My Last Pry

Smokin' Joe

2012-01-25T03:50:00.000-08:00

If God ever calls me to a holy war, I want Joe Frazier by my side.

--Muhammad Ali, after Ali vs. Frazier III, The Thrilla in Manila

They just don't make 'em like him anymore.

The Evil Empire: Attack of the Death Stars

2012-01-17T18:17:00.000-08:00

Evil Empire Bankster: Screw you Mr. Baby!

Consumer Reports has just published a cover story on banking fees and how you can fight back. That story follows below.

One of the most puzzling things about EM08 is the disconnect between fighting the banksters and yet supporting them.

I think I wrote about this before, but when I was in Berkeley about a year and a half ago, my daughter and I were having coffee and I noticed something. Across the street was a BoA, and a steady stream of customers were going in and out and to the ATMs.

Later, we ended up downtown, and there they were; BoA, Wells, JPMC, and Citi, all within several hundred yards of each other, in prime real estate and humming along, plundering away.

What I thought about was Berkeley's history as the historic seat of the counter culture movement, defiantly so. And like much of the crazy liberal agenda, it's not short on irony. Berkeley prides itself on keeping out big box retailers like Walmart (although Target is technically right on the north border). And yet here they are, the Evil Empire's biggest thugs, the Death Stars, destroying people's lives like a... Death Star.

And here's the rub; if this is happening in the historic capitol of the counter culture, the fight, this war, is on a much deeper level than we suspect. This is where I part ways with Occupy, because while I support their anger and certainly their broad-stroke grievances, the psychological colonization is where the battle must be won.

On day one of Occupy Berkeley, I spoke with several young, seemingly privileged, "activists" about this war I see. To say I was met with indifference is to be kind; they were too busy with the show aspects of protesting; chanting, mic checks, signs, demonstrations... one bloke went so far as to argue that my point wasn't even crucial. Then I asked him who he banked with. He answered BoA and at that point my friends who were standing off to the side just turned and laughed.

One of the things that seems to come with being young these days is a lack of context and history. In terms of divesting from the banksters I always contextualized it via the example of South Africa. Here we had a half century old system of racial oppression that the entire world condemned, and yet, South Africa didn't care. But as soon as the campaign to divest was underway that was the straw that broke the camel's back.

The truth is that consumer and commercial divesting -- deposits, loans (the way they really make money) and equities -- will arguably hurt the banksters more on the pr front. That's because banks make money in investment banking and mechanisms like interbank lending. Still, with all of the bad blood the banksters have fostered, a big move on behalf of consumers and commercial accounts would be well timed. Then there's shorting the banks, one of the weapons that has a nice sting to it. Barring interventionist moves by uncle scam, I think shorting the banksters is one of the sharpest weapons around.

Despite being the recipients of the largest welfare bailouts in history, the banksters continue to think only about themselves, as evidenced by the record profits and enormous bonuses the top execs continue to reap. The message is clear; you, the little people, exist solely for them to parasitically suck the life out of. After all, what is money if not a representation of your energy in the form of work? But for change -- let alone a revolution -- to occur, the basic necessity of making sure one's own backyard is in order. If downtown Berkeley shows us anything, it's that we need a steam cleaner.

Bank accounts

More fees are coming. How to fight back–or flee.

Consumer Reports magazine: February 2012

People say they’re furious at behemoth banks, for myriad reasons: lending practices that helped sink the economy, government bailouts, foreclosures, huge bonuses for CEOs, and now higher fees and tougher account requirements.

Get ready to vent some more. Here’s what’s industry experts and our own analysis suggest you’ll find now and in the coming months:

Fee hikes and tougher account requirements will probably continue, especially while the economy remains weak. For example, some banks, including PNC and U.S. Bank, are now charging a $25 fee even to close certain accounts.
Customers with a lot of accounts at one bank might avoid some fees, but they’re not immune. Banks may try a spectrum of charges even for good customers, including fees for paper statements and higher safe-deposit costs.
You’re more likely to find lower fees and better rates at community banks, larger credit unions, and online institutions.

Banks are trying to make up billions in lost revenue due to the bad economy, new regulations, and in some cases perhaps even their own inefficiencies. But you don’t have to be the one to pay the price.

Does it make sense for you to switch banks? We’ll show you what to expect and what your options are.

Escalating fees

For David Bookbinder, a computer technician from Peabody, Mass., the decision about whether to ditch his megabank was an easy one. When Citizen’s Bank imposed tougher requirements in 2010 for customers who wanted to maintain no-fee checking, he transferred his personal and business accounts to East Boston Savings Bank, an institution with a fraction of Citizen’s assets.

“I didn’t have the time/patience or attention span to waste on watching my accounts so as to avoid the fees,” he wrote to The Consumerist, one of Consumer Reports’ websites.

It’s a common refrain. Bank experts say that institutions are increasingly depending on fees from traditional bank accounts and other lines of business.

Bank of America, which recently dropped plans for a $5 monthly debit-card fee after an uproar, is charging some customers $5 to replace lost debit cards and $20 for rush replacement, which had not been extra. It also charges e-banking customers $8.95 each month they use a teller to make a transaction. In December TD Bank began charging $15 for incoming domestic wire transfers. And in February Chase imposed a $12 fee on its standard checking account, which had been free for most customers.

Some banks even charge fees if you close an account too soon after opening it. U.S. Bank and PNC charge $25 if it’s closed within 180 days. Chase had imposed a $25 fee if an account was closed within 90 days but dropped it in December 2011.

You’re probably paying more and getting less. Fewer than half of the noninterest checking accounts are now free, down from 76 percent just two years ago, according to a 2011 survey by Bankrate.com.

And the average fee banks charge noncustomers to use their ATMs rose to a new high for the seventh consecutive year, from $2.33 in 2010 to $2.40. Add your own bank’s fee for using an out-of-network ATM and the charge climbs to $3.81 on average. The average fee to cover insufficient funds hit a record $30.83, up from $30.47.

More to come

Experts predict that banks will continue to experiment with fee increases, tougher account requirements, cost-cutting, and new sources of revenue, such as sharing customers’ marketing data.

“Banks are closely examining what costs they can eliminate and where they might be able to charge, and what the market will bear and not drive customers away,” says Beth Robertson, director of payments research for Javelin Strategy & Research in California.

It’s likely the megabanks will lead the pack, as small institutions wait to see whether they should follow along or court angry customers by offering better deals.

Here’s what to expect:

More relationship accounts. Banks will probably dangle more carrots and brandish more sticks to get you to consolidate your accounts at a single institution, which will mean more fees. But you can avoid them by, for example, having direct deposit of your paycheck or linking your savings and investments. Mike Moebs, an economist and CEO of Moebs Services, an economic research firm in Lake Bluff, Ill., says customers with multiple accounts are the most profitable for banks.

Move toward electronic banking. Banks save when you serve yourself, just like gas stations do when you pump your own. So expect them to push computer and mobile-phone banking. That means you might pay more if you use a teller or speak with someone on the telephone. Some banks might present the changes as a perk, not a fee. TD Bank offers customers a $1 discount off their monthly checking maintenance fee if they agree to online statements instead of printed ones.

Higher penalty fees. Do something wrong, such as overdraw your account, and you’ll probably pay more. It costs banks just a few cents to handle a debit-card transaction, but when an account is overdrawn and the bank has to figure out what happened, the cost can escalate to $13, Moebs says. Because 87 percent of Americans don’t balance their checkbooks, he says, there could be lots of fees.

Big credit-card push. Banks are likely to encourage the use of credit cards, says Bill Hardekopf, CEO of LowCards.com, a consumer resource for credit-card information in Birmingham, Ala. They get a swipe fee when someone uses a credit card, and so far those fees have escaped regulation that has made debit cards less profitable for banks. Moebs predicts that banks will shrink the grace period on credit-card purchases, now around 20 days, and eventually eliminate it. So even customers who pay their bill off every month could be hit with interest charges.

Less-favorable rates. Banks could try to reduce their losses by increasing the interest-rate margin—the spread between what they pay to borrow money and what they charge to lend it. That could mean higher lending rates, especially on credit cards and other unsecured loans, as well as on auto loans.

Higher loan fees. Don’t be surprised if you’re suddenly charged a fee when you apply for a car loan, Moebs says. And fewer banks might offer to drop origination fees on mortgages.

Charges for premium services. Customers could see new or higher charges for premium services, such as safe-deposit boxes, online budgeting tools, or person-to-person payments, such as Chase’s QuickPay service, which allows you to send money to someone else using just an e-mail address or mobile-device number.

Quirky new features. Check your account statement these days and you might notice retailer ads or coupons. With so-called transaction-driven marketing, banks have begun allowing marketing and data-mining companies to sift through customer transactions and tailor offers based on what they find. Fifth Third Bank’s Prewards program provides digital coupons that automatically apply a discount when you swipe the bank’s debit card at a specified retailer.

Big banks have higher costs, so they charge more, an analyst says.

Why this is happening

Banks are fighting pressure on several fronts. Lending is down, interest rates are at historic lows, and there’s been a decline in investment income.

“Fee income really has served to stabilize revenue in light of the volatile interest-rate environment of the past dozens years,” says Greg McBride, Bankrate.com’s senior financial analyst.

Big banks are also struggling with out-of-control costs, Moebs notes.

He says banks with assets of around $50 billion or more have exceeded their optimal efficiency level, which he places between $500 million and $5 billion.

“The big banks have gotten themselves in the mess that they’re in, and it’s a cost mess,” he says. “And that is something the average consumer and government officials don’t see. They’re always saying bigger is better. Bigger is not better.”

Taking all expenses into account, including salaries, buildings, and equipment, Moebs estimates that it costs a megabank $350 to $450 to maintain a checking account annually, compared with $175 to $240 for community banks and credit unions.

That “translates to higher fees, higher balance requirements, higher loan rates and lower deposits rates,” he says. That’s why, he says, overdraft fees for big banks average $35, compared with $28 for small banks and $25 for credit unions.

Scott Talbott, senior vice president of governmental affairs for the Financial Services Roundtable, an industry group, says it’s hard to compare institutions of such different sizes. “Banks compete with each other on a daily basis, and those competitive forces result in a wide-variety of products and services being offered to the consumer,” he says.

Analysis performed for Consumer Reports by Informa Research Services, a market-research firm in Calabasas, Calif., found other differences among the more than 1,000 financial institutions it tracks. For example, among those that charge a monthly fee for noninterest checking, the average was $10.27 at the largest 10 banks, compared with $7.45 at banks with less than $4 billion in assets and $6 at the 10 biggest credit unions. The fee was higher ($6.91) at credit unions that had assets below $4 billion than at the largest ones.

An Informa study published in The American Banker in July found that interest rates at community banks were lower than national averages for credit cards, home-equity loans, and lines of credit. But they were higher for five-year auto loans.

Bank of America’s debit-card-fee attempt caused particular outrage because customers didn’t like the idea of having to pay to get their own money, Hardekopf of LowCards.com says. “There’s no charge for writing a check, so why should there be a fee for me to access my own money to buy that tank of gas?” he asked.

David Darnell, co-chief operating officer of Bank of America, says it recognized customers’s concerns regarding the debit-card fee. “As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so,” he says.

But a study by the Research Intelligence Group, a market-research company in Fort Washington, Pa., found that customers don’t easily forgive. Almost a third of the respondents said they would leave their bank if it charged for debit-card payments, and two in five would harbor ill feelings even if the bank reversed the fees.

Matt McFarland, an attorney from Nashville, Tenn., abandoned Regions Bank last fall for a smaller bank when Regions imposed a monthly $4 charge on debit-card transactions. The bank reversed its decision and refunded charges to customers, but he isn’t eager to go back. “They said everyone is going to do this, which turned out to be wrong,” he says. “They were trying to put it off on Congress.”

Changing landscape

At a time when banks are relying more on fee income, federal regulations have indeed clamped down on fees in several areas. The regulations are intended to stop what consumer groups and government officials saw as banking-industry abuses.

The latest rule, which took effect in October, limits the so-called “interchange” fees that large banks—those with more than $10 billion in assets—can charge retailers when people swipe their debit cards to pay for a purchase.

They’re now capped at 21 cents to 24 cents per transaction, about half the average amount banks had been charging. (The actual cost of processing a debit transaction requiring a PIN is 8 cents on average, and one requiring a signature is 13 cents.) That change alone is expected to cost banks $6.6 billion a year, Javelin says.

It follows other rules that took effect in 2010. One limits the ability of credit-card issuers to raise interest rates on cardholder balances. The Boston Consulting Group estimates that new regulations will cost banks about $18 billion a year. Another provision bars them from charging overdraft fees in connection with ATM and debit-card transactions unless customers opt for overdraft protection. Javelin estimates that will cost banks $5.6 billion a year.

It’s not surprising that banks are reacting by raising fees in areas not regulated, says McBride of Bankrate.com. “If the government came along and said you can only charge so much for a hamburger, you’d charge more for soda and fries,” he notes.

John Hall, a spokesman for the American Bankers Association, says that as with any business model, when you reduce income, banks are going to rethink their strategies.

Others question bank tactics. Jean Ann Fox, director of financial services for the Consumer Federation of America, says, “All kinds of adverse financial changes have struck banks, and it appears that they are turning to their captive customers to make up that revenue, knowing how difficult it is to switch accounts.”

Your other options

Suze Orman, personal finance expert and TV host, says everyone should size up their bank and check out the fees they’re paying, but many won’t. “People barely open up their statements because they don’t want to see the money they don’t have,” she says. “You’re now asking people to open a statement and try to find the fees they’re being charged.”

There’s a lot of business at stake. Moebs estimates there are 132 million people who have checking accounts with banks and credit unions. The Credit Union National Association says its members have 45 million checking accounts. But the association noted in a 2009 report that its members are much smaller in asset size than the biggest banks. (About 650,000 accounts were added in the four weeks following Bank of America’s announcement of its since-rescinded debit-card fee, CUNA says.)

Credit unions were originally organized to serve small groups of customers from a workplace or community. Gradually, regulations have been loosened. In 1998, for example, Congress allowed credit unions to offer membership to people in well-defined geographic areas.

Specialized credit unions have been able to offer services on a wider scale. For example, the Pentagon Federal Credit Union, at www.penfed.org, was set up to offer services to members of the military and their families. Now, you can join for $20 even if you don’t have military connections.

Many credit unions have expanded services to match what you’ll find at a bank. Since they’re nonprofit institutions that exist solely for the benefit of their customers, fees tend to be lower. Larger credit unions have consistently lower fees than smaller ones, according to Informa data.

While some credit unions might not have as many branches and ATMs, a number belong to cooperative networks. You can search for credit unions that might be a good fit for you at the CUNA website locator, atwww.creditunion.coop.

Sorting through the terms and conditions in banking agreements can make it hard for consumers to comparison shop. There’s an effort under way to make it easier. Sens. Dick Durbin (D-Ill.) and Jack Reed (D-R.I.) have asked banks to adopt a one-page, easy-to-read disclosure form developed by the Pew Charitable Trust, a nonprofit policy group.

They’ve also asked the Consumer Financial Protection Bureau to require financial institutions to post a concise, consumer-friendly disclosure form on their websites. Consumers Union, the advocacy arm of Consumer Reports, supports this move as a way for customers to shop for the best deals in banking.

Stay or switch?

If your bank plans to stick you with new fees or tougher account requirements, your first thought might be to find a new one. That might be your best option, but switching banks can be a hassle. So it’s important to weigh your options before making a decision to move.

Check the terms. If you’re facing a single new fee, see what it would take to avoid it. Increasing your account balance by a few hundred dollars or signing up for direct deposit might work.

Change your habits. For example, plan a weekly visit to an ATM in your bank’s network to withdraw cash instead of going out of network. And check your statements more carefully so you don’t rack up overdraft fees.

Try to negotiate. You might be able to get a fee waived if you tell your bank you’re thinking about moving your accounts.

Consider convenience. Banking is about much more than rates and fees. It’s also about the day-to-day banking experience. Does the bank have adequate ATM locations and local branches with convenient hours, or give you privileges to use out-of-network ATMs?

Do your homework. Check with competing banks and credit unions, starting with their websites. That’s where you’ll find complete information about rates, fees, terms, and conditions.

Plan your getaway. If you’ve decided that moving your money is the best solution, make the process as smooth as possible. Check to see whether your new bank offers a “switch kit” to help you streamline the process. Or you can download a PDF of our step-by-step guide.

Make your move. Open up the account in your new bank or credit union with a small deposit. Then you can transfer funds from your old bank to the new institution electronically. Arrange to switch over your automatic payments and deposits to the new account.

The grand finale. Leave at least a small amount of cash in your old account and close it once you’re sure all checks and transfers have cleared.

They Bring Bad Things to Life

2012-01-07T13:38:00.000-08:00

Anyone who thinks America is fair, stands for justice and all of the red, white and blue rhetoric should check out this latest on General Electric. As I tell Obama supporters, listen to what he says, but look at what he does. When Van Jones left his administration -- I believe he was fired or left under duress -- the question in my mind was who's next?

Then Obama hired GE's Jeff Imelt. Take it from there.

Fraud and folly: The untold story of General Electric’s subprime debacle

Ex-employees say GE ignored warnings from whistleblowers

By Michael Hudson

1/6/12

For General Electric Co., hawking subprime mortgages was a long way from making light bulbs and jet engines.

That didn't stop the industrial giant from jumping into the subprime business in 2004, lending blue-chip respectability to the market for risky home loans by paying roughly half a billion dollars to buy California-based WMC Mortgage Corp.

What GE got in the bargain, former WMC employees say, was a place where erstwhile shoe salesmen, ex-strippers and even a former porn actress could sign on as sales reps and make big money pushing home loans. WMC's top salespeople earned a million dollars a year or more and lived fast, swigging $1,000 bottles of Cristal and wheeling around in $100,000 Ferraris and Bentleys.

In pursuit of these riches and perks, several ex-employees claim, many WMC sales staffers embraced fraud as a tool for pushing through loans that borrowers couldn’t afford.

Dave Riedel, a former compliance manager at WMC, says sales reps intent on putting up big numbers used falsified paperwork, bogus income documentation and other tricks to get loans approved and sold off to Wall Street investors.

One WMC official, Riedel claims, went so far as to declare: “Fraud pays.”

How well did GE address WMC’s fraud problems?

GE says it did plenty to deal with the issue. Some ex-employees counter that GE officials didn’t do enough to rein in illicit practices, despite warnings from Riedel and other whistleblowers inside the lender. GE dispatched emissaries to look into the problem, the ex-employees say, but their efforts were too little, too late.

“They sent in people we thought were going to bring us back in the right direction,” Victor Argueta, a former risk analyst at WMC, says. “But it just never happened.”

By 2007, WMC was bleeding bad loans and red ink. General Electric shut the lender and reported related losses totaling more than $1 billion.

‘Everyone knew’

How could General Electric — a corporate icon voted America’s most admired company in 2006 and 2007 — have stumbled so badly?

The story of GE’s subprime misadventure has earned little attention from news media or public officials amid headlines about bank failures and mega-bailouts at other big companies. But now, with the aftershocks still being felt by GE and by WMC's borrowers, lawsuits and former employees have begun to shed light on what happened and why.

It’s a tale of a 134-year-old industrial concern that’s transformed itself into a financial services juggernaut. It’s also a story about breakdowns in corporate compliance systems amid the chase to cash in on the latest innovations in high and low finance.

In interviews with iWatch News, eight former WMC employees claim WMC’s management ignored them when they reported loans supported by falsified documents, inflated incomes or other legerdemain. Two of them say they were transferred and demoted because they pressed too hard to expose corrupt practices.

Riedel, who worked as quality-control manager for the lender’s largest production division, claims that after he informed a GE official about fraud inside the lender, WMC’s management demoted him — reorganizing him out of his job, taking away his office and his staff and forcing him to sit at a desk for months without a job title.

“I didn’t have any files,” Riedel told iWatch News during a series of interviews. “I basically stared out a window.”

Two other former WMC employees confirm Riedel’s account of his transfer. “Everyone knew,” Argueta, the former risk analyst, says. “We all knew why he’d been moved to our section, from a nice comfy office out to the cubicles.”

General Electric didn’t answer questions from iWatch News about the accounts provided by Riedel and other ex-employees. It also declined to provide detailed answers to a series of questions about how much it knew about alleged fraud at the Burbank, Calif.-based lender and what steps it took to deal with it.

In a written statement, GE says that “following its acquisition by GE, WMC strengthened and expanded its compliance programs and standards. WMC held people to those standards. In those instances where WMC learned of violations of these standards, management took disciplinary action, including terminations of employment.”

‘All kinds of crazy loans’

WMC made a name for itself long before GE came courting.

Founded in 1955, it had been known for much of its life as Weyerhaeuser Mortgage, a subsidiary of the pulp and paper giant Weyerhaeuser Co.

By the late 1990s it had a new owner — billionaire financier Leon Black’s Apollo Management LP — and it had moved into the subprime game, spurring production by rolling out a “Race to the Top” program that gave top sales performers the use of Porsche Boxsters.

The push to book mortgage deals produced a rash of bad loans around the country. WMC claimed it had been victimized by on-the-ground fraudsters who’d used bogus appraisals and other deceits to get mortgages approved.

In Minnesota’s Twin Cities, however, so many WMC loans ended up in or near foreclosure that a local newspaper, the Star Tribune, suggested WMC had “self-inflicted some of its wounds by pushing too hard and fast” to sell loans. An assistant state attorney general told the paper that the company simply didn't do "some of that due diligence” needed to ensure loan deals made sense.

“I have never seen a company that has been this aggressive,” one mortgage broker told the Star Tribune. “They were doing all kinds of crazy loans. They were doing anything they could do to push these deals through.”

Questions about WMC’s lending tactics were also raised by an academic study that looked at a pool of 5,610 loans the company had made around the country in 1998. By December 1999 almost 25 percent of the loans were facing foreclosure or were seriously delinquent — more than five times the rate for loans originated by other major subprime lenders, the study found.

GE, meet WMC

Despite these problems, WMC’s aggressive sales culture helped it survive and grow.

One of the forces behind its resurgence was Amy Brandt, who had gone from practicing law to peddling mortgages for WMC, quickly rising to become WMC’s No. 1 salesperson and then executive vice president of production. When she joined the executive team in 2000, she later told a business magazine, the company was on the verge of bankruptcy, and she helped lead what was, in her words, an “unbelievable turnaround story.”

By the end of 2003, Brandt was WMC’s president and chief operating officer, and the lender was producing $8 billion a year in subprime home loans and boasting profits of $140 million a year. It had also attracted the interest of General Electric, which was looking to grow in what, since 2001, had been a slow-moving economy.

“We’re going to have to turn up the engines to drive growth,” GE’s chairman, Jeffrey Immelt, told a TV interviewer in late 2003, explaining his company’s overall growth strategy. “The economy is not going to give you much, so what do you do?”

One of the things General Electric did was to seek profits in a home loan market that was rapidly heating up.

The big deal was announced in April 2004.

General Electric has never publicly disclosed the purchase price, but Apollo later revealed in securities filings that GE paid nearly $500 million for WMC, providing a nice profit for Black’s firm, which had paid less than $200 million for the lender seven years before.

GE asked Amy Brandt to stay on. She added CEO to her title. Internal documents obtained by iWatch News indicate GE promised the 31-year-old executive as much as $20 million in compensation over three years — including a $10 million upfront bonus at the closing of the deal.

General Electric declined to answer questions from iWatch News about the acquisition. It won’t say how much scrutiny it gave the lender before it closed the deal, or whether it was aware of WMC’s earlier fraud problems.

GE officials made it clear at the time that their regard for Brandt played a role in the company’s decision to buy WMC. “A big part of us doing the acquisition was Amy, no question about it,” a top GE executive told American Banker.

Immelt and other GE honchos thought so much of what Brandt had done with WMC, Businessweek later noted, they invited her to talk before the parent company’s top 600 executives at its annual leadership summit in Boca Raton, Fla.

As she left the stage, Immelt gave her a high five.

Tricks of the trade

Dave Riedel started at WMC soon after General Electric took over.

Riedel had experience in the banking industry as a real-estate appraiser, loan underwriter and, most recently, mortgage fraud investigations manager at Washington Mutual Bank. At WaMu, he claims, higher ups had told him to keep quiet when he’d tried to warn them about fraud-tainted loans streaming into the company’s mortgage pipeline.

With General Electric in charge, Riedel thought things would be different at WMC. He thought he’d get a chance to do his job and, he says, “catch the bad guys.”

He supervised a quality-control team of a dozen or more people who watched over WMC’s lending in a broad area of Southern California where salespeople were pushing subprime loans as well as “Alt-A” mortgages, another type of risky home loan.

The team, Riedel says, found many examples of fraud committed by in-house staffers or the independent mortgage brokers who helped bring in customers to the lender. These included faking proofs of loan applicants’ employment and faking verifications that would-be home buyers had been faithfully paying rent for years rather than, say, living with their parents.

Some employees also fabricated borrowers’ incomes by creating bogus W-2 tax forms, he says. Some, he says, did it old-school, cutting and pasting numbers from one photocopy to another. Others, he says, had software on their computers that allowed them to create W-2s from scratch.

‘Branded as a whistleblower’

In 2005, Riedel’s team became concerned about a sales manager who oversaw the funding of hundreds of loans a month. An audit of these loans, Riedel says, found that many of the deals showed evidence of fraud or other defects such as missing documents.

This wasn’t enough to get the sales manager fired. At most, Riedel says, the guy got a stern lecture.

“He became a little more shy. He wasn’t so flamboyant,” Riedel says. “But nothing changed.”

Later, during a sit down with a visiting GE compliance official, Riedel recalls, he described the audit and the response.

Over the next few days, Riedel claims, his career was thrown into tumult.

He says a WMC official countered by telling the GE representative that Riedel didn’t know what he was talking about and that the company had already been planning to demote him.

Riedel was stripped of his title, he says, and idled for months with no assignments and no staff.

A former WMC executive, who spoke on the condition of anonymity, says the fact that GE knew about Riedel’s concerns about fraud may have prevented WMC officials from firing him, but it didn’t stop them from putting him into corporate limbo.

“He was kind of branded as a whistleblower and not a team player,” the former executive says. “They didn’t exactly fire him. They just marginalized him and he didn’t really have anything to do.”

‘Business as usual’

While Dave Riedel was fighting battles inside WMC’s California headquarters, Gail Roman was losing battles on the other side of the country.

Roman worked as a loan auditor at WMC’s regional offices in Orangeburg, N.Y. She and other colleagues in quality control, she says, dug up persuasive evidence of inflated borrower incomes and other deceptions on loan applications.

It did little good. Management ignored their reports and approved the loans anyway, she says.

“They didn’t want to hear what you found,” Roman told iWatch News. “Even if you had enough documentation to show that there was fraud or questionable activity.”

If GE made any progress against fraud at WMC, Roman says, she didn’t notice it. Fraud was as bad at WMC in 2006 as it was when she started at the lender in 2004, she says.

“I didn’t really see much of a change,” Roman says.

Victor Argueta, the former risk analyst, says he didn’t see much change either.

Meetings would be held. Executives from GE would agree fraud was a problem and something needed to be done. “But the next month it was business as usual,” Argueta says.

Argueta was barely a year out of college, with an undergraduate economics degree from the University of Southern California, when he started at the lender in 2004. What he encountered, he recalls, wasn’t what he had expected to find at a branch of a top-flight Fortune 500 corporation.

Twenty-something salespeople with little education or mortgage experience ran the show, he says. They pulled in $250,000 to $350,000 a year while sales managers made $1 million or $2 million, thanks to generous production bonuses and the network of independent mortgage brokers that fed the lender business.

“We had ex-strippers working there,” Argueta says. “The whole point was to have someone attractive to talk to the brokers. One of the salespeople did porn before she worked there. When someone told me that, I couldn’t believe it. Then I saw the video and I realized it was true.”

Argueta says one top sales staffer escaped punishment even though it was common knowledge he was using his computer to create fake documents to bolster applicants’ chances of getting approved.

“Bank statements, W-2s, you name it, pretty much anything that goes into a file,” Argueta says. “Anything to make the loan look better than what was the real story.”

In one instance, Argueta says, he sniffed out salespeople who were putting down fake jobs on borrowers’ loan applications — even listing their own cell phone numbers so they could pose as the borrowers’ supervisors and “confirm” that the borrowers were working at the made-up employers.

Management gave him a pat on the back for pointing out the problem, he says, but did nothing about the salespeople he accused of using devious methods to make borrowers appear gainfully employed.

Nightmare loans

Roman and Argueta weren’t alone in their concerns, according to other ex-employees who spoke on the condition they remain anonymous, because they still work in banking and fear being blackballed within the industry.

“It was ugly,” one former fraud investigator at WMC recalls. “I would have nightmares about some of the things I’d find in a file. I’d wake up in the middle of the night going, ‘Oh my God, how did this happen?’ ”

A former manager who worked for WMC in California claims that company officials transferred and essentially demoted her after she complained about fraud, including the handiwork of a sales rep who used an X-Acto knife to create bogus documents, cutting numbers from one piece of paper and pasting them onto another, then running the mock-up through a photocopier.

“They knew I had a lot of crap on them and I wasn’t going to shut up,” she says. “And the easiest way was to pay me off. Create a job where I could just sit and collect my money.”

Both Riedel and another former WMC employee confirm the woman’s account.

Two other ex-employees say that, in their experience, WMC managers didn’t condone fraud. When he identified fraud-tainted loans, one of the two recalls, his managers killed them.

Both add, though, that the lender did push loans that were likely to land borrowers in trouble in the long run. The desire to keep sales numbers growing often trumped good judgment, the other ex-employee recalls. “It was like hitting your head against a brick wall, trying to make sure the right thing was done,” she says.

‘Fraud pays’

By early 2006, Dave Riedel had begun to rebuild his career inside WMC.

He helped put together a presentation in May 2006 aimed at giving GE officials a sense of how serious WMC’s fraud problems were. Riedel says an audit of soured loans that investors had asked WMC to repurchase indicated that 78 percent of them had been fraudulent; nearly four out of five of the loan applications backing these mortgages had contained misrepresentations about borrowers’ incomes or employment.

Riedel also helped work on a computer program designed to dig out fraud across the company’s loan portfolio. It sifted through a swarm of data, including evidence that many borrowers submitted multiple applications with income figures that mysteriously grew from one application to the next. Then it spit out a fraud alert flagging applications that appeared to have false information.

Riedel hoped that the company would use the data-tracking program on a real-time, wide-scale basis, he says.

It was at a meeting about the computer program, Riedel says, that an executive declared “fraud pays” — explaining that it didn’t make sense to slow the gush of loans going through the company’s pipeline, because losses due to fraud were small compared to the money the lender was making from selling huge volumes of loans.

The anti-fraud algorithm was never put into regular use, Riedel says.

Final days

In October 2006, Dave Riedel changed his computer password to “finaldays107!” — reflecting his expectation the company would be out of business by October 2007 (10-7).

As home values were starting to fall and subprime loan defaults were starting to rise across the industry in late 2006, Amy Brandt stepped down as WMC’s top executive. She told a trade publication that her contract with GE was ending and, rather than re-enlist, it was time for her “to move on.”

“This was really my baby, and I wanted to wrap up this era because I really love the company,” Brandt explained.

By the spring of 2007, problems in the subprime mortgage market had grown more serious. Borrower defaults and investor alarm had spun the mortgage industry into chaos. In the first half of the year, WMC lost more than a half-billion dollars.

GE officials blamed the mortgage market’s swoon for WMC’s problems. In mid-July, GE revealed it had entered what its chairman, Immelt, described as an “active exit process.” Immelt told investors his company decided to end its three-year subprime experiment because “we just had too many other better choices. And I just think we wanted to get this off the table vis-a-vis the things that investors have to think about with GE.”

Along with taking an immediate hit to its balance sheet, GE also set aside hundreds of millions of dollars to cover investors’ demands that it buy back defective WMC loans.

By October 2007 — as Riedel had predicted — WMC Mortgage was effectively out of business, dead after having pumped out roughly $110 billion in subprime and “Alt-A” loans under GE’s watch, according to industry data tracker Inside Mortgage Finance.

‘Living it up’

And Amy Brandt?

She was “living it up,” at least according to Businessweek.

WMC’s former CEO had a 30-acre ranch outside Los Angeles where she kept a dozen horses. She’d used some of the millions she’d earned at the lender, the magazine said, to start an independent record label, YMA Music Group, which signed such artists as former Limp Bizkit guitarist Wes Borland. She’d also become CEO of Vantium Capital, a private equity fund that planned to make money off distressed mortgages.

Brandt told Businessweek that, looking back, she wished she’d done more to diversify the kinds of loans WMC made.

“We were too aggressive in some areas,” she said.

Others agreed that WMC had been too aggressive in its lending practices.

A study by federal regulators, “Worst Ten in the Worst Ten,” found WMC’s loans accounted for the second-highest number of foreclosures on subprime and “Alt-A” mortgages in the nation’s 10 hardest-hit foreclosure hotspots, trailing only New Century Financial.

In the Fort Pierce-Port St. Lucie area in Florida, for example, 47 percent of the loans WMC booked from 2005 through 2007 had ended up in foreclosure as of late 2009, the study found.

Washington State banking regulators accused WMC, Brandt and two other WMC executives of “deceptive and unfair practices.” The regulators claimed the lender failed to make sure all borrowers received legally required disclosures, including paperwork that reported how much they would be paying on their loans.

WMC reached a consent order with the agency that included modest cash payments to a few borrowers. It didn’t acknowledge wrongdoing.

Brandt told iWatch News she couldn’t comment on the state regulators’ allegations or answer other questions about her time at the lender.

One former employee, who spoke on the condition her name not be used, says she believes Brandt “was so far removed from daily operations that she probably didn’t know” how bad fraud was inside the company.

‘Stunning failure rate’

Mortgage investors also are taking a closer look at WMC’s practices.

A review of a $550 million pool of mortgages booked by WMC and another subprime lender, EquiFirst, found inflated borrower incomes, missing documents and other “material breaches” in 150 loan files out of a sample of 200 — a “stunning 75 percent failure rate,” according to an investor lawsuit filed in September in federal court in Minnesota.

One of the defective WMC loans, the suit claims, was supported by paperwork that said the borrower earned almost $180,000 a year doing “account analysis.” The borrower’s tax returns, the suit says, showed he actually made less than $20,000 per year driving a taxi.

GE told iWatch News that it will “vigorously defend” itself against the lawsuit. It says the suit’s claims are “based upon a flawed statistical sampling of a small number of loans.”

The Federal Housing Finance Agency, meanwhile, charges that General Electric misled investors in the sale of hundreds of millions of dollars in securities backed by WMC mortgages.

The agency’s lawsuit claims GE didn’t tell the truth about how well WMC followed its loan underwriting guidelines, or about how much borrowers owed on their homes or whether they intended to live in them or use them as investment properties.

GE denies the allegations, and insists that Freddie Mac, which invested in the securities, made out well on the deals.

On the record

Dave Riedel no longer reads the financial news. When someone brings up the mortgage crisis at a party, offering opinions about what happened and why, he keeps his mouth shut. Talking about it makes his blood pressure rise.

After WMC closed, he spent almost two years looking for work before he found a sales job outside the banking industry. Nobody in the banking business was interested in hiring him.

Of the 40 best fraud investigators he knows, Riedel estimates that maybe four of them still have jobs in banking. Meanwhile, he says, bureaucrats without the talent or temperament for fighting corruption have snapped up choice fraud-control jobs at many big banks.

Despite his desire to put his mortgage days behind him, he says he felt an obligation, when iWatch News contacted him, to tell what he knew.

Later, he had second thoughts, worrying there might be blowback against him for talking about what happened inside WMC and GE, even if he stuck to facts rather than opinion. He asked his comments be put “off the record.” When he was told it wasn’t possible to go off the record after the fact, he made peace with going public.

“I have an ethical problem with covering things up,” Riedel says.

Given a chance, he adds, he’d be willing to talk to the FBI about what he uncovered during his time at WMC.

The feds should be turning over rocks, he believes, across the mortgage industry. People who committed or condoned fraud and helped crash the economy, he says, need to be held accountable.

“I can’t tell you who broke the law and who should or shouldn’t go to jail,” he says. “But I can tell you that these people should have to answer to somebody about what happened.”

Cuts for Cooky: Donny Hathaway, "For All We Know"

2012-01-01T22:38:00.000-08:00

Our Bonds that Blind

2011-12-29T04:17:00.000-08:00

Matt Taibbi continues to hound the too big to fail banks, and it's to our advantage. He's done it yet again in an expose' of the rigged game that's government bonds, long held to be the safest investments around. While to some extent that may be true, keep in mind that things have changed over the course of the last few decades as debt loads have exploded at every level. Thinking about buying any Cali bonds? Look at how the governator has shredded our books and then think twice. Then read the last chapter of Michael Lewis' latest and quite excellent book, Boomerang, then think again. Interestingly, Lewis' book -- which profiles the way the meltdown played out in different countries such as Iceland and Greece, ominously ends with his -- and my -- home state of California, itself a nation state at about #8 in the world's largest economies. And in case you haven't heard, we are sunk to our eyeballs in debt. And although he wasn't alone, thank you governator, for trashing our future.

Over a year ago I posed a simple question to my good friend Torben who I see eye to eye on the meltdown with, and while researching em08 over a year and a half ago, I was astounded at the debt loads, not just of credit cards, student loans, car loans... let alone mortgages, but of munis. I asked him, "What if Cali defaults on its bonds? Then what?" Torben said, more or less, "Then we're sunk." Cali's far bigger than Greece and almost as big as Italy's economy! No less than jpmc conflict of interest chairman and ceo (it's a conflict of interest to be both) Jamie Dimon thought the same. And with a self pat on the back, yours truly beat him to the punch. And yet, in spite of a couple of noodnicks like us figuring this out, not a single major mass media merchant I know of has addressed this ticking time bomb.

Personally, I think bonds have been paying off by robbing Peter to pay Paul. That is, because of our unified economy, folks in other states will pay for Cali's tragedy, similar to the way Germany has now become the EU's piggy bank. In other words, the federal government will just keep injecting us with money, because *they* know how important it is to keep California from blowing up the entire world. One thing's for sure, after reading Taibbi's piece, the cat's out of the bag on what a rigged game bonds are. Which means that to add to the long roster of welfare money cons, we can now add red, white and blue bonds.

Nothing means "not a thing". Neither is sacred anymore.

==============================================

[Some of the links in Taibbi's piece may be dead/lost; that's why I always supply the link to the original article. if you need to, just click on the title of the piece. -jp]

How Banks Cheat Taxpayers

by Matt Taibbi

Rolling Stone, 12/27/11

A good friend of mine sent me a link to a small story last week, something that deserves a little attention, post-factum.

The Bloomberg piece is about J.P. Morgan Chase winning a bid to be the lead underwriter on a $400 million bond issue by the state of Massachusetts. Chase was up against Merrill for the bid and won the race with an offer of a 2.57% interest rate, beating Merrill’s bid of 2.79. The difference in the bid saved the state of Massachusetts $880,000.

Afterward, Massachusetts state treasurer Steven Grossman breezily played up the benefits of a competitive bid. "There's always a certain amount of competition going on out there," Grossman said in a telephone interview yesterday. "That's good. We like competition.”

Well … so what, right? Two banks fight over the right to be the government’s underwriter, one submits a more competitive bid, the taxpayer saves money, and everyone wins. That’s the way it ought to be, correct?

Correct. Except in four out of five cases, it still doesn’t happen that way. From the same piece [emphasis mine]:

Nationwide, about 20 percent of debt issued by states and local governments is sold through competitive bids. Issuers post public notices asking banks to make proposals and award the debt to the bidder offering the lowest interest cost. The other 80 percent are done through negotiated underwriting, where municipalities select a bank to price and sell the bonds.

By "negotiated underwriting," what Bloomberg means is, "local governments just hand the bid over to the bank that tosses enough combined hard and soft money at the right politicians."

There is absolutely no good reason why all debt issues are not put up to competitive bids. This is not like defense contracting, where in some situations it is at least theoretically possible that X or Y company is the world’s only competent manufacturer, say, of armor-plated Humvee doors, or some such thing. It’s still wrong and perverse when companies like Halliburton or Blackwater get sole-source defense contracts, but at least there’s some kind of theoretical justification there.

But this is a bond issue, not rocket science. In most cases, all the top investment banks will offer virtually the same service, with only the price varying. Towns and cities and states lose billions of dollars every year allowing financial services companies to overcharge them for underwriting.

It gets even worse in the derivatives markets, where banks routinely overcharge state and local governments for things like interest rate swaps, for one very obvious reason – swaps are not traded on open exchanges, so only the banks know how to price them.

Imagine what NFL gambling would be like if the casinos didn’t publish the point spreads every week, and you’ll get a rough idea of how the swap market works. If you couldn’t look it up, how many points would you give the Dolphins against the Jets next week? Two? Five? Seven? The big casinos know, because they’re taking all that action, that the real number is one point.

In the same vein, exactly how accurately do you think some local county treasurer might be able to guess the cost of an interest rate swap for his local school system? Answer: he’d probably do about as well as you or I would, guessing the odds on a Croatian soccer match.

[the preceding three paragraphs are ULTRA important points. -jp]

The big banks know this, which is why there should never, ever be non-competitive bids for those sorts of financial services. In a sole-source contract for a swap deal, you’re trusting a (probably corrupt) Too-Big-To-Fail bank to give you a good deal for a product whose price is not publicly listed anywhere.

There have been numerous investigations and lawsuits across the world connected with this sort of systematic overcharging, from Erie, Pennsylvania to the notorious Jefferson County, Alabama case, to Milan, Italy (which sued Chase and four other banks for misleading them about derivative prices).

In the Erie case, Chase recommended to the locals that they hire a financial adviser to review the deal. What they didn’t tell the local government was that Chase had paid a fee to this adviser, a firm called Investment Management Advisory Group Inc., or IMAGE. They pulled the same scam with the school district of Butler County, Pennsylvania.

And in the oft-discussed Jefferson County case alone, Chase reportedly overcharged the locals $100 million for the crooked swap deals that, in a completely separate outrage, will probably leave Birmingham bankrupt for the next generation.

All of which is exactly what people like the OWS protesters are complaining about when they talk about greed and excess on Wall Street. Nobody is begrudging a bank’s desire to make money, and nobody is saying a bank shouldn’t be allowed to make money, even a lot of money, performing legitimate services for the state and the taxpayer.

But when you put a thumb on the scale in a financial services contract, the costs start to get outrageous very quickly. The banks would still do a very crisp, almost effortlessly lucrative business if they just stuck to submitting competitive bids for legitimate work – but instead of that, they for some reason have to game the system, grease politicians, rig bids, and stick the taxpayer with overpriced products. Which sucks, of course. Hopefully politicians will catch on and go the Massachusetts route more often.

What Do You Want?

2011-12-21T14:52:00.000-08:00

There's one question that pundits and politicians keep posing to the Occupy gatherings around the country: What are your demands?

I have a suggestion for a response: We demand that you stop demanding a list of demands.

-Robert Jensen (1)

If ever there was a lens through which to watch paternalistic, reactionary privilege play out on center stage, it's with Occupy Wall Street. The presumably befuddled establishment pundits and requisite pie holes like billionaire know-it-all Mikey Bloomberg.

Anyway, here's a little toon I conjured up to express my eye-rolling.

Juke

2011-12-11T23:40:00.000-08:00

KD was busy doin' work during the lockout.

Occcupy Oakland General Strike Nov 2

2011-10-30T03:09:00.001-07:00

Another long day at OO. I don't think I'll be participating formally anymore, for various reasons I may or may not reveal. I will be engaged though, and am meeting a bunch of friends for the strike next Wednesday. In the meantime, here's a logo I made up in commemoration.

This will be available on shirts soon. Email withdrawnow@gmail.com if interested.

Cuts for Cooky: Amalia Rodrigues, Mariza, Cristina Branco

2011-10-20T03:27:00.000-07:00

I've a work in progress on Occupy, but it'll have to wait, as it's way too involved. I've a lot to say, as befits me prolix.

But one of the weird things about EM08 is the far reach, indeed, infecting virtually all corners of the world. I heard an interview today with a Portuguese man, and he was very angry yet plaintive about the state of things, as Portugal's just one more in the line of suckers with Greece, Italy, France and Spain who were looted by Goldman and the rest of the American thugs. The interviewer said that the situation looked grim, and the man verbally shrugged; "that's why we have fado."

I thought it was an artistic answer.

First up, the doyenne, the late Amalia Rodrigues, then the beautiful Mariza, and, in one of my favorite kind of formats, Cristina Branco in an informal chamber setting; a living room. She kills it.

Lessons in Privilege: Initiatives, Black Power Mixtape and Moneyball

2011-09-27T01:07:00.000-07:00

credit: Meme generator. Funny stuff.

THOSE WHO KNOW

I'm helping a group of associates here in Berkeley investigate the initiative process toward participatory budgeting, whereby everyday people will have a direct say in where tax dollars will be spent, and, by implication, oversight of the process. Like the foregoing run-on sentence, it's a long slog, but that's the nature of the fight.

Recently, several of this group attended an event organized by Zocalo, who I know a thing or two about as they've been churning in LA for some time. When I learned of this event, I thought of my past experiences with Zocalo, a group given to theory and not unique in that respect, but with a fine veneer of polish.

The first thing that struck me upon looking at the Zocalo panel assemble on stage was that 1) They were all white, 2) upon looking at their credits, they were all wonksters in one form or another.

I braced myself. Expectations were lowered, expectations were met. It's my own personal coping mechanism.

Subsequent to that event, a participatory budgeting group member forwarded an announcement about another event with the theme of "slow money", which piqued my interest, given my stake in researching and keeping abreast of EM08, the economic meltdown of '08. Then I noticed that the lowest entrance fee was about $600.

So, in light of these developments, I think keeping in mind the history of the way the so-called left has consistently been shot through with privileged values should be talked up.

Those "thought leaders" that are Zocalo or the slow money event permeate just about everything in our society, from new media to, yes, resistance movements. It's one of the reasons, for example, when someone starts waxing poetic about ted conferences I inwardly roll my interior eyes. Or when Esther Dyson begins one of her diatribes about the Net, let alone when Paul Krugman pontificates about economics.

NOTHING NEW
One key thing to remember is that this is nothing new. Power in whatever form obviously has a generative goal which implies surviving and prospering. The history of the left is ripe with internal strife and infiltration, but an important distinction must be made; just as the NOI or the BPP were infiltrated and disrupted, it's impossible for, say, my group of everyday people to infiltrate the board of Goldman or B of A, much less to monitor them at a level that would make us satisfied. Right now, a group of protesters is "occupying" Wall Street, and it's gone viral. Will it reach Goldman's board room? I'll give 3 to 1 on that not happening.

This means it's important for everyday people to keep in mind that the struggle for fairness is triangulated; Zocalo convening an all white panel to speak about their experience is no more realistic of my colored world than Goldman's is. How many would be shocked to learn that, as recently as ten years ago, Native American Women were completely absent in prime time television? Their genocide has been surgically thorough; they walk the earth as ghosts, not just apart from Zocalo's panel, they may as well be on Pluto, because at least on Pluto their odds of finding someone who cares about them go up.

If it's one thing I've learned it's that framing conveys a lot, and I don't just mean rhetorically. The Zocalo event was a "serious" environment, just as any large college lecture hall is. "Real" thinking happens there, and if knowledge springs forth from the streets, well, how can those who "know" pontificate, theorize and profit? More, how can those who "know" take seriously those from the streets? Finally, why should those from the streets take what those who "know" seriously? It's an assumption at best to even think that those in the barrio take seriously those who "know", and yet, those "knowers" act as if it doesn't matter because of the privileged places they occupy. In other words, the "bubble of knowing" accords insulation; they have certainty that the evil empire they are (ostensibly) fighting up above is a noble if not strategically and morally correct fight, and since "they know" are only doing what's best for those who do not know below them.

BLACK POWER MIXTAPE & MONEYBALL
Over the weekend I saw both Black Power Mixtape and Moneyball, and the more I thought about it, the more I was impressed by the latter and just kind of indifferent toward the former. On the surface, BPM is the kind of flick right in the boomers' wheelhouse; big names, big times. And while the footage is great and in good condition, it's a pastiche, and I came away thinking it was just a walk down memory lane, nice in its nostalgia, but fairly tame stuff. Angela Davis, the poster child of the 60's black power movement, is given prominence, occupies the poster for the film, and yet was never involved with movement building. She was an intellectual, and very good at it, but never involved in the day to day work of building a grassroots movement the way the BPP was. It also comes off as contrived; having Talib Kweli, Eryka Badu and Questlove ruminating on the crucible of the 60's/70's is like Britney Spears talking about the merits of Steal This Book. Ok, maybe not like that, but....

Which brings me to a point; for progressives who are truly concerned with changing the system, if everyday people's voices aren't present in their diversity, run. This is embodied in Malcolm's words when he said:

There's one thing I want to make clear; no matter how much respect, no matter how much recognition whites show toward me, as far as I'm concerned, as long as that same respect and recognition is not shown toward every one of our people in this country it doesn't exist for me.

Moneyball, on the other hand, is ostensibly about as far from the progressive left this side of the skynet death star. It's "about" major league baseball general manager Billy Beane, but is about thinking but also about guts; how a mind can free itself from the societal strictures of tradition and pressure. It's about breaking through old hat.

Corporations love to say "think outside of the box", while doing everything to suppress it. Make no mistake, Major League Baseball's franchises are corporations, and in some ways, are arguably more pressurized than working for Citigroup. It was Noam Chomsky himself who famously pointed out that, contrary to popular belief, Americans are very smart and analytical, and as proof, just turn on sports talk radio and listen to the callers running down everything from the efficacy of man to man versus zone defense to matchups, coaching strategies, trades and their implications... any sports fan knows what he means. And it's true.

Amidst that comes Michael Lewis, about as good a writer as there is (on EM08 and other subjects, like being a dad), who just happens to be a sports nut. And he discovered something funny; that despite a payroll dwarfed by industry behemoths like the Yankees and Dodgers, the Oakland A's were doing something against all odds; they were winning.

What Lewis discovered is not just a great story, but a platinum lesson for those seeking change against the evil empire. Because Moneyball is really about the Godfather of Billy Beane's adopted approach (Sabermetrics), Bill James. And while Beane's story of struggling against convention is a great one, the fact is that Moneyball would never be without James, who first thought of the system of looking at baseball from outside of the box of tradition. And who is Bill James, a former player, a coach? Nope. He was an everyday joe who loved baseball, thought about it from a different angle, and went on a journey of discovery. It's a really good story and a textbook movie on how to think different.

In a movie brimming with the lesson of breaking through, Beane himself is served up a cardinal lesson late in the movie. In about as contrived a scene as can be, and yet perfectly pitched, he's schooled in some of the greatest lessons of all; to see himself and the big picture amidst this weird thing called life. It works, but I'm a sucker for old Hollywood; I've seen Capra's opus, It's a Wonderful Life, countless times, and it never loses any of its power, in fact, like a fine wine, it only seems to get better. Moneyball is a throwback movie to that Golden Age of Hollywood, and for two hours, I was a little boy sitting in the Golden Gate Theater, enthralled. Thanks also to director Bennett Miller, for time well spent.

The fact of James being an everyday person who had such an enormous impact on a tradition over a century old whizzes right by the viewer in Jonah Hill's dialog and a short burst of James' photo, but listen and watch for it: It's the golden Easter egg, the moneyball within Moneyball.

See this movie.

Response: Randall Kennedy on Obama's black critics

2011-09-19T12:48:00.000-07:00

First, Kennedy's piece, then mine.

Why Obama's black critics are wrong
By Randall Kennedy, Special to CNN
September 19, 2011

Editor's note: Randall Kennedy is a professor at Harvard Law School and the author, most recently, of "The Persistence of the Color Line: Racial Politics and the Obama Presidency" (Pantheon Books).

Cambridge, Massachusetts (CNN) -- Throughout President Barack Obama's political career, he has been dogged by insinuations or, indeed, accusations that he is not "black enough" to warrant strong support from African-Americans. Rep. Bobby Rush made that assertion when he successfully fended off Obama's effort to wrest from him his seat in the House of Representatives in the Democratic primary in 2000. Alan Keyes voiced that sentiment in his losing campaign against Obama for the U.S. Senate.

When Obama accepted the presidential nomination of the Democratic Party, the celebrity scholar Cornel West groused that the first African-American standard-bearer for a major party had "run from history" by failing to mention explicitly the "black freedom movement."

Skepticism regarding Obama's racial bona fides has continued to surface since he moved into the White House. Rep. Maxine Waters, for instance, has recently chided him for failing to craft policies that would explicitly target black unemployment and for otherwise neglecting, in her view, to evince a proper acknowledgment of the baleful and disproportionate pain being experienced in black communities on account of the economic downturn. What is one to make of this critique?

First, it should not be at all surprising. Black America is ideologically diverse, just like other communities. Moreover, as I document in "Sellout: The Politics of Racial Betrayal," there exists in black America a special anxiety about the loyalties of high achievers, especially when their success is largely dependent on whites and others who are not black. Every prominent black in a predominantly white setting faces, at one time or another, claims from fellow blacks that he or she is "selling out." GOP slams 'Buffett Rule' to cut debt Obama: America can't 'wait 14 months'.

Second, Obama's black detractors receive a degree of attention in the news media that is far greater than their representativeness of black America or their influence within it. The great bulk of black American voters -- upward of 90% -- supported Obama in 2008 and do so today. They do so because of his party affiliation, his liberal policy preferences, his identification with the African-American community (the offspring of an interracial couple, he calls himself black and married a black woman), his personal attractiveness -- he is uncommonly articulate, handsome, knowledgeable and gracious -- and the fact that with all of the added burdens attendant to his blackness, he was still able to climb the Mount Everest of American politics. Unlike some of Obama's most vocal detractors, the black rank-and-file have a realistic appreciation of the limits of his authority and the power of the forces arrayed against him, including a large, albeit amorphous, strain of racial resentment. Pained by the economic recession, they refrain from blaming Obama and instead direct their ire at those who not only saddled the first black chief executive with such a harrowing task of cleanup but also obstruct him relentlessly and often with barely disguised contempt.

Third, even though Obama's black detractors constitute currently only a small sliver of African-American public opinion, their critique is nonetheless important in practical, electoral terms.
It is often the case that a vocal, motivated minority can exercise influence that far exceeds their numbers. Enthusiasm matters. A drumbeat of complaint calling into question Obama's attentiveness to blacks might well diminish the fervency of the support he will need for his re-election effort. Furthermore, certain actions he might take to respond to the racial critique might well alienate other, nonblack, potential supporters.

The race line will ensnare Obama no matter how he proceeds. It will not necessarily defeat him. His epochal victory in 2008 showed that, unlike previous eras, our own is one in which a black politician can overcome racial barriers to win the highest office in the land. Still, the sobering reality is that race remains an important, persistent force in American life despite the presence of a black family in the White House.

===================================================

True Color

A response to Prof. Randal Kennedy's
"Why Obama's black critics are wrong"

by JP Kaneshida

When then senator Obama was campaigning for president, he very vocally called for the largest welfare payments in history in the wake of Lehman's implosion and, unbeknownst to the general public, Merrill ready to go next. Then he voted for it - just as Clinton did, McCain did, Kerry did... just as they all did (save for the anomalies).

When he won the presidency, I became curious, and, taking a page from Watergate's Mark "Deep Throat" Felt, I followed the money. Here's the truth; of Obama's top 20 largest campaign contributors, the largest industry representation -- at 25% -- is banking; Goldman, JPMC, Citi, UBS, and Morgan Stanley.

In the face of this, for Kennedy to be trying to raise a debate about the topic of intra-black discussion on whether or not Obama is "black enough", while a real phenomenon, is a "folk argument" and only really given weight in the hands of a gifted mind like Malcolm's, when he broke down the house/field negro syndromes. Kennedy's take -- with a "Special" assist by CNN -- occupies valuable mainstream media real estate and mis-directs toward the tree while the forest is being clear-cut. In other words, to talk about race and the Obama presidency through the prism of anything other than Detroit having had a fall of 2008 H-bomb dropped on it isn't criminal, but it gives new meaning to ostriches putting their heads in holes; it's digging the holes.

And here's the money ball; those historic welfare payments to the banks are the direct result of racism. How? So called "liar's loans" and "predatory loans" -- notice how those terms correctly and accurately place responsibility upon the originators of the loans, to the chagrin of Rick Santelli -- were disproportionately aimed squarely at black and brown populations. The end result post EM08 -- Economic Meltdown 08 -- is, well, Detroit.

To be fair, most black intellectuals haven't stepped up to the plate and hit this hanging curve. But Barack's the prez. You know, the bully pulpit. The Weberian charismatic leader. The one who took bazillions of everyday peeps' hard-earned money in a landmark campaign noted for several things, but most shockingly, the sheer amount of money raised.

That record amount of money was everyday Americans hoping beyond hope, pleading, imploring... for someone to have their backs. Instead, in one of the most monumental "go eff yourselves" in history, questions about whether or not Obama's down, while legit, obscure the real allegiances he's made, nurtured and keeps. The old adage, "actions speak..." and Felt's "follow the money" should be the tattoos of our time.

The cue here and plainly evident in the three years since EM08? There haven't been any prosecutions let alone indictments of any of the major banksters, mortgage lenders, credit ratings agencies, or regulatory agencies, let alone hedge fund and other large fund managers to see if there was fraud, collusion or conflicts of interest. Hey, these are the largest, most pervasive and still ongoing financial crimes in history, that's all.

That the DOJ, SEC, congress, the senate, the president... haven't haven't lifted a finger against the evil empire, and if anything have given rewards to the welfare thugs while the world is on its knees, is the ultimate eff you. But it also flips off history; when the S & L fiasco went down, we prosecuted and jailed over 1,000 banksters; ask John McCain's criminal buddy no more, Chuckie Keating, who went rafting up the river. We took them into receivership, converted debt into equity and got on with life. This is sop and furthermore, the law - just ask professor William Black who speaks with authority on the subject as one of the regulators that took care of those criminals then. Don't like the official view from someone who was there and did it right? Then ask Bill Ackman, CEO of hedge fund Pershing Square Capital Management, who says the same thing.

Arguments over whether Obama's "black enough" are frankly insulting in the face of the most rampant criminality, fraud and conflicts of interests on a scale that makes Watergate look like a Comicon dork convention. The truth is that we live in the largest, most pervasive and entrenched criminal welfare state in world history. Depending upon the reader, whether Obama's black enough or not will of course vary and my point is that while they are sort of interesting polemical discussions, Obama's real pr magic is that he's shown his true color to be so deeply dark green that sometimes -- sometimes -- it looks black.

Cuts for Cooky: X: I Must Not Think Bad Thoughts

2011-08-28T02:51:00.000-07:00

I saw X last year, actually Exene and Doe, and when they played this, one of my favorite X tunes, it was so moving, because of the times and the personal feeling of being under the gun.

What an appropriate anthem this song is for today's crazy world... I don't know where this version was shot, but it's quality is bad. In some ways it adds to the punk aesthetic, much like the vid of White Girl I posted a while back.

Stick around til the bitter end; Doe basically love trashes LA. I'm headed back for an extended visit in about three weeks. I can't wait.

Cuts for Cooky: Lady Gaga's The Edge of Glory

2011-08-14T02:27:00.000-07:00

I'm not a Gaga fan, but recognize her talent, although it can be hard to find through all of the gratuitous garishness of her shows and production. Take this song in its album version and it's a dance tune, but as a ballad with just her singing with piano and it's better.

Leave it to the Stern Show's long history of bringing out the best in talent, whether in interviews or performing. It just figures that after her appearance, I'd post a song of hers; it's all Stern's fault. What's missing here is the long preamble where she goes into the genesis of the song, how it's about her grandfather who at the time was dying, and her grandmother who wouldn't leave his side. Gaga explained that she told her grandmother that he didn't want to die in front of her, that (being Italian) he was too proud. So she convinced her grandmother to leave after having been there for something like two weeks, and a couple of hours later he passed. Gaga used being on the edge as that moment when one is about to cross over.

I guess I'm a sucker for these kinds of stories, and her setup made the song moving to my sappy sentimentality. As DeNiro says to Minnelli toward the end of New York, New York; "Sappy Endings."

Susan Saladoff's "Hot Coffee"

2011-08-05T02:12:00.000-07:00

The amount of money that's spent on television on a political campaign has a[n] enormous effect on the outcome. And in fact in 2000, the statistics showed that the side that spent the most money won about 90% of the time.

--Kenneth Canfield, Georgia Judicial Nominating Commission

Spoiler alert: some details lie ahead that if I knew beforehand wouldn't ruin viewing for me, but everyone's different.

Susan Saladoff

Those who know me know that I place a premium on information; it's why I feel understanding the fourth estate is so crucial for everyday people. They'd also tell you that my opinion of lawyers is like that of many; they're like those creepy ultra deep-water sea creatures, serving some sort of function in the universe. With that out of the way, there are good lawyers, and Susan Saladoff's one of them. A former civil attorney, her film, Hot Coffee, is one of the best I've seen in recent memory. I think her movie should be required viewing in junior high school civics and for everyday people in general because it employs several of the principles that I believe media must have if it's to serve the interests of everyday people:

1. Exposes the mechanisms through which power flexes its muscles.

2. Names names; who was/is responsible, what they did, and when. Also, if possible and taking a Watergate page, what they knew and when they knew it, and chain of command.

3. When it comes to understanding the way power works, probably the single most important investigatory principle and practice, and borrowing again from Watergate, this time from Mark "Deep Throat" Felt, follow the money.

As an aside, while power has always exercised the various channels it controls, since the economic meltdown of 2008 (EM08), I think the stakes for everyday people have risen significantly; risk has only grown along with uncertainty (today, the Dow dropped over 500 points as worries about the EU crisis and American instability have finally caught religion, or so it would seem; stay tuned). What this means is that corporations, despite sitting on skyscraper piles of money, aren't going to spend to create jobs. What it also means is that they are going to hedge their bets harder on anything and everything that can bleed money, which means torts.

For everyday people, going into litigation is intimidating and overwhelming, largely because of ignorance. There's a part in Hot Coffee that speaks to this when several people on the street are asked a simple question: "What's a tort?" Their answers, while amusing in their fumfering, make a point, because torts are without a doubt something that every school should educate a student about. Now think about sports; would you go into a game for fairly high stakes without knowing the rules, the fundamentals and without practicing? A tort, and specifically, the way the legal system has been gamed by power, is illustrative of the way real politics and the legal system works in America; but for everyday people, it's a game they know nothing about, because 1) The system is rigged to allow power to work largely out of view, and 2) our culture encourages and fosters superficiality, distraction and mis-directed values away from power.

In an example of mis-directed values, what steams me is that poker players get demonized as degenerates, but a poker game at a reputable casino or card house is fair, because going in you know the house's rake, and aside from that, it's you against the competition, everyone must abide by the rules, and there are eyes everywhere to ensure that. You can't even cuss at the table.

The image of poker players as degenerates versus, say, the US Chamber of Commerce, which floods the political system with corporate lobby money, speaks to the snow job con that's an example of the mis-directed values and morals of our twisted culture. As Saladoff shows, it is economics that impels the legal system, not lofty, idealistic notions of "justice" or "fairness," much less the grand visions of the American forefathers. If our schools were to relevantly prepare young people for the real world, they would do things like screen movies such as Hot Coffee and have roiling discussions in order to ignite the flame of critical thinking. Instead, our schools leave kids as the suckers at the poker table, not knowing a thing, or deluded into thinking they know what's going on.

My latest jag is that with defense, auto, healthcare, big-agri, and of course, banking, we are now the largest welfare state in history. I've gone into it before, but toward the end of Hot Coffee, Lisa Gourley, the mother of Colin and one of the case studies (one of the most heartbreaking things I've ever seen, making me simultaneously furious and sad), says a very important thing; that because of the way medical lawsuits have been capped in this country -- largely in response to big corp's "tort reform" pr onslaught and their prostitute politicians that led the legislative charge -- that although the Gourleys won their malpractice case, in the face of the jury awarding them millions, because of the cap, it was reduced. As a result, their costs beyond the reduced settlement amount now are paid by Medicare. In other words, the taxpayers.

Once again, here we have large corporations taking the profits, but socializing the losses. That's welfare, folks.

One other thing; I didn't know Congressman Bruce Braley (D-IA) from Adam until Saladoff's film, but at about 32 minutes in, he has the balls to call out the US Chamber of Commerce -- a very powerful lobby on behalf of some of the largest corporations going. Big hat tip here, and as with Saladoff being a lawyer with a sense of justice and fairness, we could use more politicians like Braley.

Last, I have a personal stake in the spirit of Hot Coffee; my family went through a malpractice, wrongful death suit. I wrote the argument paper that was used verbatim by our (pedestrian) lawyer and was the "lead" on behalf of my family. That suit dragged on for five years and, of course, was capped. Think about that, a cap on a life. That's economics in the real world, not supply and demand curve mumbo jumbo. But once again, following Mark Felt's (Watergate's "Deep Throat") dictum to follow the money, and I think I know what's going on. With armies of accountants and lawyers advising the corporations, the formula goes something like this; filibuster the case until the end of the statute of limitations and pay out settlements from interest earning accounts. In other words, maximize the earning power of your investment accounts against litigation. And as in the case of the Gourleys, as much as possible, get an edge on the game by fixing it a'la forced arbitration to eliminate the power of juries, and socialize risks and losses through capped settlements. Again, that's economics and politics in the real world.

Brilliantly thought out and executed, Susan Saladoff lays out Hot Coffee in a masterful, William Kuntsler in his heyday manner. That this is her first film is remarkable, as it's very well directed and produced; that it's such a valuable contribution to knowing the enemy makes it essential to anyone who values fairness.

See this movie; it's an education in and of itself. I can't recommend it highly enough.

It really opened my eyes [as] to how the system works.

--Lisa Gourley

What Was

2011-07-27T15:25:00.000-07:00

One of the things Russell Brand nails in his touching tribute and farewell to Amy is his description of what communicating with an addict is, the "barely discernible but un-ignorable veil... [They] look through you to somewhere else they'd rather be. And of course, they are."

I lived that, and am now experiencing that with someone close to me. It may sound strange to some on the outside, but this person's addiction isn't drugs, alcohol or even sex, and in many ways is much more pernicious. To them, I can only say, that the answer you seek is ease itself, hidden in plain sight, and that if you had the power the words alone would unlock the chains. And while it's painful to watch you twist and turn in the wind, I rest my hope for you in the simple fact that if a wretch like me can find it, then anyone can.

What was so remarkable about Amy went beyond her phenomenal voice, and spoke to history, the fact that her roots went straight to the greats like Dinah. It's her acknowledgement of standing on the shoulders of giants that deepened my appreciation of her as an artist. As I write this, I'm listening to a demo of Amy singing Love is a Losing Game with just her and guitar. At the end, just now, she nonchalantly asked the engineer, "Is that alright?" What a weird, wonderful moment.

For Amy
by Russell Brand
July 24th, 2011

When you love someone who suffers from the disease of addiction you await the phone call. There will be a phone call. The sincere hope is that the call will be from the addict themselves, telling you they’ve had enough, that they’re ready to stop, ready to try something new. Of course though, you fear the other call, the sad nocturnal chime from a friend or relative telling you it’s too late, she’s gone.

Frustratingly it’s not a call you can ever make it must be received. It is impossible to intervene.

I’ve known Amy Winehouse for years. When I first met her around Camden she was just some twit in a pink satin jacket shuffling round bars with mutual friends, most of whom were in cool Indie bands or peripheral Camden figures Withnail-ing their way through life on impotent charisma. Carl Barrat told me that “Winehouse” (which I usually called her and got a kick out of cos it’s kind of funny to call a girl by her surname) was a jazz singer, which struck me as bizarrely anomalous in that crowd. To me with my limited musical knowledge this information placed Amy beyond an invisible boundary of relevance; “Jazz singer? She must be some kind of eccentric” I thought. I chatted to her anyway though, she was after all, a girl, and she was sweet and peculiar but most of all vulnerable.

I was myself at that time barely out of rehab and was thirstily seeking less complicated women so I barely reflected on the now glaringly obvious fact that Winehouse and I shared an affliction, the disease of addiction. All addicts, regardless of the substance or their social status share a consistent and obvious symptom; they’re not quite present when you talk to them. They communicate to you through a barely discernible but un-ignorable veil. Whether a homeless smack head troubling you for 50p for a cup of tea or a coked-up, pinstriped exec foaming off about his “speedboat” there is a toxic aura that prevents connection. They have about them the air of elsewhere, that they’re looking through you to somewhere else they’d rather be. And of course they are. The priority of any addict is to anaesthetise the pain of living to ease the passage of the day with some purchased relief.

From time to time I’d bump into Amy she had good banter so we could chat a bit and have a laugh, she was “a character” but that world was riddled with half cut, doped up chancers, I was one of them, even in early recovery I was kept afloat only by clinging to the bodies of strangers so Winehouse, but for her gentle quirks didn’t especially register.

Then she became massively famous and I was pleased to see her acknowledged but mostly baffled because I’d not experienced her work and this not being the 1950’s I wondered how a “jazz singer” had achieved such cultural prominence. I wasn’t curious enough to do anything so extreme as listen to her music or go to one of her gigs, I was becoming famous myself at the time and that was an all consuming experience. It was only by chance that I attended a Paul Weller gig at the Roundhouse that I ever saw her live.

I arrived late and as I made my way to the audience through the plastic smiles and plastic cups I heard the rolling, wondrous resonance of a female vocal. Entering the space I saw Amy on stage with Weller and his band; and then the awe. The awe that envelops when witnessing a genius. From her oddly dainty presence that voice, a voice that seemed not to come from her but from somewhere beyond even Billie and Ella, from the font of all greatness. A voice that was filled with such power and pain that it was at once entirely human yet laced with the divine. My ears, my mouth, my heart and mind all instantly opened. Winehouse. Winehouse? Winehouse! That twerp, all eyeliner and lager dithering up Chalk Farm Road under a back-combed barnet, the lips that I’d only seen clenching a fishwife fag and dribbling curses now a portal for this holy sound. So now I knew. She wasn’t just some hapless wannabe, yet another pissed up nit who was never gonna make it, nor was she even a ten-a-penny-chanteuse enjoying her fifteen minutes. She was a fucking genius.

Shallow fool that I am I now regarded her in a different light, the light that blazed down from heaven when she sang. That lit her up now and a new phase in our friendship began. She came on a few of my TV and radio shows, I still saw her about but now attended to her with a little more interest. Publicly though, Amy increasingly became defined by her addiction. Our media though is more interested in tragedy than talent, so the ink began to defect from praising her gift to chronicling her downfall. The destructive personal relationships, the blood soaked ballet slippers, the aborted shows, that youtube madness with the baby mice. In the public perception this ephemeral tittle-tattle replaced her timeless talent. This and her manner in our occasional meetings brought home to me the severity of her condition. Addiction is a serious disease; it will end with jail, mental institutions or death. I was 27 years old when through the friendship and help of Chip Somers of the treatment centre, Focus12 I found recovery, through Focus I was introduced to support fellowships for alcoholics and drug addicts which are very easy to find and open to anybody with a desire to stop drinking and without which I would not be alive.

Now Amy Winehouse is dead, like many others whose unnecessary deaths have been retrospectively romanticised, at 27 years old. Whether this tragedy was preventable or not is now irrelevant. It is not preventable today. We have lost a beautiful and talented woman to this disease. Not all addicts have Amy’s incredible talent. Or Kurt’s or Jimi’s or Janis’s, some people just get the affliction. All we can do is adapt the way we view this condition, not as a crime or a romantic affectation but as a disease that will kill. We need to review the way society treats addicts, not as criminals but as sick people in need of care. We need to look at the way our government funds rehabilitation. It is cheaper to rehabilitate an addict than to send them to prison, so criminalisation doesn’t even make economic sense. Not all of us know someone with the incredible talent that Amy had but we all know drunks and junkies and they all need help and the help is out there. All they have to do is pick up the phone and make the call. Or not. Either way, there will be a phone call.

The Death Stars

2011-07-24T16:50:00.000-07:00

I didn't get to finish this, it has some more work but I've lost interest. Still it shows what one can do while listening to interviews with the Net, Photoshop fired up, and a healthy dose of Travis Bickle revenge toward the Evil Empire.

To borrow Joe Nocera's & Bethany McLean's title, All The Devils are Here. Well, 32 of them. Next up, all of the hack msm journalists and analysts who got EM08 completely wrong, and in some cases, insisted things were ok leading up to the fall of '08. In fact, I know someone in real estate 10 months ago who is still drinking bubble flavored kool aid, trying to convince peeps the market bottomed and it was a good time to buy. I checked his ass so hard he acted like Jack Tatum hit him. Then, only a month ago he wrote to tell me (and others) yet again, that real estate was a good move.

That after almost a year of deleveraging and way more to go, plus all of the uncertainty and mess around mortgage gate, not to mention no one's talking about the disaster CRE is, with over a trillion there waiting to jack us into Judgement Day. Ah, como es la guerra.

What I tell peeps is that while there have been empires past, because of the limitations in technology, they were bound to colonies. But in the EM08 world, we have the first true world empire, and its madness has infected everyone; this is why what's happening in the EU has huge consequences everywhere else. And, we have some of the walking puss sacks below to thank, many paid by you. How's that for bending us over twice? Here then are the biggest thugs in history, the Death Star's Hitmen and the Dark Side's agents.

Some of these are easy, but without cheating, I bet you can't name all of them.

Razzing the Death Star

2011-05-17T22:41:00.000-07:00

When it comes to hubris, if Goldman Sachs were a porn star and everyone else had a 10 inch weenie, Goldman would somehow have a 2 footer. And no, they wouldn't care what women had to say.

Said hubris is usually -- when it's called at all -- associated with Goldman's penchant for fixing games, lying and all around corruption when it comes to bets. In his notorious Wall Street memoir, Liar's Poker, Michael Lewis said of Salomon Brothers, his old firm and the head of the snake that would become the mortgage backed securities game, that you never wanted to be on the other side of the bet with them. And if Salomon was Darth Vader, Goldman is surely the Death Star.

But here's an aspect of the Goldman Death Star -- GDS, the kind, warm den on a cool autumn afternoon Goldman. You know, snuggly and fuzzy, in a Death Star kinda way. Take a look at their ad banner below; the black man as the object of Goldman Death Star affection and the way GDS is touted as a catalyst for communities (!!!) that would be even more hilarious were it not running against the stark irony reality check of the story headline. Let the community support -- and hilarity -- ensue.

click to enlarge

Killer Nanny

2011-05-13T22:29:00.000-07:00

I'm a Comcast Ho. Yeah, AND...?

Straight out of the opening of Blue Velvet's weird bugs underneath the white picket fence crawls Stepford Wife in her wildest dreams Meredith Atwell Baker, although one imagines the wildest this puss gets is sneaking squirts from the Reddi Whip can at midnight. It's all over the news about how she sold out her FCC commmish position to Comcast and is now -- in the finest aping of Phil "the walking hemorrhoid" Gramm -- leaving the FCC to join -- ta da -- Comcast.

As we know from EM08, such conflicts of interest are nothing new, the so-called "revolving door" between uncle scam's chamber of horrors bureaucracy and the corporate boardrooms of hell where creepy old men take 3 hour strip club lunches and jack their jollies as they dream of new ways to rape and pillage. You know, like the scorpion said about it being "his nature"....

But while Philly Gramm's joining UBS barely tweaked the msm in terms of conflicts of interest, somehow even the HuffPo has run Baker's story fairly prominently. In fact, my in box had several messages screaming about this.

So what can we expect out of this ink? Vegas is putting the line at "blah blah blah"; there'll be some minor talk from the msm and of course unc scam. Just as with all of the hot gas when unc scam "investigated" EM08 (the FCIC). That's about it.

As Gerald Celente would say, What [do they think I am], a child?

And now this; evidently, unc scam really really really cares about your safety, America's safety, and white picket fences. Because the threat of online poker, well, that's a cancer eating away at our soft underbelly. And let's face it, we're light years ahead in the soft underbelly race.

It's like these jerkoff politicians that are "tough on crime" to the tune of seven million prisoners, the most in history, are way more concerned with maintaining the public threats as black and brown kids and online poker. Meanwhile, Wall Street, big oil, big auto, big healthcare, big agri, big insurance, big defense... all step up like clockwork and take their welfare checks without the aid of guns or violence.

But I'd be remiss if I didn't mention the irony of it all. The poli-hos evidently feel perfectly fine with having lotteries -- a bigger sucker bet than 3 card monte. "Let's see, let's take out poker, a game with strategy and put in a game with no strategy and statistical odds that are tantamount to zero."

"Batshit crazy" doesn't even come close to describing what's going on. "Pathological" and "sociopathic" are in there for sure.

Purple Pain: Mavs Sweep, End of an Era

2011-05-08T23:17:00.000-07:00

Even a billion douches can't keep him from believing it, either.

After losing the third game in their second round playoff series versus the Mavs, I penned a letter to my Laker friends. And yes, I call the Lakers the "Lakes" - it's an old habit, so buy an rpg and shoot me.

With today's slaughter, the "Mother's Day Massacre" which saw the Lakes meltdown like our economy, the public rape and torture is at least over. The Mavs were unstoppable, and everything I said about game 3 applies in spades.

Now that Phil's gone, it may be time to bring in Coop to lead them. Here's a guy who has the champion and Lakes pedigree, played with the greatest floor general the game will ever see who happens to be an owner and vp, and obviously has expressed interest with his coaching stint in the WNBA.

And then there's the sad spectacle of Pau's meltdown. Pau, as talented a big in the league, was just sad to watch. LakerNation's David brickley put it into perspective:

Gasol’s struggles are mental; there is no other way to explain it. After he fails at something on the court Pau shrugs his shoulders, hangs his head, and complains to the refs.He is not performing at even close to what he is capable of when the Lakers need him, and it seems as if he doesn’t even care.Or at least comes off like he doesn’t have the answers to fix his issues.He gets paid 17.8 million dollars per year to be the Robin to Kobe Bryant’s Batman.The Lakers traded a player away for Gasol that Laker fans couldn’t stand, and what many call the biggest draft bust in history, Kwame Brown.Kwame Brown in the 2006 playoffs with the Lakers averaged 13 points per game, while shooting 53% from the field, and pulling down 7 rebounds per game.Pau Gasol in the 2011 playoffs with the Lakers is averaging 13 points per game, while shooting 42% from the field, and pulling down 7.8 rebounds per game.Look familiar?

$17.8 mil is a ton of meltdown money. It really is sad. Kinda weird, too.

Let this series be a harsh reminder that while the Lakes were loaded with talent -- much more so than the Mavs -- they were completely dominated and swept. It is one of the most stunning upsets in sports ever. And for that, give credit of course to Nowitski, Terry, Barea (super off the bench), and Rick Carlisle, who outcoached Phil at every turn of the road. Oh, and old man Jason Kidd.

=================================

From May 7, 2011 after the game 3 loss.

Dear Chicky Baby Fan Club,

The hated Celtics in their game 3 with Miami today did what I had hoped the Lakes would do Friday in theirs; they got attitude. That may sound like mumbo jumbo to those of you who know me; that when it comes to sports, it should be about strategy, tactics and techniques. But psychology is arguably the bigger part of sports, and in this area, I think the Lakes have just burned out. Not even Phil thumping Pau's chest can revive this patient. So, to drown my sorrows I'm going to torture y'all with my breakdowns of why -- in my boy MM's words -- the party's ova for the Lakes.

One thing first; Imo, the series at worst should be 2-1 Mavs. In fact, I think all three games have very key correctable reasons -- different in each game but related in one overall aspect. Here we go....

GAME 1

The Mavs were down by 16 in the third. The first game thus set an ominous tone, but I think the very last play said a lot about why we're now down by 3, and it's this; WHY when you have to score, would you go for a 3??? I don't care if it's Yoda shooting with the aid of The Force, Kobe shot a 25 footer - at best a 45% proposition. And, if I remember correctly, it wasn't a clear shot, and I believe he was falling away, thus compounding the degree of difficulty.

Percentage basketball says; work for a good percentage shot, or at least (some would say this would be option 1), drive and increase your odds of getting to the foul line.

The Lakes instead made the worst choice that makes the least sense (Phil and staff are sounding like our government, right?). That's a basic, fundamental tactical mistake - a big one, at a big time in a big game.

GAME 2

The Lakes have never been a distance shooting team. There have been anomalies -- Coop in the day could hoist. Zeke from Cabin Creek could gun (in one of the most remarkable achievements ever, he averaged 43 through a playoff series). Despite history and Chicky Baby rolling his eyes from the grave, the Lakes continued their assault on the "worst distance shooting in a playoff game" record. At one point I think Mike Breen said they were 2 for 20 when yet another 3 was launched.

My head couldn't explode anymore because the damage had been done way before.

Yet again, another violation of basic strategy which says; if something isn't working, you must change, shift gears.

GAME 3

Obviously this was a disaster, but in a game that will rank in Purp & Gold infamy, when everyone else was out of it, Shannon Brown came off the bench and gave the Lake body on the gurney a desperately needed transfusion, much like Coop in the day did. I've long been a fan of this kid, and believe he should have been developed better. So anyway, what does Phil do after this kid puts on a terrific show?

He takes him out.

And the Lakes corpse -- once again -- reverts back to dying on the gurney, its adrenaline rush soon to be forgotten.

Once again, this is a violation of a cardinal strategic rule; never change a winning tactic. Remember in game 2 when Carlisle put in Barea and the way that kid turned on the Mavs as if a turbo charger had been shoved up their asses? You didn't see Carlisle yanking that kid out before the Mavs had thoroughly stomped and psyched out the Lakes. In other words, Carlisle let Barea play out his rush.

This is a basic 101 strategy in war, investing, business, even gambling, perhaps more so in gambling. If you're cranking at the tables, let's say you're on your way to tripling up, what, you should pick up your chips and all of a sudden call it a night?

The irony in a footnote here? Bynum all of a sudden decides that now is the time to get fired up. All of the shots of him shouting and getting all worked up seemed like so much posturing - desperate posturing, by someone who because of circumstances and all, has been far from what I thought he could be.

THE THREAD

It should be obvious by now, but Phil's the common denominator in all of this. A few of my friends and I are of the opinion that Phil's overrated, and I think this proves it. In games 1 & 2, arguably, for as bad as the Lakes played, they could have won if the fundamental mistakes would have been avoided.

There's a poker saying; it's a game of making the least mistakes. In a way, sports (and everything, really) and in particular hoops can be thought of this way. But with these three games, the Lakes added another dimension to that adage; because when you commit errors on such an elementary level, you go to the core. And if things are off at the core, how can you possibly expect the billion other things that basketball imposes to not be affected? It's like trying to build a bridge without understanding physics.

The late Arthur Ashe told one of my favorite stories about a time when he was playing Davis Cup, and during a changeover, his coach said, "Get your first serve in." Ashe cited this because it's silly to tell a tennis player, but particularly a pro like Ashe, to get his first serve in, because it'd be like telling Kobe: "Make 80% of your freethrows." While that's an example of bad coaching, at least Ashe's coach was thinking about strategy, even if it was on a kindergarten level. But it's kind of obvious that Phil hasn't been; maybe he's daydreaming about Jeanie.

This lack on the fundamental level has reared its ugly head in some conspicuous ways, particularly on D. Dirk was so open on one 3 there was a campfire beside him.

LOOKING AHEAD: ALL'S NOT LOST

Obviously, Kupchak is gonna have to work this summer, really, extra hard. Blow up that cell of yours, Kup, because you know what? We haven't had a real point guard in a while. I like Fish, but even in his prime, Fish wasn't the caliber 1 that a team as storied as the Lakes deserved. But guess what; Chris Paul's unrestricted in 2012. So is Deron Williams. Hello? You're breaking up....

Baron Davis is also up in 2012 as are fellow Bruins Westbrook and Farmar, but I don't know if Baron's a good fit. He can run 1, but he loves to get wild. I think Westbrook's good. I'd take a chance on him. I don't know how the Celts managed to get Rondo, but that kid's the find of the decade. But if we get CP, then it's on. But that raises the obvious; what're we giving up?

Magic said that except for Kobe everything's legit bait. Think about that; he's basically cleaning house. I don't know if I agree, but let's not forget that before the playoffs, the Lakes were a legit 3-peat threat. Very legit. Also, while I think Magic was the greatest player ever, as a coach he made Del ("Dull") Harris look interesting. So as a GM, I don't know how much more insightful he'd be.

The other historically glaring need is for a 4. Gone are the days of hard helmets like AC or Clark Kent; we need someone to get in, plug up the middle and grab some fucking boards like he's starving and missed shots are cheeseburgers. Zach Randolph, after a billion teams (including everyone's bus stop, the Clips), is having the time of his life. I heard earlier he had 14 boards and it was only the 3rd quarter or something. And guess what? He's unrestricted.

When was the last time a Laker power forward just went off and dominated the boards? No Rodman doesn't count.

But arguably the biggest change is Phil. As I said before, I think his lack of attention on basic strategy has been key. In prior years the Lakes have relied on talent and youth, but it was only a matter of time before 1) they got older and slower (Barea made them look like they were wearing lead boots) and 2) the league caught up to the vaunted triangle offense. The Lakes certainly contributed -- the lack of mental fortitude I mentioned at the top is but one example. Not paying attention to other basics -- such as pounding it down the lane or in the block when you've talented players like our bigs and one of the premier shot creators in history in Kobe is a sin. Instead, the Lakes were reduced to giving it to Kobe (or Pau), everyone fleeing to the weak side and then standing around as one on one ensued and a J was launched. Not only is it boring, but, violating yet another strategic rule, it's predictable. Communicating and rotating on D is yet another.

The Lakes are the sports meltdown to go with the economy. With the Spurs ouster and the Celts dropping their first 2 (they're still holding serve though), change is obviously the operative word.

I've now seen 3 of the 4 classic team incarnations (Baylor/West/Chamberlain, Magic, Kobe). What hurts so much is not that they lost -- "all good things must come to an end" was my ma's mantra when I was a kid and my eyeroll cue -- but the way they lost. Unlike our economy, the Lakes can recover. In the big scheme of things, I know this peasant wish of mine doesn't mean jackshit, but I have way too much emotionally invested in this team to let go now. So here's to the future.

From the Vaults: Korean History Channel

2011-04-04T03:07:00.000-07:00

Many moons ago I was researching a bunch of AA stand ups and discovered something; there are some really talented brothers out there. In fact, Fish and I saw Dr. Ken before he broke and we both knew he had it but wondered if the machine was ready or willing to give him a shot.

Now in the Internet era there are some pretty creative AA kids. Bart and Joe are two of them, under the moniker, "Just Kidding Films" on YouTube. This one's kinda long but like most, yours truly included, editing is one of the flaws in their game. Still, the bright spots are what to look for, and the thing to look for here in this first vid is the Korean soap parody.

As a viewer put it: with a seashell cover her nipperl I was like wow you a beautiper...

They're still rough around the edges but you can see they have talent. Anyway, a while back I think it was Renee that first turned me on to them and showed me this next one; I 'bout shit my pants laughing.

Funny Hurt

2011-03-24T02:14:00.000-07:00

Sarah's story was from the 3/10/11 show @ 2:13:15

Sarah Silverman was recently on the Stern Show and said something really funny but so on point. The setup was, as usual the way Stern can make the mundane interesting and/or entertaining, and in this case, he and Sarah were riffing on being sick. What Sarah says about her experience illustrates the relationship between big American style medicine and corporate payola.

Howard: When you get on that path of antibiotics, you're ruined.

Sarah: I think you're right.

Howard: Think I'm right, I know I'm right. Have your cold, go through it for a few days. Rest up, your body needs some rest, and you'll come back stronger. This is the first cold I've had in two years, because I don't take antibiotics.

Robin: Remember the good old days when people had colds and they just took care of them?

Howard: Yeah, they died!

Sarah: I went to the doctor and he goes, "I'm going to give you anitbiotics." I go, "Are you gonna give me Biaxin?" He goes, "Yeah, how'd you know?"

I go, "Cause you have a Biaxin notepad, Biaxin pen, a Biaxin calendar..."

The Show Must Go On

2011-03-22T02:20:00.000-07:00

Ya gotta hand it to this kid, Kate Wilson, she soldiers on. And thank god she does -- this is funnier than shit! I like the ones she tries to stifle... LMAO!

Hat tip to the Stern Show.

Isn't that Special?

2011-03-06T15:53:00.000-08:00

The recipe is getting old: take a savant, somebody who plays golf better than any other human, or can cut on the bias, or throws a lot of touchdown passes, and surround him with sycophants and barrels full of money. Praise everything he says or does no matter how solipsistic or selfish. And what do you get? Exactly what the adoring public deserves. Even Galliano’s drug abuse was seen by many of the most prominent people in fashion as an adorable foible, like wearing a monocle or writing with a fountain pen. “Oh, that’s just John,” one of France’s better known fashion people once told me. “Obsessive indulgence is his thing.
--John Galliano's Explosion, by Michael Specter, March 2, 2011, The New Yorker

Axel Jordache
Vot about ze sins of ze fodders? You believe ze kids have to pay for vot zare fodders did?

Rudy Jordache
I’m not so sure that’s true.

Axel Jordache
(mocking laughter) You’d better hope it izn’t.

-- Irwin Shaw, Rich Man, Poor Man

When Van Halen was stomping through arenas and making more money in one concert than most see in a year they had a cause and a clause written into a bevy of demands in their agreement ("tour rider" in industry jingo) as legend holds it; indulge in "the good life" to Zeppelin-esque proportions and no brown ones as in M&Ms. Whether or not the clause is true, the story served to make people react with a disapproving shake of the head and raised eyebrows. It also served as a way to capsulize the cult of personality that the late 70's had blueprinted, the go-go 80's nurtured and that now, in the super-predatory era of bankers and their cronies has been juiced up to cosmic clown proportions.

Van Halen and I share one thing in common; we're from sycophant city, where every type of jerkoff with any kind of celebrity is nauseatingly babied so long as the machine deems them worthy. LA's also home to the has-beens, a lot in some ways even more sorry than the never weres, standing on the corner of Hollywood and Vine pathetically trying to light the Hollywood pipe with just their fingers. At least the never weres eventually learn the hard way and give up. Well, most of them.

John Stewart had a great line in his interview with Terry Gross (NPR's Fresh Air) about how he came from a generation and time that would call you out if you thought yourself above the fray.

Oh, you think you're special? You're not special.

Not in today's world of special in a can, where the bargains change daily and the menu runs deep, across industries, spans continents and even co-opts the homeless. Need I mention golden throat Ted Williams? Here's a dude that evidently is a serial abuser on many fronts, and yet with the first glint of Youtube ho-dom, he's given corporate gigs and courted by money. Like he's special.

The truth always evens things out though, at least in reality, sometimes with humor and irony but not enough in raw dollars let alone Federal Grab Your Ankles and Grimace Prison. So Betty Ford was a drunk, Newt, Henry Hyde and half of the Hill are hos and former chair of the senate banking committee during the whole subprime real estate scandal Chris Dodd had not one but two sweetheart conflict of interest deals with Angelo "The Toxicator" Mozilo.

So if John Galliano spits venom, is accused of being a Jew hater and Dior fires him, we should not lose site that despite such public floggings some people very much are special. Welfare thieves and their psycho fuck enablers, for instance, are the specials of the day, perhaps in the Special Hall of Fame; Jamie Dimon, Lloyd Blankfein, Chuck Prince, Ken Lewis, John Thain, Joey Cassano, the aforementioned Chris Dodd, Phil Gramm, his wife Wendy Gramm, Ben Bernanke, Tim Geithner, Larry Summers, Hank Paulson....

Beyond his homespun way of talking on the real, I loved Malcom's pragmatism. He also had what no one on the so-called left has these days; elephant balls. I can hear Malcolm today saying:

Why is it that when a clothing designer is accused of being anti-semitic he's publicly outed and loses his prominent job. A TV star is also outed and flogged. They both lose their livelihoods. But when the corporate board of Texaco is caught red-handed--ON TAPE--uttering racist remarks, two white guys get suspended and it's business as usual? Oh, they pay a fine and do some piddly public relations -- you know, that's when they say what they think you want to hear but don't believe in their heart of hearts. No, my question to you is, if a corporation is an individual, and John Galliano and Charlie Sheen are humiliated to no end, lose their livelihood and are damaged goods, then why is Texaco, some fifteen years after we know the way they feel about black folks, why, if a corporation is a person, is Texaco still working at its livelihood?

Number 2

2011-02-24T19:53:00.000-08:00

If you look on the sidebar here where I basically (try and) kick these criminals in the nuts, just check out #2. I wrote that at least a year ago, and it's not that I'm a savant, I just want to prove to my friends and family that for all of my psycho ranting, I think I have EM08 right.

The new marauders don't use guns

Main Street Movement Erupts as Thousands Across Country Protest War on the Middle Class

From truthout:

Thursday 24 February 2011

by: Zaid Jilani | Think Progress | Report

Thursday 24 February 2011

Inspired by the events in Wisconsin, thousands of Americans all over the country are taking action to battle legislation that would attack their labor rights, defund their schools, threaten their health and safety, and decimate the American middle class. Here are just some of the places across the nation that are taking part in this new “Main Street Movement” to defend and rebuild the American middle class:

for the full story: http://www.truth-out.org/main-street-movement-erupts-as-thousands-across-country-protest-war-on-the-middle-class68039

Cuts for Cooky: Jimi, Villanova Junction

2011-02-19T19:58:00.000-08:00

Seldom recognized amongst most rock aficionados, Villanova Junction is a great kickback song for a lazy afternoon. As with Third Stone from the Sun he here echoes the influence of Wes, and creates a mood of introspection that I bet would surprise those only superficially familiar with his music. Jimi headlined Woodstock, and by the time he came on much of the crowd had left; like Jim Gray leaving, I wish I could make a short film with those who walked out on history and see what they think of their decision now. Nonplussed and as usual rising to the occasion, Jimi's Woodstock version is the best take.

Send in the Clowns, Don't Bother, They're Here: Client 9

2011-02-18T01:09:00.000-08:00

Most corrupt gargoyle on most corrupt capitol building?

I've put off watching Client 9 for several reasons, but chief among them was that I didn't need to have my head explode again. You know, life is short, we've only got so much time on earth, blah blah blah. But much like Spitzer not being able to resist his temptations, I caved. Now I can say that I've reached yet another bottom to the abyss that is EM08, however, I'm now multi-tasking, if that's what you call throwing up while your head's also exploding. Knowledge is messy.

Greenberg's initials prove he knew

There's a moment among a roster full where the central theme of Alex Gibney's is thrown with such in your face gusto it becomes hallucinatory, because it involves no less than mister AIG himself, Hank Greenberg, concocting fraud. Greenberg -- widely regarded then as the most powerful corporate king -- had even initialed (more than once) a handwritten deal memo for the $500 million con. In the end, the Gen Re officers that Greenberg had roped into the scheme were found or copped pleas. Greenberg's fate, however, is perhaps best summed up in a snippet from an interview he gave to Charlie Rose in the aftermath of EM08 when Rose asked him about the value of his stock. Greenberg says that it's worthless, Rose presses for a figure, and Greenberg with a straight face and a shrug says, "a hundred million."

And what is "Gen Re"? Why, it's a re-insurance company, which is just a smoke and mirrors way of calling a casino a legit business, in the same way that insurance is in reality gambling. All reinsurance casinos do is invest in some of the bets that another insurance company made. Just as a CDS (credit default swap) is to a CDO (collateralized debt obligation). And who owns Gen Re? Warren Buffett via Berkshire Hathaway.

I've said it before; Two years plus after the largest heist in history, with forces very much still in play (foreclosuregate, pension fund crises, fed, state & muni debt loads, millions in unemployment, over 43 million on food stamps, record number of bank closings...) with implications for the future that are unprecedented (just on debt loads alone) and despite massive evidence of fraud, conflicts of interest, payola... there hasn't been talk of one prosecution for those who were the architects and overseers.

But evidently there's time, money and manpower to go after a governor getting laid.

Cuts for Cooky: Esperanza Spalding

2011-02-14T18:24:00.000-08:00

Every once in a while I come across a young artist that really brings it. Just today I was checking out Olly Moss' graphic art and plan on hittin' it with a piece, he's that good, as in a Saul Bass heir. This piece, however, is about a musician.

Esperanza is so self-possessed it's a marvel. Jesus I've been in college and wondered how in the hell those kids even got in. Home-schooled, vibrant, articulate, smart as a whip, she's a triple + threat; bass, voice and pen. And at age 28 or so, along with Christian Scott, is one of the youngins devoting herself to jazz! For all of the ragging I do on kids these days, Esperanza -- as befits her name -- gives us old farts hope.

There's tons of her performance stuff out, but I'm posting these interviews because I think it's important for Renee to hear Esperanza talk about her life.

Amy Winehouse, "I Wake Up Alone"

2011-02-13T01:26:00.000-08:00

Cuts for Cooky: The Pierces, "Boring"

2011-02-12T10:36:00.000-08:00

Wireless Welfare: Add AT&T and Verizon to Deadbeat Welfarists

2011-02-10T20:27:00.000-08:00

The more I thought about America the welfare state, other examples of course popped up like Wack-a-Moles. Education was the most obvious one. Art was another, such as the NEA. But where I step off the bus of the hardliners, I'm all for the NEA as long as puke industries like banking and healthcare are welfare industries.

Anyway, here's the WaPo's Cecelia Kang riffing on yet more welfarists. Cell companies! AT&T are total shitheads, but I would have to come across this at a time when I was just about to pull the trigger on an iPhone with Verizon.

AT&T, Verizon get most federal aid for phone service

AT&T and Verizon Communications were the biggest recipients of federal support from an $8 billion phone subsidy program, according todata released Thursday by the House Energy and Commerce Committee.

Over the past three years, AT&T received $1.3 billion in funds to deploy phone lines to rural areas. Verizon got $1.27 billion in the same 2007-09 period.

Lawmakers and public interest groups are questioning the use of those federal funds, much of which appears to go to wireless services areas where telecom companies would be even without support. And they say the fund needs to be overhauled to focus on expanding broadband connections.

“Subscribers now pay close to 14 percent of their long-distance phone bills to subsidize scores of telephone providers in each geographic market, while other providers are serving the same markets without a penny of support,” Rep. Joe Barton (R-Tex.) said in a statement.

The committee's ranking member said the Federal Communications Commission, which oversees the fund and supplied the committee with the data, should be focused on reforming the fund instead of pushing to assert more authority over broadband by redefining Internet access as a telecommunications service.

“It is inexcusable that the FCC chairman is trying to reclassify broadband service under the pretext that the commission lacks authority to implement aspects of the national broadband plan, when he should instead be focusing on bipartisan aspects of the plan that he clearly has authority to move on, such as reducing antiquated voice service subsidies,” Barton said.

Last year, Verizon tapped the most money from the Universal Service high cost fund, mostly because of its acquisition of Alltel.

CenturyTel received $931 million, Alltel received $747 million, andTelephone and Data Systems received $661 million from 2007 through 2009.

Derek Turner, director of policy at the public interest group Free Press, noted that many of those company – including AT&T and Verizon – appeared to use the money for wireless networks. Those companies would have served areas where they received federal subsidies even without the government support, he said.

“The USF process at the FCC doesn’t ask if money is actually needed to ensure access to those areas,” Turner said. “Some areas have as many as19 carriers serving it with USF funds. That is scarce money that could be used for broadband.”

And some projects appear too expensive for the number of people served. Westgate Communications in Washington state, for example, runs 17 separate phone lines at a cost averaging $17,000 per line.

By Cecilia Kang | July 8, 2010; 5:31 PM ET

Welfare Gone Wild

2011-02-10T01:29:00.000-08:00

Language is important, but because of its utilitarian usage has a "dulling effect" and makes people sitting ducks for all sorts of monkey biz. The father of public relations, Edward Bernays, understood this and capped a very successful career working with some of the largest corporations. Beyond Karl Rove is Frank Luntz who whipped the Republicans into marketing shape; thus, "estate taxes" became "death taxes." And in one of the most famous verbal hits ever, George Bush I fired "the dreaded 'L word'" at liberals and buried it next to Hoffa's bones.

So, language, words, are very important, and here's where I'm going; the largest heist in history was not a "bailout," much less "TARP," it was WELFARE. The most criminal and vile kind of welfare; staring down a double barrel sky is falling harangue from the right, left and most in-between. And that time-worn tactic, fear, was the sword of Damocles.

But in spite of the right's classic demonization of brown people crossing our borders in order to have kids and prey on us via welfare, not one on the left calls this fiasco, this absurdity of absurdities for what it is; Welfare Gone Wild.

And talk about some BIG assed welfare mothers; look at Israel, which has been on the dole for half a century. Cash, guns, ammo, tanks, bombs, intelligence... like clockwork, year after year going to foreigners, even in the face of Americans left holding the bag as with Katrina and now EM08.

Want more? Here's a list of the biggest and baddest welfare deadbeats in history; Let's call these the "Welfies", The Welfare Awards for the biggest deadbeats and beggars in history whose white collars make brown mothers on assistance seem like Pop Warner to the NFL:

Too Big to Fail banksters, headed by BoA, JPMC, Citi, Wells, Morgan Stanley, and the ever-present when there's a con going down, Goldman. Need I go on?
Insurance: AIG was one of the single largest recipients of direct welfare money payouts, some $70 billion of your money that barely left Tim Geithner's quivering, hush hush urgings and found its home lining the pockets of, yep, you got it right, Goldman, making them whole on their bets (Credit Default Swaps).
While we're talking about insurance, we might as well talk about the way healthcare is welfare. Think about it, what is Medicare but welfare, like clockwork, siphoning taxpayer money to corporations? It's but one reason why healthcare in this country will never be socialized; it's controlled by not one or two industries, but three; big pharma, hmos and insurance. Any one of which has ultra-deep pockets and is so far up the ass of congress via their lobbyists everyday people have zero chance in this fight. Put three huge industrials together with common interests and it's bon voyage to hope for everyday people, hello to grabbing your ankles and the grimace of reality, whether you know this or not, because eventually, by odds, everyone gets sick.
Agri-biz. Like clockwork, year after year, huge welfare payouts go out to pukes like Archer Daniels Midland and Con Agra for things like corn that they then flood the market with. Notice, childhood obesity and diabetes have been steadily increasing over the past 20-30 years and of course American adults are hogs without governors on their mouths. Agri-biz is perhaps the most pernicious and ironic form of welfare; pernicious because of the health ramifications, ironic because with the in-our-faces approach to cheap carbs in this country -- cereals to soda -- you'd think we'd wise up. Unfortunately, not even Dick Cheney having sausage links in his veins will wake us up.
Big auto. Not much more to say here save for Chrysler is one of the worst welfare mothers, with the recent welfare it received being the second time it has come begging for money. The first was under the revered Lee Iacocca.
Defense - If there's an overall Welfie winner, it's defense. By far the largest portion of our budget, it's 100% welfare, and one of the oldest, battle-tested methods of welfare transference from everyday people to the elite (pun intended). The corporations with defense contracts -- the Lockheeds, Boeings, Martin Marriettas of this privileged world -- are just the most obvious first line of welfare deadbeats, because the money is re-distributed via the equities market. Thus, the econ elite with the wherewithal (large capital investments + inside info + inside connections) enrich themselves as a result of the welfare state. Dis-Honorable mention and a special Welfie goes to Dick Cheney's Halliburton whose no-bid contracts as a result of the Iraq invasion set a new high in low for welfare leeching cronyism.
Government employees. Take the heads of the three branches of government, and they all receive welfare healthcare - for life. Which raises the question; if a socialist healthcare system is so evil, then why don't our politicians who receive it deny it? Why don't they work to rescind it? why don't they do as Nancy asked inner city kids, and just say no...? Enlarge the iris a bit and every government employee's pension -- including their healthcare -- is welfare.

A fundamental problem in America is that we lie to ourselves. Columbus was not a great explorer and people of equal talent to Einstein had to have toiled anonymously in cotton fields and sweat shops (hat tip to the late great Stephen Jay Gould). The truth of the matter is that America has no such thing as the "free market" and is not a capitalist system of economics, it is at best a perversion of ... of what I don't know, but in the same way and taking a cue from Wolfgang Schivelbusch, that under Stalin there was no such thing as Communism but tyranny flying under the guise.

The raw truth; America has been a welfare state for quite some time. In fact, the more I think about that and until I wrote the above list, I never realized just how deeply rooted in welfare we are. We're junkie status.

Now if we can just be honest with ourselves about it.