Leaks that embarass the U.S. vs. leaks that make the U.S. look good.

Is the Obama Administration uniformly clamping down on leaks? Not at all, says Glenn Greenwald.

But the worst part of this whistleblower war, beyond the obvious threats it poses to transparency and a free press, is how purely selective it is. Just as Lynndie England went to prison for her detainee abuse while Don Rumsfeld, Dick Cheney and John Yoo went on lucrative book tours for theirs, it is only low- to mid-level leakers who are punished by the Obama DOJ, and then only for the crime of embarrassing the U.S. Government rather than glorifying it. High-level Obama administration leakers disclose classified information at will, without the slightest fear of punishment. One can pick up a newspaper or listen to a television news broadcast almost every day and find examples of leaks from Obama’s high-level officials far more serious than those allegedly committed by the Bradley Mannings and Thomas Drakes of the world. From today’s New York Times article on Syria:
In Washington, a senior American official who is tracking Syria closely said Thursday that American intelligence reports had concluded that Syrian forces were moving some parts of their chemical weapons arsenal to safeguard it from falling into rebel hands, not to use it. “They’re moving it to defend it in some of the most contested areas,” said the official, who spoke on condition of anonymity because of the classified intelligence reports.

Continue ReadingLeaks that embarass the U.S. vs. leaks that make the U.S. look good.

The limits of disclosure

The Consumer Financial Protection Bureau (CFPB) recently proposed "easier-to-use mortgage disclosure forms that will help consumers make informed decisions when shopping for a mortgage and avoid costly surprises at the closing table. The aim of the CFPB is to expand protections for “high-cost” mortgage loans. Mortgage transactions are inherently complex, however. The CFPB has done some great work proposing the new forms. (to compare, here is a guide to the current version of the document many people struggle to understand, the real estate Settlement Statement -- HUD-1). One might fairly ask whether it is even possible to make these forms (which are still not simple) any easier to read or comprehend. In fact, this is the question asked by Jeff Sovern in a NYT Op-Ed piece, "Help for the Perplexed Home Buyer." Sovern applauds the excellent work of the CFPB, but then gives a brief tour of the proposed new forms:

The loan estimate, which consumers receive early in the application process, spans three pages and includes more than 100 disclosures about things like monthly payments and taxes. That’s a lot for consumers to take in, and if they use the information to comparison shop, as Congress intends, they will multiply the number of disclosures with every loan they consider. The closing disclosures, which include the final loan terms, are even longer, at five pages. . . The newest forms try to address overload by packing the most important information into the first page — but that first page includes more than 40 disclosures, and it still doesn’t tell borrowers the total amount they will pay over the life of the loan or the late payment penalty . . . There’s no way around it: mortgage transactions are complex and involve a tremendous amount of information.

Sovern suggests that written disclosures can only go so far, at least in complex transactions like these. He proposes that the problem can be lessened somewhat, but not completely cured, by making consumer counseling available. I agree with this analysis and this approach, and I also applaud the work of the CFPB. I would add that one of these reasons that this issue of communicating financial information to consumers is that so many of them are afflicted with innumeracy. I've spoken with many consumers as part of my law practice, and I must report that many of them would struggle with 4th grade math. I've had clients who have no conception of how to calculate a simple interest rate (one client couldn't tell me how much interest would accrue in one year based on $100 principal and 10% interest rate). I wish I could hold that hope that any written disclosures could solve this problem, but I assume my anecdote has already made it clear that the problem is multifaceted, involving consumer education and the policing of the mortgage industry. The above discussion also makes me wonder whether we couldn't simply the system much further, and whether path dependence keeps us in the mindset that all of these numbers need to be sprayed all over several pages. When you go to the grocery store, you ask for the price of box of cereal, and you are told a price. You are not told about all of the numbers that go into that price, such as transportation, handling, taxes, mid-level distributors, etc. I am not claiming that I have done any work on this issue of trying to simplify mortgage forms, but I wonder whether a solution might reside in forcing lenders or brokers to figure the many factors internally, and simply give the consumer a price. Then again, that is what the CPFB has done on the first page of the proposed new form. Perhaps my thinking is tainted by my conviction that many system are made to be complex in order to make them opaque to some people and profitable to others (those with teams of lawyers and accountants). Complexity is often not an accident or a necessity. It is often a tactic.

Continue ReadingThe limits of disclosure

Romney as poster boy for the 1%

I wondered whether this would happen, and it is happening: Mitt Romney is representing far more than himself on the campaign trail. He has become the face that people are now associating with the 1%. Further, Romney's ideas and disconnectedness are going to deemed representative of the 1%. Romney and his friends are going to be seen as the people perceived as controlling Congress. As the America economy stays stagnant or sinks further, Mitt Romney's face is the face that people are going to associate with the destruction of the U.S. economy, and with the inability of Republicans to offer them anything other than the "free market." At this point, I'm wondering whether the Republican Convention is going to have the mood of a funeral. Nonetheless, some polls show Romney neck in neck with Obama, but I suspect that the existence of secret overseas bank accounts is a wound that's going to keep on bleeding all the way to election day, along with the fact that Romney is out there criticizing what is essentially his own health care plan. These are two non-starters for a man who will repeatedly remind many Americans of the guy that fired them and who doesn't give a shit about them.

Continue ReadingRomney as poster boy for the 1%

American Higher Education as bait and switch?

Thomas Frank at Harper's has decided to spend an entire article kicking what has become of higher education in America. Here's an excerpt from the article, which is available only to subscribers online:

[T]he purpose of college isn’t education per se. According to a report issued last year by the National Survey of Student Engagement, American undergrads spend less time at their studies nowadays than ever. They are taught by grad students or grotesquely underpaid adjuncts. Many major in ersatz vocational subjects, and at the most reputable schools they get great grades no matter how they perform. But we aren’t concerned about any of that. Americans have figured out that universities exist in order to man the gates of social class, and we pay our princely tuition rates in order order to obtain just one thing: the degree, the golden ticket, the capital-C Credential. Doubters might scoff that a college diploma is by the year turning into an emptier signifier. Nonetheless, that hollow Credential is what draws many of the young to campus, where they will contend for one of the coveted spots in that gilded, gated suburb in the sky. Choosing the winners and losers is a task we have delegated to largely unregulated institutions housed in fake Gothic buildings, which have long since suppressed any qualms they once felt about tying a one-hundred thousand- dollar anvil around the neck of a trusting teenager. [More . . . ]

Continue ReadingAmerican Higher Education as bait and switch?