Archive for April, 2010

Michael Steele commits truth: GOP walked away from black America and kept walking

From the Chicago Sun-Times:

“Why should an African-American vote Republican?

“You really don’t have a reason to, to be honest — we haven’t done a very good job of really giving you one. True? True,” Republican National Chairman Michael Steele told 200 DePaul University students Tuesday night….

Steele seemed to hold the diverse student audience’s attention most when he talked about his own experience suffering racial discrimination — in his first law firm interview for example — and when he confessed his party’s failure to reach out to African-Americans:

“We have lost sight of the historic, integral link between the party and African-Americans,” Steele said. “This party was co-founded by blacks, among them Frederick Douglass. The Republican Party had a hand in forming the NAACP, and yet we have mistreated that relationship. People don’t walk away from parties, Their parties walk away from them.

“For the last 40-plus years we had a ‘Southern Strategy’ that alienated many …

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A case study in power, politics and very big money

You’ve probably never heard of IntercontinentalExchange, or ICE, even though it’s based right here in Atlanta. But in the global world of credit default swaps and derivatives trading that is now drawing so much attention, ICE stands as a giant.

Among other things, ICE acts as a clearinghouse for credit swaps and derivatives, putting buyer together with seller and guaranteeing the transaction to both parties. One ICE subsidiary, ICE Trust, announced in March that during its first year of operation, it had “cleared $4.3 trillion in gross notional value on more than 55,000 transactions” involving credit default swaps. According to BusinessWeek, ICE’s two clearinghouse operations have processed $6.4 trillion of trades — again “notional value” — since March 2009. (”Notional value” means the maximum amount that might conceivably be at play in those trades; the real value is considerably less.)

Nonetheless, those are big numbers, and they are likely to get bigger still, given that …

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Do jobless checks subsidize laziness? Research shows….

Do unemployment benefits reduce the incentive to find work and thus increase the length of unemployment?

el2010-12-2

Percentage of American work force unemployed six months or longer. Underlying data series from the U.S. Bureau of Labor Statistics. Gray bars denote recessions (latest trough tentatively dated 6/09). Source: Federal Reserve Board of San Francisco.

It’s an interesting question, made more pertinent by the record increase in unemployment duration during the current recession. As of March, 4.3 percent of the U.S. work force had been unemployed for at least six months, much higher than the previous record of 2.6 percent in the ‘83 recession.

The question has largely broken along political lines. Some conservatives have argued yes, unemployment benefits lengthen unemployment because they in effect subsidize laziness. Liberals, on the other hand, point out that in the current economy the problem is a great shortage of jobs, not of job seekers. Statistics indicate that there are …

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Israel, U.S. military at odds over strategy with Iran

Israeli officials find themselves in a bit of a dilemma. If international sanctions fail to halt Iran’s drive toward nuclear weapons, as seems likely, Israel sees military action as a necessity. But the United States is making it clear that at least for the short term, it will not take such a step and strongly opposes such action by Israel as well.

The Jerusalem Post quotes U.S. Undersecretary of Defense for Policy Michele Flournoy to that effect from a press briefing today in Singapore.

“Military force is an option of last resort,” Flournoy said, echoing earlier statements by Joint Chiefs of Staff Chairman Adm. Mike Mullen. “It’s off the table in the near term.”

Kim Ghattas of the BBC takes that a step further, noting testimony before Congress last week by Gen. James Cartwright, vice chairman of the joint chiefs. In effect, Ghattas writes, Cartwright told Congress that “If Iran decides to go for nuclear weapons, the US may not be able to permanently stop this from happening …

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Identify the crazy people in this scenario

As my colleague Jim Galloway reported, a House committee took testimony last week on a bill to make it a misdemeanor to forcibly implant microchips in human beings.

But things took a strange turn when a woman from DeKalb County stepped forward to testify:

“I’m also one of the people in Georgia who has a microchip,” the woman said. Slowly, she began to lead the assembled lawmakers down a path they didn’t want to take.

Microchips, the woman began, “infringe on issues that are fundamental to our very existence. Our rights to privacy, our rights to bodily integrity, the right to say no to foreign objects being put in our body.”

She spoke of the “right to work without being tortured by co-workers who are activating these microchips by using their cell phones and other electronic devices.”

She continued. “Microchips are like little beepers. Just imagine, if you will, having a beeper in your rectum or genital area, the most sensitive area of your body. And your …

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State leaders play a cruel, disrespectful game with MARTA

It is, at some level, a test of basic respect.

It’s also a test that the leadership of Georgia is failing, at least so far. Their refusal to date to lend a helping hand to MARTA in its moment of great need — a gesture that would not cost state taxpayers a single penny — comes across as callous and even oddly vindictive.

Tens of thousands of our fellow Georgians rely on MARTA for daily transportation. The transit system is as critical to their lives as streets and roads are to those Georgians who live in suburbs, small towns or rural areas.

MARTA customers use the system to go to work; they use it to get to school so they can educate themselves. They use it to check on the well-being of their elderly parents and grandparents; they use it to get to church on Sunday, to go to the doctor’s office and to bring home groceries.

And unlike every other major rail system in the country, MARTA provides that service with no financial support from state government. For decades, the people …

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SEC decision to sue Goldman broke along party lines

Well, this proves one of two things:

Either the Democrats at the SEC are playing crass politics by filing a civil suit against Goldman Sachs, or the Republicans are demonstrating why the SEC under their control was such a toothless enforcer.

From Bloomberg:

April 19 (Bloomberg) — The U.S. Securities and Exchange Commission split 3-2 along party lines to approve an enforcement case against Goldman Sachs Group Inc., according to two people with knowledge of the vote.

SEC Chairman Mary Schapiro sided with Democrats Luis Aguilar and Elisse Walter to approve the case, said the people, who declined to be identified because the vote wasn’t public. Republican commissioners Kathleen Casey and Troy Paredes voted against suing, the person said….

The decision shows Schapiro, a political independent, moved forward in accusing New York-based Goldman Sachs of fraud in the face of resistance from not only the company but her fellow commissioners. It’s the second time this year Schapiro …

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Gates is right: There’s no clear answer for Iran

On Sunday, the New York Times reported that Defense Secretary Robert M. Gates wrote a secret memo in January to the White House warning “that the United States does not have an effective long-range policy for dealing with Iran’s steady progress toward nuclear capability.”

Wrote the Times:

“One senior official, who like others spoke on the condition of anonymity because of the sensitive nature of the memo, described the document as “a wake-up call.” But White House officials dispute that view, insisting that for 15 months they had been conducting detailed planning for many possible outcomes regarding Iran’s nuclear program.

… in his memo, Mr. Gates wrote of a variety of concerns, including the absence of an effective strategy should Iran choose the course that many government and outside analysts consider likely: Iran could assemble all the major parts it needs for a nuclear weapon — fuel, designs and detonators — but stop just short of assembling a fully …

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School’s spy-cam scandal and the technological imperative

Some of you may remember the case of the suburban Philadelphia school district accused of using remote-activated laptop cameras to spy on its students in the privacy of their own homes. District officials at first claimed that the technology had only been used rarely, and only for legitimate purposes such as tracking stolen laptops.

Well, not exactly.

As the Philadelphia Inquirer reports:

“The president of the Lower Merion school board said Friday that investigators had retrieved “a substantial number” of photos secretly snapped by laptops the district gave its high school students, and that officials were arranging for parents whose children were photographed to see the pictures in private.

In his strongest terms since the furor began over the laptop-tracking program two months ago, board president David Ebby also said district officials “deeply regret the mistakes and misguided actions” that have given rise to a lawsuit, a federal criminal inquiry, a call for new privacy …

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Goldman Sachs fraud case stunning in its indictment of Wall Street culture

I’m hardly an expert in securities law, and the Securities and Exchange Commission has yet to prove in a court of law the facts that it laid out in its stunning civil suit filed Friday against Goldman Sachs.

But if the facts prove out as the SEC alleged, the whole culture of Wall Street is even more corrupt and cynical than we have been led to believe.

Which is really saying something.

Let me try to make this as simple as possible. The SEC alleges that in 2005-6 or so, hedge fund manager John Paulson could foresee problems coming with the billions of dollars in securitized mortgages, or collateralized debt obligations, being sold as Triple-A rated. In fact, Paulson was so sure that many of those CDOs would default that he wanted to short them, or bet against them paying off.

So far, so good. That’s what hedge fund managers do — they look for inefficiencies in the market and exploit them. They are also compensated quite handsomely. According to the New York Times, Paulson …

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