6/30/11

Image
In the world of the well-heeled, the rich are referred to as “high net worth individuals” (HNWIs) and defined as people who have more than $1m (£620,000) of free cash.

According to the annual world wealth report by Merrill Lynch and Capgemini, the wealth of HNWIs around the world reached $42.7tn (£26.5tn) in 2010, rising nearly 10% in a year and surpassing the peak of $40.7tn reached in 2007, even as austerity budgets were implemented by many governments in the developed world.


The report also measures a category of “ultra-high net worth individuals” – those with at least $30m rattling around, looking for a home. The number of individuals in this super-rich bracket climbed 10% to a total of 103,000, and the total value of their investments jumped by 11.5% to $15tn, demonstrating that even among the rich, the richest get richer quicker. Altogether they represent less than 1% of the world’s HNWIs – but they speak for 36% of HNWI’s total wealth.
Groups Want Field Hearings on AT&T-T-Mobile Merger A coalition of advocacy groups wrote to FCC Chairman Julius Genachowski asking him to hold field hearings on AT&T's proposed $39 billion acquisition of T-Mobile USA. The groups cited the FCC's field hearing in Chicago on the Comcast-NBC Universal merger and asked Genachowski to hold a series of public hearings around the country to discuss the implications of the merger.
Gautham Nagesh, The Hill
FCC Refuses to Say Wireless Industry Is Competitive -- Again Once again, the FCC this week declined to say whether or not there is effective competition in the wireless industry. As a result, this non-conclusion provides few clues as to what the FCC will do regarding the pending merger of AT&T and T-Mobile.
Chloe Albanesius, PC Magazine
FCC Proposes New e-Rate Eligibility Rules A proposed new rule for the federal e-Rate program could discourage schools from buying service contracts when they purchase network equipment, at least one program expert warns. The rule is part of a draft version of the latest Eligible Services List for the e-Rate, which provides discounts on the cost of telecom services and Internet access. If approved, the revised list would take effect in the 2012 program year.
eSchool News
NFL to FCC: Leave Sports Blackout Rule Alone The NFL has told the FCC not to tinker with the sports blackout rules, which prevent cable or satellite providers from carrying an NFL game when the over-the-air broadcast is blacked out due to lack of attendance at the game.
John Eggerton, Broadcasting & Cable
Why Is European Broadband Faster and Cheaper? Blame the Government The nation that invented the Internet ranks 16th in the world when it comes to the speed and cost of our broadband connections. It's not surprising that we lag behind such hacker havens as Sweden and Finland, nor densely-populated Asian nations like Japan and South Korea. But the U.S. also trails countries that are poor by European standards: Portugal is just ahead of us in 15th place; Italy is number 14. Why is the U.S. so far behind?
Rick Karr, Engadget
Net Neutrality from the Creators' Perspective A free and open Internet presents infinite possibilities not only for we content creators but for a fully informed, inspired, and yes, entertained citizenry as well, offering a vast variety of options far beyond what is currently available on television, radio and in movie theaters.
Michael Winship, SavetheInternet.com
Hearing on Govt. Spectrum Use Slated The House communications subcommittee has slated yet another in a string of spectrum hearings, this one on federal government spectrum use.
John Eggerton, Multichannel News
Civil Rights Groups Campaign Against Proposed Internet 'Spy' Law Canadian civil rights groups are planning a summer-long campaign to raise awareness about a proposed law they say would force Internet companies to spy on their users.
Jason Magder, Montreal Gazette
Android Activations Now Total 500,000 Per Day In December, Google announced that it was activating 300,000 Android phones a day, a boost from the 200,000 activations it had logged a few months before. Android, in other words, was ascendant. And guess what? Android isn't done climbing.
Christian Science Monitor
The Real Smartphone Wars Have Only Just Begun Pre-pay cellphones globally dominate 70 percent of the market. As Android explodes and Apple ponders an iPhone Lite, prepare yourself for the true smartphone skirmish.
Fast Company
The iPhone Effect: How Apple's Phone Changed Everything Apple's iPhone debuted four years ago, and we sometimes take it for granted how much has changed since then. The phone altered the smartphone landscape and ushered in the modern era of intelligent, connected devices. Apple has not cruised to the top and in fact continues to trail nemesis Google’s Android in smartphones sales. But it shook up the industry and forced changes and upheaval among many competitors.
GigaOM
FCC Wants More Details on KUSF Transaction The FCC is taking a close look at third-party funding relationships at KUSF in San Francisco, the college radio station that KUSC in Los Angeles took over in January as part of its proposed $6 million signal expansion into the Bay Area.
Current
Coming Soon: The "Reading Rainbow" Flash Mob LeVar Burton, former host of the now-defunct PBS show, "Reading Rainbow" wants fans to join a public performance of its theme song.
Emma Mustich, Salon
Lords Report: Ofcom Should Have Final Say over BBC Complaints Media regulator Ofcom, rather than the BBC, should have the final say over complaints about impartiality and accuracy with the corporation's programs, according to a House of Lords committee report.
Tara Conlan, The Guardian
act now

Around the country, broadcasters are using sneaky legal deals and loopholes to evade the FCC's media ownership rules. This "covert consolidation" takes many forms, but the results are the same: Media companies pad their bottom line by sacrificing local journalism, competition and diversity. Tell the FCC that covert consolidation has to go. It's time to change the channels.
In Other News...
Supreme Court Has Ruled; Now Games Have a Duty It is now the law of the United States that video games are art. It is now the law of the United States that video games are a creative, intellectual, emotional form of expression and engagement, as fundamentally human as any other.
New York Times
MySpace Expected to Be Sold Within Two Days News Corp. is expected to sell the troubled social media site MySpace in the next two days. Two front-runners have emerged in the auction process: online ad company Specific Media and private equity firm Golden Gate Capital.
Reuters
Half of U.S. 20-Somethings Have No Landline The shift away from landlines continues, as 24.9 percent of all American adults now live in homes with wireless-only voice connections. Among younger adults aged 25 to 29, the numbers are twice as high; more than half have only a cellphone.
Ars Technica
New Online Open Newsroom a Hit for Swedish Newspaper A pioneering Swedish newspaper that involves its readers in the daily editorial decision-making process says the new approach has been a massive hit with users and advertisers.
Maui Police Discover Google, Drop Subpoena Against Maui Time An extensive investigation by the Maui Police Department has determined that the use of Google's search function is more effective than threatening its local newsweekly with legal action.
Association of Alternative Newsweeklies
Pope Tweets for First Time, Uses iPad The Vatican is continuing to take steps to pull itself into the 21st century, as they have announced the launch of a brand new Vatican news site with a Tweet. Not just any Tweet, but the first official Tweet from Pope Benedict XVI himself.
WebProNews
Only Five Networked Cars for Every 1,000 Would End Traffic By hooking up just a few cars to a grid that allows engineers to adjust conditions based on real-time traffic conditions, everyone would be blessed with congestion-free rides.
Fast Company
FBI Raids Iowa Woman's Home in Lulz Security Hacker Investigation The hacking group Lulz Security ended its 50-day reign of terror this weekend, but law enforcement's hunt for its members will go on. Last week, FBI agents raided an Iowa woman's home because of her connections to the group.
Gawker
Upcoming Events
Free Minds, Free People Conference 2011
Jul 7-Jul 10: Providence, RI
Blogging While Brown
Jul 8-Jul 10: Los Angeles, CA
FCC July Open Meeting
Jul 12: Washington, DC
National Association for Media Literacy Education
Jul 22-Jul 25: Philadelphia, PA
VidCon
Jul 28-Jul 30: Los Angeles, CA
BlogHer '11
Aug 5-Aug 6: San Diego, CA

It's time to stand up to the Republicans' empty threats
Take Action!
Clicking here will automatically add your name to this petition:
Automatically add your name:
Take action now!
The deadline to raise the debt ceiling is just over a month away, and things are not looking good.
Republicans recently broke off talks with Vice President Biden over the White House's proposal to raise $400 billion in revenue by eliminating tax breaks for wealthy individuals and corporations.
That proposal represented no more than one dollar in revenue increases for every five dollars in cuts, but even that was a bridge too far for Republicans.
And let's remember, while the Republicans won't even agree to a minimal amount of tax increases, they are willing (in fact eager) to put extremely popular and important programs like Medicare, Medicaid and Social Security on the chopping block.
These negotiations are a farce and it's time for President Obama to cut bait and stop trying to negotiate with Republican extremists.
As bad as the state of current negotiations is, the final deal might be even worse. The Hill, a trade publication that covers Capitol Hill, reported that members of Congress in both parties think President Obama will once again cave to the Republicans' demands. 1
And why not? Time and again, Republicans have taken the needs of all Americans hostage to the narrow ideological demands of the Tea Party base. And President Obama has repeatedly responded to this strategy first by preemptively compromising and then caving even more when Republicans move the goalposts and demand further concessions.
We saw this during the Bush tax cut fight in December of last year and the negotiations over the continuing resolution to avoid a government shutdown earlier this year.
But what makes this dynamic so maddening and ridiculous when it comes to raising the debt ceiling is that defaulting on our debt, which is the scenario that is driving the negotiations, would seriously hurt the Republicans' Wall Street benefactors.
So if you cut through the kabuki, it's clear that in this case at least the Republicans are exceedingly unlikely to go through with their threats and allow our government to default on our debt.
President Obama needs to stand up the Republicans and call their bluff, because that is what it is.
There's one final point that merits mentioning. The Bush tax cuts for the wealthy are some of the biggest drivers of the large federal deficit, yet the Republicans went to the mat to extend them in December. And they then used the subsequent increase in the deficit caused by the tax cuts they championed as a reason to call for cuts to Medicare, Medicaid and Social Security.
We'll all be better off when they are allowed to expire. But until then, we should stop treating the Republicans as good-faith actors when they're engaging in deficit hysteria. And that is only further underlined by their unwillingness to raise any taxes while pushing cuts to vital programs.
Thank you for speaking out.
Matt Lockshin, Campaign Manager
CREDO Action from Working Assets
P.S. Occasionally when send out an action that encourages President Obama to take a strong negotiating position, some of our members think it amounts to an attack on the president. But Paul Krugman captures the stakes of this fight and correctly understands it as a watershed moment. Referencing the Republicans' unwillingness to accept tax increases of any sort, he writes, "What this says to me is that Obama cannot, must not, concede here. If he does, he's signaling that the GOP can extract even the most outrageous demands; he's setting himself up for endless blackmail. A line has to be drawn somewhere; it should have been drawn last fall; but to concede now would effectively mean the end of the presidency."2 We agree.
1 "House Democrats feel jilted by the president in budget, debt talks," Mike Lillis, The Hill, June 28, 2011.
2 "Debt Limit Stakes," Paul Krugman, New York Times, June 28, 2011.
It's time for action. You can make it happen, figrd readers
Donate
climber
Dear Figrd readers
As corporations amass more and more power over our government and all of our lives, how do we stop them from trampling our rights and polluting the air and water we need to survive?

We must be unrelenting, we must be strategic and we must be more brave than we've ever imagined we could be. Now is the time for action.

Last month, four RAN activists chained themselves to Disney's headquarters to shine a light on its forest destruction. Just a week later, six more were arrested bringing attention to the struggle of 30,000 Ecuadoreans living with Chevron's oil disaster in the Amazon.

Why would these courageous men and women risk so much? Because sometimes it takes rappelling off a bridge and unfurling a 50-foot banner to get a corporation to put people's health and the environment first.

RAN's next big action is going to be absolutely awe-inspiring…Do you want to be in on it?

We need you there with us. We need your direct support now to start planning.

You can feed an activist a meal that will fuel them through the grueling physical challenge of a banner action. It only takes $10.

Precision communication is key to pulling off direct actions. Put a mobile phone into the hands of our next action coordinator for $25.

Direct action climbers dangle hundreds of feet over land or water, which means safety comes first. Protect the most vital tool a climber has, their head. Give $50 to buy a safety helmet for a RAN activist during our next big banner hang.

Now if you've got the means and the passion to push Corporate America hard, I'm asking you to go big. Like 80-feet wide kind of big.

Be the funder behind RAN's next massive banner. $500 will get the job done.

When corporate polluters refuse to stop decimating precious rainforests or blowing up historic mountain ranges, we've got to take action.

YOU can make it happen. Donate today. 
Rebecca Tarbotton
For a just and thriving planet,
Rebecca Tarbotton
Executive Director

6/27/11


IMPORTANT MESSAGE & INFO MUST READ!!!!!!

Government data leaked by hackers reveal US government domestic spy program has grown far beyond our wildest nightmare, with Government operatives spying on our every move, in every imaginable aspect of our lives, both online and offline.

Information leaked from government hacked websites reveal that the US domestic spy program has infiltrated every facet of our society both online and offline. The information revealed in the data leaks reveal that companies that we use on a daily basis and have come to rely on in our modern society, companies that we would never suspect, are in spying on us for the FBI. In fact a wide range of companies have been revealed to be spying on us from our healthcare providers, medical insurance companies and hardware stores to companies that provide payroll services, accounting services, financial services, credit card companies, banks, data centers, human resource companies and web hosting companies and every kind of company in between.
In fact the FBI has domestic spies in 350 Fortune 500 companies and even operates in real estate companies, job search websites, employment staffing services, public schools and colleges, music sharing websites and even sites that report on the location of underground parties and raves.
Less shocking is that the Spy Program has been designed in a way to allow the Feds operate outside the laws of the US Constitution, entirely side stepping the 4th amendment which protects individuals against illegal search and seizure by requiring the government to obtain a warrant.


In This Article:
  • Background information on the hacks
  • Guardian: HBGary emails reveal massive disturbing public-private partnership to spy on web users
  • HBGary Emails Only Tip Of The Iceberg. AntiSec Hacks Leaking Membership Information Of FBI InfraGard Spy Program In Atlanta Reveals Much Larger Spy Operation
  • What is The FBI InfraGard Spy Program?
  • ACLU warns the FBI InfraGard Domestic Spy Program Has Turned The US Into A Nazi Style Police State
  • List of Companies Participating in the FBI Domestic Spy Program In The Atlanta Georgia Area Alone Reveal Domestic Spy Program Has Grown Beyond Our Wildest Nightmares

Background information on the hacks

The Hacker Group Anonymous and LulzSec have recently declared war against the establishment after releasing a series of videos calling for peaceful revolution in America.
The flamboyant antics have caused a wide rebuke members of the anti-establishment movement who accuse the groups of engaging in behavior that will accomplish nothing more than garner support for draconian cyber security, online spying and internet censorship laws. Indeed, the FBI has responded to the attacks by raiding a data center and seized servers running several popular blogs and social bookmarking sites.
However while members of the online community rebuke the group for giving the Government cause to enact these laws, the data being released by the group from their hacks reveal that the Government spy program has already grown orders of magnitudes beyond what our politicians are publicly trying to legalize.

Guardian: HBGary Emails reveal massive disturbing public-private partnership to spy on web users

For starters, the Guardian news paper just wrote a piece about an investigation into emails released by Anonymous revealing a massive online spy program between the Government and with a wide array of corporations from Google and Apple to a wide array of technology companies.

A sinister cyber-surveillance scheme exposed

Hacked emails from security contractor HBGary reveal a disturbing public-private partnership to spy on web users

Last February, three of these firms – HBGary Federal, Palantir and Berico, known collectively as Team Themis – were discovered to have conspired to hire out their information war capabilities to corporations which hoped to strike back at perceived enemies, including US activist groups, WikiLeaks and journalist Glenn Greenwald. That such a dangerous new dynamic was now in play was only revealed due to a raid by hackers associated with the Anonymous collective, resulting in the dissemination of more than 70,000 emails to and from executives at HBGary Federal and its parent company HBGary.
After having spent several months studying those emails and otherwise investigating the industry depicted therein, I have revealed my summary of a classified US intelligence programme known as Romas/COIN, as well as its upcoming replacement, known as Odyssey. The programme appears to allow for the large-scale monitoring of social networks by way of such things as natural language processing, semantic analysis, latent semantic indexing and IT intrusion. At the same time, it also entails the dissemination of some unknown degree of information to a given population through a variety of means – without any hint that the actual source is US intelligence. Scattered discussions of Arab translation services may indicate that the programme targets the Middle East.
Despite the details I have provided in the document – which is also now in the possession of several major news outlets and which may be published in whole or in part by any party that cares to do so – there remains a great deal that is unclear about Romas/COIN and the capabilities it comprises. The information with which I’ve worked consists almost entirely of email correspondence between executives of several firms that together sought to win the contract to provide the programme’s technical requirements, and because many of the discussions occurred in meetings and phone conversations, the information remaining deals largely with prospective partners, the utility of one capability over another, and other clues spread out over hundreds of email exchanges between a large number of participants.
The significance of this programme to the public is not limited to its potential for abuse by facets of the US intelligence community, which has long been proverbial for misusing other of its capabilities. Perhaps the most astonishing aspect is the fact that the partnership of contracting firms and other corporate entities that worked to obtain the contract was put into motion in large part by Aaron Barr, the disgraced former CEO of HBGary Federal who was at the centre of Team Themis’s conspiracy to put high-end intelligence capabilities at the disposal of private institutions. As I explain further in the linked report, this fact alone should prompt increased investigation into the manner in which this industry operates and the threats it represents to democratic institutions.
The Guardian report points to a wiki set up detailing the contents of 60,000 leaked emails and the security implication involved.

Romas/COIN

For at least two years, the U.S. has been conducting a secretive and immensely sophisticated campaign of mass surveillance and data mining against the Arab world, allowing the intelligence community to monitor the habits, conversations, and activity of millions of individuals at once. And with an upgrade scheduled for later this year, the top contender to win the federal contract and thus take over the program is a team of about a dozen companies which were brought together in large part by Aaron Barr – the same disgraced CEO who resigned from his own firm earlier this year after he was discovered to have planned a full-scale information war against political activists at the behest of corporate clients. The new revelation provides for a disturbing picture, particularly when viewed in a wider context. Unprecedented surveillance capabilities are being produced by an industry that works in secret on applications that are nonetheless funded by the American public – and which in some cases are used against that very same public. Their products are developed on demand for an intelligence community that is not subject to Congressional oversight and which has been repeatedly shown to have misused its existing powers in ways that violate U.S. law as well as American ideals. And with expanded intelligence capabilities by which to monitor Arab populations in ways that would have previously been impossible, those same intelligence agencies now have improved means by which to provide information on dissidents to those regional dictators viewed by the U.S. as strategic allies.
The nature and extent of the operation, which was known as Romas/COIN and which is scheduled for replacement sometime this year by a similar program known as Odyssey, may be determined in part by a close reading of hundreds of e-mails among the 70,000 that were stolen in February from the contracting firm HBGary Federal and its parent company HBGary. Other details may be gleaned by an examination of the various other firms and individuals that are discussed as being potential partners.
Of course, there are many in the U.S. that would prefer that such details not be revealed at all; such people tend to cite the amorphous and much-abused concept of “national security” as sufficient reason for the citizenry to stand idly by as an ever-expanding coalition of government agencies and semi-private corporations gain greater influence over U.S. foreign policy. That the last decade of foreign policy as practiced by such individuals has been an absolute disaster even by the admission of many of those who put it into place will not phase those who nonetheless believe that the citizenry should be prevented from knowing what is being done in its name and with its tax dollars.
To the extent that the actions of a government are divorced from the informed consent of those who pay for such actions, such a government is illegitimate. To the extent that power is concentrated in the hands of small groups of men who wield such power behind the scenes, there is no assurance that such power will be used in a manner that is compatible with the actual interests of that citizenry, or populations elsewhere. The known history of the U.S. intelligence community is comprised in large part of murder, assassinations, disinformation, the topping of democratic governments, the abuse of the rights of U.S. citizens, and a great number of other things that cannot even be defended on “national security” grounds insomuch as that many such actions have quite correctly turned entire populations against the U.S. government. This is not only my opinion, but also the opinion of countless individuals who once served in the intelligence community and have since come to criticize it and even unveil many of its secrets in an effort to alert the citizenry to what has been unleashed against the world in the name of “security.”
Likewise, I will here provide as much information as I can on Romas/COIN and its upcoming replacement.
Although the relatively well-known military contractor Northrop Grumman had long held the contract for Romas/COIN, such contracts are subject to regular recompetes by which other companies, or several working in tandem, can apply to take over. In early February, HBGary Federal CEO Aaron Barr wrote the following e-mail to Al Pisani, an executive at the much larger federal contractor TASC, a company which until recently had been owned by Northrop and which was now looking to compete with it for lucrative contracts:
[...]
More helpful is a later e-mail from Lovegrove to Barr and some of his colleagues at TASC in which he announces the following:
Our team consists of: – TASC (PMO, creative services) – HB Gary (Strategy, planning, PMO) – Akamai (infrastructure) – Archimedes Global (Specialized linguistics, strategy, planning) – Acclaim Technical Services (specialized linguistics) – Mission Essential Personnel (linguistic services) – Cipher (strategy, planning operations) – PointAbout (rapid mobile application development, list of strategic partners) – Google (strategy, mobile application and platform development – long list of strategic partners) – Apple (mobile and desktop platform, application assistance -long list of strategic partners) We are trying to schedule an interview with ATT plus some other small app developers.
From these and dozens of other clues and references, the following may be determined about the nature of Romas/COIN:
1. Mobile phone software and applications constitute a major component of the program.
2. There’s discussion of bringing in a “gaming developer,” apparently at the behest of Barr, who mentions that the team could make good use of “a social gaming company maybe like zynga, gameloft, etc.” Lovegrove elsewhere notes: “I know a couple of small gaming companies at MIT that might fit the bill.”
3. Apple and Google were active team partners, and AT&T may have been as well. The latter is known to have provided the NSA free reign over customer communications (and was in turn protected by a bill granting them retroactive immunity from lawsuits). Google itself is the only company to have received a “Hostile to Privacy” rating from Privacy International. Apple is currently being investigated by Congress after the iPhone was revealed to compile user location data in a way that differs from other mobile phones; the company has claimed this to have been a “bug.”
4. The program makes use of several providers of “linguistic services.” At one point, the team discusses hiring a military-trained Arabic linguist. Elsewhere, Barr writes: “I feel confident I can get you a ringer for Farsi if they are still interested in Farsi (we need to find that out). These linguists are not only going to be developing new content but also meeting with folks, so they have to have native or near native proficiency and have to have the cultural relevance as well.”
5. Alterion and SocialEyez are listed as “businesses to contact.” The former specializes in “social media monitoring tools.” The latter uses “sophisticated natural language processing methodology” in order to “process tens of millions of multi-lingual conversations daily” while also employing “researchers and media analysts on the ground;” its website also notes that “Millions of people around the globe are now networked as never before – exchanging information and ideas, forming opinions, and speaking their minds about everything from politics to products.”
6. At one point, TASC exec Chris Clair asks Aaron and others, “Can we name COIN Saif? Saif is the sword an Arab executioner uses when they decapitate criminals. I can think of a few cool brands for this.”
7. A diagram attached to one of Barr’s e-mails to the group (http://imageshack.us/photo/my-images/7/pmo.png/) depicts Magpii as interacting in some unspecified manner with “Foreign Mobile” and “Foreign Web.” Magpii is a project of Barr’s own creation which stands for “Magnify Personal Identifying Information,” involves social networking, and is designed for the purpose of storing personal information on users. Although details are difficult to determine from references in Barr’s e-mails, he discusses the project almost exclusively with members of military intelligence to which he was pitching the idea.
8. There are sporadic references such things as “semantic analysis,” “Latent Semantic Indexing,” “specialized linguistics,” and OPS, a programming language designed for solving problems using expert systems.
9. Barr asks the team’s partner at Apple, Andy Kemp (whose signature lists him as being from the company’s Homeland Defense/National Programs division), to provide him “a contact at Pixar/Disney.”
Altogether, then, a successful bid for the relevant contract was seen to require the combined capabilities of perhaps a dozen firms – capabilities whereby millions of conversations can be monitored and automatically analyzed, whereby a wide range of personal data can be obtained and stored in secret, and whereby some unknown degree of information can be released to a given population through a variety of means and without any hint that the actual source is U.S. military intelligence. All this is merely in addition to whichever additional capabilities are not evident from the limited description available, with the program as a whole presumably being operated in conjunction with other surveillance and propaganda assets controlled by the U.S. and its partners.
Whatever the exact nature and scope of COIN, the firms that had been assembled for the purpose by Barr and TASC never got a chance to bid on the program’s recompete. In late September, Lovegrove noted to Barr and others that he’d spoken to the “CO [contracting officer] for COIN.” “The current procurement approach is cancelled [sic], she cited changed requirements,” he reported. “They will be coming out with some documents in a month or two, most likely an updated RFI [request for information]. There will be a procurement following soon after. We are on the list to receive all information.” On January 18th of next year, Lovegrove provided an update: “I just spoke to the group chief on the contracts side (Doug K). COIN has been replaced by a procurement called Odyssey. He says that it is in the formative stages and that something should be released this year. The contracting officer is Kim R. He believes that Jason is the COTR [contracting officer's technical representative].” Another clue is provided in the ensuing discussion when a TASC executive asks, “Does Odyssey combine the Technology and Content pieces of the work?”

AntiSec Hacks Leaks Membership Information Of FBI InfraGard Spy Program In Atlanta

While those emails reveal a level of corporate fascism and spying being conducted online, it made me think “maybe these hacker groups are leaking emails and passwords reasons beyond just kicks.”
Indeed LulzSec and Anonymous just posted a leak of email addresses and passwords from the FBI InfaGuard website.
0p_anon Operation Payback
InfraGard Atlanta Users Passwords by #LulzSec pastebin.com/UHAMpkMM Enjoy

What is The FBI InfraGard Spy Program?

If you are like me, you probably have never even heard of Infaguard, so if nothing else the hacker release raises awareness for bringing attention to the massive FBI domestic spy program that works with local businesses, academic institutions, and law enforcement officials to spy on US citizens under the justification of “preventing hostile attacks” against the US. However, as revealed later the connection between many of the companies spying on their customers and the goal of preventing hostile attacks is a far-fetched at minimum.
Wikipedia writes:

InfraGard

InfraGard is a private non-profit organization serving as a public-private partnership between U.S. businesses and the Federal Bureau of Investigation. The organization describes itself as an information sharing and analysis effort serving the interests and combining the knowledge base of a wide range of members.[1] InfraGard states they are an association of businesses, academic institutions, state and local law enforcement agencies, and other participants dedicated to sharing information and intelligence to prevent hostile acts against the United States.[2]
Concerned about human rights, the American Civil Liberties Union (ACLU) warned that there “is evidence that InfraGard may be closer to a corporate TIPS program, turning private-sector corporations — some of which may be in a position to observe the activities of millions of individual customers — into surrogate eyes and ears for the FBI”.[3] As of September, 2010, the organization reported membership at over 40,000 (including FBI).[4]
From the FBI InfraGard site:
Infagard - FBI Domestic Spy Program
InfraGard is an information sharing and analysis effort serving the interests and combining the knowledge base of a wide range of members. At its most basic level, InfraGard is a partnership between the Federal Bureau of Investigation and the private sector. InfraGard is an association of businesses, academic institutions, state and local law enforcement agencies, and other participants dedicated to sharing information and intelligence to prevent hostile acts against the United States. InfraGard Chapters are geographically linked with FBI Field Office territories. Learn more about InfraGard

IfraGard - Infrastructure Protection - Extends information sharing between the FBI and Private CompaniesInfraGard is a Federal Bureau of Investigation (FBI) program that began in the Cleveland Field Office in 1996. It was a local effort to gain support from the information technology industry and academia for the FBI’s investigative efforts in the cyber arena. The program expanded to other FBI Field Offices, and in 1998 the FBI assigned national program responsibility for InfraGard to the former National Infrastructure Protection Center (NIPC) and to the Cyber Division in 2003. InfraGard and the FBI have developed a relationship of trust and credibility in the exchange of information concerning various terrorism, intelligence, criminal, and security matters.

Become a MemberInfraGard is an information sharing and analysis effort serving the interests and combining the knowledge base of a wide range of members. At its most basic level, InfraGard is a partnership between the FBI and the private sector. InfraGard is an association of businesses, academic institutions, state and local law enforcement agencies, and other participants dedicated to sharing information and intelligence to prevent hostile acts against the United States. InfraGard Chapters are geographically linked with FBI Field Office territories. Each InfraGard Chapter has an FBI Special Agent Coordinator assigned to it, and the FBI Coordinator works closely with Supervisory Special Agent Program Managers in the Cyber Division at FBI Headquarters in Washington, D.C. While under the direction of NIPC, the focus of InfraGard was cyber infrastructure protection. After September 11, 2001 NIPC expanded its efforts to include physical as well as cyber threats to critical infrastructures. InfraGard’s mission expanded accordingly.
In March 2003, NIPC was transferred to the Department of Homeland Security (DHS), which now has responsibility for Critical Infrastructure Protection (CIP) matters. The FBI retained InfraGard as an FBI sponsored program, and will work with DHS in support of its CIP mission, facilitate InfraGard’s continuing role in CIP activities, and further develop InfraGard’s ability to support the FBI’s investigative mission, especially as it pertains to counterterrorism and cyber crimes.

InfraGard is an organization dedicated to the protection of the United States and the American people. In order to maintain a level of trust within the membership, all applicants undergo a records check performed by the FBI. Applications are screened according to a defined criteria and then passed to the local chapter for final processing.
InfraGard membership comes with great responsibility. We value active members who are willing to devote their time, effort and talent to help build this organization and achieve our goals of protecting the American people. You will be a representative of the nation’s largest volunteer organization dedicated to critical infrastructure protection.
Finally, before you fill out your application, please read the InfraGard Code of Ethics and browse the other Policies and Procedures. As a member of InfraGard, you will be expected to abide by these guidelines.
The benefits of joining InfraGard include:
  • Network with representatives from other companies that help maintain our national infrastructure. Quick Fact: 350 of our nation’s Fortune 500 have a representative in InfraGard.
  • Gain access to an FBI secure communication network complete with VPN encrypted website, webmail, listservs, message boards and much more.
  • Learn time-sensitive, infrastructure related security information from government sources such as the FBI and DHS..
  • Get invitations and discounts to important training seminars and conferences.
  • Best of all, there is no cost to join InfraGard.


ACLU warns the FBI InfraGard Domestic Spy Program Has Turned The US Into A Nazi Style Police State

The ACLU warned that there “is evidence that InfraGard may be closer to a corporate TIPS program, turning private-sector corporations — some of which may be in a position to observe the activities of millions of individual customers — into surrogate eyes and ears for the FBI”.
The ACLU compiled a paper on the dangers of the program warning that FBI domestic spy program would turn America into a real 1984 police state.

The Surveillance-Industrial Complex

How the American Government is Enlisting Private Parties in the Construction of a Surveillance Society

Foreword
From the doctor’s office to the supermarket, any record of where we had gone or what we had done could only be tracked by looking at paper and ink.
Today, however, the most intimate details of our personal habits and behaviors are now computerized. On millions of hard drives and microchips, more and more of what we do every day is recorded – not only by the government, but also by corporations. And as this report shows, when it comes to preserving our privacy, that is increasingly a distinction without a difference.
This special ACLU report, the 12th in our series on civil liberties since 9/11, paints a sobering picture of just how little control we have over our information today.
It shows how information-age technology, anemic privacy laws and soaring profits have all combined to endanger our privacy rights to a point never before seen in our history
After you read this report, you will see that reform is clearly needed.
Americans from across the political spectrum understand that “the right to be left alone” is central to our constitutional democracy – that a secure sense of personal privacy is vital to pre-serving the openness of American life, and to protecting the boundless creativity, innovation and prosperity for which we are known around the world.
If we allow the fear of terrorism to create a new industrial base for surveillance technology, unfettered by reasonable and effective privacy constraints, these special characteristics of the American way of life will wither on the vine.
This report is packed with fascinating and frightening details about how the relationship between government and big business is changing before our eyes – or, all too often, behind our backs.
Brought together, these details add up to a trend that would be almost hard to believe if it were not so well documented.
We at the ACLU are not sitting passively as the growth of a “surveillance-industrial complex” continues.
I hope that you will read this report, and then join us to help stop it.
[....]
But there is a third crucial obstacle that the American security establishment is seeking to
overcome in its drive to access ever more information about ever more people. That obstacle is the practical limits on the resources, personnel and organization needed to extend the government’s surveillance power to cover hundreds of millions of people. There will always be limits to the number of personnel that the U.S. security state can directly hire, and to the “ratio of watchers to watched.”
This is the obstacle that the U.S. security establishment seeks to overcome by enlisting individuals and corporations as auxiliary members of its surveillance networks.
[...]
A massive effort is underway to turn regular Americans into untrained government monitors.
[...]
The recruitment of informants for particular investigations has long been a key tool of law enforcement, but only under the most oppressive governments have informants ever become a widespread, central feature of life. The East German Stasi, for example, not only employed 91,000 full-time workers, but also recruited from among the citizenry more than 170,000 non-professional informants, or as many as one in every 50 citizens, to spy and report on their fellow citizens. Stasi agents even used blackmail and other pressure tactics to get people to spy on their own family members. The result was to create a pervasive sense of mistrust that prevented citizens from sharing their complaints with each other, gaining strength from connecting with others of like mind and challenging those who were in power.
A massive effort is underway to turn regular Americans into untrained government monitors who, pressed by constant urgings for vigilance and suspicion and lacking the training or accountability of professional law enforcement officers, are asked to report to the authorities anything they think is “unusual or suspicious.”
Many “suspicious behaviors” cited by the authorities have no rational or proven relationship to terrorism.

List of Companies Participating in the FBI Domestic Spy Program In The Atlanta Georgia Area Alone Reveal Domestic Spy Program Has Grown Beyond Our Wildest Nightmares

While the average person is not going to want to have anything to do with user name and password information released by the hacker group, the by looking at the domain names of the email accounts leaked, the list shockingly reveals is just how deeply the domestic spy program has penetrated local communities.
Keep in mind that list shows the websites of businesses only in the Atlanta area, that have registered for online access to the Atlanta InfraGard site and there are many more chapters and locations of this program all over the United States.
The list of companies participating in the FBI spy program to share their customers data with the Feds is just a startling revelation into how far out of control the domestic spying in the United States has grown. It infiltrates so many aspects of our every day life that we most likely would not even think twice about.
From payroll services, to accounting, to web hosts, IT technology providers, credit card companies, banks, local hardware stores, the list of companies spying on their customers for the FBI goes on and one.
Here is a unique list of domains of the companies and people involved in the program, extracted from the hacker leak, many that we would never suspect.
accenture.com – A popular employment head hunter

About Accenture

Accenture is a global management consulting, technology services and outsourcing company, with more than 215,000 people serving clients in more than 120 countries.  Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments.  The company generated net revenues of US$21.6 billion for the fiscal year ended Aug. 31, 2010.
alkizz.net Music sharing site.
alston.com
Alston + Bird – Business firm with offices in North Carolina, New York, Georgia, Washington D.C., Texas and California.

Services

Alston & Bird provides an extensive array of services covering legal and industry specialties. The list below provides a quick glance at those services. If the area you want to explore is not listed below, please use the Services Search tool to locate information in this section of the Web site.
Services
* Corporate & Finance
* Intellectual Property
* Litigation
* Tax
* Legislative & Public Policy
* Environment & Land Development
* Life Sciences
* Industries
* Detailed Listing
aol.com
atlantaga.gov
atlantagothic.net – A site reporting on the latest undeground raves and parties in the Atlanta area.
audits.ga.gov
bellsouth.net
borderhawk.com – The BorderHawk Team has substantial experience assessing, analyzing, and designing information protection programs —especially for Critical Infrastructure– related disciplines as Communications Security, Computer Security, Information Technology Security, Network Security, and Information Security to name a few. Offers services protecting against the “risk of social media and other technologies”.
careerbuilder.com – Online employment classifieds site.
cc.gatech.edu – Georgia tech College Of Computing.
Georgia Tech - Under Cover CEO
Georgia Tech - Under Cover CEO
ccboe.net Columbia County Elementary School
ceridian.com Global Human Resources, Payroll, Benefits & Payment Solutions
charter.net
cherokee.k12.ga.us Cherokee County Public Schools
choicepoint.com – Lexis Nexis – Risk management financial services, health care and insurance to retail and government.
cityofno.com
clear.net Internet Service Provider – Wireless Internet — Mobile 4G Wireless Internet Access from CLEAR
co.dekalb.ga.us
comcast.net
commscope.com Designs and produces cables for enterprise, HFC broadband, and carrier applications
computerjobs.com IT Employment Service.
cox.com

cox.net
cr3.us Drug Testing Firm?
danielcorp.com full-service real estate organization engaged in development, investment and management of office, multifamily, master-planned residential, retail, urban mixed-use, hospitality, medical and senior living properties.
danielpappadakis.com Financial Advisors offering Accounting services, Estate Management, Payroll Services, Etc.
definition6.com – Marketing Agency
deloitte.com – Major international accounting and consulting firm. Business Analytics, Mobile Apps, M&A Survery, Audit, Consulting, Financial Advisory, Risk Management …
demiurgeconsulting.com -
dfaco.com Business And Technology Convergence Services
digitel.net – Internet Service Provider Offering VOIP and Data Storage Solutions
earthlink.net
earthwayelectric.com – Electrical Services Company
epa.gov
equifax.com – Consumer Credit Bureau
faa.gov
fhlbatl.com – Federal Home Loan Bank of Atlanta
fsis.usda.gov
gatech.edu
gbi.state.ga.us
ge.com – General Electric
gema.ga.gov
genpt.com – Genuine Parts company
getfunctional.com
gladtech.net – Network and Information Security Solutions, Managed Security
gmail.com
Gmail.com
GMAIL.COM
graydonmckee.com – Vice President and Chief Operating Officer of Ascension Risk Management, a national risk management consulting firm
gsu.edu – Georgia State University
gta.ga.gov
haradas.com
hdqtrz.com
hksystems.us
homedepot.com
hotmail.com
ic.fbi.gov
ieee.org – IEEE Standards Association – Sets standards for technologies – non-profit professional association dedicated to advancing technological innovation related to electricity. It has more than 400,000 members in more than 160 countries, 45% outside the United States.
inficorp.com – InfiCorp Holdings, Inc. has merged with First National of Nebraska, Inc., the largest privately owned banking company in the country
InfraGard.org
InfraGard.org
interquestga.com
kennesaw.edu -Kennesaw State University
kia-rus.info
lmco.com Lockheed Martin – Technology and Defense Contractor.
luciddataservices.comLucid Data Services – Information Security Consulting
mac.com Apple Computer Corporation
mail.gatech.edu
mettlerics.com
mindspring.com
mishmash.com
monarchresiliency.comMonarch Business Resiliency – MBR, an independent consulting company based in Atlanta, is 100% focused on IT Disaster Recovery, Business Continuity Planning, and Business Resiliency, uniquely able to assist you with all aspects of your company’s Business Continuity/Resiliency program.
noblesouth.com – Blog – “The Noble view is Our place to express our views”
norcrossgroup.com – Norcross Digital Discovery Services – Norcross Group is a Licensed Private Detective Agency
nrc.gov – United States Nuclear Regulatory Committee
oca.state.ga.us
peer1.com Peer 1 – Web hosting data center and Content Delivery Network (CDN) Provider
prodigy.net (Redirects to AT&T – My Yahoo)
rediffmail.com India News Portal
regallager.com Regal Lager is a distributor of high quality baby and children’s products located in the surburbs of Atlanta, Georgia.
rim.com Research In Motion Limited, Manufacturer of the Blackberry phone
romega.us Rome, Georgia township website
s1.com Software solutions provider for Leading banks, credit unions, retailers, and processors.

S1′s customers include

sandyspringsga.org
scrconsulting.com – SCR Consulting Services – Security, Compliance And Risk Services.
securetechnologysystems.com Secure Technology Systems – Payment processing , Privacy laws, Disaster and Business Continuation Planning , IT Assessment, Strategic Planning, and Realignment, Internal Audit Augmentation.
secureworks.com Dell computer owned IT company that provides world-class information security services to help organizations of all sizes protect their IT assets.
security-forces.com Private Security Force Provider. (Like Blackwater, XE Services)
siemens.com Technology conglomerate
silvertonbank.com
smla.com IT Technology provider to fortune 500 companies.
southernco.com Southern Company – A leading U.S. producer of electricity, Southern Company owns electric utilities in four states and a growing competitive generation company, as well as fiber optics and wireless communications.
spearnetworks.com Blog Providing IT Scrips and Systems Engineer and Administration services.
srs.gov
stonesoft.com Stone Soft – Network Security Software Company
symantec.com Symantec – Anti-Virus and Network Security Software Company
tiburon-ent.com
trustnetinc.com – Trust Net – Newtork Security, Corporate Compliance and IT Solutions provider
turner.com – Time Warner Media Company
twistedtechnologies.com Twisted Technologies – IT support, web hosting, and data center.
us.army.mil US Army
us.ibm.com IBM computer and technology conglomerate
USG.EDU University System Of Georgia
verizon.net
verizonbusiness.com Verizon Business
vivid.net
wellstar.org Wellstar – World-class healthcare for over 600,000 people
yahoo.com

The Busts Keep Getting Bigger: Why?

July 14, 2011

Paul Krugman and Robin Wells

Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present
by Jeff Madrick
Knopf, 464 pp., $30.00                                                  
krugman_1-071411.jpg
Charles Prince, left, in 2003, when he took over as chief executive of Citigroup after the resignation of Sanford Weill, right
Suppose we describe the following situation: major US financial institutions have badly overreached. They created and sold new financial instruments without understanding the risk. They poured money into dubious loans in pursuit of short-term profits, dismissing clear warnings that the borrowers might not be able to repay those loans. When things went bad, they turned to the government for help, relying on emergency aid and federal guarantees—thereby putting large amounts of taxpayer money at risk—in order to get by. And then, once the crisis was past, they went right back to denouncing big government, and resumed the very practices that created the crisis.
What year are we talking about?
We could, of course, be talking about 2008–2009, when Citigroup, Bank of America, and other institutions teetered on the brink of collapse, and were saved only by huge infusions of taxpayer cash. The bankers have repaid that support by declaring piously that it’s time to stop “banker-bashing,” and complaining that President Obama’s (very) occasional mentions of Wall Street’s role in the crisis are hurting their feelings.
But we could also be talking about 1991, when the consequences of vast, loan-financed overbuilding of commercial real estate in the 1980s came home to roost, helping to cause the collapse of the junk-bond market and putting many banks—Citibank, in particular—at risk. Only the fact that bank deposits were federally insured averted a major crisis. Or we could be talking about 1982–1983, when reckless lending to Latin America ended in a severe debt crisis that put major banks such as, well, Citibank at risk, and only huge official lending to Mexico, Brazil, and other debtors held an even deeper crisis at bay. Or we could be talking about the near crisis caused by the bankruptcy of Penn Central in 1970, which put its lead banker, First National City—later renamed Citibank—on the edge; only emergency lending from the Federal Reserve averted disaster.
You get the picture. The great financial crisis of 2008–2009, whose consequences still blight our economy, is sometimes portrayed as a “black swan” or a “100-year flood”—that is, as an extraordinary event that nobody could have predicted. But it was, in fact, just the most recent installment in a recurrent pattern of financial overreach, taxpayer bailout, and subsequent Wall Street ingratitude. And all indications are that the pattern is set to continue.
Jeff Madrick’s Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present is an attempt to chronicle the emergence and persistence of this pattern. It’s not an analytical work, which, as we’ll explain later, sometimes makes the book frustrating reading. Instead, it’s a series of vignettes—and these vignettes are both fascinating and, taken as a group, deeply disturbing. For they suggest not just that we’re seeing a repeating cycle, but that the busts keep getting bigger. And since it seems that nothing was learned from the 2008 crisis, you have to wonder just how bad the next one will be.
The first thing you need to know about the cycle of financial overreach, crisis, and bailout is that it was not always thus. The United States emerged from the Great Depression with a tightly regulated financial sector, and for about forty years those regulations were enough to keep banking both safe and boring. And for a while—with memories of the bank failures of the 1930s still fresh—most people liked it that way. Over the course of the 1970s and 1980s, however, both the political consensus in favor of boring banking and the structure of regulations that kept banking safe unraveled. The first half of Age of Greed describes how this happened through a series of personal profiles.
To some extent Madrick covers familiar ground here. He recounts the economic turmoil of the 1970s, as the country was caught in the grip of stagflation. And as he points out, Nixon and Ford—like today’s Republicans—blamed the economy’s troubles not on the true culprits but on big government. Madrick stresses a key point that is often forgotten or misunderstood to this day: the surging inflation of the 1970s had its roots not in some general problem of “big government” but in largely temporary events—the oil price shock and disappointing crop yields—whose effects were magnified throughout the economy by wage-price indexation. Yet constant policy shifts by the Treasury and the Federal Reserve (remember wage-price controls?) under Nixon, Ford, and Carter, Madrick argues, made the American public lose faith in government effectiveness, creating within it a ready acceptance of the antigovernment messages of Milton Friedman and Ronald Reagan.
While we believe that there were deeper reasons for Reagan’s rise, Madrick is right that the economic malaise of the 1970s gave Reagan his big opening. As Madrick describes, Reagan’s enormous capacity for doublethink and convenient untruths enabled him, the front man for business interests, to convince a credulous public that “government had become the principal obstacle to their personal fulfillment.” In possibly the best chapter of the book, Madrick recounts the irony of how Reagan, the great moralizer, made unchecked greed and runaway individualism not only acceptable, but lauded, in the American psyche.
Madrick also does an especially persuasive job of demythologizing Milton Friedman, who provided intellectual heft for the antigovernment movement. As Madrick points out, although Friedman offered some important economic insights, he often shoehorned real-life data to fit into a one-sided narrative, gaining his theories wider acceptance than was ultimately justified. And Friedman, like Reagan, preferred “overly simple assertions of free market claims,” discarding the caveats.
In Friedman’s worldview, free markets were the solution to practically every problem—health care, product safety, bank regulation, financial speculation, and so on. And Friedman squarely blamed government for the Great Depression, a view that is at odds with the data. (Although it is almost certainly true that mistakes by the Fed made the situation worse.) As Madrick quotes him, “The Great Depression, like most other periods of severe unemployment, was produced by government management rather than by inherent instability of the private economy.” Replace “Great Depression” with “the financial crisis and its aftermath,” and it could be John Boehner today, rather than Friedman in 1962, speaking these words. Like Reagan, Friedman proclaimed a creed of greedism (our term)—that unchecked self-interest furthers the common good.
While 1970s inflation undermined confidence in government economic management and catapulted Friedman to fame, it also undermined the New Deal constraints on financial institutions by making it impossible to maintain limits on interest rates on customer deposits. To tell this part of the story, Madrick turns to an often-neglected figure: Walter Wriston, who ran First National City/Citibank from the 1960s into the 1980s. These days Wriston is best known among economists for his famous quote dismissing sovereign risk: “Countries don’t go out of business.”
But as Madrick documents, there was much more to Wriston’s career than his misjudgment of the risks involved in lending to national governments. More than anyone else, he epitomized the transformation of banking from cautious supporter of industry to freewheeling independent profit center, creator of crises, and recurrent recipient of taxpayer bailouts. As Madrick deftly points out, “Wriston lived a free market charade,” strongly opposing the federal bailouts of Chrysler (1978) and Continental Illinois (1984) while his own back was saved multiple times by government intervention.
The transformation of American banking initiated by Wriston arguably began as early as 1961, when First National City began offering negotiable certificates of deposit—CDs that could be cashed in early, and therefore served as an alternative to regular bank deposits, while sidestepping legal limits on interest rates. First National City’s innovation—and the decision of regulators to let it stand—marked the first major crack in the system of bank regulation created in the 1930s, and hence arguably the first step on the road to the crisis of 2008.
Wriston entered the history books again through his prominent part in creating the late-1970s boom in lending to Latin American governments, a boom that strongly prefigured the subprime boom a generation later. Thus Wriston’s dismissal of the risks involved in lending to governments would be echoed in the 2000s by assertions, like those of Alan Greenspan, that a “national severe price distortion”—i.e., a housing bubble that would burst—”seems most unlikely.” Bankers failed to consider the possibility that all of the debtor nations would experience simultaneous problems—Madrick quotes the head of J.P. Morgan saying: “We had set limits, long and short, on each country. We didn’t look at the whole.” And in so doing they prefigured the utter misjudgment of risks on mortgage-backed securities, which were considered safe because it was deemed unlikely that many mortgages would go bad at the same time.
When the loans to Latin American governments went bad, Citi and other banks were rescued via a program that was billed as aid to troubled debtor nations but was in fact largely aimed at helping US and European banks. In that sense the program for Latin America in the 1980s bore a strong family resemblance to what is happening to Europe’s peripheral economies now. Large official loans were provided to debtor nations, not to help them recover economically, but to help them repay their private-sector creditors. In effect, it looked like a country bailout, but it was really an indirect bank bailout. And the banks did indeed weather the storm. But the loans came with a price, namely harsh austerity programs imposed on debtor nations—and in Latin America, the price of this austerity was a lost decade of falling incomes and minimal growth.
This was, then, an enormous bank-led crisis—soon followed by the savings and loan crisis, which Madrick treats only briefly, but which had a higher direct cost to taxpayers than even the current crisis. And the response of the political system to these crises was… to shower more favors on the financial industry, dismantling what was left of Depression-era regulation.
The second part of Madrick’s book surveys the wide-open, anything goes financial world that deregulation created. This was an era marked by two huge bubbles—the technology bubble of the 1990s and the housing bubble of the Bush years—both of which ended in grief, although the economic damage inflicted by the second bubble’s bursting was vastly greater.
Again, Madrick’s exposition takes the form of a series of personal vignettes. As in the first part of the book, some of these cover familiar ground. We learn about the career of Alan Greenspan and how he used his reputation as an economic guru—a reputation that in retrospect was entirely undeserved—to push his antigovernment, antiregulation ideology. We meet some of the architects of the 2008 crisis: Angelo Mozilo of Countrywide Financial Services, Jimmy Caine of Bear Stearns, Dick Fuld of Lehman, Stan O’Neal of Merrill Lynch, and Chuck Prince of Citigroup (created by the merger of Travelers Insurance with—yet again—Citibank). Mozilo was the leading peddler of subprime and other risky mortgages, loans made to people who shouldn’t have been getting loans. The others were all involved in the process of slicing, dicing, and recombining these loans into supposedly safe financial instruments, AAA-rated investments that suddenly turned into waste paper when the housing bubble burst.
However, the real star is a figure who, if not exactly neglected, isn’t at the center of most crisis narratives: Sanford I.—Sandy—Weill. Weill’s personal rise paralleled the transformation of finance, as the genteel figures of the era of regulated, boring banking were replaced by aggressive outsiders. During the 1960s, old-school Wall Streeters mockingly referred to Weill’s brokerage—Cogan, Berlind, Weill & Levitt—as Corned Beef with Lettuce. By 2000, however, the old Wall Street was gone, and the former outsiders were in charge. Weill, in particular, had masterminded the merger of Citibank and Travelers, and after a power struggle emerged as the new Citigroup’s CEO.
What was truly remarkable about that merger is that when Weill proposed it, it was clearly illegal. Salomon Smith Barney, a Travelers subsidiary, was engaged in investment banking, that is, putting together financial deals. And New Deal–era legislation—the Glass-Steagal Act—prohibited such activities on the part of commercial banks (deposit-taking institutions) like Citibank. But Weill believed that he could get the law changed to retroactively approve the merger, and he was right.
Almost immediately, the new financial behemoth was wrapped in scandal. Nowadays it’s common to treat the technology bubble of the 1990s and the housing bubble of the decade following as having been very different stories. And in financial terms they were quite different: the tech bubble didn’t lead to a dramatic rise in debt the way the housing bubble did, and as a result the bursting of the bubble didn’t cause major defaults and a run on the banking system. Yet Wall Street—and Wall Street corruption—played a crucial role in both bubbles, as Madrick reminds us in a chapter titled “Jack Grubman, Frank Quattrone, Ken Lay, and Sandy Weill: Decade of Deceit.” As Madrick points out, Grubman, an analyst at Salomon Smith Barney who was effectively on the take, was central to some of the biggest accounting frauds. And Weill ended his reign at Citigroup immensely rich but under an ethical cloud.
There are a lot of villains in this story—so many that by the end of the book we were, frankly, suffering from a bit of outrage fatigue. But why have villains triumphed so repeatedly?
The proximate answer, clearly, is the abdication of regulatory oversight. From junk bonds to derivatives to sub-prime mortgages, regulators either turned a blind eye or were impeded by business interests and politicians—Democrat as well as Republican. Undoubtedly the most outrageous act—and the most economically damaging to the country—was Greenspan’s refusal to use regulatory powers at his disposal to rein in the exploding sub-prime market, despite being warned repeatedly that a catastrophe was brewing. Like Reagan and Friedman, Greenspan firmly believed in greedism; in his view, the financial markets could do no wrong.
Yet if the problem was lack of oversight, that leads to another question: Why did the regulators abdicate—and keep abdicating despite repeated financial disasters? This is perhaps the most frustrating aspect of Madrick’s otherwise excellent book: we get a lot of the what, but not much of the why. Madrick’s character-centered narrative makes it seem as if the triumph of greed was the result of a series of contingent events: the inflation of the 1970s, the exploitation of that inflation by Reagan and Friedman, the wheeling and dealing of the likes of Sandy Weill, and the diffidence of Jimmy Carter and Bill Clinton. Yet surely there must have been deeper forces at work.
We have argued elsewhere (and are not unique in doing so) that white backlash—especially Southern white backlash—against the civil rights movement transformed American politics, creating the opportunity for a major push to undermine the New Deal. Also, it’s hard to make sense of the growing ability of bankers to get the rules rewritten in their favor without talking about the role of money in politics, and how that role has metastasized over the past thirty years. There’s another book to be written here—perhaps less personality-centered and hence less entertaining than Madrick’s, but one that gets at the forces that made the reign of financial villains possible.
Whatever the deeper story, however, Madrick’s subtitle gets it right: what we have experienced is, in a very real sense, the triumph of Wall Street and the decline of America. Despite what some academics (primarily in business schools) claimed, the vast sums of money channeled through Wall Street did not improve America’s productive capacity by “efficiently allocating capital to its best use.” Instead, it diminished the country’s productivity by directing capital on the basis of financial chicanery, outrageous compensation packages, and bubble-infected stock price valuations.
And what has happened in the aftermath of the 2008–2009 crisis is still worse: all the evidence suggests that the United States is on track to spending the better part of a decade experiencing high unemployment and sub-par growth blighting millions of lives—particularly the old, the young, and the economically vulnerable.
Yet even now we don’t seem to have learned the lesson that unregulated greed, especially in the financial sector, is destructive. True, most Democrats are now in favor of stronger financial regulation—although not as strongly as is required by the continuing manipulations by large financial institutions. But today’s Republicans remain firmly attached to greedism. In their view, it’s still government that’s the problem. It has now become orthodoxy on the right—despite overwhelming evidence to the contrary—that Fannie Mae and Freddie Mac, not Angelo Mozilo and Countrywide Credit, are to blame for the subprime mess. While proclaiming themselves defenders of the little guy, Republicans are currently hard at work undermining the Obama administration’s consumer protections that would largely prevent a replay of rapacious subprime lending.
The Age of Greed is a fascinating and deeply disturbing tale of hypocrisy, corruption, and insatiable greed. But more than that, it’s a much-needed reminder of just how we got into the mess we’re in—a reminder that is greatly needed when we are still being told that greed is good. Cross-posted via:
http://www.nybooks.com/articles/archives/2011/jul/14/busts-keep-getting-bigger-why/?pagination=false