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
 

Senate Democrats Will Filibuster Gorsuch...Maybe

Demos President Heather McGhee on Neil Gorsuch and his corporatist policies (cued partway into the presentation)

by Gaius Publius

There a long litany of reasons why Neil Gorsuch is a terrible choice for the Supreme Court, including and especially his strong "corporatist" leanings. Demos President Heather McGhee speaks about that in the brief video above. Needless to say, continuing the Roberts Court pattern of enabling corporate rule over rule by the people will have dangerous consequences for those so ruled, as well as for the Republic, when that rule is overthrown. Make no mistake — when corporate rule finally go too far, takes one step too many, it will be overthrown. When that occurs, the moment will be neither pretty nor comfortable.

Another in that litany of reasons, of course, is to deny to the Republicans the fruits of a stolen seat.

Yet a third has to do with his relationship with religion, as shown in the Hobby Lobby case. As the invaluable Dahlia Lithwick points out, "Our current religious-liberty jurisprudence, as laid out by the Supreme Court in its Hobby Lobby opinion, is extremely deferential toward religious believers. What believers assert about their faith must not be questioned or even assessed. Religious dissenters who seek to be exempted from neutral and generally applicable laws are given the benefit of the doubt, even when others are harmed. Sometimes those harms are not even taken into account." She adds, "Gorsuch agrees with all of this and then some. His record reflects a pattern of systematically privileging the rights of religious believers over those of religious minorities and nonbelievers."

And a fourth, related to the first, is that, as Lithwick has elsewhere pointed out [corrected: it was Eric Segall] that the Supreme Court, unlike the other two branches of government, has no compelling force to guarantee its legitimacy — no army, in other words; no police force. Its legitimacy rests on agreement only.

Consider: You may think Executive Branch decisions are illegitimate, but its officers can nevertheless have you arrested or worse. The Executive Branch, in other words, can force, can compel, your submission. The same with Congress, should it decide someday to advance its prerogatives. Congress can pass laws and, if it wishes, compel the Executive Branch to enforce them. The Supreme Court, in contrast, has no way to compel any citizen to obey its decrees.

When a court, any court, which by definition should be impartial, is widely considered illegitimate — captured and corrupted by partisan or minority forces — the community governed by that court enters "you can submit or rebel" territory. This is Segall's warning. In my view we are very close to that time when the Supreme Court, in the eyes of most of its citizens, has shed the last of its legitimacy. The process started in earnest with the partisan theft, by the Court, of the 2000 presidential election. The shredding of its cloak of legitimacy continues to this day.

This suggest a larger question, of course — what happens when a government loses the "consent of the governed"? — but that's a subject for another day. Nevertheless, with all that's going on around us, can that consideration, something much to be feared by anyone hoping to live in a just and orderly society, ever be far from our minds?

A "Deal" on Gorsuch?

But I want here to look at one political aspect of the Gorsuch nomination — the fact that the Democrats, one of the abused parties in this saga, seem to have offered Republicans, or are considering offering to them, a "deal" that would allow Gorsuch to be confirmed. Then, when the deal became known, they appear to have reversed themselves. But have they?

First, the deal (my emphasis):

Democrats weigh deal to let Gorsuch through

Lawmakers are mulling an offer to Republicans that would keep the filibuster intact for the next Supreme Court nominee.

A group of Senate Democrats is beginning to explore trying to extract concessions from Republicans in return for allowing Supreme Court nominee Neil Gorsuch to be confirmed, according to multiple sources familiar with the matter. ... The deal Democrats would be most likely to pursue, the sources said, would be to allow confirmation of Gorsuch in exchange for a commitment from Republicans not to kill the filibuster for a subsequent vacancy during President Donald Trump’s term.

This report, like many such reports from places like Politico, also contains the "cover story," the "reasonable explanation" (in sales terms) that the guilty parties would like you to believe are their motives. "The lawmakers worry that Gorsuch could be confirmed whether Democrats try to block him or not — and Democrats would be left with nothing to show for it."

The real reason corporatist Democrats — a group that includes Chuck Schumer, remember, if it is not led by him — want Gorsuch confirmed is that their corporate paymasters (sorry, campaign contributors) want Democratic Senators to help confirm him, and may shut off the flow of money if they don't.

Who are the Democrats who want to cut a deal to get Gorsuch confirmed? The article wouldn't name them, but does say, "The current talks are limited to about a half-dozen Democratic lawmakers." While the article says the senators looking to cut a deal on Gorsuch requested anonymity, it adds, "Some liberals are aiming to block Gorsuch, while others are worried about the electoral prospects for 10 senators up for reelection next year in states won by Trump if they’re seen as obstructing the president’s court pick" (my emphasis).

A look at Democrats up for reelection in 2018 includes these, culled from a list of those whose votes for Trump nominees are among the worst:

• Cantwell
• Cardin
• Carper
• Casey
• Donnelly
• Heinrich
• Heitkamp
• Kaine
• King (Independent)
• Klobuchar
• Manchin
• McCaskill
• Menendez
• Nelson
• Stabenow
• Tester

All of these senators will face the voters in 2018. Care to pick a "half dozen" from that list who may have been on Politico's "anonymous" list? Joe Manchin is named in the Politico piece as being especially concerned about preserving the filibuster, as is Chris Coons, who is not up for reelection until 2020.

Remember, it will take just eight Democrats to break a filibuster and confirm Neil Gorsuch.

Reaction to News of the "Deal"

After a strong negative reaction to news of this "deal," Senate Minority Leader Chuck Schumer announced that the Democrats would filibuster the nomination. The Washington Post headline announced:

"Schumer: Democrats will filibuster Gorsuch nomination"

The implication is that all Democratic senators, or a sufficient number of them, would indeed block this nomination, thus clearing the Party as a whole of the suspicion of complicity. But the Post article itself was more circumspect: "Senate Minority Leader Charles E. Schumer (D-N.Y.) said he will vote no on President Trump’s nominee and asked other Democrats to join him in blocking an up-or-down vote on Gorsuch" (my emphasis). Note — he "asked" other Democrats to join him.

The Post adds to the uncertainty, noting:

The Democrats’ liberal base has been pressuring senators to block Trump’s nominees across the government. But Schumer stopped short of saying that his entire Democratic caucus would join him in opposition to Gorsuch, leaving political space for some Democrats to find ways to work with Republicans.

Will the Gorsuch nomination be filibustered, or "filibustered"? Democrats have the numbers to block this, and Schumer is strong enough to whip his caucus into line — if he wants to. Will we watch the Schumer-led Democratic Party block Neil Gorsuch from a lifetime seat on the Court, or just pretend to?

Bottom Line — Who Will Step Up for Gorsuch So Others Don't Have To?

Privately, I think there are easily more than eight corporatists in the Democratic Senate caucus who would eagerly put paid to their obligations to the very very wealthy, who want this nomination to succeed very very much. If the Gorsuch vote were secret — or entirely unnoticed, as most Monsanto Senate votes are — you'd see them all vote yes without a backward glance. Even "liberal lion" Al Franken votes with Monsanto when the spotlights are off. Same with MSNBC darling Amy Klobuchar, who is on the list above, by the way.

The list of possible pro-Gorsuch senators includes the obvious names above — Manchin, Heitkamp to name just two — but also includes these so-called "undecided" senators:

• Kaine (Clinton's veep pick)
• Klobuchar (her again)
• Warner (a Schumer ally in Senate leadership)
• Coons
• Hassan
• Donnelly
• Nelson
• Tester

The chips are down and most of the cards have been played. The Democrats have heard from their other base — people who vote — and have announced a filibuster. It's in their power to win, during this round anyway. What will they do?

This test is a very big deal. It will tell voters once again who the Democratic Party, in the aggregate, represents. Will eight Democrats (including the Democratic-caucusing Angus King) cross the line and vote with Republicans so others don't have to? Or will Senate Democrats realize that the path to irrelevance in the Age of Trump, well paid though it be, leads through this door, and stand up to the money that funds them?

I can't wait to find out what happens. Either way, it will be consequential (meaning, have consequences).

GP
 

Obama and the Perez Election — Are the Democrats Trying to Fail?

Bernie Sanders: "Are they going to welcome into the Democratic Party the working class in this country and young people, or is it going to be party of the upper middle class and the cocktail crowd and the heavy campaign contributors? Which to a significant degree it is right now."

by Gaius Publius

[Obama] called DNC members himself [on behalf of Tom Perez], and had aides including confidante Valerie Jarrett, former political director David Simas and his White House director of political engagement Paulette Aniskoff working members by phone through the votes on Saturday afternoon.

—Politico

I recently wrote about the recent race for DNC Chair between Sanders-endorsed and CPC co-chair Keith Ellison on the one hand, and Obama- and Clinton-wing-endorsed Tom Perez on the other (see "Field Notes from the Battle Within the Democratic Party"), and concluded the following.

Four points:

• Whatever his other merits, there's no question that Tom Perez is running at the behest of the Obama wing of the party as a counter to Keith Ellison, co-chair of the Congressional Progressive Caucus.

• There's also no question, whatever the organizational merits of any of the DNC Chair candidates, that for medium- to low-information voters this is seen as a proxy battle between the Obama-Clinton wing and the Sanders wing of the Party (search here for the phrase "proxy battle").

• And there's absolutely no question that one of Sanders' big issues in the primary was (a) the role of money in politics, and (b) the role of money in the way the Party does business. Needless to say, that message resonated with a great many supporters who had no interest in seeing the Party's current leadership continue. That was not only true for all Sanders voters in the primary; it was true for many Sanders supporters who failed to turn out in general election as well.

• Which means, finally, that if Perez wins this contest, those medium- to low-information voters may well think the Party hasn't changed much after all, and just stay home again in 2018.

After all, don't you think that if every Sanders supporter had pulled the lever for Clinton, she'd have won in a landslide instead of lost in a squeaker?

Whatever the merits of the two leading candidates, Perez and Ellison, with respect to this position, it could not be more obvious that the Party establishment, including and especially its outgoing, still-popular, eight-year president, really really wanted Perez to win.

Why?

Control, the Appearance of Control...

For whatever combination of reasons, the need of many long-time Party insiders, from the county level up through the national level, for control of the Party is extremely great. This may be in part due to the nature of humans to protect territory, especially long-held territory. The local clique that has always run Cub Pack 257 our of your local church, for example, may resent like hell the influx of a group of new parents who start thinking, "Why are you running things this way?"

(And imagine their irritation if those parents discovered that much of their Cub Pack money went into the hands of a "preferred supplier" of equipment who happened to be married to the Assistant Pack Leader?)

Of course, organizations don't always end up filled with insiders holding tight to power for its own sake. My local HOA, for example, went in two years from having a self-protective, angry, clique-led insider club to a welcoming, "let's hear from the owners" inclusive leadership group — but only after a series of electoral coups took out the lower-level insiders and finally, the board chair himself (who suddenly discovered a need to move to a penthouse in a different city).

But it happens often enough, and it's certainly — and for those with eyes, obviously — happening inside the modern (post-Reagan) Democratic Party. There may be any number of causes, but the result is the same.

Control of the Party. However it came about — I have a private opinion on the source of this need for dominance — starting with Bill Clinton in the 1990s, when the Democratic Party reshaped itself in response to 12 years of Republican rule, hatred by establishment Democrats directed at those to their left grew fierce. It also became quite noticeable.

For example, Matthew Karp recently wrote at Jacobin:

Two stark facts have defined the 2016 Democratic primary since the campaign began last spring. The first is the remarkable success of self-proclaimed socialist Bernie Sanders, who appears to be mobilizing far more support from lower-income voters than any other Democratic underdog in a generation.

The second fact, evident since the beginning of the campaign but even more visible in recent weeks, is the fierce determination of the Democratic Party elite to nominate Hillary Clinton.

With both Sanders and Donald Trump surging in the polls, many observers have framed the 2016 race as one that pits insurgent populist campaigns against consolidated party establishments. It’s easy for this kind of insider versus outsider analysis to become sloppy and conspiratorial. In fact, the contours of “the establishment” are often difficult to define, and a closer examination frequently reveals several different elite factions facing off against each other.

Yet there is abundant evidence that the Democratic Party elite has thrown its full weight behind Clinton — and against Sanders — in ways that surpass any other primary campaign in recent history.

I won't comment here about the reasons for this animus, but I will state it as a fact. "Third way," establishment Democrats, by and large, hate "the left." Jesse Jackson and his supporters used to be the incarnation of those "to the left," which explains and accounts perfectly for Bill Clinton's cruel and public Sister Souljah moment.

Today, Sanders and his supporters are the current incarnation. Establishment Democrats' need to keep control of the Party — to keep the rest of the Party in line and under their thumb — is still clearly one of their guiding principles.

Top Clinton fundraiser who whipped votes for Perez says Ellison was blocked to stop the left https://t.co/juxHQxjeoY pic.twitter.com/O8Kq2X6flK

— David Sirota (@davidsirota) February 27, 2017

The Appearance of Control. Once a leadership elite seeks that degree of control  — as linked just above, Chuck Schumer reportedly preferred to see Republican Pat Toomey re-elected to the Senate than let someone as independent as Democrat Joe Sestak into the insider club he's in charge of — the appearance of control is also critical. (It should be noted that Schumer was an early supporter of Ellison's candidacy.)

Much of the press commentary about this race, in attempting minimize the split between the Sanders wing and the Obama-Clinton wing, saw either of the choices, Perez and Ellison, as good ones for the Party. For example, US News concluded prior to the voting, "Ellison would likely serve the party well, and his Muslim faith would serve as clear symbolic counterpoint to the policies of the Trump administration. However, the party should resist the factionalizing between Sanders and Clinton supporters and focus on the candidate who can build the infrastructure, organization, messaging and fundraising networks to make the party more competitive across the 50 states." Nathan Robinson writes much the same in the piece linked near the end. Neither is alone in this view.

So if these two candidates were presented as roughly equivalent (note the word "presented"), why did winning DNC Chair matter so much that Barack Obama, personally, whipped for Perez? Two of the three answers are obvious — not only did control of the DNC matter to him and his fellow insiders, but the appearance of control matters as well.

Put crudely, a machine boss can't be seen to lose, even when next to nothing is actually lost. To those for whom power matters very very much, they can't even seem to be losing it.

...And Money

Which bring us to the final point, the third reason Obama-insiders wanted Perez to beat Ellison for this position. It's not just about control. There are real dollars at stake if power within the DNC, the smaller than 500-member insiders club, passes into the "wrong hands."

Remember my Cub Scout example above, the one about the "preferred supplier" of equipment being the spouse of a pack leader? What if that "preferred supplier" derived all of his income from dealings with the scouts? How motivated would his pack leader-spouse be to keep complaining parents, all of them, off of her pack committee? The answer is obvious. Very motivated.

Nomiki Konst, investigative reporter for TYT Network, who covered the DNC Chair contest closely (see also here), had this to say via email after the election (my emphasis):

I keep saying to any reporters who plan on writing about Bernie vs Hillary/Obama Wing proxy fight that this was actually a proxy battle between Unity democrats vs. HRC & OFA elitists.

Keith had so many establishment Dems and progressives. Unions and even most state party chairs.

Perez still won because he had elitists Dems -- the biggest bundlers and political operatives, as well as the president and VP, working on his behalf.

Remember, Perez had barely any union endorsements, a couple state Party Chair endorsements, did not have the minority leader of the senate and absolutely NO Sanders supporter endorsements.

And he still won by 35 votes.

"The biggest bundlers and political operatives" means, first, the bag men and women ("bundlers," collectors of the millions that come into Party hands) and, second, those to whom that money goes ("operatives," consultants, pollsters, campaign advisors and very well paid media buyers). "Bundlers and operatives" are, in other words, the suppliers and recipients of what, in a presidential election year, amounts to billions of dollars spent per candidate, and all the political favors big money purchases for its ultimate sources.

Konst highlighted that problem in a striking interview with Perez just a few days before the election (written up here):

Konst: Aren't conflicts of interest a concern? If you're going to change the culture on the ground, how do you change it without banning these conflicts of interest who want to keep the party bloated?

Perez: When you say that someone wants to keep the party bloated, I don't know. The people that I talk to want to build a Democratic Party that works for everyone. ... The folks that are running the Unity Commission, there's going to be a lot of different perspectives that are put to bear — that's what we want!

Konst (incredulous): Including consultants?

Perez: We have a big tent in the Democratic Party....

Keeping the party "bloated" means keeping corporate money, hedge fund money and cash from very high wealth individuals (example, Haim Saban) flowing freely into Party hands so it can just as freely pass out to the hands of its friends — who in turn help Party insiders stay in power.

Few will write the story this way — Konst is one of the exceptions — but following the "flow of funds" explains much of what's behind the fierce determination of Democratic insiders (that is, the 447 women and men who actually vote for DNC Chair) to keep things just as Nancy Pelosi wants — the way they are right now, thank you very much.

The miracle is that Ellison got even 200 votes at all, and lost by only 35. Still, despite the support of "unions and most state party chairs," he lost by a significant margin. Ellison gained zero votes from the crowded first round of voting to the two-person second round, while Perez sprinted to a win.

What's Next for Democrats?

What's next for Democrats deserves an essay by itself. But needless to say, an increase in #DemExit is one of the anticipated options, even by several of the delegates Konst interview on the floor at the DNC meeting.

A worst-case scenario is painted below. First, consider this from NBC News on whether the public views insiders of either party favorably, (my emphasis): "One sentiment that unites the fractured nation is fury at the establishment in Washington. Fully 86 percent of those surveyed said they believe that a small group in D.C. has "reaped the rewards of government while the people have borne the cost. That includes 88 percent of Republicans and 85 percent of Democrats."

Then consider how that broad unpopularity of insiders may intersect with this DNC election. Of that, Nathan Robinson, editor at Current Affairs, writes, "By failing to appoint Keith Ellison to chair the DNC, Democrats have written their suicide note."

Here's just a taste of the longer piece:

They Must Be Trying to Fail

At this point, one has to conclude that the national Democratic Party has a death wish. ...

[I]t was incredibly important that the Democratic Party take some steps to indicate that it cared about progressives. Since the election, it hadn’t been doing a very good job of this. (Nancy Pelosi’s insistence that nothing needed to change, and her rebuke to a young leftist, demonstrated the prevailing attitude.) Appointing Keith Ellison to chair the DNC was the perfect opportunity. After all, chairing the DNC is a pretty minor role. It would mostly have been a gesture of friendship and unity, showing that even after the catastrophic mistake of ignoring leftist warnings not to run Clinton, the party was capable of valuing its leftmost members.

But no. Instead of granting the tiniest possible concession, the party has decided to affirm precisely what Nancy Pelosi has indicated: democratic socialists and social democrats don’t belong in the party. It’s not for them. What the party does depends on what billionaire donors want it to do.

This is politically suicidal.

As if that wasn't enough, Robinson adds, "Now, progressives in the party are further alienated. Good luck getting them to vote for Democrats. ... The progressives needed to receive some kind of gesture. And they have received one: an enormous middle finger." Indeed.

Your Bottom Line

Consider these facts:

1. It clearly mattered very much, to Obama, to high Party insiders, and to the support ecosystem around them, that no one representing the Sanders camp be allowed real power in the Party. (Sanders himself is in charge of "outreach" and reports in that capacity to Chuck Schumer.) Even when the role is highly visible but "minor." The DNC Chair does have a modicum of control, unlike those who hold "messaging" roles, but even that much control won't be allowed.

2. Yet all you hear from Democrats, correctly in my view, is "Defeating Trump is Job One." The nation, indeed the world, is at a crossroads — on the climate front, a crossroads of world-historical proportions.

3. Yet there's an obvious disconnect between the Party's rhetoric and its actions. Is control of the Party more important than bringing in the groundswell of popular support needed to defeat the Republicans in all branches of government?

4. And people do notice that disconnect, more now than before. Some might even call it, not a disconnect, but a contradiction. Or hypocrisy. Some, those who couldn't pull the lever for Clinton, may even call it that at election time.

5. If so — if the insider-controlled Democratic Party puts its own need for party dominance over the needs of the nation — the nation and indeed the world will suffer greatly. Will insider Democrats suffer to the same degree as the rest of us? If they think they're getting what they want, no.

So a question for those who gaze into the future. None of this dire predicting is certain, but it's certainly possible. Will there be a price, for the Party and the world, attached to adherence to power at any price? If there is, establishment Democrats sure are flirting with it.

Again.

Scheduling note: My comments appear regularly here on Monday and Thursday, or Tuesday and Thursday if Monday is a holiday.

GP
    

A Corporate Convention: "Comcast Presents ... The Democratic Party. Welcome to Philadelphia."

The above is a real fake ad — it's a fake Air France ad that really showed up in Parisian ad spaces during the recent climate conference. "Care about climate change? Of course not. We're Air France. If we cared we'd stop flying planes. We're just sponsoring the climate conference to confuse you, and to make sure we keep making money" (or words to that effect).

by Gaius Publius

It's looking more and more that the Crossroad in Philadelphia, the 2016 Democratic Convention, will be a crossroad indeed. Wasserman Schultz is reported to be openly stacking the convention committees with Clinton supporters, despite Sanders having won, so far at least, 45% of the delegates.

And Ed Rendell — a "huge Hillary Clinton backer," a "vocal proponent of shale gas extraction" (fracking), former governor of Pennsylvania, former DNC chair and current "DNC Host Chair" (under Debbie Wasserman Schultz) — is telling Sanders supporters, in effect, "You'll get to vote before you watch him lose, and then he'll make a nice goodbye speech, so don't make trouble afterward. Play nice and play along." (Note that Rendell has already called the rest of the race for Clinton. We'll see about that.)

Dem convention host: Sanders supporters better 'behave themselves' when he loses https://t.co/cXhVMv5Yur pic.twitter.com/REYfEznKii

— The Hill (@thehill) May 8, 2016

And over the crowd at the Wells Fargo® Convention Center will fly, at least virtually, all of the banners of every corporation that finances and maintains this Establishment — including the ones that finance, almost certainly, its nominating convention.

A Corporate Convention

We won't know about corporate funding of the Democratic Party Convention until after it's held (clever of the law to allow that), but here's what happened in 2012 (my emphasis):

Corporate cash helps fuel Democratic convention despite pledges

New group accepts company money

CHARLOTTE, N.C. — While Democrats have touted their grassroots fundraising efforts for the 2012 Democratic National Convention, deep-pocketed corporate donors are helping underwrite the event.

Among the corporate sponsors at the Charlotte convention: AT&T Inc., Bank of America, Duke Energy, Time Warner Cable, Coca-Cola, Wells Fargo, UnitedHealth Group, Piedmont Natural Gas, US Airways and law and lobbying firm McGuireWoods.

The corporate sponsorship appears to fly in the face of the Democrats’ pledge to host a “people’s convention.”

The party’s 2012 “host committee” is not accepting contributions from corporations, lobbyists and political action committees. Democrats also capped how much money individuals can give at $100,000.

But the party is accepting in-kind donations from corporate firms. In addition, a second nonprofit, called “New American City” was established in May to “defray” administrative expenses and other costs. New American City does accept corporate money.

The exact levels of these companies’ financial support won’t be known until mid-October when filings will be submitted to the Federal Election Commission.

Banks, cable companies (like Comcast, which as you'll see has a special seat at this year's well-bought table), health insurance companies, fracking companies, airlines and lobbying firms — all are in all likelihood all lined up to foot the bill for the Establishment-run Democratic Convention. The Party fêtes its patrons. The patrons smile down at the Party.

When you're the only one with money, they all have to come to you eventually. This is from a USA swimming national championship event (source).

By the way, I'd be shocked if Big Pharma weren't a huge contributor funding this year's Democratic Convention. TPP is an Obama high-value special order; drug companies are among the biggest winners if it passes; and how better to say thank you to a friend than to help the friend of a friend when she needs the cash. We won't find out about Pharma sponsorship until after the nomination, of course, but watch for it.

Comcast's Special Seat at the Democratic Party Table

You remember Comcast, right? They own MSNBC, one of the many networks that helped Hillary Clinton immensely when her pre-won nomination was suddenly put in doubt by Bernie Sanders voters. It took a lot of shoulders to shove that wheel nearer the finish line, and MSNBC (Comcast, $74 billion annual revenue) had a lot of shoulders to push with, as did CNN (Time Warner, $28 billion annual revenue), the New York Times (the New York Times Company, $1.5 billion annual revenue) and anyone else with a lot of money to lose if an actual anti-corruption candidate dared to win. (Don't give up yet, billionaires. She could still lose. Keep fighting.)

So, Comcast. The name to remember (aside from the above-mentioned Ed Rendell, a Comcast employee) is David Cohen. Here's Daily Kos diarist Liberty Equality Fraternity and Trees, one of my favorites over there, with the news:

Comcast EVP/Republican Fundraiser to Serve as Senior Advisor to DNC 2016 Host Committee

Earlier today, Philadelphia mayor Michael Nutter announced that David Cohen, executive Vice President of Comcast, will serve as senior adviser to Philly's Host Committee for the 2016 Democratic National Convention.

The same Comcast that is one of America's least favorite companies.

And the same David Cohen and same Comcast that lobbied against Obama's net neutrality proposal.

And the same Comcast that fought Philadelphia's paid sick leave legislation, getting the mayor to veto it two times before he finally accepted a watered-down version today. ...

And the same David Cohen that raised money for former Republican governor Tom Corbett and current Republican senator Pat Toomey.

But running America the way it's currently run is a bipartisan joint, right? I just wish there were a Comcast banner flying high above the arena when the delegate votes are taken and Sanders speaks. Then Sanders could point repeatedly to it and rail against corporate governance, all without saying their name.

Care to Plaster Philadelphia with Posters?

I'm in the early stages of thinking about this, but consider this thought, and if you like it, you can join in. Remember, you don't need anyone's permission to make a fuss, especially an artistic one.

Corporations, many of them big polluters, spent a lot of money green-washing themselves by actually sponsoring, openly and nakedly, the recent COP21 Paris climate conference. It's like a tobacco company contributing to a lung cancer clinic — and getting naming rights. But they did it anyway, hoping no one would notice the problem.

Then this happened overnight, in Parisian bus stops and other places that normally hold billboards. It looks like a simple product poster, but it isn't:

Also this:

And of course, the lovely piece at the very top.

It's called "brandalism" and I hear it's a lot of fun. Feel like joining the fun? You don't need anyone's permission to say yes. I even understand one could make smaller posters, some with adhesive backing and some suitable for nailing to nail-ready outdoors objects (but only where legal, of course). Philadelphia could be your playground if you want it to be. Or not; your call on that.

My thought: As decorative as Philadelphia already is (that's the magnificent Comcast Center at the link, by the way), perhaps the city could use a little something extra — or a lot of it — a something that only you and your friends can provide, should you decide to go yourself.

GP
  

Another $40 Billion Left the Country in July

From the U.S. Commerce Department's September 2015 Report of the U.S. Monthly Trade Deficit (source)

by Gaius Publius

We Americans usually focus on the government's deficit with, mainly, its citizens, often called the "national deficit." This is an almost completely artificial number, since the government isn't a household, but the manufacturer of something most of us very much want — money. (Think of it this way; every dollar the government doesn't spend, every dollar it keeps in its back pocket, is a dollar that will never get into your back pocket, ever. Every dime the government doesn't spend is a dime you'll never see. Please think about the implications of that.)

But the trade deficit, the "balance of payments" deficit — the difference between the amount of money we actually give to foreigners, and the money we take from them — is real. If you were the United States, in July you handed a net $40 billion to foreign individuals and corporations. And you've been doing the same each month for the past year. Multiply that by 12 months and you're looking at roughly $500 billion (half a trillion) going out the door in a year.

Here's what that looks like over a longer period of time:

U.S. Balance of Payments, year after year, since 1950 (source)

That $40 billion that went out the door in July is actual money, it's actually gone, and it will only come back to the U.S. when the foreign entities who own it offer to buy your assets with it — your house, say, or all of the stock in Burger King — and you're so broke you're eager to sell it to them.

Dave Johnson, our go-to writer on trade, with the news:

The U.S. Census Bureau reported Thursday that the July goods and services trade deficit was an enormous, humongous $41.9 billion. This is down from a revised $45.2 billion in June.

This is an increase from May’s enormous, humongous $40.9 billion trade deficit.

We had the highest ever level of imports in autos and auto parts, at $30 billion.

The trade deficit with China was $31.57 billion. This is the highest monthly trade deficit of this year, and it was 75 percent of our July trade deficit.

The U.S. goods deficit with Japan was $5.7 billion, up from $5.2 billion in June.

The U.S. goods deficit with South Korea was $2.6 billion, up from $2.3 billion in June.

Note that these numbers do not reflect China’s big currency devaluation, which happened in August. Even without that, this trade deficit measures a terrible situation for American manufacturers and workers.

We're giving away the store, month after month, year after year. Eagerly, in the case of the wealthy, since a lot of that wealth comes back to them in the form of higher profit and CEO compensation. Or blindly, in the case of our middle class, since Tom Brady's problems are of greater interest, it seems, than their own. (I blame the men and women who own our media, but you may have other thoughts on that.)

How to Think About the Trade Deficit

The simplest way to think of the trade deficit, and why it's happening, is this. Imagine a man (usually it's a male we're talking about, though Carly Fiorina qualifies) whose company makes $100 million in revenue in a given year, who pays $30 million of that in non-CEO wages, and whose company, when it's all done, sees $20 million in profit.

From that $20 million, he takes a CEO salary of, say, $3 million in cash and other benefits, including stock options. His company's stock is a solid $10 per share, and has been for a while.

Then he figures it out. He closes all his U.S. factories, fires those workers, and outsources all of his manufacturing to "contractors" in Asia. Now, instead of paying $30 million in wages, he pays just $5 million in U.S. wages and $10 million to his manufacturing contractors, saving $15 million on what used to cost him $30 million. Nothing else has changed in this example, neither his sales nor his prices.

Since he doesn't drop his retail price, his profit swells from $20 million to $35 million on the same sales volume. With the extra money, he bumps his own pay from $3 million to $6 million. In the process the stock price jumps to $15 per share (because of the jump in profit), which further sweetens his own take, since his pile of company stock, part of his "executive compensation package," is now worth 50% more.

Next year he'll use company money to buy back a big pile of stock and take it off the market, making his personal stock pile (sorry) even more valuable. And he'll look for an even cheaper foreign "contractor" to manufacture his goods.

What Just Happened? Making CEOs Rich at Your Expense

Simply by changing his manufacturing base, the following occurred:

• All of his U.S. manufacturing workers lost their jobs. 
• $10 million that would have stayed in the U.S. (as U.S. wages) went to a foreign "contractor," thus adding to the trade deficit. 
• The company pocketed $15 million in increased profit, which boosted its stock price.
• Of that $15 million, the CEO pocketed an extra $3 million. 
• The stock market is buoyed by stock buybacks and the need by CEOs to keep prices high.

Bottom line, the CEO sent $10 million overseas so he could skim $3 million from the savings. In essence this is a kickback scheme. Multiply that across the entire U.S. manufacturing (and part of the service) economy, and you'll see (a) why CEOs everywhere are handing U.S. money as fast as they can to foreign entities so they can pocket the skim, and (b) why this will never stop until someone makes it stop.

Want to watch it in real time? Watch the monthly trade deficit report. 

The Crumbling American Middle Class

In the meantime, all of those fired workers buy fewer and fewer goods even as foreign-produced goods become cheaper and cheaper. Or, to quote the decidedly right-leaning International Living, a magazine for libertarian expat-wannabes, the consumer action is rapidly moving abroad (Sept 2015, print only):

Want to Profit? Look Abroad

"The U.S. is no longer the consumer market it once was," writes Jeff D. Opdyke of TheSovereignInvestor.com. "And that is all you need to know to find your future investment opportunities.

"McDonalds, for instance, has set its sights on high-growth markets outside the U.S. Across Asia/Pacific, the Middle East, and Africa MCD is planning to open 550 new restaurants, with 200 additional eateries slated for China alone.

"Though I am not a proponent of investing in multinationals, as an investor, you can see where you should look for opportunities by watching where companies like McDonald's are shifting their focus. Go there, and large profits await for you."

As analysts like Thom Hartmann have written (for example, in his excellent book The Crash of 2016), the American middle class is crumbling as we watch. If you want the reason, look no further than the trade deficit, the "balance of payments." Again, that money is gone, and will only come back when its new owners want to buy our assets, because frankly, that's mainly all we have left to sell them.

GP

Business Watch: The K-cup people "K-capitulate" (not my pun!), reopening their closed 2.0 system to strange un-pre-cupped coffee

The Breakfast Blend is a light roast, and so has practically no flavor (is breakfast time a "no flavor" zone?), but Green Mountain sells a quite drinkable medium-roast Vermont Country Blend -- and a dark-roast French Roast for people who've been trained by Starbucks to prefer their coffee beans roasted till they screech for mercy.

by Ken

Since my only contact with Keurig-style coffee-making is in the office, where we have a very nice machine, but one that's apparently first-generation (and in our office we don't do a whole lot of upgrading). I had never encountered such a beast until the company installed one a couple of years ago, complete with a dedicated hookup to a supply of filtered water.

"At will" caffeine delivery is one of the few perks the company provides us, and before the Keurig system, we did it via one of those commercial double-pot electric drip machines. But people were constantly not bothering to make a fresh pot, or else the bottom third of a pot would remain frying on the heat plate for hours and had to be dumped. And of course there was lots of cleanup.

In all these ways the Keurig system was a dramatic improvement. The ground-up coffee inside a K-cup isn't exactly fresh (who knows how long ago it was ground up and inserted?), but at least the thing is sealed, so it's never too stale. And it's certainly much cleaner, much more convenient. You want coffee, or tea, you just brew it to order! Voilà! Through trial and error, our office manager settled on an assortment of coffees and teas to keep on hand. The system works.

Since, again, all of my K-cuppery happens in the first-generation World of Keurig, it wasn't till a couple of months ago that I saw something online which clued me in that since 2014 there has been a brave new 2.0 World of Keurig, in which everything has changed -- or at least the allowability of using reusable K-cups has. That has been, in a word, eliminated.

Which made basket cases of customers who've been rendered captive by the alllure of the Keurig system for providing relatively quick and convenient hot beverages of all sorts, or maybe by the investment they've made in machines that use K-cups. Now, belatedly, the company is admitting, sort of, that it screwed up.

Maybe I should say that I enjoy our office machine, which is a higher-end model than I would ever buy for myself, in that it is designed for, or at least allows, installation of a direct water source, so that in theory there's hot water ready to brew the second you insert your K-cup. This also means, I assume, that the water is being heated 24/7, even on weekends when we hardly ever have anyone on the premises. But what the heck, it's not my electric bill. Also, it still always takes some time to start brewing, and often quite a lot of time. At those times I'm sympathetic. I have that feeling a lot, where it's just so hard to get started. But the upthrust is that the brewing process isn't always that quick. At home I use a little electric-drip coffee-maker, and it really doesn't take that much time to brew a four-cup pot. ("Four cups" in official parlance. In real-world cups, or at least my-world cups, I call it two.)

Of course at home I also use my own coffee. True, I usually use a Melitta filter, but then, I usually use each filter twice, and even if I used them only once, that wouldn't jack the per-cup cost up anywhere near the cost of a cup brewed Keurig-style. As I discovered when we started using our Keurig machine in the office, and I once I got over my fear of it I came to kind of enjoy the convenience, while the machines aren't prohibitively expensive, the K-cups are really, really expensive. How expensive?

As the Washington Post's "Morning Mix" editor, Fred Barbash, reported a couple of days ago in a piece called "Keurig’s K-Cup screw-up and how it K-pitulated Wednesday to angry consumers." (If you think that pun is awful to read, try typing it.)

Once a consumer buys the coffee machine, the coffee drinker may spend as much as $50 to $60 per pound on the coffee contained in the K-Cups, considerably more than the cost of even Starbucks’s breakfast blend, which goes for about $11.95 per pound.

Ouch! I had figured out all on my own that those little suckers were pricey, but, well, ouch!

But coffee-drinkers aren't total saps and patsies.

Some years back, thousands of Keurig single-serve machine fans found a cheaper alternative, however — refillable, non-disposable K-cups, little plastic coffee grounds holders, which the company graciously sold under the brand of “My K-Cup.”

Not only was it cheaper, but the coffee drinker had more choice, as “My K-Cup” could be filled with any brand of coffee off the shelf.

AND THEN CAME 2.0

In August 2014, when Keurig introduced its “2.0” line of coffeemakers, it stopped making “My K-Cup” for it and made the machine incompatible with any K-cups already in existence, as well as with any unlicensed disposable K-cups made by other companies.

It was $50 a pound and a trail of waste — or nothing.

Here's where it gets really gnarly. I mean Keurig's official response.

“The My K-Cup accessory and other reusable filters are not compatible with Keurig 2.0 Brewing Technology,” the company explained on Facebook, “because the brewer has no way of determining what beverage is being used or how much coffee is being added, and therefore cannot adjust to factors such as brew strength and amount of water, which could represent a safety concern…”

Oh, fercripessakes! A safety concern? They're protecting us? Is anyone buying this? Anyone at all?

Clever competitors moved quickly to fill the void, with ways to, in effect, hack into the Keurig technology. The Rogers Family Company’s “Freedom Clip” was sold patriotically as “Our Gift To You and Everyone …. Freedom Of Choice!”

“We at Rogers Family Company® believe that your right to choose any option is imperative. That’s why we have developed this easily installed ‘Freedom Clip’ for Keurig 2.0® brewers. Just place the clip in your new brewer and it will see all k-cup type pods as ‘Authorized K-Cups®.’ This clip is our gift to you. Now go forth and brew with freedom.”

"Freedom Clip"! I like that! And somehow I don't think I would like being the company on the opposite side of the battle line. It turns out that Keurig eventually had the same response.

Worse for Keurig, as executives acknowledged Wednesday during its quarterly earnings briefing, sales of Keurig machines tanked and they began to accumulate on the shelves across the country. Sales of brewers and accessories declined by 23 percent, the company reported. Its stock price fell 10 percent in after hours trading.

And "with that," says Fred, "Keurig’s CEO did what he had to do. He capitulated Wednesday in a call with market analysts.

“We heard loud and clear from consumers,” said Brian Kelley, “who really wanted the My K-Cup back. We want consumers to be able to bring any brand and bringing the My Cup back allows that.

“My K-Cup was a terrific addition for the consumer. It wasn’t used a lot, but for the consumer it was a nice element to have if they were given coffee as a gift. . . . We took it away because My K-Cup wasn’t going to work with our new system.

“Quite honestly, we were wrong. We underestimated the passion the consumer had for this. We missed it. We shouldn’t have taken it away. We’re bringing it back.”

So you see, it was just an unfortunate cooincidence that the 2.0 machines wouldn't take those outlaw cups. And the company's concern for customer safety was just so intense, what could they do?

I guess we found out Wednesday.

#

World Wildlife Fund (WWF) Supports TPP

The copyrighted, registered trademark
of the World Wildlife Fund

by Gaius Publius

If you support the World Wildlife Fund (internationally named the "World Wide Fund for Nature"), consider stopping. They call this "greenwashing," something WWF is familiar with (see below). Thanks are due to the White House, which made the news very public in another piece of TPP puffery (my emphasis throughout):

What They're Saying: Environmental Advocates Point to the Trans-Pacific Partnership as a Historic Opportunity to Protect Our Oceans, Forests, and Wildlife

The Trans-Pacific Partnership (TPP) offers a substantial opportunity to advance American interests and values, including a once-in-a-generation chance to protect our oceans, wildlife, and the environment.

The Asia-Pacific Region and TPP parties encompass some of the world’s most ecologically significant regions, are home to major markets for wildlife and wildlife products, and include eight of the top 20 fishing nations, together accounting for a quarter of global marine catch and seafood exports. Taking action in the region is of critical importance given that five of the TPP parties are among the world’s 17 “mega-diverse” countries, a group covering less than 10 percent of the earth’s area, but supporting more than 70 percent of the earth’s species plant and animal species. ...

They forgot to add, "TPP, this time with jobs." How do we know the above is just puffery, just the sell? Because the day the jobs show up, enforceable environmental protections will show up too. Meaning never.

That doesn't mean the race has ceased, however, to snooker the public — and many Congress members — into thinking that somehow TPP is a "progressive" answer to the world's ills. That race has just begun. From the same White House puff piece come quotes from "respected" (meaning big-name) presumed-left organizations. We can ignore CAP, for example; they're known–neo-liberal, known–"free" market. But there are some interesting names in the "Yes to TPP" list, starting with the World Wildlife Fund.

The World Wildlife Fund Is Selling TPP

The World Wildlife Fund, the "Panda" organization, is selling TPP? Apparently so:

The Trans-Pacific Partnership (TPP) is one of those potentially game-changing solutions. The TPP is a trade agreement designed to promote economic growth by enhancing trade and investment among twelve TPP partner countries in the Asia-Pacific region, including the United States… It's not often that large-scale opportunities arise to help protect our planet. And surprisingly enough, the TPP, if it is done right, can offer a valuable way forward.

-- Carter Roberts, World Wildlife Fund, in Conserving Nature Is Good Trade Policy February 28, 2014

I wonder what they got in exchange.

Let's look at this more closely. You probably think the people at WWF are the good guys, right? They're the good guys only in the sense that methane is climate-friendly — they're "good" by branding (the panda is well chosen) plus a modicum of good deeds. In methane's case, the branding is the word "clean" in "clean energy" and the modicum is, "We're deadly to the climate, but less so than coal."

In WWF's case, the modicum is, "We take lots of corporate cash and make them look great for giving it. Then we do some good." Do they do other favors as well? Skip back to the top and read that TPP endorsement again:

"The Trans-Pacific Partnership (TPP) is one of those potentially game-changing solutions...."

I wonder if he was handed those words. TPP is a "solution," but only if the problem is not enough corporate profit or control. According to the White House, other "humane" organizations backing TPP include The Humane Society and Nature Conservancy. Good to know — include them on your don't-donate list as well.

Is WWF Too Corporate to Be Trusted?

There's a lot to expose in the world of big-money "Big Green" organizations. But let's stick with WWF. Here are just a few tastes of what people who've dug into these issues have to say. Click the links for more. Let's start with Wikipedia (footnotes in the source):

WWF has been accused by the campaigner Corporate Watch of being too close to businesses to campaign objectively. WWF claims partnering with corporations such as Coca-Cola, Lafarge, Carlos Slim's and IKEA will reduce their impact on the environment. WWF received €56 million (US$80 million) from corporations in 2010 (an 8% increase in support from corporations compared to 2009), accounting for 11% of total revenue for the year.

Keep Coca-Cola in mind. More from Wikipedia:

The German public television ARD aired a documentary on 22 June 2011 that claimed to show how the WWF cooperates with corporations such as Monsanto, providing sustainability certification in exchange for donations – i.e. greenwashing. WWF has denied the allegations. By encouraging high-impact eco-tourism, the program alleges that WWF contributes to the destruction of habitat and species it claims to protect. WWF-India is not active at the tiger reserve given as the example, but it is active elsewhere seeking to limit adverse tourism impacts and better sharing of tourism benefits to local communities. The program also alleges WWF certified a palm oil plantation operated by Wilmar International, a Singaporean company, on the Indonesian island of Borneo, even though the establishment of the plantation led to the destruction of over 14,000 hectares of rainforest. Only 80 hectares were ultimately conserved, the ARD documentary claims. ...

See what I mean about a modicum of good? WWF is likely touting the 80 hectares they saved, not the 14,000 they didn't — 'cause you "can't let the perfect be the enemy of the good." (The "good" in this case includes the next corporate donation.)

WWF and Coca-Cola

Now about Coca-Cola. Here's what kind of branding that corporate "investment" purchases, from the WWF website:

WWF and the Coca-Cola Company Team Up to Protect Polar Bears

[The cold Arctic] landscape – which spans eight countries, including the United States – is also one of the most important areas for keeping the Earth’s climate system stable and a key indicator of the state of global well-being. Major ecological changes are taking place here at a faster and more dramatic rate than anywhere else in the world. Warmer temperatures are rapidly melting summer sea ice, which will likely all but disappear within a generation. The survival of ice-dependent species like the polar bear hinges on our ability to protect their last viable habitats.

... In addition to our freshwater conservation efforts, WWF and The Coca-Cola Company joined forces to help protect the polar bear and its habitat. Building upon Coca-Cola’s support since 2007 of WWF’s polar bear conservation efforts, we launched the Arctic Home Campaign in North America during the 2011 holiday season to raise widespread awareness and funds for these efforts. Due to the success and inspiration generated by Arctic Home in North America in its initial year, the program was expanded to 17 countries in Europe in winter 2012/2013.

Through Arctic Home, WWF has been able to engage in research in the high Arctic above Canada and Greenland, where it is believed that summer sea ice will persist the longest. WWF also is collecting important information on the Arctic ecosystem and working with Arctic residents and governments to develop a conservation plan in this “Last Ice Area.” ...

What's WWF doing with the gift that Coke gives them? They're giving the world the gift of "raised awareness," plus research into helping polar bears find the last summer ice (before there is none). Can you think of a better climate use of a half billion dollars, WWF's 2010 revenue? I think I can — starting with portfolio divestment.

What does Coke get in return? A great new ad campaign, this time with bears:

Somewhere in there is a panda and a polar bear

Of course, the real Coca-Cola company is these guys, the "death squads for union leaders" people (do click; it's a shocker). Maybe WWF could raise Coke's awareness about murder to protect profit.

What Does "Greenwashing" Mean?

Greenwashing is when non-profit environment-friendly organizations like NRDC or WWF give "green" ground cover — essentially a paint job, as the name suggests — to corporate malefactors in exchange for corporate money. The corporations get unalloyed credibility in the eyes of the public and diminished pressure to stop doing wrong. (Click the Coke link above to see the start of what they do wrong.)

For the "green" organizations, however, the money ties their hands. Ultimately most become enablers in the destruction they think they're preventing. Groups like NRDC, for example, are enablers for the fracking and methane industry. More examples:

The crimes of Shell were elucidated to the world by the resistance of people, mainly indigenous, doing the day to day dying in the Niger Delta; the people giving them awards were the WWF. The crimes of fracking operators in the United States northeast were highlighted by farmers and ranchers who needed the water and noticed it was catching on fire and their skin was burning right off of their bones, the people telling us we need natural gas from fracking have been the NRDC. The destruction of the tar sands in Canada is most well known because of indigenous refusal to disappear from history to cancer and the destruction of their traditional forests; those who want us to work with Shell and Suncor run the David Suzuki Foundation.

For the corporations, this is gold, like using the Olympics to make themselves look like a force for good, except this time they're using sympathetic polar bears instead. If you want to read more about "greenwashing" and corporate and foundation capture in the post-Reagan environmentalist era, start here. It's a sad story, but worth knowing about. It's one reason individual contributors don't get much bang for their Big Green donation buck.

What Else Does Corporate Funding Buy?

Which brings us back to the question at the start: What do WWF, The Humane Society and Nature Conservancy get in return for their clearly well-orchestrated "greenwashing" of TPP? Hard to say exactly, since we don't get a seat in meetings where quid and quo match up. But it's almost illegal for a corporation to spend stockholder money and not get a monetizable reward. And when it comes to TPP, the White House and most major CEOs are all over it. So we're left to guess, or maybe just watch as the non-profits' annual statements roll out. But the TPP endorsement statement is so obviously false, I'd bet they got something in exchange for it.

But however it happened, that nice corporate-connected panda at the top of this piece is all for TPP, meaning she's all for jobs in China. Ironic, that.



But profit-supplied do-gooder money has to come from somewhere. What better symbol of TPP than the Panda and the place our traded-out jobs will be sent to?

GP