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Different rules for different folks

Tuesday, June 11, 2013

A few stories picked up at random on the net, the common thread of which is that it’s good to be a banker or the functional equivalent. Among other things, you get to make your own laws.

Consider first, this article from this morning’s Times. When a broker defrauds you, you can’t sue them. Every brokerage contract in the country requires a victim of broker fraud to seek relief through arbitration. It’s a system already set up to favor the brokers, but even that’s not good enough for them. When they are found to be in the wrong they can seek absolution, so that if you, as a consumer, try to do your due diligence, you won’t be able to find out that that friendly broker has been found guilty of some nefarious deed or other.

An industry group called the Financial Industry Regulatory Authority maintains a database of sanctioned brokers, but if you say pretty please, they’ll scrub your misdeeds:

As Main Street investors rely increasingly on Finra’s online database, BrokerCheck, to vet professionals on Wall Street, brokers and executives like Ms. Kief and Mr. Daifotis are pursuing every means possible to remove negative information from their records. Ms. Kief, in fact, even went so far as to ask her arbitrators to expunge two unrelated arbitrations, which the panel declined to do.

“People are starting to use BrokerCheck the way they use TripAdvisor,” said Seth E. Lipner, a professor of law at the Zicklin School of Business at Baruch College who represents investors in cases against brokers. “No broker wants these red flags on their record.”

The effort to expunge records would be less critical if brokers were subject to the same legal exposure as other professionals who are defendants in lawsuits brought by customers, like doctors or lawyers, investor advocates say.

But as a result of a 1987 Supreme Court decision, brokerage firms have been able to insist that customers give up their right to sue in court before they can even open an account. The resulting transfer of investor lawsuits to private arbitration has meant that Wall Street firms and their employees have avoided the burden of a court record of claims against them for a quarter-century. Arbitration hearings are closed and documents are not available to the public. The information on BrokerCheck is thus the only repository of allegations an investor can mine.

Why, you might ask, don’t the victims object to the scrubbing. Because the Masters of the Universe bribe them not to do so. How silly of you to ask.

Meanwhile, over at the SEC, Obama’s latest industry friendly appointment (you can always tell the really bad ones. They’re the ones that breeze through their Senate confirmations) has installed yet another fox in the henhouse:

The Financial Times has caught a significant revolving door that its business press peers have largely overlooked.

In a front page story, the pink paper points out that the incoming chief counsel for the SEC has an outstanding suit against him from his last incarnation, as head of compliance for the Americas for Deutsche Bank.

Read the whole story for all the details. Suffice it to say that it’s a wonderful thing if the prosecutor is a former employee, and is possibly looking ahead to another, more lucrative position, down the road.

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Yet another Modest Proposal

Tuesday, June 11, 2013

It seems clear that the chink in the armor of the National Security State is the fact that a lot of normal human beings-the kind that have consciences and know right from wrong- are given access to state secrets. It can’t be avoided. We need drones to handle this stuff.

There is only one solution. Increase the salaries of the people handling national security stuff by a factor of about 1000. That will raise the compensation to levels high enough to attract the intelligent sociopaths that would otherwise become hedge fund managers. They would have no compunctions about the work they would be doing, and the secrets would remain safe.

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Attention Deficit Disorder at Work

Monday, June 10, 2013

Speaking of Iran-Contra, to which I alluded in my previous post, it looks like Obama is now the beneficiary of a phenomenon that I, at least, first noticed at the time of that affair.

The geezers among us remember that at first, the scandal consisted of the fact that Reagan secretly sold weapons to Iran. There was no question that Reagan absolutely knew what was going on. That fact alone would have gotten Obama in the impeachment dock, and should have done for Reagan, but the Reagan people performed brilliantly.

What did they do? They came forward and acknowledged that the money they made on the secret arms deal was used to buy arms for the Contras in Nicaragua, and announced that Reagan was totally unaware of that fact. They knew that the media and beltway folks can only think about one thing at a time, and sure enough, everyone ignored the crime to which Reagan had already pleaded guilty in favor of trying to find out if he had committed the crime to which he’d pleaded not guilty by reason of incompetence. Congress duly wasted its time looking into the one issue, while ignoring the other.

The same phenomenon is on display these days, though not through any obvious White House machinations. Benghazi, IRS, and AP are fading into irrelevance because the one big thing is the NSA spying “scandal”. I’m the first person to agree that the NSA should not be spying on us all, but folks, there is nothing new here. This program, or stuff like it, has been known about for years. It wasn’t that long ago that we on the left were loudly arguing that the telecoms should not be granted retroactive immunity for doing precisely what they are continuing to do, and a guy named Obama said he agreed with us, until the time came to vote on the bill.

The Obama folks must be secretly delighted and would probably like to give Glenn Greenwald and Mr. Snowden a medal. The Republicans could unite around the fake Benghazi and IRS scandals, and the AP thing, which they never cared about, never got any traction, but they’re at a loss on this thing, since they heartily approve of wholesale spying on the American people. They approve of it so much that they can’t take the standard Obama era approach and attack him for doing what they have previously proposed (see, e.g., Obamacare). So while everyone concentrates on this Bush era, Obama continued assault on our liberties, the Republicans’ favored “scandals” are withering on the vine, and the Republican bigwigs find themselves in the uncomfortable position of having to defend Obama. One reason the Republicans are able to dominate beltway discourse is that they speak with one voice, but on this issue, they are unable to do that. It helps, of course, that this really is a serious thing, though it is not the shocking revelation that it’s played out to be. But that doesn’t really matter. What’s important is that it’s the latest thing, and all previous things are quickly forgotten, because the collective Washington mind can only contain two things at once: the permanent obsession with deficits (this applies only during Democratic administrations), and the latest thing to come along.

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One conspiracy theory we always knew was true

Monday, June 10, 2013

We are all familiar with the term “October Surprise”. It refers to an action taken shortly before an election, usually by the party in power, designed to affect the election’s outcome. The term was first used, I think history would show, in 1980, when Republicans loudly proclaimed their certainty that Jimmy Carter would somehow, likely in some sort of unholy deal with Iran, get the hostages out of Iran at a time designed to guarantee himself re-election. All the while, many of us have always believed, the Republicans were conspiring with the Iranians to make sure that such a thing would definitely not happen until Reagan was safely elected. There was evidence in support of the theory, though never a smoking enough gun to make a dent on public opinion. Most people never bothered to wonder why Carter was able to finally succeed in freeing the hostages on the date most favorable for Reagan: Inauguration Day, which guaranteed that Reagan would not have the issue to dog him, and would not have ownership of whatever agreement was made to free them. Who knows, Jimmy might have known he was being played, but what could he do?

Later, when Ronnie was caught sending money to Iran, inquiring minds wanted to know: were those persistent rumours about a campaign season deal true? Congress duly investigated, but as was their wont, Democrats preferred a believe-no-evil approach was called for. A critical question was whether Bill Casey, the by then deceased former head of the CIA, had or had not gone to Madrid to make the deal to guarantee the hostages would remain hostages for the duration. The Congressional committee decided he did not, and absolved the Reaganauts of any wrongdoing.

But…, as Robert Parry of Consortium News reports:

Former Rep. Lee Hamilton, who oversaw two congressional investigations into Ronald Reagan’s secret dealings with Iran, says a key piece of evidence was withheld that could have altered his conclusion clearing Reagan’s 1980 campaign of allegations that it sabotaged President Jimmy Carter’s hostage negotiations with Iran.

In a phone interview on Thursday, the Indiana Democrat responded to a document that I had e-mailed him revealing that in 1991 a deputy White House counsel working for then-President George H.W. Bush was notified by the State Department that Reagan’s campaign director William Casey had taken a trip to Madrid in relation to the so-called October Surprise issue.

Casey’s alleged trip to Madrid in 1980 was at the center of Hamilton’s investigation in 1991-92 into whether Reagan’s campaign went behind Carter’s back to frustrate his attempts to free 52 American hostages before the 1980 election, popularly known as the “October Surprise.” Hamilton’s task force dismissed the allegations after concluding that Casey had not traveled to Madrid.

“We found no evidence to confirm Casey’s trip to Madrid,” Hamilton told me. “We couldn’t show that. … The [Bush-41] White House did not notify us that he did make the trip. Should they have passed that on to us? They should have because they knew we were interested in that.”

Asked if knowledge that Casey had traveled to Madrid might have changed the task force’s dismissive October Surprise conclusion, Hamilton said yes, because the question of the Madrid trip was key to the task force’s investigation. “If the White House knew that Casey was there, they certainly should have shared it with us,” Hamilton said, adding that “you have to rely on people” in authority to comply with information requests.

The document revealing White House knowledge of Casey’s Madrid trip was among records released to me by the archivists at the George H.W. Bush library in College Station, Texas. The U.S. Embassy’s confirmation of Casey’s trip was passed along by State Department legal adviser Edwin D. Williamson to Associate White House Counsel Chester Paul Beach Jr. in early November 1991, just as the October Surprise inquiry was taking shape.

(via Consortiumnews)

I’m not generally a conspiracy theorist, but this one fit together all too neatly, and it was precisely the sort of thing one would expect from a party that has always, since the days of Nixon, believed in winning at any cost. I’ve always believed that it happened, and I think it paved the way for the later secret deal in which the U.S. secretly sold arms to a state that was, officially, an implacable enemy of ours.

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Mea culpa

Sunday, June 9, 2013

A day or two ago I penned a short post about a study that showed that inequality in the United States was a result of deliberate governmental policy. The point I tried to make, in a more or less humous vein, is that it doesn’t take a study to make that finding; the facts are staring us right in the face.

To my shock and surprise the post post garnered a comment from the study’s author, David Cay Johnston, which I reproduce here:

JCW, the cynical commentary you offer is not useful.

But for a lot of hard work by a relative handful of people digging through and analyzing the official data you would not be so well informed.

This study is not redundant, it is groundbreaking because it establishes facts that show the prevailing argument about what drives inequality is wrong.

After many years of digging out facts that were not known and getting them into the public record I am happy that you grasp the issues so well.

But a very large number of our fellow Americans, including many of the most politically and economically powerful citizens.

Also see my new piece on these issues, which just went up at National Memo and my earlier column for Tax Analysts on relative income growth of the vast majority and the oligarchs – an inch to 5 miles.

He’s mostly right, of course. (Looks like he forgot to finish the fourth sentence, but it’s easy to see where he was going). We do need these things rigourously proven, though sometimes you have to wonder if that does any good, since the ruling elites and media movers and shakers have an amazing facility for ignoring the facts. Still, I stand by the gist of my observation. It was pretty easy to see, for anyone who understood math, that each and every Republican tax cut was a transparent attempt to shift money from the masses to the elite. That was a matter of simple arithmetic. That left two possibilities. First, that the shift was the whole point. Second, that the politicians involved had no idea what they were doing. The latter seems unlikely to the nth degree, so that leaves us with the former. The same pattern repeats itself over and over, including many bills passed with substantial Democratic support. Repeal of the Glass-Steagall Act is a case in point, though the motivations there could be more successfully obscured than in the “tax cut” bills.

In any event, I want to apologize for seeming to dismiss the hard work that went into the study. Sometimes it is necessary to prove the obvious.

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Maher de-canonizes Reagan

Sunday, June 9, 2013

Amen

Hat tip Why Evolution is True

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Friday Night Music

Friday, June 7, 2013

So, no rock legends died this week, but chance has come to my rescue. I’ve got my iPod connected to my car stereo system, and my choice of music is pretty much dictated by randomly spinning the selection wheel on the stereo. It’s an uncertain process, since I also have to keep an eye on the road, and the ultimate selection, while not exactly totally random, is close enough. Anyway, a couple of days who should appear on the little LED screen but the Allman Brothers, who I promptly chose and realized straightaway that I’ve never put them up, or at least I can’t remember having done so, which is the same thing.

This is an instrumental, Jessica. Great guitar work, of course.

I actually thought about putting up something on Esther Williams, who died yesterday. I decided against it, but I do recommend perusing some of the stuff on youtube. She was actually a little before my time, and I don’t think I’ve ever seen any of her water routines before. She had a lot of guts. I was a swimmer myself, though not very good (terrible, actually), but you couldn’t get me or most of the swimmers I knew to do a swan dive off a high diving board. Even the diver on my college team, who was an excellent diver on the one meter, was a little gun shy on the high board. According to the Times obit, she literally broke her back diving off a 50 foot platform because the idiots making the movie she was in put a metal crown on her head that caused it to snap back when she hit the water. Oh, what the heck, this is as far from the Allman Brothers as you can get, but check this out.

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The least surprising news of the year

Thursday, June 6, 2013

Why am I not surprised that the NSA is monitoring our phone calls?

Why am I not surprised that this intrusion into our private lives is the one issue in which the cherished goal of “bi-partisanship” has been reached, for Congressional Democrats and Republicans alike seem to think it’s great.

The real question is: why does anyone find this surprising?

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Fresh from the Department of Redundancy Department

Thursday, June 6, 2013

David Cay Johnston, Pulitzer Prize winner and former New York Times reporter on economic issues, analyzes a recent study of wealth among five nations among those with the richest economies and concludes: “In short, what the paper shows is this: Inequality is a product of government policy.”

(via Widening Economic Inequality in United States Is a Deliberate Result of Government Policy, New Study Finds)

And yes, this post’s title is apt, or apt enough, for “redundancy” besides meaning the “state of being redundant”, also means, “Something redundant or excessive; a superfluity”, and surely the study is superfluous, or it is if all it shows is that inequality is a product of government policy.

As Hamlet’s buddy Horatio, might have said: “There needs no study, come from a think tank, my lord, to tell us this.”

But of course, I jest. We don’t really need a study, but in today’s world, the nose on your face, may it be ever so plain, doesn’t really exist unless it is confirmed by a study.

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A Tale of our Times

Wednesday, June 5, 2013

This post is only tangentially related to politics, though the story is emblematic of our culture. I found out about it because my wife and I subscribe to the Boston Globe, for it’s a local Boston story. We were particularly interested because our son currently has a fellowship at the Academy of Arts and Sciences, where the story takes place.

If, like us before he got the fellowship, you have never heard of the Academy of Arts and Sciences, let me enlighten you. It is, as the Globe reports, a prestigious institution, founded by John Adams, John Hancock and their ilk while the American Revolution raged around them. They felt Boston deserved an institution that could compete head to head with Benjamin Franklin’s Philadelphia based American Philosophical Society. But this story is not about our patriotic forbears, for it is very much a modern fable.

The Globe ran a story yesterday revealing that the president of this institution, one Leslie Cohen Berlowitz has, not to put too fine a point on it, lied about her academic credentials. That Ph.D from NYU that appears on her resume? NYU has no record of it. In fact, the good “Doctor”’s only claim to the title is an honorary degree, and calling yourself a Doc on the strength of a free degree is a giant academic no-no.

But the real story here is twofold. First, there’s the backstory, and dare we assume that word of Ms. Berlowitz’s mendacity may have come to the Globe from her staff:

She was almost fired in 1997, a year after she became chief executive of the academy, because of her heavy-handed management style, according to a former member of the governance board who asked not to be named.

Gail Loffredo lasted just 14 days as Berlowitz’s executive assistant in 2012. She said Berlowitz fired her last year after her teenage daughter found a lump in her chest and Loffredo told Berlowitz she needed to take her daughter to the doctor the following week. Loffredo later learned that Berlowitz had gone through as many as five other assistants in as many months.

“She is horrible,” Loffredo said, adding that she regularly witnessed Berlowitz scolding employees in her office in front of colleagues.

Ben Didsbury, a former membership coordinator charged with compiling contact information for academy fellows, recalled being ordered to apologize in front of other staffers after Berlowitz mistakenly called a person’s fax number rather the voice line and thought Didsbury had reversed the numbers.

“There was fear permeating through the whole place,” said Didsbury, who now works as a freelance audio engineer in Cambridge.

Workers were even afraid to speak much of the time, making the office seem eerily quiet. Didsbury recalls one time when an office assistant asked him if he needed any more staples, and Berlowitz stormed into his office yelling: “You do not talk to each other!”

(via The Boston Globe)

Did I mention that this lady is paid over $600,000.00 (more than most college presidents) to run an institution with a budget of a little more than $8 million? Or that she is chauffeured around by her long suffering employees, travels frequently on the Academy’s dime, and while doing so eats at only the finest restaurants?

But I haven’t gotten to the second fold (the story is twofold, remember?). When the Globe confronted her, she, of course refused to speak. She had a flack do it for her. Unfortunately, the response was, shall we say, not terribly convincing:

“Neither the academy nor President Berlowitz is going to respond to subjective, interpretive, and gossipy allegations from former employees and unnamed sources,” Howell said in the statement. “Nor are they going to respond to personal questions that are irrelevant, do not belong in the public domain and, frankly, smack of sexism.”

Well that didn’t really quite cut it, for obvious reasons. In fact, my wife and I were speculating about whether press flack Howell was purposely subverting his boss, but given her style she surely reviewed every word before it was released. So, yesterday, they tried again. Bear in mind that the Globe’s original article concentrated more on her penchant for “kissing up and kicking down” (a great phrase, that) than on her fraud. So, give a guess how she chose to explain the fraud:

A spokesman for Berlowitz, who has often clashed with employees in her 17-year tenure, blamed her staff for incorrect information in a statement Tuesday, even though Berlowitz signed some of the submissions and is known for being a micromanager who insists on seeing every document that leaves the academy.

“President Berlowitz, who reviewed only the substantive content of the applications, was unaware of the mistakes,” academy spokesman Ray Howell said in the statement. “President Berlowitz takes full responsibility for the error, and the academy is working to correct the information with relevant funding agencies.”

(via The Boston Globe)

Blame the staff, of course. It’s clear from the articles that there is no way in the world the woman wasn’t aware of the fraud.

This truly is a story of our time. Arrogance, greed, fraud, and contempt for the ordinary American worker, all mixed up and baked to perfection. She missed her calling. She belongs on Wall Street.

Postscript: While my son does have a fellowship at the Academy, he doesn’t, so far as I know, work directly for this woman and never mentioned her before we read the article. He is not “staff” and is not among her victims.

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