Category Archives: Social values

Another Reminder That Crime Pays: No Charges Filed Against Countrywide’s Mozilo

The New York Times’ Gretchen Morgenson dutifully tells us, based on a Los Angeles Times sighting, that federal prosecutors will not be filing charges against the Tanned One, Angelo Mozilo of Countrywide. This follows the failure of investigations to lead to a criminal prosecution of another major perp in the financial crisis, one Joseph Cassano, the head of AIG’s Financial Products unit.

There has been far too little discussion of why no legal action has been taken.

Readers can no doubt come up with additional reasons, but I see at least two.

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Why Liberals Are Lame

The chattering classes of the left are encouraged by the spectacle of 14 Wisconsin state senators having the intestinal fortitude to deny the governor a quorum for a budget vote that includes provisions to strip most state employees of virtually all of their collective bargaining rights. They were in turn emboldened by large scale demonstrations in the capitol, which seemed to get their momentum from the fact that students, rather than taking the day off when teachers called in sick so they could protest, turned out in large numbers to support them.

Don’t underestimate the ability of the Democrats to trade this opportunity away. All the defecting Senators are asking for is to slow down the process and negotiate the bill. Sounds reasonable, right?

As someone who been party to deal-making, the problem with being reasonable and measured is that that only works with fair-minded and/or experienced opponents. Being non-negotiable is not only terribly effective (you throw a tantrum and then make only token concessions to let the other side save a teeny bit of face), it also takes comparatively little in the way of bargaining skills.

The right wing, for the most part, has made being unreasonable and non-negotiable part of its branding. The left, peculiarly, has not adapted. And the result is that it too often winds up ceding way more ground than it needs to.

Many readers will point out that this ineffectiveness serves as useful protective cover, particularly with the Obama Administration. It has repeatedly sought to have its cake and eat it too, by appealing to as much as possible of the traditional Democratic base (which they figure they can abuse, since it has nowhere to go) while also playing up to corporate backers. The true state of play has reached the point that even purveyors of leading edge conventional wisdom like Jeffrey Sachs are now willing to say that we have two center-right parties in the US.

But this, while true, misses an underlying pathology.

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Wisconsin Governor Uses Police State Tactics (Literally) on Democratic Senators (Updated)

A major row has been under way in Wisconsin as governor Walker has been trying to push through state-union-breaking changes as part of his program to deal with a projected $3 billion shortfall in the state budget over the next two years. (Update: as reader petrograd indicates, an analysis of the state’s finances shows this shortfall to be entirely the result of spending increases planned by Walker. The state ran a modest surplus in the latest fiscal year and the projected falls in tax receipts over the next two years were less than $200 million cumulative. So this budget hysteria is a gross distortion of the state’s true condition).

His state budget plan included ending state worker collective bargaining rights and cutting pay and benefits. He not only said he would not negotiate, but announced he had alerted the National Guard in the event of worker protests (note the last time the Guard was called in to handle a labor dispute was in 1934). Walker since backed down on this particular threat, but has now sent out state police to round up Democratic state senators who are refusing to vote on the latest iteration of Walker’s proposal, From PRWatch:

Mary Bottari reports that the state capitol police are scouring the Wisconsin Capitol in an attempt to track down the Wisconsin Senate Democratic Caucus. The Wisconsin Senate was slated to vote on the budget bill today, but they were prevented from doing so because all Democratic Senators walked out denying the Republicans a necessary quorum. The Republicans issued a “call of the house” empowering the state capitol police to round up missing Senators, but the Democrats were prepared for this and promptly departed the building and may even have left the state.

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Guest Post: Awareness of Poverty Over Three Centuries

By Martin Ravallion, Director of the Development Research Group, World Bank. Cross posted from VoxEU

For how long have we cared about poverty? Tracing the number of references to the word “poverty” in books published since 1700, this column shows that there was marked increase between 1740 and 1790, culminating in a “Poverty Enlightenment”. Attention then faded through the 19th and 20th centuries, leaving room for the second Poverty Enlightenment in 1960 – and interest in poverty still rising.

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Taibbi on Why No One on Wall Street Goes to Jail

There’s a fine new piece by Matt Taibbi on the utter lack of criminal prosecutions on Wall Street, particularly of the big perps. He goes through a series of well known instances of actual (to everyone save the prosecutors) cases of chicanery, ranging from Freddie Mac accounting fraud, the protection of Morgan Stanley CEO from insider trading charges, Lehman’s misleading reporting of restricted stock payments, and gives the sordid details of how whistleblowers were ignored and aggressive SEC staff like Gary Aguirre were fired.

To my mind, the juiciest and most depressing part of the story comes fairly late in the piece, when Aguirre attends a day long conference last November (with a $2200 price tag) on financial law enforcement. This is what “enforcement” looks like:

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Jeffrey Sachs on the Budget: “Do we really have to have our own Egypt here in the United States?”

This is astonishing. Jeffrey Sachs manages to speak candidly about what is going on about the Obama budget cuts and related politics on an MSM outlet. To put it mildly, this is a marked contrast with his prior stance on liberalization of financial markets and development. Hat tip Jesse via e-mail:

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Doug Smith: Social Impact Bonds – Right Result, Wrong Way (Part 1)

By Douglas K. Smith, Member, Board of Directors, SeaChange Capital Partners

Social impact bonds, a useful experiment underway in England, is gaining attention on this side of the pond, including from the Obama administration. We are glad to see this at SeaChange (a non-profit group seeking innovative ways to bring capital to the non-profit sector). What is deeply concerning, though, is how some elites are packaging and promoting social impact bonds as yet one more example of everything the market does is good while everything government does is bad. Moreover, these same elites betray a stunningly superficial grasp about how markets actually work.

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New York Times Article Perpetuates Short-Sighted Management Attitudes

One of the reasons American management isn’t what it used to be is that most companies do not give a rat’s ass about employees. Yes, you’ll get the usual human resources blather about how “our employees are our most important asset”, but actions on this front speak vastly louder than words. In the 1970s and early 1980s, management gurus and the business press argued that one reason German and Japanese manufacturers were trouncing their American counterparts was that they had better employee relationships. But even though there is still a mini-industry dedicated to producing corporate “leaders”, US companies too often see employees as costs, and their objective is to get buy spending as little as possible on them, rather than treating them to the extent possible as allies in building a more successful, profitable venture.

An article in the “You’re the Boss,” a New York Times column, demonstrates how deeply these warped values have taken hold in American business. Now admittedly, this feature focuses on small businesses, and these enterprises are often on the knife edge of survival. At the same time, every now-big company was a small company once, and presumably a venue like the New York Times is trying to help these companies perform better and for those that have significant potential, to chart a path that increases their odds of achieving it.

So consider this discussion:

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Chamber of Commerce Law Firm Studied Disinformation, Smear and Coercion Campaign Against Opponents

On the one hand, it’s a badge of honor of sorts to see the most powerful political lobby, the Chamber of Commerce, have its operatives moving from the “ignore you” to the “fight you” stage of engagement. The flip side is that the tactics that they are willing to consider don’t reflect at all well on their commitment to principles like the rule of law or decency.

ThinkProgress today broke the story of the dirty works being considered. Readers may be aware of a massive leak of e-mails of the security firm HB Gary Federal which made the mistake of trying to hack the computers of Anonymous, the group that has taken to punishing organizations that cut off donations to Wikileaks.

Anonymous obtained and leaked the internal messages and rubbed HB Gary’s face in it a bit too.

The e-mail dump exposed some dirty laundry, namely that of a disinformation campaign that HB Gary plus two other “security” firms Palantir, and Berico Technologies (which together called themselves Team Themis had started to map out for a law firm the Chamber of Commerce works actively with, Hunton & Williams.

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Quelle Surprise! Tax Increases on Rich Do Not Lead to Exodus

A solid paper by Cristobal Young and Charles Varner, “Millionaire Migration and State Taxation of Top Incomes” (hat tip Matt) helps debunk the idea that high income individuals will pull up stakes if their taxes go up. The case study is an interesting one: New Jersey’s tax increases on top earners. New Jersey made the biggest increase of all US states, and also has the distinction of having a low income tax state (Connecticut) nearby, meaning that tax-sensitive residents had an option of moving not all that far to escape the increase, which presumably would allow them to maintain family ties.

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The study results might be labeled “Millionaires are People Too.”

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Tom Ferguson: Memo to Obama – Anything but Democracy Now for Egypt is Building on Sand

By Tom Ferguson, Professor of Political Science at the University of Massachusetts, Boston, and a Roosevelt Institute Senior Fellow. Cross posted from New Deal 2.0

Food and oil prices are rising as tension in Cairo is soaring — time to get on board with the people’s demands.

Add Barack Obama to the long list of statesmen who couldn’t solve the Riddle of the Sphinx. For a while last week it looked like a miracle was happening: The United States was on the verge of doing right and doing well at the same time. After stumbling initially, the administration openly warned the Egyptian army and government not to slaughter the protesters. It also started lining up behind the Egyptian people’s demands for a swift transition to a new, more democratic regime. Neo-con lions like Robert Kagan and Elliott Abrams bedded down with liberal internationalist lambs in a “Working Group on Egypt” that called for reforms and Mubarak’s exit, while John McCain and other Republicans offered bipartisan cover for Real Change in the world’s oldest civilization.

But by Saturday, February 5, the wheels started coming off.

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The IMF’s Epic Fail on Egypt

Over the last week, we’ve had the spectacle of the Western media speculating about what is going on in Egypt in the absence of much understanding of the forces at work (this article by Paul Amar is a notable exception).

Needless to say, there has also been a great deal of consternation as to how the West’s supposedly vaunted intelligence apparatus failed to see this one coming. This lapse is as bad as the inability to foresee the collapse of the Soviet Union (it’s arguably worse: a lot of people profited from the Cold War, and they’d have every reason to fan fears and thus look for evidence that would support the idea that the USSR was a formidable threat. By contrast, one would think that conveying word that the domestic situation in Egypt was charged would have led to more intense scrutiny which ought to have served some interests (like various consultants and analysts). That suggests the US was so wedded to Mubarak that anyone who dared say his regime was at risk would get “shoot the messenger” treatment, and thus nary a discouraging word was conveyed).

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Reagonomics Was Pro Business, Not Pro “Market”: We Speak on Real News Network

The centenary of Reagan’s birth is providing an excuse for trotting out a lot of hoary old myths and selective history about the 40th president. We gave a bit of an antidote on the Real News Network.

As much as I thought this clip came out well, I have a minor quibble, and wished the folks at Real News Network had not invoked the expression “free market” in the headline on their site. It’s a dangerous bit of propaganda, a malleable, often slippery concept (per Lewis Carroll’s Humpty Dumpty “It means just what I choose it to mean—neither more nor less”) and is rife with internal contradictions (see our long form discussion in ECONNED for details). The equivalent expression in the 1960s was “free enterprise” and that conveyed far more accurately whose interests were really served by the sort of liberalization being sought.

Enjoy!

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Pete Peterson Using High School Courses As Trojan Horse for Anti-Social Security, Medicare Propaganda

It’s not a pretty spectacle when a very rich man tells little people they ought to get by with less, particularly when his firm benefitted handsomely from the pump and dump operation that led to the financial crisis.

Pete Peterson, one of the two founders of the Blackstone Group, has had a longstanding campaign against Social Security and Medicare. He’s sufficiently aggressive that to combat consistent poll ratings that show that both programs enjoy substantial support, his foundation set out to generate different survey results by stacking the deck heavily in its favor. As we recounted last July:

For those who did not catch wind of it, the Peterson Foundation, which has long had Social Security and Medicare in its crosshairs, held a bizarre set of 19 faux town hall meetings over the previous weekend to scare participants into compliance and then collect the resulting distorted survey data, presumably to use in a wider PR campaign.

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Marshall Auerback: Plan B for Health Care Reform – It’s Called ‘Medicare for All’

By Marshall Auerback, a portfolio strategist and hedge fund manager who writes at New Deal 2.0. If we’re forced back to square one by the Supreme Court, why not get it right? My colleague, Bo Cutter, has noted the likelihood of continued challenges to health care reform in the wake of the recent Florida State […]

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