Meet the new occupation: same as the old occupation! Or pretty much: not as many troops, not as many dead and wounded every week, but still. In the new US-Afghanistan accord—which may or may not be ratified early next week by President Hamid Karzai’s Loya Jirga, and which may or may not be signed until some in mid-2014—the United States will be able to maintain as many as nine military bases in Afghanistan. In addition, American troops and US contractors can go in and out of Afghanistan without visas. And neither the troops nor the contractors will be subject to Afghan law.
In a hilarious statement of his priorities, Karzai said: “We want the Americans to respect our sovereignty and laws and be an honest partner. And bring a lot of money.” The delegates to the Loya Jirga laughed, said The New York Times.
The Afghan foreign ministry released draft text of the accord, which (among other things) codifies that the United States must continue to finance Afghanistan’s ragtag security forces indefinitely, or at least through 2024, saying “the United States shall have an obligation to seek funds on a yearly basis to support the training, equipping, advising and sustaining of” the Afghan forces.
According to The Washington Post: “The United States can maintain up to nine bases, and American troops and support contractors will be able to enter Afghanistan without having to obtain a visa.” Karzai said that as many as 15,000 foreign troops could remain in Afghanistan through 2024. Of those, it’s expected that less than 10,000 would be American troops, including Special Forces units that, under the terms of the accord, will be able to conduct night raids against targets suspected of terrorism. And the bases can be used, presumably, for launching drone attacks against targets in both Pakistan and Afghanistan.
The government of Afghanistan gave in on a critical US demand, that American troop and contractors not be subject to Afghan law. That was a deal-breaker in the talks with Iraq, when Prime Minister Nouri al-Maliki rejected a similar US demand. Says the Afghan text of the US-Afghan Bilateral Security Agreement, in rather convoluted language:
Afghanistan, while retaining its sovereignty, recognizes the particular importance of disciplinary control, including judicial and non-judicial measures, by the United States forces authorities over members of the force and of the civilian component. Afghanistan therefore agrees that the United States shall have the exclusive right to exercise jurisdiction over such persons in respect of any criminal or civil offenses committed in the territory of Afghanistan. Afghanistan authorizes the United States to hold trial in such cases, or take other disciplinary action, as appropriate, in the territory of Afghanistan.
The text adds: “Passports and visas shall not be required. Such personnel shall be exempt from Afghan law and regulations on registration and control of foreign citizens.”
Senator Jeff Merkley, an Oregon Democrat, is pushing a proposal on Capitol Hill to require that the continued occupation of Afghanistan, even if ratified by a US-Afghan accord, be endorsed by Congress. That’s an interesting idea, but despite strong public disapproval in polls for continuing the war in Afghanistan in any form, it’s far-fetched to think that Congress would disapprove the pact.
Read Bob Dreyfuss’s take on how diplomacy with Iran is straining US-Israel relations.
Today’s top—though belated—media criticism comes from Erik Wemple from The Washington Post. He dissects the long-lamented but until now much-overlooked blending of ads and coverage within Mike Allen’s fabled, overrated, “Playbook” morning tip sheet (and e-mail newsletter) at Politico. Allen, a former Post reporter, has been one of the chief Politico staffers since its beginning.
One can only cheer when Wemple observes early on in his lengthy piece, “It’s about time that Politico’s Allen got his due as a native-advertising pioneer.”
Other media commentators are now responding and I’ll chart their reactions (and any Allen reply) below at the end of my piece. Jonathan Chait at New York magazine has tweeted, for example: “The ethical disaster most journalists would define as a firing offense is, for Mike Allen, a job description.” And he’s written this. Andrew Sullivan’s headline declared, “Mike Allen, Busted.” Seveal wags have retitled the Wemple piece, “SLAYBOOK.”
So what’s native advertising?
One of the hottest issues in journalism today is “native” advertising, the tricks that publishers deploy to elide the domains of journalism and advertising. BuzzFeed has sustained gray-bearded criticism for its boundary-defying listicles. The Atlantic earlier this year ran a native ad from the Church of Scientology that inflamed its audience and prompted an apology and a review of Atlantic procedures for approving ads. Forbes, The Washington Post and the Huffington Post are also experimenting with this approach to funding journalism.
Until now, Allen’s alleged transgressions, well-blended as they are—for example, ads from the US Chamber of Commerce plus outsized coverage of its work and views—have never been catalogued. Wemple took the time and summarizes:
A review of “Playbook” archives shows that the special interests that pay for slots in the newsletter get adoring coverage elsewhere in the playing field of “Playbook.” The pattern is a bit difficult to suss out if you glance at “Playbook” each day for a shot of news and gossip. When searching for references to advertisers in “Playbook,” however, it is unmistakable. And its practitioner is expanding the franchise.
Beyond the Chamber…
Another big name that’s gotten a healthy dose of earned media from Playbook is BP, a company that has faced quite a challenge in image-conscious Washington, thanks to the 2010 oil spill at the Deepwater Horizon rig leased by the company. In recent months, BP has blanketed “Playbook” with ads hyping the company’s status as “America’s largest energy investor.” The free BP mentions authored by Allen tell a similar story.
Then there are examples involving Goldman Sachs and other big-business entities, along with Allen’s going out of his way to show some love for Sheldon Adelson and so on. Allen and Politico chief John Harris refused interviews for the piece. Wemple:
In rejecting a sit-down discussion, Editor-in-Chief John Harris said the premise “is without merit in any shape or form.” Without an interview, it’s impossible to judge Allen’s motivations. For example, does he write nice things about the chamber because he wants more advertisers or because he feels their agenda doesn’t get fair play in other outlets? Did he publish those BP plugs because he thought they were newsworthy or because he’s got a friend at the company?
As noted earlier, Andrew Sullivan has weighed in at his popular blog, The Dish.
Dish readers know what I think of “native advertizing” and “sponsored content.” If it’s an advertorial, just call it and clearly label it an advertorial! Full disclosure and transparency are essential. The rest is whoredom, not journalism. When a journalist becomes a copy-writer for big advertisers giving him or his publication money, and does not clearly disclose the conflict of interest, he or she has ceased to be an independent journalist and joined the lucrative profession of public relations.
Read Erik Wemple’s evisceration of Mike Allen’s Playbook and make up your own mind. But to my eyes, it reads like a meticulously researched tale of at least the appearance of blatant corruption.
Glenn Greenwald has tweeted that the Wemple piece shows “how Mike Allen reaches new lows in renting out his journalism to the highest corporate bidder.” Clara Jeffery, Mother Jones editor: “Wemple’s story codifies what many have suspected: Lack of a moral core at center of Politico.” Jay Rosen: “At issue: what is an ad and what is news?”
And this from Nick Confessore, political reporter for The New York Times: “Near absence of
@ErikWemple’s story on my Twitter feed a pretty good testament to how much of D.C. officialdom sups at Mike’s table.” David Carr, media writer at the Times: “Playbook reads different through the prism of @erikwemple’s eye-popping story. Brutally good content analytics.”
But Philip Bump at The Atlantic’s Wire muses: “Not to detract from Wemple’s piece, but anyone unaware of Playbook’s cloying obsequiousness clearly doesn’t actually read Playbook.”
Michael Serazio explores the troubled waters of sponsored content in the digital age.
Oh, the drama of it all! New York Yankee third baseman Alex Rodriguez, facing a 211-game suspension and the effective end of his career, chose to display a unique defense strategy at his arbitration hearing. He slammed down his hands and shouted, “This is ridiculous!” Then the three-time MVP leveled what is being described as a “stream of profanities” at Major League Baseball’s chief operating officer, Rob Manfred. After all of this, baseball’s last great diva topped it off by storming the hell out with a promise to never return.
The official word from A-Rod and his small army of lawyers was that he was enraged that league commissioner Bud Selig would be neither present at his hearing nor required to testify. Whether this was in fact a case of spontaneous combustion or ham-handed choreography, it was mere dinner theater compared to what happened next. A-Rod then journeyed to the last locale in New York City where his word is sacred and his character is above reproach: the radio studio of Sports Radio WFAN’s Mike Francesa.
In the forty minutes that followed, we were treated to the spectacle of what it sounds like when someone who has led a remarkably charmed life suddenly perceives himself to be Jean Valjean, the honest man being mercilessly persecuted by powerful people enflamed with vengeance. In A-Rod’s mind, his Javert, the man with a “vendetta” who “hates [his] guts”, is even more frightening than a singing Russell Crowe: 80-year-old Commissioner Bud Selig.
There is the old expression that a liberal is a conservative who has been to jail. A-Rod, who supports Republican political candidates like an honorary Koch brother, was a born-again radical in Mike Francesa’s radio booth, raging against “injustice”, and railing against “the system.” Mike Francesa backed him up, saying, “This is not about a rogue player. It is about a rogue sport.”
What was remarkable about the interview is that it was possible to be disgusted by his self-serving sense of victimization, to remember the lies he told to the face of Katie Couric, to roll your eyes at the tenderly asked questions of Mike Francesa and still agree with the overwhelming thrust of what he was saying. The most honest part of A-Rod’s interview was when he said to Francesa that people on the street stop him and say, “I hate your guts and you’re being railroaded.”
You could not find a more dubious messenger, but the message is not necessarily wrong. Major League Baseball promised mountains of evidence that Alex Rodriguez was not only prescribed performance-enhancing drugs by Anthony Bosch’s Biogenesis clinic but also “obstructed justice” by attempting to buy evidence from Bosch and keep witnesses from testifying. Yet all evidence of this that we have seen thus far is rooted in the testimony of Bosch himself. A-Rod’s team alleges that Anthony Bosch has been paid as much as $150,000 by Major League Baseball for his testimony, along with promises that he would not be prosecuted by the Florida attorney general’s office for distributing contraband pharmaceuticals. There are witnesses who have come forward to say that, yes indeed, Major League Baseball brought out the checkbook to acquire his allegiance.
“Vendetta” is a strong word, but Rodriguez is probably right that Bud Selig looks at him and licks his chops. The 211-game suspension is in flagrant violation of the collective bargaining agreement with the union, but MLB is determined to push this through. This is Selig’s opportunity, one year before his own announced retirement, to look like someone who helped clean up the sport. The same Bud Selig who sat on his hands and looked the other way during the go-go steroid 1990s; the same Bud Selig who along with his fellow owners became unimaginably wealthy as the balls went flying out of the park; the same Bud Selig who has been subject to withering books, news exposés and documentaries about why he chose to do nothing as locker rooms became all-you-can-inject pharmacies, wants A-Rod’s pelt to be part of his legacy. Instead of “Bud Selig, steroid enabler,” he becomes the man who stood up to the union and cleaned up the game.
Meanwhile, here is Alex Rodriguez, the speed bump on the way to Bud Selig’s retirement, on Mike Francesa’s radio show sounding like Norma Rae, saying that he will fight this to very end. “I have no regrets,” he said. “It’s the system that is wrong.” He may be right, but waging and winning a fight against Major League Baseball would require an outpouring of solidarity from his fellow players and trust that this is not all a self-serving smokescreen. Solidarity and trust: for all his hundreds of millions of dollars, these are two things he has never been able to attain. A-Rod may try to sell himself as baseball’s Jean Valjean, but that may be beyond even his own dramatic powers.
Dave Zirin takes a look at A-Rod’s Maryland slums.
According to a nationwide study conducted by the Gay, Lesbian, and Straight Education Network (GLESN), 90 percent of LGBTQ students report hearing derogatory language or experience some type of verbal bullying, and more than 50 percent experience some kind of physical harassment or assault. LGBTQ students are five times more likely to cut class or skip school because they feel unsafe, while 28 percent will drop out of school altogether because of bullying. Lesbian, gay, bisexual and queer youth are five times more likely to attempt or commit suicide than their straight peers, while trans youth are nine times more likely.
In 2011 the “It Gets Better” campaign became a national phenomenon. Thousands of people—from celebrities like Lady Gaga to ordinary high school students—produced video messages of support for LGBTQ youth struggling with bullying. The decision of so many to show their solidarity with LGBTQ youth, and the way in which the “It Get’s Better” campaign helped catapult the issue of bullying and suicide into the national spotlight, is a major advance for the LGBTQ movement.
But we can’t leave the responsibility of ending anti-LGBTQ bullying and youth suicide on the shoulders of the victims. By telling LBGTQ youth who are experiencing violence and struggling with suicide that it’s their responsibility alone to overcome and survive these struggles, without also highlighting the many ways in which our education system, politicians and the government are systematically failing to address these problems, we run the risk of blaming the victims, and leaving the biggest bullies—politicians and school officials—off the hook. Message of support to LGBTQ youth are a beautiful sign of solidarity, but alone they are inadequate to deal with the depth and scale of the crisis at hand.
* * * * *
Creating schools that are safe places for LGBTQ youth and affirming to people across the sexual and gender spectrum requires addressing the problem on multiple levels. Being a teenager is tough enough. Being a gay teenager is even tougher. Having slurs like faggot hurled at you in the hallways, getting spat on after school, having your head bashed into a few lockers, and being forced to fend off upperclassmen who try to beat you up are just a few examples of what I had to put up with as a gay teen. Homophobia took it’s toll on me; in my early teens I struggled intensely with suicide, depression, and low self esteem. Thankfully, with the help and support of friends, family, and supportive LGBTQ youth organization, I got through it. These are the sorts of organziations that need to be supported. On a micro level, educators and student allies can play a role in making schools a welcoming space for LGBTQ students by calling out anti-LGBTQ bullying, taking time to discuss LGBTQ issues in the classroom, and supporting LGBTQ students when they work to address these problems.
At the same time, teachers and students are highly limited in their ability to make a difference in their schools and the lives of LGBTQ youth as long as school districts and state and federal agencies fail to take the necessary steps to address the problem on a structural, policy-wide level. While many school districts and states refuse to adequately address anti-LGBTQ bullying, some have adopted programs to address these problems but lack the resources necessary to seriously implement the far-reaching measures required. This is especially true for schools in lower income communities, which are disproportionality made up of students of color and lack the same resources as their wealthier, whiter suburban counterparts.
Given the pervasiveness of anti-LGBTQ bullying and youth suicide, far-reaching changes are required to make schools a safe and affirming place for LGBTQ youth. This includes measures such an LGBTQ-inclusive curriculum, sexual health classes that address LGBTQ issues, more on-site social workers and counselors, anti-bullying and suicide prevention educational programs for students and faculty, and the necessary funding required to adequately implement these programs. In addition to creating safe schools, community organizations such as BAGLY and FIERCE are also important to providing affirming and empowering outlets for LGBTQ youth.
* * * * *
Often, the problems of anti-LGBTQ bullying and suicide are narrowly discussed as a problem of insensitive bullies. Normally, punitive measures like suspensions, expulsions and, in some extreme cases, criminal prosecutions are the focus of solutions put forward by public officials. Generally, little help is offered to those who have been victimized and few policies that could transform the larger structural factors which allow bullying to flourish in the first place are ever even contemplated.
Ending anti-LGBTQ bullying and the damaging—even life-threatening—mental health issues it produces does not need to include increasing incarceration. Holding bullies accountable by requiring them to undergo LGBTQ educational programs and providing them with counseling does more to eliminate bullying and creating an LGBTQ-inclusive environment in schools than simply punishing perpetrators with suspensions or prison sentences. Transforming our schools has to be the aim of our efforts.
* * * * *
Only a decade or two ago, one would be hard-pressed to find more then a handful of politicians willing to address anti-LGBTQ bullying. But now, elected officials are talking publicly about these issues. Even President Barack Obama made an “It Gets Better” video. This sea change in official discourse is undoubtedly due to years of grassroots activism by parents, students and educators.
While many politicians are now quick to lend their support to issues such as gay marriage and anti-bullying campaigns, few are actually willing to seriously push for the necessary policy changes to address the range of problems affecting LGBTQ young people, in and outside of schools. Even the rare few who do, like Massachusetts Governor Deval Patrick, fail to allocate the necessary resources and funding to adequately deal with the problem.
Too often, the same Democratic politicians who are willing to speak at LGBTQ events, solicit LGBTQ votes, take LGBTQ donations and advocate for LGBTQ equality are the same officials complicit in cutting funding for the very programs that LGBTQ youth depend on. The lives of LGBTQ young people are not playthings to be tossed around for political capital. As people who want schools that are safe and affirming places for LGBTQ students and hope for a future where no young person will ever feel like death is a better option then living, we have a responsibility to hold politicians accountable to their rhetoric. We are best positioned to do this when we organize with others to build grassroots movements that are less concerned with befriending the political establishment and courting corporate sponsorship, and more focused on doing whatever it takes to pressure those in power to implement the wide-reaching changes required to end the range of problems facing queer youth once and for all.
Only a few miles separate the Baltimore neighborhoods of Roland Park and Upton Druid Heights. But residents of the two areas can measure the distance between them in years—twenty years, to be exact. That’s the difference in life expectancy between Roland Park, where people live to be 83 on average, and Upton Druid Heights, where they can expect to die at 63.
Underlying these gaps in life expectancy are vast economic disparities. Roland Park is an affluent neighborhood with an unemployment rate of 3.4 percent, and a median household income above $90,000. More than 17 percent of people in Upton Druid Heights are unemployed, and the median household income is just $13,388.
It’s no secret that this sort of economic inequality is increasing nationwide; the disparity between America’s richest and poorest is the widest it’s been since the Roaring Twenties. Less discussed are the gaps in life expectancy that have widened over the past twenty-five years between America’s counties, cities and neighborhoods. While the country as a whole has gotten richer and healthier, the poor have gotten poorer, the middle class has shrunk and Americans without high school diplomas have seen their life expectancy slide back to what it was in the 1950s. Economic inequalities manifest not in numbers, but in sick and dying bodies.
On Wednesday, Senator Bernie Sanders convened a hearing before the Primary Health and Aging subcommittee to examine the connections between material and physiological well-being, and the policy implications. With Congress fixed on historic reforms to the healthcare delivery system, the doctors and public health professionals who testified this morning made it clear that policies outside of the healthcare domain are equally vital for keeping people healthy—namely, those that target poverty and inequality.
“The lower people’s income, the earlier they die and the sicker they live,” testified Dr. Steven Woolf, who directs the Center on Society and Health at Virginia Commonwealth University. In America, people in the top 5 percent of the income gradient live about nine years longer than those in the bottom 10 percent. It isn’t just access to care that poor Americans lack: first, they are more likely to get sick. Poor Americans are at greater risk for virtually every major cause of death, including cancer, heart disease and diabetes. As Woolf put it, “Economic policy is not just economic policy—it’s health policy.”
Tracing health disparities back to their socioeconomic roots adds context to growing calls for pro-worker policies like raising the minimum wage and providing paid sick leave. Lisa Berkman, director of Harvard’s Center for Population and Development Studies, presented a range of evidence indicating that policies supporting men and women in the labor force—particularly low-wage and female workers—lead to better health for themselves and their families.
The experts also identified education as a “key lever” for improving health outcomes, as education is closely linked with economic mobility and in turn, health. The mortality risk has risen for less educated women in recent years, while diabetes death rates are three times higher among Americans without a high school diploma than those who graduated. With 22 percent of American children living in poverty, several witnesses pointed to the expansion of early childhood education as policy that would have a profound effect on the nation’s health.
Witnesses also highlighted the importance of the social safety net to shield families from the adverse health effects of poverty. As Republicans and Democrats alike contemplate billions of dollars of cuts to the food stamp program, nearly 50 million people, or nearly one in six Americans, face “food insufficiency.” Hunger has particularly severe health effects for children, leading to a higher risk of learning disabilities, conditions like anemia and asthma, and increased hospitalization.
Many other wealthy countries have a more robust buffer for poor families, which helps to explain why America’s health statistics are so much worse. (The fact that the United States has higher poverty rates and greater inequality than our peers has a lot to do with it, too.) “Our relative investment in those social programs, social services, is striking,” said Woolf. “We are an outlier in the proportion of our dollars we spend on healthcare relative to those social programs, whereas the countries who spend much more on social programs than on health care are the ones that are living longer.”
“And presumably saving money on healthcare as well,” interjected Sanders, raising another important point: the social and economic programs that promote individual health could have profound effects on healthcare spending and the economy overall. “When you hear statistics about low-income people having much higher incidences of diabetes, which is costing this country hundreds millions of dollars, then to my mind the answer is to invest to prevent diabetes, to prevent other illnesses, rather than just spending more than any country on earth trying to treat these illnesses,” Sanders told me after the hearing.
Woolf noted that it is chronic diseases like diabetes, which are correlated with socioeconomic inequality, that are driving up the cost to the government of programs like Medicare and Medicaid. Overall, policymakers underestimate the costs of not prioritizing preventative care, and underestimate the long-term benefits of social spending programs.
“The social and economic policies that the government has developed over the years that may be health-promoting, aren’t counted as being health-promoting,” explained Berkman. “We don’t think about that in the benefits side of the equation. We only think about them in terms of short-term economic turnaround or employment or labor when in fact the spillover to health may be enormous.”
Once it becomes clear that the determinants of health and illness are in neighborhoods, schools and worksites, Berkman pointed out, a wealth of policy solutions present themselves. The problem is in the politics.
“With the Republicans controlling the House and wanting to cut virtually every program that advances human health in this country and well-being, it’s going to be a very tough struggle,” Sanders told me when I asked him about the prospects for advancing policies discussed in the hearing.
“What you heard today was the apex of a great philosophical divide, in that what we are saying is that if you invest in the children, if you invest in the environment, if you invest in education, if you invest in decent housing, not only do you create people who are healthier and happier, but you end up saving money.” The House, he noted, would prefer to cut nutrition and education. “We’re living on different planets in terms of what the debate is about.”
In states with mandatory minimum sentencing, a nonviolent offense—like stealing candy—can land you in prison for life. Liliana Segura reports.
Liz Cheney, running for Senate in Wyoming to oust incumbent Republican Senator Mike Enzi, champions her role in conservative media as a political asset. On her campaign website, she touts her experience in the media bringing “attention to the threats to liberty posed by the Obama administration.”
For a part-time position, Cheney has been paid handsomely: her recently filed candidate disclosure form shows that she received $281,587 from Fox News. In July of this year, Fox ended the contract given Cheney’s bid for office.
Her other sources of income also stem from communications. Assorted speaking fees honoraria and a book advance associated with the book she wrote with her father, former vice president Dick Cheney, resulted in an additional $640,950 in income.
While Liz Cheney has been in the news this week after being rebuked by her sister, Mary Cheney, over her opposition to gay marriage, the disclosure also shows that Liz has been associated with Mary’s consulting firm, Yellowstone Associates, through 2011.
Cheney is not the only candidate to pass through the revolving door between the Republican Party and well-paid positions with Fox News. Disclosures show Rick Santorum was paid $239,153 as a part-time contributor before he ran for president in 2011. Mark Sanford, before he won his special election for a House seat in South Carolina, was paid $130,000 by the network.
Cheney’s campaign had asked for an extension earlier this year for the disclosure that appeared today through the Senate ethics office. The extension was granted, but was due on November 14. Records show the mailing was received on November 19. Her attorney comes from Holtzman Vogel, a law firm that has represented a number of GOP campaigns and secret-money groups, including Americans for Prosperity.
Zoë Carpenter reports from inequality’s frontline.
Tuesday afternoon, the Department of Justice announced a final $13 billion agreement with JPMorgan Chase over the risky mortgage practices and financial securitization practices that lead up to the 2008 financial collapse.
So what’s in the settlement, and how far does it go in truly making the financial sector accountable for the widespread economic misery it caused five years ago?
What wrongdoing is JPMorgan paying for?
This goes to the heart of what caused the financial crisis. The settlement is resolving claims that JPMorgan Chase (and two firms it later purchased, Washington Mutual and Bear Stearns) sold Residential Mortgage-Backed Securities when it knew the underlying mortgages were troubled.
It was these toxic securities that infiltrated the global economy and then turned sour, taking the financial system with them. JPMorgan Chase did not formally admit to guilt (which would have placed the bank in even more serious regulatory and legal jeopardy) but did agree to a statement of facts outlining severe malfeasance in the run-up to the crisis. Specifically, the statement of facts outlines how, on multiple occasions, bank employees knew that the underlying mortgages were not appropriate for securitization but allowed it anyway and never told the investors who were making the purchase.
Getting at this misconduct was the reason the Residential Mortgage-Backed Securities task force was formed. “Since my first day in office, I have insisted that there must be accountability for the misconduct that led to the crash of the housing market and the collapse of the American economy,” said Attorney General Schneiderman, co-chair of the RMBS group. “We won a major victory today in the fight to hold those who caused the financial crisis accountable.”
How much is JPMorgan Chase paying, and where does the money go?
The settlement is for $13 billion—the largest sum a single company has ever paid the US government, more than tripling the previous mark, which was the $4 billion BP paid the government for the Deepwater Horizon spill. Thirteen billion dollars also represents half of JPMorgan Chase’s annual profits.
Nine billion of that goes to settle claims brought by various regulatory agencies and states over claims related to RMBS. Specifically, JPMorgan will pay $2 billion as a civil penalty to settle the Justice Department claims under the Financial Institutions Reform, Recovery, and Enforcement Act; $1.4 billion to settle federal and state securities claims by the National Credit Union Administration; $515.4 million to settle federal and state securities claims by the Federal Deposit Insurance Corporation; $4 billion to settle federal and state claims by the Federal Housing Finance Agency; $298.9 million to settle claims by the State of California; $19.7 million to settle claims by the State of Delaware; $100 million to settle claims by the State of Illinois; $34.4 million to settle claims by the Commonwealth of Massachusetts; and $613.8 million to settle claims by the State of New York.
The remaining $4 billion must go to distressed homeowners. Half of it will come in the form of principal reduction—where the amount owed on distressed mortgages is reduced—and the rest will go towards refinancing mortgages at better rates, donation of bank-owned properties to nonprofits or Land Banks, new mortgages to low- and moderate-income families hurt by the financial crisis, and below-market loans to some people who had their homes destroyed by Hurricane Sandy.
Why is the deal important?
In January 2011, this deal didn’t seem possible. The looming National Mortgage Settlement was heavily rumored to include immunity and indemnification to all involved banks for all conduct related to the crisis. But a strong progressive pushback led to immunity’s being stripped from the deal and to the creation of the RMBS task force, which brokered this settlement.
And more prosecutions are possible—Attorney General Eric Holder was explicit on that point Tuesday. “Without a doubt, the conduct uncovered in this investigation helped sow the seeds of the mortgage meltdown,” he said. “JPMorgan was not the only financial institution during this period to knowingly bundle toxic loans and sell them to unsuspecting investors, but that is no excuse for the firm’s behavior. The size and scope of this resolution should send a clear signal that the Justice Department’s financial fraud investigations are far from over. No firm, no matter how profitable, is above the law, and the passage of time is no shield from accountability.”
While there is plenty to criticize in this settlement (more on this next), it’s important to note some ways in which the federal government refused to be pushed around by JPMorgan. As The New York Times reports today, CEO Jamie Dimon tried to settle for just $3 billion, but DoJ officials refused to even meet with him. Only when the amount was dramatically raised did a meeting occur.
JPMorgan also wanted the FDIC to indemnify it for misconduct related to Washington Mutual, and that request was denied. It also wanted immunity from an ongoing criminal investigation in California related to RMBS—that was also denied. These sticking points delayed finalization of the deal for weeks, but JPMorgan ultimately had to relent.
What are critics saying?
There are many strong criticisms of this settlement, however. The central one is that no actual bank executives were charged—despite the fact that the Justice Department clearly established a pattern of misconduct at many different levels of the bank. “The bottom line is that there’s continued reliance on the immaculate conception theory—that no people were actually involved,” Bartlett Naylor, a financial policy advocate with Public Citizen, told The Nation.
Naylor, who served as chief of investigations for the Senate Banking Committee during the Savings & Loan crisis—where more than 800 bank officials went to jail—said such prosecutions are crucial because they create a true disincentive to bad behavior on Wall Street, as opposed to a fine, even a substantial one, that will essentially be paid by investors.
“Now, the price [for malfeasance] is you have negotiations with the government and you suffer some embarrassment, some negative press, but it’s the price of business,” Naylor said. “This shouldn’t be the price of business—this is something beyond just present value of future earnings. This is about morality. This is about the fabric of our society. We’re financializing our economy. We’re becoming increasingly an economy about banking. And lawlessness.”
Last week, US District Judge Jed S. Rakoff penned an op-ed excoriating the Justice Department for failing to charge a single high-level bank executive in relation to the crash, despite ample evidence of wrongdoing. This isn’t some random activist, but rather a senior judge in the Southern District of New York who is intimately familiar with prosecutions of the financial industry. When he’s concerned, everyone should be.
The other main criticism is that JPMorgan Chase will end up paying much less than $13 billion in the end. Only $2 billion applies to after-tax profits, meaning the rest can be accounted as a loss—so after taxes, it will cost the bank less than $9 billion. Many people have noted that the homeowner relief “penalties” in the settlement are for things the bank is already doing anyway, like extending payment schedules for troubled mortgages, extinguishing badly troubled second-tier loans and donating distressed properties to nonprofits.
Lee Fang investigates the invisible hand of business in the 2012 election.
Editor’s Note: Each week we cross-post an excerpt from Katrina vanden Heuvel’s column at the WashingtonPost.com. Read the full text of Katrina’s column here.
In the richest country in the world, the poorest among us are children.
16 million children living in poverty suffer worse education, health and job outcomes, making it even harder for them and their families to break out of their circumstances.
In New York City, where nearly one-third of children live below the poverty line, Mayor-elect Bill de Blasio has pledged to tackle the pernicious problems of poverty and income inequality, and the centerpiece of his plan—to expand preschool to more low-income four-year-olds—is just plain common sense.
Studies demonstrate that kids who attend high-quality preschool achieve higher test scores, are less likely to go to jail and are more likely to secure good jobs with higher wages. Low-income kids of color, who are the least likely to have access to great preschools, benefit the most.
To stand idle in the face of these facts is to allow millions of children to fall behind in school before they even start. We can do better—and Oklahoma can show us how.
Editor’s Note: Each week we cross-post an excerpt from Katrina vanden Heuvel’s column at the WashingtonPost.com. Read the full text of Katrina’s column here.
A Facebook friend writes: “To what extent did Dallas factor into LBJ’s agenda getting through?”
That’s an easy one: quite nearly one hundred precent. There’s no question that Kennedy was an utter failure as a passer of laws during his proverbial thousand days. I wrote about that in Before the Storm: Barry Goldwater and the Unmaking of the American Consensus: “His only real legislative victory had come in the second week of his term, when the House voted to enlarge the size of the Rules Committee to dilute the power its reactionary majority of Northern Republican and Southern Democrats had used to bog down…social legislation. But he won the victory by only a single vote.” (Those interested in more detail should seek out a 1968 book by Tom Wicker, JFK and LBJ: The Influence of Personality upon Politics.) And that victory, I wrote, “availed him nothing.” His bill to commit major federal funds to education for the first time failed; a bill for aid to depressed areas was watered down; a minimum wage increase was tiny, the number of workers it covered decreased. As for his heroic introduction of the sweeping civil rights bill, Robert Caro suggests that at the time of his death he was apparently ready to trade away its signature provision, the ban on discrimination in public accommodations. A housing bill and what would become Medicare were on the verge of failure—all this despite an approval ratings in the 70s during the spring before his death.
Then, the assassination. Then, Teddy White’s proclamation that America had just been deprived of “Camelot” (more on that later!). Lyndon Johnson stood before a joint session of Congress and said, in words scripted by Kennedy’s great speechwriter Ted Sorensen, “All that I have I would have gladly given not to be standing here today…. On the 20th day of January, in 1961, John F. Kennedy told his countrymen that our national work would not be finished ‘in the first thousand days, nor in the life of this administration, nor even perhaps in our lifetimes on this planet. But,’ he said, ‘let it begin.’ Today, in this moment of new resolve, I would say to all my fellow Americans, let us continue!’ ”
Then came the legislative deluge. Same Congress; the only difference was the blatant and skilled manipulation of the memory of the fallen martyr by LBJ. Medicare. Medicaid. Civil Rights, without a single serious change from draft to passage. Federal aid to education. The tax cut I wrote about yesterday (he threatened to keep legislators in Washington through Christmas unless they passed it). Authorizing legislation for an “all-out war on human poverty,” claimed as an inheritance from Kennedy, though it had been Kennedy’s chairman of the Council of Economic Advisers’ idea to divert money to merely eliminating “pockets of party,” an idea tabled because Kennedy decided reaching out to suburban voters for 1964 was the more important priority.
Part 1 of Kennedy Week focuses on JFK’s legacy as a nuclear strategist and symbol of liberalism.
Tuesday afternoon, news broke that the United States and the Afghan government were on the verge of a new security deal that could potentially create an indefinite US military presence in the country. NBC News obtained a draft of the agreement, which extends until “2024 and beyond” and allows for the United States to operate military bases in Afghanistan and maintain combat operations against who it deems Al Qaeda operatives.
The draft agreement didn’t specify troop levels, but Afghan officials told NBC News they hoped 10,000 to 15,000 American troops would remain in the country for at least the next decade, though American officials said it would be closer to 7,000 or 8,000. In either case, if signed, the United States would be agreeing to at least a decade-long military commitment in Afghanistan—meaning a twenty-three-year war, at the very least.
But a bipartisan group of senators—led by Jeff Merkley of Oregon—is trying to pump the brakes. They have a simple principle: before President Obama agrees to another decade of war, he should consult Congress and the American people.
The Nation has learned that Merkley, along with original co-sponsors Rand Paul, Joe Manchin, Mike Lee and Ron Wyden, will introduce an amendment to the upcoming National Defense Authorization Act that expresses a sense of the Senate that Obama should seek congressional approval no later than June 1, 2014, for any extended presence in Afghanistan.
This is how the relevant part of the amendment, which was provided to The Nation, reads:
A Senate leadership aide, however, told The Nation that Merkley’s amendment was unlikely to receive a vote before the Senate breaks for Thanksgiving recess, and that once the Senate returns, “there will be a priority to wrap up NDAA and vote on a final bill.” The aide did not rule out, however, that a vote on the amendment could still occur after the holiday.
A similar measure asking Obama to seek congressional approval for an extended war in Afghanistan passed the House earlier this year by a 305-121 vote, also as an amendment to the lower chamber’s version of the NDAA. It also had bipartisan sponsorship.
While neither amendment is binding, both clearly put the White House in a difficult position. Polls show the grinding war in Afghanistan is highly unpopular, with 67 percent of Americans believing the war was not worth it. A debate over authorization to continue a seemingly endless war in Afghanistan might mirror the debate over intervention in Syria earlier this year—where congressional support never materialized.
Check out The Nation’s interactive database compiling civilian casualties in Afghanistan since the US-led invasion in 2001.