FDL Book Salon Welcomes Eileen Appelbaum and Rosemary Batt, Private Equity at Work: When Wall Street Manages Main Street

Welcome Eileen Appelbaum (CEPR), Rosemary Batt (Cornell University) and Host David Dayen (David’s webpage) (Twitter)

Private Equity at Work: When Wall Street Manages Main Street

A couple weeks ago, Burger King announced a merger with the Canadian coffee-and-donuts chain Tim Hortons. Well, not actually Burger King, but 3G Capital, the private equity firm that owns a 70% stake in the fast food chain. This was 3G Capital’s second big deal in recent months, having also purchased the venerable H.J. Heinz ketchup company. And to secure the deal, 3G Capital paid a substantial amount in shares to Scout Capital Management and Highfields Capital Management, who were buying up Tim Hortons stock in preparation for their own private equity takeover.

Nothing about this is unusual. As researchers Eileen Applebaum (Center for Economics and Policy Research) and Rosemary Batt (Cornell University) explain in their important book Private Equity at Work, 2,797 private equity firms in the United States have investments in 17,744 companies, directly impacting the employment of 7.5 million workers, according to the latest statistics. They are highly focused in retail, food service, health care and really wherever money can be plucked. (more…)

Late Night: There Is a Deeper Wave Than This

A wave of action is coming on April 4th, the date they killed MLK, the date Cindy Sheehan lost her son, the date cherry blossoms and resisters to fascism begin to show after an endless winter of many, many years. Take a look at Wave Of Action.

Electing a different president six years ago was not a partial step, a failed attempt, a warm-up round. It was a halftime show of circus clowns and cheerleaders. The partial step, the failed attempt, the warm up, the ground work, the base of experience and training and testing was Occupy.

And what’s happened since? We’ve learned more about how close Occupy came to shifting the balance. We’ve learned more about how scared the bankers and the warmongers and their servants in the unconstitutional police-state acronym crowd were (the FBI-DHS-CIA-NSA-SOBs). We’ve learned about the plans in Houston to murder Occupiers. We’ve learned about the infiltration, the instigation, the expropriation. We’ve looked back at the counterproductive results of tolerating a bit of violence on the side of justice and peace. We’ve marveled at the mistake of calling violence inclusiveness and tolerance.  We’ve wondered at the humor, heroism, and effectiveness of nonviolent creative action.

The movement has grown, indoors, online, and off the radar. It’s developed strategies for taking on debt and homelessness and war. Awareness has grown, education has spread, and ideas have sunk in. People now know that we can’t lift up the poor without pulling down the plutocrats. It’s understood that we can have democracy or billionaires, not both. The notion of shifting priorities is even making headway; behind the screaming of “no cuts!” and “less spending!” there’s a steady, rising voice — ebbing and flowing like the ocean — insisting that we can move the money from the military and the oil corporations and the bankers to green energy and schools and trains and parks and actual aid to everyone on earth, with plenty of tax cuts to spare.

“The country is broke” is understood as a lie on the scale of “the Defense Department makes us safer” or “the marketplace benefits us all” or “this weather is part of normal cycles” or “the corporate media is independent of the government” or “the government is independent of the corporations.”

When public pressure stopped missiles into Syria in September the educational work of years and years was paying off. When public pressure helped stop new sanctions and war momentum against Iran in February, a new pattern was developing. When Obama began this week at least pretending to turn against the NSA he’d been defending for months, a crack opened up in a wall of unaccountable abuses. Opportunities are opening up all around us. Students are taking on Israeli crimes. Towns are taking on fossil fuel fanaticism. Parents on taking on corporate-educationism.

A new Occupy should have crowds of DiFi masks (the one person Senator Dianne Feinstein objects to spying on). A new Occupy should hold joint events in the United States and Russia demanding peace from both governments, nuclear disarmament, and investment of those nuclear dollars in defense against real threats, like climate change, disease, and guns.

Things are not getting better. The earth is dying. Weapons sales are skyrocketing. Russia and China are being groomed as new enemies. Real healthcare reform remains almost incomprehensible to millions who need it. Pay Day loans are growing at the rate that prison terms for profiteers ought to be.  But resistance to the downward slide is growing as well.  Whistleblowers are appearing. Courage is catching and spreading. States are setting up conversion and transition plans. Obamahopium is wearing off without Hillareoin taking hold.

If there was ever a moment to put survival and well-being ahead of politeness and obedience, this is that moment. The weather is right. The climate is right. The experience is fresh, but the participants rested. April 4th is opening day. Will you throw out the first pitch in your town? Will you do it now? Will you re-occupy everything and never give it back? Find an event, create an event, or enliven an event near you or far from you: https://waveofaction.org

This is not for show this time. This is not to send a message. This is not to make a few friends. This is to make millions of friends. This is to change the course of our culture. This is the big leagues. Rest up. Get ready. Know your power.

The War on Marriage on Christmas

Very rarely does our government ask us what to have a war on. The proposal for missile strikes into Syria was a rare occasion when public pressure and other factors compelled Congress to demand a say. Public pressure then compelled Congress to say No.

A peace protest. Sign: Another Mother for Peace
What if We The People actually got to vote for peace or war?

But daily drone buzzings over various nations aren’t occasions for public debate. We aren’t being asked about another decade in Afghanistan or cooking up a future war on Iran. And our current president and his predecessor combined have wiped out eight wedding parties (six in Afghanistan, one in Iraq, and one in Yemen earlier this month) without our having ever been asked about any of them.

What if we were?

There are various ways a debate over whether to launch a war could go. In a highly-informed debate, we might investigate whether a war would violate the Kellogg-Briand Pact, the U.N. Charter, and the U.S. Constitution. We might ask how many adults, children, and infants would likely be killed, injured, and traumatized, how many refugees created, what sort of environmental damage, what economic cost, what erosion of our civil liberties, what heightened secrecy in government, what increase in violence throughout our culture and the country attacked, what likely blowback for decades to come, and what obvious alternatives are available to violence. But, of course, if we asked all that, then we’d never have any wars.

In a more plausible scenario, we might expect a debate to squeeze its way onto our televisions that would ask questions like: How many U.S. troops will die? How much will it cost? Why are we on the same side as al Qaeda this time?  How will it end once begun?  How does bombing more people express our support for suffering people? Or, depending on the circumstances, maybe even this: Haven’t we been arming that dictator for decades — why the urgency to overthrow him now?

But how would a debate over whether to send hellfire missiles screaming into a wedding party look? What if such a debate were to develop in our news media this Christmas season?

In areas of frequent drone strikes, people are often afraid to get together in large numbers. In Yemen, parents resort to home schooling for fear of letting their children out of the house.  Few and far between are the events deemed important enough to risk violating that rule. One such event is a wedding.

How much, we might hear our pundits ask, could be saved by killing 15 people at a wedding as opposed to killing them each separately? (If the missiles alone cost $1 million each, the answer is well over $14 million.) What element of surprise might be gained in obliterating people whose minds are distracted by love and friendship and an important right rite of passage? What fear and respect might be placed into the minds of the survivors? Let’s say one of the wedding couple survives and the other doesn’t; which one would it be most desirable to let live? Does it matter what kind of dress the bride is wearing? Should fashion consultants be brought in by the Pentagon, or should morning talk shows contribute that analysis as part of their patriotic duty? Should the missiles hit just as little kids bearing flowers enter the scene?

The debate may sound absurd, but its creation would actually be a significant step toward sound government. We ought to vote on or be represented by officials who vote on important decisions for us. We ought to be informed, engaged, and consulted. Therefore, a debate before the next wedding strike is a perfectly reasonable proposal — unless of course we’re going to unilaterally stop blowing up weddings. Far be it from me to suggest anything that rash.

(more…)

FDL Book Salon Welcomes Gar Alperovitz, What Then Must We Do?: Straight Talk About the Next American Revolution

Welcome Gar Alperovitz (GarAlperovitz.com) (University of Maryland) (New Economics Institute)  and Host David Dayen (DavidDayen) (Salon.com) (NakedCapitalism) (Twitter)

What Then Must We Do?: Straight Talk About the Next American Revolution

In What Then Must We Do?, political economy professor Gar Alperovitz slowly and deliberately nudges readers off the traditional course of political activism assumed to bring about progressive change – elections, legislative fights, protest actions, firing the twin engines of grassroots Democratic groups and organized labor – arguing that these methods have failed. He finds readers at that moment of despair, when the best efforts we’ve known to create the space for change have failed. Indeed, he doesn’t believe that these efforts can reverse what is now a decades-long march of structural economic, environmental and political decline. “Absent major national shocks,” he writes, “the capacity for fundamental political change is limited in the American context.”

What then must we do? We must work, gradually, opportunistically, insistently, for democratization of the economic sphere, creating a nation of worker-owned cooperatives and publicly provided goods and services. This shift in the control and ownership of property – energy, broadband Internet, agriculture, banking, health care services, etc. – is happening, at an albeit glacial pace, in areas across the country, in ways we often don’t recognize. 130 million Americans are members of some kind of cooperative, 95 million through credit unions, which have benefited from the nascent “move your money” campaign out of big banks (I am among the ranks of credit union membership).

To use an isolated success story, Chattanooga, Tennessee, has the largest publicly provided municipal broadband Internet service in the country, delivering speeds as high as two hundred times faster than the national average, at an affordable price, distributed by the city’s publicly-owned electric utility. This deliberate effort to generate world-class local infrastructure has attracted businesses to Chattanooga, as well as other economic development. Examples like this litter the book.

It’s nice to think that an evolution of further democratization efforts, focused on the communities most receptive to the idea, while using them as models to bring the rest of the country along, can succeed in creating a more equitable society where prosperity is broadly shared. And certainly, shifting how wealth is owned and controlled could generally have a salutary effect, though I’m skeptical of automatically fitting all public ownership examples into a frame of absolute good. (Should state-owned oil companies excite us, or Alaska’s public distributions of dividends on oil deposits? Or airlines that happen to be publicly owned in countries controlled by dictatorships?)

I wish more attention was provided to the flip side of the democratization scenario, which is also happening right now around the country – the privatization of public assets. This has accelerated since the Great Recession, as cash-strapped municipalities seek ways to balance their budgets by stripping their cities and regions of their resources. And it’s happening with the full culpability of largely Democratic urban mayors. Philadelphia is selling off its historic Gas Works. Chicago sold its parking meters, to disastrous effect. Operations and maintenance on the main highway between Denver and Boulder, Colorado is now in private hands. And there are dozens of other examples of outright privatization or public-private partnerships, a key initiative of the Obama Administration. Alperovitz mentions this in passing, but stresses that there need to be simultaneous strategies of holding the line against these predatory privatization efforts, the selling of America to private interests, while also moving forward on other fronts with public provisions of things like broadband Internet and electricity and banking. (Sadly there was no mention of one of my personal hobby horses, a public option for simple banking through the US Postal Service.)

It’s also unclear to me whether Employee Stock Ownership Plans (ESOPs) and worker-owned cooperatives have always and forever “embraced with a specific political-economic intent,” as Alperovitz claims. He notes the General Motors rescue as an example of how the government can take over a private company, and how the Voluntary employee benefit association (VEBA) of GM’s union partially owned the company in the aftermath. But of course, a feature of post-rescue GM is lower salaries for its line workers, hardly the intended outcome of worker ownership, in Alperovitz’ context. To use another example from the book, the biggest region in America for employee ownership is Ohio, which has been actively involved in such democratization for three decades. I don’t get the sense that their economy, wages and standard of living are somehow in better shape over that period than regions which have not embraced this model; in fact, quite the opposite. But perhaps this just means that they haven’t yet moved far enough in that direction. Alperovitz talks of evolutionary cycles, and when you are up against entrenched corporate interests, that’s probably the right way to think.

The book is excellent on dispelling the myth of privatization as an inherently more efficient manner to distribute goods and services. This conveniently neglects all the negative externalities private ownership incorporates, such as the threats to the economy from private banks (and the cost of the inevitable bailouts), the poor set of outcomes associated with our largely private health insurance system, the costs of “throwing away cities” by constantly moving factories to take advantage of tax benefits or lower wages, and so on.

Overall, I think Alperovitz nails the insufficiency of the current ways in which we think about motivating progressive change, and the suggestion of putting efforts into different economic models with workers and public interests at the forefront is a far better reaction than simple despair. “All of us have a vested interest in pessimism,” he writes, because it enables us to merely carp from the sidelines. We should rather have a vested interest in developing institutions that are sustainable, that aren’t dependent on endless growth at the expense of community interests, that serve the taxpayers who fund the system rather than narrow corporate lobbies, that will work toward reductions in inequality and the preservation of the planet instead of the pure profit motive.

I look forward to a good discussion on these issues. Welcome Gar Alperovitz to FDL Book Salon. (more…)

FDL Book Salon Welcomes Gar Alperovitz, What Then Must We Do?: Straight Talk About the Next American Revolution

Welcome Gar Alperovitz (GarAlperovitz.com) (University of Maryland) (New Economics Institute)  and Host David Dayen (DavidDayen) (Salon.com) (NakedCapitalism) (Twitter)

What Then Must We Do?: Straight Talk About the Next American Revolution

In What Then Must We Do?, political economy professor Gar Alperovitz slowly and deliberately nudges readers off the traditional course of political activism assumed to bring about progressive change – elections, legislative fights, protest actions, firing the twin engines of grassroots Democratic groups and organized labor – arguing that these methods have failed. He finds readers at that moment of despair, when the best efforts we’ve known to create the space for change have failed. Indeed, he doesn’t believe that these efforts can reverse what is now a decades-long march of structural economic, environmental and political decline. “Absent major national shocks,” he writes, “the capacity for fundamental political change is limited in the American context.”

What then must we do? We must work, gradually, opportunistically, insistently, for democratization of the economic sphere, creating a nation of worker-owned cooperatives and publicly provided goods and services. This shift in the control and ownership of property – energy, broadband Internet, agriculture, banking, health care services, etc. – is happening, at an albeit glacial pace, in areas across the country, in ways we often don’t recognize. 130 million Americans are members of some kind of cooperative, 95 million through credit unions, which have benefited from the nascent “move your money” campaign out of big banks (I am among the ranks of credit union membership).

(more…)

The Fiscal Slope Exposes Deficit Scolds as Cowards

Maya MacGuineas, one of the "deficit scolds" responsible

Let’s just stipulate something for the record. If the Congressional Budget Office were asked to step in and score John Boehner’s “Plan B,” it would score as an increase to the deficit by about $4.9 trillion over ten yeas. If CBO scored the Obama plan, it would score as an increase to the deficit by about $4.1 trillion over ten years. That’s because current law dictates that America goes over the cliff and stays there. It doesn’t contemplate any changes to the law. And if America went over this cliff, the resulting austerity would be so great that it would swing the economy into recession. It would also virtually wipe out the long-term deficit gap, even while it would probably increase it a bit in the near term, because of increases in automatic stabilizers. But over the long-term, the deficit would essentially be wiped out.

The fact that everyone in Washington, everyone on Wall Street, every economic analyst in America is freaking out over this possibility should tell you what you need to know about the importance of reducing the deficit. Both sides are trying their best to cut taxes from current law to avoid the near-term consequences of austerity. The debate comes from whether to cut taxes by $4.1 trillion or by $4.9 trillion. Both sides basically want to keep the spending cuts from the 2011 debt limit deal relatively intact, just shifting it around a bit.

The CBO also publishes an “Alternative Fiscal Scenario,” where they try to guess at what policies will get extended and what policies won’t. But that’s nonsense. They might as well consult a fortune teller. CBO’s job is to explain the consequences of current law and proposals to alter it. If they were honest, they would explain that Congress and the White House are currently negotiating over how much to increase the deficit.

This article covers a lot of this same ground. But it focuses on the case for doing a deal in January. I’m trying to explain the case for telling “deficit hawks” to shut their damn mouths. They’ve been exposed by this entire process as complete cowards, unable to deal with the consequences of their own rhetoric. They’ve demanded, in the most apocalyptic terms imaginable, a “deal on the debt” that led to the political construction of this cliff, which nobody can seem to figure out how to avoid. There’s nobody more responsible for the economic hardship in the aftermath than the likes of Pete Peterson and Maya MacGuinness. And the sad thing is that they won’t feel it. They’re incomparably wealthy, and they won’t face any challenges if a recession CAUSED BY THEIR ACTIONS hits. It’s the average working man and woman who will suffer.

Acknowledgements

It is with a heavy heart that I wrap up these eight-plus years of writing things on the Internet. The concurrence between my last day and the end of the Mayan calendar, by the way, is purely coincidental; I do think there will be news after today, and most likely people covering it (anyway, the whole world-ending thing is a great big misunderstanding, I guess). Anyway, there are a lot of people who deserve to be mentioned.

I could really bore you to tears and begin my thank-yous with Vinton Cerf and inventor of the blog Dave Winer, but let’s instead move on to calling out the people who worked with me here at FDL News over the years, those who have come and gone and those still remaining, most of whom get far too little attention, but without whom I could not have had this incredible run. I give a great tip of the cap to editors like Gregg Levine and Scarecrow and Elliott (and every so often, Jane), to the indefatigable Bev Wright at the Book Salon, to my fellow members of the FDL family past and present, like Jon and Spencer and Marcy and Bill and Lisa and Kevin and Pam and Tom and Teddy and Phoenix Woman and Peterr and Eli and on and on, to Michael Whitney and Brian Sonenstein on the activism side, to Ryan Cook and Deveria Flowers and all the other moderators and behind-the-scenes folk I’m sure I’m leaving out.

Jane hired me, and then let me basically set my own course for what this site would look like. She has been ridiculously generous and encouraging to me from Day 1, and I will never forget the opportunity and platform she provided me. She assembled this all-star team of writers and activists and sustained this site during a challenging time for independent media, and I have no doubt that she will continue to succeed. Thanks so much.

Fatster is someone who jumped in when I needed some help maintaining the site over a vacation, and stayed on to produce the best and most variegated daily links roundup on the Internet, reaching levels I could only have hoped to surmount when I did my end-of-the-day tab dump. She’s been a great asset to this site in 2012, and I hope she keeps at it.

I could not even begin to count the sources, progressive friends, think tankers, activist organizations, communications people, legislative aides, lawmakers, fellow journalists and bloggers, and basically everyone who helped me at any point in some form or fashion with putting together a post. I may not have always lined up on the same side as them on every issue, but they were always willing to help me out and engage where necessary. It takes a village to build a news cycle blog.

And to you, the reader. Over the past couple weeks since I made this announcement that I would step aside, I have been overwhelmed by the outpouring of support and kind words from countless folks. People who do this for a while will tell you that they always, in the back of their mind, fear (and probably are just convinced) that they are merely screaming into a dark void. It means so much to me that you all have reached out to let me know that, in some meager way, I managed to have a measure of impact, at least at that individual level. This is all a writer can really hope for, and I’m humbled by your comments and emails and tweets.

My wife Mary is the most wonderful, patient person in the whole world, and I’m certain she will be pleased to get to go to sleep at night without the piercing light of an active laptop to contend with. The biggest thanks goes to her since none of you, at least as far as I know from my vantage point, have to put up with that. Also I’m sorry I left the back door open last night. Like blogging, marriage is a work in progress.

I really and truly have no idea what I’m going to do next as far as this part of my life goes. My wife tells me that I’ll last a month, tops, before crawling back. I don’t really think so (I gave a fuller explanation of my thought process in making this decision on Sam Seder’s radio show, if you’re interested), but she seems to know me well. So we shall see.

If anything does change, I’m sure I’ll let people know @ddayen. And if I do move forward, I hope I can count on you to move forward with me.

This has been a great privilege. Thank you.

###

Acknowledgements

It is with a heavy heart that I wrap up these eight-plus years of writing things on the Internet. The concurrence between my last day and the end of the Mayan calendar, by the way, is purely coincidental; I do think there will be news after today, and most likely people covering it (anyway, the whole world-ending thing is a great big misunderstanding, I guess). Anyway, there are a lot of people who deserve to be mentioned.

I could really bore you to tears and begin my thank-yous with Vinton Cerf and inventor of the blog Dave Winer, but let’s instead move on to calling out the people who worked with me here at FDL News over the years, those who have come and gone and those still remaining, most of whom get far too little attention, but without whom I could not have had this incredible run. I give a great tip of the cap to editors like Gregg Levine and Scarecrow and Elliott (and every so often, Jane), to the indefatigable Bev Wright at the Book Salon, to my fellow members of the FDL family past and present, like Jon and Spencer and Marcy and Bill and Lisa and Kevin and Pam and Tom and Teddy and Phoenix Woman and Peterr and Eli and on and on, to Michael Whitney and Brian Sonenstein on the activism side, to Ryan Cook and Deveria Flowers and all the other moderators and behind-the-scenes folk I’m sure I’m leaving out.

Jane hired me, and then let me basically set my own course for what this site would look like. She has been ridiculously generous and encouraging to me from Day 1, and I will never forget the opportunity and platform she provided me. She assembled this all-star team of writers and activists and sustained this site during a challenging time for independent media, and I have no doubt that she will continue to succeed. Thanks so much.

Fatster is someone who jumped in when I needed some help maintaining the site over a vacation, and stayed on to produce the best and most variegated daily links roundup on the Internet, reaching levels I could only have hoped to surmount when I did my end-of-the-day tab dump. She’s been a great asset to this site in 2012, and I hope she keeps at it.

I could not even begin to count the sources, progressive friends, think tankers, activist organizations, communications people, legislative aides, lawmakers, fellow journalists and bloggers, and basically everyone who helped me at any point in some form or fashion with putting together a post. I may not have always lined up on the same side as them on every issue, but they were always willing to help me out and engage where necessary. It takes a village to build a news cycle blog.

And to you, the reader. Over the past couple weeks since I made this announcement that I would step aside, I have been overwhelmed by the outpouring of support and kind words from countless folks. People who do this for a while will tell you that they always, in the back of their mind, fear (and probably are just convinced) that they are merely screaming into a dark void. It means so much to me that you all have reached out to let me know that, in some meager way, I managed to have a measure of impact, at least at that individual level. This is all a writer can really hope for, and I’m humbled by your comments and emails and tweets.

My wife Mary is the most wonderful, patient person in the whole world, and I’m certain she will be pleased to get to go to sleep at night without the piercing light of an active laptop to contend with. The biggest thanks goes to her since none of you, at least as far as I know from my vantage point, have to put up with that. Also I’m sorry I left the back door open last night. Like blogging, marriage is a work in progress.

I really and truly have no idea what I’m going to do next as far as this part of my life goes. My wife tells me that I’ll last a month, tops, before crawling back. I don’t really think so (I gave a fuller explanation of my thought process in making this decision on Sam Seder’s radio show, if you’re interested), but she seems to know me well. So we shall see.

If anything does change, I’m sure I’ll let people know @ddayen. And if I do move forward, I hope I can count on you to move forward with me.

This has been a great privilege. Thank you.

###

Morgan Stanley Banker Who Stabbed Cab Driver Fired by Firm

William Bryan Jennings, mugshot

I was racking my brain for one final story that sums up this era in politics, the state of our world circa 2012, and I have to give it to this one from a few days ago.

William Bryan Jennings, whose parents obviously hoped for a Progressive populist reformer as a child, grew up to work at Morgan Stanley, and acquire all the sense of entitlement and douchebaggery that goes along with such an occupation (I believe they give that to you at the same time as your parking space). One year ago to the day, on December 21, 2011, Jennings left a Christmas party in New York City, and his town car didn’t show up (#richwhitepeopleproblems). So he hailed a cab to take him to his home in Darien, Connecticut. When he got home, Jennings decided to treat the cab ride like a buyout deal, and trying to negotiate down for a lower fare. This is an executive at Morgan Stanley who didn’t want to pay full fare to get home. The cabbie asked for $204 (Jennings said it was $294). Jennings offered $50 (good negotiating ploy; start low!). At this point I should mention that Jennings makes around $3 million a year.

The cabbie went to the police to settle the argument, driving away from the home. So Jennings did the obvious thing: he pulled out a pen knife and started fighting with the Middle Eastern cabbie, yelling racial slurs like “Go back to your own fucking country” and “I’m going to kill you, motherfucker,” cutting him on the right hand and eventually escaping from the cab. Jennings ran home and spent two months hiding from the police before coming forward.

You know how this story ends. Jennings got away with it. The state dropped the charges because the cabbie held onto the pen knife for five months before delivering it to police, thereby tainting the evidence. So it’s the same old story; entitled, rich banker assaulting a working person and getting away with it on a technicality. William Bryan Jennings was too big to fail.

But a funny thing happened. Morgan Stanley fired the guy for breaching their internal code of conduct.

William Bryan Jennings, the banker whose assault and hate-crime charges over a dispute with a New York cab driver were dropped, was fired by Morgan Stanley and is now reportedly trying to get millions in deferred compensation denied him by his former employer […]

Jennings and his attorney did not immediately return a request for comment. An unnamed spokesman for Jennings told the Journal: “The issue is not Mr. Jennings’ conduct. The issue is Morgan Stanley’s conduct. Morgan Stanley knew Mr. Jennings was victimized and still fired him and still kept his money.”

A spokeswoman for Morgan Stanley provided a statement:

“While we cannot comment on specific instances or individuals, the claw back provisions in our compensation model allow us to take action where appropriate when an employee engages in conduct that is detrimental to the firm, including conduct that causes damage to the firm’s franchise and reputation, or creates a situation in which the Firm suffers losses or is exposed to excessive financial or regulatory risks.”

This seems like a case of just desserts, and it is. But the flip side of this is that Morgan Stanley saw the opportunity to deny compensation to one of their executives after he embarrassed the firm, and they made it a pretty good deal for them by clawing back as much as $5 million in compensation. The firm did not suffer any losses from this sorry tale, let’s be honest. But Morgan Stanley can use that for their own financial advantage.

So this is the perfect Wall Street story: entitled, self-absorbed assholes, the fecklessness of the justice system, and firms taking any opportunity to make money off the exchange.

America!

Judge Strikes Down Constitutional Challenge to the Filibuster

Senate Chamber

If there’s going to be reform to the Senate’s rules, it’s going to have to come from the Senate itself. That’s the implication of a ruling in federal court today throwing out a Constitutional challenge to the filibuster.

Judge Emmet Sullivan ruled that the plaintiffs in the case, who claimed that the Senate used an unconstitutional super-majority to block citizenship for undocumented immigrants brought to America as children by their families, had no standing to challenge the Senate’s internal procedures. Additionally, he said that the judicial branch has basically no right to dictate rules changes to the legislative branch:

Reaching the merits of this case would require an invasion into internal Senate processes at the heart of the Senate’s constitutional prerogatives as a House of Congress, and would thus express a lack of respect for the Senate as a coordinate branch of government.

It’s hard for me to really argue with this ruling, even if it didn’t arrive at my preferred ends. You can’t really have courts overturning the way that the Senate does its business. The angle of members of the House, also parties to the case, arguing that their rights of representation were violated by the filibuster just doesn’t really fly in this case.

So the Senate will have to fix the Senate. As for the status of that, Democrats appear to have the votes to make at least some changes to the filibuster rule, none of which eliminate it. But too many members of the majority are antsy at using the Constitutional option, which says that rules changes at the beginning of a session require a simple majority. They don’t want to be saddled with the precedent, which of course would be the biggest deterrent to obstruction on the part of the minority. In addition, the extension of the fiscal slope debate means that the Senate won’t have a lot of time to deliberate over the rules, because they may be expected to legislate immediately upon swearing-in. So the whipping really has to get done in the next several days.

I think something will get done in the Senate, but the chances of that being game0-changing are remote. Then again, looking at the bad Jerry Lewis film that is the House of Representatives at this point, the Senate looks positively functional.

Sullivan’s ruling is here.