Tag: ek Politics

Insurers Inflating Books, New York Regulator Says

By MARY WILLIAMS WALSH, The New York Times

June 11, 2013, 8:50 pm

Benjamin M. Lawsky, New York’s superintendent of financial services, said that life insurers based in New York had alone burnished their books by $48 billion, using what he called “shadow insurance,” according to an investigation conducted by his department. He issued a report about the investigation late Tuesday.

…

Insurance is regulated by the states, and Mr. Lawsky said his investigators found that life insurers in New York were seeking out states with looser regulations and setting up shell companies there for the deals. They then used those states’ tight secrecy laws to avoid scrutiny by the New York State regulators.

Insurance regulation is based squarely on the concept of solvency – the idea that future claims can be predicted fairly accurately and that each insurer should track them and keep enough reserves on hand to pay all of them. The states have detailed rules for what types of assets reserves can be invested in. Companies are also expected to keep a little more than they really expect to need – called their surplus – as a buffer against unexpected events. State regulators monitor the reserves and surpluses of companies and make sure none fall short.

…

The transactions at issue are modeled after reinsurance, a business in which an insurance company pays another company, a reinsurer, to take over some of its obligations to pay claims. Reinsurance is widely used and is considered beneficial because it allows insurers to spread their risks and remain stable as they grow. Conventional reinsurance deals are negotiated at arm’s length by independent companies; both sides understand the risk and can agree on a fair price for covering it. The obligations drop off the original insurer’s books because the reinsurer has picked them up.

Mr. Lawsky’s investigators found, though, that life insurance groups, including some of the best known, were creating their own shell companies in other states or countries – outside the regulators’ view – and saying that these so-called captives were selling them reinsurance. The value of policies reinsured through all affiliates, including captives, rose to $5.46 trillion in 2012, from $2.82 trillion in 2007.

The chief problem with captive reinsurance, Mr. Lawsky said, is that the risk is not being transferred to an independent reinsurer. Also, the deal is not at arm’s length. And confidentiality rules make it difficult to see what secures the obligations.

The New York State investigators subpoenaed this information and discovered that some states were approving deals backed by assets that would not be allowed in New York; Mr. Lawsky referred to “hollow assets,” “naked parental guarantees” and “conditional letters of credit.”

…

Insurers, unlike banks, have no prepaid fund like the Federal Deposit Insurance Corporation to make customers whole in the event of a collapse. That’s why Mr. Lawsky said he feared that taxpayers might have to be called to the rescue again.

The Next Crash And The Next Bailout Now

By Charles P. Pierce, Esquire

at 11:15AM Jun 13, 2013

Give them a suit with rubber pockets and they’d steal soup.

Learning from the sweet — and largely unprosecuted — techniques of their pals in the financial-services industry, it appears that the moguls, poobahs, and panjandrums in the insurance industry are finding their own special ways to game the entire system into the poorhouse.

…

You think any of these guys looked at what happened in 2008 and thought, “Boy, those guys really were crooks and bought the country a helluva catastrophe. We should learn from them and not do that ourselves.” Nope, I guarantee you the first thoughts among the people who thought up this scam for the insurance companies was, “Holy crap, look at the dough those guys made!” And I guarantee you those same people all got raises. The upper levels of American capitalism is so rotten with amorality, so utterly devoid of any conventional sense of ethics, let alone social responsibility, that it hardly seems worth pointing it out any more. Congratulations to America’s graduate schools of business. You have bred three generations of vampires to feed on the rest of us. It’s as though every medical school in the country adopted the basic approach to thoracic surgery of Sweeney Todd and married it to the economic philosophy of Bialystock And Bloom.

Does Robert Reich call for creation of a Third Party?

The Two Centers of Unaccountable Power in America, and Their Consequences

Robert Reich

Thursday, June 13, 2013

There are two great centers of unaccountable power in the American political-economic system today – places where decisions that significantly affect large numbers of Americans are made in secret, and are unchecked either by effective democratic oversight or by market competition.

One goes by the name of the “intelligence community” and its epicenter is the National Security Agency within the Defense Department. If we trusted that it reasonably balanced its snooping on Americans with our nation’s security needs, and that our elected representatives effectively oversaw that balance, there would be little cause for concern. We would not worry that the information so gathered might be misused to harass individuals, thereby chilling free speech or democratic debate, or that some future government might use it to intimidate critics and opponents. We would feel confident, in other words, that despite the scale and secrecy of the operation, our privacy, civil liberties, and democracy were nonetheless adequately protected.

But the NSA has so much power, and oversight of it is so thin, that we have every reason to be concerned. The fact that its technological reach is vast, its resources almost limitless, and its operations are shrouded in secrecy, make it difficult for a handful of elected representatives to effectively monitor even a tiny fraction of what it does. And every new revelation of its clandestine “requests” for companies to hand over information about our personal lives and communications further undermines our trust. To the contrary, the NSA seems to be literally out of control.

The second center of unaccountable power goes by the name of Wall Street and is centered in the largest banks there. If we trusted that market forces kept them in check and that they did not exercise inordinate influence over Congress and the executive branch, we would have no basis for concern. We wouldn’t worry that the Street’s financial power would be misused to fix markets, profit from insider information, or make irresponsible bets that imperiled the rest of us. We could be confident that despite the size and scope of the giant banks, our economy and everyone who depends on it were nonetheless adequately protected.

…

That neither Republicans nor Democrats have done much of anything to effectively rein in these two centers of unaccountable power suggests that, if there is ever to be a viable third party in America, it will may borne of the ill-fated consequences.

You see, things are getting a little hot on the domestic front what with IRS-gate (probably no there there),  AP/Fox-Gate (it’s bad to spy on reporters), NSA-gate (Hey, no big.  We’re spying on everybody!), and the various policy failures (No Grand Bargain for YOU!  Mr. Deficit- he dead).

So we need a distraction.  Something that will revive that good old mindless U-S-A! U-S-A! chanting spirit.

I’ve got it!  How about another Middle Eastern war?

U.S. Confirms Syrian Government’s Use Of Chemical Weapons

By Hayes Brown, ThinkProgress

Jun 13, 2013 at 5:54 pm

The United States on Thursday confirmed that the Syrian government used chemical weapons on its own people, ending weeks of uncertainty over precisely who had unleashed the deadly agents.

…

That uncertainty apparently no longer exists within the U.S. intelligence community. According to a statement from the White House, the intelligence community now with a high-degree of confidence “estimates that 100 to 150 people have died from detected chemical weapons attacks.” The White House also indicated that the United States is “going to make decisions about further action on our own timeline.”

…

President Obama has long called the use of chemical weapons by the Assad regime a “red-line,” one that would be met with unspecified consequences if it were to be crossed. The determination that the line has been crossed has led to the Obama administration finally deciding to provide more and greater types of support to the Syrian rebels in their attempts to overthrow Assad.

On a call with reporters, Deputy National Security Adviser Ben Rhodes said Obama has decided to give the rebels “military support,” but refused to directly say whether the U.S. had decided to arm Syria’s rebels, saying he was unable to detail every type of support the Syrian rebels will be receiving. Rhodes stressed, however, that this aid would be “responsive” to the requests of the Syrian Military Council and that it would be “substantively different” in “both scope and scale than what we have provided before.” The Obama administration has mulled arming the rebels for months now without pulling the trigger, instead insisting on only providing non-lethal aid.

Gee, didn’t we arm Osama Bin Ladin and Saddam Hussein?

What could possibly go wrong?

Snowden Has Already Exposed Potentially Illegal Activity

By: Jon Walker, Firedog Lake

Wednesday June 12, 2013 11:21 am

Snowden’s actions have already technically revealed illegal activity. This can be proven without even engaging in a debate about whether the programs revealed have been operating in a fully legal manner.

Perjury is a crime and misleading Congress while it is trying to engage in oversight of the executive branch is very serious wrongdoing. By revealing that the NSA has been secretly collecting data on millions of Americanshttp://fdlaction.firedoglake.com/2013/06/11/clappers-lie-to-congress-was-prepared-in-advance/http:// Snowden proved that Director of National Intelligence General James Clapper’s [prepared answers to Congress were false ].

While Clapper currently engaged in extremely semantic hair splitting to make the case he didn’t actually lie but simply answered the question in the “least untruthful manner,” it is clear that Snowden’s actions exposed what was at least potentially a criminal act by a top government official. Regardless if a case is actually brought against Clapper, a serious potential act of wrongdoing was brought to light by this leak.

Fire James Clapper

By Fred Kaplan, Slate

Posted Tuesday, June 11, 2013, at 12:44 PM

Back at an open congressional hearing on March 12, Sen. Ron Wyden (D-Ore.) asked Clapper, “Does the NSA collect any type of data at all on millions or hundreds of millions of Americans?” Clapper replied, “No sir … not wittingly.” As we all now know, he was lying.

We also now know that Clapper knew he was lying.

…

As a member of the Senate Intelligence Committee, Wyden had been briefed on the top-secret-plus programs that we now all know about. That is, he knew that he was putting Clapper in a box; He knew that the true answer to his question was “Yes,” but he also knew that Clapper would have a hard time saying so without making headlines.

But the question was straightforward. It could be answered “yes” or “no,” and Clapper had to know this when he sat there in the witness chair. (Notice that, in his response to Mitchell, Clapper said he came up with the wife-beating analogy only “in retrospect.”) There are many ways that he could have finessed the question, as administration witnesses have done in such settings for decades, but Clapper chose simply to lie. “Truthful” and “untruthful” are not relative terms; a statement either is or isn’t; there’s no such thing as speaking in a “most truthful” or “least untruthful” manner.

Nor was this a spontaneous lie or a lie he regretted making. Wyden revealed in a statement today that he’d given Clapper advance notice that he would ask the question and that, after the hearing, he offered Clapper a chance to revise his answer. Clapper didn’t take the offer.

…

It is irrelevant whether Clapper really believes his definition of “collect” or made it up on the spot. Either way, this is a man who cannot be trusted to hold an honest discussion about these issues. If he lied about what he thinks “collect” means, he will lie about lots of things. If he really thinks the English language is this flexible, it is unwise to assume that any statement he makes means what it appears to mean.

This is crucial. We as a nation are being asked to let the National Security Agency continue doing the intrusive things it’s been doing on the premise that congressional oversight will rein in abuses. But it’s hard to have meaningful oversight when an official in charge of the program lies so blatantly in one of the rare open hearings on the subject. (Wyden, who had been briefed on the program, knew that Clapper was lying, but he couldn’t say so without violating the terms of his own security clearance.)

And so, again, if President Obama really welcomes an open debate on this subject, James Clapper has disqualified himself from participation in it. He has to go.

Clapper’s Lie to Congress was Prepared in Advance

By: Jon Walker, Firedog Lake

Tuesday June 11, 2013 9:19 am

Apparently, when Director of National Intelligence General James Clapper misled Congress it wasn’t simply the case of providing an inarticulate answer to a surprise question. Senator Ron Wyden let it be known today that he not only told Clapper in advance that he would ask the question about domestic surveillance, but even give Clapper a chance afterwards to officially revise his on the record remarks.

…

If Clapper is not seriously investigated for misleading Congress it should bring into question why we even bother put people under Oath before testimony to Congress. If the people in power are going to be above this law, both the law and the concept of Congressional oversight are worthless.

Apparently Clapper Makes It a Habit to Lie While Defending NSA Programs

By: Jon Walker, Firedog Lake

Wednesday June 12, 2013 6:52 am

Not only did Director of National Intelligence James Clapper purposely give misleading answers to Congress while under oath to hide the existence of NSA programs, but he also apparently lies about what these programs accomplished. The Obama administration declassified details about a terrorist plot that was supposedly stopped by PRISM, but Clapper got the basic details wrong.

NYC Bomb Plot Details Settle Little In NSA Debate

By MATT APUZZO and ADAM GOLDMAN, Associated Press

06/11/13 03:58 PM ET EDT

In the rush to defend the surveillance programs, however, government officials have changed their stories and misstated key facts of the Zazi plot. And they’ve left out one important detail: The email that disrupted the plan could easily have been intercepted without PRISM.

…

Zazi, an Afghan-American cab driver living in the Denver suburbs, was an al-Qaida-trained bomber. In September 2009, he sent a coded message to a Yahoo email address in Pakistan. Months earlier, British officials had linked the Yahoo address to a known al-Qaida operative.

…

The NSA intercepted that email, touching off a frenzied two-week investigation in New York and Colorado that led to Zazi’s arrest. He pleaded guilty and provided information that helped send two friends to prison.

…

When news of the phone-records program broke, officials quickly credited it with thwarting an attack.

…

A senior intelligence official confirmed soon afterward that Rogers was talking about Zazi, but offered no explanation.

…

Now, in talking points declassified by the administration, the government says that Internet eavesdropping, not archiving phone records, disrupted Zazi’s plans.

The use of PRISM to catch Zazi does little to resolve one of the key questions in the surveillance debate: whether the government needs to take such vast amounts of data, sometimes sweeping up information on American citizens, to keep the country safe.

That’s because, even before the surveillance laws of 2007 and 2008, the FBI had the authority to – and did, regularly – monitor email accounts linked to terrorists. The only difference was, before the laws changed, the government needed a warrant.

To get a warrant, the law requires that the government show that the target is a suspected member of a terrorist group or foreign government, something that had been well established at that point in the Zazi case.

In using Zazi to defend the surveillance program, government officials have further confused things by misstating key details about the plot.

Director of National Intelligence James Clapper said investigators “found backpacks with bombs.” Really, the bombs hadn’t been completed and the backpacks the FBI found were unrelated to the plot.

Why Clapper’s Deception Destroys Obama’s Defense of Newly Revealed NSA Programs

By: Jon Walker Tuesday June 11, 2013 9:57 am

Not only are the prepared deceptive answers given by Director of National Intelligence General James Clapper in Congressional testimony potentially serious crimes, but the entire incident completely undermines President Obama defense of the newly revealed NSA domestic surveillance programs.

When asked about revelations Obama defended both the legality and legitimacy of the programs by repeatedly claiming they were subject checks by the other branches of government. Obama’s entire case for why these programs are acceptable is based on the premise that Congress is fully briefed and has complete oversight.

…

If this member of the executive branch in charge of said programs is going to mislead Congress under oath about the program then Congress is not being “fully briefed.” If the executive branch is going to actively and potentially illegally deceive Congress then it is impossible for Congress to engage in real oversight. Congress can’t provide a real check on that which it has been lied to about.

This problem is not only limited to Clapper. It should be noted that several members of the administration should have known about Clapper deceptive remarks when they were made. Yet apparently the administration did nothing to encourage Clapper to amend his answers while there was still ample time, publicly correct the record or punish him for his unacceptable behavior.

Ai Weiwei is a Chinese contemporary artist, active in sculpture, installation, architecture, curating, photography, film, and social, political and cultural criticism.  …  As a political activist, he has been highly and openly critical of the Chinese Government’s stance on democracy and human rights. He has investigated government corruption and cover-ups, in particular the Sichuan schools corruption scandal following the collapse of so-called “tofu-skin schools” in the 2008 Sichuan earthquake. In 2011, following his arrest at Beijing airport on 3 April, he was held for over two months without any official charges being filed; officials alluded to their allegations of “economic crimes” (tax evasion).

NSA surveillance: The US is behaving like China

Ai Weiwei, The Guardian

Tuesday 11 June 2013 09.30 EDT

In the Soviet Union before, in China today, and even in the US, officials always think what they do is necessary, and firmly believe they do what is best for the state and the people. But the lesson that people should learn from history is the need to limit state power.

If a government is elected by the people, and is genuinely working for the people, they should not give in to these temptations.

During my detention in China I was watched 24 hours a day. The light was always on. There were two guards on two-hour shifts standing next to me – even watching when I swallowed a pill; I had to open mouth so they could see my throat. You have to take a shower in front of them; they watch you while you brush your teeth, in the name of making sure you’re not hurting yourself. They had three surveillance cameras to make sure the guards would not communicate with me.

But the guards whispered to me. They told stories about themselves. There is always humanity and privacy, even under the most restrictive conditions.

To limit power is to protect society. It is not only about protecting individuals’ rights but making power healthier.

Civilisation is built on that trust and everyone must fight to defend it, and to protect our vulnerable aspects – our inner feelings, our families. We must not hand over our rights to other people. No state power should be given that kind of trust. Not China. Not the US.

The Logic of the Surveillance State

by Ian Welsh

2013 June 9

The problem with surveillance states, and with oppression in general, is the cost.  This cost is both direct, in the resources that are required, and indirect in the lost productivity and creativity caused by constant surveillance.  Surveillance states, oppressive states, are not creative places, they are not fecund economically.  They can be efficient and productive, for as long as they last, which is until the system of control is subverted, as it was in the USSR. We forget, in light of the late USSR’s problems, that it did create an economic miracle in the early years, and tremendously boost production. Mancur Olson’s “Power and Prosperity” gives a good account of why it worked, and why it stopped working.

Liberalism, in its classic form, is, among other things, the proposition that you get more out of people if you treat them well.  Conservatism is the proposition that you get more out of people if you treat them badly.

Post war Liberalism was a giant experiment in “treat people well”.  The Reagan/Thatcher counter-revolution was a giant experiment in “treat people worse”.  The empirical result is this: the rich are richer and more powerful in a society that treats people like shit, but a society which treats people well has a stronger economy, all other things being equal, than one that treats them badly.  This was, also, the result of the USSR/West competition.  (Treating people well or badly isn’t just about equality.)

Liberalism, classic and modern, believes that a properly functioning “freer” society is a more powerful society, all other things being equal.  This was, explicitly, Adam Smith’s argument.  Build a strong peacetime economy, and in wartime you will crush despotic nations into the dirt.

If you want despotism, as elites, if you want to treat everyone badly, so you personally become more powerful and rich, then, you’ve got two problems: an internal one (revolt) and an external one: war and being outcompeted by other nations elites, who will come and take away your power, one way or the other (this isn’t always violently, though it can be.)

The solution is a transnational elite, in broad agreement on the issues, who do not believe in nationalism, and who play by the same rules and ideology. If you’re all the same, if nations are just flags, if you feel more kinship for your fellow oligarchs, well then, you’re safe.  There’s still competition, to be sure, but as a class, you’re secure.

That leaves the internal problem, of revolt.  The worse you treat people, the more you’re scared of them.  The more you clamp down.  This is really, really expensive and it breaks down over generations, causing internal rot, till you can’t get the system to do anything, no matter how many levers you push.

What is being run right now is a vast experiment to see if modern technology has fixed these problems with surveillance and oppressive states.  Is it cheap enough to go full Stasi, and with that level of surveillance can you keep control over the economy, keep the levers working, make people do what you want, and not all slack off and resist passively, by only going through the motions?

The oligarchs are betting that the technology has made that change.

Orwell intended 1984 as a cautionary tale, not a recipe for totalitarianism.

NSA collecting phone records of millions of Verizon customers daily

Glenn Greenwald, The Guardian

Wednesday 5 June 2013

The National Security Agency is currently collecting the telephone records of millions of US customers of Verizon, one of America’s largest telecoms providers, under a top secret court order issued in April.

The order, a copy of which has been obtained by the Guardian, requires Verizon on an “ongoing, daily basis” to give the NSA information on all telephone calls in its systems, both within the US and between the US and other countries.

The document shows for the first time that under the Obama administration the communication records of millions of US citizens are being collected indiscriminately and in bulk – regardless of whether they are suspected of any wrongdoing.

…

Under the Bush administration, officials in security agencies had disclosed to reporters the large-scale collection of call records data by the NSA, but this is the first time significant and top-secret documents have revealed the continuation of the practice on a massive scale under President Obama.

…

The order, signed by Judge Roger Vinson, compels Verizon to produce to the NSA electronic copies of “all call detail records or ‘telephony metadata’ created by Verizon for communications between the United States and abroad” or “wholly within the United States, including local telephone calls”.

The order directs Verizon to “continue production on an ongoing daily basis thereafter for the duration of this order”. It specifies that the records to be produced include “session identifying information”, such as “originating and terminating number”, the duration of each call, telephone calling card numbers, trunk identifiers, International Mobile Subscriber Identity (IMSI) number, and “comprehensive communication routing information”.

…

The law on which the order explicitly relies is the so-called “business records” provision of the Patriot Act, 50 USC section 1861. That is the provision which Wyden and Udall have repeatedly cited when warning the public of what they believe is the Obama administration’s extreme interpretation of the law to engage in excessive domestic surveillance.

In a letter to attorney general Eric Holder last year, they argued that “there is now a significant gap between what most Americans think the law allows and what the government secretly claims the law allows.”

“We believe,” they wrote, “that most Americans would be stunned to learn the details of how these secret court opinions have interpreted” the “business records” provision of the Patriot Act.

Privacy advocates have long warned that allowing the government to collect and store unlimited “metadata” is a highly invasive form of surveillance of citizens’ communications activities. Those records enable the government to know the identity of every person with whom an individual communicates electronically, how long they spoke, and their location at the time of the communication.

Such metadata is what the US government has long attempted to obtain in order to discover an individual’s network of associations and communication patterns. The request for the bulk collection of all Verizon domestic telephone records indicates that the agency is continuing some version of the data-mining program begun by the Bush administration in the immediate aftermath of the 9/11 attack.

The NSA, as part of a program secretly authorized by President Bush on 4 October 2001, implemented a bulk collection program of domestic telephone, internet and email records. A furore erupted in 2006 when USA Today reported that the NSA had “been secretly collecting the phone call records of tens of millions of Americans, using data provided by AT&T, Verizon and BellSouth” and was “using the data to analyze calling patterns in an effort to detect terrorist activity.” Until now, there has been no indication that the Obama administration implemented a similar program.

These recent events reflect how profoundly the NSA’s mission has transformed from an agency exclusively devoted to foreign intelligence gathering, into one that focuses increasingly on domestic communications. A 30-year employee of the NSA, William Binney, resigned from the agency shortly after 9/11 in protest at the agency’s focus on domestic activities.

In the mid-1970s, Congress, for the first time, investigated the surveillance activities of the US government. Back then, the mandate of the NSA was that it would never direct its surveillance apparatus domestically.

At the conclusion of that investigation, Frank Church, the Democratic senator from Idaho who chaired the investigative committee, warned: “The NSA’s capability at any time could be turned around on the American people, and no American would have any privacy left, such is the capability to monitor everything: telephone conversations, telegrams, it doesn’t matter.”

Better than Bush?  Better than McCain?  Better than Romney?

Well, if by better you mean more effective…

The problem with our “elites” is that most of them are certifiable morons who only have their jobs due to nepotism and cronyism.  Thus, to disguise the fact that they are consistently and reliably wrong and incompetent, they constantly try to hide their mistakes and make sure that they can never be held accountable for them.

Today’s example comes from the Department of Homeland Security which asserts its authority to search your electronic devices at border crossings based on nothing but an inarticulate “hunch”.

[A]dding a heightened [suspicion-based] threshold requirement could be operationally harmful without concomitant civil rights/civil liberties benefit. First, commonplace decisions to search electronic devices might be opened to litigation challenging the reasons for the search. In addition to interfering with a carefully constructed border security system, the litigation could directly undermine national security by requiring the government to produce sensitive investigative and national security information to justify some of the most critical searches. Even a policy change entirely unenforceable by courts might be problematic; we have been presented with some noteworthy CBP and ICE success stories based on hard-to-articulate intuitions or hunches based on officer experience and judgment. Under a reasonable suspicion requirement, officers might hesitate to search an individual’s device without the presence of articulable factors capable of being formally defended, despite having an intuition or hunch based on experience that justified a search.

Civil Rights/Civil Liberties Impact Assessment- Border Searches of Electronic Devices (.pdf), December 29, 2011

This document was released pursuant to an ACLU Freedom of Information Act request and here’s what they have to say about it-

DHS Releases Disappointing Civil Liberties Report on Border Searches of Laptops and Other Electronics

By Brian Hauss, Legal Fellow, ACLU Speech, Privacy and Technology Project

06/05/2013, 3:49pm

This line of thought is faulty for a few reasons. DHS claims that giving Americans the opportunity to challenge laptop searches in court would lead to the divulgence of national security secrets, but this is obviously wrong. The government has numerous resources at its disposal to prevent the disclosure of sensitive information. The “state secrets privilege,” to take just one example that is used in court cases, has been criticized on many grounds, but no one has ever seriously suggested that its protections are too anemic. Although DHS might fear the prospect of being called into open court to explain its actions, executive accountability before the law is the bedrock on which our system of constitutional self-government is built.

…

Even more problematic is the government’s claim that the “hard-to-articulate” hunch of a border agent is enough for the government to scrounge around through our personal photos, medical and financial records, email, and whatever other sensitive information may be stored on our laptops and phones. While the report cites unspecified anecdotal evidence that wrongdoers are sometimes apprehended based on “intuitions,” it says nothing about the number of innocent people who are subjected to unjustified searches as a result. As the Supreme Court explained in Terry v. Ohio, if law enforcement agents are allowed to intrude upon people’s rights “based on nothing more substantial than inarticulate hunches,” then “the protections of the Fourth Amendment would evaporate, and the people would be ‘secure in their persons, houses, papers and effects,’ only in the discretion of the [government].”

To be sure, rummaging around through people’s personal papers may well turn up the occasional bad guy, but that is not the only consideration. No doubt law enforcement agents would also find it useful to walk into people’s homes at will, but we don’t allow them to do so because that would intrude on our reasonable expectation of privacy in our homes. And just as we reasonably expect privacy in our homes, so, too, do we expect that border agents will not base their decisions to search through our electronic information on a whim or a hunch. Put another way, requiring law enforcement agents to possess objective reasons for a search is a feature of our constitutional framework, not a bug.

(h/t Wired)

Transcript

Transcript

An Austerity Success Story in Slovenia

By Megan Greene, Bloomberg News

Jun 3, 2013 6:00 PM ET

Slovenia was among the first euro-area nations to run afoul of the macroeconomic imbalance procedure, a mechanism created in 2011 to monitor compliance with the currency union’s new rules. In April, the EU flagged the country’s high degree of corporate indebtedness. More than half of bank loans in Slovenia are to the nonfinancial corporate sector. Of these, more than 30 percent are nonperforming.

The Slovenian government responded with an ambitious reform program. Among other things, it pledged to inject 900 million euros ($1.18 billion) of capital into its three largest banks, and to move soured assets from these lenders to a bad bank, the Bank Asset Management Company, starting in June. Slovenian Finance Minister Uros Cufer also agreed to bring in an external auditing company to conduct an asset-quality review of the nation’s banks and to verify the size of the hole in this sector.

To raise money for the bank recapitalization, the Slovenian government announced it would sell 15 state-owned enterprises. This is even more ambitious than the Portuguese privatization program, widely considered to be the model for struggling euro-area governments.

…

Even in the worst-case scenario, the cost of recapitalizing the banks and funding the bad bank amounts to no more than about 10 percent of Slovenia’s gross domestic product. This would increase the government’s debt burden to about 75 percent of GDP, still less than that of most other euro-area governments, including Germany.

That said, the trends in Slovenia are worrisome. Public debt has more than doubled from 22 percent of GDP in 2008 to almost 55 percent in 2012. This is partly because an economic slump, expected to continue for at least another year, has been eroding the denominator, GDP. The share of nonperforming corporate loans at Slovenia’s three largest banks tripled from about 10 percent in 2009 to 30 percent in 2012. The banks’ distress will keep cutting into lending, pushing still more corporate borrowers to the brink.