Monthly Archives: September 2014

536: The Secret Recordings of Carmen Segarra

This American Life has an article on and a recording of the program 536: The Secret Recordings of Carmen Segarra.

An unprecedented look inside one of the most powerful, secretive institutions in the country. The NY Federal Reserve is supposed to monitor big banks. But when Carmen Segarra was hired, what she witnessed inside the Fed was so alarming that she got a tiny recorder and started secretly taping.

This story was developed in partnership with Pro Publica. I reported on their coverage in the previous post Inside the New York Fed: Secret Recordings and a Culture Clash.

The quibble I had with how the other report ended is thoroughly covered in This American Life audio. This coverage makes it quite clear that Segarra was willing to come out with a public compromise with her supervisors even though she told them in confidence that she did not agree with them.

I hope that Senator Elizabeth Warren makes as big a deal over this issue as she possibly can. As soon as Eric Holder is out of the Department of Justice, perhaps we can get some investigation of this from the highest levels.

It is clear from this, that the people who are concerned about the Fed and “who watches the watchers” are quite right to be demanding more oversight of the Fed. This is not a call to do away with the Fed, nor is it a call to rein them in. It is quite the opposite. It is a recognition that the FED is not doing its job diligently enough. There needs to be a systemic change in the organizational structure that makes it impossible for the FED to hide its failures to do its job.

John Oliver Demands to Know How Ayn Rand Is ‘Still a Thing’

Last Week Tonight with John Oliver has the segment “How is Ayn Rand Still a Thing”

Ayn Rand has always been popular with teenagers. She’s something you’re supposed to grow out of like SKA music or handjobs.

The older people who still haven’t figured out what’s wrong with her ideas are in a serious state of arrested development. They have a firm idea on the way the world ought to be without any understanding that the world is nothing like their idea and never can be.

Ranger Curt: Vote Yes on 2 to Stop Litter

Thanks to Elizabeth St. John for posting this on her Facebook page.

Former Massachusetts Chief Park Ranger Curt Rudge explains why it’s so important to vote Yes on Question 2 on Nov. 4 to stop bottle litter in Massachusetts and expand the Bottle Bill. Big beverage companies are spending over $5 million to say things are fine the way they are–but Ranger Curt has seen bottles without a deposit on them from sports drinks, iced tea, and water are piling up as litter in our beautiful state. He’s seen the damage this litter does to our parks. That’s why we need to vote Yes on Question 2 on November 4. (30 seconds)

As on who lives on a busy rural road, I can attest to what Ranger Curt has to say. The litter I see at the edges of my property has few returnables in it. What little there is is scavenged by people who can make a few cents returning it. The rest just hangs around as litter. I am not about to be the trash collector for the clods who throw this stuff out their windows.

I have been tempted to post the following sign, but I know that would just escalate the war.

Beware The Trash Monster

Eric Holder Resigns, At Long Last

The Real News Network has the interview After Eric Holder Resigns, A Look at His Record on Bank Prosecutions.

And as you mentioned, this administration, and Eric Holder in particular, are known for the viciousness of their war against whistleblowers. What the public doesn’t know–and it doesn’t know because of Eric Holder–is that in the three biggest cases involving banks–again, none of them, not a single prosecution of the elite bankers that drove this crisis–all three of those cases, against Citicorp, against JPMorgan, and against Bank of America, were made possible by whistleblowers. Eric Holder was the czar at the Department of Justice press conferences in each of these three cases, and he and the Justice Department officials, the senior Justice Department officials, at those press conferences, never mentioned the role of the whistleblowers–never praised the whistleblowers and never used those press conferences as a forum for asking whistleblowers to come forward. And so your viewers should take a look at the Frontline special on this, where the Frontline producers made clear that as soon as word got out that they were investigating the area, dozens of whistleblowers came forward, and each of them had the same story: the Department of Justice had never contacted them.

This Department of “Justice” seems to have the uncanny knack of going after the innocent and protecting the guilty. I think it is pretty clear that Eric Holder did an excellent job of carrying out the directions of President Obama. If I were a little less cynical, I would be left wondering how this administration could have let us down so badly.

Inside the New York Fed: Secret Recordings and a Culture Clash

Elizabeth Warren has posted on her Facebook page a commentary on the Propublica article Inside the New York Fed: Secret Recordings and a Culture Clash.  Warren’s comment on the article are:

When regulators care more about protecting big banks from accountability than they do about protecting the American people from risky and illegal behavior on Wall Street, it threatens our whole economy. We learned this the hard way in 2008. Congress must hold oversight hearings on the disturbing issues raised by yesterday’s whistleblower report when it returns in November – because it’s our job to make sure our financial regulators are doing their jobs.

I agree that the story is quite disturbing and seems to be an indication of why our regulatory system is continuing to fail to protect us.  I think that the very reason that inequality has grown faster under Obama than under Bush is exactly the fact that we bailed out the rich but refused to prosecute them for the crimes they committed.

Given what I have just said, I must disagree with the way the article ended.  It cuts the knees out from under their own story about a woman, Segarra, who was hired to be the Goldman Sachs regulator.  Her boss was Silva.  The Santander case was described earlier in the article.

The audio is muddy but the words are distinct. So is the tension. Segarra is in Silva’s small office at Goldman Sachs with his deputy. The two are trying to persuade her to change her view about Goldman’s conflicts policy.

“You have to come off the view that Goldman doesn’t have any kind of conflict-of- interest policy,” are the first words Silva says to her. Fed officials didn’t believe her conclusion — that Goldman lacked a policy — was “credible.”

Segarra tells him she has been writing bank compliance policies for a living since she graduated from law school in 1998. She has asked Goldman for the bank’s policies, and what they provided did not comply with Fed guidance.

“I’m going to lose this entire case,” Silva says, “because of your fixation on whether they do or don’t have a policy. Why can’t we just say they have basic pieces of a policy but they have to dramatically improve it?”

It’s not like Goldman doesn’t know what an adequate policy contains, she says. They have proper policies in other areas.

“But can’t we say they have a policy?” Silva says, a question he asks repeatedly in various forms during the meeting.

Segarra offers to meet with anyone to go over the evidence collected from dozens of meetings and hundreds of documents. She says it’s OK if higher-ups want to change her conclusions after she submits them.

But Silva says the lawyers at the Fed have determined Goldman has a policy. As a comparison, he brings up the Santander deal. He had thought the deal was improper, but the general counsel reined him in.

“I lost the Santander transaction in large part because I insisted that it was fraudulent, which they insisted is patently absurd,” Silva said, “and as a result of that, I didn’t get taken seriously.”

Now, the same thing was happening with conflicts, he said.

A week later, Silva called Segarra into a conference room and fired her. The New York Fed, he told Segarra, who was recording the conversation, had “lost confidence in [her] ability to not substitute [her] own judgment for everyone else’s.”

I commented in the article’s comment section and on the Warren Facebook post:

At the end of the article the quarrel seemed to be over whether or not Goldman had a conflict of interest policy.

Why couldn’t they come to an agreement to say that “Goldman Sachs had a conflict of interest policy, but that it did not comply with Fed guidance”?  Those were her own words.  Why was she so adamant that she could only express her thoughts as “They didn’t have a policy” when she knew how those literal words were so easily refuted?  Her response to that refutation would be the exact words I proposed above.

There is obviously more to this story than can fit in a news article.  However, you do have to wonder why the reporters would put it the way they did in the face of my obvious question which any reasonable editor would have asked?

Am I the only one to see this hole in the case?

I just wish that this strong case about how regulation is being badly managed at the Fed didn’t have this silly ending to detract from the case.  Moreover, it is too bad that the people presenting the case, Propublica and Elizabeth Warren, don’t choose to address this flaw.

Inside the Koch Brothers’ Toxic Empire

Rolling Stone magazine has the article Inside the Koch Brothers’ Toxic Empire.

Together, Charles and David Koch control one of the world’s largest fortunes, which they are using to buy up our political system. But what they don’t want you to know is how they made all that money.

As much as I have come to realize the evil nature of the Koch brothers, I don’t think I had an inkling of how bad they were.  If you read this, make sure you have a jaw strap to keep your jaw from dropping on the floor. (And if you want to make a verbal safety recommendation as I have written it above, make sure you pronounce the name of  the safety device carefully.)

The New York Times Claims that Opposing EU Austerity Leads to Anti-Semitism

New Economic Perspectives has the article The New York Times Claims that Opposing EU Austerity Leads to Anti-Semitism by William Black.

It turns out that opposition to austerity is a key cause of Anti-Semitism – at least in the imagination of NYT reporters.

“With Europe still shaking from a populist backlash against fiscal austerity, some Jews speak of feeling politically isolated, without an ideological home.”

That sentence is odd on multiple dimensions. First, there is the question of what is “shaking” Europe. The NYT thinks it is opposition to austerity – not austerity – that is “shaking” Europe. That reverses reality. The troika’s infliction of austerity forced the Eurozone back into a gratuitous Second Great Recession and much of periphery into a gratuitous Second Great Depression. It has now pushed Italy into a third recession and the eurozone as a whole into “stagnation” – eight years after the bubbles burst and six years after the most acute phase of the financial crisis. Eurozone austerity is one of the great crimes against humanity.

This is just another reason why I have trouble understanding why Jews of any foresight would still believe in The New York Times, fiscal austerity, or any Ayn Rand philosophy extolling the greed of oligarchs.

The realization the other day that fundamentalist Muslims seem to be the most adamant opponents of the ills caused by unfettered capitalism, leads me to the following transition.

It is one thing to want to support Israel, but when it comes to turning a blind eye to the cause of the Palestinians, we are treading dangerously near to being on the wrong side of the class war. The support for Israel and the resultant blame put on the Palestinians sounds to me too remarkably close to the arguments of the 1% against the 99% in this country and the world in general.

If you blame the downtrodden for all of their problems without realizing who is doing the treading, then you may be on the wrong side of the argument. Whatever little logic you may have on your side will be hardly noticed when the downtrodden finally rise up.

Hands Off Social Security & Medicare DC Rally

Watch Elizabeth Warren’s  presentation.  It is only about 5 minutes long.

With Social Security and Medicare under renewed threat from Tea Party extremists in Congress, Senate Majority Leader Harry Reid, House Democratic Leader Nancy Pelosi, Senator Elizabeth Warren, Congressman Bruce Braley, other members of the House and Senate, the Koch Sisters, seniors from across the country, advocates for seniors and other concerned Americans will hold an event this Thursday, September 18th in Washington, DC to tell the GOP: “HANDS OFF Social Security and Medicare – We Earned It!”.

In this class warfare, our class won’t have a chance if we don’t stand up and fight.

Charlie Baker saved Harvard Pilgrim. Can we stop debating it?

The Boston Globe has the column Charlie Baker saved Harvard Pilgrim. Can we stop debating it? by Shirley Leung.

It’s true that Baker raised rates by a lot, but so did other insurers at the time. The increases, however, weren’t onerous enough to prevent Harvard Pilgrim from growing. Membership rose from a low of 750,000 to more than 1 million on his watch.

Yes, Baker was well paid, but his compensation package was in line with his peers in 2008, the last full year he was CEO. He still doesn’t hold a gold coin to Ted Kelly, who made out with nearly $50 million a year as CEO and chairman of Liberty Mutual.

As for Baker rescuing Harvard Pilgrim, let’s get this straight because you’re going to hear a lot from Martha Coakley, the attorney general and Democrat gubernatorial candidate who will tell you Charlie was no hero. He got a state bailout. Slashed jobs. Hiked prices. Is this leadership?

So this is what you need to know: After serving in the Weld and Cellucci administrations, Baker went off to work in health care, and in 1999, he was brought in to fix a company in deep trouble. He did so with a plan, a firm hand on the rudder, and grit. He pulled out of Rhode Island. He cut jobs, even outsourced them. He invested in technology to improve customer satisfaction.

By the time he left, Harvard Pilgrim was rated the best health insurer in America in annual rankings conducted by a respected nonprofit. So give the guy credit where credit is due.

So we get the idea that Charlie Baker should be governor because his health insurance rate increases were not any worse than the other insurance companies at the time.  Being a firm believer in the law of supply and demand, we are to conclude that Shirley Leung isn’t purposely leaving out the other side to the story of Harvard/Pilgrim’s increasing enrollment that would offset the increase in rates.

We can praise Charlie Baker for being no more rapacious than other executives when it comes to his compensation package.  I’m supposed to consider voting for Baker because he is not nearly as bad as Ted Kelly?

As far as Charlie Baker being a job creator, Leung says “He cut jobs, even outsourced them.”  Let’s also praise Baker because “He invested in technology to improve customer satisfaction” after he decimated morale amongst his workforce with draconian job cuts.  OK, so that last part is only my interpretation.  Doesn’t the world have a problem that corporations can save money by replacing workers with automation, and feels a need to apportion the benefits of increased productivity to only its top management and share holders?  The Charlie Baker’s of the world are the problem, not the solution.

Charlie Baker must be a genius to have rescued Harvard/Pilgrim with his own ingenuity (and a “state bailout”).

Now, consider the responsibilities of a governor.  Suppose you manage to run the government by keeping within your budget, cutting taxes, and laying off people, but the state has a higher unemployment rate, crumbling infrastructure, declining education achievements, and higher rates of poverty.  Can you simply say that the negatives are just not my job as you could when you were in private business?

Let’s hope we never elect a governor who thinks that running a state is just like running a business.

Monetizing Internet Content – A Working Example

A news story on WBZ-TV made it clear to me that there were already services in operation that had some similarity to the idea I have been pushing. See the previous post Monetizing Internet Content – One More Time.

I could not find the WBZ story on line to look up the services they mentioned, but it gave me the idea to search the web.

Infoq has the article How to Pay the Author: Flattr Micropayment Service.

Here is the video that the company, Flattr, has put up on YouTube.

Flattr is a revolutionary social micropayment system. This how it works. Visit us at

I also found references to Tiny Pass and a zillion others.