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Archive for February 2010

LASIK Carries Unacknowledged Risks

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Failure Magazine has a great report on the risks of LASIK eye surgery:

The estimated $2.5 billion industry has recently come under fire for its failure to acknowledge potential risks. Last spring, the FDA inspected approximately 50 LASIK facilities and found that 17 had “inadequate” systems in place for collecting and transmitting data to the FDA on patients’ reports of post-surgical complications (“adverse events”), which commonly include dry eye, blurry vision, double vision, and problems with glare and starbursts.

In August of last year, Consumer Reports Health released the results of a survey, which found that 55 percent of Americans who’ve had laser vision correction surgery still wear glasses or contacts some of the time. Fifty-three percent experienced at least one side effect within the first four weeks of surgery, and 22 percent of patients still experienced side effects six months after surgery.

Written by pavanvan

February 28, 2010 at 11:43 pm

Supreme Court Allows Corporations to Donate Anonymously

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The Times reminds us of an unsavory after-effect of the Supreme Court’s recent Citizens United v. FEC case. Under the decision, corporations no longer have to disclose to whom they donate or how much, effectively destroying organizations like Opensecrets.org that attempt to track the influence of money in politics. This is terrible news.

Experts say the ruling, along with a pair of earlier Supreme Court cases, makes it possible for corporations and unions to donate anonymously to nonprofit civic leagues and trade associations. The groups can then use the money to finance the types of political advertisements that were at the heart of last month’s ruling.

Democratic Congressional leaders called the loophole dangerous, and they have proposed legislation that would require nonprofit groups to identify publicly the sources of financing for their political advertisements.

Health Insurance Anti-trust Exemption

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Matt Taibbi has one of the most lucid posts on the recent health-care scandal I’ve seen recently.

You may remember the California Anthem Blue uproar that occurred a week or so ago, wherein they arbitrarily and unilaterally jacked up their prices almost 40%. Taibbi asks the logical question – “Why can’t California customers just switch to another, cheaper provider?” – and then answers it: “Because they have no choice.”

You see, as it turns out, health insurance providers are exempt from anti-trust legislation, which means they can hold veritable monopolies over huge areas and no one can do a thing about it. This was certainly news to me.

Dating back to 1947, what was supposed to be a “temporary” exemption quickly became a permanent loophole in the Sherman Anti-Trust legislation.

As Taibbi says:

This is why insurers (especially insurers with large market shares in small states) are easily able to gouge customers and deny coverage. There’s really no legal mechanism for preventing the firms from getting together and arranging price-fixing and other outrages. In a normal market customers would be able to get better coverage and cheaper rates from a competitor, but insurance is really more like a series of competition-free fiefdoms where the customers can’t go elsewhere for a better deal.

The exemption is known as the McCarran-Ferguson amendment, and so long as it’s still on the books health-care providers will continue to have a monopoly over large swaths of land. This is yet another reason why the “individual mandate” in Obama’s health-care plan is so goddamn offensive. “Reform” is impossible without repealing McCarran-Ferguson. How many of you think that’s likely?

The (Literal) Rape of American Children

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The New York Review of Books gives a harrowing continuation of its series on widespread sexual abuse in our “juvenile detention centers”:

Adults who want to have sex with children sometimes look for jobs that will make it easy. They want authority over kids, but no very onerous supervision; they also want positions that will make them seem more trustworthy than their potential accusers. Such considerations have infamously led quite a few pedophiles to sully the priesthood over the years, but the priesthood isn’t for everyone. For some people, moral authority comes less naturally than blunter, more violent kinds.

Ray Brookins worked for the Texas Youth Commission (TYC), the state’s juvenile detention agency. In October 2003, he was hired as head of security at the West Texas State School in Pyote. Like most TYC facilities, it’s a remote place. The land is flat to the horizon, scattered with slowly bobbing oil derricks, and always windy. It’s a long way from the families of most kids confined there, who tend to be urban and poor; a long way from any social services, or even the police. It must have seemed perfect to Brookins—and also to John Paul Hernandez, who was hired as the school’s principal around the same time. Almost immediately, Brookins started pulling students out of their dorms at night, long after curfew, and bringing them to the administration building. When asked why, he said it was for “cleaning.”

What can one say here? We talk of Bagram in Afghanistan or Guantanamo Bay as “legal black holes”, and we feel content, safe in the knowledge that “real American prisoners” have rights. But who has actually seen the inside of a prison?

Surprisingly many, if the statistic bear witness. The Times reported a couple years ago that upwards of 1 in 100 adults was incarcerated – an astounding figure which no other country, not even China, can boast. In absolute numbers, the United States carries more prisoners than any other country, a fact which fails to awe until one considers that China and India each have triple our population. Much of this has to do with draconian drug laws, wherein a man or woman can be put in jail for years for the horrific crime of carrying around some dried-up plant or a bit of white powder – but much of it also has to do with this “lock ’em and forget ’em” mentality of dealing with crime, as though the primary focus of our “justice system” ought to be punishment, rather than rehabilitation.

More worrying is how this attitude has shifted toward juvenile prisoners. I don’t want to make too many apologies for our incarcerated juveniles, for the truth is that many of them have committed horrible acts, but to treat them simply as miniature adults represents, I think, a grave injustice.

Particularly when they’re raped by their so-called caretakers, as the above article meticulously and painfully details.

Written by pavanvan

February 28, 2010 at 3:04 pm

Greece to Get $41 Billion Bailout

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The Wall Street Journal reports today that Greece will get a $41 Billion “financing” package from Germany and France, who, I hasten to point out, aren’t exactly swimming in liquidity themselves.

The plan seems to be that Germany and France will soak up some of this Greek debt via public markets and state-owned banks, due to a EU bylaw that prohibits member states from owning the debt of other members. What’s astounding to me is that no one is asking Wall Street to pony up any of this cash. They, after all, are almost entirely responsible for this Greek debt crisis, and they made hundreds of millions of dollars watching Greece go down in flames.

Goldman Sachs alone, who was arguably the single biggest catalyst for Greece’s downward spiral, paid out more than $21 Billion in sheer bonuses to its employees. AIG, another  major player in this, paid out more than $100 million. I mean, shouldn’t some of this money go toward cleaning up the mess they caused? The Times printed an excellent series of articles on Wall Street’s complicity in this just one week ago.

Javier Hernandez  even reported that major bank shares swung upward on rumors of a pending EU Bailout to Greece. So they’re blatantly profiting from their crimes. I mean, how is this legal?

Oh yeah, I keep forgetting. The banks own Congress. They make the laws.

Written by pavanvan

February 28, 2010 at 2:34 pm

Quote of the Day

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Imagine a puddle waking up one morning and thinking, ‘This is an interesting world I find myself in, an interesting hole I find myself in, fits me rather neatly, doesn’t it? In fact it fits me staggeringly well, must have been made to have me in it!’ This is such a powerful idea that as the sun rises in the sky and the air heats up and as, gradually, the puddle gets smaller and smaller, it’s still frantically hanging on to the notion that everything’s going to be alright, because this world was meant to have him in it, was built to have him in it; so the moment he disappears catches him rather by surprise. I think this may be something we need to be on the watch out for.’

– Douglas Adams

Written by pavanvan

February 28, 2010 at 12:01 am

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Climate Denial and OJ Simpson

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Bill McKibben has a great analogy in this week’s The Nation that explains the success of our staid climate change deniers:

The campaign against climate science has been enormously clever, and enormously effective. It’s worth trying to understand how they’ve done it. The best analogy, I think, is to the O.J. Simpson trial, an event that’s begun to recede in our collective memory. For those who were conscious in 1995, however, I imagine that just a few names will make it come back to life. Kato Kaelin, anyone? Lance Ito?

The Dream Team of lawyers assembled for Simpson’s defense had a problem: it was pretty clear their guy was guilty. Nicole Brown’s blood was all over his socks, and that was just the beginning. So Johnnie Cochran, Robert Shapiro, Alan Dershowitz, F. Lee Bailey, Robert Kardashian et al. decided to attack the process, arguing that it put Simpson’s guilt in doubt, and doubt, of course, was all they needed. Hence, those days of cross-examination about exactly how Dennis Fung had transported blood samples, or the fact that Los Angeles detective Mark Fuhrman had used racial slurs when talking to a screenwriter in 1986.

If anything, they were actually helped by the mountain of evidence. If a haystack gets big enough, the odds only increase that there will be a few needles hidden inside. Whatever they managed to find, they made the most of: in closing arguments, for instance, Cochran compared Fuhrman to Adolf Hitler and called him “a genocidal racist, a perjurer, America’s worst nightmare, and the personification of evil.” His only real audience was the jury, many of whom had good reason to dislike the Los Angeles Police Department, but the team managed to instill considerable doubt in lots of Americans tuning in on TV as well. That’s what happens when you spend week after week dwelling on the cracks in a case, no matter how small they may be.

Bill McKibben has done some fantastic journalism on this issue, and I highly recommend reading his article in full.

Written by pavanvan

February 27, 2010 at 12:11 pm

Quote of the Day

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What is any political campaign save a concerted effort to turn out a set of politicians who are admittedly bad and put in a set who are thought to be better. The former assumption, I believe is always sound; the latter is just as certainly false. For if experience teaches us anything at all it teaches us this: that a good politician, under democracy, is quite as unthinkable as an honest burglar.

– H.L. Mencken

Written by pavanvan

February 27, 2010 at 12:02 pm

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Profiles in Idiocy: Thomas Friedman

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Here we go again! Another evasive, revisionist piece of trash from none other than our favorite warmonger, Thomas Friedman! I hasten to point out that Friedman was one of the Iraq War’s biggest cheerleaders, once exhorting the starving Iraqi masses to “Suck. On. This.” (i.e. our bombs). That linked YouTube video comes highly recommended because it reveals, for all the world to see, just what a slimy reptile Mr. Friedman really is. But no, he’s not finished! In his February 24th New York Times column he takes his complete lack of ethics, his shifting morality, and his base “intellectualism” to a new low.

Tongue-twistingly entitled “Iraq’s Known Unknowns, Still Unknown” (a ‘clever’ play, I suppose, on Rumsfeld’s famous quote), his article begins with one of the most poorly written, eurocentric, history-denying openings I’ve ever seen:

From the very beginning of the U.S. intervention in Iraq and the effort to build some kind of democracy there, a simple but gnawing question has lurked in the background: Was Iraq the way Iraq was (a dictatorship) because Saddam was the way Saddam was, or was Saddam the way Saddam was because Iraq was the way Iraq was — a collection of warring sects incapable of self-rule and only governable with an iron fist?

Maybe Iraq was “the way it was” because the Untied States actively funded Saddam Hussein’s dictatorship for decades. Has this man ever read a history book? We supported Saddam all through the ’80s, and then after his failed adventure in Kuwait we imposed “sanctions” on Iraq which had the net effect of strengthening his regime, albeit at the cost of 500,000 Iraqi children (what Madeline Albright called “a price worth paying”). Does he think that may have something to do with it? Nah, it’s much easier to just be a racist and tar Iraq as a “collection of warring sects incapable of self-rule and only governable with an iron fist”. That way the US invasion almost seems justified!

It’s hard to imagine anyone topping that astounding bit of stupidity, but really, Friedman is just getting started:

Ironically, though, it was the neo-conservative Bush team that argued that culture didn’t matter in Iraq, and that the prospect of democracy and self-rule would automatically bring Iraqis together to bury the past. While many liberals and realists contended that Iraq was an irredeemable tribal hornet’s nest and we should not be sticking our hand in there; it was a place where the past would always bury the future.

But stick we did, and in so doing we gave Iraqis a chance to do something no other Arab people have ever had a chance to do: freely write their own social contract on how they would like to rule themselves and live together.

Oh boy! I’m sure the Iraqis were just thrilled that we gave them the chance to “freely write their own social contract” – I mean, sure, it was at the barrel of US artillery, but it’s not nice to talk about that, right, Friedman? And I think you’re missing something here. Do you remember something called “WMDs”? You know, the ones that we never found? I think that was the real reason we attacked Iraq, in blatant violation of international law. All this talk of “supporting democracy” came afterward.

Also, the “liberals and realists” did not contend that Iraq was an “irredeemable tribal hornet’s nest”, you miserable racist. We said that America shouldn’t “stick [its] hand there” because attacking a country that was not actively preparing to declare war would be a monstrous act of aggression and an express violation of international law. It’s “irredeemable” to “contend” otherwise.

Then Mr. Friedman talks about his latest meeting with Gen. Odierno, who, along with Joe Biden, has apparently done the most to “coax, cajole, and occasionally shove Iraq away from the abyss”. You know, the abyss that we opened up. The Iraqis sure are lucky they had Uncle Sam around to “cajole” them away from it!

I found the general hopeful but worried. He was hopeful because he has seen Iraqis go to the brink so many times and then pull back, but worried because sectarian violence is steadily creeping back ahead of the elections and certain Shiite politicians, like the former Bush darling Ahmed Chalabi — whom General Odierno indicated is clearly “influenced by Iran” and up to no good — have been trying to exclude some key Sunni politicians from the election.

Wrong, you colossal ass, a thousand times wrong! Jesus Christ, I can’t believe you work for the New York Times. The real reason “some key Sunni politicians” are being excluded from the Iraqi election is because of a specific order by our own Paul Bremer that banned former Ba’ath party members from contesting elections. Your own newspaper reminded us of this just five days before your column ran. Don’t you read newspapers? But it’s so much easier to shift the blame onto our scapegoat Chalabi, isn’t it? Facts are just too cumbersome.

How does Friedman think the elections might play out? Well…

The ideal but least likely scenario is that we see the emergence of an Iraqi Shiite Nelson Mandela. The Shiites, long suppressed by Iraq’s Baathist-led Sunni minority, are now Iraq’s ruling majority. Could Iraq produce a Shiite politician, who, like Mandela, would be a national healer — someone who would use his power to lead a real reconciliation instead of just a Shiite dominion? So far, no sign of it.

Okay, you want to see a “Shiite Nelson Mandela”. What has the US been doing to promote this? Well, we’ve been arbitrarily arresting and throwing Shiites in jail on false pretexts for a while now. Didn’t Nelson Mandela go to jail? We’ve brutally occupied their country and left it swarming with mercenaries. I guess that’s kind of like South Africa? I don’t know. Maybe Mr. Friedman could just drop this dishonest comparison to Nelson Mandela and try and give some real solutions. Nah, that’s too hard.

So tell us what you don’t want, Mr. Friedman:

The two scenarios you don’t want to see are: 1) Iraq’s tribal culture triumphing over politics and the country becoming a big Somalia with oil; or 2) as America fades away, Iraq’s Shiite government aligning itself more with Iran, and Iran becoming the kingmaker in Iraq the way Syria has made itself in Lebanon.

Again with the racial overtures! Good lord, what kind of human being are you? “Iraq’s tribal culture”, eh? “A big Somalia with oil”? Did you really write that with a straight face? You “pundits” are all the same. If a country doesn’t have cars and multinational corporations in it, then its automatically a “tribal” culture. Man, you would have fit right in with the European imperialists laying waste to Asia and South America. You were born in the wrong century, Mr. Friedman!

As to your second scenario: forgive me, but why? Why shouldn’t Iraq be friends with its neighbor, Iran? Just because you, personally, wouldn’t like it? What do you mean by “kingmaker”? Iraq’s culture is predominantly Shi’a – so to a reasonable observer it should make sense that Iraq and Iran would be friends. Mr. Friedman, however, is not a reasonable observer.

He ends with a parting shot, and a last bit of historical revisionism:

Why should we care when we’re leaving? Quite simply, so much of the turmoil in the region was stoked over the years by Saddam’s Iraq and Ayatollah Khomeini’s Iran, both financed by billions in oil revenues. If, over time, a decent democratizing regime could emerge in Iraq and a similar one in Iran — so that oil wealth was funding reasonably decent regimes rather than retrograde ones — the whole Middle East would be different.

Mr. Friedman, unlike myself, was actually alive to remember the Iran-Contra scandal, and thus has no excuse for this spectacular display of ignorance. “So much of the turmoil” in the region was not stoked by “billions in oil revenues”, as it was by billions in CIA dollars, paid to both sides, with express instructions to keep fighting. I mean Jesus, how can he not remember this? The United States gave arms and funding to both sides of the Iraq-Iran conflict, and used the proceeds to illegally fund a terrorist group in Nicaragua. Doesn’t he think that “stoked” some turmoil in the region? I guess when you’re Thomas Friedman, history just doesn’t matter.

I simply cannot believe this guy is writing for The New York Times while tens of millions of Americans are out of work. Anyone who has graduated from high school has a firmer grasp of history than Thomas Friedman. Anyone short of a Ku Klux Klan member has more ethical integrity. Thomas Friedman is a joke.

Media’s “Independent Analysts” Actually Paid Lobbyists

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Some great investigative reporting from Sebastian Jones over at The Nation:

Since 2007 at least seventy-five registered lobbyists, public relations representatives and corporate officials–people paid by companies and trade groups to manage their public image and promote their financial and political interests–have appeared on MSNBC, Fox News, CNN, CNBC and Fox Business Network with no disclosure of the corporate interests that had paid them. Many have been regulars on more than one of the cable networks, turning in dozens–and in some cases hundreds–of appearances.For lobbyists, PR firms and corporate officials, going on cable television is a chance to promote clients and their interests on the most widely cited source of news in the United States. These appearances also generate good will and access to major players inside the Democratic and Republican parties. For their part, the cable networks, eager to fill time and afraid of upsetting the political elite, have often looked the other way. At times, the networks have even disregarded their own written ethics guidelines. Just about everyone involved is heavily invested in maintaining the current system, with the exception of the viewer.

But not only cable news channels are guilty of this. A couple months ago, Fairness and Accuracy in Reporting revealed that The Washington Post allowed an anti-social security lobbying firm to write, in full, a front page article. The article, originally from the “Fiscal Times”, a front organization for a Wall Street billionaire and former Nixon Cabinet member, sought to scare readers over the looming deficit crisis Social Security presents. These fears have been thoroughly debunked (notably by economist Dean Baker), but this didn’t prevent The Post from  putting forth this lobbyist’s views as uncontested “fact”.

Online journal Politico is also heavily implicated, as Ken Silverstein at Harper’s reports. Not even the web is safe. Our staid media outlets have basically been reduced to pimps, selling their hard-won public respect to the highest bidder. This behavior is criminal, and should be prosecuted.

Written by pavanvan

February 26, 2010 at 7:17 pm

Six Largest US Banks Own 63 Percent of GDP

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A startling statistic buried within an outstanding New Republic article:

As a result of the crisis and various government rescue efforts, the largest six banks in our economy now have total assets in excess of 63 percent of GDP (based on the latest available data). This is a significant increase from even 2006, when the same banks’ assets were around 55 percent of GDP, and a complete transformation compared with the situation in the United States just 15 years ago, when the six largest banks had combined assets of only around 17 percent of GDP. If the status quo persists, we are set up for another round of the boom-bailout-bust cycle that the head of financial stability at the Bank of England now terms a “doom loop.”

Good god. I knew that these banks were big, but I had no idea they were this big. The New Republic devotes the rest of its article to explaining why Obama’s bank regulations are (surprise!) a sham. But then, we should have already known that. When Treasury Secretary Geithner appeared on Newshour a few days ago, he baldly stated that these new regulatory rules “will not include breaking up the banks“. Forgive me, but what is the point of “regulation” if our banks are allowed to keep their “too big to fail” status and continue to engage in the same practices that brought down our economy in 2008? The so-called Volcker rules do nothing to stymie the relationship between Wall Street and Washington, they do nothing to prevent banks from over-leveraging (as they had during the run-up to the crisis), they allow the banks to retain their gargantuan size… so what were the Volcker rules supposed to do again? Oh yeah, it bans “proprietary trading”, somthing which only accounts for 5 percent of total bank revenue.

Meanwhile, President Obama is proposing yet another giveaway to the banks, this time in the form of $30 billion in loans at below-market interest rates. If I sell you something about below-market value, then I’m giving you a gift. That’s what these “loans” are. The Washington Post attempts to bury the issue in the middle of the piece, and refers to the subsidy as going to “community banks”, without noting that most of these “community banks” have long since been bought up by our banking behemoths.

I don’t really know what else to say here. The banks own Congress; they own the House; they own Obama (check out his campaign donors) – there doesn’t seem to be any way out of this. I think some mobs with torches and pitchforks would not go amiss at this point.

Written by pavanvan

February 26, 2010 at 6:27 pm

Bernanke Frantically Tries to Save his Job

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Bloomberg has a good article today about how our favorite Fed Chief, Mr. Bernanke, is trying to allay calls for a Fed audit by offering more “transparency”. Let’s see what he has in mind:

The Fed will support legislation to let government auditors probe six temporary programs created to combat the financial crisis such as the Primary Dealer Credit Facility, Bernanke said yesterday in House testimony. While he would support the delayed release of names of firms getting aid from those programs, he said banks borrowing through the longstanding discount window must be allowed to remain anonymous.

Bernanke’s move toward greater openness may not dissuade lawmakers who want the Fed to disclose more information about the Fed’s lending and policy decisions. Lawmakers are responding to public anger over the Fed’s role in the $182.3 billion bailout of American International Group Inc.

“He is definitely trying to defuse the Ron Paul issue,” said Diane Swonk, chief economist at Chicago-based Mesirow Financial Inc., which oversees $37.4 billion in assets. “The best he can do at the moment is to play more offense than defense.”

Does he really expect us to buy this bullshit? If that’s what he calls “transparency”, I’ve got some water from the Ganges to sell him. The whole point of this Fed audit is to see what they did with the money we don’t know about. Specifically, we’d like to know about money that was lent under the table to the European union to prevent it from collapsing. And George Washington, over at ZeroHedge, tips us off to $12 Billion in Federal Reserve dollars (cash money, yo) that mysteriously went to Iraq during 2003-2004. Whom did they send it to? Why? These are the questions an audit is supposed to answer.

Releasing hand-picked data from 6 controversial Fed programs tells us nothing. The flimsy excuse Bernanke gives us for why he shouldn’t be audited is that it would have a “bad effect on markets”, and give the impression that Fed policy is subject to “political pressure”. Hey, idiot! I think that “impression” has already been effectively created. You remember reducing the benchmark lending rate to zero, and then keeping it that way for two years? Yeah, that was pretty much political. And what were the bailouts, then? Oh, yeah, political. Man, this is such a convenient excuse – any time someone suggests oversight, all you have to do is say the word “political” and poof! Oversight vanishes.

The Fed needs a full, meaningful audit if we’re going to get any semblance of economic balance back. These days of unlimited money must end.

Written by pavanvan

February 26, 2010 at 3:13 pm

Quote of the Day

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Why should we accept that the “talent” of someone who writes jingles for an advertising agency advertising dog food and gets $100,000 a year is superior to the talent of an auto mechanic who makes $40,000 a year? Who is to say that Bill Gates works harder than the dishwasher in the restaurant he frequents, or that the CEO of a hospital who makes $400,000 a year works harder than the nurse or the orderly in that hospital who makes $30,000 a year? The president of Boston University makes $300,000 a year. Does he work harder than the man who cleans the offices of the university? Talent and hard work are qualitative factors which cannot be measured quantitatively.

Howard Zinn


Written by pavanvan

February 26, 2010 at 12:01 am

Posted in Uncategorized

Tax Rates Plummet For The Rich – Income Skyrockets

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In other news, the sky is still blue, and water still wet.

The Center for Budget and Policy Priorities has a fantastic report out this week regarding the effective income tax rate for our many, many millionaries.

As they say:

The top 400 households paid 16.6 percent of their income in federal individual income taxes in 2007, down from 30 percent in 1995. This decline works out to a tax cut of $46 million per filer in 2007, or a total of $18 billion in tax cuts for these households per year.

To make it into the top 400, a household needed an adjusted gross income of at least $35 million in 1992 (in 2007 dollars) and $139 million in 2007.

The decline in effective tax rates at the very top is due in large part to the capital gains tax cuts enacted in 1997 and 2003. The top marginal tax rate on capital gains is now 15 percent, less than half the top tax rate on wages and salaries. The top 400 taxpayers derived two-thirds of their income from capital gains and qualified dividends in 2007.

Over roughly the same period, the top 400 filers enjoyed huge gains in pre-tax incomes. The average pre-tax income of this group rose by over 400 percent between 1992 and 2007, equivalent to a $275 million increase per person, after adjusting for inflation. In 2007 alone, average pre-tax incomes rose by 31 percent among these individuals.

Here’s the money graph:

It’s a good thing we have such a progressive President in the White House; one who would never let the rich get away with their stolen cash.

Written by pavanvan

February 25, 2010 at 6:32 pm

Posted in Economy

Tagged with , , , ,

Banks Bet Hard Against Greek Debt They Sold

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The Times continues its reporting on the Greek crisis:

Echoing the kind of trades that nearly toppled the American International Group, the increasingly popular insurance against the risk of a Greek default is making it harder for Athens to raise the money it needs to pay its bills, according to traders and money managers.

These contracts, known as credit-default swaps, effectively let banks and hedge funds wager on the financial equivalent of a four-alarm fire: a default by a company or, in the case of Greece, an entire country. If Greece reneges on its debts, traders who own these swaps stand to profit.

“It’s like buying fire insurance on your neighbor’s house — you create an incentive to burn down the house,” said Philip Gisdakis, head of credit strategy at UniCredit in Munich.

Fabulous. So let me see if I have this straight: our banks sold Greece predatory loans which they knew Greece would never be able to repay – then they took out “insurance” on those loans, effectively betting against Greece’s solvency. Heads they win; tails Greece loses. It’s important to note that this is the exact same behavior they indulged in during the sub-prime fiasco. They sold loans to people whom they knew would never be able to pay them back, and then bet that those loans would default. If, by some miracle, the debtor was able to pay these banks back, they’d get a nice interest rate. If, as the banks bet, the debtor couldn’t pay them back, they’d get re-imbursed via the Credit Default Swaps. It’s a classic win-win for the banks – and a lose-lose for whatever poor sucker they entrapped.

Only now its happening on the level of entire countries. I want to stress that Greece is neither the first nor the last nation to default on account of the malfeasance of US banks. Iceland came before it, and Spain, Ireland, or even France are likely to come afterward.

It is clear that our banks are purely malevolent forces, who benefit only from the destruction of others, and that, for the sake of the world economy, they must be thoroughly audited and broken up. And it is equally clear that this will never happen.

Written by pavanvan

February 25, 2010 at 12:09 pm

Posted in Economy

Tagged with , , , , , ,

Quote of the Day

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The great unmentionable evil at the center of our culture is monotheism. From a barbaric Bronze Age text known as the Old Testament, three anti-human religions have evolved — Judaism, Christianity, Islam. These are sky-god religions. They are, literally, patriarchal — God is the Omnipotent Father — hence the loathing of women for 2,000 years in those countries afflicted by the sky-god and his earthly male delegates. The sky-god is a jealous god, of course. He requires total obedience from everyone on earth, as he is in place not for just one tribe but for all creation. Those who would reject him must be converted or killed for their own good. Ultimately, totalitarianism is the only sort of politics that can truly serve the sky-god’s purpose.

– Gore Vidal

Written by pavanvan

February 25, 2010 at 12:01 am

Posted in Uncategorized

New Desperation from the FDIC

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(c/0 The Daily Digest)

ZeroHedge has a good find today: The FIDC is getting so desperate that it’s literally begging Americans to open savings accounts. Here’s the press release:

FOR IMMEDIATE RELEASE
February 22, 2010     Media Contact:
Greg Hernandez (202) 898-6984
Cell: (202) 340-4922
Email: ghernandez@fdic.gov

The Federal Deposit Insurance Corporation (FDIC) is calling upon consumers across the nation during America Saves Week to  consider establishing a basic savings account or boosting existing savings. FDIC Chairman Sheila Bair said, “One fundamental lesson of the financial crisis is that savings can help families withstand sudden changes in their economic well being. Establishing a savings account in a federally insured institution is a great first step to build wealth and begin a savings habit that will last a lifetime.”

The personal savings rate rose to 4.6 percent in 2009 from 2.7 percent in 2008, according to the U.S. Department of Commerce. “I am pleased to see that people are saving more of their hard-earned money and building wealth. Having personal savings for an emergency fund or saving for a future expenditure, such as a college education, can make a big difference in avoiding other costly alternatives. I’ve always been a big advocate of a back-to-basics approach to financial services; it’s my hope that Americans’ increase in savings is the beginning of a long-term trend,” Bair said.

“Money saved by consumers also provides a stable source of funding for investments in the economy that benefit all Americans,” said Bair. “In fact, a country with robust savings generally has more capital to fund investments and support economic growth over the long-term. As demonstrated recently, it is harmful to an economy when consumers spend beyond their means, financed by debt that they cannot afford to repay.”

Man, things are not looking good. And for those who are interested, here are the number of  FDIC “problem banks” over time, now in convenient chart format!

That’s a lot of liabilities. Oh yeah, and their reserves just went negative, so they’re basically broke. Hooray!

Written by pavanvan

February 24, 2010 at 10:32 pm

Wall Street Bonuses Increase 17%: A Banker’s Reaction

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A little part of me dies when I read stories like this. I mean, I know Wall Street “owns” Congress, as Rep. Dick Durbin was kind enough to inform us, and so the chances of any meaningful punitive action towards them are virtually nil, but still these developments never fail to outrage.

And through it all, one cannot help but wonder: What exactly do these bankers do to deserve their multi-million dollar salaries? People tell me they “work hard”, sure, but then so does a ditch-digger outside Kuala Lumpur, and no one pays him a million dollars. It isn’t even as though their work helps anyone, or at least not objectively. I’ve heard all manner of explanations that “the economy stops without Wall Street” – as though it hadn’t done that with Wall Street’s help.

The part most perplexing to me is how these bankers seem immune to shame for their theft. Surely they read the newspapers, every one of which carries countless stories of everyday citizens who had their lives turned upside-down by this crisis of their making. The Times had a particularly good one the other day about how millions face years of unemployment because of the crisis. The article is entitled “The New Poor“. Several of the people they interviewed had their savings wiped out and are now on the verge of homelessness. I mean, don’t they read articles like that and feel bad?

Apparently not. I recently spoke with a high-school buddy of mine (well, maybe buddy is the wrong word) who, after an economics degree at Duke, found a comfortable position at a prominent Wall Street firm.

“Yeah, I’m a fat cat”, he said, with an unmistakable note of pride.

I wanted to know how he felt about the new poor, particularly as the company to which he attached himself had a direct hand in causing the financial crisis.

He shrugged. “Those people deserved it. They should have been smarter with their money.”

I was appalled. “But your company sold them predatory loans! I mean, you guys willfully misled them.”

“Look”, he countered, “No one put a gun to their heads and forced them to trust us. They’re idiots. If they were smarter, they would have gone to school, gotten business degrees, and been in a position to know what they’re talking about. You play with fire, you get burned.”

“But then what’s the point of your business? Aren’t you in the business of handling the money of people who lack the knowledge to handle it themselves?”

He laughed mirthlessly. A cold look crept into his eyes. “Are you stupid or something? We’re in the business of making money. That’s it. Sometimes we make money by making other people money – sometimes we make money when other people lose money. That’s the bottom line.”

I was at a loss for words. “How can you be so callous?” I managed to stammer.

“Stop it with this gay shit. Like its my responsibility to worry about every poor loser who comes through my door. I’m only responsible for myself. Period. I don’t go around telling people to watch my back – I watch my own. They should do the same. I’m fucking sick of you assholes coming up to me and whining about all these idiots who lost money during the crash. Those retards deserved it. I looked out for myself – my company looked out for itself – and we’re making money. Those idiots didn’t look out for themselves. They expected someone else to do it. And look what happened.”

Nearly defeated, I asked, “So the banks have no responsibility for all these people who are now financially ruined?”

“If they want to blame someone, they should take a long, hard look in the mirror. These dickheads were happy enough with us when we were making them 15% per year, but now that things go sour they look for someone to blame. It’s their own damn fault. What, they think we’re in business just to help them out? Fucking retards.”

Conscious that I was beginning to sound like a broken record, I persisted. I just couldn’t believe what I was hearing.

“Well, you guys were ready enough to take the government bailouts. I mean, how can you justify that?”

He scowled. “Look, you have no idea what the fuck you’re talking about. What did you study in undergrad? Engineering? Leave this shit to the experts, troll. If the government allowed the banks to fail, the economy would have crashed. Done. The world would have been over. And all those bullshit sob stories you’re trying to sell me, they would have been 100 times worse. Anyway, we’re paying you assholes back, so I don’t see what you’re crying about.”

He left me with a bit of advice. “You really need to pull your head out of your ass. All this crying over others isn’t gonna get you anywhere. You’re what – 22? How much money do you make?”

I told him. He burst into laughter.

“See, that’s what I’m talking about! You’re gonna grow up to be one of these losers we take advantage of, if you aren’t careful. Here, what you should do – read some Ayn Rand. She’ll tell you all you need to know.”

And that, ladies and gentlemen, is the mentality of Wall Street, that collection of companies without whom we cannot survive.

Written by pavanvan

February 24, 2010 at 12:37 pm

Quote of the Day

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It is dangerous for a national candidate to say things that people might remember.
– Eugene McCarthy

Written by pavanvan

February 24, 2010 at 12:01 am

Posted in Uncategorized

The North Face is Watching You

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You remember that scene in Minority Report where Tom Cruise is walking through the mall and all these advertisments are tailored specifically for him? Well, yuppie clothing manufacturer The North Face looks as though its going to try something similar:

Advertisers have long been intrigued by the promise of cellphones, because they live in people’s pockets and send signals about shoppers’ locations. The dream has been to send people ads tailored to their location, like a coupon for a cappuccino when passing a coffee shop.

Despite the hype, few cellphone owners have received such ads. This year, that may change, analysts say, as companies like the North Face embrace location-based mobile ads.

Speechless

Written by pavanvan

February 23, 2010 at 11:16 pm

Profiles in Idiocy: Anne Applebaum

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Anne Applebaum has won major accolades for her Gulag: A History, for which she owes a huge debt of gratitude to Alexander Solzhenitsyn, and which constitutes the poor man’s history of the Soviet Union – for when you want your histories dull and without universal insights into human nature. Her work for The Washington Post, however, has been singularly atrocious, and one wonders what, exactly, she learned from all her research into the depths of evil.

Her columns consistently and unapologetically disavow international law, human rights, or any concern for civilian casualties – each week brings a new and more forceful call to “defend our allies” and “defeat our enemies”, usually with only the most token concern for anyone who might stand in our way.

Her latest article, horrifically entitled: “Prepare for War With Iran – In Case Israel Strikes” displays all of her odious tendencies, and is worth discussing in detail.

She starts by observing that President Obama is unlikely to launch a pre-emptive strike on Iran. Why?

The president will not bomb Iran’s nuclear installations for precisely the same reasons that George W. Bush did not bomb Iran’s nuclear installations: Because we don’t know exactly where they all are, because we don’t know whether such a raid could stop the Iranian nuclear program for more than a few months, and because Iran’s threatened response — against Israelis and U.S. troops, via Iranian allies in Iraq, Afghanistan, Palestine and Lebanon — isn’t one we want to cope with at this moment.

Apparently this lady hasn’t heard of a little thing called international law. You see, under normal circumstances, countries aren’t allowed to go mindlessly bombing each other on flimsy pretexts. This constitutes “aggression”, and the Nuremberg Principles (to which we supposedly subscribe) consider it “the supreme international crime”. I mean, I get that we basically threw that idea out the window long ago, but isn’t Ms. Applebaum supposed to be a scholar who specializes in international relations? What kind of scholar thinks the only reason we don’t go around bombing other countries is because it probably wouldn’t work?

After this bald refutation of the basic principles of international law, Ms. Applebaum raises another specter of war. Even though we may consider it inconvenient to bomb Iran, that doesn’t mean other countries won’t. Other countries like Israel. As she remarks:

The defining moment of his presidency may well come at 2 a.m. some day when he picks up the phone and is told that the Israeli prime minister is on the line: Israel has just carried out a raid on Iranian nuclear sites. What then?

Yes, “what then” indeed? Well, a reasonable observer might note that such a “raid” would be an act of sheer aggression, not to mention one supremely unjustified. After all, Israel boasts of its nuclear weapons every chance it gets, and Iran hasn’t carried out any “raids” on its nuclear sites.  A country truly interested in the rule of law would chastise Israel for its wanton aggression, cut off the extravagant military aid ($2.5 billion per year) it currently supplies the aggressor, and maybe even impose those sanctions everyone likes to talk about so much. The same sanctions we’re currently threatening Iran with. I don’t remember Israel getting any sanctions when it got the bomb. Oh, that’s right. We gave it to them.

The rest of the article serves as a justification for such Israeli “raids”. As she says:

Many Israelis regard the Iranian nuclear program as a matter of life and death. The prospect of a nuclear Iran isn’t an irritant or a distant threat. It is understood directly in the context of the Iranian president’s provocative attacks on Israel’s right to exist and his public support for historians who deny the Holocaust. If you want to make Israelis paranoid, hint that they might be the target of an attempted mass murder. Mahmoud Ahmadinejad does exactly that.

I have a hard time believing she wrote this passage with a straight face. Perhaps she remembers a little speech given by President Bush, charmingly nicknamed the “Axis of Evil” speech. In it, he specifically named Iran to the eponymous “axis”, and then punctuated that slur by invading another member of said axis. The US mainstream press is is full of naked suggestions that President Obama attack Iran, including this endearing piece by Mr. Daniel Pipes, ludicrously entitled How to Save the Obama Presidency: Bomb Iran. “The American people would support it,” Mr. Pipes contends.

For crying out loud, Ms. Applebaum’s own article is entitled “Prepare for War with Iran”! I wonder if she thinks that might make the Iranians “paranoid”.

Of course, Ms. Applebaum doesn’t want war with Iran. But a country’s gotta do what a country’s gotta do:

I do hope that this administration is ready, militarily and psychologically, not for a war of choice but for an unwanted war of necessity. This is real life, after all, not Hollywood.

And here we see, finally, in what an alternate reality our mainstream punditry operates. Defending an Israeli war of aggression is no longer a choice, but a necessity. Should Israel, without consulting us, begin a unilaterial bombing campaign on Iran, the United States has no choice but to fight Israel’s war for it. I mean, does Ms. Applebaum expect us to buy this nonsense?

Next she’ll be telling us that it’s necessary for the US to remain the “sole superpower” for the indefinite future. Oh wait…

Mr. Reagan: Tear Down This Myth!

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An enlightening interview of historian Will Bunch by Scott Horton:

1. Your book describes itself as a deconstruction of the myth of Ronald Reagan. But how successful has the effort at myth-making been? How does Reagan now stack up among the presidents among historians and the public in general?

It’s interesting–Reagan’s reputation has risen with both the public and historians the further we get in memory from his actual presidency–which I think is a huge tribute to both the myth-making machinery created by the likes of Grover Norquist and the mainstream media’s willingness to embrace the myth. For example, in March 1990, some 13 months after Reagan left the Oval Office, Reagan’s popularity (59 percent) had dipped below that of Jimmy Carter (62 percent). Two major surveys of historians in the mid-1990s rated Reagan’s presidency as below average, not one of the all-time greats.

Ironically, it was those historian rankings that inspired Norquist, the Heritage Foundation, and others to begin what became the Ronald Reagan Legacy Project–the group that aims to name schools, roads, etc., for the Gipper in every U.S. county–and related activities. A key part of that myth-building was the notion that Reagan was largely responsible for “winning the Cold War”–a premise that was rejected, according to a USA Today poll in 1989, when it was actually happening, by Americans crediting Mikhail Gorbachev for the reforms instead. You see the fruits of that effort today; professors–arguably eager to show they’re not tools of liberal bias–now rate Reagan as high as the Top Ten of U.S. presidents, and public opinion of the 40th president is fairly high as well.

Written by pavanvan

February 23, 2010 at 4:11 pm

Posted in culture, Politics

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Investigative Journalists Are Better Spies Than CIA

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From The Washington Post:

KABUL — On their first day of class in Afghanistan, the new U.S. intelligence analysts were given a homework assignment.

First read a six-page classified military intelligence report about the situation in Spin Boldak, a key border town and smuggling route in southern Afghanistan. Then read a 7,500-word article in Harper’s magazine, also about Spin Boldak and the exploits of its powerful Afghan border police commander.

The conclusion they were expected to draw: The important information would be found in the magazine story. The scores of spies and analysts producing reams of secret documents were not cutting it.

Hilarious.

Written by pavanvan

February 23, 2010 at 3:12 pm

Quote of the Day

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I’ve often been struck by the extensive knowledge that people have of sports, and particularly, their self-confidence in discussing it with “experts.” While driving, I sometimes turn on radio talk shows on sports, and am always struck by this. People calling in have no hesitation in criticizing the coaches, the judgments of the people running the shows, etc. In contrast, when discussing matters of concern to human lives — their own and others — people tend to defer to “experts,” though for the most part the expert knowledge is no more beyond them than how the local professional sports team should play their next game. That’s where the indoctrination comes in: in the intensive training that brings people to feel that they must defer to alleged “experts” on matters of very direct concern to them, far more so than sports. I do, however, agree that there can be negative aspects to the heavily promoted frenzy on spectator sports, loyalty to the home team, etc. Depends very much on how it is carried out.

– Noam Chomsky

Written by pavanvan

February 23, 2010 at 12:01 am

Posted in Uncategorized

Web Passivity

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Light posting today as I’m out on assignment – but in the meantime, check out this post on Washington’s blog for your reading pleasure: Is the Web Making Us Passive?

Indeed, the passivity-inducing potential of the Internet will probably increase in the future.

Specifically, in the coming years, the web will almost certainly be 3-D.

Moreover, it will likely become a multimedia experience, including virtual reality body suits (or at least headgear), smell and perhaps even taste (indeed, since there are only 5 tastes but thousands of different smells, it should be much easier to recreate virtual tastes than smells).

If the current Web is already allowing us to blow off the steam which we would otherwise channel into social protest, can you imagine how much more so in a 3-D, multi-media, full immersion internet? For in that type of virtual environment, we could go attend virtual protests complete with sights, sounds, smells and physical sensation, and our brain could be reasonably well tricked into thinking we really did it, thus taking all of the wind out of our sails and the fire out of our gut.

All of us – even political writers and filmmakers- need to guard against settling for virtual victories. We have to get out there and engage in real action in the “real world” as well, and to guard against a dystopian Matrix-like future where the virtual reality is wonderful but the real world is a nightmare.

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February 22, 2010 at 10:06 pm

Posted in culture

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