Five liberal pundits repeat RW anti-teacher talking points

What's happening to education in this country is one of the biggest under-the-radar stories of the new century. It gets some attention, then it doesn't, and still the movement to totally transform public schools marches on.

I'd like to make several points here. The first is this — that many so-called "liberals" are on board with the corrupt "education reform" movement. You'd think they know'd better, but they seem to not.

(Wonder why? Me too. See the Takeaways below for some thoughts on that.)

Here's from Alternet, a great find by Sarah Jaffe (my emphasis and reparagraphing):

5 Liberal Pundits Repeating Right-Wing Teacher-Bashing Talking Points
Chicago's teacher strike is shaping up to be one of the most important labor actions in a generation. So why are people who consider themselves progressives siding with the bosses?

Chicago's teacher strike may turn out to be the most important one in a generation, as teachers stand up to a corporate-backed education reform regime that stresses testing and firing teachers as a form of “accountability” while continuing to refuse to invest real money in making educational opportunities equal for all students.

The so-called education reform movement wants high-stakes tests that students take yearly to be used to evaluate teachers and weed out the "bad" ones, and pushes money into charter schools that are privately owned and don't have union teachers.

Under the guise of "accountability" for teachers and schools, reformers put taxpayer dollars into the hands of private investors despite the charter schools' negligible results when it comes to actually improving education.

The movement has been particularly pernicious because it's crept inside the heart of the Democratic party and taken hold of politicians and commentators who profess to be on the side of working people, but end up bashing teachers' unions.

These are the "liberals" who've been fighting the teacher's strike. The article itself details their sins far more fully that what's below.

1. Nicholas Kristof. The New York Times' columnist is celebrated for his trips into Global South countries to report heartwrenching stories of women; he's lauded as an activist and a human rights advocate. But when it comes to women and workers fighting for their rights closer to home, he seems to have a big blind spot. ...

Kristof [argues] for “bottom-third” teachers not to have job protections, then [suggests] that we should listen to teachers for ideas on how to weed out that bottom third. ...

2. Joe Nocera. Nocera, also at the Times, tries to soften his critique of the teachers' strike by throwing them a bone midway through his column. ... But where you got your next sentence is completely unclear. “On the other hand, the status quo, which is what the Chicago teachers want, is clearly unacceptable.” ...

3. Dylan Matthews. Over at Wonkblog, founded and headed by liberal darling Ezra Klein, Dylan Matthews went two for two, first arguing that teachers' strikes hurt student achievement (measured, of course, by those magical test scores) and then churning out a charming little piece arguing over teachers' wages. ...

4. Matt Yglesias. Yglesias' contribution, at Slate, to the teachers' union-busting is one of the most unintentionally ironic things I've ever seen. Just a year and a couple of months out from the biggest labor uprising in decades over the rights of public employees, Yglesias is actually arguing that teachers' unions suck because they are public employees. ...

5. Jacob Weisberg. It might be easier to understand Yglesias' position on striking teachers when you look at his boss's tweets on the subject. Weisberg, editor-in-chief at Slate, is the most gleeful yet:

Rooting for Rahm to make the Chicago Teachers' Union sorry for this inexcusable strike. Students in class fewest hours of any big city.

It's disconcerting to see such clear desire for punishment of working people (by a multimillionaire politician whose best friends are on Wall Street no less). ...

Meet the perps, supposedly on our side.

Takeaways:

■ First, it's about the Benjamins (the money); in particular, the Benjamins collected as tax support for public education. School "reformers" want that money spent only on their kids. "Accountability" is just the cover story.

■ Second, left-support of breaking the CTU strike plays to what Chris Hayes calls "the meritocracy" and its interests. I call this the "liberal" version of the ultimately-race-based class war.

Said differently, high-dollar Republican voters don't want their kids in public schools with non-biblicals — so they home-school and create "Christian" academies.

High-dollar Democratic voters don't want their kids sullied and held back by inner-city types (of all types), so they create charter schools and places like the Chicago Lab School, where Rahm Emanuel sends his own kids.

Both groups want public school money diverted to their separatist school systems. Thus, both want "reform."

■ Third, ask yourself, where does that leave the public schools? More particularly, what then is their mission?

In a phrase, public schools become wage slave prep for those soon-to-be-nonexistent factory jobs.

Here's lawyer and Chicago school parent Matt Farmer making the case against this dual educational track. In Chicago, the perps are Penny Pritzker and Rahm Emanuel, both with ties to ... Barack Obama (h/t Sam Seder's Majority Report for the clip):



Your (unstolen) tax dollars at work. This is what Our Betters in Blue have in mind for you and your kids. (Our Betters in Red add those ugly identity issues to the mix, like vagina-control and religious orthodoxy.)

■ For a nice factual analysis, read this by our own Matt Browner Hamlin. Nails it. Keep his points in mind when listening to the so-called liberals who what to bust this strike.

■ Finally, do you wonder why Chicago's other unions haven't shut down the town in support? Could it be the twin devils of the modern union movement: (1) the testosterone divide and (2) co-option by Democratic leadership?

Worth considering. Either way, I agree with Ms. Jaffe's initial assessment. This is "one of the most important labor actions in a generation."

Which way will it go? Will you help if you can?

GP

To follow or send links: @Gaius_Publius
  Read the rest of this post...

Obama FTC appointee Joshua Wright has ties to Google; Google has had business before FTC

There are lots of stories lurking behind Google, many not good. They are a behemoth, a billionaire predator, but most of "us" think of them as "our" billionaire predator because (a) they're Silicon Valley–based, and (b) they opposed SOPA & PIPA.

But don't be fooled. At some point I'll have time to peel that onion, and there's rot inside it.

For now though, just a taste. This story reveals the nexus intersect of NeoLiberal Barack Obama; the faux–consumer-centric Federal Trade Commission (their supposed job is to police the anti-trust borders); the billionaires behind growing dinosaur Google, and ... the fabulous Koch Bros.

■ Let's start with the news, from Chris O'Brien, a tech columnist for the San Jose Mercury News (my emphases everywhere and some paragraph violence):

Obama FTC Nominee Joshua Wright Has Ties To Google

President Obama announced Monday that he had nominated George Mason University professor Joshua Wright for the U.S. Federal and Trade Commission. Wright has been selected to replace a Republican on the committee, and as such, it will come as no surprise that Wright has a long track record of advocating against anti-trust enforcement and the heavy hand of government.

But what seems to be overlooked in much of the coverage of his selection is that Wright has a history of receiving funding for his work from groups supported by Google. And of course, as we know, Google has had some ongoing tussles with the FTC, and will likely have more down the road.

I first came across Wright’s name earlier this year as part of research for a column I wrote examining the various ways Google and Microsoft sought to engage third parties such as lawyers, pundits, academics, and communications firms, to influence public opinion and policy. There is little requirement to disclose the money that goes toward wielding this soft influence.

I get it. Wright hates the "heavy hand of government" unless he can wield it to benefit his paymasters.

So first take-away — Wright is Google's man on the FTC. Great place to have a "man" (paid retainer) if you have once and future business with this supposed anti-trust minder.

Remember, Obama put him there. Unless this is just heavy senatorial horsetrading — and remember, Obama's pretty much on board with this big-donor stuff already — can you guess the payout? (Think campaign; then think Legacy Library donor. Then ask — is Obama a retainer as well? Sorry, just being a literalist. Look up retainer; it does have a meaning.)

■ Now for the George Mason "University" side — it's a Koch Bros Joint. Desmogblog (a nice site to keep in rotation, by the way) has the goods:

Koch and George Mason University

Funding and Connections

Since 1985, George Mason University (GMU), and its associated institutes and centers, has received more funding from the Koch Family Charitable Foundations than any other organization--a total of $29,604,354. The George Mason University Foundation has received the most funding, $20,297,143, while the Institute for Humane Studies has been directly given $3,111,457, the Mercatus Center $1,442,000, and George Mason University itself has received $4,753,754.

In addition to financial ties, Koch also has personnel involved with the university. Richard Fink, the vice president of Koch Industries, Inc., and the former president of the Charles G. Koch Foundation and the Claude R. Lambe Foundation, serves on the board of directors of the George Mason University Foundation and the Mercatus Center.

Fink's connection to George Mason University is strong. Besides teaching at the university from 1980-1986, Fink has also served on a number of boards at the university including the Institute for Humane Studies and the Center for the Study of Public Choice, the Board of Visitors, and the Student Affairs Committee.

There's much more where that came from; do click. And the Mercatus Center is particularly infamous (and useful).

(If you're DC-based, did you notice that the Koch Bros are touted on the Mall as funding Smithsonian stuff? Add in Nova and it's a great sludge PR campaign: "Chas & David Koch: you know, the science guys.")

So GMU and Joshua Wright are Koch-connected. If approved (foregone, he's a Republican), Wright is Obama's Google's man on the FTC.

But is Obama also Koch-connected? He is if he approves the Keystone Pipeline. And as I read Obama, he wants Keystone bad, but will delay until after the election.

Interesting club they have (that you're not a part of).

Barack Obama – Federal Trade Commission – Joshua Wright – Google Inc. – George Mason "University" – Koch Brothers – Keystone Pipeline – (Barack Obama Legacy Library).

Our Betters; they run the world for them and pretend it's for us. How thoughtful of them (us, to keep them in power).

GP

To follow or send links: @Gaius_Publius
  Read the rest of this post...

"Niallism" — This is what defrocking an academic looks like (climate scientists, take note)

This is a follow-up to this post about kicking intellectually dishonest academics out of their (former) profession.

The post had two parts:

• The first half, in which Krugman takes "Niall Ferguson the political operative" (my phrase) to task for being, well, more or less a dishonest political actor.
  
  
• The second half, in which I recommend doing same to Koch-fueled climate "scientists" who have traded integrity for a career as an operative, but kept their lab coats anyway.

For those who've been spared the pleasure, Niall Ferguson is the "economic historian" who has turned up seemingly everywhere these days defending austerity and ridiculing anyone who proposes solutions not endorsed by the world's elites.

PBS has created shows around his views; respected magazines often host his opinions; and most recently Newsweek has used his byline to trash Obama with obvious lies in a blatantly political cover story. (Yes, lies. And Ferguson, trading on his academic brand, was the delivery boy.)

Now via Krugman, we're led to this by Matthew O'Brien in The Atlantic. Here's what defrocking and de-labcoating an academic looks like. Climate guys, take note (my emphasis and paragraphing):

The Age of Niallism:
Ferguson and the Post-Fact World
Bluster cannot make untruths true

People who believe facts are nothing think you'll fall for anything. Call it Niallism.

This is my last word (well, last words) on Niall Ferguson, whose Newsweek cover story arguing that Obama doesn't deserve a second-term has drawn deserved criticism for its mendacity from Paul Krugman, Andrew Sullivan, Ezra Klein, Noah Smith, my colleagues James Fallows and Ta-Nehisi Coates and myself.

The problem isn't Ferguson's conclusion, but how Ferguson reaches his conclusion. He either presents inaccurate facts or presents facts inaccurately. The result is a tendentious mess that just maintains a patina of factuality -- all, of course, so Ferguson can create plausible deniability about his own dishonesty.

Then he gets specific:

Exhibit A is Ferguson's big lie that Obamacare would increase the deficit. This is not true. Just look at the CBO report Ferguson himself cites. ...

And then gets even more specific than that. After much dissection of the indefensible and dishonest, O'Brien concludes:

Of course, it's not just Ferguson. There is an epidemic of Niallism -- which Seamus McKiernan of the Huffington Post defined as not believing in anything factual. It's the idea that bluster can make untruths true through mere repetition. We expect this from our politicians, not our professors.

In the end, O'Brien contrasts the academic Ferguson was with what he has become, a blustering liar unworthy of his frock and his credentials. A sad, ironic side-by-side.

I'd have gone one step further. I'd have not only taken his frock; I'd have burned it in the public square. But that's me.

O'Brien does the next best thing — he names the essence of dishonesty after the man:

Niallist: One who believe facts are nothing.

"Niallism" has a great ring to it, and if god is just, it will follow the man to the grave. A fitting monument, given the human suffering Ferguson helps cause. After all, he's an eager and well-worked lackey for the Billionaire Bankers Club, and those folks are doing real damage.

Climate scientists, take note. Taking away the lab coat is an option.

You could spend your lives engaging with your bought denier "colleagues" — who would frankly like nothing better. Or you could dispatch them more quickly, as O'Brien has done, with strong "uncollegial" strokes, and move on to the next big job.

I personally like the latter choice; there should be a price for academic dishonesty in matters this important. But that's me.

GP

To follow or send links: @Gaius_Publius
  Read the rest of this post...

Report on Putin: Life as a Galley Slave

It's not nearly as easy as you might think to be a modern tsar in Russia. The mansions, the yachts, the helicopters, the $75,000 toilets. It's rough. What's especially difficult is pretending that you're a simple guy, with simple tastes while so many struggle to reach even the middle class.

According to the report (which includes photos or the alleged mansions, yachts and jets) by his former deputy prime minister, Putin has amassed wealth far beyond what most even imagine. His greatest fear of giving up his leadership position is losing access to his luxurious lifestyle. (Accessing the report is not easy though this article includes photos of some of his properties.)

As Russians do join the middle class, will they continue to support Putin? For years my Russian friends and colleagues (who eventually all left Russia) tolerated it because there was a general movement upward for many. Now there is more frustration and a general realization that things may be about as good as it gets in Russia. Will that be enough for Putin?

There are the columned facades of palaces outside Moscow, in the southern resort of Sochi, and dozens more around the country. On an island in the centre of Lake Valdai, stands a 930 hectare estate serviced by a 1,000-strong staff that includes a "presidential church, swimming pool, two restaurants, movie theatre, bowling alley and concrete helipad".

The authors compare Putin's nearly two dozen official residences to the number held by other state rulers – two for the leaders of the United States and Germany, and three for the president of Italy. Nine of the villas were built while Putin was at the helm of the country, they note.

The leader has long attempted to present an image of average Russian machismo, staging regular photo ops with factory workers and bikers. Images of his stark home life stand in contrast to the meetings he holds in the Kremlin's gilded halls. During a televised meeting of his participation in Russia's nationwide census in 2010, Putin appeared on a drab beige sofa in one of the two modest flats he is officially registered as owning.

Yes indeed. Just a simple galley slave, as Putin calls himself. Read the rest of this post...

In 2010, 75% of Americans near retirement had less than $30,000 in their retirement accounts

As we approach the 2012 elections, the "fiscal cliff" (clever branding, that) and Obama's post-electoral march to the Grand Bargain sea, I want to present to you three virtual images. And an injunction.

■ Image one, from the New York Times in a recent article on retirement (my emphases and some reparagraphing throughout):

Seventy-five percent of Americans nearing retirement age in 2010 had less than $30,000 in their retirement accounts. The specter of downward mobility in retirement is a looming reality for both middle- and higher-income workers.

Almost half of middle-class workers, 49 percent, will be poor or near poor in retirement, living on a food budget of about $5 a day.

The article is really good; do read the rest. But I want to stop here a moment.

Gather that fact — 75% of about-to-retire Americans are headed off their own "fiscal cliff." Once that $30,000 is gone, boom.

■ Image two, from the William Pitt Rivers article that led me to the quote above:

I heard the sound of clinking and clanking coming from the front of my house. I knew what it was immediately: one of the Can People was making her daily pass through my recycling bins. ...

The Can People are old men and women, stooped, wearing worn-out clothes and fraying shoes as they rattle through my refuse with gnarled, arthritic hands. ...

I wave to them when I see them, but they seldom respond, either because their eyesight is too poor to make me out as I stand on my porch like a lord, or because they are too ashamed to acknowledge the fact that I see them, and thus see what it is they must do to survive. ...

I remembered a brace of ginger ale cans I'd neglected to bring outside. Hurriedly, I tossed them into a bag and brought them to my porch. She was bent into the blue bin to the waist, and when she reared up at the sound of me, there was fear in her eyes. ...

I came to the railing, extended the bag of cans to her, and she took them without a word. Her face was a delta, a map of time itself, and she could not bring herself to meet my eye. She placed the bag of cans in her shopping cart, and I watched as she clattered her way down the sidewalk[.]

In the article, Mr. Rivers takes apart "something called Charles Lane" — a Wash Post writer and water-carrier for something called Paul Ryan. A worthy read.

■ Image three, this man, a politician whose face I've seen lately telling Clinton's money man Robert Rubin ("Bob" he says) and a roomful of Rubin's best friends (including "Roger" and "Peter") that Social Security needs reforming.

He forgot to say that he was just the man to do it, but I can't blame him for that. This was 2006 and he was not yet president of the United States.



"Too many of us have been interested in defending programs as written in 1938," he codedly says. Social Security was enacted in 1935 and significantly amended in 1939, partly in response to the government's kicking the economy back into recession by reduced New Deal (stimulus) spending.

Other telling quotes:

"The coming baby boomer retirement will only add to the challenges."

And:

"Most of us are strong free-traders."

Good to be among friends.

■ The injunction — It's legitimate to consider the man above to be 2012's Lesser Evil. As near as I can tell, the current Koch-couped Republican Party is a wrecking ball.

But Lesser Evil is still evil. If you do decide to hand him four unfettered years to do as he chooses, remember — you put him there. You have to help save us from this evil as well.

I'm serious. If you vote for Romney, what he does will be your fault.

If you vote for Obama — and you don't try to stop his Keystone Dreams and the looting of the safety net to please the future funders of the Barack H. Obama World Legacy, Library, and Retirement Tour — that will be your fault too.

Stopping those who want to install "Ayn Ryan" is only half the job.

If you conspire to install Obama, you have to stop him too. It's part of the job you gave yourself by voting for him.

GP

To follow or send links: @Gaius_Publius
  Read the rest of this post...

Government won’t prosecute Goldman Sachs in fraud probe

I hate when that happens. On Thursday I posted this, secretly hoping I'd be proven ever so wrong:

[I]f Goldman is a proxy for Wall Street money, Obama was seriously bought by the banks in 2008.

The payback — zero banking prosecutions, including for billionaire thief (and Obama fundraiser) Jon Corzine, who will never see a courtroom or handcuffs.

It's the way it works, folks. Obama is employed, a wage-slave, just like you and me. Meet his paymasters.

As I say, I really want to be wrong about this stuff. Who wants to live in a country as corrupt as this one?

Now just one day later, turns out I was ever so right (my emphases and paragraphing; h/t Jordan Banks via Twitter):

The Justice Department said Thursday it won’t prosecute Wall Street firm Goldman Sachs or its employees in a financial fraud probe. In a written statement, the department said it conducted an exhaustive investigation of allegations brought to light by a Senate panel investigating the 2008-2009 financial crisis.

“The department and investigative agencies ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time,” the department said.

Bottom line — DoJ lets Goldman skate free.

It's at the discretion of the prosecutor whether to prosecute.

Some prosecutors — for example, in cases involving petty (brown-skinned) street crime — need only something approximating the possibility of a conviction, or near enough, so long as they have a single shaky witness from blocks away who might even look credible if cleaned up (or "coached").

Other prosecutors — for example, in cases involving Jon Corzine or others of Our Betters — need no less than a "smoking gun" plus crime scene photos of the perp as the bullet leaves the chamber — without which, they say, they just don't have enough to go to trial (do click, my characterization isn't far off; and yes, that's our hero Pat Fitzgerald talking).

Thus it is with Obama's Justice Dept — which in fine Bush II tradition, is no longer just the nation's Justice Dept.:

Four years ago, employees of New York-based Goldman gave three-fourths of their campaign donations to Democratic candidates and committees, including presidential nominee Barack Obama.

For what it's worth (not much apparently) this is the evidence from the Senate that Obama's DoJ decided wasn't enough (note: Senate panels conduct inquiries under oath):

A Senate subcommittee chaired by Sen. Carl Levin, D-Mich., in April 2011 found that Goldman marketed four sets of complex mortgage securities to banks and other investors but that the firm failed to tell clients that the securities were very risky.

The Senate panel said Goldman secretly bet against the investors’ positions and deceived the investors about its own positions to shift risk from its balance sheet to theirs. ...

The Justice Department’s decision capped a good day for Goldman as the Securities and Exchange Commission decided not to file charges against the firm over a $1.3 billion subprime mortgage portfolio. ...

Note the hippie-bashing in the sentence following the last one. The source for the Sun-Times article is the AP.

If this isn't fraud, nothing is fraud (so long as the perp is Goldman). And yes a very "good day for Goldman". Are we a banana yet, or just headed that way?

Now me, more directly. The Nixon pardon was ground zero for loss of Rule of Law. First it was one man, president-cum-king, the top guy, who could not be prosecuted. When Nixon said this —

"When the president does it, it's not illegal."

— he had managed through his pardon to make himself correct.

Next, under Bush I, the circle of "unprosecutables" opened to include the cabinet, Weinberger et al. Today it includes any major banker, even known thief (and Obama fundraiser) Jon Corzine.

The circle of protection is still widening. I'd watch the Sheldon Adelson news if I were you. If Adelson can't be prosecuted — not convicted, that's for a jury; just prosecuted — you'll know the umbrella of immunity has opened further.

My sad prediction — Adelson skates, never sees a courtroom. What's the script? The Rs charge "political prosecution" and Holder backs down.

The result? Now no one funding a political campaign above a certain dollar amount can be brought to trial for anything but the personally-murdered recently dead (plus witnesses).

"On a scale from one to America, how free are you?" Not free enough, I suspect.

GP

To follow or send links: @Gaius_Publius Read the rest of this post...

Corporations are turning against Obama; support for Romney increases

This is from Bloomberg. Their headline is:

Goldman Sachs Leads Split With Obama, as GE Jilts Him Too

There are many stories in this Bloomberg piece. Here's two of them (my emphasis and paragraphing):

Four years ago, employees of New York-based Goldman gave three-fourths of their campaign donations to Democratic candidates and committees, including presidential nominee Barack Obama.

This time, they’re showering 70 percent of their contributions on Republicans.

So, two sentences, two stories:

First, if Goldman is a proxy for Wall Street money, Obama was seriously bought by the banks in 2008. The payback — zero banking prosecutions, including for billionaire thief (and Obama fundraiser) Jon Corzine, who will never see a courtroom or handcuffs.

It's the way it works, folks. Obama is employed, a wage-slave, just like you and me. Meet his paymasters.

Second, the banks are now abandoning Democrats and financing Republicans (again, if Goldman is a proxy). All you need to know? The calculation is obvious — Obama will never turn against them if he wins; and the payback if Romney wins is huge. By backing one, they own both.

Doubt me? Care to bet that Obama stays bought if he wins in 2012, even without major bankster "backing"? (I know, sucker bet. Sorry.)

That takes you through the first two sentences of this fascinating piece. The next paragraphs establish that yes, Goldman is indeed a proxy for Wall Street, though a front-runner in the running-from-Democrats derby.

This, a little further down, teaches a different lesson:

Dallas-based AT&T Inc. (T) employees, who divided their contributions evenly between the parties in 2008, are now giving almost two-thirds of them to Republicans.

Chairman Randall Stephenson gave $30,800 to the Republican National Committee in February -- his biggest donation in more than two decades -- six weeks after the Obama administration rejected a proposed merger with T-Mobile USA Inc.

If the first two points were the carrot, this is the stick. This is exactly why you can't have nice politicians; the people with the money have bought them all up.

There's a lot more in the article — GE, for example, 49%–owner of MSNBC, has turned against Team What, we weren't nice enough? as well:

Employees of General Electric Co. (GE) are giving 63 percent of their contributions to Republicans this year, almost a mirror image of their distribution in 2008 when Democrats received 66 percent of their donations.

"Employees" — this means corporate bigs, the kids with golden bonuses and bathroom keys. How do I know? 'Cause in a modern corporation that's where the money is. The corporate littles couldn't finance a dog-catcher race.

I can stop here. The article really is a good read, and there's more in it.

My goal is more modest, to bring you just what I brought you. I owe lunch to Wall Street and Bloomberg for making my job so easy. Thanks, fellas.

GP

To follow or send links: @Gaius_Publius
  Read the rest of this post...

Who is the enemy leading us to climate catastrophe?

UPDATE: A complete list of climate series pieces is available here:
The Climate series: a reference post.
________

We started this Climate Catastrophe series with a number of posts that look at the numbers. That series is listed here.

The bottom line based on the numbers:

  ■ Elite consensus says global warming must stay below 2°C (3½°F) — and even that will cause a great many changes in human habitation.

  ■ There's a mass extinction scenario at 3°C (5½°F) warmer. Will our species be among the 20–50% expected to die off? Perhaps.

  ■ Yet the planet is on track for an astounding 7°C (12½°F) increase by 2100 — certain death for our species. This is the "do nothing" scenario, the path we're now taking.

This is a suicide course, obviously, for the species. How do we change that? The answer takes us into the political realm.

Why can't we fix this?

It would be easy to assign blame to any number of sources. We could talk about human complacency, or the fact that the last generation to live will not be ours. We could mention the numerous nations of the earth, all of which must pull together, each of which has an economic interest not to.

We could talk about the stars, or the moon, or the fact that so many of us are rubes (sorry, underlings). We could blame electro-chemical impulses of the brain, or the networks for showing us so much sports.

We could blame the Tea Party, the Democrats, or the Sunday talks shows (for never talking about it).

But for Bill McKibben in his excellent Rolling Stone essay (and for me) there's really only one party to blame — especially if you want your blame to be effective and not impotent.

If you blame the rubes, for example, or our common rubicity, you will get nothing done. To paraphrase someone, the rubes you will always have with you; trying to change that is a loser course of action.

But all of the lesser agents of our destruction have just one puppet-master, a very small group — the Oil Barons, those who are profiting. McKibben (my emphasis and paragraphing throughout):

But what all these climate numbers make painfully, usefully clear is that the planet does indeed have an enemy – one far more committed to action than governments or individuals. Given this hard math, we need to view the fossil-fuel industry in a new light. It has become a rogue industry, reckless like no other force on Earth. It is Public Enemy Number One to the survival of our planetary civilization.

"Lots of companies do rotten things in the course of their business – pay terrible wages, make people work in sweatshops – and we pressure them to change those practices," says veteran anti-corporate leader Naomi Klein, who is at work on a book about the climate crisis. "But these numbers make clear that with the fossil-fuel industry, wrecking the planet is their business model. It's what they do." ...

They're clearly cognizant of global warming – they employ some of the world's best scientists, after all, and they're bidding on all those oil leases made possible by the staggering melt of Arctic ice.

And yet they relentlessly search for more hydrocarbons – in early March, Exxon CEO Rex Tillerson told Wall Street analysts that the company plans to spend $37 billion a year through 2016 (about $100 million a day) searching for yet more oil and gas.

Hold onto that name Rex Tillerson; we'll come back to him.

McKibben does an excellent job of working out the incentives that drive these companies — both the obscene profits, and this:

Much of that profit stems from a single historical accident: Alone among businesses, the fossil-fuel industry is allowed to dump its main waste, carbon dioxide, for free. Nobody else gets that break[.]

No restaurant can pile its garbage in the street for free. No dry cleaner can pour its spent poison fluid down the drain. Oil Can Henry can't dump its oil-can oil in front of the building next door. But hydrocarbon producers can treat the air as private property, and fill it with their waste.

McKibben then talks about the "carbon tax" solution, but let's wait on that (the next post will focus on solutions).

Instead let's go back to Mr. Tillerson, CEO of ExxonMobil and part of its top controlling class. I want to focus your mind a bit further than McKibben has done.

It's not the corporations; it's the people who run them

Did you notice that I mentioned the oil barons, and McKibben talked about the industry? These aren't quite the same.

I want to make a few points about corporations. The points may be obvious, but it's useful to keep them in mind. They are:

(1) Corporations are not people, and they don't have ideas or will. They are empty vessels.

If you took a neutron bomb to the home office of MegaCorp.com and let it rip, the building, filled to the brim with inventory and IP, would be empty of humans and a dead thing. You could wait for weeks for the offices to act; they wouldn't.

(2) This is especially true today, since the corporation now serves a different function than it was designed for. At first, a corporation served to make its stockholders moderately wealthy — or at least wealthier.

Modern corporations serve one function only — to make the CEO class obscenely rich, even at the expense (that's a Bain link) of the corporation itself (yes you, Carly Fiorina).

Thanks to the incentives in the post-Reagan tax code and the capture of Boards of Directors by the CEOs themselves, controlling the modern corporation — being the Jack Welsh of your world — is a straight path to big-league power and wealth. You've arrived.

As I've said many times, in a number of ways:

      Corporations loot the nation.
      CEOs loot the corporation.
      CEOs then buy everything on earth they want or need.

In the western world, the corporate controlling class lives higher than the kings and presidents who serve them. That's not invective, but a simple fact.

Call it my Flow-of-Funds Rule. Money flows right through the corp into CEO pockets, just like warm beer flows through you on a night of heavy drinking. Your body retains only what it needs. The receptacle gets the rest.

(3) Thus the modern corporation is no more than a power-extender for its hosts, the CEO, CFO, COO and so on, who use it to feed on all the wealth of the world. A perfect image of the relationship between CEO and corp is Ripley and the powerloader from the film Aliens:

The modern corporation serves no other function for its controlling class than to allow that class to live like this (h/t Paul Krugman):

“It’s incredible, right?” shouts Jeff Greene over the roar of the two-seater dune buggy’s motor. “It’s 55 acres!”

Still in his whites from this morning’s tennis match, he’s giving a personal tour of his Sag Harbor estate, barreling at 30 miles per hour through the vast forest of scrubby pines and soft moss of its gated grounds.

“Beautiful nature here!” A blur of deer goes by, and the trees break to reveal the summer sun glinting off a grassy lagoon. Greene slows by its shore.

“This is our swan pond, and this is our private beach,” he says, gesturing toward a slip of white sand encircling the edge of the North Haven Peninsula. “It goes all the way to the ferry. Three thousand feet of beach,” he adds, a smile spreading across his tanned face. ...

“I’ve got a huge, huge position in mortgage-backed securities,” he says. “I started accumulating them in 2009, when the market was really down and things were really scary.” That’s also when he picked up this property for around $40 million (half the 2007 listing price), which he and his wife have christened “Greene Haven.”

“I wish we could spend more time here,” he says. “Honestly, we have so many great homes.”

This is why they exist, what they live for. This is victory, what is good in life. The purpose of the powerloader is to extend its master's reach. The purpose of the corporation, the same.

Ask yourself — if the CEO of Chevron could triple his personal wealth in a day by burning the corp to the ground and salting its earth, would he do it?

Why would he not?

McKibben fingers the fuel industry; I blame the people it serves

I bring this up for a reason, and not just to play with fun prose. As you'll see when we talk about solutions, McKibben builds his strategies around targeting the real enemy. As a result, he focuses on the fossil fuel industry.

Me, I wouldn't shoot at the powerloader, but the person inside, the various Rex Tillerson's of the world. To motivate a corp, you have to motivate its master.

This is a subtle difference perhaps, but as I hope you'll see when we get there, a useful one.

Yours in usefulness,

GP

To follow or send links: @Gaius_Publius
  Read the rest of this post...

NRA back in bed with ALEC

From Media Matters (my emphasis and paragraphing):

In April, as corporate sponsors fled their organization in the face of pressure from liberal activists angry with the group's support of "Kill at Will" self-defense laws and voter ID bills, ALEC announced that they were disbanding their Elections and Public Safety Task Force, which worked on those issues. At the time, that task force's chair told Media Matters that such issues were no longer a priority for ALEC.

The NRA was reportedly extremely unhappy with ALEC's reaction to public pressure regarding the "Kill at Will" laws, which spread to dozens of states after ALEC adopted a model bill based on the Florida statute that was cited as an influence in the case of slain Florida teenager Trayvon Martin.

An NRA representative reportedly criticized the group for dismantling the task force during a meeting of conservative leaders, warning other participants that ALEC could flee from their issues as well.

But the continuation of the NRA's annual shoot at ALEC's annual meeting suggests that the two conservative groups have patched up their differences and are again working together to promote right-wing legislation.

What annual shoot?

According to [Center for Media and Democracy] "For the past several years, on the Saturday of ALEC's annual meeting, the NRA has regularly hosted an outing for ALEC legislators and lobbyists to go shooting together -- with complimentary guns and ammo plus plenty of food and drink (this time it is a barbeque)."

If the "annual shoot is on" I would guess the divorce is off. Friends forever.

UPDATE: I hope the progressive world realizes what an opportunity this is. The ALEC attack by Color of Change et al worked to create corporate defunding and exit because of the racism. Racism is apparently a bridge too far for corporate America these days. Good to know.

How about a similar move against NRA? They have funders, some very high-dollar.

We could: (1) Publicize that list, the money (if available), and ask the question "Is the NRA a racist organization?" (2) Pick one corporation (one with mainstream family-friendly cred and a neutral "brand" to protect) and target them, like with the ALEC targeting. (3) Publicize any exits we get and continue the drive.

It wouldn't kill the NRA, but it would put them on defense (for a damn change). Time to alter the momentum against those guys, say I.

GP

To follow or send links: @Gaius_Publius
  Read the rest of this post...

$21 trillion hidden from taxes by global super-rich

A peek at the world of the global super-rich via The Guardian, reporting on an important new study by the Tax Justice Network.

This study attempts to size the global "offshore" economy, the amount of cash stashed and hidden from global taxation in offshore tax-haven countries.

Their number at least — $21 trillion. Yes, with a "t".

I can only say, the "global super-rich" must be super rich indeed — $21 trillion is almost double the size of the whole U.S. economy.

Here's the Guardian story, thanks to two contributors for the link (MiroCollas via Twitter and commenter AC_in_Mich via email); emphasis and some reparagraphing mine:

A global super-rich elite has exploited gaps in cross-border tax rules to hide an extraordinary £13 trillion ($21tn) of wealth offshore – as much as the American and Japanese GDPs put together – according to research commissioned by the campaign group Tax Justice Network.

James Henry, former chief economist at consultancy McKinsey and an expert on tax havens, has compiled the most detailed estimates yet of the size of the "offshored" economy in a new report, The Price of Offshore Revisited, released exclusively to the Observer.

He shows that at least £13tn – perhaps up to £20tn [$30tn] – has leaked out of scores of countries into secretive jurisdictions such as Switzerland and the Cayman Islands with the help of private banks, which vie to attract the assets of so-called high net-worth individuals.

Their wealth is, as Henry puts it, "protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy".

According to Henry's research, the top 10 private banks, which include UBS and Credit Suisse in Switzerland, as well as the US investment bank Goldman Sachs, managed more than £4tn in 2010, a sharp rise from £1.5tn five years earlier.

The full Tax Justice Network report, The Price of Offshore Revisited, is here (pdf).

A resources page including related documents is here.

As I said when talking with Jay Ackroyd on a recent Virtually Speaking, this is what George Bush meant by "freedom" — a "borderless frictionless" global economy, in which capital can move freely, seeking whatever return it can get wherever it can get it.

For the George Bushes of the world, and the men and women they serve, the only good in the world is money and the power to keep it. And the only freedom worth having is the freedom to use it.

"The problem here is that the assets of these countries are held by a small number of wealthy individuals while the debts are shouldered by the ordinary people of these countries through their governments," the report says.

I think they're building a world, these men and women, one trillion dollars at a time. Tough sledding that, but I think they're almost there.

The result?

"[I]nequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people," said John Christensen of the Tax Justice Network. "People on the street have no illusions about how unfair the situation has become."

We're looking at it.

GP

To follow or send links: @Gaius_Publius Read the rest of this post...

The epic heat wave: "Of course it's about climate change"

UPDATE: A complete list of climate series pieces is available here:
The Climate series: a reference post.
________

Sorry, did I just say "climate change"? I ought to say Climate Catastrophe. So should you.

This will be the first of many posts on climate catastrophe. In my opinion (but not only mine), we're passed the tipping point. And following Dornbusch's Law, having arrived, it's coming on faster than anyone expected.

Krugman, with the first bit (my paragraphing):

The Burning Land

I’ve been searching for something useful to say about the epic heat wave and drought afflicting U.S. agriculture, other than that this is the shape of things to come.

Of course it’s about climate change: a rising number of temperature records is exactly what you’d expect given an underlying upward trend in global temperatures.

He won't be alone saying this on these pages. I have a raft of pieces tabbed up and waiting to be posted.

Just for good measure, this via Michael J. Roberts, whom Krugman links to in a different post (my emphasis):

The weather fluctuates and heat waves happen. But the data show that the relative frequency of extreme events like this has increased tremendously. Just look a few posts back or read Jim Hansen's Climate Dice paper (PDF). Statistically speaking, this is almost surely climate change.

Hansen is one of the big guns in the field. I'll have more on Hansen's new paper later.

After a brief consideration of the (considerable) consequences, The Professor looks at the prospect for change in policy:

there is no prospect whatsoever of getting action.

So there.

The outcome isn't good. It's still not too late to at least mitigate the catastrophe (yes, the c-word again; get used to it).

But that would take a dictatorship which transfers massive wealth from the Koch Bros and their Ilk to alternative energy ... now.

You could do that via a huge tax. But as I said, a (friendly) dictatorship would be needed, because the political system is locked up, both parties are compromised and complicit, and the media, which should be messaging on behalf of the solution ... is messaging on behalf of the problem.

Screwed, to use a carpentry term.

We'll have more on climate catastrophe very soon — there are now lots of voices with lots of data.

Stay tuned. If nothing else, the Blame Game should be hours of entertainment all by itself. (I'm serious; I can't wait until the complicit start dancing and pointing — and asking for Federal money.)

GP

To follow or send links: @Gaius_Publius
  Read the rest of this post...

Sen. Pat Leahy's "clear conflict of interest"— or How to buy the IP law you want

The Republic Report is on fire, a must-read site for corruption news.

Staples in their coverage (and ours) are tales of bought congressmen and bought laws. It's why I call Congress the House of Retainers; like all retainers, congressmen work for a living, doing the bidding for those who don't.

Latest is Sen. Patrick Leahy (D-Vermont). You probably think of him as a "good guy" because ... well, you probably aren't sure, are you. Maybe "from Vermont" has something to do with it; it's certainly part of his branding ("Pat Leahy, liberal from Vermont"). Fund-raising, like all sales, is all about branding.

But Leahy, in his role as head of the Senate Judiciary Committee, is one of the main reasons that our side lets all but the worst of MoveCon judges onto the bench, while their side blocks almost every one of ours.

In other words, Leahy is one of the reasons the courts are so stacked against us. (Do click; it's one of Ms. Lithwick's best discussions of the modern court system.)

And now for a little quid pro quo. I've often said that corruption, the real thing, doesn't have to involve money, just abuse of power to benefit someone who hasn't earned what's handed to him. For example, is a referee in a college football game, one in which one side is loved by the ref and the other side hated, corrupt for taking no money at all for five bad game-changing calls?

What do you call it when an IP Big gives gifts to the chair of a Senate committee with "wide sway over IP law"? Corruption, one might say.

And what gifts. Lee Fang reports (my emphasis and paragraphing):

Corruption comes in many forms. Sometimes special interests attempt to buy influence through disclosed campaign donations, but too often, influence is purchased through unorthodox giveaways to our politicians, from discounted mortgages, to free yachts, and promises of future jobs. ...

Senator Pat Leahy (D-VT) is chair of the powerful Judiciary Committee, which has wide sway over intellectual property law.

This Friday, Leahy, a “lifelong fan” of the Batman comic book series, will make his second cameo in a Batman movie when “The Dark Knight Rises” opens in theaters.

As Demand Progress notes, Leahy’s appearance is a clear conflict of interest, given the movie industry’s intense lobbying for stricter intellectual property laws covering their products.

Fang has the quid and the quo:

Leahy ... has received over $900,000 in campaign contributions from the movie and music industry[.] ... He was the guest of Warner Brothers Studio CEO Barry Meyer — the same Meyer whose company and its association (called the MPAA) has spent millions lobbying Leahy’s committee.

In 2010, Meyer testified in front of Leahy on intellectual property legislation. His company is particularly interested in dual legislation known as SOPA/PIPA, which has attracted widespread criticism for its potential to give new powers to industry and government to broadly censor the Internet. ...

Fang's report is filled with this stuff; do read.

Are you getting that "liberal" Pat Leahy is an eager SOPA/PIPA supporter? Markos Moulitsas, quoted here, says:

Democratic Vermont Sen. Patrick Leahy is inexplicably leading the charge in the Senate with the Protect IP Act [PIPA].

Inexplicably? Doing his master's bidding, I would say.

GP

To follow or send links: @Gaius_Publius
  Read the rest of this post...

Sheldon Adelson and "the gambling capital of the world": Using big Chinese bucks to buy American elections

This is one of those patented Maddow Show first segments. It starts one place, moves to another place, and suddenly ties everything together with a bang.

Macao is introduced at the 1:00 mark. Once you get past the athletes-and-smog reference, you're into the main part. If you really feel the need to speed along, start at 2:10 — but be sure not to miss China-U.S. population graph at 2:10.

That population ratio — 4:1 — is the key to the whole segment. 4:1 helps define the size of the gold mine Sheldon Adelson is working.

"Macao ... is the gambling capital of the world" (3:20; my emphasis). That's a whole lot of gold to work with.

Maddow's bottom line has to do with the risk of Adelson being prosecuted under the Foreign Corrupt Practices Act.

My bottom line is that the Chinese government is pumping money as fast as it can into the pockets of Las Vegas–and–Macao casino owner Sheldon Adelson. And with that money Adelson is buying as much U.S. election as he can.

Any guesses whether Obama and his seemingly White House–directed Justice Dept. will actually do anything like a meaningful prosecution. (Hint: Jon Corzine is still a free man, and last I heard, still an Obama fundraiser.)

Watch (to watch large in a separate tab, click here). Stay at least through the start of the interview at 12:00, though the interview with ProPublica is excellent.

A reminder:

• U.S. industrial policy — Enrich global billionaires at the expense of the American people (true for both parties).
  
  
• Chinese industrial policy — Enrich global billionaires to the benefit of the nation of China.

"Free trade" y'all. (I'll have more on this in a bit.)

Adelson is mining for gold the casino gambling jones of the whole of China. A good part of that gold is going straight to the 2012 election. And the Chinese know it.

Any guess what side-deals Adelson has with the Chinese government if Romney wins? Any bets how he says Thank you?

When foreign money buys your elections, you're a "client state" (look it up). This is what we did and do to our colonies. Now it's being done to us.

Spelling note just for fun.

"Macao" is the original Portuguese name and spelling, and the region (a peninsula and a small group of islands) was the location of the first Portuguese (and first western) settlement in China (mid-1500s under the Ming, a strong dynasty).

Later Chinese emperors became weaker and weaker vis-à-vis the west, and after the Opium Wars, Macao became first a wholly-controlled city (1864) and then a straight-up Portuguese colony (1887), similar to British-controlled Hong Kong and Singapore.

"Macau" is a more modern Portuguese spelling than "Macao" but both are used (my paragraphing):

The form "Macao" was the original Portuguese spelling, and has been retained in most European languages. ... [Thus] "Macao" is the traditional English spelling.

However since the handover of administration from Portugal to China in 1999, the government of Macau considers both "Macao" and "Macau" to be acceptable English spellings of the name, whereas in Portuguese "Macao" has long been abandoned and just "Macau" remains the official spelling.

So why do I stick with "Macao"? Because the sound "ao" and its nasal version "ão" are so common in Portuguese — and so lovely — that it marks the language for me. Plus the Portuguese, in their wisdom, haven't respelled any of those other "-ao" places (like Curaçao, Bilbao [which is admittedly in Spain, but Portuguese-sounding], or even Makawao, a Portuguese cowboy town on Maui).

Nor are the Portuguese respelling any of their liquid -ão words, like coracão (heart).

So I like the -ao in Portuguese, and I'm keeping it. Lord knows why the Chinese former-colony was respelled and not Curaçao, for example, but that's on them. As the wikipedia says:

The present Chinese name [of Macao is] 澳門, Àomén.

I'll switch to that spelling when the rest of the world does. In the meantime, we all know how to spell Adelson — m-o-n-e-y.

GP

To follow or send links: @Gaius_Publius
Read the rest of this post...

Taibbi and Spitzer on LIBOR: The business model of the banks "is corrupt and rotten to its core"

A nice three-way discussion between Eliot Spitzer (who's met corruption face to face), Matt Taibbi (who writes about it almost daily), and Dennis Kelleher (who has represented banks for a living).

As Kelleher says at 2:10 in the clip below:

Their business model ... is based on making as much money, as quickly as possible, in any way that they can not get caught (emphasis his).

Remember, Kelleher knows these guys inside-out — as Spitzer notes, he has a history as a banking industry lawyer.

This is a guy who knows these guys. He later (8:10) calls them "not banks" but "finance and trading companies."

Great discussion. Watch:



Taibbi notes (4:30), because the BBA throws out the eight outliers in the 16 daily quotes, for LIBOR to be constantly wrong, it has to be "all of them" doing it:

It's not just five banks ... really it's going to come out that it's going to be all of them. It's "cartel-style" corruption; it's not just Barklays.

Be sure to watch Kelleher's close — it touches the political system.

(If you want a backgrounder with a little more depth, here's ours.)

GP

To follow or send links: @Gaius_Publius
  Read the rest of this post...

House Ethics Committee decides to do nothing, as usual

Surprise, surprise, the House Committee on Ethics announced this week that it would do... nothing.

The committee said it would take a pass on allegations that Rep. Vern Buchanan (R-FL) inaccurately reported positions he had held and income he had received on his annual financial disclosure statements between 2007 and 2010.

The committee confirmed that Rep. Vern Buchanan had filed inaccurate financial forms, but said the omissions were inadvertant, no different from the “hundreds or thousands of errors” it sees each year in such reports.

What response did Buchanan, the GOP's top fundraiser, have to this:
He said the omissions amounted to chump change -- an interesting way to describe an amount roughly equivalent to one-third of the median annual income of families in his native Florida.

A letter from the congressman’s attorney said that the nearly $15,000 amounted to “somewhere between 0.0000434% and 0.00000962% of his total assets” -- noting the “small error relative to the size” of his holdings.

Well, lucky him!!

Turns out his troubles may not be over. Even though NewsMax has decided that the Ethics Charges Are Politically Motivated, the House panel is continuing to investigate allegations that Buchanan once offered to pay a former business partner $2.9 million if he agreed to sign a false affidavit claiming he knew nothing about plans to reimburse employees of Buchanan’s car dealership. The FBI, Internal Revenue Service and a federal grand jury are conducting separate investigations. Read the rest of this post...

25% of Wall Street execs believe you need to cheat to win

Surprise! Is it any wonder we have a serious corruption and ethics problem on Wall Street? What's worse is that these are the people who are writing the laws of the land and preventing the US and Europe from economic recovery.

In a survey of 500 senior executives in the United States and the UK, 26 percent of respondents said they had observed or had firsthand knowledge of wrongdoing in the workplace, while 24 percent said they believed financial services professionals may need to engage in unethical or illegal conduct to be successful.

Sixteen percent of respondents said they would commit insider trading if they could get away with it, according to Labaton Sucharow. And 30 percent said their compensation plans created pressure to compromise ethical standards or violate the law.

To be fair to Wall Street, they're above the law and they know it. Read the rest of this post...

Fracking all the way to the bank

Governor Andrew Cuomo, you have some company.

It turns out that New York is not the only state selling its soul to the natural gas industry this summer. Good ol’ North Carolina is joining the fracking bandwagon, too, and opening up its landscape to the unlovely risks of mini-earthquakes, water pollution and disease dissemination.

This past week, just in time to mark our nation’s birthday, Republicans in the North Carolina state legislature overrode a veto by Governor Beverly Purdue to give a green light to hydraulic fracturing. Drill, baby, drill!

Still, the vote was a close-run thing. The Republicans only prevailed because a veteran Democratic lawmaker, Becky Carney, mistakenly cast the deciding vote after a marathon legislative session late Monday night. She opposes fracking but inadvertently gave the GOP the votes it needed to override the governor’s veto.

She cried when she realized her mistake – and with good reason. The industry has too much political juice to give its opponents room for error. The wider the fracking debate spreads, in fact, the more it becomes clear that conflicts of interest abound at every turn.

According to The Institute for Southern Studies, North Carolina state lawmakers took two fact-finding trips to Pennsylvania to investigate the issue. Their guide was a gas company facing multiple federal and state investigations into possible fracking-related violations, Oklahoma-based Chesapeake Energy. No prizes for guessing which “facts” they found.

One of Chesapeake’s business practices, according to a Reuters investigation, is to conspire with its top competitor, Encana Corp of Canada, to avoid bidding against each other in land-purchasing deals, all the better to keep prices artificially low. According to the piece:

In one email, dated June 16, 2010, [CEO Aubrey] McClendon told a Chesapeake deputy that it was time "to smoke a peace pipe" with Encana "if we are bidding each other up." The Chesapeake vice president responded that he had contacted Encana "to discuss how they want to handle the entities we are both working to avoid us bidding each other up in the interim." McClendon replied: "Thanks."

Shocker, that is not the only price-fixing natural gas scandal out there. Citizens for Responsibility and Ethics in Washington (CREW, where I worked for years as the Deputy Director) has asked the Justice Department’s Antitrust Division to initiate an investigation into whether large natural gas producers, including Chesapeake and ConocoPhillips, are illegally conspiring to limit their production in a bid to raise demand and increase prices.

Turns out, over the past few months, natural gas prices have dropped to a ten-year low while inventories have increased dramatically. Clearly, it’s in the companies’ business interests to reverse that. The question is whether they are violating antitrust laws in the process – and whether the state legislatures they are so effectively targeting for new business even care.

What is so galling about all these anti-competitive practices by the natural gas industry is that on the one hand they conspire to push gas prices higher by reducing production and on the other they attack President Obama and the Democrats for not agreeing to give them more wells to drill.

The companies want government both ways – active on their behalf and inactive on everyone else’s. Our legislators should be smart enough not to fall for it. Read the rest of this post...

Did the Bank of England approve Barclay's false LIBOR rate submissions?

See where this is headed? It spirals ever outward.

Not only are we looking at fraud and self-dealing by the largest banks in the West.

Not only are we looking at interest rate manipulation that deprives hundreds of trillions of dollars worth of interest-sensitive instruments of money they deserved to receive. (See our LIBOR backgrounder for more.)

We now have some evidence that the Bank of England — the UK central bank — had knowledge of the LIBOR Lies, and approved Barklays' artificially lowered submissions as a solution for Barklays.

If so, the Bank of England knew about it all. From ProPublica (my emphasis and paragraphing):

In October 2008, with the financial crisis at full bore, Barclays was again on the higher end of rate submissions. That month, according to filings, a senior Barclays manager spoke with a Bank of England official about Libor rates, and the idea that they might be artificially low.

Hearing of this conversation, other Barclays managers “formed the understanding” that the Bank of England wanted Barclays to lower its submissions.

This week, Barclays released an email confirming the conversation was between Diamond and Bank of England’s deputy governor Paul Tucker. It was another Barclays manager, Jerry del Missier, who determined what he thought Tucker’s comments meant, Barclays says.

Shorter Barklays: Sir, these other lying banks are killing us, making our rates look too high.

Shorter Bank of England: So? How 'bout you lie too.

This is still iffy; interpretation land. But it's pretty certain that the conversation took place, whatever meaning either side attached to the statements.

Even so — if the UK central bank knew that LIBOR was being manipulated, that itself is enough to make ... who? the UK government? ... complicit.

The parallel case would be if the Fed knew that JPMorgan Chase — a LIBOR bank, by the way — were doing the same thing. Whom do you arrest? Ben Bernanke?

And you should know that there are starting to be reports that what the Bank of England knew, the Fed knew. Business Insider:

But a research paper from the Federal Reserve's Jeremy Berkowitz (now a professor at the University of Houston) indicates that the Fed was worried about LIBOR manipulation as early as February 1998.

In that paper, Berkowitz tests alternative methods of calculating LIBOR rates specifically because the Fed has already seen three examples of misreporting from one bank in early 1996. While he writes those incidents off as being "undoubtedly...unintentionally misreported," the composition of a paper to prevent against such errors suggests a great deal of interest from the Fed in this subject. ...

While Rabinowitz's paper does not imply that banks had been colluding to manipulate rates at the time it was written, it suggests that the Fed was already be concerned about the effects of inaccurate reporting by banks about their lending practices ten years before the financial crisis.

If the Fed was alerted in the late 1990s, they had to be paying attention. Do these Big Boy bankers talk to each other? I'm guessing once a month at least — at St. Andrews.

Just keep your eyes open. This hasn't begun to blow. (And if it never does, that will be even worse news.)

Watching...

GP

To follow or send links: @Gaius_Publius
  Read the rest of this post...

Why the U.S. Justice Dept is investigating the LIBOR scandal

This LIBOR scandal is both deep and wide. Wide enough to reach both sides of the Atlantic.

Why both sides, you ask? Good question, since LIBOR stands for the London Interbank Offered Rate. We're still digging to understand, we at La Maison, but the two bits below may help.

(By the way, you may find our earlier piece — "LIBOR for Laymen" — helpful to get you started. It explains the basics.)

■ Robert Reich says this in The Guardian (my emphasis and some reparagraphing throughout):

There are really two different Libor scandals, and both are about to hit America's shores. The first has to do with a period just before the financial crisis, around 2007, when Barclays and, presumably, other major banks submitted fake Libor rates lower than the banks' actual borrowing costs in order to disguise how much trouble they were in. This was bad enough. Had American regulators known then, they might have taken action earlier to diminish the impact of the near financial meltdown of 2008.

But the other scandal is worse, and is likely to get the blood moving even among Americans who assume they've already seen all the damage Wall Street can do. It involves a more general practice – starting around 2005 and continuing until … who knows, it might still be going on – to rig the Libor in whatever way necessary to assure the banks' bets on derivatives would be profitable. This is insider trading on a gigantic scale. It makes the bankers winners and the rest of us – whose money they've used to make their bets – losers and chumps.

Obviously, Libor is not limited to the UK. As the benchmark for trillions of dollars of loans worldwide – mortgage loans, small-business loans, personal loans – it affects the most basic service banks provide: borrowing money and lending it out. People put their savings in a bank to hold in trust, and the bank agrees to pay interest on those. And people borrow money from the bank and agree to pay the bank interest.

Note: Two scandals.

One involves self-dealing — the banks were rigging LIBOR so derivatives deals they were involved in would be profitable. This amounts to being the both the pitcher and the umpire in a baseball game.

The other involves LIBOR as a benchmark for hundreds of trillions in other deals — loans, mortgages and contracts. If the rates are wrong, people who should have been paid a higher interest were cheated. As I said earlier, this is fraud, and the victims are world-wide, including in the U.S.

One more piece of information from Reich:

Wall Street will almost surely be implicated in the scandal. The biggest Wall Street banks – including the giants JP Morgan Chase, Citigroup and Bank of America – are likely to have been involved in similar manoeuvres. Barclay's couldn't have rigged the Libor without their witting involvement.

The reason they'd participate in the scheme is the same reason Barclay's did – to make more money.In fact, Barclays' defence has been that every major bank was fixing Libor in the same way, and for the same reason.

■ I'll have more on this scandal, including a list of which banks are LIBOR banks. These three are among them:

• The Bank of America
• JP Morgan Chase
• Citibank, NA

It may be a London rate; but it's not just London banks that set it.

GP

To follow or send links: @Gaius_Publius
  Read the rest of this post...

Following Barclays scandal, British customers moving from banks

When (not if) the Libor scandal reaches the US shores, there's a high likelihood of US customers shifting away from banks and into credit unions, again. The previous wave involved millions of customers shutting down their accounts with the mega-banks and moving over to smaller credit unions. Hopefully action groups are preparing for the next wave of disgust with the corruption of big banks because we're getting very close to a lot more news of blatant corruption within that putrid industry.

If you are banking with one of the big banks, chances are very high that you're only enabling bad behavior by giving them business. It's a hassle to change, but why help the corrupt? The Guardian:

Angry bank customers have been voting with their wallets and bombarding co-ops, building societies and credit unions with applications for current accounts over the past week, after the NatWest computer meltdown and the Barclays rate-rigging scandal.

Data compiled by the campaign group Move Your Money UK shows an explosion in requests to switch from large high street banks to smaller alternatives that consumers hope will take a more ethical approach. Charity Bank, which lends its savers' money to charities, has seen a 200% increase in depositors; the Ecology Bank has had a 266% jump in applications; and Triodos, a Bristol-based "sustainable bank", a 51% increase.

Credit unions, which are often small institutions investing people's savings in their local economy, have seen week-on-week increases of at least 20%, some of them up to 300%. Evidence of the growing number of switchovers comes as Ed Balls, the shadow chancellor, on Sunday calls on the government to make it easier for consumers to switch to another bank or building society. Speaking on the BBC's Andrew Marr Show, Balls will say that while people are increasingly dissatisfied with their banks, it is still too difficult for customers to switch accounts. He told the Observer: "Ministers are dragging their feet on reforms to improve competition and consumer choice in the banking sector. Consumers must come first. It's time for action."

Read the rest of this post...