What Do You Think Crony Capitalism Is/How CEOs Avoided Prison in Meltdown & Greece "Austerity" Brutality Teaches Attention Payers (Wilding ObamaBOTS)

[Thank you, San Dimas, California, for my 19,000 visitor. And you arrived via my buddy at Salmon Alley!] (Stolen from my daughter's FaceBook page!)

"Crony Capitalism?" Naomi Klein has seen it close up. Do you want to see even more here? Hot and fresh from the air (ether) presses (from AntiFascist Calling):

Sunday, May 15, 2011 As Whistleblower Prosecutions Rise, Government Withholds Spy Doc, Fears Lawsuits Against Telecom Partners With Obama's Justice Department threatening to classify previously unclassified material during the upcoming trial of accused NSA whistleblower, Thomas A. Drake, Secrecy News reports that prosecutors claim they can do so because "NSA possesses a statutory privilege that protects against the disclosure of information relating to its activities." Never mind that security apparatchiks have carried out multiyear, illegal driftnet surveillance operations against the American people, or that the broad outlines of these illicit programs have been known for almost six years when they were first reported by The New York Times. Despite these inconvenient truths, our "transparency" president's minions are now asserting the right to erase well-known facts from the public record to win a conviction in a high-profile case. And with a federal Grand Jury now meeting in Alexandria, Virginia to criminally investigate the WikiLeaks organization and its founder, Julian Assange, to determine whether they can be charged with violations of the draconian Espionage Act, the administration is pulling out all the stops by targeting individuals who expose government crimes and corruption. Accused of leaking information that uncovered high-level corruption at the Pentagon's electronic intelligence satrapy, Drake is charged with serving as a source for a series of articles published by The Baltimore Sun that provided rich details on cosy relations between NSA officials and Science Applications International Corporation (SAIC). According to investigative journalist Siobhan Gorman, three years and $1.2 billion after choosing SAIC as the primary contractor for a failed digital communications project called Trailblazer, "SAIC did not provide computer experts with the technical or management skills to complete the project." In subsequent reporting, the Sun revealed that "six years after it was launched, the Trailblazer program consists of little more than blueprints on a wall." Drake's revelations of high-level cronyism at the agency which cost taxpayers billions of dollars were further amplified by other reporters. Writing for CorpWatch, investigative journalist Tim Shorrock disclosed that NSA "is the company's largest single customer, and SAIC is the NSA's largest contractor." Shorrock tells us that "the company's penchant for hiring former intelligence officials played an important role in its advancement." According to CorpWatch, "the story of William Black, Jr." is emblematic of the clubby, good-old-boy networks that constellate the National Security State. "In 1997," Shorrock writes, "the 40-year NSA veteran was hired as an SAIC vice president 'for the sole purpose of soliciting NSA business,' according to a published account. Three years later, after NSA initially funded Trailblazer, Black went back to the agency to manage the program; within a year, SAIC won the master contract for the program." Hardly surprising, given the fact that the so-called revolving door ushering former top intelligence officials into corporate board rooms is a tale oft-told, as the curriculum vitae of former NSA- and Director of National Intelligence, John Michael "Mike" McConnell, readily attests. After his two-year stint as President Bush's DNI (2007-2009), McConnell returned to his perch at the ultra-spooky Booz Allen Hamilton security firm as Senior Vice President where he currently manages that firm's cybersecurity portfolio. Peddling his expertise as an intelligence insider, McConnell is one of the chief tricksters hawking the so-called "cyber threat," the latest front to have emerged from the highly-profitable "War on Terror." Last year, in a widely-cited Washington Post op-ed, McConnell claimed that the United States needs "to reengineer the Internet to make attribution, geolocation, intelligence analysis and impact assessment - who did it, from where, why and what was the result - more manageable." What should interest readers here, is the fact that while the Obama administration wages war on whistleblowers like Thomas Drake, Bradley Manning and others, who expose waste, fraud, abuse and war crimes, the architects and perpetrators of those offenses, high-level corporate and government officials, escape justice and continue to operate with impunity. In the Drake case, Secrecy News analyst Steven Aftergood writes, "The NSA Act ... has never been used to exclude information in a criminal case." That the administration has chosen to do so with Drake serves as an unmistakable warning that the federal government will crush anyone who challenges crimes perpetrated by the secret state. Aftergood told NPR last week that the Obama regime's surge of whistleblower prosecutions is "a worrisome development." "Leaks serve a very valuable function as a kind of safety valve," he said. "They help us to get out the information that otherwise would be stuck." And with Congress, spearheaded by right-wing Democratic Senator Dianne Feinstein, chairwoman of the powerful Senate Intelligence Committee, seeking to go even further to persecute whistleblowers, the government is poised to choke-off what little remains of democratic oversight, thus ensuring that information remains "stuck." As FBI whistleblower Sibel Edmonds points out, "every time when I think things couldn't possibly get any worse, I'm proven wrong and they actually do get worse." "Our so called representatives," Edmonds writes, "are planning to increase the federal government's unchecked powers by giving them the right to strip national security whistleblowers of their pensions." According to the National Whistleblowers Center (NWC), under Section 403 of the Intelligence Authorization Act, "the head of an employee's agency can simply accuse a whistleblower of leaking classified information and that whistleblower can automatically be stripped of their federal pension, even after they retire." So draconian is this proposal that once stripped of their pensions, whistleblowers would be barred from accessing the federal courts to challenge their administrative punishment. "Instead," NWC avers, "they will be forced to use the DNI's administrative procedures to try to defend themselves. In other words, the DNI will be the prosecutor, the judge and the jury to strip pensions from public servants." Shielding Telecoms ... from their Customers Meanwhile across the Potomac, the ACLU reported last week that in response to their lawsuit challenging the constitutionality of the repulsive FISA Amendments Act and their Freedom of Information Act request "to learn more about the government's interpretation and implementation" of FAA, "the government released a few hundred pages of heavily redacted documents." As readers recall, the FAA was a piece of legislative detritus passed by a Democratic-controlled Congress in 2008 that authorized the secret state's driftnet surveillance of American's communications while providing retroactive immunity to NSA's private partners in the telecommunications' industry. Just so we understand what it is Congress shielded, AT&T whistleblower Mark Klein described how the firm and the NSA physically split and then copied global communications traffic flowing into their offices and then passed it along to the Agency. In his self-published book, Klein wrote:

What screams out at you when examining this physical arrangement is that the NSA was vacuuming up everything flowing in the Internet stream: e-mail, web browsing, Voice-Over-Internet phone calls, pictures, streaming video, you name it. The splitter has no intelligence at all, it just makes a blind copy. There could not possibly be a legal warrant for this, since according to the 4th Amendment warrants have to be specific, "particularly describing the place to be searched, and the persons or things to be seized." ... This was a massive blind copying of the communications of millions of people, foreign and domestic, randomly mixed together. From a legal standpoint, it does not matter what they claim to throw away later in the their secret rooms, the violation has already occurred at the splitter. (Mark Klein, Wiring Up the Big Brother Machine... And Fighting It, Charleston, South Carolina: BookSurge, 2009, pp. 38-39.)

"Two weeks ago," ACLU National Security Project staffer Alexander Abdo wrote, "as part of our FOIA lawsuit over those documents, the government gave us several declarations attempting to justify the redaction of the documents." In the course of examining the documents, ACLU researchers "came across this unexpectedly honest explanation from the FBI of why the government doesn't want us to know which 'electronic communication service providers' participate in its dragnet surveillance program." On page 32 we are enlightened by the following nugget:

In this case, the FBI withheld the identities of the electronic communication service providers that have provided information, or are listed as potentially required to provide information, to the FBI as part of its national security and criminal investigations under authority granted by Section 702 of the FAA. Exemption (b)(4)-1, cited in conjunction with (b)(7)(D)-1, has been asserted because disclosure of the identities of electronic communication service providers would cause substantial harm to their competitive position. Specifically, these businesses would be substantially harmed if their customers knew that they were furnishing information to the FBI. The stigma of working with the FBI would cause customers to cancel the companies' services and file civil actions to prevent further disclosure of subscriber information. Therefore, the FBI has properly withheld this information pursuant to Exemption (b)(4), in conjunction with (b)(7)(D)-1. (Declaration of David M. Hardy, Federal Bureau of Investigation, in American Civil Liberties Union, et al v. Office of the Director of National Intelligence, et al, Civil Action No. 10-CV-4419 (RJS), April 25, 2011)

Got that? While the federal government illegally spies on us, those who are sworn to uphold the Constitution and protect our rights are engaged in a massive swindle designed by Congress to shield private lawbreakers whose "competitive position" might be compromised should their filthy corporate practices be exposed. Public harm, private profit; it doesn't get any clearer than this! (Image courtesy of JoshuaDysart.com).

Why CEOs Avoided Getting Busted in Meltdown William K. Black

The defining characteristic of crony capitalism is the ability of favored elites to loot with impunity and the failure of regulators to do their jobs.

We have seen this in the financial crisis that started in 2008 and in an earlier era, when the savings-and-loan industry collapsed.

In the Texas “Rent-a-Bank” scandal of the 1970s, for example, two ringleaders created a fraud network of 50 lenders that caused billions of dollars in losses. The watchdogs removed and sanctioned one of the main culprits, but because the crimes weren’t prosecuted, the same crooks reappeared in the 1980s to do it all over again, only on a bigger scale. Unless you imprison the fraudsters, sophisticated financial scams grow ever more destructive.

It seems as if we have forgotten this lesson.

Take the seven senior officials convicted in the failure of one of the lenders that drove the 2008 credit crunch. All of the cases arose from an investigation of Taylor Bean & Whitaker Mortgage Corp. The first trial occurred last month -- 6 1/2 years after the Federal Bureau of Investigation warned publicly that there was an “epidemic” of mortgage fraud and predicted that it would cause a financial crisis if it weren’t contained. The trial and conviction of Taylor Bean’s former chairman, Lee Farkas, occurred nine years after his crimes were suspected.

Taylor Bean was a small Florida mortgage broker before the fraud began as the housing boom took off. Fannie Mae had cited Farkas for multiple violations, but never filed a criminal referral, which would have triggered an investigation. Had it done so, Farkas might have been prosecuted and Taylor Bean shut long before it caused so much damage. Instead, it expanded, then failed, pulling down a bank with it at a cost of $2.8 billion to the Federal Deposit Insurance Corp. Farkas plans to appeal the verdict.

Fraud With Impunity

The Office of Thrift Supervision, the successor to the S&L regulator where I worked, made no criminal referrals in the latest crisis. The Office of the Comptroller of the Currency and the Federal Reserve made less than a handful. Mortgage and investment banks also made very few referrals -- and never against their senior officers.

Now it is true that banks made thousands of criminal referrals, but almost all involved low-level figures. The volume overwhelmed the Federal Bureau of Investigation, which failed to devote adequate resources. As late as 2007, the agency assigned only 120 investigators spread among 56 field offices to probe thousands of cases. More than eight times that number probed the S&L frauds, a far smaller epidemic.

Unlike the S&L debacle, there was no national task force and no comprehensive prioritization. This made it difficult to investigate the huge, fraudulent subprime lenders. And since there were no criminal referrals of these firms, the FBI wasn’t even attempting to pursue them.

Two Lessons

The two great lessons to draw from this epidemic of fraud is that if you don’t look for it, you don’t find it and that wherever you do look, you do find fraud. The FBI was concentrating on retail banking, or individual borrowers and smaller lenders. But the big problems were being created in the wholesale end of the business, where loans were pooled, packaged, sold and securitized. Because the FBI only looked at relatively small cases, it found only relatively small frauds.

The FBI has been processing no more than 2,000 mortgage- fraud cases a year. There are two things to consider though: Not only were they the wrong cases to focus on, but they amounted to nothing in light of the estimated 1 million fraudulent mortgage loans made annually during the housing bubble years.

Deserted by Regulators

The FBI -- deserted by the banking regulators and undercut by the Justice Department -- was so desperate that it formed a partnership with the Mortgage Bankers Association in 2007. The trade association had created an absurd definition of mortgage fraud under which accounting frauds by a lender were impossible and bankers were the victims. By 2009 the financial crisis had become so acute that Treasury Secretary Timothy Geithner discouraged criminal investigations of the large nonprime lenders.

Nobel laureate George Akerlof and Paul Romer wrote a classic article in 1993. The title captured their findings: “Looting: the Economic Underworld of Bankruptcy for Profit.” Akerlof and Romer explained how bank CEOs can use accounting fraud to create a “sure thing” in the form of record short- term income, generated by making low-quality loans at a premium yield while making only minimal reserve allowances for losses. While it lasts, this fictional income allows the chief executive officer to loot the bank, which then fails, and walk away wealthy.

Wealth Destruction

In criminology, we call these accounting-control frauds and we know that they destroy wealth at a prodigious rate. There’s no “if” about the losses -- the only questions are when they will hit, how big they will be, and who will bear them. The record income produced explains why those involved get away with it for years. Private markets don’t discipline firms reporting record profits. They compete to fund them. Fraudulent CEOs can control the hiring and firing and can create the perverse incentives that produce a dynamic in which bad ethics drive good ethics out of the marketplace.

Sophisticated accounting-control frauds not only sucked in employees who should have known better, but also loan brokers. The result is that the large fraudulent lenders -- those making a lot from liar’s loans -- produced an echo epidemic of deception.

Fraud, it turns out, begets fraud.

(William K. Black is an associate professor of economics and law at the University of Missouri-Kansas City and the author of “The Best Way to Rob a Bank Is to Own One.” The opinions expressed are his own.)

To contact the writer of this column: William K. Black at blackw@umkc.edu

To contact the editor responsible for this column: James Greiff at jgreiff@bloomberg.net.

Been wondering about how that austerity program is working out in Greece? And thinking, well, if it works for them . . . BRING IT ON?

From News Junkie (not a site to be taken lightly, my friends):

The austerity measures that are currently being pushed through the American congress, as well as many state legislatures, are part of a global thrust by conservatives and shock-doctrine capitalists to consolidate wealth with the very few, at the expense of the middle class: the working class; the expendable class.

Photo via Alfavita.gr

While American partisan politics have the citizens divided over the wisdom and necessity of these measures, those countries that have already had them imposed are divided only between the citizens being exploited and the government that is working on behalf of the global corporations and financial institutions that are profiting from the austerity measures.

Photo via syspeirosiaristeronmihanikon

In Greece, organized labor has suffered the same assault that is now attempting to decimate American unions. Workers salaries have been cut by as much as 30%. Education, health, and other necessary services have been wiped out, and taxes have been raised, in order to pay the debt that the banks created… to the banks. That’s right, sound familiar? The citizens are facing cuts in services and wages, and higher taxes, to pay back the banks that caused the problem in the first place.

In Greece, Doctors, teachers, and other public sector employees have gone on strike to protest the ravaging of their economy by the global financial cartels. They have lived the reality that is currently being proposed in America, as well as most of the European Union. While Greece and Portugal were the first of the European and North American countries to succumb to these draconian measures designed to drain the citizens of the world of what wealth wasn’t directly stolen in the ‘crash’ of 2007, England, Ireland,Italy, France, et al… including the USA, are on the menu for the international profiteers.

Photo via Alfavita

The austerity scam is coming to America. You can see it in Wisconsin, Michigan, Ohio, and many other states with Republican governors and/or houses, and it is at the very heart of the Republican budget proposals. Democrats aren’t doing much better. Democrats offer a kinder, gentler version of the same thing, but it all ends up in the same place for Americans; the loss of organized bargaining power, lower wages, far fewer services, the privatization of basic utilities (which means they will cost more), and an increased national debt to keep the populace enslaved for the foreseeable future. While many Americans are being tricked into the logic of these policies, as were those around the world before they were hit with the harsh realities of their implementation, those to whom they have become a reality have found it necessary to take to the streets in order to protect their very lives and well-being. Americans have spent the last thirty years like the frogs in the proverbial pan, slowly being brought to a boil. At some point, apathy will give way to hunger. When it does, the following account from Greece may easily be written from New York, Washington, Chicago, or Los Angeles. )Video vis syspeirosiaristeronmihanikon)

Anarkismo.net: Greece, Police brutality in Athens by Dmitri (English translation)

Here are photos and videos from various sites and blogs, especially from Athens Indynedia, from and about the events in the centre of Athens during the demonstration as a part of the general strike of 11 May 2011 against austerity measures, visit of troika (of E.U., IMF and Eur. Bank – which are co-ordinating Greek economy etc). — The police attacked to the contingents of protesters without a reason, without being a clash before or an attack on any bank or so. The police attack was so brutal that dozens of people went to the hospitals to take some aid. — Also there are reports that some police special forces men were brutal especially against women protesters. —- One protester named Yannis K., member of the local Resistance Assembly of Kypseli/Patisia (inner Athens suburbs) is facing death after went into an emergency surgery in Nikaia Hospital after been beat by the police severely.

There are information that government and police leadership are reinforcing the police in Athens by bringing more forces from other cities, in a case that Yannis will die something that will cause similar to December 2008 events after the killing of 16 yo Alexis Grigoropoulos.

Here are some links: http://ipposd.wordpress.com http://www.sigmalive.com/news/greece/381563 http://syspeirosiaristeronmihanikon.blogspot.com/2011/0….html (stay a little bit on this site because the photos are coming the one after the other) http://www.alfavita.gr/artro.php?id=32247

International solidarity to our Greek comrades and the Greek social movement. _________________________________________ Archive: http://ainfos.ca/en

Americans need to know what is being proposed, and know what those proposals are doing elsewhere. It’s the same scam being proposed here that has been advanced elsewhere. If you want to know your future, as it is looking right now, simply take a look at Greece. If you don’t like what you see, now is the time to get involved, and put a stop to it, before your ability to resist suffers the same fate as your economy.

Photo via Alfavita

I gotta go with Ted Rall. He's a trustworthy person of my same moral suasion whom I have followed almost religiously (if I did that kind of thing) until his disappearance from the approved scene. (And where did that "cult of personality" around Barack Obama come from?)

Rise of the Obamabots Ted Rall May 16th, 2011 Stifling Liberal Dissent Under Obama After they called the presidency for Obama, emails poured in. “You must be relieved now that the Democrats are taking over,” an old college buddy told me. “There will be less pressure on you.”

That would have been nice. In the late 1990s my cartoons ran in Time, Fortune and Bloomberg Personal magazines and over 100 daily and alternative weekly newspapers. I was a staff writer for two major magazines.

Then Bush came in. And 9/11 happened.

The media gorged on an orgy of psychotic right-wing rhetoric. Flags everywhere. Torture suddenly OK. In a nation where mainstream political discourse was redefined between Dick Cheney on the right and libertarian Bill Maher on the not-as-right, there wasn’t any room in the paper for a left-of-center cartoonist. My business was savaged. Income plunged.

My editor at Time called me on September 13, 2001. “We’re discontinuing all cartoons,” she told me. I was one of four cartoonists at the newsweekly. “Humor is dead.” I snorted. They never brought back cartoons.

McCarthyism — blackballing — made a big comeback. I had been drawing a monthly comic strip, “The Testosterone Diaries, for Men’s Health. No politics. It was about guy stuff: dating, job insecurity, prostate tests, that sort of thing. They fired me. Not because of anything I drew for them. It was because of my syndicated editorial cartoons, which attacked Bush and his policies. The publisher worried about pissing off right-wingers during a period of nationalism on steroids.

Desperate and going broke, I called an editor who’d given me lots of work at the magazines he ran during the 1990s. “Sorry, dude, I can’t help,” he replied. “You’re radioactive.”

It was tempting, when Obama’s Democrats swept into office in 2008, to think that the bad old days were coming to an end. I wasn’t looking for any favors, just a swing of the political pendulum back to the Clinton years when it was still OK to be a liberal.

This, you have no doubt correctly guessed, is the part where I tell you I was wrong.

I didn’t count on the cult of personality around Barack Obama.

In the 1990s it was OK to attack Clinton from the left. I went after the Man From Hope and his centrist, “triangulation”-obsessed Democratic Leadership Council for selling out progressive principles. Along with like-minded political cartoonists including Tom Tomorrow and Lloyd Dangle, my cartoons and columns took Clinton’s militant moderates to the woodshed for NAFTA, the WTO and welfare reform. A pal who worked in the White House informed me that the President, known for his short temper, stormed into his office and slammed a copy of that morning’s Washington Post down on the desk with my cartoon showing. “How dare your friend compare me to Bush?” he shouted. (The first Bush.)

It was better than winning a Pulitzer.

It feels a little weird to write this, like I’m telling tales out of school and ratting out the Vast Left-Wing Conspiracy. But it’s true: there’s less room for a leftie during the Age of Obama than there was under Bush.

I didn’t realize how besotted progressives were by Mr. Hopey Changey.

Obama lost me before Inauguration Day, when he announced cabinet appointments that didn’t include a single liberal.

It got worse after that: Obama extended and expanded Bush’s TARP giveaway to the banks; continued Bush’s spying on our phone calls; ignored the foreclosure crisis; refused to investigate, much less prosecute, Bush’s torturers; his healthcare plan was a sellout to Big Pharma; he kept Gitmo open; expanded the war against Afghanistan; dispatched more drone bombers; used weasel words to redefine the troops in Iraq as “non-combat”; extended the Bush tax cuts for the rich; claiming the right to assassinate U.S. citizens; most recently, there was the forced nudity torture of PFC Bradley Manning and expanding oil drilling offshore and on national lands.

I was merciless to Obama. I was cruel in my criticisms of Obama’s sellouts to the right. In my writings and drawings I tried to tell it as it was, or anyway, as I saw it. I thought — still think — that’s my job. I’m a critic, not a suck-up. The Obama Administration doesn’t need journalists or pundits to carry its water. That’s what press secretaries and PR flacks are for.

Does Obama ever do anything right? Not often, but sure. And when he does, I shut up about it. Cartoonists and columnists who promote government policy are an embarrassment.

But that’s what “liberal” media outlets want in the age of Obama.

I can’t prove it in every case. (That’s how blackballing works.) The Nation and Mother Jones and Harper’s, liberal magazines that gave me freelance work under Clinton and Bush, now ignore my queries. Even when I offered them first-person, unembedded war reporting from Afghanistan. Hey, maybe they’re too busy to answer email or voicemail. You never know.

Other censors are brazen.

There’s been a push among political cartoonists to get our work into the big editorial blogs and online magazines that seem poised to displace traditional print political magazines like The Progressive. In the past, editorial rejections had numerous causes: low budgets, lack of space, an editor who simply preferred another creator’s work over yours.

Now there’ s a new cause for refusal: Too tough on the president.

I’ve heard that from enough “liberal” websites and print publications to consider it a significant trend.

A sample of recent rejections, each from editors at different left-of-center media outlets:

• “I am familiar with and enjoy your cartoons. However the readers of our site would not be comfortable with your (admittedly on point) criticism of Obama.”

• “Don’t be such a hater on O and we could use your stuff. Can’t you focus more on the GOP?”

• “Our first African-American president deserves a chance to clean up Bush’s mess without being attacked by us.”

I have many more like that.

What’s weird is that these cultish attitudes come from editors and publishers whose politics line up neatly with mine. They oppose the bailouts. They want us out of Afghanistan and Iraq. They disapprove of Obama’s new war against Libya. They want Obama to renounce torture and Guantánamo.

Obama is the one they ought to be blackballing. He has been a terrible disappointment to the American left. He has forsaken liberals at every turn. Yet they continue to stand by him. Which means that, in effect, they are not liberals at all. They are militant Democrats. They are Obamabots.

As long as Democrats win elections, they are happy. Nevermind that their policies are the same as, or to the right of, the Republicans.

“So what should I think about [the war in Libya]?,” asks Kevin Drum in Mother Jones. “If it had been my call, I wouldn’t have gone into Libya. But the reason I voted for Obama in 2008 is because I trust his judgment. And not in any merely abstract way, either: I mean that if he and I were in a room and disagreed about some issue on which I had any doubt at all, I’d literally trust his judgment over my own. I think he’s smarter than me, better informed, better able to understand the consequences of his actions, and more farsighted.”

Mr. Drum, call your office. Someone found your brain in the break room.

Barack Obama and the Democrats have made it perfectly clear that they don’t care about the issues and concerns that I care about. Unlike Kevin Drum, I think—I know—I’m smarter than Barack Obama. I wouldn’t have made half the mistakes he has.

So I don’t care about Obama. Or the Democrats. I care about America and the world and the people who live in them.

Hey, Obamabots: when the man you support betrays your principles, he has to go — not your principles.

(Ted Rall is the author of “The Anti-American Manifesto.” His website is tedrall.com.)

Go there. Please. "I'm losing my taste for fruit!" ____________________