Month: July 2013

Federal Court Rules that Federal Reserve Cannot Be the Banksters Bitch Over Swipe Fees

U.S. District Judge Richard Leon just ruled that the Federal Reserve’s rules on debit card swipe fees are too bank friendly and ignore the statutory requirements of Dodd-Frank:

The Federal Reserve disregarded Congress’s intent when deciding how much banks can charge merchants for debit-card transactions, a judge ruled, rejecting Dodd-Frank-imposed regulations governing “swipe” fees.

U.S. District Judge Richard Leon in Washington ruled today that the Fed didn’t have the authority to set a 21-cent cap on debit-card transactions. Leon said the rule, which has been in effect since October 2011, would remain in place pending new regulations or interim standards.

“The Board has clearly disregarded Congress’s statutory intent by inappropriately inflating all debit card transaction fees by billions of dollars and failing to provide merchants with multiple unaffiliated networks for each debit card transaction,” Leon said in his 58-page ruling.

The groups, in a lawsuit filed in November 2011, said merchants will be “substantially harmed” by the fees the Fed set under the Durbin Amendment, a provision of the Dodd-Frank legislation. The rule went into effect on Oct. 1, 2011.

“The board’s final rule permits banks to recover significantly more costs than permitted by the plain language of the Durbin Amendment and deprives plaintiffs of the benefits of the statute’s anti-exclusivity provisions,” the retailers argued in their complaint.

What?  The law is not friendly enough to the banks, and so the Fed draws up regulations ignoring the law? 

I am so (not) surprised.

The NSA Spying Gets Worse

Now we have XKeyscore, which “collects ‘nearly everything a user does on the internet’.”

A top secret National Security Agency program allows analysts to search with no prior authorization through vast databases containing emails, online chats and the browsing histories of millions of individuals, according to documents provided by whistleblower Edward Snowden.

The NSA boasts in training materials that the program, called XKeyscore, is its “widest-reaching” system for developing intelligence from the internet.

The latest revelations will add to the intense public and congressional debate around the extent of NSA surveillance programs. They come as senior intelligence officials testify to the Senate judiciary committee on Wednesday, releasing classified documents in response to the Guardian’s earlier stories on bulk collection of phone records and Fisa surveillance court oversight.


The files shed light on one of Snowden’s most controversial statements, made in his first video interview published by the Guardian on June 10.

“I, sitting at my desk,” said Snowden, could “wiretap anyone, from you or your accountant, to a federal judge or even the president, if I had a personal email”.

US officials vehemently denied this specific claim. Mike Rogers, the Republican chairman of the House intelligence committee, said of Snowden’s assertion: “He’s lying. It’s impossible for him to do what he was saying he could do.”

But training materials for XKeyscore detail how analysts can use it and other systems to mine enormous agency databases by filling in a simple on-screen form giving only a broad justification for the search. The request is not reviewed by a court or any NSA personnel before it is processed.

So, either Rep. Rogers knowingly lied, or he was lied to by the state security apparatus.

Yeah, it just keeps getting worse, and there is more to come, at least that is what Senator Ron Wyden said yesterday when he said that, “U.S. intelligence agencies’ violations of court orders on surveillance of Americans is worse than the government is letting on,” which means that even with a incredibly compliant FISA Court (You need to keep them away from toilet paper, because they will sign anything), they be bothered to follow the “law”.


Retta on stereotypes on Conan:

What Ezra Klein Said

He notes that when pundits talk about “the center”, they are endorsing a radical agenda that is overwhelmingly opposed outside the beltway:

Martin’s article doesn’t define “the center.” But it’s not the center of public opinion. It’s more a reference to an amorphous Washington consensus. Insofar as that concept ever made sense, the idea was that it’s the legislative center, the zone of compromise where things can actually get done. But even that concept has begun to break down in recent years, as that Washington center — what you might call the “Simpson-Bowles center” — no longer holds any weight in Congress.

When you’re judging policy, “good” and “bad” are descriptions that make sense. So are “popular” and “unpopular,” and “likely to pass” and “no chance.” But “the center”? It’s time to retire that one, or at least come up with a more rigorous definition of what we mean when we use it.


How Torture Comes Home, Part 55

We now have a report that the CIA is hemorrhaging because its management sucks:

For the Central Intelligence Agency, he was a catch: an American citizen who had grown up overseas, was fluent in Mandarin and had a master’s degree in his field. He was working in Silicon Valley, but after the terrorist attacks of Sept. 11, 2001, he wanted to serve his country.

The analyst, who declined to be named to shield his association with the CIA, was hired in 2005 into the agency’s Directorate of Intelligence, where he was assigned to dig into Chinese politics. He said he was dismayed to discover that unimpressive managers wielded incredible power and suffered no consequences for mistakes. Departments were run like fiefdoms, he said, and “very nasty internecine battles” were a fixture.

By 2009, he had left the CIA. He now does a similar job for the U.S. military.

CIA officials often assert that while the spy agency’s failures are known, its successes are hidden. But the clandestine organization celebrated for finding Osama bin Laden has been viewed by many of its own people as a place beset by bad management, where misjudgments by senior officials go unpunished, according to internal CIA documents and interviews with more than 20 former officers.

So, how does this relate to torturers?

Because the torturers are people who are not that good at their jobs. If they were good, they wouldn’t have to break the law to create the illusion of results. (A quick Google shows that torture does not work)

Of course, between the torture fetishists of Bush and His Evil Minions, and the torture apologists of Obama and His Evil Minions, torture has become a ticket that you need to punch to advance in “the agency”.

So, because successive White Houses have institutionalized torture, they have also institutionalized incompetent agents who become incompetent managers who are fearful that their lack of ability will be exposed.

We have incentivized torture, incompetence, and corruption for people who want to have intelligence as a career path.

This is Beyond Orwell’s Wildest Imaginings

In his seminal work 1984, he coined the idiom, “We’ve always been at war with Eastasia.”

Well, Obama and His Evil Minions have done this one better, and they claim that the list of people that we are at war with is classified:

Back in May, we noted the oddity of the charges in Bradley Manning’s trial, in which he was accused of aiding three different “enemies,” with the last one being classified. Specifically, he was accused of aiding Al-Qaida, Al-Qaida of the Arabian Peninsula (AQAP, which is different than AQ itself) and… mystery enemy. Back at the beginning of July, the government quietly dropped the charge against the classified enemy, so that’s no longer in play in that case. That said, apparently this concept of classifying who we’re at war with wasn’t just limited to the Manning trial. ProPublica has the ridiculous and frightening tale of finding out that the answer to the simple question of who the US is at war with, is apparently classified as well.

At a hearing in May, Sen. Carl Levin, D-Mich., asked the Defense Department to provide him with a current list of Al Qaeda affiliates.

The Pentagon responded – but Levin’s office told ProPublica they aren’t allowed to share it. Kathleen Long, a spokeswoman for Levin, would say only that the department’s “answer included the information requested.”

The Pentagon also went on to tell ProPublica that revealing who we’re actually at war with would do “serious damage to national security.” The main reason? They think those groups would use the info as good publicity and allow them to recruit more.………

If the UK were to hook up a generator to the grave of Eric Arthur Blair, they could power all of Europe, because he is surely spinning in his grave at unbelievable speed.


Pic of the day:  Why conservatives hate New York City Bike Share:

One of the Worst of the Blue Dogs Gets a Free Pass

Bill Halter, who nearly defeated the despicable Blanche Lincoln in the 2010 Arkansas Democratic Primary, has decided to withdraw from the race for Governor, leaving the race to one of the Dlue Doggingist of the Blue Dogs, Mike Ross.

It appears that the proximate cause is anemic fund raising.

My guess is that this is payback from the Clintons, who have not “gotten over” his challenge to Lincoln. (She would have lost anyway, the polls were clear on that.)

This sucks.

More Adventures of the New Party of Jefferson Davis

Paul Krugman notes that the current attempts by Congressional Republicans to use the threat of a government shutdown to roll back Obanmacare mirrors the actions of the South when they tried to destroy the United States.

You see, Marco Rubio is now claiming that Obama wants to shut down government because he will not end his health care plan.

As Krugman notes, Lincoln nailed this at his Cooper Union speech over 150 years ago:

Under all these circumstances, do you really feel yourselves justified to break up this Government unless such a court decision as yours is, shall be at once submitted to as a conclusive and final rule of political action? But you will not abide the election of a Republican president! In that supposed event, you say, you will destroy the Union; and then, you say, the great crime of having destroyed it will be upon us! That is cool. A highwayman holds a pistol to my ear, and mutters through his teeth, “Stand and deliver, or I shall kill you, and then you will be a murderer!”

To be sure, what the robber demanded of me – my money – was my own; and I had a clear right to keep it; but it was no more my own than my vote is my own; and the threat of death to me, to extort my money, and the threat of destruction to the Union, to extort my vote, can scarcely be distinguished in principle.

The party of Lincoln has become the party of Jefferson Davis.

A New Definition of Chutzpah………

Know your meme

Yes, John Pike, infamous as the Pepper Spray cop in Berkeley, who subsequently became a meme, and is now a poster boy for the banality of evil, has now filed for workmans’ comp:

The former UC police officer who was internationally condemned for pepper-spraying demonstrators at UC Davis is seeking workers’ compensation, saying he suffered psychiatric injury as a result of the November 2011 incident.

John Pike has a settlement conference set for Aug. 13 in Sacramento, according to the state Department of Industrial Relations’ website and an Associated Press report.

Pike was fired in July 2012, eight months after a task force investigation found that his action was unwarranted.

I’m beginning to think that the only folks out there with a bigger sense of entitlement than Congressional Republicans Newt Gingrich are bad cops.

Whenever the worm turns, and the scrutiny that they apply to others is applied to them, they employ every trick in the book to avoid justly deserved consequences.

The Joys of Children are Without Number

We took Natalie to  Camp Tizmoret Shoshana, a Jewish performing arts camp.

It is at Capitol Camp, about 50 miles from home.

So, we packed up in the morning, and drove her to camp.

100+ miles round trip, and then Sharon and Charlie had to get ready for their performances at Open Space Arts this afternoon.

Only Natalie forgot a few things: her music theory notebook, Portman (her marionette), and her towels.

Then, after the play, we get a text that she had also forgotten her asthma inhaler.

So, instead of getting her stuff to her tomorrow, we had to go back tonight.

So, back we went, another 2 hour round trip.

At one point, we drove through a thunderstorm that felt like the apocalypse.

We had zero visibility, and the almost constant lightning had the wipers strobing across the windshield.

We are now headed back home (Sharon is driving), finally.

I swear, Natalie would forget her own head if it weren’t attached.


Libertarian Paradise:


H/t Naked Capitalism for the pic.

Eric Holder Will Sue Texas Under the Voting Rights Act

He has announced that he will sue Texas under section 3C of the voting rights act. Basically, the Supreme Court invalidated the old list that was incorporated into the law when it was first passed (Section 5 4), but section 3, which can be invoked on the basis of specific actions by a state, can also require preclearance on voting changes.

This has been invoked before, albeit briefly:

The Obama administration moved to retain some oversight of the way states conduct elections after the Supreme Court invalidated part of the landmark 1965 Voting Rights Act, setting up a new fight with Republican governors.

The legal strategy, announced by Attorney General Eric Holder Thursday, is directed initially at Texas’ voting procedures, but it promises to have much broader impact: The action in Texas, Mr. Holder said, “will not be our last.” Other states expected to receive Justice Department scrutiny include South Carolina, North Carolina and Alaska.

On Thursday, the Justice Department asked a panel of judges in San Antonio to order continued scrutiny of the state’s voting rules and operations, following the Supreme Court ruling in June that effectively nullified what had been a requirement for the state to seek federal approval of any changes.

In an announcement that drew strong criticism from Texas Gov. Rick Perry and Republicans in other states, the attorney general said the Justice Department would invoke a little-used section of the law as a replacement measure for the one the Supreme Court struck down.

In its decision, the court effectively voided Section 5 of the Voting Rights Act by ruling unconstitutional the formula the federal government used to identify jurisdictions that must receive its approval—a process called preclearance—before changing voting procedures.

Now, Mr. Holder said, the Justice Department will use Section 3 of the law to try to keep Texas subject to preclearance. Under Section 5, certain states and counties with a history of discrimination against minority voters couldn’t implement voting-rule changes without federal approval. Under Section 3, a court must first find evidence of intentional discrimination—a tougher test—before subjecting the jurisdiction to preclearance.

In the Texas case filed late Thursday, Justice Department lawyers are seeking a 10-year preclearance period.

In this case, the “tougher standard” is not so tough.

There was already a finding of fact by a court a few months ago (under the now defunct section 5) that Texas was engaged in discrimination.

I also think that discovery, when the DoJ computer forensics teams go through emails at the Texas state house, should be very interesting.

Props to Eric Holder. (I cannot believe that I just wrote that)

Hopper Wins

Which is good.

If the networks had won, they would have tried to come up with a way to prevent people from going to the bathroom during the ads.

But the courts have affirmed the right for viewers to use ad skipping technologies:

A federal court decision Wednesday gave fresh support to a new technology that helps consumers avoid a basic irritant of television watching — the commercial.

Dish’s Hopper service, which automatically removes advertisements before consumers view recorded shows, is the latest technology to worry broadcasters. These companies have long reaped profits from a practice that is as old as the television itself — forcing viewers to watch ads before they can see the rest of a show.

But a growing slew of technology firms, from Amazon to Netflix, has roiled the industry by offering programs outside the traditional distribution channels that for years dictated what appeared on the living room television. For far less than what cable companies charge, these upstarts are giving consumers more control over what they watch and when they watch it, while enabling them to easily skip ads. Google, the owner of YouTube, became the latest to join this trend, unveiling a device on Wednesday that pumps online videos and other content directly into television sets.

Such innovations have raised questions about how many Americans are actually viewing commercials these days and cast a shadow over a basic way that television funds itself. Digital video recorders have become so common that many consumers fast-forward through ads. With Dish’s Hopper, people can watch shows free of commercials shortly after they are broadcast live.

Now that Hopper has received greater legal support, analysts expect cable companies, DVR providers and others who distribute television content to quickly offer similar services.

While the business fallout from this is unclear, if it had gone the other way, it would have been incredibly ugly for the end users.

I’m not reflexively supportive of technology, but the record in entertainment is clear:  Not only do innovations benefit the end user, it also creates new revenues for the content providers.

Schadenfreude on 401(k) Plans

Ian Ayres, a professor at Yale, has been reviewing 401(k) programs, and will publicize the really sucky plans that charge excessive fees:

A Yale Law School professor is causing a ruckus among U.S. corporations with plans to publicize a study of employers’ 401(k) plan costs.

The professor, Ian Ayres, has sent about 6,000 letters to companies, saying he would disseminate the results of his study using Twitter, with separate hashtags for each company.

Prof. Ayres has mailed out several different versions of the letter since June, and at least one said that he had identified an employer’s 401(k) specifically “as a potential high-cost plan.” He said that he and his research partner planned to publicize the results in spring 2014.

Tri-City Electrical Contractors Inc., in Altamonte Springs, Fla., received one such letter on July 5. It said that the company’s plan ranked worse than 77% of plans of comparable size based on total plan cost.

“As a reminder, fiduciary duties are the most stringent imposed by the law, and require administrators to act solely in the interests of plan participants,” continued the letter, which was reviewed by The Wall Street Journal.

The letters come as administrators of 401(k) plans have been under fire for what some workers and retirees say are excessive fees. Federal fee-disclosure rules went into effect last year requiring 401(k) administrators to better spell out the fees being charged to plan sponsors and participants.

The problem is that there are a lot of 401(k) administrators who over-promise returns to justify inflated fees.

Call me old fashioned, but I think that there should be (low) statutory limits on 401(k) and IRA because otherwise, the tax breaks are simply going straight into Wall Street’s pockets (expense ratio is largely unrelated to plan returns).

If you want to blow your money on a mutual fund manager who charges high fees, it’s your business, until Uncle Sam starts supplying tax benefits, at which point, it becomes a matter for the public to discuss.