Using the U.S. census as a teachable moment

I received my census form in the mail today. I don't generally think twice about it - I understand why the government needs this information to allocate representation, funding, etc. But the insert caught my eye: the Census Bureau took the time to tell me that I don't need to worry about what they're going to do with my personal information. It is, after all, protected by law. Here's an excerpt from the Census Bureau website:

We depend on your cooperation and trust, and promise to protect the confidentiality of your information. Title 13 of the U.S. Code protects the confidentiality of all your information and violating this law is a crime with severe penalties. In addition, other federal laws, including the Confidential Statistical Efficiency Act and the Privacy Act reinforce these protections.
Obviously the Census Bureau considers these assurances regarding the legal protection of privacy to be crucial to getting honest answers. I'm not surprised - the information could certainly be used to identify likely tax evasion, immigration status, even occupancy codes. It is very sensitive information in its raw, unaggregated form. This isn't my first census form. I've had the opportunity to participate in the previous two censuses. But for me, for the first time, I am not reassured by their claim. After all, I'm pretty sure that warrant-less wiretaps are illegal too. As is torture - isn't it? I believe the evidence is strong that our government has authorized or allowed both activities. Certainly it was necessary to pass legislation giving telecommunications companies immunity from prosecution for participating in wiretaps. I'm no legal expert but to this citizen that means that the wiretaps are acknowledged to be illegal - we just won't do anything about it. So, how can I have any faith that the Census Bureau would live up to it's claims? How can anyone? But it's an opportunity. This is one of those "teachable moments" that a parent, or teacher would apply to an unruly child. What more natural consequence could there be for lawless behavior by the government than to say "You know what? I won't tell you that information because I don't trust you to act in good faith with it." The census, as an opportunity for civil feedback, is a perfect time to teach that lesson. I only wish that it could be recognized as civil feedback instead of the apathy that it would undoubtedly be labeled as.

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How do Wall Street banks make their money?

In the March 4, 2000 episode of Rolling Stone, Matt Taibbi answers a question on many peoples' minds: To exactly does Wall Street make so much money that it could hand out multi-billions of dollars in bonuses last year and this year? The story of Taibbi detailed article is that the Wall Street banks use at least seven major scams to make their money, and most of them involve taking advantage of American taxpayers. The seven scams can be summarized in one principle: "the answer . . . is basically twofold: they raped the taxpayer, and they raped their clients." Taibbi's entire article is available online. If the extremes, the corruption and the opacity of Wall Street have angered you, you'll appreciate Taibbi's facts, as well as his colorful descriptions. The first of the seven major cons described by Taibbi is the "Swoop and Squat," by which Taibbi is referring to the fact that AIG should not have been able to hand over big chunks of cash to a single creditor like Goldman when AIG was about to go belly up. Taibbi correctly refers to this maneuver as a "fraudulent conveyance." That money accounts for $19 billion in cash that Goldman would not have had without the massive intervention by the United States. As Taibbi asks: "To is that $13.4 billion in 2009 profits looking now?" Taibbi cautions that these numbers don't even include the direct bailouts of Goldman Sachs and other big banks. I'll mention one more of the seven major Wall Street cons described by Taibbi: "The Dollar store." Less than a week after the AIG bailout, Goldman and another investment bank, Morgan Stanley applied for and received permission to become bank holding companies, which made them available for increased federal financial support. Why would they do that? You probably won't read this anywhere in your local newspaper, because it's real news.

Institutions that were, in reality, high risk gambling houses were allowed to masquerade as conservative commercial banks. As a result of this new designation, they were given access to a virtually endless stream of "free money" courtesy of unsuspecting taxpayers. The $10 billion that Goldman received under the better-known TARP bailout was chump change in comparison to the smorgasbord of direct and indirect aid it qualified for as a commercial bank.

When Goldman Sachs and Morgan Stanley received those expedited federal bank charters, they were given permission to go to the Fed to borrow huge amounts of money at 0%. Taibbi points out that without this federal gravy, these banks would've totally collapsed, because they had no other way to raise capital at the time. Consider what the banks did with this taxpayer money, however.

Borrowing at 0% interest, banks like Goldman now have virtually infinite ways to make money. In one of the most common maneuvers, they simply took the money they brought from the government at 0% and went it back to the government by buying treasury bills that pay interest of three or 4%. It was basically a license to print money--no different than attaching an ATM to the side of the Federal Reserve.

Taibbi writes that that "The Dollar Store" goes a long way to explaining the enormous profits of Goldman Sachs last year. The entire article is well worth reading. Taibbi has once again done a terrific job of describing the corrupt ways of Washington and Wall Street.

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The rot at the center

Robert Reich has noticed how the democratic base is demoralized. Who is to blame?

A growing portion of the public, fed by the right, blames our problems on "big government." Much of the reason for the Democrats' astonishing reluctance to place blame where it belongs rests with big business's and Wall Street's generous flows of campaign donations to Democrats, coupled with their implicit promise of high-paying jobs once Democratic officials retire from government. This is the rot at the center of the system. And unless or until it's remedied, it will be difficult for the President to achieve any "change you can believe in.
And if you are looking for America by the numbers, you'll find the sad up to date statistics right here, in this Alternet post by David DeGraw.

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What passes for ethics in DC

What do they want in order to make a finding that a politician was politically corrupt? Apparently a signed confession, based on an article in the Washington Post:

The House ethics committee ruled Friday that seven lawmakers who steered hundreds of millions of dollars in largely no-bid contracts to clients of a lobbying firm had not violated any rules or laws by also collecting large campaign donations from those contractors.

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The problem with politicians

Colin Beavan (No Impact Man) sums it up like this at his blog:

[T]he politics of Washington are defunct. The Democratic politicians want to beat the Republicans. The Republican ones want to beat the Democratic ones. They are, like the rest of us, scared for their jobs! But the American people? We just want to get along with each other and solve problems. We want happy lives and to be kind to our neighbors. We want leaders who care about us more than their own careers.
Americans are often under the illusion that we have meaningful choices when we vote in national elections, but that is dangerously simplistic. Big money and commercial media pre-designate the candidates who qualify as "serious candidates" long before the citizens vote. Those candidates who prevail are those that have given sufficient winks and nods to big money such that they continue to get well-funded. To compound things, big money likes the status quo. Hence, Barack Obama's continuing lovefest with Wall Street (Disclosure: I voted for Obama but I'm sorely disappointed--yet I still think he is far preferable to McCain-Palin). There are no easy solutions to this problem. The start of a solution, in my opinion, is to give smart, "non-connected" and non-monied people a real chance to get elected. There are several "clean money" campaign reform proposals floating about (for details on one of these, see this post by Lawrence Lessig). The purpose of clean-money elections is the radical idea promoted by the Founding Fathers: that We the People would self-govern. The topic Colin Beavan raises today is the most important political topic out there, in my opinion. Without an honest, open and self-critical deliberative process, we don't actually have a democracy. With the current system of private-money elections (especially in the wake of Citizens United), we don't have an honest, open and self-critical deliberate process. What we have instead, is what Beavan has described: a big expensive game where politicians do anything and say anything to maintain their power and perks.

Continue ReadingThe problem with politicians