More On Stupid Competition Amongst States

Richard Longworth (h/t the Dish):

This competition is not new, but it seems to have heated up since 2009, when Kansas passed a law that lets companies relocating to the state keep 95 percent of their employee withholding tax for up to 10 years. This has lured several companies to move from Kansas City, Missouri, to Kansas City, Kansas (known locally as KCK) and its suburbs, bringing several hundred jobs with them. Stung by the moves, the Missouri KC has offered multi-million-dollar packages to keep firms, like the National Association of Insurance Commissioners and AMC Entertainment, from decamping to the Kansas side.
Top Corporate Leaders Urge Governors to Stop Poaching Neighbors’ Businesses, Kansas City Star, April 11, 2011
Businesses Stand to Gain Most in Rivalry of States, New York Times, April 7, 2011
Kansas and Missouri aren't the only Midwestern states raiding each other's watermelon patches. The governors of Wisconsin, Illinois and Indiana, which would seem to share a common economy, have been squabbling over which state has the lowest taxes, to the point that Indiana and Wisconsin have posted billboards on their state lines urging Illinois companies to flee north or east, as the case may be (presumably passing en route all those Democratic legislators from Indiana and Wisconsin who hid out in Illinois to avoid having to vote for objectionable legislation back home.)
In Kansas and Missouri, all this has reached the point that even businesses in the two KCs, which presumably could benefit from these bribes, have told their two states to grow up. Seventeen leading businessmen from both sides of the border sent an open letter to Kansas Gov. Sam Brownback and Missouri Gov. Jay Nixon, urging them to voluntarily "agree to a bilateral halt" in this "economic border war."
Nixon responded positively. Brownback basically told the businessmen to go jump in the Missouri River. This probably has something to do with the fact that, so far, Kansas has been winning most of these battles. 

Republicans have staked their political future on being able to prove that lower taxes mean more jobs, so they have to go around slashing taxes and spending, and then bribing businesses to move to their state, preferably from a higher tax state.  Unfortunately, this means cuts to primary, secondary and higher education, cuts to local governments and public safety, cuts to libraries and cuts to infrastructure spending.  Those are all long-term investments to improve the work force and the livability of the state which are being cut.  The short-term payoff of new jobs (taken from a neighboring state) might get a politician reelected or allow him to move to higher office (failing up, as it were), but come time those incentives expire, the business will start shopping for more incentives, possibly in a state which is willing to undermine long-term investment for short-term job growth (see Sears).  This is a failing strategy for all but the companies, and even they are undermining the long-term workforce quality where they move to.  When businesses are requesting that it stop, you know it has gone too far. 

Who Owns U.S. Debt?

Robert Reich says rich Americans (via Mark Thoma):

Forty years ago, wealthy Americans financed the U.S. government mainly through their tax payments. Today wealthy Americans finance the government mainly by lending it money. While foreigners own most of our national debt, over 40 percent is owned by Americans – mostly the very wealthy.

This great switch by the super rich – from paying the government taxes to lending the government money — has gone almost unnoticed. But it’s critical for understanding the budget predicament we’re now in. And for getting out of it.  

Over that four decades, tax rates on the very rich have plummeted. Between the end of World War II and 1980, the top tax bracket remained over 70 percent — and even after deductions and credits was well over 50 percent. Now it’s 36 percent. As recently as the late 1980s, the capital gains rate was 35 percent. Now it’s 15 percent.

Not only are rates lower now, but loopholes are bigger. 18,000 households earning more than a half-million dollars last year paid no income taxes at all. In recent years, according to the IRS, the richest 400 Americans have paid only 18 percent of their total incomes in federal income taxes. Billionaire hedge-fund and private-equity managers are allowed to treat much of their incomes as capital gains (again, at 15 percent).

He doesn't have any solid numbers here as to what the wealthiest own, because I'm sure a lot of that debt is held by mutual funds and pension funds.  I would guess most wealthy Americans have fairly small holdings in Treasuries as a percentage of their portfolios.  Regardless, he gets the chance to repeat a lot of numbers which can use repeating. In the meantime, Paul Krugman points out that Paul Ryan is again calling for lower taxes on the wealthy to create growth.  I still want Paul Ryan to explain where all the growth is from the Bush tax cuts.  The fact of the matter is that the wars in Iraq, the Bush tax cuts and the Great Recession are most responsible for the deficits we are currently running.  Throw in Medicare Part D, and you have the Republicans as primarily responsible for the mess we are in.  CBPP points that out again.

Naked Capitalism Link of the Day

Today's link: The Secret Sharer, at the New Yorker.  The article describes the case brought under the Espionage Act of 1917 against Thomas Drake, an NSA employee who became a whistleblower against the agency's surveillance of U.S. citizens:

Few people have a precise knowledge of the size or scope of the N.S.A.’s domestic-surveillance powers. An agency spokesman declined to comment on how the agency “performs its mission,” but said that its activities are constitutional and subject to “comprehensive and rigorous” oversight. But Susan Landau, a former engineer at Sun Microsystems, and the author of a new book, “Surveillance or Security?,” notes that, in 2003, the government placed equipment capable of copying electronic communications at locations across America. These installations were made, she says, at “switching offices” that not only connect foreign and domestic communications but also handle purely domestic traffic. As a result, she surmises, the U.S. now has the capability to monitor domestic traffic on a huge scale. “Why was it done this way?” she asks. “One can come up with all sorts of nefarious reasons, but one doesn’t want to think that way about our government.”

Binney, for his part, believes that the agency now stores copies of all e-mails transmitted in America, in case the government wants to retrieve the details later. In the past few years, the N.S.A. has built enormous electronic-storage facilities in Texas and Utah. Binney says that an N.S.A. e-mail database can be searched with “dictionary selection,” in the manner of Google. After 9/11, he says, “General Hayden reassured everyone that the N.S.A. didn’t put out dragnets, and that was true. It had no need—it was getting every fish in the sea.”
Binney considers himself a conservative, and, as an opponent of big government, he worries that the N.S.A.’s data-mining program is so extensive that it could help “create an Orwellian state.” Whereas wiretap surveillance requires trained human operators, data mining is automated, meaning that the entire country can be watched. Conceivably, U.S. officials could “monitor the Tea Party, or reporters, whatever group or organization you want to target,” he says. “It’s exactly what the Founding Fathers never wanted.”
On October 31, 2001, soon after Binney concluded that the N.S.A. was headed in an unethical direction, he retired. He had served for thirty-six years. His wife worked there, too. Wiebe, the analyst, and Ed Loomis, a computer scientist at SARC, also left. Binney said of his decision, “I couldn’t be an accessory to subverting the Constitution.”

The article stresses how badly the Bush administration violated the Constitution, then desperately tried to track down the whistleblowers who leaked their criminal activity.  It further indemnifies Obama for hypocritically prosecuting Drake, after claiming to oppose the NSA eavesdropping and claiming to support the rights of whistleblowers.  The executive branch has claimed way too much authority, and abuses of that power comes from whoever is in the White House.  The whole article is well worth reading, it is absolutely chilling.  Michael Hayden comes off especially poorly, as a corrupt hack who was too busy trying to get private contractors rich to figure out how to do things lawfully, or well.

How the Very Rich Are Different

Chuck Marr compares how Republicans treat the very wealthy compared to average Americans (via Mark Thoma):

Congressional Republican leaders are trying to put a new twist on how the very rich are different.  By seeking to reduce long-term deficits entirely through huge budget cuts that fall disproportionately on low-income programs — rather than a balanced package of budget cuts and tax increases — they are effectively arguing that wealthy Americans shouldn’t have to sit with other Americans at the table where sacrifices will be made.
As the chart shows, the top 400 have enjoyed the best of both worlds over the past couple of decades:  dramatically higher incomes and much lower taxes.  Between 1992 and 2008 (the period the IRS data cover), the average share of their incomes that these households paid in federal taxes dropped from 26 percent to 18 percent, while their annual incomes shot up by over 700 percent, after inflation.  And still, Republican leaders insist that wealthy Americans shouldn’t pay a penny more in taxes.

He goes on to highlight planned Republican cuts to Medicaid, Medicare and Pell Grants, and how those will affect Americans who are definitely not very wealthy.  It amazes me that Republicans claim all Americans should share in the sacrifice, but don't ask the best-off Americans to give anything more up.  It is truly bizarre.  Never in the past 60 years have the wealthiest Americans paid less in tax, yet Republicans won't acknowledge that this fact is one of the main reasons we are in such dire financial straits.  And yet when the time comes for sacrifice, people who have benefitted so much as tax rates came down, aren't asked to pay rates closer to what they used to.  Unbelievable.

Sears Looks at Moving When Tax Incentives Expire

This makes me rethink my appreciation of Craftsman tools:

 Sears Holdings Corp (SHLD.O) is looking at whether to move its corporate headquarters after the state and local incentives that brought it to Hoffman Estates, Illinois, a northwest Chicago suburb, expire in 2012. The company, which says it is in the early stages of the process, has had some preliminary discussions with the village of Hoffman Estates, a Chicago suburb northwest of the city, and commissioned a study to assess the economic impact of its departure on the village and the state, spokesman Chris Brathwaite told Reuters.
"We owe it to our associates and shareholders to consider options and alternatives and intend to be very thoughtful and thorough in our deliberations," he said.
In the wake of a huge income tax increase enacted by Illinois in January to address a budget deficit that was heading toward $15 billion, states like New Jersey and Wisconsin launched plans to sway Illinois-based businesses to relocate.
And while Illinois continues to struggle with unpaid bills, it granted a tax break worth about $100 million over 10 years to Motorola Mobility Inc (MMI.N) last week to ensure that the company remains in the state.
Sears is struggling and trying to shake things up with a new chief executive officer, Lou D'Ambrosio.
Its sales have fallen every year since it was formed by the 2005 merger of Sears and Kmart, but the first quarter results it reported last week were its worst sales showing since the merger.

State and local governments are engaged in a downward spiral when it comes to competition for business relocations.  This looks to me like Sears taking advantage of Illinois and Hoffman Estates in order to get some new incentives.  If the headquarters is moved to Wisconsin or New Jersey or some other state run by an asshole Republican governor, I don't think I'll be buying anything from Sears.  I think their only real options in leaving Illinois would be to sneak over the border to Wisconsin or Indiana to avoid the state income tax increase, as there are too many workers who would have to relocate to go to Texas or New Jersey.  This looks to me to be out of the Bob Evans playbook, where they discussed moving to Texas prior to getting a sweetheart deal to move from Columbus to New Albany.  This is a game which only benefits corporations while screwing all taxpayers.  It needs to end.

Ring of Thieves

What do you get when the New York Yankees, the Dallas Cowboys and Goldman Sachs work together?  You get screwed, that's what:

In the more desirable seats at Yankee Stadium, an already pricey $10.50 draft beer will run you an eye-popping $12.60 thanks to an involuntary 20 percent "service fee" tacked on to the original price. If the sticker shock doesn’t make that brew bitter enough, consider this: Despite what you might expect, that extra $2 and change isn't going to the hustling server who sold it to you, according to a new lawsuit.
Legends Hospitality, the concessionaire co-owned by the New York Yankees, the Dallas Cowboys, and Goldman Sachs, allegedly pockets the 20 percent service fee attached to food and drink in violation of New York law, according to a class-action lawsuit filed against the company by three Yankee Stadium servers this week. If certified as class action, the suit could involve more than a hundred servers and hundreds of thousands of dollars in claims.
At the center of the dispute is how hot dogs, sodas and other ballpark fare are served in the stadium's field-level seats, which typically cost between $100 and $350 a game. At field level, fans don't have to fetch their food and drink; they instead can place orders with servers carrying credit-card machines and get the orders ferried to their seats by food-and-drink runners.
Under this arrangement, the servers act a lot like salespeople. "They schmooze the customers, and they're trained to upsell, just like any other waitress," says the plaintiffs' lawyer, Brian Schaffer. "If somebody says, 'I want a hot dog,' they say, 'But wouldn’t you like a cold beer with that?'"
According to the suit, the menus field-level spectators find in their cupholders include this disclaimer: "A 20% service charge will be added to the listed prices. Additional gratuity is at your discretion." That phrase "additional gratuity" would seem to imply that the 20 percent is, in fact, a gratuity, but Schaffer says his clients don’t get that money. Instead, they receive a far more modest commission, between four and six percent, of their total sales for the game.

Stay classy, assholes.  It is way too appropriate that these three entities are working together in this deal.  All of them are pretentious jerkass operations used to making money hand over fist, and yet they can't get enough.  Not that I can feel too bad for the people in the expensive seats, but jeez, why jack it up 20% more?

Update: I think these three make up the sports and finance Axis of Evil.

The Wire, in Real Life

Brendan Kiley covers a two-year sting operation on the attendees of an afterhours party spot by the Seattle Police and FBI( h/t The Dish):

Around 8:40 a.m. on March 30, 2011, four years after the investigation began, four men show up at the King County Courthouse to face charges for violating RCW 9.46.220, the state law regulating "professional gambling in the first degree." A few reporters are taking notes and tweeting the proceedings. They are here to see the "speakeasy defendants" who've been all over the local papers and blogs, guys arrested for throwing parties where people drank after-hours and played cards. In the past 10 years, according to the prosecutor's office, King County has pressed charges against only one other person for violating RCW 9.46.220. It's a law that the government doesn't seem to care that much about. After all, from Seattle you can drive 20 miles south to Tukwila or 10 miles north to the Drift On Inn Roadhouse Casino on Aurora Avenue and gamble legally.
But these four men (all of them, I later learn, poor—if they really were "professional gamblers," they were lousy at it) are being prosecuted for the crime of playing poker somewhere between Tukwila and Shoreline with the wrong guy, an undercover cop.
The defendants are quiet, well dressed, and bewildered by the charges. One of them told me that the poker stakes were so low, he would lose or win $100 at most in the course of a night. ("All those guys were broke, broke as a joke," Mia Brown agrees. "They'd borrow five dollars from someone to go put on the card table. It was small and it was stupid.")
The defense lawyers will be bewildered by what they find in the discovery process—all the paperwork and evidence and audio and video surveillance accumulated by the two-year investigation that involved the FBI, SPD, SWAT teams, and federal firearms and immigration and customs agents. One defendant's discovery request turned up nearly 2,000 pages of documentation and over 100 CDs and DVDs, and even that defendant's attorney had to file extra requests because he said there were big gaps of time missing.
Why did law enforcement dedicate such massive resources to bust some penny-ante card players for charges that only one person has faced in the past 10 years?
One of the defendants, Brady McGarry, had a simple explanation: "If you spend that much time and money, you have to put somebody up on that cross."

This investigation shows how much more thoughtful and professional fictional detectives on The Wire were in comparison to actual police.  It is amazing that a police officer would spend so much time getting to know so many people who were so insignificant.  Too bad actual police won't spend so much time busting crooks on Wall Street or big money guys who use campaign contributions to get policy changes which make them tons of money.

Selling Out

AP:

As 2010 drew to a close, the mayor of Newark, N.J., was staring into a budget abyss so deep that he sold 16 city buildings to pay the bills. They included the architecturally significant Newark Symphony Hall and the police and fire headquarters. In New York, the transit authority may sell its Madison Avenue headquarters, complete with an underground tunnel connected to Grand Central Terminal and air rights to build a skyscraper on top.
And soon, if state legislators have their way, private investors will be able to buy plenty of other municipal treasures: power plants in Wisconsin, prisons in Louisiana and Ohio and municipal buildings in Boston.
The Great Government Tag Sale is on. As states and cities struggle with billions of dollars in shortfalls, elected officials are increasingly selling public assets to cover their costs. Sometimes municipalities sell the buildings to pocket a one-time pile of cash and then lease them back so they can continue to use them.

This is pathetic.  We are going to get screwed by private investors who buy these properties, because too many people just hate government.  Taxes on the state and federal level keep getting slashed to help out the people who don't need help, while everybody else has to pay more.  This will not end well.

Naked Capitalism Link of the Day

From Friday: The People vs. Goldman Sachs, by Matt Taibbi:

They weren't murderers or anything; they had merely stolen more money than most people can rationally conceive of, from their own customers, in a few blinks of an eye. But then they went one step further. They came to Washington, took an oath before Congress, and lied about it.
Thanks to an extraordinary investigative effort by a Senate subcommittee that unilaterally decided to take up the burden the criminal justice system has repeatedly refused to shoulder, we now know exactly what Goldman Sachs executives like Lloyd Blankfein and Daniel Sparks lied about. We know exactly how they and other top Goldman executives, including David Viniar and Thomas Montag, defrauded their clients. America has been waiting for a case to bring against Wall Street. Here it is, and the evidence has been gift-wrapped and left at the doorstep of federal prosecutors, evidence that doesn't leave much doubt: Goldman Sachs should stand trial.

It is a very interesting read, although Taibbi is known to go to some extremes (even though I agree with him, some people think the vampire squid is an overstatement).  It is clear that Goldman knew they were selling shit to their clients, and yet they sold them anyway.  Somebody should go to jail.

Naked Capitalism Link of the Day

Today's link: Brokerage rip-off datapoint of the day, by Felix Salmon:

A lot of people have signed up for Wikinvest and handed over access to their brokerage accounts. I spoke briefly to SigFig founder Parker Conrad, who explained that it’s incredibly easy to flick through those accounts and come up with examples like the one he pulled up, of a man with $2.3 million in his Merrill Lynch account.
This guy probably knows that he’s paying his Merrill broker an annual management fee of 1.75%, which alone is more than $40,000 a year. But he doesn’t know that other Merrill clients in his position are paying far less — that Merrill brokers basically charge as much as they can, and the average Merrill client on Wikinvest pays less than half that, just 85 basis points.
And there are other things this guy doesn’t know, as well, because they’re buried in his statements — things like the fact that Merrill charged him $5,763 to make 24 trades last year, over and above that $40,000 management fee. That’s about $240 per trade.
Other fees are even higher. The Merrill broker bought something called the Fidelity Advisor International Capital Appreciation Fund, which charges 1.45% per year on top of a 5.75% fee payable when you buy the thing in the first place. The fund is substantially identical to the Fidelity International Capital Appreciation Fund, which has a 1% management fee and no front-loading at all. Why would any advisor with his client’s best interests at heart put that client into FCPAX rather than FIVFX? He wouldn’t — FCPAX is simply a vehicle invented by Fidelity for advisors which allows them to skim off hefty commissions.

Wall Street is full of crooks.  They should be taxed much more than they are.  They are ridiculously paid thieves and contribute nothing of value to society.

Torture Doesn't Work in Gathering Intelligence

Who should one believe, Dick Cheney or people who actually interrogate people?  Barry Ritholtz:

Virtually all of the top interrogation experts – both conservatives and liberals (except for those trying to escape war crimes prosecution) – say that torture doesn’t work:
• Army Field Manual 34-52 Chapter 1 says:

“Experience indicates that the use of force is not necessary to gain the cooperation of sources for interrogation. Therefore, the use of force is a poor technique, as it yields unreliable results, may damage subsequent collection efforts, and can induce the source to say whatever he thinks the interrogator wants to hear.”

• The C.I.A.’s 1963 interrogation manual stated:

Intense pain is quite likely to produce false confessions, concocted as a means of escaping from distress. A time-consuming delay results, while investigation is conducted and the admissions are proven untrue. During this respite the interrogatee can pull himself together. He may even use the time to think up new, more complex ‘admissions’ that take still longer to disprove.

I think it is a sign of how far the Republican party has sunk that we are even discussing this subject.

Making Money in Microseconds

Via Ritholtz, Donald McKenzie looks at computerized trading and high frequency trading algorithms:

Little of this has to do directly with human action. None of us can react to an event in a millisecond: the fastest we can achieve is around 140 milliseconds, and that’s only for the simplest stimulus, a sudden sound. The periodicities and spasms found by Hasbrouck and Saar are the traces of an epochal shift. As recently as 20 years ago, the heart of most financial markets was a trading floor on which human beings did deals with each other face to face. The ‘open outcry’ trading pits at the Chicago Mercantile Exchange, for example, were often a mêlée of hundreds of sweating, shouting, gesticulating bodies. Now, the heart of many markets (at least in standard products such as shares) is an air-conditioned warehouse full of computers supervised by only a handful of maintenance staff.
The deals that used to be struck on trading floors now take place via ‘matching engines’, computer systems that process buy and sell orders and execute a trade if they find a buy order and a sell order that match. The matching engines of the New York Stock Exchange, for example, aren’t in the exchange’s century-old Broad Street headquarters with its Corinthian columns and sculptures, but in a giant new 400,000-square-foot plain-brick data centre in Mahwah, New Jersey, 30 miles from downtown Manhattan. Nobody minds you taking photos of the Broad Street building’s striking neoclassical façade, but try photographing the Mahwah data centre and you’ll find the police quickly taking an interest: it’s classed as part of the critical infrastructure of the United States.
Human beings can, and still do, send orders from their computers to the matching engines, but this accounts for less than half of all US share trading. The remainder is algorithmic: it results from share-trading computer programs. Some of these programs are used by big institutions such as mutual funds, pension funds and insurance companies, or by brokers acting on their behalf. The drawback of being big is that when you try to buy or sell a large block of shares, the order typically can’t be executed straightaway (if it’s a large order to buy, for example, it will usually exceed the number of sell orders in the matching engine that are close to the current market price), and if traders spot a large order that has been only partly executed they will change their own orders and their price quotes in order to exploit the knowledge. The result is what market participants call ‘slippage’: prices rise as you try to buy, and fall as you try to sell.

It is legalized looting to allow market makers to take advantage of the data to take little amounts of money on vast numbers of shares, but try getting that practice banned.  It seems detrimental to this country that our brightest minds are being used to come up with trading algorithms to shave tiny amounts of money from retail traders and pension funds and deposit that in investment banker bonuses.

Bush-era War Criminals Continue Claiming Torture Located Bin Laden

Barry Ritholtz takes the offensive against the torture works meme.  He highlights Dan Froomkin making the case that torture slowed down the investigation:

Indeed, as Dan Froomkin notes in a little-noticed essay, torture actually delayed by years more effective intelligence-gathering methods which would have resulted in finding Bin Laden:

Defenders of the Bush administration’s interrogation policies have claimed vindication from reports that bin Laden was tracked down in small part due to information received from brutalized detainees some six to eight years ago.
But that sequence of events — even if true — doesn’t demonstrate the effectiveness of torture, these experts say. Rather, it indicates bin Laden could have been caught much earlier had those detainees been interrogated properly.
“I think that without a doubt, torture and enhanced interrogation techniques slowed down the hunt for bin Laden,” said an Air Force interrogator who goes by the pseudonym Matthew Alexander and located Abu Musab al-Zarqawi, the leader of al Qaeda in Iraq, in 2006.
It now appears likely that several detainees had information about a key al Qaeda courier — information that might have led authorities directly to bin Laden years ago. But subjected to physical and psychological brutality, “they gave us the bare minimum amount of information they could get away with to get the pain to stop, or to mislead us,” Alexander told The Huffington Post.
“We know that they didn’t give us everything, because they didn’t provide the real name, or the location, or somebody else who would know that information,” he said.
In a 2006 study by the National Defense Intelligence College, trained interrogators found that traditional, rapport-based interviewing approaches are extremely effective with even the most hardened detainees, whereas coercion consistently builds resistance and resentment.

I would think that an examination of human nature would tell you that would be the case.  When your enemies resort to torture, they are proving your belief in their inherent evil.  It becomes heroic in your mind to resist them as much as possible.  Because you are suffering physical pain, you have to tell them things, so you make stuff up.  They can't know what is true and what isn't, so they have to try to confirm these stories, leaving you with time to embellish more, and come up with reasons for why they couldn't confirm what you'd told them. 

Whereas, treating the detainees with respect, trying to build trust, undermines the detainee's belief in his enemy's inherent evil.  It is likely that long exposure to the "enemy" will humanize him and convince the detainee that he and the interrogator aren't as far apart as previously believed.

The fallacy of the "ticking time-bomb" scenario which torture proponents use to soften opposition to torture is that if a detainee has information of an "imminent" attack, you need to know the anticipated timing of the attack, which you likely don't, and the detainee must be forced to give up the information quickly.  He actually knows how long he must resist torture to allow the attack to go off, and he knows the factual information about the attack, which you don't.  He can send your manpower off on wild-goose chases in a situation in which time is of the essence.  In other words, the situation in which torture advocates try to prove the necessity of torture is actually the least-likely time in which torture would ever work.  The person being tortured holds all the cards, and in his mind is engaged in a noble struggle against evil opponents.  The torturer is making it less likely that he will get his information.  So far, I have not seen any evidence that utilizing tactics used by tyrants throughout history to get forced confessions from political opponents has ever produced usable intelligence anywhere outside of the obviously fantasy world of 24, where one man is able to stop years of planning in a single day.  Dick Cheney and his henchmen should be tried for their crimes.

Update:  Andrew Sullivan discusses Cheney's campaign:

So in order to defend torture, Cheney has to say that it's a success when the tortured tell lies. Heads he wins, tails we lose. Moreover, in the last two years or so, torture has been forbidden - although its legacy remains with war criminals protected by the US government, in violation of Geneva - and it was after those two years of a return to decency that bin Laden was found and killed. As for the Bush administration's over-arching goal - democratization of the Middle East - it was only under Obama that we got the Green Revolution in Iran, the successful revolutions in Egypt and Tunisia, and the power-struggles now happening in Syria and Libya. When these Bush administration fanatics are presented with clear evidence that Obama has been far more successful against terror and its causes than they ever were, they return to their precious, their torture program, and claim ludicrously that, without it, bin Laden would not have been captured. Rumsfeld joined in the chorus of mass distraction this weekend on the same basis. All this really tells you is that these people realize that if their torture regime is definitively found to have been counter-productive in their lifetimes, if bin Laden was caught two years after the torture program was ended and with no evidence it helped, then their barbaric policy will be exposed once again as unnecessary, un-American, unproductive, and a violation of core human values.
Cheney calls investigations into war crimes that went beyond the authorized torture techniques "an outrage." Well, he would, wouldn't he? He knows where the war crimes trail ends up - in his office. And he knows where he should be if we were governed by the rule of law: in jail. The real outrage is that he is still walking free - and doing all he can to entrench torture in the American way of war.

I've got to agree.  Cheney is the worst of the worst, and a giant coward.

Ohio State Investigates Car Sales

And the walls came tumbling down.  I'm definitely not going to lose any sleep if Tressel is sent packing.  OSU fans are remarkably quiet right now.  I remember a friend who was the editor of The Lantern, when talking about Lorenzo Styles, saying, "Lorenzo, Styling in his Benzo," back in the Cooper era. 

ESPN:

Ohio State's director of compliance is reviewing at least 50 car sales to Buckeyes athletes and relatives to see if they met NCAA rules, The Columbus Dispatch reported Saturday.... The Dispatch reported that a car salesman who received game passes from Ohio State athletes handled many of the deals at two different dealerships. Ohio State has since taken the salesman, Aaron Kniffin, off the pass list.
Athletes are prevented from receiving special deals not available to other students. They are not permitted to trade autographs for discounts. Both dealerships display signed Ohio State memorabilia in their showrooms.
One car, a 2-year-old Chrysler 300 with fewer than 20,000 miles, was titled to then-sophomore defensive player Thaddeus Gibson in 2009. Documents show the purchase price as $0. Gibson said he did not know why the title showed a zero for the purchase price and said he was still paying for the car.
State law requires dealers to report accurate information about all car sales for tax purposes.
School officials have seen no evidence of players getting special treatment in vehicle sales, Douglas Archie, associate athletic director for compliance, said in a statement Saturday.
"Consistent with our standard procedures, we are nevertheless reviewing these sales to assure ourselves that our policies were adhered to," he said.
Pryor's mother and brother also purchased cars from the dealerships. Kniffin loaned his own car to Pryor for a three-day test drive to Pryor's home in Jeannette, Pa.
Kniffin and the owner of one of the dealerships he worked for, Jason Goss, have attended seven football games as guests of players, including the 2007 national championship game and the 2009 Fiesta Bowl.

Also:

A graphics-based T-shirt produced by a Tampa, Fla., company is among other recent efforts at Ohio State's expense, according to The Blade.
The shirt by Smack Apparel, "Tressel's Tattoo and Pawn -- Turning a Blind Eye Since 2001," is a hot sell in Ann Arbor and other big college football towns, the report said.
"We knew that Michigan fans would eat it up, and they have," said Wayne Curtiss, Smack Apparel's owner.
Another T-shirt company has twisted the Big Ten's new division names, with the front displaying "Legends" along with a pair of Joe Paterno-style, heavy-framed eye glasses.
But the back of the shirt carries a similar punchline as the Michigan billboard. It's imprinted with "Liars" instead of "Leaders" and carries an image of Tressel's familiar sweater vest.
"People see it as something that's fun and something that's funny," Curtiss said, according to The Blade. "We just take a situation that has fans talking, and then try to have some fun with it. We hope people can laugh and take it the right way."

Irish Economy Struggling With Austerity

NYT:

Benefiting from years of low interest rates that followed the creation of the euro zone in 1999, Ireland enjoyed one of the biggest growth spurts of any country in Europe, and spent lavishly as its wealth increased. The economy expanded an average of 7 percent in the decade leading up to 2007 before plunging into a deep recession. Per person, inflation-adjusted economic activity has fallen approximately 18 percent from the peak, when the average gross domestic product per person was a shade over 43,000 euros ($62,000). Now it is less than 35,000 euros ($50, 767).
As the country tries to recover from the bust, many of its people are paying a tremendous cost for the folly of the country’s banks and to bring its government finances back in order.
As part of Ireland’s effort to pay down its immense debts and bail out the banks, the Condras’ salaries from their state jobs as hospital workers have been cut 20 percent in two years. Higher taxes and further spending cuts are on the horizon.

It looks like years and years of pain for the Irish as they bail out their corrupt banks.  They should have let them fail.  Bondholders should have taken haircuts and stockholders should have been wiped out.  Now the taxpayers are going to be slowly bled out.

Naked Capitalism Link of the Day

Today's link: Why ETF's give an uneasy sense of deja vu, at the Financial Times:

And even if investors are wise enough to understand the risks of individual ETFs, the bigger structural impact is not well understood. The FSB, for example, fears that liquidity mismatches and poor collateral practices could create unpleasant markets jolts in a crisis. It also notes there are potential conflicts of interest because of “the dual role of some banks as ETF provider and derivative counterparty.” And there is another, more basic concern: precisely because the market has exploded with such stunning speed, it may be changing flows in unpredictable ways.
The commodities sector is one case in point: though politicians like to blame hedge fund “speculators” for price swings, ETFs may be as important as hedge funds in recent price trends. But many other asset classes are affected too. As I noted in a recent column, recent swings in the Vix (volatility index) may reflect a recent boom in volatility-linked notes.
Some canny hedge funds, of course, understand these shifts, and are making profits by trading these flows. But less agile investors risk being stranded (including those invested in ETFs). And, more broadly, “the impact of such innovations on market liquidity and on financial institutions servicing the management of the fund is not yet fully understood by market participants, especially during episodes of acute market stress,” the FSB says. Just look at this week’s stunning swing in the silver market. Or, for that matter, last year’s “flash crash”.

I just read a story the other day saying that the triple-long or triple-short ETF's were being held by some investors long-term, even though these Funds' value goes to nothing over time, and they were only meant to be traded over short intra-day periods.  Similarly, the commodity ETFs were getting gouged by the regular market traders each time they had to roll their long positions.  Retail investors always are the patsies at the table.

The Republican Torture Meme

All the folks claiming that torture helped us locate Bin Laden have gotten Andrew Sullivan's blood up:

Not only do these war criminals and shoddy lawyers refuse to take accountability for their crimes, they tell clear untruths about how the capture of bin Laden was achieved and distort history.
So let us be very clear. The war criminal Dick Cheney presided over the worst lapse in national security since Pearl Harbor, resulting in the deaths of more than 3,000 people. This rank incompetent failed to get bin Laden at Tora Bora, and then dragged the US on false pretenses into a war in Iraq, empowering Iran's dictatorship, and killing another 5,000 more Americans on a wild goose chase. He presided over the deaths of more than 8,000 Americans, and tens of thousands of Iraqis during his criminally incompetent years in office.
On the other hand, the man who abolished torture as soon as he took office, Barack Obama, captured and killed Osama bin Laden, and captured a massive trove of intelligence, more than two years later. No Americans died in the operation.

Exactly, but it must be emphasized, KSM was waterboarded 183 times, and didn't give up the information about the couriers.  He finally gave that information up several months after the Bush administration quit using the waterboard.  Torture doesn't work, and even if it did, it is evil and immoral.  People who use torture are sadists, cowards or both.  The Bush administration was both.  Dick Cheney is the biggest coward and sadist.

Bush Did Not Find Bin Laden

ABL at Balloon Juice opens up a great post with a pretty good description of Republicans (maybe not safe for work):

Teabillies: Yes, they are assholes. No they won’t act like adults.

Despite Obama’s calls for unity in the aftermath of “We killed that motherfucker,” Republicans are still acting like Republicans—that is to say—lying assholes.  First, they are falling all over themselves to assign credit to George Bush for nabbing Bin Laden¹, despite two undeniable facts:
Fact One: George Bush gave up on the hunt for OBL, both in 2002 (when, at a press conference, Bush stated that he was no longer worried about finding Bin Laden) and then again in 2006 (when Bush closed the CIA unit tasked with finding Bin Laden).  Whether or not you fall into the weird contingent of people who are shedding morality tears for OBL, one thing is clear—this was all Obama.
Fact Two: Republicans are assholes (I think I may have mentioned that before):

She then goes on to the story of a teacher who, in front of the whole class, told a Muslim student, "I bet you're grieving."  Actually, there isn't anywhere that says the teacher is a Republican, but I would bet money on it.

Guess where that happened, yes, Texas.

Naked Capitalism Link of the Day

Today's link: A peek into one of the deepest little cesspits in Europe, by David Malone:

Beyerishe LB was either the witless dupe who was left holding a huge shit schnitzel or just the last in a long line of greedy and corrupt bottom feeding institutions who wanted the chance to siphon some of that fetid  underground nourishment for themselves.  I personally feel the latter is the more likely explanation for the Europe wide enthusiasm for buying Austrian banks. Austria, with its anonymous accounts had made itself into a major portal for dirty money seeking onward transfer into European banks. And European banks were drawn to Austria like flies to a sewer.

The fact is Beyerische bought a bank for 1.6 billion euros into which it had to immediately pour another 2.1 billion euros just to keep it afloat.  Which although it sounds blunderingly stupid is, by Bavarian banking standards little worse than average. Compare Beyerische to the saga of inept incompetence which surrounded two other Bavarian banks Beyerische Hypotheken-und Wecshel Bank and Beyerische Vereins-bank, whose billions in losses forced the shot-gun wedding whose issue was HVB (see Dominoes Falling from the East) and you wonder how Germany has any banks at all?

Today there is still another 3.1 billion euros of bad debts to be paid at Beyerische. The open question vexing both sides of the German/Austrian border is who will pay? Since Beyerishe sold Alpe Adria back to Austria for a whopping 1 euro it might fall upon the Austrian people. But it might still land back on Beyerishe and therefore on the German taxpayers. Both sides would love to find a way of claiming they were just innocent victims of foreign fraud.

I guess you could call this the European bank mess-Austrian edition.  The article goes into great detail about various bank black holes in Austria which tie into Anglo-Irish Bank, among others.  What a mess, we definitely haven't seen the worst of this yet.

Torture DIDN'T Get Key Intelligence

Washington's Blog guest blogging at naked capitalism:

There’s a new meme widely circulating today claiming that torture was okay after all, because it helped us locate and kill Bin Laden. See this, this, this and this.
As ABC News notes:

The revelation that intelligence gleaned from the CIA’s so-called black sites helped kill bin Laden was seen as vindication for many intelligence officials who have been repeatedly investigated and criticized for their involvement in a program that involved the harshest interrogation methods in U.S. history.
“We got beat up for it, but those efforts led to this great day,” said Marty Martin, a retired CIA officer who for years led the hunt for bin Laden.

But as ABC notes in the next paragraph:

Mohammed did not reveal the names while being subjected to the simulated drowning technique known as waterboarding, former officials said. He identified them many months later under standard interrogation, they said, leaving it once again up for debate as to whether the harsh technique was a valuable tool or an unnecessarily violent tactic.

Torture apologists are trying to defend themselves and give Bush credit for this success.  For one, Bush didn't follow it up.  For another, torture does not work.  Treating people like human beings does work.  Torture is immoral and a war crime for which Japanese soldiers were tried after World War II.  There is no reason that the U.S. should have ever used torture.