Month: December 2013

Hill and the Bro

by digby

I got a lot of interesting feedback on my post the other day about the prospects of America voting for a woman president and a Clinton vs Christie match-up. The imagery of the bros against the beyotches is kind of sickening to me, but I fear it may end up being the most useful way of seeing the race if it were to happen.

It’s a long way from 2016 and nobody really knows anything. But here’s how it looks from where we sit now:

Former Secretary of State Hillary Clinton (D) and New Jersey Gov. Chris Christie (R) would be nearly tied if they were running against each other in the 2016 presidential race, a new CNN/ORC poll finds.

According to the survey, 48 percent of registered voters would back Christie, while 46 percent would vote for Clinton — a difference that falls within the survey’s margin of error.

Christie polled far better than any other potential GOP candidate included in the poll, largely because he was able to attract a majority of independents, suburban residents and older voters, according to CNN.

Imagine what a lovely race that would be.

Here’s a taste:

Yes, sir.

Shrill insight ‘o the day

by digby

It does seem absurd that corporations would refuse to pay higher wages if the result is a booming economy.
Krugman explains why corporations might not mind moderate depression:

Profits took a hit during the financial crisis, but have soared since then, and are now 60 percent above pre-crisis levels; meanwhile compensation has grown hardly at all, and indeed fallen in real per capita terms.

The point is that we have a depressed economy for workers, but not at all for corporations. How much of this is due to the bargaining-power issue is obviously something we don’t know, but the disconnect between the economy at large and profits is undeniable. A depressed economy may or may not actually be good for corporations, but it evidently doesn’t hurt them much.

Now, about the political economy: I don’t think we have to believe in a cabal of CEOs trying to keep the economy depressed. All that we need is for the big money to find the state of the economy OK from its point of view, so that politicians who listen to that money lose interest in the unemployed. You can round up a who’s who of CEOs for Fix the Debt; you can’t even get started on a power-list drive to Fix the Economy.

And so it remains unfixed.

There you have it.

The currency of secrets

by digby

A case can be made . . . that secrecy is for losers. For people who don’t know how important information really is. The Soviet Union realized this too late. Openness is now a singular, and singularly American, advantage. We put it in peril by poking along in the mode of an age now past. It is time to dismantle government secrecy, this most pervasive of cold war-era regulations. It is time to begin building the supports for the era of openness which is already upon us.

That’s Daniel Patrick Moynihan and this is an interesting essay by Jack Shafer about his book called Secrecy, which was written in the wake of a Senate investigation in the 1990s into the over-classification of government information. It’s filled with very provocative and unusual insights into the issue. The book was written before the extremely rapid growth of the surveillance state in the post 9/11 internet era, so the concerns raised don’t even begin to address the specifics of the data collection programs we are currently dealing with. I’m just going to pull out a few paragraphs that deal with the history of American government secrecy, one of which seems particularly relevant in light of the somewhat flamboyantly possessive behavior by the leaders of the NSA:

“Secrecy is a form of regulation,” Moynihan declares in his opening sentence, restricting what information citizens may possess about their government and the actions performed in their name. Unlike economic regulation, whose dimension can be gleaned from reading the US Code and scanning the Federal Register, the shadow cast by secrecy is fundamentally unknowable to few outside the government elite. Writing elsewhere, Moynihan stated, “Normal regulation concerns how citizens must behave, and so regulations are widely promulgated. Secrecy, by contrast, concerns what citizens may know; and the citizen is not told what may not be known.

On occasion, the national security establishment will even prevent the president of the United States from being read in on the secrets elemental to the performance of his office. In the late 1940s, the US Army’s Venona project cracked the codes the Soviet Union was using to communicate with its spy network in America, Moynihan reported. The decryptions were shared with fbi Director J. Edgar Hoover and other members of the national security brotherhood, but General Omar Bradley concealed them from President Harry S. Truman because his White House was known to leak.

Venona gave an accurate picture of Soviet penetration of the US. Had the secrets been made public—the Russians had learned by then that they’d been found out—the nation might have been spared the poisonous squalls about domestic communism exhaled by Senator Joseph McCarthy. Of the Venona decryptions, that were finally made public in the mid-1990s, Moynihan writes:

Here we have government secrecy in its essence. Departments and agencies hoard information, and the government becomes a kind of market. Secrets become organizational assets . . . . In the void created by absent or withheld information, decisions are either made poorly or not made at all. What decisions would Truman have made had the information in the Venona intercepts not been withheld from him?[…]

Moynihan and Powers trace our government’s passion for secrets to the Wilson administration’s paranoiac views about dissent during World War I, and its passage of the Espionage Act of 1917 and the Sedition Act of 1918, which established the secrecy bureaucracy and in its early incarnation dictated press censorship.

The Russian Revolution and Moscow’s establishment of the Communist International, pledged to world revolution, further rattled the American state. The domestic communist conspiracy, such as it was, never threatened the US government. The overreaction to the subversives, who never numbered more than a few thousand, ran through the Cold-War era, sustaining a culture of secrecy designed to keep the populace dumb and frightened. Excessive secrecy kept the public from learning that the United States suffered no “missile gap” with the Soviets; that the Bay of Pigs invasion was doomed; that the Vietnam War was built on lies and deceit; that the Soviet Union was disintegrating. Excessive secrecy, Powers wrote, gave bureaucratic cover to flawed policies and failed careers inside government.

It also gave the government a weapon to “stigmatize outsiders and critics.” Had Truman been able to draw on the secrets stash, he could have arrested America’s paranoia about the internal communist threat by speaking the truth about the pitiful weakness of Soviet spies. But because he was in the dark, too, he couldn’t directly refute the alarmists. “[McCarthy] was able to gain hearing for his fantastic charges only because he could claim that the evidence to support them was kept hidden by the executive branch,” wrote Powers. This damming up of information has created what Powers calls “postmodern paranoia, an aesthetic preference for ‘alternative’ modes of thought that leads to playful interest in conspiracy theories about government secrecy just for the hell of it.” In other words, the rationing (or regulation) of information creates a market for misinformation.

Nowadays we have judges declaring Islamic terrorism to be an existential threat, thus justifying even more secrecy than before.

Surely anyone can see why it’s important, at the very least, to be able to challenge this from time to time, especially when we see new technologies that have not been legally defined and thoroughly vetted for constitutional applicability. And we know the government will not do this voluntarily, don’t we? Because, as Moynihan pointed out way back when, secrets are a bureaucratic currency that’s hoarded and distributed by those who have access to it. Sometimes they don’t share it even with our democratic leaders.

And as Shafer points out, this isn’t just about protecting us from being surveilled for our porn habits. It’s got much broader implications:

If, as Randolph Bourne famously wrote, war is the health of the state, then terrorists are the health of secret-keepers. The attacks of September 11 restored the American secrecy cult. The battlefield extends from home to foreign mountain ranges, and the war is fought in both real and virtual space. Your phone, your computer, your internet connection, the algorithms used to do your banking online have all been drafted into the state’s secret and escalating war on Al Qaeda. Thanks to Snowden, we now know about the government’s secret cyberattacks, its secret giant gulps of internet traffic, its secret databases of your data, and its secret cracking and compromising of encryption. Aided and abetted by a secret FISA court, the last two presidential administrations have normalized privacy intrusions and eavesdropping, with no end in sight as long as one fanatic plots to set off a bomb somewhere.

Presaging the government’s response to 9/11, Moynihan distilled this template for government’s action during and after wartime in a passage about America’s extravagant post-WWI spychasing:

Note the pattern set in 1917. First twentieth-century war requires or is seen to require measures directed against enemies both ‘foreign and domestic.’ Such enemies, real or imagined, will be perceived in both ethnic and ideological terms. Second, government responds to domestic threats with regulations designed to ensure the loyalty of those within the government bureaucracy and the security of government secrets, with similar regulations designed to protect against disloyal conduct on the part of citizens and, of course, foreign agents.

Moynihan was no secrecy nihilist. He believed in “legitimate and necessary” military secrets, but wanted much of the culture of secrecy the spooks depended on to be replaced with open approaches to intelligence questions. “Analysis, far more than secrecy, is the secret to security,” he wrote. Open inquiries, in Moynihan’s view, independent of the bureaucracy’s control, and critiqued, debated, and verified by other open-source researchers, would produce the best results. Had we insisted on such an inquiry of Saddam’s weapon programs, perhaps we could have been spared the second Gulf War.

For all the hand wringing about the Snowden revelations making the country less safe, it’s interesting how few ramifications there have been for those who used secrecy to push us into a war that ended up killing many thousands and creating millions of enemies we wouldn’t have had otherwise. Imagine if the Bush administration hadn’t been able to exploit (stove-pipe) the secrecy state to its advantage to sell a war they’d been waiting for an excuse to wage for political and economic reasons.

Shafer concludes with this depressing throught, but one with which I have to reluctantly concur:

As Moynihan repeatedly points out, war and the threat of domestic disorder, is the health of the secrecy state. “We make policy by crisis, and we particularly make secrecy policy by crisis,” scholar Mary Graham told The New York Times in early 2003, predicting that the temporary emergency powers then being approved would last at least for 20 years, “just as we lived with the Cold War restrictions for years after it was over.”

To read Secrecy now is to despair. As long as threats exist against America and opportunistic legislators hold office, there appears no practical way to roll back the secrecy bureaucracy. In the summer of 2013, when emotions against the NSA intrusions were highest, a bill to limit the agency’s powers to collect electronic information was voted down in the House of Representatives. Maybe I’m impatient, but if Snowden’s revelations aren’t enough to convince Congress to sand a corner off the secrecy establishment, I doubt if anything on his computer drives could.

The desperate unemployed

by digby

… after suffering appropriately by being forced to anticipate the worst, may be getting some relief. If everything goes without a hitch:

With jobless aid poised to expire for 1.3 million Americans this weekend, a bipartisan team of senators is proposing a short-term extension of unemployment benefits that will come to the floor as soon as Congress returns in January 2014.

Sens. Jack Reed, a Rhode Island Democrat, and Dean Heller, a Nevada Republican, are proposing a bill that would extend unemployment benefits for three months.

“To cut it off this way is both wrong from a principle, what we should stand for as a nation, and from a very sound, practical economic perspective,” Reed said on a Thursday conference call.

The $6 billion proposal proposes to maintain aid for the long-term unemployed, who would have their benefits restored retroactively, while buying legislators more time to work out a longer extension. The legislation is expected to come to the Senate floor on Jan. 6, Reed said.

It sounds more and more as if the least insane Republicans have belatedly realized that cutting off these benefits will hurt them politically and hurt the recovery economically. And it means the Democrats have rubbed the sleep from their eyes and (once more) realized that their friends the Republicans are just as cruel and stupid as they seem.

Most Republicans oppose the extension of federal benefits—which kick in after state jobless aid expires—arguing that they increase dependency on the government and are unnecessary since the job market has improved .”Does it make sense for our country to borrow money from China to give it to the unemployed in America? That is weakening us as a country,” Sen. Rand Paul told NBC News.

Oh my God. Once more with feeling, folks:

[I]t does not matter who owns the public debt, because its repayment places absolutely no budgetary burden on anyone. It might take a minute or two out of the day of some operations person at the Fed, but that’s all. That person might bring up the spreadsheet of a Chinese bank’s savings account at the Fed (its “Treasury securities” account) and deduct a certain amount, by a keystroke, thereupon to bring up that same bank’s checking (“reserve”) account spreadsheet and add that same amount, by a second keystroke. The debt is thereby paid. Ta-da!

No one sees a tax increase. No one’s stuff is dispossessed by Chinese soldiers. No Shanghai Shylock turns up demanding pounds of American flesh. There definitely isn’t slavery. As a matter of fact, no one except people working in finance is ever aware that it is happening.

It’s intuitive but wrong to picture the public debt as private debt we’re all on the hook for. In reality, public debt isn’t really properly thought of as borrowing at all, according to Frank N. Newman, former deputy secretary of the U.S. Treasury under President Clinton. Since the U.S. doesn’t need to borrow back the dollars it originally spent into existence in order to spend them again, the purpose of issuing Treasuries is really just for “providing an opportunity for investors to move funds from risky banks to safe and liquid treasuries,” he writes. Investors aren’t doing the U.S. a favor by buying treasury securities; the U.S. is doing investors a favor by selling them. Otherwise, without the option “to place their funds in the safest most liquid form of instrument there is for U.S. dollars,” would-be bondholders “are stuck keeping some of their funds in banks, with bank risk.”

The reason China owns all those safe securities is that because the U.S. purchases all those Chinese-made commodities for U.S. dollars. China converts the dollars into the dollars’ interest-bearing siblings, bonds, and park them at the Fed until they mature – that is, when the spreadsheet switcheroo ceremoniously retires the debt. At this point, China usually just rolls over the debt by purchasing new securities. This keeps Chinese currency weak against the dollar, so China can have the U.S.’s export market – this is the “currency manipulation” you’ve heard self-righteous pontification about.

What does the U.S. get out of this arrangement? IPhones for which it exchanges digital entries in a spreadsheet at the Fed. What does China get? An extremely productive economy, for one thing.

Rand Paul has a big following. A lot of people think he makes sense. And he doesn’t make sense. But then neither do the rest of our leaders of both parties who evoke your household budget when explaining the economy and bring up “China” as if they are somehow in a position to “pull the plug” and then all hell will break loose. It’s facile, lazy political rhetoric on all sides and it’s dangerous.

There is only one thing to be said about something like Unemployment Insurance: we don’t have enough jobs for the people who want to work. We must help them through this time because we are a decent, wealthy society and there but for the grace of God (or a bad streak of luck) go any of us. The end, goodbye.

The entire economy is a house of cards waiting to tumble

by David Atkins

Yesterday Digby highlighted the outstanding piece by Matt Taibbi on HSBC executives avoiding even a second of jail time for engaging in blatant drug money laundering for major cartels.

The most shocking bit bears repeating:

Though this was not stated explicitly, the government’s rationale in not pursuing criminal prosecutions against the bank was apparently rooted in concerns that putting executives from a “systemically important institution” in jail for drug laundering would threaten the stability of the financial system. The New York Times put it this way:

Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system.

Now, there are a lot of people who read that statement and say “Bull.” It’s widely assumed on the right that this is just another example of liberal crony capitalism, that all we need to do is let capitalism and the legal system take their course, watch those liberal Brits and New Yorkers flounder, and the free market will take care of everything. Liberals tend to think that campaign finance, big bank lobbying, neoliberal ethics and big business corruption in general leads the justice department to make excuses for the failure to see justice done.

But I would posit a far more shocking conclusion: that the authorities actually believe it when they say such things. And an even more shocking conclusion: that they may well be right.

As I have argued again and again here at Hullabaloo, the modern economy is teetering house of cards propped up by wildly overinflated assets.

To make a long story short, the combined forces of globalization, flattening, deskilling and mechanization led to an inexorable downward trend in the power of wage earners in the labor market. Entire industries disappeared, employment stability decreased, wages shrank, jobs went to machines or to other countries for far lower pay, entry-level jobs became “internships”, benefits shriveled, and so on. It didn’t help that many countries (especially the U.S.) instituted intentional policies to benefit the rich and reduce their tax burden, but inequality has increased throughout the industrialized world to one degree or another regardless of governmental policy.

Instead of making harder choices, most policymakers took the easier way out of the quandary: increase asset values instead. Free trade deals lowered prices for goods at the expense of domestic labor; 401Ks replaced pensions to boost the stock market at the expense of retirement stability; credit cards and other lending vehicles were provided to ordinary citizens who couldn’t make ends meet under normal circumstances (remember that in the 1950s most households got by entirely without credit!); the one-earner household norm was replaced with a two-earner norm at the expense of a variety of social ills; and, of course, since traditional savings vehicles, pensions, and the wages to fund them had been destroyed, huge housing incentives were created to push people into home ownership as their primary savings vehicle and hedge against inflation.

The result is the modern economy: a seemingly puzzling combination of record stock prices, record corporate profits, very strong housing prices and robust GDP gains, combined with rising cost of living, increasing unemployment in developed nations, insanely high youth unemployment rates and student debt, diminishing savings, entire industries disappearing with no hope of return, and minimal or even negative wage growth.

The entire economy is run by the asset classes on behalf of the asset classes. There’s no money left in the real economy anymore, and the trends toward mechanization and globalization of jobs are only increasing at exponential rates, dramatically increasing the power of the asset classes at the expense of wage earners.

Most people don’t have remotely enough money saved in retirement. What happens if the housing market that represents a huge portion of the most older middle class’ retirement savings “crashes” to levels that would actually be appropriate to the buying power of middle class wages, particularly among younger Americans?

Most people don’t have pensions. They have a 401K if they have anything at all. What happens if the stock market collapses to levels that are sensible and reflective of the real Main Street economy? It’s not just the stockbrokers who go belly up. It’s everyone with a 401K.

Most people need credit cards to make ends meet. What happens if the credit card companies can’t lend because their overleveraged house of cards comes crumbling down? Economic disaster.

And the thing about overinflated assets is that it doesn’t take much more than a sneeze to blow the whole house of cards over.

It’s well-known that one of the functions of banks is to bring money that disappears into the black market, back out of the black market. Money laundering is illegal, but in a funny way it’s also somewhat essential. It’s less essential if you have a strong middle class. But in an economy entirely propped up by assets and investment liquidity, if bankers get imprisoned for laundering money in a way that puts a chill on black market asset processing, the Justice Department types might be entirely accurate in assuming that liquidity will freeze in a such a way as to send the economy into a tailspin. Remember that the Fed has been engaged in “quantitative easing” for years now, giving the banks loads of free money with zero percent interest rates. It still can’t afford to take its foot off the gas pedal.

If that’s a terrifying thought, it should be. This isn’t a question of social and economic injustice. This is a question of an economy built on lies and mirrors, an economy whose sickness is so deep that even a small dose of justice to its asset classes could kill the patient.

Wage growth and reductions in income and wealth inequality are the only medicine that will nurse this dying patient back to health. Without it, even a small breeze like prosecuting some money launderers might be enough to snuff out the candle.

.

Ooops. Looks like the long term unemployed got lost in the shuffle

by digby

*Sigh*

The looming expiration of federal unemployment benefits raises the question of whether Democratic lawmakers bungled the debate. Though Congress can still act retroactively, Democrats’ goal had been to pass an extension of the benefits before Dec. 28, when they are set to expire. The administration and allies on the Hill worked tried to attach a provision to the budget deal passed in mid-December.

But by the time they began engaging the fight, few Democrats seemed particularly attentive and Republicans were more than comfortable running out the clock. Now, with Congress in recess, long-term unemployment insurance will come to an end for 1.3 million Americans, potentially costing 240,000 jobs, according to the White House’s Council of Economic Advisers. Was it inevitable? Or was it a case of political mismanagement? The record indicates that Democrats were late to show up, distracted in part by other concerns. A month and a half before the deadline, few members of Congress or administration officials were even talking about unemployment insurance.

The first major mention from the White House came in mid-November, in a little-noticed remark from top economic adviser Gene Sperling during an interview at The Atlantic’s Washington Ideas Forum.

“With an unemployment rate of 7.3 percent, we need to raise the emergency unemployment insurance and push for extensions to 2014,” Sperling said.

The statement received such scant attention that administration officials had to flag it for news outlets to ensure that the message actually got out. One day later, White House Press Secretary Jay Carney amplified Sperling’s remarks by declaring the president “believes we should extend this provision through the end of 2014, and we are confident that Congress will join us in this effort.”

But there was no reason for the White House to be confident. The shutdown of the federal government in October, followed by the disastrous launch of the president’s health care law, had commanded the spotlight. On the Hill, lawmakers were only casually paying attention to unemployment insurance, outside of the House Ways and Means Committee, which oversees the benefits.

If they do decide to fix this they have the people on their side, at least:

A majority of Americans believe Congress should restore the federal unemployment insurance program that it allowed to expire in the recent budget deal, according to a new poll. The details of the survey further suggest that voters stand ready to punish lawmakers who block an extension — something several Republicans have indicated they are prepared to do.

Overall, 55 percent of Americans believe the Emergency Unemployment Compensation (EUC) program should be extended compared to 34 percent who say it should end, the Hart Research Associates poll found. Among women, 61 percent approve of the program and just 28 percent believe it should cease. The pollsters, who were working on behalf of the National Employment Law Project (NELP), also separated out a subset of respondents who fit the profile of a mid-term election voter. Among the sort of people who show up for off-year elections like the one awaiting Congress in 2014, 55 percent support extending EUC. Senior citizens are especially supportive of the program, and other constituencies that Republicans depend upon in November such as white women and non-college-educated white voters also exhibit majority support for EUC.

Hopefully they will hear an earful from their voters and will come back and extend these benefits.

And if this article is correct I don’t think you can see this as anything other than political mismanagement. Apparently, they simply assumed it would be included. I guess because they think Paul Ryan is a nice generous guy in spite of his Ayn Rand worship???

Oy. Time to finish off that egg nog…

Laundering justice

by digby

Does everyone remember this little event from about ten years ago?

[Tommy Chong] and his lawyers were hoping for a community service sentence as punishment for distributing thousands of bongs and marijuana pipes online through his California company, Nice Dreams Enterprises. 

But Chong, famous for such movies as “Up in Smoke” with longtime partner Cheech Marin, is going to prison instead.

U.S. District Judge Arthur J. Schwab yesterday gave him nine months in a federal lockup and fined him $20,000.

As part of the sentence, Chong forfeited his Internet domain name, Chongglass.com, along with $103,514 in cash and all of the drug paraphernalia seized by federal agents during a raid Feb. 24.

He’ll be allowed to self-report to prison, probably to a facility nearest his Pacific Palisades, Calif., home.

The case against him was part of “Operation Pipe Dreams,” a national investigation of drug paraphernalia distributors that began in Pittsburgh during the prosecution of Akhil Kumar Mishra and his wife, Rajeshwari, who ran two head shops Downtown in the 1990s.

Nine months and hundreds of thousands of dollars for selling some glass pipes. Not drugs. Just pipes.

And then we have this, via Matt Taibbi:

If you’ve ever been arrested on a drug charge, if you’ve ever spent even a day in jail for having a stem of marijuana in your pocket or “drug paraphernalia” in your gym bag, Assistant Attorney General and longtime Bill Clinton pal Lanny Breuer has a message for you: Bite me.

Breuer this week signed off on a settlement deal with the British banking giant HSBC that is the ultimate insult to every ordinary person who’s ever had his life altered by a narcotics charge. Despite the fact that HSBC admitted to laundering billions of dollars for Colombian and Mexican drug cartels (among others) and violating a host of important banking laws (from the Bank Secrecy Act to the Trading With the Enemy Act), Breuer and his Justice Department elected not to pursue criminal prosecutions of the bank, opting instead for a “record” financial settlement of $1.9 billion, which as one analyst noted is about five weeks of income for the bank.

The banks’ laundering transactions were so brazen that the NSA probably could have spotted them from space. Breuer admitted that drug dealers would sometimes come to HSBC’s Mexican branches and “deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows.”

This bears repeating: in order to more efficiently move as much illegal money as possible into the “legitimate” banking institution HSBC, drug dealers specifically designed boxes to fit through the bank’s teller windows. Tony Montana’s henchmen marching dufflebags of cash into the fictional “American City Bank” in Miami was actually more subtle than what the cartels were doing when they washed their cash through one of Britain’s most storied financial institutions.

Far be it from me to suggest that the US Government uses its mighty police and judicial powers unfairly and inconsistently. But if I were to do so, there is no place where it is more obvious than when it is tasked with meting out punishment for those in the financial sector. Tommy Chong is a wealthy celebrity, of course, but he was on the wrong side of the drug war and they wanted to make an example of him. Being involved in the drug trade or even smoking the odd joint in certain places is a risky business in America. Unless you are a wealthy banker laundering drug money,of course, in which case you will get off scott free and the bank will have to pay your fine …

If only this guy had been a banking executive:

On July 9, 2013, in Oklahoma City, Okla., Johnnie Ray Bragg Jr. was sentenced to 480 months in prison, four years of supervised release and ordered to forfeit $260,752. Bragg pleaded guilty in August 2012 to drug and money laundering conspiracies. According to court documents, from about September 21, 2010 to about April 20, 2011, Bragg and others received currency from the sale of narcotics and deposited the proceeds into bank accounts at branches of a bank in Oklahoma, which were controlled by others in the conspiracy. Bragg and others also wire transferred drug proceeds from Oklahoma to California and purchased “money packs” that were then used to load funds from the drug proceeds onto Bragg’s prepaid Visa card. Bragg used the Visa card to pay for his travel between Oklahoma and California in furtherance of the drug-trafficking conspiracy.

Too big to jail sounds like a facile little slogan but it appears to be completely accurate:

Though this was not stated explicitly, the government’s rationale in not pursuing criminal prosecutions against the bank was apparently rooted in concerns that putting executives from a “systemically important institution” in jail for drug laundering would threaten the stability of the financial system. The New York Times put it this way:

Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system.

This justice department is apparently congenitally unable to hold members of the financial elite accountable for wrongdoing. They can’t even do it for laundering drug money. This means that banks are officially unassailable criminal enterprises.

Texans getting screwed by energy deregulation. Surprise surprise.

by David Atkins

Energy deregulation: it’s not just for screwing California consumers anymore. Texas energy companies have been dipping their vampire fangs into the bloodstream of Texas consumers as well:

Texans living in deregulated electricity areas paid about $22 billion more in the last decade than they would have under a regulated system, according a recent analysis by a consumer group.

Texas residential consumers have paid as much as 45 percent more for deregulated electricity than their counterparts in regulated areas of the state since lawmakers devised the new system for much of the state in 1999, according to the Texas Coalition for Affordable Power, which recently published an assessment of Texas energy price data from 2002 through 2012.

The findings raise questions about claims made at the time that deregulation would result in lower prices for Texan consumers. While prices for both deregulated and regulated electricity have fallen since their peak in 2008, average deregulated prices remain about 3 cents high per kilowatt hour than their regulated counterparts for residential consumers…

Prices for deregulated electricity in Texas have also stayed higher than national electricity prices for most of this time, dipping below the national average in 2012 for the first time since deregulation started. In 2012, Texans in deregulated areas paid 11.75 cents per kilowatt hour while the the national average was 11.82 cents. Prior to deregulation, Texans had consistently paid lower electricity rates than the national average throughout the 1990s, the report said.

Maybe it’s just the Christmas spirit talking, but I simply cannot fathom the level of dedication to greed that allows these people who push ALEC-style deregulatory policies knowing that it will further impoverish consumers to benefit rich executives, to sleep easy at night. I couldn’t do it. I would be wracked with guilt for even being a party to it. Progressives talk a lot about sociopathic policies on the right. It’s not necessarily that we believe that everyone who implements them is a sociopath, obviously. But at some point you would expect conscience to kick in for normal people.

And therein lies a whole new Social Security debate

by digby

The Wall Street Journal reports a tear in the matrix:

Elizabeth Warren is telling us something important: The politics surrounding Social Security are shifting… [and] it signals an important longer-term change in the political forces behind the debate on Social Security, and perhaps other entitlements as well. The rising focus on income inequality, reduced concern about federal deficits, the effect of the recession on baby-boomer finances and the aging of the Republican Party all are subtly shifting the ground beneath the discussion.

Ms. Warren gave voice to this new phase when she took to the Senate floor recently with a speech calling head-on for higher Social Security benefits. “Seniors have worked their entire lives and have paid into the system, but right now, more people than ever are on the edge of financial disaster once they retire—and the numbers continue to get worse,” she said. “That is why we should be talking about expanding Social Security benefits—not cutting them.”

As that reference to retirees on the “edge of financial disaster” indicates, one force driving the argument is the fact that a lot of baby boomers saw their retirement cushions deflated by the financial shock of 2007 and 2008. Research by the Employee Benefit Research Institute shows that the share of workers saving for retirement has declined to 57% now from 64% in 2008—and that the share of workers who have more than $25,000 set aside has declined over the same period to 43% from 51%.

That slide in retirement preparation coincides with a resurgence of concern—to some extent in both parties—about income inequalities in the American economy. The argument that the wealthy have done fine in recovering from the financial shock while others have struggled helps ease the way for benefit-increase proponents to push for a boost in payroll taxes on upper-income Americans to finance higher Social Security benefits.
[…]
But the Committee for a Responsible Budget argues that while modest tax increases may help preserve current benefits, raising them enough to finance higher benefits would be a politically and economically dicey proposition—and have the questionable effect of diverting resources toward the old from the young.

Expanding benefits under current conditions “makes no sense at all,” says Maya MacGuineas, the committee’s president.

And therein lies a whole new Social Security debate.

Welcome to our turf, Ms MacGuineas.

We haven’t been on this side of the argument in some time, but as this column points out, certain realities are beginning to come into focus and the politics are favorable for a push to actually expand the social insurance programs. At the very least we seem to have arrested the drive to cut benefits, which was always a cynical Shock Doctrine style attack born of the financial crisis that should never have been endorsed by any right thinking human being.

But don’t get too excited. This battle will be waged again. Whether the economy is “performing” well or in the ditch, the financial elites will always say there is a good reason to degrade the New Deal programs or cut their taxes. Usually both at the same time. But it’s just possible that we have managed to shame the neo-liberal members of the Democratic Party a little bit, resulting in them putting their Wall Street benefactors’ agenda on the back burner for the moment. Baby steps.

Waiting for a woman

by digby

This article in the Daily Beast reprises some of the hideous sexist attacks against Hillary Clinton through the years reminding everyone of what fun it’s going to be if she runs for president.

This one is fairly characteristic of the 90s I thought, although they left out the usual lesbian accusation:

In April 1992, U.S. News and World Report, called her the “overbearing yuppie wife from hell.”

That’s US News and World Report, not National Review. The Beast article assumes that it will be Republicans alone doing this if Clinton throws her hat into the ring, and we may have finally evolved to the point where that’s true. Yes, evolved. Because until recently, it wasn’t only the Republicans but the mainstream press and plenty of Democrats who said the same sort of things — and worse. I think there has probably been some consciousness raising among the media over the past few cycles, mostly thanks to the utterly neanderthal behavior of the far right. And the Democrats will be unlikely to let their sexist slips show unless there is someone they like better than Clinton running for the nomination. So maybe it will be an honest, non-sexist campaign about the issues, at least among the press and the Democrats. (Forget the Republicans, sexism is a vital element of their ideology — gotta keep the traditional hierarchy going or they have nothing.) But I will not hold my breath. People revert to overt sexism very easily when they get angry, pressured or challenged. In fact, it’s shockingly reflexive.

I wish I believed that America was ready to elect a woman president. After all, the machismo culture of Chile just featured a race between two women and the socialist won! But I honestly just don’t know. And the weird thing is that I thought differently a decade ago. It’s the last ten years that woke me up to the deep, underlying psycho-structural uniqueness of American sexism.  (And, needless to say, the prospect of Clinton vs Christie conjures images of an epic battle between the bros and the … rest of us, that is enough to give me hives.)  Yes, I fear we really could see a presidential campaign that makes your average 7th grade student council election look deep by comparison. We are just that exceptional.