Richard (RJ) Eskow: The Price of Evil at JPMorgan Chase
You’d think shareholders would be up in arms at Dimon and the Board of Directors for mismanaging their bank so badly. And yet they’re all still in their seats, thanks in part to the way large corporations are allowed to manipulate their own corporate governance. Dimon is both CEO and Board Chair, an extraordinarily privileged position he was not asked to give up after the London Whale scandal.
And about that scandal: There are four things worth knowing about the Whale:
The trades were illegal, according to all the evidence.
Despite the bank’s bragging about its risk management model — which it publicized widely as a lure to investors — that model wasn’t followed by the London office.
Jamie Dimon’s publicists and politician friends have burnished his reputation as “America’s best banker” – and he bypassed his bank’s org chart so that the London unit reported directly to him.
His friends and publicists have also burnished his reputation as the country’s most ethical banker. As Henny Youngman used to say, How do ya like me now?
We’ve been all over JPMorgan Chase and Jamie Dimon for a long time. (See below for a partial listing), so we’re glad to see the public tide finally turning against the bank and its leader. One of the triggers for that shift was the Senate’s report on the bank’s trade, which is as damning in its own way as Rosner’s.
Netflix now has the right to share your viewing habits – Salon.com
After nearly two years of intense lobbying, Netflix has won the reform it needs to integrate its services with Facebook. Ars Technica first reported that the Senate quietly passed a reform to the Video Privacy Protection Act (VPPA) last week, giving video streaming companies the right to share your data for up to two years after asking for your permission once. (Mother Jones notes that “The Senate didn’t even hold a recorded vote: The bill was approved by unanimous consent”).
This is a government subsidy to a business, in this case, a particular business. The act gives away a right to privacy with no return to the consumer.
Is this good business ethics? One of the first tests of ethics is the question, “Is it legal?” The “reform” makes what was previously illegal into a legal act. It’s also intensely profitable. This passes the sole test of Friedman’s code, “Does it enhance shareholder value?” Yes, it makes more money for the company. I would expect the company’s value to be enhanced.
But this is slicing good business ethics pretty thin. It’s legal and profitable. But so are a great many things that we can be ashamed of.
Is it bad business ethics? It takes a public good, privacy, and converts it to private profit. What did consumers gain from allowing Netflix to sell their information to other companies? That easy, they won the right to be specifically targeted in advertising. Their viewing habits can be used to get a handle on their political beliefs, whether they have children, etc.
It might be argued that the consumer has to give permission to access his records. A blanket right has been abolished and replaced with a private opt out clause. One of the things I have learned is that few of my students even though they are computer literate have any concept of how their data can be used against them. Considering that observation and the mass of e-mails we are bombarded with, I find it unlikely an informed decision is going to be made in many cases.
A company has been profited at a cost to the public interest. It is a government subsidy with all that implies. The company could have done better.
From around the Web –
From the web site, 33 Bits of Entropy: (This article highlights another important issue in online privacy. jp)
New lines will need to be drawn defining what is acceptable data-release policy, and in a way that takes into account the actual re-identification risk instead of relying on syntactic crutches such as removing “personally identifiable” information. Perhaps there will need to be a constant process of evaluating and responding to continuing improvements in re-identification algorithms.
Perhaps the ability of third parties to discover information about an individual’s movie rankings is not too disturbing, as movie rankings are not generally considered to be sensitive information. But because these same techniques can lead to the re-identification of data, far greater privacy concerns are implicated.
Today, Netflix presented at the F8 conference to talk about their planned integration with Facebook. You can see what you friends are watching and they can see what you are watching on Facebook. Not only on a granular level, but Facebook will present what it finds to be interesting trends among your friends’ viewing habits. Mark Zukerberg’s example showed that four of his friends just watched movies staring Johnny Depp. Netflix will be integrating with both Facebook’s newly announced Timeline as well as their OpenGraph platform. Facebook will have similar integration with Hulu.
An archaic 1988 law, the Video Privacy Protection Act, currently prevents the sharing of your video watch lists, such as with services like Netflix or Hulu, on social media outlets such as Facebook or Google+. Earlier this month, the US Senate put through an upgrade to the bill to address this issue, to little notice. It was a minor correction to an old set of laws. But when the US House got ahold of it, they put forth some edits, which is where the problem begins.
These changes, as reported by the ACLU, divorces the bill from a larger set of laws, called the Electronic Communications Privacy Act. In so doing they eliminated protections which were in place to require a warrant for accessing of cloud-based private electronic communications and other content, such as email, private social network posts, any information stored on cloud based servers. Instead, a subpoena is all that is required, a legal process but one which does not require the due diligence of a warrant, not even requiring an active investigation to acquire.
We here in America should start practicing democracy instead of pretending. The government no longer works for human beings only for lobbyists and their employers.
When the American Government under the Articles of Confederation began to break down, the great men of the nation acted to save the country from dissolving into a dozen or so petty states.
We’re in the same situation now. We just don’t have any great men. Our current crop of politicians are contemptible. Would let a anyone involved in that disgrace of a “budget ceiling” negotiation work for you?
What should a constitutional convention do? Get rid of the Senate. The idea that the two Senators from North Dakota should have the same weight in national deliberations as the two Senators from California is bizarre and ridiculous. What’s more it allows a small minority to have veto power over the rest of the nation. That’s why we have farm supports that make no sense here financially while causing havoc overseas. You can’t make intelligent policy when a minority can derail intelligent action. Let’s have a single house legislature with the seats distributed by population. That’s democracy. Pretending that the states are actually independent countries is an idea the Civil War should have finished off for good.
The second thing we should do is get rid of the electoral college. Elect the President directly by the voters. Electing Presidents by states electoral votes is a formula for disaster. You get Presidents without actual majorities.
The third thing is to put the right to vote into the Bill of Rights. Every kind of shenanigans is now being employed and has been used throughout American history to keep people from voting. Let’s make sure everyone is on the same set of rules. It’s wrong to stop people from voting. Period.
The Constitution created a government divided in purpose to make oppression less likely. It wasn’t a bad idea but now it is no longer viable. The government and the those influencing it are more the enemies of the people than ever before, and because the government only sort of responds to the voters, that response is muted and ineffective. We need a government strong enough to resist large pressure from large economic organizations but weak enough to leave people individual rights.
To keep our rights, it is time to change the form of our government. Now.
“Symbolic votes like this that aim to do nothing but pit people against each other will only frustrate the public even more,” Senate Majority Leader Mitch McConnell said.
“Americans really aren’t interested in scapegoats,” he continued. “They just want to pay less to fill up their cars. That’s why this Democratic bill to tax American energy is an affront to the American people.”
I can think of 2 billion reasons this is not a “symbolic” vote and if by pitting people against each other, you mean calling the multibillion dollar profiting oil companies being called to task for their cynical political machinations, pitting people against each other, you are a very cynical man.
Is it ethical to manipulate Congress for relief from taxes when you run an extremely profitable multi-national corporation? It is ethical to call your opponents Un-American for wanting fair taxation?
You do not have to do a deep analysis of the ethical components here. This is a tragedy for the American people that evades the word, theft, by a razor’s edge.
More significant is that both these oil companies and the congressmen protecting them can be found day after day preaching with complete and apparent total conviction the value and importance of free markets. But we see here the colossal hypocrisy, basically six large corporations dictating to a suppliant congress a vast competitive advantage over any competitors. What about the innovation and low prices that competition brings about? Where’s that?
I have been told I am shrill. Explain to me at a time when there are serious plans to limit or eliminate Medicare and Social Security, why these companies should be able to evade their taxes. Tell me. Apparently this nation deserves no tax money from corporations since we don’t provide laws, roads, education, or a horde of ships, tanks, and planes to defend their property. Yeah, I’m shrill. Isn’t someone supposed to look out for the citizens?
From time to time I explain these things to people and they ask me who they should vote for. I tell them honestly, “There is no one.” The only difference between the two parties is in the level of obedience that lobbyists can command. I believe the welfare of the American people figure at most peripherally in the affairs of our government.
You should probably read the report and get your fill of the seamy side of capital hill. The combination of power and sexual access is intoxicating. It is hard to do the right thing when there is just so much money and so much temptation. That, of course, is not an excuse.
Special thanks to NotionsCaptital.
Adulterous Nevada Republican John Ensign resigned his U.S. Senate seat before the Senate Ethics Committee issued a report that would have led to his expulsion. The last time the U.S. Senate expelled a member: 1862. The Ensign ethics report is out, so add it to your summer reading list. Some may think it’s not a romance novel, but Mr. Ensign’s web of deceit involved a long-term affair with His Neighbor’s Wife (an employee and spouse of an employee … Read More
I have been accused of being shrill. Today is the day, I should tear the wallpaper off the walls in hot raging anger. The Senate passed a bill on the last day of the session by unanimous consent that essentially solves the banks’ mortgage foreclosure problems.
The bill, passed without public debate in a way that even surprised its main sponsor, Republican Representative Robert Aderholt, requires courts to accept as valid document notarizations made out of state, making it harder to challenge the authenticity of foreclosure and other legal documents.
The timing raised eyebrows, coming during a rising furor over improper affidavits and other filings in foreclosure actions by large mortgage processors such as GMAC, JPMorgan and Bank of America.
Questions about improper notarizations have figured prominently in challenges to the validity of these court documents, and led to widespread halts of foreclosure proceedings.
The legislation could protect bank and mortgage processors from liability for false or improperly prepared documents.
Do we live in a nation where citizens matter? Hundreds of thousands of mortgages have been done without actual knowledge of the facts. This is not legal. But here comes Congress just when the crisis is beginning to develop. And Congress like the cavalry rides not to rescue the homeowners but to make it difficult or impossible for them to challenge inaccurate or false documents. It will also make it difficult or impossible to sue for redress by these simple Americans who lived their lives believing falsely they had a government that was concerned in some way about their rights.
It’s not law yet. It awaits that “stalwart defender” of the public, Barack Obama, to sign or veto. What do you bet?
This is incredible. The mortgage companies are caught committing essentially fraud on a massive scale at the very least lying to the court system not once but hundreds of thousands of times(probably several million times) and the government acts to legalize their acts just as the scandal is revealed.
I don’t know what to say. I am well aware that besides this frail web site, I have no influence. I want to go outside and scream. Doesn’t someone, anyone care about the homeowners who have been abused hundreds of thousands of times?
What do these huge accumulations of money have to do to get in trouble? Apparently there is nothing they can’t do. Apparently there is no line they can cross, that will cause our government to act against them.
Will there be any action taken? Will there be any outrage? Will there be any investigations and will they lead to any actual action?