It's getting to the point where I don't even want to read Simon Johnson anymore. Yes, he's right. If we reduce oversight safeguards to "trust us," we have a system far too ripe for corruption - in fact, almost asking for it:

Buried in the late wire news on Friday – and therefore barely registering in the newspapers over the weekend – Treasury announced the rules for pricing its option to buy shares in banks that participated in TARP.

The Treasury Department said the banks will make the first offer for the warrants. Treasury will then decide to sell at that price or make a counteroffer. If the government and a bank cannot agree on a fair price for the warrants, the two sides will have the right to use private appraisers.

This is a mistake.

The only sensible way to dispose of these options is for Treasury to set a floor price, and then hold an auction that permits anyone to buy any part – e.g., people could submit sealed bids and the highest price wins.

In Treasury’s scheme, there is significant risk of implicit gift exchange with banks - good jobs/political support/other favors down the road – or even explicit corruption. For sure, there will be accusations that someone at Treasury was too close to this or that bidder. Why would Treasury’s leadership want to be involved in price setting in this fashion?

Treasury apparently sees corruption as an issue about personalities (i.e., WE aren’t ever corrupt) rather than about institutional structure. For example, if you create an arrangement that easily permits corruption, such as through nontransparent decision making or negotiation around warrant pricing, you set up incentives to be corrupt. Either existing people change their behavior, or new people will seek appointment in order to participate in corruption.

This is also a point, by the way, that Treasury has been making for years through its representatives at the International Monetary Fund – including during the Clinton Administration, when the same people were running U.S. economic policy as now. It’s a good point and never easy for countries-with-potential-corruption to hear. It applies as much to the United States as to anywhere else.

Treasury will argue the disposal of warrants is a one-off event, but this is not a plausible line: it is part of a much longer series of nontransparent decisions over finance. The attitude that “we can be nontransparent because we will never be corrupt” creates reputational risk for both Treasury and participating banks. If extraordinary support for the financial sector lasts several years, we will likely have at least one time-consuming and damaging investigation into all the details of these settlements.

Lawyers, Guns and Money: This is your court on conservatives – a strange enthusiasm for punishment of the innocent.

TransGriot: 10 busted myths about the Canadian health care system.

Intrepid Liberal Journal: Living on only $2 a day – an interview with economist Jonathan Morduch.

Cab Drollery: Your money at play – outsourcing oversight. (What could possibly go wrong?)

The Bobblespeak Translations: Meet the Press with Sam Nunn and Fred Thompson, translated.

Guest post by Batocchio. Temporarily e-mail tips to batocchio9 AT yahoo DOT com.

From the White House blog:

The President explains his plan to address one of the major causes of the current economic crisis -- the breakdown of oversight leading to widespread abuses in the financial world. The new Consumer Financial Protection Agency will have the sole job of looking out for the financial interests of ordinary Americans by banning unfair practices and enforcing the rules. This is a cornerstone in America’s new economic foundation.

Transcript below the fold.

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While the corporate media is praising Obama's announcement yesterday to more stringently monitor mountaintop mining, those involved in fighting the massive pollution that results from the practice say it's nowhere near enough. One group's attorney called it "rearranging the bureaucratic deck chairs." (Remember how Obama kept talking about "clean coal"? This is what it looks like, folks: powerful poison dumped into people's lives.)

Friday morning, this terrible news:

Just how bad has the coal ash situation gotten in the United States? So bad that the Department of Homeland Security has told Sen. Barbara Boxer (D-Calif.) that her committee can't publicly disclose the location of coal ash dumps across the country.

The pollution is so toxic, so dangerous, that an enemy of the United States -- or a storm or some other disrupting event -- could easily cause them to spill out and lay waste to any area nearby.

And yet, for some reason, it's perfectly fine when mining companies do it! Hey, how about that "clean coal"?

There are 44 sites deemed by the Environmental Protection Agency to be high hazard, but Boxer said she isn't allowed to talk about them other than to senators in the states affected. "There is a huge muzzle on me and my staff," she said.

In other words, this is a very urgent problem. Activists say all Obama has to do is enforce the Clean Water Act that already exists.

If the Obama administration wants to protect the people and mountains of Appalachia, it needs to end the destructive practice of mountaintop mining, not settle for promises of stricter scrutiny of the mining permits, advocates say.

[...] The White House announced what it described as an “unprecedented” agreement among the Environmental Protection Agency, the Army Corps of Engineers and the Interior Department to better coordinate and tighten the agencies’ oversight of mountaintop mining and to review the mining existing laws.

In a memorandum of understanding, the agencies promised to:

• Require more stringent environmental reviews for future mountaintop mining permits, including using the Clean Water Act to reduce contamination in streams and watersheds;

• Propose a rule change to stop allowing a type of nationwide permit that doesn’t require site-specific reviews for mining operations to dump the mineral-laden debris of former mountaintops into streams;

• Strengthen oversight of state agencies, both in their permitting and enforcement;

• And, if the U.S. District Court vacates the Bush administration’s 2008 Stream Buffer Zone Rule as requested, return to the 1983 rules restoring the 100-foot buffer zone around streams for mining waste.

These are all steps in the right direction, but they aren’t enough, says Willa Mays, Executive Director of Appalachian Voices:

"Their priorities do not take into account that mountains are being blown up today, and until mountaintop removal coal mining is ended, residents will continue to suffer from high disease rates, floods, and poisoned water supplies directly attributable to this mining practice."

Advocates across Appalachia echoed her concern.

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William K. Wolfrum: We white men are now an infintesimally oppressed, slightly less powerful majority

Sisyphus Shrugged: Speaking of temperament...

POGO: Taxpayers are victims of continued government charge card abuse

World-O-Crap: The Last Temptation of Limbaugh

Booman Tribune: Cruising with nutjobs...

ANNALS OF JOURNALISM: Anatomy of a Column, Agnus Douthat...The Cheney Channel, the family that lives on TV...along with "Speaker" Gingrich...Who's killing newspapers...NYT helping BUSHCO again...Independent Media...Help Philly Inquirer find that REAL liberal columnist...Heresy on the Right...Still lovin' their old flame...The dinner that went mad...A really terrible cover...World watches America...WTF is this guy talking about?... The Weekly Standard looks forward ...

Congress Matters: Bush Attorneys General Ashcroft and Gonzalez: Torture "may be necessary in the future"

The Brad Blog: Former FBI translator and whistleblower, Sibel Edmonds, suggests blackmail may be at the heart of Congressional refusal to bring accountability and oversight to its own members - such as both Hastert and Harman - in matters of espionage and national security

TAPPED: ACORN charged in Nevada

The Reality-Based Community: Note to Republicans

AFL-CIO Now Blog: Millions lose health coverage since recession and job-based health care declines

Show Me Progress: Chillax, Y'all

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Russ Feingold talks to Rachel about the need for Congressional oversight and holding the Bush administration accountable for what they've done regardless of what the Attorney General's office does. Although having an AG's office that will actually prosecute contempt charges definitely would be refreshing to say the least.

Feingold doesn't give much creedance to the statements made by Kit Bond that he got assurances from Eric Holder on torture prosecutions (or the lack thereof). And he discusses his proposal to amend the Constitution to require special elections when there are Senate vacancies. After our recent fiascos I agree with him. If had to name one Senator that I truly had any respect for, Feingold would be the first and one of the few to come to mind and he's earned it, as much as the Bush administration has earned my disrespect.

American presidents and their staff work for the American people, they are not monarchs with an inner court of priviliged nobles. President Obama has reminded all his predecessors of that simple fact, living up to a campaign promise to "nullify attempts to make the timely release of presidential records more difficult."

President Barack Obama, in his first full day in office, revoked a controversial executive order signed by President Bush in 2001 that limited release of former presidents’ records.

The new order could expand public access to records of President Bush and Vice President Dick Cheney in the years to come as well as other past leaders, said Steven Aftergood, director of the Project on Government Secrecy at the Federation of American Scientists. …

Under Bush’s order, former presidents had broad ability to claim executive privilege and could designate others including family members who survive them to exercise executive privilege on their behalf.

Obama’s new order gives ex-presidents less leeway to withhold records, Aftergood said, and takes away the ability of presidents’ survivors to designate that privilege.

Separately, an Obama memorandum issued Wednesday also appears to effectively rescind a 2001 memo by President Bush’s then-Attorney Gen. John Ashcroft giving agencies broad legal cover to reject public disclosure requests.

Over at MoJo blog, they quote CREW chief counsel Anne Weismann as explaining:

"[Obama]'s putting former presidents on notice that if you want to continue a claim of executive privilege that [Obama] doesn't think is well-placed, you're going to have to go to court."

Even Ed Morrissey at Hot Air is impressed, writing "On Inauguration Day, I promised to offer praise for Barack Obama when he pursued good policy, and it didn’t take long." At least one other conservative thinks this executive order is "nothing more than him throwing a meaty bone to his constituency who hopes to be able to find out “The Truth” about the Bush administration’s alleged plans to turn this nation into a dictatorial theocracy." That's simply mean-spirited hyperbole, hiding an implied argument. Who would really want to argue, out there in plain words, that stopping Bush's bosses (the American people) from finding out what's in millions of his administration's emails is a good thing?

Crossposted from Newshoggers

I haven't seen this anywhere else but it doesn't deserve to fly under the radar (h/t Newshoggers' tireless researcher Kat).

An internal investigation has cleared the Pentagon of violating a ban on domestic propaganda by using retired military officers to comment positively about the war in Iraq in the US media.

In a report posted on its website Friday, the Pentagon's inspector general said "we found the evidence insufficient to conclude that RMA (retired military analysts) outreach activities were improper."

The report said the controversy, which erupted in April following an expose in the New York Times, warranted no further investigation.

The Times found that the Pentagon laid on special briefings and conference calls for the retired officers, many of whom then repeated the talking points as military experts on television news shows.

It also found that many of the media analysts also worked as consultants or served on the boards of defense contracting companies, but that those ties often went undisclosed to the public.

Are they freaking kidding? Of course, the slip-slide hinges on the definition of "propaganda"

US law bars government agencies from using funds for domestic propaganda, but the inspector general's report said the definition of propaganda is unclear.

The report said historically it has been interpreted to mean publicity for the sake of self aggrandizement, partisanship, or covert communications, and that by those standards the evidence did not show a violation of the ban.

"Further, we found insufficient basis to conclude that (the office of the assistant secretary of defense for public affairs) conceived of or undertook a disciplined effort to assemble a contingent of influential RMAs who could be depended on to comment favorably on DoD (Department of Defense) programs," it said. [Emphasis mine - C]

And on that strict interpretation the IG is correct. Because it isn't partisan to lie and use proxy puppets to boost bogus cheers for a war that the media were always gung-ho for and that even Dem leaders like the next Secretary of State voted to get into...just dishonest.

*Sigh.*

Here's Amy Goodman interviewing Col. Sam Gardiner and Peter Hart of FAIR about the Pentagon's tame mouthpiece program back in April.

Crossposted from Newshoggers

Eli Lake says Republicans intend questioning CIA director-designate Leon Panetta nomination on the basis of his possible involvement in the Clinton administration's illegal rendition activities.

Put aside the glaring hypocrisy of right-wingers suddenly deciding such renditions might be a bad thing after protesting vigorously for eight years that they were an essential and excusable tool in the War On Some Terror. Put aside the hypocrisy of leftwing pundits who are suddenly using the term "extraordinary rendition" where before they had no problem calling an illegal spade a spade.

It's still a good question.

Panetta should face questions like these, and he shouldn’t do what CIA director-designates often do when receiving them, which is offering answers in closed sessions. The public is owed a reckoning about the torture that was done in its name, no matter who was president when it occurred. Just because committee Republicans are being selective and obnoxious about this doesn’t invalidate the principle.

Illegal is illegal, and I for one am heartily sick of those who change their stance on that depending on whether or not "their" guy did it. It's not simply all about closing Gitmo.

Crossposted from Newshoggers

Former Gitmo guard Chris Arendt has told a BBC interviewer about the abuses he saw there. He was quite clear that what he saw was ''torture'' and that some of his fellow guards were so violent as to be ''psychotic.''

Here's Arendt talking at the "Winter Soldiers" press conference hosted by IVAW back in April last year.

He tells the BBC in this new interview that the abuses he witnessed included heavy beatings, shaving insults into inmates hair and the usual "enhanced interrogation" techniques wingnut senator Jon Kyl is so proud of - for opposition to which he would contest Eric Holder as Obama's nominee for Attorney General.

Personally, I'd say Kyl's opposition was a great reason to confirm Holder.

Our leaders have framed the problem as a “crisis of confidence” but what they actually seem to mean is “please pay no attention to the problems we are failing to address.” - Michael Lewis

In today's New York Times, Michael Lewis, author of "Liar's Poker" and "Panic: The Story of Modern Financial Insanity", looks at the systemic intertwined interests (like the don't-rock-the-boat SEC) that kept Wall St. embroiled in such questionable and risky practices. As just one example among many, he points to the man who tried to stop Bernie Madoff for years:

... Consider the strange story of Harry Markopolos. Mr. Markopolos is the former investment officer with Rampart Investment Management in Boston who, for nine years, tried to explain to the Securities and Exchange Commission that Bernard L. Madoff couldn’t be anything other than a fraud. Mr. Madoff’s investment performance, given his stated strategy, was not merely improbable but mathematically impossible. And so, Mr. Markopolos reasoned, Bernard Madoff must be doing something other than what he said he was doing.

In his devastatingly persuasive 17-page letter to the S.E.C., Mr. Markopolos saw two possible scenarios. In the “Unlikely” scenario: Mr. Madoff, who acted as a broker as well as an investor, was “front-running” his brokerage customers. A customer might submit an order to Madoff Securities to buy shares in I.B.M. at a certain price, for example, and Madoff Securities instantly would buy I.B.M. shares for its own portfolio ahead of the customer order. If I.B.M.’s shares rose, Mr. Madoff kept them; if they fell he fobbed them off onto the poor customer.

In the “Highly Likely” scenario, wrote Mr. Markopolos, “Madoff Securities is the world’s largest Ponzi Scheme.” Which, as we now know, it was.

Harry Markopolos sent his report to the S.E.C. on Nov. 7, 2005 — more than three years before Mr. Madoff was finally exposed — but he had been trying to explain the fraud to them since 1999. He had no direct financial interest in exposing Mr. Madoff — he wasn’t an unhappy investor or a disgruntled employee. There was no way to short shares in Madoff Securities, and so Mr. Markopolos could not have made money directly from Mr. Madoff’s failure. To judge from his letter, Harry Markopolos anticipated mainly downsides for himself: he declined to put his name on it for fear of what might happen to him and his family if anyone found out he had written it. And yet the S.E.C.’s cursory investigation of Mr. Madoff pronounced him free of fraud.

Of course, Madoff was a relatively small part of the culture:

The American International Group, Fannie Mae, Freddie Mac, General Electric and the municipal bond guarantors Ambac Financial and MBIA all had triple-A ratings. (G.E. still does!) Large investment banks like Lehman and Merrill Lynch all had solid investment grade ratings. It’s almost as if the higher the rating of a financial institution, the more likely it was to contribute to financial catastrophe. But of course all these big financial companies fueled the creation of the credit products that in turn fueled the revenues of Moody’s and Standard & Poor’s.

These oligopolies, which are actually sanctioned by the S.E.C., didn’t merely do their jobs badly. They didn’t simply miss a few calls here and there. In pursuit of their own short-term earnings, they did exactly the opposite of what they were meant to do: rather than expose financial risk they systematically disguised it.

This is a fascinating piece, with lots of advice about what needs to be fixed to restore confidence in the financial system. (As you may have guessed, nothing substantive has been done yet.) Go read the rest.

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Oh, it's so nice to see some of the straight-talkin', ready-to-lead, he-gets-it-because-he-was-a-POW stylings of former presidential candidate John McCain, isn't it? The strongest assessment and responsibility assigned for the Torture Presidency was co-authored by Our Man McCain, dismissing completely the White House alibi that Abu Ghraib atrocities were committed by a few "bad apples".

The abuse of detainees in U.S. custody cannot simply be attributed to the actions of ‘a few bad apples’ acting on their own. The fact is that senior officials in the United States government solicited information on how to use aggressive techniques, redefined the law to create the appearance of their legality, and authorized their use against detainees.[..]

The administration’s policies concerning [torture] and the resulting controversies damaged our ability to collect accurate intelligence that could save lives, strengthened the hand of our enemies, and compromised our moral authority.

You read that right. John McCain and Carl Levin said in no uncertain terms that the policy to torture prisoners was conceived in the highest offices of the administration and have hurt this country both in intelligence gathering, but also more critically, national security.

But hold those public servants accountable? Hey now, that's asking too much of ol' Johnnie.

STEPHANOPOULOS: Some look at that and say, because of that, there should be a special prosecutor looking into all the crimes that were committed, and no one should be exempted from that.

MCCAIN: Well, look, that's not my job. If overwhelming evidence indicates that, that's fine. But the point is, I thought, and Senator Levin did, that we should carry out our responsibilities in the Senate Armed Services Committee and do a thorough and complete investigation. I'm not that interested in looking back. What I am interested in and committed to is making sure we don't do it again.

"It's not my job"?!?!?!?! Who the hell's job is it, then? C'mon, McCain. You KNOW they've broken the law. You KNOW they've hurt our national security. You KNOW that our reputation on the world stage is horribly damaged. But you're not interested in "looking back"? How about being interested in doing your damn job, Senator, and exercise some oversight? History isn't going to look poorly on the presidency alone, you cowardly putz, if you REPORTED torture and did nothing about it.

Transcripts below the fold

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What Donald Rumsfield failed to mention when he famously said that America had to "go to war with the army it has" in response to criticisms from soldiers about a lack of armor is that the US went to war with the army it couldn't be bothered upgrading.

The US Marine Corps asked the Pentagon's inspector general to perform the audit after coming under fire for setting aside an urgent request from field commanders in 2005 for Mine Resistant Ambush Protected (MRAP) armored vehicles.

"DoD (Department of Defense) was aware of the threat posed by mines and improvised explosive devices (IEDs) in low-intensity conflicts and of the availability of mine-resistant vehicles years before insurgent actions began in Iraq in 2003," the audit found.

"Yet DoD did not develop requirements for, fund, or acquire MRAP-type vehicles for low-intensity conflicts that involved mines and IEDs," a summary of the report said.

"As a result, the department entered into operations in Iraq without having taken available steps to acquire technology to mitigate the known mine and IED risk to soldiers and Marines," it said.

Heads should roll for this, even now, including those in charge of Marine Corps procurement, the Corps itself and Rummie as top man at the DoD at the time (and we all know where the buck eventually stops). Their inertia and lack of action even long after it was obvious what was needed led to hundreds of unnecessary deaths and tens of thousands of wounded, ruined lives. We're talking about at least half the entire butcher's bill from Bush's military adventures. This isn't a matter of history to the crippled, the dead and their families and justice demands accountability.

Can servicemen even bring a class action suit? I'm thinking about if the powers-that-be won't respond appropriately, which I highly doubt they will.