Category: Business

Corporate news from all over

650,000 customers fled corporate banks last month

Seth Anderson0 comment

Bank of America - Kodachrome
Bank of America – Kodachrome

We did close a Bank of America account (presumedly), but haven’t yet closed our Chase accounts.

Yes, The Big Banks DO Care If We Move Our Money

650,000 customers moved $4.5 billion dollars out of the big banks and into smaller banks and credit unions in the last month.

But there is a myth making the rounds that the big banks don’t really care if we move our money. For example, one line of reasoning is that no matter how many people move their money, the Fed and Treasury will just bail out the giants again.

But many anecdotes show that the too big to fails do, in fact, care.

Initially, of course, if the big banks really didn’t care, they wouldn’t have prevented protesters from closing their accounts.

(click here to continue reading Big Banks Plead with Customers Not to Move Their Money | The Big Picture.)

A Fool Too Long
A Fool Too Long

and no matter how much the One Percenter Banks claim they don’t care if we move our money elsewhere, of course they do care:

Even though the government may keep throwing money at the dinosaurs, the Basel regulations do have some capital requirements, and so the big banks need to bring in some actual deposits to fund their casino gambling.

Moreover, if too many depositors leave, the illusion that the big banks are serving the American public will be burst, and a critical mass of consciousness will occur, so that the banks’ questioned control over the American political and financial systems will start to be questioned.

So moving our money is an effective step towards reclaiming America.

Alabama Crops Rotting in the field

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Indian Cucumber
Indian Cucumber

Oh, Alabama. Didn’t you learn anything from the Arizona fiasco?

Alabama’s new anti-immigrant law, the nation’s harshest, went into effect last month (a few provisions have been temporarily blocked in federal court), and it is already reaping a bitter harvest of dislocation and fear. Hispanic homes are emptying, businesses are closing, employers are wondering where their workers have gone. Parents who have not yet figured out where to go are lying low and keeping children home from school.

To the law’s architects and supporters, this is excellent news. “You’re encouraging people to comply with the law on their own,” said Kris Kobach, the Kansas secretary of state, who has a side career of drafting extremist immigration legislation for states and cities, notoriously in Arizona and now in Alabama.

Alabama’s law is the biggest test yet for “attrition through enforcement,” a strategy espoused by Mr. Kobach and others to drive away large numbers of illegal immigrants without the hassle and expense of a police-state roundup. All you have to do, they say, is make life hard enough and immigrants will leave on their own. In such a scheme, panic and fear are a plus; suffering is the point.

…The problems do not stop there. Farmers are already worrying that with the exodus, crops will go unpicked. Like much of the rest of the country, Alabama needs immigrant labor, because too many native-born citizens lack the skill, the stamina and the willingness to work in the fields — even in a time of steep unemployment.

(click here to continue reading It’s What They Asked For – NYTimes.com.)

Tomato Mountain Organic
Tomato Mountain Organic

Surprising to nobody who has ever lived on a farm1 or who reads this blog- Alabama agricultural businesses are having extreme difficulty finding people to pick crops once their intolerant anti-immigration bill passed, and farm laborers fled the state.

ONEONTA, Alabama (AP) — Potato farmer Keith Smith saw most of his immigrant workers leave after Alabama’s tough immigration law took effect, so he hired Americans. It hasn’t worked out: They show up late, work slower than seasoned farm hands and are ready to call it a day after lunch or by midafternoon. Some quit after a single day.In Alabama and other parts of the U.S., farmers must look beyond the nation’s borders for labor because many Americans simply don’t want the backbreaking, low-paying jobs immigrants are willing to take. Politicians who support the law say over time more unemployed Americans will fill these jobs2

…

Tomato farmer Wayne Smith said he has never been able to keep a staff of American workers in his 25 years of farming. “People in Alabama are not going to do this,” said Smith, who grows about 75 acres (30 hectares) of tomatoes in the northeast part of the state. “They’d work one day and then just wouldn’t show up again.” At his farm, field workers get $2 for every 25-pound (11.3-kilogram) box of tomatoes they fill. Skilled pickers can make anywhere from $200 to $300 a day, he said. Unskilled workers make much less. A crew of four Hispanics can earn about $150 each by picking 250-300 boxes of tomatoes in a day, said Jerry Spencer, of Grow Alabama, which purchases and sells locally owned produce.

A crew of 25 Americans recently picked 200 boxes — giving them each $24 for the day. It may make sense for some to stay at home. Unemployment benefits provide up to $265 a week while a minimum wage job, at $7.25 an hour for 40 hours, brings in $290. Spencer said the Americans he has linked up with farmers are not physically fit and do not work fast enough. “It’s the harshest work you can imagine doing,” Spencer said.

(click here to continue reading The Associated Press: Few Americans take immigrants’ jobs in US state.)

Let’s see, bust your ass, break your back, squatting in the hot sun and make $24 a day, or maybe more if you persevere a year or two, long enough to become skilled; or make $290 a week in an air-conditioned minimum wage job, making copies at Kinkos. Hmm, not much of a choice.

The only way banning illegal immigrants from farm labor will ever work is if either food costs to consumers jumps astronomically higher, or if minimum wage gets overturned by government fiat. I sincerely doubt the Republicans would be bold enough to eliminate minimum wage, even though they mention it every once and a while. And would you pay $17 for a single tomato? Probably not. So what’s the solution, besides allowing borders to open up? NAFTA, I guess, and more shipping of American jobs to places where $25 a day without benefits is adequate for a worker to survive.

Great plan you’ve come up with, immigrant haters in the GOP.

Footnotes:
  1. yes, I lived on a farm, but I don’t now, thanks god [↩]
  2. despite any evidence [↩]

Plutocrats Running Scared

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Curvaceous
Curvaceous

Dr. Paul Krugman has a point:

But listening to the reliable defenders of the wealthy, you’d think that Ms. Warren was the second coming of Leon Trotsky. George Will declared that she has a “collectivist agenda,” that she believes that “individualism is a chimera.” And Rush Limbaugh called her “a parasite who hates her host. Willing to destroy the host while she sucks the life out of it.”

What’s going on here? The answer, surely, is that Wall Street’s Masters of the Universe realize, deep down, how morally indefensible their position is. They’re not John Galt; they’re not even Steve Jobs. They’re people who got rich by peddling complex financial schemes that, far from delivering clear benefits to the American people, helped push us into a crisis whose aftereffects continue to blight the lives of tens of millions of their fellow citizens.

Yet they have paid no price. Their institutions were bailed out by taxpayers, with few strings attached. They continue to benefit from explicit and implicit federal guarantees — basically, they’re still in a game of heads they win, tails taxpayers lose. And they benefit from tax loopholes that in many cases have people with multimillion-dollar incomes paying lower rates than middle-class families.

This special treatment can’t bear close scrutiny — and therefore, as they see it, there must be no close scrutiny. Anyone who points out the obvious, no matter how calmly and moderately, must be demonized and driven from the stage. In fact, the more reasonable and moderate a critic sounds, the more urgently he or she must be demonized, hence the frantic sliming of Elizabeth Warren.

So who’s really being un-American here? Not the protesters, who are simply trying to get their voices heard. No, the real extremists here are America’s oligarchs, who want to suppress any criticism of the sources of their wealth.

 

(click here to continue reading Panic of the Plutocrats – NYTimes.com.)

US-TransCanada E-Mail Trail Reveals Corruption

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Free to Change Your Mind.
Free to Change Your Mind.

A little insight into how Washington corruption works – not necessarily with a suitcase of cash, though that is implied, but rather with government officials having a cozy relationship with industry. The Obama administration is better than the prior regime, but not by much…

A State Department official provided Fourth of July party invitations, subtle coaching and cheerleading, and inside information about Secretary Hillary Rodham Clinton’s meetings to a Washington lobbyist for a Canadian company seeking permission from the department to build a pipeline that would carry crude from the oil sands of Canada to the Gulf of Mexico.

E-mails released Monday in response to a Freedom of Information Act request filed by the environmental group Friends of the Earth paint a picture of a sometimes warm and collaborative relationship between the lobbyist for the pipeline company, Trans-Canada, and officials in the State Department, the agency responsible for evaluating and approving the billion-dollar project.

The exchanges provide a rare glimpse into how Washington works and the access familiarity can bring. The 200 pages are the second batch of documents and e-mails released so far.

They also offer insight into the company’s strategy, not revealed publicly before. TransCanada lobbyists exchanged e-mails with State Department officials in July about their intention to drop their request to operate the Keystone XL pipeline at higher pressures than normally allowed in the United States to win political support, but then suggested they would reapply for the exception once the project had been cleared.

“You see officials who see it as their business not to be an oversight agency but as a facilitator of TransCanada’s plans,” said Damon Moglen, the director of the climate and energy project for Friends of the Earth. While the e-mails refer to multiple meetings between TransCanada officials and assistant secretaries of state, he said, such access was denied to environmentalists seeking input, who had only one group meeting at that level.

Environmental groups argue that the 1,700-mile pipeline, which could carry 700,000 barrels a day from Alberta to the Gulf Coast of Texas, would result in unacceptably high emissions and disrupt pristine ecosystems.

(click here to continue reading Pipeline Foes See Bias in U.S.-TransCanada E-Mail – NYTimes.com.)

Behind the Scenes at the Garfield Conservatory

From the Friends of the Earth website:

We have received a new round of documents from the State Department in response to our Freedom of Information Act request. These documents are deeply disturbing in that they provide definitive evidence of pro-pipeline bias and complicity at the State Department — including one “smoking gun” email (PDF) in which State Department employee Marja Verloop literally cheers “Go Paul!” for pipeline lobbyist Paul Elliott after he announces TransCanada has secured Senator Max Baucus’ support for the pipeline.

The most interesting emails in this tranche are between Elliott and Verloop, a member of the senior diplomatic staff at the U.S. Embassy in Ottawa, with responsibility for energy and environment issues. In one back and forth, Elliott and Verloop discuss TransCanada’s July 2010 decision to abandon its efforts to obtain special permission to pump oil through the Keystone XL at higher-than-usual pressures. The same exchange contains a reference to reassurances from the State side that the 90-day review would “delay…State’s recommendation of a presidential permit but such a delay won’t be as long as the one advocated for by the EPA.” (PDF)

The exchange indicates an understanding between the State Department and TransCanada that TransCanada would be in a position to apply for a pressure increase after getting the permit. The tacit understanding on the permit and NID timing was even relayed by Verloop to her boss, U.S. Ambassador to Canada David Jacobson, in an email where she says to him: “TransCanada is comfortable and on board.” The revelation of the understanding between State and TransCanada on the pipeline pressure issue could be unwelcome to Senator Jon Tester, who announced his support for the pipeline only after he was reassured by TransCanada’s decision to lower the pressure.

 

(click here to continue reading New FOIA docs reveal smoking gun regarding State Department bias | Friends of the Earth.)

TIF Money is Slush Fund Money

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Honey Jug
Honey Jug

More on the planned development in the former MB Financial building that we’ve discussed previously, one that is getting millions of taxpayer dollars in a time of fiscal austerity for the non-developer constituencies…

Joseph Antunovich, president of Antunovich Associates, the designer of the project, said the area west of Halsted Street is “very emerging.” Over the past 10 to 15 years, he said, it has been developed into a desirable area.

Ald. Walter Burnett, 27th, said the area’s silent majority has supported the project, called Gateway to the West Loop, because it would create more than 200 construction jobs immediately and more jobs when the retail stores and the hotel open.

The developer, CD-EB/EP Retail JV, is asking the city for $7 million in tax increment financing to help pay for the first phase of the project, estimated to cost about $41.8 million.

The outlay needs approval from the City Council, though that is likely with Burnett’s endorsement. There is no financing in place for the second phase of the project, which includes the hotel.

Sy Taxman, one of the developers, said he is in conversations with two companies interested in developing a corporate hotel at the site. But, he said, construction isn’t expected to start until the first phase is substantially completed.

After a year without new hotel developments downtown, there are at least three on the way, and the city is likely to see more, said Adam McGaughy, executive vice president of Jones Lang LaSalle Hotels, a unit of the Chicago-based real estate firm with the same name.

 

(click here to continue reading Cityscapes: West Loop business owners, residents at odds over Antunovich-designed plan for mixed-use development.)

2 South Halsted

2 S. Halsted, Chicago

My point is the same: why does this developer need tax payer funding to build in such a “desirable area”? Slush funds, in other words, for 200 temporary construction jobs, plus a few minimum wage jobs afterwords. I’d rather the $7,000,000 be spent on repairing water mains, sewers, potholes, teachers, firemen, yadda yadda, and not to help make profits for building developers, and yield campaign contributions to Walter Burnett, Jr.

Tumblr Raises $85 Million Without a Business Model

Seth Anderson0 comment

Silver Time from a Time Strange

Is the tech industry bubbling again? I have a Tumblr account, and like it well enough to keep using it, but there’s not anything compelling enough that I would pay a subscription for a Tumblr blog, and how else exactly is Tumblr going to make money?

Blogging service Tumblr said it has raised $85 million, although the New York-based company has scant revenue and has yet to develop a solid business model.

The lack of revenue kept some major Silicon Valley venture firms from signing onto the deal. But at least two prominent firms—Greylock Partners, an investor in Facebook Inc. and Groupon Inc., and Twitter-investor Insight Venture Partners have joined the investment round.

Other new investors include The Chernin Group, Sir Richard Branson and returning investor partners Spark Capital, Union Square Ventures, and Sequoia Capital.

Tumblr didn’t comment on the valuation that the investment conferred on the company but in recent money-raising discussions investors valued the company at around $800 million

(click here to continue reading Tumblr Raises $85 Million – WSJ.com.)

and even Tumblr execs don’t have a clue as to where the revenue will be coming from…

“Questions around monetization still exist,” he said. “But the company has absolute scale, massive traction, and huge growth and money-making potential.”
So far, Tumblr’s efforts to generate revenue have been mostly experimental.

A Jobs Program In America

Seth Anderson0 comment

Restorative Harmony
Restorative Harmony

If only our politicians were as brave and bold as Franklin Roosevelt…I wouldn’t hold my breath

Bob Herbert writes:

Politicians have given little more than lip service to this terrible turn of events. If there was but one message that I would try to get through to the nation’s leadership, it is that we cannot begin to get the United States back on track until we begin to put our people back to work.

And there is so much work to be done. Start with the crying need to rebuild the nation’s aging, deteriorating infrastructure – its bridges and highways, airports and air traffic control systems, its sewer and wastewater treatment facilities, the electrical grid, inland waterways, public transportation systems, levees and floodwalls and ports and dams, and on and on. Lawrence Summers, until recently President Obama’s top economic adviser, has pointed out that 75 percent of America’s public schools have structural deficiencies. Twelve percent of the nation’s bridges have been rated structurally deficient and another 15 percent are functionally obsolete.

Three to four trillion dollars worth of improvements will be needed over the next decade just to bring the infrastructure into a reasonable state of repair. Meanwhile, we’ve got legions of unemployed construction workers, manufacturing workers, engineers and others who are ready and eager to step into the breach, to take on jobs ranging from infrastructure maintenance and repair to infrastructure design and new construction. It shouldn’t require a genius to put together those two gigantic pieces of America’s economic puzzle – infrastructure and unemployment.

Yes, it would be expensive. But the money spent  would be an investment designed to bring about a stronger, more stable economic environment. Putting people to work bolsters the economy and the newly-employed workers begin paying taxes again. Improving the infrastructure would make American industry much more competitive overall, and would spawn new industries. Creation of a national infrastructure bank that would use government funds to leverage additional investments from the private sector to finance projects of national importance would lead to extraordinary longterm benefits.

But even rebuilding the infrastructure is not enough. The employment crisis facing the U.S. is enormous and is taking a particularly harsh toll on the less well-educated members of the society. We need to take our cue from Franklin Roosevelt who understood during the Depression that nothing short of a federal jobs program was essential. The two-pronged goal was to alleviate the suffering of the unemployed and, as the workers began spending their wages, improve the economy.

Roosevelt put millions of Americans to work, including artists, writers, photographers and musicians. It was an unprecedented undertaking, and it worked.

(click here to continue reading HOME – PolicyShop.)

Broken History

Broken History

and meanwhile, the GOP’s prescription for creating jobs is laughable. Laughable if this wasn’t my country we are talking about. But we are discussing the US, so the joke isn’t very funny.

The Republicans think these things will be useful: destroying unions, more free trade agreements, lowering business taxes even lower, repealing EPA and other regulations, and cutting the minimum wage. If you think any of these policy ideas are going to jump-start our anemic economy, I have a beautiful bridge in Brooklyn to sell you.

Sarah Jaffe reports at Alternet:

Washington, nearly a year after the 2010 election that was supposedly all about jobs, finally seems to have woken up to the fact that the economy is still in the dumps and Americans are sort of angry about it. Make that very angry. And with Republicans in charge of at least part of Congress as well as many state governments, they know they’re about to take some of the blame for the continuing lack of any policy ideas on job creation–recent polls show only 24 percent of the country approves of how they’re doing their jobs. Not to mention the GOP primary field is loaded with contenders claiming they have the magic solution to the jobs problem.

So what is this masterful GOP jobs agenda? You won’t be shocked to hear that it’s more of the same—more deregulation, more tax cuts, more whining about deficits. “House Republicans are planning votes for almost every week this fall in an effort to repeal environmental and labor requirements on business that they say have hampered job growth,” says the Washington Post. But since you’re about to be hearing these same ideas, with minor variations, over and over again, we thought we’d count down the five worst ideas, and arm you with some reasons why they’re so very bad.

Obama Administration Abandons Plan to Change Bush Pollution Policy

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Stack for Fisk Generating Station
Stack for Fisk Generating Station

Such a cynical strategy: screw the liberals, because when it gets down to two candidates, and one is a Tea Bagger Know-Nothing, who are liberals going to vote for? Of course, that was Al Gore’s strategy too, and he lost1

Obama better be careful, if all the liberal enthusiasm is drained away, voter turnout will be anemic, and he won’t be reelected.

WASHINGTON — President Obama abandoned a contentious new air pollution rule on Friday, buoying business interests that had lobbied heavily against it, angering environmentalists who called the move a betrayal and unnerving his own top environmental regulators.

The president rejected a proposed rule from the Environmental Protection Agency that would have significantly reduced emissions of smog-causing chemicals, saying that it would impose too severe a burden on industry and local governments at a time of economic distress.

Business groups and Republicans in Congress had complained that meeting the new standard, which governs emissions of so-called ground-level ozone, would cost billions of dollars and hundreds of thousands of jobs.

 

(click here to continue reading Obama Administration Abandons Plan to Tighten Air-Quality Rules – NYTimes.com.)

Satanic Gift
Satanic Gift

And I know Obama was never a very strong supporter of the environment2, but I reject this argument. Pollution controls are not going to cost jobs any more than lowering taxes on the rich is going to create jobs.

If the US Chamber of Commerce and the American Petroleum Institute is applauding your actions, you are doing it wrong.

Reaction from environmental advocates ranged from disappointment to fury, with several noting that in just the past month the administration had tentatively approved drilling in the Arctic, given an environmental green light to the 1,700-mile Keystone XL oil pipeline from Alberta, Canada, to Texas and opened 20 million more acres of the Gulf of Mexico to drilling.
Daniel J. Weiss, senior fellow at the Center for American Progress, said, “Today’s announcement from the White House that they will retreat from implementing the much-needed — and long-overdue — ozone pollution standard is deeply disappointing and grants an item on Big Oil’s wish list at the expense of the health of children, seniors and the infirm.” The center is a liberal research group with close ties to the White House.

Bill McKibben, an activist leading a two-week White House protest against the pipeline project which has resulted in more than 1,000 arrests, said that the latest move was “flabbergasting.”
“Somehow we need to get back the president we thought we elected in 2008,” he said.
Cass R. Sunstein, who leads the White House office that reviews all major regulations, said he was carefully scrutinizing proposed rules across the government to ensure that they are cost efficient and based on the best current science. He said in a letter to Ms. Jackson that the studies on which the E.P.A.’s proposed rule is based were completed in 2006 and that new assessments were already under way.

The issue had become a flashpoint between the administration and Republicans in Congress, who held up the proposed ozone rule as a test of the White House’s commitment to regulatory reform and job creation. Imposing the new rule before the 2012 election would have created political problems for the administration and for Democrats nationwide seeking election in a brittle economy.

Leaders of major business groups — including the U.S. Chamber of Commerce, the National Association of Manufacturers, the American Petroleum Institute and the Business Roundtable — met with Ms. Jackson and with top White House officials this summer seeking to moderate, delay or kill the rule. They told William M. Daley, the White House chief of staff, that the rule would be very costly to industry and would hurt Mr. Obama’s chances for a second term.

Green Zone
Green Zone

Environmental activists can barely contain their fury at Obama’s craven actions:

John D. Walke, clean air director of the Natural Resources Defense Council, an advocacy group based in New York, likened the ozone decision to a “bomb being dropped.”
Mr. Walke and representatives of other environmental groups saw the president’s actions as brazen political sellouts to business interests and the Republican Party, which regards environmental regulations as job killers and a brick wall to economic recovery.

…the president could face political repercussions in subtler but nevertheless corrosive ways: from losing volunteer enthusiasm to tying up his allies in fights with him instead of with his enemies. “Energy from part of the base will now be directed at communicating with the White House and not with the public about the administration’s record,” said Daniel J. Weiss, director of climate strategy at the Center for American Progress, a liberal research group with close ties to the White House.

…

Anthony Leiserowitz, director of the Yale Project on Climate Change Communication, who does extensive work on public perception and the environment, said the real threat to the president’s reputation stemming from the ozone decision went far beyond environmentalists.

“It could play into an emerging narrative in his own party that he is caving too quickly to Republican pressure,” Dr. Leiserowitz said. “It is a dangerous narrative in your own base because it cuts down on enthusiasm and it is a narrative that his opponents will pick up on.”

In fact, it is a lesson that some environmental groups have already learned, and they are preparing to act accordingly.

“I think that two-plus years into Obama’s presidency is more than enough time for him to have established a clear weak record,” said Kierán Suckling, executive director of the Center for Biological Diversity, which has been battling the president on endangered species.

“The environmental movement needs to keep piling the pressure on and realizing playing nicey-nice won’t work,” Mr. Suckling said, adding that more public actions and lawsuits are the way to get Mr. Obama’s attention.

(click here to continue reading Obama’s Retreat on Ozone Standards Angers Environmentalists – NYTimes.com.)

Footnotes:
  1. well, Gore actually won, but not by as much as if he had campaigned as a liberal instead of a DNC acolyte, and thus Bush was able to finess a victory with the help of the Supreme Court [↩]
  2. with the exception of maybe from spring to fall of 2008 [↩]

trial lawyers and outrageous paydays

Seth Anderson1 Comment

Circuit Court of Cook County
Circuit Court of Cook County

We get class action notices in the mail all the time, and mostly just throw them out. I suspect most of them are bogus lawsuits that mostly benefit the lawyers filing the case. I wonder if their days are numbered…

But this week, the U.S. Ninth Circuit Court of Appeals put a damper on the business model of legal extortion by trial lawyers filing frivolous lawsuits. It sent this particular class-action settlement back to the lower court for reconsideration. It was the court’s first failure to rubber-stamp such a class-action settlement in eight years.

Ted Frank of the Center for Class Action Fairness had filed the objection to the settlement. “We have been saying all along that this is an abuse of the class-action process,” Frank told me. He said that the case could be a milestone in his fight to prevent such abuses.

“A defendant is willing to throw a million dollars at a case to make it go away, because it’s often more expensive to defend it,” Frank said. “And the attorneys are OK with settling for that million dollars, if they get the million dollars. But if most of the money has to go to their clients, they won’t bring the crummy cases in the first place. They’ll only bring meritorious cases.”

Frank has become the proverbial fly in the trial lawyers’ ointment, objecting again and again to bogus nuisance settlements that make up the bread and butter for some. In January, his objection helped convince a court to throw out a settlement between Classmates.com (the online social site with the annoying popup ads) and some users who felt they had been duped into signing up.

In that case — whose merits appear much stronger than the Bluetooth case — the lawyers had negotiated $117,000 for the aggrieved class, and a million-plus-dollar fee for themselves.

Frank’s organization, a nonprofit 501(c)(3), is currently fighting settlements that are overly generous to trial lawyers in cases against Kellogg, Volkswagen and Toys “R” Us, among others.

(click here to continue reading Days numbered for trial lawyers getting outrageous paydays | David Freddoso | Columnists | Washington Examiner.)

and from the Center for Class Action Fairness:

Victory: court rejects Classmates.com settlement We’d like to think our objection had at least a little to do with the end result.

This decision is not a big surprise after the court was severely critical of the settlement during the December 16 fairness hearing. We won’t know for a while why the court rejected the settlement, but Judge Richard Jones today issued an order stating that he did so, that the parties should return to litigation, and that a formal opinion would be forthcoming. (The parties might reasonably murmur that they’re hard pressed to have productive settlement negotiations until they know where they fell short in the court’s eyes.)

(click here to continue reading Center for Class Action Fairness, LLC: Victory: court rejects Classmates.com settlement.)

Work Made For Hire As A Sound Recording

Seth Anderson1 Comment

Fred Waring and the Pennsylvanians - Full Dimensional Stereo
Fred Waring and the Pennsylvanians – Full Dimensional Stereo

Speaking of slimy music corporations, remember when this happened?

“As a sound recording.”

Margaret Cone read that innocuous-sounding legislative language and her heart skipped a beat. The time was last November, during the closing days of last year’s congressional session. Cone was a veteran Washington lobbyist.

She’d been tipped off that an amendment to a pending bill — quietly inserted without debate — would reclassify under the nation’s copyright laws all sound recordings, like cassettes and CDs, as “work made for hire.”

If true, that slight change would mean musicians would never again be able to own their recordings. Instead, record companies would become the sole legal owners of a record over its legally copyrightable life, currently 95 years.

Talking to a friend on the phone as she sifted through pending legislative bills, Cone recalls having “a sinking feeling that something wasn’t on the level.” She checked one bill that dealt with copyright; no mention of work for hire. She sifted through another, Title I of the Satellite Home Viewer Improvement Act, and found nothing.

Then, “on a fluke,” she went to the buried “definitions” section of that second bill and there she found this:

“(e) WORK MADE FOR HIRE-Section 101 of title 17, United State Code is amended in the definition relating to work for hire in paragraph (2) by inserting “as a sound recording.”

“My knees literally gave way,” says Cone, who often represents artists on Capitol Hill and instantly understood the ramifications of the proposed copyright change. “I told my friend on the phone, ‘I gotta go! I gotta go!'”

She dashed to the offices of the Courts and Intellectual Property Subcommittee to try to get some answers. “I wanted to find out how bad it was,” she recalls.

That was Nov 16. Two days later, despite Cone’s frantic back-room protests and pleas, the work-for-hire amendment, attached to a massive 1,740-page omnibus spending bill, passed the House and Senate. President Clinton signed it into law Nov. 29.

Early this August1, after months of public and often hostile debate, the record companies, lead by the Recording Industry Association of America, finally agreed to ask Congress to essentially repeal the work-for-hire amendment Cone discovered that day.

The battle represented a rare victory for musicians on both Capitol Hill and in the business arena.

(click here to continue reading Four little words – Eric Boehlert – Salon.com.)

Kraftwerk - Electric Cafe
Kraftwerk – Electric Cafe

Footnotes:
  1. 2000 [↩]

mafia-like aspects of the Murdoch Empire

Seth Anderson0 comment

Federal Bureau of Investigation Chicago Division
Federal Bureau of Investigation Chicago Division

Michael Wolff of Adweek has been a follower of the Rupert Murdoch News Corporation for a long time, even written a book1 about Murdoch a while ago (before the current, seemingly ever-escalating scandal). Mr. Wolff is not surprised that the FBI and the DOJ are considering pursuing RICO statute investigations into News Corp.

In my biography of Rupert Murdoch, I referred to News Corporation as Mafia-like, provoking the annoyance of my publisher’s libel lawyers. I explained to them that I did not mean to suggest this was an organized crime family, but instead was using “mafia” as a metaphor to imply that News Corp. saw itself as a state within a state, and that the company was built on a basic notion of extended family bonds and loyalty.

But just because it’s a metaphor doesn’t mean it isn’t the real thing, too.Well-sourced information coming out of the Department of Justice and the FBI suggests a debate is going on that could result in the recently launched investigations of News Corp. falling under the RICO statutes.

RICO, the Racketeer Influenced and Corrupt Organizations Act, establishes a way to prosecute the leaders of organizations—and strike at the organizations themselves—for crimes company leaders may not have directly committed, but which were otherwise countenanced by the organization. Any two of a series of crimes that can be proven to have occurred within a 10-year period by members of the organization can establish a pattern of racketeering and result in draconian remedies. In 1990, following the indictment of Michael Milken for insider trading, Drexel Burnham Lambert, the firm that employed him, collapsed in the face of a RICO investigation.

Right Turn Ahead
Right Turn Ahead

Michael Wolff continues with some more details about the criminal culture of News Corporation, and Rupert Murdoch:

As it happens, much of this pattern of conduct at News Corp. has long been hiding in plain site. How the company has gotten away with such behavior is, in fact, a subtext of the investigations that are now unfolding.

Partly, the company has escaped legal scrutiny because this is a boys-will-be-boys sort of story. News Corp.’s by-any-means aggressiveness has become so much a part of its identity that it seemed almost redundant to find fault with it. Everybody knew but nobody—for both reasons of fear and profit—did anything about it; hence its behavior has become, however unpleasant, accepted.

And partly, it’s because the fundamental currency of the company has always been reward and punishment. Both the New York Post and Fox News maintain enemy lists. Almost anyone who has directly crossed these organizations, or who has made trouble for their parent company, will have felt the sting here. That sting involves regular taunting and, often, lies—Obama is a Muslim. (Or, if not outright lies, radical remakes of reality.)

Threats pervade the company’s basic view of the world. “We have stuff on him,” Murdoch would mutter about various individuals who I mentioned during my interviews with him. “We have pictures.”

Similarly, the Post and Fox News heap praise and favors on partisans, who in turn do them favors (the police, in New York as well as London, receive and return the favors). This reward and punishment has translated into substantial political power, both in terms of regulatory advantages and, too, in the ability of the company to shield itself from the kind of scrutiny that it has taken a perfect storm of events to have it now receive.

Then, too, as one of the largest media organizations, it has insured a hands-off attitude (if not policy) from other media organizations—those which have business with it, or whose executives want to protect their prospects of working for it, or that extend courtesies in the hope they will be extended back. There’s also the money. Ultimately, if you have the goods or the savvy with which to damage the company, you get paid off. In London, that’s how News Corp. thought it could contain the hacking scandal, with big cash payments to and confidentiality agreements with the hacking victims.

In the U.S., Floorgraphics, the company that News America Marketing tried to extort, was bought for far more than its value when it persisted in its suit against News Corp. Judith Regan received an outsize settlement when she pushed her claim that Ailes had pressured her to lie about her relationship with Kerick.

(click here to continue reading Michael Wolff on the State of the Murdoch Empire | Adweek.)

Footnotes:
  1. The Man Who Owns the News: Inside the Secret World of Rupert Murdoch [↩]

Harnessing Technology to Help Chicago

Seth Anderson0 comment

Mayor Emanuel
Mayor Emanuel

Interesting, at first glance, but we’ll see what effective policies come out of the office first. Just saying Chicago is going to focus on social media and transformative technologies is a sound bite, issued daily by hundreds of corporations and entities big and small. I am pleased the Mayor Emanuel is a modern man who at least knows what technology can do, in contrast to1 Mayor Daley. Maybe EveryBlock will get data from City Hall more quickly in the near future…

But this is City Hall and the diagram-filled windows belong to Brett Goldstein, Mayor Rahm Emanuel’s chief digital officer. After a single encounter, I’d only partly question his sanity, since he left a nice San Francisco job with OpenTable, an online restaurant reservation service, to become a police officer on the West Side.

But Mr. Goldstein, a Boston native who has degrees in criminal justice and computer science, wound up as a head of the Chicago Police Department’s Predictive Analytics Group. And now the new mayor has teamed him with John Tolva, an I.B.M. refugee and the city’s chief technology officer, and Kevin Hauswirth, its director of social media, to harness technology to make a typically calcified big-city government more transparent, more efficient and a catalyst for economic development.

In a world of Groupon, Foursquare, Facebook, Livestream, Tumblr, Twitter and Shazam, a few municipalities with similar goals, including London, New York and Washington, are exploiting relatively new strategies like social media. But no mayor appears to have created all three such positions, or to be quite so focused, as Mr. Emanuel, the vacationing heat-seeking missile with a bloodlessly pragmatic streak and prodigious Rolodex.

The early results include nearly 200 online “data sets,” like breakdowns of crime, calls to 311, vendors banned from city business, restaurants’ rodent-baiting requests, processing time for building permits and removal of fallen trees after bad weather, response rates to graffiti-removal calls and installation of 96-gallon plastic garbage cans at single-family residences.

My personal favorite is wasmycartowed.com. Is your Honda Civic not where you left it last night? This Web site will tell you if it’s in a city pound, quelling fears of its winding up in a South Side chop shop. Mr. Tolva offers a challenging historical corollary: As a pioneer in meat packing, Chicago prodded innovation in related areas like transportation and cold storage. Why not use “data, knowledge and ideas” as transformative agents. The two coasts need not be the only pacesetters in this regard.

(click here to continue reading 3 of Mayor’s Men Join Forces. Their Goal – Harness Technology to Help the City. – NYTimes.com.)

 

Footnotes:
  1. at least in my perception [↩]

One Third Of Chicago in TIF Zone

Seth Anderson1 Comment

Interest is Going Up - Ilford HP5
Interest is Going Up – Ilford HP5

Juan-Pablo Valez of the New York Times adds this bit of detail to the Chicago TIF story that we’ve been complaining about for a while1

But many people remain unswayed. They point out that much of the TIF money was diverted from public schools, parks, libraries and other taxing districts and was instead put into accounts that Mr. Daley controlled and kept shrouded in secrecy.

“The findings do nothing to dissuade what had been my longstanding concerns, which were transparency in the process,” said John Fritchey, a Cook County commissioner.

Mr. Fritchey, a North Side Democrat, irked Mr. Daley last year when, as a state representative, he introduced legislation that would have funneled TIF money directly to the Chicago Public Schools.

Mr. Fritchey and other elected officials in Chicago have said that hundreds of millions of dollars are sitting in the accounts of scores of TIF districts, even after Mr. Daley tapped the TIF account last year to help balance the city’s 2011 budget.

“There is no question that several good projects came to be through the use of TIF funds,” Mr. Fritchey said. “The bigger question is, Is the city getting its money’s worth out of that investment? It’s a troubling prospect to give millions of taxpayer dollars to projects that are also generating millions in developer fees.”

Mr. Daley vigorously championed the use of TIF. By the end of his tenure in May, city officials had established more than 160 TIF districts that covered about one-third of Chicago. In total, the districts capture about $500 million a year, city and Cook County documents show.

The amount is equal to about one-sixth of the city’s annual core budget, although under Mr. Daley the money was not tracked or approved as part of the budgeting process, and his administration provided only a vague accounting of its TIF activities.

 

(click here to continue reading TIF Aided Public and Private Projects Almost Evenly, Analysis Shows – NYTimes.com.)

United Airlines Headquarters
United Airlines Headquarters

If 33% of the city is located in a TIF development zone, doesn’t it effectively defeat the purpose of tax? Especially when so much of the money gets funneled to politically connected developers? Perhaps in addition to adding more transparency to the process, before a project gets funded, the voters of the district should get to vote directly on the decision. Ha.

Now, as aides to Mayor Rahm Emanuel review the city’s use of TIF amid the backdrop of severe budget shortfalls, an analysis by the Chicago News Cooperative shows that TIF spending was allocated almost evenly between public works and subsidies for private interests.

The examination of city TIF records for the last eight years of Mr. Daley’s tenure reveals that his administration spent about $1.7 billion in TIF money toward public and private endeavors. While about $700 million was spent to the benefit of private interests, roughly $865 million went to public projects like school construction, street repairs and Chicago Transit Authority stations and tracks. Another $1 billion paid off bonds issued to finance public and private projects, for a total outlay of almost $3 billion, the city records show…

Developers received $505 million in subsidies, just over 30 percent of the total TIF money spent by Mr. Daley. Those payments included $5.4 million to United Airlines to move its headquarters to Willis Tower, $13.7 million for the insurance giant CNA to renovate its South Loop headquarters and $8.5 million to help renovate the Carbide and Carbon building to house the Hard Rock Hotel on Michigan Avenue.

The city also spent more than $200 million buying properties, razing vacant buildings and cleaning up toxic land, mostly for the benefit of private developments.
Another $90 million, or 5 percent of total spending, was used for program administration, consulting and legal services, and for job training for businesses in select districts.

Carbon and Carbide Building blues
Carbon and Carbide Building blues

Giving taxpayer money to asshole corporations like CNA and United Airlines (and potentially the thuggish Ayn Randians at the Chicago Mercantile Exchange) really irks me. What do they need my cash contributions for? I’d rather divert my tax dollars back to schools (even though I don’t have children), roads, bike lanes, water mains, yadda yadda…

Footnotes:
  1. and we’re not the only, nor the best source of news about TIF slush funds btw [↩]

TIF Slush Fund Continues

Seth Anderson2 Comments

Miller Coors HQ West Loop
Miller Coors HQ West Loop

Chicago’s TIF slush fund is the by far the most corrupt thing about Chicago’s government these days, and Ben Joravsky of the Chicago Reader has been following the story closely:

 

 

But because of loopholes in the state TIF law, the mayor’s pretty much free to spend the money on anything he wants, such as subsidies to corporations in return for unenforced agreements to keep jobs in Chicago. That’s how TIF money ended up subsidizing wealthy corporations setting up shop in the “blighted” communities in and around the Loop.

Ferguson’s July 12 report (available at chicagoinspectorgeneral.org) hones in on the role played by World Business Chicago, an economic development group whose board is appointed by the mayor and includes many of Chicago’s corporate big shots. Among them are Glenn Tilton, who used to be CEO of United Airlines, and Terrence Duffy, chairman of CME Group, formerly known as the Chicago Mercantile Exchange.

WBC’s mission is to convince other corporate big shots to move jobs if not their headquarters to town, which is supposed to make us swell with civic pride—as though persuading, say, MillerCoors to move its corporate headquarters here from Milwaukee and Denver is the corporate equivalent of the Bears beating the Packers.

…

Anyway, as Ferguson points out, it’s not just that the folks at the WBC call on other corporate hotshots to move to town. It’s that they use handouts from the TIFs as one of the lures.

As Ferguson found, from 2005 to 2010, WBC wrote letters to the city’s TIF overseers, recommending subsidies for 12 corporations, including Accretive Health, ArcelorMittal USA, Block 37, CareerBuilder.com, CME Group, CAN, MillerCoors, NAVTEQ, United Airlines, Willis Group, and Ziegler and Ccompanies.

 

(click here to continue reading Mayor Emanuel does the TIF reform dance | Ben Joravsky on Politics | Chicago Reader.)

Self Portrait with South View

Why do these wealthy corporations need tax payer money to build, especially during these dire economic times? Nobody really has a good answer. In the West Loop, Roundy’s got money from the TIF fund to build an upscale store called Mariano’s Fresh Market, directly across the street from an existing (and recently built) Safeway (Dominick’s), and a few blocks from a proposed Wal-Mart…

Yet just last month Emanuel’s administration signed off on a deal to give $7 million—taken from the Near West TIF district—to a bunch of developers so they can build an upscale grocery store at Monroe and Halsted.

Wow, where do I start?

First of all, the area is hardly blighted—it’s booming by Chicago standards.

Second, it doesn’t need a grocery store—there’s a Dominick’s right across the street.

And third, there are any number of more pressing needs for that $7 million. Every unit of local government is freaking broke—Mayor Emanuel just grimly announced that the city’s deficit is $600 million and counting.

I asked city officials if the developers had substantiated a claim that, but for the TIF, the land could not be developed. I’m still waiting for them to get back to me on that one.

The city says the grocery store will create 200 new jobs. That amounts to a subsidy of $35,000 a job—if we actually get all the jobs. And let’s face it—the city has never done much to monitor job agreements in the past.

I think we’d all be better off if Mayor Emanuel just closed the Near West Side TIF and sent the roughly $54 million it has in reserves back to the city, schools, parks, and county, which were all foolish to give it up in the first place.

(click here to continue reading Mayor Emanuel does the TIF reform dance | Ben Joravsky on Politics | Chicago Reader.)

And to top it off, this site isn’t even a blighted building, up until a few years ago, MB Financial, a mid-sized bank with over $10,000,000,000 in assets, was headquarted in this building. They moved across the street into a newer, sleeker building, but their old location isn’t exactly a shit hole.

Google: Rivals Are Ganging Up and Taking Our Lunch Money

Seth Anderson1 Comment

Alternative Google
Biggus Google

Poor, poor lil’ Google. They are a billion dollar company, and yet they whine like this:

Google Inc. accused rivals Oracle Corp., Microsoft Corp. and Apple Inc. of waging an “organized, hostile campaign” against the Internet search giant’s Android mobile phone software, using questionable patents.

“They want to make it harder for manufacturers to sell Android devices,” Google Chief Legal Officer David Drummond wrote on a company website. “Instead of competing by building new features or devices, they are fighting through litigation.”

The campaign against Android is being waged “through bogus patents,” Mr. Drummond wrote, adding that “Microsoft and Apple have always been at each other’s throats, so when they get into bed together you have to start wondering what’s going on.”

(click here to continue reading Google: Rivals Are Ganging Up – WSJ.com.)

I’m too lazy to write up responses to Google’s questionable, ridiculous arguments, but luckily, smarter folk have already done so. Like John Gruber:

So if Google had acquired the rights to these patents, that would have been OK. But when others acquired them, it’s a “hostile, organized campaign”. It’s OK for Google to undermine Microsoft’s for-pay OS licensing business by giving Android away for free, but it’s not OK for Microsoft to undermine Google’s attempts to give away for free an OS that violates patents belonging to Microsoft?

Or Brad Smith of Microsoft:

Google says we bought Novell patents to keep them from Google. Really? We asked them to bid jointly with us. They said no.

Ride Smarter
Ride Smarter

Google whines some more:

A consortium that included Microsoft and Apple recently paid $4.5 billion for patents auctioned by Nortel, an amount that Google notes was “five times larger than the pre-auction estimate of $1 billion.”

Take Action With Your Money
Take Action With Your Money

Daring Fireball again:

First, the “estimate” of $1 billion was partially set by Google itself.

Then when the auction actually started, it’s OK for Google to bid over $3.14 billion, but when Apple and Microsoft bid $4.5 billion, that’s “way beyond what they’re really worth”. And if these patents are “bogus”, why was Google willing to pay anything for them, let alone pi billion dollars?

No one other than Nathan Myhrvold and his cronies sees the U.S. patent system as functioning properly, but Google’s hypocrisy here is absurd. Google isn’t arguing against a handful of never-should-have-been-issued software patents. They’re not arguing against patent trolls like Myhrvold and his shell companies like Lodsys — companies that have no products of their own, no actual inventions, just patents for ideas for products. They’re effectively arguing against the idea of the patent system itself, simply because Android violates a bunch of patents held by Google’s competitors. It’s not “patents” that are attacking Android. It’s competing companies whose patents Google has violated — and whose business Android undermines — who are attacking Android.

John Paczkowski adds:

Clearly, the company is taking a new tack here, framing the issue in its own way and, presumably, putting whatever lobbying and legal muscle it has into throwing out roadblocks. To wit, these few lines, also taken from Drummond’s post:

We’re encouraged that the Department of Justice forced the group I mentioned earlier to license the former Novell patents on fair terms, and that it’s looking into whether Microsoft and Apple acquired the Nortel patents for anti-competitive means.

I bet you are. Particularly since you’re facing antitrust inquiries into your own core businesses. And in the end, that may be another purpose of this post: To show regulators that Google isn’t always the unstoppable juggernaut it is portrayed to be. Sometimes it’s the victim, or it would like to be viewed that way, especially by the FTC and the tough-talking judge presiding over its patent infringement showdown with Oracle. One last point: If the patents to which Google refers are “bogus,” why bother decrying them at all? Or, for that matter, trying to purchase them in the first place?

(click here to continue reading Google Rails Against Anti-Android Patent Purchases – John Paczkowski – News – AllThingsD.)

CB's Broken Balloons
CB’s Broken Balloons

TechCrunch wonders why Google is so interested in patents now…

As you’ve undoubtedly seen by now, Google decided to go on the offensive today with regard to patents. No, they didn’t go after any company for violating their patents. Nor did they spend billions acquiring new ones. Instead, David Drummond, Google’s SVP and Chief Legal Officer, took to the Google Blog to lash out at Microsoft, Apple, Oracle, and others for using “bogus patents” to attack their Android mobile platform.

But why now? In the past, Google has remained fairly mum on the topic. And they certainly weren’t calling out rivals by name. They’ve talked generally about the broken patent system, and even did a post explaining why they were willing to spend big money on the Nortel patents — for defensive purposes. But those approaches haven’t worked. Google is now arguably more vulnerable than they’ve ever been. And the stakes are about to go even higher.

When Google lost the Nortel bidding, they’re believed to have bid north of $4 billion before dropping out. Apple, backing Rockstar Bidco, eventually won with a bid of $4.5 billion. Now a battle for an even bigger treasure of patents looms.

(click here to continue reading Why Did Google Blog About Patents Today? Because The Nortel Loss Was Just The Beginning. | TechCrunch.)