brainiac conspiracy

History's Greatest Monsters

There seems to be no offense too great, and no failing too dismal, to disqualify them from remaining in the good graces of official Washington. I mean, what's really worse---the fact that this war criminal still roams freely among us, or that our capital's paper of record solicited her opinion on foreign policy after she had firmly established herself as one of most incompetent foreign-policy experts in the history of the Republic. This is how we ended up in Iraq with smoking guns and mushroom clouds, people.

---Baron V

Market-Based Solutions II

In most polite company you can expect to be widely mocked and ridiculed for insinuating that one of capitalism's most foundational tenets is the extraction of profit from the deliberate exploitation of other human beings, and even at times profiting directly from their suffering and misery. Marxism! Communism! Discredited ideology! They'll hurl all sorts of slogans---markets are freedom!---and call you many names, but that doesn't mean that it isn't the truth. Because, well, it is.

---Baron V

Your Tax Dollars at Work

Scientific R&D is one thing our government has always excelled at:

The Counter-Electronics High Power Microwave Advanced Missile Project (CHAMP), led by Boeing's Phantom works, promised to change the face of contemporary warfare, and its test was a complete success.

CHAMP flew over the Utah Test and Training Range last Tuesday, discharging a burst of High Power Microwaves onto the test site and brought down the compound's entire spectrum of electronic systems, apparently without producing any other damage at all. Even the camera recording the test was shut down.

Struggling to contain his enthusiasm, Boeing's Keith Coleman says, "We hit every target we wanted to. Today we made science fiction into science fact."

But it would be nice---for a change---if our leaders decided to invest our money in technologies that, oh, I dunno, eradicated diseases or reduced global warming or promoted sustainable agricultural practices instead. Crazy thought, I know, but it would probably prove more beneficial to the commonweal than building a bunch of radar-busting robots to provide cover for overseas missile strikes. Not to mention what could happen once this technology falls into the wrong hands, the likelihood of which in our hacked-in world is almost certainly inevitable. So if any of our leaders ever read this blog, they can't say in retrospect that nobody warned them about it.

---Baron V

Alt-Shift-1972

Interesting question arises today: Suppose George McGovern had won the '72 election. Would we know much of anything about the Watergate scandal today? The "third-rate burglary" passed in and out the public eye rather quickly over the summer of that year, and about all we knew by Election Day were (1) that some cash intended for the Nixon re-election campaign had been laundered through a slush find into the bank account of one of the burglars, and (2) that the FBI had established that the break-in was one component of a dirty tricks campaign being waged by the Nixon camp. But that's all anybody knew.

So the question becomes: with Nixon on his way out of town and a new President about to be sworn in, does the Post keep a pair of city beat reporters on a story that has lost a great deal of its timeliness? Look at it how it might have been argued at the time: Whatever the outline of the dirty-tricks campaign might have been, it certainly wasn't effective, because the conspirators got caught and their candidate lost. Much ado about nothing, in other words. Wouldn't the paper's resources be put to better use running down stories about the incoming President and his transition team, features on his wife and family, recaps of the just-completed presidential campaign, and details of the District's inauguration prep?

Keep in mind, too, that the link between the burglars and the White House wasn't established on the record until FBI directorate nominee Patrick Gray testified to it in February '73: Specifically, at his confirmation hearing before the Senate Judiciary Committee. If George McGovern had won the White House, that testimony would've likely never been heard because someone else almost certainly would've been nominated for the job.

My guess is, with a new administration about to be sworn in, Watergate would have been quickly pronounced Yesterday's News, and we wouldn't have heard much more of it beyond some cursory notice in the Post's back pages of the the burglars' trial and sentencing. The rest of the story would have likely been lost in the backward rush of history's rear view. In that sense, Nixon's landslide could be said to have paved the way for his downfall because it ensured that a number of the scandal's key players---John Mitchell in particular, who ran the re-election campaign---would maintain a high public profile for the next four years instead of fading into electoral obscurity, out of sight and out of mind. That's my hunch, but it's an interesting scenario to ponder either way.

---Baron V

Honoring The Heroes II

Only one misstep here:

Could the 9/11 attack have been stopped, had the Bush team reacted with urgency to the warnings contained in all of those daily briefs? We can’t ever know.

Oh yes we can. All that needs to happen is for (a) the appropriate national security records to be declassified, (b) a Congressional investigative commission formed, (c) the responsible parties subpoenaed to testify, and (d) this time, compelled to testify under oath. Would that be an absolute guarantee that we'll find out what those incompetents could or could not have done? Probably not, but I am willing to bet we're likely to find out a great deal more than what we know now.

The last three items on this list should already have been checked off five years ago, when Democrats controlled both houses of Congress. The first item on this list could be done at any time under executive order. In the unlikely event that Team Democrat regains control of both chambers, might I suggest putting these items at the top of the agenda? That is, if you really want to honor the heroes of 9/11 by informing their survivors and next of kin about everything their government was doing---or not---to protect them.

---Vitelius

More Like a Scandal

Though it's probably only coming to light at all because they didn't pay off the right people:

Standard Chartered Bank ran a rogue unit that that schemed with Iran's government to hide more than $250bn (£160bn) in illegal transactions for nearly a decade, according to a scathing report by New York regulators.

According to the report filed by the New York state department of financial services (NYSDFS), when challenged [by] a US colleague, a Standard Chartered executive caustically replied: "You fucking Americans. Who are you to tell us, the rest of the world, that we're not going to deal with Iranians."

About 60,000 transactions were involved and the bank was "apparently aided" by its consultant Deloitte & Touche in hiding details from regulators.

The bank could lose its license to trade in New York, a potentially devastating blow, and has been summoned to a meeting with the regulator on 15 August to answer the allegations.

Fair enough on the "fucking Americans" charge because we can be insufferable dickheads in the way we boss around other nations (save Israel, which reserves the right to boss us around), but all the same, our government does have the right to regulate financial transactions within its borders---though I suppose you could be forgiven for having thought over the past few years that this authority no longer applied.

---Vitelius

Epitaphs

Worth reading in full, but the money quote belongs on the administration's tombstone should it fail to survive November:

Nothing blunts the fierce urgency of now like the soft promise of later.

---Vitelius

Motivational Reekers

I smell lawsuits:

Fire officials in California say at least 21 people were treated for burns after attendees of an event for motivational speaker Tony Robbins tried to walk on hot coals.

The San Jose Mercury News reports reports that at least three people went to a hospital and most suffered second- or third-degree burns.

Robbins was hosting a 4-day gathering called "Unleash the Power Within" at the San Jose Convention Center. Witnesses say on Thursday, a crowd went to a park where 12 lanes of hot coals were on the grass.

Robbins' website promotes "The Firewalk Experience" in which people walk on super-heated coals.

In the pantheon of '80s buncombe peddlers---and there certainly was no shortage of them, was there?---I always thought this clown slotted somewhere between Dave Del Dotto and Benny Hinn. Thirty years on, it's amazing to me that people are still buying the bullshit. But we humans do have strong impulses to trust our authority figures, now, don't we.

---Vitelius

Unfinished Business

Four years later, in some glaringly obvious ways, we haven't progressed beyond Square 1:

To give plant owners an incentive to participate in these auctions, ISO guarantees to cover their costs for starting up or running their plants at a minimal level, even if their bids aren't accepted. This is known as "bid cost recovery." ISO rules allow bidders to claim payments of up to twice their real costs.

In simplest terms, JPMorgan submitted bids in the day-ahead market that were so low the firm was certain to be accepted onto ISO's roster of potential electricity suppliers---in fact, they were negative bids, essentially offering to pay ISO to take their electricity. The bidding is overseen by software, not human beings, and the automated program isn't smart enough to distinguish a real bid from a potentially fake one . . . ISO believes that JPMorgan never intended to make that sale, but the beauty of its low bids was that they made it eligible to collect bid cost recovery payments.

The next step was for JPMorgan to make sure that ISO didn't actually buy its electricity, presumably because the profit margin from the bid cost recovery claim was greater than from actually selling energy. So in the real-time market, it priced its electricity so high that ISO wouldn't buy it.

The bottom line, the ISO says, is that JPMorgan's traders never intended to sell it electricity via these bids. The scheme, it says, seems to have been designed purely to capture a bid cost recovery payment the bank didn't deserve, at a rate that was inflated anyway.

ISO says it first noticed that its auction was being gamed this way in August 2010, when bid cost recovery claims started creeping above the historical range of $3 million to $7 million a month. By February, the monthly bill hit $24 million. More than half the sum, it turned out, was draining out through the bidding loophole.

So in March last year, ISO put through an emergency request to FERC for permission to stamp out the practice by immediately revising its bidding rules. The request was granted, and the problem disappeared . . . for 10 days.

Then, the ISO found, the same perpetrators discovered another loophole and started squeezing that until it screamed for mercy. As a result, the ISO says, it incurred unnecessary costs of $5.3 million over a period of just five days in April 2011. The new scheme prompted the ISO to ask FERC for a second emergency rule change, also granted.

JPMorgan is one of the best managed banks there is," Obama said during a taped interview that will air on ABC's The View. "Jamie Dimon, the head of it, is one of the smartest bankers we got."

Yeah, yeah, I know, it's time to fall in line behind Team Democrat because Supreme Court abortion rights marriage equality right to work, etc. But as long as Team Democrat is running the executive branch and the Washington regulatory regime, I'm not going to stop bitching about this until the day these assholes have all been nationalized, then imprisoned---and neither should anyone else. I know this just makes me some irrational Firebagger, but I also happen to live in California, and these bastards stole money from me. So if you want me to shut up, kindly tell the smartest banker we got to mail me a refund check.

---Vitelius

Just Rewards For a Job Well Done

I know it's unwise to speak ill of the dead, so:

In January 2011, Joe Paterno learned prosecutors were investigating his longtime assistant coach Jerry Sandusky for sexually assaulting young boys. Soon, Mr. Paterno had testified before a grand jury, and the rough outlines of what would become a giant scandal had been published in a local newspaper.

That same month, Mr. Paterno, the football coach at Penn State, began negotiating with his superiors to amend his contract, with the timing something of a surprise because the contract was not set to expire until the end of 2012, according to university documents and people with knowledge of the discussions. By August, Mr. Paterno and the university’s president, both of whom were by then embroiled in the Sandusky investigation, had reached an agreement.

Mr. Paterno was to be paid $3 million at the end of the 2011 season if he agreed it would be his last. Interest-free loans totaling $350,000 that the university had made to Mr. Paterno over the years would be forgiven as part of the retirement package. He would also have the use of the university’s private plane and a luxury box at Beaver Stadium for him and his family to use over the next 25 years.

The university’s full board of trustees was kept in the dark about the arrangement until November, when Mr. Sandusky was arrested and the contract arrangements, along with so much else at Penn State, were upended.

---Vitelius

Off The Grid

Also known as More Light Blogging the rest of the day. Gotta go make some money!

What to do while I'm away? Well, you could watch TV, or read a book, or consider defecting to Cuba.

---Vitelius

Unless It's Nailed Down

There's nothing they won't pilfer, and no one they won't pilfer from. Even their own employees:

Wall Street employees, who dispense financial advice to individuals and companies, aren’t following a basic investing tenet with their own money: diversification.

Workers at the five largest Wall Street banks saw the value of company stock in their 401(k) accounts, sometimes the biggest holding of those plans, decline more than $2 billion last year, according to annual filings. Those losses don’t include shares received as bonuses.

Still having a hard time figuring out why our government didn't insist on regime change at every failed financial firm that took a federal rescue package. They insisted on it when they rescued General Motors, and in retrospect it was a smart move to make. But I guess it was more important to avoid offending Eric Holder's former clients and Tim Geithner's lunch buddies than it was to actually fix the institutions that are the single biggest parasitic drag on the economy. Future historians are really not going to be kind to us.

---Vitelius

We Still Need a Truth & Reconciliation Commission

Because we have still not been given an honest accounting of the true origins of the Global War on Terror™, though we are finding out in drips and drabs:

Perhaps most damning are the documents showing that the CIA had bin Laden in its cross hairs a full year before 9/11---but didn’t get the funding from the Bush administration White House to take him out or even continue monitoring him. The CIA materials directly contradict the many claims of Bush officials that it was aggressively pursuing al-Qaida prior to 9/11, and that nobody could have predicted the attacks. “I don’t think the Bush administration would want to see these released, because they paint a picture of the CIA knowing something would happen before 9/11, but they didn’t get the institutional support they needed,” says Barbara Elias-Sanborn, the NSA fellow who edited the materials.

If the failure to address the root causes of the financial crisis is the Obama administration's greatest policy failing, its conscious decision to run interference for---and sometimes, even doubling down on the worst practices of---a dissembling and self-serving gang of war criminals with the blood of thousands of innocent civilians on their hands is its greatest moral failing. It may be water under the bridge to the administration, but unless I'm mistaken, there is no statue of limitations for crimes against humanity.

---Vitelius

Friends in Freedom™ Do The Darnedest Things

Sure glad our tax dollars are helping to subsidize freedom-related program activities:

Gush Etzion has become a hot destination in recent months for tourists seeking an Israeli experience like no other: The opportunity to pretend-shoot a terror operative. Residents of the nearby settlements, who run the site, offer day-trippers a chance to hear stories from the battleground, watch a simulated assassination of terrorists by guards, and fire weapons at the range.

There is something terribly and tragically wrong with these people.

---Vitelius

The Usual Suspects

Funny how the same people always seem to be in the vicinity wherever an arson fire breaks out:

In the largest derivative transaction disclosed so far, Greece borrowed 2.8 billion euros from Goldman Sachs Group Inc. in 2001 through a derivative that swapped dollar- and yen-denominated debt issued by the nation for euros using a historical exchange rate, a move that generated an implied reduction in total borrowings.

Someone will need to explain to me sometime why transactions like this---where you're exchanging hard currency (i.e., assets) in exchange for paper backed by, well, more paper---shouldn't be banned altogether since you're literally "papering" over someone's bad sovereign debt by pegging its value to someone else's less-bad sovereign debt, which deceives investors into seeing less risk to the instrument than really exists---which, if you're Goldman, you can leverage to swindle investors by repackaging it as some AAA-rated security. At least, I think that's what happened here.

Whatever the ruse, if our overlords knew that the Greeks were a bad credit risk and kept lending them money anyway,they really don't deserve to be repaid. I realize that's not the way the world works in our Age of Austerity, but you can't really fault the Greek government for feeding from the trough as long as the bankers were providing the slop. We should all be so lucky.

---Vitelius

June 17

It's a date which will live in infamy, and not because it's my birthday (true, that) but because of the opportunities missed and the lessons not learned from what happened on that day 40 years ago. What often gets overlooked when discussing it, first and foremost, is the fact that at its core, it was about using the power of the state to crush all political opposition. This included not only the opposition political party but dissident groups, major media outlets, journalists and whistleblowers. Of course, there's no way to do that legally under our Constitutional system of government, so that's why dozens of laws had to be broken. It's why the plumbers and the slush funds existed in the first place, and why all the illegal covert operations and harassment campaigns were undertaken.

Now, a few underlings and bagmen were eventually convicted of lesser offenses, but the more salient fact that the President was never held accountable for this, or any other, aspect of the crime---holding the rule of law hostage to ransom a monopoly on power---virtually ensured that future Presidents would be tempted to behave similarly in the future. And most of them have, engaging in all manner of lawlessness against opponents real or imagined: Unsanctioned bombing campaigns against innocent civilians, using the law enforcement to crack down on whistleblowers, funding mercenary armies against acts of Congress, launching unilateral invasions against non-hostile nations, abiding torture and detention of civilians without charge, disenfranchising hundreds of thousands of voters, and surveilling and assassinating American civilians without oversight. And this lawlessness is no longer the sole province of right-wing Republicans; in our time, quite a lot of it enjoys bipartisan support.

As for the only President in the last 40 years who was held to account for breaches of the law, it was over lying about a blowjob from an intern.

Put it this way: When a newly-minted President announced in 1974 that "our long national nightmare is over," he all but guaranteed that the long national nightmare engendered and exacerbated by an unaccountable outlaw executive branch would never be over---and the national nightmare persists to this day.

---Vitelius

Our Failed Liberal Media

I really used to enjoy Ezra Klein's work when he was blogging at the Prospect, but there must be something in the Post's water cooler that lowers its employees' political IQ points. I mean, this has got to be one of the stupidest bits of analysis I've read in some time:

Even if you disagree with every one of Mitt Romney’s policies, there’s a chance he’s still the best candidate to lift the economy in 2013.

That’s not because he has business experience. For all his bluster about the lessons taught by the private sector, his agenda is indistinguishable from that of career politician Paul Ryan. Nor is it because he’s demonstrated some special knowledge of what it takes to create jobs. Job growth in Massachusetts was notably slow under Romney’s tenure. It’s because if Romney is elected, Republicans won’t choose to crash the economy in 2013.

The Congressional Budget Office estimates that if Congress gridlocks this year---if it simply gets nothing done---the economy will take a $607 billion hit in 2013 as the Bush tax cuts expire, the payroll tax cut expires and assorted spending cuts kick in. Falling off that “fiscal cliff,” they predict, will throw us back into recession.

But it’s worse even than that: Speaker John Boehner has said he wants another debt-ceiling showdown. We’re not expected to hit the debt ceiling until February or March, and so the only scenario in which the debt ceiling matters is one in which Congress has already pushed us over the fiscal cliff. So as bad as the last debt-ceiling crisis was---and Gallup’s polling showed it did more damage to consumer confidence than the fall of Lehman Bros---this one would be worse.

Miles Nadal, CEO of the marketing and communications firm MDC Partners, says that at a recent event with executives of more than 100 companies, the business leaders, panicked about this possibility, agreed on the best outcome for the economy: “a Republican landslide.” Why? “Because anything that breaks the logjam is positive,” he says. “The quality of the leader is less relevant than the ability to break gridlock.”

Jesus, where to begin.

First, we might as well agree that this is tantamount to saying that government-by-blackmail is somehow preferable to the stalemated arrangement we have now. The problem with this argument, of course, is that it fails to hold the people responsible for the stalemate, well, responsible for the problem they've created and perpetuated. The government isn't deadlocked because of some holistic dysfunction that's baked into the Constitution: It's deadlocked because one party no longer respects the legitimacy of the opposition party---which is to say, in our form of liberal democracy---and is using every parliamentary device to prevent it from acting. Any attempt to discuss breaking up institutional gridlock in Washington that fails to mention the words "unprecedented filibuster abuse" is frankly hard to take seriously as a piece of objective analysis.

In other words, if the economy craters next spring because a debt-ceiling agreement isn't reached, it won't be due to some intractable "deadlock," it will due to willful sabotage inflicted by one party against the President and his party. This really is not difficult to call out, and if all those worried businessmen want to ensure this problem doesn't play out next year, they should all be putting the screws to the GOP Congressional leadership and pressuring them to behave like grown-ups, not fretting over the existential danger of divided government. Heaven forbid we actually let the voters have the kind of government they want.

Second, I think the logical fallacy at work here is the assumption that a lot of Serious Persons in the Beltway media make about the political leadership on Capitol Hill, i.e., that when the dust settles after November, President Romney and an all-Republican Congress will come to their senses and not blow another huge hole in the deficit with tax cuts for rich people and escalations in military spending, and paying for it all by phasing out Medicare, turning Social Security into a private-equity fund, and axing entire government agencies like the EPA and the Energy Department because doing so would yield obviously disastrous outcomes. Which is to say, we should not expect Republicans to do what they say they will do because, well, at heart they're rational actors who will act rationally when they're handed the reins of power and not start needless wars, bankrupt the Treasury, turn the federal bureaucracy into a party patronage machine, and drive the American economy into the ground while blaming liberals for everything. Even though the last time (ahem) Republicans controlled the House, the Senate, and the White House, they started needless wars, bankrupted the Treasury, turned the federal bureaucracy into a party patronage machine, and ran the economy into the ground while blaming liberals for everything.

Congressional Republicans have not shown an ability to govern rationally in any discernible way since 1994. Why Ezra Klein or anyone else who isn't working for Murdoch would believe for a second that they'll somehow moderate their positions after the voters hand them control of all three branches of the government---which they will interpret as a mandate for scorched-earth policy-making---is beyond my ability to explain. Anyone care to attempt an interpretation? I'm stumped.

---Vitelius

Experience Counts for Something

I'd look at this piece as more of an embarrassment than anything else, and only relevant because it should remind everyone that start-up companies always pose a huge investment risk---regardless of industry---because most small-business start-ups in this country don't survive longer than five years. Since that's the case, why not let venture capital fund those enterprises and let the government stick to funding companies with proven track records? What I'm saying is, the next time an administration wants to provide funding for solar power, say, why roll the dice on an unproven entity like Solyndra when you could tap a company like General Electric or General Motors to do it? I mean, those companies have experience servicing government contracts, and they already have the in-house talent (engineers, designers, skilled labor) to execute the terms. Yes, there'd be some retooling and retraining costs involved, but those could be worked out via tax credits, accelerated depreciations and the like. I'm sure the CEOs of those companies would welcome the extra business, so why risk gambling away the taxpayers' investment on uncertain prospects? That's what venture capital should be doing with their investors' money. At least, that's how it seems here.

---Vitelius

Self-Correcting Wisdom

Future historians will marvel at an era when our overlords were all so busy trying to squeeze more money out of poor people, they couldn't see what kind of cluster they were creating:

[T]he main source of trouble is that the member states of the euro have surrendered to the European Central Bank their rights to create fiat money. They did not realize what that entails---and neither did the European authorities. When the euro was introduced the regulators allowed banks to buy unlimited amounts of government bonds without setting aside any equity capital; and the central bank accepted all government bonds at its discount window on equal terms. Commercial banks found it advantageous to accumulate the bonds of the weaker euro members in order to earn a few extra basis points. That is what caused interest rates to converge which in turn caused competitiveness to diverge. Germany, struggling with the burdens of reunification, undertook structural reforms and became more competitive. Other countries enjoyed housing and consumption booms on the back of cheap credit, making them less competitive. Then came the crash of 2008 which created conditions that were far removed from those prescribed by the Maastricht Treaty. Many governments had to shift bank liabilities on to their own balance sheets and engage in massive deficit spending. These countries found themselves in the position of a third world country that had become heavily indebted in a currency that it did not control. (Emphasis added.)

Of course, when banks take foolish risks with other people's money, the proper corrective remedy for government to implement is sustainable entitlement reform.

---Vitelius

Also Too, Unicorns

Not buying this on its surface:

Over the last week, the signals have been abundant that congressional Republicans are pivoting from their total opposition to “Obamacare” toward supporting the more popular chunks of the law.

It’s an election-year strategy to mitigate the fallout if the Supreme Court grants them their wish and strikes down the law next month. The House GOP is weighing a replacement plan to reinstate its more popular components, such as guaranteeing coverage regardless of pre-existing conditions, letting people under 26 stay on a parent’s policy and closing the Medicare “doughnut hole.”

That may be what they're saying, but they're not going to propose any of those things---at least not in the forms that are being advertised. What you'll see coming from these clowns are a bunch of individual bills aimed at reinstating each of the Affordable Care Act's most popular provisions, and each bill will have a number of "poison pill" amendments attached to it---a rider permitting open carry on commercial airliners, or a rider creating a national Birth Certificate registry, or a rider defining abortion as a form of "domestic terrorism": In other words, proposals that they know Democrats can never vote for in good conscience. So the kabuki plays out: Republicans will vote unanimously in favor of these bills, Democrats will vote (mostly) unanimously against, the bills will die in the Senate, and Republicans will blame the Democrats for killing off the best parts of health-care reform.

Whatever approach they take, the Teabillies are not going to co-opt liberal health-care policy just because it's an election year, they're going to sabotage it---and use it as a tool to embarrass the opposition. Because if there's one thing these people like even better than winning, it's humiliating liberals. Sadism is baked into their psychic DNA; it's a signifier that defines their worldview.

And you know what? They'll probably be successful with this tactic. They can always rely on some headline writer at the Post or the Times to frame the narrative as "Senate Dems Vote Down Under-26 Health Coverage," and they can always bitch to the editors of Politico if the coverage doesn't suit them; and all the Serious Persons in Washington will shake their heads disapprovingly and wonder why Democrats can't find a commonsense middle ground with Republicans, and this is why we need Generalissimo Bloomberg, etc.

But either way, I really wish the President's supporters would try to stop spinning the impending nullification of the Affordable Care Act into some P.R. victory for the White House when the likeliest possible outcome in the court of public opinion is the exact and diametric opposite.

---Vitelius