D.C. yawns at plight of unemployed

The Washington, D.C., establishment continues to demonstrate its indifference to the unemployment crisis, and the mainstream media is all too happy to ignore the problem, too. From Jonathan Chait:

Good news! The economy added 163,000 jobs last month, just a bit over the level required to keep up with population growth. A return to a free fall now seems less likely. On the other hand, there is the small footnote that the return to full employment is nowhere in sight. The recovery looks safe for those of us who are not already screwed. That, sadly, has come to be the primary focus of our economic policy.

In the years since the collapse of 2008, the existence of mass unemployment has stopped being something the economic powers that be even pretend to regard as a crisis. To those directly impacted, the economic crisis is an emergency, a life-altering disaster the damage from which will endure for years. But most of those in a position to address it simply have not seen it in such terms. History will record that the economic elite has viewed the economic crisis from a perspective of detached complacency…

Morgan-Stanley to pay $4.8M for scam that cost consumers $300M

What’s wrong with this story, aside from the fact that it’s another infuriating example of a big bank getting slapped on the wrist for cheating consumers on a grand scale?

A federal judge grudgingly approved Morgan Stanley’s $4.8 million settlement of electricity price-fixing charges over activity estimated to have cost New York consumers about $300 million, turning aside claims by a major nonprofit that the accord let the bank off too easily.

The case, which also involved the electricity generator KeySpan Corp, was the first in which the U.S. Department of Justice said it tried to recover improper profit from a financial services company that used derivatives to foster anticompetitive behavior.

Morgan Stanley entered a swap agreement with KeySpan in 2006 that gave it a stake in revenue by Astoria Generating Co, which also operated in New York City. It also entered a related hedge with Astoria.

The government said the arrangement allowed KeySpan to withhold substantial electricity generating capacity from the market, driving prices higher for consumers, and generated $21.6 million of net revenue for Morgan Stanley.

U.S. District Judge William Pauley in Manhattan said he shared the concerns of state officials and the AARP, a nonprofit serving people 50 and older, that any settlement should have reflected the harm to consumers and forced Morgan Stanley to give up the $21.6 million.

“Given the government’s stark allegations of manipulative conduct against Morgan Stanley, disgorgement of $4.8 million is a relatively mild sanction,” Pauley wrote. “There is a risk that a large financial services firm like Morgan Stanley could view such a modest penalty as merely a cost of doing business.

“But despite this court’s misgivings, the government’s decision to settle for less than full damages is entitled to judicial deference, particularly in view of the novelty of the government’s theory…”

“…It’s extremely disappointing,” Michael Gianaris, a New York State senator who opposed the accord, said in a telephone interview. “If banks can commit misdeeds and still generate tens of millions of dollars in profit as a result, not only are we not achieving justice, but we are not deterring future acts by other banks…”

Justice Department spokeswoman Gina Talamona said the accord “should send a message to the financial services community that the antitrust division will vigorously pursue anyone who engages in anticompetitive conduct in the derivatives industry, and that they will be held accountable…”

Vigorously! It takes a lot of of chutzpah to use that word, given the fact that the presiding judge wanted Morgan-Stanley to give up $21.6 million but deferred to the feds, who decided that one-fifth of that amount was sufficient.

I don’t know what the judge meant by “novelty of the government’s theory,” but who would have thought a few years ago that Barack Obama’s Justice Department would turn out to arguably be even less credible than Dubya’s was?

Salute to the Beatles

Last night, I went to the water show at the local rec center. How could I not? It was a salute to the Beatles! But my batteries were low and I didn’t get everything.

It was so much fun – the kids were absolutely adorable, there was great music and we didn’t have to watch little girls dressed like hookers and gyrating like Madonna. Disney princess camp – or Beatles camp? No contest!

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