The Privatized Internet — Entire .ORG Domain Registry Sold to Investment Equity Firm "Ethos Capital"; Registration Fee Restrictions Removed

Cover of a 2015 book glorifying the privatization of the Internet via "a unique and vibrant interplay between government and private industry." Nothing dollarable is safe.

by Thomas Neuburger

The love of money is a sickness with these people.
—Attributed to an Indian chief as he watched the Europeans move west.

Nothing dollarable is safe.
—John Muir, 1908

Buried in the recent impeachment and campaign news was this announcement from the Internet Society and Public Interest Registry (emphasis mine):

Ethos Capital to Acquire Public Interest Registry from the Internet Society

Public Interest Registry Will Continue Management and Mission of .ORG Under New Ownership

Reston, VA (November 13, 2019) – The Internet Society and Public Interest Registry (PIR) today announced that they have reached an agreement with Ethos Capital, under which Ethos Capital will acquire PIR and all of its assets from the Internet Society.  The transaction is expected to close during the first quarter of next year.

“This is an important and exciting development for both the Internet Society and Public Interest Registry,” said Andrew Sullivan, President and Chief Executive Officer of the Internet Society, the organization that established Public Interest Registry.  “This transaction will provide the Internet Society with an endowment of sustainable funding and the resources to advance our mission on a broader scale as we continue our work to make the Internet more open, accessible and secure – for everyone.  It also aligns Public Interest Registry with Ethos Capital, a strong strategic partner that understands the intricacies of the domain industry and has the expertise, experience and shared values to further advance the goals of .ORG into the future.” 

“Since the inception of Public Interest Registry, our mission has been to enable the .ORG Community to use the Internet more effectively and change the world for the better,” stated Jon Nevett, CEO of Public Interest Registry.  “That will not change. We have enjoyed a long and successful relationship with the Internet Society, and are thrilled that we will be able to continue – and expand – our important work with Ethos Capital while sustaining our commitment to the .ORG Community going forward.”

Internet names and numbers are controlled by ICANN, the Internet Corporation for Assigned Names and Numbers, a private non-profit corporation. ICANN has been subject to being "gamed" by corporate interests almost since its founding, especially but not exclusively with respect to trademarks versus the rights of non-corporate entities to purchase and register unused domain names.

Some top-level domain names (TLDs) — .COM is a TLD, as are .ORG and .EDU — are not administered directly by ICANN, but have been assigned to other administrators. For example, in May 2019 ICANN granted exclusive "administration rights" to amazon.com for the .AMAZON generic TLD "after a 7 year long dispute with the Amazon Cooperation Treaty Organization (ACTO)."

This is true of the .ORG generic TLD, a TLD much used by non-profit public interest groups. .ORG has been operated by the Public Interest Registry (PIR) since 2003. PIR is a Virginia-based not-for-profit created by the Internet Society (ISOC) specifically to manage the .ORG top-level domain.

But, as you can see by the announcement above, the Internet Society — because it apparently needed the money — has sold all control of the .ORG top-level domain to Ethos Capital.

Has anyone ever heard of Ethos Capital?

Who Is Ethos Capital?

It's a little difficult to get information about Ethos Capital, since they have such a small Web presence. They appear to be these guys, an African capital investment firm:

Ethos Capital offers investors long-term capital appreciation by investing in a diversified portfolio of unlisted investments managed by Ethos Private Equity, the largest private equity firm in sub-Saharan Africa.

So what is a sub-Sarahan Africa equity investment firm doing purchasing control of the whole of the .ORG registry? How does an African firm get into position to do this at all? And why are they doing it now?

To answer these question, we turn to The Register, a UK publication, which has looked into this story:

Who's behind Ethos?

Despite stating that Ethos Capital “understands the intricacies of the domain industry” its founder and CEO Erik Brooks has no experience within that industry. The firm’s website lists only Brooks and one Nora Abusitta-Ouri – who joined the outfit last month as its “chief purpose officer” – as employees.

But there is a common thread between those two and it is Fadi Chehade, a former CEO of ICANN, the organization that oversees the domain-name system and awards the contracts to run internet registries.

It was under Chehade that ICANN radically changed its approach to internet registries, including a massive expansion of the internet namespace and a move toward a free market approach to internet addresses. Chehade’s actions as CEO led directly to the Ethos Capital buyout of .org but he is not listed as a part of Ethos Capital and the company has so far failed to respond to our questions about his connection to the firm.

More recent decisions by ICANN also had a significant bearing on the decision to sell the .org registry. At the end of June this year, in a controversial decision made despite significant and vocal opposition, ICANN decided to lift price caps on .org domains for the next 10 years, paving the way for unlimited price increases on the 10 million .org domain names. That decision massively increased the value of the .org registry from millions to potentially billions of dollars.

At the time, ICANN justified the decision by saying it was bringing the contract in line with the many new extensions that have been added to the internet in recent years. And this week, ICANN’s chairman Maarten Botterman told The Register in a statement that:

“The renewal agreement for .org removed the price cap and includes pricing provisions that are consistent with the base form registry agreement that is published and has been in public view for some time, essentially removing the role of ICANN in pricing restraints, where possible.”

So the order of events is:

• ICANN, under Fadi Chehade, in a highly controversial move, massively expands top-level domain names, greatly multiplying profit opportunities for registrar and middlemen.

• PIR, a non-profit entity tasked with managing the .ORG top-level domain, removes the price cap on .ORG registrations, meaning any price can be charged by any registrar.

• A few months later, Ethos, an investment firm, buys the .ORG operation by purchasing PIR, the non-profit entity that controls it.

Sounds like a neoliberal wet dream come true to me.

The article emphasizes that so far no connection between Chehade and Ethos has been established or acknowledged, but note well that Ethos has not responded to requests for information on the connection — when a simple denial would have sufficed. I think The Register is right to smell a rat.

In the meantime, any poor, cash-strapped non-profit with a .ORG domain name — for example, sierraclub.org, to pick just one of literally millions — is best advised to renew its registration for the maximum time allowed, and do it now.

After all, there's no telling when our noble billionaire job-creators will seize this new opportunity to milk yet another cow completely and utterly dry.
  

Neoliberalism Killed 346 People Aboard the Boeing 737 MAX 8

What was left of Ethiopian Airlines Flight 302, a Boeing 737 MAX 8 jet, after it crashed to the ground six minutes after takeoff. All 157 people aboard were killed (source)

by Thomas Neuburger

The essence of modern neoliberalism, as encouraged and enabled by both political parties, is the Ayn Randian notion that the greatest amount of freedom in the world should be given to capital — that the giant pool of money should be allowed to flow unrestrained into any country it wishes, seek whatever profit it wishes to seek, then flow out, again unrestrained, leaving in its wake whatever wreck it wishes to walk away from.

The poster child for neoliberal profit-seeking is, of course, NAFTA and its legacy of devastated lives in every country touched by it, but there are more examples than anyone could count. This devastation has been going on for decades, starting in my own memory with Ronald Reagan's permitted transfer of the U.S. semiconductor manufacturing industry to Asia. (Reagan "earned" two million dollars in speaking fees during a fully paid eight-day grand-tour trip to that country within a year of leaving office — clearly "thank you" money for his many gifts to the suddenly swollen wealth of Japan.)

Since the age of greed was kicked off in the 1980s, and because in those years Americans were taught to love their predators (remember breathless praise of shows like Lifestyles of the Rich and Famous), the pursuit of profit by the few at the expense of the lives of the many has only accelerated.

The latest instance of this destructive pursuit is the story of the Boeing 737 MAX 8 jet. There are many parts to the 737 MAX 8 story. This part takes us, once again, to U.S. outsourcing to Asia and $9/hour software engineers in India.

From Bloomberg:

Boeing's 737 Max Software Outsourced to $9-an-Hour Engineers

• Planemaker and suppliers used lower-paid temporary workers
• Engineers feared the practice meant code wasn’t done right

It remains the mystery at the heart of Boeing Co.’s 737 Max crisis: how a company renowned for meticulous design made seemingly basic software mistakes leading to a pair of deadly crashes. Longtime Boeing engineers say the effort was complicated by a push to outsource work to lower-paid contractors.

The Max software -- plagued by issues that could keep the planes grounded months longer after U.S. regulators this week revealed a new flaw -- was developed at a time Boeing was laying off experienced engineers and pressing suppliers to cut costs.

Increasingly, the iconic American planemaker and its subcontractors have relied on temporary workers making as little as $9 an hour to develop and test software, often from countries lacking a deep background in aerospace -- notably India.

According to Mark Rabin, a former Boeing engineer whose work supported the 737 MAX project, the decision to outsource coding to India “was controversial because it was far less efficient than Boeing engineers just writing the code. I took many rounds going back and forth because the code was not done correctly.”

But outsourced U.S. jobs and greatly reduced wage costs were not the only benefits to Boeing from this decision. The company was also rewarded handsomely for it, winning, according to Bloomberg, "several orders for Indian military and commercial aircraft, such as a $22 billion one in January 2017 to supply SpiceJet Ltd. That order included 100 737-Max 8 jets and represented Boeing’s largest order ever from an Indian airline, a coup in a country dominated by Airbus."

Needless to say, in a nation dominated by neoliberal thinking and morality, more than $22 billion in new contracts easily offsets the loss of 346 lives in the two 737 MAX crashes, each of which killed everyone on board.

In a nation that abhors neoliberal morality, on the other hand, one would see trials for manslaughter instead.
 

Pelosi Advisor Proposes Non-Binding Arbitration as Road to Lowering Drug Prices

Prescription drug prices in the U.S. are universally hated (source). Which political party will step up and genuinely address the issue?

by Thomas Neuburger

Let's put two recent stories next to each other and see what conclusions we can draw.

A "Game Changing" Opportunity

First, Democratic pollster Stan Greenberg has found that Donald Trump has two strong vulnerabilities — one on trade, one on drug prices — and also that these are interlinked:

Democrats and progressives believe they may have found a way to unmask [Trump's] sham populist pivot. And their developing counterargument involves not one, but two, of the issues on which Trump will build his case for reelection: prescription drugs and trade.

This counterargument surfaced almost by surprise in a series of focus groups recently conducted in the industrial Midwest by veteran Democratic pollster Stan Greenberg, for the trade watchdog group Public Citizen. Greenberg outlined his findings in a memo that was shared with this blog.

Specifically, Greenberg found that working-class white voters who switched from Barack Obama to Trump are deeply angry about soaring prescription drug prices. As a result, they vehemently oppose a key provision benefiting Big Pharma at the core of Trump’s renegotiation of NAFTA — which he touts as proof that he’s delivering for his working-class white base.

The problem on the trade side is that the proposed NAFTA 2.0 agreement (rebranded as "USMCA") includes major concessions to drug manufacturers. Elizabeth Warren, for example, in announcing her opposition, said that "NAFTA 2.0 is ... stuffed with handouts that will let big drug companies lock in the high prices they charge for many drugs."

Especially egregious is the increased patent protection in the new agreement (emphasis added):

[T]he US Trade Representative Office’s Fact Sheet on the deal states that it “Includes 10 years of data protection for biologic drugs and expanded scope of products eligible for protection.” (Details await publication of the full agreement. Also, apparently, “data protection”—of, for example, clinical trial results—is the equivalent of patent protection for such products.)

The 10-year span is more than what had existed before (in the case of Mexico, essentially nothing; with Canada, an eight-year term is on the books) but the biopharma industry has long argued for the same 12-year exclusivity that exists for biologics within the US market. That 12-year span was a key sticking point in the long-ago Trans Pacific Partnership (TPP), which, before it was dumped by the incoming Trump Administration, was an effort to bring some added protection to biopharma products.

The problem on the drug side is that almost every voter in the country, Republican and Democrat, hates the current price of pharmaceutical drugs. The polling against it is universal. Here's how Greg Sargent characterized Greenberg's results:

Working-class whites in Greenberg’s focus groups apparently agreed. As his memo notes, these voters “hate” pharmaceutical companies and are deeply convinced that high drug prices are the result of their political influence.

In effect, Greenberg concluded, this debate links corporate power directly to soaring medical costs, providing a gateway to a larger argument about the ability of big corporations to rig market rules in their favor. These voters, Greenberg noted, “especially distrust the way that corporations bend the system to their will,” with lobbyists and big campaign donations, “so that they can earn more profits while hurting workers and consumers.” As one Macomb man put it: “They are buying their laws, basically.”

Greenberg was surprised by the depth of emotion about pharmaceutical companies and drug prices, noting that they “emerged as an extraordinary point of anger.” The result: Pointing to the Big Pharma provision constitutes the “single most powerful argument” against Trump’s NAFTA rewrite.

All of this provides Democrats with an excellent opportunity in the next election cycle, an opportunity that Greenberg characterizes as "game changing."

Pelosi Advisor Proposes Non-Binding Arbitration as Road to Lowering Drug Prices

Second, here's what Democratic leaders are doing in the face of this opportunity:

Liberals worry Pelosi may pivot away from a bold drug price plan

A split between House Democratic leaders and rank-and-file members over how to lower drug prices is threatening the party's efforts tries to make good on one of its biggest campaign promises just weeks into the new congressional session.

Some progressive lawmakers and outside groups are concerned that aides to Speaker Nancy Pelosi are proposing to have a third party help decide the price of a drug through binding arbitration — a solution that falls short of the Democrats' 2018 campaign platform that promised direct government negotiations for medicines in Medicare Part D.

Note that the plan's "binding" arbitration is actually non-binding, since drug companies can opt out.

The same article says, "Two major concerns are emerging with his push for arbitration. Sources say [Pelosi senior advisor Wendell] Primus is limiting it to a select group of high-cost drugs, instead of developing a broader proposal for all medicines. Additionally, the arbitration process would be voluntary and nonbinding, meaning companies could opt out without consequence" (emphasis added). 

Public Citizen's Peter Maybarduk calls the deal "a total capitulation to pharma from what we can tell." Social Security Works' Alex Lawson said, "Poll after poll shows that lowering drug prices is a top concern for the American people. They also show that maintaining access to needed drugs is equally important. ... Negotiating with licenses ... accomplishes both goals by directly negotiating lower prices without putting patients’ access in pharma’s greedy crosshairs."

The Pelosi plan appears to be toothless and impotent.  

What Is Democratic Party Leadership Up To?

Debate is now raging in progressive circles about this proposal. The question isn't, What good is it? It's universally disliked. The question instead is, What is Pelosi up to?

Answers range from "she has a secret plan" to "acting foolishly but well-intentioned" to "protecting sources of Party revenue on the backs of voters' health."

The question for this piece isn't, What do you think of Pelosi's proposal? The question instead is, What will voters think of the Democratic Party in 2020?

Feel free to answer these questions in a way that makes sense to you.
  

Can Anyone Stop Him From His #1 Agenda Item— Monetizing The White House?

The kind of media that misses the irony of referring to Señor Trumpanzee as “president,” is upset the the new issue of New York depicts the fake and utterly illegitimate president as a pig. And because of that, they’re missing Jonathan Chait’s important reasoning: It’s The Corruption, Stupid. The Hill frets that “The April 2 issue of the magazine features a close-up photo of Trump with a pig's snout replacing his nose.” The full title is important: "Not Collusion... Not Incompetence... Not Cruelty... It's the Corruption, Stupid-- Why His Self-Dealing is His Biggest Political Liability."

Trump’s emulation of Putin isn’t necessarily as much about the authoritarianism as it is about kleptocracy. Putin, the world’s richest man, has ripped off the pathetic imbeciles in Russia. Historically, the Russian people are used to it, even expect it. Trump may find America slightly different… at least some of America.

“My whole life I’ve been greedy, greedy, greedy,” declared Donald Trump during the 2016 campaign. “I’ve grabbed all the money I could get. I’m so greedy. But now I want to be greedy for the United States.” To the extent that Trump’s candidacy offered any positive appeal, as opposed to simple loathing for his opponent, this was it. He was a brilliant businessman, or at least starred in a television show as one, and he would set aside his lifelong pursuit of wealth to selflessly serve the greater good. This was the promise that pried just enough Obama voters away from Hillary Clinton in just enough upper-Midwest states to clinch the Electoral College.

Since Trump took office, his pledge to ignore his own interests has been almost forgotten, lost in a disorienting hurricane of endless news. It is not just a morbid joke but a legitimate problem for the opposition that all the bad news about Trump keeps getting obscured by other bad news about Trump. Perhaps the extraordinary civic unrest his presidency has provoked will be enough to give Democrats a historic win in the midterms this fall, but it is easy to be worried.

Trump’s approval rating hovers in the low 40s: lower than the average of any other president, yes, but seemingly impervious to an onslaught of scandals that would have sunk any other president, and within spitting range of reelectability.

As the races pick up in earnest, some kind of narrative focus is going to be necessary to frame the case against Trump. Here, what appears to be an embarrassment of riches for Democrats may in fact be a collection of distractions. It is depressingly likely that several of Trump’s most outrageous characteristics will fail to move the needle in the states and districts where the needle needs moving. His racism and misogyny motivate the Democratic base, but both were perfectly apparent in 2016 and did not dissuade enough voters to abandon him.

The Russia scandal is substantively important, but it is also convoluted and abstract and removed from any immediate impact on voters’ lived experience. The reports of Trump’s affair with Stormy Daniels, even the possibility of hired goons to keep her quiet, is not exactly a disillusioning experience for voters who harbored few illusions to begin with.

But they did harbor one. Trump’s core proposition to the public was a business deal: If he became president, he would work to make them rich. Of course, the fact that Trump was able to reduce the presidency to such a crass exchange, forsaking such niceties as simple decency and respect for the rule of law, exposed terrifying weaknesses in the fabric of American democracy. But the shortest path to resolving this crisis is first to remove Trump’s party-- and it is Trump’s party-- from full control of the government in 2018, and then to remove Trump from the White House in 2020. The clearest way to do that is to demonstrate that Trump is failing to uphold his end of the deal. After all, the students at Trump University once constituted some of the biggest Trump fans in America. Until they realized Trump had conned them. Then they sued to get their money back.

Historically, corruption-- specifically, the use of power for personal gain-- has played a central and even dominant role in American political discourse. In the 1870s, revelations that public officials were caught lining their pockets with millions of dollars from alcohol taxes (the Whiskey Ring) and inflated railroad costs (Crédit Mobilier) exploded into spectacular scandals. One of the triumphs of the Progressive Era was establishing rules and norms of professionalism in government so that public officials would not be tempted to sell their favors. The far more petty corruption cases of the 20th century still roused public rage. Harry Truman was famously scorned in his time, owing to penny-ante scandals, one of which involved an aide’s acceptance of some freezers. Dwight Eisenhower’s chief of staff had to resign after he accepted a vicuña coat; George H.W. Bush’s chief of staff, John Sununu, resigned in disgrace after using military aircraft for personal and political trips. There is a reason Trump labeled his opponent “Crooked Hillary,” and it stems from a law of American politics Democrats would be wise to remember: To be out for yourself is probably the single most disqualifying flaw a politician can have.

“Why shouldn’t the president surround himself with successful people?” argued Larry Kudlow, now Trump’s primary economic adviser, in 2016. “Wealthy folks have no need to steal or engage in corruption.” The administration seems to have set out to refute this generous assumption. The sheer breadth of direct self-enrichment Trump has unleashed in office defies the most cynical predictions. It may not be a surprise that he continues to hold on to his business empire and uses his power in office to direct profits its way, from overseas building deals down to printing the presidential seal on golf markers at the course near Mar-a-Lago. It is certainly not a surprise that Trump has refused to disclose his tax returns. What’s truly shocking is how much petty graft has sprung up across his administration. Trump’s Cabinet members and other senior officials have been living in style at taxpayer expense, indulging in lavish travel for personal reasons (including a trip to Fort Knox to witness the solar eclipse) and designing their offices with $31,000 dining sets and $139,000 doors. Not since the Harding administration, and probably the Gilded Age, has the presidency conducted itself in so venal a fashion.

It is hardly a coincidence that so many greedy people have filled the administration’s ranks. Trump’s ostentatious crudeness and misogyny are a kind of human-resources strategy. Radiating personal and professional sleaze lets him quickly and easily identify individuals who have any kind of public ethics and to sort them out. (James Comey’s accounts of his interactions with the president depict Trump probing for some vein of corruptibility in the FBI director; when he came up empty, he fired him.) Trump is legitimately excellent at cultivating an inner circle unburdened by legal or moral scruples. These are the only kind of people who want to work for Trump, and the only kind Trump wants to work for him.

It should take very little work-- and be a very big priority-- for Democratic candidates to stitch all the administration’s misdeeds together into a tale of unchecked greed. For all the mystery still surrounding the Russia investigation, for instance, it is already clear that the narrative revolves around a lust (and desperation) for money. Having burned enough American banks throughout his career that he could not obtain capital through conventional, legitimate channels, Trump turned to Russian sources, who typically have an ulterior political motive. Just what these various sources got in return for their investment in Trump is a matter for Robert Mueller’s investigators to determine. But Trump’s interest in them is perfectly obvious.

Trump’s campaign followed his patented human-resources strategy, filling its ranks with other rapacious and financially precarious men. Paul Manafort was deeply in debt to a Russian oligarch when he popped up on Trump’s doorstep. Michael Flynn was selling his credentials to Russian and Turkish dictators while advising Trump. Jared Kushner was flailing about in an effort to make good on a massive loan he took out on a white-elephant Manhattan building and seems to have used his access to Trump to leverage potential investors who might bail him out. Even as he has wielded enormous influence, Kushner has been unable to obtain a top-secret security clearance, because he may be vulnerable to foreign influence.

The virtue of bribery is a subject of genuine conviction for Trump, whose entrée to politics came via transactional relationships with New York politicians as well as Mafia figures. Trump once called the Foreign Corrupt Practices Act, which bars American corporations from engaging in bribery, a “ridiculous” and “horrible” law. Enforcement of this law has plummeted under his administration.

Trump’s vision of an economy run by tight circles of politically connected oligarchs has reshaped America’s standing in the world. The same effect that applies at the personal level with Trump has appeared at the level of the nation-state. Small-d democratic leaders have recoiled from the Trump administration, while autocrats have embraced him. Similarly, the president and his inner circle feel most comfortable in the company of the wealthy and corrupt. They have built closer ties to Russia, the Gulf States, and China, all of which are ruled by oligarchs who recognize in Trump a like-minded soul. They share the belief that-- to revise a favorite Trump saying-- if you don’t steal, you don’t have a country.

An easy fatalism about all this corruption has gained wide circulation. It was known about Trump all along and his voters signed up for it anyway, so nothing matters, right? In fact, Trump’s behavior runs directly contrary to his most important promises. “Draining the swamp” was not supposed to mean simply kicking out Democrats and competent public officials. He made speeches promising good-government reforms: a ban on lobbying by former members of Congress and stricter rules on what lobbying meant; campaign-finance reform to prevent foreign companies from raising money for American candidates; a ban on lobbying by former senior government officials on behalf of foreign governments.

Not only has Trump made no effort to raise ethical standards but he and his administration have flamboyantly violated the existing guidelines. Lobbyists are seeded in every agency, “regulating” their former employers and designing rules that favor bosses over employees and business owners over consumers. The problem of former government officials’ being paid by foreign governments has been superseded by the far larger problem of current government officials’ being paid by foreign governments.

Small episodes of corruption can play an outsize role in American politics, since the human scale of petty self-dealing is often easy to understand. And in Trump’s case, the smaller and larger scandals reinforce each other. Why is Trump giving rich people and corporations a huge tax cut? Why has he been threatening to take away your health insurance? Why is he letting Wall Street and Big Oil write their own rules? Above all, if Trump supposedly believed that “if I become president, I couldn’t care less about my company-- it’s peanuts,” why are his children still running it? For the same reason he has let his Cabinet secretaries run up large travel expenses, and why his son-in-law met with oligarchs in China and the Gulf States whose money he was trying to get his hands on.

Even the strong economy does not mean Democrats have no way to attack Trump’s economic management. After all, the reason public opinion about the economy improved almost immediately after his election is that the Republican message machine stopped bad-mouthing the recovery and instead rebranded the same conditions as a fabulous new era of prosperity. Rather than sit back and allow Trump to take credit for a recovery he inherited, Democrats can press the point that he and his allies are doing little more than skimming off the top of it.

Somebody persuaded corporations, fattened by a trillion-dollar tax windfall, to publicize the same raises and bonuses they had been handing out for years as a special dividend of the Trump tax cuts. If Democrats win control of a chamber of Congress and thus the ability to hold hearings, they should investigate whatever coordination yielded this nexus of self-interest. A Democratic House or Senate could also compel disclosure of Trump’s tax returns, and both the documents themselves and any drama surrounding them would attract more attention to the administration’s commitment to self-enrichment.

But that can happen only if the Democrats win the midterms, and the best way to do that is to tell a very simple story. Trump represented himself as a rich man feared by the business elite. He had spent much of his life buying off politicians and exploiting the system, so he knew how the system worked and could exploit that knowledge on behalf of the people. In fact, his experiences with bribery opened his eyes to what further extortion might be possible. Trump was never looking to blow up the system. He was simply casing the joint.

In the same issue Joy Crane and Nick Tabor have a companion piece with an introduction by David Cay Johnston, 501 Days In Swampland. “On the day he took the oath of office,” wrote Johnston, “Donald Trump delivered two messages about what to expect from his administration. First came the lofty promise of his inaugural address. ‘The forgotten men and women of our country will be forgotten no longer,’ he vowed. ‘For too long, a small group in our nation’s capital has reaped the rewards of government while the people have borne the cost. Washington flourished-- but the people did not share in its wealth.’ The second message, which Trump delivered without speaking a word, was aimed at a much smaller, but very rich, audience. As the new president’s motorcade left the Capitol, rolling past knots of supporters and protesters, it suddenly stopped three blocks short of the White House. Trump, the First Lady, and the rest of his family got out of their limos and took a three-minute turn in the middle of Pennsylvania Avenue. This was no random spot. The very first place Trump headed after being sworn in-- his true destination all along, in a sense-- was the Old Post Office and Clock Tower, which only 12 days before the election had been repurposed as the Trump International Hotel Washington. The elegant granite structure, whose architectural character Trump had promised to preserve, was now besmirched by a gaudy, faux-gold sign bearing his name. The carefully choreographed stop sent a clear signal to the foreign governments, lobbyists, and corporate interests keen on currying favor in Washington: The rewards of government would now be reaped by a single man-- and the people would bear the cost.”

More than at any time in history, the president of the United States is actively using the power and prestige of his office to line his own pockets: landing loans for his businesses, steering wealthy buyers to his condos, securing cheap foreign labor for his resorts, preserving federal subsidies for his housing projects, easing regulations on his golf courses, licensing his name to overseas projects, even peddling coffee mugs and shot glasses bearing the presidential seal. For Trump, whose business revolves around the marketability of his name, there has proved to be no public policy too big, and no private opportunity too crass, to exploit for personal profit.

Nowhere has the self-enrichment been more evident than at his Washington hotel, which quickly filled up with the very lobbyists and swamp creatures Trump had railed against during his campaign. Oil companies, mining interests, insurance executives, foreign diplomats, and defense contractors all rushed to book their annual conferences at Trump’s hotels and resorts, where Cabinet members graciously addressed them. After hiking the nightly rate to $653-- 32 percent higher than other local luxury hotels-- Trump collected $2 million in profits from the property during his first three months in office. By last August, the hotel’s bar and restaurant had hauled in another $8 million in revenue. And although Trump has pledged to give away any money his hotels earn from foreign governments, the plan contains a lucrative loophole: Employees at his hotels admit that they make no effort to identify guests who represent other countries, meaning that much of the foreign money spent at Trump’s properties flows directly into his own pockets. On March 28, a federal judge allowed a lawsuit to go forward that charges Trump with violating the Constitution by accepting money from foreign governments at his D.C. hotel.

In fact, although Trump refuses to disclose the details of his myriad business operations, he continues to enjoy access to every dime he makes as president. Instead of setting up a blind trust to avoid conflicts of interest, as other presidents have done, Trump put his two grown sons in charge of his more than 500 business entities. His sons regularly brief Trump about how the enterprises are doing, enabling him to personally monitor how his decisions in office affect his bottom line. What’s more, only 15 days after this “eyes wide open” trust was set up, Trump amended the fine print to allow him to take money out of the operation any time he pleases. The loophole, buried on page 161 of the 166-page form, stipulates that any “net income or principal” can be distributed to Trump “at his request.” Far from putting his wealth in a blind trust, Trump asked the public for its blind trust, effectively sticking his money in a piggy bank in Don Jr.’s room that he is free to raid at any hour of the day or night.

Trump’s children are working hard to cash in on his time in office-- especially with foreign investors. At taxpayer expense, they have flown to Uruguay, the Dominican Republic, Dubai, and India in search of licensing and real-estate deals, trading on the president’s influence in exchange for investments. But the biggest complication of Trump’s presidency-- and the one he works hardest to keep secret-- is the way his entire business operation is mired in massive debt. Rather than being independently wealthy, public records show, Trump and the business partnerships in which he is a leading investor owe big banks and foreign governments at least $2.3 billion-- far more than his disclosure reports indicate. His largest single loan-- for nearly $1 billion-- is from a syndicate assembled by Goldman Sachs that includes the state-owned Bank of China. If either Trump or Jared Kushner, who tried to shake down Qatar’s finance minister for a loan, winds up needing to negotiate new terms on his ballooning debt, America could find itself being dictated to by a foreign government-- all because the White House, thanks to Trump’s business model, has become a true House of Cards.

What follows is 501 days of official corruption, from small-time graft and brazen influence peddling to full-blown raids on the federal Treasury. Given how little Trump has disclosed about his finances, this timeline of self-dealing is undoubtedly only a fraction of the corruption that will eventually come to light. But as even this initial glimpse makes clear, Trump isn’t draining the swamp-- he’s monetizing it.

European Colonialism Is the Central Fact of Politics on Earth

"Columbus' treatment of the Hispaniola natives was even worse [than his treatment of natives in the Bermudas] as his soldiers raped, killed, and enslaved them with impunity at every landing. When Columbus fell ill in 1495, soldiers were reported to have gone on a rampage, slaughtering 50,000 natives. Upon his recovery, Columbus organized his troops' efforts, forming a squadron of several hundred heavily armed men and more than twenty attack dogs. The men tore across the land, killing thousands of sick and unarmed natives. Soldiers would use their captives for sword practice, attempting to decapitate them or cut them in half with a single blow" (source; click to enlarge).

by Gaius Publius

I spent the last week and a half on the west coast (Pacific Ocean side) of Vancouver Island in British Columbia, blissfully free of U.S. television and the manufactured-angry social disease we call American political discourse. No hyped-by-hate "God, guns and gays" types among the BC rurals; just nice reasonable people who like living outdoors.

The week off included the U.S. holiday known as Columbus Day, reading about which exposed me to this excellent piece by Jon Schwarz, of Tiny Revolution fame, now writing at The Intercept. This is one of the most perceptive, dot-connecting pieces I've read in a long time, so I'd like to tease it to you, and in the process comment on what I take to be its main point.

First the tease — its intro:

Columbus Day Is the Most Important Day of Every Year

Today, October 12, is Columbus Day. Every year it’s officially the second Monday in October; this year it falls on the exact anniversary of the Niña, Pinta and Santa María’s arrival in the Bahamas 523 years ago.

So to mark today, I’ve made a list. I’m sure to almost all Americans it would seem like a meaningless jumble of things with no connection to each other. But in fact it tells one story, the story of why October 12, 1492, is the most important date in human history — and demonstrates that you have to understand that in order for anything happening on Earth now to make sense:

• $ (i.e., the dollar sign) — and Cerro Rico, Bolivia’s “Mountain That Eats Men”
• the movies War of the Worlds and Avatar — and the movies Apocalypse Now and Day of the Jackal
• the original seal of the Massachusetts Bay Colony — and the “generous offer” made by Israel to the Palestinian Authority in 2000
• Cinco de Mayo — and the investor-state dispute settlement section of the Trans-Pacific Partnership
• an abortive 2003 attempt to bring Nelson Mandela to the United Nations to oppose the invasion of Iraq — and South Koreans protesting the 2010 Israeli attack on the first Gaza flotilla
• Hitler’s October 17, 1941, discussion of the invasion of the Soviet Union — and the Washington Redskins

Confused? Here’s the explanation...

The thread of connections among those bulleted objects and events is a fun ride; to take it, I recommend reading the piece from start to finish.

But let's just focus on this part, its main point:

Columbus’ landfall in the Western Hemisphere was the opening of Europe’s conquest of essentially all of this planet. By 1914, 422 years later, European powers and the U.S. controlled 85 percent of the world’s land mass.

White people didn’t accomplish this by asking politely. As conservative Harvard political scientist Samuel Huntington put it in 1996, “The West won the world not by the superiority of its ideas or values or religion … but rather by its superiority in applying organized violence. Westerners often forget this fact; non-Westerners never do.”

In fact, European colonialism involved a level of brutality comparable in every way to that of 20th-century fascism and communism, and it started with Columbus himself. Estimates of the number of people living on the island of Hispaniola when Columbus established settlements range from 250,000 to several million. Within 30 years of his arrival, 80 to 90 percent of them were dead due to disease, war and enslavement, in what another Harvard professor cheerily called “complete genocide.” Contemporary accounts of the Spaniards’ berserk cruelty really have to be read to be believed.

Formally, of course, European colonialism largely ended in the 1940s, ’50s and ’60s. Yet informally, it has — behind the mask of what Pope Francis recently called “new forms of colonialism” — continued with surprising success.

Thus European colonialism is the central fact of politics on earth. And precisely because of that, it is almost never part of any American discussion of politics. Anthropologists call this phenomenon “social silence” — meaning that in most human societies, the subjects that are core to how the societies function are exactly the ones that are never mentioned. [bolded emphasis mine]

Take just that one idea, which I took for my title — European colonialism is the central fact of politics on earth — take it to heart, and then reflect on the world we see today. Schwarz: "If we maintain the social silence around colonialism, our past and present will always be bewildering..." Indeed.

From the start of the early march into Europe of the Proto-Indo-European people from their home near the Caucasus Mountains, with their father-gods — both "Zeus" and "Jupiter" are derived from proto-Indo-European words that became "deus pater" — and their Bronze Age daggers, spears and axes, the European "West" has been consistently among the most rapacious tribes of our species.

Bringing It All Back Home

This is not about the past, but the past continued in us. What we did, we do — in our Ferguson-like neighborhoods; in our guilt-or-innocence-be-damned, glory-in-punishment courts and prisons; in abandoned storm-torn Puerto Rico; in our eager, invisible bombings and dronings throughout the Middle East and into Asia; in our happy, unironic interference in every election on earth we care about; and so much more. Hillary Clinton, as Secretary of State, certified a coup in Honduras that led to the deaths of many, like activist Berta Cáceres, yet she complains with loud voice and apparent impunity that foreign electoral "interference" may have damaged her own electoral chances.

As Schwarz says, international colonizing by Western Europe and its Sun King offspring, the United States, is entirely invisible to its perpetrators.

Yet nothing about the state of the world today — from a nearly inevitable climate change disaster to wealth inequality beyond the dreams of avarice — can be understood without accounting for the invisible celebrations of rape and plunder that underpin everything done by the West to the rest of the world.

Want proof? Pull out your smart phone and consider where it was made — in factories surrounded by suicide nets to stop the wage slaves working there from killing themselves as the better alternative to their lives and conditions — all so we can have the next benefits of Western life, like faster texting and sexier screen bezels.

Click to enlarge; source.

Or, to bring this full circle, consider Columbus again (emphasis mine):

When slaves held in captivity began to die at high rates, Columbus switched to a different system of forced labor. He ordered all natives over the age of thirteen to collect a specified amount (one hawk's bell full) of gold powder every three months. Natives who brought the amount were given a copper token to hang around their necks, and those found without tokens had their hands amputated and were left to bleed to death.

The Arawaks attempted to fight back against Columbus's men but lacked their armor, guns, swords, and horses. When taken prisoner, they were hanged or burned to death. Desperation led to mass suicides and infanticide among the natives. In just two years under Columbus' governorship more than half of the 250,000 Arawaks in Haiti were dead.

From Columbus' own pen:

"Now that so much gold is found, a dispute arises as to which brings more profit, whether to go about robbing or to go to the mines. A hundred castellanos are as easily obtained for a woman as for a farm, and there are plenty of dealers who go about looking for girls; those from nine to ten are now in demand, and for all ages a good price must be paid."

Yes, that's a proud reference to the availability of nine-year-old native girls.

There's Always a Price...

The only difference between then and now is the timing of the price. The generations before us paid some price for their conquests, but not nearly in proportion to the damage they were doing. The West lives well despite its way of getting there.

I think this generation though, guilty and innocent alike, unlike those previous, will reap the full reward of the Indo-European rape of the world. The "war on (dark-skinned) terror" is already coming home, to Europe as a start in the form of angry and suffering climate and war refugees, and soon I fear to the paranoid, unguardable U.S. Can the United States be considered safe in a globalized world, with our myriad shopping malls and power stations, even if we turn every public gathering place into the airport? Can anyone doubt that the response to global colonial war will be global blowback?

Just as the rich have created this breaking world, so too can they heal it — by standing down. I'm not sure that's in our future though, since our future is still in their hard and grasping hands.

World-historical thoughts as we ponder the next ten years.

GP
 

Getting Rid of Equifax

Negligent data-breach victim Equifax ironically warning its corporate customers that their data could be breached

by Gaius Publius

The massive data breach suffered by Equifax, one of the nation's three credit data reporting agencies, caused by what looks for all the world like negligence (see below), has gotten everyone's attention, including the other two credit agencies. Experian is running commercials as we speak offering to help.

But concerns about protecting financial data deal with only half the story. Why do companies like Equifax, TransUnion and Experian exist to begin with?

After all, as many writers have recently pointed out, you the consumer are not their customer — you're their product. It's you and your data that's being sold to their actual customers, anyone who wants it and will pay.

You actually have no financial relationship with any of these companies at all, and they have no — repeat, no — obligation to serve your interest. Equifax, in fact, suffered a prior data breach last March and told no one about. After the most recent breach, their corporate executives sold several million in stock and options before reporting it. And despite the fact that the "fix" for the current data vulnerability was available months before the breach, Equifax didn't install it. Negligence, in other words, but with no possibility of recourse by those injured — you.

Consumers have no rights at all with respect to these companies — no right to forbid them access to their financial data, no right to force them to correct errors, and no right to limit where they sell their collected data (to your employer, for example).

One can only conclude that Equifax — and in fact that whole industry — performs a private service, but no public service whatsoever, and arguably does public harm, all for the profit of its CEO and shareholder class.

Why do they exist at all? The answer lies in their history.

Why Does Equifax Exist?

The reason Equifax exists is revealed by a look into its history. Via writer Bryce Covert at the New York Times (emphasis mine):

Equifax is the oldest of the Big Three credit reporting bureaus, and it got its start as a private investigator in the late 1800s. A client — a business or a bank — would ask it about a consumer, and it would go about digging up dirt on things like marital problems and convictions. That client would then pay it for its services.

This questionable business model raised eyebrows in the 1960s, when the companies were still compiling information on people’s “moral character” such as affairs or drinking problems. At the time, the reports weren’t available at all to the subjects themselves. That changed with the Fair Credit Reporting Act, which was signed in 1970. But even that reform put virtually no oversight on the bureaus’ practices.

Things haven’t changed all that much. Those who want to dig up dirt via a credit report pay one of the Big Three companies and voilà, they have a dossier of financial information.

In other words, Equifax, TransUnion and Experian exist to "dig up dirt" on ordinary people so people with money can decide what to do with them — whether to loan them money, to employ them, to insure them, to sue them, or not. This industry acts as a protection agency for the wealthy, in that it serves only to protect their wealth.

Equifax et al are like the sleazy private detective loitering about with a camera wherever you go, checking to see if you're seeing someone other than your spouse — except that the dirt these companies are digging up can do much more damage than a divorce. This dirt can keep you unemployed and unemployable for more than a decade.

Are Credit Data Collection Agencies Needed?

The answer to that question is Yes, but they don't have to exist as for-profit companies accountable to no one but their owners and top executives. Collecting credit data can most easily — and accurately — be done be a government agency. It is in fact done by government agencies in the largest countries in Europe.

Covert again:

In at least 40 other countries — including Belgium, France, Germany, Italy and Spain — credit reporting can be done by a public credit registry. It is usually operated by a central bank that already oversees the financial institutions that feed information into the reports. These reports tend to be more accurate because the operators have a legal right to demand data from banks as well as a mandate to ensure it’s correct and that errors are fixed. Data on late payments and defaults are erased once a consumer has settled up.

Many of these public registries leave out things like medical debt, tax information and personal details like marital status, focusing only on loan amounts. Only about 40 percent of registries collect consumers’ addresses, and two-thirds collect taxpayer IDs — the kind of information leaked in the Equifax breach. [emphasis mine]

The benefit to government taking over this function would not just be greater accuracy, but social responsibility. Do you want your employer — or potential employers — to access your credit data? After all, nothing about your credit data predicts how you will perform on the job. Government control of this function would limit who can request this information to those who actually need it, not those who merely want it.

The Neoliberal Profit-Protection Racket

Of course, the opposition to such a proposal is the same as the opposition to Medicare For All, despite its obvious cost- and outcome-benefit to American citizens. Post-war neoliberals in both parties see the job of government as proactively protecting the profit of large companies and investors (click if you don't see why; the link takes you to an excellent interview with Philip Mirowski, Economics professor at the University of Notre Dame and an expert on this subject).

On the Republican side of the neoliberal sales job, it's called "freedom." On the Democratic side it's called "wealth creation," with the (deliberately false) implication that jobs will follow.

Would the nation be better off without the jobs in the credit reporting industry? Of course; the industry is not that large an employer to begin with, and if they could lay off half of their employees tomorrow and still make money, they would. Every large company in America, in fact, would do the same at the drop of a hat.

In the same way, the nation would be better off without the jobs in the health insurance industry — and there would be one huge added bonus. The net effect of Medicare For All would be a financial stimulus so large that those lost jobs would be more than offset by the giant economic stimulus the nation would experience every year due to the very large net savings — a net increase in each family's bottom line of thousands of dollars per year.

Elizabeth Warren has introduced a bill that would make it illegal for employers to request credit data on employees or prospective employees. A start, but that solves only the edges of the problem. Someone should introduce a bill making credit data collection and reporting a public function.

Any progressive Congress people willing to take that risk and reap the reward in massive public support? Now's the time to step up.

GP
  

Violence and the State: Equifax

White-collar criminologist Bill Black and Aaron Mate discuss the massive Equifax data breach on The Real News Network (source)

by Gaius Publius

According to the Associated Press the credit reporting and data storage agency Equifax has suffered a massive data breach, and information on 143 million people — including "credit card and Social Security numbers, addresses and birth dates," plus potentially a whole lot more — have been lost forever to thieves.

The date Equifax said it first learned the breach is July 29. The date it reported this to the public was Thursday, September 7. The data breach(es), according to Equifax, occurred "from mid-May through July 2017."

That information is now "out there" and will be out there, sold and traded between gangs of cyber-criminals, for the next 30 years. The number of U.S. citizens is about 325 million people, of which about 23% are under 18 years of age. The number of U.S. adults is thus about 250 million people.

Equifax has, in other words, through neglect and/or error, disclosed identity data on 44% of the U.S. population, and more critically, on 57% of the adult population. If there are at least two adults in your family, the odds great are that at least one of you is in the affected group.

This is clearly the most serious data breach in U.S. history, one that compromises the financial integrity of more than half of all adults — and will continue to compromise their integrity for the next generation, until they are either dead or the data contains so few living individuals as to be worthless.

You can read more about the Equifax data loss here (AP) and here (NBC News).

This is not about the data loss per se, however damaging it will prove to be, but about the company, the culture of its CEO class, and indeed the CEO class of very large companies in general. It's also about the U.S. government's likely response and how that response will prove to be yet another instance of the violence of the neoliberal (wealth-protecting) state in its service to the very rich.

What To Do

But first, before a taking look at the implications of this data breach, here are two things to consider as a next step for you. The first comes from the invaluable Wolf Richter (h/t Naked Capitalism; italics mine):

But here is the most effective way to prevent identity theft:

Put a “security freeze” on each of the three major credit bureaus

A security freeze (aka “credit freeze”) will prevent the credit bureaus from selling your data to anyone. It will not prevent hackers from stealing that info, but it will make it very difficult for them – or for those who buy that data from them – to use this data to open credit accounts in your name and steal your identity. If they submit your data to a credit card company to apply in your name for a credit card, the credit card company checks with credit bureaus to confirm this information and review your credit. But since there is a credit freeze on your account, Equifax cannot disclose that information, and the credit card company will not open an account in your name.

Note: Even if you try to open a new bank account or credit account, you will not be able to, unless you first remove the credit freeze. Credit freezes do not impact current banking and credit relationships; they continue as normal.

Here are the pages of the three major credit bureaus where you can request or lift a security freeze: Equifax, TransUnion, and Experian.

Credit bureaus are required by law to provide this service, otherwise they wouldn’t. They hate it. Selling your data is how they get revenues. Locking this data eliminates those revenues. But it’s the most effective way to protect yourself.

And remember: you’re not their customer; you’re their product.

The last statement is important — you are not an Equifax customer. That means you haven't signed any agreements with Equifax ... yet.

A second recommendation going forward: Don't sign any agreements with Equifax. See below for why.

If a "Mom and Pop" Store Had Suffered a Similar Data Breach...

And now a look beneath the news to the implications. If a "mom and pop" store had suffered a data breach of this kind, one would reasonably expect the following to be done or required:

• A timely alert to all customers that the breach had occurred.

• A list of the kinds data that had been compromised — for example, "only Social Security numbers," or "Social Security numbers plus login passwords," and so on. 

• A timely, proactive and free notification to affected customers that they specifically were in the affected group. 

• Disclosure of the vulnerability that permitted the breach and a demonstration that the vulnerability had been effectively addressed. 

• Some form of restitution — implicit within which is an admission of liability — to customers who experience material harm. 

Were any of those items not part of the store's response, one would expect lawsuits to force the store's compliance. If the store, for example, were to charge customers a fee to find out if they were in the affected group — or attempted to profit by the breach in any other way — a class action lawsuit would immediately follow.

One would also expect, if the financial harm to the store of this breach were great enough, that the store could be forced out of business. After all it is a "free market" and customers could always take their business elsewhere for any reason at all. In other words, one of the costs of doing business in a "free market" is failure, and stores and restaurants fail every day.

The Equifax CEO Class Responds to Its Massive Data Breach

Almost none of the above-listed responses has occurred in the Equifax case, nor is any branch of national government expected to force those responses.

According to Professor Bill Black (see the transcript or the video above), here's what the Equifax CEO class did do (or in the case of front-running stock and option dumping, probably did do).

• The breach was undisclosed for more than a month.

• During that time, three Equifax executives dumped more than $2 million in stock and a great many more sold stock options, clearly, if not yet provably, ahead of the expected fall in Equifax stock price.

AARON MATE: It took more than a month for Equifax to publicly disclose it, and during that time, just days after it happened, three company executives sold nearly $2 million worth of stock. Equifax claims they were unaware the intrusion had occurred....

BILL BLACK: On top of that, there was also an immediate … in the same time period that these senior executives were selling their stock, there was a massive increase in sales of stock options compared to the normal for Equifax, and that almost certainly was again because people had been tipped about what had happened in the breach.

Here's a chart of the Equifax stock price for the last three months. The 52-week high was $147.02. On Friday, September 9, the day the market reacted to the announced breach, the stock opened at $141.45 and closed down almost 14%, at 123.23.

Equifax stock price for the three months prior to the data breach announcement (source; click to enlarge). Note the two drops in late July and a week later on low volume, and the deep drop on very high volume on September 8. The small circled price rise is discussed below. 

In other words, the Equifax CEO class arguably withheld the information from the public long enough to protect much of their personal wealth in company stock. It appears from the chart above that by mid-August, most insiders who were "in the know" had sold all the stock and options they intended to. (Note the two low-volume drops in very late September and early-mid-August.) The small spike on August 22 (circled) looks like a market reaction by those not "in the know" to a price considered too low. The price from that point to the Friday announcement-collapse is basically flat.

• You will have to pay to find out if you're one of the affected. You will have to pay twice, in fact. First, Equifax won't tell you if you're affected unless you sign away your right to sue or to join to join a class action suit. From the International Business Times:

If you want to know if you were one of the 143 million people whose data was breached in a hack of Equifax’s data, the company has a website you can use to find out — but there appears to be a catch: To check, you have to agree to give up your legal right to sue the company for damages. ...

On Friday, social media users spotlighted fine print on Equifax’s website that appears to force users to agree to waive their class action rights if they use the company’s website to see if their personal data was exposed by the recent hack. It is precisely the kind of arbitration clause that a pending Consumer Financial Protection Bureau (CFPB) rule is designed to outlaw — if Republicans and the Trump administration allow it to go into effect as scheduled later this month.

About that last point — "if Republicans and the Trump administration allow it to go into effect" — look for quite a number of finance industry–friendly Democrats to be put on the spot as well if this comes for a vote in Congress. Finance is where the money is, and finance industry money flows through a virtual firehose to both parties.

If your credit becomes indeed compromised by this breach, there's a measurable cost to not being able to sue to recover damages for harm done — the dollar cost of the harm itself being just a start.

• The second way you may have to pay is more insidious. If you sign up at their website to find out if you're affected, you get one year of free "data protection" that automatically converts to a product you pay for if you don't opt out after a year.

Bill Black, from the interview above:

BILL BLACK: ... On top of that, they immediately saw an opportunity, A, to protect themselves, that you talked about, and B, to make a profit. As you say, they said, “We will provide you with one year of protection.” Now first, the information lost, in addition to the types that you talked about, included Social Security numbers, which of course do not change normally, so that information will be commercially valuable to other frauds for 10 to 30 years, so one year of protection, A, doesn’t do it. B, as you said, they said … “they” being Equifax … “If you … ” and this is in the fine print, mind you, “If you sign up for this protection, you have to give up any right to bring a class action suit.” ...

That isn’t it, because they also said, “Hey, this is a chance to make money on the victims.” It turns out, if you sign up for this one-year of free protection, it’s automatically renewed, and they charge you for it after year one. Again, they know that if they do this to some tens of millions of people, that most people will simply not track that it’s a year later and that they have to kill this protection, and so they’ve turned this massive abuse, this greed upon greed upon greed, into yet another opportunity to make money off the customers who they’re treating in the most atrocious fashion possible.

Black concludes this section by making an excellent point: "This is like a bad novel that someone wrote who hated corporations, except all of it’s coming from the senior leadership of the corporation."

"Greed upon Greed" from the Senior Leadership of Equifax

This makes two more general point about the culture of Equifax senior leadership, their CEO class:

• Personal greed. By delaying release of the breach, they added to the harm done simply to protect, in all likelihood, their personal wealth.

• Corporate predation. By charging people for information that should be available for free —  by charging for protection beyond a one-year time frame for damage that could occur anytime in the future — the company and its CEO class is using this disaster as a profit opportunity.

How is that not a text book definition of clinically pathological greed and predatory behavior? Were the owners of a "mom and pop" store to respond in this fashion, they'd not only be forced out of business and into bankruptcy, they'd likely be forced to live on a different coast under different names.

Violence and the State

Which leads to a final point. This breach and its likely consequences represents three acts of violence inflicted on the population of the U.S.

The first act of violence, of course, was committed by the hackers and will be perpetuated by whoever they sell their data stash to.

The second act of violence is being committed now by Equifax and its CEO class. They're denying Americans information they need to assess their vulnerability — or charging for it in any of several ways. In other words, if Equifax has harmed you, Equifax is trying to pass much of the cost back to you.

The third act of violence is about to be committed by the bipartisan wealth-protecting neoliberal state, which sees as its duty — is paid in fact to see as its duty — the protection of corporate profits, including Equifax's, at the expense of its citizens. If Equifax is protected by government and business-friendly conservative judges, in all likelihood, the company will suffer no damage at all beyond a temporary PR "speed bump." Government protection of Equifax will guarantee that the maximum possible cost will be passed to you.

If you need any evidence that this characterization of government is correct, consider NAFTA, TPP, and all the other "trade" deals our government has attempted or engaged in — all of which are bipartisan, neoliberal, and put profit before people in each of their many provisions and clauses.

If you wish, you watch this play out yourself. As you do, ask these questions and observe the answers:

Will Equifax be forced to disclose, at no cost to Americans, which Americans are affected?

Will Equifax be forced to make restitution, at no cost to Americans, for damage incurred further into the future than one year?

Will Equifax risk going out of business for this massive data breach, or will its "runway be foamed" by government protection so it can recover as a company pretty much intact?

Finally, will Equifax senior management see criminal prosecution for profiting from harm on such a massive scale?

If you think the answers to the questions above are sure to be No, you've been watching a painful sight — the bipartisan U.S. government in the post-Reagan era.

Violence and the state — this is why the failed revolution we now call the "2016 election" will inevitably continue, whichever pit or paradise it leads us to as a country. The profit-before-people racket we call the U.S. government is now under grave assault, and has been since the 2016 Democratic primary and the general election that produced a President Trump. The response to this massive data breach, if it plays out as all others have, will add to the fuel under that revolution.

Will the electoral situation improve in 2018 and 2020? Not unless one of the following occurs — the U.S. government grows a conscience, or a Sanders-like president is nominated. I wouldn't bet on the first, and the 2016 primary spoke wonders about the second. Stay tuned.

GP
 

More On The Republican Wing Of The Democratic Party

Executive Vice President sounds so much better than "lobbyist sleaze bag"

At the very end of February, we ran an exhaustive piece on the dangers of electing Kathleen Matthews, Chris Matthews lobbyist wife, chair of the state Democratic Party. Short version: the Democratic Party needs fewer vile millionaire elitists running the party, not more. A few days later the vile millionaire elitist was selected to be interim party chair. She's already running for a full 4 year term, which will be voted on in a couple of months. She admits that party bosses Steny Hoyer, Chris Van Hollen and Ben Cardin asked her to run.

Her appointment was criticized by former Montgomery County Council member Valerie Ervin (D), who said the process smacked of insiderism. The state party “missed an opportunity to open up the space for a new and different kind of leadership,” said Ervin, who is the first African American woman to be elected to the council.

Yesterday Robert Woodruff, in posting a Hal Ginsberg piece at ProgressiveMaryland.org, wrote about "Democrats slip-sliding back in the centrist, old-boy direction that has brought us Larry Hogan [and asks] where will progressives go instead?" Ginsberg:

Appearances to the contrary, Maryland’s Progressive Democrats have little to cheer about. While over 60% of Marylanders are registered Democrats, Republican Governor Larry Hogan is enjoying “sky-high popularity.” Despite Maryland’s high cost of living, the intransigence of some Democratic legislators and executives has stymied efforts in Baltimore City, Montgomery County, and Prince George’s County to raise the minimum wage to $15. Maryland’s traditionally excellent public schools are struggling to accommodate influxes of immigrants and increasing numbers of students from poor families.

The latest blow to progressives came March 1 courtesy of the Maryland Democratic Party’s eight-member Executive Committee when it elected Kathleen Matthews to be interim chair... The State Central Committee will decide in May whether to elect Matthews, who says she will run, to a full term as Chairperson. She is also promising an open and transparent process. Nevertheless, by installing Matthews as interim chair two months before the election, rather than appointing a current member of the Executive Committee, top party officials have made clear that she is their choice to lead the party over the next four years.

Matthews is a consummate Washington insider. Her duties at Marriott, where her annual salary comfortably exceeded $1 million, included overseeing “a political action committee that contributed over $1 million to House and Senate candidates.” She counts as friends and allies many establishment politicos from both parties who were generous financers of her unsuccessful Congressional bid.

...The Matthews pick exposes the obliviousness of Maryland’s top Democrats to the winds of change buffeting the party both nationally and at home. In the Presidential primaries, self-proclaimed democratic socialist Bernie Sanders inspired millions of young people and independents and nearly upset overwhelming favorite Hillary Clinton. When Sanders withdrew from the race, much of the excitement on the Democratic side left too.

In 2014, Maryland’s Lieutenant Governor Anthony Brown ran a singularly uninspiring race and lost. He had campaigned as a reasonable centrist standing between Marylanders and the allegedly right-wing Larry Hogan. Two years later, Jamie Raskin beat Matthews with an unabashedly progressive message and Bernie Sanders’ endorsement.

...As the state struggles with sky-high housing costs, stagnant wages, and overcrowded public schools, Maryland progressives must look beyond the Democrats for political leadership. A party that values so highly a multi-millionaire news personality and corporate lobbyist with no commitment to progressive economic populism does not share our values.

Boo! This isn't a Maryland problem. There are power-mongering elitists like Hoyer and Van Hollen everywhere in America, incongruously, embedded in the Democratic Party. Just look at Charles Peters' new book, We Do Our Part-- Toward A Fairer And More Equal America. A Washington Monthly Peters protege, Paul Glastris, the magazine's editor-in-chief, wrote an appreciation of the book, Recapturing the Soul of the Democratic Party. "We Do Our Part," he wrote, "is a history of how American political culture evolved from the communitarian patriotic liberalism of Peters’s New Deal youth to a get-mine conservatism in which someone like Donald Trump could be elected president."

In the standard telling, the decline of big government liberalism begins sometime around the Tet Offensive and the assassination of Bobby Kennedy. Peters fixes the date much earlier: 1946. That’s the year a number of senior advisers to the recently deceased FDR, people like Thurman Arnold and Abe Fortas, decided to become lobbyists. Few New Dealers had done this before, so the connections and insider knowledge these men possessed were rare and valuable. Arnold and Fortas grew rich and powerful-- the advance guard of what would become a vast Washington industry.

Peters’s concern isn’t just with how lobbying corrupted the political process, though it certainly did that-- Fortas, for instance, was denied the job of chief justice of the Supreme Court thanks to shady payments from a client-connected foundation-- but more broadly with how it corrupted the incentives and worldview of those who came to Washington. Men like Fortas, a brilliant Yale Law School grad from a modest background who owned multiple homes and Rolls-Royces, set a new lifestyle standard in Washington. As more staffers and ex-congressmen followed the lobbying path, those still in government began to see their salaries, which they once considered comfortable, as penurious. (Eventually they became so, as all the high incomes bid up real estate prices and the local cost of living.)

This acquisitiveness was connected to another rising sin: snobbery, specifically the practice of signaling superiority to the hoi polloi through one’s purchases and discriminating tastes in food, drink, and culture. JFK himself, despite his war heroism and inspiring call to service, embodied the trend by marrying the high-born, fashionable Jacqueline Bouvier and surrounding himself with celebrities.

The twin viruses of greed and snobbery are not, to say the least, conducive to a focused and sympathetic concern for average Americans. But Peters reminds us that these behaviors were not widespread among educated people in Washington or throughout America in the 1950s and ’60s. The postwar prosperity and compression of incomes continued, the draft was still nearly universal-- even baseball greats served their two years-- and the federal government continued to deliver impressive new national projects, from interstate highways to Medicare, that the vast majority of Americans appreciated.

...The viruses of snobbery and selfishness spread wildly over the course of the 1970s and ’80s. Graduates from top colleges flocked to high-paying jobs at law firms and investment banks rather than to public service, and the caliber of the civil service accordingly declined. Magazines that catered to consumer chic and cultural signaling, like New York, Vanity Fair, and Washingtonian, grew fat with advertisers and subscribers. On PBS, the TV home of the educated elite, Louis Rukeyser’s Wall Street Week became the number one show.

“Money had become a major and open interest of the meritocratic class,” writes Peters, in a way it simply hadn’t been from the 1930s through the ’60s. As a consequence, “the cause of lower taxes and of conservatism in general flourished, as shown by the election of Ronald Reagan in 1980.” Even elites who didn’t support Reagan were sympathetic to the growing idea that the market should deliver more “shareholder value.” So they didn’t protest (some even cheered) when corporations closed plants, busted unions, and spent their cash on stock buyback schemes rather than on new products and services. To the extent that they expressed their public spiritedness, it was by supporting causes-- gay rights, the environment-- that weren’t the central concerns of most middle- and working-class voters, whose incomes were stagnating while the meritocrats’ were soaring.

The result was greater and greater resentment of the educated elite. The Rush Limbaughs and Roger Aileses of the world fed off that resentment to boost their ratings and advance a conservative movement that didn’t, in the end, improve their audiences’ economic situation-- a fact that Trump exploited by running against establishment conservatives as well as liberal elites.

Peters credits Bill Clinton with being the only Democratic president or candidate in decades who managed, through his policies and gift for empathy, to bridge the gap between the meritocrats and the white middle and working classes. And he sees evidence that Democrats have awakened to the problems of greed, snobbery, and elite detachment, including “the radical increase in awareness of income inequality” and “some meritocrats overcoming their snobbery to make a serious effort to understand the Trump vote.” He also sees signs “that people are beginning to question their relentless pursuit of money, or at least some of the reasons why they think they have to make a lot of money.”

More concretely, he is heartened by examples of elites returning to government service. These include the investment banker Steve Rattner, who joined the Obama administration and helped save the auto industry, and the top Silicon Valley talent Obama personally recruited to the new U.S. Digital Service after the disastrous rollout of the health care exchange website. Peters makes a plea for more Americans, especially liberals, to run for office at the local, state, and national levels-- something that, in the months since his book went to press, actually seems to be happening.

If anything, I think Peters underestimates the degree to which Americans are hungry to serve. What confounds his call for more of the best and brightest to join government is a lack of opportunity. The problem is political. There are eight applicants for every slot in AmeriCorps, the national service program founded by Bill Clinton. But Democrats’ attempts to expand the program have been consistently checked by Republicans. Trump’s budget office has drawn up plans to eliminate it altogether. More broadly, the federal workforce, at 2.8 million employees, is the same size it was in the 1960s when Peters was part of it, even though the U.S. population since then has more than doubled and the federal budget has quadrupled in real terms. Lawmakers control the federal head count and don’t want to be seen as “growing the bureaucracy.” The most Democrats in Congress have been willing to do is beat back repeated Republican efforts to further decimate the federal workforce.

To make up for the inadequate number of staff, the government increasingly relies on contractors. Peters bemoans this trend, citing numerous examples of how it has hurt government’s performance. He’s right. But he doesn’t call for the obvious solution: boost the number of federal employees so more of the work can be done in house. This would require hiring a million new federal workers, according to University of Pennsylvania political science professor John DiIulio, and boosting their pay as well.

That is also the key to curbing the power of lobbyists, which won’t happen merely by inveighing against their greed. Lobbyists’ power comes mainly from their control of information-- about the industries they represent, about the ways government programs work-- that congressional staffers, many of them young and inexperienced, often lack. The way to neutralize that power is to strengthen government’s capacity to get that information independently, by hiring more staffers and researchers and paying them more so they can make a decent living without having to join the private sector.

Of course, a politician who called for hiring a million more federal workers, and raising their salaries, might appear suicidal in the current political climate. But if Peters is correct-- and I think he is-- that a key to bridging the class gap is for more Americans, especially the elite, to serve in government, a political way has to be found. The same bilious anti-government fever that gave America Ronald Reagan and Newt Gingrich has now given us Trump. Peters reminds us that government service was once a broadly shared and elite experience and value. To cure the fever, today’s liberals must figure out how to make it so again.

I hope you see Kathleen (and Chris) Matthews in this description. And Rahm Emanuel, Debbie Wasserman Schultz, (alas) Nancy Pelosi, Chuck Schumer... the New Dems, the Republicans like Charlie Crist, Tom O'Hallaran and others being recruited into the House Democratic caucus (where they invariably vote with their old comrades across the aisle). Next time you hear some shit-eating New Dem scum bag, whining about the evils of political "purity," kick him in the balls and drop me a note so I can salute you.