Archive for January 2nd, 2013
This is the beginning of the end: a totally Soviet-style result, reported in the NY Times by Adam Liptak:
A federal judge in Manhattan refused on Wednesday to require the Justice Department to disclose a memorandum providing the legal justification for the targeted killing of a United States citizen, Anwar al-Awlaki, who died in a drone strike in Yemen in 2011.
The ruling, by Judge Colleen McMahon, was marked by skepticism about the antiterrorist program that targeted him, and frustration with her own role in keeping the legal rationale for it secret.
“I can find no way around the thicket of laws and precedents that effectively allow the executive branch of our government to proclaim as perfectly lawful certain actions that seem on their face incompatible with our Constitution and laws while keeping the reasons for their conclusion a secret,” she wrote.
“The Alice-in-Wonderland nature of this pronouncement is not lost on me,” Judge McMahon wrote, adding that she was operating in a legal environment that amounted to “a veritable Catch-22.”
A lawsuit for the memorandum and related materials was filed under the Freedom of Information Act by The New York Times and two of its reporters, Charlie Savage and Scott Shane. Wednesday’s decision also rejected a broader request under the act from the American Civil Liberties Union.
David E. McCraw, a lawyer for The Times, said the paper would appeal.
“We began this litigation because we believed our readers deserved to know more about the U.S. government’s legal position on the use of targeted killings against persons having ties to terrorism, including U.S. citizens,” Mr. McCraw said. “Judge McMahon’s decision speaks eloquently and at length to the serious legal questions raised by the targeted-killing program and to why in a democracy the government should be addressing those questions openly and fully.”
Jameel Jaffer, a lawyer with the A.C.L.U., said his group also planned to appeal. “This ruling,” he said, “denies the public access to crucial information about the government’s extrajudicial killing of U.S. citizens and also effectively greenlights its practice of making selective and self-serving disclosures.”
A Justice Department spokesman said only that lawyers there were reviewing the decision.
Judge McMahon’s opinion included an overview of what she called “an extensive public relations campaign” by various government officials about the American role in the killing of Mr. Awlaki and the circumstances under which the government considers targeted killings, including of its citizens, to be lawful. The Times and the A.C.L.U. argued that the government had waived the right to withhold its legal rationale by discussing the program extensively in public.
(Samir Khan, a naturalized American citizen who lived at times on Long Island and in North Carolina, was also killed in the strike, on Sept. 30, 2011. Another strike two weeks later killed a group of people including Mr. Awlaki’s 16-year-old son, Abdulrahman al-Awlaki, who was born in Colorado.) . . .
Continue reading. If Congress was doing its job, it’s this sort of thing—not to mention the torture that explicitly violates US law, along with the president’s refusal to investigate or to prosecute CIA officials that admitted destroying evidence—that would launch impeachment proceedings, not a blow job.
Philip Pilkington, a writer and research assistant at Kingston University in London, has a very interesting post at Naked Capitalism:
Most pieces written and published on economic topics in our newspapers are morality tales rather than economic analysis. Economic analysis is boring and thus only a few people are going to read it. By contrast, morality tales pull at the heartstrings like a Hollywood script. They contain words and phrases that most readers can identify with – sentiments that they too have felt, either in the past or in the present.
Without understanding this it is simply impossible to grasp articles such as the one published on the New York Times website on New Year’s Day which depicts the extreme austerity experiment undertaken in Latvia over the past few years as a success. After reading it I initially made my way over to Eurostat to look at the data and see if the facts led to a different narrative of Latvia’s experience with austerity.
Then I realised that this was an entirely pointless endeavour. Much better, I thought, to analyse the article itself rather than the statistics – which, if the reader cares to look into without blinkers will how the information presented by the Times is actually inconsistent with the happy face it attempts to put on Latvia’s exercise. In what follows then I include only details which are found in the original NYT article. We’ll look not at Latvia’s plight but the Times’ narrative to see how coherent it is on its own terms and, most importantly, what it attempts to convey.
The article begins with a story about a man who faced the austerity bravely. Because his newborn son required surgery he bought a tractor and began hauling wood to make ends meet. Quite the imagery, of course. Rugged, sturdy – very Baltic.
This is the theme throughout. Latvia is seen as a country that can endure the pain, whereas countries like Greece cannot. What the author means by this is that in Latvia people have largely accepted the cuts without protest while in Greece they have not. This is conveyed well by the image of the man hauling wood in order to ensure that his newborn child gets the surgery it needs.
What is so unusual about this piece and what strikes the informed reader straight away is that such endurance is seen as curative. As the headline says “used to hardship, Latvia accepts austerity, and pain eases”. The problem is that the piece doesn’t seem to ever substantiate this claim. Sure, there’s the story of a man who fires his employees only to rehire them after the worst of the recession is over, but this is just a story. I’m sure there are similar stories in Ireland, Spain or Greece if an eager reporter were to look hard enough. But when it comes to statistics – you know, the way we generally measure the effects of economic policies – the proof is strangely lacking.
The author starts off by writing that the country experienced a 20% decline in GDP when the austerity measures began. He then goes on to point out that last year the economy grew by around 5% “making it the best performer in the 27-nation European Union”. This doesn’t make much sense at all. If an economy experiences such a significant recession the only way it can be said to recover is by first wiping out the losses incurred during the downturn. In Latvia’s case that would require maybe 15% growth in the first year and maybe 10% in the second. Pointing out that the economy has grown by only 5% indicates a massive failure, not a success – at least, by any normal criteria of measurement. The trick here is to compare Latvia to the other EU countries and saying that it is the best performer. But this is not a real comparison because none of the other EU countries experienced a 20% decline in GDP, so comparing present growth rates is a completely misleading way to decide whether austerity has worked or not.
The article then goes on to say that the budget deficit is down and that exports are rising. On their own these are completely meaningless indicators. Everyone agrees that Latvia’s economic problems were not caused by budget deficits or trade imbalances, so why look at these indicators specifically? The author gives no reason; he’s just trying to make his narrative stick together.
He then goes on to write that the cuts have left 30.9% of the country “materially deprived” (yes, one third of the country are poor!) and that unemployment stands at 14.2%. Again, the author engages in rhetorical tricks to make these numbers appear softer than they are. He compares the unemployment rate with that of Greece and Spain. Looking at past trends, however, and the fact that Latvia is a small export-led economy we’re probably better off comparing it with Ireland whose unemployment rate is around 14.6%. No success here either.
The final piece of data the author presents is . . .
Continue reading. The NY Times is rapidly becoming a sycophantic shill for the wealthy and powerful, following the same path as the Washington Post has long since taken.
Throughout the months of November and December, a steady stream of corporate CEOs flowed in and out of the White House to discuss the impending fiscal cliff. Many of them, such as Lloyd Blankfein of Goldman Sachs, would then publicly come out and talk about how modest increases of tax rates on the wealthy were reasonable in order to deal with the deficit problem. What wasn’t mentioned is what these leaders wanted, which is what’s known as “tax extenders”, or roughly $205B of tax breaks for corporations. With such a banal name, and boring and difficult to read line items in the bill, few political operatives have bothered to pay attention to this part of the bill. But it is critical to understanding what is going on.
The negotiations over the fiscal cliff involve more than the Democrats, Republicans, the middle class and the wealthy. The corporate sector is here in force as well. One of the core shifts in the Reagan era was the convergence of wealthy individuals who wanted to pay less in taxes – many from the growing South – with corporations that wanted tax breaks. Previously, these groups fought over the pie, because the idea of endless deficits did not make sense. Once Reagan figured out how to finance yawning deficits, the GOP was able to wield the corporate sector and the new sun state wealthy into one force, epitomized today by Grover Norquist. What Obama is (sort of) trying to do is split this coalition, and the extenders are the carrot he’s dangling in front of the corporate sector to do it.
Most tax credits drop straight to the bottom line – it’s why companies like Enron considered its tax compliance section a “profit center”. A few hundred billion dollars of tax expenditures is a major carrot to offer. Surely, a modest hike in income taxes for people who make more than $400k in income and stupid enough not to take that money in capital gain would be worth trading off for the few hundred billion dollars in corporate pork. This is what the fiscal cliff is about – who gets the money. And by leaving out the corporate sector, nearly anyone who talks about this debate is leaving out a key negotiating partner.
So without further ado, here are eight corporate subsidies in the fiscal cliff bill that you haven’t heard of.
1) Help out NASCAR - Sec 312 extends the “seven year recovery period for motorsports entertainment complex property”, which is to say it allows anyone who builds a racetrack and associated facilities to get tax breaks on it. This one was projected to cost $43 million over two years.
2) A hundred million or so for Railroads - Sec. 306 provides tax credits to certain railroads for maintaining their tracks. It’s unclear why private businesses should be compensated for their costs of doing business. This is worth roughly $165 million a year.
3) Disney’s Gotta Eat - Sec. 317 is “Extension of special expensing rules for certain film and television productions”. It’s a relatively straightforward subsidy to Hollywood studios, and according to the Joint Tax Committee, was projected to cost $150m for 2010 and 2011.
4) . . .
Continue reading about how Congress wants to help the wealthy, not the poor.
For those who are interested, here’s a recent review (at candleandsoap.about.com).
High-fructose corn syrup seems to be in everything. Could that contribute to the prevalence of obesity? Megan Brooks reports at Medscape:
Consuming fructose appears to cause changes in the brain that may lead to overeating, a new study suggests.
“Increases in fructose consumption have paralleled the increasing prevalence of obesity, and high-fructose diets are thought to promote weight gain and insulin resistance,” lead author Kathleen A. Page, MD, and colleagues from Yale University in New Haven, Connecticut, write.
In this study, they showed in healthy volunteers that although glucose ingestion resulted in reduced activation of the hypothalamus, insula, and striatum on MRI — areas that regulate appetite, motivation, and reward processing — as well as increased functional connections between the hypothalamic striatal network and increased satiety. Fructose ingestion had none of these effects.
“The disparate responses to fructose were associated with reduced systemic levels of the satiety-signaling hormone insulin and were not likely attributable to an inability of fructose to cross the blood-brain barrier into the hypothalamus or to a lack of hypothalamic expression of genes necessary for fructose metabolism,” they conclude.
Their findings are published in the January 2 issue of the Journal of the American Medical Association.
Glucose vs Fructose
Fructose ingestion produces . . .
Tom Philpott writes in Mother Jones:
Like hospital patients, US farm animals tend to be confined to tight spaces and dosed with antibiotics. But that’s where the similarities end. Hospitals dole out antibiotics to save lives. On America’s factory-scale meat farms, the goal is to fatten animals for their date at the slaughterhouse.
And it turns out that antibiotics help with the fattening process. Back in the 1940s, scientists discovered that regular low doses of antibiotics increased “feed efficiency”—that is, they caused animals to put on more weight per pound of feed. No one understood why, but farmers seized on this unexpected benefit. By the 1980s, feed laced with small amounts of the drugs became de rigueur as US meat production shifted increasingly to factory farms. In 2009, an estimated 80 percent of the antibiotics sold in the United States went to livestock.
This year, scientists may have finally figured out why small doses of antibiotics “promote growth,” as the industry puts it: They make subtle changes to what’s known as the “gut microbiome,” the teeming universe populated by billions of microbes that live within the digestive tracts of animals. In recent research, the microbiome has been emerging as a key regulator of health, from immune-related disorders like allergies and asthma to the ability to fight off pathogens.
In an August study published in Nature, a team of New York University researchers subjected mice to regular low doses of antibiotics—just like cows, pigs, and chickens get on factory farms. The result: After seven weeks, the drugged mice had a different composition of microbiota in their guts than the control group—and they had gained 10 to 15 percent more fat mass.
Why? “Microbes in our gut are able to digest certain carbohydrates that we’re not able to,” says NYU researcher and study coauthor Ilseung Cho. Antibiotics seem to increase those bugs’ ability to break down carbs—and ultimately convert them to body fat. As a result, the antibiotic-fed mice “actually extracted more energy from the same diet” as the control mice, he says. That’s great if you’re trying to fatten a giant barn full of hogs. But what about that two-legged species that’s often exposed to antibiotics?
Interestingly, the NYU team has produced another recent paper looking at just that question. They analyzed data from a UK study in the early ’90s to see if they could find a correlation between antibiotic exposure and kids’ weight. The study involved more than 11,000 kids, about a third of whom had been prescribed antibiotics to treat an infection before the age of six months. The results: The babies who had been exposed to antibiotics had a 22 percent higher chance of being overweight at age three than those who hadn’t (though by age seven the effect had worn off).
The connection raises another obvious question: Are we being exposed to tiny levels of antibiotics through residues in the meat we eat—and are they altering our gut flora? It turns out that the Food and Drug Administration maintains tolerance limits for antibiotic residue levels, above which meat isn’t supposed to be released to the public (PDF). But Keeve Nachman, who researches antibiotic use in the meat industry for the Johns Hopkins Center for a Livable Future, told me that the FDA sets these limits based solely on research financed and conducted by industry—and it refuses to release the complete data to the public or consider independent research. . .
Amazing talent profiled by Adam Green in the New Yorker:
A few years ago, at a Las Vegas convention for magicians, Penn Jillette, of the act Penn and Teller, was introduced to a soft-spoken young man named Apollo Robbins, who has a reputation as a pickpocket of almost supernatural ability. Jillette, who ranks pickpockets, he says, “a few notches below hypnotists on the show-biz totem pole,” was holding court at a table of colleagues, and he asked Robbins for a demonstration, ready to be unimpressed. Robbins demurred, claiming that he felt uncomfortable working in front of other magicians. He pointed out that, since Jillette was wearing only shorts and a sports shirt, he wouldn’t have much to work with.
“Come on,” Jillette said. “Steal something from me.”
Again, Robbins begged off, but he offered to do a trick instead. He instructed Jillette to place a ring that he was wearing on a piece of paper and trace its outline with a pen. By now, a small crowd had gathered. Jillette removed his ring, put it down on the paper, unclipped a pen from his shirt, and leaned forward, preparing to draw. After a moment, he froze and looked up. His face was pale.
“Fuck. You,” he said, and slumped into a chair.
Robbins held up a thin, cylindrical object: the cartridge from Jillette’s pen. . .
At the World Bank, we have made the world’s most pressing development issue — to reduce global poverty — our mission. We focus on achieving the Millennium Development Goals, which call for the elimination of poverty and sustained development. These goals provide us with targets and yardsticks for measuring results.
The reality, reported in ProPublica by Cheryl Strauss Einhorn:
Accra is a city of choking red dust where almost no rain falls for three months at a time and clothes hung out on a line dry in 15 minutes. So the new five-star Mövenpick hotel affords a haven of sorts in Ghana’s crowded capital, with manicured lawns, amply watered vegetation, and uniformed waiters gliding poolside on roller skates to offer icy drinks to guests. A high concrete wall rings the grounds, keeping out the city’s overflowing poor who hawk goods in the street by day and the homeless who lie on the sidewalks by night.
The Mövenpick, which opened in 2011, fits the model of a modern international luxury hotel, with 260 rooms, seven floors, and 13,500 square feet of retail space displaying $2,000 Italian handbags and other wares. But it is exceptional in at least one respect: It was financed by a combination of two very different entities: a multibillion-dollar investment company largely controlled by a Saudi prince, and the poverty-fighting World Bank.
The investment company, Kingdom Holding Company, has a market value of $12 billion, and Forbes ranks its principal owner, Prince Alwaleed bin Talal, as the world’s 29th-richest person, estimating his net worth at $18 billion. The World Bank, meanwhile, contributed its part through its International Finance Corporation (IFC), set up back in 1956to muster cheap loans and other financial support for private businesses that contribute to its planet-improving mandate. “At the World Bank, we have made the world’s most pressing development issue—to reduce global poverty—our mission,” the bank proclaims.
Why, then, did the IFC give a Saudi prince’s company an attractively priced $26 million loan to help build the Mövenpick, a hotel the prince was fully capable of financing himself? The answer is that the IFC’s portfolio of billions of dollars in loans and investments is not in fact primarily targeted at helping the impoverished. At least as important is the goal of making a profit for the World Bank.
I reached this conclusion after traveling to Ghana—in many ways typical of the more than 100 countries where the IFC works—to see firsthand the kinds of problems the World Bank’s lenders are supposed to tackle and whether their efforts are really working on the ground. I pored through thousands of pages of the bank’s publicly available reports and financial statements and talked to dozens of experts familiar with its performance in Ghana and many other countries.
In case after case, the verdict was the same: The IFC likes to work with huge corporations, funding projects these companies could finance themselves. Its partners are billionaires and massive multinationals, from oil giants like ExxonMobil to Grupo Arcor, the huge Argentine candy-maker. Its projects include not only glitzy hotels and high-end shopping malls, but also gritty gold and copper mines and oil pipelines, some of which end up benefiting the very corrupt, authoritarian regimes that the rest of the World Bank is urging to change. Nearly a quarter of the IFC’s paid-in capital from member governments—now standing at $2.4 billion—came from U.S. taxpayers, and every president in the World Bank’s 69-year history has been an American. But the United States has had little complaint with these practices, even when they have become a subject of public controversy.
Not long ago, the World Bank’s internal watchdog sharply criticized the IFC’s approach, saying it gives little more than lip service to the bank’s poverty-fighting mission. The report, a major 2011 review by the bank’s Independent Evaluation Group, found that fewer than half the IFC investments it studied involved fighting poverty. “[M]ost IFC investment projects generate satisfactory returns but do not provide evidence of identifiable opportunities for the poor to participate in, contribute to, or benefit from the economic activities that the project supports,” the report concluded. In fact, it said, only 13 percent of 500 projects studied “had objectives with an explicit focus on poor people,” and even those that did, the report found, had a “limited” impact. The IFC did not dispute the conclusions. . .
It does seem as though the financial industry has had excellent returns on their massive political contributions and infiltration of the top of levels of government (e.g., Timothy Geithner, Eric Holder). The DoJ in particular seems beholden to the finance industry and shows marked reluctance to investigate or pursue prosecutions. And the SEC? The agency that simply ignored correspondence pointing out Bernie Madoff’s scam? Now I imagine the DoJ will allow the NYSE to be folded into a new cartel. Pam Martens reports in Wall Street on Parade:
If the general public knew the history of the company that has announced it is acquiring the New York Stock Exchange, there would be a loud clamor for the anti-trust division of the Justice Department to become involved. But the larger question is, where has the Justice Department been on this issue for more than a decade?
The company planning to acquire the New York Stock Exchange in an $8.2 billion cash and stock deal is the Atlanta-headquartered Intercontinental Exchange, known on Wall Street simply as ICE.
ICE went public in 2005. There are two paragraphs in its offering statement that are simply breathtaking:
“In May 2000, our company was formed, and Continental Power Exchange, Inc. contributed to us all of its assets, which consisted principally of electronic trading technology, and its liabilities, in return for a minority equity interest in our company. In connection with our formation, seven leading wholesale commodities market participants acquired equity interests in our company, either directly or through affiliated entities. We refer to these leading commodities market participants, or their affiliates, as the case may be, as our Initial Shareholders. Our Initial Shareholders are BP Products North America Inc. (formerly known as BP Exploration and Oil, Inc.), DB Structured Products, Inc. (formerly known as Deutsche Bank Sharps Pixley Inc.), The Goldman Sachs Group, Inc., Morgan Stanley Capital Group Inc., S T Exchange Inc. (an affiliate of Royal Dutch Shell), Société Générale Financial Corporation and Total Investments USA Inc. (an affiliate of Total S.A.).
“In November 2000, six leading natural gas and power companies, which we refer to as the Gas and Power Firms, acquired equity interests in our company. The Gas and Power Firms are AEP Investments, Inc. (formerly known as AEP Energy Services, Inc.), Aquila Southwest Processing, L.P., Duke Energy Trading Exchange, LLC, El Paso Merchant Energy North America Company, Reliant Energy Trading Exchange, Inc. and Mirant Americas Energy Marketing, L.P.”
One might be forgiven for thinking that this sounds more like a cartel than an exchange. It is clear from these disclosures that ICE came into being because powerful moneyed interests on Wall Street (Goldman Sachs, Morgan Stanley, et al) wanted to team up with Big Oil and Big Gas and create their own electronic trading platform – and their own rules.
The offering statement also notes that the lead underwriters, Morgan Stanley and Goldman Sachs, were wearing multiple hats as existing shareholders: “We expect that Morgan Stanley Capital Group Inc. will sell 1,395,395 shares, or 17.8% of its interest in us, The Goldman Sachs Group, Inc. will sell 1,100,000 shares, or 14.6% of its interest in us…”
According to a September 30, 2012 report from Morningstar, units of Morgan Stanley and Goldman Sachs continue to own sizeable stakes in ICE.
ICE continued to gobble up pieces of the trading market, acquiring the International Petroleum Exchange in 2001. At the time, the International Petroleum Exchange was second only to the New York Mercantile Exchange for trading energy futures. ICE quickly replaced human traders with computers.
ICE made another brazen announcement less than two months after AIG collapsed into the arms of the U.S. government because of its insane exposure to credit default swaps. Wall Street firms had used AIG to insure their exposure on credit default swaps and the U.S. government paid Wall Street firms 100 cents on the dollar on behalf of AIG. By October 30, 2008, the date of the ICE announcement, Bear Stearns had collapsed, Lehman had collapsed, Merrill Lynch had collapsed into the arms of Bank of America, Citigroup was teetering. Wall Street had proven itself to be a pile of dysfunctional hubris and corrupt self regulation.
And yet, ICE announced it was teaming up with nine of the largest investment banks to create its own solution to trading credit default swaps: . . .
At least some Republicans in Congress are fed up with the inability of their party to govern responsibly and take their duties seriously. Mark Santora reports in the NY Times:
Elected officials from the New York area erupted with outrage on Wednesday after the House refused to take up a federal aid package for states that suffered damages from Hurricane Sandy, and even local Republicans blasted their Congressional leaders for their inaction.
“I’m saying right now, anyone from New York or New Jersey who contributes one penny to Congressional Republicans is out of their minds,” Representative Peter T. King, a Long Island Republican, said during an interview on CNN on Wednesday morning. “Because what they did last night was put a knife in the back of New Yorkers and New Jerseyans. It was an absolute disgrace.”
Gov. Chris Christie, a New Jersey Republican, furiously accused the Congressional leadership of his own party of “duplicity” and “selfishness,” and called the decision not to hold a vote on the storm-relief measure “irresponsible.” He said the legislation had fallen victim to “palace intrigue,” and “it’s why the American people hate Congress.”
And Representative Michael G. Grimm, a Republican from Staten Island, said the failure to vote was a “betrayal.” He urged that action be taken as soon as possible.
“It’s not about politics,” he said. “It’s about human lives.”
Last week, the Senate adopted a $60.4 billion aid package, and on Wednesday Mr. King and other local politicians said they had been promised that the House would bring it up for a vote before the current legislative session ends on Thursday.
That is unlikely now, and the aid bill will have to be reintroduced in the new Congress and passed by both chambers. . .
Seeking a nick, I went with the Rotbart, which has been difficult for me to learn.
But first: The wonderful Wet Shaving Products Monarch High Mountain White made a wonderful lather from RazoRock Cacao soft shaving soap, and I got a lot of pleasure from the process, this time for some reason focusing on the sound rather than the tactile sensation (which I by no means ignored).
The Rotbart this time was a kitten if not a puppy: totally smooth shaving with no problems at all. Sometimes when I return to a difficult razor I found that in the interim I seem to have learned it, much as William James in Psychology wrote that we learn ice skating in the summer and bicycling in the winter.
As a result, still no test of the Clubman styptic dab. But I did enjoy a good splash of New York aftershave, and now I’m enjoying the clean apartment now in progress.