Archive for the ‘Business’ Category
Systems of governance that are seized by a tiny cabal become mafia states. The early years—Ronald Reagan and Bill Clinton in the United States—are marked by promises that the pillage will benefit everyone. The later years—George W. Bush and Barack Obama—are marked by declarations that things are getting better even though they are getting worse. The final years—Donald Trump—see the lunatic trolls, hedge fund parasites, con artists, conspiracy theorists and criminals drop all pretense and carry out an orgy of looting and corruption. . .
That’s the lede to this article by Chris Hedges at TruthDig.com. It continues:
The rich never have enough. The more they get, the more they want. It is a disease. CEOs demand and receive pay that is 200 times what their workers earn. And even when corporate executives commit massive fraud, such as the billing of hundreds of thousands of Wells Fargo customers for accounts they never opened, they elude punishment and personally profit. Disgraced CEO John Stumpf left Wells Fargo with a pay package that averages nearly $15 million a year. Richard Fuld received nearly half a billion dollars from 1993 to 2007, a time in which he was bankrupting Lehman Brothers.
The list of financial titans, including Trump, who have profited from a rigged financial system and fraud is endless. Many in the 1 percent make money by using lobbyists and bought politicians to write self-serving laws and rules and by forming unassailable monopolies. They push up prices on products or services these monopolies provide. Or they lend money to the 99 percent and charge exorbitant interest. Or they use their control of government and the courts to ship jobs to Mexico or China, where wages can be as low as 22 cents an hour, and leave American workers destitute. Neoliberalism is state-sponsored extortion. It is a vast, nationally orchestrated Ponzi scheme.
This fevered speculation and mounting inequality, made possible by the two ruling political parties, corroded and destroyed the mechanisms and institutions that permitted democratic participation and provided some protection for workers. Politicians, from Reagan on, were handsomely rewarded by their funders for delivering their credulous supporters to the corporate guillotine. The corporate coup created a mafia capitalism. This mafia capitalism, as economists such as Karl Polanyi and Joseph Stiglitz warned, gave birth to a mafia political system. Financial and political power in the hands of institutions such as Goldman Sachs and the Clinton Foundation becomes solely about personal gain. The Obamas in a few weeks will begin to give us a transparent lesson into how service to the corporate state translates into personal enrichment.
Adam Smith wrote that profits are often highest in nations on the verge of economic collapse. These profits are obtained, he wrote, by massively indebting the economy. A rentier class, composed of managers at hedge funds, banks, financial firms and other companies, makes money not by manufacturing products but from the control of economic rents. To increase profits, lenders, credit card companies and others charge higher and higher interest rates. Or they use their monopolies to gouge the public. The pharmaceutical company Mylan, in a classic example, raised the price of an epinephrine auto-injector used to treat allergy reactions from $57 in 2007 to about $500.
These profits are counted as economic growth. But this is a fiction, a sleight of hand, like unemployment statistics or the consumer price index, used to mask the speculative shell game.
“The head of Goldman Sachs came out and said that Goldman Sachs workers are . . .
The article by Daniel Gross appears in Slate:
n Sunday, the Army Corps of Engineers seemed to hand a victory to the Standing Rock Sioux and their fellow protesters, who have been campaigning to stop the construction of an oil pipeline in North Dakota. After delaying a decision on Nov. 14, a week after the election, the Army Corps has now said it won’t grant an easement for the pipeline to travel beneath a dammed portion of the Missouri River. The parties behind the Dakota Access Pipeline should look into alternative routes, the corps said.
But the saga is far from over. In fact, the reaction by the two companies constructing the pipeline, Energy Transfer Partners and Sunoco Logistics Partners, was telling. Dismissing the ruling as a “purely political action” that was part of the Obama administration’s desire to avoid making a final decision on the project, the companies insisted it would have no bearing on their plans whatsoever. They said they are “fully committed to ensuring that this vital project is brought to completion and fully expect to complete construction of the pipeline without any additional rerouting in and around Lake Oahe. Nothing this Administration has done today changes that in any way.”
In other words, the companies believe that they, not the government nor the Native American tribes whose land could be impacted by the pipeline, make the decision. They’ve deemed the ruling illegitimate because it was made by an administration with which they disagree, and they signaled they will move ahead regardless. Investors seem to agree. . .
Michael Powell has a great piece in the NY Times:
There was grand news out of Lynchburg, Va., last week: Liberty University announced that it had hired Ian McCaw, a “godly man of excellent character,” as its athletic director.
Liberty, which bills itself as the world’s largest Christian university, has large appetites, and it desires to vault into the big time. And McCaw, a man with the angular build and cobalt blue-eyed intensity of an ultramarathon runner, has achieved much success in his three decades in college sports.
“My vision for Liberty is to position it as a pre-eminent Christian athletic program in America,” McCaw said during a news conference in Lynchburg.
McCaw is well acquainted with Christian athletics. In May, he left his job as the athletic director at Baylor, another eminent Christian university. His departure followed a devastating investigation that found that the leaders of the football team and the athletic department had looked away when told of multiple gang rapes and sexual assault.
Liberty plays football in Division I’s second rung. The university is run by Jerry Falwell Jr., a godly sort who understands the need for occasional accommodation with the secular world. Earlier this year he strolled around the Republican National Convention with his candidate, Donald J. Trump, a thrice-married man whom numerous women have accused of sexually harassing them.
This did not please Liberty’s students, who are expected to abide by the Liberty Way, which sets strict personal guidelines including, but not limited to, no NC-17 movies, no face piercings, no naughty music, and absolutely no canoodling, such as hanging out alone with a person of the opposite sex. Getting caught in a “state of undress” with the opposite sex is good for a $250 fine and 18 hours of community service.
When a Liberty student penned an editorial critical of Trump for the campus newspaper, Falwell censored it. (Liberty University also teaches Young Earth creationism, which is the belief that God created the universe, Earth and life in the last 10,000 years.)
The hiring of McCaw has also proved contentious. As the university’sFacebook page filled up with angry comments, Falwell felt compelled to offer explanations on the university’s website. He said Liberty had conducted an “investigation.” It found that McCaw was a fine man. Far from being pushed out of Baylor, Falwell said, McCaw’s “decision to resign was his own choice.”
“If he made any mistakes at Baylor,” Falwell said — let us pause here to appreciate his use of the conditional — “they appear to be technical and unintentional.” There is not an athletic director in America, Falwell added, who better understands the importance of complying with federal guidelines on reporting any sexual assault on a campus.
And thus tin is transmuted into gold.
At this point, it’s worth recalling the summary that Baylor provided about its confidential investigation. The law firm Pepper Hamilton, which oversaw the inquiry, said it had found that the “the choices made by football staff and athletics leadership, in some instances, posed a risk to campus safety and the integrity of the University.”
The report’s summary gloried in passive language, and in an act of apparent Christian charity, it omitted all names and, therefore, any accountability.
But this is what it meant, if not what it said: Athletic leaders (that would be McCaw) and football coaches learned of accusations of gang and date rape and decided not to report that violence; they met with the alleged victims, and their parents, and still did nothing.
The football team existed in the same hermetic world found at too many top college programs. This, the report found, “reinforces the perception” — and, of course, the reality — “that rules applicable to other students are not applicable to football players.”
McCaw, who had spoken of his hand-in-glove working relationship with Briles, oversaw all of this. When Briles chose to bring in Sam Ukwuachu, a talented defensive end who transferred from Boise State, all involved should have known his background, which was deeply troubling.
At 6 feet 4 and 220 pounds, Ukwuachu was a terror to opposing quarterbacks, and to women with the misfortune to make his acquaintance. At Boise State, he was found to have beaten a former girlfriend. He was nonetheless welcomed at Baylor. While forgoing football for the year required of athletic transfers, he sexually assaulted a freshman soccer player. According to Texas Monthly, Baylor officials made a few not-so-pointed inquiries and cleared Ukwuachu. . .
Alice Speri reports in The Intercept:
Private immigration detention facilities may be bad — but they’re probably not going anywhere.
That, in essence, was the conclusion of a much anticipated review of the Department of Homeland Security’s reliance on private companies to detain an immigrant detainee population that’s reaching historic highs, and that the president-elect is promising to escalate to even greater levels.
The report, produced by a panel of law enforcement, national security, and military experts, was commissioned by the Department of Homeland Security on the heels of a similar review by Department of Justice in August. In that report, the DOJ found that private prisons “simply do not provide the same level of correctional services, programs, and resources,” “do not save substantially on costs,” and “do not maintain the same level of safety and security” as facilities operated by the Bureau of Prisons. The Justice Department said it would begin to gradually phase out its own private contracts — which are a fraction of private prison companies’ business when compared to federal immigration detention centers.
The DHS advisory committee report, released last week, raised similar criticisms of the billion-dollar private prison industry, but was more fatalistic in its conclusions.
“Much could be said for a fully government-owned and government-operated detention model, if one were starting a new detention system from scratch,” said the report. “But of course we are not starting anew.”
“Fiscal considerations, combined with the need for realistic capacity to handle sudden increases in detention, indicate that DHS’s use of private for-profit detention will continue,” the report concluded. Only one of the six members of the Homeland Security Advisory Council subcommittee that drafted the report, Marshall Fitz, dissented, recommending instead “a measured but deliberate shift away from the private prison model.”
But when the report — and its conclusion that private prisons were an inevitable evil — was brought to the broader HSAC committee for a vote, it sparked a contentious discussion. The committee ultimately voted 17-5 to make Fitz’s dissent the report’s recommendation to DHS.
Carl Takei, an attorney at the ACLU’s National Prison Project, called the vote a “stunning reversal.” . . .
How long has this been going on? Jennifer Rubin writes really good columns these days (with example)
I remember when Jennifer Rubin was praising Mitt Romney without reserve, only later to admit that after his defeat that she was just making statements that she thought would help him. You can see why I stopped reading her column.
The Wall Street Journal reports: “U.S. employers added a seasonally adjusted 178,000 jobs in November and the unemployment rate fell to 4.6%, the Labor Department said Friday. While the rate was the lowest since August 2007, it reflected some people finding jobs while even more dropped out of the workforce.”
Certainly troubling trends continue. (“Declining participation in the labor force is one of the nation’s more worrisome economic trends, highlighting crosscurrents that have lifted the prospects of many Americans while creating new challenges for others.”) And there are some specific bright spots. (“A broad measure of unemployment and underemployment, which includes those who have stopped looking and those in part-time jobs who want full-time positions, was 9.3% in November, down from 9.5% the prior month and the lowest level since April 2008. The rate averaged 8.3% in the two years before the recession.”) However, as we anticipate a new administration with a president who painted the U.S. economy as a wreck, some perspective is in order.
Credit is due to President George W. Bush and, in turn, President Obama (and the Federal Reserve and the presidents’ respective treasury secretaries) for the emergency measures that averted a meltdown of the financial system. Bush passed and Obama continued the Troubled Assets Relief Program, which right- and left-wing populists bitterly opposed.
My colleague Robert Samuelson wrote: “One lesson of the financial crisis is this: When the entire financial system succumbs to panic, only the government is powerful enough to prevent a complete collapse. Panics signify the triumph of fear. TARP was part of the process by which fear was overcome. It wasn’t the only part, but it was an essential part. Without TARP, we’d be worse off today.” That was in 2010, when unemployment was close to 9 percent.
Given the large gap in time between the nearly billion dollar stimulus and the onset of real job growth, we are less convinced that this played much of a role in reviving a then-$15 trillion economy. (Liberals complained it was too small to work — before deciding that it gave us the “Obama recovery.”)
The alarmists on all sides got it wrong. Obamacare didn’t sink the economy, nor did the expiration of a sliver of the Bush tax cuts. Those on the right who claimed otherwise were wrong. Meanwhile, the absence of a second stimulus did not prevent us from reaching 4.6 percent unemployment. Inequality did not, contrary to the president’s frequent claims, impede recovery. The left had those things wrong. Populists were also off base: Trade deals don’t prevent us from growing or adding substantial numbers of jobs. (We have job churn, not losses because of trade, and many other factors.) The trade deficit does not mean we are losing jobs or failing to grow; the opposite is true.
Each side will claim the recovery would have been better and faster if it had its way, but our point is that essential gridlock for eight years after TARP did not cause economic calamity. We should promote pro-growth, pro-job programs butwith caution and humility to admit the U.S. economy left to its own devices generally recovers. (There certainly are other reasons — inequality, upward mobility, wage growth — for pursuing some robust policy changes. Liberals, conservatives and populists will differ as to what those are.)
What is not in dispute is that Donald Trump will enter office in January with an economy that is nothing like the dystopia he painted. Before charging off to throw up tariffs or pass a massive tax cut that opens up a gusher of red ink, or throw 11 million people out of the country, perhaps some caution is warranted. We are not now in a recession, and we should stop pretending we are to justify extreme measures which carry unintended consequences. We are growing at 3.2 percent at last count; and Trump’s treasury nominee declares we can grow at a rate — get this — of between 3 and 4 percent.
We suggest getting back to reality and assessing our real needs:
- We have a gap between skills and the needs of the 21st century economy.
- We need to upgrade infrastructure.
- We have a Byzantine . . .
Of course, one cannot overlook the other enormous drain on the economy: the war of unwarranted aggression. Lest we forget, George W. Bush undertook an invasion of Iraq, then bungled the recovery beyond belief, creating a breakdown that seems to have rippled across the Mideast. On hindsight, George W. Bush dealt a serious economic wound to the US, along with the moral wounds (the innovation of instituting torture as an actual government policy, along with mass surveillance of the public). And, TBH, we all might be better off if Bush had not been so dismissive of the national security intelligence briefings, an attitude that seems even worse in our President-Elect, who simply refused to believe the intelligence he received in the briefly, blowing it off because his own impressions (formed from cable TV and Twitter) are different.
At any rate, the GOP is directly responsible for much of the damage our country has suffered in the 21st century. So far. And, based on what we see of Trump, the GOP will soon be responsible for much more damage. And just to be clear, this is reality we’re talking about: what your daily life will be like four years from now.
Two interesting things about the Dakota Access Pipeline protest: First, it’s growing. Second, the NY Times and Washington Post are giving it very little coverage. I did a search of the NY Times, for example, and it seemed that most reports were secondhand: from Reuters or Associated Press. The Times apparently doesn’t think it’s worth sending their own reporters there. The mission of the Times seems increasingly to protect power.
PressTV has a report, with photos. From their report:
According to reports, as many as 3,500 veterans are joining protests against the multibillion-dollar oil pipeline project near a Native American reservation.
Thousands of veterans have already arrived at the Oceti Sakowin Camp near the small town of Cannon Ball in North Dakota.
The veterans, organized under the banner “Veterans Stand for Standing Rock,” said on Saturday they will put their bodies on the line to assist thousands of activists who have spent months demonstrating against plans to route the pipeline beneath a lake near the Standing Rock Sioux Reservation.
Invoking the nonviolent protest tactics of Mohandas K. Gandhi and the Rev. Martin Luther King Jr., the veterans pledged to peacefully support the unarmed Native American protesters.
“In the ultimate expression of alliance, we are there to put our bodies on the line, no matter the physical cost, in complete nonviolence,” wrote the group’s in its “operations order.”
“Our mission is to prevent progress on the Dakota Access Pipeline and draw national attention to the human rights warriors of the Sioux tribes,” the group added.
The Army has warned that it would close the camp and force out the protesters, who have been staying there in the region’s freezing cold temperatures.
When the Army is mobilized against American citizens, it’s always a bad sign—and generally indicates that the Powers That Be feel threatened.
But click the link to see the photos.
Pam Martens and Russ Martens report in Wall Street on Parade:
Two days ago, a former Citigroup employee, Erin Daly, filed a 27-page lawsuit in Federal Court in Manhattan alleging gender discrimination and unlawful termination. On the same day, November 28, Daly simultaneously filed a complaint with the Department of Labor alleging she was retaliated against by Citigroup after she reported “violations of insider trading laws” to lawyers at the bank. It is illegal for U.S. banks to retaliate against whistleblowers.
According to the Federal lawsuit, less than two weeks after Daly reported the insider trading law violations to internal lawyers, she was terminated from the bank.
These are extremely serious charges against a mega Wall Street bank that would have gone belly up in 2008 had it not received $45 billion in equity infusions from the taxpayer, over $300 billion in asset guarantees from the government and more than $2.5 trillion in secret, cumulative loans from the Federal Reserve at below-market interest rates from 2007 to 2010.
These are also extremely serious charges because Citigroup became an admitted felonon May 20, 2015 over its role in the rigging of foreign currency trading. A behemoth Wall Street bank holding hundreds of billions of dollars in insured deposits backstopped by the taxpayer while simultaneously being a charged felon is not an admirable banking business model. Citigroup’s history of being serially charged with brazen violations of law by its regulators should have already resulted, in a rational world of finance, in its forced breakup a long time ago. (See highlights of charges below.)
The Federal Reserve, which oversees bank holding companies, has said it is looking at risk controls as well as the culture at the largest Wall Street banks. It should take a serious interest in the allegations being made by Daly. Her description in the Federal lawsuit of how hot Initial Public Offerings (IPOs) are handled at the bank as well as . . .
The article includes this:
A Sampling of Settled Charges Against Citigroup Since 2008:
December 11, 2008: SEC forces Citigroup and UBS to buy back $30 billion in auction rate securities that were improperly sold to investors through misleading information.
February 11, 2009: Citigroup agrees to settle lawsuit brought by WorldCom investors for $2.65 billion.
July 29, 2010: SEC settles with Citigroup for $75 million over its misleading statements to investors that it had reduced its exposure to subprime mortgages to $13 billion when in fact the exposure was over $50 billion.
October 19, 2011: SEC agrees to settle with Citigroup for $285 million over claims it misled investors in a $1 billion financial product. Citigroup had selected approximately half the assets and was betting they would decline in value.
February 9, 2012: Citigroup agrees to pay $2.2 billion as its portion of the nationwide settlement of bank foreclosure fraud.
August 29, 2012: Citigroup agrees to settle a class action lawsuit for $590 million over claims it withheld from shareholders’ knowledge that it had far greater exposure to subprime debt than it was reporting.
July 1, 2013: Citigroup agrees to pay Fannie Mae $968 million for selling it toxic mortgage loans.
September 25, 2013: Citigroup agrees to pay Freddie Mac $395 million to settle claims it sold it toxic mortgages.
December 4, 2013: Citigroup admits to participating in the Yen Libor financial derivatives cartel to the European Commission and accepts a fine of $95 million.
July 14, 2014: The U.S. Department of Justice announces a $7 billion settlement with Citigroup for selling toxic mortgages to investors. Attorney General Eric Holder called the bank’s conduct “egregious,” adding, “As a result of their assurances that toxic financial products were sound, Citigroup was able to expand its market share and increase profits.”
November 2014: Citigroup pays more than $1 billion to settle civil allegations with regulators that it manipulated foreign currency markets. Other global banks settled at the same time.
May 20, 2015: Citicorp, a unit of Citigroup becomes an admitted felon by pleading guilty to a felony charge in the matter of rigging foreign currency trading, paying a fine of $925 million to the Justice Department and $342 million to the Federal Reserve for a total of $1.267 billion.