The popular science fiction writer John Scalzi wrote a post on his web log some months back about how he owed his success as a writer not only to his own efforts, but to public services and to people who helped him along the way. He spoke of his birth at an Air Force hospital, his gratitude for public schools and public libraries, how his divorced mother at times had to rely on welfare and food stamps, and his scholarships to an elite private school and then to the University of Chicago. He named and thanked teachers who encouraged him and editors who gave him opportunities as a writer.
None of this would have availed him anything if he had not had the talent and the determination to become a good writer. But it would have been a lot harder, and maybe impossible, to develop as a writer and to find a public without the help of others. It is not an either/or proposition.
Scalzi concluded as follows.
I have helped others too. I am financially successful now; I pay a lot of taxes. I don’t mind because I know how taxes helped me to get to the fortunate position I am in today. I hope the taxes I pay will help some military wife give birth, a mother who needs help feed her child, help another child learn and fall in love with the written word, and help still another get through college. Likewise, I am in a socially advantageous position now, where I can help promote the work of others here and in other places. I do it because I can, because I think I should and because I remember those who helped me. It honors them and it sets the example for those I help to help those who follow them.
I know what I have been given and what I have taken. I know to whom I owe. I know that what work I have done and what I have achieved doesn’t exist in a vacuum or outside of a larger context, or without the work and investment of other people, both within the immediate scope of my life and outside of it. I like the idea that I pay it forward, both with the people I can help personally and with those who will never know that some small portion of their own hopefully good fortune is made possible by me.
So much of how their lives will be depends on them, of course, just as so much of how my life is has depended on my own actions. We all have to be the primary actors in our own lives. But so much of their lives will depend on others, too, people near and far. We all have to ask ourselves what role we play in the lives of others — in the lives of loved ones, in the lives of our community, in the life of our nation and in the life of our world. I know my own answer for this. It echoes the answer of those before me, who helped to get me where I am.
My professional achievements are less than John Scalzi’s, but my sentiments are the same.
Through my life, many people helped me along the way. In my old age, I enjoy helping others in my turn, not in a self-sacrificial way but as a source of pleasure and satisfaction. I benefited and still benefit from public services, from education in public schools and a state university to the benefits of Social Security and Medicare. I feel shame that the next generation is not going to be able to have what I have.
There is more to life than (1) accumulating stuff and (2) resisting pressure to share my stuff.
Watch this documentary if you want to see an example of the failure and futility of the war on drugs.
The rise of poverty, crime and drug-dealing in Baltimore is related to the decline of high-wage manufacturing industry, such as the big U.S. Steel plant at Sparrows Point. Black people had a narrow window of opportunity between the time that good-paying union jobs in industry were open to them, and the time that U.S. manufacturing industry started to decline. A high-wage, full-employment economy is the best thing that could happen for poor people in cities such as Baltimore.
The talk that the so-called war on drugs is actually a war on black people may seem exaggerated, but statistics indicate that there is little difference in rates of drug abuse or use of illegal drugs among white and black Americans, and yet blacks are incarcerated for drug crimes 10 times as frequently as whites. I think this probably is more a result of indifference to the plight of poor black people in urban slums rather than a deliberate policy.
I see little immediate hope of change. President Obama is committed to the war on drugs on many fronts, from waging low-level war in Colombia to overriding California’s medical marijuana laws, and I don’t see Gov. Romney changing anything if elected. The most important national figures criticizing the war on drugs are ex-Gov. Gary Johnson of New Mexico, the Libertarian Party candidate for President, and Rep. Ron Paul, the Republican gadfly.
While great effort is being put into meeting the supposed threat of voting by people without proper ID, a more serious threat of election fraud is virtually ignored. About one in four American voters will vote on digital electronic voting machines without any paper record to verify the machine tallied the results correctly. Furthermore these machines use secret proprietary software, so there is no way to check for possible flaws.
In the lead-up to the 2008 election, many people were concerned about the Diebold touch-screen voting machines. Votes were miscounted or deleted in a number of elections, and computer experts showed that the machines could be hacked without detection. Since then Diebold has been absorbed into Dominion Voting Systems which, along with Election Systems and Software, provides virtually all the digital electronic machines used in American elections.
These problems haven’t gone away.
Following a June 2009 election, officials in Pennington County, South Dakota, discovered a software malfunction that added thousands of non-existent votes to the county totals.
In a municipal election in Palm Beach County, Florida, in March 2012, a problem with election management software allotted votes to the wrong candidate and the wrong contest. The official results were only changed after a court-sanctioned public hand count of the votes.
In the 2008 Republican presidential primary in Horry County, South Carolina, touch screen voting machines in 80 percent of the precincts temporarily failed, and when precincts ran out of paper ballots, voters could not cast ballots in their home precinct.
In a test-run for an online election in the September 2010 Washington, D.C., primary, a hacker team was able to change all of the votes to “elect” their own candidates. The online voting system was days away from being launched in a real election for use by overseas and military voters. After the incident, the Internet voting system was canceled.
Here is a chart from an organization called the Verified Voting Foundation that shows the predominant types of voting systems in the various states.
Click to enlarge.
Here is a simplified version from Mother Jones.
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The Verified Voting Foundation in a joint report with Common Cause and the Rutgers School of Law made these recommendations to ensure an honest count:
Require paper ballots or records of every vote.
Have a contingency plan if the machines break down.
Protect military and overseas voters by counting their marked ballots, not by tallying them on-line.
Institute a post-election audit to ensure the electronic report is correct.
Use ballot reconciliation practices to flag votes being added or lost as they are tallied.
The original argument for touch screen machines was that some physically handicapped persons could not work the levers on mechanical voting machines. Here in New York state, the old machines have been replaced by scan-able paper ballots, which anybody can use and which are available for recount if anybody thinks the scanning machines made an error.
Click on Counting Votes 2012: CountingVotes.orgfor a joint report and recommendations by the Verified Voting Foundation, Common Cause and Rutgers School of Law.
The 120-nation Non-Aligned Movement opened a week-long meeting today in Tehran, Iran. The video above shows Prof. Vijah Prasad, a professor of international relations, discussing the significance of the meeting with the Real News Network’s Paul Jay. It is an important meeting, representing a majority of the world’s nations, and attended by the Secretary-General of the United Nations and the Prime Minister of India, among others. It shows that Iran is not as isolated as governments of the United States, Israel and their allies would like, and that it is possible to defy the world’s military superpower.
Another recent declaration of independence from the United States was the recent Organization of American States resolution upholding Ecuador’s right to offer the sanctuary of its London embassy to Julian Assange of Wikileaks.
I think there is a new world order emerging, but not the one described by the elder President Bush. I hope American leaders have the wisdom to accept the position of the United States as one of the world’s important nations instead of the world’s only important nation, while it is still possible to do so gracefully.
The following is from George Orwell’s “As I Please” column in the London Tribune for October 13, 1944
Recently I was told the following story, and I have every reason to believe it is true.
Among the German prisoners captured in France there are a certain number of Russians. Some time back two were captured who did not speak Russian or any other language that was known either to their captors or their fellow prisoners. They could, in fact, only converse with one another. A professor of Slavonic languages, brought down from Oxford, could make nothing of what they were saying. Then it happened that a sergeant who had served on the frontiers of India heard them talking and recognized their language, which he was able to speak a little. It was Tibetan! After some questioning, he managed to get their story out of them.
Some years earlier they had strayed over the frontier into the Soviet Union and had been conscripted into a labor battalion, afterwards being sent to western Russia when the war with Germany broke out. They were taken prisoner by the Germans and sent to North Africa; later they were sent to France, then exchanged into a fighting unit when the Second Front opened and taken prisoner by the British. All this time they had been able to speak to nobody but one another and had no notion of what was happening or who was fighting whom.
It would round the story off neatly if they were now conscripted into the British army and sent to fight the Japanese, ending up somewhere in Central Asia, quite close to their native village, but still very much puzzled as to what it is all about.
Here’s a similar story told a few weeks ago in The Daily Mail of London.
American paratroopers in Normandy in June 1944 thought they had captured a Japanese soldier in German uniform, but he turned out to be Korean. His name was Yang Kyoungjong.
In 1938, at the age of 18, Yang had been forcibly conscripted by the Japanese into their army in Manchuria. A year later, he was captured by the Red Army after the Battle of Khalkhin-Gol and sent to a labor camp. The Soviet military authorities, at a moment of crisis in 1942, drafted him, along with thousands of other prisoners, into their forces.
Then, early in 1943 he was taken prisoner at the Battle of Kharkov in Ukraine by the German army.
In 1944, now in German uniform, he was sent to France to serve with one of the Wehrmacht’s eastern battalions made up of Soviet prisoners to defend Normandy at the base of the Cotentin peninsula. After time in a prison camp in Britain, he went to the United States. Yang settled there and died in Illinois in 1992.
I don’t draw any particular conclusions from these stories, except to take note of the tens of millions of people in the 20th century who were dispossessed, conscripted, uprooted, exiled and killed by totalitarian governments and global wars, and to be thankful I lived where I did when I did. I hope that Mr. Yang had a good life in the United States.
I recently stumbled on an striking guest post on The Agitator web log by William L. Anderson, a citizen-journalist who takes it upon himself to look into abuses of civil liberty in sex crime accusations. Here are some highlights.
People of our present era like to believe that they are sophisticated, intelligent, and incapable of engaging in the kind of witch hunts that made Salem, Massachusetts, famous, yet in the past 30 years American law enforcement and prosecutors have pursued what only could be described as witch hunts, as they have railroaded innocent people into prison for crimes that clearly have not occurred. There are the more famous witch hunts, such as the McMartin and Kern County cases in California, the Little Rascals Case in North Carolina, the Grant Snowden case in Florida, the witch hunt of Wenatchee, Washington, and many more.
In each of these cases, people have been accused of the most sordid and horrible kinds of child molestation, from outright rape to shoving swords into the rectums of children (and, amazingly, leaving absolutely no trace of injury), cooking babies in microwave ovens, engaging in Satanic rituals in the middle of the day at day care centers, throwing children into shark-infested waters, and more. We would like to think that there at least would be some physical or corroborating evidence for such actions, but these “crimes” were pursued even though nothing seemed changed about the children.
Anderson pointed out that none of the prosecutors in such cases suffered in their careers for wrongful conviction of the innocent.
… One only has to think of Janet Reno, Ed Jaegels, Scott Harshbarger (who prosecuted the notorious Fells Acres Case in Massachusetts), and Gary A. Riesen, the Chelan County, Washington, district attorney who was re-elected until his retirement last year by voters despite his “witch hunt” prosecutions. Reno rode her wrongful convictions to the position of U.S. Attorney General, Jaegels has been a conservative icon in California, and Harshbarger rose to prominence in national Democratic Party circles.
Nancy Lamb, who pursued the Little Rascals Case — the most expensive criminal case in the history of North Carolina — was lionized in the media and even now, according to North Carolina’s Judicial District 1 website, remains as a prosecutor who “specializes in child abuse.” In all of these cases, the individual prosecutors benefited from prosecuting innocent people. None had to face lawsuits, and none were brought up before their various state bars for discipline.
Their actions wasted millions of dollars, destroyed individual lives and families, and unnecessarily created real victims. None paid anything resembling a personal price. Likewise, those employed by the various Child Protective Services agencies and the Children’s Advocacy Centers — all of which were created by federal legislation — are immune from lawsuits and face almost no legal scrutiny for their aggressive questioning that literally demands that children “disclose” abuse, even when the children being questioned vociferously deny that any abuse even happened.
\We as a society are still paralyzed by fear of child sexual abuse, and of being accused of sexual abuse. School teachers and Sunday school teachers dare not take a crying child into their arms to comfort them, lest they be accused of inappropriate touching. These days parents fear to let their children out of their sight because of the pedophile menace.
Recently a man I know was falsely accused of sexual abuse of a child, based on a report of something that had happened 10 years before. The case dragged out for two years—was once dismissed, then was reinstated and finally has been dismissed again. He refused a plea bargain because he was innocent. Yet in the process he lost his house, went heavily into debt and might have been forced to plead guilty in return for no prison time if friends hadn’t chipped in to pay for his defense.
On the other hand, people affiliated with powerful institutions—certain Roman Catholic dioceses or Pennsylvania State University—have molested children for years and gotten away with it for years.
Sexual abuse of children is something that we should deal with as any other crime, by making judgments based on reason and evidence, regardless of the status of the accuser or accused.
Click on Day-care sex-abuse hysteriafor Wikipedia’s roundup of the more notorious false accusations of child sexual abuse of the late 1980s and the 1990s.
IWilliam L. Anderson’s day job is professor of economics at Frostburg State University in western Maryland. It’s a small world. My parents met there as students in the 1920s, when it was Maryland Normal School No. 2.
Neil Barofsky, the former special inspector general for the TARP program, said the Home Affordable Modification Program was not intended to protect homeowners from foreclosure, but to stretch out the foreclosure process so that banks wouldn’t be overburdened. This chart from the New York Times shows that only a quarter of homeowners who asked for HAMP assistance got help—a higher proportion than I would have expected, based on what I’ve read.
In Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street, Barofsky said the program was full of perverse incentives. The official purpose of HAMP was to allow qualified homeowners to modify their mortgage payments and avoid foreclosure. But the administration of the program was put into the hands of mortgage service companies, which were paid by the banks to collect payments and process foreclosures. While the mortgage-holders might have benefited from mortgage modifications in some cases, the service companies got higher fees if they foreclosed and sold the properties.
Barofsky said HAMP was structured so that it was more profitable for mortgage service companies to stretch out payments and then foreclose than to award quick permanent modifications. Servicers were allowed to charge and accrue late fees when borrowers were in trial modifications, even though they were fully paid-up; the fees were supposed to be waived if the modification was granted, but could be collected if the home was sold through foreclosure.
It was to servicers’ benefit to accidentally-on-purpose lose documents, Barofsky wrote, because that stretched out the process and provided an excuse to charge penalties. A survey by ProPublica, an investigative journalism organization, showed that borrowers had to submit documents an average of six times.
Barofsky said some servicers would tell homeowners that if they deliberately skipped a mortgage payment, they could qualify for a HAMP modification. This would make them liable to late fees and penalties, and sometimes the servicer would foreclose anyway.
Reading this post by Sean D. Sorrentino on An NC Gun Blogmade me feel proud and grateful to be an American.
I sat down to lunch with some of my fellow Americans today [August 12].
In case you can’t tell, I’m the one in the middle.
I went to the Sikh temple in Durham, NC. I showed up at about 11:30 and went inside. The rules are that you must take off your shoes and wear something on your head. They were kind enough to loan me a hat that looks like a surgical cap.
What I heard wouldn’t have been out of place at any random Christian church in the nation. Peace, love, equality, goodwill towards all men, that sort of thing. They made good use of technology too. They had a computer set up to display running translations of the songs they were singing. I’ve not been in church in a long time, so I don’t know if that’s done in any Christian churches to display the particular hymns being sung or for the readings, but it was really helpful for me to follow along.
After about 45 minutes of singing and playing (it was more of a performance than a sing along) we had some speakers. There were Sikhs as well as guest speakers. *** ***
*** *** The sight of the flag makes me happy. I believe in America and in Americans. I take second place to no one in love for my country. The Sikh speakers, especially the President of the temple, exceeded me in patriotism by a long shot. America is not blood, and it’s not soil. America is ideas, and the people who believe them. These were Americans. They might have been born here or far away. But once they started talking about America, the “best” and “safest country in the world,” you could tell that they were Americans. These are not scare quotes, these are direct quotes from the speakers. Thomas Jefferson might have had a problem understanding the accents, but not the sentiments.
And now for the funny part. There must be some sort of gun enthusiast radar. I don’t know if they found me or I found them, but we found each other. The guys I was sitting next to were both Sikh and gun owners. We talked about guns, and we’ll be getting together sometime soon to go shooting. *** *** I was … treated to a discussion of how banning guns would not change anything. I was told that criminals would get guns no matter what the laws, and that taking guns from the honest people would only make things worse. In short, it was a discussion pretty much like any that you would read on any pro-gun blog.
My brother and sister-in-law live in a part of California’s agricultural region, which is said to resemble the Punjab in climate and where there is a well-respected Sikh community. My sister-in-law teaches school, and years ago there was a conflict over whether little Sikh boys could come to school with daggers in scabbards, which was a violation of the school’s no-weapons policy. They worked out a pragmatic compromise whereby the boys would wear their daggers, but they would be welded into the scabbard so the boys couldn’t stab anybody. A few of the more strict Sikh families sent the boys to school with empty scabbards and then gave them their daggers when they came home. I always liked this story, because it showed how Americans of differing heritage can, with good will, work out their differences.
Sean D. Sorrentino and I probably would disagree on many things, but not about how American patriotism as loyalty not to a race or ethnic group, but to the Constitution and to American freedom and democracy.
Both President Barack Obama and Governor Mitt Romney are reported to be toying with the idea of raising the Medicare eligibility age from 65 to 67, along with Social Security. This is a bad idea. It will save the government money, but it will not save the public money. Instead it will shift the cost to individuals and private businesses.
Medicare delivers health insurance at a lower cost than private insurance. That is because it doesn’t siphon off part of its revenue as profits for owners and shareholders, and because it doesn’t hire actuaries to figure out who to disqualify because they’re unhealthy. The Center for Budget and Public Priorities did a study that showed that raising the Medicare eligibility age will actually raise the cost of health insurance because of the ways it will shift the burden.
That is assuming that the people who are disqualified from Medicare for two years will get health care and health insurance from other sources. Many of them probably won’t. When you’re laid off from your job in your 50s, as many people have been, it is unlikely that you’re going to get a new job with health insurance benefits. It’s not certain you’re going to get a new job at all. I know of people who put off getting medical checkups or certain medical treatments until they become eligible for Medicare. Raising the eligibility age will mean more people without coverage waiting longer.
Thomas Ferguson, a political scientist at the University of Massachusetts at Amherst, Boston, is one of the most astute political observers I know about. He is going to be a regular on the Real News Network. I’m just now catching up with his first broadcast, which was last Friday. Here it is.
Click on The investment theory of politicsfor my account of Ferguson’s idea that American political parties represent conflicting business interests rather than the public, and that voters only get a choice on issues that don’t affect corporate profits or on which corporate interests are in conflict. In the post, I review Ferguson’s 1995 book, Golden Rule: the Investment Theory of Political Parties and the Logic of Money-Driven Politics.
Click on Business, not politics, driving nation rightwardfor my review of Right Turn: the Decline of the Democrats and the Future of American Politics, which Ferguson co-authored with Joel Rogers in 1986.
Unfortunately both books are out of print and a lot of his current writing is in scholarly publications not available on-line, so the Real News Network is doing a good service to the public by giving Ferguson a public platform.
[8/26/12] I had hoped for a follow-up interview with Thomas Ferguson this weekend, but it didn’t happen.
About a year ago, I put up a post about the killing of innocent people in Pakistan by U.S. flying killer drones. I linked to photos by Noor Behram, an intrepid Pakistani photographer who traveled to the tribal areas of Pakistan and documented the deaths caused by the drones. But the photograph with which I led the post was apparently not taken by Noor Behram and was not of drone victims, but was a news photo of innocent victims of a terrorist attack in the city of Peshawar.
The turnout of minority voters—Hispanics, African-Americans and others—will determine the outcome of the 2012 election.
Click to enlarge.
If they turn out in the same proportion as they did in 2008, and vote for President Obama in the same proportion as they did in 2008, Obama is almost sure to win. Otherwise, not.
Democratic candidates for President have won a strong majority of the votes of members on minority groups for more than 20 years, and Republicans have won a majority of the votes of non-Hispanic white voters. In 2008, the turnout of minority voters was greater than in 2004, and the turnout of white voters was less. That was enough to change the result from Republican in 2004 to Democratic in 2008.
The Brookings study indicates that if non-Hispanic white voters turn out and vote for Mitt Romney in the same proportion as they did in 2004, and minorities turn out for Barack Obama as in 2008, Obama will win.
So it may not be enough for the Republican Party to get a good turnout of non-Hispanic white voters. They would need to hold down the turnout of minority voters. That’s the explanation for all the proposed voter ID laws and other schemes to make voting more difficult, such as the new limits on early voting in Ohio.
Click to enlarge.
“I guess I really actually feel we shouldn’t contort the voting process to accommodate the urban — read African-American — voter-turnout machine,” said Doug Preisse, chairman of the [Franklin] county Republican Party and elections board member who voted against weekend hours, in an email to The Dispatch. “Let’s be fair and reasonable.”
The largest minority voter group is Hispanics. That’s why immigration from Mexico has become such a hot issue. Unless things change, more legal Hispanic immigration means more Democratic voters. and why President Obama at this time announced his path to citizenship for certain children of unauthorized immigrants.
My opinion is that either Mitt Romney or Barack Obama could appeal to voters across ethnic and racial lines if either had a realistic plan or firm intention for addressing unemployment, low wages and mortgage foreclosures.
I bought a big jug of honey this morning from a beekeeper at the Rochester Public Market. I told him I am glad he is still in business in the light of Colony Collapse Disorder, a disease which for the past five years has ravaged the nation’s beehives.
The beekeeper is inclined to blame pesticides. Other possibilities, he said, are diseases brought in with bee colonies imported from foreign countries. His hives are recovering, and he thinks it is because he has relocated away from cornfields which are subject to high-altitude pesticide spraying, and away from other beehives.
Click to enlarge.
A recent study by Harvard scientists supports the pesticide hypothesis. A team of researchers led by biologist Chensheng Lu blame a class of pesticides called neonicotinoids, which disrupt the nervous systems of insects. Seeds are treated with these systemic pesticides, and the toxins are taken up into the plants, where they remain through the growing season. Elizabeth Kolbert reported in the New Yorker that studies by British and French scientists also blame neonicotinoids.
Germany, France and Italy have banned neonicotinoids. If the United States did the same, it would be a big disruption to the U.S. corn industry, which is the largest part of U.S. agriculture. Brandon Keim reported in Wired that cornfields sprayed with neonicotinoids cover an area nearly as large as Montana.
Pesticide companies say researchers’ conclusions are uncertain. I don’t deny the possibility that Colony Collapse Disorder has other causes or additional causes.. But who should get the benefit of the doubt in such cases? Chemicals do not have human rights. They are not innocent until proven guilty beyond a reasonable doubt. The burden of proof should be on the pesticide companies to show their chemicals are safe.
WASHINGTON — The United States said Friday that it did not believe in “diplomatic asylum” after Ecuador offered to let WikiLeaks founder Julian Assange stay indefinitely in its embassy in London.
Ecuador has turned to the Organization of American States, which met Thursday and Friday in Washington, after deciding to offer asylum to the Internet activist who is wanted in Sweden on sexual assault allegations.
Under a 1954 agreement, the Organization of American States agreed to allow asylum in diplomatic missions for “persons being sought for political reasons,” although not individuals indicted for “common offenses.”
“The United States is not a party to the 1954 OAS Convention on Diplomatic Asylum and does not recognize the concept of diplomatic asylum as a matter of international law,” the State Department said in a statement.
In 1956, following the Soviet Union’s crushing of the Hungarian freedom fighters, Cardinal Josef Mindszenty sought diplomatic asylum in the U.S. embassy in Budapest, and he remained in the embassy for 15 years. Just last April, the blind Chinese dissident Chen Guangcheng sought asylum in the U.S. embassy in Beijing, and later was granted passage to the United States.
Is the U.S. government now repudiating its historic policy? Is it saying that the United States had to right to grant protection to Cardinal Mindszenty or Chen Guangcheng?
And, if it is not involved in the Sweden’s extradition of Julian Assange or the dispute between the British and Ecuadorian governments, why issue a statement at all?
What can be added to the happiness of a man who is in health, out of debt and has a clear conscience?
This quote is from Adam Smith’s The Theory of Moral Sentiments.
Adam Smith (1723-1790) is the founder of the modern discipline of economics. Being an old retired guy with time on his hands, I once sat down and read The Wealth of Nations and The Theory of Moral Sentiments the whole way through. As with most great classics, I found them different from how they had been described.
Although a strong advocate of the idea of a free market, Adam Smith was not a defender of corporations or the wealthy, nor was he an opponent of public works or a social safety net for the poor. In his day, most corporations were government-sponsored monopolies that were chartered for a specific purpose. Smith saw free enterprise and economic competition as a way to limit profit to a reasonable amount and force businesses to respond to what the public wanted.
I do not know what Adam Smith would think of the economic controversies of today, because our government, economy and society are so different from his. But he most certainly was not a social Darwinist who looked on economic competition as a way of weeding out the unfit, nor did he think of maximizing wealth as a worthy goal. Rather he saw the free market as an alternative to economic privilege and as a way strangers could establish relationships to their mutual benefit.
Neil Barofsky was special inspector general for the Trouble Asset Relief Program from December 2008 to March 2011. His new book, BAILOUT: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street, told me a lot about not only of the failures of the Obama administration, but of the dysfunctional culture of Washington, D.C.
In Barofsky’s early days in Washington, he was kindly advised not to be too abrasive or controversial. Herb Allison, the former Merrill Lynch executive who was the so-called “TARP czar,” told him that if he played the game, he was assured of moving on to a good job either in Washington or Wall Street; otherwise, he would be unemployable. That is also what Senator Richard Shelby (R-Alabama) told him—that if he did his job right, he would make a real difference and serve the American people in a meaningful way, and he also would never be able to get a job again.
His account makes U.S. government seem like the court of King Louis XVI in 18th century France. Everybody was obsessed with protocol, rank, status, privileges and keeping in the good graces of the powers that be. Having a big office was very important. High officials were flattered as if they were demi-gods. Barofsky wrote that he made up his mind early on that he was going to do his job well and then get out.
He was a federal prosecutor in New York who prosecuted Colombian drug lords and white collar criminals. A Democrat, he was appointed in the waning days of the Bush administration after Congress insisted on the IG position as a condition for approving TARP. Treasury Secretary Hank Paulson gave him the cold shoulder, but Treasury Secretary Timothy Geithner was downright hostile. He learned early that the secret of influencing the executive branch is to have friends in Congress, and the secret of influencing Congress is to cultivate the press, which he did.
His report is another confirmation of the failure of the Obama administration to bring Wall Street under control. According to Barofsky:
Secretary of the Treasury Timothy Geithner basically trusted the banks to manage their own bailout. They were lent $4.7 trillion, not just the $700 billion authorized by Congress, with no significant audit or supervision, under conditions in which they could hardly fail to profit. In one case, a couple of bankers literally designed a program which they then proceeded to administer, to their great profit.
The purpose of the bailout was to get credit flowing into the economy again for consumer loans, home mortgages and financing for small business, but this didn’t happen, and nothing was put in place to assure that it would happen. Barofsky conceded that a bailout probably was necessary in late 2008 to prevent a financial collapse, and that the banks repaid most (not all) of the money advanced. But he said there was no need to bail out the banks at 100 cents on the dollar, and no justification for refusing to audit how the money was spent.
The Home Affordable Modification Plan (HAMP) was never intended to provide help homeowners avoid mortgage foreclosures, but rather, in Geithner’s words, to “foam the runway” for the banks—that is, to stretch out the foreclosure process so that banks and mortgage servicers would not be overwhelmed by having more foreclosures than they could handle. Barofsky said Geithner resisted audits and measures to protect homeowners from fraudulent mortgage servicing programs.
There is nothing in place to prevent another financial crash, as bad or worse than the one that went before. The only thing different is that government has authority which will make possible future bailouts without going to Congress.
While Barofsky’s book did confirm my low opinion of Secretary Geithner, it did raise my opinion of Congress. Barofsky was able to accomplish what little he did—a few audits, a few successful prosecutions for fraud—through the support of courageous Democrats and Republicans in Congress. I have a higher opinion of Senator Shelby than I did before, although qualified by the fact that he is a highly partisan Republican who anti-labor, anti-civil rights, and opposed to creation of a Consumer Financial Protection Board.
Barofsky currently is a senior fellow at New York University School of Law.
The following brief segments from PBS’s Newshour provide an impression of Barofsky’s personality, background and thinking.
Ecuador has decided to grant political asylum to Julian Assange. But he is not home free. The British government served notice beforehand that it will not allow Assange free passage out of Britain, and that it has a legal right to storm the Ecuadorian embassy if Assange is not handed over.
This is from the Government of Ecuador’s announcement.
…the Government of Ecuador, true to its tradition of protecting those who seek refuge in its territory or on the premises of diplomatic missions, has decided to grant diplomatic asylum to citizen’s Assange, based on the application submitted to the President of the Republic, by written communication, dated London, June 19, 2012, and supplemented by letter dated at London on June 25, 2012, for which the Government of Ecuador, after a fair and objective assessment of the situation described by Mr. Assange, according to their own words and arguments, endorsed the fears of the appellant, and assumes that there are indications that it may be presumed that there may be political persecution, or could occur such persecution if measures are not taken timely and necessary to avoid it…
This is from a translation of a letter by the British government to the Ecuadorian government prior to the granting of asylum.
As we have previously set out, we must meet our legal obligations under the European Arrest Warrant Framework Decision and the Extradition Act 2003, to arrest Mr. Assange and extradite him to Sweden. We remain committed to working with you amicably to resolve this matter. But we must be absolutely clear this means that should we receive a request for safe passage for Mr. Assange, after granting asylum, this would be refused, in line with our legal obligations. … …
We have to reiterate that we consider continued use of diplomatic premises in this way, to be incompatible with the VCDR (Vienna Convention on Diplomatic Relations) and not sustainable, and that we have already made clear to you the serious implications for our diplomatic relations.
You should be aware that there is a legal basis in the U.K. – the Diplomatic and Consular Premises Act – which would allow us to take action to arrest Mr. Assange in the current premises of the Embassy.
Click on Ayatollah Cameron Threatens to Invadefor Middle East historian Juan Cole’s comparison of the British threat to invade the Ecuadorian embassy with British complaints about Iranian failure to protect the British embassy and respect diplomatic immunity.
Elizabeth Warren, as the appointed chair of the Congressional Oversight Committee on the Troubled Asset Relief Program, asked questions that needed to be asked. In September, 2009, she asked Treasury Secretary Timothy Geithner where the TARP money went, and why the bailed-out banks didn’t have to accept stringent conditions that were imposed on the bailed-out automobile companies. You can see his response on the video above.
If Warren wins election as Senator from Massachusetts this November, she will be able to continue to ask the questions that need to be asked.
This infographic summarizes a report on for-profit higher education issued late in July by the Senate Health, Education, Labor and Pensions Committee, which is headed by Iowa Democrat Tom Harkin. It shows that, on average, for-profit higher education is a really bad deal.
The profit motive works well when it is aligned with the interest of customers. Manufacturers that make good computers, refrigerators or automobiles make higher profits in the long run than manufacturers that make bad products. People have the information—from friends and neighbors or maybe from Consumer Reports—that enables us to make an intelligent choice. With for-profit health insurance providers, on the other hand, there is no good way to tell a good one from a bad one except by experience, in my case painful experience. In health insurance, there are conflicting incentives—to build a reputation in the long run, or to maximize short-run profits by minimizing payouts.
The short-run incentive for for-profit colleges is to find the right balance between maximizing enrollment and maximizing tuition, neither of which is necessarily related to providing a good education. Probably there are for-profit colleges that do provide a good education, but, if so, it would be hard for students and their parents to figure out which ones they are. There is a seller’s market for higher education, because young people believe they have no economic future without the credential of a college degree. The credential, not the education, is the product, and, as the infographic shows, the for-profit colleges do a poor job even at providing the credential.
For-profit is not the same thing as private enterprise. The report showsed that for-profit colleges get the majority of their revenue from Pell grants, Defense Department education grants, GI Bill aid and other government sources.
