Obama at Ft. Hood.
Author: Matthew G. Saroff
What the F$#@ is Up With This?
OK, I don’t generally follow the comings and goings of newspaper personnel, though I do read Romenesko, a kind of gossip central for the news gathering biz.
So, when there was sudden and abrupt bloodletting at the Moonie Washington Times, fired senior editorial staff, including the right wing hack John Solomon, I figured that this is simply an artifact of some bizarre family thing with the Moon Family, patriarch Sun Myung Moon will be 90 in January, and there was some sort of weird family thing.
After all, many family owned businesses are dysfunctional family owned businesses, and without a board of directors, any institution under private ownership can pretty do whatever they want.
Well, so I snickered, and then moved on, until I read that armed security guards had been stationed on the 3rd floor, where senior management works, and that staff had been told that they could not use the elevators.
When you are using armed guards to keep out editorial staff, it’s odd.
There are rumors that the paper will be shut down, though considering the nature of its management, they could be constructing a giant statue of papa Moon out of Brie cheese too.
Breaking: Bear Stearn Fund Managers Not Guilty
Graphic h/t Calculated RiskIt was clear that they were putting lipstick on a pig, but under the law at the time, it was not outrageous enough to justify a conviction, it appears that hawking their funds while dissing it privately, along with also, in one case, selling those said funds like a maniac, ain’t enough to prove guilt.
You see, the standard at the time was, “suitable,” which means that they cannot put a client in a clearly improper investment, but they can consider things like their sales commissions and bonuses as a part of the decision, as opposed to the “fiduciary” standard, which requires the agent to act solely in the best interest of the client:
“Buried in President Obama’s proposed regulatory overhaul is a change that could upend Wall Street: Brokers would be held to a higher “fiduciary” standard that would compel them to place their client’s interests ahead of their own.
Currently, brokers are only required to offer investments that are “suitable,” which means they can’t put clients in inappropriate investments, such as a highly risky stock for an 80-year-old grandmother. The move could change the way products are sold and marketed and even how brokers are compensated.”
…
But requiring brokers to operate under a fiduciary standard could force them to offer products that are less costly and more tax-efficient. They will have to disclose any potential conflicts of interest, such as any fees they may get for favoring one product over another. That could mean clients will be offered fewer proprietary products if the broker can find a lower-cost option elsewhere.
Unfortunately, at this point this:
- Has not been implemented
- Applies to a retail broker only
- The proposal appears to continue to allow a firm to penalize a broker who acts in the best interest of their client: see Penalty Box.
In any case, I think that proving wrongdoing under a fiduciary standard will be much easier, as it should be.
These guys dicked with their clients mercilessly for their own personal benefit, they just didn’t quite, they just did not cross the line to illegal.
Under a fiduciary standard, it probably would.
The Big Story that is Not a Big Story
It turns out that there is a significant inaccuracy in GDP figures, it has to do with the way that imports are accounted for in GDP:
The fundamental shortcoming is in the way imports are accounted for. A carburetor bought for $50 in China as a component of an American-made car, for example, more often than not shows up in the statistics as if it were the American-made version valued at, say, $100. The failure to distinguish adequately between what is made in America and what is made abroad falsely inflates the gross domestic product, which sums up all value added within the country.
American workers lose their jobs when carburetors they once made are imported instead. The federal data notices the decline in employment but fails to revalue the carburetors or even pinpoint that they are foreign-made. Because it seems as if $100 carburetors are being produced but fewer workers are needed to do so, productivity falsely rises — in the national statistics.
“We don’t have the data collection structure to capture what is happening in a real time way, or what is being traded and how it is affecting workers,” said Susan Houseman, a senior economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo, Mich., who has done pioneering research in the field. “We have no idea how to measure the occupations being offshored or what is being inshored.”
In terms of GDP, this is, for now at least, a pretty small part of the picture, well under 1%, which makes it a small story.
On the other hand, one of the arguments for offshoring is that by shipping jobs to China, where worker and environmental protections are weak, and an under valued currency further subsidizes these imports, is that it allows us to focus on what we are good at, and thus boost productivity and GDP.
The bottom line is, as William Alterman, the assistant commissioner for international prices at the BLS notes, “What we are measuring as productivity gains may in fact be changes in trade.”
This is a big part of the story, because the argument for free trade is that it creates, or at least increases, overall well being in our society.
The problem is that the delta from free trade may be grossly overstated, or not exist at all.
Bad News for the Cyberterrorism Protection Racket
A while back This Sunday, 60 Minutes did a piece on how hackers created a massive blackout in Brazil.
Only it wasn’t any sort of computer problem, it was poorly maintained power lines, where soot (carbon is conductive) created short circuits which took down the line:
Brazil’s independent systems operator group later confirmed that the failure of a 345-kilovolt line “was provoked by pollution in the chain of insulators due to deposits of soot” (.pdf). And the National Agency for Electric Energy, Brazil’s energy regulatory agency, concluded its own investigation in January 2009 and fined Furnas $3.27 million (.pdf) for failing to maintain the high-voltage insulators on its transmission towers.
Also look at their additional links:
- No Chinese Hackers Found in Florida Outage Either
- Did Hackers Cause the 2003 Northeast Blackout? Umm, No
- Put NSA in Charge of Cyber Security, Or the Power Grid Gets It
So, as it stands right now, the only people claiming this have no proof, but are likely to get contracts, if they are private, or additional government money, if they are public.
The issue here is the vulnerability of the grid, see the 2003 blackout, and the problem is that since privatizing electric utilities, they have skimped on infrastructure, leaving no margin for error.
Journamalism
Greg Sandoval at CNET writes about Rupert Murdoch’s latest whining about how “the Google” is stealing from his media empire, and decides, once Google issues a response, to edit the article to add two paragraphs at the end, quoting Google:
Publishers put their content on the Web because they want it to be found. Very few choose not to include their material in Google News and Web search. But if they tell us not to include it, we don’t.
In leaving this a he said/she said argument, Mr. Sandoval is being dishonest.
Unlike Murdoch, whose statements (earlier post) might be an artifact of his being an ignorant old fart who might not understand the following:
All they have to do is go to the Web site’s robots.txt file and type this:
User-agent: Googlebot
Disallow: /
Mr. Sandoval works for a news organization dedicated to covering the tech beat.
At a minimum, he has an obligation to report that Murdoch does not know what he is talking about, though it should be noted that these comments are coming from all levels at Newscorp, and so a real journalist would show that it is clear that Murdoch is looking for is a legislative framework to both force Google (and search engines generally) to both carry his content, and pay to fulfill this requirement.
In relegating this to the final two paragraphs under “Google responds”, he somehow implies that there is a real issue here, as opposed to the truth, that Murdoch and Newscorp are basically Astroturfing for must carry/must pay legislation.
I Get Emails from Politicos Raising Funds
In this case Frank Kratovil, who was looking for both money and sweat equity.
My reply:
I live in Owings Mills, very close to your district, and might be inclined to contribute or volunteer for efforts in Baltimore County, except for the vote on Healthcare Reform.
First, I do not believe that this would be a good use of my time. As Harry S Truman said, “Given the choice between a Republican and someone who acts like a Republican, people will vote for the real Republican all the time,” and I believe that the voters of MD-1 will choose the real Republican regardless of what I do.
Secondly, on a more personal level, I am self-employed, and use MHIP for my insurance, because there is no other insurance available due to my wife’s pre-existing conditions, and I have seen cuts in coverage and a rate hike in excess of 50% just this year.
Third, anyone who cites the Washington Post editorial board on healthcare [he linked to some WaPo Op/Eds], where they have consistently and deliberately got the facts wrong, is being either clueless or disengenuous.
So long, and thanks for all the fish.
—
Matthew G. Saroff
And yes, I did reference Hitchhikers.
Someone Needs a Serious Chill Pill
That explains, why my sandals go from 0-60 in 5.2 SecondsPorsche makes a $50,000+ sports car it calls the Cayman.
Crocs, the makers of the ugly sandals, makes a pair of ugly sandals called the Cayman.
For what it’s worth, Porsche has sued Crocs the name, claiming violation of trademark.
Honestly, I think that Crocs have a better claim to the name, given that the Caymans (the reptile is a caiman) are an island where one walks on the beach, but that’s irrelevant.
The real question is whether there is any possibility of confusion between a 2,954 lb sports car, and a 5 oz shoe.
The purpose of a trademark is not to give a company exclusive use of a name, but to avoid consumer confusion, and as best as I can tell the shoes predate the car anyway (see comments here), which would strongly imply that Crocs has the advantage such as it is.
In any case, Porsche got an injunction against the shoes in Germany, but Germany has weird IP law.*
*This is what got us that Mercedes ad where they say that they have a patent on crumple zones, but “Never enforced the Patent”. They never enforced the patent, because it is not recognized anywhere else in the world.†
†I believe Germany changed their patent laws at some point in the 1970s.‡
‡I offer the caveat that these comments in the footnotes regarding the Mercedes patent are recollections of a conversation over a decade ago vague 20+ year old memories though, so YMMV, though a Google search does have people who recall the ad.
Economics Update (a Day Late)
It’s not just bankruptcies in the US that are on the rise. Personal insolvencies in the UK just rose to a new record.
In the US, Advanta filed for bankruptcy, which may seem like a minor thing, except for the fact that they were a huge player in small business credit cards, or rather, they were until they shut that down because of excessive defaults in May.
In energy, oil rose, largely on concerns about the potential effects of Tropical Storm Ida, and in currency, the IMF is suggesting that the Dollar has a way to go, so the dollar went down.
I Never Thought that I would Post An Entire Bill to My Blog
Because, these days, they all seem to be over 100 pages long.
But , when Senator Bernie Sanders (I-VT) offered his Too Big To Fail – Too Big To Exist bill, a bill that has a body only 27 lines long, (PDF link) I thought that it deserved a read (after the break).
No big surprise though, the New York Times, all the news that’s fit to line Tweety’s (the Warner Brothers version, not the MSNBC Version) cage, subtly casts him as your crazy old uncle, “The bill has no co-sponsors…..Mr. Sanders, who has described himself as a socialist,” while Bloomberg actually covers it seriously, and notes that there are a lot of people in Congress who actually support this idea.
This may not be as long of a long shot as it seems, since, as Barry Ritholtz notes, while the big banks love this, the regional and smaller banks would like this a lot, since they are getting eaten alive by the bigs ability to borrow money at an interest rate that is very near 0%, because of the support offered by the Treasury, Fed, FDIC, etc.
H/t The Baseline Scenario for extracting the text in an HTML friendly manner
A BILL
To address the concept of ‘‘Too Big To Fail’’ with respect
to certain financial entities.
1 Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled,
3 SECTION 1. SHORT TITLE.
4 This Act may be cited as the ‘‘Too Big to Fail, Too
5 Big to Exist Act’’.
6 SEC. 2. REPORT TO CONGRESS ON INSTITUTIONS THAT
7 ARE TOO BIG TO FAIL.
8 Notwithstanding any other provision of law, not later
9 than 90 days after the date of enactment of this Act, the
10 Secretary of the Treasury shall submit to Congress a list
2
1 of all commercial banks, investment banks, hedge funds,
2 and insurance companies that the Secretary believes are
3 too big to fail (in this Act referred to as the ‘‘Too Big
4 to Fail List’’).
5 SEC. 3. BREAKING-UP TOO BIG TO FAIL INSTITUTIONS.
6 Notwithstanding any other provision of law, begin-
7 ning 1 year after the date of enactment of this Act, the
8 Secretary of the Treasury shall break up entities included
9 on the Too Big To Fail List, so that their failure would
10 no longer cause a catastrophic effect on the United States
11 or global economy without a taxpayer bailout.
12 SEC. 4. DEFINITION.
13 For purposes of this Act, the term ‘‘Too Big to Fail’’
14 means any entity that has grown so large that its failure
15 would have a catastrophic effect on the stability of either
16 the financial system or the United States economy without
17 substantial Government assistance.
When You are a Subject of Contempt on SNL, You’ve Lost
SNL on Goldman Sachs, and their preferential H1N1 vaccine access, or as they basically say swine flu vaccine for the pigs.
Between Taibbi and this, there are a lot of people in Congress who are more than willing to tell Barack and His Evil Minions™ (Geithner/Sumers) to go Cheney themselves.
Adding to My List of They Who Must Not Be Named
A new addition to They Who Must Not Be Named, Levi Johnston.
Just cannot bring myself to care, and he is not currently involved in, or influencing, a national campaign, so he is on the list too.
Finally, Some Backbone from the Progressive Caucus
They have sent a letter to Pelosi with 41 signatures saying that they will not vote for any healthcare bill with the Stupak Amendment, or anything that, “restricts a woman’s right to choose any further than current law.”
They get it. They realize that the Stupak amendment effectively bans insurance that covers insurance from the public exchanges, which would have the effect of banning coverage for abortion nationwide over a relatively short period of time.
Good for them, and we need to primary Bart Stupak…..Hell, if I have a job in 2010, I’m considering contributing to his Republican challenger.
The Honorable Nancy Pelosi
Speaker
U.S. House of Representatives
H-232 Capitol
Washington, DC 20515Dear Madam Speaker:
As members of Congress we believe that women should have access to a full range of reproductive health care. Health care reform must not be misused as an opportunity to restrict women’s access to reproductive health services.
The Stupak-Pitts amendment to H.R. 3962, The Affordable Healthcare for America Act, represents an unprecedented and unacceptable restriction on women’s ability to access the full range of reproductive health servicesto which they are lawfully entitled. We will not vote for a conference report that contains language that restricts women’s right to choose any further than current law.
Sincerely,
Indeed
Nice HairEzra Klein, writing on the idea of The Washington Post having Texas Governor Rick Perry write an OP/ED on how states handle healthcare better:
Letting Perry serve as the spokesman for a federalist solution to the health-care system is a bit like letting Dick Fuld testify on the adequacy of self-regulation on Wall Street, or Donald Rumsfeld explain that occupations are easy.
Texas has, no big surprise, the largest percentage of uninsured in the nation.
Though to be fair, Texas Governor Rick Perry has really nice hair.
On a related note, one wonders how much longer he gets to the Washington Post OP/ED page, and by extension editorial page editor Fred Hiatt, c*cks*ck*rs.
I figure that the Bull Durham/Dan Froomkin rule cuts in eventually.
Pay Per View Review
Well, it was time for another family movie, and it was my choice, and my Sharon absolutely put her foot down about the Simpsons Movie, so I chose Monsters vs Aliens.
Reese Witherspoon…Susan Murphy / Ginormica (voice)
Seth Rogen … B.O.B. (voice)
Hugh Laurie … Dr. Cockroach Ph.D. (voice)
Will Arnett … The Missing Link (voice)
Kiefer Sutherland … General W.R. Monger (voice)
Rainn Wilson … Gallaxhar (voice)
Stephen Colbert … President Hathaway (voice)
Paul Rudd … Derek Dietl (voice)
It’s an old story, girl is going to get married, girl gets struck by meteor, girl grows to humongous size, girl gets imprisoned in a secret government facility….
Actually, it is an story. It’s the Wizard of Oz story with a bit of a twist.
I realized this about ¾ of the way through the movie.
That being said, it is well animated, well acted, and well scripted, and rather enjoyable.
It’s also a movie that does well with the pause and rewind buttons, because there are a number of fractured takes on old SF films and film conventions.
The big surprise here are appearances by Stephen Colbert as the president of the United States, where he most amusingly chews scenery.
Watch through the credits.
Recommended, with one caveat: If you love the golden gate bridge, you may cry at one point.
Of Course They Don’t, The Wall Street Owns Them
Click for full size
Note: These numbers are inflation adjusted
So, after Gordon Brown finally comes out in favor of a Tobin tax on financial transactions, Timothy “Eddie Haskell” Geithner comes out categorically against it:
A day-by-day financial transaction tax is not something we are prepared to support,” Geithner said in an interview with Sky News. In his concluding press conference, Geithner was asked repeatedly to say why he opposed such a tax on banks and indicated he doubted its effectiveness.
“This idea (of a bank transaction tax) has been around for a long time…I think frankly the experiences are mixed,” he said, expressing an American view that there was no widespread backing for such a tax.
The banks f%$#ed us all, we spent to bail them out than on, “WW1&2 (omitted from graphic), the moon shot, the New Deal, total NASA budgets (omitted from graphic), Iraq, Viet Nam and Korean wars COMBINED,” but somehow it’s unreasonable to place a tax on speculation, to:
- Reduce speculation.
- Pay for their own bailout.
The Obama administration has its tongue so far up Wall Street’s ass that it is tasting tonsils.
I was Right
When I predicted that Representative Anh “Joseph” Quang Cao would be the ‘Phant who voted for the healthcare bill.
A New Neologism
Stupak (n) – The sepsis commonly experienced after unsafe back alley abortions
Coined by Atrios.
Not Enough Bullets: Fat Cat Tax Evader Edition
Floyd Norris documents the latest outrage, that Goldman Sach is looking at buying tax credits from Fannie Mae.
The idea here is that Fannie Mae is losing money, and is federally owned now, so it can’t use the tax credits, so it sells them to GS for something like 80¢ on the dollar, screwing the taxpayer.
Goldman, you may recall, was saved with taxpayer money when the panic spread last year. A naïve person might think such a company would see a patriotic virtue in paying taxes.
Fannie Mae is currently a ward of the government. So this boils down to a proposal to pay Uncle Sam perhaps 15 cents to avoid paying 20 cents to Uncle Sam. The gall involved in even proposing such a thing is awesome.
It also points out one reason companies pay so little in taxes. These tax credits exist as a nonbudgetary way of stimulating investment in low-income housing. It would be a lot cheaper for the government to simply subsidize that, but instead it offers tax credits so there is no “expenditure” for foes of big government to criticize.
Seriously, we need someone to move in and break heads, but the Obama/Geithner/Summers troika has no interest in challenging the excesses of Wall Street.
Well, At Least they Know that They Can’t Find their Ass with Both Hands
There are only two reasons for the US Army’s Missile Defense Chief to want to give this to the Navy:
The chief of the Army’s Space and Missile Defense Command would prefer the Navy assume oversight and execution of the budding mission to base SM-3 Block IB ballistic missile killers ashore in Europe for protection against an Iranian attack. “Today, we have a number of priorities that we have trouble meeting outside of missile defense,” Lt. Gen. Kevin Campbell says, including providing weapons for the wars abroad. The Pentagon plans to field in Europe the Block IB interceptors designed for use on Aegis ships by 2015, and later the longer-range Block IIAs. The Army has 10 years’ experience in operating land-based missile defense architectures abroad through the Patriot PAC-3 and now the Terminal High-Altitude Area Defense (Thaad) system, but Campbell says his command is strapped for resources.
The first is that they think that the system will fail, though the Navy’s Standard Missile has had a much better record in test than the Army’s systems, and the second is that he legitimately believes that the Army would screw this up to the degree that it would harm his career.
Me, I go with the 2nd hypothesis.
It’s actually a good thing. The first step to getting out of a hole that you have dug yourself in is to realize that you are in a hole.