If the FISA court approved a warrant for the FBI and NSA to obtain all of Verizon's "metadata," I think it's safe to assume it approved warrants for all the other major carriers as well. I am certain that neither my friend Prudi not my friend Judy are terrorists — they just don't have the skills, much less the motivation — and they're my primary telephone correspondents. Yes, my kids call every week or two, and they're not terrorists either, so I guess I won't be scooped up in some anti-terror dragnet.
On the other hand, I do get fairly frequent calls from other parties who must also be calling terrorists. You probably get the robo-call that begins, "This is an important message about your current credit card account..." I'm betting that the real terrorists get more calls from that outfit than from any of their terrorist buddies, and I'm calling on the FBI to shut them down. They might even be calling from outside the USA — who knows? Maybe they are terrorists, trying to drive us so crazy we go out and start killing each other.
Seriously, though, Barack Obama and his administration have been a total disappointment with regard to Fourth Amendment rights and with regard to transparency. "Oh," exclaim the administration hacks, "but the things we do are for the sake of national security — to protect your safety. And if it weren't for those horrible leakers letting you know they're happening, they wouldn't bother you at all!"
Once again, it's time to quote Jefferson: "They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety."
Showing posts with label transparency. Show all posts
Showing posts with label transparency. Show all posts
Friday, June 7, 2013
Tuesday, January 5, 2010
What Actually Happened?
Bernanke says the problem at the heart of our recent economic problems was lack of regulation, not (heaven forfend!) Fed monetary policy. Interest rates, he says, were not too low.
Perhaps it wasn't interest rates — and, certainly, I'm not one to argue against greater regulation. The problem is that the financial instruments that brought on the crisis could not have been regulated because nobody knew what the hell they consisted of, or what they conceivably might have been worth. It's pretty clear that the ratings agencies that gave those instruments their AAA ratings didn't have a clue.
In other words, the crisis arose from a straightforward case of market failure, based on lack of information, and what really is needed is vastly more transparency. All securities should be sold on public exchanges, so that all buyers know what others are paying. Buyers should be fully informed of the content of the tranches of securitized debt they purchase, and not have to depend on the seller's optimistic evaluations of risk and reward. When banks hold such vehicles on their books, they should be valued according to real market prices, not imaginary projections of what they might be worth some day — and all of a bank's holdings should be on the books, not hidden away in SIVs.
If a regulator — the Fed, or anybody else — is going to make sure that banks no longer can become so grossly overleveraged that they threaten the world's financial structure, it is necessary to know all about their assets and liabilities. Secrecy (and creative bookkeeping) made the recent crisis possible, and only openness can prevent it from happening again.
And what can we expect from Congress?
My prediction: a little lip service to consumer protection, and a lot of kissing Wall Street's ass.
Perhaps it wasn't interest rates — and, certainly, I'm not one to argue against greater regulation. The problem is that the financial instruments that brought on the crisis could not have been regulated because nobody knew what the hell they consisted of, or what they conceivably might have been worth. It's pretty clear that the ratings agencies that gave those instruments their AAA ratings didn't have a clue.
In other words, the crisis arose from a straightforward case of market failure, based on lack of information, and what really is needed is vastly more transparency. All securities should be sold on public exchanges, so that all buyers know what others are paying. Buyers should be fully informed of the content of the tranches of securitized debt they purchase, and not have to depend on the seller's optimistic evaluations of risk and reward. When banks hold such vehicles on their books, they should be valued according to real market prices, not imaginary projections of what they might be worth some day — and all of a bank's holdings should be on the books, not hidden away in SIVs.
If a regulator — the Fed, or anybody else — is going to make sure that banks no longer can become so grossly overleveraged that they threaten the world's financial structure, it is necessary to know all about their assets and liabilities. Secrecy (and creative bookkeeping) made the recent crisis possible, and only openness can prevent it from happening again.
And what can we expect from Congress?
My prediction: a little lip service to consumer protection, and a lot of kissing Wall Street's ass.
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