoods, forced foreclosures, fear and the general lack of national interest.

Karen Greenberg: How Terrorist ‘Entrapment’ Ensnares Us All

When the government gets in the business of playing along with terror plots, it’s not just justice that suffers – but our safety

Two weeks ago, Jose Pimentel was arrested as an alleged terrorist bomb-maker as a result of an NYPD sting. Within hours of the arrest, his attorney raised the prospect of a possible entrapment defense. Last month, when Mansour Arbabsiar was indicted for trying to assassinate the Saudi ambassador to the United States on behalf of Iran, he, too, was the subject of a sting, in this case by the FBI, and he claimed entrapment. These are but the latest iterations of dozens of terrorism cases that have come through the system with varying degrees of “entrapment” claims by the defense at the time of arrest. The Fort Dix case from New Jersey in 2007, and the more recent instances of the sole terrorism suspects in Portland, Washington, DC and Baltimore are among the many cases in which some sort of entrapment was alleged (at least, at the outset).

This is a problem in a counterterrorism world where law enforcement relies on preventive stings as its main strategy. By definition, the strategy precludes a defense. Legally, entrapment is mostly about the suspect’s predisposition because the other element of entrapment, inducement by the government to commit the crime, is usually not disputed. Thus, if the government can show that the defendant was inclined to the crime, then the entrapment-by-inducement defense cannot prevail in court. In a terrorism case, the fact of being willing to commit an act of terrorism is seen as predisposition, no matter how much of a Catch-22 this may be. As a result, lawyers rarely choose to mount the defense.

Mary Bottari FOX News, OWS, Banksters, and Bombs

Last week, tragedy was averted when savvy security at Deutsche Bank (DB) in Frankfurt, Germany, spotted a suspicious package and sequestered a letter bomb intended for the DB CEO. This was the second time Deutsche Bank was attacked in this manner. In 1989, their CEO was killed by a bomb later traced to violent extremists in Germany’s Red Army Faction.

Scanning the horizon for someone to blame for the latest attack on Germany’s largest bank, FOX news pundit Dan Gainor worked “the Internets.” Did he detail Deutsche Bank’s track record of making friends by ripping off consumers and foreclosing on their homes? Did he mention that Deutsche Bank stirred public ire when it was bailed out by multiple governments, including two billion from the U.S. Federal Reserve? Did he even bother to notice that it was widely reported that an Italian anarchist group had already claimed responsibility for the attack?

No. In his piece on FOX News, “Left, Obama Escalate War on Banks Into Dangerous Territory,” Gainor decided to go after the bank-busting activists at the Center for Media and Democracy in Madison, Wisconsin, specifically our BanksterUSA.org site, because the Bankster masthead is riddled with bullet holes.

Miriam Pemberton: Military Spending is the Weakest Job Creator

Even before the supercommittee’s demise, the defense industry and its Pentagon and congressional allies were making preemptive strikes on the next phase: the automatic cuts, half of them from defense, that are supposed to follow the supercommittee’s failure. And with national unemployment rates stuck near 9 percent, the effect of these cuts on jobs has loomed large in their sights.

The largest defense industry trade association, the Aerospace Industries Association, recently funded a study predicting $1 trillion in military cuts over 10 years would add 0.6 percent to the national unemployment rate. The Pentagon then funded its own study that conveniently rounded that prediction up to an even 1 percent.

The glaring flaw in these studies is that they make claims about the effect on the economy as a whole as if these military cuts were being made in a vacuum.

Dec 14 2011

On this Day In History December 14

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

December 14 is the 348th day of the year (349th in leap years) in the Gregorian calendar. There are 17 days remaining until the end of the year.

On this day in 1995, the Dayton Agreement is signed in Paris.

The General Framework Agreement for Peace in Bosnia and Herzegovina, also known as the Dayton Agreement, Dayton Accords, Paris Protocol or Dayton-Paris Agreement, is the peace agreement reached at Wright-Patterson Air Force Base near Dayton, Ohio in November 1995, and formally signed in Paris on December 14, 1995. These accords put an end to the three and a half year long war in Bosnia, one of the armed conflicts in the former Socialist Federative Republic of Yugoslavia. Some articles erroneously refer to the agreement as the Treaty of Dayton.

Background

Though the basic concepts of the Dayton Agreement began to appear in international talks since 1992, the negotiations were initiated following the unsuccessful previous peace efforts and arrangements, the August 1995 Croatian military Operation Storm and its aftermath, the government military offensive against the Republika Srpska, in concert with NATO’s Operation Deliberate Force. During September and October 1995, many of the world powers (especially the USA and Russia), gathered in the Contact Group, applied intense pressure to the leaders of the three sides to attend the negotiations in Dayton, Ohio.

The conference took place from November 1 to November 21, 1995. The main participants from the region were Serbian President Slobodan Milosevic (representing the Bosnian Serb interests due to absence of Karadzic), Croatian President Franjo Tudman, and Bosnian President Alija Izetbegovic with Bosnian Foreign Minister Muhamed Sacirbey.

The peace conference was led by U.S. Secretary of State Warren Christopher, and negotiator Richard Holbrooke with two Co-Chairmen in the form of EU Special Representative Carl Bildt and the First Deputy Foreign Minister of Russia Igor Ivanov. A key participant in the US delegation was General Wesley Clark (later to become NATO’s Supreme Allied Commander Europe (SACEUR) in 1997). The UK military representative was Col Arundell David Leakey (later to become Commander of EUFOR in 2005). The Public International Law & Policy Group (PILPG) served as legal counsel to the Bosnian Government delegation during the negotiations.

The secure site was chosen in a bid to curb the participants’ ability to negotiate in the media rather than at the bargaining table.

After having been initiated in Dayton, Ohio on November 21, 1995 the full and formal agreement was signed in Paris, France, on December 14, 1995 also by French President Jacques Chirac, U.S. President Bill Clinton, UK Prime Minister John Major, German Chancellor Helmut Kohl and Russian Prime Minister Viktor Chernomyrdin.

The present political divisions of Bosnia and Herzegovina and its structure of government were agreed upon as part the constitution that makes up Annex 4 of the General Framework Agreement concluded at Dayton. A key component of this was the delineation of the Inter-Entity Boundary Line, to which many of the tasks listed in the Annexes referred.

The agreement mandated a wide range of international organizations to monitor, oversee, and implement components of the agreement. The NATO-led IFOR (Implementation Force) was responsible for implementing military aspects of the agreement and deployed on the 20th December 1995, taking over the forces of the UNPROFOR.

Ironically, the chief architect of the Dayton Accord, Ambassador Richard Holbrooke, died yesterday, December 13, in Washington, DC. May he rest in peace.

Dec 14 2011

Extractionism: Grand Larceny By The Banks

Extractionism: taking money from others without creating anything of value; anything that produces economic growth or improves our lives.

MSNBC talk show host, Dylan Ratigan has a new book, Greedy Bastards, coming out in January and has been promoting the premise of the book, how the banks have shaken down taxpayers, in a series of on-line pod casts. He recently interviewed Yves Smith, author of ECONned and proprietress of naked capitalism, gave Dylan an education of how the banks have been extracting capital for themselves and why investors are afraid to take them to court for fear the government will retaliate.

Under an extractionist system, we find lose value at a faster rate over time, while we need to be creating it.  Instead of giving people incentives to make good deals where both sides can benefit, extractionist systems rewards those who take and take some more, and give nothing in return.  Sadly, extractionism has crept its way into every aspect of our economy – it’s everywhere, from trade to taxes to banking.

Let’s take a look at banking as an example.  As Yves Smith explains, financial firms do provide valuable services to our economy, like establishing stable and reliable methods of payment for goods and services, and selling bonds and stocks to help raise new money to fund big projects. There are more than that, of course, but those are two basic examples of valuable services that our banking and financial sector provides.

Now, let’s look at how they can also be extractive – almost always going back  the lack of transparency in the financial markets.

Yves identifies two main extractive techniques of our financial industry.  The first is charging too much for goods or services. “Even fairly sophisticated customers can’t know what the prices are of many of the products, so it’s difficult for them to do side-to-side comparisons,” says Yves.

The second method is producing products that are so complicated – like in the swaps market – that clients can’t see hidden risk in them.  “This has unfortunately become extremely common now that we have a lot more use of derivatives. Many of the formulas that are used they are disclosed by they are extremely complicated, and then on top of that, the risk models that are commonly used for evaluating the risk actually understate the risk,” says Yves.

(emphasis mine)

In the interview Yves makes suggestions how this can be fixed:

  • 1. A small tax on all financial transactions.
  • 2. Give financial institutions a bigger financial responsibility when they knowingly recommending bad products or dubious strategies.
  • 3. We need increased political pressure for an effective and robust Securities and Exchange Commission.
  • 4. More inspection of what the banks are doing in their over-the-counter businesses.
  • The full interview transcript is here.

    Yes, we do need a Constitutional amendment to get money out of politics so this can be stopped.

    h/t Yves Smith @ naked capitalism

    Dec 14 2011

    Reality TV