04/03/2014 archive

“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”.

Follow us on Twitter @StarsHollowGzt

The New York Times Editorial Board: The Court Follows the Money

The Supreme Court on Wednesday continued its crusade to knock down all barriers to the distorting power of money on American elections. In the court’s most significant campaign-finance ruling since Citizens United in 2010, five justices voted to eliminate sensible and long-established contribution limits to federal political campaigns. Listening to their reasoning, one could almost imagine that the case was simply about the freedom of speech in the context of elections. [..]

But make no mistake, like other rulings by the Roberts court that have chipped away at campaign-finance regulations in recent years, the McCutcheon decision is less about free speech than about giving those few people with the most money the loudest voice in politics.

Anne M. Ravel: How Not to Enforce Campaign Laws

THE Federal Election Commission is failing to enforce the nation’s campaign finance laws. I’m in a position to know. I’m the vice chairwoman of the commission.

At my confirmation hearing last year, I promised to vigorously uphold those laws. I’ve been on the commission only six months, yet I’ve quickly learned how paralyzed the F.E.C. has become and how the courts have turned a blind eye to this paralysis.

The problem stems from three members who vote against pursuing investigations into potentially significant fund-raising and spending violations. In effect, cases are being swept under the rug by the very agency charged with investigating them.

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.

April 3 is the 93rd day of the year (94th in leap years) in the Gregorian calendar. There are 272 days remaining until the end of the year.

On this day in 1948, President Harry S.Truman signs Foreign Assistance Act.

President Harry S. Truman signs off on legislation establishing the Foreign Assistance Act of 1948, more popularly known as the Marshall Plan. The act eventually provided over $12 billion of assistance to aid in the economic recovery of Western Europe.

In the first years following the end of World War II, the economies of the various nations of Western Europe limped along. Unemployment was high, money was scarce, and homelessness and starvation were not unknown in the war-ravaged countries. U.S. policymakers considered the situation fraught with danger. In the developing Cold War era, some felt that economic privation in Western Europe made for a fertile breeding ground for communist propaganda.

The Marshall Plan (officially the European Recovery Program, ERP) was the large-scale economic program, 1947-1951, of the United States for rebuilding and creating a stronger economic foundation for the countries of Europe. The initiative was named after Secretary of State George Marshall and was largely the creation of State Department officials, especially William L. Clayton and George F. Kennan. Marshall spoke of urgent need to help the European recovery in his address at Harvard University in June 1947.

The reconstruction plan, developed at a meeting of the participating European states, was established on June 5, 1947. It offered the same aid to the Soviet Union and its allies, but they did not accept it. The plan was in operation for four years beginning in April 1948. During that period some US $13 billion in economic and technical assistance were given to help the recovery of the European countries that had joined in the Organization for European Economic Co-operation. This $13 billion was in the context of a U.S. GDP of $258 billion in 1948, and was on top of $12 billion in American aid to Europe between the end of the war and the start of the Plan that is counted separately from the Marshall Plan.

The ERP addressed each of the obstacles to postwar recovery. The plan looked to the future, and did not focus on the destruction caused by the war. Much more important were efforts to modernize European industrial and business practices using high-efficiency American models, reduce artificial trade barriers, and instill a sense of hope and self-reliance.

By 1952 as the funding ended, the economy of every participant state had surpassed pre-war levels; for all Marshall Plan recipients, output in 1951 was 35% higher than in 1938.[8] Over the next two decades, Western Europe enjoyed unprecedented growth and prosperity, but economists are not sure what proportion was due directly to the ERP, what proportion indirectly, and how much would have happened without it. The Marshall Plan was one of the first elements of European integration, as it erased trade barriers and set up institutions to coordinate the economy on a continental level-that is, it stimulated the total political reconstruction of western Europe.

Belgian economic historian Herman Van der Wee concludes the Marshall Plan was a “great success”:

   “It gave a new impetus to reconstruction in Western Europe and made a decisive contribution to the renewal of the transport system, the modernization of industrial and agricultural equipment, the resumption of normal production, the raising of productivity, and the facilitating of intra-European trade.”

George Catlett Marshall (December 31, 1880 – October 16, 1959) was an American military leader, Chief of Staff of the Army, Secretary of State, and the third Secretary of Defense. Once noted as the “organizer of victory” by Winston Churchill for his leadership of the Allied victory in World War II, Marshall served as the United States Army Chief of Staff during the war and as the chief military adviser to President Franklin D. Roosevelt. As Secretary of State, his name was given to the Marshall Plan, for which he was awarded the Nobel Peace Prize in 1953.

Get out your check books, folks, the Supreme Court opened the bank for the deposits of big money to flood the US political system.

The Supreme Court on Wednesday continued its abolition of limits on election spending, striking down a decades-old cap on the total amount any individual can contribute to federal candidates in a two-year election cycle.

The ruling, issued near the start of a campaign season, will very likely increase the role money plays in American politics.

The 5-to-4 decision, with the court’s more conservative members in the majority, echoed Citizens United, the 2010 decision that struck down limits on independent campaign spending by corporations and unions.

Wednesday’s decision seemed to alter campaign finance law in subtle but important ways, notably by limiting how the government can justify laws said to restrict the exercise of First Amendment rights in the form of campaign contributions.

Power Surge for Donors

By Nicholas Confessor, The New York Times

The ruling opens the door for each party’s establishment to reclaim some power from the super PACs and other independent spending groups that are now playing an outsize role in campaigns. Experts said the decision would permit party leaders to form joint fund-raising committees and solicit multimillion dollar checks on behalf of candidates. The House minority leader, Nancy Pelosi, for example, could in theory approach a donor seeking to help Democrats win control of the House of Representatives, and solicit as much as $2.3 million – $5,200 for each Democratic candidate in every House race, plus a contribution to the Democratic Congressional Campaign Committee.

A donor could also, in theory, give $5,000 per year to every political action committee currently registered with the Federal Election Committee. That would total more than $13 million, versus the $74,600 allowed under the existing aggregate cap.

The bidding is now open.

The Wire is a classic scam made famous by The Sting.

It’s based on Front Running, that is, geting information information before your customers and using it to extract money from them.

I defy you to find any difference between that and High Speed Trading.

Wall Street Rips Off ‘The Sting’

By Matt Taibbi, Rolling Stone

POSTED: July 9, 2013 12:55 PM ET

It turns out that in recent times, if you paid them an extra subscription fee of a few thousand dollars a month, Thomson Reuters would allow you access to the Consumer Confidence data a full two seconds earlier than the rest of its subscribers – at 9:54:58 a.m., as opposed to 9:55:00 exactly.

…

The two-second head start allows high-speed traders to plunge into the markets en masse and retreat all the way back again before most of the world sees this market-altering economic data.

…

As my friend Eric Salzman joked, the two-second head start is a scheme taken straight out of The Sting, where the “hook” was early access to the results of an out-of-state horse race. All that’s missing is Robert Shaw placing his bet: “Five hundred thousand dollars to win. Lucky Dan!”

…

There’s a reason why high-frequency trading is such a lucrative business. With the tiniest head start on market-moving data, computerized traders can make giant piles of money. And as others have reported, the Thomson Reuters consumer confidence survey isn’t the only economic data mine to which traders can buy early access.

Deutsche Borse sells access to its Chicago Business Barometer three minutes early to anyone willing the relatively modest sum of 2,000 Euros a year.

Meanwhile, the Institute for Supply Management teamed up with Thomson Reuters to also sell a kind of enhanced access to the results to a monthly survey of purchasing managers (which measures both manufacturing and non-manufacturing industries). The ISM releases the data to everyone at 10:00 a.m. once a month, but those who pay extra get the data in a form that’s a few ticks easier for computer trading algorithms to read and digest.

It’s bad enough that this goes on out in the open, but part two of this joke is that nobody’s ashamed of it in the slightest. In fact, Thomson Reuters threw the P.R.-office version of a hissy fit today after Schneiderman closed shop on their neat little revenue stream. The firm refused to permanently end the practice and defiantly insisted upon their right to sell data to whomever they want, whenever they want.

…

Yes, there’s a socially beneficial activity, helping your customers make “better informed trading and investment decisions” two seconds faster than your other customers (read: suckers). Clearly, someone who wants to buy a two-second head start is doing so because he or she needs those extra two seconds to soberly digest market data, not because he or she wants to massively front-run the rest of the investing public using high-speed computers.

Michael Lewis talks about it in Flash Boys: A Wall Street Revolt

CNBC: The Fight that stopped Wall Street

Yes, let’s talk about Confidence Fairies.

Scam artists and Con Men (you do realize the ‘Con’ in ‘Con Man’ stands for confidence?).  Thieves and Liars.

Welcome to The Breakfast Club! We’re a disorganized group of rebel lefties who hang out and chat if and when we’re not too hungover  we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Join us every weekday morning at 9am (ET) and weekend morning at 10:30am (ET) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.