Matt Taibbi: What Wall Street accomplished

Through his hard-charging and entertaining investigative pieces in Rolling Stone, Matt Taibbi has repeated snuffed out that little spark of hopefulness in me. His latest article in Rolling Stone was the most crushing of all: "Wall Street's Big Win: Finance reform won't stop the high-risk gambling that wrecked the economy - and Republicans aren't the only ones to blame." Taibbi proposes that the recent Wall Street "reform" fixed about 10% of the problem, and that it was designed primarily to cover up an uncomfortable political truth:

The huge profits that Wall Street earned in the past decade were driven in large part by a single, far-reaching scheme, one in which bankers, home lenders and other players exploited loopholes in the system to magically transform subprime home borrowers into AAA investments, sell them off to unsuspecting pension funds and foreign trade unions and other suckers, then multiply their score by leveraging their phony-baloney deals over and over. It was pure ­financial alchemy – turning ­manure into gold, then spinning it Rumpelstiltskin-style into vast profits using complex, mostly unregulated new instruments that almost no one outside of a few experts in the field really understood. With the government borrowing mountains of Chinese and Saudi cash to fight two crazy wars, and the domestic manufacturing base mostly vanished overseas, this massive fraud for all intents and purposes was the American economy in the 2000s; we were a nation subsisting on an elaborate check-­bouncing scheme. And it was all made possible by two major deregulatory moves from the Clinton era: the Gramm-Leach-Bliley Act of 1999, which allowed investment banks, insurance companies and commercial banks to merge, and the Commodity Futures Modernization Act of 2000, which ­exempted the entire derivatives market from federal regulation. Together, these two laws transformed Wall Street into a giant casino, allowing commercial banks to act like high-risk hedge funds, with a whole new galaxy of derivative bets to lay action on. In fact, the laws made Wall Street even crazier than a casino, because in a casino you have to put up actual money to make bets. But thanks to deregulation, financial companies like AIG could bet billions, if not trillions, without having any money at all to back up their gambles.
The Republicans are to blame, right? That's only half right. Consider what happened to the "Volcker rule," a proposal designed to restore the firewall between investment houses and commercial banks. It never had a chance . . . [More . . . ]

Continue ReadingMatt Taibbi: What Wall Street accomplished

Most Americans: no concerns with slow internet connections

Apparently, most Americans are OK with the idea that many Americans have slow internet connections:

A majority of Americans believe the government's plan to deliver a high speed internet connection to every citizen by 2020 is either not important or should not be embarked upon.The Pew Internet Project said 52% of survey respondents felt that way while 40% felt the issue was a top priority.

Keep in mind that the $7.2 Billion in stimulus grants dedicated to national broadband are the equivalent of only a few weeks of funding for the American adventures in Afghanistan. Keep in mind that this $7.2 Billion stimulus is far less than 1% of the U.S. in defense spending for 2010.

Continue ReadingMost Americans: no concerns with slow internet connections

Whose oil spill was it?

The Editors at Scientific American have reminded us that oil users (and that includes all of us) are pushing the big oil companies into taking the drilling risks they take:

[I]f we expect oil companies to manage risk better, then society as a whole needs to do the same. The market forces that encouraged BP to take ill-considered risks are largely of our own creation, as stockholders, consumers and citizens. The hodgepodge of subsidies that masquerades as our current national energy policy invites disaster; it fails to grapple with the urgent need to stop wasting energy and start encouraging clean sources. Every day we still need 85 million barrels of oil—the equivalent of more than 25 Ixtoc spills—to keep the wheels of our society turning.
If you do the math, you'll see that 85 million barrels of oil equals 3,570,000,000 gallons per day. That equals 148,750,000 gallons per hour, 2,479,166 gallons per minute, and 41,319 gallons per second. Americans are currently using an amount of oil that makes us staggeringly dependent on a dwindling natural resource that is mostly imported. And most of that imported oil is sending huge quantities of American dollars to regimes whose interests run counter to American interests. Our oil dependence should thus be seen as a major risk to our national security. We could slash this usage dramatically with reasonable conservation measures. But politicians believe that it is suicide to ask Americans for any form of sacrifice, even when national security depends on it.

Continue ReadingWhose oil spill was it?

Dangerous Intersection is under construction, always

Recently, it occurred to me that we should have a mobile version of Dangerous Intersection, but I learned that the plugins allowing mobile versions required upgrading my WordPress Platform version. My past two attempts to upgrade to 2.9x hadn’t gone well (I twice tried and twice reverted to version 2.7 over the past few months). This week’s upgrade to 3.0 worked without any snags, however. I truly love the WordPress system and the fact that it's open-source software. To take full advantage of the 3.0 features, I also decided to upgrade the design of this website, making use of Solostream’s newest WordPress design theme, called “Prosper.” BTW, I’m extremely happy with Solostream’s products, forums and customer service. In case you’re wondering, this single use version of “Prosper” cost $79, which I consider a great price, given the loads of feature options, most of which require no knowledge of html. There's no way I could have afforded a custom design this sophisticated. Coming soon, I hope, will be a mobile version of Dangerous Intersection. Until I started using an iPhone (my workplace offered them to employees this year), it didn’t occur to me that I would actually spend significant amounts of time reading from a mobile device, especially while waiting in lines or riding mass transit. Well, that’s how the world is moving, it seems. I hope you enjoy the new design of DI, which I worked to make more “open” than my previous designs. You'll notice that it is a two-column site now (more or less). I also took the liberty of reworking the title artwork and moving in some new navigation features. For instance, if you search categories or key words, the results will now show up in three columns, making it easier to scan your results. I’m still making quite a few tweaks, and some of the previously existing features are not yet back in. Thus, you are looking at a design-work-in-progress to go along with the contemplative-work-in-progress. If this website continues to be successful, that is how it should be—one of our main goals should always be to avoid ossification. That is essentially what philosopher Bertrand Russell once told someone who had accused him of having changed his mind on a topic. Russell pointed out that the option to changing is stagnating. Update: We now seem to have the mobile version of Dangerous Intersection working. I've been testing it on an iPhone, while Josh Timmons, who aptly hosts the site and provides technical consultations, indicates that DI also looks good on Android.

Continue ReadingDangerous Intersection is under construction, always

U.K. Guardian skewers the “war on drugs”

It's clearly time to rethink the U.S. War on Drugs. For many good reasons, consider this Editorial by the U.K.Guardian:

If the purpose of drug policy is to make toxic substances available to anyone who wants them in a flourishing market economy controlled by murderous criminal gangs, the current arrangements are working well. If, however, the goal is to reduce the amount of drugs being consumed and limit the harm associated with addiction, it is surely time to tear up the current policy. It has failed.

This is not a partial failure. For as long as courts and jails have been the tools for controlling drugs, their use has increased. Police are powerless to control the flow. One recent estimate calculated that around 1% of the total supply to the UK is intercepted. Attempts to crack down have little impact, except perhaps in siphoning vulnerable young people into jails where they can mature into hardened villains.

Continue ReadingU.K. Guardian skewers the “war on drugs”