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Archive for March 13th, 2010

Making CEOs Responsible for Company Financials Didn’t Stop Lehman From Cooking the Books

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And profits are so important that if a company can’t get them legitimately, it will immediately lie. Megan Carpentier at Washington Independent:

One of the major components of the post-Enron accounting reforms, and laughable so, was a provision requiring that all CEOs sign off on their company’s financial statements. It was supposed to prevent CEOs from willfully looking the other way while subordinates cooked the company books (i.e., deny them plausible deniability) and inculcate in American corporate culture a sense of responsibility. It was laughable then, and, as yesterday’s report on the book-cooking that went on at Lehman Brothers proves, it’s laughable today.

The provision was based on the assumption that when CEOs admitted they didn’t know about accounting “errors” that caused collapses and massive disruptions, that they were telling the truth and that, if they had to be personally responsible, they might look into accounting irregularities and stop mischievous underlings from ruining companies. It’s surprising now to think that Congress was that gullible, or thought the American people were.

In the case of Lehman CEO Richard Fuld, he’s been found “grossly negligent” for certifying accounting statements he made no effort to look into, just as you might think. According to Michael de la Merced and Andrew Sorkin, Lehman shifted $50 billion off its books with fraudulent accounting tricks in the months before its collapse. They’d been engaging in the transaction since 2001, and there wasn’t a thing that the post-Enron regulations did to stop it.

Richard S. Fuld Jr., Lehman’s former chief executive, certified the misleading accounts, the report said.

“Unbeknownst to the investing public, rating agencies, government regulators, and Lehman’s board of directors, Lehman reverse engineered the firm’s net leverage ratio for public consumption,” Mr. Valukas wrote.

Mr. Fuld was “at least grossly negligent,” the report states, adding that Henry M. Paulson Jr., who was then the Treasury secretary, warned Mr. Fuld that Lehman might fail unless it stabilized its finances or found a buyer.

But there’s more: Mike Spector, Susanne Craig and Peter Lattman at The Wall Street Journal report that a senior executive flagged the transactions for management and the auditors as fraudulent — but was, of course, ignored.

Read the rest of this entry »

Written by LeisureGuy

13 March 2010 at 7:02 pm

Posted in Business, Government, Law

Chamber of Commerce (Again) Hopes to Scale Back Proposed Black Lung Benefits

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Businesses don’t care about their employees or their customers, only their owners and their profits. An example reported by Mike Lillis in the Washington Independent:

With black lung disease on the rise in Appalachia, West Virginia Sen. Robert Byrd (D) last year took action. As Democratic leaders were piecing together their sweeping health reform proposal, the nine-term Byrd attached language that would expand black lung benefits for coal miners and their families.

It hasn’t been well received by the business community.

The U.S. Chamber of Commerce is attacking the provision (again), Politico reported yesterday, and their strategy for killing it is clear: They want to put it in the same category as the special Medicaid deal carved out to win the support of Nebraska Sen. Ben Nelson (D) — a deal so unpopular that even Nelson doesn’t support it any longer.

“This had to be another one of those backrooms deals that was put into the larger bill to cobble votes together,” Bruce Josten, the Chamber’s top lobbyist, told Politico.

Never mind that that wasn’t the case. Byrd’s office has been quick to point out that the language was a part of the Senate HELP Committee bill that passed that panel last July.

“This is nothing new coming from the chamber,” Byrd’s office said today in an email. “They were opposed to this provision before it passed the Senate in December, as they were with the entire health care reform bill.”

Under current law, miners have to prove that they’ve got black lung disease before they become eligible for benefits through the Black Lung Disability Trust, a 32-year-old program funded largely with an excise tax on coal companies. The Byrd amendments would (1) extend benefits to spouses of miners who’ve died from black lung, and (2) install the legal presumption that sick miners with at least 15 years experience are suffering from black lung, thereby allowing them to tap the benefits unless insurers can prove that the illness is something else.

In a January statement, Byrd said that the changes are only fair to the workers of Appalachia.

These black lung benefits have been promised to coal miners who come down with totally disabling black lung disease. But too often the coal companies and the insurers have chosen to elude their responsibility to these ailing miners by out-lawyering and literally out-lasting them.

Who will stand up for these families who have lost a loved one or the ability to earn a living because of the years they spent toiling inside a coal mine?

Not, it would seem, the Chamber of Commerce.

Written by LeisureGuy

13 March 2010 at 6:56 pm

Christopher Hitchens on the ten commandments

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Via Open Culture:

Written by LeisureGuy

13 March 2010 at 4:26 pm

Posted in Daily life, Religion

Daylight Savings Time starts tomorrow, and it costs energy

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Interesting paper with the finding that going to DST does NOT save energy but instead costs energy:

You can’t save daylight by moving around the hands on your clock, of course. So daylight saving time remains as absurdly named as it ever was.

The general pointlessness of DST was the subject of a Rachel Maddow interview Friday (video below) with the author of a whole book (!) on the subject.

What’s germane here is that DST saves about as much energy as light, according to most studies.  In fact, a 2008 study found DST “may actually waste energy“:

Up until two years ago, only 15 of Indiana’s 92 counties set their clocks an hour ahead in the spring and an hour back in the fall. The rest stayed on standard time all year, in part because farmers resisted the prospect of having to work an extra hour in the morning dark. But many residents came to hate falling in and out of sync with businesses and residents in neighboring states and prevailed upon the Indiana Legislature to put the entire state on daylight-saving time beginning in the spring of 2006.

Indiana’s change of heart gave University of California-Santa Barbara economics professor Matthew Kotchen and Ph.D. student Laura Grant a unique way to see how the time shift affects energy use. Using more than seven million monthly meter readings from Duke Energy Corp., covering nearly all the households in southern Indiana for three years, they were able to compare energy consumption before and after counties began observing daylight-saving time. Readings from counties that had already adopted daylight-saving time provided a control group that helped them to adjust for changes in weather from one year to the next.

Their finding: Having the entire state switch to daylight-saving time each year, rather than stay on standard time, costs Indiana households an additional $8.6 million in electricity bills. They conclude that the reduced cost of lighting in afternoons during daylight-saving time is more than offset by the higher air-conditioning costs on hot afternoons and increased heating costs on cool mornings.

“I’ve never had a paper with such a clear and unambiguous finding as this,” says Mr. Kotchen, who presented the paper at a National Bureau of Economic Research conference this month.

A 2007 study by economists Hendrik Wolff and Ryan Kellogg of the temporary extension of daylight-saving in two Australian territories for the 2000 Summer Olympics also suggested the clock change increases energy use.

The Kotchen and Grant NBER paper is here.  It concludes: …

Continue reading.

Written by LeisureGuy

13 March 2010 at 4:15 pm

Posted in Daily life, Science

Papal damage control underway regarding pedophile cover-up

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The Vatican is starting serious damage control, apparently depending heavily on lies and omissions. Rachel Donadio and Nicholas Kulish in the NY Times:

As new details emerged on allegations of child sexual abuse by a priest in the Munich archdiocese then led by Pope Benedict XVI, the Vatican spoke out on Saturday to protect the pope against what it called an aggressive campaign against him in his native Germany.

At the same time, a high-ranking Vatican official overseeing internal investigations on Saturday acknowledged that 3,000 cases of suspected abuse of minors had come to its attention in the past decade, of which [only – LG] 20 percent had been brought to trial in Vatican courts.

In a note read on Vatican Radio on Saturday, the Vatican spokesman, the Rev. Federico Lombardi, said it was “evident that in recent days there are those who have tried, with a certain aggressive tenacity, in Regensburg and in Munich, to find elements to involve the Holy Father personally in issues of abuse.” He added, “It is clear that those efforts have failed.”

In Germany, a man who said he was sexually abused by a priest there in 1979 said Saturday that church officials had told him then that the priest would not be allowed to work with children again. Instead, the priest was allowed, under Benedict’s watch, to resume full duties almost immediately, where he went on to abuse more children. [This, along with Pope Benedict XVI's micromanaging style, pretty much establishes in my mind that Benedict covered up the problem, as it seems most Catholic Bishops did. The Church's aversion to scandal is MUCH greater than its commitment to justice. – LG]

The Vatican also sought to defend the pope against criticism that a Vatican rule requiring secrecy in abuse cases was tantamount to obstruction of justice in civil courts. [Yes, it is obstruction of justice: the things done were crimes and concealing the crime and helping the perpetrator is clearly obstruction of justice. – LG]

Msgr. Charles J. Scicluna, the director of a tribunal inside the Congregation for the Doctrine of the Faith, the Vatican’s doctrinal arm, dismissed as “false and calumnious” accusations that Benedict covered up abuse cases when he oversaw investigations for four years as prefect of that congregation before becoming pope…

Continue reading. Needless to say, Msgr. Scicluna does not adduce any facts to support his statements. And, later in the story:

… In Germany, where hundreds of people have come forward in the last few months with accusations of abuse by priests, new details emerged Saturday about a case in the Munich Archdiocese, where Benedict, then called Joseph Ratzinger, was archbishop.

A man who said he was sexually abused by a priest in Essen in 1979 said that when the abuse was reported the church handled the accusation as an internal matter without notifying the police or prosecutors. In a telephone interview on Saturday, the victim, who asked to be identified as Wilfried F. to protect his anonymity, said the pastor forced him to perform oral sex.

Wilfried F. was 11 years old at the time. His story was first reported Saturday in the daily newspaper Süddeutsche Zeitung...

And also this:

… In the interview on Saturday, Monsignor Scicluna also addressed accusations that the Vatican was obstructing justice by imposing secrecy on reports of abuse.

In 2001, Benedict, who was then in charge of Vatican investigations of abuse allegations, sent a letter to bishops counseling them to forward all cases of abuse of minors to the Congregation for the Doctrine of the Faith, where they were to be subject to secrecy…

Sure sounds like obstruction of justice and a cover-up to me. Especially since they then didn’t do anything for 80% of the cases.

Written by LeisureGuy

13 March 2010 at 4:03 pm

Not news: Disney Corp is contemptible

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An example:

Source: New York Times, March 9, 2010

The Campaign for a Commercial-Free Childhood is a small advocacy group that last fall successfully got the Walt Disney Company to offer full refunds to people who had purchased the company’s "Baby Einstein" videos, which were supposed to make very young children into geniuses. But research found that Baby Einstein videos not only failed to make babies smarter, but they actually delayed language development in toddlers. Kids who watched the videos learned fewer words than babies who never watched them.

In 2006, the Campaign for a Commercial-Free Childhood complained to the Federal Trade Commission about Disney’s educational claims about the videos. As a result, Disney dropped the word "educational" from their marketing materials for the videos, but that wasn’t enough. Lawyers threatened a class-action lawsuit for deceptive practices unless Disney agreed to refund the purchase price to everyone who had bought the videos. Disney finally agreed to the refund, calling it an "enhanced consumer satisfaction guarantee," without mentioning the product’s defect or the lawyers’ demands.

Shortly after the New York Times announced the refunds, though, Disney contacted officials at the children’s mental health center that had long housed and sponsored the Campaign, and pressured them to evict the Campaign, saying the group should not advocate against corporations (even though advocacy is a core responsibility of the 1963 law that provides federal financing for community mental health centers).

Written by LeisureGuy

13 March 2010 at 3:43 pm

Test your broadband

with 2 comments

Very interesting post at Balloon Juice by mistermix:

Whatever else he is (secret Muslim, socialist, hater of America and Real Americans), Obama is arguably the first, and certainly the second (after Carter) technocrat President. Technocrats tend to appoint other technocrats to technology positions, instead of making those spots political rewards for clueless insiders. Nowhere is that more obvious than the FCC, which is now run by an asskicker named Julius Genachowski. He replaced a Clinton-appointed and Bush-promoted mediocrity, Michael Powell (son of Colin).

It’s too early to tell whether Genachowski’s efforts will turn into real change, but he’s making a lot of the right noises. Here’s a love letter from a normally skeptical tech site, written a few months back:

The Genachowski-led FCC has been relentless in its effort to disrupt the status quo. In office for six months, Genachowski and team are drafting a national broadband plan; working on net neutrality rules; fingering companies like Google, Apple, and Verizon; dealing with spectrum reallocation; handling the nuts-and-bolts of white space device deployment; threatening to extend neutrality rules to wireless networks; and considering the transition from traditional circuit-switched phone networks to a full-IP communications network. Now, we can add “shaking up the cable industry” to the list.
[...]
So Genachowski doesn’t seem to be a radical, but he does appear to be both relentless and ambitious in his quest to see these ideas carried through to their maximum potential for disruptive innovation. And he’s not above irritating just about every major incumbent with a network to do it.

This is a long-winded way of saying that everyone ought to visit the latest FCC effort, broadband.gov, and test your broadband connection. The FCC is collecting data about Internet speed across the country to find out where broadband stimulus money can best be spent. If that site gets a ton of hits, not only will it collect good data, but the FCC will have more proof that the public is watching and gives a shit.

 

I did the test. My result:

Broadband test

Written by LeisureGuy

13 March 2010 at 3:39 pm

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