Archive for the ‘Business’ Category
The editors of the NY Times comment on California’s intelligent regulation on egg production—and Missouri’s challenge to it:
California voters and lawmakers have decided that, starting next year, all eggs sold in that state must come from hens that can stand up, lie down and extend their wings fully without touching another bird. This is a perfectly reasonable effort to improve, at least for one creature, the deplorable conditions associated with modern industrial farming. It could also improve public health. Astonishingly, the attorney general of Missouri, Chris Koster, has decided to sue to overturn the rule in federal court. The court should dismiss the case.
Mr. Koster argues that the rules violate the commerce clause of the Constitution by imposing regulations on businesses in other states. But courts have long held that states can enact food, safety and other regulations in the public interest, as long as they do not discriminate against businesses in other states. California’s egg-production rules clearly meet the nondiscrimination standard, because all egg producers who want to sell their products in the state must abide by them.
Moreover, the regulations, which go into effect next year, can provide benefits to consumers by . . .
Here’s the news story that prompted the editorial
SEC employees get notified of companies scheduled for investigation and dump their stocks, generally before the company’s stock sinks on news that it’s under investigation. Why do SEC employees even control their stock holdings? Haven’t they heard of a blind trust?
Ryan Koronowski writes at ThinkProgress:
Alpha Natural Resources, the third-largest coal company in the U.S., agreed to pay a $27.5 million fine after violating water pollution permits in Kentucky, Pennsylvania, Tennessee, Virginia and West Virginia.
Over the last seven years, Alpha and its subsidiaries discharged heavy metals into waterways across those five Appalachian states 6,289 times, through 794 different discharge points, sometimes by as much as 35 times the legal limit.
The pollutants that spilled from the coal mines throughout Appalachia include “iron, pH, total suspended solids, aluminum, manganese, selenium, and salinity,” according to an EPA press release.
The giant coal company will also spend $200 million to stop sending toxic discharge into the nations rivers and streams. According to the AP, which obtained details about the settlement on Wednesday, “under the agreement, the mine operators will install wastewater treatment systems and take other measures aimed at reducing discharges from 79 active coal mines and 25 coal-processing plants in those five states.”
Cynthia Giles, who runs the Environmental Protection Agency’s enforcement office, told the AP that the settlement was “the biggest case for permit violations for numbers of violations and size of the penalty, which reflects the seriousness of violations.”
“This is the largest one, period.”
A big part of the reason this settlement was so comprehensive and expensive is because in 2011, Alpha Natural Resources bought a coal company called Massey Energy. Massey’s coal operations account for more than half of the violations represented in Wednesday’s settlement.
Alpha spent $7.1 billion to purchase Massey, and it has been picking up the pieces ever since. Months after the purchase agreement was announced, Massey was still fighting a legal battle over dumping 1.4 billion gallons of toxic coal slurry into old underground coal mines — knowing all the while that the mines leaked into the water supply. Alpha settled the lawsuit with hundreds of West Virginia residents in 2011.
Massey received global headlines for the tragic explosion in 2010 that killed 29 miners, and stayed in the headlines as Massey CEO Don Blankenship’s confrontational relationship with safety regulators prompted shareholder calls for his resignation. In 2009, Blankenship called the idea that safety regulators cared more about coal miners than he did “as silly as global warming.” This despite the small world encompassing coal industry and coal regulators: President Bush appointed a former Massey official to an MSHA review commission in 2002.
In 2012, Massey mine superintendent Gary May pled guilty to charges of criminal conspiracy over deceiving federal safety regulators. When the Mine Safety and Health Administration would come for an inspection, May would warn miners, increase air ventilation, falsify records, and cut corners in order to hide dangerous safety violations.
Though 2014 is barely two months old, the U.S. has seen a raft of coal spills — in West Virginia, North Carolina, West Virginia again, and West Virginia again — signalling the problem of dirty coal is not going away.
Very interesting article in the Washington Post by Brian Fung:
If you had a lucky childhood, tucked away in a corner of your closet was a gigantic collection of loose Legos. It was the culmination of dozens of kits and construction sets, collected over the years and dumped into a single bin. Paw through the bits and pieces long enough, and you could create anything: Spaceships. Submarines. Medieval castles. Western ranches.
But soon, hobbyists won’t be limited by what’s inside those bins. They’ll be able to craft their own bricks, thanks to 3D printers that make fabricating those plastic parts as convenient as going to Toys R Us. With such technology, entire structures can now be reverse-engineered, reduced into a pile of components and snapped together in minutes.
You see the danger here for Lego. 3D printing may prove to be one of the biggest tests the company has ever faced. Unlike the rise of PCs and tablets, which merely demanded that Lego invest in new digital products, 3D printing strikes at the heart of Lego’s core business. Manufacturing small bits of plastic is, in fact, what 3D printers do best.
Lego doesn’t see it that way — as Roar Rude Trangbæk, a company spokesperson, told me, it’s a lot harder than it looks to produce high-quality bricks.
That may be true for now. But it rarely pays to bet against improvements in technology — meaning that this 5,000-piece puzzle isn’t going away.
Outside the company, Legos and 3D printing are a natural fit for each other — sometimes literally. Designers like Stefanie Mueller have started using Legos as part of their prototypes. For large items, Mueller developed a program called faBrickator, which converts a 3D design image into a homegrown Lego project, complete with instructions. Only the crucial parts, the ones that need constant retooling, are reserved for the 3D printer. According to the German Ph.D student, using a combination of Lego blocks and smaller 3D-printed pieces can cut a 14-hour production process down to 67 minutes. . .
An interesting book review in the NY Review of Books by Marcia Angell:
by Alison WolfCrown, 393 pp., $26.00
In just the past two or three decades, women in more than token numbers have taken their place alongside men at the upper levels of government, the professions, and business. They now earn more than half of all college degrees, and they will shortly make up a majority of lawyers, doctors, and college faculty. While they still account for only a small minority of political and business leaders, that, too, is changing. The rapid ascension of women to the most influential sectors of society—occurring in all advanced Western countries—is likely to have profound implications for public policy, and perhaps even more for the way families construct their lives and raise their children.In her remarkably wide-ranging book, Alison Wolf describes these women at the top—why their numbers have grown so fast in recent years and what their lives are like. She estimates they make up roughly 15 to 20 percent of working women in advanced countries, or about 70 million women worldwide. (Whether she is defining them by education or income is not clear, but it doesn’t much matter, since the two are so closely correlated.) She calls them variously “professional women” (an unfortunate choice), “graduates,” and the “elite,” but none of those terms quite captures the combination of education, ambition, and professional commitment that characterizes them. Clearly, we need a term that refers to something more than just graduating from college, but it’s hard to come up with one, as Wolf demonstrates. I’ll call them “upper-middle-class,” although that is not very precise either. Whatever the term, if you are reading this, the chances are that you are one of these women or living with one.
The book says relatively little about the other 80 to 85 percent of women, and virtually all Wolf’s interviews are with women in the upper-middle class, mainly her friends and colleagues; and, it seems to me, disproportionately women in business or finance. But that is a small cavil (mainly with the subtitle, which seems to promise a focus on all working women) in a book that is so interesting and well documented, drawing on a variety of surveys as well as interviews. Moreover, the focus on upper-middle-class women seems justified, since their rise to the top is a new and largely unexamined phenomenon. Despite the mountain of data Wolf amasses, however, she does not say very much about what she thinks the reader should conclude from all of it. I will try to draw some conclusions here, based on her book, on other publications, and on my own experiences.
Until the 1960s, with few exceptions, the only way even educated women could gain security, let alone status, was to make as good a marriage as possible as early as possible, leave the workforce (if they were ever in it), and spend the rest of their lives caring for their families and homes. Their social standing was that of their husbands. For practical reasons, sex, marriage, and children were tightly bound together, at least in respectable circles. There was no reliable birth control, the social stigma of extra-marital pregnancy was great, and unmarried men often did not take responsibility for the children they fathered, leaving single mothers barely able to support their children. Smart women made sure not to get pregnant before marriage, and the best way to ensure that was not to have sex.
From earliest history right through the 1950s, there was therefore a transactional element to marriage. In return for the security and protection and social approbation the husband provided, the wife provided sex and children and management of the household. If the man was wealthy and the woman beautiful and charming, so much the better. Of course, there was often love and companionship as well, but throughout history, as Wolf writes, “sex proffered, sex withheld were the main assets that girls possessed.”
All that changed almost overnight when the birth control pill hit the market in the early 1960s. Suddenly, premarital sex was no longer risky. Very quickly, the Pill (everyone knew what that capitalized word meant) came into widespread use, and for the first time, both women and men could have sex without fear of pregnancy. That certainly suited the times, and the Woodstock generation enthusiastically embraced free sex—or at least a certain segment of that generation did—and premarital sex generally lost its stigma. Both women and men often had multiple sex partners before marriage, and began to marry much later. The median age at first marriage for women increased from twenty-one in 1960 to twenty-seven in 2011.
Reliable contraception also made it feasible for women to undertake long years of education and commit to careers in a way that had not been possible before, and they began to be encouraged by, of all people, their fathers—their “besotted” fathers, in Wolf’s words. One reason for the change in the attitudes of fathers is that in the second half of the twentieth century, . . .
Ian Millhiser notes at ThinkProgress:
A company called Marijuana Doctors, which connects medical marijuana patients with doctors who can prescribe the drug, claims that it is airing what it claims is the “first ever marijuana commercial on a ‘Major Network.’” The ad, which “draws a parallel between a ‘shady’ street dealer attempting to push ‘unsafe’ sushi to unsuspecting buyers, and medical marijuana patients being forced to obtain their medication in a similar fashion,” airs in New Jersey on several national networks — including A&E, Fox, CNN, Comedy Central, Food Network and the History Channel. . .
Although medical marijuana is legal in New Jersey — the state started issuing medical marijuana identification cards in 2012 — adult patients currently have greater access to the drug than children. Indeed, one family recently decided to move from New Jersey to Colorado to ensure their daughter would have access to the liquefied marijuana she uses to stave off potentially fatal seizures. Child marijuana patients in New Jersey are technically allowed to access edible marijuana, but marijuana in this form isn’t generally available at New Jersey dispensaries.
Gov. Chris Christie (R-NJ) recently rejected a bill that would have permitted families in a similar situation to buy marijuana in other states and transport it home to New Jersey.
Pam Martens has an update on the rash of deaths JP Morgan has suffered. The article at the link includes the following timeline as well as links to related articles:
Timeline of JPMorgan worker deaths, ages 22 to 39, during December 2013, January and February 2014:
Audrey Raishein Beale (Yon) died on December 4, 2013 at age 35 in Katy, Texas. Beale, according to her obituary, was employed as a certified senior underwriter at the Houston, Texas branch of the JPMorgan Chase Bank at the time of her death. Beale was reported to have died of cancer.
Joseph M. Ambrosio, age 34, of Sayreville, New Jersey, passed away on December 7, 2013 at Raritan Bay Medical Center, Perth Amboy, New Jersey. He was employed as a Financial Analyst for J.P. Morgan Chase in Menlo Park. The cause of death was not given.
Jason Alan Salais, 34 years old, died December 15, 2013 outside a Walgreens inPearland, Texas. A family member confirmed that the cause of death was a heart attack. According to the LinkedIn profile for Salais, he was engaged in Client Technology Service “L3 Operate Support” and previously “FXO Operate L2 Support” at JPMorgan. Prior to joining JPMorgan in 2008, Salais had worked as a Client Software Technician at SunGard and a UNIX Systems Analyst at Logix Communications.
Albert Suh, 22 years old, died on January 12, 2014. The police reported that emergency medical workers arrived at the John C. Bell apartment building in Philadelphia where a fire escape platform had collapsed with Suh and two female friends. Suh was taken to Hahnemann Hospital, where he was listed in critical condition. He was pronounced dead at 5:43 a.m. Sunday, January 12. The two friends were reported injured but to have survived. Suh’s LinkedIn profile shows that he worked as an Analyst at JPMorgan from June 2013 to his death in January. Prior to that he interned from June 2012 through August 2012 as an analyst at AXA Advisors.
Ashley Dawn Stone, 30, of DeBary, Florida, passed away Sunday, January 19, 2014, at St. Joseph’s Hospital in Tampa, Florida. Stone was employed by JP Morgan Chase Bank in Lake Mary, Florida. A cause of death was not listed
Gabriel Magee, 39, died on January 28, 2014. Magee was discovered at approximately 8:02 a.m. lying on a 9th level rooftop at the Canary Wharf European headquarters of JPMorgan Chase at 25 Bank Street, London. His specific area of specialty at JPMorgan was “Technical architecture oversight for planning, development, and operation of systems for fixed income securities and interest rate derivatives.”
Ryan Crane, age 37, died February 3, 2014, at his home in Stamford, Connecticut. The Chief Medical Examiner’s office is still in the process of determining a cause of death. Crane was an Executive Director involved in trading at JPMorgan’s New York office. Crane’s death on February 3 was not reported by any major media until February 13, ten days later, when Bloomberg News ran a brief story.
Dennis Li (Junjie), 33 years old, died February 18, 2014 as a result of a purported fall from the 30-story Chater House office building in Hong Kong where JPMorgan occupied the upper floors. Li is reported to have been an accounting major who worked in the finance department of the bank.
I wonder whether such flagrant betrayal of supporting the general welfare would be grounds for recall or impeachment. Probably not. Alan Pyke reports at ThinkProgress.
Pennsylvania is one of just 15 states that ban predatory payday loans, for now. If state Rep. Chris Ross (R) and state Sen. Pat Browne (R) have their way, though, the Keystone State will open its arms to companies that already pull billions of dollars out of poor communities each year through loans with average interest rates of over 300 percent.
Browne has sponsored a bill to remove the state’s 24 percent cap on interest rates. The legislation is modeled on a bill Ross pushed through the Pennsylvania House last year, but which never won Senate passage in 2013. While Browne did not comment on the effort, Ross told the Pittsburgh Tribune-Review that their efforts are meant to give the state better control over companies that currently operate in the state from the internet shadows.
“I believe there is a need for a properly structured, short-term lending in Pennsylvania,” Ross said. “We’ve got the Internet, for which there is no effective means of regulation to protect consumers.”
The Department of Justice is fighting illicit online lending, despite criticism from industry-friendly Republicans at the national level. And while that indicates that there is a real demandfor cash advances in poor communities where paychecks don’t always come in time to cover the bills, it doesn’t mean lifting the cap on interest rates is necessarily the right solution. If lawmakers want to do something to help satisfy that demand, they don’t have to invite the fine-print trickery of private payday lending companies into their states’ neediest corners. (Each year more than 12 million people take out payday loans nationwide and end up paying roughly $520 in interest and fees for every $375 they borrow thanks to limitless interest rates.)
The most promising alternative would be to resurrect the Postal Service’s (USPS) long-dormant banking powers. The USPS has physical locations in many communities that have been abandoned by banks — places where payday lenders flourish by virtue of being the only option for desperate people — and could provide the same basic banking services and short-term loans at non-abusive prices. The revenue that postal banking would bring in would also close the budget hole Congress created for the USPS when it required the agency to keep its pensions fully funded for the next 75 years, a requirement no other business or government agency faces. Polling on the idea is scarce, but one survey found significant support for the idea with many still unsure what to think.
Using the post office to meet the needs of poor people without access to bank accounts would also end the cycle of legislative gamesmanship that has surrounded payday lending for decades. The companies that profit from the practice spend a lot of money on political contributions, and use the resulting clout to either kill reform efforts in states where the loans are allowed or expand their access to customers in states that regulate the industry more tightly. Payday lenders have proven adept at evading state regulators, and have slipped through the cracks of national financial regulation. While the Consumer Financial Protection Bureau is finally putting regulatory cops on the payday lending beat and winning unprecedented legal victories for abuses, postal banking offers an even more elegant solution.
The rise of secret laws, secret courts, and secret decisions that affect us all is a very regressive step. One is astonished to see such things become standard practice in the US and presage the doom of democracy. The virtue of open court proceedings with evidence presented publicly and the defendant able to question the plaintiff or prosecutor is so that we can be assured that justice was indeed done and that fairness prevailed. Once the courts become secret, with secret evidence and secret decisions, then we are moving directly in a totalitarian direction. The next step would be secret prisons, and we have seen those as well in the gulag created by George W. Bush. (We also have prisons that are not secret in terms of location, but who is imprisoned and what goes on in the prison is secret: the infamous Bagram prison in Afghanistan, for example.) Secrecy is essential for actions that cannot withstand the light of day.
And now our corporate overloads are striving to get secret courts to resolve their inter-corporate disputes: they do not want the issues of the evidence made public because it would reveal to the public the sorts of things corporations now feel free to do. (See, for example, the actions of Duke Energy in North Carolina, where the corporation has placed one of its own in the Governor’s mansion.)
Judith Resnick reports in the NY Times:
Should wealthy litigants be able to rent state judges and courthouses to decide cases in private and keep the results secret?
The answer should be an easy no, but if the judges of Delaware’s Chancery Court persuade the United States Supreme Court to take their case and reverse lower federal court rulings outlawing that practice, corporations will, in Delaware, be able to do just that.
The state has long been a magnet for corporate litigation because of its welcoming tax structures and the court’s business expertise. Yet the State Legislature became concerned that Delaware was losing its “pre-eminence” in corporate litigation to a growing market in private dispute resolution.
To compete, Delaware passed a law in 2009 offering new privileges to well-heeled businesses. If litigants had at least $1 million at stake and were willing to pay $12,000 in filing fees and $6,000 a day thereafter, they could use Delaware’s chancery judges and courtrooms for what was called an “arbitration” that produced enforceable legal judgments.
Instead of open proceedings, filings would not be docketed, the courtroom would be closed to the public and the outcome would be secret. The Delaware Supreme Court could review judgments, but that court has not indicated whether appeals would also be confidential.
A group called the Coalition for Open Government, including news and civic organizations, objected that Delaware’s legislation was unconstitutional. In 2012, a federal judge agreed that the law violated the public’s right of access to civil proceedings under the First Amendment. A divided appellate court concurred. Delaware judges are now asking the Supreme Court to reinstate Delaware’s system.
Proponents argue that keeping sensitive business information secret and avoiding uncomfortable publicity is what makes arbitration attractive. To defend their rent-a-court system’s “conciliatory atmosphere,” conducive to “business relations,” Delaware’s chancery judges invoked the history of privacy in arbitration. This translates into giving control to litigants to make their own rules, use state judges and prevent the public from knowing anything.
Can judges in courts preside over trial-like proceedings in private? Many state constitutions (including Delaware’s) insist that all “courts shall be open.” The United States Constitution does not have those words, but the Sixth Amendment guarantees criminal defendants the right to a “speedy and public trial,” and civil and criminal litigants have rights to jury trials. Those provisions — with First Amendment rights to petition for redress and free speech, due process and English open court traditions — have produced a body of law mandating openness. Before a proceeding can be closed, judges need to make a record of what exceptional circumstances, such as trade secrets or national security, justify secrecy.
What are the stakes? As the philosopher Jeremy Bentham explained centuries ago, when presiding at trial, judges were “on trial.” Publicity (“the very soul of justice”) takes control away from both judges and disputants and shifts power, to the great “tribunal of public opinion.”
Only in the second half of the 20th century did courthouse doors really welcome all persons, regardless of race, gender and ethnicity. Congress, creating new rights for consumers and employees, supported access by funding legal services. Class actions enabled pursuit of claims. Information poured out, as technologies let people read briefs online, watch proceedings streamed live, and download data on courts’ budgets. Courts demonstrate how to have civilized debates about deeply contested views of what law is or ought to be.
In contrast, the public face of private dispute resolution depends on what providers decide to put on it. Information may dribble out, through corporate disclosure statements, academic studies, state mandates for disclosures (such as insurance payments for malpractice) and anecdotes.
Delaware’s program points to a broader problem: the growing privatization of judging and the closing of access to courts. The Supreme Court has accelerated this trend through its expansive interpretation of the Federal Arbitration Act of 1925, intended to ensure that if parties’ contracts include private arbitration, federal courts would enforce them.
In a series of recent decisions, the court stretched that law to apply to consumers and employees, with no bargaining power over terms. For example, purchasers of cellphones and prospective employees are frequently required to sign “contracts” replacing court access with procedures companies choose. These are take-it-or-leave-it deals. If you want a cellphone or a job, you have to agree to private dispute resolution.
Because of this one-sidedness, . . .
Corporations love to rhapsodize about the free market even as they do everything in their power to prevent it. See Silicon Valley’s hiring practices for example. No surprise that the leading libertarian lights of Silicon Valley are unethical as well as greedy. From the article:
Alan Hyde, a Rutgers professor who wrote “Working in Silicon Valley: Economic and Legal Analysis of a High-Velocity Labor Market,” said the no-poaching accusations go contrary to what has made the valley so successful: job-hopping.
“There is a fair amount of research that tech companies, particularly in California, have distinctive personnel practices,” he said. “They hire for short tenures and keep ties with former employees so there can be an exchange of information across company lines. The companies in this suit might have been killing the golden goose.”
They certainly tried to keep their practices quiet. Eric E. Schmidt, then Google’s chief executive, said he preferred that the company’s Do Not Call list be shared orally, according to court papers, “since I don’t want to create a paper trail over which we can be sued later.”
In a similar vein, an Intel recruiter asked Paul S. Otellini, the company’s chief executive, about a hands-off deal with Google.
“We have nothing signed,” Mr. Otellini responded in an email. “We have a handshake ‘no recruit’ between Eric and myself. I would not like this broadly known.” [Of course not: unethical behavior looks so tawdry in the light of day. - LG]
The origins of the conspiracy, according to the lawsuit, date back to the 1980s, when the filmmaker George Lucas sold part of his company to Mr. Jobs.
“We cannot get into a bidding war with other companies because we don’t have the margins for that sort of thing,” Mr. Lucas is quoted as saying in the court papers. So Lucasfilm and what was to become Pixar made a deal that there would be no cold-calling, that they would notify each other when offering a job to an employee and that any offer was final and would not be improved in response to a counteroffer.
What worked for Pixar would work for Apple, Mr. Jobs decided.
Trip Gabriel reports in the NY Times:
Last June, state employees in charge of stopping water pollution were given updated marching orders on behalf of North Carolina’s new Republican governor and conservative lawmakers.
“The General Assembly doesn’t like you,” an official in the Department of Environment and Natural Resources told supervisors, who had been called from across the state to a drab meeting room here. “They cut your budget, but you didn’t get the message. And they cut your budget again, and you still didn’t get the message.”
From now on, regulators were told, they must focus on customer service, meaning issuing environmental permits for businesses as quickly as possible. Big changes are coming, the official said, according to three people in the meeting, two of whom took notes. “If you don’t like change, you’ll be gone.”
But when the nation’s largest utility, Duke Energy, spilled 39,000 tons of coal ash into the Dan River in early February, those big changes were suddenly playing out in a different light. Federal prosecutors have begun a criminal investigation into the spill and the relations between Duke and regulators at the environmental agency.
The spill, which coated the river bottom 70 miles downstream and threatened drinking water and aquatic life, drew wide attention to a deal that the environmental department’s new leadership reached with Duke last year over pollution from coal ash ponds. It included a minimal fine but no order that Duke remove ash — the waste from burning coal to generate electricity — from its leaky, unlined ponds near drinking water. Environmental groups said the arrangement protected a powerful utility rather than the environment or the public.
Current and former state regulators said the watchdog agency, once among the most aggressive in the Southeast, has been transformed under Gov. Pat McCrory into a weak sentry that plays down science, has abandoned its regulatory role and suffers from politicized decision-making.
The episode is a huge embarrassment for Mr. McCrory, who worked at Duke Energy for 28 years and is a former mayor of Charlotte, where the company is based. And it has become yet another point of contention in North Carolina, where Republicans who took control of the General Assembly in 2011 and the governor’s mansion last year have passed sweeping laws in line with conservative principles. They have affected voting rights and unemployment benefits, as well as what Republicans called “job-killing” environmental regulations, which have received less notice.
Critics say the accident, the third-largest coal ash spill on record, is inextricably linked to the state’s new environmental politics and reflects an enforcement agency led by a secretary who suggested that oil was a renewable resource and an assistant secretary who, as a state lawmaker, drew a bull’s-eye on a window in his office framing the environmental agency’s headquarters.
“They’re terrified,” said John Dorney, a retired supervisor who keeps in touch with many current employees. “Now these people have to take a deep breath and say, ‘I know what the rules require, but what does the political process want me to do?’ ”
Duke has apologized for the Dan River spill and says it is now committed to cleaning up some of its 32 coal ash ponds across the state. The company has also been subpoenaed in the federal investigation.
A spokesman for Governor McCrory said the governor had no role in the state’s proposed settlement with Duke. . .
Continue reading. The story at the link includes a video. And the comments are worth reading. People are becoming increasingly angry at the downfall of the US.
The GOP strongly opposes any agency, law, or other measure that will assist consumers (cf. their continuing attacks on Obamacare, for example). The CFPB is a regular target, as described in the Washington Post by Lydia DePillis:
The two-and-a-half-year-old Consumer Financial Protection Bureau may finally have a confirmed director, but that doesn’t mean Republicans are done throwing rocks at it.
The House debated (and is expected to pass) a package of bills this afternoon that would replace the bureau’s single director with a five-person commission, prevent it from collecting consumer credit card information, and make it easier for the Treasury’s Financial Stability Oversight Council to overrule CFPB regulations. House Republicans have been trying to pass many of these things for years, which hobbled the fledgling agency’s effectiveness by making it play defense even though they never became law.
Perhaps the most important component has to do with money: The legislation would change the CFPB’s funding mechanism so that its budget comes from Congress rather than the Federal Reserve. It authorizes $300 million for each of the next two years, or about two-thirds of what the bureau has been spending annually. After that, there’s nothing – per the House Financial Services Committee’s GOP majority and theCongressional Budget Office, it would save $5.4 billion over the next 10 years, which can only be true if the CFPB isn’t funded at all. (GOP committee staff said later that the bill only saves that much “in the vernacular,” and that they don’t intend to zero out the bureau’s budget entirely.)
Of course, it’s almost certain the bill won’t clear the Democratically-controlled Senate anyway, and the White House has already promised not to sign it. For that reason, one might see this as a purely political exercise, allowing a stream of GOP Congress members to inveigh against “perhaps the most powerful agency in government” (Rep. Patrick McHenry, N.C.) that’s “disgracefully unaccountable to the American people” (Rep. Marlin Stutzman, Ind.) and proof that “big government is breathing down their backs” (Rep. Sean Duffy, Wis.).
The bureau’s defenders rebutted most of their attacks — the credit card data being collected can’t be traced back to individual consumers, for example — but occasionally just threw up their hands in exasperation.
“We could’ve saved a lot of trees and a lot of time if we had a bill that said ‘end the Consumer Protection Bureau,” said Rep. Dennis Heck (D-Wash.), one of the few Democrats who lined up to oppose it. “We all know what the fate of it is going to be. And what is the opportunity cost of making that point? At least one opportunity cost is being able to work on actual regulatory relief.”
So the CFPB is probably safe — at least until the midterm elections. But the continued onslaught is evidence that it hasn’t made as many friends as it might’ve hoped, even after delivering $3 billion to consumers in settlements over fraudulent practices by financial institutions, and helping thousands who called in to complain about mortgages, student loans, auto loans, payday lenders, and debt collectors. The bureau’s leaders tried really, really hard to win over the community banks and credit unions, but their trade associations still spoke outin favor of the legislation that would render it essentially powerless, protesting that the CFPB’s new requirements are still too onerous for smaller institutions to deal with.
The GOP truly sees the role of government as protecting businesses, with consumers left to fend for themselves.
Kevin Drum has an excellent post: unions are over, so what will now present a countervailing force to business? Government cannot do it any longer: that has been annexed as a tool of business. So what will speak for labor?
And the DOJ does nothing. The Obama Administration does nothing. The government seems to have decided that wealth places one above the law. Danielle Douglas writes in the Washington Post:
Swiss banking giant Credit Suisse helped wealthy Americans hide billions of dollars from U.S. tax collectors for several years and federal prosecutors have done little to hold violators accountable, according to a U.S. Senate subcommittee report due out Wednesday.
The allegations were particularly stunning in the face of the budget cuts and deficits that the United States faces, lawmakers said. The report casts the Justice Department as a hapless enforcer that has dragged its feet in getting Credit Suisse to turn over the names of some 22,000 U.S. customers.
Lawmakers have accused the bank of helping wealthy Americans avoid paying taxes on as much as $12 billion in assets held at the institution. Prosecutors have been aware of the misconduct at Credit Suisse for at least four years, in which time they have indicted seven bankers and launched a probe of the institution, according to the report. But no one has stood trial, and the bank has not been held legally accountable, the report says.
Justice spokeswoman Emily Pierce bristled at the report’s characterization of the department, pointing out that it has charged 73 account holders and 35 bankers and advisers with offshore tax evasion offenses since 2009.
“We have acknowledged that as many as 14 Swiss financial institutions are currently under investigation, and we won’t hesitate to indict if and when circumstances merit,” Pierce said.
Prosecutors have been hampered by the Swiss government, which has prevented banks from handing over information after its largest bank, UBS, turned over 4,700 accounts in 2009. Justice has yielded 238 names of Credit Suisse customers through treaty requests.
Sen. Carl M. Levin (D-Mich.), chairman of the subcommittee on investigations, insisted at a news conference Tuesday that the department could do more, including using civil summons and a grand jury subpoena to get information.
“The Department of Justice must use the legal tools that it has and not depend on Swiss courts,” he said. “Collecting taxes owed by tax evaders is vitally important for our fiscal situation. Beyond that, there is a basic question of fairness. These individuals are cheating not just the government but honest Americans who pay what they owe.”
Credit Suisse chief executive Brady W. Dougan and Deputy Attorney General James M. Cole were scheduled to appear at a subcommittee hearing Wednesday.
The 175-page report, the culmination of a two-year investigation, alleges that from 2001 to 2008 Switzerland’s second-largest bank helped customers disguise Swiss accounts by opening them in the name of offshore shell entities. Bankers used cloak-and-dagger tactics to conceal their misdeeds, according to the report.
One former customer told investigators that a Credit Suisse banker once handed him bank statements hidden in a Sports Illustrated magazine during a breakfast meeting at a Mandarin Oriental hotel.
About 1,800 Credit Suisse bankers were opening and servicing Swiss accounts for wealthy Americans by 2008. Some of those bankers helped American clients structure large cash transactions to avoid U.S. reporting requirements, in violation of U.S. law. The bank also used outside parties to supply clients with credit cards that enabled them to secretly draw upon the cash in their Swiss accounts, according to the report.
The situation at Credit Suisse changed in 2008 when UBS came clean about its role in aiding U.S. tax evasion, which led the bank to disclose thousands of accounts as part of a $780 million settlement with Justice. Credit Suisse embarked on a five-year process of closing the Swiss accounts of Americans who refused to disclose them to U.S. authorities. About 18,900 wealthy Americans closed the accounts rather than pay taxes, according to the subcommittee. . .
Would a corporation deliberately harm the health of the public, including not merely illness but many deaths, merely for the sake of profit? Need I ask? (cf. cigarettes for a prime example—and it’s still going on)
Mark Bittman has a good column in the NY Times:
In the last few years, it’s become increasingly clear that food companies engineer hyperprocessed foods in ways precisely geared to most appeal to our tastes. This technologically advanced engineering is done, of course, with the goal of maximizing profits, regardless of the effects of the resulting foods on consumer health, natural resources, the environment or anything else.
But the issues go way beyond food, as the City University of New York professor Nicholas Freudenberg discusses in his new book, “Lethal but Legal: Corporations, Consumption, and Protecting Public Health.” Freudenberg’s case is that the food industry is but one example of the threat to public health posed by what he calls “the corporate consumption complex,” an alliance of corporations, banks, marketers and others that essentially promote and benefit from unhealthy lifestyles.
It sounds creepy; it is creepy. But it’s also plain to see. Yes, it’s unlikely there’s a cabal that sits down and asks, “How can we kill more kids tomorrow?” But Freudenberg details how six industries — food and beverage, tobacco, alcohol, firearms, pharmaceutical and automotive — use pretty much the same playbook to defend the sales of health-threatening products. This playbook, largely developed by the tobacco industry, disregards human health and poses greater threats to our existence than any communicable disease you can name.
All of these industries work hard to defend our “right” — to smoke, feed our children junk, carry handguns and so on — as matters of choice, freedom and responsibility. Their unified line is that anything that restricts those “rights” is un-American.
Yet each industry, as it (mostly) legally can, designs products that are difficult to resist and sometimes addictive. This may be obvious, if only in retrospect: The food industry has created combinations that most appeal to our brains’ instinctual and learned responses, although we were eating those foods long before we realized that. It may be hidden (and borderline illegal), as when tobacco companies upped the nicotine quotient of tobacco. Sometimes, as Freudenberg points out, the appeals may be subtle: Knowing full well that S.U.V.’s were less safe and more environmentally damaging than standard cars, manufacturers nevertheless marketed them as safer, appealing to our “unconscious ‘reptilian instincts’ for survival and reproduction and to advertise S.U.V.’s as both protection against crime and unsafe drivers and as a means to escape from civilization.”
The problems are clear, but grouping these industries gives us a better way to look at the struggle of consumers, of ordinary people, to regain the upper hand.The issues of auto and gun safety, of drug, alcohol and tobacco addiction, and of hyperconsumption of unhealthy food are not as distinct as we’ve long believed; really, they’re quite similar. For example, the argument for protecting people against marketers of junk food relies in part on the fact that antismoking regulations and seatbelt laws were initially attacked as robbing us of choice; now we know they’re lifesavers.
Thus the most novel and interesting parts of Freudenberg’s book are those that rephrase the discussion of rights and choice, because we need more than seatbelt and antismoking laws, more than a few policies nudging people toward better health. . .
The comments to the article are quite interesting, although not always well thought out.
Nilay Patel writes at The Verge:
Here’s a simple truth: the internet has radically changed the world. Over the course of the past 20 years, the idea of networking all the world’s computers has gone from a research science pipe dream to a necessary condition of economic and social development, from government and university labs to kitchen tables and city streets. We are all travelers now, desperate souls searching for a signal to connect us all. It is awesome.
And we’re fucking everything up.
Massive companies like AT&T and Comcast have spent the first two months of 2014 boldly announcing plans to close and control the internet through additional fees, pay-to-play schemes, and sheer brutal size — all while the legal rules designed to protect against these kinds of abuses were struck down in court for basically making too much sense. “Broadband providers represent a threat to internet openness,” concluded Judge David Tatel in Verizon’s case against the FCC’s Open Internet order, adding that the FCC had provided ample evidence of internet companies abusing their market power and had made “a rational connection between the facts found and the choices made.” Verizon argued strenuously, but had offered the court “no persuasive reason to question that judgement.”
Then Tatel cut the FCC off at the knees for making “a rather half-hearted argument” in support of its authority to properly police these threats and vacated the rules protecting the open internet, surprising observers on both sides of the industry and sending new FCC Chairman Tom Wheeler into a tailspin of empty promises seemingly designed to disappoint everyone.
“I expected the anti-blocking rule to be upheld,” National Cable and Telecommunications Association president and CEO Michael Powell told me after the ruling was issued. Powell was chairman of the FCC under George W. Bush; he issued the first no-blocking rules. “Judge Tatel basically said the Commission didn’t argue it properly.”
In the meantime, the companies that control the internet have continued down a dark path, free of any oversight or meaningful competition to check their behavior. In January, AT&T announced a new “sponsored data” plan that would dramatically alter the fierce one-click-away competition that’s thus far characterized the internet. Earlier this month,Comcast announced plans to merge with Time Warner Cable, creating an internet service behemoth that will serve 40 percent of Americans in 19 of the 20 biggest markets with virtually no rivals.
And after months of declining Netflix performance on Comcast’s network, the two companies announced a new “paid peering” arrangement on Sunday, which will see Netflix pay Comcast for better access to its customers, a capitulation Netflix has been trying to avoid for years. Paid peering arrangements are common among the network companies that connect the backbones of the internet, but consumer companies like Netflix have traditionally remained out of the fray — and since there’s no oversight or transparency into the terms of the deal, it’s impossible to know what kind of precedent it sets. Broadband industry insiders insist loudly that the deal is just business as usual, while outside observers are full of concerns about the loss of competition and the increasing power of consolidated network companies. Either way, it’s clear that Netflix has decided to take matters — and costs — into its own hands, instead of relying on rational policy to create an effective and fair marketplace.
In a perfect storm of corporate greed and broken government, the internet has gone from vibrant center of the new economy to burgeoning tool of economic control. Where America once had Rockefeller and Carnegie, it now has Comcast’s Brian Roberts, AT&T’s Randall Stephenson, and Verizon’s Lowell McAdam, robber barons for a new age of infrastructure monopoly built on fiber optics and kitty GIFs.
And the power of the new network-industrial complex is immense and unchecked, even by other giants: AT&T blocked Apple’s FaceTime and Google’s Hangouts video chat services for the preposterously silly reason that the apps were “preloaded” on each company’s phones instead of downloaded from an app store. Verizon and AT&T have each blocked the Google Wallet mobile payment system because they’re partners in the competing (and not very good) ISIS service. Comcast customers who stream video on their Xboxes using Microsoft’s services get charged against their data caps, but the Comcast service is tax-free.
We’re really, really fucking this up.
But we can fix it, I swear. We just have to . . .
The food industry always opposes any effort to inform the consumer. Food companies, for whatever reason, VERY much do not want consumers to have information about the foods they are buying. But the proposed improvements look good to me:
Tara Culp-Pressler writes in ThinkProgress:
Later this week, the White House is set to unveil the first update to FDA-approved nutrition labels in more than two decades. Politico reports that First Lady Michelle Obama will announce the changes on Thursday, as part of her larger focus on encouraging healthy habits and tackling childhood obesity.
At the beginning of this year, the Food and Drug Administration indicated that updating nutrition labels would be a top priority for the agency in 2014. But officials didn’t confirm a timeline for rolling out the new requirements.
The move has the potential to impact a considerable number of Americans. A recent studyconducted by the U.S. Department of Agriculture found that the number of people who rely on nutrition labels when they’re grocery shopping is on the rise. About 42 percent of working-age adults and 57 percent of older adults now say they consider the FDA’s labelwhen they’re selecting their food — and nearly three fourths of all adults report they would use similar information in restaurants if it were available.
The Center for Science in the Public Interest (CSPI), a nonprofit organization dedicated to nutrition and food policy, has repeatedly urged the FDA to “bring food labeling into the 21st century.” Back in 2010, the organization released a report entitled “Food Labeling Chaos” that detailed the lack of industry-wide regulations in this area to hold companies accountable. The report urged the agency to crack down on brands that made overreaching claims about their products, establish a consistent standard for the foods labeled as “natural,” and make several updates to the current nutrition labels.
CSPI’s report put forth several suggestions for improving nutrition labels — like . . .
An article by Alma Guillermoprieto in the NY Review of Books makes an interesting case: Guzman just wanted out.
At 6:40 AM last Saturday, Joaquín Guzmán Loera was taken prisoner by Mexican Navy special forces in the pretty little seaside resort of Mazatlán, where senior Americans love to retire and where the juniors of the drug trade love to party. Since his escape from jail in 2001, he had moved freely around Mexico, and, it would seem, much of the rest of the world. People who know about these things even say that he was frequently in San Diego, California, shopping for the designer tennis shoes and fancy moccasins he favored. But in the end the best-known, and possibly even the most powerful of Mexico’s many, many drug traffickers was pretty much where he’d always been: in his home state of Sinaloa. He was found dozing peacefully in a plain furnished apartment overlooking Mazatlán’s oceanfront drive—the kind of place rented by families looking to save money on a comfortable vacation. Reportedly, there was a pot of beans on the kitchenette stove at the time of his arrest. His fortune is legendary, but Guzmán has always been a country boy at heart.
His capture was so easy that one wonders if he was tired of the hard life, looking to be caught, needing some relief from the pressure of transporting thousands of tons of marijuana, cocaine, heroin, methamphetamines, you name it, in addition to the daily agony of deciding whom to kill, whom to trust. And then there was all the money requiring cleaning, tons of that too, literally, barrels and cratefuls of cash coming in every week: What to do with the boxes of it left over once the bodyguards, spies, goons, hit men, police officers, judges, mayors, governors, customs officials, army generals, prison guards, railroad workers, trucking bosses, journalists, ranch hands, relatives, cabinet ministers, bank officers, helicopter, jet, and airplane pilots, business associates, and barbers have been paid off? This last item is not negligible; the person who comes in to wield scissors very close to your neck once a month or so and monitor your half-hearted attempts at a disguise—a moustache, a dye job—is someone you definitely want to tip richly if you’re Joaquín “Chapo” Guzmán.
Everyone has to be tipped, in fact, every single person you come into contact with—if you’re Guzmán and there’s a seven-million-dollar reward on your head. Tipped and feared. The jefe was reported to drive around Sinaloa and the states of Durango, Chihuahua, and Sonora with an army of bodyguards, in armored cars, lookouts everywhere. It’s a tiresome business, and so it becomes a real question: What was Guzmán doing, slumbering in an apartment building right on Mazatlan’s main tourist drag, five days after Navy special forces knocked down the reinforced metal door to one of his seven houses in the Sinaloa capital of Culiacán, giving him just enough time to escape through one of the tunnels that connected the houses to each other and to the public water system? In the mountains and craggy valleys of the Sierra Madre, Guzmán has been impossible to capture even on those occasions when the security forces showed some interest in doing so. But he fled from Culiacán last week not to the Sierra but to Mazatlán. Perhaps he thought he’d been tipping to everyone´s satisfaction, and miscalculated.
Until the Gulf Coast traffickers made their bid for national coverage starting in the late 1970s, . . .
A good point in the comment thread to Mike Lofgren’s essay on Moyers & Company:
The Universal Law of Order: “Whenever two or more individuals unite to form an organization the survival of the organization becomes paramount to the survival of the individual.”
And so organizations strike back hard when threatened—e.g., the attack on Adrian Schoolcraft of the NYPD who simply exposed what the NYPD was doing; the likelihood that Edward Snowden, who simply exposed what our government is doing, likely faces life imprisonment in solitary should he return to the US; and perhaps even the mysterious rash of unexpected deaths of young (in their 30′s) JP Morgan IT professionals.
Too many organizations believe that what they are engaged in doing is wrong and/or illegal—they become frantic if the information threatens to become public.
Thanks to Big Chrono for pointing out the Adrian Schoolcraft article.
UPDATE: Here from Murtaza Hussein in The Intercept is a rather flagrant example of an organization feeling threatened by legal action taking extra-legal means to attack a person exposing it: a man in Pakistan who is seeking legal redress from the CIA for drone attacks.