You and I are paying the legal bills of executives accused of fraud

Here is yet another secret deal that has recently seen the light of day thanks to the New York Times:

Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud. The cost was a closely guarded secret until last week, when the companies and their regulator produced an accounting at the request of Congress. The bulk of those expenditures — $132 million — went to defend Fannie Mae and its officials in various securities suits and government investigations into accounting irregularities that occurred years before the subprime lending crisis erupted. The legal payments show no sign of abating.
If this was such a good idea, why was it kept secret.

Continue ReadingYou and I are paying the legal bills of executives accused of fraud

Avoid These Topics to Help End Civilization

Courtesy of WikiMedia There are four subjects the polite American avoids discussing in public: Politics, Religion, Sex, and Money. The ostensible reason for this taboo is to avoid offending anyone. But here I argue that this over-correctness is a causative factor in the decline of a civilization. Let's do money, first. As far as I know, this is a particularly American obsession. My European parents had to learn not to talk about money when they came to this country. Other places, the question, "So, how much do you make?" is as normal as "Are you married?" But in the U.S.A, we maintain a fiction of a classless society. We ask the same question only obliquely: "Where did you go to school?" is a good indicator of family income and social position. It is to the advantage of the landed class employers that their serfs employees not compare incomes, as well. By not allowing people to honestly gauge their economic value, they stay insecure. And insecurity leads to all manners of submissive behaviors, shoring up the security of the ruling classes, both secular and religious. Sex is a more generally repressed topic. There is no stronger drive, yet we must never directly say what we feel about it. Western churches even teach that one should deny and ignore the strongest drives within ourselves, leading to all sorts of perverse (read as counter-social) behaviors. To discuss it in public would allow people to see how normal their lusts really are, removing a major source of insecurity. Minor curiosities would not blossom into obsessions and perversions. Such openness would reduce the influence of those very organizations that profit from its repression, like churches and (other) marketing firms, whose urgent short-term goals are only occasionally and accidentally in line with continuing our civilization. Religion is a big one. People wear "subtle" symbols to let others of the same brand know they can be approached on the subject. The third eye, a cross or fish, a Koranic verse, and a star are some of the more obvious "secret" symbols. But it is a major faux pas to overtly declaim about your own faith to someone who may not agree. Unless, of course, the purpose is to stir controversy or solicit, two disreputable (completely human) drives. Again, by not knowing when and to whom you may come out,one feels insecure. This gives the leaders the upper hand. Especially when they strive to sow divisiveness, as in malignant fundamentalist sects. Finally, politics. This is the least stringent of the social prohibitions. I think this is in part because the churches and marketing firms rule the field, anyway. In our land, there are basically two sides: The established American parties, and those who can barely tell them apart. The parties do have differences. One wants to conserve our resources, reduce capitalist predation, and protect the underclass in hopes of a better tomorrow, and the other wants government to protect the minorities (specifically the rich, the unborn, and corporations) and let God (or the invisible hand) sort out the others until the imminent judgment day. So it occurred to me that hiding from these basic topics destabilizes civilization. Social groups balkanize into small, trusted segments that define themselves by their perceived differences. Each of the 30,000 Christian sects publicly claim the sum of all members of all denominations as supporting them, yet privately know that most of the 30,000 others are wrong and hell-bound. We have been divided, and conquered. If the people knew where they stood, and knew where the leaders stood, we would have actual checks and balances as were envisioned by our founders. Without such things, our nation may well founder.

Continue ReadingAvoid These Topics to Help End Civilization

Americans are pie in the sky regarding economic and social mobility

Based surveys by the Brookings Institute, Americans fervently want to believe that hard work pays off in America. They believe that you are not locked into a particular strata of social and economic mobility by the lot of your parents. Yet the evidence doesn't bear this out.

While cross-country comparisons of relative mobility rely on data and methodologies that are far from perfect, a growing number of economic studies have found that the United States stands out as having less, not more, inter-generational mobility than do Canada and several European countries. American children are more likely than other children to end up in the same place on the income distribution as their parents. Moreover, there is emerging evidence that mobility is particularly low for Americans born into families at the bottom of the earnings or income distribution.
The truth is that the United States is a low-mobility country:
In the United States and the United Kingdom, about half (50 percent) of parental earnings advantages are passed onto sons. If trends hold consistent, it would take an average of six generations for family economic advantage to disappear in the United States and the United Kingdom.
Paul Krugman sums it up: "[T]he right is winning economic debates because people believe, wrongly, that there’s something inherently moral about free-market outcomes." We Americans are dreamers, even when it blinds us to the need for real change. "American children are more likely than other children to end up in the same place on the income distribution as their parents." The real numbers contained in the linked report are real eye-openers. All of this was predictable. The Economist wonders where the anger is:
It's striking how little inchoate public rage has actually boiled to the surface in the rich world. Rising inequality, especially at the top end, combined with stagnating middle class incomes, has been a feature of the world for at least the past ten years. It's been two years since the biggest bail-outs and the rise toward double-digit unemployment. And the anger is...where? Europeans are demonstrating against budget cuts, but these are rarely explicitly directed at national plutocrats. In America, the language of the angriest is very similar to that of the plutocrats themselves. Indeed, the complaint that today's elite lack the noblesse oblige of the aristocrats of old, and are therefore risking public anger, seems to badly misread American public opinion. The middle class doesn't want hand-outs from condescending rich people. They want moralistic language and complaints about deficits.

Continue ReadingAmericans are pie in the sky regarding economic and social mobility

Wikileaks and a Swiss bank list

On Monday, Rudolph Elmer is said to have turned over to Wikileaks names of US, UK and Asian celebrities, lawmakers and business-folks who may or may not have been trying to avoid paying taxes. Apparently, the data are confusing even to those used to dealing with such, so release won't be soon. Still, it will be interesting to see who is in the Heidi Fleiss Black Book of off-shore accounts. Most particularly if there are any prominent (and current) US lawmakers.

Continue ReadingWikileaks and a Swiss bank list

Welcome back to the United States. Give me your laptop and your passwords.

Glenn Greenwald has written about the federal government's common practice of seizing laptops and smartphones of American citizens who are re-entering the United States and reviewing their private data. Amazingly, our government is seizing this personal data without probable cause and even without reasonable suspicion:

When you really think about it, it's simply inconceivable that the U.S. Government gets away with doing this. Seizing someone's laptop, digging through it, recording it all, storing the data somewhere, and then distributing it to various agencies is about the most invasive, privacy-destroying measure imaginable. A laptop and its equivalents reveal whom you talk to, what you say, what you read, what you write, what you view, what you think, and virtually everything else about your life. It can -- and often does -- contain not only the most private and intimate information about you, but also information which the government is legally barred from accessing (attorney/client or clergy/penitent communications, private medical and psychiatric information and the like). But these border seizures result in all of that being limitlessly invaded. This is infinitely more invasive than the TSA patdowns that caused so much controversy just two months ago.
But how often are these e-strip searches occurring?
[T]his is happening to far more than people associated with WikiLeaks. As a result of writing about this, I've spoken with several writers, filmmakers, and activists who are critics of the government and who have been subjected to similar seizures -- some every time they re-enter the country.
But this is the tip of the iceberg:
A FOIA request from the ACLU revealed that in the 18-month period beginning October 1, 2008, more than 6,600 people -- roughly half of whom are American citizens -- were subjected to electronic device searches at the border by DHS, all without a search warrant.
I highly recommend reading Greenwald's detailed article for the reaction to this practice by a smattering of members of Congress and by a few court decisions. The sad bottom line is that there is no political momentum to condemn and bar this practice, even in the context of ubiquitous rhetoric regarding the need to limit the power of the federal government.

Continue ReadingWelcome back to the United States. Give me your laptop and your passwords.