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Here’s Melissa Harris-Perry talking about the Pew study on net worth from the other day.

Our Dying Economy

Nicholas Shaxson (the author of Treasure Islands) has a post on a probably-doomed attempt by developing countries to have more of a say over international tax policy.

According to Jay Rockefeller, the Republicans shut down the FAA primarily to help Delta ensure its workers never unionize.

A few days ago I linked to an article arguing that Microsoft’s profits largely stemmed from tax avoidance–facilitated in part by their purchase of Skype. Here’s a longer article laying out MS’ tax dodging. It seems like it’d be a useful strategy to lay out how all the companies engaged in the worst kind of tax cheating are doing it because they’re not really doing much as companies anymore.

Our National Security State

Ron Wyden and Mark Udall are basically trying to force Eric Holder and James Clapper to admit that it’s a bad thing to interpret laws–notably, the PATRIOT Act–in ways that the public doesn’t understand. I suspect this won’t make it out of the Intelligence Committee. So I wonder whether Harry Reid will make good on his promise to let them raise it in the full Senate. Me, I think the bill would be more effective if Holder and Clapper each had to write “I will not use smart phones to track innocent Americans’ locations” once for each time they have done so.

ACLU has a new report on secrecy out I plan to return to. In the meantime, Steven Aftergood has some interesting things to say about it.

The Treasury Department says Iran is funneling money to Al Qaeda. I’m more interested in the questions Blake Hounshell raises in reporting the issue, though, than actually convinced Treasury isn’t just making shit up.

Justice and Injustice

A judge just ruled that Shirley Sherrod’s lawsuit against Andrew Breitbart can proceed.

Your Daily Murdoch

Now why do you suppose James Murdoch and Rebekah Brooks were getting briefed by Britain’s Defense Secretary? And does anyone actually believe Murdoch’s top execs haven’t gotten similar treatment here?

It’s not so much that Piers Morgan doth protest too much. It’s that the traditional media is bending over backwards to accept his version of the claim that he never authorized anyone to hack a phone. Not to mention they’re accepting a very carefully parsed answer–Morgan’s “I have never hacked a phone, told anyone to hack a phone, nor to my knowledge published any story obtained from the hacking of a phone” leaves a whole lot of knowledge of hacking on the table.

Apparently, the plan for the cover-up in the UK consists of generalizing the inquiry into journalists’ conduct generally, with a series of seminars about the ethics of journalism, which I presume will ensure that public opinion magically starts to side with Murdoch, not his victims or rule of law.

The Guardian reports that NotW is suspected of hacking the phone of the mother of the girl for whom “Sarah’s Law”–a sex predator transparency law–was named after. It also says Rebeka Brooks gave her the phone! If you saw Brooks’ testimony before Parliament, she used NotW’s championship of Sarah’s Law as PR spin.

Free for All 

Marion Nestle assesses McDonald’s new Happier Meals and finds them unimpressive, largely because they still offer soda. Interestingly, though, it appears Happy Meals aren’t selling like they used to partly because kids are snobbier about toys and partly because the dollar items on McDonald’s menu ends up being a cheaper way to feed kids.

I long meant to do a piece looking at how the Japanese earthquake exposed the problems with our current supply chain. Matt Stoller has taken what happened after the earthquake as an opportunity to reflect on the possibility of systemic failure because our supply chain has been concentrated and outsourced.

In the last few years, economists have spent a lot of time and energy thinking about bank runs. A bank run happens when depositors think a bank is weak and scramble to get their money out before it collapses. “Tight coupling” of financial institutions, like when banks are overly dependent on each other, can create a cascading series of problems for the system itself.

[snip]

Worryingly, there’s been very little consideration of how systemic collapses can happen in another, perhaps more dangerous realm—the industrial supply system that keeps us in everything from medicine to food to cars to, yes, videotape. In 2004, for instance, England closed one single factory, which caused the United States to lose half of its flu vaccine supply.

Barry Lynn of the New America Foundation has been studying industrial supply shocks since 1999, when he noticed that global computer chip production was concentrated in Taiwan. After a severe earthquake in that country, the global computer industry nearly shut down, crashing the stocks of large computer makers. This level of concentration of the production of key components in a globalized economy is a new phenomenon. Lynn’s work points to the highly dangerous side of globalization, the flip side of a hyper-efficient global supply chain. When one link in that chain is broken, there is no fallback.

Lynn has continued to study industrial supply shocks and says, “What I have found most interesting recently is the apparent role supply chain shocks played in triggering a synchronized slowdown of industrial economies in April—production down (in USA, China, Europe, Southeast Asia), jobs down, demand down, GDP numbers down—due almost entirely to the loss of a single factory that makes microcontroller chips for cars.”

Today, the problem manifests as shortages of videotape or auto parts, but the global supply chain is so tangled and fragile that next time it could be electronics, weaponry, or even food or medicine. As Lynn noted in an interview with Dylan Ratigan, China controls 100 percent of the national supply of ascorbic acid, which is a basic food preservative. Leading oncologists are already warning that we are experiencing severe shortages of generic yet pivotal cancer drugs, because there’s no incentive for corporations to make them.

The company Lynn mentions whose chip factories (there were actually 7 originally) went down with the earthquake, Renasas, did a remarkable job both restoring production and sustaining what supply it could.

But it’s telling that a company with just 40% of the market could threaten such a central industry.

Of course, it’s not just in auto manufacturing where chip production has been a critical issue. I’ve bitched before about the concern that “counterfeit” chips have left our military toys susceptible to failure. Or, dispensing with the secrecy, the possibility that specially-engineered chips may have backdoors that hackers are exploiting.

Look at the way our defense establishment proposes dealing with that issue.

In 2010, the US military had a problem. It had bought over 59,000 microchips destined for installation in everything from missile defense systems to gadgets that tell friend from foe. The chips turned out to be counterfeits from China, but it could have been even worse. Instead of crappy Chinese fakes being put into Navy weapons systems, the chips could have been hacked, able to shut off a missile in the event of war or lie around just waiting to malfunction.

[snip]

The US has been worried about its foreign-sourced chips in its supply chain for a while now.  In a 2005 report, the Defense Science Board warned that the shift towards greater foreign circuit production posed the risk that “trojan horse” circuits could be unknowingly installed in critical military systems. Foreign adversaries could modify chips to fizzle out early, the report said, or add secret back doors that would place a kill switch in military systems.

[snip]

The Defense Science Board warned in its report that “trust cannot be added to integrated circuits after fabrication.” IARPA disagrees. The agency is looking for ways to check out chips once they’ve been made, asking for ideas on how the US can verify that its foreign chips haven’t been hacked in the production process.

Keep your suggestions original, though. IARPA’s sister-shop, DARPA, has already done some work on chip verification. DARPA’s TRUST program uses advanced imaging and X-rays to search for deviations from chips’ designs. Its IRIS program aims to check out chips when the US doesn’t have the full designs to compare them to.

One way IARPA would like to make chips from foreign foundries safe is by splitting up the manufacturing process. Under this scenario, the front-end-of-line (FEOL) stage of manufacturing would take place at offshore foundries, while the back-end-of-line processing would finish up at a more secure US facility.

That is, either because we no longer have the capacity (true in part) or our capacity has lost the technological edge (true in part), rather than just mandate that chips going into war toys be built in the US, IARPA proposes a two-step manufacture process to ensure our chips are not counterfeit or hacked. We’ll just do the finishing touches to the chips, IARPA suggests, not build the chip from start to finish.

Is it so unreasonable to instead suggest that chip manufacture is something our country needs to invest in, both to ensure the diversity of the supply chain globally but also to provide supplies to the Military Industrial Complex?

Apparently, that is paradigmatically unthinkable.

At least in DC.

Meanwhile, the Alliance for American Manufacturing has a poll out that shows the US is as close to unanimous as you can get that it needs to invest more in manufacturing. Some of the results:

• 90% have a favorable view of American manufacturing companies – up 22 points from 2010.
• 97% have a favorable view of U.S.-made goods – up 5 points from 2010.
• 94% of voters say creating manufacturing jobs is either “one of the most important” things government can do or “very important.”
• 90% support Buy American policies “to ensure that taxpayer funded government projects use only U.S.-made goods and supplies wherever possible.”
• 95% favor keeping “America’s trade laws strong and strictly enforced to provide a level playing field for our workers and businesses.”

Now, even polls on Medicare and Social Security–for which there is overwhelming support–poll closer to 70%. That says either this poll is skewed, or that the one thing Americans agree upon is that we need to start making things in this country again.

That may not bode well for Obama’s reelection, given that after this debt ceiling gets resolved, he and the Republicans are going to try to rush through three trade deals.

On the economy, generally, there’s a surprising disjunction between what the country believes and what DC espouses. But on jobs and manufacturing, the split is even more stark (well, except for exceptions like Jared Bernstein, who is incredulous at the direction this is heading).

I realize that the government–Obama and the Republicans–have created their own crisis that makes the debt an issue of national importance. But even while they do that, they’re ignoring equally looming threats. And, at the same time, the concerns of 90% of the country.

Who knew that Detroit was so commodity-rich it was ruining entire segments of industry?

Only, I presume Detroit gets little to none of the fortune Goldman is making by hoarding aluminum in warehouses in the city, thereby driving the price up and making millions on warehouse rent. This Reuters article describes the scam, but it works sort of like this.

The London Metal Exchange has rules to smooth out market prices for the commodities sold on its market (the rules thus serve the same goal as derivatives). As part of this, the exchange regulates over 640 metals warehouses around the world. The idea is, the metals can be stored there during recession, then used after the economy improves. The LME requires that a certain amount of metal must be delivered each day, to keep it flowing. But it sets those limits by city, not by warehouse. So in a city like Detroit, owning a concentration of warehouses allows a firm to create an artificial bottleneck in supply of the metal. And it’s costing the people who actually want to use aluminum to do something productive with it.

“It’s driving up costs for the consumers in North America and it’s not being driven up because there is a true shortage in the market. It’s because of an issue of accessing metal … in Detroit warehouses,” said Nick Madden, chief procurement officer for Atlanta-based Novelis, which is owned by India’s Hindalco Industries Ltd and is the world’s biggest maker of rolled aluminum products. Novelis buys aluminum directly from producers but is still hit by the higher prices.

[snip]

Premiums for physical aluminum — the amount paid above the LME’s cash contract currently trading at $2,620 a tonne — in the U.S. Midwest hit a record high of $210 a tonne in May, up about 50 percent from late last year. In Europe, the premium is at records above $200 a tonne, double the levels seen in January 2010.

The ripple effect into Asia has seen the premium paid in Japan increase 6 percent to $120 a tonne in the third quarter from the previous quarter, the first rise in nearly six quarters.

One of the keys to this scam is that the traders that own the warehouses also own the exchange.

The lack of real change has some in the industry questioning the very structure of the LME, which, unlike its publicly owned U.S.-based rival commodities exchanges, is owned by many of the financial institutions that trade there.

[snip]

That concern is growing. Critics of the exchange point to a potential problem with zinc supply though New Orleans, where inventories now account for 61 percent of total LME-registered stocks.

Most of the warehouses in New Orleans are owned by Goldman and Glencore.

And those same traders are buying up warehouse companies around the world.

Now, given that the two cities mentioned in this article–Detroit and New Orleans–are seriously hurting, it seems one solution would be for the cities to impose a tax designed to move product (presumably, such a tax would also create more work for those working in the warehouses). If concentrated empty space is their competitive advantage, why shouldn’t they stick it to Goldman?

Apparently, the ducks that live in the Grand River think we should “Give peace a chance.” McCaffrey the MilleniaLab and I saw this on our walk this morning.

Justice and Injustice

All my complaints that DOJ won’t indict banksters? Well, they won’t indict American banksters. They did, however, indict a handfull of Credit Suisse banksters last week for helping Americans shield their loot from taxes.

Victory for Joe Nocera! Apparently DOJ has now revealed it is investigating Wells Fargo for the criminal discrimination alleged in the Fed settlement it signed last week. Note, however, that all this appears to be headed for yet another settlement; can we please have a criminal prosecution, DOJ?

Our National Security State

Both Jason’s story on the Air Force using the New Testament and the comments of Wernher Von Braun to teach missile officers the ethics of nuclear war, and Spencer’s story on the FBI using Orientalist trash to teach agents on Islamic culture are nauseating by themselves. But read together, they say our national security establishment propagates the ideology of Crusade in our fight against terrorism. Here’s the Air Force and the FBI PowerPoints used to spew such propaganda; it’s nice to see we’ve got our propaganda bureaucratized on PowerPoint.

The US forced a Mexican flight to stop short of US airspace because a human rights activist, Raquel Gutiérrez Aguilar, was on the flight. This is at least the third human rights activist the government has tried to keep out of–or even away from–this country.

Claiming (falsely) that there’s no evidence that Anders Behring Breivik is linked to U.S. groups, Peter King has refused Democratic requests that he expand his terror hearings to include the far right. Of course, given that the US rightwinger inspired Breivik, rather than the reverse, this is consistent with King’s earlier support for US-sponsored terrorism in Ireland. I guess for King, terrorism is okay so long as the US exports it.

The CIA says the Russians bombed our embassy in Georgia last September. Congress wants to suggest that means Russia can’t be trusted with a defense agreement. I don’t remember them saying that when we bombed the Chinese embassy in Serbia.

In a post deservedly taking a victory lap for his case that the secret PATRIOT powers relate to geolocation, Julian Sanchez notes a change in Ron Wyden’s legislation designed to limit the government’s use of geolocation. Whereas it used to modify FISA, it now includes an exception to permit geolocation. It seems–though this is just a guess–that the bill is now trying to force the government to use a higher standard before using geolocation.

As part of its effort to raise attention to DOJ’s new investigative guidelines, the Brennan Center has fact checked the claims DOJ officials made before the last round of DIOG changes, finding that they misled what those changes would entail as they were trying to gain support for them.

NSA made a big deal out of declassifying a 200-year old document on cryptography. Only, the document was never classified, and has been available in digital format for several years.

It looks like DOJ is using its relaxed approach to Miranda with white alleged terrorists, too, in this case with the accused MLK Day bomber. They’re just lucky this isn’t going to endanger their prosecution here. (h/t scribe)

Our Dying Economy

Shorter Stephen Roach: By using the myth of bond vigilantes to create an unnecessary debt ceiling crisis, we have pushed China to become bond vigilantes.

Free for All

Reasons why my brain is probably shrinking: years of acute back pain, Internet–uh–enjoyment, and chronic insomnia. (I consider my wine drinking to wash out with my beer drinking.) Reasons why my brain is not shrinking: meat, lots of sunlight, no more pot-smoking, very lapsed Catholicism.

Yesterday, Tim DeChristopher was sentenced to 2 years and a $10,000 fine for his successful efforts to expose an improper BLM drilling auction.

At his hearing, DeChristopher rebutted the prosecution’s claim that he needed to face a tough sentence to uphold rule of law.

Mr. Huber also makes grand assumptions about my level of respect for the rule of law. The government claims a long prison sentence is necessary to counteract the political statements I’ve made and promote a respect for the law.

[snip]

This is really the heart of what this case is about. The rule of law is dependent upon a government that is willing to abide by the law. Disrespect for the rule of law begins when the government believes itself and its corporate sponsors to be above the law.

Mr. Huber claims that the seriousness of my offense was that I “obstructed lawful government proceedings.” But the auction in question was not a lawful proceeding. I know you’ve heard another case about some of the irregularities for which the auction was overturned. But that case did not involve the BLM’s blatant violation of Secretarial Order 3226, which was a law that went into effect in 2001 and required the BLM to weigh the impacts on climate change for all its major decisions, particularly resource development. A federal judge in Montana ruled last year that the BLM was in constant violation of this law throughout the Bush administration. In all the proceedings and debates about this auction, no apologist for the government or the BLM has ever even tried to claim that the BLM followed this law. In both the December 2008 auction and the creation of the Resource Management Plan on which this auction was based, the BLM did not even attempt to follow this law.

[snip]

I’m not saying any of this to ask you for mercy, but to ask you to join me. If you side with Mr. Huber and believe that your role is to discourage citizens from holding their government accountable, then you should follow his recommendations and lock me away. I certainly don’t want that. I have no desire to go to prison, and any assertion that I want to be even a temporary martyr is false. I want you to join me in standing up for the right and responsibility of citizens to challenge their government. I want you to join me in valuing this country’s rich history of nonviolent civil disobedience.

And in response, of course, the judge did lock DeChristopher away. It’s a farce given the facts of the case, but consider how it looks when, as DeChristopher invites, you consider DOJ’s other efforts to “uphold rule of law.”

Compare the damage–if any–DeChristopher’s actions did to that which BP has done. As bmaz noted in April, a year after the Macondo explosion, no one has yet been held accountable for 11 deaths, to say nothing of the physical damage to the Gulf. And as Jason Leopold recently reported, our unwillingness to heed whistleblowers has led to more damage from BP. Part of the problem, of course, is the difficulty finding a judge without a financial interest in BP.

Or compare DeChristopher’s punishment with that of Massey energy. DOJ has records that Massey faked safety records for the Big Branch mine, yet over a year after 29 people were killed, no one has been held responsible. Don Blankenship not only got to retire with $12 million, he continues to get paid by the company as a “consultant.”

Or compare DeChristopher’s punishment with that of Angelo Mozilo or Lloyd Blankfein. Between them, they had a huge role in causing Americans trillions of dollars in preventable losses. After fining Mozilo $67 million he won’t pay personally, DOJ judged that Mozilo’s actions did not constitute criminal wrongdoing, so he remains free to enjoy his corruptly gained riches. And in spite of the apparent fact that Blankfein lied to Congress last year about the ways Goldman crashed the economy, DOJ has only now begun to make motions of investigating his lies.

And consider the others who tried to expose government wrong-doing. The government spent three years trying to prosecute Thomas Drake for whistleblowing–apparently because they suspected he leaked details of the illegal wiretap program. And it is currently pursuing a strategy that may land James Risen in prison–Risen says, in retaliation for his reporting on the illegal wiretap program. Yet DOJ went to great lengths to avoid holding anyone responsible for actually doing the illegal wiretapping.

We’re about to try Abd al Rahim al-Nashiri for his alleged role in the USS Cole bombing, which is fine. But the government not only hasn’t punished his torturers, but it hasn’t punished those who destroyed exonerating evidence of his torture.

DOJ has apparently given up any pretense of supporting the rule of law. The law is a tool used to punish political protest and exposure of wrong-doing. And it is a tool to protect the corporations whose crimes do far more damage to this country.

John Robb recently predicted that after a Soviet-style collapse, our legal system will collapse.

What happens to the legal system when the US suffers a Soviet style collapse?  Answer:  It will rapidly decay.

Here’s a simple formula for this (it works for both legal systems and government bureaucracies):

Low legitimacy + slashed operating budgets = rampant corruption

Regardless of any decay in the legal system, business will still be conducted.  Small disputes will be resolved through the existing system, with graft tipping the scales or speeding the outcome.  Large disputes involving substantial wealth transfer will be something else entirely.  These disputes will be resolved through the ability of one party or the other to apply the threat of (or actual) violence to the negotiation process.

These pressures won’t only be the result of counterparties that have access or control the large mafias/gangs/militias (or corporate militaries) that will spring up during economic collapse (far larger than we’ve seen the US to date).  Threats will also be mounted by government/defense/security officials that use their government sanctioned command of violence (police, SWAT, military units, etc.) as a means to personal enrichement.

But (as his suggestion about the impunity people like Mozilo and Blankfein were given shows) he gets the chronology wrong. Aside from the bribed BP judges, it’s not corruption per se that is collapsing our judicial system. It’s the apparently conscious choice on the part of the government to void the concept of rule of law, the choice to treat political speech and whistleblowing as a much greater crime than the corporate crimes that have devastated our country.

I think DeChristopher is right: seeing his sentence isn’t going to scare anyone into cowing in the face of such a capricious legal system. Rather, it makes it clear what the stakes are.

Robert Chesney took a look at the Executive Order associated with the Administration’s roll-out of its Transnational Crime Organization program yesterday, which basically blocks the property of a group considered to be a TCO (note, in some places the Admin uses the acronym TOC; I agree with Chesney that TCO makes more sense and so will use that instead now).

As I guessed yesterday, the EO basically institutes a “material support for TCO” concept, directly parallel to the terrorist one.

Section 1.  (a)  All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, including any overseas branch, of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in:

(i)   the persons listed in the Annex to this order and

(ii)  any person determined by the Secretary of the Treasury, in consultation with the Attorney General and the Secretary of State:

(A)  to be a foreign person that constitutes a significant transnational criminal organization;

(B)  to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any person whose property and interests in property are blocked pursuant to this order; or

(C)  to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order.

(b)  I hereby determine that the making of donations of the types of articles specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)) by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order would seriously impair my ability to deal with the national emergency declared in this order, and I hereby prohibit such donations as provided by subsection (a) of this section.

(c)  The prohibitions in subsection (a) of this section include, but are not limited to:

(i)   the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order; and

(ii)  the receipt of any contribution or provision of funds, goods, or services from any such person.

(d)  The prohibitions in subsection (a) of this section apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order.

The EO also clarifies something that was not clear from yesterday’s dog and pony show rolling this out: the Administration has listed four organizations that will, at this point, be considered TCOs:

1. THE BROTHERS’ CIRCLE (f.k.a. FAMILY OF ELEVEN; f.k.a. THE TWENTY)
2. CAMORRA
3. YAKUZA (a.k.a. BORYOKUDAN; a.k.a. GOKUDO)
4. LOS ZETAS

Now, like Chesney, I have a few questions about this list. Like Chesney, I want to know why only Los Zetas is listed. Are we really playing favorites among Mexico’s drug cartels? Chesney thinks it might be a reaction to Los Zetas’ murder of an ICE agent earlier this year. But the choice also has curious implications for the Operation Fast and Furious program, in which ATF agents dealt guns used by Los Zetas members. Is this just a way to give ATF a way to validate the concept behind that failed program?

But there may be another reason. I suggested yesterday that Wells Fargo, which last year entered into a Deferred Prosecution Agreement for the money laundering it did for Mexican cartels in 2005, ought to be on the list of TCOs, too. The one cartel I know of that is definitely tied to that money laundering, however, is Sinaloa. So by leaving Sinaloa off the list, you leave of the necessity of freezing the funds of TBTF banks.

I’m even more mystified by the inclusion of the Yakuza–Japan’s mob–on the list. Japan has long tolerated the Yakuza even while making claims they’d crack down. Did we consult with them before we put the Yakuza on the list?

More curiously, the Yakuza played a key role in the response to this spring’s Japanese earthquakes (this is akin to the role that some terrorist organizations had in Pakistan’s flood and earthquake response, as well as Hezbollah’s general role in Shiite Lebanese welfare). This post provides a good description of the Yakuza’s role and their reasons for providing such humanitarian aide. Some highlights:

In truth, the measure of a yakuza boss is not how honourable he is, it’s how much cash he brings in, a fact that might help explain the mobsters’ motives for providing aid. A senior member of one organised crime group in eastern Japan acknowledges this. He says: “It’s usually about money. Earthquakes and disasters are one of the few times that yakuza can do what they’re supposed to do: help other people. We can do it because we’re not bound by red tape. It’s as simple as putting up the money, ordering the soldiers to buy supplies, put them on trucks, and carry them to areas where they’re needed. Certainly some members are looking at this as a chance to gain goodwill and local support when the reconstruction begins. In my case, I just want to give back to the community where I was born. That’s the spirit of the yakuza. That’s the ideal. Other people have other motives.”

Whatever their mixed motives, right now the yakuza are apparently helping the weak and the suffering, bringing warm blankets to those who are cold, feeding the hungry and getting water to the thirsty. The Sumiyoshi-kai and the Inagawa-kai in total have sent over 200 tons of supplies to devastated areas according to police sources and raised several million dollars from their own members to facilitate the aid. The Matsuba-kai, the Kyokuto-kai (both in Tokyo), and even smaller groups like the Aizukotestu-kai (in Kyoto) are all chipping in.

[snip]

One member of the Sumiyoshi-kai group I spoke to, a full-time gangster in the Saitama prefecture specialising in extortion, explains the efforts simply:

“In times like this, the usual societal divisions are meaningless. There aren’t yakuza and civilians or foreigners and Japanese. We’re all Japanese now. We all live here. Down the road, there is money to be made, for sure.

“Right now, it’s about saving lives and helping each other out. Ninety-five per cent of all yakuza are human garbage. Maybe 5 per cent uphold the rules. Right now we’re all doing our best. It’s one of the few times we can be better than we normally are.”

Even a senior police officer from Ibaraki agrees, speaking under conditions of anonymity. “I have to hand it to the yakuza. They have been on the ground from day one providing aid where others don’t or cannot do it. Laws can be like a two-edged sword and sometimes they hamper relief efforts. Sometimes, outlaws are faster than the law. This is one of those times.”

Now, it doesn’t appear that the Yakuza used foreign aid to pay for this humanitarian support. That is, it doesn’t seem like western money effectively went to the Yakuza, meaning it could be contrived as material support for a TCO.

Nevertheless, there are sure to be a whole host of ways in which American businesses might end up funding the Yakuza.  We’ll quickly find those businesses to be in the position that Chiquita got in, though without the cover story that they paid terrorists to protect their employees.

And then, ultimately, there’s the process by which mobs get picked as TCOs. The current list almost seems like a test of concept–an attempt to throw several different kinds of mobs on the list, to see how the new legal toy works in practice.

But remember it’s the Secretary of Treasury deciding, with no transparency, who is and who is not on the list. You know–the same guy insisting that banks never be held to account for their crime, even while he enables them to become more powerful.

Again, don’t get me wrong. Transnational gangs are a big problem. But this is a gigantic slippery slope that none of us really get to see even as we’re already sliding down it.

And it still doesn’t protect us from the banksters looting our own economy.

(This video documents a mother’s effort to get her son a Voter ID card in WI.)

Good News for Kids

McDonalds is rolling out new and improved Happy Meals, now with fruits or veggies and fewer fries. These Happier Meals will have 20% fewer calories.

The NYPL has offered an amnesty on overdue fines; but to earn it, the kids need to read. Kids get $1 knocked off their fines for every 15 minutes they read. I’m wondering if there’s a way we could get the NYPL to come up with a debt reduction plan, rather than the yahoos in Congress.

Justice and Injustice

Bunny Greenhouse vindicated! You might remember Greenhouse as the Army Corps of Engineer Chief Oversight Officer who criticized abuses that led to KBR getting a no-bid contract in 2005. She was demoted as a result. But she just got a $970,000 settlement for retaliation.

Remember that ridiculous $85 million wrist slap the Fed gave to Wells Fargo last week, in part because its employees lied on liar loans? Joe Nocera asked DOJ why they weren’t prosecuting those folks. In response, DOJ sent him a statement on 2010 indictments, none of which had anything to do with Wells Fargo.

Back when I was Valedictorian of Cowpie High, the Administration tried hard to discourage me from making the traditional Valedictorian speech–they were worried I would incite rebellion, I think, or maybe say “blowjob.” But even though they distrusted me, I ultimately got to accept the honor. Not so Kymberly Wimberly, (h/t ABL) an 18 year old black woman in Alabama Arkansas who had the best GPA in her class, but nevertheless was replaced as Valedictorian by a white student with a lower GPA.

Jerry Brown nominated Goodwin Liu to the CA Supreme Court.

Bob Fertik expanded on my thoughts about News Corp being a Transnational Organized Crime organization into a worthwhile post. The big question, though, is whether DOJ will treat Murdoch’s band of hacks in the same way as they will the mafia or drug cartels under this program.

A MN Court just ruled that letting pesticides drift over another farm’s field counts as trespassing. It’s be really nice if this rule were applied to Monsanto and their GMO plants.

Our Dying Economy

We continue to treat the long-term unemployed like shit, specifically refusing to consider hiring people who are long-term unemployed.

Cate Long at MuniLand reports on what an infrastucture bank might look like, if we ever raise the debt ceiling. But she notes something disturbing: even though both parties appear to back this infrastructure investment, it’s not entirely clear who will own the infrastructure that gets built.

A number of people have pointed to this WaPo/ABC post showing voters souring on Obama’s economic policies. But what most surprised me about the cross tabs are the results for the question, “Who do you think cares more about protecting the economic interests of Wall Street?” 59% said the GOP, 26% said Obama, and just 4% said both (they had to offer up that answer). I mean, granted, the GOP has done more for Wall Street, particularly in scuttling things like the CFPB. But are people not noticing the way Obama has refused to hold Wall Street accountable? If that remains true, that, by itself, might make the difference in 2012.

Our Economy’s Not the Only One with Troubles

Following a fatal high speed rail crash in Wenzhou, analysts think China will not be able to compete for rail business internationally, as they were increasingly doing. Maybe that’s why China buried the train and has mandated a “in the face of great tragedy, there’s great love” theme for reporting on the crash.

The British economy has tanked since Cameron pushed through austerity. It’s what we have to look forward to!

Our National Security State

Another one of our CyberSecurity officials stepped down suddenly on Friday. There are suggestions he left because the US government’s websites have been hacked recently.

The Third Circuit has ruled that the government can collect DNA from people arrested, but not yet convicted, for a crime.

40 police offices and other units around the country are adopting an iPhone based iris scanner technology to make IDing people in the field easier.

Matthew Olsen admitted in his confirmation hearing to be the head of the National Counterterrorism Center that the “authority may exist” to track Americans inside this country using their cell phone geolocation. Olsen’s General Counsel at NSA right now, so presumably he would know.

Apparently, we’re still in the habit of kidnapping the family members of alleged terrorists.

John Robb explains why extremist groups–such as the Norwegian terrorist or an off-shoot of the La Familia drug cartel in Mexico–might be attracted to Knights Templar culture: because they offer these groups the “fictive kinship” that makes the group closer to a tribe, but one not bound by normal laws.

Sandy Levinson, over at Balkinization, thinks Tom Friedman’s stupid “Radical Center” effort funded by hedge fund money is an effort to set up a David Petraeus run.

The Pew Research Center has a report showing not just the decline in net worth across demographic groups from 2005 to 2009, but more importantly, the relative net worth of those groups.

It shows that, no matter how bad the $23,000 drop in net worth that the housing crash represented to whites, they’re still doing far better off than people of color. Hispanics lost $12,000, fully 66% of their net worth. African Americans lost almost $6,500, more than half of their net worth.

And of course, the real scandal is that the media net worth for whites is 20 times that of African Americans and 18 times that of Hispanics.

Here’s how the report describes the source of these discrepancies (the short version is that whites have more assets in addition to their homes–and lost less value in their home–than Hispanics and African-Americans).

Hispanics: The net worth of Hispanic households decreased from $18,359 in 2005 to $6,325 in 2009. The percentage drop—66%—was the largest among all groups. Hispanics derived nearly two-thirds of their net worth in 2005 from home equity and are more likely to reside in areas where the housing meltdown was concentrated. Thus, the housing downturn had a deep impact on them. Their net worth also diminished because of a 42% rise in median levels of debt they carried in the form of unsecured liabilities (credit card debt, education loans, etc.).

Blacks: The net worth of black households fell from $12,124 in 2005 to $5,677 in 2009, a decline of 53%. Like Hispanics, black households drew a large share (59%) of their net worth from home equity in 2005. Thus, the housing downturn had a strong impact on their net worth. Blacks also took on more unsecured debt during the economic downturn, with the median level rising by 27%.

Whites: The drop in the wealth of white households was modest in comparison, falling 16% from $134,992 in 2005 to $113,149 in 2009. White households were also affected by the housing crisis. But home equity accounts for relatively less of their total net worth (44% in 2005), and that served to lessen the impact of the housing bust. Median levels of unsecured debt among whites rose by 32%.

Even with this explanation, the Pew Report doesn’t talk about the implications of this. What kind of stability can a family have if they effectively have only $6,000 to fall back on (and for 24% of Hispanic and African-American households, that $6,000 represents nothing more than a car). Given the rush to gut social security, what kind of retirement (or disability) can this family have?

And note the rise of unsecured debt among all races. A lot of folks are just living on credit cards or other debt (or were, back in 2009; a lot of people have gone bankrupt since then).

There’s a huge chunk of this country living on the edge and that group is disproportionately African-American or Hispanic.

Our Collapsing Empire

Remember how much better Hillary was on trade than Obama in the primary? She gave a really depressing speech–talking up free trade–in Hong Kong today.

Oh. Sorry. Bob Baer was only mostly serious when he said Israel would attack Iran in the fall. But who needs to attack Iran? After five Russian scientists who contributed to Iran’s Bushehr nuclear power plant died in a plane crash last month, one of Iran’s top nuclear scientists was just gunned down outside his home. Or maybe not.

This interesting take-from Gregory Johnsen, who knows a bit about Yemen–says our use of drones there are making AQAP stronger.

Jason Leopold describes how David Addington and Jim Haynes pushed David Hicks charges through to help out Prime Minister John Howard.

Our Collapsing Economy

Dan Froomkin reviews the big money being spent to pass three more NAFTA-style trade deals.

According to this post, the average duration of unemployment just shot up to a new high: 39.9 weeks. And there are now more than 2 million 99ers–folks who have been out of work for more than 99 weeks. This is not the time for austerity, but unfortunately the bozos in Washington can’t help themselves.

Everyone’s talking about this long piece on the insanity of our debt limit crisis, “What were they thinking.” My favorite line, from an anonymous ex-White House employee? “It’s not a place that welcomes ideas.”

In which Republican David Frum lectures Obama about trusting banksters.

This is an interesting piece on how Wall Street has gotten suspicious of Microsoft’s tax shell game.

Corporatists v. the Environment

Hungary is destroying 1000 acres (or much more–see joberly’s comment) of land that got planted with Monsanto’s GMO corn, apparently without the knowledge of the farmers. What’s particularly interesting about this, IMO, is the company that sold the GMO seeds that is now bankrupt. Under what business model does a company sell more expensive Monsanto seeds, particularly if the company is not viable? It almost seems like the company was a ploy to get the seeds in there.

Big Carbon is miffed about the statue at University of Wyoming suggesting that coal has ties to the explosion of pine beetles in the state. The effort to pressure the University is bad enough, but I think the statue is pretty cool on its own right.

Grist finds an interesting way to visualize what the GOP budget would destroy: by describing what it would do to 10 great vacation spots.

Your Daily Murdoch

The ACLU and Gawker are partnering to sue Governor Chris Christie for “correspondence, phone records, and calendar entries” of conversations between him and Roger Ailes. NY Magazine had reported that Ailes had pressed Christie to run for President. ACLU is arguing that Christie did not properly invoke executive privilege, and privilege wouldn’t cover such conversations in any case. I can’t help but wonder whether Gawker, at least, is going for something else, such as mention of why Christie didn’t prosecute News Corp for a US-based hacking incident with Floorgraphics.

John Brennan, Eric Holder, Janet Napolitano, and some other Administration bigwigs just rolled out the Administration’s new Strategy to Combat Transnational Organized Crime (TOC). Here’s how they define TOC:

Transnational organized crime refers to those self-perpetuating associations of individuals who operate transnationally for the purpose of obtaining power, influence, monetary and/or commercial gains, wholly or in part by illegal means, while protecting their activities through a pattern of corruption and/or violence, or while protecting their illegal activities through a transnational organizational structure and the exploitation of transnational commerce or communication mechanisms. There is no single structure under which transnational organized criminals operate; they vary from hierarchies to clans, networks, and cells, and may evolve to other structures. The crimes they commit also vary. Transnational organized criminals act conspiratorially in their criminal activities and possess certain characteristics which may include, but are not limited to:

• In at least part of their activities they commit violence or other acts which are likely to intimidate, or make actual or implicit threats to do so;
• They exploit differences between countries to further their objectives, enriching their organization, expanding its power, and/or avoiding detection/apprehension;
• They attempt to gain influence in government, politics, and commerce through corrupt as well as legitimate means;
• They have economic gain as their primary goal, not only from patently illegal activities but also from investment in legitimate businesses; and
• They attempt to insulate both their leadership and membership from detection, sanction, and/or prosecution through their organizational structure. [my emphasis]

It all sounds like they could be talking about Goldman Sachs or News Corp. But the specific crimes they mentioned are:

• Drug trafficking
• Human trafficking
• Russian, Italian, Japanese mafia (in addition to Mexican drug cartels)
• Counterfeiting

In other words, this initiative will look at very serious TOCs. But they won’t look at the TOCs that have done the most damage to the US in the last several years: the banksters that, through fraud, intimidation, and political influence managed to loot and then crash the economy. The same banksters that are now–frankly with DOJ enabling them–using their corporate structures to avoid any accountability for having crashed the economy.

That’s a problem. Because imagine what we could do to the banksters if we used any of the several following tools against them:

A new Executive Order will establish a sanctions program to block the property of and prohibit transactions
with significant transnational criminal networks that threaten national security, foreign policy, or economic interests.
A proposed legislative package will enhance the authorities available to investigate, interdict, and prosecute the activities of top transnational criminal networks.
A new Presidential Proclamation under the Immigration and Nationality Act (INA) will deny entry to transnational criminal aliens and others who have been targeted for financial sanctions.
A new rewards program will replicate the success of narcotics rewards programs in obtaining information
that leads to the arrest and conviction of the leaders of transnational criminal organizations that pose the greatest threats to national security.
An interagency Threat Mitigation Working Group will identify those TOC networks that present a sufficiently
high national security risk and will ensure the coordination of all elements of national power to combat them.

We could freeze Goldman and its executives from using their ill-gotten goods. We could recruit new whistleblowers, rather than jailing them. We could throw “all elements of national power” to combat Goldman.

Instead, we’ve been funneling trillions to them.

Now I don’t mean to be glib with this observation. The Administration is about to roll out a law enforcement regime that applies terrorist-like authorities to combat the TOCs it believes are illegitimate. While I haven’t seen the bill the Administration is proposing, it seems that the taint of illegality in one part of the TOC will qualify that TOC for such terrorist-like treatment across the network.

Except if you’re a bankster. Because if you’re a bankster, the government will use all its resources to ignore or settle the crimes that lay at the heart of your TOC, just so it doesn’t have to face the illegitimacy of the TOC as a whole.

But I guess that’s what the Administration expects to drive our economy.