December 2014 archive

File this one under yet another failure of supposed elites who turn out to know very little about the subjects they’re “professional experts” in.

St. Louis Police Claim It’s Their ‘First Amendment’ Rights Not To Protect Football Players Who Supported Protestors

Mike Masnick, Tech Dirt

Tue, Dec 2nd 2014 9:33am

It’s been pretty obvious that law enforcement in the St. Louis area has a rather tenuous grasp on the concept of the First Amendment. Obviously, they’ve done a fairly terrible job recognizing the right to “peaceably assemble” for quite some time, even having a court declare its “5 second rule” approach unconstitutional. They’ve also ignored the freedom of the press by repeatedly arresting journalists. And, remember, the local prosecutor has claimed that it was really all those people speaking out on social media who were to blame.

But it appears that the misunderstanding of the First Amendment has been taken to new, and even more ridiculous levels, following a brief show of support for the protestors by some players for the St. Louis Rams (the local NFL football franchise for you non-sportsball people). The Rams’ wide receivers decided to all put their hands up — the “hands up, don’t shoot” gesture — in support of Michael Brown and the protestors. It’s a small, but meaningful gesture, showing they supported the protestors. And it shouldn’t have been taken as anything more than that.

Instead, the St. Louis County police decided to respond… by suggesting that, because of this, the police would no longer protect the Rams.

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As many have noted, this certainly sounds like Roorda saying that it’s the police’s “First Amendment” rights to look the other way should any threats come to the team or the stadium.

Of course, that’s not how the First Amendment actually works. It’s quite the opposite. As Sally Jenkins at the Washington Post points out, the reality is exactly the opposite. The First Amendment protects the public from government officials (including the police) from taking actions based on expression of members of the public. If anything, Roorda’s implied threat violates the First Amendment, suggesting that the government will punish people for their expression.

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Of course, the First Amendment now also protects the press digging into Jeff Roorda’s own background and reporting what they find. Like the time he was reprimanded for trying “to ‘cover’ for another police officer filing a report that contained false statements.” Or how he’s against body cameras because they “sometimes don’t reflect exactly what happened” and saying that “cameras have been bad for law enforcement” because “it causes second guessing by the courts and the media.” Roorda has also defended an officer who a surveillance video showed was assaulting a handcuffed suspect, claiming the officer was “only defending himself” and saying he was doing “as he’s trained to do.”

In fact, we actually wrote about that last story and posted the video.

As we noted at the time, Roorda then lied about what’s in the video. Roorda claimed that the officer was crouched down and the suspect started moving forward at him. But the video shows no such thing. Roorda further claimed that such videos should only be used when it helps the police view of things.

Meanwhile, the St. Louis County Police still seem to think that their First Amendment rights include pretending that the Rams apologized to them when they did not.

A nation crippled by fear: Why America’s reaction to Ferguson, Tamir Rice and ISIS are all connected

Marcy Wheeler, Salon

Tuesday, Dec 2, 2014 06:58 AM EST

White people in this country are afraid — and it’s the key to understanding race relations and our foreign policy.

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What was so striking about Obama insisting that there’s never an excuse for violence was not just the contrast with his resumption of his predecessor’s violence in the Middle East, a resumption of policies that have resoundingly failed.

It’s that the president decried violence even as various parts of government rolled out what looked like a counterinsurgency strategy in Ferguson. The Saint Louis area and, in the following days, groups around the country rebelled – most people, peacefully – against the serial, banal violence of cops directed against African-American sons. In Ferguson especially, the fears sown in the weeks before the verdict provided the excuse to roll out state instruments of violence that may well have exacerbated the violence after the verdict – and certainly didn’t contain it. Sure, technically the government is supposed to have a monopoly on violence – which is why Darren Wilson got away with shooting an unarmed black teenager without being charged. But of late, the legitimacy of the state’s violence has become increasingly fragile. The state’s excuses for violence, both overseas and in localities across America, are increasingly dubious. The legitimacy of their excuses was further undermined last week when it became clear Cleveland cops shot a 12-year-old boy, Tamir Rice, wielding a toy gun.

In his speech after the Darren Wilson news, Obama might better have spoken about fear, not violence.

Because fear incited by provocative videos posted online likely explains why Americans ignored the resurgence of violence in Iraq until a few Americans were killed (and ignore the frequent beheadings carried out by our allies the Saudis).  “As long as ISIS is beheading Americans there’s no way the president can stand up and say that Syria isn’t our problem,” Drew reported a source asserting.

And whatever else you think of Darren Wilson’s testimony – which conflicted in some ways with what he reportedly said immediately after the shooting – he used the language of fear and dehumanization to justify the killing. The big black teenager he shot, Mike Brown, was like “Hulk Hogan,” Wilson said. “It looks like a demon,” Wilson described Brown’s face. Brown “made like a grunting” before Wilson fired the fatal shots. “[T]he only other option I thought I had was my gun,” Wilson explained to the grand jury to explain why he started shooting Brown. As for 12-year-old Rice, he and his toy gun elicited a response from a caller for this reason: He was “scaring the s___ out of people.”

Isolated Incidents

Ramming Speed

The real news, Jon’s web exclusive 2 part extended interview with Andrew Napolitano (ugh), and this week’s guests below.

Andrew Ross Sorkin on Wall Street Paying to Get Regulators

Dean Baker, Center for Economic and Policy Research

Tuesday, 02 December 2014 04:00

Andrew Ross Sorkin used his column today to complain about the AFL-CIO and others making an issue over Wall Street banks paying unearned deferred compensation to employees who take positions in government. He argues that the people leaving Wall Street for top level government positions are victims of a “populist shakedown.”

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In the housing bubble years the Wall Street folks made themselves incredibly wealthy packaging and selling bad mortgage backed securities. When this practice threatened to put them all into bankruptcy, the Treasury and Fed stepped in with a bottomless pile of below market interest rate loans and loan guarantees to keep them afloat.

This was explicit policy as former Treasury Secretary Timothy Geithner makes very clear in his autobiography. He commented repeatedly that there would be “no more Lehmans,” and he ridiculed the “old testament” types who thought that somehow the banks should be made to pay for their incompetence and left to the mercy of the market.

The result is that the Wall Street banks are bigger and more powerful than ever. By contrast, more than 10 million homeowners are still underwater, the cohort of middle income baby boomers are hitting retirement with virtually nothing but their Social Security and Medicare to support them, and most of the workforce is likely to go a decade without seeing wage growth. And Geithner is now making a fortune at a private equity company and gives every indication in his book of thinking that he had done a great job.

This state of affairs would probably not exist if the Treasury had been full of people without Wall Street connections. If we had more academics, union officials, and people with business backgrounds other than finance, it is likely that all the solutions to the economic crisis created by Wall Street would not have involved saving Wall Street as a first priority.

Bankers Who Commit Fraud, Like Murderers, Are Supposed to Go to Jail

Dean Baker, Center for Economic and Policy Research

Tuesday, 02 December 2014 09:45

Wow, some things are really hard for elite media types to understand. In his column in the Washington Post, Richard Cohen struggles with how we should punish bankers who commit crimes like manipulating foreign exchange rates (or Libor rates, or pass on fraudulent mortgages in mortgage backed securities, or don’t follow the law in foreclosing on homes etc.).

Cohen calmly tells readers that criminal prosecutions of public companies are not the answer.

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Cohen’s understanding of economics is a bit weak (most of these people quickly found other jobs), but more importantly he is utterly clueless about the issue at hand.

Individuals are profiting by breaking the law. The point is make sure that these individuals pay a steep personal price. This is especially important for this sort of white collar crime because it is so difficult to detect and prosecute. For every case of price manipulation that gets exposed, there are almost certainly dozens that go undetected.

This means that when you get the goods on a perp, you go for the gold — or the jail cell. We want bankers to know that if they break the law to make themselves even richer than they would otherwise be, they will spend lots of time behind bars if they get caught. This would be a real deterrent, unlike the risk that their employer might face some sort of penalty.

Why is it so hard for elite types to understand putting bankers in jail?

The Wall Street Journal Still Refuses to Grasp Accounting Control Fraud via Appraisal Fraud

By William K. Black, New Economic Perspectives

December 2, 2014

Even moderately-sized lenders have vastly greater power to successfully extort appraisers than does any residential borrower. It may be true that “many” borrowers tried to “pressure” appraisers to increase the appraisal, but the overwhelming source of such pressure was from lenders and their agents and virtually all of the successful pressure came from lenders and their agents.

Then New York State Attorney General Andrew Cuomo’s investigation confirmed that the largest mortgage lenders were leading the extortion of the appraisers to inflate appraised values.

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These … findings allow us to understand a great deal about the appraisal fraud epidemic.

• Appraisal fraud was endemic
• Appraisal fraud was led by the controlling officers of lenders and their agents
• No honest lender would ever coerce, or permit, the inflation of the appraised value because the home’s true value provides a critical protection to the lender
• The lenders’ controlling officers were deliberately creating a “Gresham’s” dynamic in which bad ethics drives good ethics out of the appraisal profession
• Honest lenders’ controlling officers could easily block such a Gresham’s dynamic by creating desirable financial incentives and internal controls that will block inflated appraisals
• Appraisal fraud optimizes accounting control fraud by lenders (and loan purchasers)

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We now have well documented experience with two epidemics of appraisal fraud – the savings and loan debacle and the current crisis plus the developing epidemic. It should be very hard to get appraisal fraud wrong given these painful experiences and the appraisers’ astounding petition that made it inescapably clear no later than the year 2000 that there was an epidemic of appraisal fraud led by the lenders’ controlling officers. Unfortunately, the Wall Street Journal is up to the task of getting it horrendously wrong.

The WSJ’s title for its article on appraisal fraud makes obvious that it has learned nothing from two fraud epidemics in two crises a quarter-century apart. “Dodgy Home Appraisals are Making a Comeback: Industry Executives See Parallels With Pre-Crisis Valuations, Regulators are Wary.” Every aspect of the title is disingenuous. The bank “executives see parallels” because they have run the same appraisal fraud scheme twice only a few years apart. That is one of the immense social costs of failing to prosecute the banksters that led the fraud epidemics that drove the financial crisis. “Dodgy” is a misleading euphemism for “fraud.” The article uses the word “fraud” only once. Even then, it uses the word “fraud” only to describe civil investigations of appraisal fraud by Freddie Mac.

The WSJ’s key sources for the article – “Industry Executives” – are the “perps” leading the frauds. The WSJ article, however, never even considers the possibility that they are (again) leading the effort to extort appraisers to inflate the appraised value.

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The obvious question, except to the WSJ, is why the banks’ controlling officers continue to design perverse compensation systems for loan officers. The loan officers don’t design their own compensation systems. Everyone saw in the most recent crisis that the compensation systems designed and implemented by the banks’ controlling officers were exceptionally criminogenic and had the inevitable effect of creating the three fraud epidemics that drove the financial crisis. We have known for over a century that if you pay loan officers on the basis of loan origination volume you will produce endemic fraud. No bank CEO can claim with a straight face to be “shocked, shocked” that when he creates perverse compensation incentives the result is endemic fraud.

The WSJ, however, tries to make it appear that the ever-so-honest managers are paragons of virtue who first create compensation systems that create overwhelming incentives that produce endemic loan origination fraud by loan officers – and then strive mightily to limit the resultant endemic fraud that they caused.

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(It) claims that “banks” were hiring AMCs in an effort to try to prevent the bank’s corrupt loan officers from extorting appraisers to inflate appraisals. “Banks,” of course, are incapable of having any true intent. The article actually means to claim that the banks are run by honest CEOs who are making strident efforts to ensure that their corrupt loan officers do not extort appraisers to engage in appraisal fraud. Given that premise, the obvious question is the one I raised above – why do those same CEOs create the perverse incentives that corrupt the loan officers and create their overwhelming incentive to extort appraisers to commit appraisal fraud if the CEO is dedicated to preventing appraisal fraud? There is also an obvious way for bank CEOs to end promptly the coercion of appraisers by the bank’s corrupt loan officers – fire the corrupt loan officers and the appraisers who succumb to their extortion.

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(T)he AMCs are now extorting appraisers to inflate appraisals. The article reports that “some” claim that the reason that the AMCs are extorting appraisers to inflate the appraisals is that the AMC’s are being extorted by the “lenders.” This should, of course, lead the author to explain what that word refers to. In context, it seems to admit the truth – that the extortion is led by the officers that control corporate policy, i.e., the bank CEOs. So much for the WSJ’s claim that the banks’ controlling officers are the good guys betrayed by the fraud mice.

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The funniest line in the title is “Regulators are Wary.” The Clinton and Bush administration anti-regulators were the recipients of the appraisers’ petition. They took no meaningful action to block the Gresham’s dynamic and the resultant epidemic of appraisal fraud. The Obama administration anti-regulators and anti-prosecutors have not prosecuted or sanctioned any senior banker for his role in leading the epidemic of appraisal fraud. The anti-regulators are so far from “wary,” and have been for so many years, that picturing them as vigilant rather than oblivious is very funny. An extremely careful reader of the article would realize that the article does not report that the supposedly “wary” regulators actually did anything that would be effective in stopping endemic appraisal fraud.

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No bank officer was sanctioned administratively by the regulators, sued by them, or prosecuted. No enforcement action is described as being taken by the OCC against any bank. The OCC is not described as adopting any rule. The OCC is not described as having made a single criminal referral. If this is what the WSJ thinks describes a “wary” regulator’s response to a fraud epidemic then they are delusional. I have explained in prior articles that the head of the OCC is an anti-regulator who has expressly refused to make ending control frauds led by bank CEOs a regulatory priority. Note that the OCC not only failed to use the word “fraud” to describe appraisal fraud, it also attributed the endemic appraisal fraud to preposterous explanations such as insufficient staff “training” and “oversight.”

I think we’ve clearly seen enough of the new Meet the Press host to make most of us wish that Jon Stewart had taken NBC’s offer.

Chuck Todd: “I wish we didn’t focus on the individual personalities of journalists”

Scott Porch, Salon

Saturday, Nov 29, 2014 02:00 PM EST

Isn’t it a little icky that corporate media companies are polling on how much viewers like you?

Let me say this: I don’t like it when journalists become part of a story. We have a culture in social media that wants to make journalists as big a part of the story as politicians themselves. That’s not good. People say, “Oh, you’re trying to insert yourself into a story.” I’m not. I’m trying to be a conduit, to be a challenge or a devil’s advocate for the public. I wish there wasn’t as much focus on the individual personalities of journalists. The people we cover should be the focus.

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The journalists shouldn’t be the focal point. Whenever I have moderated a debate, it’s just like a football game. If people are talking about the officiating at the end of a game, that’s not good. You want people to talk about the game. The moderator shouldn’t be the story; the candidate should be the story.

There are at least two things wrong with this picture, first- politics is not a game and the incestuous Versailles Villager culture that looks at it that way and casts themselves in the role of Football Referees is exactly what’s wrong with the Media that can no longer be called news.  It has all the gravity of Professional Wrestling with less entertainment value.

Secondly, if you want to be taken “seriously” you need to stop peddling crap like this-

Chuck Todd Pretends David Brooks Is An Expert On Race Relations

By LeftOfCenter, Crooks & Liars

November 30, 2014 12:42 pm

This is an uncomfortable conversation, Chuck and Brooks both admit. I suppose it’s because two white guys, with absolutely no idea what it’s like to live with the institutionalized racism that plagues our society, are offering their assessment of a situation they don’t really care to discuss.

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Naughty social problems? I didn’t know that discussing race issues is naughty and unpleasant. I suppose he feels it doesn’t matter what color people are, as if society has no institutionalized racial-disadvantages and racial discrimination is a figment of all of our imaginations. Chuck later asks Brooks, the new race guru,

How does this conversation continue next week?

So it’s not a threat Chuck? It’s a promise, we’ll have more David Brooks next week?

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Thanks David Brooks, for reminding us of everything that is wrong with the GOP when it comes to helping our children. They have no use for early childhood education (or any education that they don’t profit from), they cut funding for poor minority youth programs and scholarships for disadvantaged youth. The GOP is the worst offender when it comes to financing the very same programs that Mike Brown wasn’t privileged enough to enjoy. They ignore the simple unpleasant truth that the Republican party has destroyed education funding, across the board, since Nixon.

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It is run by very, very bad people who firmly adhere to a “Rule or Ruin” view of America, and have a long and ridiculously well-documented history of playing to the lowest and ugliest instincts of its angry, paranoid base as their truest path to prosperity and power.

Of course, if Mr. Brooks was being interviewed by, say, a journalist on, say, a news show, this subject might have been pursued further. But as luck would have it he was, instead, interviewed by Chuck Todd on “Meet the Press”.

Unfortunately this is one time the tired old trope is true- both sides do it.  It’s not so much about Brooks being a Republican as it is he’s shilling 30 years of proven Neoliberal failure that is the D.C. consensus.

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Sen. Joseph McCarthy is censured; Scientists demonstrate the world’s first artificially-created, self-sustaining nuclear chain reaction; Enron files for Chapter 11 protection; Colombian drug lord is shot and killed.

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