Privatization

Privatization is the turning over of services and entities to private government. It is a form of rent seeking in which persons seek to govern an entity for the sake of wealth and riches (profit). The rent seekers usually sell their services either on the premise that they can do a better job of running entities or they simply acquire and exercise power and control over entities and systems through acquisition and exercise of power. When they create the system they run that is not strictly speaking privatization as they are running that service from the start. But the results are similar.

Privately run entities are usually run for the private separate advantage of the owners and investors. They are usually monopolies and so such entities usually control their markets, have unequal power and information, can set monopolistic rents on their goods and services, and usually are monopolies or part of an oligarchic power structure. And so their rule of services and entities is usually oppressive and redistributes wealth from customers and employees to investors and owners.

History verifies is worse than bureaucratization (and usually combined). In the 19th century the Pennsylvania Railroad was bigger, had more power, and a bigger bureaucracy, than the State Government of Pennsylvania. Eventually they had to be "regulated" because they couldn't logically be broken up (on the contrary they needed to be integrated). Once regulated our Railroads decayed because private management was monopolistic acquisitive and diverted it's trust accounts to speculative purposes. Using it's monopoly over rails and steady income to finance other activities. A Government entity must be run on a mission; which may not have an end point but does have virtues and objective measures. For example a railroad provides transportation services and integrates towns and country; but private government does not have that mission, it's only mission is to make money. And as demonstrated with turnpikes, canals, railroads, and countless other examples going back to before the USA was a company, that is fatal to the efficient running (government) of any service or system.

Privacy protections like a string thong in a mens club

Press Secretary Carney's Press Conference August 9

Snowden's whistleblowing has embarrassed the administration because domestic spying in a Democracy is only effective if it is secret and under strict control. At least that is the premise of authorities before, and after, the word "democracy" becomes a joke due to abuses of spy powers. I was listening to Press Secretary Carney as he was asked about NSA spying. His carefully worded answer was that:

MR. CARNEY: "Well, I think the article eventually explained we have made clear that under FAA 702, the NSA may not intentionally target a U.S. person. In carrying out its mission, NSA collects only what it is explicitly authorized to collect. And while NSA analysts examine only a very small percentage of the world’s traffic, if communications of U.S. persons are incidentally collected the agency must follow minimization procedures that are approved by the U.S. Attorney General and designed to protect the privacy of U.S. persons. Specifically, these procedures require NSA to minimize the acquisition processing, retention and dissemination of information of or concerning U.S. persons."

His answer was no difference from what Bush's Press Secretaries were saying. This of course is talking about the National Security Agency. And the problem is that reporters are asking the wrong question. Carney is absolutely right. NSA itself is not supposed to spy on US citizens. It's job is to spy on foreign threats. For spying on US citizens you have to look to other agencies and other programs, which piggyback on FISA and work with NSA, so that technically it's not the main NSA FISA program doing the spying. Carney can say:

"The purpose of the program is to investigate and potentially prevent terrorist threats emanating from foreign sources. And the protections in place regarding the inadvertent collection of information of U.S. citizens ensure that there's a minimized -- a process of minimization that protects the privacy of American citizens."

...and be perfectly misleading. The reporter, of course, already knows this is not the whole truth, so asked for a redirect in plain language about NSA listening/reading private citizen messages:

MR. CARNEY: "It's not being read. The information that is targeted has to do with terrorist threats or potential terrorist threats emanating from foreign persons in foreign areas. And there are procedures in place -- as I just described and I'm sure ODNI and others, NSA, can explain to you in greater detail -- that ensure that inadvertently collected information is minimized and dealt with appropriately.

The right questions are "are there other programs, beyond what NSA does, that do sift through private messages? Does the DEA have access to the so called "Corporate Store?" But Carney is probably forbidden to answer that question. Reporters have to be savvy enough to ask the right questions. What NSA does as NSA is the wrong question. And really they just need to do their homework. The white house press corps is supposed to be the best of the best. So far they've just shown they are the toadiest of a pack of toads.

Civil Liberties problem or PR problem?

Obama is almost breaking relations with Russia because he's sheltering Snowden. The irony of this is that we used to regularly harbor dissidents from the World oppression, the Russian Gulag and the Russian surveillance state, and we'd get super ticked if anyone threatened us for it. Russia is a sovereign state, and Snowden seeking assylum there is appropriate given that it is probably the only country that still is willing to stand up to us, he really does face torture and mistreatment when and if he ever returns to the USA, and Snowden did break the law but IS a whistleblower. If is he were a simple spy the USA government would probably get ticked and otherwise go "ho hum" that's the spy game. They are ticked at Snowden because he did blow the whistle on some programs that directly violate the constitution, directly violate liberal (not libertarian --that is a brand rustling counterfeiter operation) traditions, and traditions of free speech and good government. If Snowden were so wrong the President wouldn't have felt it necessary to give a speech affirming respect for due process, privacy, and individual civil rights

President's speech:

So the President gave a speech where he "highlighted his commitment to the balance between “protecting our security and preserving our freedoms" and announced his plans for increased transparency and reforms in our intelligence programs, in order to give the public confidence that these programs have strong oversight and clear protections against abuse:

"The American people need to have confidence in them as well. And that's why, over the last few weeks, I’ve consulted members of Congress who come at this issue from many different perspectives. I’ve asked the Privacy and Civil Liberties Oversight Board to review where our counterterrorism efforts and our values come into tension, and I directed my national security team to be more transparent and to pursue reforms of our laws and practices."

He wouldn't have called for "appropriate reforms" of FISA and NSA if Snowden hadn't embarrassed him.

Infowars, Infragard, Fusion Centers and State Control

In his speech he agreed that the secret courts shall have a secret defense bar to represent those who don't know they are being spied on, probably as well as public defenders defend accused criminals in most states. Personally I'm not impressed. This looks like a PR move, and the center of abuses isn't at the Federal level anyway, it's at the State Level and it is centered on Fusion Centers and programs like Infragard, where these same national agencies work with State and local police, private and State agencies, and fight crime, "terrorism", "unrest", drugs, and whatever the pet Peeve of the local governor is; all with access to databases that originally were supposed to be for spying on spies only.

Fact is, as I alluded to the other day in "Bush's Loogie", General Hayden, Bill Casey, and others envisioned a public-private security capability that could focus on domestic spying and operate under fewer restrictions than Government agencies operating under supervision of courts and officials afraid of their shadow. but of course, courts need judicial oversight too;

Metastasis

The real problem is not the government going after Al Qaeda or actual terrorist groups. It is when they use the resources of a spy/police state to attack citizens trying to live within their lives and pursue their private affairs. Not everyone is a criminal, but for police and spy types, everyone is suspect until cleared. When prosecutorial forces are allowed to run free, the burden of proof for criminality becomes "can you prove your are innocent" or not. And since no human being is completely innocent, that means that no human being can be secure from a spy state. Spying Metastasizes. Moreover, spy states become so single mindedly obsessed about enemies and potential enemies that they will shut down or attack anything that gets in the way of their operations. And they will use their powers of official secrecy to criminalize efforts for such institutions to defend themselves from them. This is going on here. Yesterday, Lavabit, an internet email supplier shut down rather than comply with a secret court order:

http://www.theguardian.com/commentisfree/2013/aug/09/lavabit-shutdown-snowden-silicon-valley Greenwald writes (it's also in Forbes and other articles):

"A Texas-based encrypted email service recently revealed to be used by Edward Snowden - Lavabit - announced yesterday it was shutting itself down in order to avoid complying with what it perceives as unjust secret US court orders to provide government access to its users' content. "After significant soul searching, I have decided to suspend operations," the company's founder, Ladar Levinson, wrote in a statement to users posted on the front page of its website. He said the US directive forced on his company "a difficult decision: to become complicit in crimes against the American people or walk away from nearly ten years of hard work by shutting down Lavabit." He chose the latter.

And so, will it really save us from the security forces if the secret courts have a secret defense, secret court orders, gag the ones they serve, and make it criminal to complain?

"CNET's Declan McCullagh smartly speculates that Lavabit was served "with [a] federal court order to intercept users' (Snowden?) passwords" to allow ongoing monitoring of emails; specifically: "the order can also be to install FedGov-created malware." After challenging the order in district court and losing - all in a secret court proceeding, naturally - Lavabit shut itself down to avoid compliance while it appeals to the Fourth Circuit.

So, here we have secret courts (presumably FISC court, but possibly just district courts) ordering secret behavior aimed, not at going after Foreign operatives, but going after an alleged "spy", Snowden, who most people would label more a whistleblower. And from the record around this, they probably were trying to force Lavabit to put in malware that would give them access not just to Snowden's email, but to all email clients of Lavabit. We are used to hearing of "black hatted" hackers sticking malware on our computers, but here it is the government doing it.

"This morning, Silent Circle, a US-based secure online communication service, followed suit by shutting its own encrypted email service. Although it said it had not yet been served with any court order, the company, in a statement by its founder, internet security guru Phil Zimmerman, said: "We see the writing on the wall, and we have decided that it is best for us to shut down Silent Mail now."

And Glenn Greenwald comments (which I agree with):

What is particularly creepy about the Lavabit self-shutdown is that the company is gagged by law even from discussing the legal challenges it has mounted and the court proceeding it has engaged. In other words, the American owner of the company believes his Constitutional rights and those of his customers are being violated by the US Government, but he is not allowed to talk about it. Just as is true for people who receive National Security Letters under the Patriot Act, Lavabit has been told that they would face serious criminal sanctions if they publicly discuss what is being done to their company. Thus we get hostage-message-sounding missives like this:

He then shares this from Lavabit:

I wish that I could legally share with you the events that led to my decision. I cannot. I feel you deserve to know what's going on - the first amendment is supposed to guarantee me the freedom to speak out in situations like this. Unfortunately, Congress has passed laws that say otherwise. As things currently stand, I cannot share my experiences over the last six weeks, even though I have twice made the appropriate requests."

So between court gag orders and congress gagging those who they force to cooperate. Do we really have anything less than a police state? Forbes reports:

“As a Dallas company, we weren’t really equipped to respond to this inquiry. The government knew that,” said Levison, who drew parallels with the prosecutorial bullying of Aaron Swartz. “The same kinds of things have happened to me. The government tried to bully me, and [my lawyer] has been instrumental in protecting me, but it’s amazing the lengths they’ve gone to to accomplish their goals.”

Putting courts over spy programs actually just corrupts the courts, as long as secrecy is the rule. Separation of powers becomes a joke when Judges, prosecutors, and spies are all part of the same enterprise. Rule of law becomes less protective of privacy and rights than a string thong at at a mens club.

That is enough for this post. I drafted it yesterday. But the information is too depressing. Aaron Swartz was driven to suicide by a prosecution that was going to put him in jail for the rest of his life for challenging a private company's (JStore) usurpation of information that belongs in the public domain (and libraries). And "that's not all!". More to come.

Further Readings and links used in this post:

Sources and Further Readings:

http://www.whitehouse.gov/the-press- office/2013/08/09/press-briefing-press-secretary-jay-carney-882013

http://www.whitehouse.gov/blog/2013/08/09/protecting-our- security-and-preserving-our-freedoms

Bush's Loogie: http://holtesthoughts.blogspot.com/2013/08/bushs-loogie.html

Forbes Editorial:http://www.forbes.com/sites/kashmirhill/2013/08/09/lavabits-ladar-levison-if-you-knew-what-i-know-about-email-you-might-not-use-it/

Forbes Lavabit article: http://www.forbes.com/sites/kashmirhill/2013/08/08/email-company-reportedly-used-by-edward-snowden-shuts-down-rather-than-hand-data-over-to-feds/

Guardian Articlehttp://www.theguardian.com/commentisfree/2013/aug/09/lavabit-shutdown-snowden-silicon-valley

Why Summers and Wall Street should not run the Federal Reserve

Grifters and Swindlers

Wall Street was once a venerable institution, but is now little more than a den of thieves. Maybe there are decent people, but the culture itself is one of grifters and swindles, cons and it's been this way for a while with the help of corrupt lawyers like Eric Holder, and corrupt political-pundits like Rubin and Larry Summers. Okay, it always has had a sleazy side, ever since markets were places where animals were bought, sold, and slaughtered. There have always been hucksters, grifters, fraudsters, and thieves. But never so brazen and so many. And so transparently so! And they always manage to "dirty" their marks so that they think they are at fault.

I had other subjects in mind, but several news topics pushed them aside today. In the context of these news items I'm hearing that Larry Summers wants to be Federal Reserve Chairman and the logical and Obama wants to pass up the integral (person with integrity) choice for the job; Janet Yellen. This would be a disaster. Larry Summers should be in jail not the Fed. Janet Yellen is well qualified and what we need right now. But Summers is a corrupt insider and Obama likes him for some reason.

Champion putting hungry foxes in the hen houses

He's been involved in nearly every corrupt short sighted decision in this country since before he championed repeal of Glass Steagle in the waning days of the Clinton Administration. Wikipedia summarizes well [sorry this would take three blogs otherwise]:

1. "Summers hailed the Gramm-Leach-Bliley Act in 1999, which lifted more than six decades of restrictions against banks offering commercial banking, insurance, and investment services (by repealing key provisions in the 1933 Glass–Steagall Act):

"Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century," Summers said. "This historic legislation will better enable American companies to compete in the new economy."

2. As a member of President Clinton's Working Group on Financial Markets, Summers, along with U.S. Securities and Exchange Commission (SEC) Chairman Arthur Levitt, Fed Chairman Greenspan, and Secretary Rubin, torpedoed an effort to regulate the derivatives that many blame for bringing the financial market down in Fall 2008."
3. And there is his role in bringing down Gray Davis in California and enabling Enron to replace him with the Terminator (Arnold Schwarzenegger) Summers excused Enron's financial manipulation in that incident.

Indeed he still supports financial deregulation, is still blocking regulation of the derivatives market and enabling banks to acquire rent seeking opportunities. Heaven help us if he gets access to the Federal Reserves regulatory apparatus! In the Daily Beast Steven Senne quotes Kurt Eichenwald saying:

In his book about Enron, Conspiracy of Fools, Kurt Eichenwald describes Summers’ role in the early stages of the California energy crisis when the state was suddenly faced with power shortages and energy costs that were soaring up to 20 times normal levels. Then-Governor Gray Davis, convinced that Enron and others were manipulating the market, begged the federal government to intervene.

And of course it turned out that Enron really was engaging in swindles and frauds, and that the program of deregulation that the Summers/Rubin school was pursuing would eventually lead to other companies immitating and multiplying frauds -- which are still continuing to this day. And was there quid pro quo? You decide. Tony Wikrent posted this excerpt from emails from around that same time in "Real Economics":

"As you know, Ken has talked to Larry Summers about serving on Enron's Board of Directors. Larry told Ken that in light of his selection to head Harvard, he wants to hold off going on any corporate boards for now. My understanding is that Larry will most likely accept Ken's offer at the end of the year."

Looks like Quid Pro Quo to me. But that's not all. He's also been a champion of bankers and wealth over just about every other priority. During his stint at the World Bank he helped engineer our current trade imbalances by engineering a bailout of East Asian Countries based on letting them arbitrage the dollar. He:

"engineered a bailout that gave countries the money they needed to get through the crisis, but required that they would pay their debts in full. The flip side was that the United States would maintain an open door to exports from the region.

If he'd learned anything from these things it might be one thing but he still champions corporate power, is against regulation and is out to deregulate just about anything that wants to be deregulated. And Obama seems to feel the same way. The times Rana Foroohar quotes him in 2011:

“I’ve been more cautious than many about constraining financial innovation,” he said, adding that he didn’t believe the financial crisis had its roots in “new-fangled financial instruments” but rather in a simple real estate bubble.

If he can say that despite Enron and everything that has happened since, then he's also a prevaricator.

Read more: http://business.time.com/2011/04/12/larry-summers-no-regrets-on-deregulation/#ixzz2bJvLVbRa

No surprises

But that should be no surprise. Money leads people to moral blindness and eyes open recklessness, and the pursuit of money and power is what is behind most corruption. Wall Street is unrepentant. Goldman Sachs has been accused of manipulating aluminum prices, and other companies Copper and other metals. Without laws forbidding them using "other people's money" recklessly they'll continue using their corrupt control over congress, courts and executives to make more money and take over and loot one industry after another. With Summers at the Fed at least he won't be provoking stupid policy decisions such as getting rid of the mortgage option for ordinary people trying to buy a house:

Rules are meant to be Broken

Summers is an awful choice for a human being (could be worse of course), much less to be a trusted advisor or in any position of trust. Yet a lot of folks think Summers is a genius and continue to believe him despite his track record of being wrong and the corrupt results of his prescriptions. This is because he reflects the Wall Street mindset that Alexis Goldstein wrote about after he left it more than 2 years ago. Nothing has changed about it or the people who shill for it:

"But the key to truly understanding superiority on Wall Street is by looking at how it’s measured: with cold, hard numbers. Numbers can be amplified by honest work, but they can also be amplified by betrayal, manipulation, and cheating. And when everything is a cold cost-benefit analysis, why wouldn’t you break regulations—provided you knew the profits you stood to make would dwarf the fines you would pay should you get caught?"

Wall Street's modus operandi for nearly a century has been to "promise the moon" and then laugh at people when the promise turns out to be a lie. And folks like Larry Summers are there to make sure that they can ignore regulations, engage in "new-fangled" swindles and not even get fined in the first place -- to their hearts content. Deregulation and prosecutors who tell Congress that Wall Street firms are "too big to jail" have contributed to the current attitude that Goldstein refers to in this quote:

"This is why paying fines when you are caught breaking the rules is simply deemed “the cost of doing business” on Wall Street. "

Summers has already been handsomely rewarded, and once he leaves office he'll get more rewards still. I suspect his membership in boards and he'll draw good speech fees once he leaves office. And he's still at it. His current project is an attack on government supported mortgages for the remaining middle class: BINYAMIN APPELBAUM writes in the New York Times;

The president praised a bipartisan Senate effort to replace Fannie and Freddie with a system that would charge lenders for explicit government guarantees of some mortgage loans. And while there is a risk that the cost of borrowing would increase, Mr. Obama also said that he wanted to preserve the wide availability of the 30-year, fixed-rate loans that are preferred by most Americans.

A risk? No the word is certainty. And all of us know that their promises are worthless. The end of Fannie and Freddie means the end of the 30 year fixed rate mortgages and folks locked into Usurious interest rates. Wall Street has a massive power over both parties -- and this has to be fought. The first step is defeating Summers.

But of course the Grifters label these frauds and corrupting laws "reform" and act like it will benefit the people it assaults. The same article notes:

"“Washington has suddenly come alive on housing finance reform,” said David Stevens, president of the Mortgage Bankers Association"

Mike Papantonio notes that we should be deliberative as we fight, and neither get furious, nor let nasty people rattle our nerves. It is hard sometimes. But worth the effort. Because once you open your eyes and learn how to see and analyze you can tell the scoundrels from more integral people. I didn't mention that Yellen is more than qualified, a lot smarter, teaches economics, serves on the Federal Reserve Board now, and is honest. Nor did I mention that Larry Summers has a reputation as a macho misogynist. That is because the current in crowd thinks that being a woman or having integrity is a drawback for the job.

Sources for this post:

http//www.nytimes.com/1999/11/05/business/congress-passes-wide-ranging-bill-easing-bank-laws.html

http//online.wsj.com/article/SB123665023774979341.htm

http//www.pbs.org/wgbh/pages/frontline/warning/view/#morelink"

http//www.huffingtonpost.com/2013/08/05/larry-summers-enron_n_3708137.html

http//www.thedailybeast.com/articles/2008/11/12/larry-summers-and-enron.html

http//real-economics.blogspot.com/2010/12/larry-summers-role-in-derivatives.html

http//www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/larry-summers-biggest-blunder

http//business.time.com/2011/04/12/larry-summers-no-regrets-on-deregulation/

Aluminum scam:

http//www.nakedcapitalism.com/2013/07/how-goldman-made-5-billion-by-manipulating-aluminum-inventories-and-copper-is-up-next.html

http//nplusonemag.com/leaving-wall-street

http//www.nytimes.com/2013/08/07/business/washington-edges-warily-into-housing.html?smid=fb-share&_r=0

Rolling Stone's narrative on the 2008 bailout includes details on Summer's swindling role in it:

http://www.rollingstone.com/politics/news/secret-and-lies-of-the-bailout-20130104?page=2

Bush's Loogie

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Don't feed the Bears

Don't feed the bears they say!

But I'll feed that bear anyway.

He's nice and sweet, and looks like a giant puppy.

Surely he'll appreciate food from this yuppy.

Don't feed on the humans they say!

But look at that fool walking my way.

Christopher H. holte

Bears Don't need Fishing Poles

Bears don't need no stinking poles,

they stick their paw inside wet holes,

and catch a fish with claws and paw,

and immediately chuck it in their maw.

"You humans, you stand there all silly and slow,

while the fish steal your bait and laugh and dance.

And you wear silly hats and swipe at gnats.

Just to get away from your wives and their spats."

"You think we are dumb,

but we have class and nerve

and can catch a fish no matter how it swerves.

We eat well and love the smell,

until you humans turn our rivers to hell."

Christopher H. Holte

PS: Thanks to Jerry E. Williams for telling me Lyle Stories my imagination can segue off.

Lyle the Lumbering Bear

Lyle the lumbering bear,

gave me quite a scare.

I'd taken my pole to the lake.

And was fishing for my dinner stake,

when Lyle comes out of the woods intent

On getting a meal from me for free.

I didn't mind if he caught some fish,

But I was afraid I might be his dish.

So I abandoned my pole,

and I ran for the house.

While lyle casually inspected my gear

and ate my lunch.

I didn't mind too much,

I had my pepper spray,

ready to shoot him

and I still have my skin.

Christopher H. Holte