Later On

A blog written for those whose interests more or less match mine.

Archive for December 30th, 2013

Modern-day driving test

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Written by LeisureGuy

30 December 2013 at 8:47 pm

Posted in Daily life, Video

Businesses treat fines as routine overhead: part of the cost of doing business

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It’s been commonly observed that making corporations pay fines does nothing—nada, zip, zilch—to change behavior. They pay the fine, promise one thing or another, and continue as before. OTOH, it’s also been observed that putting business executives in prison does tend to get the attention of the business—though it doesn’t necessarily end bad corporate behavior (check out GE’s rap sheet, for example—and they’re still at it).

David Gillen has an interesting article (with a good 3-minute video) in the NY Times:

For Wall Street, 2013 will go down as the Year of the Big Fine.

Five years after all those bailouts for big banks, major financial institutions like JPMorgan Chase and Bank of America agreed to pay many billions of dollars in fines this year to settle claims involving a range of wrongdoing, from questionable mortgage practices to trading fiascos.

Others corporate titans have paid out, too. Johnson & Johnson agreed to pay $2.2 billion to settle claims that the company marketed a drug for unproved uses and paid kickbacks to doctors. Another big drug company, Glaxo SmithKline, agreed to pay $3 billion and pleaded guilty to criminal charges that it illegally marketed drugs.

The list goes on. But amid all the headlines — and there have been many in recent years — the question remains: Do big fines actually prompt corporations to mend their ways? Many ordinary people certainly want companies to be held accountable. But for corporations, fines sometimes seem like the cost of doing business. That is because the costs often pale next to the profits that companies stand to make by doing the things that get them into trouble in the first place.

What’s more, the penalties often come years after the supposed infractions came to light.

Continue reading.

 

Written by LeisureGuy

30 December 2013 at 8:46 pm

Posted in Business, Law

U.S. Struggles to Keep Pace in Delivering Broadband Service

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Actually, most of the visible struggle is the struggle from communications companies who are fighting to keep slower speeds. Edward Wyatt reports in the NY Times:

San Antonio is the seventh-largest city in the United States, a progressive and economically vibrant metropolis of 1.4 million people sprawled across south-central Texas. But the speed of its Internet service is no match for the Latvian capital, Riga, a city of 700,000 on the Baltic Sea.

Riga’s average Internet speed is at least two-and-a-half times that of San Antonio’s, according to Ookla, a research firm that measures broadband speeds around the globe. In other words, downloading a two-hour high-definition movie takes, on average, 35 minutes in San Antonio — and 13 in Riga.

And the cost of Riga’s service is about one-fourth that of San Antonio.

The United States, the country that invented the Internet, is falling dangerously behind in offering high-speed, affordable broadband service to businesses and consumers, according to technology experts and an array of recent studies.

In terms of Internet speed and cost, “ours seems completely out of whack with what we see in the rest of the world,” said Susan Crawford, a law professor at Yeshiva University in Manhattan, a former Obama administration technology adviser and a leading critic of American broadband.

The Obama administration effectively agrees. “While this country has made tremendous progress investing in and delivering high-speed broadband to an unprecedented number of Americans, significant areas for improvement remain,” said Tom Power, deputy chief technology officer for telecommunications at the White House.

The disagreement comes over how far behind the United States really is in what many people consider as basic a utility as water and electricity — and how much it will affect the nation’s technological competitiveness over the next decade. “There aren’t any countries ahead of us that have a comparable population distribution,” said Richard Bennett, a visiting fellow at the American Enterprise Institute, who said that the United States was closing the gap. . .

Continue reading.

Written by LeisureGuy

30 December 2013 at 10:56 am

Posted in Business, Technology

The NY Fed, conflicted beyond trust

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Pam Martens reports in Wall Street on Parade:

The Federal Reserve System that is charged with setting monetary policy in the United States consists of a Board of Governors in Washington, D.C. and 12 regional Federal Reserve Banks. The Board of Governors functions as an independent government agency – its Board is appointed by the President of the United States but its funding comes from the regional Federal Reserve Banks.

Slowly, like a tiny Goldfish in a large tank of water that grows over time into a monster fish capable of clobbering anything else placed in the tank, one of the 12 regional Federal Reserve Banks has obtained unique powers not shared by the 11 other regional Federal Reserve Banks.

This is just a partial list of how the New York Fed is unique among its peers:

The President of the New York Fed sits permanently on the Federal Open Market Committee (FOMC). The Presidents of the other 11 regional banks rotate on the FOMC;

Although there is no law requiring that the New York Fed should be the sole regional Fed Bank to conduct the open market operations of the FOMC, it has uniquely served in this function since 1935;

It is the only regional Fed Bank to have its own trading floor and speed dials to the largest firms on Wall Street;

It is the only regional Fed Bank to be allowed to intervene in foreign exchange markets;

The New York Fed, uniquely among the regional Fed Banks, stores gold for foreign central banks, governments and international agencies;

The New York Fed played a uniquely controlling role in the disbursement of trillions of dollars in loans to foreign and domestic banks during the 2007 to 2010 meltdown of Wall Street;

And, problematically, while needing the good will of Wall Street firms to carry out its open market operations mandate, it simultaneously functions as a primary regulator to some of the largest firms.

Over the past several years, Wall Street On Parade has identified for its readers a raft of conflicts of interests at the New York Fed that would not be tolerated at any other financial regulator. For example, its Board of Directors has routinely included the CEOs of the very same Wall Street firms it regulates.Sandy Weill, the former Chairman and CEO of Citigroup, served two terms on its Board, from 2000 to 2006, as Citigroup built up a toxic time bomb of Structured Investment Vehicles (off balance sheet debt) and subprime mortgage exposure that would, from 2008 to 2010, require a taxpayer bailout totaling $45 billion in equity, over $300 billion in asset guarantees, and more than $2 trillion in low cost loans from (wait for it) – its own regulator, the New York Fed.

Presiding over the New York Fed as this toxic brew fermented at Citigroup was Timothy Geithner, President of the New York Fed from 2003 through the crash of 2008. Geithner became U.S. Treasury Secretary following his five years at the New York Fed. Multiple insiders have written books about what they perceived to be Geithner’s favoritism to Citigroup as Treasury Secretary.

In Confidence Men, Ron Suskind says that Geithner ignored a directive from President Obama to wind down Citigroup. Sheila Bair, former head of the FDIC during the crisis, portrays Geithner in Bull By the Horns as little more than Citigroup’s messenger boy.

The public should rightfully expect that a regulator that presided over the greatest Wall Street collapse since the Great Depression would have its wings clipped by Congress. Instead, the New York Fed has actually found ways to become more hubristic.

In early 2012, as JPMorgan was building up an unmanageable position in illiquid, toxic derivatives in a dark corner of its trading empire in London using the insured deposits of its banking customers, its Chairman and CEO, Jamie Dimon, was sitting on the Board of Directors of the New York Fed. As it was being investigated by the New York Fed, Jamie Dimon continued to sit on its Board, . . .

Continue reading.

Written by LeisureGuy

30 December 2013 at 10:27 am

Terrific interactive maps

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Jennifer Schuessler reports in the NY Times:

In 1932, when Charles O. Paullin published his monumental Atlas of the Historical Geography of the United States, reviewers were overwhelmed by its nearly 700 maps covering seemingly every facet of the country’s social, economic and political life, including maps, then novel, showing county-by-county results for presidential elections going back to the beginning of the Republic.

But the atlas, by its creator’s admission, was missing one thing — motion. “The ideal historical atlas might well be a collection of motion-picture maps,” Paullin’s editor and main collaborator, John K. Wright, wrote in the introduction, “if these could be displayed on the pages of a book without the paraphernalia of projector, reel and screen.”

Historians and everyday Internet time wasters have long since become used to animated maps, covering topics ranging from a four-minute recap of the Civil War to the globaldistribution of tweets about Beyoncé’s new album. Now, modern bells and whistles have also come to Paullin’s atlas. A souped-up online version has just been released by the University of Richmond’s Digital Scholarship Lab, bringing what some historians still consider a work of unsurpassed scope into the age of the iPad.

“Paullin’s maps show ordinary people making a living, moving across the landscape, worshiping at churches, voting in elections,” said Robert K. Nelson, the director of the Digital Scholarship Lab. “They covered so many topics that there’s really something for everyone.”

Paullin’s atlas was hailed in 1932 for the imaginative ways it showed change over time. The new site’s digital enhancements bring that sense of movement to further life, allowing users to pull up the fine-grained data behind many maps (most of which have been georectified, or warped to align accurately with a modern digital map), or just sit back and watch as animation shows, say, the march of women’s suffrage or other social reforms. . .

Continue reading. Here are categories of interactive maps:

The Natural Environment
Cartography, 1492-1867
Indians, 1567-1930
Explorations in the West and Southwest, 1535-1852
Lands, 1603-1930
Settlement, Population, and Towns, 1650-1790
States, Territories, and Cities, 1790-1930
Population, 1790-1930
Colleges, Universities, and Churches, 1775-1890
Boundaries, 1607-1927
Political Parties and Opinions, 1788-1930
Political, Social, and Educational Reforms, 1775-1931
Industries and Transportation, 1620-1931

Written by LeisureGuy

30 December 2013 at 10:24 am

Posted in Daily life

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Study: People Receiving Unemployment Insurance Work Harder To Find Jobs

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At ThinkProgress Alex Seitz-Wald reports research that blows a hole in another conservative idea:

A new study from Congress’ Joint Economic Committee (JEC) debunks the prevailingconservativenotion that Unemployment Insurance (UI) dissuades people from looking for a job. “On the contrary,” the report finds, “beneficiaries of federal UI benefits have spent more time searching for work than those who were ineligible for UI benefits.” “In fact, since Congress enacted federal unemployment benefits, time spent looking for a job has tripled among the long‐term unemployed who are out of work as a result of job loss,” the report adds.

As this chart shows, while unemployment rose during the recession, people who received UI benefits spent more time looking for work than those who didn’t qualify for the federal program:

UIBenefitsTimeSearchingForWork-e1323977353368 (1)And this makes sense. Federal unemployment insurance requires recipients to actively look for new work, and also gives them more flexibility to do. Someone with no job and no UI benefits will likely have to focus first on paying bills on a day-to-day basis before finding a job for the long-term.

And while some studies have attributed UI benefits to marginal increases (less than 2 weeks) in the length someone remains unemployed, the JEC report concludes that this minor effect is “simply because some of those unemployed workers would have otherwise dropped out of the labor force, discouraged by lack of job prospects” were it not for their UI benefits.

However, the GOP in Congress, never very interested in evidence, has ended the long-term unemployment insurance. The GOP views terminating the insurance as “beneficial” to the long-term unemployed, and Sen. Rand Paul seems to believe that terminating the insurance will create new jobs.

Written by LeisureGuy

30 December 2013 at 10:09 am

Best way to buy research results? Buy the researcher

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Integrity is precious in part because it is rare. David Kocieniewski writes in the NY Times:

Signs of the energy business are inescapable in and around Houston — the pipelines, refineries and tankers that crowd the harbor, and the gleaming office towers where oil companies and energy traders have transformed the skyline.

And in a squat glass building on the University of Houston campus, a measure of the industry’s pre-eminence can also be found in the person of Craig Pirrong, a professor of finance, who sits at the nexus of commerce and academia.

As energy companies and traders have reaped fortunes by buying and selling oil and other commodities during the recent boom in the commodity markets, Mr. Pirrong has positioned himself as the hard-nosed defender of financial speculators — the combative, occasionally acerbic academic authority to call upon when difficult questions arise in Congress and elsewhere about the multitrillion-dollar global commodities trade.

Do financial speculators and commodity index funds drive up prices of oil and other essentials, ultimately costing consumers? Since 2006, Mr. Pirrong has written a flurry of influential letters to federal agencies arguing that the answer to that question is an emphatic no. He has testified before Congress to that effect, hosted seminars with traders and government regulators, and given countless interviews for financial publications absolving Wall Street speculation of any appreciable role in the price spikes.

What Mr. Pirrong has routinely left out of most of his public pronouncements in favor of speculation is that he has reaped financial benefits from speculators and some of the largest players in the commodities business, The New York Times has found.

While his university’s financial ties to speculators have been the subject of scrutiny by the news media and others, it was not until last month, after repeated requests by The Times under the Freedom of Information Act, that the University of Houston, a public institution, insisted that Mr. Pirrong submit disclosure forms that shed some light on those financial ties.

Governments and regulatory agencies in the United States and Europe have been gradually moving to restrict speculation by major banks. The Federal Reserve, concerned about the risks, is reviewing whether it should tighten regulations and limit the activities of banks in the commodities world.

But interviews with dozens of academics and traders, and a review of hundreds of emails and other documents involving two highly visible professors in the commodities field — Mr. Pirrong and Professor Scott H. Irwin at the University of Illinois — show how major players on Wall Street and elsewhere have been aggressive in underwriting and promoting academic work.

The efforts by the financial players, the interviews show, are part of a sweeping campaign to beat back regulation and shape policies that affect the prices that people around the world pay for essentials like food, fuel and cotton.

Professors Pirrong and Irwin say that industry backing did not color their opinions. . .

Continue reading. It’s a lengthy article with much detail.

I imagine that Profs. Pirrong and Irwin make that claim because it is contractually required. It is interesting how fiercely they fought against disclosing the information, very much as though they had something to hide. Their shame is understandable.

Written by LeisureGuy

30 December 2013 at 10:04 am

Posted in Business

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