Busy week. 1 Bank, and 2 credit Unions
And here they are, ordered, and numbered for the year so far.
And here are the credit union closings:
She, along with Tom Coburn,* have introduced a bill which would force disclosure of the details of sweetheart settlements:
Last week, Sen. Elizabeth Warren (D-Mass.) introduced a bill with Sen. Tom Coburn (R-Okla.) that aims to make government settlements with corporations more transparent and fair. It could end up saving taxpayers billions of dollars.
When banks and other corporations are accused of breaking the law, the government often settles cases instead of going to trial. In the wake of the financial crisis, for example, the Department of Justice (DOJ) and government banking watchdogs have settled cases against banks that helped tank the economy. Regulatory agencies have argued that settlements are adequate tools to enforce the law, but Warren has protested. She notes that many settlements are tax-deductible. Other deals are confidential, meaning the public has no idea whether the terms of the agreement are fair.
Warren’s bill would discourage tax-deductible settlements by forcing federal agencies to explain why certain settlements are confidential, and to publicly disclose the terms of nonconfidential agreements so that taxpayers can see how much settlement tax-deductibility is costing them.
You can go to the link and get the link, but basically, it is typically something in the range of 30%-40% that is deductible.
Of course, while recovery of this money is good, the real benefit is that it creates a profound disincentive for the sweetheart settlements that seem to the norm these days.
*Talk about the political odd couple.
Warren’s press release is after the break.
Washington, DC – United States Senators Elizabeth Warren (D-MA) and Tom Coburn (R-OK) today introduced bipartisan legislation to increase transparency around settlements reached by federal enforcement agencies. When federal agencies close investigations and settle cases, they often tout the dollar amount obtained from the offender, but in many cases that amount is misleading because of tax deductions and other “credits” built into the settlement that reduce the settlement’s true value. Worse, sometimes agreements are deemed confidential, with key details or even the fact of a settlement hidden from the public. The Truth in Settlements Act will require more accessible and detailed disclosures about these agreements to allow the public to hold regulators accountable for the true value of these deals.
“When government agencies reach settlements with companies that break the law, they should disclose the terms of those deals to the public,” said Senator Warren. “Anytime an agency decides that an enforcement action is needed, but it is not willing to go to court, that agency should be willing to disclose the key terms and conditions of the agreement. Increased transparency will shut down backroom deal-making and ensure that Congress, citizens and watchdog groups can hold regulatory agencies accountable for strong and effective enforcement that benefits the public interest.”
“Taxpayers deserve to know the settlement details corporations arrange with the government, and the best place for Congress to start is with policies that enhance transparency,” Dr. Coburn said. “Since agencies are not currently required to disclose the financial structure of government settlements, too often the true value of those settlements is not known because often companies are allowed to deduct part of the payment. Our bill gives taxpayers the transparency tools they need to access real information and numbers regarding enforcement settlements.”
Under the Truth in Settlements Act, all written public statements that reference the dollar amounts of settlements will be required to include explanations of how those settlements are categorized for tax purposes and whether payments may be offset by “credits” for particular conduct. Companies that settle with enforcement agencies will be required to disclose in their Securities and Exchange Commission (SEC) filings whether they have deducted any or all of the dollar amounts of their settlements from their taxes; and federal agencies will be required to post basic information about settlements and provide copies of those agreements on their websites.
To address concerns about confidentiality, the Truth in Settlements Act also requires agencies to explain publicly why confidentiality is justified in any particular instance. The Act also directs agencies to disclose basic information about the number of settlements they deem confidential each year and directs the Government Accountability Office (GAO) to conduct a study of confidentiality procedures and to provide additional recommendations for increasing transparency. These and other provisions of the Truth in Settlements Act will increase the transparency of government settlements and permit greater public scrutiny.###
The 3rd Friday of the year, and we have our first bank failure.
Absent something major, I expect this year to be less active than last year
There must be something about their heritage as “Ma Bell” that leads them overplay their hand.
The FCC gave a space for wireless providers, and AT&T jumped full in with a pay for play Internet:
Today, AT&T announced a “Sponsored Data” plan that would put it in a position to pick winners and losers online. This plan would require that Internet services pay to make sure customers are able to view their content by exempting it from data caps. Service providers that can’t meet the price tag that AT&T sets could be left behind.
The following can be attributed to Michael Weinberg, Acting Co-President:
“The FCC needs to protect consumers and creators from internet service providers (ISPs) who want to pick winners and losers online. This is but the latest example of how data caps are increasingly becoming used to threaten the open internet. As AT&T CEO Randall Stephenson announced in May, data caps are all about forcing content creators to pay and are no longer about any sort of network congestion. In December, Stephenson admitted to investors that they had addressed the network capacity issues that were used to justify data caps in the first place. It is time for the FCC to heed Public Knowledge’s over two year old call to investigate data caps and gather basic information about their use. It is impossible for the FCC to examine the impact of today’s announcement on net neutrality until it develops an understanding of data caps.
“When it was reported in May that ESPN was in negotiations with a major carrier to pay to be exempt from data caps, Public Knowledge highlighted that this was an obvious violation of net neutrality. The company that connects you to the internet should not be in a position to control what you do on the internet. AT&T’s announcement positions itself to do just that.
“In addition to being a ripoff for both consumers and content creators, AT&T’s plan erects a massive barrier in front of anyone hoping to be the next big thing online.”
In addition to the more general philosophical concerns addressed above by Public Knowledge, the Daily Beast observes AT&T’s new business model is primarily an attempt to stop investing in improving its network and start shaking down content providers:
AT&T has proudly moved past the days when the iPhone crashed its network for millions of excited subscribers. In May of last year CEO Randall Stephenson told investors that AT&T anticipated reducing expenditures on its network and that data caps were really about charging content providers He repeated his confidence in AT&T’s network in December.
The sponsored data plan itself further highlights AT&T’s confidence in its network: if the network truly was fragile AT&T probably would not be inviting creators to dump a lot more content onto it. Any problems in the network that exist going forward should be traced back to the fact that AT&T is investing in its special paid access lanes instead of the parts of the network available to everyone else.
Furthermore, even if AT&T is painting an overly rosy picture to investors and deluding itself about its network capacity, monthly data caps are an incredibly inefficient way to deal with momentary network congestion.
But they are a great way to gouge content creators.
And let us not forget that it’s not just AT&T that is trying to junk copper, and replace it with overpriced and limited wireless. Remember how Verizon tried to foist Voice Link™ fixed wireless on the residents of Fire Island, NY?
What about people who don’t live in places like Owings Mills, MD? People who not only cannot choose between Comcast Xfinity or FIOS?
What about poor neighborhoods, or rural neighborhoods, where the Telcos are systematically starving land line infrastructure?
The consumer is going to get F%$#ed over this.
The Senate has approved Janet Yellen as the next Chairman of the Federal Reserve.
While it important is that she is the first woman to Chair the Fed, more important is that she is not Larry Summers.
The Democratic wing of the Democratic Party managed to prevent Barack Obama from pursuing into his Wall Street Neoliberal inclinations.
Hopefully, this means we can stop him when he (once again) tries to sell out Social Security, Medicaid, and Medicare in the name of a “Grand Bargain.”
Yesterday, I posted about the Libertarian delusional dream that is Uber.
Today, I read about an Uber driver hitting 3 pedestrians, killing a 6-year old girl
:
Update, 11:35 a.m.: Uber confirmed that Muzzafar was, indeed a contractor with the company. It’s since deactivated his account. An Uber spokesman stressed, again, that Muzzafar was not “providing services through the Uber system” at the time he struck and killed a 6 year-old girl at Polk and Ellis Streets.
Update, 9:46 a.m.: Police release name and photo of the self-identified Uber driver (See bottom).
It’s been a rough year for Uber thus far. Just four hours before the car-hire startup planned to ring in 2014 — ideally with an onslaught of high-priced trips through San Francisco’s bustling downtown corridor — one of its contracted drivers allegedly hit a family in a Tenderloin crosswalk, killing a 6-year-old girl and critically injuring her mother and brother.
“There are no words to express the deep sadness and grief felt for young San Francisco resident, Sophia Liu,” Supervisor Jane Kim wrote in a statement issued shortly after the young girl’s death.
Kim added that the accident would have been “100 percent avoidable” had the driver followed basic traffic laws. She considered the incident a harbinger for app-based car-hire startups, indicating that it raises questions about driver training and compliance.
Notice the non denial denial?
In their blog, they said that, “This tragedy did not involve a vehicle or provider doing a trip on the Uber system.
Notice what they did not say? They did not say that he wasn’t logged in, and that he wasn’t waiting for some of those lucrative, “Onslaughts of high-priced trips.”
Why else would he be driving around San Francisco on New Years Eve?
Driving? In San Francisco? On New Years Eve? That is nucking futs! ……… Unless, of course, you are there to make some bank by getting dispatches from a certain Techno-Randian transportation company.
Then, it makes lots of sense.
It is telling that Uber has deliberately chosen a model which is structured largely to evade any responsibility, or liability, for the misdeeds of its drivers.
H/t Crooks & Liars.
The latest poster boys for techno-Libertarians is the taxi service Uber, which is a smartphone based car hire service.
At the core of their business model is the idea that there is no need for any pesky regulations, because ……… Internet.
Ignoring for the moment supply restrictions like New York City’s Medallion* system, there is a reason that cabs, and cabbies, are regulated.
There is a need to ensure that the cars are safe, that the cabbies are properly trained,† and that pricing is consistent and transparent, so, for example, we do not see price gouging, on New Year’s eve, or during a rain storm.
So, what does Uber do? It triples rates for New Year’s Eve, and Randroid morons like Rob Leathern, the Chief Product Officer of Brand Networks, has this is not like price gouging at all, because ……… Internet:
Uber’s pricing isn’t price gouging. It’s just in an area we are deeply conflicted about, and missing some transparency that would increase consumer trust. They could certainly give all or some more of their excess surge profits to the drivers, or show us more of the extensive data their Math Team produces but doesn’t yet share– if their algorithms are as sophisticated as they claim then the benefit they get from sharing information with customers will outweigh any competitive concerns.
Bullsh%$.
This is price gouging, and it has been defined as such throughout the developed world for something over 80 years.
One of the reasons that we as a society make laws against this is because it is unethical, and dishonest.
I really hope that if he ever has a heart attack, that Mr. Leathern does not find an ambulance driver who jacks up the rate to take him to the hospital.
*Apart from that Mrs. Lincoln, how was the play? The medallion system sucks.
†Uber has already had at least 1 rape allegation attached to its service so far, and it turns out that rape by gypsy cab drivers is endemic.
Yes, our, “market based solution,” continues to overprice and under perform:
San Antonio is the seventh-largest city in the United States, a progressive and economically vibrant metropolis of 1.4 million people sprawled across south-central Texas. But the speed of its Internet service is no match for the Latvian capital, Riga, a city of 700,000 on the Baltic Sea.
Riga’s average Internet speed is at least two-and-a-half times that of San Antonio’s, according to Ookla, a research firm that measures broadband speeds around the globe. In other words, downloading a two-hour high-definition movie takes, on average, 35 minutes in San Antonio — and 13 in Riga.
And the cost of Riga’s service is about one-fourth that of San Antonio.
The United States, the country that invented the Internet, is falling dangerously behind in offering high-speed, affordable broadband service to businesses and consumers, according to technology experts and an array of recent studies.
In terms of Internet speed and cost, “ours seems completely out of whack with what we see in the rest of the world,” said Susan Crawford, a law professor at Yeshiva University in Manhattan, a former Obama administration technology adviser and a leading critic of American broadband.
The problem is the market based solutions. It’s more profitable to create and extract monopoly rants than it is to provide better and cheaper service, so they do that.
It’s economics 101.
The free market mousketeers screw us again.
24 bank failures, 13 credit union failures.
The only question is how much of this is an artifact of reducing stresses on banks, and how much is an artifact of consolidation in the bank industry, which reduces the number of bank that can fail.
The US offers free “lifeline” cell phone service for the poor.
In Georgia, the powers that be decided to levy a fee on the free cell phones, because ……… They just want to hate on the poor, I guess.
A Federal Court just told them to go Cheney themselves:
A federal judge has blocked Georgia’s plan to charge low-income residents $5 per month for cell phone service that currently is provided free of charge.
The fee was set to take effect on Jan. 31 and would have made Georgia the only the U.S. state to charge for the federally subsidized phone service.
“The public interest tilts in favor of providing telephone services to low-income households that otherwise would be unable to afford mobile phones,” U.S. District Court Judge Richard Story wrote on Tuesday in a temporary injunction that stops the new fee while a court challenge is pending.
Nationally, about 14 million households participate in the Lifeline phone program, according to the Universal Service Administrative Co, the nonprofit organization that administers the program.
The level of hate and evil here is only exceeded by the pettiness shown.
Un-dirtyword believable.
AFter 3 years, and interminable lobbying by finance industry, the Volker rule restrict proprietary trading by banks has been finalized :
Government regulators ushered in a new era of oversight Tuesday aimed at reining in Wall Street risk-taking, voting to prevent big banks from trading for their own benefit.
The “Volcker rule,” named after former Federal Reserve chairman Paul Volcker, also bars banks from owning hedge funds and private-equity funds. The centerpiece of the 2010 Dodd-Frank financial overhaul law took three years to complete as government infighting and intense lobbying by banks slowed the process.
“Our financial system will be safer and the American people are more secure because we fought to include this protection in the law,” President Obama said in a statement.
Lawmakers devised the measure to prevent banks with government backstops such as deposit insurance from making risky trades for their own benefit, arguing that the bets could endanger taxpayers. The challenge for regulators has been restricting such proprietary trading without impeding acceptable practices, such as firms trading on behalf of clients as market-makers or hedging their risk against fluctuations in interest rates.
But banking industry officials continued to warn that the rule goes too far. “Many bankers will struggle to understand complex provisions that have no application to their business model and are open to conflicting interpretations,” Frank Keating, president of the American Bankers Association, said in a statement.
On Tuesday, the Federal Deposit Insurance Corp. board and the Federal Reserve unanimously approved the final version of the rule. The Securities and Exchange Commission voted 3 to 2 in favor, while the Commodity Futures Trading Commission adopted it in a 3 to 1 vote.
Supervision will ultimately be the responsibility of the Office of the Comptroller of the Currency, the CFTC and the SEC.
That last line is profoundly worrying, since with three agency being responsible for enforcing this, none of them will be held accountable.
And then there is the fact that, “The 71-page rule, a streamlined version of the 298-page draft, addresses many concerns about which activities and investments are allowed, but gives regulators flexibility to interpret the rules.”
The article wrings it’s hands about how the banksters have to spin off their prop trading desks, but as Dean Baker observes, that was the point of this whole endeavor:
It’s not clear what this could mean, since the point of the Volcker Rule was to keep banks from engaging in proprietary trading. If they have spun off their trading desks then its purpose will have been accomplished. The goal is not to prevent trading, but to prevent banks from effectively speculating with government guaranteed deposits.
Even then, I do not think that it’s going to work.
You know the ones, the “fresh water” economists, the free-market mousketeer conservatives for whom the rational actor acting in an unconstrained laissez-faire system is king.
It is a matter of faith, completely unsupported by reality, that regulating a market will always be counter productive.
As it pertains to consumer protections for credit cards, to paraphrase the Bard, “There are more things in heaven and earth, than are dreamt of in their philosophy.
Much to ths shock of right wing economists, adding consumer protections to credit cards worked:
Four years ago, Congress decided to force down the hidden fees that credit card companies collect from their customers. It passed a law called the 2009 Credit Card Accountability Responsibility and Disclosure Act — a name chosen so the law would be known as the Card Act.
When Neale Mahoney, an economist at the University of Chicago’s Booth School of Business, set out to evaluate the effect of that law, he was confident he knew what he and his colleagues would find: It didn’t work.
“I went into the project with this sort of conventional wisdom that well-intentioned regulators would force down fees and that other fees and charges would increase in response,” he told me this week, comparing hapless rule makers to the carnival visitors playing the game known as Whac-a-Mole, where a mole springs up somewhere else as soon as one is knocked down.
But his expectation was wrong. The study came to a conclusion that surprised Mr. Mahoney and his colleagues: The regulation worked. It cut down the costs of credit cards, particularly for borrowers with poor credit. And, the researchers concluded, “we find no evidence of an increase in interest charges or a reduction to access to credit.”
The study, whose other authors are Sumit Agarwal of the National University of Singapore, Souphala Chomsisengphet of the Office of the Comptroller of the Currency and Johannes Stroebel of New York University’s Stern School of Business, estimates that the law is saving American consumers $20.8 billion a year.
There are a number of theories as to why this occurred, but the most likely is that regulation, when properly executed, simply works, though an argument could be made (though probably not by the credit card companies) that this worked because much of the credit card companies’ business model is parasitic, and as such they are unwilling to walk from “free” money.
It appears that while they were publicly treating it as crazy talk, internally, they were seriously looking at the depositing a trillion dollar coin at the Federal Reserve:
The Obama administration was serious enough about manufacturing a high-value platinum coin to avert a congressional fight over the debt ceiling that it had its top lawyers draw up a memo laying out the legal case for such a move, The Huffington Post learned last week.
The Justice Department’s Office of Legal Counsel, which functions as a sort of law firm for the president and provides him and executive branch agencies with authoritative legal advice, formally weighed in on the platinum coin option sometime since Obama took office, according to OLC’s recent response to HuffPost’s Freedom of Information Act (FOIA) request. While the letter acknowledged the existence of memos on the platinum coin option, OLC officials determined they were “not appropriate for discretionary release.”
HuffPost submitted the FOIA request when there was increased speculation about the use of the platinum coin option ahead of the debt ceiling crisis this fall. Under the compromise reached between the House and Senate following the government shutdown, the U.S. will hit the debt ceiling once again on Feb. 7, though the Treasury can use extraordinary measures to extend that deadline.
Supporters of the platinum coin option say that under a 1996 law allowing the Treasury Department to mint a platinum coin in any denomination, the president could order the manufacture of, say, a $1 trillion coin that would be deposited in the Federal Reserve. The Treasury Department would then use the platinum coin funds to meet government obligations without the need for Congress to grant any additional spending powers.
There are a number of reasons for the Obama administration to fight the FOIA request:
My money* is on a dumb ass secrecy fetish.
The idea that a legal opinion on monetary policy (seigniorage) is somehow, “not appropriate for discretionary release,” is completely ludicrous.
The only potential harm that can come from a release is insider trading from an unauthorized release.
*My money in this case is about 50 Zimbabwean dollars.
I normally do not make comments about the outcome of sporting events on this blog, and at 3-8 (now 3-9) their playoff chances before the game were about the same as John McCain christening the Gerald Ford class carrier Barack Obama.
However, there was the worst officiating error I have ever seen in the game.
It was worse than the scab referees that they brought in last year:
The NFL’s officiating director said Monday that the officials should have stopped the game during the final minutes of the Washington Redskins’ 24-17 loss Sunday night to the New York Giants to clear up confusion over what down it was during the Redskins’ last drive of the game.
“In this situation where there is obvious confusion as to the status of the down, play should have been stopped prior to third down and the correct down communicated to both clubs,” Dean Blandino, the league’s vice president of officiating, said in a written statement released by the NFL. “This should have occurred regardless of the fact that Washington had no timeouts and it was inside two minutes.”
Blandino said the “ball was correctly spotted” by the officials and referee Jeff Triplette correctly “signaled third down” but the head linesman “incorrectly motioned for the chain crew to advance the chains, which caused the down boxes to read first down.
“Following a Washington incomplete pass, the chains were moved back and the down boxes correctly reset to fourth down,” Blandino said.
………
[Referee Jeff] Triplette told the pool reporter that the officials didn’t halt the game to sort out the confusion “because that would have given an unfair advantage,” apparently to the Redskins, in his view, by stopping the clock. Triplette said he couldn’t respond to Shanahan’s contention he’d been told by an official it was a first down because he was unaware of that situation.
No. If you have an unclear ruling on the field, you halt play, and Mr. Triplette needs not to work in the NFL any more.
Instead, the Redskins took a 1st down play, a long pass, on 3rd down.
It’s OK for refs to make a mistake. Sticking with the mistake, even though you are aware of it at the time, because of its effect on the game, means that you should not be a referee.
Of course, this will be handled through the a process agreed upon by the NFL and the Referees Association, so the consequences of Triplette’s decision are a part of a negotiated collective bargaining agreement, and I support this.
But if there is a way to keep this guy away from making on-field decisions, it would be appreciated.
And while you are at it, how about making the Referees full time employees, so they can train the whole year.
This whole part time thing ain’t working.
Mark Roe at Harvard has concluded that in addition to everything else, to big to fail (2B2F) is a petri dish for incompetent insulated management:
Corporate governance incentives at too-big-to-fail financial firms deserve systematic examination. For industrial conglomerates that have grown too large, internal and external corporate structural pressures push to re-size the firm. External activists press it to restructure to raise its stock market value. Inside the firm, boards and managers see that the too-big firm can be more efficient and more profitable if restructured via spin-offs and sales. But for large, too-big-to-fail financial firms (1) if the value captured by being too-big-to-fail lowers the firms’ financing costs enough and (2) if a resized firm or the spun-off entities would lose that funding benefit, then a major constraint on industrial firm over-expansion breaks down for too-big-to-fail finance.
His insight is two fold.
First is the point made by plenty of economists that 2B2F institutions are able to borrow money at lower rates, because, notwithstanding the law, if they implode, their creditors expect to be the beneficiary of a government bailout, because the consequences of not doing so are perceived to be catastrophic.
The second point is far more interesting, and original. He believes that one of the constraints on executive behavior is the potential takeover by any of the many vultures out there (Icahn, Pickens, etc.), and that they are too big to be taking:
These lower financing costs from the too-big-to-fail subsidy are a shadow poison pill — the corporate governance defense that managers and boards have used to ward of unwanted takeovers in the industrial sector. Worse, the shadow financial pill impedes restructurings more strongly than a conventional poison pill. It impedes not just outsiders, as does the conventional pill, but insiders as well — a controlling shareholder where there is one, the board of directors and the CEO where there is no controlling shareholder — even if restructuring the firm would be operationally wise.
James Kwak further expands on this by noting that a corporate takeover is effectively impossible at this scale:
Not so with too-big-to-fail banks. For one thing, TBTF banks are impossible to acquire in one piece: no other bank could absorb JPMorgan, even if there weren’t the rule against a banking conglomerate having more than 10 percent of all U.S. deposits. The other option is to engineer a breakup, which is what all manner of shareholder advocates have been arguing for. But, Roe argues, if being too big to fail is your competitive advantage, that would kill the golden goose. Therefore, the market for control doesn’t work properly, and these behemoths continue bumbling along their way—not just threatening the financial, but doing a lousy job at their job of providing credit to the economy.
So, even if you believe that basic market forces serve to regulate corporate governance, (I don’t) the market breaks down at this scale, and government intervention is essential.
Berlusconi has been expelled from the Italian parliament following his conviction for tax fraud:
The Italian Senate has voted to expel ex-Prime Minister Silvio Berlusconi from parliament with immediate effect over his conviction for tax fraud.
Berlusconi, who has dominated politics for 20 years, could now face arrest over other criminal cases as he has lost his immunity from prosecution.
He told supporters in Rome it was a “day of mourning” for democracy.
Ahead of the vote, he vowed to remain in politics to lead his Forza Italia in a “fight for the good of Italy”.
A defiant Berlusconi told supporters gathered outside his Rome residence that “no political leader has suffered a persecution such as I have lived through”.
He said: “It is a bitter day, a day of mourning.”
Central to Berlusconi’s success has always been his near monopoly on commercial TV in Italy, particularly when juxtaposed with his control of the state TV networks after he was first elected.
What the need to do now is to pass regulations preventing this ghastly intersection of monopoly media ownership and electoral politics from recurring.
Because the Securities and Exchange Commission has delayed a revolving door regulation:
Months ago, bowing to concern about regulators who leave government and then work their former colleagues on behalf of industry, the Securities and Exchange Commission (SEC) announced that it was tightening restrictions on the revolving door.
Specifically, the SEC decided to close a loophole in the ethics rules that allowed some “senior” SEC personnel to lobby the agency immediately after leaving instead of staying on the sidelines for a year or more, as employees at other federal agencies must do. The change in the rules—revoking a longstanding exemption for some SEC officials—appeared to be a rare stand against the revolving door at an agency that has long blurred the lines between the regulators and the regulated.
But not so fast.
A notice published in Monday’s edition of the Federal Register said that the Office of Government Ethics (OGE) was withdrawing the new rule at “the request of the SEC” so that the agency could have more time to “effectively educate affected employees before the exemption revocation takes effect.”
The rule, which was published as “final” on October 3, had been scheduled to take effect on January 2.
The ethics office said it expects to republish the rule in January 2014, but it then would take another 90 days for the rule to go into effect, according to Monday’s announcement. As a result, SEC employees who would be affected by the rule change—including supervisory accountants, attorneys, economists, analysts, and administrative specialists—will have even more time to take advantage of the loophole. As long as they leave before the rule change takes effect, they’ll still be able to lobby the agency during their first year out.
For the ethics office to withdraw a rule after it had been adopted but before it could take effect appeared to be an unusual event. POGO searched the Federal Register going back to 1994 (the earliest year available in the Government Printing Office’s online archives) and found no other OGE notice containing the phrase “Withdrawal of Final Rule.” We asked an OGE spokesman how frequently this has happened, but he declined to comment.
Not feeling hope and change here.
We’ve seen this before.
The White House puts out a potentially significant rule, or rule change, and the right wing noise machine cranks up, and they back off.
This is why I’m dubious that their place greater restrictions on tax-exempt political groups will amount to much:
The Obama administration proposed new rules on Tuesday to rein in tax-exempt groups that have transformed the U.S. political landscape in recent years by harnessing hundreds of millions of dollars in anonymous donations to influence elections.
The proposal would alter definitions in the tax code that allow limited campaign and fundraising activities by the tax-exempt groups, some of which have been at the center of allegations that the Internal Revenue Service targeted conservative Tea Party groups for extra scrutiny.
These tax-exempt “social welfare” groups, organized under section 501(c)(4) of the tax code, mushroomed after a 2010 U.S. Supreme Court ruling that relaxed campaign finance rules. Part of their appeal is that the groups do not have to disclose the identities of their donors as long as they spend less than half their time and money on political activities.
Critics say the relaxed rules have opened the door to the abuse of campaign finance rules meant to curb the influence of wealthy donors in U.S. politics.
………
U.S. government officials have struggled for years to determine what qualifies as political activity. The proposed rules would more clearly define “candidate-related political activity” and also ask for public comment about how much political spending these groups should be allowed to do. The proposed rules introduce several bright-line tests that would determine when a 501(c)(4) is doing too much campaign activity and is violating its tax-exempt status.
Among these new definitions, advertising that names a candidate 60 days before a general election would count as political activity. Certain contributions that can now be made anonymously by these groups may need to be reported. Any “voter guides” that refer to a candidate would be considered political activity.
Also, any event within 60 days of a general election at which a candidate appears as part of the program would be a political event.
“This proposed guidance is a first critical step toward creating clear-cut definitions of political activity by social welfare organizations,” Mark Mazur, Treasury assistant secretary for tax policy, said in a statement.
If they implement this, it would be good first step, but I expect it to be watered down beyond recognition.
The proposed regulations on CEO pay were defeated by referendum:
Swiss voters rejected a proposal to limit executives’ pay to 12 times that of junior employees yesterday, a measure that would have gone further than any other developed nation.
The measure was opposed by 65 percent of voters, the government in Bern said yesterday. Polls, including one by consulting firm gfs.bern, had signaled that outcome as probable. Voter turnout was 53 percent, the highest in three years.
“It’s a big relief,” Valentin Vogt, president of the Swiss Employers’ Association, said in an interview on Swiss national television SRF. “It’s a signal that it’s not up to the state to have a say in pay.”
Switzerland is the home to at least five of Europe’s 20 best-paid chief executive officers. Opposition to excessive pay has stiffened among the traditionally pro-business Swiss following the government bailout of UBS AG (UBSN), Switzerland’s biggest bank, in 2008 and a plan — later scrapped — by Novartis AG (NOVN) to pay outgoing Chairman Daniel Vasella as much as $78 million.
In March, Swiss voters approved the so-called fat-cat initiative that gave company shareholders a binding vote on managers’ pay and blocked golden handshakes and severance packages.
The problem here is that you need to get a foot in the door.
If they you had made it 100x, or 500x, it probably have won, but 12x seems to be too restrictive, even to a rabid liberal like me.
After all, depending on how you count, the ratio of the average worker to a CEO was between 18.3-20.1:1, so the ratio to lowest paid was probably in the range of 40:1.
Note that the $78 million parachute divided by 100 is still more than $¾ million, so the most extreme examples would be shut down, and we would stop seeing the CEO dick swinging over obscene pay packages.
No bank failures this week, but I forgot to look at the NCUA list of credit union closings.
The 12th credit union of the year failed, Polish Combatants Credit Union, of Bedford, OH.
