Archive for Corruption
It doesn’t take a rocket scientist to figure out the system is rigged. Sen. Elizabeth Warren makes that point at every opportunity. But her most recent interview about that with Thomas Frank in Salon shifted too quickly from philosophy to process. Warren would rather talk about how the rigging hurts working people. She wants to explain how the system is rigged and by whom:
The system is rigged. And now that I’ve been in Washington and seen it up close and personal, I just see new ways in which that happens. But we have to stop and back up, and you have to kind of get the right diagnosis of the problem, to see how it is that—it goes well beyond campaign contributions.
Indeed it does. But “the question that lies at the heart of whether our democracy will survive” isn’t a matter of process or policy.
Janine Wedel comes closer to the mark in an excerpt (also in Salon) from her book, “Unaccountable: How Elite Power Brokers Corrupt our Finances, Freedom, and Security.” Everyday people know the system is rigged better than the elite. Wedel sees it in the comments section of Transparency International’s annual rankings of corrupt countries. “Ordinary people have an instinctual grasp of the real nature of corruption and the inequality that often results.” The United States, they believe, is “grievously under-scrutinized.”
Perhaps it is not just a coincidence or a quirk of American policy-making that the words “innovation” and “reform” lately seem to attach themselves to ideas that drive more public money, public infrastructure, and public control into the hands of private investors. Nor that this meme is driven by lobbyists for public-private partnerships (P3s) where corporations stand to rack up profits by privatizing the commons.
Whether it is turning over state prisons to for-profit Corrections Corporation of America or public education over to publicly traded K12 Inc., we are to believe that despite the scandals and poor outcomes, the private sector will always do a better job than big gummint. We hear the private sector is more “efficient” than efforts run by the people and for the people. But more efficient at what?
This last week, as we noted, ITR Concession Co, and its parent company, the Spanish-Australian consortium Cintra-Macquarie declared bankruptcy on its concession to operate the Indiana Toll Road. The 75-year deal fell apart after only eight.
But getting back to efficiency. Think maybe the Germans could do it better? Maybe not.
Your dystopian future has arrived. NPR’s May series, Guilty and Charged, explored the spreading judicial practice of judging people guilty of misdemeanor offenses then imprisoning those unable to pay fines and an expanding menu of fees. (The poor.) But while practice of billing defendants for their punishment may be relatively new, the municipal courts in St. Louis County, MO, where the unarmed Michael Brown was shot by police last month, resemble something out of Dickens. Or else Terry Gilliam’s Brazil. Radley Balko (Rise of the Warrior Cop) painted a detailed portrait of the county’s legal culture — if you can call it that — in the Washington Post last week.
It’s a world in which white flight created a string of subdivisions-turned-towns stretching north and west from St. Louis. As black families followed, whites retreated or quickly established dozens of zoned, postage-stamp-sized municipalities.
“The state’s one requirement before giving you the power to zone was that you had to incorporate and draw up a city plan,” [University of Iowa historian Colin] Gordon says. “That plan could be as simple as getting an engineer to slap a ‘single family’ zone over the entire development. Your subdivision is now a town.”
Gordon says this is why the towns in St. Louis can have such unusual names, such as Town & Country or Bellefontaine Neighbors. “Look at a place like Black Jack in North County. It began as a private subdivision in the 1970s. When they saw the looming threat of housing projects, they quickly zoned the neighborhood as single-family and incorporated as a municipality.” Today Black Jack is more than 80 percent black. There’s a similar town of about 1,200 people near Ferguson, just across the street from the Normandy Country Club. It’s 91 percent black, has a 35 percent poverty rate, and has a median household income 40 percent below the state median. Its name? Country Club Hills.
As black families filtered in, the towns too small to sustain local government with property and sales taxes made police departments into profit centers that generate revenues by shaking down residents, most of them poor.
“You see that sort of thing a lot,” [legal aid attorney Michael-John] Voss says. “We’ll get a client who was pulled over and cited for failure to provide proof of insurance, or driving with a suspended license. But there’s no additional citation for a moving violation. So why was she pulled over in the first place?”
But the stop might generate a string of violations, fines and fees that, if not addressed, result in arrest warrants and court costs.
There are many towns in St. Louis County where the number of outstanding arrest warrants can exceed the number of residents, sometimes several times over. No town in Jackson County comes close to that: The highest ratios are in the towns of Grandview (about one warrant for every 3.7 residents), Independence (one warrant for every 3.5 residents), and Kansas City itself (one warrant for every 1.8 residents).
St. Louis County is a dispiriting labyrinth of speed traps and police demands to see permits and papers. Those so targeted are unlikely to afford the fees, much less an attorney to help get them discharged or reduced. Balko explains that with 23,457 pending arrest warrants in 2013 in Pine Lawn (roughly 7.3 per resident), the town brought in about $576 per resident. Antonio Morgan’s story is especially instructive and infuriating. Just trying to support his family by repairing cars makes Morgan a police target, like Brazil‘s “terrorist” heating and air conditioning engineer Archibald “Harry” Tuttle.
It’s a place where the poor are prey, and the prey are black. With “the every day harassment and degradation” of such a system, it’s a wonder Ferguson, MO didn’t explode sooner.
(Cross-posted from Hullabaloo.)
Joe Nocera reflects on the lack of accountability over the financial crash of 2008. You’d have thought we might have learned from the Savings & Loan scandal of the 1980s, but no.
In some ways, the legislators who deregulated the S.&L. industry felt that they had no choice — if they didn’t act, the S.&L.’s would have been in terrible trouble, just of a different kind. Seventeen years later, when Congress repealed the Glass-Steagall Act — thus deregulating the entire financial services industry — it didn’t have that excuse. The drive to abolish Glass-Steagall was ideologically inspired, the core belief being that the market would keep the industry honest. But the S.&L. crisis had proved that wasn’t true.
About 1,100 were prosecuted in the wake of the S&L scandal. Federal prosecutions in the wake of the 2008 economic collapse have been a joke, writes Nocera, wondering if when it repealed the Glass-Steagall Act, government had failed to learn its lesson from the S&L deregulation.
Or, perhaps, in the intervening years Wall Street learned that capturing government regulators more fully would allow them to commit financial crimes without fear of prosecution?
Another day in Wake County Superior Court yesterday in the case of “Moffitt v. Asheville,” Judge Howard Manning Jr. presiding. Rep. Tim Moffitt and Rep. Chuck McGrady, R-Henderson were on hand for the hearing in the lawsuit challenging Moffitt’s “Regionalization of Public Utilities” law that forcibly transfers control of Asheville’s water system to a new regional authority.
Much hinges on whether or not Moffitt’s bill was deliberately written to evade the state’s constitutional ban in Article 2, Sec. 24 on enacting local legislation “relating to health, sanitation, and the abatement of nuisances.” Asheville activist Barry Summers was there to remind attendees — graphically — not of the water system’s history, but of the legislation’s.
While both McGrady and Moffitt watched the proceedings in court, Asheville’s attorney Dan Clodfelter disagreed with the state’s assertion that the bill was not local in nature. An attorney with the Charlotte-based law firm Moore and Van Allen, Clodfelter himself served as a state senator until last month, when he was named the mayor of Charlotte.
The bill does not specifically name the city of Asheville. But Clodfelter said it was clear that was lawmakers’ intent, rather than creating a statewide bill with a general set of principles to administer.
“Our constitution says what it says,” Manning said, indicating that the constitutional question was the crux of the case. Expect an appeal, however Manning rules.
Moffitt v. Asheville is a style of legal shenanigans we have seen emerge over the last decade from Wall Street to Jones Street to Pennsylvania Avenue. That is, to push the limits of the law to the breaking point and beyond, to knowingly step over the line and — using the law itself for cover — to arrogantly dare anyone to push back. If no one does, or if they do and fail, those who twist the law to their own ends succeed, and the boundary between the legal and the criminal moves again, and not in the direction of the public good. Rinse, repeat. Thus, torture becomes “enhanced interrogation,” fraudulent securities become top-rated investments, and public investments in schools, water systems, highways and airports slowly become the private wealth of oligarchs. Like watching an accident in which everything goes into slow motion, it is happening before our very eyes. Because it transpires in remote meeting rooms under color of law, we the people are not supposed to notice.
(Original post has been corrected. Rep. Nathan Ramsey was not in attendance Friday, but was cited in reporting as an original sponsor of the water bill.)
If you’ve been following the nasty, divisive “makers vs. takers” meme promoted on the right, Fox News in particular, add this to what makers “make.”
Some of those makers — you know, job Creators (it is capitalized, right?) — are wheeling and dealing and spending millions on technology to shave milliseconds of high-speed trades. That is, they are investing in speed — milliseconds — digitally running ahead of a stock order to buy it first and sell it to the buyer at a markup when the order arrives. Something like “The Wire” in the movie, “The Sting.” Speculators are boring through mountains between New York and Chicago to put in straighter, shorter fiber-optic cables to make this con work.
Paul Krugman this morning:
What are we getting in return for all that money? Not much, as far as anyone can tell. Mr. Philippon shows that the financial industry has grown much faster than either the flow of savings it channels or the assets it manages. Defenders of modern finance like to argue that it does the economy a great service by allocating capital to its most productive uses — but that’s a hard argument to sustain after a decade in which Wall Street’s crowning achievement involved directing hundreds of billions of dollars into subprime mortgages.
What this game shows is how finance has become a game not of job creation or productively allocating financial resources, but of playing small-time investors for suckers. This is what the so-called makers are in the business of making. And Fox thinks you’re the parasite.
At least Newman and Redford ran The Big Con with more panache.
David Simon on America as a Horror Show
We’ve changed and we’ve become contemptuous of the idea that we are all in this together. This is about sharing and about, you know, when you say sharing there’s a percentage of the population (and it’s the moneyed percent of our population), that hears socialism or communism or any of the other -isms they want to put on it. But ultimately we are all part of the same society. And it’s either going to be a mediocre society that, you know, abuses people or it’s not…
And that once they’re in that situation, they’re not only marginalized, they’re abused. I mean, we are the country that jails more of our population than any other state on the globe. More than totalitarian states we put people in prison. We’ve managed to monetize these irrelevant people in a way that allows some of us to get rich.
Now, we’re all paying for it as taxpayers for having this level of incarceration in American society which is unheard of in the world. But we let some people, you know, get a profit off of it. The monetization of human beings like that, you know, anybody tells you that the markets will solve everything, the libertarian ideal.
I can’t get past just how juvenile the thought is that if you just let the markets be the markets, they’ll solve everything.
The cattle barons are nervous and getting reckless.
The United States has come to resemble those iconic westerns with a Wild West economy in which cattle barons rule, politicians and lawmen are on their payrolls, and struggling settlers are either compliant or prey.
But after the 2008 crash and bailout on Wall Street, one after another Occupy, the Consumer Protection Bureau, Sen. Elizabeth Warren, Moral Mondays and now Pope Francis have put the cattle barons on notice that their grip on power is weakening.
“America’s descending into madness,” writes Henry Giroux in his latest book. The author appeared on Bill Moyer’s program Friday as the nation observed the 50th anniversary of the Kennedy assassination. Since the Reagan-Thatcher era, Kennedy’s calls to public service and national aspiration have been systematically supplanted with an ethos of radical self-interest and tawdry appeals to men’s basest instincts. It is a world, Giroux asserts, in which elites consider that “survival of the fittest is all that matters” and that “democracy is an excess.” Giroux is appalled.
… the notion that profit making is the essence of democracy, the notion that economics is divorced from ethics, the notion that the only obligation of citizenship is consumerism, the notion that the welfare state is a pathology, that any form of dependency basically is disreputable and needs to be attacked, I mean, this is a vicious set of assumptions.
The point is that the superrich have not gone Galt on us — not really, even if they imagine they have. It’s much closer to pure class warfare, a defense of the right of the privileged to keep and extend their privileges. It’s not Ayn Rand, it’s Ancien Régime.
Matt Taibbi has a new investigative piece at Rolling Stone detailing another scheme by which FIRE (Finance, Insurance and Real Estate) investors are trying to “Shoot the Moon” and purloin as much of America’s wealth as they can before the peasants take to the streets with torches and pitchforks.
MATT TAIBBI:What I would say about that, is what did Willie Sutton say about why he robbed banks? That’s where the money is. Look, pension funds are sort of the last great big unguarded piles of money in this country and there are going to be all sorts of operators who trying to get their hands on that money.
The operators Taibbi mentions have tried unsuccessfully to get control of Social Security funds. They’re working hard to gain control of publicly owned utilities and publicly built infrastructure. You’re already paying to keep more people in cells in private prisons. They’ve demonized public schools, public school teachers and their unions as well, almost as if FIRE wants them out of the way. Here’s why in this chart showing the largest annual expenditure in all 50 states — because it’s where the money is in state budgets.
If you built it, if you own it, they want it. If the money is not already in their pockets, Wall Street is looking for some way to put it there.