The Law is for Little People

Elon Musk just tweeted that if his workers vote to unionize, they will lose their stock options.

I'm really not sure how much value the stock options would be to the shop floor workers, they will be locked up well past when they are worthless, much as it happened in the Dot Com bust, but still his threat is a direct violation of the NLRA, which prohibits penalizing workers for exercising their labor organizing rights:

The United Auto Workers has been Elon Musk’s target for days of derision on Twitter, and his posts may open Tesla Inc. up to trouble with U.S. labor regulators.

………

The UAW, which is actively trying to organize Tesla’s California assembly plant, has fired back with tweets of its own. But the more consequential outcome from the spat on the social-networking service may come in the form of unfair labor practice allegations made to the National Labor Relations Board, according to Wilma Liebman, who led the agency during the early years of the Obama administration.

Musk posted earlier this week that nothing was stopping Tesla employees in Fremont, California, from voting to join a union. But, he wrote, “Why pay union dues & give up stock options for nothing?” Liebman read this as a warning that the company would take away workers’ stock options if they succeeded in organizing the factory.

Nothing stopping Tesla team at our car plant from voting union. Could do so tmrw if they wanted. But why pay union dues & give up stock options for nothing? Our safety record is 2X better than when plant was UAW & everybody already gets healthcare.

— Elon Musk (@elonmusk) May 21, 2018

“If you threaten to take away benefits because people unionize, that’s an out-and-out violation of the labor law,” Liebman, who’s done legal work for the UAW in the past, said in an interview.

This, is, as the saying goes, black letter law, and, if the expected complaint is filed, I would expect the NLRB to take some sort of action.

Ironically enough Trump's NLRB might be more likely to take action than the Obama's, because the Trump administration is less enamored with Silicon Valley than was the Obama administration, though I would not expect much beyond a stern warning.

Tweet of the Day

I hope the NFL decides to completely stop all concession stand sales during the anthem as well. We wouldn’t want people buying a $10 beer and an $8 hot dog during our sacred anthem.
All TV camera crews must stop filming and direct attention at the flag too.
Just seems fair.

— Sage Rosenfels (@SageRosenfels18) May 23, 2018

This is in response to the NFL announcing that they are banning players kneeling during the Star Spangled Banner.

What a group of cowards.

A New Definition of Hell

Did you know that there was a high school in Pennsylvania that is punishing students for not smiling?

No, this is not The Onion. This is hell on earth:

Northern Lebanon School District students in Pennsylvania must smile while walking the hallways at the institution or they will be punished, according to a report.

Students who do not smile in the hallways between periods will be instructed to, and if they refuse, they will be sent to the guidance counselor’s office to talk through their problems, reported Lebanon Daily News. Meanwhile, parents claim that reports of bullying in the district are mostly ignored by administrators.

Teachers at the institution, who have not been named, told the news agency that Benjamin Wenger, the assistant high school principal, has been strictly enforcing the rule, though it has not yet been put into writing within the district.

It appears that the difference between kindergartners and assistant high school principals is that the latter do not have meaningful adult supervision.

And if you think that my, "Adult Supervision," comment is over the top, I would note that Mr. Wenger's boss, High School Principal Jennifer Hassler, and a colleague, Middle School Principal Brad Reist, have taken to playing catch with sex toys for their own personal amusement.  (More horrifying details at the link)

This is unbelievably f%$#ed up.

I Love This

It appears that the denizens of Silicon Valley are experiencing some butt hurt because a popular pastor in the area has described their world as an, "Elitist den of hate."

Truth hurts, don't it?

These are people who make their money from regulatory arbitrage and government subsidies (patent, copyright, not having to pay sales tax, etc), collude to hold down worker wages, bust unions, etc.

No sympathy from me:

A Silicon Valley pastor has resigned from his church after calling the city of Palo Alto an “elitist sh%$t den of hate” and criticizing the hypocrisy of “social justice” activism in the region.

Gregory Stevens confirmed on Monday that he had stepped down from the First Baptist church of Palo Alto, an LGBT-inclusive congregation, after his personal tweets calling out the contradictions of wealthy liberals in northern California surfaced at a recent council hearing.

In emails to the Guardian, the 28-year-old minister detailed his “exasperation” with Palo Alto, a city in the heart of the technology industry, surrounded by severe income inequality and poverty.

“I believe Palo Alto is a ghetto of wealth, power, and elitist liberalism by proxy, meaning that many community members claim to want to fight for social justice issues, but that desire doesn’t translate into action,” Stevens wrote, lamenting that it was impossible for low-income people to live in the city. “The insane wealth inequality and the ignorance toward actual social justice is absolutely terrifying.” He later added: “The tech industry is motivated by endless profit, elite status, rampant greed, and the myth that their technologies are somehow always improving the world.”

………

The underlying messages to Stevens’ tweets, however, touched on continuing tension in Silicon Valley, where some of the world’s wealthiest companies and entrepreneurs have pledged to better the world through innovations, yet working-class families and poor residents struggle to afford the most basic necessities. The region has one of the worst homelessness crises in the country and a huge shortage of affordable housing, forcing tens of thousands of low-income workers to commute more than 50 miles to work.

………

He argued that the church’s rich neighbors could afford to “feed and house” all the homeless people in Palo Alto and surrounding cities, but instead focused on passing laws that further criminalized this population, encouraging police to harass those sleeping outside or in cars. The city had also made it hard for the church to provide meals for the homeless by requiring costly permits, he said.

………

But Palo Alto, he said, “wanted nothing to do with actual justice and was more interested in guarding their enclave of power and wealth”, adding: “If the wealth inequalities are not addressed, any talk about climate change, homelessness, and migrant rights is in vain.”

I agree with him completely, and I would apply it more generally to the hyper-wealthy throughout the west, particularly the US.

The world has become an increasingly brutal and hypocritical place.

Speaking of Bureaucrats Lying to Legislators,

The ational Nuclear Security Administration (NNSA) has been lying to legislators to encourage them to dump billions into new warheads:

There are many reasons to keep certain parts of the U.S. nuclear weapons complex a secret. But fraud, waste, and abuse run rampant when the mystique and awe of nuclear bombs gets in the way of effective oversight. And it is the taxpayer who ends up suffering.

The secrets to creating a nuclear explosion and the materials to do so are kept by the National Nuclear Security Administration (NNSA), a semi-autonomous agency within the Department of Energy, and it has a $1.2 trillion plan to build new nuclear warheads and facilities over the next 30 years.

But new documents obtained by the Project On Government Oversight (POGO) discussing the life expectancy of nuclear weapons components show that the uranium cores may have a longer life span than originally thought. This may undermine some justifications for an expansive—and expensive—nuclear modernization plan.

Although much of the documents are redacted, likely to keep safe the most sensitive details of the U.S. nuclear enterprise, the remaining details seem to suggest that initial life-span estimates were too conservative. These initial estimates were partially used as justification for plans to build an expensive new facility and revising plans based on these findings could result in billions of savings for taxpayers.

But there’s no getting around the fact that twice now the NNSA has either obscured facts that would suggest a more limited capacity is all that’s required or has pursued an expensive plan without knowing all the facts beforehand.

In light of NNSA’s rhetoric about the aging nuclear arsenal and the desperate need for more money to modernize, POGO endeavored to determine exactly what upgrades were truly needed to support a credible nuclear deterrent. In 2013, we released a report that called for a study into the lifetime of uranium secondaries in order to determine what capacity would be required of a proposed new facility. A study would make clear how many of these secondaries would need to be manufactured in the new building. POGO’s report on the proposed Uranium Processing Facility (UPF) highlighted how the public was being kept in the dark about this number, an important justification for continued and increased funding. At the time, a number of Energy Department sources told POGO several hundred warheads had already gone through the life extension process and would not need remanufactured secondaries.

Once again I will quote Ike, "Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed."

Rule 1 of FBI Legislative Proposals is Don't Trust the FBI

Rule 2 is see rule number 1:

The FBI has repeatedly provided grossly inflated statistics to Congress and the public about the extent of problems posed by encrypted cellphones, claiming investigators were locked out of nearly 7,800 devices connected to crimes last year when the correct number was much smaller, probably between 1,000 and 2,000, The Washington Post has learned.

Over a period of seven months, FBI Director Christopher A. Wray cited the inflated figure as the most compelling evidence for the need to address what the FBI calls “Going Dark” — the spread of encrypted software that can block investigators’ access to digital data even with a court order.

The FBI first became aware of the miscount about a month ago and still does not have an accurate count of how many encrypted phones they received as part of criminal investigations last year, officials said. Last week, one internal estimate put the correct number of locked phones at 1,200, though officials expect that number to change as they launch a new audit, which could take weeks to complete, according to people familiar with the work.

“The FBI’s initial assessment is that programming errors resulted in significant over-counting of mobile devices reported,’’ the FBI said in a statement Tuesday. The bureau said the problem stemmed from the use of three distinct databases that led to repeated counting of phones. Tests of the methodology conducted in April 2016 failed to detect the flaw, according to people familiar with the work.

………

Since then, Wray has repeated the claim about 7,800 locked phones, including in a March speech. Those remarks were echoed earlier this month by Attorney General Jeff Sessions.

“Last year, the FBI was unable to access investigation-related content on more than 7,700 devices — even though they had the legal authority to do so. Each of those devices was tied to a threat to the American people,” Sessions said.

Officials now admit none of those statements are true.

The FBI’s admission is likely to fuel further criticism from lawmakers, privacy advocates and tech companies, and hinder the bureau’s public efforts to address encryption issues.

If you believe that this was an unintentional error, I have a bridge in Brooklyn to sell to you.

If law enforcement gets their way in shaping criminal justice, you get a police state, because it makes their job easier.

This is why I get paranoid about legislative initiatives from law enforcement.

You Remember the Story of the Boy Who Cried Wolf?

After about a year and a half of a noun, a verb, and Vladimir Putin, we now have some pretty good evidence that Donald Trump and his relatives have been selling foreign policy.

We're talking an explicit quid pro quo, but you'll hear very little about this because it all fades into the miasma that is Trump's ethical lapses.

In the process of pursuing Vladimir Putin as if he were Ernst Stavro Blofeld, people have ignored the fact that Trump is deeply and profoundly corrupt, and always has been:

Today marks the 16-month anniversary of Donald Trump becoming the 45th president of the United States, and nowhere has our unlikeliest commander-in-chief placed a greater stamp on America’s place in the world than his dramatic — and sometimes arbitrary and capricious, or so it seems — shifts in foreign policy. None of these seismic changes seemed more baffling than last spring’s abrupt sellout of the Persian Gulf state of Qatar — a longtime ally where the U.S. Air Force Central Command and its 10,000 American troops are now based.

………

Trump stunned his own foreign policy team — including then-Secretary of State Rex Tillerson and Defense Secretary James Mattis — when he tweeted that Qatar is a sponsor of terrorism and seemingly endorsed an economic and political blockage of the tiny, oil-rich nation organized and led by two powerful neighbors, Saudi Arabia and the United Arab Emirates, or UAE.

………

How to make sense of a 180-degree shift in policy that seemed so counter to U.S. interests in the region? A few months later, people who suspect the worst about Trump and his minions learned a possible motive that was almost too cynical to comprehend. Not long before Team Trump switched gears on Qatar, key officials from the emirate had met with Charles Kushner — father of Trump’s son-in-law and senior adviser, Jared, who’s in charge of Trump’s Middle East portfolio — to discuss a massive Qatar-funded bailout of 666 Fifth Ave., the debt-laden Manhattan skyscraper that was threatening to sink the Kushner family real estate empire. But the Qataris rejected the deal — just weeks before the policy about-face. Whatever actually happened, the appearance was simply awful. 

No, the reality is simply awful.

It also seems not to have been the full story. This weekend, the New York Times published a stunning report about a plan floated by a longtime emissary for the Saudis and the UAE in early August 2016, when Trump had just grabbed the GOP nomination but faced an uphill campaign against Hillary Clinton. Donald Trump Jr., aide Stephen Miller and Erik Prince, founder of the notorious mercenary outfit once know as Blackwater, listened intently as the emissary offered Team Trump millions of dollars in assistance, including a covert social-media campaign, to help Trump win that would be run by a former Israeli spy who specializes in psychological warfare, or psywar.

“The emissary, George Nader, told Donald Trump Jr. that the princes who led Saudi Arabia and the United Arab Emirates were eager to help his father win election as president,” the Times reported. Some key elements — exactly who was behind the plan, and what parts, if any, were carried out — remain murky.

I should mention here that Nader is a convicted felon, having served multiple sentences for child porn and sexual child abuse.  (As Anna Russel would say, "I'm not making this up, you know.")

And the corruption is pretty explicit:

As long as Trump and Jared Kushner continue to hold onto their business holdings while leading U.S. foreign policy, this cloud will remain. Did Trump voice support last week for ending American sanctions on the Chinese telecom company ZTE Corp. because it would benefit their U.S. subcontractors, or because a Chinese fund is investing $500 million in an Indonesia theme park that should dramatically boost the value of a related Trump Organization development? Then there’s the matter of Qatar, because in recent months it has become clear that the Gulf state is again in the Trump administration’s good graces, and the strategic alliance has been renewed as if last spring’s blowup never happened. Is that because it’s a more sensible policy — or is it because a firm called Brookfield Asset Management that is backed heavily by Qatari funds is near a deal to bail out Kushner’s 666 Fifth Ave? Is it any wonder that so many longtime key allies of the United States wonder if they can trust Trump’s America?

I note that Trump was thoroughly corrupt, and deeply mobbed up last year, but, instead of looking at the stuff that blatantly obvious, we have discussions of pee tapes.

Good Point

The good folks at FAIR note, and disapprove of the fact that when white people engage in racist behavior, the press does their level best to maintain their anonymity:

The presumption of innocence is supposed to protect those accused of a crime, in law and in the press. In corporate media, that rule also seems to apply to white people who report people of color to the police for doing innocuous things. As FAIR found, their identities are far more closely protected than those of people falsely targeted for “suspicious” behavior.

In the past few weeks, major news media have been flooded with coverage of incidents of alleged racial profiling and implicit bias—from golfers reported to police for playing “too slowly,” to picnickers fingered for using the wrong type of grill at a park. This coverage was prompted by viral videos and other social media posts released by the accused or by concerned bystanders, in real time or soon after these events occurred. The characters in these stories had one thing in common: The callers and officers involved were white; the alleged offenders, black or brown.

In a survey of coverage of four recent racial profiling cases, FAIR examined articles or segments in the New York Times, Washington Post and USA Today; on NPR, CNN, Fox, and the CBS, NBC and ABC evening news; as well as in major papers in the region where the incidents occurred.

These stories, while similar in content (often using the same quotes or incorporating Associated Press reports), didn’t lack for details. Those accused, police, witnesses, and corporate and institutional leaders were interviewed. Multimedia elements were included, such as smartphone, regular, and police body cam videos, audio from 9/11 calls, police reports and screen captures of social media posts.

But almost across the board, while the accused’s names and personal details have been made public, the accusers remain unnamed. Though equally newsworthy, they were allowed to retain their anonymity.

It took a while for the racist Starbucks manager, or the racist Yale grad student, or the woman who called the police on black people barbecuing in the park, to be revealed, and the information was crowd sourced, and on Twitter, before the major news organizations deigned to publish this information.

For other news stories, the identity of the malefactor would be in the first two paragraphs of the story, but there seems to an editorial omerta as regards wypipo behaving badly.

Why, "F%$# the Cable Companies," Is Such a Good Campaign Slogan

Because they are really horribly awful entities:

While people remain exclusively fixated on the telecom industry's attacks on net neutrality, the reality is companies like Comcast, Charter, AT&T and Verizon are busy trying to eliminate nearly all federal and state oversight of their businesses. And while deregulation has its uses in healthy markets as part of an effort to protect innovation, you may have noticed that the telecom market isn't particularly healthy. As such, the end result of eliminating most meaningful regulatory oversight without organic market pressure in place is only likely to make existing problems worse.

This battle is getting particularly heated on the state level. After the Trump administration dismantled net neutrality and consumer privacy protections, states began flexing their muscle and attempting to pass their own privacy and net neutrality rules. ISP lobbyists, in turn, tried to head those efforts off at the pass by lobbying the FCC to include (legally untested) language in its net neutrality repeal "pre-empting" states from being able to protect broadband consumers in the wake of federal apathy.

And in the wake of the net neutrality repeal, companies like Charter (Spectrum) are trying to claim that states have no legal authority to hold them accountable for failed promises, slow speeds, or much of anything else.

For example, Charter is already trying to use the FCC net neutrality language to wiggle out of a lawsuit accusing it of failing to deliver advertised speeds. And the New York Public Service Commission also recently stated it found that Charter has been effectively lying to regulators about meeting conditions affixed to its $89 billion acquisition of Time Warner Cable and Bright House Networks. As part of the deal, Charter was supposed to deploy broadband to a set number of additional homes and businesses, but regulators found (pdf) several instances where Charter actively misled regulators.

Last week Charter replied to these allegations by again claiming that states have no authority over them. As part of that effort the company is already citing the FCC's preemption language buried in its net neutrality repeal:

Seriously.  If Democrats are running for office, and not mentioning this sh%$, they, and their high priced consultants, are engaging in political and electoral malpractice.

We Need a Death Penalty for Corporations

Case in point, Wells Fargo:

Some employees in a Wells Fargo unit that handles business banking improperly altered information on documents related to corporate customers, according to people familiar with the matter.

The behavior again raises questions about Wells Fargo’s risk-management practices and controls. The bank has been sanctioned in recent months by federal regulators for problems in these areas and as a result can’t grow its balance sheet.

The employees in Wells Fargo’s so-called wholesale unit, which is separate from its retail bank, added or altered information without customers’ knowledge, according to the people familiar with the matter. The information added varied from social security numbers to addresses to dates of birth for people associated with business-banking clients, the people said.

………

The behavior took place in 2017 and early 2018 as Wells Fargo was trying to meet a deadline to comply with a regulatory consent order related to the bank’s anti-money-laundering controls, the people said. The employees were also working to get documents in order prior to new requirements from another regulator for disclosures related to proof of beneficial ownership of businesses, the people added.

Wells Fargo became aware of the behavior in recent months from employees, the people said. After investigating, the bank discovered the behavior wasn’t an isolated incident, the people added. The bank is still investigating the matter, one of these people said.

………

The altering of information within the business-banking division of Wells Fargo, which serves small firms with annual sales ranging from $5 million to $20 million, comes as the bank is continuing to grapple with the fallout from the sales-practices scandal that erupted in September 2016. That involved bank employees fabricating information to open as many as 3.5 million accounts without customers’ knowledge or authorization.

The phrase, "Rotten to the core," applies here.

If there is a company who is as unequivocally merited its erasure from the universe, it is Wells Fargo.

To paraphrase Pat Boone, Wells Fargo should, "Be displayed publicly and have all of his fingers and toes broken, and then publicly executed," as a warning to other miscreants.

It's Called Monopoly Rents and Oligopolies

The good folks at the New York Times have noted that healthcare costs in the US started rising sharply relative to other developed nations around 1980.

Ignoring the obvious error (Dean Baker notes that the increase in US medical inflation started in the 1970s, not the 1980s) the history is clear: this began with a major push toward deregulation that began under the Carter administration, along with largely successful efforts to privatize what had been publicly owned research and development.

The walk-back from meaningful antitrust enforcement, and to deregulate many aspects of the market economy, along with efforts to privatize federally funded research progressed rapidly during the late 1970s, culminating with the disastrous Bayh-Dole act, which had the effect of handing government research to private entities.

Later, under the Reagan administration, the break-neck pace of these changes further accelerated.

It became the wild west, and a very opaque one at that, and to paraphrase former banking regulator Bill Black, if looting is possible, it has already happened.

What's more the proceeds of the looting are almost immediately reinvested in rent seeking activities like campaign donations, to embrace and extend the regime.

Rinse, lather, repeat.

Of Course

Is anyone surprised that Betsy DeVos is shutting down any meaningful investigation of fraud by for-profit colleges?

I'm not:

Members of a special team at the Education Department that had been investigating widespread abuses by for-profit colleges have been marginalized, reassigned or instructed to focus on other matters, according to current and former employees.

The unwinding of the team has effectively killed investigations into possibly fraudulent activities at several large for-profit colleges where top hires of Betsy DeVos, the education secretary, had previously worked.

During the final months of the Obama administration, the team had expanded to include a dozen or so lawyers and investigators who were looking into advertising, recruitment practices and job placement claims at several institutions, including DeVry Education Group.

The investigation into DeVry ground to a halt early last year. Later, in the summer, Ms. DeVos named Julian Schmoke, a former dean at DeVry, as the team’s new supervisor.

Now only three employees work on the team, and their mission has been scaled back to focus on processing student loan forgiveness applications and looking at smaller compliance cases, said the current and former employees, including former members of the team, who spoke on the condition of anonymity because they feared retaliation from the department.

Could someone please tell Bob Mueller that Betsy DeVos was involved with secret discussions with Vladimir Putin?

Please?

When the Going Gets Tough, the Tough Tell Lies

Westmoreland did it in Vietnam in the 19602, and the Pentagon is doing it in Afghanistan today:

It is challenging enough that the war in Afghanistan has gone on for almost 17 years. But now the Trump administration is raising hackles in Congress by cloaking in official secrecy an unusual amount of data about the longest armed conflict in American history, including, until very recently, the dwindling size of the beleaguered Afghan military.

Information contained in a recently issued government report provides a window into what the Pentagon has been keeping secret since last year: The Afghan army has shrunk by 11 percent and insurgents have gained territory, raising questions about whether the Pentagon has been concealing a strategy gone awry.

………

But just as the Pentagon began sending thousands more troops to Afghanistan, it also began classifying key war metrics it had previously made public. That included ways of measuring the success or failure of America’s mission: training and funding the Afghan military so it can beat back the Taliban and other insurgents.

The latest report by John Sopko, the special inspector general for Afghanistan reconstruction — who objected strongly to the new program of secrecy and pried some of the data out of US military leaders in Afghanistan — contained some worrisome figures.

There has been a long history of the US military lying to Congress, and in come cases lying to the President to continue with their wars, whether it be Vietnam, or Iraq, Lebanon, or (to a slightly smaller degree) Korea, we know that the military will attempt to restrict information given to the civilian leadership so that they can continue fighting.

To quote Georges Clemenceau, "War is too important to be left to the generals."

Even by the Standards of Trump, This is Unbelievably Stupid

Donald Trump has a plan to lower drug prices in the United State.

Basically, he wants to force other countries to pay more, and then big pharma, out of the goodness of its heart, will lower prices in the USA, because the drug companies will only take as much money as they need, and won't waste it on excessive executive compensation or stock buybacks.

I'm not sure if they are being stupid, or if they think that we are this stupid, but in either case, the level of idiocy buggers the mind:

President Trump, poised on Friday to unveil his strategy to lower prescription drug prices, has an idea that may not be so popular abroad: Bring down costs at home by forcing higher prices in foreign countries that use their national health systems to make drugs more affordable.

On Tuesday, Mr. Trump rebuffed his European allies by withdrawing from the Iran nuclear deal. Threatened tariffs on steel and aluminum have strained relations with other developed nations. And now the administration is suggesting policies that could hit the pocketbooks of some of America’s strongest allies.

“We’re going to be ending global freeloading,” Mr. Trump declared at a meeting with drug company executives in his first month in office. Foreign price controls, he said, reduce the resources that American drug companies have to finance research and develop new cures.

The White House Council of Economic Advisers fleshed out the idea three months ago in a report that deplored the “underpricing of drugs in foreign countries.”

The council said that profit margins on brand-name drugs in the United States were four times as high as those in the more regulated markets of major European countries and Japan. The United States, it said, needs to “address the root of the problem: foreign, developed nations, that can afford to pay for novel drugs, free-ride by setting drug prices at unfairly low levels, leaving American patients to pay for the innovation that foreign patients enjoy.”

Most of pharma research funding already comes from the governmet and big pharma spends more on advertising and marketing than they do on research, but, according to Trump and his Evil Minions^™, the problem is that they can't rape consumers hard enough.

Great googly moogly.

Once Again Proving that High Finance Can Destroy Everything

In this case, it's Univision that they have run into the ground:

This is the story of how corporate raiding, complacency, excess, and incompetence are gutting a media company that matters to tens of millions of people. It’s not a novel story, and perhaps not even scandalous by the standards of corporate opulence: A shark-obsessed boss, millions wasted on consultants, and an executive who insisted on publishing softcore porn are more embarrassing buffoonery than insidious greed. The main problem—the billions in debt the company ran up in the process of its owners buying it and weighing it down—is practically routine in media and beyond; that doesn’t make it any less infuriating.

This company is Univision, which until recently obligingly filled the role of absentee stepfather to Gizmodo Media Group, our employer. Now, Univision’s business is struggling, and GMG has suddenly found itself under a very watchful eye.

Once upon a time, Univision, an American broadcasting operation aimed primarily at Spanish speakers in the United States, was a tremendous golden goose laying tremendous golden eggs: It made incredible amounts of money and had to do essentially nothing for it other than run programming produced by Televisa, a Mexican broadcasting operation. The fairy tale ended long ago. Univision has been in decline for years, thanks to a disastrous private equity buyout finalized in 2007; an aging audience; a burdensome program-licensing deal with Televisa; competition from Telemundo and Netflix; layers of overpaid and useless middle management; and a general failure to position itself for a digital future.

………

From routine human resources f%$#ups to vastly overselling the prospects of an IPO whose ultimate doom this March precipitated the company’s current cost-cutting spree, Univision has been deeply mismanaged and is in the midst of making huge cuts that have, among other things, already claimed vast swaths of Univision Noticias—the most vital newsgathering operation serving the Spanish-speaking community in the U.S.—and Fusion Media Group. Consultants from Boston Consulting Group, who have reportedly recommended budget cuts of up to 35 percent in some parts of the company, have been combing through the books for months, and more than 150 people have been laid off so far. Plenty more cuts are pending (Univision president of news Daniel Coronell reportedly described them as “catastrophic” to his newsroom), including at GMG, the staff of which fears the newsroom may be cut by up to a third by the end of June, perhaps as part of a broader pivot toward video and branded content. What is happening to the company is not ultimately a failure of editorial or even executive management, though: If Univision was a mammoth whose failure to adapt slowed it down, it was private equity investors, consumed by the thought of turning their riches into more riches, who brought it down and bled it dry.

(emphasis mine)
You'll notice a pattern: Company has problems, or potential problems, takes said company private with other people's money, bleeds it dry, and leaves bleached bones.

Rinse, lather, repeat:

In 2007, a consortium including Texas Pacific Group, Thomas H. Lee, Madison Dearborn, Providence Equity, and Saban Capital took Univision private for $13.7 billion. These firms—executives of which still shape Univision’s board—borrowed heavily to finance the deal, saddling their new prize with more than $10 billion of debt. According to an FCC filing, each firm holds between 20.6 and 7.1 percent of Univision’s equity, and between 27.3 and zero percent of the voting interests. Thomas H. Lee, the only firm with no voting rights, has no official members on Univision’s board, but two of THL’s employees, James Carlisle and Laura Grattan, are listed as Univision board observers in their company bios; Univision would not say if the firm had appointed members to the board or who they were. Univision, for its part, declined to answer questions about the board, while all the involved firms either declined to comment or did not respond to questions about their involvement with Univision.

Leveraged buyouts such as the ones by which these companies acquired control of Univision were common in the years leading up to the financial crisis: Investors borrow a huge amount of money to purchase a company and then make that company responsible for paying back the debt. The amount of borrowing required is often large relative to a company’s earnings. This relationship—known as leverage—is used to gauge whether a company is likely to be able to pay back its lenders. The financial world commonly measures this through the ratio of “debt to EBITDA,” or earnings before interest, taxes, and depreciation and amortization of various assets. (The finance industry’s inscrutable jargon is a feature, not a bug. Just think of this ratio as a company’s debt compared to how much money it makes each year.)
Univision’s ratio, estimated at 12.5-to-1, made it highly leveraged even by the standards of the pre-crisis boom period. (In 2013, Obama administration regulators would urge banks to limit companies’ leverage to roughly half this level to reduce the risk of default.) Still, in 2007—when the company maintained a tight grip on the then-swelling U.S. market for Spanish-language media, and before media enterprises came to be viewed as dead investments—Univision found itself in a position of relative strength.

One of the reasons that we see this is because our regulatory and tax regimes subsidize such behavior.

As to a fix, on the mild side are things like changing the bankruptcy code to allow for private equity management fees, and all paid received by executives in excess of $1 million a year to be clawed back.

On the more severe side, and I think that this might be necessary, completely eliminating the deductability of interest payments would be a good thing.

I am sure that there is a middle ground, but I want to fiddle while Wall Street burns.

Feet of Clay

It appears that Warren Buffett's mortgage companies aggressively redline, steering affordable mortgages away from black borrowers:

Trident Mortgage Co. helps more families buy homes in Philadelphia and neighboring Camden, New Jersey, than any other company, but it primarily serves one demographic: white people.

That is no coincidence: Trident employs a nearly all-white team of mortgage consultants, and all of Trident’s offices are in white neighborhoods, where it makes the overwhelming majority of its loans to white homebuyers.

It’s a division of Berkshire Hathaway Inc., the giant holding company led by Warren Buffett, which has dramatically expanded its mortgage brokerage portfolio in recent years, reporting nearly 28,000 loans worth $7.3 billion last year.

“I originally paid little attention to HomeServices,” Buffett wrote in his most recent shareholder letter, referring to Berkshire Hathaway’s real estate brokerage operation, HomeServices of America Inc., which controls Trident and two other mortgage companies. Then, he said, its “growth exploded.”

………

But as they’ve become major players in cities across America, Berkshire Hathaway’s affiliated mortgage companies have followed a consistent pattern. Government lending data reviewed by Reveal from The Center for Investigative Reporting shows the companies direct their lending toward white borrowers and white neighborhoods, even in population centers such as Philadelphia where a majority of residents are people of color.

The analysis is part of Reveal’s ongoing coverage of modern-day redlining in America, which found 61 metro areas, from Jacksonville, Florida, to Tacoma, Washington, where people of color were significantly more likely to be denied a conventional home loan than their white counterparts. This was true even when people of color earned the same amount of money as white loan applicants, wanted to take on the same size loan or buy in the same neighborhood.

Reveal’s analysis found people of color were far more likely to be turned down for a loan in many of Berkshire Hathaway’s largest markets, including Philadelphia, Atlanta and Washington, D.C. It makes loans through three firms, Trident Mortgage, HomeServices Lending LLC and Prosperity Home Mortgage LLC. Here’s a breakdown:

• In Philadelphia, Trident Mortgage made 1,721 conventional home purchase loans in 2015 and 2016, 47 of them to African Americans and 42 to Latinos.
• In Atlanta, HomeServices Lending made 1,358 conventional home purchase loans, 63 to African Americans and 46 to Latinos.
• In Washington, Prosperity Home Mortgage made 2,650 conventional home purchase loans, including 167 to African Americans and 144 to Latinos.

Legal experts said Berkshire Hathaway’s mortgage companies were carrying out the very practices outlawed by the Fair Housing Act, a 50-year-old law that banned racial discrimination in lending, by locating their branches in white neighborhoods, employing mortgage consultants who – from their websites – appear to be overwhelmingly white and lending mostly to white borrowers.

“It sounds to me like they are intentionally avoiding doing business with people of color,” said Allison Bethel, director of the fair housing clinic at the John Marshall Law School in Chicago.

………

The analysis compared the racial breakdown of mortgage lending for every lender in every city in America. It showed Berkshire Hathaway’s mortgage companies took in a far greater proportion of their conventional loan applications from white homebuyers than their competitors in its largest markets in 2015 and 2016.

The figures were especially stark for Trident, which placed all of its 55 loan centers across Delaware, New Jersey and Pennsylvania in majority-white neighborhoods, Reveal’s analysis found. The analysis also showed 92 percent of the company’s conventional home loan applications came from borrowers in majority-white neighborhoods. When Trident did lend in neighborhoods where the majority of residents were people of color, most of the loans still went to whites.

Berkshire Hathaway’s mortgage business has the hallmarks of one that could be prosecuted for “failure to serve” under the Fair Housing Act, according to Eric Halperin, a former federal prosecutor who oversaw fair lending cases during President Barack Obama’s first term.

………

The government lending data analyzed by Reveal also showed Trident served a much smaller and whiter section of the Philadelphia area than the region’s No. 2 lender, Wells Fargo, which overall took in a slightly smaller number of conventional home purchase applications. Trident made 26 times as many conventional loans to white homebuyers as black homebuyers in Philadelphia in 2015 and 2016, the data shows. For Wells Fargo, that ratio was 7 to 1.

It seems to me that Oracle of Omaha might have a blond blind spot when it comes to issues of people of color.

So Not a Surprise

If there is one safe US Senate seat for the Democrats this election cycle, it's California.

But this time around, the not only did the California Democratic Party not endorse Dianne Feinstein, ^* she actually lost to her challenger by a significant margin, though not enough to actually get the endorsement. (Kevin De León beat her 54% to 37%, and he needed 60% for the endorsement)

So, now that she has a viable primary challenge, and the top two finishers will almost certain Feinstein and De León, which given California's jungle primary means that they will face off in the general.

Once again proving that Republicans fear their base, and Democrats hate their base, so given that Feinstein is far more conservative than the state, and De León is not, the establishment has pulled out the stops for Dianne, including an endorsement from Barack Obama.

Not a surprise. Barack Obama has always hadd nicer things to say about conservatives than he ever did about progressives:

Former President Obama is endorsing Sen. Dianne Feinstein (D-Calif.) as she faces a prominent Democratic challenger.
Obama said in a Friday statement that he was giving his "strong endorsement" and calling Feinstein "one of America's most effective champions for progress to the Senate.”

"She’s always been an indispensable leader for California, and we became dear friends and partners in the fight to guarantee affordable healthcare and economic opportunity for everybody; to protect our planet from climate change, and our kids from gun violence," he added.

Feinstein's reelection campaign blasted out the announcement on Friday, noting the two had worked on "shared priorities" when Obama was a senator and during his administration.

Feinstein, 84, has held her the seat since 1992 but is facing frustration from liberals who believe her old-school Senate collegiality is out of touch in the era of President Trump.

The problem is not her , "old-school Senate collegiality," it's her support for the surveillance state, Wall Street, Iraq, the Death Penalty, the Flag Burning Amendment, Internet Censorship, expansion of the H1B program, and her opposition to marijuana legalization that puts her out of step with California voters.

It isn't her "Senate collegiality" that people have a problem with, it's her policies.



^*Full disclosure, I've never met her, but she is my 2nd cousin once removed.

Someone Else Noticed

A few days ago, I noted that Manhattan District Attorney Cyrus Vance, Jr. was less than stellar on prosecuting the rich and powerful.

It appears that someone at New York Magazine noticed his habit of kissing up and punching down as well:

To hear the media tell it, Manhattan district attorney Cyrus Vance Jr. is soft on white-collar crime. First came the news that an attorney for Ivanka Trump and Donald Trump Jr. had arranged a fund-raiser for Vance after he refused to prosecute them for fraud. Then there was Vance’s decision not to file sexual-assault charges against Harvey Weinstein, even though police had caught the Hollywood mogul on tape confessing to the crime. Last month, spurred by a story in New York, Governor Andrew Cuomo ordered the state attorney general to investigate Vance’s handling of the case. The incidents have cost the DA: During his uncontested election for a third term in November, 10 percent of voters were so fed up with him that they went to the trouble of writing in someone whose name wasn’t Cy Vance.

But all the attention on Vance’s treatment of the rich and powerful has obscured a more surprising aspect of his record: The DA, who styles himself a progressive reformer, is actually far more punitive toward poor and minority defendants than his counterparts in other boroughs. According to a report issued last year by a special commission on Rikers Island, Vance’s office was responsible for almost 38 percent of the city’s jail population in 2016, even though it handled just 29 percent of all criminal cases in New York. “No other borough comes close,” the report concluded. Brooklyn — despite having a million more residents than Manhattan — accounted for only 22 percent of those behind bars.

………

That parade of imprisonment is compounded by Vance’s onerous demands for bail. In 2016, the DA’s own statistics show, his office detained 17 percent of those it charged with misdemeanors or minor infractions — anything from smoking a joint to jumping a turnstile. Only Staten Island, with one-seventh as many petty crimes as Manhattan, matched that level of incarceration.

Then there’s Vance’s notoriously stingy approach to providing defense attorneys with the police reports and witness statements they need to defend their clients. While most of the city’s other DAs have moved toward the practice of “open file discovery,” releasing crucial records shortly after arraignment, Vance pursues what defense attorneys call “trial by ambush,” using the narrow requirements in the state’s law on pretrial disclosure — considered one of the most restrictive in the nation — to withhold vital evidence from indigent defendants until the last possible moment. As a result, public defenders say, poor clients in Brooklyn can easily obtain evidence that is denied to those accused of similar crimes in Manhattan. “It’s two boroughs divided by a river,” says Bill Gibney, a veteran of the Legal Aid Society, the city’s oldest and largest public defense organization. “Different policies, different results.”

The fact that Vance ran unopposed is a disgrace.  Someone should run against him in the primary as well as the general, whether it be a Republican, the Working Families Party, the DSA, or Raving Monster Looney party.

The DA's office under Vance is a horror show.

One Setback from Being a Bond Villain

You may recall that roughly a month ago, Tesla was kicked off the NTSB investigation of its fatal "autopilot" crash for issuing self serving pres releases, which the NTSB frowns upon.

Well, it can now be revealed that when the NTSB called Elon Musk, he hung up on them.

I am a firm believer that a leader needs to be receptive to criticism and differences of opinion.

William Durant, founder of General Motors, famously would defer major decisions if there was no opposition, on the theory that the lack of dissent meant that there had not been enough consideration of the downside.

Elon Musk clearly has some problems:

On April 11, Robert Sumwalt, the chairman of the National Transportation Safety Board, called Tesla CEO Elon Musk to tell him that the federal agency was taking the unusual step of removing the company from its investigation into a fatal March 2018 Tesla X crash in California.

Now, as Bloomberg reports, Sumwalt says that Musk abruptly ended the call, according to remarks that the safety official gave before the Society of Air Safety Investigators' Mid-Atlantic Regional Chapter dinner on Thursday.

"Best I remember, he hung up on us," Sumwalt said.

In a short email sent to Ars, Christopher T. O'Neil, the NTSB's chief of media relations, confirmed Bloomberg's description of the call.

"The account of the Chairman's remarks is accurate," O'Neil wrote.

………

On April 12, the NTSB formally removed Tesla as a party to the investigation into the crash.

"The NTSB took this action because Tesla violated the party agreement by releasing investigative information before it was vetted and confirmed by the NTSB," the agency wrote. "Such releases of incomplete information often lead to speculation and incorrect assumptions about the probable cause of a crash, which does a disservice to the investigative process and the traveling public."

For its part, Tesla said, in fact, that it withdrew before being booted out of the investigation.

A spokesperson even said that the NTSB was "more concerned with press headlines than actually promoting safety."

No Mr. Bond, I Expect You to Die

I am not explicitly stating that Elon Musk has a screw loose, but I am saying that we should be very concerned if he buys a white Persian cat.

The Stupid, it Burns Us!!!!

In 2016, @Tim_Canova mounted a primary challenge against Debbie Wasserman Schultz. This year, he's running against her again, this time as an independent. You'll never guess which foreign country they're attempting to link him to. Do Dems have any other tactic at this point? https://t.co/NtOh3s6rcY

— Glenn Greenwald (@ggreenwald) May 3, 2018

Seriously, this, "A noun, a verb, and Vladimir Putin," crap has to end.

It loses elections, and demoralizes potential supporters who want to see issues addressed.

The ony people helped by this are the usual incompetent consultants who rake in the campaign money from political candidates.