Amanda Frost has a piece up at Slate about how Congress should abolish the Supreme Court’s three-month vacation. The merits of that idea aside, Congress should first abolish its own moronic vacations. Although I understand that representative democracy means visiting one’s home district, the number of breaks is ridiculous. The House essentially gets a week recess off every month. Both houses still take an August recess. Most of these recesses give Congresspersons time to raise money for their reelection.

Yet, Congress’s job is far more important and copious than the Supreme Court’s. If the Supreme Court chooses not to hear cases and allow different court of appeals opinions to rule in different circuits, the Republic will not collapse. If Congress doesn’t do something about the end of the stimulus and Bush tax cuts as well as the end of various federal aid, the Republic may actually collapse.

Missouri U.S. Senate candidate Rep. Todd Akin’s awful suggestion that women rarely get pregnant from “legitimate rape” is awful for many reasons — a mind-blowing lack of knowledge of basic human biology, the suggestion that many rape victims who ask for abortions must be lying, etc.

The real problem with his comments, however, is that they are essentially part of the Republican orthodoxy on being adequately “pro-life.” For example, VP nominee Paul Ryan has said that he does not support abortion even in cases of rape or incest — only when the mother’s life is at risk. Five Republican presidential candidates — Gingrich, Bachmann, Santorum, Paul, and Perry — all supported a pledge that only permitted abortion in cases where the mother’s life is at risk (and even then, “every effort should be made to save the baby’s life as well”). As much triangulation as the Romney campaign attempts, the “abortion is always murder” crowd is the core of the Republican base.

In the meantime, Todd Akin will still probably win in Missouri, regardless of his ignorant and offensive comment. The Missouri Republican Party’s official platform supports overturning Roe v. Wade, forced anti-abortion counseling, preventing public money from going to abortions, preventing public employees from referring abortions, etc. Much as Republicans may pretend, Akin’s comments aren’t shocking or surprising at all — they are part and parcel of Republican anti-abortion extremism.

This is pretty glorious. Paul Ryan says that Rage Against the Machine is one of his favorite bands. Tom Morello, the guitarist for the band, responds by saying, “Paul Ryan Is the Embodiment of the Machine Our Music Rages Against.”

This is the closest I have ever come to feeling sorry for Paul Ryan. If Sufjan Stevens or Thom Yorke or Joanna Newsom were to announce to the world that they thought I sucked, my feelings would be pretty hurt! But then I remember that Paul Ryan wants to engineer one of the largest transfers of wealth from the middle class to the ultra-wealthy, and I stop feeling sorry at all.

Ok, I know I’m not supposed to be cocky. And I am overall a rather pessimistic person, so I don’t even feel comfortable saying this, anyway. Plus, like everyone else, my political predictions frequently turn out to be wrong.

But, with Romney’s selection of Paul Ryan for VP, this election is now over. Obama will win, and fairly easily.

You may recall that in the past few weeks, there has been some uproar over Harry Reid’s claim that Romney paid zero taxes over the course of a decade.  It’s a claim that could be easily disproved by Romney releasing his taxes, but of course he seems loath to do that.

But now the conversation has changed. Forget the past, let’s look at the future. Paul Ryan’s budget plan, which now becomes the Romney/Ryan budget plan, has some specific ideas for cutting taxes. In particular, it would slash corporate taxes to zero. For the one year of tax returns Romney has released, in 2010, Romney paid about 14% in taxes on his income. Under his new Romney/Ryan budget plan, that number would be… 0.82%. The reason? Nearly all of Romney’s income in that year comes from capital gains/dividends and the like.

This is unimaginably toxic. The political ads write themselves. Romney always had to fight against his image as a rich guy who just wants to cut taxes so that he becomes richer, while the middle class foots the bill. Now he picks a guy who has proposed to do exactly that.

We typically try to refrain from over-analyzing the horse race, but sometimes, we allow ourselves some horse-race bullshit. After all, it does matter who wins a presidential election.

Thus, the podcast follows. Topics include:

  • Romney and Bain: Is Romney being Swift-boated (i.e., attacked with misleading reports that undermine his core strength)? Is it working?
  • Is it fair to attack Romney for being an out-of-touch rich guy, even if he is?
  • Do narratives matter?
  • How much to economic indicators matter?
  • What are our best guesses on the presidential race so far?
  • Will the Supreme Court Obamacare decision matter?
[audio http://dl.dropbox.com/u/14175885/Podcast8.mp3]


With each financial scam/hoax/fraud, we hear people decry capitalists not acting as they once did — with honor and so forth. David Rhode has a new short piece for the Atlantic about this topic regarding the Libor scandal. In summary, bankers are behaving unethically and their lack of ethics hurts all of us. And I basically agree with that.

I do take issue, however, with the idea that somehow the past was better. Remember that time when Jay Gould tried to corner the gold market? Remember that time when rampant speculation and poorly regulated credit markets led to the Great Depression? (Oh yeah, did I mention that a bunch of financial wizards tried to overthrow the government?) The amorality of the S&L is on par with the amorality of today.

Capitalists have always pursued profit above all. That’s the point. It would be folly to expect them to do otherwise. That’s exactly why blunt, dumb regulations, rather than public scoldings, are needed to hold the line.


David Rohde

David Rohde – David Rohde is a columnist for Reuters, two-time winner of the Pulitzer Prize, and a former reporter for The New York Times. His forthcoming book, Beyond War: Technology, Economic Growth and American Influence in the New Middle East will be published in March 2013. More

The Libor Scandal and Capitalism’s Moral Decay

By David Rohde

Jul 13 2012, 2:45 PM ET 181

The scandal engulfing the financial industry is yet another sign that our business leaders no longer respect the rule of law. 



Maybe the acronym at the heart of the scandal is too confusing. Or Americans are simply tired of hearing about greedy bankers. By any measure, though, the Libor bank scandal is an extraordinary example of the 1 percent stealing from the 99 percent – and our crumbling ethics.

If an organized crime group was accused of breaking into the Nassau County Treasurer’s Office on New York’s Long Island and stealing $13 million, outrage would be widespread. And if the same group was accused of stealing millions from the City of Baltimore and other struggling municipalities, they would emerge as an issue in the presidential campaign.

Instead, the Libor scandal is emerging in dribs and drabs and drawing little public attention. The middle class is being victimized, and there is little protest.

Last month, the British bank Barclays agreed to pay $453 million to American and British authorities to settle allegations that it manipulated key interest rates for profit between 2005 and 2009, specifically the London Interbank Offered Rate, or Libor. American and British investigators are now examining whether traders at a dozen other banks — including the “too-big-to-fail” U.S. banks JPMorgan, Citibank and Bank of America — also manipulated rates.

It is hard to overstate the impact of the Libor benchmark, which is used to value some $360 trillion in loans and financial contracts worldwide. It affects lending to governments, businesses and consumers, and even student loan and credit card rates.

So Barclays’ victims weren’t just other banks and traders. They included taxpayers in dozens of communities who are believed to have paid millions more in interest than they should have at the height of the financial crisis. Teachers and other public servants may have been laid off because of bankers’ pursuit of ever-higher profits.

Lawsuits filed by the City of Baltimore and dozens of other parties against Barclays, JP Morgan, Bank of America, Citibank and Deutsche Bank have been consolidated into a single case in a New York federal court. Banks are denying any wrongdoing, and the true scope of the losses — and the role of American banks — is expected to emerge in the complex legal battles ahead.

I do not believe all bankers are evil. I admire business owners who innovate, create jobs and strengthen communities. But theft — whether the perpetrator is clad in a business suit or blue jeans — is theft.

And let’s not kid ourselves. Our ethical decay stretches beyond Wall Street. It spans industries, political parties and groups. In April, systematic bribery by executives of the U.S.’s second-largest company – Walmart – was reported across Mexico. In June, American sports officials accused cyclist Lance Armstrong of engaging in a massive doping conspiracy. And Jesse Jackson Jr. appears to be the fifth member of Congress to be embroiled in an ethics scandal in two years.

Around the world, a globalized economy is creating planetary-sized profits — and relentless pressure. A May survey by Ernst & Young of 400 chief financial officers around the world found that a growing number of them were willing to pay bribes and falsify their firm’s financial performance to survive the financial downturn.

The number of chief financial officers who said they would engage in bribery to stay in business grew from 9 percent in 2011 to 15 percent in 2012. And the number who said they would misstate their company’s financial health to get though a downturn rose from 3 percent in 2011 to 5 percent in 2012.

“One of the most troubling findings of the survey is the widespread acceptance of unethical business practices,” Ernst & Young said in a statement. “It is particularly alarming that respondents are increasingly willing to make cash payments.”

Corporate boards and other overseers, meanwhile, appear to be looking the other way. Eighty-one percent of those surveyed worldwide by Ernst & Young said anti-bribery and anti-corruption codes of conduct were in place in their companies. But nearly half said they did not believe employees had been punished for violating those polices.

When I read stories about the “most common passwords” or whatever, I always wonder how they got this information in the first place. Usually the pieces are laughers or a warning to people to have more “secure” passwords. The latest Yahoo! Mail breach suggests that the commonest password “base words” are things like “password” and “qwerty.”

But fancier passwords are actually not much better than non-fancy passwords. “checkmymail” is as safe as “Ch3cK!Mym41L” if they’re going to be stolen anyways. The most likely threat of breach isn’t from someone guessing your password — it’s from you writing it down, saving it in your browser, forgetting to logout on a public computer, or having someone steal your password wholesale from the company itself. If banks, email companies, and the federal government can’t keep information from outing, what’s the point in having a super-secure password?

When we think about risk, it usually turns out that the biggest risks are hidden or impossible to assess. You can take a lot of precautions to protect your password (Slate’s Farhad Manjoo has tips here), but in the long run, that risk is tiny compared to the risk of just having your password stolen one day. It’s like the weird-but-true factoid that you have a higher chance of dying by asteroid than by lightning. We can take precautions to protect us from the small risks, but the big risks are often out of our control; you can’t get Yahoo!Mail (for which you pay nothing) to be more secure with your data.