May 2014 archive

India Jones Part 2

Warren

Oh, I know what you want to see.

It’s hard not to laugh when some NeoLib Freshwater Friedmanite starts pontificating about ‘the invisible hand of the Market’ and ‘price discovering rational actors’ when it’s such a load of fucking bullshit.

Those concepts were developed by Adam Smith in his book Wealth of Nations in response to the prevailing practice of Royal Grants of Monopoly and Crony Capitalism as part of the Merchantilist system of Colonial wealth extraction and prohibitive Tariffs designed to protect ‘favored’ industries and individuals.

He spends far more time in that work inveighing against collusive business interests that form cabals and monopolies to engage in price fixing, a “conspiracy against the public or in some other contrivance to raise prices” to maximize the amount “which can be squeezed out of the buyers”.

Smith also warned that a business-dominated political system would allow a conspiracy of businesses and industry against consumers, with the former scheming to influence politics and legislation. Smith states that the interest of manufacturers and merchants “…in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public…The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention.”

This is NOT “Free Enterprise”, it is a criminal enterprise and should be prosecuted under RICO–

HSBC, JPMorgan and Credit Agricole charged with alleged euro rates fixing

Reuters

Tuesday 20 May 2014 14.25 EDT

Brussels has charged Britain’s biggest bank, HSBC, its US peer JPMorgan and France’s Crédit Agricole with rigging financial benchmarks linked to the euro.

The European commission said it would soon charge the broker ICAP for suspected manipulation of the yen Libor financial benchmark.

…

Prosecutors have charged 16 men with fraud-related offences.

“The commission has concerns that the three banks may have taken part in a collusive scheme aimed at distorting the normal course of pricing components for euro interest rate derivatives,” the commission said.

The three banks and ICAP, which refused to settle the case in December, could face penalties of up to 10% of their global turnover if found guilty of breaching EU antitrust rules.

“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

Trevor Timm: Everyone should know just how much the government lied to defend the NSA

A web of deception has finally been untangled: the Justice Department got the US supreme court to dismiss a case that could have curtailed the NSA’s dragnet. Why?

If you blinked this week, you might have missed the news: two Senators accused the Justice Department of lying about NSA warrantless surveillance to the US supreme court last year, and those falsehoods all but ensured that mass spying on Americans would continue. But hardly anyone seems to care – least of all those who lied and who should have already come forward with the truth.

Here’s what happened: just before Edward Snowden became a household name, the ACLU argued before the supreme court that the Fisa Amendments Act – one of the two main laws used by the NSA to conduct mass surveillance – was unconstitutional.

In a sharply divided opinion, the supreme court ruled, 5-4, that the case should be dismissed because the plaintiffs didn’t have “standing” – in other words, that the ACLU couldn’t prove with near-certainty that their clients, which included journalists and human rights advocates, were targets of surveillance, so they couldn’t challenge the law. As the New York Times noted this week, the court relied on two claims by the Justice Department to support their ruling: 1) that the NSA would only get the content of Americans’ communications without a warrant when they are targeting a foreigner abroad for surveillance, and 2) that the Justice Department would notify criminal defendants who have been spied on under the Fisa Amendments Act, so there exists some way to challenge the law in court.

It turns out that neither of those statements were true – but it took Snowden’s historic whistleblowing to prove it.

Daniel Devir: The resegregation of America’s schools

The Supreme Court ruled 60 years ago this May 17 in Brown v. Board of Education that “segregation of white and Negro children in the public schools of a State solely on the basis of race, pursuant to state laws permitting or requiring such segregation,” is unconstitutional.

The ruling abolished the explicitly mandated segregation made infamous in the Deep South. But political reaction and larger structural shifts, such as white suburbanization, quickly overwhelmed tentative progress. Today, segregation – both racial and economic – remains the core organizational feature of American public education. In 1980, the typical black student attended a school where 36 percent of students were white. Today, the average black student attends a school where only 29 percent are. Many black and Latino students attend schools where nearly every other student is nonwhite – including in supposed liberal bastions such as New York and Chicago.

Indeed, New York state’s public schools are the most segregated in the nation, according to a March report from the Civil Rights Project at the University of California, Los Angeles. In New York City, 19 of 32 community school districts are less than 10 percent white. That includes all of the Bronx, two-thirds of Brooklyn and half of Manhattan.

This is no time for an anniversary celebration.

President Barack Obama has said that he wanted to reform how the NSA collects and stores metadata. What he says and what he does, again, are two different things.

The “Consult with Congress” Stage of USA Freedumb

By Marcy Wheeler, emptywheel

Remember how, in the days after President Obama announced his principles for reforming the dragnet, his Senior Administration Official pretended that any efforts to make the scope of the program worse would come from Congress? [..]

Well, it looks like the Administration isn’t so passive after all. They’re working with House leadership to gut the bill.

   TROUBLE FOR USA FREEDOM? – House leadership and Obama administration officials met with committee members Sunday to negotiate changes to key NSA reform legislation, parting late in the evening without reaching a final resolution, said a congressional staffer close to the process. Still, it seems clear that the USA FREEDOM Act, approved by the House Judiciary and Intelligence committees little more than a week ago, will not reach the House floor intact. Some passages have been watered down already, the staffer acknowledged, declining to go into specifics. The bill is set for “possible consideration” this week, according to the schedule circulated by House Majority Leader Eric Cantor’s office.

   Word of the talks caused some of the bill’s most ardent privacy and civil liberties backers to cry foul and say they could withdraw support. Areas of concern to watchdogs include possible removal of transparency language allowing companies to tell their customers about the broad numbers of lawful intercept requests they receive; and a debate on whether the search terms used by the NSA to search communications records should be narrowly defined in statute.

   “The version we fear could now be negotiated in secret and introduced on the House floor may not move us forward on NSA reform,” said human rights organization Access. “I am gravely disappointed if the House leadership and the administration chose to disrupt the hard-fought compromise that so many of us were pleased to support just two weeks ago,” said Kevin Bankston, policy director of the New America Foundation’s Open Technology Institute.

And while it’s not clear these secret changes would broaden the scope outside of counterterrorism (though I think that’s possible already), it does seem clear the Administration is pushing for these changes because the already weak bill is too strong for them.

Congress is no better.

Advocates fear NSA bill is being gutted

By Kate Tummarello, The Hill

To win the support of NSA defenders, lawmakers abandoned some reform provisions in Sensenbrenner’s original bill. One of the major changes was dropping the appointment of a constitutional advocate to the Foreign Intelligence Surveillance Court, which approves the NSA’s spying requests, and substituting it for a panel of experts.

The bill was also stripped of language that would have allowed tech companies to publish more specific information about the number and types of government requests for user data they receive.

During Judiciary consideration, an amendment to allow less specific reporting was added back into the bill, but some worry that provision is in danger now because the administration thinks it’s already reached a deal that allows tech companies to publish more information about the NSA requests.

While pro-reform advocacy groups and members hailed the House bill as a positive first step, many lamented the revisions and said the legislation will be in trouble on the floor if it undergoes further changes.

A Deep Dive into the House’s Version of Narrow NSA Reform: The New USA Freedom Act

By Mark Jaycox, Electronic Freedom Foundation

Here’s how the House version of the USA Freedom Act compares to the Senate’s version, what the new House version of the USA Freedom Act does, and what it sorely lacks.

The Senate’s Version of USA Freedom Act

As we mentioned when the original USA Freedom Act was first introduced, it proposed changes to several NSA activities and limited the bulk collection of all Americans’ calling records. It would fix a key problem with Section 702 (.pdf) of the Foreign Intelligence Surveillance Amendments Act (FISAA), bring more transparency to the Foreign Intelligence Surveillance Act Court (FISA court), and introduce a special advocate to champion civil liberties in the FISA court.

The House’s New Version of the USA Freedom Act:

The new USA Freedom Act concentrates on prohibiting the collection of all Americans’ calling records using Section 215 of the Patriot Act. Other sections of the bill would allow the FISA Court to assign amici, or non-parties who can brief issues before the court; create new government reports about the spying powers; and create new company reports detailing how many accounts and customers are affected by FISA Court orders.

First and foremost, the bill introduces a different conceptual approach to prohibiting mass spying under Section 215. Unlike the Senate version, which tries to stop the mass collection of calling records by mandating that the records sought “pertain to” an agent of a foreign power or their activities-an approach that we’ve worried about because “pertains to” and “relevant” are so similar-the House version mandates that a “specific selection term” (currently defined as uniquely describing a person, entity, or account) be the “basis for the production” of the records. The overall language may be stronger than in the old USA Freedom Act, but “specific selection term” must be further defined as “entity” could be construed expansively. After the order is filed, the government can obtain up to “two hops“-which may be too expansive for many investigations-from the selection term.

The bill also tries to tighten the “minimization procedures” that apply to government collection of records using Section 215 and other spying authorities like national security letters and the FISA Pen Register/Trap and Trace (PR/TT) provision. But the procedures only touch the FBI, not other agencies-like the NSA-that may be obtaining records using Section 215. In addition, the House version uses language we’ve seen in Section 702’s minimization procedures. If you remember, those procedures are horrendous. They allow for the overcollection, overretention, and oversharing of Americans’ communications “mistakenly” collected. The House must draft stronger minimization language to completely ensure improper information about untargeted users is not collected. For instance, simply inserting the word “acquisition” or “collection” would help.

End the NSA’s Mass Spying

Tell Congress: Support the USA FREEDOM Act. Stop the FISA Improvements Act & Other Fake Reforms.

There’s a powerful reform proposal moving through Congress. H.R. 3361, the House’s version of the USA FREEDOM Act, would limit bulk collection of phone records and add transparency to the egregious NSA spying.

If it passes, the USA FREEDOM Act will be the most meaningful reform of government surveillance in decades. While the USA FREEDOM Act doesn’t address every issue with NSA surveillance, it’s a powerful first step.

But certain members of Congress don’t want reform. Representatives Mike Rogers and Dutch Ruppersberger have introduced a bill that attempts to make NSA spying worse. And Senator Dianne Feinstein is promoting the FISA Improvements Act, a bill posing as reform that attempts to legalize the worst aspects of NSA surveillance.

We can’t let NSA apologists preserve the status quo. Demand real reform.  Stop mass spying.

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. Everyone’s welcome here, no special handshake required. Just check your meta at the door.

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This Day in History

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.

Click on image to enlarge

May 20 is the 140th day of the year (141st in leap years) in the Gregorian calendar. There are 225 days remaining until the end of the year.

On this day on 1896, the six ton chandelier of the Palais Garnier falls on the crowd resulting in the death of one and the injury of many others. The falling of one of the counterweights for the grand chandelier resulted in the death of one person.

This incident, as well as the underground lake, cellars, along with the other elements of the Opera House even the building itself were the inspirations of Gaston Leroux for his classic 1910 Gothic novel, The Phantom of the Opera.

The ceiling area, which surrounds the chandelier, was given a new painting during 1964 by Marc Chagall. This painting was controversial, with many people feeling Chagall’s work clashed with the style of the rest of the theater.

The Palais Garnier, known also as the Opéra de Paris or Opéra Garnier, but more commonly as the Paris Opéra, is a 1,600-seat opera house on the Place de l’Opéra in Paris, France, which was the primary home of the Paris Opera from 1875 until 1989. A grand building designed by Charles Garnier in the Neo-Baroque (or “Baroque Revival”) style (it is also said to be of the related Second Empire style), it is regarded as one of the architectural masterpieces of its time.

Upon its inauguration during 1875, the opera house was named officially the Académie Nationale de Musique – Théâtre de l’Opéra. It retained this title until 1978 when it was re-named the Théâtre National de l’Opéra de Paris. After the opera company chose the Opéra Bastille as their principal theatre upon its completion during 1989, the theatre was re-named as the Palais Garnier, though Académie Nationale de Musique is still sprawled above the columns of its front façade. In spite of the change of names and the Opera company’s relocation to the Opéra Bastille, the Palais Garnier is still known by many people as the Paris Opéra, as have all of the several theatres which have served as the principal venues of the Parisian Opera and Ballet since its initiation.

History

The Palais Garnier was designed as part of the great reconstruction of Paris during the Second Empire initiated by Emperor Napoleon III, who chose Baron Haussmann to supervise the reconstruction. During 1858 the Emperor authorized Haussmann to clear the required 12,000 square metres (1.2 ha) of land on which to build a second theatre for the world-renowned Parisian Opera and Ballet companies. The project was the subject of architectural design competition during 1861, and was won by the architect Charles Garnier (1825-1898). The foundation stone was laid during 1861, with the start of construction during 1862. Legend is that the Emperor’s wife, the Empress Eugénie, asked Garnier during the construction whether the building would be built in the Greek or Roman style, to which he replied: “It is in the Napoleon III style, Madame!”

India Jones

C.O.L.B.E.R.T

Springtime for Bankers

Paul Krugman, The New York Times

MAY 18, 2014

By any normal standard, economic policy since the onset of the financial crisis has been a dismal failure.

…

Now Timothy Geithner, who was Treasury secretary for four of those six years, has published a book, “Stress Test,” about his experiences. And basically, he thinks he did a heckuva job.

…

How can people feel good about track records that are objectively so bad? Partly it’s the normal human tendency to make excuses, to argue that you did the best you could under the circumstances.

…

But there’s also something else going on. In both Europe and America, economic policy has to a large extent been governed by the implicit slogan “Save the bankers, save the world” – that is, restore confidence in the financial system and prosperity will follow. And government actions have indeed restored financial confidence. Unfortunately, we’re still waiting for the promised prosperity.

Much of Mr. Geithner’s book is devoted to a defense of the U.S. financial bailout, which he sees as a huge success story – which it was, if financial confidence is viewed as an end in itself.

…

One reason for sluggish recovery is that U.S. policy “pivoted,” far too early, from a focus on jobs to a focus on budget deficits. Mr. Geithner denies that he bears any responsibility for this pivot, declaring “I was not an austerian.” In his version, the administration got all it could in the face of Republican opposition. That doesn’t match independent reporting, which portrays Mr. Geithner ridiculing fiscal stimulus as “sugar” that would yield no long-term benefit.

But fiscal austerity wasn’t the only reason recovery has been so disappointing. Many analysts believe that the burden of high household debt, a legacy of the housing bubble, has been a big drag on the economy. And there was, arguably, a lot the Obama administration could have done to reduce debt burdens without Congressional approval. But it didn’t; it didn’t even spend funds specifically allocated for that purpose. Why? According to many accounts, the biggest roadblock was Mr. Geithner’s consistent opposition to mortgage debt relief – he was, if you like, all for bailing out banks but against bailing out families.

Tim Geithner, unreliable narrator

Felix Salmon, Medium

Published May 18, 2014

one thing has become generally-received wisdom about the book: whatever you might think of Geithner’s actions and opinions, he’s at least presenting himself in an honest and unvarnished manner. Michael Lewis describes this as a “near-superhuman feat”: “there’s hardly a moment in Geithner’s story when the reader feels he is being anything but straightforward,” he writes.

If Geithner isn’t being honest about his actions and the actions of others, then the whole book becomes much more problematic. And already critics on the right have, predictably enough, accused Geithner of lying.

Most of the time, such accusations boil down to a he-said-she-said about private conversations held in secret. But sometimes, Geithner makes simple declarations which are easily fact-checked.

…

Geithner at his most prescient and heroic. He enters a hidebound wood-paneled institution where coffee is brought to his desk on a silver tray while briefings involved precious little discussion or debate; and in his very first speech he decides to speak truth to entrenched financial power, trying to “push back against complacency” and warn against the rise of the shadow banking system.

But here’s the thing: we can read the speech, it’s archived on the Fed’s website. And so it’s pretty easy to tell whether Geithner did indeed try to push back against complacency, in his speech, and warn of the rise of the shadow banks.

Spoiler: he didn’t.

…

Geithner was saying that the shadow banking system is getting bigger, that the banks the NY Fed regulated were accounting for a smaller and smaller part of the total financial system - and that this was a positive development. Geithner wasn’t warning his audience about the risks of shadow banking, he was extolling it, on the grounds that it had “improved the capacity of our system to handle stress”!

…

This is a bright green light to all the bankers in the room, saying “go ahead with all your whiz-bang new innovative products, we think they’re great, even if we don’t really understand them or know how to regulate them, it’s our job to keep up with you, and we have people in Basel who are on it.” Not once did Geithner indicate that the financial system was getting too complex and that the Canadian approach of forcing banks to keep things simple was maybe a good idea. Instead, he embraced all of the complexity, and just said that the regulatory architecture would have to cope, somehow.

…

There are two big worrying things here. The first is that Geithner didn’t see the crisis coming at all, and indeed was something of a cheerleader for all of the dangerous activities that the banks were getting up to. The second, which is just as bad, is that with hindsight, Geithner sees this speech as being prescient and heroic - that it’s something to be proud of, rather than sheepishly ashamed of.

As I read the rest of Geithner’s book, then, I’m basically forced to treat the author as an unreliable narrator. Geithner might seem to be straight-up and guileless, but his report of this speech shows that he can remember things - even things which are easily found on the internet - in an extremely self-serving manner. Maybe that’s only to be expected, from a political memoir. But it’s disappointing, all the same.

“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

Paul Krugman: Springtime for Bankers

By any normal standard, economic policy since the onset of the financial crisis has been a dismal failure. It’s true that we avoided a full replay of the Great Depression. But employment has taken more than six years to claw its way back to pre-crisis levels – years when we should have been adding millions of jobs just to keep up with a rising population. Long-term unemployment is still almost three times as high as it was in 2007; young people, often burdened by college debt, face a highly uncertain future.

Now Timothy Geithner, who was Treasury secretary for four of those six years, has published a book, “Stress Test,” about his experiences. And basically, he thinks he did a heckuva job.

He’s not unique in his self-approbation. Policy makers in Europe, where employment has barely recovered at all and a number of countries are in fact experiencing Depression-level distress, have even less to boast about. Yet they too are patting themselves on the back.

Charles M. Blow: Poverty Is Not a State of Mind

Paul Ryan and Jeb Bush, the didactic-meets-dynastic duo, spoke last week at a Manhattan Institute gathering, providing a Mayberry-like prescription for combating poverty in this country: all it takes is more friendship and traditional marriage. [..]

My qualm with the statement is the insistence on a “traditional marriage.” Loving families, of any formation, can suffice. While it is true that two adults in a home can provide twice the time, attention and income for a family, those adults needn’t necessarily be in a traditional marriage. Yes, marriage can have a sustaining and fortifying effect on a union and a family, but following that argument, we should be rushing headlong to extend it to all who desire it. In some cases, even parents living apart can offer a nurturing environment for children if they prioritize parenting when it comes to their time and money. Not all parents have to reside together to provide together.

There are many ways to be a loving family and to provide what children need. All forms of marriage are valid and valuable, as well as other ways of constructing a family.

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.

This Day in History