Tonight is bone-chillingly eerie in the Mission District, and diaphanous fingers of fog encircle the Bay Area, and in the nation and around the world notorious creeps keep their eyes on us from their platforms of power. On a dark Friday the 13th, we stare right back and hum merrily.
The Hall Of The Mountain Grill – Hawkwind
The Chill Of Death – Charles Mingus
The Devil’s Trill Sonata (With Piano) – Itzhak Perlman
Spooky Girlfriend – Elvis Costello
They Are Night Zombies!! They Are Neighbors!! They Have Come Back from the Dead – Sufjan Stevens
Djed – Tortoise
Fear – David Byrne
Fire Down Below – Nick Cave
Lovefingers – Silver Apples
Everyone Is Afraid Of Clowns – Kumquat
Safety Is The Cootie Wootie (Pt. 1-3) – The Residents
Rusty Metal – Aphex Twin
The Sheltering Sky – King Crimson
Third From The Sun – Chrome
Earth People Dr. Octagon
The Boogie Monster – Gnarls Barkley
Earth Died Screaming – Tom Waits
The first creep of the evening is presidential hopeful Mitt Romney.
“Mitt Romney wants you to show your papers. But he won’t show us his.” –Joe Biden
And Romney’s support for voter suppression laws disrespects the NAACP’s entire legacy. The only glimmer of hope is in the fact that Romney’s policies are so vague that they do not seem overly destructive… yet.
The Wall Street Journal editorial board tore into Romney last week for trying to “play it safe and coast to the White House by saying the economy stinks and it’s Mr. Obama’s fault,” arguing instead that Romney needs to offer “some understanding of why the President’s policies aren’t working and how Mr. Romney’s policies will do better.”
Romney hasn’t identified a loophole he’d close, any specific federal programs he’d slash, how he would reduce the deficit, or been clear on his tax returns or full history at Bain.
His entire platform can be summed up as schoolyard name-calling.
The Washington Post reports that Bain Capital invested in companies that were “pioneers” in outsourcing and offshoring, but Mitt Romney would rather shift blame, race-bait, and proclaim his opponent to be glue while he, himself, acts as rubber. On the health-care tax, layoffs… he even criticizes Obama for not taking a clear stand on the issues, while doing exactly that (much to the chagrin of his own party).
“Unlike President Obama, you don’t have to wait until after the election to find out what I believe in — or what my plans are,” Romney said in April.
So while being funded by the creepy Koch brothers, Mitt continues to get more radically right-wing and creepy himself. Granted, he was always creepy, going so far as to impersonate a police officer and pull over his friends while they were on dates.
So while the GOP notion of a small business encompasses “fabulously rich so-called small business owners like Kim Kardashian and Paris Hilton,” the Congressional Budget Office just released a very thorough update of their high quality household income series, adding data through 2009:
When it comes to federal taxation, there is just no case in the data to be made in any way, shape or form that we Americans are overtaxed. Not middle income, not high income—not the overall average. Not relative to other countries (figure 4 here), and not relative to our historical rates back to 1979.
By the end of the series, the average US household was paying 17.4% of their income in federal taxes, compared to 22% in 1979. The main culprit is the income tax; all the others in the figure stay relatively constant.
The bottom slide shows a long downward trend in the effective rate paid by the top 1% starting in the mid-1990s, and particularly large cyclical effects at the end of the series for middle and low-income households. At their peak average income in 2007 ($1.9 million), had the top 1% paid taxes at their mid-90s effective rate (35%) instead of their 2007 rate (28%), their tax liability would have been $134,000 higher.
The next creep on the list is Barack Obama, who defies states’ rights and individual civil liberties by crushing Medical Marijuana dispensaries, despite having partaken in them in the past himself.
Now, Barack Obama has quietly signed his name to an Executive Order allowing the White House to control all private communications in the country in the name of national security.
“Assignment of National Security and Emergency Preparedness Communications Functions:
“The Federal Government must have the ability to communicate at all times and under all circumstances to carry out its most critical and time sensitive missions,” the president begins the order. “Survivable, resilient, enduring and effective communications, both domestic and international, are essential to enable the executive branch to communicate within itself and with: the legislative and judicial branches; State, local, territorial and tribal governments; private sector entities; and the public, allies and other nations.”
“Such communications must be possible under all circumstances to ensure national security, effectively manage emergencies and improve national resilience.”
Later the president explains that such could be done by establishing a“joint industry-Government center that is capable of assisting in the initiation, coordination, restoration and reconstitution of NS/EP [national security and emergency preparedness] communications services or facilities under all conditions of emerging threats, crisis or emergency,” calling from agents with the Department of Homeland Security, Pentagon, Federal Communications Commission and other government divisions to ensure that his new executive order can be implemented.
“Infrastructure includes wireline, wireless, satellite, cable, and broadcasting, and provides the transport networks that support the Internet and other key information systems,” suggesting that the president has indeed effectively just allowed himself to control the country’s Internet access. “The authority to seize private facilities when necessary, effectively shutting down or limiting civilian communications.”
The Pentagon is even considering awarding a Distinguished Warfare Medal to drone pilots who work on military bases often far removed from the battlefield, claiming it takes bravery to fly a U.A.V.” — unmanned aerial vehicle — “particularly when you’re called upon to take someone’s life
“Whatever one thinks of the justifiability of drone attacks, it’s one of the least “brave” or courageous modes of warfare ever invented. It’s one thing to call it just, but to pretend it’s “brave” is Orwellian in the extreme. Indeed, the whole point of it is to allow large numbers of human beings to be killed without the slightest physical risk to those doing the killing. Killing while sheltering yourself from all risk is the definitional opposite of bravery.” ~Glenn Greenwald
And as In These Times reports:
Reasonable minds can differ as to whether a person who commits a heinous crime deserves to die, but no one can dispute that rulers given extraordinary powers—such as the power to decide who lives and who dies—will sooner or later abuse those powers.
In contrast, support for the death penalty here in the U.S. is declining, with five states voting to abolish it in recent years. Americans have come to accept that the state can’t be trusted with the machinery of death. So why do we trust our elected officials to assassinate terrorists on foreign soil, where they act as prosecutor, judge, jury and executioner?
Our government says that its drone strikes are only rarely killing civilians. But we the people cannot evaluate this claim because the Obama administration has classified all the evidence, only releasing information at its own discretion. As David Sirota recently noted, Congress is focused not on overseeing the assassination program, but on punishing those who leaked it to the press. The Obama administration is aggressively prosecuting the whistleblowers who reveal information about the disreputable acts it wants kept secret.
The New York Times reports that Pakistan and Yemen are becoming less stable and more hostile to the United States. The Washington Post reports that in Yemen, videos of dead children and furious tribesmen holding up American missile parts have flooded YouTube, breeding anger at the United States and sympathy for al Qaeda. The fact that the drone war keeps expanding—from Afghanistan to Pakistan to Yemen to Somalia to the Philippines—also suggests that the strikes are not “crippling al Qaeda,” as we are told.
In a functioning representative democracy, these issues would be investigated and debated. Such an investigation would be useful to the American people who pay for these wars. But it would not be useful to the military-industrial complex, which wants to see the drone war expanded, not curtailed.
All in the name of the corporate war machines filling Congress’ coffers and politicians’ pockets. The black budget is booming. And psychotic bank CEOs and conservative corpo-fascists are taking over every branch and party in government, including once-libertarian think tanks. The rich get richer and the evil go even more psychopathic, and now there’s scientific evidence to back it up.
Earlier this year, [psychologist Paul] Piff, who is 30, published a paper in the Proceedings of the National Academy of Sciences that made him semi-famous. Titled “Higher Social Class Predicts Increased Unethical Behavior,” it showed through quizzes, online games, questionnaires, in-lab manipulations, and field studies that living high on the socioeconomic ladder can make people less ethical, more selfish, more insular, and less compassionate than other people. It can make them more likely, as Piff demonstrated in one of his experiments, to take candy from a bowl of sweets designated for children.
Over and over, [professor Kathleen] Vohs has found that money can make people antisocial. She primes subjects by seating them near a screen-saver showing currency floating like fish in a tank or [showing them] words like ‘bill’, ‘check’, or ‘cash’. Then she tests their sensitivity to other people. In her Science article, Vohs showed that money-primed subjects gave less time to a colleague in need of assistance and less money to a hypothetical charity. When asked to pull up a chair so a stranger might join a meeting, money-primed subjects placed the chair at a greater distance from themselves than those in a control group. Vohs even found that money-primed people described feeling less emotional and physical pain: They can keep their hand under burning-hot water longer and feel less emotional distress when excluded from a ball-tossing game.
No better example of this can be seen than the massive scandal of all scandals, the interest-rate fixing Libor case.
We trust that the banking system is setting today’s rate based on its best guess about the future worth of the money. And we assume that guess is based on the cumulative market predictions of countless lenders and borrowers all over the world about the future supply and demand.
But suppose our assumption is wrong. Suppose the bankers are manipulating the interest rate so they can place bets with the money you lend or repay them – bets that will pay off big for them because they have inside information on what the market is really predicting, which they’re not sharing with you.
That would be a mammoth violation of public trust. And it would amount to a rip-off of almost cosmic proportion – trillions of dollars that you and I and other average people would otherwise have received or saved on our lending and borrowing that have been going instead to the bankers. It would make the other abuses of trust we’ve witnessed look like child’s play by comparison.
Sad to say, there’s reason to believe this has been going on, or something very much like it. This is what the emerging scandal over “Libor” (short for “London interbank offered rate”) is all about.
Robert Diamond, Jr., the former Barclays CEO who was forced to resign, said the emails made him “physically ill” – perhaps because they so patently reveal the corruption.)
But Wall Street has almost surely been involved in the same practice, including the usual suspects — JPMorgan Chase, Citigroup, and Bank of America – because every major bank participates in setting the Libor rate, and Barclays couldn’t have rigged it without their witting involvement.
In fact, Barclays’s defense has been that every major bank was fixing Libor in the same way, and for the same reason. And Barclays is “cooperating” (i.e., giving damning evidence about other big banks) with the Justice Department and other regulators in order to avoid steeper penalties or criminal prosecutions, so the fireworks have just begun.
During questioning by British politicians over his role in the ongoing Libor-fixing scandal, the Bank of England’s Deputy Governor Paul Tucker admitted Monday that he couldn’t be sure that regulators had put an end to private sector manipulation of the key interest rate.
This is not to say that the charges that Barclays (and possibly many other banks) have been improperly influencing Libor — the London interbank offered rate — are unimportant. Libor is supposed to represent the cost at which banks are able to borrow money from other banks. As such, it is the linchpin of a vast galaxy of interest rates — globally, the price of around $350 trillion worth of home mortgages, car loans and credit card interest rates rises and falls according to the daily fluctuations of Libor. It’s bad and depressing news to learn that the big banks have been intentionally lying about what they think it costs them to borrow money, motivated either to boost their day-to-day trading profits or simply to represent that their bank’s bottom line is healthier than the true numbers would indicate.
Regulators on both sides of the Atlantic are expressing dismay. On Monday, San Francisco Federal Reserve Bank president John Williams acknowledged, reported Reuters, that Barclays’ behavior had eroded confidence in the integrity of the banking system. Which is bad news, he said, because “trust is absolutely critical to conduct any type of business.”
Robert Reich wonders whether “the unfolding Libor scandal will provide enough ammunition and energy to finally get the job [of breaking up the big banks] done.”
At Slate, Mathew Yglesias believes that the new revelations “should destroy the credibility of banks once and for all.”
On Monday, the Hill reported that the House of Representatives is expected to approve legislation that would end the requirement that bank ATMs include a physical sign warning that fees might be charged for bank withdrawals. Banking lobbyists claim that the change in the law is necessary because people are physically removing the signs and then “frivolously” suing the banks for not providing the legally mandated warning. the real motivation is obviously to boost fee income.
One of Mitt Romney’s biggest campaign finance “bundlers” is a lobbyist for Barclays — and before the scandal blew up, Romney was scheduled to attend a London fundraiser hosted by the (now-resigned) Barclays CEO Bob Diamond.
The rate of a loan consists of adding the “risk-free” rate to a risk-premium. If either the risk-free rate or risk-premium goes up, then the price of a loan goes up. If you are a particularly risky borrower, you will pay more for a loan. This is because your risk-premium, compared to other borrowers, is higher, and that is added into your loan rate. If the risk-free rate is 3 percent and your risk of not paying back a mortgage requires a 2 percent premium, then your mortgage rate is 5 percent. If your risk of not paying back unsecured debt on a credit card requires an 8 percent premium, then your interest rate on your credit card is 11 percent.
More complicated models include more types of risk-premia and other things, but this basic approach is how financial markets work. They all need a measure of what money costs independent of the risks associated with any specific loan. As a result, all the most complicated models have this “risk-free” rate at their core.
Now think of some of the scandals and controversies over recent loan pricing. Here’s a great Washington Post piece by Ylan Mui on African American homeowners scarred by the subprime implosion. There are cases where people with the same risk profiles were given different interest rates. Here’s a report from EPI by Algernon Austinarguing that African Americans and Latinos with the same credit risks as whites were charged a higher total interest rate for mortgages even though the risk-free rate and their risk-premium rate should have been the same. The data implies that an additional, illegitimate “+ race” was added to the equation above.
The reason it matters is because that tactic can’t work forever. You can manipulate prices and juke government stress tests and otherwise lie to make people believe your bank’s balance-sheet is healthier than it is, but eventually that system is going to collapse. And, crucially, if the primary objective is “delay,” then when the crisis actually hits, it hits in an overwhelming way with no plausible way to fairly allocate losses or take other actions. Take Lehman Bros as an example!
After Lehman Brothers went bust, banks started submitting “fake” numbers for fear that “real” numbers would make them look bad. Apparently everyone was doing it. Recently, the scandal caught up with British giant Barclays, which was forced to pay a fine for its misdeeds. Many more banks will be found out for manipulating LIBOR interest rates before this is over.
JPMorgan Chase admits that a trading goof earlier this year has helped earn the country’s biggest bank $5.8 billion in losses — nearly triple the original estimate.
Jamie Dimon, Chairman and CEO of JPMorgan, announced that billions of insured deposits at his bank had been invested in high risk derivatives and had sustained at least a $2 billion loss. The Department of Justice and FBI have commenced investigations.
Now it has emerged that not only was Dimon conflicted in his role on the New York Fed but the President and CEO of the New York Fed had an equally dubious conflict of interest, paying_$190,000_annually_to_the spouse_of_bank’s_top_regulator!
And so while our beautiful nation may be put up for sale to the highest bidder, The Pew Economic Mobility Project has been tracking the economic status of thousands of families since 1968 — the data covered in the current report is through 2009. As Catherine Rampell summarized in the New York Times:
The median person in the poorest quintile has a family net worth that is 63 percent less than that of his counterpart a generation ago: $2,748, versus $7,439…
The median family in the top socioeconomic class today (i.e., the family at the 90th percentile) is worth $629,853, compared to $495,510 in the last generation. That’s a 27 percent increase in the size of the median fortune in the top income stratum.
If you’re scoring at home: Rich: richer; Poor: poorer.
Meanwhile, the police are outright lying about the full list of terrorists they say have “attempted to kill New Yorkers in 14 different plots.” Law enforcement is engaging in massive phone surveillance to the tune of 1.3 million requests for mobile phone data, revealing all manner of shadowy secrets. The corporations comply, with Verizon aiming for the right to edit your personal internet access in the name of “editorial discretion.”